Deep Kalra on Building MakeMyTrip and the Future of AI in Travel | SenseAI Ventures

Closest of friends around me were saying, 'What the hell are you doing?' Yeah, I saw AMF bowling as a failure, and so I had one dot. If I'd make my trip as a failure, I would have two dots, and two dots make a line. So internally I was saying this is my last shot.

You know, it's funny, I also agree with what you say, but I think out here there's an anomaly. So, very comfortable childhood. I grew up in a private... my dad was in the private sector, my mom was a teacher. So I think just the right amount of everything. It was great, but there was nothing entrepreneurial that happened. I mean, if I trace back, I guess my grandfather on both sides – at that generation, most people were entrepreneurs. But my grandfather from my paternal side was a good entrepreneur in Pakistan, then he moved to undivided India, then to Delhi and reset up. So maybe it was something there, but I was not excited or pulled towards it. He had a small business, etc. I was quite happy to do a professional career. So I can't say that fashioned it. Maybe something I've thought about: maybe it's just the support and backing one got from parents – 'okay, whatever you want to do.' I can give you one example. I was all set to do engineering. I did PCM and computer science in my... and I didn't get IIT. I can say I didn't study enough, but that's just an excuse. I didn't get IIT and I was very, very disappointed. But on the basis of board marks, I got BITS Pilani and DCE. I was all set to join BITS Pilani, I got EEE, and I was pretty excited. Then last minute I just said no, I'm going to do Eco and Stats. And my parents backed me up completely. In fact, I think they were almost happier I did that. So I think that support really helped – they said okay, whatever makes you happy, so long as you're doing something good, not something crazy. I didn't tell them I'm going to go play football. So I think maybe that was some kind of help in your earlier years to build up a system of self-confidence. That's the only thing I can figure out, but there was nothing entrepreneurial that really made MakeMyTrip happen.

I think so. I think just the support and backing in you – it's like I've seen a lot of other people where parents play a very active role, but when you know you have to do this or this or this, then willy-nilly kids start looking forward to the approval. So I think it kind of works both ways. But if you're going to take the decision and they're going to back you up, then it just helps you make your own decision. And you know, we as parents have tried to do that with our own kids, so yeah.

Yeah, you're right. The traditional path – banking at ABN AMRO. I loved the bank, I didn't like banking. Took me a couple of years to figure that out, found it too boring. Actually it took me 10 years to figure that out. It was corporate banking, so you know how it is. Maybe if it was a different part of the bank it would have been different, but I'm glad it wasn't. Then actually what's relevant to talk about is what I did after that, which very few people know about. I told these guys, I'm excited to talk about that. So I think at that point I was just done with being a banker, still very young, 26, and itching to do something different. So I actually interviewed for different jobs, wanting to go far away from banking and realizing that I'd like to be a marketer of real products. I had two very interesting offers. I love to talk about one with great pride because Ajay Banga, who's now a friend, offered me a job with Pepsi Foods in India, which he says in his classic Punjabi, 'It's good you didn't take it because you'd be selling pizzas all your life.' I also got a job with Arvind Clothing – Arrow had just come to India, and all of us corporate types were so excited to get our Arrow shirts. There weren't too many options then. But then I took up this very entrepreneurial thing. A very dear friend of mine from school days who was with KPMG was helping an American company set up in India. He said just meet this guy, I know you want to do something different, and they're looking for someone to be the India rep. So you'll work for them. The company was AMF Bowling, world leaders in setting up bowling alleys. That one-hour meeting in Hyatt in Delhi went on for I think two and a half, three hours, and by the end of it I told this gentleman Chris, 'Yeah, I'm on.' So it was pretty crazy to do that, and that was quasi-entrepreneur, I guess. So connecting the dots, it was definitely the role – I worked for them, but a big part of my upside was how many lanes we sold. Selling projects in India wasn't easy, very real estate intensive. But what that taught me – I did that for four years and I really tried hard. I met anyone in the country who either owned land or purported to own land, more of the latter because in India everyone says so. I think I learned street smarts there doing that job. Even then I didn't say okay I want to do my own thing. I actually joined GE Capital after that, and that was the second panic attack that I stopped learning. The first one was I'm getting bored with banking. The second after four years here was, listen, I'm not learning. AMF Bowling was a nice company but it wasn't an intellectual giant. My capital... you went back into finance? Yeah, it was actually more consumer finance. So I joined GE Countrywide, what is now GE Money. My charter was very interesting, and I have to say hats off to GE for giving me a role like that. They gave me a VP role and said find new avenues to distribute our consumer finance products – auto loans, personal loans, stuff, consumer finance loans that hold 0% days and all. The new avenue was obviously the internet, so I guess I have to thank GE and my boss for introducing me to the internet formally. It was good. I worked very short because I tried pretty hard to get internet into what we did – GE India.com. To promote Bassein's credit, he gave us a million bucks to build out GE India.com. But very quickly I realized that's just a weekend project, and our bread and butter came from finance. So I said okay. I was there for what, a year? 16 months to be exact. And I was just so excited about the internet that I was literally up all night just writing out business plans. I had two business plans. So you woke up one day and said this is it and I'm leaving? Or you worked at it for a while? I worked pretty hard at it for almost four or five months, getting sure. The nights were spent doing this, but I hadn't quit. Then I did quit on the 31st of March 2000 to keep accounts very clear. I've always started something new on the 1st of April. Did you get a bonus or not? That wasn't really the real reason. But GE was very nice about it. I just said I'm going to do this thing. I had some savings, I put it all in. My wife had some savings, she gave me all of that. And went ahead and said we're going to do this. Managed to raise early stage finance, but when I quit I didn't have that money. Early stage finance was not very usual at all at that time. It's a funny thing: according to Sanjeev Bikhchandani of Naukri, we were the last company and they were the second last company to get funded before the dot-com bust. So we got $2 million from eVentures, which was a lot of money in 2000 for sure. But here's the rider: less than a year down the line, they wanted the money back because the bust hit, 9/11 had happened, we were in travel, all our business was US-India, and SARS – which is really the great grandfather of COVID – had happened too. So there was a triple whammy in our business. Then the real entrepreneurship and the real rubber hit the road in 2001 when I had to make a call: either pay everyone a couple of months salary and pack up, find corporate jobs, go back to corporate life, or make a fight of it. So I did what I learned later is called a distress management buyout. I didn't know it then, I was just doing what I could do.

Yeah, so I think I remember this conversation really well. So NJ Bara from eVentures, who runs Zius now, and Sanjeev Singhal who runs Nexus, they said listen, we love what you're doing, etc., but our fund is packing up, LPs have called their money. First question was what is an LP, and then I realized oh, by the way it's SoftBank and New Corp, so they want their money back. They said well obviously we spent most of the money, we're on track, we're doing really well. They said no no, we get all of that. So why don't you shut down the company or why don't you buy us out? They were being a little opaque, and I said if I could buy you out I'd never take your money, right? We're traditional bankers. But obviously what they were pushing me towards was that you can buy us out on the cheap. I went back to a couple of friends. Interestingly, the same friend who got me the AMF Bowling job, who's a finance guy and a well-known investment banker today, I said so Sanj, what do I do? He says, you know how much do you have? I coughed up – it was less than 50 lakhs, just about that much. I said that's how much money I can rustle up pretty much. He said make the deal with it. Make a deal with it. I learned the craziest lesson. I went in with that, I had a couple of angels backing me too, and I said guys, I have 46 lakhs and that's it, and this is from everyone literally. And they said deal. I walked out feeling like an idiot – I could have offered them a fraction of that amount. So they basically wanted something on paper. So you got $2 million for 46 lakhs? You know what Americans like – basically they wanted zero liability. Exactly. And like anyone would do, you signed everything. I mean, if tomorrow someone goes and jumps off a building kind of thing, they want nothing to do with it, which I fully appreciate. Interestingly, Sanjeev backed us in his personal capacity, so I had a couple of angels. Those next two years were the real real test because then you're drawing zero salary as a founder. A couple of guys took big cuts and I made them co-founders. I think that's where we are today. If you think about it, Rajesh, who you know, I couldn't afford him any longer, he angel funded, and I said the moment we can afford you, we'll get you back. So it was crazy days. I actually told everyone on a Friday evening that don't come in tomorrow – we worked every Saturday, we worked most Sundays half day – so just come back on Monday, in or out. Senior guys take cuts, junior guys no cuts but no raises. It sounds easy now, and I think way back then it's just the power of being very young and being a little stubborn. So I think early 30s you can do all this kind of stuff. I was so relieved when 40% of the team said we're out, including some heavyweight guys. That helped bring down the burn. The next two years was just madness – madness in terms of survival. There was only one metric: cash burn, because nothing else mattered. We had no investors, we just wanted to survive, pull through. So metric is reduce cash burn, earn what you can, which basically meant living in the office. Most of us slept in the office very often. It was a crazy time for a small team. We 24 of us left, cut back from a decent office to a mezzanine which was at 12 rupees a square foot in Okhla – you won't get cheaper real estate. Just crazy times. But then I think that was the defining moment. Got out of that and started seeing we started not losing money – not printing money, not losing money. Then things changed. 9/11, dot-com bust was left behind. 2003, 'dot-com' was no longer a bad word. An angel, one of our customers, invested $150k in us, and 2004 another guy did. Then finally by 2005 we were doing really well, took money from SAIF Partners which is now Elevation. The crazy growth from 2005 to when we IPOed was 25x in that time. It was just fantastic. But it was really those few years which defined what we are. I still have some of the guys with me from the beginning, which I think has made all the difference because they feel for the company in a very different way. Also when we IPOed, I must add, 70% of our staff had stock in the company, so felt really good about that.

Yeah, thank you.

Yeah, I think the impact of AI is just going to be humongous across. Smart things like smart funds are focusing on AI now, and smart companies. But for travel, I think it can be pretty humongous. I'll tell you what my vision is, and I shared it with my team like three days ago in Bangalore. We had a town hall in Bangalore, and I was talking to them. I said, I believe, and I fundamentally believe, trips right now the way we're doing them are still pretty cumbersome. Sure, we might have disrupted the industry way back then, but there's been no big disruption in travel. I do believe AI is going to be as big a disruption as smartphones and the internet. I'll tell you why. I'll give you a simple example. Real trip one month ago – big family trip, sister-in-law's milestone birthday celebration in Goa. I think between my brother, his wife, my wife, and me, we would have put in maybe 20 man-hours if not more to plan. Firstly, where we were going? Knowing it can only be a three-night or Goa, but we still had to do the checks. My brother's saying no no, it's hot, we'll go to Kashmir. I said but what party are you going to do in Srinagar? Don't forget it's our 40th. He says oh yeah, that's true. I said okay let's go to Dilli, there's this lovely charming place Taj, but knowing again that's not the kind of holiday. And we had ages 6 to 83 on the trip. So he said listen, it's going to be Goa. If we have two nights, if we have three nights, could be perfect. Okay, chalo Goa. Then where to stay? I said it has to be a villa. Which part of town? The kind of villa? Then the restaurants, then the flights for 14 people coming from four different cities, flying in which airport? All of that has to be done in a different way. It will be done, and I'm pretty sure we're going to do it: define the problem statement in plain speak. I'm going to say, 'I am planning my wife's ex-birthday and families, this is a family trip, we want to stay in a villa with minimum five rooms, not more than six rooms, maybe the kids can have an extra room, definitely with a pool, in North Goa, we don't want to be more than 30 minutes away from Assagao given food, etc. Figure out flights: four people are coming from Bombay, two are coming from Rishikesh, eight are coming from Delhi, whatever. Figure out the best flights. We don't like to fly, so we'd like to fly between 9 and 10 a.m. kind of thing.' All of this data is available today. We do the same thing – we find the villa, then we put that location pin and say okay now is it closer to Mopa in the new airport or is it closer to Dabolim? But it's very cumbersome, even with MakeMyTrip it's cumbersome. But it should be just throwing up this answer in seconds and give choices. Of course, no one will trust – the human brain can typically compare between three to five. That's why when you have comparison tables, you'll have one, two, three, sometimes a fourth. More than that we cannot process. Give me three options, help me compare them on price. If I'm a price customer, even then you want to know price eventually. Everyone wants to. That's it. I don't want to know anything, I don't want to give any more information. So if you think about it, today all of that is being deconstructed and structured in a way where we're doing one by one by one, even though we want to put it together. AI will not only do that, AI will also hyper-personalize. In fact, if you say real AI, I don't even need to tell all of this because I'm a past customer with MakeMyTrip. But I'm the wrong example. Let's say it's a friend of mine, let's say it's you planning. If you bought with us before three times, you've given us so much data with your permission, we can use that. You've also searched with us but not bought. You've already told us your preferences, the airlines you like, the airlines you don't, the seat you like. Like I'm a die-hard IndiGo fan, that's what I use to travel domestically, or Vistara. So we already know that about you. We know the kind of place you'll want, is this a luxury customer, is it budget, or somewhere in between? You've given us so many clues by your travel with us, by all the data points you've left behind. If you're not using them, we are doing a great disservice to you and to ourselves. So AI is going to change the industry because no travel is simple. All travel has multiple facets to it. Even the simplest – like you're here from Bangalore, you needed a car both ways. Maybe you had a car in Bangalore drop you off, but in Delhi you needed a car. Of course you can take an Uber or Ola, but there's a way we offer you, MakeMyTrip offers you cabs, but you still have to say I want an airport cab. But isn't it obvious? You knew you told us where you want to come, you probably didn't need a hotel or you did, so you maybe needed three facets besides your food requirements. We should be able to provide that or a car for the day, but we should be able to do it in a conversational way. So AI will power all of this. On one side you'll have natural language speaking in your whatever language, easily understood, and on the other side you'll be pulling this data from different places, stitching it together, and giving the answers in a very easy to understand manner. That will be joy because no one wants to spend time on travel planning, everyone wants to spend time on the actual travel. Absolutely. That's the reality. Travel planning – we all do it, we get into that trap. We don't have a choice because we want travel to be really convenient, but we'd much rather just have a few choices. Getting 20 choices is a pain. So things are going to change. That's a really exciting future.

Yeah, it's a perfect segue, and that's why I said if I – I mean, I'm sure you guys were listening – but we'll take permission. You said you'll take permission, but you have to, right? There are two things you can do if you're going to give something tailored for a person: you either take permission, otherwise you use anonymized data. So we are looking – we don't know it's Deep in this case if I'm doing a cohort analysis, but I do know that 20 different people were saying very similar things, and we bunched them into a cohort which is, you know, young traveler likes boutique stays – I'm just making this up – but wants to do this kind. There are 20 different people who do that, could be men, women. If you do it further, maybe they're just 20 women who like – we know – and that number could be 20,000. That cohort has to be given the right prompts and the right information, which is very different from a cohort which says, 'I'm a budget seeker, I will always go and take an Ola or an Uber, I don't need anything else, I want bare down stripped down cheapest airline way to get there.' There are many people like that, could be 100,000 people. They have to be given different signaling and different messaging. But there's no way you can invade the privacy thing. So I don't think there's actually a dichotomy. I just think if companies take shortcuts and don't do the hard work, that's when you run into problems.

Yeah, firstly, I mean you have to be very clear where you're gleaning data from, if at all you're gleaning. So we believe we now have enough data of our own that we don't really need to go elsewhere. That's great, right? We have that because of just the sheer numbers – over a million customers have bought from us, besides we have a lot more data. But even if let's say there was a situation where we could get some data either from our partners, whether it's Google or in this case we're using – we're doing a pilot with Microsoft ChatGPT or we're doing something with Meta – I mean those are also very responsible companies, so it's kind of who you work with. Then you have all your agreements in place. There is a lot of data – what is scary is what's available on the dark web. It's all floating out there, and every two weeks there's a breach, right? Someone loses their data. It's as simple and stupid as this: people use the same password in different places. That's the reality. Changing email is very hard, so you'll have your same email, it could be your Gmail or whatever. If you use the same password for different companies and someone's data gets hacked into – I'm not even saying it's an unethical company, very good companies get hacked into. It's one of the big preventive costs that we all have to take to make sure it doesn't happen to you. And you get hacked into, that data is out there. So that's the scary part. That's why you get these alerts: change your password, change your password. Because you know someone as big as – I think sometime back a couple of Indian companies got hacked into, then what was it Target in the US that was huge, so many customers. So people were told to change because the credentials are out there and people can misuse them. That being said, in India I think we've built in very good levels of security. This is what I call the late mover advantage, right? Because we were late to the game, unlike the US where everything worked on approximate match address, approximate match name, and CVV was enough. Now you just think about it, there's hardly any security today with our second level security, especially OTP. In fact, CVV is just gone. The two-factor authentication in this country is fantastic, it's a game changer. But guess what? OTPs are going to change. So what's going to happen now is a ladder approach. So on certain sites, for certain amounts, taking your permission, you will not need an OTP. So if Deep is making a payment to MakeMyTrip or to, let's say I buy a lot on Amazon, up to X amount, maybe it won't need one because it'll just make it quicker. It's like keeping stored value there, but it's like the contactless card in the metro in the UK. But at the no, I'm talking about even not physical, not card not present – that's where it's trickier. But you've given that permission. It's a ladder, it's a hierarchy. Below a certain amount, yes, but at the next level you will need an OTP. I still think an OTP is a pretty clever way. But what is changing is biometrics. Even through your computer and your phone – most people are transacting on the phone in India – your fingerprint and iris are the game changers. It's all happening, it's going to happen in the next couple of years in India too, which is probably more secure in a sense. It's natural progression. If you've seen Jamara, even the OTP is not secure. That's true.

Yeah, multiple times during that time. I have to be totally candid, nothing to hide, but I think it's human nature. You can't block out – on one side there's rationality. I mean, the closest of friends around me were saying, 'What the hell are you doing?' They're saying, 'Are you crazy?' Literally, because there's nothing going on. 18 months you don't draw a salary, it starts causing stress at home also, I can tell you that. So I think what I figured was that see, I saw AMF Bowling as a failure, my personal failure. So I had one dot. If I make my trip as a failure, I would have two dots, and two dots make a line. Basically I would not have the courage to try again. So internally I was saying this is my last shot. I actually tell the same thing to young entrepreneurs: if you're trying something out, or any entrepreneurs, be ready to try this out for four to five years. I always said don't look in the rearview mirror before four to five years. So have enough gas in the tank that you can last, because it takes that much time for something to come out. If it happens earlier, phenomenal, well done, the timing is right. But it could take four or five years. So don't say I'm going to try this for two years. I haven't seen anyone build a great company by trying it for two years. There might have been some, but 99% will not, and you will not know what you missed building. It's so true that the best of companies have not seen light of day because some founder gave up too early. Giving up early is the easiest part; the toughest part is to go on. So we made some rules. Me and a couple of guys, I said okay, one rule: people are looking at us every day in office and saying long faces, things must be really bad here. So I said if we are in, we are in for a month. I now call it 'Discipline and Depression.' Basically we said we are in for a month, end of month we will review again. But we are not going to start looking at existentialism – should we, shouldn't we? We are in for a month. We've seen the money we made. Better. Secondly, be obsessed about metrics. So that for me is the way I am. The metrics are telling you you're moving in the right direction. For us, the holy grail is conversion. I believe repeat is the least celebrated metric and the most important one. And therefore cash burn – are you getting better? Are you not only reducing cash burn, but are you actually on every transaction losing a little less money at that time, and later are you making more money even if it's one paisa? But you're moving in the right direction. That's what unit economics is. You know these terms, it's common sense. I think all the great businessmen from this country, definitely the Marwaris, they knew it long back. The Patta system knew all of this: are you getting better at what you're doing – efficiency, productivity, unit economics? If you are, then you're moving in the right direction. Then you check in for one more month. But literally we were living month to month. That's true for that 24-month period, it was month to month.

You know, honestly, I don't think there's any balance in this thing. It's you're either in or out. There's a very fine line between resilience and stubbornness. Later on in life, it's very cool and sexy to say 'oh resilient' and all. At that time, you're plain stubborn, which means you believe so much in yourself, you have so much – and I'm not saying it in a cocky sort of way – I actually believe so much in your team or what you're doing that you have to back it up. It's no different in sport. Why do we hear of these crazy comeback stories? You ask anyone, they say we backed ourselves up, or the captain backing someone else and saying I believe this guy has it when it counts. Then suddenly you say oh my God, this unknown guy won us the World Cup. How did that happen? Because that is the same thing. But you just have to say listen, if I'm in it, it's 100%, it's binary. You cannot not be. That's why saying that monthly thing – then for the month you're in, so that your team around you, even if there are 21 people seeing the three of you, they're saying wow, things must be good. Because frankly, people are followers. They are happy to follow. The scariest thing, the only thing which gave me sleepless nights, was not shutting down and finding a job – with a good degree you'd get another job. The scariest thing is the people out there who have trusted you, because you they are saying show us the way. And by the way, the most satisfying thing is when each one of them has done well with the company, built their homes, bought their second homes, done all of that stuff. It's the most gratifying thing possible. In fact, a GE colleague, Raman Roy, told me this and I've never forgotten. He was also a VP, Punit, Raman, this whole gang was there. Raman and I quit on the same day, and he set up Spectramind. When I was going through this tough time, I would go to him in Okhla. In fact, he offered to buy us out, but I said no, we don't want to sell. He said listen, hang in there. He says, what when you get your housewarming from one of your colleagues, they'll bring ladoos saying 'sir, bahut badhiya.' He's saying that's the sweetest thing, and it's so true. That's the most gratifying thing. The rest of it, you'll do okay. So I think that would give me sleepless nights – that there's an unspoken commitment to these guys. I know where I'm taking them, and if I don't know where I'm going, that puts a lot of pressure. It's the same thing even later in life. It's the commitments you give your investors. You take money from the market, we list it at $14. We have gone in COVID time and below, we've dipped under $14 because there was no travel. But today we are back there, stocks are $40, and we can strut there. My colleagues are right now doing a non-deal roadshow. It feels good to give them a solid return on their capital. There's a moral commitment, it's not a written commitment. Written is if you've taken a convertible bond or something and it's under the water. But there's a moral commitment: you raise money from someone, you want to give them a return, at the minimum you want to give them their capital back. So I think that puts pressure, at least for me. Sleepless nights. I'm one of those people who can't take a rupee loan from someone – I can't sleep.

I don't know if I can give you something which you haven't heard, but it's as simple as that but as vital as that, which is customer obsession. It's just got to be there as ethos for the whole company. It starts from leaders, it starts from the founders, and it has to be there for everyone. I remember reading this lovely book called 'Nuts' which was written on the Southwest story, and they talked about two things: the consumer and your internal customer, the employee. Famously, the founder of Southwest had been interviewed and said gun to head, which one would you choose? And he had made the right answer, I totally believe, which is employee. Because if you don't have happy employees, you can never have happy customers. They also believed in empowerment, which meant if you screwed up as an air hostess, you've spilled coffee on someone's suit and they're like you know piping...

Describing his early approach: when they messed up a ticket, they gave customers a voucher for the next purchase, even giving up their entire margin. He emphasizes genuine care for customers and employees. He talks about maintaining a familial culture, metric discipline, and the importance of hiring. He shares his practice of doing consumer labs and meeting new joiners. He advises founders to spend time on hiring, look for cultural fit and sense of humor, and use stock options to align incentives.

Great question, Raja. It's about digging deep. One interview is easy to fake; the second interview with more questions reveals doubts. Hiring for the founding team is most important. I always look for conviction and push them hard on their ideas. Test for skills by asking them to critique MakeMyTrip. If they aren't prepared, I'm not interested. Also, reward well with stock options. I give two compensation offers: one with more cash, one with more stock. It's a red flag if they choose more cash. Also, look for stability; job hopping worries me. In Bangalore, getting people back to work is a challenge, but founders must obsess over hiring.

From a travel point of view, it's great for our business. The current generation in their 20s and 30s doesn't want to own a house or car; they'd rather spend on experiences. They want to travel, sometimes just for Instagram. People are taking many more breaks than before. I met someone who took 52 breaks in a year. They want adventure and authentic experiences. They know everything about thrilling destinations. So they are spending that money, and I'm not complaining.