Hello and welcome back to First Principles. This is the 49th episode since we started, or the 8th episode of season 3.

In this episode, I sit down with Aloke Bajpai, Group CEO of Ixigo, one of India’s fastest-growing and most downloaded travel platforms. While most Indian OTAs followed the Western template of flights-first followed by hotels, Aloke and his co-founder Rajnish took a radically different path. The one that would take nearly 14 years before Ixigo became a full-blown OTA.

Aloke takes us through Ixigo’s unconventional journey, starting as a meta-search engine in 2007 that couldn’t raise funding for over a year. We explore how the insight that 96% of Indians don’t fly, led them to build a train-first platform, spending four years creating utility features without any monetization. He breaks down the technical innovation behind solving India-specific problems. Right from predicting waitlist confirmations using machine learning to creating a crowdsourced running status system using cell tower IDs when GPS and internet failed along railway tracks.

A central theme is resilience through empathy. Aloke shares how near-death experiences during the 2008 global financial crisis and COVID-19 shaped Ixigo’s culture. We discuss the founder’s decision to go to zero salary, the whiteboard moment where the entire team transparently decided on salary cuts, and the contrarian choice to proactively refund customers during COVID even when the company was running out of money. Finally, Aloke argues that peace of mind, not tickets, is what travel companies should really be selling.

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This episode was produced by Uddantika Kashyap and mixed and mastered by Rajiv CN.

Write to us at [email protected] with your feedback, suggestions, and guests you would want to see on First Principles.

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Full transcript:

(The transcript is auto-generated and there may be occasional errors. Please cross-check)

Rohin Dharmakumar: [00:00:00] Aloke, I discovered something in the course of my research, which is that when you were at IIT, you were really interested in ethical hacking?

Aloke Bajpai: [00:00:10] Yes, I was.

Rohin Dharmakumar: [00:00:12] And that got you banned from the computer center at IIT Kanpur.

Aloke Bajpai: [00:00:15] For a few months, yes.

Rohin Dharmakumar: [00:00:17] What exactly were you doing? And tell me about the computer lab and tell me what the order or which professor called you up and told you that you’re banned from the computer center.

Aloke Bajpai: [00:00:28] So, you’re good with your research, Rohin. But I actually, uh, you know, me and a couple of friends used to hang around in the computer center figuring out how Linux, uh, works and how, you know, you could actually go around the system and do things. Although we never used it for doing anything nasty, um, but we once got caught, you know, having root access to a machine.

Rohin Dharmakumar: [00:00:52] I was about to say, were you trying to get root access? And then you said it.

Aloke Bajpai: [00:00:56] Yes, and you know, I think we were out of the computer center for a couple of months because of that. But, uh, um, I think we also built a very good bond with the SysAdmin there because of this incident. Yeah.

Rohin Dharmakumar: [00:01:10] It seems like such a quaint concept, right? The entire concept of computer labs. Because I remember it back from school and from colleges where labs were a thing. You take off your shoes, go inside. There was dedicated time and it was really valuable because it was almost like, wow, in this time, this machine is mine and I can do whatever I want to do with it.

Aloke Bajpai: [00:01:30] Yeah, those were the days we used to get time slots where we could print batch jobs.

Rohin Dharmakumar: [00:01:35] Yes.

Aloke Bajpai: [00:01:36] Yes.

Rohin Dharmakumar: [00:01:37] I remember the earliest, my earliest memories of computer labs in school were where you had these dot matrix printers. And you had these software that would allow you to print banners on long running dot matrix paper, which you could stick up in your room.

Aloke Bajpai: [00:01:52] That’s right. ASCII art and all that.

Rohin Dharmakumar: [00:01:55] That’s right. Well, so that was that. You getting banned from the IIT Kanpur computer lab for a few months. Second, your company, it’s Ixigo, but the actual name for the company is Le Travenues. Does Le Travenues come because you were in the French Riviera for the first five years of your career?

Aloke Bajpai: [00:02:18] Partially yes. So actually, uh, the story goes as follows. Rajnish and I, we quit our jobs and came back to India in 2006. And we were registering the company. And it so happened that, uh, the ROC did not like that we were just calling it Travenues Technology Limited. They said this is a generic name. Although I had my view on that because Travenues is also Travel plus Avenues.

Um, but they said please add something in the beginning to make it more unique. And we were left with a choice of what do we add, right? And we had just come from France and, you know, everything had a Le or a La in front of it. So we just went with Le, and the ROC approved it. So that’s the story.

Rohin Dharmakumar: [00:03:05] And this is the thing, I sometimes wonder what are these rules that the ROC is applying? Because similar things have come up with The Ken as well when we try to apply or even the earlier company that I had. Like they will always reject it for the reasons that this is too common. And then you’re thinking, who else has this? Because I searched for it, I couldn’t find anything.

Aloke Bajpai: [00:03:25] Yeah.

Rohin Dharmakumar: [00:03:26] And then you have to just add something to it and that some random thing that you add in the spur of the moment ends up becoming a listed company name like, you know, 20 years later.

Aloke Bajpai: [00:03:38] Absolutely. And a lot of debate happened just before the DRHP filing that should we change the name, right? Because people were like, okay, now we could probably call it Ixigo Limited. But, you know, I think at that time we said this name has carried us well so far. It’s probably going to carry us well from here as well. So we decided to just continue living with it. And, you know, in a way we are a house of brands, house of companies in some sense, because we acquired also other businesses and brands. Um, so this becomes also the mothership in that sense.

Rohin Dharmakumar: [00:03:57] All right. French Riviera, Le Travenues, Ixigo. Aloke Bajpai, welcome to First Principles. Thank you so much for being here in Bangalore this December morning. I appreciate it. We’ve been trying to get together for this for a while. I’m finally glad that happened. And actually happened in a time where it looks like the Indian travel sector is sort of going through this incredible churn on account of the meltdown that Indigo had. Ixigo listed last year. And is doing really well on the stock markets. Congratulations.

Aloke Bajpai: [00:04:30] Thank you.

Rohin Dharmakumar: [00:04:31] Tell me, when did Ixigo… next year will you be 20 years old? Is that right? 2016 is when you started?

Aloke Bajpai: [00:04:38] So we actually started working on the idea in 2006. So in that sense, yes, next year we’ll be 20 years from the time we started working on it.

Rohin Dharmakumar: [00:04:48] Sorry, 2006. I said 2016. My bad.

Aloke Bajpai: [00:04:51] Yeah. And we launched in 2007. So in that sense, 19 years from launch next year.

Rohin Dharmakumar: [00:04:57] Interesting. I’m going to ask you some basic questions about Ixigo.

Aloke Bajpai: [00:05:01] Okay.

Rohin Dharmakumar: [00:05:02] Ixigo is of course a listed company. It’s a travel company because that’s how people see it from the outside. But how would you describe, what is Ixigo really as a company? How would you describe it?

Aloke Bajpai: [00:05:15] I think Ixigo is born out of the passion to help travelers out in terms of, uh, you know, the pain areas that exist, uh, right from the time you start thinking of a trip to while you’re on it, right? So before, during and after the trip, there’s lots of pain and agony that travelers go through to sort out the smallest of things. And I think Ixigo was born out of the passion to help solve that.

Um, the avatar in which we’ve been solving it has obviously evolved over time. Um, but the ethos remains the same, right? That we want to build the company that provides the best customer experience to travelers, right? And, and I think in that endeavor, uh, we have obviously entered several categories in a very unique way. Um, but if you think about the very long term, right? I think the companies that deserve to win are the ones that actually build the best customer experience in that space. Uh, and that’s been the common sort of passion for all the “Ixi-Gems” that are working on this.

Rohin Dharmakumar: [00:06:10] Ixi-Gems?

Aloke Bajpai: [00:06:12] Yes.

Rohin Dharmakumar: [00:06:13] What is that? Is that the…

Aloke Bajpai: [00:06:15] That’s how we call our employees.

Rohin Dharmakumar: [00:06:17] Oh, okay. I was… The reason I was asking is because you’re also a house of brands. So I thought perhaps the brands are called Ixi-Gems. But I get it. We’ll come to this later because one of the running strands across all your conversations in the past has been the importance of culture and employees. So I totally get why they’re called Ixi-Gems. But let me come back to Ixigo. Give us a sense of Ixigo’s scale right now.

Aloke Bajpai: [00:06:29] Well, uh, last year, uh, almost 550 million annual active users, which means half of people who use internet in India actually used us at least once. Uh, would have used at least one of our apps or brands, uh, or platforms, you know, at least once. And if I look at a monthly active number, we have more than 80 million monthly active users.

Um, we are doing, uh, transactions that are, uh, essentially now in terms of the number of passengers that we move around from one point to another in India across train, flight, bus, right? We’d be doing, uh, close to, uh, close to 150 million annualized, uh, you know, passengers that are being, uh, transported from point A to point B in India.

Uh, so in that sense, you know, we have significant penetration in the market. And in terms of downloads also, uh, we have the most downloads in our space. So we’ve crossed more than 700 million downloads across our apps. Um, and continue to be, uh, the fastest growing both in terms of usage and in terms of, uh, the transaction value that flows through us. So last quarter we did, uh, uh, close to 4,400, um, um, you know, crores of, uh, transaction, gross transaction value. So on an annualized basis, um, uh, you know, you can think of it as about 17, 18,000 crores of, uh, annualized gross transaction value flowing through us.

Rohin Dharmakumar: [00:07:55] You also have a very strong Bharat theme which runs across Ixigo. How would you explain that?

Aloke Bajpai: [00:08:00] Yeah. So if you think about why we do what we do, one of the reasons is that, um, we believe that the Western template of building an OTA was a bit flawed in the Indian context. Because if you look at the established norm on how online travel platforms globally got built, people would first launch a flight booking, uh, experience whether on web or app, acquire users, and then they would sell hotels to make money. And this was an established norm in US, in Europe. Uh, even in India, the first batch of OTAs were doing just that.

I think we realized at one point in our journey, and I think this was around 2012, ’13 when mobile internet was taking off, that if you look at the penetration of air in the country, uh, back then this was sub 3%. Today that number is close to 4 and a half percent of the population that flies every year. If you look at even China, which is 37%, US is in the 80s, uh, we are very under-penetrated as a market when it comes to air. What that means is that travel for an average Indian, uh, may not even relate to getting on a flight at all. Right?

And, and that was the insight that came to us, um, while we were building this and, and we realized that why is nobody building a train-first OTA in the Indian context? Because the first port of call for any Indian to, uh, go on any vacation, journey, pilgrimage, etc., is to get on a train and then figure out after they reach there, typically they figure out their accommodation. You know, this is, this is how we all grew up, you know, in our journeys. And I come from a tier two middle-class family.

Rohin Dharmakumar: [00:09:40] Yes. For me, the highlight of my childhood was summer vacations where we would travel from Delhi to Kerala by two plus days, two and a half days of train up and down. But it was essentially train all the way throughout childhood.

Aloke Bajpai: [00:09:55] Yeah. And it was a very joyous experience, right? As a child.

Rohin Dharmakumar: [00:09:58] It was hot and humid and dusty, but it was joyous.

Aloke Bajpai: [00:10:02] It was joyous. Um, but there were also these moments of anxiety in that, right? You reached the station, you were asking the coolie which platform number your train was on.

Rohin Dharmakumar: [00:10:10] And you’re scanning those papers which are pasted on each of those compartments saying, “Is it this? Is it still on the wait list? Did it get done?”

Aloke Bajpai: [00:10:18] Exactly. And I remember queuing up at 6:30 AM outside the ticket window so that when the ticket window opens, you know, we are able to get a reserved ticket. This was in the pre-online eras.

So, uh, we also had these insights about, you know, while growing up, what are the pain areas that train travelers faced? Uh, and some of them were still surprisingly still around those pains. Even today, you know, some of those pain areas are still around, uh, which is accurately figuring out information along the journey. Uh, and and a lot of this keeps changing, you know, platform numbers can change and coach positions can change and, you know, running status may not be as accurate on one platform or the other. So these problems have existed for the longest of times.

It’s just that no company got obsessed about solving them. And we actually got into this space in 2013 and said somebody’s got to solve all the problems that a train traveler faces in order to build, uh, an experience that gives you peace of mind. Right? And, and, you know, I’ll talk more about peace of mind because in a way travel is a category which is very different from any other e-commerce categories because you’re selling an experience. You’re not selling just a ticket.

Right? And, and I think that’s the biggest mistake anyone can make looking at this category. We are not, at least us as a company, we do not see ourselves as a company that’s established to sell tickets. We are selling peace of mind. That’s what I keep telling our team. That look, we are in the peace of mind business. Uh, when people travel, they do not want to deal with the anxiety of things that can go wrong, things that change. It could be before or during or after the trip. It could be a flight cancellation. It could be a a bus that did not turn up at all at the stop. You know, we have to deal with these things as an OTA. Your job does not end or start even at selling that ticket, right? So um and I think that’s what has set us apart, right? If you think about every category that Ixigo entered, we did not enter with the obsession to sell tickets. Which was very different in in terms of approach than any of our peers had at that point.

Rohin Dharmakumar: [00:12:35] You spent some four years building a rail, um, a train travel app and experience and engagement without offering even transactions on it if I’m not mistaken, right? Forget monetization.

Aloke Bajpai: [00:12:48] That’s right. So, and, and even if you roll back even to 2007 when we launched, we launched as a flights meta search. We were not selling any tickets on flights.

Rohin Dharmakumar: [00:13:00] Right. Like, okay. Just take us… Because you’ve gone through… You launched as Flight Meta Search and then you became OTA then…

Aloke Bajpai: [00:13:28] And then we do the train utility app in 2013, which is largely solving these pain areas.

Rohin Dharmakumar: [00:13:35] Sorry, Aloke. I’m going to interrupt you and take you back right to the beginning. Since we are doing this transition thing. Uh, you and Rajnish, both of you worked at Amadeus?

Aloke Bajpai: [00:13:45] Yes, we worked at Amadeus in Europe.

Rohin Dharmakumar: [00:13:47] Which is a global giant that provides the software that everyone runs. You started, when you started, if I’m not mistaken, both of you wanted to start something similar. And you did that as well, right? Some sort of a B2B SaaS.

Aloke Bajpai: [00:14:02] Actually, actually when we came back we were toying with several models.

Rohin Dharmakumar: [00:14:05] Came back from the French Riviera. I must mention this right.

Aloke Bajpai: [00:14:08] From the French Riviera. We were living, uh, in a place which was between Nice and Cannes. Um, so, you know, we would watch the film festival live and we would also be driving along the coast every summer. But we left that life, the good life, and and came back because we got bored of the 35-hour work week. Uh, and there was this day when I went to office on a Saturday to finish something earlier than, you know, I I had a deadline for. And I get called by my boss’s boss on Monday saying, “What were you doing in office on Saturday?” And you know, because this was, uh… setting the wrong ex– wrong example.

And, and as a 20-something, uh, year old, right? You actually want to give as much as possible in terms of time, energy to to make your career grow. And you know, this was counterintuitive. So, uh, you know, when we looked at, uh, our career graph from there, we felt that, you know, if we stick around and just keep doing this, you know, we might end up being, uh, uh, maybe some kind of manager in this company after a few years. But is it going to give us real satisfaction?

And I think that’s the point when also I was not very sure what I wanted to do next. So I actually go and apply to business schools, um, and go to INSEAD for a year because I’m still not 100% sure what I want to do next in life. I was very sure I did not want to live that life anymore. Um, and and of course I sit through all the big four consulting interviews and I get dinged from all of them because… and the feedback after a lot of nudging one of them gives me a feedback saying “You cannot think straight.” So, you know…

Rohin Dharmakumar: [00:16:05] And did you… Sorry, what does that mean? Did you ever, I’m sure at some point you reflected on it. What does it mean that that you cannot think straight?

Aloke Bajpai: [00:16:12] I mean, you know, you had these case studies and your, you know, you had to estimate things and you know, you you need to, you needed to have structured thinking to to crack those.

Rohin Dharmakumar: [00:16:22] Ah, structured thinking.

Aloke Bajpai: [00:16:24] And and this person believed that, you know, I did not have a very structured thinking about things. So, uh, go back.

Rohin Dharmakumar: [00:16:32] Which actually today would look, if I look back at Ixigo, it’s proven right. But it’s proven right in the right way because you, if you went about a structured manner then you probably would have attacked the flight space and stuck with it etc. and stuff like that. But sorry, I want to kind of take you… You know this thing of… There’s a lot of founders that I’ve spoken to who seem to have this common thing of they started their careers in these really successful large global organizations. Where, you know, prestigious organizations, work is good, you have a predictable line to getting promoted, making lots of money, staying abroad etc. And all of them in some way I think like you know whether it’s Indian, whether it’s outside etc. I was looking at Harshil Mathur of Razorpay, he worked with Schlumberger. Anand Jain of CleverTap, he started like you know I mean he was actually interested in… so I’ll bring to the other point as well. Manav Garg started if I’m not mistaken with Olam International in Singapore. Tarun Mehta, he worked if I’m not mistaken again Ashok Leyland or large companies. Right?

This is one strand where they work with these large companies which on the face of it, you’ve landed your dream job. Why aren’t you there? Second thing is that all of them at some level in their childhoods, like when I’m researching, they seem to have this thing… “I got my first computer.” “I got exposed to computer magazines.” “I, you know, went to the computer lab and started.” So it’s al– and that’s the same with you as well right?

Aloke Bajpai: [00:18:25] Yeah, I think my first exp– my first exposure to computers was in 1988 actually. I was eight years old and um, at in those days my dad was posted in Kenya in in our town, they had this…

Rohin Dharmakumar: [00:18:38] Yes, Mombasa.

Aloke Bajpai: [00:18:39] Mombasa, yes. So we had, uh, a new type of institute that had opened up very close to where we lived. It was called Bits and Bytes. And they would have this poster out there saying “We’ll teach your kids how to use computers.” And they had the initial Macintosh, uh, etc. installed there. And you know, they had… they were teaching kids Logo, the language, uh, you know which was used back then. Um, and then the elder would people would be learning COBOL and Pascal and all that. But my dad sent me to a summer camp there. Uh, just out of the blue. I said, you know, this looks interesting. Can I do something here? So I went for a two month long summer camp. And that changed, uh, you know for me like my perception of what computers were. And and I was like this really cool, right? I like I want to spend more time learning this. Uh, there’s a lot that can be done on a computer.

So that was my first exposure. And then of course when I moved back to India, our family moved back in the 90s and I grew up there. You know, we fortunately in our school we had a computer lab and I would spend also a lot of time there. Uh, sometimes you know, uh, my computer teacher was not very happy with me because I would ask him questions outside the syllabus. And and he would sometimes even not know the answer. So so it was very interesting. Uh, but that love for computers has been there throughout. Uh, and now that’s love for anything new that comes out.

Rohin Dharmakumar: [00:20:10] So the the line that I am essentially tracing is because now I have the benefit of hindsight is many people seem to have this love for something which is gets triggered in childhood. Like usually computers, tinkering, hands-on creativity which stays sort of sustained, goes through up and down periods. And at some point they end up joining large com– So there is almost like you can see that when these people land up in large companies, at some point they are going to leave those large companies and go back to starting something on their own.

Aloke Bajpai: [00:20:45] Because they get bored in predictable environments, right? Like, uh, if you have a tinkering mindset and you have a creative mindset, uh, you will get bored in a process driven nine-to-five environment where you cannot step outside the box and do things. Right? So so that’s what happened.

Rohin Dharmakumar: [00:21:05] What led you and Rajnish to decide that we’re going to start something on our own? I did read that one of the roles was played by the movie Swades.

Aloke Bajpai: [00:23:08] Yeah, yeah. So I was in B-school when Swades came out and uh…

Rohin Dharmakumar: [00:23:12] You were in Singapore.

Aloke Bajpai: [00:23:13] I I was in Singapore. That’s right. I I watched Swades at least like four or five times. And I and that particular song which uh, nudges you to go back, right? I watched it multiple times. I think something inside me told me that um, you know, this was the right moment because any which ways after B-school is one of the pivotal moments in everyone’s careers where you have to make a choice what you’re doing next. And one of the choices was to move back to India, do something there. Uh, versus you know, look for a job abroad. And even though I had a couple of job offers by the end of it…

Rohin Dharmakumar: [00:23:55] How old, how old were you?

Aloke Bajpai: [00:23:57] I I was 25 when I was finishing INSEAD. Um, and uh, I I happened to uh, you know come back to Nice uh, for a couple of days. And Rajnish and I had coffee together. And I was like…

Rohin Dharmakumar: [00:24:12] Two of you studied together at IIT and were wingmates.

Aloke Bajpai: [00:24:15] We were wingmates. We were also flatmates when we were working there together. Uh, but this I’m talking about when the year at INSEAD was over and I was in midst of figuring out what I’m doing next. Uh, we have coffee there together and we were like, okay, we could either keep doing, you know, these boring corporate jobs for the rest of our lives and and you know retire as a VP in some large company. Or we could actually take a bet on ourselves, move back to India, do something in travel tech, which is what we understand. Um, but we still didn’t know what. But we were like, you know, if if we don’t do it at the age of 25, when are we going to do it? Right? Because this is the right time. And we have not sort of uh, got any other liabilities on our head in in terms of uh, families. And we were not married by then. And um, and and also in terms of energy, right? We had enough energy to devote to this. Because we knew that this would take a lot of intense amount of time and energy, right? But when you’re 25 and ambitious, right? You you you can take that leap of faith on yourself. What we didn’t have was capital because I had just taken a loan to pay off my B-school and you know that loan was not fully paid. And Rajnish also was in some family debts etc. which he still had to pay off. Uh, so at the time when we moved back to India in 2006, we both actually are not, you know, financially in the best of shapes. But we are very passionate about building something, right? And that’s that’s a very unique zone to be in because there’s a lot of uncertainty.

Rohin Dharmakumar: [00:26:00] Yes an outlier. Because one of the trends that I’ve seen is that as B-school fees continue to grow and grow, more students are taking on loans to fund it. So as a result of which, for no fault of theirs, they become risk averse when they’re coming out because they’re like I need to first pay this back before… And therefore those crucial period like you said when you come out of B-school when you can take a risk, they end up not taking a risk and then deferring it and often that sort of becomes like a career in itself.

Aloke Bajpai: [00:26:30] Yeah.

Rohin Dharmakumar: [00:26:31] What was it about in the two of you where you said that both of us are in debt but we’ll still take this chance?

Aloke Bajpai: [00:26:38] I think we were just mad in hindsight. Like there’s no there’s no logic to it.

Rohin Dharmakumar: [00:26:42] All right. No capital, mad in hindsight, both with debt, coming back to India from uh, you know, the French Riviera and from Singapore. And what did you decide to start? What was the first business? The first iteration of Ixigo?

Aloke Bajpai: [00:27:00] So the the first we were toying with two ideas. One of them was to build uh, you know, like a GDS killer or the next generation GDS because we’d worked for Amadeus so you know you always you always have some bias on things that you’ve done.

Rohin Dharmakumar: [00:27:15] GDS is sort of like this master ticketing system.

Aloke Bajpai: [00:27:18] GDS is the global distribution system. So these black and green screens that you had that used to sell airline tickets. And then once the internet came, people figured out hey you can actually use the browser to sell stuff. Um, but essentially was built to distribute travel supply globally. Uh, so one of the ideas we were toying with was to build like a next generation GDS.

The other idea was that online had just started to take off. There were three OTAs that had already raised money in India. Uh, in fact four. Uh, the MakeMyTrip folks had just moved back to uh India to focus on the market. They were focused on the US for a few years. Uh, TravelGuru, Yatra, Cleartrip they had all raised money. The first Series A round was done. Um, and so you know we just felt that hey is online travel something we should look at? That’s just getting started. Air Deccan was around. This is the time when aviation had just started to show signs of uh, you know fast growth. And the the 99 rupees fares that Captain Gopinath was promoting, you know, had really stimulated the market, right? In that sense.

So so we felt that perhaps you know we should look at onl– And internet was always like our first love because uh, both of us even at Amadeus were working on uh, you know web technologies. Like I I was part of a team that actually wrote the first browser based cruise booking engine for travel agents. Uh, and Rajnish was also doing a lot of cool stuff on uh, you know how web can disrupt you know that entire old green screen business. So in that sense we started to look at what the internet plus travel plus India, you know, equation could mean for us. And we realized that we did not want at that time to build yet another OTA because a, because a few of them had already raised that much capital. And we felt that we don’t even know if, you know, uh, it’s worth spending our time building a fifth OTA at that point trying to do exactly the same thing.

But we felt that hey, the other model that was very interesting was meta search. There were these one-year-old businesses, two-year-old businesses like Kayak or Skyscanner which had just started in US and Europe which had started to from a consumer perspective look like the more disruptive model because you could actually go and search and crawl multiple travel websites and find the best deals at one place. So the first model we took our bet on was saying can we build a meta search for India which can aggregate all the airline fares, all the uh OTA deals etc. at one place. And that was the version we launched in June 2007. That was the first version of Ixigo.

Rohin Dharmakumar: [00:30:15] And that was fairly successful?

Aloke Bajpai: [00:30:18] Well I think uh, you if I’m not mistaken with just through word of mouth within the first six months itself you had like what close to 100,000 people who signed up etc?

Aloke Bajpai: [00:28:38] Yes. So the first version of Ixigo was launched from a DSL connection at our home.

Rohin Dharmakumar: [00:28:45] Yes. With a 512 kb pipe.

Aloke Bajpai: [00:28:47] Kbps pipe. Uh, with DynDNS pointing the DNS to that box. Right? And I was in hindsight like the the crappiest setup that you could do. But then we were a scrappy startup with limited resources and and you know that’s what we took we could fathom on day one. Uh, send out emails to a bunch of friends saying “Hey we just launched this check this out.” We used to have Yahoo and Google Messenger back in those days if you recollect. So Google Hangouts. So we so the server was in that in your house and like with the the 512 kb pipe coming into that. That’s right. And with a DynDNS pointing to it. Um, it was in hindsight like the the crappiest setup that you could do. But then we were a scrappy startup with limited resources and and you know that’s what we took we could fathom on day one.

Uh, sent out this email blast to my friends. Uh, Rajnish and I change our status on Yahoo Messenger saying “Check out ixigo.com.” And that evening itself the site crashed. Because you know obviously we had not at all worked out that there would be thousands of people wanting to check it out at once. Uh and a friend of mine who worked at Microsoft actually sent it on his corporate email uh group saying check this out. So uh you know in that sense it was a good problem to have. We immediately moved to like uh you know proper hosting and hosted servers and and and figured out that we need to build something more stable. This is actually gonna work. So um but yeah I think we we grew very rapidly by word of mouth. Within a few months we had 100,000 plus monthly active users.

Rohin Dharmakumar: [00:31:30] With zero marketing spend.

Aloke Bajpai: [00:31:32] I think within six months we were there. With zero marketing spend. We didn’t have any marketing dollars. Actually uh we were living in those days Gurgaon was the cheapest place to rent an apartment in Delhi because it was just literally dumps of dirt right all around and a few buildings being constructed. That was Gurgaon for you this was 2006, 7 right 7. So uh we find the the cheapest uh apartment we can and we’re just renting that out and running the company from there. Uh and and and then we realize that look we need to think of this more professionally, move to servers uh uh you know even move to a small office and and maybe hire one or two people because we would need somebody to also run it with us.

Rohin Dharmakumar: [00:32:30] Up till this point it was just the two of you?

Aloke Bajpai: [00:32:32] Up till this point it’s the three of us. We had another co-founder who uh you know dropped off along the way but uh basically the three of us were renting this apartment, writing code or talking to I was talking to airlines the the other two were writing code. And then uh you know just waking up doing that going to sleep. That was the routine every day. Uh the computers were on a dining table in the in the center of the uh the apartment and there were uh you know three rooms and we would just come out of the room sit on them and then disappear back in the rooms.

Rohin Dharmakumar: [00:33:05] Do you have photos of back then what you were doing?

Aloke Bajpai: [00:33:07] Yes yes I do.

Rohin Dharmakumar: [00:33:08] Okay great. Alright. But is it right that uh you tried to raise venture funding uh on the back of this initial viral success and you spoke to a bunch of VCs and you couldn’t manage to convince um any of them. In fact one of them apparently told you that you couldn’t even raise $100,000 with this. Is is this correct and what what happened?

Aloke Bajpai: [00:32:00] That’s right. So um see you have to understand that this was a time when there were very few venture funds in India. Um if I recollect probably five or six of them. Um and then there were a bunch of angel and seed uh you know uh consortiums but those also numbered like you could count them on your on your fingers right? So those 15 odd doors you know we we started knocking uh from the time we launched. Uh classic template uh we’d read all these uh you know uh books about Silicon Valley startups and we’d uh you know gotten inspired by journeys of uh companies in the Valley whether it was Google or or Facebook etc right which was also getting started. And I think in in that sense we were uh we were clear that if you build something that people like and you start having organic traffic usually people are able to find the money to support it right? But uh we figured out that in India it was just taking far longer than we imagined it would and and there were multiple meetings uh one particular investor I would have met at least five or six times in a in a span of seven eight months. Um but but no real movement on towards uh you know anything.

Rohin Dharmakumar: [00:34:40] Why? Because I’m assuming that whatever your ask was could not have been some kind of nosebleed valuation or something like that. So it would have been a reasonable bet.

Aloke Bajpai: [00:34:50] These were days where you know you you basically took what you got right? So there was no I mean I don’t think we had any reasonable or unreasonable ask. We were like okay we need some seed capital. Uh I think we wanted like half a million dollars or we’re not looking for a lot of money um to get started and you know we were uh kind of flexible on on what uh in what shape and form that would come. And I think uh there were two things playing in people’s heads. One is that it was already looking like a crowded space to some people saying that hey there’s four companies that have raised five to ten million each already. Uh what are you gonna do that’s so different right?

Rohin Dharmakumar: [00:35:35] Did you have that answer?

Aloke Bajpai: [00:35:37] Well people still ask me that so it’s it’s okay I mean I’ve gotten used to it. Um but but I think now we’ve hopefully proven that you know we are doing many things differently but I think that question by the way inevitably is uh is one of the reasons why the best of companies get rejected right? So if you look at the founding journeys of the best of companies you know uh whether it was Airbnb or you know they it just every space looks like a crowded space from the outside.

And I think even though we were trying to say that look our model is different we are Meta we are not an OTA and you know uh consumers love us here’s the traction graph here’s the uh you know we used to collect customer satisfaction scores. This was the desktop era of the internet Rohin so we did not have apps. This was just uh browser uh based uh uh you know interfaces and essentially what we were telling them is hey you you are opening five browser windows and doing the same search over and over again I’m saving you a lot of time and money both right? And and consumers actually were liking it but the monetization model obviously was not well established so we had gone and signed up a couple of airlines and shown that we can monetize this by uh click based models or advertising based models. But it was not a category in VCs minds which was well established and unfortunately yes there is some herd mentality in in the investing space uh and unless you understand that this has worked elsewhere will it work here you know those those things. Even Kayak and Skyscanner were like very small businesses right which which people did not know uh whether Meta globally would actually work or not. So I think that was the biggest reason.

Rohin Dharmakumar: [00:37:30] Got it. I have a follow-up question on this. Now uh this has played out like you rightly said with some of the world’s best companies you see this thread kind of playing out where I mean some VCs actually have like a you know section where they say these are the ones that we missed right and we should not have. So if I were to go back to that point from the VC’s point of view in many ways they were right to you know not get attracted by the Meta search model. Because you guys yourself would very quickly pivot away from Meta search to becoming an OTA and a bunch of other things. So therefore the the focus on the business model at that point in time in some senses was right they didn’t see.

Aloke Bajpai: [00:38:15] Yeah.

Rohin Dharmakumar: [00:38:16] But counterintuitively what they should have probably seen is that you and Rajnish would essentially do whatever it takes to continuously pivot the business to reflect it towards consumer preferences and trends and eventually make it successful.

Aloke Bajpai: [00:38:30] I think it’s easier to say this in hindsight.

Rohin Dharmakumar: [00:38:32] Yes. Could you predict it?

Aloke Bajpai: [00:38:34] I I look…

Rohin Dharmakumar: [00:38:35] How would you spot yourself at that point in time?

Aloke Bajpai: [00:38:38] Look I’ve I’ve started doing some angel investing in the last few years and also like I do mentor a few startups and I think the why is the most important question right? Why are the founders doing what they are doing? Right? Are they chasing glory? Are they chasing money? Are they chasing a a genuine passion that they’re willing to bet everything in their life on? Right? And I think that question is still of fundamental is most important at least in the early times because uh you know when when someone has started a company that motivation needs to be very pure and clear right? If you are not doing this let’s say you’ve launched a product or service. If you’re not doing this out of the pure love for serving that customer of yours and making sure that the pain area you’re solving is actually indeed solved in in veracity and that you’re able to feel satisfied that you’ve changed somebody’s life or or you know created value for that customer. I think it’s it’s that test which most people do not apply because we get carried away by metrics we get carried away by numbers…

Rohin Dharmakumar: [00:39:55] Or the size of the market opportunity.

Aloke Bajpai: [00:39:57] Most size of the opportunity. I I think spreadsheets are great but spreadsheets never tell the story right? Spreadsheets can only show you that the numbers that were promised are getting delivered or not right? The real beauty of businesses lies outside the spreadsheets right? And I get reminded of this because you know lot of VCs also or investors who are asking for okay what’s the model and you know uh how does this look like over… actually we had we had not modeled our business very well in hindsight like we had not really built out a very detailed financial model. We built it because people asked for it. But we were like we are solving a problem uh bunch of users think that this problem is worth solving and we’re getting traction right? And if people believe there’s a problem worth solving that we are not solving today we’ll go and solve it right? But as long as you’re passionate about identifying the pain areas and the problems you’re not gonna give up till you’ve actually solved each and every problem that exists in that space.

Rohin Dharmakumar: [00:41:00] How do you spot that? So you went back to 2007 and your a VC who’s trying to spot do these two guys Aloke and Rajnish have it in them can I bet on them because even though their current business model may not last even though their current spreadsheet may not last but these people will. What questions would you ask yourself?

Aloke Bajpai: [00:41:25] Look I I think if I look at it from their perspective I can understand now why it was so hard to to place a bet on us right? Because um…

Rohin Dharmakumar: [00:41:35] But conversely had someone made that bet they would have made out…

Aloke Bajpai: [00:41:38] I know and some some people did right? And uh you know our first seed investor actually was an inbound call so it’s a very interesting story. Uh this was late 2007 about October November we were running out of money which we anyway were every month. But you know in the past few months we’d managed to borrow from relatives friends you know the uh what do you call friends families and fools right? So we’d done all that um and and we reached a point where we were buying a printer for our office and our office was literally like a 400 square feet uh this this kind of room even smaller than this room probably. Um and and we write a check to buy a printer. The next day I come to office and uh you know one or two employees that we had are saying “Hey there’s a man standing out and he’s threatening us.” I said who is he? Is that it was the guy who sold the printer to us. His check had bounced. Right? And he was like you know I need my money. And that’s the day we realized hey we are broke again right?

Um and this was after several discussions with several investors that had not been very fruitful. Uh the next day we get an inbound call on we had these fixed line phones back then. So we get a inbound call on the fixed line phone and uh there is a European sounding guy at the other end saying uh can I talk to the founder of Ixigo the CEO can I talk to him? And I am the one picking up the phone I’m like I am the CEO of Ixigo. Uh and he says you know I’ve been checking out your website and playing around with it it’s very neat it works really fast and you know back in the days we’d built a rich internet application with one page which loaded results in seconds when other OTAs were taking like 30-40 seconds to load their results because we were techies who’d super optimized that we’d colocated with where the airline websites were actually hosted so we’d done a lot of smart stuff there.

Aloke Bajpai: [00:42:25] …This person recognized that right? This is something we’d been telling all the investors and saying you know check it out try it out yourself but this person calls us inbound says I loved your uh website I want to meet you guys. And I’m like okay I’ll come and meet you where are where are you base? He said I’m in Singapore. Uh we check our bank account we were broke we couldn’t pay for the printer but there was some revenue coming in from some airline the next month so we were like okay we can buy one ticket to Singapore both of us can’t travel so I go there to Singapore to pitch to William Klippgen this is a Norwegian investor who had uh been tracking our journey. He had sold a meta search for e-commerce to Yahoo back in the days uh in 2004 for close to half a billion dollars uh and then moved to Singapore become an investor. So he understood that space very well and he understood the product tech quality very well.

I pitch to him and his team so he had three or four other partners and I’m walking down you know this is in a hotel uh meeting room and then I’m walking down to the lobby and he calls me and says wait in the lobby for an hour. I’m waiting in the lobby for an hour he comes down with a draft term sheet after that meeting. And I am actually at that moment he’s trying to walk me through certain terms. In my mind I am blanked out. I’m telling you I didn’t I didn’t understand.

Rohin Dharmakumar: [00:44:30] I can imagine.

Aloke Bajpai: [00:44:32] You can you’ve seen those scenes in the films where you know words are not registering in your mind. It was happening to me. And I was just nodding I was like okay okay okay. Right? And I like literally went back to India and told the team that hey we are gonna get funding finally it looks like. Um but obviously we’d had so many disappointments that till the money didn’t hit the bank you know you were not uh but the money did hit the bank and February 2008 we raised our seed round from uh BAF Spectrum which was the fund based out of Singapore.

That moment I think uh for us was uh if you watch The Pursuit of Happyness and you see at the end when he’s given up all hope and he actually gets the job, it was that moment for us right? Because we were down to the wire in motivation in money and everything but you know users had continued growing everything was going great right? And revenue was also slowly trickling up but it was a very small trickle right it couldn’t pay more than our server bills at that point. Um so so it was I think the uh a pivotal moment in our journey when that happened. Yeah.

Rohin Dharmakumar: [00:45:50] You also managed to raise some money from some of your INSEAD professors?

Aloke Bajpai: [00:45:55] Yes I did along with that.

Rohin Dharmakumar: [00:45:57] Was that the same trip?

Aloke Bajpai: [00:45:59] Um this was afterwards actually so we had uh before this you know like uh when the printer incident happened a friend of mine from INSEAD who was my classmate the next day I asked him to wire some money. So we had an angel who was my friend and then uh post this round uh when the GFC crisis hit and that’s a story in itself is when we again tapped into uh some more angels to help us out during the 2009 uh you know time when there was hardly any capital out there. Uh and we did a bridge round where one of my professors and the Dean of uh INSEAD Singapore campus both invested in that one. Yeah.

Rohin Dharmakumar: [00:46:40] It’s very interesting. To just very quickly switch back because we started this journey uh to discuss the evolution of Ixigo and its business model. So you started by being a Meta search um which out of which you pivoted. How long were you a Meta search before you pivoted to being a full-blown OTA?

Aloke Bajpai: [00:47:05] Well uh we became a full-blown OTA in end of 2019. So we were for on the flight side we were almost for 12 years a Meta search although in the interim we moved to something called Meta Book where you could actually book on us but on our partners right? So it was a it was a platform that allowed facilitated.

Rohin Dharmakumar: [00:47:25] But it was like an intermediate step between being Meta Search and…

Aloke Bajpai: [00:47:28] Yes. So I think that intermediate step started around 2017 and so for about two and a half years we were a Meta Book and then became an OTA completely end of 2019.

Rohin Dharmakumar: [00:47:40] And then today if I look at Ixigo, the majority of your your strongest market segment is the train booking segment if I’m not mistaken right?

Aloke Bajpai: [00:47:50] Yeah.

Rohin Dharmakumar: [00:47:51] Followed by bus.

Aloke Bajpai: [00:47:52] Followed by airlines.

Rohin Dharmakumar: [00:47:53] Followed by airlines and then hotels. What were those other when did those now I understand this part like you know where you both come from Amadeus you’re like we need to start a travel company let’s start Meta search here are businesses like Kayak etc which we can there’s no such business uh in India let’s start it you run with it. At what point do you start looking at trains and buses and what causes it?

Aloke Bajpai: [00:48:20] Right. So this was around 2012-13 when mobile internet had just started to take off in India. Because remember before that uh it was just the desktop era and Meta search was the actually the most consumer friendly model in that era. Uh trains as a category I think India is very unique because if you look at 23 million people traveling every day today by a train out of which two and a half would be reserved and the rest would be unreserved. It’s in order of magnitude bigger than any other mode of transport in the country right? It’s actually in a sense the bloodline of the country the arteries and veins of the country right in that. Um and you know for an average middle class Indian or we call Bharat or whether you call it next billion users from tier 2 3 4 towns or emerging middle class people call it India 2 India 3. In that segment it’s not just the dominant mode of transport for many Indians it’s the only mode of transport which they can afford which is also close to them. So in villages in small towns there is no other way you can travel to any other town. It’s only trains.

And therefore it just seemed like the most obvious uh segment to go after. In fact when we were looking at Google search data we saw that the most dominant queries and rising queries were all related to uh train related information whether it was a PNR status check or a running status check or or just information about train schedules and routes. And Android had just come around and we said why is there no train related app on Android yet that actually provides all this information at one place.

And uh it was at this moment where we said that maybe it’s time to uh create a small team within our team. And by that time you know we were uh a more sizable if I recollect we were probably uh 60-70 people if not uh if not more but basically said why not four or five people go into a room and Rajnish and uh uh four engineers actually go into uh a room and they literally locked themselves in for a few months saying we’re gonna come out with something that makes sense for train travelers right? Like which which essentially solves their problems and also experiment with multiple ideas. So they actually came out with three or four apps. Uh the the train app in the current avatar was the precursor of that was one of them where all it did was it would pick up uh the PNR that you had booked on IRCTC from your SMS inbox it would with permission obviously start checking whether the wait list was moving. And once we had enough data we would start predicting whether that PNR would confirm or not. So if you had a wait list number 118 on a Punjab Mail third AC ticket from uh you know let’s say Delhi to uh you know let’s say to to to somewhere else uh.

Rohin Dharmakumar: [00:51:25] Ludhiana.

Aloke Bajpai: [00:51:26] Ludhiana you know would we be able to predict that yes you will get that ticket uh was a function of how much data we had. And there was a lot of data out there which was uh on blocks.

Rohin Dharmakumar: [00:51:40] I wanna ask how were you getting this information because unlike airlines and other spaces buses etc the difference is Indian Railways is run by one organization with there’s only one seller there’s only one supplier. So I the precursor to all of this is that you could only buy tickets from Indian Railways right? And the only way to check status was through Indian Railways. So if if somebody enters a PNR on the first version of the app that you built where are you folks getting this is it coming from IRCTC did they have APIs back then that you could?

Aloke Bajpai: [00:52:15] So back then back then uh this information was only on the Indian Railways website right? And people would have to go there and type it in every time and check it again and again. And all we built was uh what today people would call a more agentic way of doing it right? Which was basically we would go and do it for you and show you whether it has moved or not. Um there was also information on certain blogs where experts would come and say soothsayers almost saying ki apka confirm ho jayega ya nahi hoga right? Because based on because they would travel every day on that route and they had a lot of uh prior uh knowledge about whether a wait list number would confirm or not. But the problem with that was it was not very data led. In fact on festivals those logics would fail on weekends it would fail.

So we said this is a classical data science problem right? It’s a machine learning problem and initially we did not have the prediction model we only had the ability to check the status and alert you. So we would just check the status and alert you with a nice notification saying your ticket is confirmed because that anxiety would make you go and check 10 times a day. We would say don’t worry we are doing it for you. We will just inform you. As we started getting enough data over time we started having conviction to predict. So I think the prediction model only comes about a year later year and a half later once we have like millions of PNRs already mined uh where we are able to say okay now with a high degree of certainty I can call this uh as a 80% chance of confirmation or a 90% chance of confirmation. Now that model also keeps getting better over time as you have more and more data because uh it’s a self-sustaining moat in that sense.

Uh but it also started becoming obvious to us that this was not the only problem train travelers had. People started in fact then going on Play Store requesting new features or giving us feedback on this. Uh whether it was coach positions platform numbers uh waking you up before a station arrives because uh in India the delays can be very dynamic so setting a time based alarm doesn’t work. It has to be a location based alarm. Uh all those problems we started solving one by one. Almost 20 of those feature sets we we added over the next three years. Uh the most important one being running status because if you’re traveling in a train in India and you’re catching a nap the moment you wake up the question you’re gonna ask your co-passenger is where are we right now. Kahan pahunchi? Right and so when we traveled in trains we realized this is the most liquid use case in the whole country because everybody traveling on this coach is gonna ask that. Sometimes even uh the people sitting there would not know because outer pe khadi hai wo kahan khadi hai kitni der khadi rahegi aage ki train chali ki nahi. Those were questions everybody was asking and talking about uh but nobody had the data visibility on it and honestly the official platform also was more a control system driven platform where you know it would trigger along the track at certain places and then update the website. It was not as real-time as what people expected it to be so we said we should use the location of our own users with permission to tell others where the train was similar to how Google Maps is doing it for traffic.

And because we had the liquidity because we had these millions of PNRs coming in uh you know and and we had enough people that we knew with confidence because if I have their PNR I know that they are sitting in the train right now right? So I can just request them to share the location and share it with others and it just became this whole altruistic network where people were willing to do that to help others because they knew others would help them. Uh that’s how we got started but we ran into a bottleneck which was internet would not work along the tracks very well. Uh GPS also on certain sections of the track would not work.

Uh and we solved it in a very unique way. We started looking at the cell tower IDs of all the cell towers we saw along the track and created this proprietary database of all the cell towers uh which we could reverse lookup in real time. So you see a ping to one cell tower and then the ping after some time to the next cell tower then you can in the middle you can extrapolate some kind of speed and location and all that.

Rohin Dharmakumar: [00:56:45] So even if you don’t have internet that’s right.

Aloke Bajpai: [00:56:47] That’s right so we started using that to reverse lookup the locations and it was magical because now you could just be offline so you could go in offline mode and still see where the train was right? And that worked like magic right and and I think it was a very hard piece of technology I think only us and one other startup which finally Google acquired them two companies in India actually cracked that because you need immense amount of data and you also need immense amount of algorithmic logic behind the scenes because using those data points in a smart way to predict also whether the train will catch up or not based on prior uh days information prior seven days information but also how’s the train in front actually behaving is that actually running delayed or has that caught up you know so we see all these inputs combine them to give a very smart running status. Uh this we launched around 2015 uh and it unlocked the next wave of growth because it was just magical right like if you used it you would go and tell 10 other people about it. And the app just took off to it we went from doing millions of downloads a year to millions of downloads a month within the next two years you know that’s that was our graph. And this was where 2017 uh 2016-17 when uh we raised our next round also and we started getting inbound attention because we were just from a usage perspective exploding right at that point.

Rohin Dharmakumar: [00:58:15] That’s the trains element. The other strong element to your business is the bus element.

Aloke Bajpai: [00:58:20] Yes.

Rohin Dharmakumar: [00:58:21] Was that uh sort of like some kind of like a strategy map analysis saying that look if we’re looking at where people travel it’s not airlines it’s a minority we’ve covered trains what next buses let’s go after buses or was it something else which was serendipitous?

Aloke Bajpai: [00:58:40] Well actually it was two things. One is that if you look at uh where the constraints in the travel ecosystem are the least right demand has always been very strong in India on trains almost 30% of tickets that we sell are wait listed tickets right uh in fact that’s been the case for many many years in the country because demand is more than supply on reserved. Uh even on flights we don’t have enough capacity and you know we always complain about airfares but the fact is that we could absorb a lot more capacity if we if if Airbus and Boeing were to supply enough planes and the airlines would be happy to take early deliveries and deploy them.

Rohin Dharmakumar: [00:59:22] And if there were enough pilots we must say that right now in this.

Aloke Bajpai: [00:59:26] At this moment of time yes I think uh that’s that’s a situation uh which will come back to but uh basically India has always been a supply constrained market when it comes to travel. But if you look at buses that’s the only part of the industry where these supply constraints have not been around. If I’m a bus operator deploying a new uh top-end Volvo bus is a one crore type investment right and uh it can be actually procured within a matter of a week or two. I don’t have to wait for months or years for a delivery right? And uh the highways the expressways you know the way they have changed and evolved and you know we now have four lane eight lane connectivity uh for many of our cities I think that is just caused massive explosion in uh both supply and demand right in that sense.

But if I go back to when we got excited about buses it was for two reasons. One is when people were wait listed on trains and if the distance was let’s say less than 600 kilometers bus was the only second choice.

Rohin Dharmakumar: [01:00:30] Interesting so bus becomes sort of like your Plan B.

Aloke Bajpai: [01:00:33] Absolutely so the catchment area of people who book buses actually starts from people who get wait listed on trains that was the insight that we saw from the data.

Rohin Dharmakumar: [01:00:42] Because when you mentioned that 30% of people book wait listed tickets I was actually in my mind thinking wow there must not be any other country in the world where such a popular mode of travel has 30% of people buying a ticket which they probably will not get but they’re still going ahead with it. And then I was thinking what can you do with those 30% people and you’re essentially…

Aloke Bajpai: [01:01:05] Yeah so it’s spillover demand essentially and bus is the most obvious place where this spillover demand will consummate at least for medium distance uh long distance actually even air becomes a uh substitute as long as you can afford it. So if you’re a third AC or second AC customer you might stretch and buy an air ticket and we are seeing in fact one big reason for our uh ahead of the industry growth on air in the last few years is also because we have this massive catchment area from both trains and buses where for longer distance you know people will come and also see okay what is the flight worth and how much time will I save there. Is it worth stretching and paying for that? And obviously on certain sectors you know the arbitrage can only be 2x 3x or 4x of the ticket value or of course the very popular and long distance sectors the uh you know the price difference could be even 5x 6x. But whenever it whenever we see like a 2x or 3x price delta there is a subset of people who are willing to uh sort of move up the value chain.

The other thing that happens is on buses uh there are last mile connectivity in the country where bus is the only way to reach. So when we looked at uh our train user base and we started asking people where their ultimate destination was we discovered that for many of them it was not that station. They would then take a bus to reach let’s say a Manali or a uh you know it could be a hill station town it could be a a village right which is another one or two hour uh ride away from that city. And that led us to conclude that you know that is a very strong last mile leg in the country for access to the smallest of towns and we need to have that. So initially there also we were a Meta uh for a few years like almost for three four years.

Rohin Dharmakumar: [01:02:50] Was redBus was there?

Aloke Bajpai: [01:02:52] RedBus, AbhiBus, Travelyaari there were bunch of players at that time. Uh so we tied up with them to begin with but then we acquired AbhiBus uh in 2021 and that is how we became a Bus OTA. Uh so Train OTA we became in 2017 uh November 2017 Flight OTA end of 2019 Bus OTA after the AbhiBus acquisition so it was only in end of 2021 that we become a full-blown OTA in that sense right? Uh so I think that journey took about 14 years to go from initiation to becoming a full blown OTA.

Rohin Dharmakumar: [01:03:30] Got it. But I must say this that I mean this is by virtue of my privilege and also because of the fact that I’m not in the travel space that this way that you explained how Plan A Plan B Plan C works is interesting because for a lot of people train is Plan A.

Aloke Bajpai: [01:03:48] Yeah.

Rohin Dharmakumar: [01:03:49] And then sort of bus becomes Plan B or for some train uh plane becomes Plan B. I’m assuming the the other combinations also a lot of people look at let’s say airlines depending on the fares and if that doesn’t work out then train becomes Plan B etc. So these three sort of have this kind of cascading interconnected if not this if not that which is actually a business option as well.

Aloke Bajpai: [01:04:12] Yeah so there is uh I would say there’s a small subset of people on the flight side who will uh look at train only if the flight becomes too expensive and all of that but uh the the funnel from being a train bus user to becoming a flight user in the country that’s existed for decades right I mean we all grew up on trains and buses and then at one point we could afford to fly right? Uh most of India still has not gone through that transition so I think that will always be a natural funnel for growth not just for companies like us but also for the airlines themselves. So if an Indigo or an Air India are gonna grow at a certain rate in the country the the net new additions are going to come from people who are traveling already but not taking a flight yet right? They are sitting on a train or a bus already at some point they get a job that lets them afford flying or or an airport pops up in their city which is something that has been happening now in the last decade uh which which says that you know why do I need to take a train now I can go to uh Ayodhya or a Gorakhpur or uh you know a Bareilly by by flight so I think that’s that’s the change that’s going through uh uh India right now. And I think we are at a very like now even though we are sitting 18 19 years out in the business it still looks like a very early time in the Indian travel tech journey because a very small minority of uh people have actually come online and started doing things right? Uh we look at it through the lens where we are in the ecosystem and we believe that it’s already a very large ecosystem but if you look at the macro picture penetration of even categories like buses or even hotels is very low on in terms of online right? Bus would be around 20% hotels would be even below that um and and therefore a large number of people still are doing these things offline.

Rohin Dharmakumar: [01:06:15] You mentioned hotels which is actually your most recent foray or expansion in the travel space. Now up till now I sort of get all your like you know expansions right? You started with flights then you looked down and said hey I mean but flight is only so much what about trains and then buses all of that up till makes sense. Now hotels is not a linear follow through from that right? One could argue that of course anyone who travels needs to stay as well but it doesn’t scale these are all modes of transport the other is in some senses it’s a mode of stay etc. So how does the person who’s taking a train for you especially as Ixigo the person who’s taking a train or the person who’s taking a bus tie in to the person who’s booking a hotel and how do you think about uh the hotel business as an OTA? What’s your thesis there?

Aloke Bajpai: [01:07:10] Yeah. I think uh see these modes of transport are just entry points into the ecosystem the way I look at it is that when someone comes and let’s say uh searches for train utility information in our app or buys a bus or train ticket through us they have stepped into our ecosystem as a user and the entry point may have been that. But what have I done I’ve built a relationship with an end user for whom this might be the first online travel interaction in his life right? Uh if I’m able to solve their pain areas deliver peace of mind for that customer and for me that customer is not just the top 4% who books air but actually uh an average middle class traveler who could be coming from a tier 2 town tier 3 town uh and and in fact the way we look at it is that we have to be most relevant to uh people without any bias for you know what they were looking for because if we want to be uh seen as the most trusted travel platform in India we have to remove all biases of saying you know I’m building for only x percent y percent of the population but say can we be more democratic as a platform. And then you realize that train or bus is just that hook or entry point into building that relationship of trust with the customer but once you’ve built the relationship of trust um what we have seen is that they will look at uh all travel related needs through us because they have seen how easy it is to not just book with us but get customer service when it’s needed get their money back if there’s a refund um you know they’ve seen how we’ve treated them during covid or any other crisis um they’ve also seen that we care not just about selling tickets to them but we genuinely spend a lot of time and energy in use cases that simplify just their life right in in terms of like flights if you look at we are probably the only company that spends disproportionate time worrying about hey can you track whether your flight is gonna leave on time or depart on time where is the baggage belt what is the uh gate number uh which check-in desk do I go to we built something called Flight Tracker Pro uh three years ago uh and we built it not because there was any monetization anything but we felt that why do I need to download a separate paid app to do these things when you know we as an OTA you know we meant to handhold customers.

Rohin Dharmakumar: [01:09:40] Where do you get the data from?

Aloke Bajpai: [01:09:42] And we pay for like there’s multiple sources where we get this data from we spend money getting this data for our customers but we believe that it’s important. We believe that it’s an important part of the hand holding an experience. In fact we do not even expect any monetization from it what we expect is it will improve your experience so much that you’ll probably go and recommend the app to 10 other people or you’ll probably stick around to our app because it does that better than anyone else right?

Rohin Dharmakumar: [01:10:10] So in some senses you are investing because you want to leave some kind of a surplus in the hands of the customer so the customer feels that I’m getting more value out of this and therefore I will transfer some of that surplus through word of mouth.

Aloke Bajpai: [01:10:25] Absolutely. See Ixigo’s journey is proof that if you serve the customers selflessly over time they will reward you disproportionately. Right? Uh it takes a while it takes I think it takes a lot more resilience courage and patience to to play this playbook but this playbook is very defensible and fundamentally strong because help me understand that how would you break down this playbook if you have to explain.

So this so our playbook is very simple that if I identify the pain areas for customers in any vertical that I enter which others have failed to identify in fact many times we’ve seen people have taken those things for granted and I’ll give you two examples when we became a flight OTA hollering the OTA for refunds was a given. It would not come on its own and it would take many days they would always say seven days five days etc. Uh today our average refund time is two and a half hours right? Um getting hold of somebody on a call on an OTA was next to impossible and it was a norm ki five minute waiting time is okay on the on the line. We said we have to change this 97% of our calls have less than two minutes waiting time as we speak right this last quarter we published this data every quarter to hold ourselves accountable to it. Price change at last step is something which again there was a norm of a certain percentage in the industry when we hired people they said oh this is this is how it always works.

Rohin Dharmakumar: [01:11:50] What does it mean like you know you see a price you go to the last step suddenly you need to pay 5,000 more right?

Aloke Bajpai: [01:11:55] Mostly it’s a caching issue because people cache this for a certain time and then you know you have to free up the cache right? So it’s a it’s a technical solve that can solve this with more intelligent caching.

Rohin Dharmakumar: [01:12:05] So just from a lay person’s point of view you’re saying that the first time when you fetched saw the flight’s uh fare it was fetched and kept with you.

Aloke Bajpai: [01:12:12] For for some some amount of time.

Rohin Dharmakumar: [01:12:14] And then it changed at the airline end.

Aloke Bajpai: [01:12:16] And you moved forward so when you were actually selling it you got the fresh one because you don’t want the look book ratios to be bad. But that’s a technicality that the consumer doesn’t need to care about. The consumer cares about the fact that they feel cheated if they go to the last step and they see a price change. We spent two years just bringing that metric down through more intelligent caching where we were preemptively understanding that if this is the last seat in this fare bucket and there is a very high probability it’s going to move to the next fare bucket I would rather show the next fare bucket. Right? And and I think if your obsession for what is okay in any vertical in terms of customer experience it that threshold keeps moving and you want to make it better and better there is no limit to how good you can become. Right? But I think most most companies live with a certain level of mediocrity on customer metrics and they’re okay with that. Saying I’m okay with x percentage of calls being abandoned I’m okay with uh you know a five minute wait and you know end of the day the only thing we did right and different was we said we will not live with that mediocrity even if it takes disproportionate time and effort to become really good at those things right? We would not give up till we actually got there. And sometimes it took us years to get there.

Uh trains the same thing right train utility features we spent five years without any monetization just building those with not even thinking about when will we monetize how will we do it. But one fine day when we reached a point where we were doing more downloads than any other OTA in India and we were not selling anything to them the insight dawned on us hey maybe we should be selling tickets and we started selling train tickets and we just it just took off because the trust was already there. So we established trust not by uh not by selling building a relationship through a transaction but transaction is the way we monetize a a relationship that was already built with that trust. Right? And that playbook was converse of what the existing playbooks in our space were and I think we’ve done that time and again and now even on hotels our strategy is to do just that because there’s so much in the hotel space that people have taken for granted right? There’s a reason why even today in India for an average budget hotel the dominant booking channel is a walk-in. Right? More than 50% of budget hotel bookings in the country are still walk-ins. OTAs do not contribute more than 10 to 15% of bookings for these budget to mid-market hotels. And not that OTAs haven’t been around they’ve been around for 20 years right? But they haven’t solved the problem of trust they haven’t solved the problem of what you see is what you get they haven’t solved the problem of price parity not being broken through a walk-in discussion they’ve not solved the problem of you know what if I don’t like the room and it wasn’t the photo that you showed me. Uh they’ve not solved a bunch of problems I mean and the deeper we are going into this we are saying hey everything is still broken it’s almost like it’s 1990s for the internet right? There’s nothing that has really happened in the hotel space on the budget side in the last 15 years. And I know it’s a strong statement to make but the fact is that it’s hard to solve these things it’s not impossible it’s hard to solve these things it needs a very deep supply side uh involvement to solve it. But it’s not impossible right? It’s just that I think people have not made it the only obsession that they have in life to solve this because and that’s what you need to do eventually in every vertical. That’s how you end up solving it. It will take years but we know we’ll do it.

Rohin Dharmakumar: [01:16:00] Aloke I can’t but help observe the fact that you know this this clarity and conviction that you have on this is our defensive moat this is how we will go deeper and deeper into we’ll pick a particular consumer segment we’ll look at their problems we’ll keep going deeper and deeper getting better that will become our moat. This wouldn’t have been there when you just started in 2006 or 7 right? Because at that point I’m assuming it was this is the market we want to be in this is what we know can we make a business around it and then it sort of started evolving and at some point you begin to realize that hey the way we operate the way what we are good at is we are able to spot consumer problems and we are obsessive and we don’t give up and if we stick with it over time inevitably we figure out how to monetize it and grow as well.

Aloke Bajpai: [01:16:50] Actually even when we started I don’t think we were very obsessed about monetization or is there a business model around this or not even on Meta.

Rohin Dharmakumar: [01:17:00] What were you obsessed about?

Aloke Bajpai: [01:17:02] We were obsessed about solving customer problems pain areas and we are product guys right so we wanted to build products that solve for those pain areas. What we are good at like you said is identifying those pain areas and building deep enough empathy for the problem itself. I think that something.

Rohin Dharmakumar: [01:17:20] You said that earlier you’ve used the word empathy if I’m not mistaken for employees that you hire it’s one of the strong skills that you look for.

Aloke Bajpai: [01:17:28] It’s one of our core cultural values and it’s been shaped by our experiences as well because it you know not just for the product but also how we dealt with crisis you know we have a more empathetic template for that which was built through our own experiences and um but empathy is our core cultural value. Um and we did never had we never actually had cultural posters on the walls saying these are our cultural values but over time you know when we started asking Ixi-Gems okay what do you think we stand for like if you had to write down three or four adjectives you know to describe us and you know some words would start coming up from almost everyone you know empathy resilience ownership um you know and and also ingenuity right like we’ve always been a little ingenuous in how we’ve done things so some of these buzzwords that started appearing became our culture slide over the years but we never had one in the early days and and what we used to tell ourselves as founders was culture should be what you do right what you do is who you are as you know but it’s not about what you say you want to do or what you say your company is doing because actions are going to speak louder than those words. And every hire you make everyone you decide to let go everyone you decide to promote um every product you decide to build every feature you decide to shoot down and not do things you say no to this is all culture right all of this is culture and so you have to be very thoughtful about these actions.

Empathy I think is a core human value it’s not even a company cultural value it’s a core human value which which builds trust and which also allows us to look at things from the others perspectives right? I think if I go down a very philosophical and religious sort of path around this you will also see that for most of the dharmic religions um it’s it gets built through a journey of self-discovery and you end up being more empathetic uh if you actually go down the path of saying okay me and the person sitting across the table are not very different we are the same being inside right? So so for us in in some sense it should come naturally um and and I think what I’ve heard is from people in the valley that Indian managers actually are a little more empathetic because somewhere I think in our culture and traditions we’ve had that uh sense of saying okay uh me and the other person are actually the same right I mean deep inside so I think it just stems from there but it has been reinforced by the experiences that our company has gone through so so when you have nothing at you know when we started we had nothing and then over time there were many places in the journey at least four or five where we ran out of money. Um what we still did not let go was this sense of empathy saying okay I can empathize with what my team is going to go through um and they’re empathizing with what we are going through and you know can we find a solution to this problem right? And and you’ve you will see that uh during COVID uh during GFC uh we never let people go we never had a sort of a mass uh you know we just took a contrarian view and said perhaps there is another template perhaps there is a more empathetic way of doing these things where the solution you’re trying to find to the problem of viability of the business can be found in a more collective manner which is good for everyone right?

And so uh when the global financial crisis happened and we were in the midst of a fundraise which was supposed to close that particular week when Lehman collapsed you had a term sheet if I’m not mistaken. We had a term sheet we had a we had a seven million dollar term sheet that never came through and the last minute we’d done docs and everything right? So um that day and we were about 24 25 people so we did a uh a quick all hands and told people what was what we were going through and we found that you know at a certain salary cut for everyone you know the company would survive. And then we would compensate it with ESOPs or some other means or when we were back we could pay that um things were agreed quickly there was a whiteboard discussion a financial statement was drawn on the whiteboard transparently for all employees saying this is how much revenue we make this is our salary cost this is our server cost and can we make it for 12 to 18 months and then we found that if the founding team uh went down to zero leadership team went to like steep cuts and the rest were like 40 50 percent cut we could survive right and we could make it to the other side and we did right and most of those people stuck around for the next four five years not just one or two years uh and I think that’s that crucible moment sort of shapes culture and it just reinforced that empathy playbook that we were just talking about right and it’s not it just comes naturally at in those moments uh because that’s when you live the values that’s when you know values are tested in tough times and it’s easy to forget about them in those times and just say okay sorry these are exceptional times so we can’t do this. But if you actually live up to them we’ve seen that they pay back right.

COVID times same thing happened um we all took a collective decision not to let anybody go we also took a collective decision that we will not hold back refunds because there was uh there were OTAs doing that uh deliberately to ensure their own survival and we said look what is the worst case worst case all travel companies die we’re gonna die anyway it’s okay right? Because we’ll die a valiant death if we actually do it after refunding all the money to our customers at least nobody will come and point a finger at us right? And and we did not also want a situation where people were struggling for their health for their parents or their family members who were suffering from COVID at that time and then you had a new struggle in their head ki mera 11000 rupees ka refund aayega ki nahi. Like that’s the last thing people want to worry about in those difficult times right? So we took this decision right at the beginning of the lockdown we’ll refund uh for all the major airlines and for IRCTC whatever outstanding refund was there we will not wait for it to come back we will go ahead and refund all our customers that ask for or or are eligible for those refunds where the flights are canceled and we did it proactively. To the extent where we were again on the verge of you know like not having enough money and and honestly if COVID had lasted two three months longer we did not have the money to make it on the other side so we kind of got lucky that the market opened up.

Rohin Dharmakumar: [01:23:45] Fortune favors the brave.

Aloke Bajpai: [01:23:47] Well yes uh it does but uh it’s also like I think you’re just taking that bet blindly right like you don’t even know and honestly we had a discussion on the day the lockdown was announced right uh a night before that because most of us could sense that it was coming. A night before that we had this discussion Rajnish and I where basically we said that uh you know are we gonna continue doing this if the lockdown comes and travel is gone or are we gonna pivot the business and we kept discussing debating for an hour. We said kal subah baat karte hain right? Morning I call up Rajnish and we both said the same thing at the same time ki nahi yaar yahi karna hai right? Like basically there’s nothing else we can think about. And go back to the drawing board and say okay lockdown hai there is no reven– literally there was a graph which went down to near zero. Uh no revenue no visibility of when it opens up and nothing to do at this point except be on the customer support and help people with refunds which is what all of us did for almost two three weeks.

Then we said which products make sense to build this time you will not believe during this time the team hurdles on on a virtual call and they are saying abhi kaunsa product banana hai wo bataiye and we said okay the big problem everybody is facing is refunds can we build a product where you never have to worry about getting a full refund from anyone? And we built Ixigo Assured during the lockdown 15 days the team turned around a new product where you press the cancel button and take your money right but you have to pay us a small fee for that. But nobody minds because at the end of the day it gives you immense predictability on that transaction.

Rohin Dharmakumar: [01:25:35] And what is Ixigo Assured?

Aloke Bajpai: [01:25:38] Ixigo Assured is essentially uh…

Rohin Dharmakumar: [01:25:40] It is one of your significant revenue drivers if I’m not…

Aloke Bajpai: [01:25:43] It’s an important one I mean uh…

Rohin Dharmakumar: [01:25:45] It’s an insurance in some senses?

Aloke Bajpai: [01:25:47] No it’s actually a fair type which is fully refundable but whether or not the underlying is fully refundable we will make sure that that fair becomes fully refundable so we are basically bearing some risk of whether the airline or the uh supplier gives us back full money or not. So if there is a deduction we will bear the deduction. All we are asking is that you pay us a small fee for that. But the modification you can do even for an airport, like you could buy a Bangalore Delhi ticket and then change it to a Kolkata Goa ticket if you wanted to. So it’s almost like buying an option on a flight.

Rohin Dharmakumar: [01:26:25] Aloke I can’t but help observe the fact that you know this this clarity and conviction that you have on this is our defensive moat this is how we will go deeper and deeper into we’ll pick a particular consumer segment we’ll look at their problems we’ll keep going deeper and deeper getting better that will become our moat. This wouldn’t have been there when you just started in 2006 or 7 right? Because at that point I’m assuming it was this is the market we want to be in this is what we know can we make a business around it and then it sort of started evolving and at some point you begin to realize that hey the way we operate the way what we are good at is we are able to spot consumer problems and we are obsessive and we don’t give up and if we stick with it over time inevitably we figure out how to monetize it and grow as well.

Aloke Bajpai: [01:27:15] Actually even when we started I don’t think we were very obsessed about monetization or is there a business model around this or not even on Meta.

Rohin Dharmakumar: [01:27:25] What were you obsessed about?

Aloke Bajpai: [01:27:27] We were obsessed about solving customer problems pain areas and we are product guys right so we wanted to build products that solve for those pain areas. What we are good at like you said is identifying those pain areas and building deep enough empathy for the problem itself. I think that something.

Rohin Dharmakumar: [01:27:45] You said that earlier you’ve used the word empathy, if I’m not mistaken for employees that you hire. It’s one of the strong skills that you look for.

Aloke Bajpai: [01:27:55] It’s one of our core cultural values and it’s been shaped by our experiences as well because it you know not just for the product but also how we dealt with crisis you know we have a more empathetic template for that which was built through our own experiences and um but empathy is our core cultural value. Um and we did never had we never actually had cultural posters on the walls saying these are our cultural values but over time you know when we started asking Ixi-Gems okay what do you think we stand for like if you had to write down three or four adjectives you know to describe us and you know some words would start coming up from almost everyone you know empathy resilience ownership um you know and and also ingenuity right like we’ve always been a little ingenuous in how we’ve done things so some of these buzzwords that started appearing became our culture slide over the years but we never had one in the early days and and what we used to tell ourselves as founders was culture should be what you do right what you do is who you are as you know but it’s not about what you say you want to do or what you say your company is doing because actions are going to speak louder than those words. And every hire you make everyone you decide to let go everyone you decide to promote um every product you decide to build every feature you decide to shoot down and not do things you say no to this is all culture right all of this is culture and so you have to be very thoughtful about these actions.

Empathy I think is a core human value it’s not even a company cultural value it’s a core human value which which builds trust and which also allows us to look at things from the others perspectives right? I think if I go down a very philosophical and religious sort of path around this you will also see that for most of the dharmic religions um it’s it gets built through a journey of self-discovery and you end up being more empathetic uh if you actually go down the path of saying okay me and the person sitting across the table are not very different we are the same being inside right? So so for us in in some sense it should come naturally um and and I think what I’ve heard is from people in the valley that Indian managers actually are a little more empathetic because somewhere I think in our culture and traditions we’ve had that uh sense of saying okay uh me and the other person are actually the same right I mean deep inside so I think it just stems from there but it has been reinforced by the experiences that our company has gone through so so when you have nothing at you know when we started we had nothing and then over time there were many places in the journey at least four or five where we ran out of money. Um what we still did not let go was this sense of empathy saying okay I can empathize with what my team is going to go through um and they’re empathizing with what we are going through and you know can we find a solution to this problem right? And and you’ve you will see that uh during COVID uh during GFC uh we never let people go we never had a sort of a mass uh you know we just took a contrarian view and said perhaps there is another template perhaps there is a more empathetic way of doing these things where the solution you’re trying to find to the problem of viability of the business can be found in a more collective manner which is good for everyone right?

And so uh when the global financial crisis happened and we were in the midst of a fundraise which was supposed to close that particular week when Lehman collapsed you had a term sheet if I’m not mistaken. We had a term sheet we had a we had a seven million dollar term sheet that never came through and the last minute we’d done docs and everything right? So um that day and we were about 24 25 people so we did a uh a quick all hands and told people what was what we were going through and we found that you know at a certain salary cut for everyone you know the company would survive. And then we would compensate it with ESOPs or some other means or when we were back we could pay that um things were agreed quickly there was a whiteboard discussion a financial statement was drawn on the whiteboard transparently for all employees saying this is how much revenue we make this is our salary cost this is our server cost and can we make it for 12 to 18 months and then we found that if the founding team uh went down to zero leadership team went to like steep cuts and the rest were like 40 50 percent cut we could survive right and we could make it to the other side and we did right and most of those people stuck around for the next four five years not just one or two years uh and I think that’s that crucible moment sort of shapes culture and it just reinforced that empathy playbook that we were just talking about right and it’s not it just comes naturally at in those moments uh because that’s when you live the values that’s when you know values are tested in tough times and it’s easy to forget about them in those times and just say okay sorry these are exceptional times so we can’t do this. But if you actually live up to them we’ve seen that they pay back right.

COVID times same thing happened um we all took a collective decision not to let anybody go we also took a collective decision that we will not hold back refunds because there was uh there were OTAs doing that uh deliberately to ensure their own survival and we said look what is the worst case worst case all travel companies die we’re gonna die anyway it’s okay right? Because we’ll die a valiant death if we actually do it after refunding all the money to our customers at least nobody will come and point a finger at us right? And and we did not also want a situation where people were struggling for their health for their parents or their family members who were suffering from COVID at that time and then you had a new struggle in their head ki mera 11000 rupees ka refund aayega ki nahi. Like that’s the last thing people want to worry about in those difficult times right? So we took this decision right at the beginning of the lockdown we’ll refund uh for all the major airlines and for IRCTC whatever outstanding refund was there we will not wait for it to come back we will go ahead and refund all our customers that ask for or or are eligible for those refunds where the flights are canceled and we did it proactively. To the extent where we were again on the verge of you know like not having enough money and and honestly if COVID had lasted two three months longer we did not have the money to make it on the other side so we kind of got lucky that the market opened up.

Rohin Dharmakumar: [01:33:45] Fortune favors the brave.

Aloke Bajpai: [01:33:47] Well yes uh it does but uh it’s also like I think you’re just taking that bet blindly right like you don’t even know and honestly we had a discussion on the day the lockdown was announced right uh a night before that because most of us could sense that it was coming. A night before that we had this discussion Rajnish and I where basically we said that uh you know are we gonna continue doing this if the lockdown comes and travel is gone or are we gonna pivot the business and we kept discussing debating for an hour. We said kal subah baat karte hain right?

Aloke Bajpai: [01:34:25] Morning I call up Rajnish and we both said the same thing at the same time ki nahi yaar yahi karna hai right? Like basically there’s nothing else we can think about. And go back to the drawing board and say okay lockdown hai there is no reven– literally there was a graph which went down to near zero. Uh no revenue no visibility of when it opens up and nothing to do at this point except be on the customer support and help people with refunds which is what all of us did for almost two three weeks.

Then we said which products make sense to build this time you will not believe during this time the team hurdles on on a virtual call and they are saying abhi kaunsa product banana hai wo bataiye and we said okay the big problem everybody is facing is refunds can we build a product where you never have to worry about getting a full refund from anyone? And we built Ixigo Assured during the lockdown 15 days the team turned around a new product where you press the cancel button and take your money right but you have to pay us a small fee for that. But nobody minds because end of the day it gives you immense predictability on on that transaction.

Rohin Dharmakumar: [01:35:45] And what is Ixigo Assured?

Aloke Bajpai: [01:35:48] Ixigo Assured is essentially uh…

Rohin Dharmakumar: [01:35:50] It is one of your significant revenue drivers if I’m not…

Aloke Bajpai: [01:35:53] It’s an important one I mean uh…

Rohin Dharmakumar: [01:35:55] It’s an insurance in some senses?

Aloke Bajpai: [01:35:57] No it’s actually a fair type which is fully refundable but whether or not the underlying is fully refundable we will make sure that that fair becomes fully refundable so we are basically bearing some risk of whether the airline or the uh supplier gives us back full money or not. So if there is a deduction we will bear the deduction. All we are asking is that you pay us a small fee for that. But the modification you can do even for airport like you could buy a Bangalore Delhi ticket and then change it to a Kolkata Goa ticket if you wanted to. So it’s almost like buying an option on a flight.

Rohin Dharmakumar: [01:36:35] Aloke I can’t but help observe the fact that you know this this clarity and conviction that you have on this is our defensive moat this is how we will go deeper and deeper into we’ll pick a particular consumer segment we’ll look at their problems we’ll keep going deeper and deeper getting better that will become our moat. This wouldn’t have been there when you just started in 2006 or 7 right? Because at that point I’m assuming it was this is the market we want to be in this is what we know can we make a business around it and then it sort of started evolving and at some point you begin to realize that hey the way we operate the way what we are good at is we are able to spot consumer problems and we are obsessive and we don’t give up and if we stick with it over time inevitably we figure out how to monetize it and grow as well.

Aloke Bajpai: [01:37:25] Actually even when we started I don’t think we were very obsessed about monetization or is there a business model around this or not even on Meta.

Rohin Dharmakumar: [01:37:35] What were you obsessed about?

Aloke Bajpai: [01:37:37] We were obsessed about solving customer problems pain areas and we are product guys right so we wanted to build products that solve for those pain areas. What we are good at like you said is identifying those pain areas and building deep enough empathy for the problem itself. I think that something.

Rohin Dharmakumar: [01:37:55] You said that earlier you’ve used the word empathy if I’m not mistaken for employees that you hire it’s one of the strong skills that you look for.

Aloke Bajpai: [01:38:05] It’s one of our core cultural values and it’s been shaped by our experiences as well because it you know not just for the product but also how we dealt with crisis you know we have a more empathetic template for that which was built through our own experiences and um but empathy is our core cultural value. Um and we did never had we never actually had cultural posters on the walls saying these are our cultural values but over time you know when we started asking Ixi-Gems okay what do you think we stand for like if you had to write down three or four adjectives you know to describe us and you know some words would start coming up from almost everyone you know empathy resilience ownership um you know and and also ingenuity right like we’ve always been a little ingenuous in how we’ve done things so some of these buzzwords that started appearing became our culture slide over the years but we never had one in the early days and and what we used to tell ourselves as founders was culture should be what you do right what you do is who you are as you know but it’s not about what you say you want to do or what you say your company is doing because actions are going to speak louder than those words.

And every hire you make everyone you decide to let go everyone you decide to promote um every product you decide to build every feature you decide to shoot down and not do things you say no to this is all culture right all of this is culture and so you have to be very thoughtful about these actions. Empathy I think is a core human value it’s not even a company cultural value it’s a core human value which which builds trust and which also allows us to look at things from the others perspectives right? I think if I go down a very philosophical and religious sort of path around this you will also see that for most of the dharmic religions um it’s it gets built through a journey of self-discovery and you end up being more empathetic uh if you actually go down the path of saying okay me and the person sitting across the table are not very different we are the same being inside right? So so for us in in some sense it should come naturally um and and I think what I’ve heard is from people in the valley that Indian managers actually are a little more empathetic because somewhere I think in our culture and traditions we’ve had that uh sense of saying okay uh me and the other person are actually the same right I mean deep inside so I think it just stems from there but it has been reinforced by the experiences that our company has gone through.

So so when you have nothing at you know when we started we had nothing and then over time there were many places in the journey at least four or five where we ran out of money. Um what we still did not let go was this sense of empathy saying okay I can empathize with what my team is going to go through um and they’re empathizing with what we are going through and you know can we find a solution to this problem right? And and you’ve you will see that uh during COVID uh during GFC uh we never let people go we never had a sort of a mass uh you know we just took a contrarian view and said perhaps there is another template perhaps there is a more empathetic way of doing these things where the solution you’re trying to find to the problem of viability of the business can be found in a more collective manner which is good for everyone right?

And so uh when the global financial crisis happened and we were in the midst of a fundraise which was supposed to close that particular week when Lehman collapsed you had a term sheet if I’m not mistaken. We had a term sheet we had a we had a seven million dollar term sheet that never came through and the last minute we’d done docs and everything right? So um that day and we were about 24 25 people so we did a uh a quick all hands and told people what was what we were going through and we found that you know at a certain salary cut for everyone you know the company would survive. And then we would compensate it with ESOPs or some other means or when we were back we could pay that um things were agreed quickly there was a whiteboard discussion a financial statement was drawn on the whiteboard transparently for all employees saying this is how much revenue we make this is our salary cost this is our server cost and can we make it for 12 to 18 months and then we found that if the founding team uh went down to zero leadership team went to like steep cuts and the rest were like 40 50 percent cut we could survive right and we could make it to the other side and we did right and most of those people stuck around for the next four five years not just one or two years uh and I think that’s that crucible moment sort of shapes culture and it just reinforced that empathy playbook that we were just talking about right and it’s not it just comes naturally at in those moments uh because that’s when you live the values that’s when you know values are tested in tough times and it’s easy to forget about them in those times and just say okay sorry these are exceptional times so we can’t do this.

But if you actually live up to them we’ve seen that they pay back right COVID times same thing happened um we all took a collective decision not to let anybody go we also took a collective decision that we will not hold back refunds because there was uh there were OTAs doing that uh deliberately to ensure their own survival and we said look what is the worst case worst case all travel companies die we’re gonna die anyway it’s okay right? Because we’ll die a valiant death if we actually do it after refunding all the money to our customers at least nobody will come and point a finger at us right? And and we did not also want a situation where people were struggling for their health for their parents or their family members who were suffering from COVID at that time and then you had a new struggle in their head ki mera 11000 rupees ka refund aayega ki nahi. Like that’s the last thing people want to worry about in those difficult times right?

So we took this decision right at the beginning of the lockdown we’ll refund uh for all the major airlines and for IRCTC whatever outstanding refund was there we will not wait for it to come back we will go ahead and refund all our customers that ask for or or are eligible for those refunds where the flights are canceled and we did it proactively. To the extent where we were again on the verge of you know like not having enough money and and honestly if COVID had lasted two three months longer we did not have the money to make it on the other side so we kind of got lucky that the market opened up.

Rohin Dharmakumar: [01:40:00] Aloke, I can’t but help observe the fact that, you know, this clarity and conviction that you have on “this is our defensive moat, this is how we will go deeper and deeper into, we’ll pick a particular consumer segment, we’ll look at their problems, we’ll keep going deeper and deeper, getting better, that will become our moat.” This wouldn’t have been there when you just started in 2006 or 7, right? Because at that point I’m assuming it was “this is the market we want to be in, this is what we know, can we make a business around it?”

And then it sort of started evolving. And at some point you begin to realize that, “Hey, the way we operate, the way what we are good at, is we are able to spot consumer problems and we are obsessive and we don’t give up. And if we stick with it over time, inevitably we figure out how to monetize it and grow as well.”

So now I am essentially going back to that point in time in 2006, 2007, when you were having conversations with VCs and you were not getting funded. And I’m thinking, you know, what the VCs… if someone had spotted this in you back then, what they would have seen was: here are two folks, they are going to be supremely empathetic, so I know I can take it for granted that they’ll consistently find pain points with customers and not give up. Two, they seem to be incredibly resilient. I know these guys won’t give up even if they have to mortgage their homes, go without salaries, etc. And stuff like that, they’ll do it. They’ll go through it for whatever it takes. And the third thing is they always seem to have this sort of outsider mentality saying that we won’t take this for granted. These things are good to bet on. Let me bet on that.

Do you try and spot this when you’re occasionally writing your angel checks as well? What signs do you look for? What questions do you ask? Because this is not easy to spot for anyone.

Aloke Bajpai: [01:42:15] Yeah, I think there has to be some amount of craziness, as you call it, right? If it’s very obvious why someone is doing something, well, everybody out there would find it obvious and most likely those assets will also be overvalued because it’s just an obvious… 99% of the people think that that guy will succeed and everybody’s piling on.

I think some of the best ideas out there have not been discovered. And they are run by passionate founders who will not care what the world thinks about that. But as long as they have traction from customers which is real… and they are so obsessed about it that they will not give up easily just because they had one year where they couldn’t raise money.

My inbox is full of VC rejection emails. I promise you, I have tons of them. Because not just in the first one or two years… if you look at our journey, it was very hard to raise money because the incumbent, which was listed, was losing money for almost 10 years. The space had already consumed a lot of capital but didn’t have much to show for it. And it was very hard to even tell people that, you know, no, we are different and we are gonna build this more efficiently and we are actually gonna build something more viable.

And it was only through our actions over a decade that we proved that out and then we were able to sort of raise money and grow after that. So I think it was not an easy journey at any time. There were very low moments at times when you had no one. But in those moments, you know, I had music or something else to put my mind into because it can drive you mad.

Because it’s a very lonely place at the top. You have literally nobody to go to. But we had also supportive investors. So both Elevation and Peak during difficult moments, you know, at least at times, you know, I would chat with Shailesh and get some emotional support from the perspective of saying, “Hey, don’t worry, you know, this will go… like especially during COVID. I think the fact that you have people around you that are willing to support you even in the toughest of times gives you that mental balance. But it’s tough. It’s not something there’s a playbook for.

Rohin Dharmakumar: [01:45:10] How did you and Rajnish manage to… you started the business in debt. There have been periods where both of you went without salary for a significant point in time. If I’m not mistaken, at one of the points where Ixigo was almost out of money, you had to mortgage your house as well, etc. So right now, the thing is, of course, you’re telling me this as a founder right now and the founder is expected to provide this support and reassurance that we will emerge out of this, etc. But what was the source of support for the both of you?

Aloke Bajpai: [01:45:45] Right. No, I think our families were definitely strong pillars of support. You know, both of us had very supportive parents when we were starting. I mean, of course my dad did ask me, “Are you sure about this?” etc. But beyond that, once he saw that I was, and we had immense love and support from the family. My dad helped me pay off my B-school loan because I didn’t… for the first couple of years of Ixigo, we hardly took any salary, right? And then there were moments in the middle where that happened again. I think I got my first credit card in 2011 or 12, not before that. So that’s six, seven years after starting up.

So basically it was tough. And for Rajnish as well. I mean, his parents were supportive. And then when we got married, you know, our wives and then the kids have been sources of mental stability in times of distress. Because even like if you look at the last crisis, big one was COVID. And when you see your company which was doing well and had just turned profitable – we had just turned profitable like a few months before the lockdown – it was a struggle to get to that point and then be enjoying that moment and then suddenly COVID hits you. And you’re like, we don’t know if we’ll make it on the other side. And it was very stressful.

But we didn’t let… first of all, you know, you never let that stress show to your team because you don’t want them to be stressed out completely. So I think you have to, as a founder, keep that within yourself. And I think you have to be transparent about the fact that you’re going through a crisis with your team. That’s very important in those moments. Because they will come and actually give you a lot of signs of support. So when we actually told our team what was happening, they sent us a lot of messages of love and support saying, “Don’t stress out. We’ll make it happen. I still have a lot of those stored, you know, I look at them at times. But they said, “You know, it doesn’t matter. We’ll make it on the other side. Even if we don’t get paid, we are there for the company.” And I think those things also… the employees have also been a very strong source of support during this crisis.

Rohin Dharmakumar: [01:48:15] There is this phrase that I think you’ve used multiple times as well, which is the “cockroach startup”. Right? Now, I completely get it. Like, you know, cockroach startup because, you know, it’s resilient and it survives. And I think survival… we’ve spoken about resilience, we’ve spoken about empathy, but I think there’s one of the other things as well, right? Survival also. You speak a lot about that. Because I think people from the outside sometimes forget that survival can never be taken for granted. Right? So it’s like, he who lives, lives to fight another day. But for that you need to live.

Now, like you said, these are really tough… and you’re fortunate to have employees who’ve kind of stuck along for the ride including at times by taking deep pay cuts etc. But on the balance, how do you convince employees to work for… I can understand founders saying I want to build a frugal startup or a cockroach startup which will survive, which will sustain, which will stand the test of time. I get that. I can understand from an investor’s point of view saying let’s bet on these people because we may not understand business models right now but whatever things are 10 years from now, these folks will figure it out and they’ll stay the course of time. But when you look at it from an employee’s point of view, especially from in these times when it’s sort of and you know fortunate to have a shiny company with so much of funding and valuation and here is this like you know fancy AI based startup right… Being part of a cockroach startup is a harder sell. So how do you… what’s your advice to people, including founders especially, to find employees who are likely to be aligned to this culture of resilience, empathy, survival?

Aloke Bajpai: [01:50:15] I think it all boils down to alignment with your vision and belief in the people who are running the show. Right? So people remain very important. How the leadership team and how founders behave, which is a less discussed topic in the ecosystem, but it’s very important because they become the internal role models and they end up defining the culture. So you have to be at times restrained and you have to at times make sacrifices that set the culture, right? That define the culture.

And you know, after going public, I recollect that somebody in my leadership team came to me and said, “You know, does this mean that some of us will be entitled to business class travel in domestic?” And I said, “Hey dude, I am traveling economy.” Right? So forget about it. And now we have even more people that we are accountable for. There is, you know, hundreds of thousands of retail shareholders. We have to be even more accountable now than we were earlier.

I think it’s decisions like these that define culture. And you’re also making… you know, like who doesn’t enjoy traveling on business class etc. But if I’m doing it on a personal trip with my own money, it’s different. But if I’m on a company trip, you know, I will set the rules that I expect others to follow. Right? And the rules have to be the same. Because if I set different rules for myself, I’m already sending a signal that for certain people in this company the rules are going to be different.

Till date, I don’t have a cabin in office. Till date, I don’t believe in having special privileges just because I founded this company. I’m just another Ixi-Gem. Right? And I think it’s some of those things that hopefully, you know, set the right culture internally. But it requires some amount of sacrifice to do that. It requires some amount of restraint to do that.

Rohin Dharmakumar: [01:52:10] I’d like to wrap this up by talking about you outside of Ixigo and work. What do weekends look like for you?

Aloke Bajpai: [01:52:20] I… in summer I swim. I love reading. Though I’m finding less and less time for that.

Rohin Dharmakumar: [01:52:28] Fiction or non-fiction?

Aloke Bajpai: [01:52:30] Both actually. So I… history is a…

Rohin Dharmakumar: [01:52:33] Do you have any recommendations from the last year or two? Any interesting…

Aloke Bajpai: [01:52:36] I mean I’ve been reading some of the William Dalrymple books. Very fascinating about the history of this part of the region and you know the interplay with the colonial times. And so it’s a very fascinating… you know… there’s so many learnings that you have from history that you can still apply today. It’s very fascinating that some things actually don’t change over time. And the geopolitical situation that’s going on, you know, you can read many of the things from history there.

Rohin Dharmakumar: [01:53:05] I also want to, since you mentioned like you know colonialism and how things have changed, I want to connect that back to empathy because one of the most recent trends that’s playing out right now in America is empathy is not a good thing. You know, I mean there’s a lot of people including Elon Musk who say empathy is one of the worst features that’s in Western civilization. I would argue it’s not a feature of Western civilization but it’s again like you know you connected earlier back in the conversation to Dharmic religions etc. how empathy is more of a part of life.

Last question. On a scale of 1 to 10, how happy are you with your life?

Aloke Bajpai: [01:53:45] I would give it an eight. Yeah. I’m reasonably happy. I need to take out more time for the family and kids. That’s the part I would rate myself low on. Uh, reasonably happy with, you know, how I’m able to do at work as well as, you know, in terms of following my passions. But uh, yeah, there’s always scope to improve.

Rohin Dharmakumar: [01:54:10] Aloke Bajpai, thank you so much for this conversation.

Aloke Bajpai: [01:54:13] All right. Thank you, Rohin. It was a pleasure to be here.