'Marwaris knew it long back': MakeMyTrip founder Deep Kalra explains why 'unit economics' matters

MakeMyTrip was floating from month-to-month during its early days, said founder Deep Kalra, who spoke at length about the initial tough phase before it became the go-to platform for travellers. He said that at that point, the toughest part was to go on. Kalra revealed that his close family and friends even asked him to cut his losses and move on. The MakeMyTrip founder said that he is obsessed about metrics and the metrics pointed in the right direction that enabled him to go on.

“The metrics are telling you you are moving in the right direction. And for us the holy grail is conversion…I believe repeat is the least celebrated metric and the most important one…are you losing a little less money in every transaction and later are you making more money…even if it is 1 paisa but are you moving in the right direction? That’s what unit economics is…it is common sense. And I think all the great businessmen from this country and the Marwaris knew it long back. Are you getting better in what you are doing, which is efficiency, productivity and unit economics?” said Kalra, adding that if these are positive then you wait for one more month.

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Kalra, speaking at the SenseAI podcast, said, “The closest of friends around me were saying, ‘what are you doing’.” There was nothing going on and if you don’t draw a salary for 18 months, it starts causing stress at home also, Kalra acknowledged.

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The MakeMyTrip founder said that he saw the company as his last-ditch effort as an entrepreneur. “I tell this to all young entrepreneurs – if you are trying something out, be ready to try this out for 4-5 years, don’t look into the rearview mirror before that. Having enough gas in the tank to try it out because it takes that much time for something to come out. I haven’t seen anyone build a great company by trying for 2 years. You will not know what you missed building. It is so true that the best of companies has not seen the light of day because some founders gave up too early,” he said.

Kalra said that during their trying times, they made a rule that if they are in, they are in for a month, at the end of which they would review again but would not question things in the middle of the month.

In the podcast, he said that MakeMyTrip’s early days were replete with challenges. Kalra said that a year after raising $2 million, the investors, e.ventures, wanted their money back as the dotcom bust hit India, 9/11 happened in the US, and SARS broke out. Kalra was forced to make some tough choices and cut down on spendings. Many employees departed and they moved from a nice office to a mezzanine one in Okhla Phase 1.

MakeMyTrip listed on NASDAQ in 2010. The company sold 5 million shares at $14 each, raising $70 million.

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