Don't turn down "down turn" money

By Raj Singh, Managing Director of JetBlue Technology Ventures

Raj Singh, Managing Director of JetBlue Technology Ventures

The travel industry in which I work has been understandably turbulent as of late. As the corporate venture capital (CVC) arm of JetBlue Airways, JetBlue Technology Ventures (JTV) helps drive innovation within the airline by making strategic investments in startups at the intersection of technology, travel, and hospitality. Our mission is more important than ever as we navigate towards travel’s future state.

The current crisis has pressed the fast-forward button on change and accelerated the need for companies to ramp up their innovation efforts to remain competitive. Preexisting ‘game changers’ are now progressing much more quickly given the current demand. Corporations with established CVCs are well-positioned to succeed in this environment, as they are already accustomed to fostering rapid innovation in a controlled setting. The issue is that, given the crisis, the natural inclination is to halt investing to preserve cash.

What many don’t realize is that now is a great time to invest. Of course, companies must strike a balance between survival and adequately preparing for the future. But previous financial downturns (such as the 2008 stock market crash and recession) have demonstrated that companies committed to remaining active investors in technology and innovation not only do better during a downturn, but after as well. Even if organizations do successfully overcome this particular pandemic through survival alone, there will be more to come. How can these businesses think systematically about solutions that will enable them to adapt quickly to the next crisis? At JTV, we look for technologies that can best prepare JetBlue for the future (e.g. Volantio, 3Victors and ClimaCell). An added ‘bonus’ is that during this time, there are fewer travelers who could be affected by the risks of technology experimentation. JTV reports up through Eash Sundaram, JetBlue’s CIO and CDO, so this is a concept we are very familiar with.

Ordinarily, we’re focused on startups that will improve the end-to-end travel experience immediately (0-18 months), in the near future (2-5 years), or longer-term (7-10 years). However, given the crisis’ significant impact on our industry, we’ve shifted our focus to source more immediate startup solutions that can help JetBlue excel and profit in this environment. We recently concluded a six-week ‘innovation sprint’ to source startups specializing in contactless travel. The goal was to examine each stage of the travel ribbon to determine which technologies can be used for a safer, touchless experience. It’s imperative that JetBlue has insight into and access to the latest and greatest startups that can improve our operations and safety.

Not only do startups benefit corporations, but CVCs provide value to their portfolio companies beyond just a financial contribution. As part of the travel industry, JTV is able to counsel our startups with insider knowledge from an operator’s perspective or, where appropriate, offer a proof of concept with JetBlue or our partners. This real-world experience allows startups to test, refine, and ultimately deploy their product.

Exceptional times such as these are when investors find out if we’ve done our jobs well. JTV is fortunate to work with startups and entrepreneurs that have the resilience and adaptability to pivot and capitalize on the new travel norm

Weekly Brief

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