The India Show with Deep Kalra, Founder & Chairman, MakeMyTrip #podcast #startupcommunity #startup

My pleasure.

Yeah, that's quite right. This was year 2000. I had worked for 8 years after my MBA and I had done three corporate jobs. I think the reality is that I wasn't terribly excited in any of those corporate jobs so as to build my entire life career there. I enjoyed them all but I couldn't see myself doing that for the next 20, 30, even 40 years. Also, the big tipping point for me was really the onset of the internet. The internet started happening in a big way in India in the late '90s. It was clearly a force for me that was going to change everything we did. The way we did business, the way we interacted, it just seemed to be something which was a very powerful platform. I did try to build that into my work at GE Capital where I was just prior to starting MakeMyTrip. But it also dawned on me that perhaps the best crack at doing something on the internet would happen if you were to do it exclusively and not as a smaller part of a large organization, i.e. a startup, because that word probably didn't exist in the year 2000. But that was pretty clear that this is something which you need to be doing 100% of the time to really get, you know, speed and lift, velocity if you will. And that's why I really started MakeMyTrip.

Yeah, that was pretty, I would say, ironic timing. The start was great. I got early stage funding. I got a couple of million bucks on a business plan. I put in a little bit of my money and we got going. But within the year, my early stage investors, a fund called eVentures at that time, their LPs decided to pull out and their LPs were none other than actually SoftBank and Murdoch's Star TV. But they wanted to pull out of all dot-coms because of the dot-com bust and definitely out of all dot-coms in India. And I think at that, really in 2001, the real entrepreneurial journey started because from 2001 to 2005 we went bootstrapped, had to do a distress buyout of the fund, which is an entire episode in itself so I won't go there. Got a little bit of angel funding in 2003 and 2004, literally from customers, but that was a tiny slug of capital like $150,000. But the first two years was, I think, pretty dark if I look back. I don't think we had more capital than two months at any point of time to, you know, take care of B for 2 months. So making payroll, making rent and just the deficit because we still weren't making money obviously was very early days. But I think that taught a lot of qualities of, you know, thrift and really stretching the last dollar and also resilience. Once you get the team together, those who really believe in the mission stay on, those who don't fall off. A lot of the senior people were offered cuts in salary to be converted into stock which at that point of time seemed like a really bad idea. Thankfully in 2010 when we IPOed it seemed like a really good idea. So whoever did that benefited a lot and then I think the other people also who stayed on, you know, obviously it worked out very well for them. So if I look back I think it was probably the worst of times but in a weird sort of way the best of times and I think most startups probably go through such a time when you really are tested and it normally happens when you've got to make huge sacrifices. So I think if the going is just up, up and away then you really don't get tested and I'm glad we got tested then because who knew what lay ahead and, you know, while it was a dream run till IPO and after that also things were good, of course 2008 was global financial crisis but the real crisis for us was far later on, was really COVID. So in COVID our business travel business was really reduced to nothing. We actually shrunk to nothing. We had a quarter of national lockdown in India where we basically went down 96% in terms of revenues because there was no travel. So I think had we not gone through a lot of those, you know, trials by fire as I call them, I don't think we would have come out, you know, been able to take on the kind of future crises that lay ahead.

Yeah, and you're spot on. That is the key thing, Lucas. It's really the key thing is in tough times, how do you stay true to your vision? And even more importantly, because you can motivate yourself. It was your baby, your idea. You can keep going. But how do you rally the troops? And how do you still energize enough people who had to take cuts in salary, shrunk from a decent nice office to a very, very tiny dingy mezzanine floor? Clearly, you know, everything was, hey, we don't, do we really have the money for this kind of thing. And in small companies, it's very hard to hide the fact that things are really hard and you may or may not be able to kind of make payroll beyond a couple of months. So I think all these things become pretty obvious and if I look back I think it is to do with the passion that entrepreneurs or I would say leaders because I really had a couple of people around me who later became co-founders because of the deep cuts they took themselves. I think the kind of passion people feel towards the business. So firstly your passion has to be infectious. So I think it's got to be infectious simply because others around you can't be saying okay for this half an hour a day I'm going to tell everyone why you stay on. It's just everything you do and you have to lead by example and people look at that, you know, there must be something because this guy's all in. He's not faking it, you know, 16 hours a day. And then that becomes a kind of a culture where everyone's saying, 'Hey, listen, times are tough. Let's keep going. There's light at the end of the tunnel. We'll come back. We are getting better.' And I think there's a left brain part and a right brain part. So I really believe that the left brain part of it is very, very kind of analytical and numbers and you look at conversions and you look at everything and you say you're moving in the right direction, right? So we would measure ourselves on a week-on-week basis but by the hour. So like if we sitting here on a Friday afternoon, I will compare this Friday 3 to 4 p.m. with last Friday 3 to 4 p.m. adjusting for any holidays or whatever else. And the last Friday 3 to 4 p.m. because consumer behavior we have seen changes by day and also by hour in our kind of thing. So if you saw yourself having even tiny incremental improvements in the holy metrics or the holy grail which was really around conversion at different steps of the funnel and your unit economics getting better which is very often a derived metric but if you see yourself your dollar can go a long way your cost of customer acquisitions getting better your repeat rates getting slightly better all the time then you're moving in the right direction then it's just a question of when will the lines intersect and do you have enough fuel to go so that your revenue new line can intersect the cost line because you're keeping cost tight or actually reducing them if you can. And then the right side of the brain is obviously thinking of more creative ways all the time. These could be tiny little things like, you know, creative adverts that we were doing at that point of time or new features, small features about what people would like what would give them more comfort. So all that kind of stuff is coming together and actually moving in the same direction. So I think these are the two things which keep you going and if you're excited people start getting that and you rally them around the same cause and you actually if there's one secret source I think it's communicate. People in tough times tend to hunker down and not tell others and, you know, founders tend to just keep it to themselves or few people. I think I followed a different way, a because I didn't know better, it's not like every day but once a month there was a town hall and told everyone. I mean, we had at the lowest point in the downturn, we were down to 24 people, but told everyone or just before we shrunk, we were probably 42 people and told everyone how bad it is. And then every month, gave them a progress review and said, 'We three are in.' Me and my two other co-founders, we're in. And by and large, a lot of people, you know, younger people early in their careers, they tend to follow people. I mean they love the idea but they also say hey just like we all know the old adage like people don't leave companies they leave managers. The reverse of it is also true that people actually stay on not because of the company but they stay on because of their managers or their leaders. So I think that became the culture that it's all open. Everyone knows what's going on and as we get better things will get better for you too. So instead of looking back at a 4-year very dark tough period, I look at it as 48 months and really of those 24 months were bad. So there were 24 intervals in which if you were getting a little better, it was better. So if we were in, we were in for a month for sure.

Yeah. I wish I could tell you that there was a formula. The reality is that even today just today I was, we're still trying, I was actually meeting different people for a very senior position in the company and my co-founder who's now the CEO was very keen I met them as well and even now I think one is with every new position you're trying to fill and every new candidate you meet you can go in with your preset questions but most of the time you're trying to make a mental map of really fitment. In the early days especially when things are very tough I think you took what you could get and again the reality is in early days you need people with an all-rounder mentality which is they can do anything, you know, like I have to use a cricket analogy because I'm Indian but they can bat, they can bowl, they can pinch hit, they can field, they'll do everything just give them the ball they'll run with it. As you grow and mature as a company you need specialists and then you are hiring for specialist skills, but I've also learned there's no point really interviewing for the particular skill the person has. That's up, that's on the bio data. It's pretty clear they're very good at what they do otherwise they won't be here. I think you should try to gauge fitment and for me it is about trying to understand motivations of people, their personality type, you know, are they like, we know as a company we believe very, very deeply in teamwork, rise together, sing together kind of thing. We believe very deeply in fun at work. We try to diffuse crisis with humor because we think like that brings down the tension and that's like a personal thing so do people resonate with that? You can have people who are very serious type and, you know, they may not fit in if they don't believe all of this is important to work they might just like, you know, say okay I'll go with the flow but I think we're almost wasting time and resources whereas I believe that's totally untrue. I believe if you don't come back to work hopefully every day but definitely every Monday with a spring in your step and really excited about what you're building then you're not in the right company or not doing the right role and so our formula has always been like we want many entrepreneurs. We want people who once they've understood the rules of the game know what to do and they'll come back not for approval all the time. They'll come back when they want to make a big punt and they want to just tell you okay we're making this big punt at one point of time it could be 100,000 rupees today it could be a million rupees but okay I'm doing it this way and, you know, ask you for some ideas otherwise just go with it and if people don't keep coming back for that that means they're not taking risks that means we're not growing as a company so programmatic risk takers etc. I think that's the kind of stuff I search for, conviction, I search for a sense of humor. So I searched for some quirky stuff and I think it works seven out of 10 if I'm being honest, maybe eight out of 10, but by and large about seven out of 10. And sometimes it just hasn't worked. And that's the reality. I mean, you know what you see and you can do one, two, three, even four interviews, but I don't think, you know, we all know these are like first date, second date, you'll get people on their best behavior, and you're never really going to get them in the work situation. So I think getting them to meet other people, getting them to meet peers, people pick up different things. Whoever interviews should have a kind of veto and that's what we typically do. Don't pollute each other's kind of thoughts and ideas till you all put your heads together and say, 'Okay, now let's hear what everyone has to say and everyone who's interviewed does have a power of veto.' So I think all of that helps.

Well, it definitely does put more pressure on you. There's a quarterly pressure of reporting. With before that with private capital, private equity, I think it's slightly different. Of course, there quarterly board meetings, everything else, but I think that's just a longer term lens. Here every quarter you will, you know, share your numbers. Market will decide even through the quarter they'll decide but that's largely due to macro factors or any disclosures but largely every quarter they'll look at your numbers they'll look at, you know, how things are looking ahead and, you know, there will be movement in the stock. I think the trick is to disassociate yourself from that at a very visceral level like not to get too bothered and impacted, easier said than done and it took us I would say a couple of years before that we were very quarter-focused and then that put some pressure down the line. But then you realize sometimes you may not be making the best decisions because in our business and maybe in all businesses the best decisions are the ones which I think took a lot more effort than a quarter. Sometimes we have projects especially on re-architecting and various other things which take a year and therefore that means there's investment for a year of people resources and that'll only, you'll get your ROI much later. So can you actually build that into the narrative and actually call that out and therefore even down the line you're telling people hey you focus on that you're doing that and then actually to insulate your people I think from the ups and downs of the market. So my people are tired of me saying this but I always say don't look at the stock every day. The only reason you should look at the stock every day is in two scenarios. One the company's looking to raise capital so you need the stock's important, the price important or B you're looking to sell personally otherwise it's a vanity metric. It's a lagged kind of response to what you've done. Very often it's not a true reflection of what's going on because market only got so, let's say you're working on a fantastic feature or we have working on our chatbot which we have one but some very cool new capabilities on AI blah blah blah it's all being done right now that is going to really bear fruit maybe two, three, four quarters down the line in a full-blown way or any other feature or any other backend stuff that you made some major changes on speed and, you know, just overall better process, market doesn't know that today and they can't. So if the market's going up and down, it's not a reflection of what you've done now. It's very often a reflection of many other things, macro factors, etc. So I think the trick is to insulate and just have maybe two, three people, no more than that, really looking at market stuff, CEO, CFO, you know, investor relations, that's it.