How BookMyShow survived many winters to create a monopoly of sorts for itself
“More companies suffer and die from indigestion rather than starvation,” says Ashish Hemrajani, co-founder and CEO of BookMyShow. After one conversation with Ashish, you would rest assured that he is one of the ‘old-school’ founders and businessmen and a thorough ad man. A self-proclaimed and proud Sindhi, Ashish has always believed in frugality and has extended that virtue into his company's operations as well.
At a time when business models are being questioned, BookMyShow ascribes frugality to be the reason for its success. And, as Ashish says, “We are bloody good at what we do.”
But one has to admit that BookMyShow is doing something different to be on the top, and to hold monopoly. Even with the Paytms of the world venturing into the movie ticket-booking business, BookMyShow has come a long way. Ashish says,
This is because we work as a great soccer and not a cricket team. We are not made of individual scores that create a sum total. It is a team of soccer players that moves forward towards one goal. There are goalies and strikers who are brilliant. We are the football club of Barcelona and the FCB of the startup world, and if the FCB goes on to win the Champions league it is because they are bloody good.
Growth by numbers
The truth, however, is in the numbers. The company sold an average of over 7.8 million tickets per month in 2015-16. And this year it recorded a revenue rise from Rs 130 crore to Rs 246 crore. Started by Ashish, Parkshit Dar and Rajesh Balpande, BookMyShow, for over 17 years now, has seen different kinds of winters and summers in the world of consumer Internet.
BookMyShow has 1,500 employees, is present in 370 cities and towns, and present in four geographies. “We probably are one of the top three e-commerce brands in the country. By volume, we sell 12-15 million tickets in a month and have 100 million visits. We have three billion page views and we did Rs 2,500 crore GMV last year,” Ashish says.
Working from a modem world
During the late 90s and early 2000s, there was no GPS, satellite and cellphone communication systems, cameras or smartphones. Whenever a complaint came in about non-delivery, the team would take a description of the door and let the consumer know if they had been there or not.
There were hardly any credit cards or payment systems available and even though the team had a website, over 95 percent bookings came from the call centre. While inefficient, there wasn’t an ecosystem available to build online tickets.
Working through diversity
Currently, over 100 million people in India control 65 percent of the wealth, and the bottom 40 percent of the country control only five percent of the wealth. The concentration of wealth in metros is high, and within that the diversity is huge. Ashish adds that the meal some people have at a hotel, would possibly be two months of a person’s salary working in the same company. Ashish adds,
It is very important to be prepared and ready to ride the wave at the right times. These come constantly at a lifecycle of a business, and you need to catch the wave at the right time. Timing is the key here, either you just miss it completely or you get slammed so badly that you end up burning cash. You don’t want to be like several of the e-commerce companies that were hit by the wave and ended up burning too much cash too soon, nor do you want to be like a Kodak.
Show me the money
Ashish believes what kept them going was the fact that they understood the customer needs and expectations better than anybody else. He says,
Everybody feels that the solution to every problem is cash; it really isn’t so. While cash does solve some problems, it isn’t everything. Excess cash in fact limits people from thinking intuitively and innovatively. It becomes all about cashbacks, discounts and price wars, which just isn’t good for the ecosystem.
Consumers, Ashish says, do not tell you exactly what they are looking for, and understanding consumer needs comes from reading between the lines and understanding behavioural patterns. Marketing spends have always been low for BookMyShow.
“Even today our company is very cost-conscious. We are careful of the type of flights, number of flights, type of hotels and amounts spent on other administrative expenses. We are diligent in the way we manage electricity and stationery expenses. These are just good practices. We rather spend money on the people,” says Ashish.
The company spends on medical care for every employee, their families – spouses, children and their parents. This is over and above the CTC (cost to company). The office boys, peons and outsource staff get subsidised meals.
Ashish points out that weathering the dotcom boom and bust has trained the team to think and work frugally.
When the going gets tough
But life isn’t a sprint, it is a marathon. It isn’t about the current grade or the current challenges that you’re going through.
"I was invested in by NewsCorp in 2001, and by 2002 we were hit by the dotcom bust. I went from 150 people to six, and moved from a 2,500sqft office to a 138 sqft apartment in Bandra. And that was when the hockey stick growth happened,” says Ashish.
When the bust happened the immediate challenge was to let go of 144 people out of 150. Ashish says that his immediate goal was to ensure that everyone got a decent severance package and was placed in other jobs through recommendations.
It was a time for tough decisions; the company had to go through a slump sale and had to be bought back. But in 2007, things turned around for BookMyShow, with over 50 percent of their transactions coming through the website.
And in 2012, when the mobile applications started growing, the BookMyShow mobile app became the platform to consume content. Today, over 75 percent of the traffic comes from the company's app and mobile website.
“While there are bursts of sprints, you need to look at long-term goals and keep yourself focussed. You need to get up every Monday morning being as good as on a Friday evening,” says Ashish.
It was at this time that the team realised that giving something away for free just doesn’t get valued. Ashish adds that they would give out ticketing software to cinemas, nobody wanted it but the day they began charging for it, their order books were full for the next two years.
People like convenience and value, not discounts and freebies. The latter is the easiest to not create loyalty around your business.
“One of the biggest lessons we learnt during the slump was as difficult as it was to let go of employees it was harder to hire them back. So during the 2008 crisis, when we had to slash our salary bill by 30 percent, we ran a vote in the company on what percentage of cut people were willing to take – 10, 20 or 30 percent, instead of losing a fellow colleague. Over 90 percent voted to take a salary cut,” says Ashish.
In six months, when the market bounced back, the team had still not lost a single employee. The team also had to endure a tough battle with the Maharashtra government on convenience fee. Ashish adds that 20 percent of their bottomline was being questioned, and it would’ve set a precedence for every other State in the country.
Building the culture
With singular focus on the customer, BookMyShow has always had an internal customer service, as the company considers Net Promoter Source to be the holy grail. Each user is treated and rewarded differently, as each user’s needs and wants are different from the other. There is a constant feedback loop.
“Creating a customer-first approach happens when you build it in the cultural DNA of a company, which we have happened to build over 18 years. And everything we do is surrounded by that,” says Ashish.
Building a company's culture and DNA over 19 years is not an easy task. Ashish believes that managing growth and the expectations of people who work with you are possibly one of the most difficult tasks of an organisation. Ashish believes that you need to evolve and build your culture as the team grows.
BookMyShow upholds creativity as an essential part of its culture. Initiatives are actively encouraged, not just from the HR team, but from every department. “It is nurturing the habit of being open and discussing ideas with everyone. There is no fear of failure,” says Ashish.
As organisations and people grow, there is a tendency to lean towards working in silos. In order to break that, the team re-engineered their workspace, making it completely open, with pin-up boards, whiteboards, flat networks, tools to put up code and document it. This enabled the company to foster a culture of collaboration to think, innovate and run faster with ideas, keeping the big picture always in view.
“It took us a year-and-a-half to do this, but it was born out of creativity and innovation,” says Ashish. Starting from a very ‘Jerry Maguire’ moment, it is with little doubt that one can say, BookMyShow today has become synonymous with online ticket booking.