The Covid-19 outbreak has posed unprecedented challenges to many businesses, including the travel and hospitality industry. This meant that everything that had been built over the years had fallen to zero.
As of March 2020, the Chennai-headquartered Online Travel Aggregator (OTA) Choose your course stared into an empty space and didn’t know if he would survive another day as the government announced a nationwide lockdown to fight the pandemic.
“Everything was wiped out like that. As a founder, I have always taken pride in building an organization,” says Hari Ganapathy, co-founder of Pickyourtrail.
It was here that the courage and resilience of Pickyourtrail came to the fore. The startup was founded in 2013 as a seed company and remained so for another five years before raising its first round of external funding.
For any travel-related business, the period between October and March is the busiest, and this was no different for Pickyourtrail. Between late 2019 and early 2020, the startup was very busy fulfilling orders, generating revenue, and hiring staff. It should also be kept in mind that in the travel industry, the cancellation percentage is only 2-3%, which means that income is generally very assured.
Once the lockdown was announced, the company faced no activity and hence the founders reached out to their investors for help.
The investors gave the founders a cryptic piece of advice, which was confusing at first, and to some extent, disheartening too.
“We don’t want to be bad parents, but go figure it out,” they said.
Hari didn’t understand the real meaning of what investors were telling them then, but now he gratefully remembers that valuable piece of advice that forced them to really grow.
It would have been easy for investors to provide money to Pickyourtrail to weather the crisis, but they waited and, in hindsight, it bought out the best of this startup.
Pickyourtrail had to go back to an empty whiteboard and figure out what to do next. They had two options: the first was to downsize the organization and pay the remaining employees 100% of their salary, and the second option was to take a huge pay cut.
“It was literally a house of death,” Hari says.
The founders took the second option, where they presented their employees with a 63% pay cut. This meant the startup would have a bank balance for another 8-10 months just to hang on.
Naturally there has been a lot of disappointment in the organization and it is no one’s fault as it was triggered by an outside factor.
“We were very transparent with our employees and explained the situation to them as it was,” says Hari.
It was a mixed bag during this time with an employee base of around 230, and some of them left because they had their own commitments to meet while others stayed because of their trust. in the organization. The team also couldn’t honor some of the job offers it made to new graduates.
“Before, I took it very personally when someone left the organization. But during this period, we celebrated their departure for another job,” says Hari.
Pickyourtrail also created an outplacement team, which was managed by the founders themselves and helped many of their team members find other jobs.
They have had cases where some people who had filed their papers earlier opted to stay with the organization or someone who was admitted to a foreign university extended their stay for another six months.
Preparing for the future
It was a time when the startup had completely redesigned itself with the belief that it would be better prepared when things changed.
“We started creating a product and our tech team had a goal while our sales people got involved in SEO,” says Hari.
Pickyourtrail started tweaking their algorithms and invested in SEO, where their Instagram followers grew from 5,000 to over 100,000, and their product was truly global. This meant that American travelers could book their vacations in Greece through this India-based startup.
Pickyourtrail generally did 100% outgoing destinations. But during the lockdown and resulting work-from-home scenario, he realized ‘staycation’ was a big opportunity and started working on it.
The startup also started negotiating with its large group of partners where it reached an agreement and told them that if there was a delay in the payments, it would return it once the business improved. Many of them accepted.
“Being vulnerable and honest with people actually pays off more often than not,” Hari remarks.
After the first lockdown was lifted, there were definite signs of business picking up where they made their sale in July 2020. Hari gives an example of the Maldives as a destination where their pre-lockdown market share was around 0.8%, but now it has reached five percent.
“For all OTA players, the lockdown meant everyone had to start over from the starting line,” says Hari.
The steps taken in the first five to six months after the lockdown was announced have started to pay rich dividends for Pickyourtrail. It was no longer just one destination as they started serving multiple locations both overseas and domestically.
The encouraging aspect for Pickyourtrail was that investors came back to them and asked how much capital they would need. Hari claims they put silver at a higher valuation.
“Our relationship with investors also matured when they saw how we squeezed every dollar to expand the runway,” says Hari.
Pickyourtrail has so far raised just over $3 million in funding from prominent angel investors such as Girish Mathrubootham, Kumar Vembu and recently from Kunal Shah among others.
It was also an important lesson for the founders because it made people realize that entrepreneurs really need to have their skin in the game and that the worst of the crisis can bring out the best in people.
“We are now 2x the turnover of what it was before the lockdown and that is a quarter of the expenses,” says Hari, and it also meant he would record his highest turnover ever.
Pickyourtrail now averages monthly growth of around 12-15%, which can reach 20-22% during peak season.
The startup also faced challenges during the second wave of the Covid-19 pandemic, but they knew if that passed things would improve.
The online travel market in India has players such as MakeMyTrip, Cleartrip, Expedia, Booking.com, etc.
Hari thinks the path forward is pretty clear and she has built a culturally stronger organization with a much wider reach in terms of customer profile.
The biggest challenge facing founders today is their ability to execute.
“There’s so much pent-up demand that it’s about running fast and being hungry in the execution,” says Hari.
The startup also has an interesting challenge to overcome, particularly in terms of recruitment.
“We’ve set the bar so high with the high intensity that our people have, and the challenge now is how to hire non-transactional people in the future,” Hari says.
There have been quite a few key learnings for the founders during this strange two-year journey. Hari thinks Pickyourtrail is more of a product driven organization with a higher degree of transparency to have strong teams and most importantly the risk taking capacity has increased.
On a personal note, he says, “There are a lot of signals of virtue that come from outside, but you have to be at peace with yourself.”