Phanindra Sama, Co-founder of redBus, Tells His Startup Story, Speaks About Challenges of Indian Startups.

redBus.in, a rapidly growing Indian startup, is revolutionizing the way people book bus tickets. And, it all started when the co-founder & the CEO of redBus, Phanindra Sama could not meet his family on a festival.

In just few years of it’s launch, Phanindra & his team scaled redBus to a level where it’s revenue is above $12M. And presently, it is considered to be one of the fastest growing Indian web startup – thanks to its great service to bus travelers.

With an aim of $100M in revenues by 2012, Phanindra and team is busy expanding and growing their business. However, in spite of having a hectic schedule, Phani agreed to take some time out for an interview on Foundora and shared the story behind redBus, how he quit his day job, Indian startup scenes, and a lot more – check it out.

Interview Overview:

Hello Phanindra, please walk us through your entrepreneurial journey and background before you started redBus?

Before starting redBus, I was working for Texas Instruments, Bangalore. I was a Sr. Design Engineer there. As a child I was always fascinated with electronics – the way electrons flow in a wire and make a fan rotate etc., were very interesting to me. After studying electronics Engineering from BITS-Pilani, I was happily settled with electronics job at Texas Instruments.

You have an interesting story behind redBus; how you identified an opportunity in a problem you personally faced. Can you tell us about it and how the idea took shape from there? What were the initial hurdles?

During Diwali of 2005, I wanted to spend the festival in my home town, Hyderabad. Since I didn’t know my schedule till the end, taking a bus was the only option.

I ran around town hunting for a ticket, but they were all sold out before I reached the travel agents. Bangalore traffic is notorious and can grip you at the wrong time. That’s exactly what happened that day. Also, I realized some key issues with the then-existing model:

1. Travel agents don’t have all the information regarding all the possible bus operators. This lead to a gap and customers had to take decisions based on limited information.
2. Most of the agents were not able to sell return bus tickets.

That’s when we thought of the possibility of solving these issues by putting together information on a platform where customers could access it easily and take better decisions. The internet was the best medium to deliver all this information and make possible e-commerce to purchase return bus tickets.

This was the beginning of redBus.

The initial hurdle was to move out of our comfort zone. We were very pampered at our respective jobs and we were shielded from the tough world outside. Once we were on our own, we started to face the world outside – standing in front of the gates of companies to market our product, take beating from customers who had problems, work very hard to convince bus operators about our idea and how it could help them etc., It was a big mental hazel to sail through them. I am glad we had a good set of Co-Founders and we could sail it together lending one’s shoulder to the other in the hour of need.

Tell us some thing about your co-founders, Sudhakar & Charan and their background?

Sudhakar, Charan and I studied together at BITS-Pilani. In Bangalore, we were sharing an apartment. Before starting redBus, Charan was working for Honeywell and Sudhakar was working for IBM. Sudhakar had some technology patents on his name too.

Both your co-founders are your college mates & friends; how has been the rapport between you guys helped as a founding team? What do you personally believe one should look for in a co-founder – skill-set or the rapport?

I would say one should look for both. Co-Founders need to be smart, hardworking and mature. There needs to be high level of maturity because many things start falling apart during the first few days of startup. If Co-Founders start blaming each other, it would all fall apart.

All three of you were working in reputed MNCs before redBus; how difficult was it for you to quit your job and what helped you to make the decision?

In the year 2006, finding a new job was not that difficult. Especially for people with experience. That was one of the strong confidence boosters for us. We thought if we didn’t do then, maybe we will have to wait for many years to try our hands on entrepreneurship.

However, major push for the decision was when we were selected by TiE. When we were selected ( 1 month before we launched our service), we were very confident of our decision.

redBus is being mentored by the TiE Entrepreneurship Acceleration Program; How does the mentorship process work at TiE? What shall a startup do to get their help and guidance?

TiE accepts rolling nominations for the program. What it means is you can apply to the program anytime. Once they get good no# of nominations, they call for a in person presentation to TiE charter members. If selected by the members, you get about 2-3 mentors assigned. These mentors, depending on their bandwidth, help you with day to day working of your startup.

If you didn’t like any of your mentors, you can ask for a replacement.

All this is done for free by TiE. If you like, you can voluntarily give some stocks in your company to your mentors and TiE.

redBus has had two rounds of funding; tell us something about it. Also, at what point did you start seeking external funding?

We raised the first round 6 months in to business. Actually, once we were selected by TiE, we started getting calls from VCs. We went ahead with an early stage investor because they invest a lot of time in mentoring and grooming your company and that’s what we required then.

The 2nd round was raised last year. Inventus and Helion were investors. This was to help grow our company.

redBus currently has operations in multiple cities in India; what are the challenges in managing operations across multiple cities being a startup and how do you tackle them?

One of the biggest challenge is to propagate the same company culture and value system in multiple geographies. We do this by traveling often and by writing emails to everyone at least once in a week.

redBus has rapidly grown in the past few years; How has the organizational changes been so far? At what point do you think a startup should start organizing its structure?

I think startups should start organizing their structure every day. It’s a part of their growth. In our case, we were limited only by our understanding of what it takes to build and organize a company. We attempt doing it everyday and have small successes every now and then. This on an aggregate, over an year, results in a big change.

The start-up scene in India seems to be thriving, but still, there is a lot that needs to be done. What according to you are the major issues relating to Indian start-ups and what do you think can be done?

I think a lot of things are in the right path regarding entrepreneurship in India. I am witness to the sea change in this space in the last 5 years. A few successes now (from existing entrepreneurs) will accelerate this pace and we will find many people coming forward to setup companies.

What have been your biggest challenges and learning so far, bringing & running an Internet based service to Indian consumers?

One of the biggest challenge was the payment gateways. It’s sad to see about ¼ transactions resulting in failures due to PG issues. All e-commerce companies would have been a quarter larger if only PGs were good.

What advice would you give to upcoming entrepreneurs/startups who are trying to come up with e-services for Indian consumers?

I would say that don’t be very focused on e-service alone. Look at your customer and ask how best you can serve him. For, an offline, phone based channel could well be a bigger opportunity than e-service. Eg., www.ctrip.com (China’s largest travel company, with market cap of about 12 Billion USD, has 85% of its transactions on phone)!

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  • Anirudh Maitra

    Awesome article! Very insightful indeed.

  • Bilal Alam

    Inspiring!

  • Puneet Duneja

    i liked the way problem is changed to opportunity and opportunity is changed to idea .AtLast how idea is productized :)

  • http://www.consumercourt.in/transportation/42650-money-not-refunded-redbus-online.html Shrijeet Pande

    redBus’ responsibilities do NOT include:(1) The bus operator’s bus not departing / reaching on time(2) The bus operator’s employees being rude(3) The bus operator’s bus seats etc not being up to the customer’s expectation(4) The bus operator canceling the trip due to unavoidable reasons(5) The baggage of the customer getting lost / stolen / damaged(6) The bus operator changing a customer’s seat at the last minute toaccommodate a lady / child(7) The customer waiting at the wrong boarding point (please call thebus operator to find out the exact boarding point if you are not aregular traveler on that particular bus)(8) The bus operator changing the boarding point and/or using apick-up vehicle at the boarding point to take customers to the busdeparture pointI have faced problems with #2 and #3. And not Returning Ticket toCustomer is something new not in your list. What about refund ofpartial ticket money due to bad bus condition? Is it yourresponsibility or not?What are you doing guys ? Are you going to reply ? If yes, when ?Thanks.Regards,Shrijeet Pande

  • anju

    Innovative way to book hotels: http://goo.gl/zB0G7

  • Shankar Chelluri

    Good, want to know how they did marketing to crack bus operators & customers, initial spend after launching in first 3-6 months, cost of customer acquisition & strategy inputs to bring it down

  • vineet

    well i really appreciate the ceo of redbus journey but i am really an unsatisfied customer of red bus. I have done my booking with them and due to some reason i have to cancel my ticket on 5th of may 2013 . till now i have contacted the customer care of red bus but every time you call to them they are going to ask you the same question and at the end suggest you to write your problem to the customer care support forum. Till now i have not receive my amount .I have written to them so many times but no response till now. I have tried to find the no of the superior authority but there is no email address present on their site other than the support.

  • Srinivas

    Inspired by redbus and started http://www.giftsnflowers.in/, which India’s fast growing start up for gifts and flowers.

  • Jayanth Gowda

    It’s happy to see these people capitalising a problem into a money making idea
    # respect

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