Lola.com Launches New Spend Management Solution
Before I tell you what we launched and why, I need to share our journey to this point.
We launched our corporate travel management platform in 2018 to help mid-sized companies manage business travel with a user-friendly approach, in contrast to the clunky and hard-to-use enterprise products currently in the market. We had an amazing year in 2019, growing our customer base and revenue over 1,146% and receiving the #1 rating in customer reviews (4.7 out of 5 stars out of hundreds of ratings) for travel management software. We started off 2020 very strong, getting ahead of plan in January and February toward another year of record growth.
Then, like everyone in the travel industry, we were hit hard by the global pandemic. Business travelers stopped booking trips - business trips booked on Lola went down 97% from February to April. Companies stopped buying travel management software.
When confronted with a threat, we’re programmed to pick one of three options - fight, flight, or freeze.
We could freeze and wait it out. Many companies in travel are doing this by putting their heads down, furloughing the majority of their staff and waiting things out. In March it was not clear how long this would last and if travel would bounce back in 60 or 90 days. A lot of companies picked this strategy and waited.
We could choose flight, and run away from the problem. This would mean putting the company up for sale and likely selling to a larger player who has more cash. Many travel companies did this too. I don’t blame them. Many had only a few months of cash in the bank and lacked the right team in place to innovate.
We chose to fight.
We know that the most important factor in startup success is not skill or luck, but resiliency - it’s one of our core values, worded “All grit, no quit.” We chose to build on our strengths and fight for a new future for Lola - our ability to build simple to use software that solves complex problems, the strength and resiliency of our team, enough cash to last a long time, and our close relationships with our customers.
“Drink the waters meant to drown you.” - Nelou Keramati
The New Problem to Fix: Budget Management is Broken.
Because of our tight relationship with customers, we had insight into an additional problem beyond managing business travel that was faced by the finance teams we sell to - managing budgets and employee spending.
Budgeting, the process to create budgets, is time intensive but works fairly well. Finance teams analyze previous budgets, project future growth, and create budgets aligned across each department for the upcoming year. They then distribute these budgets out to each department. But then things break down, rapidly. Each department takes their budget amount and types it into a spreadsheet and asks team members to enter their expenses to keep track. Yes, really! We surveyed over 600 people who manage budgets at companies, and 94% of them said they track their expenses in a system separate from finance.
What’s worse than knowing you are over budget? Not knowing if you are under budget or over budget.
The sad state of the business world is that no one really knows if at this moment they are over or under budget. In fact, 61% of budget owners say they rarely or never agree with finance on how much they spent.
I’ve worked at five companies where I was responsible for multi-million dollar marketing budgets, and have spent $100m on marketing over 15+ years. I started my career in finance, I have an MBA, and even got an “A” in accounting class. You would think staying on budget for me would be easy. It was not.
Managing a budget is difficult and time consuming, and you never can see what is happening right now.
You have zero real time visibility when you are managing a budget. For expenses paid by employees on their personal cards, you don’t learn about them until they submit their expense reports, which we all know are never on time and can be months later. For expenses paid by check you have to wait for the vendor to send an invoice and for finance to process that invoice. For expenses on a shared corporate card, you can see the amounts in real time but it is impossible to know who is responsible for each charge resulting in confusion as to what part of the budget something goes in and time wasted chasing down receipts.
Managing a budget today is like driving a car by only looking in the rear view mirror. You have zero visibility into what is happening right now.
Lola.com is now Spend and Travel Management.
We believe that every dollar a company spends should be visible in real time by the department budget owner and the finance team. We believe that managing a budget should not have any surprises. We believe that expense reports suck. We believe finance professionals have more to offer their company than reviewing every expense line by line. We believe that software and automation can save companies time and money and make employees happier. Our new product, Lola Spend, brings these beliefs to life.
With our new spend product, finance teams create budgets and allocate them to departments for tracking in real time with everyone using the same report.
Departments can allocate that budget out to smaller teams as sub-budgets which roll up to the main budget. Budget owners can allocate budget to their teams and set limits for each employee if they choose.
Every employee gets a real corporate card.
This makes it easy for employees to do their jobs. But it isn’t one of those scary corporate cards where anyone could pay a $500 bar tab. All the cards are controlled by the budgets assigned to employees. Finance teams can get alerts when suspicious spending happens, like when an employee with access to the IT hardware and software budget spends $80 on candy at IT’SUGAR. Even better, you can just block all purchases from candy and confectionery stores. This corporate card both streamlines and puts you in control.
Every vendor gets their own virtual card.
You can create unlimited virtual cards so you assign one to each of your vendors. We buy a lot of stuff over and over - Facebook and Google ads, Apple and Dell computers, Microsoft and Slack software, office snacks and supplies - and life is easier when they each have their very own corporate card to charge. You can set a monthly budget for each one and hold them to it automatically. And if one of them gets hacked, you just turn off that one card and give them a new one - no more changing your card with the dozens of people who currently have it on file.
We also eliminated expense reports.
That’s right, because expenses are attached to a pre-approved budget and we make it easy to capture receipts in real time (take a pic with the mobile app!) you probably won’t do an expense report again. You’re welcome.
This works for travel too!
Our history in business travel is a key component to this new product. For many companies, 20% of employee spending is on T&E, and travel is the hardest to manage and most frequently abused budget area. Now you can set a budget with a hard limit and keep that sales team in line in real time - no surprises that pop up 6 weeks later when the expense reports roll in. Lola is the only spend management app with seamlessly integrated travel management.
We thought long and hard about what to charge for Lola Spend. Most corporate cards charge you $50 to $500 a year per card, and they have very limited controls in place to give control and visibility over spending, and no way to enforce budgets. Some day we will probably add some advanced features for finance teams and have a higher price for that new stuff. But because we make a little bit of money every time you use the Lola Card, we plan on keeping the core product free.
This year has been a journey for everyone. I am incredibly proud of how our team has pulled together despite the challenges. After months of hard work, we're excited to share Lola Spend with you, but this is just the start. We've got big plans to build on this product, and want you to be a part of it.