Engineer simplified bus travel bookings

An electrical and electronics engineer from BITS Pilani, Phanindra Sama, started Redbus, India’s first and largest online bus ticketing service in 2005, along with two of his batchmates. He gave up a well-paying and secure job to turn entrepreneur, braving the uncertainty and possible setbacks of this journey. Sama, Founder & CEO of Redbus, shares what inspired his business, the challenges and the learnings, and some stellar advice for budding entrepreneurs, and colleges.

Birth of an idea

I was working in Bangalore after graduation, and my parents were in Hyderabad. In 2005 during Diwali, I went to a travel agent who made phone calls to several bus operators. So, I went to another one, then the third, fourth and fifth. I spent the weekend in Bangalore, but felt guilty. Maybe if I went to the tenth or thirtieth operator, I might have got a ticket.  So, I thought why not create a computer software where all bus operators can share their information, so that when I go to the travel agent, he just logs into the system to check who has a seat and has to call only that operator?

Starting a company

I wrote to my batchmates about the problem I faced as well as the solution, which we can create. They were excited about the idea! Initially, we started off as a company to service the bus operators. Then we were selected by The Indus Entrepreneurs (TIE), an ecosystem for entrepreneurs, which appointed CEOs and VPs of companies as mentors for us. It made a big difference, when they validated our idea, and we sent the resignations the next day! Further more they said: Why not start the Redbus side of things? And we tasted success there. So, today we have three products: BOSS, a software for bus operators; SEAT SELLER, for travel agents and Redbus, for consumers.

An ecosystem for bus travel

Today, hundreds of bus operators use BOSS to manage their operations, for which we get real-time access to their inventory. We take this inventory and put it on Redbus for consumers to make reservations, and we take the same information and put it on SEAT SELLER  for travel agents to make reservations. So, that’s how we got the entire unorganized industry to have a seamless flow of information from bus operator to travel agent to consumer.

The setbacks

We began with our savings of Rs. 8 lakhs. In 3 months, we sold just 10 seats a week, amounting to Rs 500 a week! We thought of shutting down. After all, our jobs of two years used to pay us one lakh a month, each. But then our co-founder Sudhakar said at least give it a year. By the time we spent 5 lakhs we got VC funding of 2 crores. With 8 lakhs we would have wound up in months! 

Growth story

Today, we are a six-year-old company headquartered in Bangalore, with 26 regional offices, 680 employees, 20,000 bus routes, 1,200 bus operators, and around 40,000 outlets, which sell Redbus tickets. We are the country’s largest e-commerce portal by the number of transactions done. We are now acquired by a South African company. In the first years we had a turnover of 35 lakhs. In March 2013 we closed at 600 crores!

Learning everyday

When we started the company there were no smartphones. But today more than 10 percent bookings come by phone. The world is changing so fast that we have to learn along the way. And we are able to learn because we have learned how to learn.

Alumni inspired us

The courage to start came from our seniors at BITS Pilani, people who passed out 20 years back, worked for 10 years then started a company. People like Rajesh Hukku who started I-Flex Solutions and  Raju Reddy who started Sierra Atlantic. One nice thing is that they are all accessible, as BITS Pilani alumni network is very close. It was difficult to reach out to my boss’s boss in the office, but I could reach out to a CEO who was my college senior! 

Advice for students

When students from an engineering college say they would like to do a start-up, I tell them to work for a few years. The two years that we worked, we learned a lot – how a company works, how you have appraisals, what is an HR team etc. A friend of mine started directly after passing out, and we went to his office to learn because we were two years behind. I was shocked! He the CEO, had a huge cubicle with a peon, while his 20 engineers had smaller, same sized-cubicles. My classmate had not worked and did not know that, today, the CEO has the same-size cubicle as other guys. He wound up a few years back.

Bigger ideas

The other observation about student entrepreneurs is that ideas or solutions that they want to create, very much revolve around student community. I have seen 200 ideas where teams want to make T-shirts, another 300 where they want to make some test prep papers. The problem is they are not exposed to the world outside during their student years.

Encouraging entrepreneurship

I am really moved by how in a matter of five years, entrepreneurship has spread so fast, thanks to organizations like NEN and TIE. Today when I get calls from Tier II colleges from far off locations – Belgaum, Rajamandri, saying we have an e-cell, can you come and speak, I make it my mission to go and speak. Tier I, if schedules don’t permit, I might skip. But Tier II, I will definitely go.

Advice for colleges

Colleges can send students who wish to be entrepreneurs and have a business plan to entrepreneurship conferences attended by VCs as well as approach the incubators, which are open to students from any college. They can network, get access to funding, get their idea tested, etc. NASSCOM and TIE offer many student discounts at these conferences, and colleges can send them there. With Internet, today students can know about the events through their newsletters. Also, DST is funding 5 crores if an institution wants to set up an incubator. Last but not the least, inspire students by telling stories of self-made entrepreneurs like Narayana Murthy. These stories are powerful.