LU 319: How TravelBank CEO Duke Chung Started His First Business in His Dorm Room and Sold It to Microsoft (podcast)

Time-Stamped Show Notes:

• [00:17] Before we jump into today’s interview, please rate, review, and subscribe to the Growth Everywhere Podcast!
• [00:43] Chung started his first business in a dorm room and built it up to be a leading customer service SaaS company which was acquired by Microsoft. 
• [01:40] When he stayed with Microsoft after the acquisition, he learned how a large business operates. 
• [02:53] One of the systems Microsoft had in place was expense & travel. 
• [03:44] When SAP acquired Concur, Chung saw that there was an opportunity for the next disruptor to come in.  
• [04:42] Transformation in enterprise software happens every 12 years. 
• [06:04] Reports list the exit range for Parature in the $100M range.
• [07:18] TravelBank uses a transactional model that provides more scalability for customers. Most of the revenue is generated from suppliers. 
• [08:14] Margins start between 5-10% and can scale up to 30-40% over time. 
• [09:09] When you switch from SaaS to transactional model, how does that affect valuations? 
• [11:33] When you work off a transactional model are they buying credits or paying as they go?
• [11:55] TravelBank has scaled to 15,000 companies over 2.5 years because the software is generally free to use. 
• [12:09] TravelBank’s value proposition. 
• [14:40] What other numbers can you share around the business today?
• [14:44] In the 2.5 years since launch, we’ve scaled to 100,000 users. The company has scaled to 15,000 companies, generally in the smaller business category. 
• [15:30] In the U.S., 300 billion is spent on global business travel annually. 
• [16:12] For TravelBank, the small business segment provides a great opportunity to serve a market that has been underserved.
• [16:57] Chung addresses major changes in how businesses are purchasing software.
• [17:41] “What you see now is this adoption of employees wanting to have a voice in the decision-making process.” -Duke Chung.
• [18:48] How would you recommend that people go out there and figure out how to work on big things?
• [19:55] “A lot of the best ideas take a lot of time to build.” -Duke Chung
• [21:11] Chung reflects on how he felt when his company was acquired.
• [23:02] “My advice is to take your time to build these businesses. Enjoy every moment and think about building something big and amazing.” -Duke Chung
• [23:29] How do you filter for people who are starting businesses that don’t really solve a problem? 
• [25:23] Chung always encourages founders to really study the industry that they’re in. 
• [25:38] A simple test for product-market fit. 
• [26:50] Make sure that you’re solving a problem that’s big enough for enough people.
• [27:43] What does it mean to be thoughtful about building businesses?
• [28:31] “Failing is perfectly fine.” -Duke Chung
• [29:14] You will need an entire community behind you to help you build a business.
• [31:37] What is one new tool you’ve added in the last year that has added a lot of value?
• [33:03] Make sure you have some time to relax your mind.
• [34:32] What is one must-read book you’d recommend?

Resources From The Interview:

• Microsoft acquires Parature
• Sam Altman’s blog post on success
• Travelbank
• Duke Chung on Twitter, Facebook, LinkedIn 
• Must-read book: Delivering Happiness

Leave Some Feedback:

• What should I talk about next? Who should I interview? Please let me know on Twitter or in the comments below.
• Did you enjoy this episode? If so, leave a short review here
• Subscribe to Growth Everywhere on iTunes
• Get the non-iTunes RSS Feed

Connect With Eric Siu:

• Growth Everywhere
• Single Grain
• Eric Siu on Twitter