After his blockbuster IPO on NASDAQ in 2010, MakeMyTrip's Deep Kalra can look back and say he was resilient, not stubborn. He shares with Raini Hamdi what it takes to make your own trip to riches and stardom
Founder & CEO
How did you make this trip?
I started with a job in a bank and at the end of two years I knew I was not cut out for banking. In fact I had this morbid fear that I was going to die on my deathbed writing a credit proposal! It was non-stimulating, not non-adventurous and not impactful. Maybe it was early days and I was impatient by nature. But I was wondering, what impact was I making? I was doing corporate banking. The new, exciting young companies were being turned down by the credit department – ABN AMRO, being a Dutch bank, was conservative – and the ones that were there forever got approved, so it was not very exciting.
Then something bizarre came along. An American company, AMF Bowling, which sold 10,000 bowling lanes in China, wanted to expand in India where there was no bowling at the time. I got excited as it was an entrepreneurial job – a one-man army and no rules. I spent four years there and understood the whole business from how you lay lanes to finding investors to buy this equipment and installing it. I had 200 lanes to show for at the end of it, so clearly not a success.
But it gave you entrepreneurial insights?
Yes, the most important was that I would not be scared or deterred to do something when there were no rules.
But it did make me want to join a large company where systems and processes were in place. So I did, with GE Capital, and it was to find new avenues for distributing our consumer finance products and the new avenue was the Internet. So I was working a lot on the Internet and the more I interacted with the medium on a professional and personal level, the more I was convinced that the time was right to jump onto something that I thought would do very well, MakeMyTrip.com.
Why an OTA?
For me the epiphany if there was one – though I don’t think it was one moment but gradual – was when I put my wife’s car for sale on a site called automartindia.com and it fetched Rs20,000 (US$368) more than the traditional channel. Then in July 2000, I wanted to take her on a holiday to Phuket. We went online – I think it was asiarooms or asiahotels – and we had the same accommodation at US$70 compared with US$100 a travel consultant offered us.
Today I know with authority that the hotel was working with many consolidators in Thailand and those worked with other consolidators in markets like India, who were working with small travel agencies.
So there were three guys in the line, each making perhaps US$5-US$10 on the booking and by the time you got it, it would be more expensive than if you had gone direct or to one intermediary. I don’t like direct; one intermediary, like online, is a good idea (laughs).
When you launched on April 1, 2000, were there other OTAs?
A host of them came up at the same time, we were the first wave, but all of them perished.
Why hadn’t MakeMyTrip?
I’m just stubborn. I think though there is a fine line between resilience and stubbornness, and my saying is, if it works out, you can give yourself a pat on your back and say you’re resilient.
But at that moment, you were in the zone and you were just saying to yourself, ‘listen, there’s light at the end of the tunnel, the graphs tell you they will intersect, it’ll take a couple of years, stick with it.’
Things were bad – 2001 to 2003 were our darkest hours – because people were not used to buying online and we weren’t getting the promised second funding because of the dotcom bust. So we were pretty much on our own. So either we paid three months and shut shop, or we carried on. The hardship would go on for one, two years and we had to take the biggest cuts.
My two co-founders took massive cuts. For 18 months I didn’t draw a salary. And the team shrunk from 42 to 24 over a weekend because some people thought this was just too risky. But I don’t grudge anyone – each of us has our own personal situations. We decided we wanted to fight it out and today, am I glad we did.
It’s hard to build and create, so if you believe that there is something there, don’t give up on it easily. Especially if you are in your early 30s (he was 30 years old when MakeMyTrip was launched), it’s irrelevant if you have to spend six months more, one year more on it. I’d say, even if there’s a 25 chance you’re successful, go for it.
And the rest, for you, is history.
Yes, the turning point was in 2004/2005 when India started to open up, the low-cost carriers came in and we saw the opportunity to use technology with them. In 2005, we did Rs20 million in gross bookings; it’s 50 times that number today.
But it was inbound in the beginning, right?
Yes, non-resident Indians based in the US coming home. They were used to buying online using Expedia, Travelocity, etc, and they were buying largely air.
Today, almost 90 per cent of bookings are India residents travelling within India and overseas, which are growing at crazy rates.
So what’s next for you, being young still, 42 years?
It’s a great question and I ask myself that. To be honest, when you list a company, you make a conscious choice that you’re not exiting but actually growing the company. What we’ve got now are resources – we’ve raised US$80 million in cash from the IPO and I’m doing a lot of M&As (TTG Asia e-Daily, April 30, 2012), the first in Singapore and we’re looking in that region still.
So I’m totally fixated now on growing the business and if there is a plan B, I’d definitely like to spend more time on – it’s cliche but true – giving back. That’s going to be my next move, though I don’t know when.
I’m sure I won’t end up doing another for-profit venture. I think I got more than I ever wanted on a monetary scale. So I’m quite content and it’s important we keep taking care of shareholder value, but if we can give back...
We only have one life. Unlike most Hindus, I don’t believe in life after death. I believe there is only one life, so you want to live it well.
What drives you at work now?
Making the company a great place to work. We take pride that for two years in a row now, we’ve been voted among the top three companies to work for in India.
Our culture is transparent and open. Our philosophy is tell people what they need to do, coach and mentor, but don’t tell them how to do it, otherwise you are not going to get good managers.
We also spend a lot of time doing things together. We consciously try not to make the gap become too big between management and other folks. Once a month at least, I have lunch with a batch of 20 guys at the most junior level from the different departments, so I can listen to feedback from them.
What also drives me is making every customer a brand ambassador of MakeMyTrip. It’s easy if you are an expensive brand like Apple or a luxury brand like Oberoi, but not so easy when you are a value brand.
This article was first published in TTG Asia, June 1, 2012 issue, on page 8. To read more, please view our digital edition or click here to subscribe.