the founder of make my trip DEEP KALRA In humongous India, where snaking lines and extended waits are emblematic, instant travel reservations herald a new mobility. Deep Kalra’s MakeMyTrip Web operation, of New Delhi, pioneered the online travel field and at times has felt investor and customer delight. But this is India, remember, and for the 43-year-old Kalra, as for many a service sector startup, the flight has been a bumpy one. Today MakeMyTrip is fighting to stay profitable in an erratic economy and nascent e-commerce ecosystem. Kalra’s paper wealth, over $50 million, has been halved in 18 months and cut by two-thirds since a post-IPO peak. In the quarter ended in December, MakeMyTrip’s net revenues declined 5.5% and losses mounted to $2.6 million. Even as investors pummeled the stock back to its $14 listing price, Kalra in an interview stoically takes refuge in Bollywood-speak. “Life is QSQT … quarter se quarter tak [quarter to quarter],” he says, using the popular acronym for the iconic romance film Qayamat Se Qayamat Tak (From Resurrection to Resurrection). “We have had plenty of highs and lows,” he recounts in his office lined with hotel swipe cards and holiday pictures. Certainly, the highs have been many. Today one in eight flights within India is booked on MakeMyTrip. Many vacationers at Goa’s beaches and in mountainous Ladakh have traversed the site. In the last four years MakeMyTrip has quintupled revenues, reaching $66.3 million in the first three quarters of fiscal 2013. Profits hit $9 million in fiscal year 2012 before plummeting. The dips, going back to the company’s founding in 2000, have not always been of Kalra’s doing. India’s economy has skidded badly of late, and its airline industry has gone into a tailspin. In the December quarter domestic air traffic, which accounts for the bulk of MakeMyTrip’s revenues, shrank 9%. “When I look back, we survived a dot-com bust, investor pullout, industry slump, worked for zero salaries and bought out an investor,” says Kalra, a bit wistful. “It has been an incredible voyage.” By listing on Nasdaq in 2010, MakeMyTrip set itself up to be compared with profitable online retailers in China and elsewhere. Investors have cut Kalra no slack for the singular challenges Indian online retailers face. Take Flipkart, started by former Amazon executive Sachin Bansal, which sells everything from books and perfumes to electronics. To overcome marketplace deficits, Bansal set up in-house warehousing and shipping. He even pioneered “cash on delivery” to ease anxiety over online transactions, only to find buyers refusing deliveries at the door. “Even after battling infrastructural challenges, Indian online startups get very little time to build a brand and create customer pull before investors start getting anxious,” said G.R. Gopinath, the entrepreneur who pioneered low-cost flying in India by founding Air Deccan . MakeMyTrip itself sidestepped the tricky shipping hurdle with electronic check-ins and online hotel vouchers but not assorted other obstacles. Kalra’s enterprise began in the dusty industrial neighborhood of Okhla in New Delhi. He had graduated from a premier Indian management school and had short Indian stints at three multinationals but was dissatisfied with corporate life. His eyes were opened to the Web’s possibilities when he sold his wife’s car online, making 15,000 rupees (nearly $300) more by getting a better price and avoiding a brokerage fee. Then, while booking a holiday to Thailand, he found the hotel was $15 a night cheaper online than the quote by the neighborhood travel agent. “I was overwhelmed by the feeling that the Internet would change the way we lead our lives,” says Kalra. At 31 he set about cutting out the middleman.His idea found a taker in News Corp.-and-Softbank-backed eVentures, a short-lived Indian clone of Silicon Valley’s Draper Fisher Jurvetson. Its $2 million was an instant stamp of approval; the term sheet was scribbled on a paper napkin at the Crossroads Mall in Mumbai. It was a bit of a scrape-through: The dot-com bubble burst soon after, MakeMyTrip was the last online company to get funded before the dot-com bust, and for the next five years venture capital would not touch online startups. Today MakeMyTrip is the last one left standing among the startups that eVentures pumped millions into before closing down shortly thereafter. Kalra launched in October 2000 selling tickets and hotel rooms to immigrant Indians traveling back from the U.S. He outdid mom-and-pop rivals by offering customer support through webchat and a call center. He interviewed employee number three, cofounder Keyur Joshi, while Joshi was on a train. Their chat was interrupted half a dozen times thanks to a bad connection and a noisy wedding party onboard. Joshi is now the chief commercial officer. Kalra realized quickly that Indians were looking but not biting online, so he pulled the plug on marketing in India. “It would have been too expensive to catalyze habit change before time ,” as he puts it. While competitors burned up cash Kalra tightly focused his fledgling firm and conserved precious marketing dollars. The early days were severe. Customer calls would frequently drop in the middle of the night (peak U.S. traffic time) as rats had chewed through the cables. “We used to seek out the repairman on cold wintry nights and bribe him with bottles of rum,” he recalls. What followed in the next years was worse. A series of catastrophes–including 9/11 and SARS–hit air travel, depleting MakeMyTrip’s resources to dangerous levels. “We came within a month of our money [running out] and over a single weekend the team shrank from 40 to 12,” says Kalra. Eventures had shut off a follow-up round after the dot-com debacle. That called for hard decisions. Kalra went without pay and moved operations to a tiny mezzanine rented at 12 rupees ($0.22) a square foot. “It was so small that if anyone moved, his knees knocked against the next person’s.”Yet entrepreneurs like Kalra keep their eyes on the sweeping change. Over the last decade India’s GDP has risen from $400 billion to $1.8 trillion. A whole generation, especially in smaller cities, is leapfrogging computers to access the Internet on their mobiles. Smartphones, the key interface for mobile commerce, are expected to grow to 450 million by 2020.
Posted on: Mon, 03 Feb 2014 05:14:15 +0000
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