DARE - Because Entrepreneurs Do

A bus connects places. Phanindra Sama went ahead and connected bus to bus.

The take-off point
During Diwali 2005, all my friends and colleagues went home for the holidays, but I stayed back alone in my apartment, watching soaps, because I could not get a bus ticket. Many agents tried to get me one, but failed. That’s when it struck me: there should be a centralised system for buying and selling bus tickets.

Phanindra Sama CEO, redBus.i

I had an idea!

The Road to Progress
I wrote to seven of my friends from BITS, asking them to help me create a system. Initially, they all joined in the project. But the number fell to three by the time we finished working on the model.

So in 2006, Charan Padmaraju, Sudhakar Pasupunuri and I started redBus—an online ticketing facility for buses across India.

With the help of mentors, we found through TiE, we were soon able to commercialise our project. Though the earlier plan was to go pro bono, we eventually saw the potential and decided to jump in fulltime.

We invested Rs 5 lakh from our personal savings and thought it was a huge step, until our investors said they would put in Rs3 crore in our project. We couldn’t believe it. We were going to be big!

redBus is India’s largest ticketing company today. Our current turnover is Rs150 crores. We are present in all the major cities in India and plan to expand to several smaller cities soon.

The company today manages over 10,000 bus schedules of over 700 bus operators in 15 states.
There’s still a long way to go, of course. I won’t rest till I make the last operator a part of the organised sector.

How does redBus work?
The idea is simple. redBus gets inventory details from the bus operators and feeds the information on their website, which can be accessed by users/ customers looking for bus tickets.

We get direct access to inventory details of bus operators using our product Boss, an ERP for operators. And agents get access to the same information through our product SeatSeller.

redBus on a Roll • Ranked as India’s most promising entrepreneur no# 3 by Business World • Listed amongst the Forbes™ top 5 startups to watch out for in 2010 • Ranked no# 1 amongst the fastest growing companies in India by All World Network. The growth rate was about 4823% between 2007-‘09. • Awarded 'Startup of the Year' award by IMAI in 2010 • Awarded the Entrepreneur of the Year award under IT / ITES category by ET NOW in 2011 • redBus technology ranked amongst the top 5 winners of the prestigious CIO Asia Award in Singapore in 2011

How was redBus promoted?
Word of mouth was our primary tool of marketing. A few happy users/ customers led to a widened circle of customers for us. Use of SEO/ SEM helped us too.

And once we started selling to customers, the operators flocked in. More customers meant more operators and vice versa.

What was the biggest challenge in establishing redBus?
While everyone else seemed appreciative of our idea of a computerised and centralised system of booking tickets, bus operators refused to see the benefits. Initially, operators were unwilling to give-up their outdated way of working, but the growing sale of bus-tickets on our website convinced them.

Sama Sutra (tips for success) • Mailing groups such as Headstart, Barcamp, Open coffee club etc. could prove very resourceful for entrepreneurs. One can ask any question that he/ she may have regarding entrepreneurship. • Follow blogs like Pluggd.in, Media namma, VC Circle, Tech crunch etc., to learn what’s happening in entrepreneurial eco-system. • Networking events like TiE, CII are very useful networking events. It’s worth taking membership of these organisations.

What kind of financial arrangement/agreement was made between partners?
We are equal partners–irrespective of the work each of us contribute. We have vesting schedule of our (own) stocks. At any point in time, if any of us gets disinterested in the idea/company, he can walk away by giving away his unvested stocks to the other partners. This is the equation set for all of us.

What, if any, competition did redBus face?
We were the first ones to launch this model in India. We had no competition. However, within a few months after we started, some similar websites sprang up across the country. Infact, at one point, there were 30 companies selling bus tickets on the Internet.

Summing Up Sama’s Graph • Began life under a thatched-roof in a remote village of Andhra Pradesh, Thadpakal, where the air was pure and the fields were green. • Studied electronics at Birla Institute of Technology & Science, Pilani. • Worked with ST Micro electronics, a European semiconductor company, as Assistant Design Engineer (I loved the laid-back, European style of working.) • Felt restless. My classmates were designing, innovating, creating products, while I was sitting pretty in my lavishly designed office. • Moved to Texas Instruments, an American company known for its strict work culture (life became hectic but I was happy creating chips and circuits.) • Still felt restless. • Then Diwali 2005 rolled around, and life led me to my true destination. I was meant to create something of greater value.

Initially, as each of us were small, the entry barrier was very low. But now, redBus’ widened network of customers and bus operators has created a big entry barrier for others to enter this business.

Did redBus follow any international model(s)?
When we launched redBus, it was launched completely indigenously – thinking of a possible solution to a personal problem. We didn’t look around to see if there was an existing solution in any country.

Today, to our surprise, we learn that an integrated bus ticketing booking platform doesn’t exist anywhere in the world!

In fact, we get quite a few enquiries every month from other countries asking us if we could extend our services to them.

 

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