Building The Largest Online Bus Ticketing Company in India: redBus.in Co-founder and CEO Phanindra Sama (Part 7)

Sramana: How far were you able to bootstrap your company while maintaining your job?

Phanindra Sama: The product was completed and ready. To solve this problem, the logical process was to give the software to bus operators. If the bus operators started to use the software, we would have access to inventory. The next step would be to create software for travel agents. The third step was to create a Web interface for consumers.

We made it to the point where we gave the software to bus operators. We had the prototype ready and functioning. By May 2006 we had the prototype software ready for the bus operators. I still had my job, but I was making rounds to the bus operators and started selling the software.

The bus operator who told me it was a good idea and that he would take it decided not to buy it. He kept postponing it and telling us he would buy it later. I could not sell a single thing for two months. We had spent so much time building the product, and then nobody would buy it. They would tell us that computers were very expensive and asked us if we were going to provide one. The ones who had computers did not have Internet access and wanted us to provide that as well.

During that timem The Indus Entrepreneurs (TiE) Bangalore chapter had called for business plans under their Entrepreneurship Activation Program. That was the first time they launched that program, and they called for people who had ideas and just needed mentoring. That fit us perfectly. We had ideas and prototypes, but we needed help to take it forward. We gained three mentors from TiE and they helped us put it together.

Our mentors told us we were facing a common problem. Customers don’t like incremental products. They need a solid reason to purchase the product because they are going to take a huge risk by purchasing it. Bus operators have a very established way of operating, and essentially we were asking them to change the entire way they operated. Our computer based system was new, nobody else in the industry used it, we were not a proven company, and we were promising a benefit only sometime in the future.

Our mentors asked us to go visit bus operators and ask them questions. They wanted us to understand what it was the bus operators really wanted. When we did that, we found that the only thing bus operators really wanted was increased sales. When we told that to our mentors, they told us to give them what they wanted which was more sales. That meant we had to start on the consumer side. We had to start selling to consumers, and once people started buying it, then when we sold it to the bus operators it would simply be to streamline their supply chain.

The question for us at that point was how to sell with no inventory. If consumers came to the website and did not find an entry, they would just leave. It seemed like a non-workable solution, but we followed our mentor’s advice. We created a website and hosted it. We then went to the bus operators and got minimum allocations for two weeks. It took us one month to go live on the site because no payment processor would give us an account. They did not know how the bus industry worked and we were a new company, so they were worried about charge backs.

This segment is part 7 in the series : Building The Largest Online Bus Ticketing Company in India: redBus.in Co-founder and CEO Phanindra Sama
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