Phanindra Sama: The RedBus journey
Summary
TLDRThe speaker recounts his accidental entrepreneurial journey, starting with a personal experience of not being able to secure a bus ticket, leading to the idea of a computerized system for bus inventory management. Despite initial challenges and advice against it, he and his friends developed a prototype, eventually pivoting to a consumer-facing website, RedBus, which aggregated bus operators' inventory and increased sales. The business model evolved from providing free software to charging for value-added services, leading to significant growth and computerization in the bus industry. The speaker reflects on the successful sale of the company, expressing no regrets and a positive outlook on life post-sale.
Takeaways
- đ The founder's journey began with a personal experience of not being able to secure a bus ticket, which sparked the idea for a technological solution in the bus travel industry.
- đ ïž Initially, the team aimed to create an open-source system to help bus operators manage their inventory more efficiently, but they later pivoted to a consumer-facing platform.
- đĄ The idea for a computer system to track live bus inventory came from the inefficiency of multiple travel agents being unable to provide a bus seat.
- đ The team faced resistance from bus operators who were skeptical about adopting new technology, but they found a breakthrough with a younger, tech-savvy operator.
- đ» The transition from an open-source idea to a product was driven by the realization that bus operators needed a value proposition that increased their sales, not just a computer system.
- đ The success of the consumer-facing website, RedBus, led to increased trust and adoption of the technology by bus operators, as it directly impacted their sales.
- đ A creative workaround for the lack of computerized bus operators was to manually call operators to check seat availability, simulating a live inventory system for consumers.
- đš The software was made user-friendly for operators with varying levels of literacy by using color codes instead of written words.
- đ The company's growth was exponential, with a rapid increase in bus operators signing up for the system, far exceeding initial expectations.
- đ° The business model was successful, with bus operators and travel agents paying for the software that facilitated ticket sales.
- đ The founder expressed no regrets about selling the company, feeling content with the financial freedom and impact they had made on the industry.
Q & A
What was the initial spark that led to the creation of a technology solution for the bus travel industry?
-The individual's inability to secure a bus ticket during a festival season despite multiple attempts at different travel agencies sparked the idea of a computer system that could track live bus inventory and streamline the booking process.
Why did the initial approach of creating an open-source system for bus operators not work out?
-The initial approach did not work because the bus operators did not see the value in it. They were not convinced that the system would bring them any tangible benefits, such as increased sales.
How did the team initially validate the idea of a computer system for bus inventory?
-The team went back to the travel agent to understand the process and validate the idea. They also visited various bus operators to learn about their workflows and needs.
What was the turning point that shifted the focus from an open-source system to a consumer-facing product?
-The turning point was when the team realized that the bus operators were not interested in the software for its own sake, but rather for the sales it could generate. This led to the creation of the consumer-facing website, redbus.in.
How did the team manage to display real-time inventory on their website when the bus operators were not computerized?
-The team used a manual process where every time a consumer requested a seat, they would call the bus operator to check the availability, creating the illusion of live inventory for the consumer.
What was the key insight that led to the success of the redbus.in website?
-The key insight was that by making the bus inventory visible and easily bookable online, they could help bus operators sell more seats, which was their primary need.
How did the team overcome the challenge of scaling their manual process of checking seat availability?
-As sales improved and bus operators gained trust in the system, the team gradually transitioned the operators to SMS-based and then computer-based systems, which increased efficiency and scalability.
What was the role of mentorship in the evolution of the business model?
-Mentors helped the team realize that the bus operators were not purchasing the software due to a lack of perceived value, not because of cost or affordability issues, which led to a shift in the value proposition.
How did the team ensure that illiterate staff at bus operator companies could effectively use the computer system?
-The team used color codes instead of words to indicate different statuses, allowing even illiterate staff to operate the system effectively.
What was the business model for providing the software to bus operators and travel agents?
-The team initially offered the software for free and later started charging a fee once the bus operators saw the value in increased sales and were willing to pay for the service.
How did the sale of the company impact the founder's perspective on business and life?
-The sale provided financial freedom and allowed the founder to focus on new perspectives and opportunities, emphasizing a 'glass half full' mentality and contentment with the outcome.
Outlines
đ Incidental Entrepreneurship in Bus Technology
The speaker recounts the accidental beginning of their journey in the bus travel industry. Working at Texas Instruments and frequently traveling by bus, they faced the frustration of not being able to secure a bus seat during a festival. This led to the realization that the bus industry was technologically backward, with travel agents unable to provide real-time seat availability. The speaker's engineering background prompted the idea of a computer system that could track live inventory for bus operators, which they initially intended to develop as an open-source solution for the benefit of consumers. Despite discouragement from a travel agent, they pursued the idea, learning programming languages and software development to create a prototype system.
đ Pivoting from Open Source to Value-Driven Software
After developing a basic prototype, the speaker and their team approached bus operators to understand their workflow and integrate it into their software. They faced skepticism from operators, who doubted the feasibility of their technology. However, they found a receptive audience in a young, tech-savvy bus operator who was taking over the family business. Despite building the software, they initially struggled to convince operators to adopt it. A pivotal moment came when mentors questioned why operators, who could afford expensive buses, wouldn't invest in a computer system. The realization that operators didn't see value in the software led to a shift in strategy, focusing on increasing sales rather than technology adoption. This insight led to the launch of a consumer-facing website, which simulated live inventory by calling bus operators for seat availability, a method that eventually gained the trust of bus operators and led to a scalable solution.
đ Scaling Success and the Journey of Red Bus
The speaker reflects on the growth of their business, which started with a basic idea to solve a personal problem and evolved into a platform that revolutionized the bus travel industry in India. They recount the challenges of convincing bus operators to computerize their operations and the innovative approach of using color codes to make the system accessible to those who were illiterate. The business model, which involved providing software to operators and a consumer-facing website, eventually led to a significant increase in ticket sales and adoption of technology across the industry. The speaker also discusses the decision to sell the company, expressing satisfaction with the outcome and the financial freedom it provided, without regret for not holding onto the company for potentially higher valuations.
Mindmap
Keywords
đĄEntrepreneurs
đĄBus Travel Industry
đĄIncidental Entrepreneurs
đĄOpen-Source
đĄPrototype
đĄValue Proposition
đĄComputerization
đĄReal-Time Inventory
đĄScalability
đĄAggregation
đĄSales
đĄColor Codes
đĄLiteracy
đĄTrust
đĄMentorship
đĄBusiness Sale
Highlights
Incidental entrepreneurship in the least technologically advanced bus travel industry.
The founder's personal experience of not being able to get a bus ticket sparked the idea for a computerized system.
Initial plan was to create an open-source system for bus operators to improve ticket availability.
Learning about bus operators' workflows through direct interactions to build a useful software.
Realization that bus operators were not buying the software because they didn't see value in it.
Shift in strategy to focus on increasing bus operators' sales rather than just providing software.
Launching a consumer-facing website to sell bus tickets and demonstrate the value of real-time inventory.
Innovative workaround of calling bus operators for live inventory when they were not computerized.
Gaining the trust of bus operators by demonstrating increased sales through the system.
Transitioning bus operators from manual to computerized systems over time.
Adapting the system with color codes to make it usable by illiterate staff.
Achieving rapid adoption with 400 bus operators computerizing within a year of launching the software.
Creating a business model where every bus ticket sold in the area generated revenue for the company.
Selling the company and the founder's perspective on valuing the financial freedom and life experiences gained over pure valuation.
The journey of entrepreneurship leading to personal growth and a focus on the positives.
The company's impact on aggregating bus operators and streamlining the bus ticketing process in India.
The founder's satisfaction with the outcome and no regrets about selling the company.
Transcripts
tell us how your journey started you
brought technology to bus travel which
is the least technology industry so why
did you how did you even think about it
yeah actually we were incidental
entrepreneurs that way I was working in
Texas Instruments in Bangalore and my
parents were from Hyderabad and I used
to take buses frequently to go back to
Hyderabad and for the one odd here that
I worked in Bangalore every time I went
to this travel agent he could get me a
seat
except for the value of 2005 when I went
to him in his usual way he made a few
phone calls to the bus operators and he
couldn't get me a seat so just when I
was leaving his office he told me that
maybe another agent could get me a seat
and that really intrigued me as to if
this person is an agent for buses he
should be able to tell me whether or not
there's any bus that evening from
Bangalore to Hyderabad why is he not
able to get and why is he asking me to
go to another travel agent and so I got
curious and I went to this other travel
agent he also made two three phone calls
couldn't get me a seat so that way I
went to the third travel agent he also
did the same thing so I went to
four-five travel agents but ended up not
getting the seat so I ended up in
Bangalore for that long weekend and the
next day when I woke up I was feeling
guilty because maybe there was a tenth
travel agent to home which I had gone to
maybe he would have called the 30th bus
operator and maybe the 30th operator a
deceit which went waken from bangla to
Hyderabad right and and if indeed that
operator had a seat which meant waken
from Bangalore Hyderabad that evening it
was a big loss to him because he would
burn the same fuel same driver
everything but he would have gone with
one seat wakened and it was a loss to
all the three four travel agents that I
went to because they just happened to
call the wrong travel bus operators
right and it was a big loss to me as a
customer because I wanted to be home for
the festival and I just couldn't be
there and then being an engineer the
solution was very obvious to me right
why can't it be a computer system where
all the bus operators just mentioned how
many buses they run and what's the live
inventory
at that moment in time and I go to the
first ravage and he just logs on to that
system and says which of the operators
have a seat and then calls only that
operator so that was the solution and I
thought the wife and such a system
exists so I don't have main to all my
flatmates we were all bachelors staying
in a flat so I wrote to all of them
saying I can get a seat and can we
create this system and during those days
open-source was big so we actually
wanted to create an open-source system
which we give to the bus operators for
free and then we would benefit as
consumers and etc so that's that's how
the journey started and then one thing
led to another
so not simple one thing like so so you
you you wrote to all your friends and
they also happen to not get tickets to
go anywhere and they were around
no no they all they all had gone home
and yeah I think that was also lucky
that way because I was alone if there
was somebody else I think would have
just gone to a movie or something and
spent the weekend but the thing that
only I was there or the seven friends
and I had all this time to just think
over and feel bad about not getting a
seat I think made me think of a solution
so did you actually start working on the
solution over that weekend no I I mean
not technically but yes I went back to
the travel agent to find out how it
happens and just to validate if this
would work in etc but the agent told me
that many people had tried and it
doesn't work and he advised me not to
leave the job and do anything like this
and except try and all that so did you
leave the job to do this or did you keep
the job and do this in the evening for a
while
yeah actually because it was supposed to
be an open source thing we continue to
do it in parallel to our jobs and the
thing was we did no computer I mean
programming the Java's and the.net sin
except I was working for Texas
Instruments of VLSI designer so actually
we went and bought books on how to how
to write software
I knew C C++ but I didn't know the other
software so we literally started with a
HelloWorld program it's rendered on the
website so it took it took it took about
six seven months for us to come up with
a prototype software which was which is
doing the basic necessary
so when did you know that okay there's
not going to be an open source but this
is going to be a product so you wrote
the code now the system is available so
now you start going to travel agents to
see if they are willing to take it so
what did they say basically because we
had to create a software for bus
operators we had to know their processes
as to how they work what they do what
should what should the workflow be and
etc so we went to many bus operators
asking him how they do and etc so almost
all of them showed us a way said in fact
on the bus operator when we were like
sitting in his office there's a customer
who came in to buy a ticket and he was
telling you're showing that operator
that customer and telling me you think
that guy will buy your ticket look at
them whatever I mean he was he was not a
sophisticated person and he said I mean
guys like this traveling bus what are
you thinking you will create a solution
in etcetera but we got lucky with one
bus operator so what was happening with
this bus operator was the next
generation was taking over the business
and that young person happened to be an
engineer and then got into the business
so we stuck off very well and then he
had appreciation for technology so he
gave us a chance and he walked us
through the whole workflow and that's
how we started building the software and
but the strange thing is after we built
the software for six seven months when
we went back to the same operator to
make him use the software he wasn't
using it he wasn't buying your computer
right
he was Jessel the young persisted the
young person right and then all kinds of
things come to your mind I mean why is
he not buying is he not buying because
it is expensive for him
is it not buying because he can't pay
for it so the our mind was running on
those lines and then we said okay we'll
give it for free and then we'll buy
hardware for him
we'll get him internet connections and
acceptin and all that but that's when we
got some mentors from Thai those mentors
asked a question which almost changed
our life right the the red bus life so
they said this bus operator is buying
buying a bus which is worth a crore
right and on any route he has to buy two
buses because one bus leaves from this
side on a bus on that side so he's
pairing two clothes to
open up a root and and you are thinking
that he can't spend 20,000 to buy a
computer for that root there's something
else to it so that's how we got into we
shifted from that journey to another
journey to explore why they not buying
and that we discovered that he is not
buying because it is not seeing value in
it so so that's how we we then dropped
giving software to him and then we just
changed the value proposition to him
which was we then revisited the whole
problem statement sat with him and said
what is that one thing that you need the
help so he said I don't need computer as
I don't need Lee RS leakages I don't
need any of these things and ya say what
what is that that you need then he said
I just need sales I mean if I can sell a
hundred more seats I can buy for more
buses right and that became like a big
insight for us then we drop this whole
software to bus operators and then we
launched the the consumer side which is
red bus dot in website but the challenge
was how do you how do you have this
real-time inventory on the website when
the bus operator is not computerised
right then but we had to solve this
problem the right so then we kind of
thought laterally and then came up with
the solution saying that okay for the
consumer it appears like live but in the
back end every time a consumer comes in
and says I want the seat we call the bus
operator and take the head of entry Ivan
the way we did things like that some of
the venture capitalists didn't want to
invest in us because they said that this
is not scalable how long will you do
this things like that but somehow we
continue to do it and then Jersey people
did you have in the back end doing this
so we had the we had about six seven
people we didn't have so many sales then
slowly I think as the sales improved the
bus operators belief and trust in the
system improved so then slowly converted
him to SMS base then from there
converted into a computer based and then
by our third year we were selling enough
seeds that's when we revisited launching
the software for bus operators so we
went back picked up that code and wrote
the software for bus operators and then
we estimated that we'd get hundred bus
operators in PI
us from them because just five years
back I'm and I think sometimes I am like
astonished as how the world changed in
five years right five years back there
was no internet trust were the Internet
connectivity in India and that too in
rural areas where the bus operators are
there so so we we estimated that 100
will happen in five years but in the
third year of red bus when we launched
just in 365 days we signed up four
hundred bus operators who got
computerised overnight that was like
huge huge and the thing that was driving
that whole thing was that if they could
make their inventory life they would get
more sales and that was the only thing
that was driving and they didn't mind
using the sophisticated computer system
and many of their staff were illiterate
they couldn't even read but they were
operating computers used they knew in
the air to press this and we had all
these color codes right I mean we moved
away from the from the words like booked
reserved ladies that extra we converted
to color code so the illiterate could
know that okay if it's red it means this
if it is green this means this and he
could he was like you became expert
overnight on operating that system and
today it feels so good when you walk on
the street and the bus operator has a
computer or a travel agent has a
computer so how many bus operators not
there so there are actually we thought
we are done with aggregating the bus
operators but even today we get 30 40
bus operators onto the system every
month so actually even we don't have the
contest - how many bus operators exist
in India how many are there on your suit
right now we should have probably 1,500
to 2,000 bus operators so it's been a
this is a year old information and I
can't put the right numbers now because
we'd sold the business you sold it only
last year yeah yeah so in that seven
years how many tickets did you sell so
we were selling the every million seats
a month when we actually that was
through red bus otherwise otherwise
through this computer system that we
give to the bus operator almost every
seat that he sold went through the
computer system so we became like a
media's of bus
getting in a country okay yeah and did
they pay your fee for that masticating
system yes in continental no no yeah I
think the numbers are confidential but
the model is fine yeah so the
interesting thing there is because we
had a software for bus operators and we
had a software for travel agents and we
had a website for customers so it's so
turned out that if you are in the bus
stand and if anybody is carrying a
printed bus ticket right there is some
money that is made by us even if that
doesn't matter whether he's bought with
the bus operator or with our travel
agent or with us because all these
software's were provided by us so great
I have one last question for you is
going to put you on the spot a little
bit which is you Seoul the company
do you regret selling it she should have
hold on held on for another few billions
of valuations no no no not at all
actually I think during this whole
journey of entrepreneurship right I mean
I think has teamed as well there's so
many things that you go through that you
change so one of the things that the my
the way I changed is look at only the
glass half full right and all through my
life right and in this in this sale the
glass half full is my bank balance is
big enough that I will not end up
spending all that money in my lifetime
so I don't need extra money that way and
today I have the freedom that I have
after looking at the world there are
very very different perspectives is
absolutely non-credible for any kind of
money
you
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