From creating network effects to blindsiding MakeMyTrip: Vikalp Sahni, Founding Member and CTO, reveals how Goibibo did it
Friday July 06, 2018,
7 min Read
Vikalp Sahni, Founding Member and CTO of Goibibo, speaks to YourStory about the early days of Goibibo’s journey and where the startup is headed after the merger with MakeMyTrip.
It was the year 2007. The time when Flipkart and Ola were truly startups. It was the age of India’s first internet companies - Guruji, India’s search engine, and Minglebox, India’s social media platform. And it was a time when Indya was touted to be India’s email id and Orkut was the flavour of the season.
At that time, Goibibo, under the umbrella of the Ibibo Group, which was founded by Ashish Kashyap, Sanjay Bhasin, Deepak Tuli, Vikalp Sahni, and Uma Shankar, was working as a social media platform. Two years later, in 2009, the team put the focus on travel ecommerce.
Vikalp Sahni, Founding Member and CTO of Goibibo, in a conversation with YourStory, speaks about how they decided to focus on travel and what the growth hacks they used were.
Vikalp, who had previously worked for IBM, was one of the founding members of the startup. He along with his NIT, Silchar, college seniors had worked on different parts of the vertical search; they had even built a patented technology then on the algorithm that worked around speed and bringing the right results.
“We were asked to build Goibibo in two weeks, but we could build it in three.”
During those early years of India’s internet boom, several members of the Yahoo India team had quit and started up. “We realised early on that travel in India wouldn’t be as fragmented a market as in the Europe and US,” Vikalp says.
While Ashish and Sanjay were handling the business in Gurgaon, Vikalp worked on the tech. Goibibo was built within three weeks. In 2009, it was a fast -performing desktop website. However, they weren’t the first in the game. MakeMyTrip, Cleartrip, and Yatra had launched and were strong in the market.
What Goibibo did differently was that instead of partnering with the websites they partnered with via.com, a consolidator. Vikalp says,
“We wanted to see how we could build on top of that layer, we had to give a fast and reliable platform. At that time if you would go to a website and search for flights on MakeMyTrip or Cleartrip, you would be taken to another page, which would say ‘hold on, we are fetching your flight details’. We then thought why am I waiting for the page? We just integrated the API, added the data, and showed the details. Whichever airline came up with the details first would have their details up first.”
“The only way we could grow was by hustling and finding different hacks.”
Transparency and ease of usage became their key differentiators, Vikalp says.
“I would sit on one computer on Cleartrip, Sanjay on MakeMyTrip, and Ashish on Goibibo. The test was who would complete a booking the fastest. And if Goibibo failed, it meant I just had to go back to the drawing board,” he reminisces.
The team believed that a software dies every two to three years; to stay ahead of the curve Vikalp and his team would use newer languages and technology. While the world was on Java and PhP, Goibibo had decided to move to Python.
“We would code during the day and respond to customer emails at night. It had its charms, we were the builders so anything could be fixed immediately. It also gave a completely ‘wow’ experience to the customer,” Vikalp says.
Within two to three months the team started seeing more than 1,000 paying customers. The team started to grow, from two to eight and touched 30 people.
“When we started doing 4,000 transactions, we began investing in bus and other verticals. We realised that network effects was very important to keep a business running. Buses could build a network and so could hotels, but flights could not,” Vikalp says. By network effects, Vikalp refers to a phenomenon where a product or service gains additional value as more people use it.
By 2013, redBus was acquired by Ibibo.
“We knew we had to build solid network effects.”
Vikalp defines these years as a pivotal moment. They looked more closely at hotels as well, building software for hoteliers and for customers - and that is where the chain of network effects was built.
They quickly began to build their closed wallet - Go Cash - and a successful referral programme. Vikalp explains that this gave them a big boost on the consumer side, which gave liquidity to the supplier side.
“We also moved to a nicer office, from the dinghy office on MG Road. It made it easier to hire engineering talent,” Vikalp jokes. The network growth in network effects is what gave Goibibo the edge.
By this time even MakeMyTrip, Booking and Expedia were entering the hotel booking space. And that’s when Deep Kalra, Founder and CEO, MakeMyTrip, seriously noticed Goibibo.
Deep acknowledges that MakeMyTrip was completely blindsided about GoIbibo for the first two years, and used to say they were a discount shop. In his talk at MobileSparks 2016, he said: “We had a lot of scorn for discount shops; we knew you can’t build a business on discounting. But we were wrong.”
This perception was maintained because the MMT team didn’t pick up till almost a year ago how good GoIbibo was with technology. Deep realised that when he got a chance to look at their extranet app (a solution given to their hotel partners to manage inventory and supply chain). He was simply blown away with it though some of his team members were in denial.
He said in the conference, “It’s human nature to be defensive. My colleagues were defending and I said we were ostriches with our heads buried in the sand.”
“Are you failing fast and building faster?”
Vikalp explains that the Goibibo team works on one principle: fail fast and move on. “We did just that. It isn’t that we didn’t try new and different things. We did venture into experiences and holidays, we failed and moved on, we tried pay the hotel at your price and many other things,” he says.
But then as Deep said - and Vikalp accepts - Goibibo was giving a lot of moolah/discounts to woo consumers.
“In India, people value cost. If the merger had not happened, we all would’ve burnt more money. The fight would have been an unnecessary, long-drawn one,” Vikalp says.
The merger has helped match synergies, avoid duplications and gain understanding of what works best where. Vikalp says the good part of the merger was that from day one the team informed everyone that it was about execution and scale, not optimisation.
“The idea was to combine and build something faster. You need to figure the synergies out and then integrate and see what works,” he says.
“AI today is given, the idea is how do you use it?”
Goibibo is now focused on artificial intelligence (AI), voice over text and studying what can be done with WhatsApp. What is interesting for the team is that 28 percent of search on Google is on voice.
Goibibo has, in that sense, worked out integrations with WhatsApp, Facebook Messenger, Alexa, Echo, and Google Assistant. Where one can get a message on Whatsapp about a seat book and even make a booking and get the boarding pass through Whatsapp.
The team is looking at search and discovery through voice and text, to make booking easier for customers.
“We are focusing on post-booking experiences through WhatsApp, using AI and ML. We are doing real-time chats and conversations. Whatever conversations could be on call can be shifted to chat. We are also looking at how we can solve the payments problem,” Vikalp says.
“We want to be the natural way of a person’s travel booking cycle.” Vikalp concludes.