Start up to scale up

Definition of a Start up company

• Early stage in the life cycle of an enterprise where the entrepreneur moves from the idea stage to securing financing, laying down the basis structure of the business, and initiating operations or trading.

Start ups - Shutdown

• Among the companies that shut down in 2011, around 49% of the companies were only six months to one year old, while 31% of them were less than six months old. 20% of these companies were 1-2 years old.

• India's booming startup space where at least two new ventures are set up every day. Of these barely one out of 10 make it big while the rest fall by the wayside, creating pools of entrepreneurs who struggle to deal with failure

The Unlucky 10 Reasons Startups Fail

1. A Small or Unscalable IdeaMobile app creators who hope to start a virtuous circle by buying their way into the app store top listings.

The Unlucky 10 Reasons Startups Fail

2. No Competitive Research–Wrong Market Positioning and No Go-To-Market-Strategy

AKASH TABLETThe Aakash has become an object lesson in the Indian government's ability to create great expectations and its inability to deliver on them

The Unlucky 10 Reasons Startups Fail

3. No Focus, passion or perseveranceChennai based exporters – Exim Rajathi and Gunasekaran Exports.

The Unlucky 10 Reasons Startups Fail

4. No Flexibility – Know When to Cut LossesCommodity business.

The Unlucky 10 Reasons Startups Fail

5. Wrong or Incomplete LeadershipParamount Airways

The Unlucky 10 Reasons Startups Fail

6. Unincentivized or Unmotivated Team

The Unlucky 10 Reasons Startups Fail

7. No Mentors or AdvisorsMany cities have established startup ecosystems for them to tap into for mentorship and learnings such as YES, TIE, etc. So, make sure you are well networked and surround yourself by people who are best experienced to pass their relevant learnings on to your business, so you don’t repeat the same mistakes they made before you.

The Unlucky 10 Reasons Startups Fail

8. No Revenue Model, Ever and no long term roadmap to ROI

The Unlucky 10 Reasons Startups Fail

9. Less Capital Than NeededSubhiksha Super Market – Expanding the number of stores rapidly without sufficient funds in hand.

The Unlucky 10 Reasons Startups Fail

10. Bad Luck or TimingRupee Depreciation from Rs.54 to Rs.68.80 during FY 2013-14.

India’s largest bus ticketing company

Who is Redbus

They are India’s largest bus ticketing company with the highest bus operator partners,

largest distribution network &

highest sales!

They enable customers to book bus tickets

online, offline & through partners

Bus operator 1

Bus operator 2

Bus operator 3

Travel Agent / Branch office

Traffic

• Prior to redBus, the ticket booking process was manual, based on phone calls• Passengers go to travel agents shop• Travel Agent calls up his choice operator’s office to find out ticket availability• Travel agent gives a receipt against the payment for ticket

Operations (Prior to redBus)

Our Products

~65% market

~10%

~25% market

Fleet size < 20 bus each

Fleet size < 75 bus each

Fleet size > 75 bus each

Highly Fragmented Industry

Website

Call center & COD

Franchisee

GDS used by offline travel agents, OTAs etc.,

• Market size @ ~2.5B USD; ~220M tickets/year

• Growing at 25% per annum

What’s Exciting• Level playing field for bus operators. Small and Large operators access same distribution

network

• Our research helps bus operators operate new routes; helps increase market size

• Our technology enables supply-demand match. Helps bus operators & customers

• Our business has huge network effect. And we enjoy high trust from bus operators

• Format independent (online, call center, franchisee) organized travel company in India

• Profitable at low revenue per ticket – company culture

• Tap into India’s middle class travel consumer; non overlapping consumer base with

other OTAs

• Future products like package tours, charted bus etc.,

• We have our first installation of BOSS™ in neighboring countries like Bangladesh and

Malaysia

• Ranked No.1 amongst India’s fastest growing companies; ~4,823% growth rate

Company Snapshot– Aggressive growth

• 50 lakh• 5 Cr.• 25 Cr.• 55 Cr. • 116 Cr. • ~300 Cr.

– ~8 year old. HQ in Bangalore – 26 Regional Offices. ~800 Employees

– 1,200+ bus operators on our network/system

– 19,000+ bus services every day, across 20states. 3 Govt. RTCs

– 30,000 point of sale outlets- 10,000 direct. ~200 partners

Aug-06

Dec-0

6

Apr-07

Aug-07

Dec-0

7

Apr-08

Aug-08

Dec-0

8

Apr-09

Aug-09

Dec-0

9

Apr-10

Aug-10

Dec-1

0

Apr-11

Company Snapshot…. (Contd.)

• RedBus.in is the second highest transacted travel website in the country, next only to IRCTC

• Five government road transport corporations use redBus to sell their bus tickets

• Eight call centres to support• 80% of their orders are over the phone, not on

line.• Estimated valuation is about Rs.1,500 Crore.

Challenges - In the initial years, the main challenge was to convince the travel operators that this is a viable option. - Funding.- Today, the challenge is to take the Redbus culture to all the 26 offices.- Since we are a technology-based company, we are able to track each movement, consumer experience and transaction taking place at all the offices, but it is important to be able to bring all the offices on the same page. - Another challenge is to maintain the satisfaction level of consumer base that is so diverse.

Outcome

1. A big and scalable Idea.2. Excellent Competitive Research–Right

Market Positioning3. Larger than expected ROI.4. Great revenue model.5. Great leadership qualities.6. Vertical and horizontal growth opportunities.

Innovations“RedBus has an innovative way of doing business. Innovation means doing the right thing and not doing an unknown thing." - Converting unorganized business into organized business. Having on line presence, call centers as well as franchisees ensure that they fit in as an organized travel company in India.- All IT infrastructure and servers are on the cloud platform. All our 90 servers are on the cloud. Moving to the cloud enabled RedBus to use IT to create business differentiation and a competitive advantage. - Innovations in technology accelerates the pace of growth. - Superior service including round-the-clock customer support, wide choice and home delivery tickets.

Conclusion - Innovation in Technology.- Focus on cost- Customer service

Technology is an enabler, not an aim itself. Focus on cost and customer service