Arnie Weissmann
Arnie Weissmann

Among the reasons many of us were surprised last month by the demise of WayBlazer, travel's highest-profile artificial intelligence (AI) initiative, was that we had become habituated to the success of enterprises operated with Terry Jones' oversight.

He had compiled an impressive track record, introducing multiple generations of automated travel booking. As Sabre's chief information officer, he nurtured Eaasy Sabre, a self-booking tool featured through dial-up services in the 1980s.

Still working for Sabre, he headed up Travelocity as its founding CEO. During the period he ran it, Travelocity was king, larger than competitors Priceline and Expedia (the latter would eventually acquire the company, long after Jones took it public and departed).

He was founding chairman of the first major travel metasearch company, Kayak (later acquired by Priceline). His touch seemed golden, so even when he told me, when I interviewed him at WayBlazer's birth, that "the travel-planning space has a lot of dead bodies in it," I had reason to believe he was adept at sidestepping boneyards.

Many travel advisers who have gotten to know him have felt the tug of cognitive dissonance. He is smart and likeable, bold, but with a Midwesterner's reflex toward self-deprecation. He's an entrepreneur yet knows how to maneuver in large corporate structures. 

He uses human advisers for some of his own travels, but as he recently acknowledged to me (with only a trace of irony), he has been "trying to put travel agents out of business for years." Even when working at Sabre, he said, he was "providing bullets to the enemy."

If you sell travel, it doesn't matter whether you regard him as friend or foe. Listen up: His experience at WayBlazer is instructive.

When I had first emailed him about rumors I was hearing about WayBlazer's impending demise, he confirmed it, adding, "There's a backstory."

He subsequently provided me with a postmortem that serves as a reminder that what brings down a company is seldom a single cause and that the final factor that shutters a technology company might have more to do with financial engineering than with software engineering.

Every company, tech or not, finds its initial assumptions challenged and makes course corrections, even revolutionary directional changes. WayBlazer's launch customer was the Austin Convention and Visitors Bureau (CVB). Although during our first WayBlazer conversations four years ago Jones cited theoretical case-usages for hotels and airlines, he also believed CVBs were the first big market opportunity.

He subsequently discovered, however, that CVBs didn't have quite as much data -- or funding -- as he had thought. AI's promise lies in its ability to crunch vast amounts of data, and WayBlazer's promise to investors required customers with money.

WayBlazer initially employed the self-learning IBM Watson operating system, and Jones' partner was Manoj Saxena, an experienced serial entrepreneur and former Watson leader at IBM who was trying to apply the technology in several sectors. (Later in our conversation, Jones would attribute "two older guys doing a startup" as a factor working against the company.)

They settled on a business-to-business model because, Jones said, in the consumer space, "we'd need to answer every question on Earth. What's the best Singapore sling in Singapore? If we didn't know, we'd be trashed online."

Although Saxena found success in other verticals with Watson, travel proved challenging. Getting customers to change software platforms wasn't easy, often taking 10 months from test to contract with no immediate cash flow nor guarantee that the business would eventually sign up.

Still, there were enough successes to feel encouraged. Noreen Henry, the company's second CEO, focused on hospitality companies. A concierge product attracted Hilton and Marriott, and InterContinental Hotels Group and Leading Hotels also signed on for projects. 

WayBlazer's programmers moved chat into web ad units and demonstrated significant improvements in interaction vs. flat ads. The web ads also moved consideration from the information technology budget to marketing budgets, where decisions were made more quickly. Emirates Vacations liked the new direction and signed on, as well.

The company found better traction, but the burn rate continued to outpace cash flow. Two and a half years in, WayBlazer still had investment money in the bank, but it was feeling vulnerable.

A potential savior appeared. A large, publicly traded real estate automation company (Jones wouldn't say which one) took a strong interest in WayBlazer as a means to enhance its own software. It believed that WayBlazer's opportunity as a real estate solution was both quicker and larger than travel, and it was willing to fund software construction and provide loans to help them make it happen quickly.

A deal was struck. The arrangement left WayBlazer with a clear path forward, but also with significant debt. The company's technology was put up as collateral.

Real progress continued to be made on both the real estate and travel fronts. Things were going well.

Until suddenly, they weren't.

The real estate company decided to pivot away from AI and a WayBlazer solution. Jones said it wasn't because of dissatisfaction in their work but rather a shift in the partner's corporate strategy.

WayBlazer had made enough progress that under normal circumstances, Jones said, it could have been possible to attract more investment capital. But with the debt overhang, most investors took one look at the balance sheet and were scared away; two said they would invest, Jones said, but only if the debt were extinguished.

So, despite increasing customer interest and improving technology, the company ran out of money, with no viable option to raise capital. 

"I would have torn my hair out, but I lost all my hair at Sabre," Jones said. 

The technology's future will be decided by a bankruptcy court; it's possible it could surface again in a travel-related company.

In reflecting on the narrative, Jones didn't make excuses. 

"Four years and a lot of investors, but we didn't move fast enough," he said. He brought up the "two older men" issue again. There wasn't, he said, a young, driven visionary pushing the company forward until Henry was hired.

For travel advisers cheered by the fact that they have outlived another tech company intent on replacing them, it bears noting that WayBlazer's reasons for failure were not inherently technological or market-driven, and its death does not mean AI can't succeed in travel. You may not recall hearing about Duryea Motor Wagon; its failure as America's first commercial car company did nothing to discourage Henry Ford, Ransom Olds or Kiichiro Toyoda (to say nothing of Elon Musk and the team at Waymo).

"A McKinsey & Co. report said that travel is dead last in implementing AI but also that AI's biggest opportunity is in travel," Jones told me. "It's tough. Look at Lola going through another change in its model. But travel companies need to wake up. If someone does implement AI, it'll be a real game changer. 

"But we ran out of time at WayBlazer."


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