Crises separate males from boys. They check entrepreneurs’ grit, perseverance and keenness towards an unsure future. However only a few crises may match the extent of a world pandemic that brings companies to a standstill, wipes out income and triggers huge layoffs. When India went right into a nationwide lockdown in March this 12 months to stop the unfold of Covid-19, on-line journey ecommerce firm Ixigo’s income got here crashing right down to zero in a single day. No quantity of planning may have ready the corporate for this contingency. With a money runway of simply six months, the founders – Aloke Bajpai and Rajnish Kumar – have been working towards time. Their firm had survived the 2008 monetary disaster, however this time, it was completely different. What they achieved within the subsequent few months makes them our alternative for this distinctive survivor story. On this story, we are going to hint the journey of the entrepreneurs who’ve waged a tricky battle towards the pandemic slowdown and emerged victorious towards heavy odds, setting an instance for all the startup neighborhood.
Edited excerpts from Inc42’s interplay with the Ixigo founders who informed us candidly how the corporate weathered the Covid-19 storm.
Inc42: A pandemic-led enterprise disruption is one thing that many thought leaders, prime executives and administration leaders weren’t ready for. How did you take care of the disaster that had your business on its knees from the phrase go?
Aloke Bajpai: Should you take a look at Ixigo’s journey, you will note we’ve had a justifiable share of crises prior to now, proper from a funding slowdown to working out of funds. However we did handle to outlive. The 2008 disaster was the primary publicly seen one after we have been a really small crew, with about 20-22 members. On the time, we had closed our seed spherical and have been making an attempt to broaden aggressively, with a time period sheet for a Sequence A spherical. Then the Lehman Brothers disaster hit us, and the time period sheet collapsed. It was evident that we wouldn’t be making a lot cash for a very long time. We needed to discover the desire to outlive then. Essentially the most important studying of that point, which has been helpful within the present disaster, is that the second you realise that shit is about to hit the fan, you basically talk it transparently to all of your crew members. As a founding father of the corporate, it’s important to have that transparency, and also you also needs to have belief in your crew.
In (early) March (earlier than the lockdown), after we noticed this (Covid-19 disaster) coming, the very first thing we did was to carry an sincere dialog with our core crew, and the identical was conveyed to everybody at an all-hands assembly. Being clear upfront and letting your colleagues learn about your anxieties could make you seem weak as a founder. Nevertheless it helps construct immense belief and bonding throughout the crew, and everybody tries to be a part of the trouble to beat the problem.
Rajnish Kumar: I agree with Aloke. We predict that the most important studying for us from 2008 was that dangerous information ought to all the time journey quicker than excellent news in each instructions, be it upstream or downstream. Whether or not you might be speaking along with your buyers, stakeholders, workers and even clients, one has to make sure that dangerous information travels a lot quicker than excellent news. Additionally, we founders usually are not superhumans, proper? We’re regular human beings, and all of us make errors. So one factor that’s actually essential is to reveal your personal vulnerabilities to your crew. This makes the crew come collectively. And it builds extra belief as a result of belief is a two-way relationship.
Inc42: You mentioned it is rather essential to indicate your vulnerability in entrance of your crew when a disaster strikes. What was your first response when a nationwide lockdown was introduced? What was your first communication along with your crew?
Aloke: From our previous expertise, I’d say whenever you attempt to predict the longer term and build-out eventualities in your thoughts, chances are you’ll get a number of issues outright flawed. When the primary Covid-19 case was reported in Gurugram within the first week of March, that was the second when Rajnish and I had a dialogue. There can be a full lockdown, and we knew that the federal government would take stringent measures to curb journey, and we’d be within the centre of the disaster. So it’s not like you can not foresee it coming. We began to organize our management crew from that second. The truth is, we started to situation work-from-home (WFH) directions to our workers from round March 6, lengthy earlier than the lockdown began. So, the primary skinnyg we communicated to our workers was prioritising well being over all the things else. We let everyone earn a living from home from the primary week of March.
Then we went right into a huddle and with our management, sat down to organize for what was coming subsequent and tried to determine a option to face the disaster. We had many eventualities on the desk, together with preparations for a year-long journey restriction and preparations for restricted journey orders for six months. So, we took a mean forecast and tried to not overestimate the issue. All of us agreed to plan for a state of affairs the place there wouldn’t be any form of lively journey within the nation for six months and started planning our finances.
Inc42: Did you consider layoffs?
Rajnish: One of many knee-jerk reactions of most firms, particularly within the journey section, was to put off folks, and go forward with a steep cost-cutting measure proper on the outset. However our strategy was completely different. On the core, one of many cultural attributes that we’ve is empathy. And after we appeared on the disaster by way of that lens, we noticed that Covid-19 isn’t just any disaster; it’s a humanitarian disaster. We needed to see what was occurring to others round us whether or not they have been our clients or workers. So, we did two issues. First, we didn’t lay off anybody. Second, we checked out our clients’ ache level and noticed that there can be an enormous influx of calls from customers who have been frantically making an attempt to cancel or reschedule their flight and practice bookings. So, we bolstered our buyer expertise crew to deal with that workflow. We additionally began refunding them straight from our books for the subsequent few months (after March). Even after we didn’t get refunds from our associate or airways, we nonetheless went forward and did that in anticipation. We have been the one OTA who proactively refunded all affected clients who had booked tickets for home and worldwide journeys however couldn’t make it attributable to lockdowns.
Inc42: Had been there disagreements over the realignment/contingency technique between founders or along with your board? How did you resolve them?
Aloke: Throughout the management, a few folks had their doubts. However Rajnish and I simply went with our intestine feeling on the time. We didn’t need to have a state of affairs the place our workers and clients would turn into extra weak, the place our folks wouldn’t have jobs throughout a downturn. We have been making an attempt to cut back the monetary influence on our workers. Suppose, we had laid off our workers and some months down the road, there was a rebound in journey and ticket bookings, we must begin hiring once more. We predict it might have been tremendous dangerous for our firm tradition. Now we have all the time been very, very finicky about how we constructed our tradition. Downsizing our firm was stored because the final possibility if there have been no bookings even after six months. By that point, we might have run out of money. However fortunately for us, it wasn’t required because the journey business opened earlier than the six-month contingency we had deliberate for.
Inc42: Might you’re taking us by way of the contours of the contingency planning course of at Ixigo? Was there a contingency committee in place? Had been workers a part of the contingency planning in addition to the administration crew?
Rajnish: We created a contingency squad with completely different leads and heads of departments. Everybody within the squad was anticipated to determine how they may save prices. We additionally negotiated with nearly each software program vendor with whom we work, and we have been capable of negotiate waivers and (fee) deferments for three-six months. Then, we renegotiated rental bills, together with workplace rental. In addition to, we walked out of some long-term contracts by triggering drive majeure. As we didn’t have any income coming straight from journey, we repositioned our app and web site to make sure there was some form of person engagement. We additionally made cash from advert gross sales and by reselling insurance coverage or Covid cowl. We constructed a Covid dashboard and supplied info on Covid check spots, drugs deliveries, cellular recharge and on-line medical consultations. We additionally up to date Tara (Ixigo’s chatbot) in order that it grew to become practically 90% correct in dealing with buyer queries. We gave Tara the power to deal with all Covid-related use instances and eventualities. This technique gave us a whole lot of leverage.
Aloke: Buyer assist calls, messages and emails went up 8-10x of the standard quantity as quickly as lockdown began. Regardless of including extra folks to our buyer assist crew, we have been going through points with attending these calls. For practically three-four weeks, half the corporate was doubling up as a buyer assist crew. They volunteered to reply buyer queries about refunds and different issues. We knew that the (Covid disaster) can be a customer support nightmare. However for us, it was additionally the time to construct belief by being extra proactive and serving to clients out. We additionally focussed on refunds as a lot as doable. However all of the sudden, we had a state of affairs the place our refunds exceeded the dimensions of the enterprise we have been doing. No one fashions a journey enterprise for such eventualities the place the variety of refunds is all of the sudden greater than the variety of bookings you’re doing.
One explicit Saturday, our pay as you go account had no cash, and we couldn’t full the refunds we must course of in the course of the weekend. However we didn’t need to preserve our clients ready till Monday. So, we crowdsourced INR 40 Lakh in a single day from our workers to make these refunds. And we returned their cash on Monday. We had to do that as on weekends, we couldn’t fund the pay as you go account used to refund tickets.
Inc42: What sort of income may you generate with the kind of non permanent repurposing you had completed at Ixigo? How a lot may you earn by promoting Covid insurance coverage cowl, particularly within the absence of home and worldwide flights?
Aloke: We salvaged some 20-25% of our site visitors even when there was no practice or flight. Even on essentially the most abysmal days, our web site site visitors didn’t go right down to zero. With that site visitors in place, we have been capable of generate advert revenues and get lead-generation income for different gamers with whom we work. We have been fortunate that by Could 25, some airways have been working their flights. For a few months, our income fell to round 10-20% of what we have been making earlier than March. However our workers made some sacrifices and took wage cuts to maintain us going. The median pay lower was round 40% whereas the management crew took a 60-80% pay lower. Rajnish and I didn’t withdraw any wage for just a few months. We had stripped down our prices to a naked minimal that we would have liked to outlive, and we have been simply hoping and praying that issues would open ultimately.
Inc42: What number of hours did you spend strategising the contingency plan? Did you spend most of your day engaged on that? Might you handle a work-life stability, or did your working hours enhance considerably?
Aloke: It was a really aggravating time. For no less than two weeks, I couldn’t sleep for greater than 4 hours at night time. There was a relentless feeling of tension slightly than anything. And I had a whole lot of temper swings as I used to be pondering over questions like “Are we doing the best factor?” Or “Are we doing sufficient?” I used to be not capable of reply these questions. However I used to be doing the perfect one may do as a founder, with no matter assets I had. For a few weeks, each of us (cofounders) have been mentally disturbed. We have been within the wartime CEO mode, the place there was a no-nonsense form of strategy to discussions. By Could, we began to understand that we had really managed to take action a lot with so little assets. At present, I can’t even think about how we pulled off so many new merchandise (that Ixigo offered on the Covid dashboard).
Our development post-lockdown has been phenomenal. The truth is, we have been worthwhile within the final quarter of FY2019-20. It was Ixigo’s first-ever worthwhile quarter, and we have been even hoping for an outstanding calendar 12 months when earnings would preserve rising. After which, Covid occurred. However fortunately, due to the monetary self-discipline we had inbuilt 2019, we’ve been capable of lower down on bills and get our enterprise again to pre-Covid ranges.
Inc42: Have you ever reversed the wage cuts?
Aloke: Now we have reversed it for Ixigems (Aloke’s manner of referring to Ixigo workers) from July. We additionally accomplished value determinations. We’re one of many few journey manufacturers who did it this 12 months. We did it as a result of we felt our crew deserved it. We had deliberate for six months of zero income, however that didn’t occur. So, there was no cause to not reward folks. We additionally gave our workers deeply discounted ESOPS, which accounted for two% stake within the firm. Everybody at Ixigo, together with our workplace peon, bought ESOPs.
The Ixigo Workforce
Inc42: When did you lastly get some kind of aid? Do you recall the precise second whenever you felt assured that the journey business can be again on observe?
Aloke: We’ll really feel relieved when this disaster is lastly over, and everyone seems to be vaccinated. I don’t suppose any enterprise is within the pre-Covid consolation zone but, no less than not these within the journey area. However in July 2020, after we checked out our P&L statements, we realised that we have been really doing higher than we had deliberate for. For instance, we had deliberate for a considerably unfavorable P&L as a result of we assumed there wouldn’t be any form of journey within the nation for six months. However by July, the variety of flyers have been growing. Now, practically 55% of the pre-Covid demand is again in flight bookings. Should you take a look at trains, a significant enterprise for us, you will see that that practice ticket reservation is kind of near pre-Covid ranges. Presently, round 1.5 Mn persons are travelling day-after-day with reserved bookings, which is kind of excessive as the federal government has added much more capability to the prevailing reserved compartments.
After Dussehra and Diwali, leisure journey bounced again to an excellent extent, which was the most important aid for us. As a result of enterprise journey goes to take a really very long time to come back again to regular. Companies received’t prioritise spending on journey, no less than for some time. However for leisure journey, the demand began to bounce again round August and September. Individuals went on mini-trips within the outskirts of cities. And among the greatest properties in Goa are jam-packed for the Christmas and New Yr’s festivities. We see a 10% enhance week on week in (flight and lodge) bookings to Goa itself. The opposite metric we have been monitoring was the variety of return-trip flight bookings.
After lockdowns have been relaxed in late Could, we additionally noticed one-way journeys as everybody appeared to be speeding again to their hometowns. We weren’t certain if this may be sustainable. It took some time earlier than return-ticket bookings began to pop up on our dashboards. However by September, folks bought bored sitting at residence, and so they have began venturing out, and so they proceed to work from trip hotspots.