Posted on Thursday, June 7, 2012
What prompted you to start redBus?
In October 2005, when I was working with Texas Instruments in Bangalore, I wanted to go home for Diwali. I failed to get even a single bus ticket from the travel agents. Nevertheless, there were bound to be a few empty seats in the numerous buses that ply the Bangalore-Hyderabad route I wished to take. The lack of this real-time data with travel agents, who depended entirely on tele-calling bus operators to determine availability, set me about discovering their modus operandi. Back then online bus ticketing was practically unheard of. An online repository of bus ticket inventory was essential, where information was seamlessly available.
What was the major hurdle you faced?
Initially, bus operators were resistant to online ticketing, and believed it is only for flight tickets. At the same time, for redBus.in to function, knowing the bus operators' inventory was a pre-requisite. Since, buses tend to have 20-odd percent vacant seats anyway, we convinced the operators to allow us to display 20 percent of those seats on redBus. If these tickets were bought, it would only be a bonus for the operator. What happened is, when users logged in and saw the availability listed as 20 percent, the tickets were immediately bought. This convinced operators that online bus ticketing can indeed work!
You set up operations in Aug 2006. When did you break even?
In December 2006 we managed to break even, given that it was the holiday season. This gave us further momentum. The tickets started selling swiftly online. Once people started using the site and liked the interface, we got more bookings. On an annual basis, we broke even last year. As of now, redBus services 8,000 routes across India. In 2011, 5 million travellers used redBus to book tickets online.
RedBus is a joint effort by you and your BITS Pilani peers, how trying was the teamwork?
My classmates from BITS Pilani, Sudhakar Pasupanuri and Charan Padmaraju, were my flatmates too. It is believed that when a group is working on a start-up, their skills have to be complementary. We quit our jobs to start red-Bus, and faced some ups and downs. We were ‘incidental entrepreneurs’. To code the software for redBus.in, BOSS (bus operators software system), and SeatSeller (for travel agents) needed programming knowledge, whereas we three have studied electronics. Although many advised us to outsource coding, we bought programming books, learned from them and started writing the code. Sudhakar handles operations and finance, while Charan handles the tech aspect.
Who were your mentors?
We presented our business plan to TiE Bangalore Chapter. It was selected and TiE appointed three mentors for our project. Their advice on feasibility helped us greatly. I would say sound initial advice is crucial for any start-up.
Did redBus depend heavily on VC funding?
There is a saying that ‘a lot of start-ups die of indigestion rather than starvation’. The external money invested in redBus in the last five years is around 13 crores, which translated to a 300-crore worth business, with 450 employees and 23 branches across India till date. I still maintain that one does not need a lot of capital to start a successful enterprise. It was a collaborative effort with the VCs.
Your advice to budding entrepreneurs.
Mark Zuckerberg has studied computer science and psychology. This background in multiple faculties is what probably reflects in Facebook—popular for its emotional connect with users. I feel on-the-job work experience is crucial. It was while working that I learnt managerial techniques, employee retention, training procedures, and so on. These skills are needed in order to empathise with people when you are on the other side of the table. That coupled with a passion for problem solving can go a long way.
He calls himself an ‘incidental entrepreneur’. Phanindra Sama, CEO and co-founder, redBus.in, shares
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