One of the pioneering start-ups in the country, MakeMyTrip was founded way back in 2000 by Deep Kalra with early-stage funding, mainly focusing on the NRI travel space. With the rise of internet access in the country, the company launched itself into the domestic market in 2005 and paved the way for numerous others to follow. Having the first mover advantage, Make My Trip revolutionized the travel industry.
Fighting all odds in the early 2000s, MakeMyTrip endured these tough times but perseverance paid off when Low-Cost Carriers were launched in 2004. By grabbing this opportunity and partnering with investors SAIF, MakeMyTrip got the push it needed.
The rest of the journey has been nothing short of spectacular as Indian travellers embraced MakeMyTrip’s model.
Today, MakeMyTrip holds the title of the leading online travel platform in the country by offering a plethora of services like flight tickets, domestic and international packages, hotel reservations and rail & bus tickets. It also launched itself on the mobile platform in 2012.
In an exclusive interview with My Big Plunge, founder Deep Kalra talks about his journey through the tough times and how MakeMyTrip became what it is today.
MBP: Tell us about the inception of MakeMyTrip back in 2000.
Deep Kalra : I finished my MBA in 1992 and then worked for eight years after that. First I worked with ABN for three years. I learnt corporate banking there and enjoyed my time there but not necessarily the banking part. I realized that banking was not my cup of tea. Then I brought an American company called AMF Bowling here to start the ten pin bowling revolution in India. That had a slow start due to the timing. This was the pre-mall era so large scale real estate opportunities were scarce. Then I joined GEE Capital in their retail business which is called GEE Money today. Career-wise, the graph was decent. I hadn’t planned entrepreneurship till the internet happened. This new avenue began around 1998-99 – that resonated with me and made me believe that this is the best time to start. This convinced me that this can be a great platform and I wanted to get into the B2C sector. I actually had plans for both travel as well as stock broking. Travel seemed far more exciting. It was something I believed in and something that an entrepreneur could tap without tying up with a large institution. So finally I took the plunge in early 2000 and it’s been quite a ride.
MBP: The bowling business did not rise up and around 2000, the internet was still nascent in India. Were you sceptical about it going back to a state where the timing is not right?
DK : Thats a great point. I was very conscious and it was always there at the back of my mind that the bowling business had failed. However, that failure had actually helped me in my case to egg me on and to make sure that I don’t throw the towel too early.
We had a great start with MakeMyTrip. 2000-2001 went smoothly and we got some early stage funding. But within 15 months, the tide turned on us. The dot com bust had reached India and there was a massive meltdown. 9/11 really hit out on travel as well. At that time we were doing NRI travel, but 9/11 impacted that drastically as did SARS. What kept me going was that I did not want to give up too early. I really believed that we were on to something. Despite what happened, we were still improving bit by bit. Through 2001-2003 – these were our darkest but best years. That was really a period of trial by fire. We completely bootstrapped and many of us didn’t receive anything for 18 months. That paid off in the long run though. The team shrunk but whoever was interested stayed back. Come 2003 and things started to improve. We managed to break even and make some profit. In 2005 we launched ourselves in India and the whole game changed.
MBP: What was the idea that you started with?
When we started in 2000, the vision for MakeMyTrip was that of a travelling portal for people travelling in and out of India. Very soon we realized that there lots of lookers but very few bookers. Our conversion for inbound travel was fantastic though. Those people were already used to book amenities through online modes. So we decided to focus on that market instead of the domestic sector. We had to look at our best opportunities – that’s the beauty of bootstrapping.
In 2003, the IRCTC was born – that did a great service to all of us. Indians became comfortable to buy online and were accepting the e-commerce model. That was a game changer. The other thing was the advent of low cost carriers. The traditional travel agent did not want to sell the low cost carrier tickets because they were virtually making no money. This was way back in the days of air deccan and Indigo. This is when we thought of building direct connects into the host of airlines. We gave all the freedom to our customers. For the first time, the consumer was in control, not the travel agent. That was our first successful move in India.
MBP: How important is it for an entrepreneur to listen to his consumers, his board of directors, industry experts etc. ? How do you finally decide what course of action you should take?
DK: It’s different strokes for different folks. As far as I’m concerned, I’m quite happy to listen to others and take the best advice. There can be aspects that I may not understand and having a board takes care of that. An individual reach out is far more helpful than a group reach out. It clears things out. I have even gone beyond my board. I talk to a lot of young entrepreneurs through TiE. It’s always important to take well-informed step. Reviews are very important just like how it works in movies or hotels.
MBP: What are the kinds of revenues and sales that MakeMyTrip has received this year?
DK: The last quarter we reported was our full financial year. We crossed an interesting milestone – Our gross booking number was $1.6 billion which is a sizable amount. Our net revenue number is all the commission streams that we earn. These include revenues from airlines, hotels and packages as well as other affiliated businesses like bus ticketing, rail ticketing and advertising. So our net commission was around $140 million.
MBP: How do you see your business taking off from here?
DK: Our guidance for revenue this year is in the 20s – that’s 20% odd points but we think things can get better. This is a very interesting phase as mobile business has really taken off. In fact, 40% of our traffic comes from mobile. We are seeing more people, especially first time users, only coming through our app. When you go to tier 2 and tier 3 towns, you will find people with no computers but they have smartphones. With a 3G plan, that becomes a portal to the web. So hence, we are pushing ourselves into the mobile space but not being mobile-only.
MBP: Where do you see the future of travel?
DK: Travel for Indians is going through a phenomenal change. It’s because a lot of them are already seasoned travellers and they are seeking beyond the ordinary. They want to do different stuff. They are seeking out adventure travel, wellness travel, eco travel, culinary trail travel etc. At the same time, lots of them are coming to the travel fold for the first time. Going to Goa, Kashmir, Ladakh, Thailand, Dubai are the first options that people look out for. Someone needs to be there to guide them. First time travellers with their first income – they don’t go to traditional travel agents like their parents did. They go to the web and look for trusted old brands. We can play a great role in helping their first trip – taking them where they want to go and also act like a reassuring form factor. This is where the mobile comes in. The trust we have built around our existence of 15 years is helping us now.
MBP: If you have to start MakeMyTrip today, would you have done it differently? Considering how the valuations are going these days with seed rounds fetching a million dollars. Does it make you envious?
DK: Not at all. I’m happy that the younger generation is leading the way. We have not only enjoyed our place in the sun but also still enjoying our place in the sun. I’m a big optimist and believer in the glass being half-full. I know some of them really well and these guys are phenomenal. I think it’s phenomenal the way these companies are scaling. Things are growing so fast, these companies will catch up anyway. The point to be noted is that how fast these companies are growing and how innovative their services are. I’m very happy for these guys and the fact that the ecosystem is scaling . People tend to undervalue how difficult it is to scale up so fast. Companies like Flipkart, Snapdeal, Zomato – they are world class companies and they will do well anywhere in the world. We have to give them that credit.
MBP : How did your family and friends react when you decided to become an entrepreneur?
DK: My wife was very supportive and she had always been clear about telling me – come home happy with whatever you’re doing. There’s a good pressure where you see things growing but there’s a bad pressure where you’re just unhappy. If I’m unhappy for a week, I get very restless and I have to figure out why. My wife saw me being unhappy in the corporate world and she had also seen me create the business model and being so excited about it. I used to share with her what I used to do after staying up all night. So she understood that I was very passionate about what I wanted to do. The rest of my family, my parents – they had a lot of confidence in what I wanted to do.
The real test was during our early years when we were bootstrapping. I had very young kids and sometimes we wonder how we sailed through those tough times. But I think that is why perspective is so important. If you are going to build something new and do something new, I think nothing ventured nothing gained. I tell my kids the same things that to become something, you have to sacrifice something. I see that value in young entrepreneurs today – they are willing to sacrifice and focus. These things will pay off.
From a humble Delhi start-up to a travel industry heavyweight, MakeMyTrip’s journey is nothing but inspiring which proves how far an idea can transform if it is fueled and kept alive.