Through boom time and busts, Bigtree Entertainment, the company which runs online ticketing business BookMyShow has emerged to own nearly 85% of the online movie ticketing market in India. Ashish Hemrajani, Founder & CEO of Bigtree Entertainment, has gone through times when he didn’t know where his next meal was coming from, let alone cut a salary cheque. The company has been through near death situations. Its 14 year long journey has been a struggle but worth it, Hemrajani said in an interview with NextBigWhat. Here’s a detailed account of the startup’s journey.
Tell us about your journey as a startup?
While I was on a backpacking trip in South Africa, I heard a radio jingle playing on a channel which was promoting rugby tickets. That’s when I got the business idea. I came back and quit my job. I was very happy working at JWT after I finished my masters but I said this is an idea I must pursue and if I don’t do it now, when will I do it. This was at the age of 24. I started working on the plan in my bedroom.
A couple of months down the line, a friend of mine joined us. A few months later, another friend joined me. I approached an investor then. At the time, the Internet wasn’t prevalent. So I sent a one page fax to the investor. They liked the idea and said why don’t we fund this. Unlike today, where most of the startup guys are aware of valuations, how much they should raise or what it was going to be used for. This was the heydays of 1999. When every Johnny and his cousin was being funded. And we were one of those Johnnies. But that ratified some faith and confidence by going into the market and testing the water. We realised that there was lot of work to be done.
The ecosystem didn’t exist in 1999. None of the mobile companies offered the kind of reach they do now. There was no single number policy, no credit card, debit card and net banking penetration. Broadband connectivity was very poor. None of the cinemas had ticketing software. So we had to do everything in offline mode. We did what the market required us to do. Survival was the mother of invention. We went and bought inventory from cinemas. We had 100s of people to go and deliver tickets on motor bikes. We had an opportunity loss on weekends and an actual loss on weekdays. We had 12 call centres in 12 cities. We would buy these tickets and sell them and lot of times it would get rejected. We were carrying inventory. There would be loss in transit. Tickets would be misplaced. It wasn’t scalable.
At 24, when you started, did you face any hurdles?
At 24, there are no hurdles. You have nothing to lose and everything to gain. You have just started your career, fresh and young. Any entrepreneur who is young and says that there are hurdles is heading for a downfall. In 1999, no body even used to take you seriously. Nobody knew the power of youth. Nobody thought that a young kid could actually go and develop something. In 2013, that is not the case. You have enough stories of Mark Zuckerbergs and the likes all across the world.
What has changed from then to now?
Today everything is a level playing field. At that time, only the guys from the Stanford, Harvard, the IITs, the IIMs…If you were 24, no one took you seriously. Those were very different days. In fact today, the younger you are, the better your chances are.
You had to send a fax to get funding for an online business?
It was online, bit of offline and the call centre. Online was quite a significant portion of it. The first investor (JP Morgan- Chase Capital Partners) came in at 1999-2000. It was on the basis of a single fax– like a business model on a single sheet. It was just the idea. I didn’t put any numbers talk about scale or growth. I put a bit on market opportunity on it and it was really the idea. It was about how we are going to capture that market opportunity. I believe that he invested in the people behind the idea as well.
Did you know the investor before?
I didn’t know them previously. I knew them through a friend’s friend. But it was a very professional outreach and not because I meant something to somebody. The transaction was done on the basis of what they believe was good for them.
When did the second investor come in?
Today you have a lot of cushioning. With accelerators and incubators etc. There we were out in the big bad world in the deep end of the ocean. By 2001, News Corp had come in through Indya.com. Then the dot com bust happened. We negotiated a deal with them to buy that business back from them. They were very gracious. We had to wind down the company, pay severance to all the people, shut operations and help them roll it back over 6 months. From 2002-2006, we had no investor. In 2006, we went into the market again and raised about 7 term sheets. We were wiser and there was maturity in the market and the investing world. We closed the transaction with Network18 in 2007 and it was like Series A again. We raised a round in 2012 from Accel Venture Partners.
The Dot Com Crash and Near Death
By 2002, the dot com crash had happened. We went from 150 people to 6. We shut all our offices and retained Mumbai and Delhi office. We were down back to the basics. Between 1999 and 2002, we were getting covered by the news papers and by 2002, nobody would even come to our doorstep. But what we realised is that we wanted to stay with the business.
Free Ka Maal has No Value in India
When the bubble burst, we said, let’s go back to the basics. Rather than riding on some illusionary ecosystem, we started building it. We started installing the software at cinemas. When we were giving it for free, no one wanted it. First lesson in life I learned was that anything given for free is not valued. Charge something. When we started charging for the software, our order books were full for the next 2 years.
Secondly, we started running call centres for all our clients and ticketing back offices. We were getting paid on a cost plus model. And it was a real business now. We learned along the way.
The come back
In 2006, everything was changing. Internet, credit cards, debit cards and infrastructure was better. Our costs had come down. The environment had completely changed and we had also contributed to it in our own little ways. We said it’s time to go back to the market with an offering and that’s when we launched BookMyShow in 2007. We grew the business in sports and other areas as well. Today BookMyShow is one of the top 3 most transacted e-commerce platforms in the country. We have seen the dot com boom bust cycle twice.
In 2007, we were not a company which was losing money. We were like a dhanda. It was like how a business how a business should be run. We earned money, we paid salaries, we took money home. Otherwise we didn’t. We kept our ACs at 24 degrees, the alternate bulbs off. We ran a tight ship. We reused papers, pens pins. Nothing has changed about the company since then because we learned the hard way. For a lot of new entrepreneurs, the party is still on because they have never seen a business which is cash positive. The real test is in the battle field. When you don’t have the money, how do you pay your next salary cheque? Now there are enough investors standing by you. For us, it was important to build the business on sound fundamentals.
How was the journey while you had no investor during 2002-2006?
Between that period, we built the ecosystem by installing the ticketing software in multiplexes. Today we have 85% market share in the organised sector. We used to run call centres for all the multiplexes and cinemas. We also built websites and such. We could be close to the consumer but not at our cost because we couldn’t afford it. Nobody was funding anybody at that time. It required us to earn money everyday, every month and in every vertical. I remember in 2002, there were many times when we sacrificed taking salaries home. I didn’t know where my next meal was coming from. I couldn’t afford fuel for my car let alone buy another car. It wasn’t easy. But the environment was tough. I started getting calls from various head hunters saying hey we have a job for you in Singapore. That was an easy thing to do. But we believed in the idea. We just didn’t know how long it would take.
From 1999 to 2006, you saw the shift from telephone to web. And now you must be seeing the shift to mobile?
We saw this about three years ago when mobile wasn’t this big. Everyone knew that mobile was important. About 3 years ago, we built a 10 member team for mobile. Then it was an overkill. Today, mobile accounts for 23% of all our transaction which is up from 10% last year. We are probably the #1 mobile transaction platform, compared to anyone else in the country today. Android is about 12%, iOS is about 6-7%. Windows and the rest put together is about 3%. Penetration is now going to class 2, class 3 cities and mobile is driving it. Mobile is more immediate*.
*Big Mobility is happening. Are you there yet? Check out for details: @bigMobilityConf