Ex-employees of Flipkart, Myntra, Quikr and MyGola who decided to turn entrepreneurs with their own ventures, share vital lessons and interesting anecdotes on learnings’ they carried from their professional stints into their own startup
When the founders of Treebo, a chain of budget hotels, began putting together a team of employees to roll out their business, they had only one policy in place; to bring in policies that were practical and not to blindly follow the ways of larger organisations.
When you closely look at the way entrepreneurs who have worked earlier at a startup build their own venture, you’ll notice that many times, the way they perceive a challenge, build a culture and take a decision is influenced by their stint in the startup. Why? Because, working in a startup is a lot about taking ownership of tasks, being responsible for your own and the company’s growth, focusing on speed of execution rather than having to seek multiple approvals.
To get a first-hand perspective of this, we decided to talk to entrepreneurs of two startups, Treebo and Turtlemint, who had earlier worked in organisations such as Flipkart, Myntra, MyGola and Quikr during its early days.
Slow. Steady. Affordable. – by Treebo
Founded in early March by Sidharth Gupta and Rahul Chaudhary, two ex-Flipkart-Myntra employees, and Kadam Jeet Jain, a former employee at MyGola and MakeMyTrip, Treebo partners with budget hotels across the country to enhance the quality of services the hotels offer to customers who play on affordability. It operates on a franchisee model, wherein it creates a standard toolkit for hotels to follow, before becoming a Treebo-listed property. Its toolkit includes features such as WiFi and laundry services, trained staff, backend process management software and more.
Typically, when Treebo negotiates with a hotel owner, its investments are limited to setting up the software infrastructure and training of staff, while the owner is mandated to upgrade the physical infrastructure, which, the founders claim, won’t cost more than Rs. 1,000 per room.
In turn, the value proposition Treebo delivers is, having the hotel listed under its brand, and a promise of a certain percentage of higher occupancy once the partnership is sealed. “For example, if a hotel owner was recording 40 per cent occupancy earlier, we tell them we will try and take it up to 70 per cent,” explains Rahul Chaudhary, one of its co-founders. Until it achieves that target, Treebo does not charge a commission for the brand name or occupancy. It secures a commission only on occupancy rates that have exceeded its specifications.
Currently partnering with 55 hotels across the country (with 25 to 30 rooms in each hotel), the founders claim that Treebo is likely to achieve operational breakeven (before EBITDA) in 30 months. It was backed in a Series A round, to the tune of US $6 million by SAIF Partners and Matrix Partners India, in June 2015. “It’s not about bringing as many hotels as possible under our umbrella and offering inordinate discounts to drive higher occupancy. For us, it’s about delivering consistent quality while securing healthy margins on occupancies,” cites Kadam Jeet Jain, its third co-founder.
Working with a team of 165 employees, Treebo’s founders aim to build this startup into a leading hospitality brand for emerging markets in the next five years.
Here are four key learnings that the founders share from their experience in their journey of working in a startup before turning entrepreneurs.
When hiring employees, ensure there is a strong cultural fit. Here at Treebo, we hire a new employee only after they work with us for a week, so that apart from their skill sets, we can also learn about how well they fit into our work environment. This plays a crucial role in determining whether they will be successful or not in the company.
When teams try to solve problems together, it is better that they find solutions on their own than letting the founder decide how to approach it because they are the ones on par with the ground realities. The role of the founder should only be to set the right context. In fact, giving them that freedom also enables them to push their creativity.
At Treebo, we offer our employees unlimited leaves. We don’t count the number of leaves taken by an employee but hire responsible employees who can fulfil their targets without being micromanaged. The idea is that we are building a company from scratch and the policies need to suit our requirements and not just be a blind replica of what the larger organisations follow.
Breaking the Hierarchy
In Myntra, what Chaudhary and Gupta have learnt is the ability to think cleansheet in the context of startups and not be bogged down by typical constraints that many large companies face. Many decisions taken at Treebo are thought of from a fresh perspective, instead of being based how an established company may have approached it. For example, a classic assumption that binds large companies is, the person with the higher compensation should be the boss of the individual who gets a lower compensation. Why should that be the case? Why can’t they be viewed on capability?
Founders: Rahul Chaudhary, Sidharth Gupta and Kadam Jeet Singh
Business Model: Partners with standalone budget hotels across the country to offer enhanced service quality to its customers.
Investors: Matrix Partners India and SAIF Partners
Transforming Insurance Buying – Turtlemint
While both Dhirendra Mahyavanshi and Anand Prabhudesai were poles apart in their career, what brought them together was a brief stint together at Quikr, and a common concern; the lack of transparency in India’s insurance policy sector. For Mahyavanshi, this concern arose from his eight year long stint at ICICI Lombard which gave him several insights into the industry, while for Prabhudesai; it was a personal experience when claiming a healthcare insurance at Mumbai that led him to this thought. “When I went to claim a health insurance policy at a renowned hospital in Mumbai, I was told that the policy will not cover me for there. But when I was sold this policy, I assumed I would be covered by any hospital I went to. This incident was an eye-opener,” recalls Prabhudesai.
Hence, the founding duo quit their jobs at Quikr and rolled out Turtlemint, an online insurance comparison and selling platform, in 2015, with a core aim of going beyond just being a comparison site to bringing transparency in the purchase of insurance policies. Currently focussing on car, two-wheeler and health insurance, the company claims to offer policies on a need-based instead of a pricing-based approach.
To explain better, the company puts all policies (of a particular sector) in a mixer, studies each and every policy and designs it on a matrix structure. Then, it simplifies the terms stated in each policy and presents it in a way that a customer can understand easily. Hence, if a customer wants to buy a policy, they can view which hospitals are covered, what is the sum insured, what ailments can be covered under the policy and other micro-decisions before purchase. In other words, it follows a 3C model; cash value (amount and bonuses a customer gets), cover charge (what is covered/ not covered, and the waiting period), and convenience. “In fact, one of the often asked questions by customers is; will a particular company pay my claim? If so, how quickly? To tackle this, we’ve collected data points around payment rates and timelines and presented them to the customer,” cites Prabhudesai. In fact, since some customers also don’t know what costs can be involved in some treatments, depending on the age and size of the family, they recommend a collar amount, and explain what features get covered under it.
Funded by Nexus Partners India and Blume Ventures in February 2016, Turtlemint currently operates on a revenue model wherein it receives a commission on every sale. With 30 employees on board and recording a growth rate of 50 per cent month on month, in the next five years, Turtlemint hopes to transform the way insurance is bought in India, and be one of the prominent influencers in the market.
Here are three key learnings that the founders share from their experience in their journey of working in a startup before turning entrepreneurs.
Focus on Innovation
The key strategy to counter competition is to constantly innovate. For example, at ICICI, we were the first company to go online. And, with respect to team building, we used to hire people from outside the industry so that they bring in a fresh perspective. A third thing we did was, to split the market into various sub-markets and adopt a vertical scaling approach rather than a centralised office approach.
Don’t give up on a challenge
However difficult it is, you need to be at it, and a solution will definitely fall in place. One of the challenges we had at Quikr was to identify the right opportunity from a monetisation point of view. We were able to develop a CRM app for SMBs which became a sweet spot and we started scaling up very rapidly after that.
Speed of Execution
Especially in a tech-based startup, speed of execution is very important because we have well-funded competitors closely behind us. We work towards speed in decision making and speed in execution which comes from understanding what is important and what is not and focussing on the most core features you want to build around. For example, at Turtlemint we realised that speed comes when there is transparent communication within the organisation, and a bias for action. We have a concrete hypothesis of what will work and we quickly get into action mode and try to build something that helps us establish this hypothesis.
Founders: Dhirendra Mahyavanshi and Anand Prabhudesai
Business Model: An online platform to compare and buy insurance policies
Investors: Nexus Partners India and Blume Ventures