I am sure that the seed of a lot of startup ideas are sown over drunk discussions with friends. Happened with me too where a friend shared her experience of cycling through villages in Udaipur (in Rajasthan) and it made me think about how the people are evolving as ‘travelers’, rather than just remaining ‘tourists’.
The drinks got over but I got fixated on this thought. So, I started digging about it to get a hold on what exactly is this space, and ended up creating a raw sketch of some sort of business plan. I was a partner is a successfully running social media agency, but one fine day I discussed with my partners that I want to start something new. They were extremely supportive, I finished the transition, ran the idea through my mentor Manohar Kamath, we had rigorous discussions for next 10 days, and my bags were packed to move back to Pune.
Since then it’s been about a year now and we are all set for our beta launch in coming few days. It goes without saying that this whole year was obviously very different then I thought would be, but surely more exciting. There has been a lot of changes, pivots in thought process, but there was one thing that was constant – Continuous Learning.
Chapter 1 – Taking a (or Multiple) Step(s) Back
Step Back I – Going against, ‘1 bird at hand is better than 2 in the bush’.
When I was planning my shifting to Pune, I had the following:
- Investment offers from (not exactly VC’s) but certain HNIs from real estate industry
- Lucrative job with an exciting startup with 4x hike on what I was earning
- Bank balance in 4 digits – with loan repayments pending
I thought for not more than a day, and refused to go along with any of those. Rejecting job offer was because of a simple thought that, if I have become that much worth, I can get it again. Refusing the investment offer occupied most of the day while evaluating things and dropped it because:
- I didn’t feel that the builder who was interested, will share the vision with me
- I was very far away from a stage that requires investment, not even had a fair idea of what exactly is the travel space is.
So here I was in Pune last January and I started working on understanding the space. Talked to a lot of service providers (in experiential travel), travelers and tried to understand the real problems they face.
Step Back II – Going against the most advised, ‘quickly build something and keep improvising’ method.
Most of the VCs or startup advisers/specialists etc say entrepreneurs should quickly launch MVP and then based on audience response keep improvising. Initially that’s what I thought, but I also did some research on other startups in the space. There are few players, but still the problems service providers and travelers face, persisted. Now the question is, why? In a line, the answer is – most of the marketplaces or aggregators in travel are merely acting as travel agents and not focusing or problems beyond that. And as far I have understood the problems, they are three-fold: 1) discover-ability or relevant options, 2) hassle in processes (bookings / cancellations / refunds), and 3) expectation mismatch.
So I started digging deeper to understand the root of problems and finding solutions. Again, even after I created a blueprint of plan or say solutions for the problems, I wanted to validate the solutions as I believe that technology will play an important in making things easy and scale them up. So if I can validate all the business model elements without creating a product, then yes, it’s viable. And yes, that was the next step.
Chapter 2 – Validating Business Model
In a gist, our objective is to help travelers easily discover and book unique verified travel experiences created by authenticated escape artists. Our value proposition for both ends of business in one sentence each is simple as follows:
- Travelers (we call them Seekers): Focus on immersing in the joy of experiences, we will make all easy for you
- Providers (we call them Creators): Focus on creating and offering unique experiences and we will take care of everything else
It looks so simple, right. But to achieve this there are certain important elements which we needed to be put in place. Here is what it takes:
- Getting experience creators on board – while we are very selective on signing up our partners, we got 40+ of them on board (total 600+ experiences available)
- Verification of experiences & right story telling, so the customer can easily understand what they are gonna get and there is no expectation mis-match
- Understanding different cases to make processes (booking/cancellation etc.) easy. E.g. certain experiences are available in batches, certain within specific time period etc.
- And most importantly getting certain customers and matching them with the right experiences. Before even starting the development we had 100+ signed up travelers, 11 of them have booked & taken experiences with us and we have done total sales of ~100,000 INR. Now our gross sales are around ~300,000 INR, 200+ registered travelers, and 35+ paid customers.
Chapter 3 – The Core Team
I have created a profile for ToRoots on Angel.co and have been getting regular applications from there (some of them from people who are in strategic roles in names like LinkedIn, Ebay etc.), talked to few of them and but I always got the feel of a ‘desk job’ kind of person from them. And what I needed was somebody who can run things on ground with me. So I started focusing back on business model validation.
At the time I started with getting some sales, I was talking to a very dear friend and ex-colleague of mine – Ayush Kashyap and in the middle of the discussion, he says, “I am joining you”. And that’s it, he resigned from his job, and shifted from Delhi to Pune.
Similarly a very dear friend of mine and founder of a funded startup (WooHoo), Rahul Uppal was in Delhi attending a friend’s wedding, and in conversation with friends he mentioned to them about ToRoots. And that simply lead Simran Kaur packing her bags and shifting to Pune to be a part of ToRoots.
In parallel to all that, I was regularly meeting tech teams to be our tech partner and develop the platform. I happened to meet Vinayak Kamath in Mumbai and he mentioned to me about Appic, I met the team the same evening and in the first meeting I knew that I have found my tech partners.
Chapter 4 – Funding & Shaping up ToRoots
Around Diwali, all this was in place and now the need was funding to shape up the platform. In the month of October, I have contacted a lot of VCs, seed & angel investors, but the most common reply was – ‘We Need To See The Platform’.
So around Diwali, we took a step back, and re-calculated what was our immediate requirement (to develop the platform and give us at least 2 month run-way post launch), and the figure was 1/5th of what we were looking to raise. So we broke the investment requirement in phases, decided a minimum ticket size and approached few people in my network only. And yep, this time people were ready to participate and fulfill 2/5th of my original requirement. But we still went for the 1/5th for 2 reasons: a) we obviously wanted to dilute as less as we can, and b) we believe that excess of cash might make you bit reluctant (and innovate less).
* Here you must have noticed that ‘I’ have changed to ‘We’, simply because now there is a team 🙂
Thus we closed our pre-seed round in the month of December’15 from multiple angels and looking to close the seed round in April’16. People who participated in this pre-seed round are: 5AM Ventures, Bhola Meena (Co-Founder of OnlineTyari & GetMeCab), and more.
Epilogue – Learnings So Far
This has been a roller coaster ride so far, where we were have shaken up a lot of times, were excited a lot of times, but one thing was constant – our energy. So here are few most important things I learned being an entrepreneur:
- Always be in driver’s seat: As a founder of the company, you are the one who need to drive everything. There might be times when maybe you can get in awe of investors, advisors, mentors or anybody else (obviously they are some next level people). But remember, you are the one who will build the organization, everybody else is a facilitator, so never get into a situation where you are out of driver’s seat.
- It’s your energy which draws people and drive them: In a startup, the most important thing is your energy. It’s never your profile or experience or anything but your energy which draws people to join you, and then drive them to build things together. So, NEVER ever let your energy dip. Yes, there will be low times, but you ALWAYS need to find a way to never let it impact your energy.
- People build business and not vice-versa: Your most important role being a founder/CEO is to build people. So focus on building the right team and driving them towards the vision. (Tip: I get people in my team based on their temperament. Everything else i.e. skills, knowledge etc. can be acquired with the right temperament)
- It’s not necessary that you have to mess up everything to build your startup: There are different schools of thought on this, but it’s not necessary. It sure needs sacrifice and there is nothing called right or perfect balance, but at the same time I also believe that, if we really need to manage other things (personal) at least the basic hygienic level, we will find a way. Remember, there is always a solution to everything, it’s just about finding it.
Last But Not The Least – What’s Next
We are all set for our beta launch of web portal in this month and the apps (Android & iOS) are coming in next month. There are few things we have decided to always follow, that will give direction to how we shape up ToRoots:
- Viable business model: Our very first transaction was profitable and we simply don’t understand the business models where the marginal cost for getting a transaction/sale is higher than the marginal revenue from that sale. So every transaction should always be profitable. And we intend to become a positive cash flow business very soon.
- Traveler-centric operations: In ToRoots everything will be driven from the traveler point of view. The logic behind this is, at the end of the day our objective is to help travelers get immersed in joy of unique experiences. And if we drive everything from that viewpoint, all else will get in place. Also it helps you easily focus on things instead of distracting you with multiple things.
- Disruptive methods for each business element: Even before starting the development, we devised disruptive ways for each business element whether it is customer acquisition, experience creation, creator on-boarding, experience verification or anything else; and validated all these methods. Being a startup is all about innovation, and in the current situation in startup ecosystem, viability of any business model will depend of disruptive methods.
It has been very exciting till now, and about to get even more exciting for sure. We will keep posting about insider developments & happenings. For individual discussions you can connect to me on Twitter and we would love to know your thoughts/suggestions in comments.