 Our next speaker session, ladies and gentlemen, he's gonna be sharing more about what does it take to make e-commerce profitable. So we have with us Mr. Ashish Hemrajani, who's the CEO and co-founder of Big Tree Entertainment, Private Limited, which operates Book My Show, which is India's largest online entertainment, ticketing platform, offering tickets for movies, plays, concerts, both games and live events. So if I may please invite our next speaker, Ashish Hemrajani to please come on the stage. All right, so can we have a nice, happy round of applause there for our next speaker as well, Ashish Hemrajani. I'm dressed to work like that and usually for conferences I wear jeans, but today was an official reason to do this, but thank you for having me over. Thanks Vik, thanks Sam. What does it take to make e-commerce profitable? Why is it even a question? I just think less stupid guys running it, I guess. I don't have an answer for that. Isn't it the purpose of any enterprise to take value from society, create value for themselves and give something back and make a little profit in between? But I guess those one-on-one lessons are things that most e-commerce companies in India have sort of forgotten. So what I'm gonna try and do, it's a 20 minute session, I will try and make it as anecdotal and talk about the Book My Show journey and some of the lessons that we've learned, some harsh, some pleasant, some not so nice, some brilliant, and maybe you can pick up some sort of things that you can take back home. So I founded Book My Show about 19 years ago, lesson one that businesses aren't built as sprints, but they're built in marathons. We've been around for close to 20 years and most internet entrepreneurs today or e-commerce companies think that they, they start thinking like investors, that they wanna start a company to exit so that they can make money. I don't think you guys built Madison or all these companies to exit. I mean, you exit when you exit or when you retire or make some money, but you build a business to solve a problem. And most internet entrepreneurs today start a business because they're saying, jaldi paisa bane ga, but that's, then you should be in the stock market or not. So Book My Show started in 1999 and I'm an ex-advertising guy. I worked for J. Walter Thompson for two years and Book My Show started because of smoking and drinking. I don't smoke, but most folks around me smoked. It was a carpeted office. ITC was the brand that J. Walter Thompson handled. It was like the madmen days of 97 to 99 and there was a lot of secondary smoke and I wanted to clear my head metaphorically and physically. So I went for a holiday to South Africa, Zimbabwe in Botswana, backpack and I reached Stalin Bosch, which is like the Napa of South Africa and they give you free wine and I come from a land of scarcity where normally you give a cutting chai to an Indian, suddenly you give a red wine, everybody's looking at the viscosity, smelling it, spitting it and I'm a Cindy, I'm not spitting anything free. So I kept drinking from 11 in the morning to about three in the afternoon and I was so smashed, I'd sent a text message to my boss saying I'm quitting. She had said, okay, by the time I woke up the next morning and here I am running a business for the next 19 years. I got invested by Chase Capital partner, J.P. Morgan in 1999 and in 2001 we were invested by News Corp. So if you, some of you would probably remember that the ecosystem in India didn't exist in 1999. Internet penetration, mobile penetration, there wasn't a single number policy, you didn't have credit card penetration, net banking, debit card. So the beauty of the internet business is that as your cost curve flattens, your revenue curve keeps growing up and that's why the valuations are so high because at some point your cost curve has to sort of flatten. Most other businesses, your input cost or your cogs keep going up as your revenue curve keeps going up. But that wasn't happening for us in those early days and the reason was that even though we had a website, 98% of our bookings actually came from the call center. So we were in effect running a call center company and because you didn't have a single number, you had seven cities where we ran a call center. We were the first company in the world which did home delivery of tickets on cash. And the other thing was that we would buy inventory. So on the weekend, we would have an opportunity loss on the weekday, we had an actual loss because nobody wanted to buy tickets. And every time more people would call us, we would have more people to service those guys. And so our revenue curve went up and our cost curve kept going up again and again. The other problem was that we were running seven separate call centers in seven separate cities and therefore our marketing for those seven call centers was separate. And therefore again, the cost went up. It wasn't efficient. And the other challenge was that every time we would sell out our inventory, you would have people still calling you. So let's say for example, there's a big movie like Padmavad, people would call you and instead of having 100 people to service those calls, now you would have a thousand people because you didn't want your NPS to dip, your net promoter score. So every time you'd still wanna pick up the phone and say, I don't have any tickets available. So the cost curve and the revenue curve started going haywire. And then you know the famous infamous.com bus which started in the US in the 2000, it hit India in 2002. Book My Show went from 150 people down to six, including an office boy. We were wiped out. So I had six people that I continued with and I had to look those guys in the eye, all the guys that followed me as an entrepreneur, they left their jobs, I had to take them to Shivaji Park, I didn't have money to take them to a conference room like that and tell them, hey listen, the dream is over. But I negotiated a very hard deal to get them a six month severance, also sat down and parked my life for six months to try and place all of them, 50 or 60 of them got jobs in various entertainment businesses. And as Karma and Luck would have it today, all of them are at vice president positions giving business back to us. Second lesson in life I learned that always be good to people and Karma always pays you back. Then from 2002 to 2007, we actually were in the road building of the pipeline business. All we did was install ticketing software, change the rules of the game, service call centers, service the backend of most cinemas, cricket, sports. And the idea was born out of solving a problem and a lot of e-commerce companies today don't do that. They're not trying to solve a consumer problem. Let me go back to 1999. When I heard a radio commercial trying to sell rugby tickets in South Africa, I said it's so simple because at that time in India, if you recall you went to Stirling, Regal and E-Ross, you had pigeonholes, you had pink tickets and blue tickets and yellow tickets, you had advance counters and you had current counters. Within advance and current, you had dress circle, balcony and stall. Some of you might remember that, today all of that is gone. And so there were timings. So there was an arbitrage of price, there was an arbitrage in pricing. You didn't know if there were seats available, there was no democratization or information and they would say tickets are sold out but the scalper or the black market here opposite at the Panwala Dukan was selling it for four times the price. Those were the rules of the game. If you wanted a cricket ticket, you would go stand in line with a bamboo scaffolding on Marine Drive overnight to reach the box office, get latte charged by the cops as a customer and then to be told no tickets available and the black marketeers would sell it. It's like going to Starbucks today and saying, hey, listen, I want a cup of coffee, you're giving him the money and the guy backs you on a hand. I mean, that's how consumers were treated, right? It was just bizarre. So there's a structural role that needed to be filled and it was a problem to be solved. That's why the business was born and that's why it will continue to make money. Most businesses today are, listen, there's an investor, I can make an ass out of the guy, there's money floating around cheap capital, let me try and do this and see if I can sell a business in three years. It'll never make money because you've got to continue to bribe and throw money to get your customer. First time user, recency frequency, maintaining that customer loyalty. You've got to keep throwing cash at that customer. This is on a very, very weak footing. Till about five years back everybody said, hey, Ashish, you're talking bullshit, right? You're smoking something. I do, but not all the time. And they're like, you know, you're smoking something. How can you even talk like that? Just look at the last two or three years that have been at least 100, 150 internet companies that have died, some of them with valuations of over $5 billion or $6 billion, today are not even worth $300 million. So just look at history and you will realize, just like the stock market, don't get too excited, good times and bad times will keep ebbing and flowing. Having said that, 2007 is when the market turned again and between 2002 to 2007, what did Book My Show do? We looked at the first principles of business. If I made money, I paid salaries. If I earned money, I switched on my lights and I'm not kidding. If in summer I kept my air conditioners off, because I couldn't afford it. I still recall we couldn't afford the STD monthly charge. It was some 300 bucks at that time. And so I would go in Bandra, which was a 136 square foot office. We used to be in Pravadevi before that. My friends from advertising had helped me get Pravadevi Industrial Estate. And then in Bandra, I would go to these STD booth and make calls to clients in Delhi. And when I made those calls, there was a lot of road noise. So they would say, why is it so noisy? And I'd say, listen, we are really busy. We've got a lot of action. There was nobody, man, we were six of us really looking for business. But those were fun days because it taught us the first principles of business. Even today, those are lessons that we as a company don't forget. It's that boiling frog theory, right? If you let the water boil slowly and put a frog, he doesn't realize and he'll die. You throw the frog in really hot water, he's gonna jump out. And so it's these little things that creep into your business which will allow you not to make money. This is a 30,000 view that I'm giving you. More companies in the internet world die out of indigestion than starvation. And the reason is because there is so much cheap capital available that they just don't do right by the customer. They never think of the user or the customer. They're like, listen, I'm just gonna buy this customer and good for us. Let the Americans, the Chinese, the Japanese, now the South Africans, pour money into the country. It's created a new middle class based on all of this capital. But is it gonna sustain a real business? Only time will tell. So 2002 to 2007, as we built this pipe, we ran a really frugal ship. Even today, we fly low cost carriers. We're not our secretaries booking our tickets. We reuse envelopes. We reuse pins. We serve shit coffee in our offices. But if you want bean took up Italian coffee, you pay 20 bucks on an honor system and you can get it, but otherwise you get really cheap coffee. We stay in reasonable hotels. We lead rich lives, maybe not expensive lives. And we are very, very altruistic. And I'll come to the altruism bit in a bit. But as far as the business is concerned, we don't talk about most of it in public domain. So most guys say, listen, are you a unicorn? And I tell them, what is a unicorn? I mean, it's an ugly animal with a horn and it doesn't exist. But they say, If you're not a unicorn, some animal, I'm a mongrel. I'm a dog. I wake up every day. There's a fight out there as an entrepreneur. Somebody pets you, no problem. Somebody gives you food, eat. There's a pack of dogs, run. There will always be another day to pick up fight. And you know, if that's the way you look at it and they're like, this is not a good animal. You have to be another animal. And I tell them, I'm a cockroach. I've survived for 19 years, either in a nuclear holocaust or a microwave oven. These analogies, and now I've heard the latest one. It's not unicorns, but sunicons. Guys who are soon to become unicorns. Why should it even matter what your valuation is? Is your NPS high? Book My Show's NPS went from 31 to 62 in the last three years. Is your customer happy? What is your recency frequency? What is your lifetime value of the customer? What do you spend on your CPC cost per customer contact? What do you spend on CPA acquiring the customer? How big is it? How loyal are they? I think these are some of the metrics that really matter. But some metrics which you may sort of want to listen to. Book My Show today is present in 660 cities and towns. We are 1,600 employees. Too many, I think, but anyways, we're 1,600 employees. Book My Show sells about 14 million tickets a month. We get about 128 million visits. We do 2.5 billion page views. We have about 75 million subs. We do 35 million MEUs. And we have many, many, many everbots. That's the scale of the company today. But we're still under the radar. We still do what we do. We wake up every day, look at the consumer, and say, how do you solve a new problem? And then we looked at the business, and we said, look, is the market growing fast? And everybody talks about this middle class. And India is a 1.2 or 1.3 billion people market. It's not. We're bullshitting ourselves. We are many countries. The language, the food, the state, everything changes. And even the socioeconomic class, we are the same Indians who look away from a slum and want the maid to come seven times a week, like bonded labor and smile in the morning to serve your kids while they leave their kids at home. And we are saying, there is no other India. It's SCCA. It's urban markets. It's bullshit, right? There are so many Indians, even within a microchasm or just around us. And how are you solving that problem or catering to that individual? And so, as far as we are concerned, we said, there is no bottom feeder market as far as we are concerned. Let's look at the top of the market. So we looked at the top of the funnel, and we said, how many Indians can we cater to? There are 10% of this country, unfortunately, it's a very, very spore metric. 10% of this country controls about 40 or 43% of the wealth. The bottom 5% of this country controls, the bottom 40% of this country controls only 5% of the wealth. And then there is this emerging middle class whose definition nobody knows. We are very optimistic people. So everybody has a new definition of this middle class. So how do you actually make money with this middle class? For me, the middle class, what I see is your driver who used to get paid $6,000, $7,000. Today, we'll walk out on you if you don't pay him $18,000 because he has a mobile handset in his hand and he can get a job at Uber and Ola. I'm extremely happy for this group of people. But this, to my mind, is a big sea change because they're spending better money on healthcare, on putting their kids to better, he doesn't want his kid to be a driver for better education and better food on the table. And I think this is where we've got to cater all our strength and energy and effort into. So the view that we take of the world is the top seven markets is where we get all our business from. We are now focusing on the next 28 and the next 60, even though we're present in 650 cities and towns. That's one view that you take, that can you do something better? Do you get to newer cinemas? Are we present in as many cinemas? Are we making our proposition more valuable for the person without giving cashbacks and discounts? Of course we give cashbacks and discounts for new users, lock them down. See if you can get a new user. Can you do recency and frequency? Can you create a base of superstars which is your loyal customers, which is about 15% of our customers giving you 60, 70% of your revenue? And while retaining that base, can you still get to the new users? And of course, keeping your costs low. We still scrape the bottom of the barrel by having black and white printers in our office. I mean, we're still an invested company which is still growing at about 50, 60% year on year. It slowed down, we used to grow at 200% but we're still growing at 50, 60% at this scale. Having said that, I think the other way to look at it is can you go a little more horizontal? Because in India, it's very difficult to reach that customer base that quickly because there's regional languages, there's a socioeconomic challenge and there is also the problem of connectivity. GO has added 170 million subs in the last one year but up until then, the number of subs that were there in the country itself was not very large. This number will end up at about 450, 500 million over the next maybe two years. And then on top of that, you've got to have an intersection of does this person have a credit card? Do they have a debit card? Do they have net banking? You've seen WhatsApp's new integration on payments. I'm really loving sending 11 rupee to people and getting one bug back. It's just unbelievable, the user experience, the peer-to-peer. So we were the first partners of WhatsApp in India for white listing our services and now they've started payments. We're probably gonna be the first there. So I think as you solve for these problems, the penetration will take time. We're certainly at the cusp over the next five or 10 years and then you will need to just wait it out and just stay the course for a long period of time. The other thing that we've actually done is slightly go slightly horizontal. The metric we looked at and said, look, we have a frictionless transaction and why should we create more friction? I don't know if you guys have realized in 19 years, book my show has never asked you for your email ID, mobile number, asked you to register what's your name, your mother's name, your father's name, what's your gender, how many times you go out to eat. No questions, no F connect. Only at the time when you wanna buy a ticket, we ask you for your email ID and mobile number. And that for me is the only metric that I need or the only piece of information that I need to know who you are, where you stay, where you watch a movie, what concerts you go for. Do you buy kids movies? Do you buy adult content? Do you buy family content? Do you go for concerts, venues? I don't need to know anything else. We drop a cookie, we analyze your data through that. We don't ask you for more data because it creates friction. It's again like going to Starbucks and saying, hey listen, I want a cup of coffee and then they ask you a bunch of questions before they serve you coffee. It's pretty annoying, isn't it? So as we looked at the business and we said, we are catering to a frictionless transaction which is 2.8 minutes per session. Can we increase this for our consumers without creating friction? And therefore very subtly, within making a hue and cry, we added a piece called ratings. So book my show has a differential weighted average system for people who have actually bought a movie ticket or a concert ticket. And we ask you to rate that film and it's the most authentic rating and you get a very, very different weighted average. And then we have consumers who use their login and then say, I want to watch this movie or I want to go for this concert or I don't want to go for this concert. And then you have the last set of customers who just wants to come and vote. And then you have the critics who we give a very, very low weighted average in the book my show system which gives you the most authentic and valuable rating system that we have built within book my show. It's giving us a lot of recency frequency and it's giving us a lot of time spent on the application. The other thing that we did was when people come, they just want more information about actors, actresses, they want to know a little bit more about directors. And we added an IMDB equivalent called IEDB, again without naming it anything, within book my show and we've got 60,000 profiles again to increase engagement of people coming on the site and coming more often. We used to get people once a month, we made it once a fourth night, we made it once a week and now our metric is three times a week and 6.9 minutes per session. Then we looked at this problem and said, you know there's SEC, we're very good with the SEC, A and B, 32 plus, can be catered to the 24 to 32, can be catered to the 18 to 24 and can we go to B and C? So we said, you know what? Maybe music is the conduit to getting to these people. And therefore book my show launched a jukebox which is within the app and what we've done over there is increased our recency, frequency and time spent and getting to newer audiences who probably don't have a debit card, don't have a credit card, but maybe have a geo connection on 303 bucks, one GB of data a day and they just want to listen to music. And so it's not a playlist, it's just a streaming app. And what it's giving us, we've got a data science team which is sitting there and analyzing this data and saying when you increase the volume of Kaigo, I now know that you like Kaigo or similar genres of music or similar artists. And so now with that I know, can I get that live event into the market? I don't know how many Bob Dylan fans, maybe all of you are Bob Dylan fans looking at the age profile here or CCR or Jefferson airplane, but I want to know how many Kings of Leon fans do you have in Delhi and can I get Kings of Leon to India? And so when we looked at 18 years of data, we said, let's build a live division. So we just finished Ed Sheeran, we did AR Rehman, a four city tour, we're in the middle of an Arjeet Singh Tensei tour. We've signed Saktasolay for five years. Don't tell anyone, Saktasolay for five years in India. We're the producers for Disney, we're doing Aladdin and we're getting Disney on Ice, Peppa Pig and Shota Beam. We're just going after the kids category again, everything which is 18 to 24 and can be catered to the 24 to 32. So this live division, given the data that we have, given the digital reach that we have, given the music reach and everything that we're doing, the superstar program, the recency frequency and first time users is looking to see how much can we stretch the dollar in the top seven, the next 60 and the rest of the market. So businesses are built by solving these real problems about thinking deeply about how you can better yourself and looking inward. It's not about going and seeing if I can eat somebody else's lunch. The easiest way in India to build a digital business without actually going through the fuss is taking a 50 rupee note, getting some investor money, standing outside the gate of ITC and start handing out 50 rupee notes. You'll have 2 million customers by the time this night ends. That's not the way you actually build a loyal customer base. And before I end, I think it's very, very close to our heart is the altruism. In India, we can solve so many problems. It's just not the problem in terms of valuation, profits and revenue that you can solve for yourself. I looked around us and I said, what are we doing? Are we doing right by the people that work for us and the people that we cater to? So Book My Show turned around and said, look, we give a CTC to 1600 employees. We turn around and said, let's give medical care to everybody. No copay funded by the company. And now this comes to the heart of the problem. Even though we scrape the bottom of the barrel, do we make money in e-commerce? Or we don't make money. If there's competition, sometimes our 20 crore budget annually on advertising sometimes jumps to 20 crores a month and we can blow up 100, 120 crores in the blink of an eyelid. But in spite of that, we run a medical program in the company, which is yourself, one spouse if you have to tucked away your problem, two kids and a set of parents. So we pay up and down, not just up or down. We also started a pure term life plan from two years ago. Then three years ago, I asked the guy serving me in the office and I said, look, what do you eat? And he said, I eat 20 rupees worth of food. And I said, what do you mean? So he says, my diet is defined by 20 bucks. It's six bananas or two varapaus or bhajiya. And I said, how is it even right? So I played Robin Hood and we started a food program in the company without impacting the bottom line or the PNL. So we get a meal for 75 bucks, but we get everybody in the company to pay 125 rupees for that meal. And anybody who's salary is below 30,000 a month, which could be an outsourced staff, a janitor, a security guard, your office boys, anybody, they get the meal for 20 bucks, which is what they would normally pay for, which is playing Robin Hood. I'm not a religious person. I've never been to a temple except for archeological reasons. I find it bizarre when on Mahashevratri, people are pouring one liter of milk on Shiva's ling when there's a poor child outside. Having said that, we started something in the company where we said, look, I'm not religious, but the Gita actually talks about Krishna's discourse to Arjun on the battlefield. Basically, Krishna was a cheat. He kept the sun up. He told Karuna, Arjun, the weak spot of Karuna. And basically the lesson to be learned over there, the end is important, not the means. So most of you who are consumers of Book My Show, I'm assuming most of a lot of you are, when you buy a ticket on Book My Show, we skim all of you, basically cheat you, or one rupee a ticket. And I could have made an opt-in, but from my advertising days, I realized that there's a key which most advertisers put, which is times New Roman six font or eight font or something. So this whole one rupee, which is an opt-out instead of an opt-in, is times New Roman eight or six. So you don't even miss it. You miss it. 70% of our customers actually miss it. We're collecting one, one, one rupee, and we collect 10 crores a year from you guys and build great karma for a lot of you. We sell the double amputee, we send the double amputee kids to the Pan Am Games, who won the silver medal. We support the Jharkhand girls in soccer, 300 of them annually, which is Yuba, and six of them went to play at the Royal Sociodad, a UEFA one-level coaching, along with Real Madrid, and they went to meet 60,000 fans. We call kids from orphanages and cancer society to a movie. Every time a movie releases, without any PR or fanfare, get an actor at that time, because they're like mushrooms. They come to you only when their movie releases and make them feel really shit if they don't come there and pay for the popcorn coke and get the actor to talk to those kids. And then when you have an ISL game, an IPL, which is now around the corner, we take one day with our teams and get all the janitorial and the security staff and replace them by paying for their salary for that one day and get them to watch a game and give them food for that day and get them to watch the game because otherwise they're just cleaning toilets. And I think if we as business leaders and as media people don't do this and if we don't draw from society, create value for ourselves and give back, it doesn't matter if we're profitable or we're loss making, we're definitely at a loss for life. Thank you very much. Well, I think that deserves another round of applause there, ladies and gentlemen. What a fashion and the kind of entrepreneurial zeal there. Thank you so much indeed for joining us. I'm going to invite Laura Balsara, who's the executive director with Madison World, to please come on stage and present a token of gratitude to Mr. Ashish Hemrajani. What a great presentation indeed, I totally agree. Thank you once again.