“Mentor”, to me, as an aspiring entrepreneur, I have a huge list of mentors, right from the money rolling investors of the Wall Street to the successful start-ups in the market place, this list is concocted by me, concomitant with it is deep research and financial studies of the overall stratagem used by the companies to make their ideas unique and at the same time to suffuse them to almost all the sections of the society.
I have looked upon many rudimentary start-ups rise and fail in my readings, but one start-up that has truly incentivized my thoughts was that of “MakeMyTrip.com” established by one of my favorite personality, Mr. Deep Kalra.
The idea of “MakeMyTrip.com” intrigued me so much that it soon became one of the quintessential ideas in all aspects due to its meticulous delineation and outlook towards the market, but what awed me were the conscientious efforts towards the product.
According to me every entrepreneur should learn from this model of business, but on a cerebral level I have retained few aspects of this start-up journey, the journey of Mr. Deep Kalra that took him from being just an entrepreneur to a business magnate, which are as follows :
Kalra had set up the venture of “MakeMyTrip” in 2000—when Web mania along with private equity funding first pervaded in India. After the Dotcom crash, foreign investors either sold off stakes or renounced on deals countrywide and only the most stubborn entrepreneurs survived, among them was“MakeMyTrip”.
In MakeMyTrip’s case, SARS also tanked the Asian travel market, making the environment even worse, and with a background in banking and a family to support, getting a real job was the sensible thing to do. But great entrepreneurs don’t do the sensible thing. Kalra and two other managers bought back their equity and worked without salaries for 18 months. More than a third of the staff walked out when he asked them to take 40% pay cuts. But a year later, the company broke even and he raised money to invest in growth again.
As from this example of Kalra, it is outright that entrepreneurship is about commitment, even on the Internet where products can be launched overnight– especially in India where the online market is growing, but it’s growing slowly.
2. If you’re going to be a copycat, do it the right way
“MakeMyTrip” isn’t exactly a novel idea. The scrupulous functionality and the caparison might be similar to a lot of US online travel websites. But Kalra played the so-called "copy cat" game the right way. Online travel is almost always one of the valedictory categories to reap up fruits in the new market because it has a clear revenue model that doesn’t rely on mature advertising markets or urbane shipping routes, since most of the tickets are granted by means of a soft copy. And in the early days, he tailored and fine-tuned his site for India’s domestic travel market which for the US counterparts was probably not even on their list.
“MakeMyTrip” actually solved hurdles idiosyncratic to India and Kalra sedulously perused the competitor’s analytics to see the denouements earned and the ramifications that obstructed their way.
3. Pricing beats perfection
The stealthy pricing of the e-tickets and affordable deals was the one the thing that made“MakeMyTrip” as one of the most ubiquitously used travel websites to this day. The outright strategy that formed the core of the company to defeat the US counterparts and even out ruling the rudimentary but evolving probable Chinese coequals was to target not only the upper class of the society, as it earlier did, but to target the middle class of the Indian society that aggregated to approximately 85% of the Indian society at that point of time, so this could only be done by getting affordable and easily available e-tickets and hotel reservations as an additional feature which not only enamored the common rabbles but also attracted a whole lot of below-average class, hence attaining the confidence of the majority and abridging the so-called “not so ideal plan” to the market.
4. Big Choices Made In The Early Years
Six months after the launch, Kalra realized that Indians were only searching for flight fares but not booking. They weren’t confident about paying online. So, one of the smartest things that he did early on was to stop his team’s marketing efforts in India and then decided to focus on the NRI market in the United States and build a profitable business. It worked out well as the company hit the initial milestones. This was initially a very big decision costing the company a huge ton of money roll for approximately 7 months but the things started turning out glaringly good when the bookings and reservations turned out to be repeated and it brought down the customer acquisition rates considerably building trust in the market among the Indian people.
This was a game-changing decision guiding them towards a massive “Home Run”.
5. Timing the Market Isn’t Everything, but It Helps
I can go on and on about the things “MakeMyTrip” did right, but let’s face it—a lot of this stock pop has to do with scarcity. After all, the company’s revenues were growing at an impressive 49% a year, but according to the market speculations at that point in time, its net income was a trifling $1.3 million a quarter.
But in the markets, what a company is “worth” is in the eye of the investor, and “MakeMyTrip” is a first Indian company to go public in America in four years and it was just the fourth India-based company to go public in the US since 1999. For the sake of comparison, 14 Chinese companies have gone public in the US just this year. So while China’s economy may be growing faster, Nasdaq and NYSE investors have more chances to buy a piece of it than those interested in India.
Let it be a lesson to other anomalies like “MakeMyTrip”– price high and build the reserve immured in the confinements with the uncertainty of breaking at any point of time under the opposite fire-branding competitors.
6. Invest in Culture
The most notable incident, in case of developing a culture and relations, was that when Kalra asked his staff to take pay–cuts in those difficult days, 17 left but about 25 stayed. He wanted to make sure he rewarded them for their loyalty and invested in the company’s culture.
Kalra had his own eccentric methodology of thanking people for their service during the stygian times in the company’s development. He organized several staff retreats and also agreed on paying for the TEDx that his staff wanted to attend when it came to Bangalore. The other start-ups mostly have their staff constantly quibbling about the mercenary attitude of the management, but Kalra’s professionalism has proved that like anywhere else, retention and gain simultaneously is possible only if you ossify and strengthen the right culture.
7. Going public, Growing further
The next four to five years i.e. between 2002 and 2006 was a great time for the company. The gross merchandise value grew about by staggering 20 times, right from about $30 million in 2003 to astonishingly $600 million by the time “MakeMyTrip.com” became a listed company.
Apart from just making huge investments and taking floundering risks to develop a great image in the market, one thing that came a long way throughout with the ideology of Kalra was “people”, the public. Kalra not only strived to promulgate his idea upon the market demands but also created great online facilities to effectively solve a multitude of customer problems, as a result of which the marketing research was more effective to further the company’s policies to the public, hence flourishing the company inside-out.
(BY DHYEY RAJANI)
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