In this episode of 100xEntrepreneur Podcast, we take you through the journey of Aloke Bajpai building ixigo over the last 13 years.

Aloke is one of the few founders who experienced & survived the 2008 crisis. During the podcast, he shares how ixigo applied similar strategies and learnings to tackle the current pandemic.

Aloke’s insights which we discuss during the podcast are on –

00:28 – USP of ixigo – Built its major user base organically

01:36 – Building quirky sharable content around travel

03:56 – Where does ixigo stands in terms of net profits & GMV for FY20?

07:26 – Launching ixigo assured & TARA assistant (i.e. Travel agent of the future)

10:42 – How travel is going to open up in the next 6-12 months?

13:50 – His lessons from surviving the 2008-crisis

22:35 – 20% of ex-ixigo employees becoming entrepreneurs

24:50 – Key-value props which have pushed ixigo into a higher orbit against its competitors

28:49 – “ixigo Train App” having higher numbers of users vs all of its travel competitors apps combined

31:19 – Pursuing Ph.D. in Survival Sciences

32:39 – Identifying organic growth hacks to tackle Zero-budget marketing

42:50 – Raising capital after the 2008-crisis

50:45 – Destination for ixigo ahead: Becoming the most loved OTA in India

56:33 – Mentoring first-time entrepreneurs & supporting them as an Angel Investor

 

Read the full transcript here:

Siddhartha 0:02

Hi, this is Siddhartha Ahluwalia, welcome to the 100x Entrepreneur podcast. Today we have with us Aloke Bajpai, Co-Founder and CEO of India’s largest travel search engine ixigo, which has today built itself into a multi travel platform, including air, rail, and other commodities on travel. Aloke, welcome to the podcast.

 

Aloke 0:24

Thank you. Happy to be here.

 

Siddhartha 0:27

Aloke, we’d love to know from you, you know, the current five of ixigo, and what domains it spans into?

 

Aloke 0:34

Sure. So ixigo, currently serves more than 150 million Indians a year, you know, through various travel platforms that we built. We started off as a meta search engine for travel, in the early years, and over time evolved into a marketplace, and then an OTA. So as of, you know, last year ixigo has become transactional platform that also provides utility services across a bunch of train, flight, bus hotel verticals. And I think our biggest USP has been that, we’ve built this company very organically, and have kind of grown largely by word of mouth, and what we call zero dollar marketing. So, we’ve, we’re very proud to have disrupted the category by proving that you can build a large travel app, you know, primarily on product and content.

 

Siddhartha 1:40

ixigo is known for its quirky videos which have hundreds of millions of views. And I believe that’s one of the key components of your branding and marketing, the organic reach of your videos.

 

Aloke 1:53

Yeah. So, we’ve been doing that now for almost five years. So I think now we have a lot of scale, you know, for most of the videos that we, that we launched, but see, the insight is that nobody likes to see ads. And that’s an insight we understood, you know, as soon as social started going, that, you know, content gets shared on social because, you know, it’s either informative, or inspirational, or quirky or humorous, right? So we chanced upon that in the travel domain, because travel has so much, you know, to offer in terms of experience that you can build a lot of quirky content around, things related to travel, and we started doing this, like five years back when we hired you know, Ashish, who heads this team now. And, you know, over time, this has grown into like, our single biggest marketing area, right, internally, where we spend a lot of time researching, you know, itereating these videos, most of these have been seen by almost all Indians, I would say, you know, many of them have gone viral even in the US.

 

Siddhartha 3:04

Yeah, one of the key ones, which I remember, still fresh, in my mind, is what not to pick up from a hotel.

 

Aloke 3:10

Yes. So, that one, I think it was time very well, moment marketing, as they say, there was this incident in Bali, where, you know, the Indian family was, caught taking out certain things from the hotel room that they were not supposed to, and, and I think there was a lot of negative flak coming in, and people were sharing that across the world and we figured out that look, maybe people don’t even realize that, you know, there are some things you can take from a hotel in a legit manner, and there are others that you cannot, why not educate everyone? So, in fact, we refurbished some content that we already had, for this occasion. We launched it within a matter of hours of this, that episode going viral. And it kind of hit it across the world, right. So, you know, we got featured in some TV shows in the US, you know, organically a lot of TV channels in India carried this video organically, right? So, I think that was definitely a high moment for our marketing team.

 

Siddhartha 4:12

I look, it’s been, I believe, 14 years now of building ixigo. Right?

 

Aloke 4:17

That is correct. So we we started working on the idea in late 2006. And we launched ixigo in June 2007. So from launch, it’s been 13 years from the idea stage, it’s been 14 wonderful and Financial Express last year reported, you know, ixigo had revenues of almost 113.5 crores, and the gross transaction value is of 1584 crores that’s phenomenal.

 

So, those numbers actually are our fy 19 numbers. So in FY 20, and we haven’t really published these yet, but in FY 2020, we grew to 160 crores in revenue with very negligible losses. In fact, we had a profitable for last quarter of the year, which was DFM 2020. And in terms of GMV, you know, we are, we were very close to a 400 million annualised gmv, you know, at the time when year was closed, and then of course, COVID hit us and hit everyone else in the industry.

 

Siddhartha 5:27

Yes. And how are the various platforms of exigo? Right now doing after COVID or are still we are in the middle very much middle of the pandemic right now. But things have opened up.

 

Aloke 5:37

Yes. So I’m a believer that there is no post COVID there is basically a free COVID. And in COVID world, because this thing is going to be around for a while we learn to live with it, we will learn to get vaccinated from it. And there will always be certain precautions in the next few years. So, you know, what we’ve seen is that, obviously, you know, when it started in March, when the lock downs were announced, you know, we went down to near zero revenue for a couple of months, because there were hardly any transactions happening. I think what is interesting is ixigo started out on both flights and trains as a content and utility platform, right. So on flights, we were a meta search engine, you could search where the best deals are on our platform, whether they were on other OTS, or airline sites, you know, we would bring them for you. on trains, we started out as you know, the best place for getting accurate PNR status predictions, train running status, schedules, routes, platform numbers, you know, all the meta information that you need for trains. So by the vintage of starting out as a meta platform, you know, we got a lot of traffic, which was non transactional over time, like we were at the top of the funnel, right? So what we saw is that many people used to come to ixigo, for information, right. And then over time, we became more transactional and started converting many of these people on our own platform. When the lockdown happened, you know, some of the informational user still kept coming, because they were wondering, like, what happens to their bookings that they already have for future dates, you know, when will the lockdown be lifted? And then when the long term was lifted, people were curious whether you know, they need some state e-passes or there are quarantines or not. So I think we were very busy during that time, collating all this information and creating what has now become our COVID Center, where we disseminate, you know, all the COVID relevant information. And, you know, that’s something we launched during the lockdown. We also launched a product called ixigo assured, which allows people to get full refunds, you know, the biggest anxiety was, you know, now that lockdowns have happened, will I get a refund on that booking that’s lying there for April, right. And there were millions of customers, you know, not able to reach airline or OTA call centers. You know, thankfully, we just built this AI chat bot called Tara, which was handling almost 80% of our queries as of March. And that was very useful during this crisis, because suddenly, we had like 8x outreach to chats and calls and, you know, much of this tech actually saved us. And, much of the information of stuff, we had kept some traffic coming. In fact, during the lockdown, we still had almost 30 40% of our traffic still salvaged, despite no transactions happening. And as soon as the things opened, you know, I think we saw people coming back, there is a large number of people who need to travel because of a reason that they cannot avoid, you know, what we call utility travel or urgent travel, emergency travel, and also just to get closer to friends and family to get to a safer place and things like that. So thankfully, you know, we’ve seen month on month, you know, growth in booking since the lockdown has been lifted. And I think the worst is behind us. Hopefully, that’s what we feel, and we are looking up to, you know, Dusserha and Diwali when bookings usually to start to happen, and people want to be closer to family.

 

Siddhartha 8:58

Yeah, and I believe everybody in the world is itching to travel again. It’s been a long period of hiatus. So I think the worst is over and the best time is yet to come, where those who have been, you know, confound to life of work from home to step out.

 

Aloke 9:18

Yeah, indeed. So, I think there are two camps. You know, I remember that Brian chesky, from Airbnb said that travel as we know, it is over. But I think, you know, a few weeks back, he said he’s going to IPO later this year. So, you know, I think, my sense is, that there is a period which I think we are in right now where, you know, because there is no vaccine because there is a, you know, lack of consistent, you know, guidelines and regulations. You know, different countries have different you know, sort of regulations with respect to quarantines and You know, visas, etc. And then within the country, also different states have different guidelines, I think till the period of uncertainty exists, you know, we may see leisure travel continue to be impacted, and you know, corporate travel, obviously, people are getting used to doing zoom calls and, and, you know, Google meet. So, I think we’ve seen some impact there. But my sense is that look, when things actually do come back to normal people are going to travel with a vengeance, because like you said, you know, most people have been sitting at home, you know, the people who, who are continuing in their jobs and who have, you know, meaningful incomes, their savings have actually gone up, right, and it’s reflected in the stock market momentum as well, like people have realized they’re not spending on eating out on travel, and they have money accumulating, and they’re saving it for that great travel bounce back, as they call it, which we expect will happen, within six to 12 months from now. And, that’s the time when we just have to make sure that, you know, we are prepared for and I think most travel companies right now are going through this hiatus where we are saying, look, you just need to survive and continue to be relevant for whatever portion of demand has come back. But you also need to be preparing and building for that big bounce back, which is inevitable.

 

Siddhartha 11:33

Yes. And, currently, Airbnb is seeing, you know, more revenues, through less number of bookings, because people are booking months for work from, you know, beach locations, rather than working from home. So I think though, the way travel is bouncing back is phenomenal, especially the likes how Airbnb has demonstrated, and the current plans of going to IPO in such pandemic,

 

Aloke 12:03

yes, I think even in India, as of last month, we’ve seen a workacation type trips being planned like longer term stays, especially to states which have started to open up. So, you have Goa, you have Himachal, you have even Karnataka now opening up where there is no quarantine requirement, etc per se, unless you are symptomatic. You know, so, I think we will see, especially with the environment, where companies are saying, look, you can work from home till December or till March, right? in that environment, if you want to get away from the mundane life at home, which I think most people have Cabin Fever now, you know, I think the only way you can do it is to find yourself an isolated Hill chalet overlooking nice view of the Himalayas or, you know, perhaps, you know, and nice beach hut, you know, someplace along the beach side, and why not quarantine yourself? Or, you know, leave your next few months there. And many people actually starting to look at that as a real possibility, right? Because I think in terms of psychological, you know, productivity slash stress, right? I think people are reaching a breaking point, and many people are getting burnt out, right, because there is no boundary between, you know, when you’re working and when you’re not, and people want to have a real vacation, but But what you can do as a workstation is that you could set your boundaries and you know, enjoy that destination as well. So I think that’s something we’ll see a lot of in the next one year.

 

Siddhartha 13:40

So, Aloke, you have been through the 2008 2009 economic crisis. How was that? You know, how did you survive that? And any lessons learned during which you have been building the company in the last 13 years from that?

 

Aloke 13:57

It’s quite a story, actually. So what happened back then was we were just a two year old business, bootstrapped, we raised a small seed round, early 2008. So, we just started hiring and building a bigger team. And then we had also closed or signed a term sheet with the large VC investor, the due diligence and the docs were done. And then the Lehman Brothers crisis happened, right, and our term sheet got pulled and we couldn’t close that round. We were left in the lurch. And it was quite evident that we wouldn’t be able to raise money for a bit because, you know, obviously, the funding had dried up suddenly end of 2008, early 2009. So we reached a point where we had like a couple of months, maybe three months of cash left in the bank, and no visibility on when the funding environment would improve. Obviously, that time we had very little revenues to rely on. I mean, obviously, we could grow them but then there wasn’t any runway. So we did This hurdle with the team, which was about 25 people back then. And we were very transparent and said, Look, here’s the situation, you know, we don’t have a lot of money in the bank, there’s not going to be any new capital coming in. And, you know, our revenues are not that great. So, there’s two scenarios, either we fold or, you know, we find a way to survive. And the unanimous vote in the room or unanimous voice in the room, essentially, was that, you know, we need to find ways to survive. And, you know, one of the junior engineers got up and said, so what are our costs? You know, let’s work this out on a whiteboard. And, me and Rajneesh are very transparent and said, Look, here’s how much we pay for rent, here’s how much we pay for servers, and, and salary spend, which was, like, 80% of our cost, right? So he’s, like why can’t everybody work without salaries for the next few months, and we will be profitable, right, because we make enough revenues to cover our rent and server costs. And I was like, dude, that’s unsustainable, right? And, and then we figured out, you know, we could work out a formula where progressively, you know, like, we could have a salary cut, and then progressively bring it back as revenue start coming back. So everyone went to, you know, like, at least half the pay being cut, the founders obviously went to zero and leadership team, the two or three senior people took a deeper pay cut, and we survived for the next 9-10 months, with just that funding that we had till the point our revenues actually grew to start covering our previous salaries again, and we gave ESOPs to the team. And many of those people made, you know, money on those ESOPs in the subsequent rounds of funding. So I think it was quite a story, because all the people who were there, all 25 of them actually stuck around with us for almost three years post that crisis, many of those people actually went on to become entrepreneurs. And I’m not surprised, because if you’ve been through these kind of moments, you know, you can build the resilience required to do your own thing, right. And I think this time, it was different. Because, you know, even though the, the way we handled it was similar, because the knee jerk reaction would have been, you know, large crisis coming in travel is gonna get disrupted for a long time, you know, let’s start figuring out who becomes redundant. But I think, again, you know, this time we were 150, we had a leadership team of 12 people, we went into a call, and we said, Look, what do we do? What are the options, we build the scenarios, and we said, Look, in the worst case, if it’s really over for travel, you know, then no matter what we do, right now, you know, then the worst case scenario is something that you will always always lead to the worst case outcome. But let’s plan for the, you know, most likely case, and the most likely case, we said was three to six months without revenue, and then progressively coming back, you know, within a year, a year and a half back to where you were before. And for that case, we didn’t actually need to let go people, we just had to reduce our costs, right. So we worked out, day in day out in how to reduce our variable costs. You know, we renegotiated our leases with the landlord, we renegotiated almost every expense item of ours. And then on the salary side, you know, we had people agreed to voluntary pay cut, so most people actually agreed to let go, you know, 30 40% of that pay. I think for the people who aren’t more than a certain level, they even, you know, agree to a 60 to 80% pay cut the leadership team, essentially. And, and obviously, founders, were the first to say, look, we’re not gonna have any pay till things get back to normal. So, you know, we did that back in March, just before the lockdown. In fact, we had preempted the lockdown already. And we’ve taken all these measures and announced them, you know, just a week before the lockdown actually happened, because we could see it coming. And, you know, thankfully, we got back to a level where we could revert those salaries in July itself. So, you know, we’ve reverted everyone’s salaries in July. And we’ve actually also given everyone ESOPs. So now, you know, we gave away about 2.3% of the company in July, right from the beyond to, you know, everyone non leadership team, everyone owns shares. And these were given at a deep discount so that everybody benefits when things bounce back.

 

Siddhartha 19:33

That’s phenomenal. Aloke, you have set a phenomenal example. And doing a revenue of 160 crores with just 150 people is very much unheard of in Indian startup ecosystem. I would say you know, in US there’s a norm that Google’s and the likes do a million per per employee in revenue. But doing that in India is phenomenal. For you, you had plans of going public before COVID anytime soon?

 

Aloke 20:05

Look, I think, just pre COVID, you know, when we turned profitable, we did discuss that internally that, you know, I think the best path for this company looks like it can go public, because when you’re making significant and we’re talking about, you know, crores of profit that started coming in every quarter, we said, you know, look, it makes sense to chart a map towards an IPO. Obviously, we are recalibrating that right now, although what we can tell you is that even this financial year, we are pretty confident we’ll end on a profitable note, despite, you know, COVID, and, you know, things bouncing back, because we managed to improve our unit economics, you know, the traffic is bouncing back very well. So as of yesterday, you know, we’ve crossed 60% of our pre COVID traffic and transactions. And, and across, you know, like, we take cumulative transactions, and looks like, we should be back to where we were pre COVID, possibly, by the end of this financial year, and therefore we are saying maybe two to three years is what it will take from here to be sizable enough to think of a public offering. But it definitely seems like the kind of outcome which this company can have given what we’ve managed to build with very little capital, you know, not just on the revenue per employee metric, let me tell you something interesting. I mean, the amount of primary capital that ixigo has raised in the last 13 years is just $22 million. Right? You know, most of the players in our category spend more than that in a quarter, just on marketing, or at least we’re doing that pre COVID. Right. But that’s the total raise we’ve had till date. Right. So, on the revenue, divided by total capital raised metric, you know, we would be in the top five companies in India, I’m pretty confident of that.

 

Siddhartha 22:13

Astounding. And I believe, through your journey, even your team has learned, you know, frugality, entrepreneurship surviving in crisis. It’s reported that out of every 10 employees, one employee from ixigo, has turned out to be an entrepreneur. How did you end Rajneesh built this culture?

 

Aloke 22:31

It’s actually two now. I mean, we did this math again last month. And we figured it figured out that 20% of our past employees are entrepreneurs, and there’s quite a few companies and I could name a few years, you know, where, if you look at sprinkler, if you look at uni commerce, if you look at FreeTxx, you know, a bunch of companies that are doing well or that have done well, some of them have even built and sold already, some of them are raising the next time. So, it’s very interesting that these companies have come out of it. And I’m talking about the entire management team of these companies literally coming out of ixigo. Right. And one thing we think that has really helped, you know, and that is what helps us as well, because these are the same people who work for us for many years, is that we have a culture that’s built on resilience, and which is built on, you know, doing things in a different way. Right. So when you have well funded incumbents in a category, right, the, I think it’s, it’s easier to kind of give up the battle and do something else. Right. And, you know, there are many points in our journey where we couldn’t see the end of the road. Right. And, and I think one thing we have done, which was pretty unique is every time we’ve gone back to the drawing board and reinvented ourselves, right. And I think that’s one thing which, which I feel is very unique to our culture, and the kind of people we’ve ended up creating, because, you know, they have a never say, die kind of attitude. And, you know, they will go and change the game if they can’t win the game. So I and I think that’s very unique to create your own blue ocean to create your own, you know, playground you know, in your in your own playbook, because, you know, you can’t you can’t win any battle by the incumbents playbook. You have to create your new playbook that the incumbent cannot play by, right? That’s the only way you know, small company can actually disrupt, you know, a space where you already have dominant players.

 

Siddhartha 24:40

So, Aloke, can you share, you know, in the last 13 years of your journey, those moments which pushed ixigo into a higher orbit,

 

Aloke 24:52

I think, the maxim that you know, never waste a good crisis applies to us because we’ve had several crisis, you know, in the past and 2008 was just one of them. But, you know, there were several moments in our journey where we didn’t have visibility beyond the next six months, right. And in terms of either capital, or in terms of, you know, whether something would work. And I think, if I had to share some anecdotes, right, I think the ability to challenge the status quo, and to find solutions that may be more relevant for the customer, you know, that’s something we’ve built through the process of hiring for empathy, right? So one of the core cultural values at ixigo is empathy. Right? And it’s easier said than done and tested, right when you hire people. But I think over time, you know, that’s something we’ve put a lot of weightage on internally. And the reason is that, look, if you have a very high degree of empathy, it’s very highly likely that you will think more about the pain that the customer is suffering, and figure out ways to solve that problem, whether whether those are known ways or new ways that need to be invented, right. So back in the days, you know, when we started out on the train app, right. You know, one of the pain areas we found in the whole market was that people would have to go to the official website to search for information. But either, you know, there was very difficult to find a UX UI, where you couldn’t look for information easily or, you know, there were the reasons for that information not being accurate, right. So if you look at running status, the official website would update every 10-15 minutes and would not have the most accurate earning status on where the train was. If you look at PNR status, you would have to go to the same website again, and again, put the PNR number in, put the captcha in and find out whether your waitlist has moved or not. So back in 2013, you know, when Android was still very young, we have together almost in a matter of a week or 10 days, and app that sat on your phone, looked at all the irctc SMS on your PNR inbox and automatically, or what we used to call auto magically notified you whenever your waiting movement changed. And similarly, when you were sitting inside a train, we were seamlessly using your location to help other users. And, you know, when you were trying to track a train, we were using their location to help you. And you know, just these things, you know, when we actually built them, there was no rationale for building them, right. So all OTAs globally have followed the template of launch flight first, then try to monetize from hotels, then spend money on marketing and scale, right. And here, we found a hack, which basically said, Look, there is a very large number of people in the middle and bottom of the pyramid in India who have never taken a flight in their life. To be precise, 90% of Indians have never stepped inside an airport, right? Last year, we had 120 million fliers, you know, and that means there are, you know, almost a billion people who have never stepped on a plane. But these people travel using train. So if you have to build the biggest OTAs in India, it has to be a train first ot How can somebody miss that? That’s the insight we gained in 2013. Now, when we gain that insight, instead of launching with transactions, we said, What’s the biggest problem plane users face. And we said, the biggest problems are, I don’t know what platform my train will come on. I don’t know whether it’s running on time. And I don’t know whether my seat is confirmed, because 40% of people in India, when they book a train, they don’t get a confirmed seat, right. And they’re weightless keeps moving. And they have to check every 10 times a day, you know. And just this insight gave us the ixigo trainer, which today, by the way, it gets more downloads in you know, actually, if you aggregate all other players in the category, and you look at echo trainer, we probably do more downloads than all other players in the travel category put together, right? And the only reason is that we solved for a real customer pain or real customer problem. And we didn’t care about revenue back then. I mean, we didn’t even know how to monetize it. I think when we discussed this idea with our investors, they said, Hey, but these are people who probably don’t make a lot of money, you know, they, how are you going to monetize from these guys? And you’re like, you know, we don’t know. But we know that this is a real problem, right? And I think this attitude of trying to solve for the customer first, and then we’ll figure out monetization later is definitely something that has got us here. The other thing I want to talk about is, you know, how do you institutionalize a culture that that is built around experimentation, right. And, you know, the train app was just one of the apps that we launched, there was one point of time where we had six apps out there, we’ve killed four of them. We now have two apps left and one targeting the more evolved users with flights and one Targeting, you know, the aspiring users the Bharat or the next billion users, as Google calls them, you know, with, with trains at the forefront. However, both these apps are full stack travel apps, right. So So I think this difference in how we looked at the market, this difference in, you know, how we think the market will evolve over time, and the foresight of saying, look, the real action is going to be around next billion users, right? I think this came from experimentation, because you know, had we not just built this, this app in a matter of a week or 10 days, you know, in a hackathon, and just launched it out there and seen it grow to like, a million downloads in four months, five months, you know, we wouldn’t even know that this thing works. Right. So I think we’ve kept that now we finally engrained like we do a lot of it iterative stuff, but then we always, every quarter push our engineers to say, hey, let’s do something crazy. I mean, let’s do something that sounds like, you know, it will change the life of consumers. And we don’t care whether we’re going to monetize from it or not, we’ll figure that part out later. And most of the time, we chanced upon our next big idea that way.

 

Siddhartha 31:08

And that’s why you keep in your LinkedIn bio pursuing PhD in survival sciences.

 

Aloke 31:16

Yeah, I think we’ve been pursuing that PhD for a while now. Look, I think someone told me that, you know, success is failing to fail. Right. And I think, I think it’s easier said than done, right. So there’s, there’s definitely some science to this. And the science of this survival science is very simple that one thing that incumbents or, you know, traditional companies do very poorly is bet on ideas, which have very little monetization on day one. So, you know, the way we look at innovation is that innovation is about doing things, you know, which, which basically look like very low ROI on day one, right? So, you know, those things will look like, hey, why should we even be doing this, but which can overtime, you know, become who you are, right, and our train app is an example. But there are many other things we’re doing right now, which fall into that. So I think survival is all about just finding a way forward without having even the resources to do it. And whether it’s on marketing, so again, you know, going back to what we were talking about, which was, you know, our frugal marketing and what we did. So going back to you know, what I was talking about on the marketing side. You know, I was interviewing someone in our early days for our marketing team. And he asked me, so what’s your marketing budget, like? And I said, it’s zero, right? And he said, You’re kidding me? Right? Like I said, No, it’s really zero. We don’t have money to market. Right. But we got to figure out ways to market. And you know, so I think what happened there was that, you know, the moment you don’t have, you know, the the classical playbook or the classical resources that you need to solve any problem. That’s I think, when you are pushed towards more ingenuous solution, so, you know, we started focusing a lot on ranking well, on Google ranking, well, on the Play Store, ASO SEO and then you know, looking at content marketing, how do you, you know, appear at relevant places on the web without having to spend money. And then there was social media that came up. So there was like, Facebook. When Facebook came, ixigo was one of the first brands to start doing some very quirky travel quizzes on Facebook back in the days, and we used to get massive engagement, even though Facebook had like 20 30 million users in India back then. And over time, you know, once we started doing video, this whole thing went crazy, because we got like, you know, there would be videos that would get like 10,000-50,000 shares, right? And, shares is the only currency that matters, you know, views and likes and all that really doesn’t matter. Right. So, you know, the moment we saw that happening, we double down on that. And, I think this teaches our story that, you know, survival is about trying to continuously, you know, innovate with whatever limited resources you have, because some of those are going to get you out to the next orbit, right. So there’s a lot of people who talk about s curves, right. So you have every time to discover a new way to kind of grow your business to write another S curve, And I think if I look at my story, exigo story, you know, we’ve been writing a lot of these s curves time to time, and the only way you can write them is, you know, as a part of your team has to constantly think about disrupting the status quo of your business or your industry all the time. Because, you know, there’s incremental growth, but incremental growth never gets you to 10 X or 20 x, right? incremental growth gets up to x, you always have to have some time energy spent on, you know, what is it that makes me more, you know, I’ll say anti fragile, right, in the long term.

 

Siddhartha 35:38

And you have done various experiments, as you said, so one of the experiments I believe, was revenue, so I had interacted with GC Molly a few months back. And he shared that revenues was built from ground up, you know, B2B. And it recently got acquihired by Spicejet. So, tell us more about that experiment?

 

Aloke 35:59

Yes. So a couple of years back, you know, we had this insight, again, after talking to airlines, and after seeing the state of the art on airline technology, that one of the reasons why, you know, airlines in India, and many parts of the world have not been able to grow their direct bookings, is because the customer experience of their apps or their websites have not been at par with, you know, what the OTAs are actually built. Right. And, you know, obviously, they do have the intent to get there. Because, you know, every LCC in the world wants to become their own kind of, you know, portal slash ecommerce destination, but they don’t have enough traffic, because they’re not really invested enough on the technology, the product, the user experience, and, you know, the marketing intelligence that is required to be built on top of that growth engine. Because, look, DNA wise airlines are airlines, they run planes, right? You know, and then product and tech companies like ours, you know, are good at product and tech, right. But the thing is that, you know, airlines would usually use like service companies or, you know, IT service providers who would build specification lead solutions, and then they would be clunky integrations across 10 different systems of that sort. And things would just be running for decades. And people would say, don’t touch this. Right. So, Rajneesh and I both worked for Amadeus before, which was one of the largest travel technology companies that powered airlines to sell online. And one thing we’ve seen was that look, airlines don’t mind spending on technology, if they believe, you know, that’s going to improve their direct sales. And with that reminds, you know, we talked to a few airlines, to see if we could use the know how that we had built at ixigo to improve the overall sales or direct selling experience, you know, that airlines have because ancillary revenue, which is a very large contributor to airline bottom lines can only grow, you know, once airlines figure out how to sell that stuff themselves. Right. I mean, you can’t rely on third parties all the time. It would also be great. You know, again, on the anti fragility side, you know, be a great diversification for our business, because, you know, we were able to tap into a b2B technology industry, which is billions of dollars worth globally. Airlines, you know, large airline spend a lot of money on IT. So we had this dream of building, one could call it like a Shopify for airlines, right, which would be a dream platform that could run the app website and marketing automation for airlines, ancillary upsell, cross sell across, you know, hundreds of API’s that you could integrate across transportation, hospitality, etc. So we embarked on building that Molly was leading that team was a separate entity based out of Bangalore, we had about 14-15 people. We got spicejet as our first customer, we built something beautiful for them. It’s already live on their app and web and AI, app and mobile web. I think the web desktop goes live anytime now. But the best part is we built this secular middleware that airlines could use to work with any third party API, whether it was GDS, whether it was a cab company, hotel company, and you know, they could just cross sell upsell beautifully with that. Unfortunately, with COVID coming, we realized that we should maybe focus just on one business at this point, and the one which made more sense to focus on was obviously the core. So, we basically hived off the travel news team and technology, you know, to spicejet who has acqui-hired the team. And, we’ve decided to not do b2b for the moment because we think the airlines industry is gonna take a very, very long time globally to, you know, maybe a couple of years to get back into investment mode, right? Because they’re kind of in survival mode for that wide. So it makes more sense to focus back on our own core business for now.

 

Siddhartha 40:16

So, Aloke, tell me throughout all these years, you know, so to do experimentations, and then to do away with some experiments, and keep on doing those, which work would require a tremendous amount of objectivity? How do you do that as an entrepreneur? Because entrepreneurship is all about passion, and resilience and not giving up?

 

Aloke 40:39

Yeah, I mean, look, it’s very hard. I mean, it’s not like, it’s not easy, even for us to kill some of the things that don’t work. Because recognizing that they’re not working is the hard part, right. And that’s where you need the objectivity that you talked about. But But, you know, I think for the experimentation itself, I think objectivity is actually something that heals some of that, and not helps there. Because, you know, most of the disruptive ideas in the world did not come without, you know, thinking outside the box, and therefore, you’re not, you know, running an Excel sheet, or doing some data crunching from a big data system would would never have thrown up those insights. So I think I’m a big believer that, you know, you can do a lot of iterated growth, doing all of that. So you should have your own data science engineers, who are constantly figuring out those experiments and AB tests and iterate of ideas. But, you know, for disruptive growth, or for the S curve that I talked about, you know, you need to bet more with your gut instinct, or people call it intuition, and to build that muscle, you know, largely gotta read and try a lot of things. And you also need to talk to a lot of users, right, I think that’s one thing, I encourage everyone my team to do, you know, once a month, pick up the phone, talk to a user, right. And, you know, even till this day, you know, I’ve been personally replying to some of the customer queries that keeps coming, that, now that we’ve grown, there are tons of them every day. So we try to encourage everyone in the team to spend, at least, you know, one day, every quarter working on customer support or customer experience, because, you know, it’s a way to get more insights. In fact, we did this week where almost everybody in our team was actually, you know, trained to actually do customer support. During the COVID crisis, there was a moment of time where, a very large part of the team was actually helping out the customer support team, because just the influx of queries was insane. And I think doing that throws up so many ideas, because the market is out there telling you, what works for them, what doesn’t, and sometimes, they can’t tell you what product will make it work, but as a as a product or engineer guy, you know, you can actually visualize the solution, the moment you hear the problem, right? I think knowing the problem. And articulating the problem is where you need to spend your energies as a leader in a growth stage company,

 

Siddhartha 43:41

and Aloke, you shared about the fundraising journey, which you had in you know, 2009, the term sheet got pulled away, and then you turned, you know, almost profitable back then so that your employee salaries could be met by the revenue. How has post that the fundraising journey been with, you know, Make My Trip coming on board And then Saif AndSequoia?

 

Aloke 44:03

Yeah. So, you know, I think it was never easy. In our journey, like, I still remember that the first one year of after lunch ixigo. I was literally on the road, most of the time fundraising, they were not that many early stage investors back then is probably 20 or 30 of them. And I’d met almost all of them. And, you know, most of them had said no, right. So it was very hard in the early days. Also, because we were not following the OTA playbook. We were a meta search. And I think the thing about VCs is that, you know, at least back then even more than now, is that even if you’re not doing something out of a regular playbook that worked elsewhere, it was harder to build conviction without seeing more traction, right? So I think must knocked like at least 100 doors and done quite a few meetings all across the country. And I think over time, you know, as we grew, you know, the inbound interest started to come. So I think the series A around happened primarily due to inbound interest, as opposed to, you know, us going out and raising because we had almost broken even turn profitable. You know, we were growing very fast year on year in almost doubling year on year without any capital, right. So, you know, we got inbound and SAIF and MMT invested there. For the 2017 round with Sequoia series B around. I think the year before, that was a very tough year for us, because we were just pivoting away from meta into marketplace, which brought its own challenges, payments, and a lot of new things that we had to deal with. So even though we had a lot of traffic, we have very little monetization still to show for it, because we were still trying to get the business models right on the new pivot. But I think, you know, what really helps, in fundraising is I tell people that, you know, when you’re pitching to investors, they may or may not invest, but the impression they carry about you is what matters more, because they may come back and invest later, right. So, in Sequoia back in the days, obviously, it said no, but, you know, in 2017, they saw the kind of traffic, we’d build organically, right? I mean, we were at, like 10 12 million monthly active users, I think, built without spending, even like $5 million on marketing over the last six, seven years. Right. So I think that was the impressive part there. And that really helped. And, of course, they saw the potential for monetization. So at that time, I think we were doing hardly 20 crores in revenue, you know, so the potential for monetization with that much traffic was everything, for soon also came alongside, in that round. You know, so I, you know, the way I look at fundraising simple that look, it’s just, it’s just fuel for the road, right? I mean, you you driving a car, you know, you need to reach a destination, your destination in your mind might be, you know, a vision you want to fulfill, or an outcome an IPO or you know, or you want to take the company to a certain valuation, you know, investors are coming in and helping you fill your gas tank, I think it’s up to you to actually be more efficient with that car. Right, and, and make sure it’s driving in the right direction at the right velocity. Right. So I think the way to look at, you know, this, this entire journey is that, you got to be very prudent about whatever you raise, you know, where is that gonna take you? Right, and, you know, we’ve been extremely capital efficient, and some people feel we’ve been, you know, maybe two, you know, like, in our times, you’d have folks in marketing complain that, look, those guys are running crazy discounts, you know, why can’t we do that? And we used to say, No, right? We used to say, look, we have healthy unit economics, even if it goes lower, we’re fine with it, right. And I think sometimes you have to have that discipline in the team, you know, in order to build a more efficient, you know, more capital efficient business, I think in COVID times, you know, it’s kind of helping us because this kind of philosophy, sounds maybe more sexy right now than it did two years ago, when everybody was in hyper growth mode. But you know, end of the day, that’s the most prudent way to build value, because, you know, ultimately, whether you raise $10 million or billion dollars, right, your prerogative as an entrepreneur is to return, you know, that capital, or multiples of that capital amount to back to the investors. If you are not being prudent with it, you know, it’s very, very likely that you will end up in a spot where you will not be able to do that, right. So, so no matter what the scale, I think it’s better India is a market way, by the way, you can be as patient as possible, because, you know, 10 years ago, people came in with a thesis that in five years, we’ll have 50 unicorns. I think, every time you know, I hear this, I’m like, dude, you know, it’s gonna take 10 more years than what people imagine. But the thing is, this will be the largest market in terms of unicorns in the world when that happens, right. And I think the patience and the fact that there are certain investors who understand understand that patience, and there are some who want to, you know, do that in two years or three years, you’ve got to choose carefully what kind of investors you have, right? So we have been thankful that we found investors who have a lot of patience in terms of how we are building this, which we view more like a marathon, not like a you know, 100 meter race. And I always say that business is an infinite game, right? So even if you win in a marathon, even if you are winning the first lap, it doesn’t mean anything, right? So you got to keep that constant. NC in, in what we do year on year, and build it as a core cultural value. So now for us, you know, frugality comes naturally Right. I mean, doing marketing in a different way comes naturally, you know, being more product and customer oriented comes naturally. But in the early days, you know, it was by design, like we had to really push people to do that. And we have to say no to a lot of ideas, right? I mean, that’s what strategy is all about. If you say yes to everything, you don’t have a strategy, but we used to say no to a lot of things. And that’s how we ended up here.

 

Siddhartha 50:32

Fantastic. Aloke. And I believe you’re already at eight x in terms of the revenue and hopefully the valuation at which you raised from the time you raised the last round in 2017. So what’s the definition for you Now, you mentioned fundraise being a fuel to the destination?

 

Aloke 50:48

Yeah, that’s a good question. So, you know, one thing that is frustrating in the travel market is that if you look at the degree of customer experience, that’s prevalent out there, and I’m talking about the whole nine yards from the user experience pre booking to the customer service provided post booking. I think, as an industry, you know, globally, OTAs have failed, right. And, you know, I say this, despite being an OTA for the last one year, and you know, we are probably the newest OTA on the block. And maybe that’s why, you know, I don’t mind saying this, because we haven’t really even done most of what we want to do in this OTA side of the business. But the fact is that, you know, you look at e commerce, you look at many other verticals, you know, there are companies you admire, because they have built this very reliable and repeatable, you know, customer experience engine, right, where, you know, that, you know, as a customer, you’re always going to be dealt with in a certain manner, and you would have a predictable outcome when you go with a problem in the travel industry, unfortunately, right. And it could be because of all the stakeholders, not the OTAs, but even, you know, the suppliers themselves, whether it is about cancellation policies, whether it is about the additional service charges, convenience fees, whether it is about, you know, what is going to be included, what is not going to be included, this is not a space that has been very transparent with their users, right? This is not a space where people have actually taken calls proactively, which help their customers, right. And, you know, I think historically, this could have been the case, because, you know, just like, when you visit a new destination, as a tourist, you know, there are certain people who are willing to shortchange you, because, you know, it’s a one time transaction, like, you’re probably never gonna go back to a shop again, anyways. Right. And I think historically, you know, travel agents used to deal with their customer that way. But, in the new reality of the online world, like, if you want to build a large scalable brand, I think our philosophy is that, you know, we need to become the best at customer experience in this space. Right, and we are not going to say we have achieved anything till we get there. Right. So, at this point, our single minded mission is we need to become the most loved OTA in the Indian market, you know, within the next one to two years, right. I mean, that’s a immediate next destination. And I’m saying most loved, because, being the largest, or the biggest, or the most valuable, etc, doesn’t mean anything, you know, if customers don’t have organic love for you, right? I think we are not there yet ourselves. But because we are just one year old in the OT a game. But you know, we have the vision and the, you know, I think the passion to get there. As a team. We are going to, we’ve already done many things that other teams have been around for 10 years haven’t done in the last one year, we already proactively. So I’ll give you a few examples, you know, pre lockdown for all the international bookings that were done in the month of March, we did not wait for the airlines to refund the money to us. You know, in the month of March for people who canceled we gave them the refund immediately. For some of those we are still fighting with the airlines. But we chose to do that because that was the right thing to do for our customers. Right. And, by doing that, I think we’ve built amazing trust many of those people have come back and said they’ll never go to any other ot again, right during this lockdown and post that you know if the airline has canceled their flight, because many of the airlines did not, you know also fly even though they promised to impose the lockdown. You know, they were OTAs that were not refunding the convenience fees. Right. And we feel that’s unethical right because if the airline is giving a full refund, we have to give back the convenience fee. So we started to do that. These are very small things like you will see on many OTAs, when you try to book a flight, the price changes on the last step, right? Just before you’re making a payment. Now, how hard is it to prevent that, right? So small things that we are investing our time and energy on, to improve the customer experience. And one of the big things that we have done is Tara, which is our AI chatbot, AI customer system, which today is handling, you know, more than 80% of our chat queries. Tara also recognizes where it is failing as an AI and seamlessly transfers you to a human agent at that moment of time, right, where you start getting frustrated, and you’re like, I need to speak to someone, or you don’t get what I’m saying, etc. So I think the journey of trying to become the most loved OTA is complex, but, but we’ll get there. It’s a matter of a year or two. And once you’ve got in there, I think the rest of the stuff will sort itself out whether it is growth or revenue, or, you know, the other outcomes

 

Siddhartha 56:05

Aloke, now coming towards the conclusion of the podcast, you are yourself an investor in 20 plus startups, you know, how do you approach this hat of angel investing?

 

Aloke 56:18

Yeah, I think, once I reached the series, B kind of stage right, I was seeing that a lot of entrepreneurs were approaching me for help with their startups, you know, mentorship ideas, you know, and actually, I love doing that. So, one of the things is in my early years, there were very few people who actually gave me time to mentor me or, or helped me out, right. And we were bootstrapped for very long, right, so you can imagine that, I don’t think many companies have bootstrap for five years before their series A right. But that’s what we did right now, in those days. I still remember each and every guy who helped me and, and one of the things I told myself was, you know, if I am successful, someday, I reach a certain stage, I’m going to start giving back right in some shape and form. I believe that, if I’m giving someone advice or ideas, the I would be more vested in that conversation, if I really love that startup to actually, also Angel invest in them. And, you know, take a small stake, because that aligns the incentive for me to also spend my time on that, you know, and so, most of the time, these are people who approached me to discuss some ideas, and then if I really liked their idea, or more like what they’re doing their startup, you know, I do commit a small amount of I’m not a big ticket investor, but I do believe that maybe my backing gives them the moral, you know, courage to go and raise more money. So, I’ve been doing that at the very early stage, like the first check, typically, or, like, syndicate of the first syndicate. Most of these guys have actually been very bootstrapped kind of, like people who have started with very little capital coming from humble backgrounds, meeting middle class, people, kind of entrepreneurs. And, so far the journey has been interesting. There’s been a few exits, there’s been, obviously a few shutdowns as well. But I think there’s been a lot of learning on both sides. And there’s been at least a feeling that I’m giving back to the ecosystem.

 

Siddhartha 58:33

Thank you so much, Aloke. It was wonderful to have you thank you again for sharing your experience, your wisdom, and all your experience, and experiments with us.

 

Aloke 58:42

Thank you so much for having me, Siddhartha.

 

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