By the age of 21, Dhruv Shringi's first venture had already failed. After 13 years, he finally found success—without investing a single rupee of his own.
PRECOCIOUS ENTREPRENEUR: When he was 18, Dhruv Shringi convinced his father, an officer with the Delhi government, to sell their small plot of land to fund a chemical manufacturing unit. Three years later, he was saddled with a failed venture. "My lack of domain knowledge and differences with the partner led to the downslide," says Shringi, whose only way out of this financial mess was to sell his stake to the partner.
It was a big blow to the family's finances. "But my father remained my pillar of strength," he adds. Even then, Shringi knew he would turn an entrepreneur once again. However, he had to fortify himself with a professional degree first. In 1994, when he was 21, Shringi joined consulting firm Arthur Anderson as a trainee at a salary of Rs 2,000 a month. He also started studying to be a chartered accountant. His hard work paid off and in 1998, he was transferred to the UK as a senior consultant.
Worked with: Arthur Anderson, Ford Motor, Ebookers No. of years as employee: 11 Age at starting business: 34 years Initial investment: Rs 20 crore Sources of fund: Venture capitalists Company: Yatra, a travel portal Turnover: Rs 500 crore (Jan-Dec 2007); Rs 900 crore (Jan-Dec 2008) No. of employees: 650 |
Two years later, he quit the job to do a one-year management programme from Insead, an international business school. "My parents were livid that I was quitting a good job and taking a loan of Rs 30 lakh to study. But I needed a degree in management to realise my dream," he says. He went on to work with Ford Motors for two years and moved to Ebookers, Europe's leading online travel agency, as head of strategy in 2003 at its London office.
BEGINNING OF AN IDEA: It was almost 10 years since Shringi had his first brush with entrepreneurship, and at Ebookers he could see the outline of his business plans. Since India was not on Ebookers' diversification plans, Shringi decided to launch a travel portal for online air, rail and bus tickets as well as car rentals and holiday bookings in India.
"In 2004, there weren't any big companies that were into online ticket bookings in India," says Shringi. Their target customer was the untapped middle class. Buoyed by the first entrant advantage of his idea, he discussed the possibilities with Manish Amin, head of technology at Ebookers. Three other colleagues joined the idea pool.
PLAYING SAFE: Having sunk his father's money in the first venture, Shringi decided to play safe in his second start-up. "We decided to seek funding from venture capitalists (VCs), instead of putting in our savings," he says. But their presentations to almost 25 VCs came to naught. "Since all of us were still employed, the VCs felt we lacked commitment and would back out if the project failed," says Shringi. He was the first to quit his job in June 2005. However, on the personal front, it was not the best time to leave a well-paying job. "My wife was pregnant but I had enough savings to tide over for a few months," he says.
Another drastic change was relocating to India, after eight years. But before things could get going, three of the four other partners backed out. With the team being reduced to just two, VCs delayed committing funds. For Shringi, time was running out. He had planned to shift to India to start Yatra but money was not coming his way. "I had been without a salary for over six months," says Shringi, who moved back to Gurgaon, India, in December 2005. By early 2006, he got Norwest Venture Partners to put money in Yatra. Reliance Capital and Television Eighteen (TV 18), a media house, also came forward with funds. "Our funding totalled Rs 20 crore," says Shringi, who by now had roped in Sabina Chopra, another colleague from Ebookers, as co-founder.
| TIPS FOR STARTING OUT |
| Investment: Rs 50-60 crore |
| Skills: Ability to understand consumer's needs and work within a tight budget |
| Break even period: 3 years |
| Bottom line: Hire people who understand your vision |
SETTING UP A TEAM: Yatra's priority was to set up a team of people who shared their vision and to build the website. "It was tough convincing people as we had no office to show, just a business plan to share," he says. Since fancy salaries could not be offered, the team decided to share stock options with new members. By now, three other online travel companies had launched their websites in India. "In many ways, our delayed entry benefited us. The market was more aware and we could work on a more user-friendly website," says Shringi.
With 25 employees, they hired a 300 sq ft space in Gurgaon. While Amin focused on the technical front, Shringi and Chopra concentrated on tie-ups with airlines and hotels. "The Reliance branding added credibility to our venture," he says. In August 2006, Yatra went live. "We also started drawing proper salaries," says Shringi.
BEATING THE MARKET: To increase visibility, Yatra used the online search engine optimisation method and banner ads. The tie-up with TV 18 helped them in a big way. "TV was one medium that was clutterfree and we managed good recall value through our advertisements," says Shringi. From 80 tickets a day in September 2006, bookings jumped to 1,000 tickets a day in November.
With the brand gaining attraction and 7-8% increase in month-on-month sales, a scale-up had to be planned. "We had crossed our estimates and needed to increase our team strength," says Shringi. The VCs put in more money, the team grew to 150 and new premises were hired.
SCALING UP: To stay ahead in the market, a special call centre was set up for customer care. The website was given a more user-friendly interface. "There were many people who hesitated to use credit cards online; for them we planned alternative payment options like Net banking, pay on arrival, cash cards and so on," says Shringi. The next step was setting up lounges in Gurgaon and Chandigarh. "People can walk in, discuss plans with our experts and book holidays online from these comfortable centres," he says.
The next step is to launch bookings through mobile phones. But despite daily bookings touching 6,000 (in December 2007), the company is yet to make a profit. "Our losses have gone down and we should break even by October-November 2008," says Shringi. Through all this, he says, the experience with VCs has been an eye-opener. "We wanted to play safe that's why we stuck to the cushion of VC funding, but one should first set up the business and then approach VCs, things work out better," says Shringi.
