Anshuman Bapna, Serial Entrepreneur on multiple pivots, acquisition process and dealing with tough times

Managing partner at Prime VP, Amit Somani chats with Anshuman Bapna, former CEO mygola.

On this conversation, they chat how entrepreneurs can avoid hitting the wall when it comes to picking the startup idea, dealing with hard times, becoming transparent in communication with employees and investors, running the acquisition process and a lot more.

Anshuman Bapna is the Founder of mygola. He co-founded and sold RightHalf.com while in undergrad at IIT Bombay.
After his MBA at Stanford, Anshuman spent two years in Google's Strategic Partnerships team negotiating Adsense deals with large travel partners.

Listen to the podcast to learn about

0:53 - Lesson learned from the Mygola journey

6:45 - How to decide if you are on to something big

8:45 - Down days - ‘Annus Horibalis’ at Mygola

12:10 - How to build a culture of transparency

13:50 - You get energy from your closest relationships. Don’t ignore them.

16:15 - ‘Companies don’t sold, they get bought.’ How true is it?

21:20 - ’It’s not just the numbers. It’s not just a spreadsheet. It’s the honest relationship that you’re trying to build with your investors and with your potential acquirers.’

Read full podcast transcript below

Amit Somani 0:22

This is Amit Somani, from Prime Venture Partners. It's a pleasure to have Anshuman Bapna, formerly of Make My Trip and prior, the Founder of Mygola with us on the podcast, Welcome Anshuman.

Anshuman Bapna 0:32

Thanks! Amit, happy to be here.

Amit Somani 0:34

Anshuman, you and I have known each other for at least 10, maybe 12 years, perhaps we both came back to India at the same time, maybe even started and travel at the same time. So I've seen the mygola story a little bit but love to hear it from your mouth in terms of what the idea was, the various iterations you went through, and a little bit of the lessons learned from the mygola story.

Anshuman Bapna 0:52

Sure, happy to do so. So, I had been working at Google before I moved back to India to start MyGola. And MyGola was supposed to be a travel planning startup. Trying to solve the problem of figuring out where to go, what to do, when you're planning a complex trip. Now, as a good MBA student before I left the US, I had spoken to maybe a half a dozen other dead travel planning startups to figure out what made them actually not work out. And I think I heard a lot of different things. But the key message in there, which is embedded when I look back many-many years later was something that came back to haunt us again, and which is kind of one of the biggest reasons why MyGola did not become as big as I would have liked it to be. But that's getting ahead of ourselves a little bit. So let me come back to the story itself. 2009, I moved back to India and got my good friend from IIT days, Prateek Sharma to come on board as a Co-Founder. And what we're trying to do, our first premise was that, every time somebody is planning a trip they have to do essentially a PhD in that particular country. And why repeat that over and over again, why not this interface or this experience where you could come into a website, you could describe what kind of a trip you were looking for and which country and there would be someone else who has done that PhD who would do all the research on your behalf. And our business model was fairly straightforward. It was going to be something where you pay for every answer that you get from this experienced guide.

Now, our very first iteration which lasted about a year and a half. So, a couple of interesting things. What we had always struggled with, was the idea that well, if this takes off, then in that case, how would we ever scale up this model? Because you truly need all these hundreds, if not thousands of people at the other end who are experts in these destinations. And, what kind of tooling would they require and so on. And we realized, that was actually a non problem. It turned out that there were many different ways to actually first of all get that kind of talent pool and second to actually empower them with all kinds of interesting data tools that we had built, to get them to ramp up on a certain destination, very-very quickly. After a while we had 5000 guides who were live on the platform at any point of time across the world. Who would know these destinations. The challenge was something else. The challenge was that we were hoping that you would have users come into us and use this extensively for multiple trips. And it became quite evident early on, well, somewhere in the middle, that the kind of trips that people would use it for will actually happen once in a long-long time. In fact, I remember there was a good friend of mine, who told me that he loved the product and he was going to use it for his New Zealand trip next year, the thought that went through my mind was that by next year we will be dead, so it wouldn't matter. So, we pivoted away and trying to find something which was sharper. And one thing that we saw in our data again and again was that a lot of the questions that we would get from users would actually be about building an itinerary. So a structured plan for 7 days, 10 days in a country that they were going to. And those kinds of questions are actually the hardest to research. And we realize when we look at our users, what the existing model for that was, they would actually go to travel blogs and websites even look at packages that others have put together and then try to construct their trip as a riff on top of those existing real trips. So what we did was that we built this beautiful thing, which would suck in any article, any blog, and convert that into an itinerary. And thereby we had the world's largest collection of itineraries. And then, whenever you wanted a very custom trip you could just use data science to build an itinerary for you. The challenge there in that model was a different one altogether, which was that we realized that even though for maybe if you look at the entire trip planning process, the last 10% is where you actually spend money, but the first 90% is where you plan and that 90% would happen on our site. But, anytime it came to transactions, they would move to sites they already trusted, whether Booking.com or MakeMyTrip and so on. Because that's where their credit card was, that's where the post sales process worked and so on. Which meant that, ultimately we were building basically an e-commerce funnel because that was our business model, with a very leaky planning funnel on top of that. So, therefore it was, by definition going to be worse than a typical e-commerce funnel. So we pivoted away again from that, and then ended up focusing on a very different part of the travel journey, which is when you actually land at a destination. And our premise was that when you get there, when you get to a new city at that time, you are doing this hyper planning, moving from minute to minute, trying to optimize how much you see in that little time that you have. And we built something called perfect day that would take all these optimizations and spit out the right kind of route for your trip to Singapore. And you could book the entire thing in one go. Now, Apple picked us up as one of the best new apps out there. We were number 3 in Singapore at that time above Airbnb and Uber. But by that time, this was already year four and a half and fatigue was beginning to set in. And you could see that this is at best a small light at the other end of a very-very long tunnel.

Amit Somani 5:58

Got it. So, I picked up three things there one is frequency of use, second is being very close to the transaction. And the third thing is, fatigue and so forth. We'll talk about that later. But if you are, advising other entrepreneurs listening into this podcast who are sort of early in their journey, how do you know that you're sort of hitting a wall? There's this fine line between persistence and stubbornness. Because if you give up too soon, you might be just around the corner solving it. Both in terms of picking the idea as well as working through it, in terms of what you learned just from the MyGola story.

Anshuman Bapna 6:32

Yeah! So, I think that's always a tough one. Because, it's very hard to find in real time, whether you're actually onto something or not when you are not. And as an entrepreneur, you're conditioned to actually believe that you're just around the corner. So, I think in hindsight the couple of things that have now helped me in from a framework standpoint, one is that, the markets always win. So, a great market will make an ordinary team perform really well. A bad market will make an extraordinary team perform really badly. So, make sure that you're in a massive, large market. And my definition of a massive large market is that you should be able to find at least 3-4 companies who will be willing to pay a billion dollars for you as an exit, if everything came true. And if you don't have that, then you probably don't have a large enough market in the first place. That's one example. Another kind of heuristic to use, is simply customer discovery done backwards, which is, are you actually shipping something once every week? And are you talking to 10 plus customers every single day? And it might seem like an input metric, what I'm just giving you as opposed to an output metric, but the reality is that, so few of us actually do that diligently and in a disciplined way across the entire lifecycle, that if you were to then you will actually see all the signs of product market fit or lack of it much earlier on than most companies do.

Amit Somani 7:48

Wonderful! We talk a lot about, A market, B team market wins, B market A team market wins. So, this is a really interesting validation of that. So, switching gears and talking about, there's always all these rah-rah! about entrepreneurship and the rise and rise of entrepreneurship and all the glamour. But as we all know, and in fact, my partner Sanjay talks about it a lot, out of 365 days there may be five glory days, the other 360, are at best blocking, tackling, if not down days in the trenches. I know you went through a lot of that. I've seen you in the highs on the center stage on Phocoswright, presenting to the CEOs of Expedia, and Priceline and what have you. And on the down days, in terms of fundraising or pivoting or whatever. So can you talk to us a little bit about the downside because it isn't not talked about a whole lot and how you dealt with that and how you got through that? You, your Co-Founder, your team.

Anshuman Bapna 8:39

Yeah, absolutely! In fact, if it’s okay, I’ll probably talk about the last year at MyGola, which was the culmination of all of these down days probably, just all concentrated into one “Annus horribilis.” So, I think the two or three things that happened, one we were pivoting away again and again, and this was the third time. Not a lot of capital that we were actually pivoting away again. I realized in hindsight, what really worked between me and my Co-Founder to begin with first, was that we had back in the day almost signed like a prenuptial agreement. Even before we actually started becoming Co-Founders. It was signed in an Idli shop somewhere in Koramangala, and wasn’t really physically signed. But we talked enough about it. And and that was basically that you’re going to build a binary company, it was not going to be anything but zero or one. So therefore, when it came time to pivot again, even though we were fatigued, it was very clear that we were just going back to the principle that we’d always agreed on and there were no insecurities to deal with at that time. So that was part one. I think we extended that to all our employees, and we’re a small team 15 people, we always have this culture where our core and only cultural belief was that you treat others as adults, and the rest shall follow. And so therefore for me, it actually became very clear that the next 9 to 10 months are going to be really challenging, both from a fundraising and potentially an exit standpoint. And we took the most radical approach to it. And the most radical approach is that we had in all hands meeting like we did, every Monday, and told every single one of our employees that, the down part of the rollercoaster ride that you had signed up for, was about to begin. And we would actually split forces where, my Co-Founder will actually work with all of you to come up with a new pivot. And you’ll have to put your heart and soul into that to make that work. Well, I’ll go out and actually try to sell the company or raise financing for the next nine months. And I’ve done that before multiple times. And I know that we’ll actually get failure after failure, rejection after rejection. And the only thing that I could do, as the founder who had built this kind of company was to come back to you every Monday and tell you who rejected us last week. And that’s going to be brutal after a while. So if you want to leave, this is the best time and of those 15 one employee left at that time, but everyone else stuck through. And I realized that we had basically set hardcore expectations from the remaining 14 people about what’s going to happen the next 9 months and that really helped us a lot. In fact, by the time the MakeMyTrip acquisition happened, we were in the thick of things where some of our most well known potential buyers had fallen through just in the past couple of weeks. These are names like Airbnb, Skyscanner, Google, etc, etc. It was like one of those darkest days, when all our hopes were getting bashed one after the other, but the fact that the team had actually gone through that entire crisis and process already, and we were all in this together, held the sail through that period. So therefore, my net recommendation is that please make sure that everyone that you expect to hang around with you, through this entire journey is completely 100% aware of what’s really happening. I’ve seen lot of companies actually holding back information because they believe that employees will not be able to digest that. I don’t think you can change that from day one. But if your culture has always been one of transparency, then this is the time to show that transparency. So this is part one.

Amit Somani 11:45

I actually had a question on that. One of course, I applaud you for doing that. And I remember that because you had told me about it earlier. It’s pretty gutsy and pretty transparent to do that, but since you just mentioned it, you can’t just bring that on people at the last minute. It has to be something that you practice continuously. Otherwise, you’ll have people running for the floodgates. So I was actually very pleasantly surprised to see only one person left from what you described. So was that an ongoing thing that this culture of transparency was always there? And you were just kind of living that and therefore people expected that?

Anshuman Bapna 12:14

Yeah! that’s what i said, I mean, you can’t do this overnight, you have to do this as part of your culture from day one. And you have to fundamentally believe in it as a founder, if you believe that, it’s actually better to withhold information because only you have the entire holistic knowledge of what’s really happening with the company, then that’s your belief. I don’t think you can change that just because somebody on a podcast told you to do so. So it’s a fundamental value system that I was talking about. I think the second thing, which was a big part of this whole entire period was the thing that was actually talked much less about and I would definitely want to talk about that, which is the personal life part. Now my wife and I actually have this Bollywood love story. We have known each other since we were in class 9th. And everything that you can imagine in a Bollywood love story happened in ours, including potentially frisking her away from almost getting into a “Mandap” with the other guy. All of that happened. So, our bond was really strong. And that bond was tested during this last year, where we almost came to the point where it felt like that we might not be able to continue the marriage. And that’s the kind of stuff that I hear founders not talk about at all. Because just not the thing that you’d share with the investor or somebody else or an employee and so on. And you wouldn’t believe the number of conversations I’ve had where I know that entrepreneurs going through tough times, and they meet me to talk about their business. And almost the first question that I ask them about how their spouse is feeling and they are taken aback. They are taken aback that I even knew to ask that question. So the most important thing through all of these ups and downs is to remember where you’re rooted, where you’re getting all that energy and all that power from is actually your closest relationships. So, don’t ignore them at this stage. And it might be asking a little bit too much. But, I can tell you that once I had that clear in my mind, my ability to go back in the darkest days, back to my wife was actually kind of this double advantage where I was reinforcing our relationship, but also getting energy to bounce back. So that’s something which I think is less talked about.

Amit Somani 14:15

That’s very profound and very courageous of you to talk about it. And you correctly said it’s not talked about much. I think it’s even in terms of your own physical health, your mental health, your relationships, of course, you’re responsible for, the employees and the company and all of the rest of it. But if you don’t start in a place where you yourself rooted, it’s going to be even harder yet to go forward. So switching gears, I think you ran the acquisition process, dare I say quite well, from what I recollect, once you come to this point where you figured out that look, this thing is not really looking like a zero to one or unicorn bound or whatever else or it’s being a little bit more difficult to get traction or fundraise. How do you run that process? Because like you correctly said, You ran it for a while, so maybe a little bit on the M&A process, especially, when you’re sort of little bit in the doldrums.

Anshuman Bapna 15:04

Right! So, I think almost the first thing that I wanted to do was to make sure that the investors were feeling the same way I was. So, we were lucky enough to have someone called Ashish Gupta, who used to run Helion on our board. And Ashish, is an old friend and mentor, and I went back to him at the early start of this process. And I asked him, how Helion would think about potentially giving a bridge loan to make sure that we have enough runway to find other suitors or maybe even get the pivot to work. And Ashish had, I think, absolutely the right question for me. He said, Look, we can talk about that. But the more important thing is that you’ve already put in four and a half years of your life. Are you ready to put many more years into this? And if you feel the answer is not an absolute yes, then you probably should not even be considering looking for a bridge loan like that. And, that was kind of an eye opening question for me, and became very clear that we’re done, we wanted to get an exit at the stage now. Now, the second thing that happened was that, I started looking around for people to talk to who had done exits like this. And one of the very first things that I heard was this urban legend, which was that companies don’t get sold, they get bought. And I was like, Okay, yeah, okay, tell me more. And that was it, that was the extent of the urban legend. And so that was very unsatisfactory for me. So, I started digging more and finding other entrepreneurs, who had sold for less than a large amount, or something which might even need a haircut on the capital that they had raised by that time. And there were all these war stories that people shared. And one of the most insightful lessons that I heard was that it’s entirely a function of how many options you create. If you have one buyer, then that is it, its game over, it doesn’t really matter. You can quibble and think as much as you like about what your role should be, what your other employees should do and so on. But frankly, none of that will come to pass. So, I realized that my fiduciary responsibility, as the founder was to go out create options. And I went about it like I would go about as an entrepreneur, which is hustle. So, I literally created a spreadsheet with 40 names on it of which, maybe 8 were travel. And the remaining 32 were further and further away from travel. So, for example, Disney. I put Disney on that list saying well, who knows, maybe Disney is now thinking of now, family friendly activity called travel, and trying to do something in this who knows, you just need to find the right person at the right time, with the right thought process on these companies.

And I started running this like an investment banking process. Where I would reach out to my first degree, second degree connects and so on. By this time, I have essentially gone away from the day to day responsibility off the office, which is where my Co-Founder is trying to get the pivot done. And I am essentially getting on a plane at the first opportunity and landing up at conferences. Standard entrepreneur playbook is that you don’t buy the conference ticket. You actually buy a drink at the bar which is right outside the conference. And I would just Google all the keynote speakers, their pictures. And as soon as they would come to the bar, I would harass them. And that’s what I did. And that’s how a lot of these conversations actually started happening. Now, what I was trying to do was to basically fill out that spreadsheet, with a green or a red for every single one of these companies. And I felt that if I had an empty row where I had not qualified or disqualified Disney, then I was not doing my job. That’s how I was thinking about the entire process. And then, towards the end, when we were getting to the point where the very first term sheet started appearing, and that is the time when also I think there was a bit of a fork in the road. Because, I as you can imagine from the situation that we were in that we did not have a lot of money left, in fact, only a month of cash left in the bank, everyone by the way, every single one of the employees knew that we had only a month left and I came back to the team again and said, Look, we’re gonna split forces again. I’m going to spend half my time hustling like I’ve never hustled before to find a suitor, but the other half of my time would be spent to actually find the best jobs for you in this country. My only request for you is to not sign an offer letter until Jan 1, give me a month’s time. During that process, I was extremely transparent with both our investors and the suitors. So if I would get a term sheet from one of the companies, I would immediately turn around and say, Look, I’m going to shop this around, I’m going to talk to these three other people, I’m going to tell them that this is what I have right now. And this is what I intend to do. I hope you’re okay with that. And the fact that I was so upfront radically about this actually allowed probably, for me to be able to get some leverage in these negotiations, even though we had completely our backs to the wall. And in the end, the decision that we made off the many different companies that, ultimately we had six term sheets in the space of three weeks, and when we were comparing them, we realized that one of the things that we were optimizing for was not just the economic value for ourselves and for the shareholders but also for literally the belief that a company that acquires us at this stage is someone that we want to add a lot of value to over the next couple of years.

So, where would we be a great fit and where would we contribute the most. And there it became very clear that someone like MakeMyTrip and some like Deep at MakeMyTrip were the kind of people that we wanted to work for, over the next four years. And that I mean, I still go back to that lesson we could have done it so differently. And there’s one call out that i will make to Deep here, which I think is important. We had two offers that we are considering which are fairly close and economic value, MakeMyTrip was one of them. And the other one was a private company, which hopefully would have quadrupled, while MakeMyTrip was a public company, which will probably just like 10%-20% kind of a growth, and yet we chose MakeMyTrip, because I just trusted Deep more. And it came true literally the next month, when the due diligence process started. And in the DD process, we discovered that because of our company structure, we had this tax implication where a 10 to 15% further, haircut would happen on the deal value. Now when you’re in a DD process, you’re already kind of tainted goods at some level. If you come out of it without the acquisition going through then you’re like the “Ladki” that did not get wedded at the end of the wedding. And yet to Deep’s credit, the moment he found out about this issue, he called us up. And he called me and he said, Look, I don’t want you to worry about this problem at all, we’ll fix it, we’ll find the best tax lawyers. And if we can’t fix it, we’ll up the deal value. They couldn’t fix it, and they upped the deal value. So to me, that’s the kind of relationship that you would want to build through the entire acquisition process. It’s not just math, it’s not just the numbers. It’s not just a spreadsheet. It’s also this honest relationship that you’re trying to build with your investors and with your potential acquirers.

Amit Somani 21:27

Very fascinating! So one of the things we talk about, even though obviously, when we are investing in the company, we’re investing in companies that are going to become large, independent companies. That said, I heard this one’s from Jyoti Bansal of AppDynamics, when Cisco bought them out, like the day before the IPO or the hours before the IPO, was that, he said, look, every year I would get 3,4,5 offers, for people to buy or to want to have breakfast with me or lunch. And I would take every one of those meetings, even though he was heavily funded and growing, like the weeds from 50 million to 100 million to 300 million revenue and so forth. And he’s like, look, you always want to keep option value, you never know what is going to happen. And this is a guy whose IPO bound every banker in the country, perhaps in the world was chasing him. And he said, I would always meet like, I’ve met Cisco five years in a row. So there was a deep relationship and trust even though he had turned them down 5 times in a row, that he finally took the fifth offer because of whatever terms and everything else. So, I think that relationships and trust and so on turn big automatically. I remember I was also part of the Mygola due diligence process, but we had known you guys for a long time, thanks to Phocuswright, thanks to being in travel. And you wanted to be a large independent company, which was competitive to MakeMyTrip. So, the relationship and the trust went both ways. So, I remember that there was a lot of respect and trust for you and Prateek, at MakeMyTrip. So, I would say you shouldn’t just wait till Doomsday or N minus one days or whatever. Build relationships, even with competitors, partners, quote unquote, frenemies.

Anshuman Bapna 22:55

Absolutely right! In fact, one of the things that I keep hearing from entrepreneurs, once in a while is that XYZ company reached out to me for a potential acquisition, and I said no. So, that’s great. But what else did you do? Well, I said no, and kind of continued on that. I said, no no no. See, ultimately, an acquisition and the next round of financing are functionally equivalent financial events. Now, it’s your fiduciary responsibility, that anytime you get inbound interest, actually drop a spreadsheet, find 5 other companies, which are like the company that reached out to you, and have a conversation with them. Now, you might not exercise that conversation, especially as an entrepreneur, your emotional quotient of actually trying to build this massive large company will always come in the way. But as long as you can keep those two things separate, which is you create a lot of optionality. And then you exercise, one of those options, or none of those. Is sometimes that you can separate out all together. I think that’s what Jyoti is also talking about, which is you have to as a CEO, as a founder, you have to keep all of those options open at all times. And, who knows what the future brings.

Amit Somani 23:56

Absolutely! wonderful Anshuman, This has been very insightful and I really appreciate your candor and honesty and authenticity to talk about a lot of very sensitive things. So, thank you so much for being on the podcast.

Anshuman Bapna 24:07

Thank you for having me Amit.

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