Why would a young vice president with GE capital Services decide to quit his job and strike out on his own, especially at a time when the market for startups was at its nadir? Deep Kalra, Chief Executive Officer of online travel startup Make My Trip posed the question to himself repeatedly, even as he contemplated a variety of ideas for his own business.

It was evident to Kalra that some of the ideas he contemplated were too grandiose or too improbable and wouldn’t get through first base. However, a few, like a plan for an online broking company lingered on. Kalra figured that he would need the backing of a large financial services company for an online stock broking idea to succeed. “I spoke to people who were heading large funds. We had several meetings. People were excited by the idea but frankly, this was something for a team of people and quite clearly, it wouldn’t be as successful as a one man job.” Kalra did not yet have a core team in place so he decided to pass.

Around that time, as part of his duties at GE Capital Services, Kalra met and spoke at length with the chief executive officer of a well-known news portal. “He was very bullish on the internet as a medium of business and talked with passion about the potential of internet in India. That meeting set me thinking about the tremendous possibilities in an online travel portal that would provide the whole gamut of travel related services,” Kalra says.

A graduate from the Indian Institute of Management—Ahmedabad, the entrepreneurial spirit in him was strong, but successive years of downturn had taken industry confidence to an all time low. Kalra had one thing going for him though. He started Make My Trip (or India Ahoy as it was called then) at a time when the parabola was plumbing the depths, so there was nowhere to go but up. Kalra decided to quit his job at GE and start his online travel idea.

The first day at Make My Trip was a revelation, Kalra says. “We had no office yet, so we worked out of the office of the company that was developing our website. We spent most of the first day trying to get some basic infrastructure in place, renting out an office suite, furnishings and so on. But it was great. I had a core team with me by then, so we grabbed some lunch and in between the logistics of putting an office together we discussed some ideas. In retrospect it was not such a defining moment after all. We did nothing out of the ordinary. There was no strategy session where we threw hardball questions at each other. We just kind of eased into the Make My Trip mode of working, which we have followed ever since.”

Not that everything has been going smooth since then. Travel being a notoriously fickle industry, it was rare that something would go according to script. Predictably, barely a quarter into operations, the team hit their first roadblock. Kalra had managed to convince eVentures, an early stage venture funder to buy into his company with $2 million (Ironically, it was on All Fools Day). But for Make My Trip to succeed Kalra had to make extensive contacts among tour operators and within the hotel industry. And that took money. The $2 million lasted sometime, but in those early days, Make My Trip had a high burn rate. The money eventually ran out and Kalra went back to eVentures for a promised additional round. But this was where the CEO ran into the first of many ‘storms’ that he continuously refers to. As a result of some misunderstanding between the two limited partners at eVentures—News Corp. and Softbank, the partnership snapped and no funding was forthcoming from that quarter. “NewsCorp and Softbank, both of whom had their own institutionalized way of functioning, could not come to an understanding about some issues and the partnership snapped. So many companies that eVentures had invested in found themselves without additional funds.”

Also, there was the matter of the business plan. The business plan, which they had initially drawn up, did not bring in the money, so Kalra had to drastically alter the script. “I still have a copy of it and it makes me smile every time I read it. It is so different from what I’ve done over the years. There were some really big numbers in that business plan that would make you feel good but when you really get down to business, a lot of the numbers were not relevant to the business scenario. So we had to depart from the initial business plan pretty drastically.” However, by October 2001, Kalra claims, he was quite clear about where the money was coming from and where he was headed.

The problem with figures on the travel industry is that they are invariably misleading—so many caveats that it is hard to trust a business on them. For example, official statistics say some 5.5 million people travel abroad, which also includes corporate travel. Similarly, one India government report puts the number of domestic tourists in India at 180 million, which as Kalra puts it, ‘is optimistic to say the least.’

So Kalra had to play it by ear and find out what worked for Make My Trip best. Eventually, he decided to put plans his initial plan for the outbound and domestic travel sector on the backburner and threw his marketing dollars on the inbound segment. “For the last 10 years about 2—2.5 million people have been coming to India. And that looked to be a good market to be in.” So Kalra decided that Make My Trip would focus on the inbound market alone.

However, the 9/11 calamity turned Kalra’s entire plan around. Suddenly people were staying off airplanes. Though Kalra’s major focus was on the Non Resident Indian (NRI) market, the months after the World Trade Center attacks stretched Make My Trip’s already precarious finances to the limit. “We were in a pretty desperate situation and needed to find some funding fast if we were to survive,” Kalra says. Luckily for him, one of Europe’s largest online travel companies came to Make My Trip’s rescue.

Necessity—The Mother Of Invention
Dinesh Dhamija-led eBookers plc is one of Europe’s largest online travel companies in Europe with a presence in 11 countries. In order to shore up the revenues of eBookers, Dhamija decided to move his contact center operations to India. After a pilot project with a third party service provider failed to produce desired results, Dhamija approached Kalra.

“eBookers arrival was very providential for us. They asked us if we would be willing to provide BPO services to us. We did not know much about the concept, but we needed the money. I said we would do pretty much anything right now,” Kalra smiles.Kalra set up a 250-seat contact center facility for eBookers under a Build, Operate and Transfer agreement. He even transferred some members of his core team to the eBookers facility.

Future Plans
Despite his reservations over the official statistics, Kalra regards the domestic tourist market as the best opportunity yet. He conservatively estimates the number of domestic travelers to be at around 50 million. “Whoever captures a sizeable chunk of that market is sure to be very, very well off,” he smiles. But that is not until the bandwidth and infrastructural issues get resolved.

Of more immediate interest, however, is to become the market leader for the inbound travelers segment. The company has seen revenues climb to over $7 million in the last fiscal. Kalra claims they are on track for revenues of $15 million in the current fiscal. “For the last year, we have generated profits. So we have some money stashed in the bank. The current gameplan is to enter the U.S. market aggressively in terms of buying a midsized player there.” The company is looking to raise some debt as well as equity to finance its acquisition plans.

Kalra attributes Make My Trip’s success to the hard work put in by his core team. “I was not a travel industry guy. I have no qualms in saying that I relied on the team’s judgement. Most of the decisions we have taken have come good. There have been some problems along the way, but currently we look well set for the next 4—5 years. And in this industry, who can see beyond that?” he asks. Understandable.