The Exchanges

Q And what are the problem exactly you were solving for the first three years for travel agents?

A See, the problem statement was actually very, very simple. You know, as a travel agent ourselves, uh, airlines used to give us three to four percent commissions, and we needed to put money in various airlines in order to be able to book, uh, using their systems. Now, the solution which EZMATRIP offered to travel agent was that, hey, instead of putting 50,000 rupees in each and every airline account, why don't you put money only in EZMATRIP? And as we are aggregating bunch of you, uh, we will get six to seven percent commissions from the airlines, and we'll pass on five percent to you. So your margins will improve, and, uh, your capex will also reduce. So this, this was a very simple solution, which we were offering. We integrated all the airlines on our website, and we're offering service exclusive to travel agent for the first three years. Now, through this means, uh, we were able to, we, we were the only salespeople in the team. So we, we met thousands of travel agents, uh, you know, all across India, And then soon the word started spreading, uh, as the service, which is my trip was providing. And by, by that we, we could basically go out the business.

AI assessment note: “instead of putting 50,000 rupees in each and every airline account”

Q And, uh, at the end of three years in 2011, if you could remember, right, how are your cash flows looking at that point in time?

A So business was growing, uh, at the end of the third year, you know, we had almost about 11,000 travel agents who were using us, uh, business was growing, but that business wasn't profitable. It was barely breaking even. See, I mean, um, we, we would get seven to eight percent commissions from the airlines. We would pass on six percent to the travel agent. So within that one and a half to two percent, we had to manage all our operations. We had to manage all our cost, our technology cost, our operation cost, our sales cost. Uh, several costs and everything, right? So the business wasn't very profitable at that time. We were breaking even, but we were growing pretty well. Now that is when we actually decided that, Hey, why don't we open up ourselves to the regular consumers? And as soon as we did that, we realized that, Hey, I'm getting seven to eight percent commissions from the airlines, but I don't have to pass this six percent discount, uh, to the regular consumer. Just giving them one minute and a half percent discount is good enough because that's what market was doing. And also, you know, at that time we decided that we will not charge consumers convenience fees, which everybody was charging at that time. I don't know if you know about what convenience fees is mostly OTAs and even airlines for that matter charge convenience fees at the end of the page. So at ease matter, …

AI assessment note: “business wasn't profitable. It was barely breaking even.”

Q Uh, Prashant, uh, you and your co-founders built ease my trip during the recession of 2008. Tell us of your experience of building it then. Weren't you called insane by your friends and family for starting a venture in travel sector during recession?

A Yeah, I mean, um, so I, I grew, I, I, we all grew in Delhi and, you know, I graduated from IIT Madras. And for the first three years, I was, um, you know, working for a couple of banks in the U S and I quit my job and moved back to India in late 2008. By that time, Nishant and Rekant, two of my younger brothers, they had already started EZMATRIP. Now, uh, so basically the way we started EZMATRIP was also very different. We actually started a regular mom and pop travel agency in Delhi first. Now with that travel agency, we ran the travel agency for about seven to eight months. Uh, we understood a lot of pain points a travel agent has to go through. So the first version of Isma trip as a tech company, uh, was started to solve the pain points of a travel agent. It wasn't for a regular consumer. So we knew exactly what pain points travel agent had since we ran a travel agency ever since. And we wanted to solve those pain points of a travel agent using technology. And that's how Isma trip came into life. So, you know, Isma trip wasn't, wasn't fighting against make my trip clear trip Yatra in the beginning for the first three years. They were almost about 11,000 travel agents were using ease my trip by the end of third year. And, you know, uh, business was going pretty well. And that is exactly when we decided to pivot and start a consumer business. And now our consumer business is 9…

AI assessment note: “the way we started EZMATRIP was also very different. We actually started a regular mom and pop”

Q Prashant, so you would have taken very different decisions. For example, you would not have hired the, the highest package IITNs for the market just because you need to be so efficient, right? So how did you take care of your hiring and some other parts of the business?

A No, actually that's, that's actually a very great question. Uh, the, the hiring philosophy, the expenditure philosophy, which this company has is actually, actually very, very different. Uh, I tell you, we actually hire a lot of, uh, students, uh, freshers from NITs and, uh, you know, RITs rather than IITs. Being an IITian myself, I can tell you that there are certain things we are good at and certain things I think, um, you know, uh, you know, just, just, you know, one pedigree below could be better at. For example, uh, I think, uh, most of the IITians are actually risk adverse people. I mean, we studied way too hard to get into IIT, right? So, and I, I, I value people from bits. I value people from NITs because they didn't study that hard. They're not that risk adverse people. They didn't study that hard, uh, to get into IIT. So I don't think so that there's, there's huge amount of difference in talent. It's a difference in mentality. Uh, between, between the IITs and NITs. So, and we, we heavily depend on, uh, you know, hiring people from NITs and RITs and bits. And the other thing which we do is very different is, uh, you know, we also hire a lot of freshers from tier two to tier three towns, and then we allow them to grow in the role. For example, uh, uh, you know, when I could talk that when we had about 20 people, the first time we had 20 people was in year 2010, right? …

AI assessment note: “we actually hire a lot of, uh, students, uh, freshers from NITs”

Q And, uh, uh, you mentioned between 2011 to 2015, you were just building the base for the consumer business. If you could remember, right, how were the revenues in the consumer business during this time?

A Very little, you know, we were growing almost at 15 to 20% per year, and that to the base was very small. So I think, um, you know, back in the year, 2008, by the way, we did approach a couple of VCs to try to raise some funds, uh, in the year, 2008, when we began, I, I must have approached three or four of them. Uh, but, uh, now I can say thankfully we could not convince them. Uh, you know, so we, we approached them and their thought process was that, Hey, uh, why to invest in a B to B travel company when the travel agent is going to die. And they were right. And then our thought process was that, Hey, we will not always remain a B to B travel company. We will switch to consumer business one day. Then again, their thought process was that, Hey, clear trip, make my trip. It's ego. Uh, you know, I, I be both, they all exist already. So what's the point of investing another one? You already are too late. So according to me, I think they were right in their analysis. There was nothing wrong. Uh, and to be honest, there are so many nuances about the business. You are a VC yourself right now. So you would know that there's so many nuances about a business, which you cannot make out in the first meeting. So, and sometimes, um, I also invest in startups, right? So my advice to the startups in which I advise is that, Hey, You know, you might be a hundred percent right, but I just, I'm …

AI assessment note: “Very little, you know, we were growing almost at 15 to 20% per year”

Q And, uh, uh, what, what's interesting is that you were able to keep your operations lean because travel is extremely competitive sector. Everybody in 2011 was throwing VC money, giving discounts, uh, uh, to consumers. Uh, so how, how, how were you able to create out a unique offering and a brand positioning in front of consumers?

A See, uh, you, you absolutely mentioned it correctly that EZMAT was able to keep its operational cost very minimal. See, You know, we are not the market creators. The market was created by somebody else, you know, and to be honest, the hats off to them. Creating a market is extremely tough job. Uh, our job was a relatively easier. Our job was to be extremely efficient and be extremely disciplined. This is, these are the only things which I will ask you to take away from each matter and be extremely efficient and discipline through which we were able to continuously serve people. Not just at break even cost, but by making money and we continue to utilize the money, which we made into the business to grow even faster. So that is how the company is not only just the second largest, but we are also one of the fastest growing travel companies in India right now. Now, uh, how did we do that? So basically the answer probably lies in the beginning as the other operations, our technology, everything was streamlined to, to sustain in one and a half to two percent business. Right. When we began now, As, as, as the business was streamlined to, to sustain in one and a half to two percent, as we shifted to consumer business, our profit margin increased dramatically while our cost did not change by much. As soon as we shifted from B to B to B to C, um, you know, uh, the, the operations did not…

AI assessment note: “As soon as we shifted from B to B to B to C”

Q And as, as you started expanding into segments, what are the various segments and what, what was introduced into ease my trip offering at what point in time?

A Uh, well, we started as a, you know, we started with the flight booking, but now almost everything is available at ease my trip. You can book your hotel. You could book your holidays. You could book your train, bus, cabs, everything on ease my trip. And, uh, the, you know, right now we are, we are basically focusing on the non-air part as well, uh, via cross selling. So people are using people, people come to East My Trip for flight booking, but then we are able to cross sell them the other travel, uh, packages or other travel product. So at East My Trip, there is, there's no such service related to travel, which is not with us, but it is available with somebody else. It's a full stack OTA right now.

AI assessment note: “we started with the flight booking, but now almost everything is available”