FT: “Phanindra Sama remembers only too clearly the inspiration behind his business. “RedBus was started because of a personal pain point,” he says. “I couldn’t get a bus ticket.”
It was October 2005 and Mr Sama, who is known to everyone in his company simply as “Phani”, was heading home to celebrate Diwali, the Hindu festival of lights. The journey involved a trip from Bangalore to his parents’ home near Hyderabad, nearly 600km to the north.
“I went to this travel agent to book a ticket. He made a few phone calls to the bus operators and told me there were no seats,” says Mr Sama. He tried four more agents. All called a couple of bus companies, but none could find a seat. Even more frustrating, all of the agents told him there might be a ticket out there – they just couldn’t locate it.
Mr Sama was stuck. “I am there, all flustered, staying in my flat,” he says of the long holiday weekend that followed. “I woke up the next day, and all of my friends were not there because they had gone home. It really pained me.”
An electronics engineer by training and working for Texas Instruments, he decided to do something about it. The result was RedBus, India’s leading bus ticketing service, which links thousands of unconnected bus operators and ticket agents, and sold more than 7.5m tickets last year.
Mr Sama’s entrepreneurial journey required figuring out India’s vast but fragmented $3bn bus system, which is dominated by small and often unreliable operators. Buses often leave from anonymous storefronts and frequently travel overnight. While some are upmarket, modern vehicles with wireless internet and air conditioning, most offer much more basic features.
When Mr Sama entered the industry, fast economic growth and urbanisation had vastly increased demand for travel. But most people couldn’t afford to fly and India’s celebrated train system struggled to cope with rising demand.
A lesson in listening
Phanindra Sama says being an entrepreneur has taught him a lot about listening. Speaking of the bus operators who have received bad reviews on RedBus, he says: “You get these calls from people saying: ‘I’ve been in the industry for 10 years and suddenly you come and rate me as a bad operator. What about my reputation?’ ”
“I think a lot of entrepreneurs probably don’t make time. If somebody says, ‘I want to talk to you’, they don’t make time,” he says. “We make time because that is very important for us.”
It is a lesson he has picked up not only from patiently listening to angry customers but also from reading management theory.
“There is a common theme in all those books. They say make space for others,” he explains. “I have dreams and passions, [but] everybody in the team also has their own dreams and passions. So if I have to get the best progress that we want, it can’t just be me standing there and having everybody do what I want.”
Even so, Mr Sama found India’s bus users were treated shabbily, with scant information on prices or bus companies. “This whole industry was very unregulated,” he says – a situation he admits has barely changed in the years since the company’s launch.
Despite holding down a day job, Mr Sama spent his weekends working out how to improve matters and even convinced his two flatmates to join him. Just under a year later, the trio had quit their jobs and were preparing to launch the RedBus website, along with two other software packages linking India’s disparate travel agents and bus companies.
The site has since become both popular and profitable, with revenues of Rs6bn ($110m) last year. It has also won fresh funding from the likes of Inventus Capital and Helion Venture Partners, investors attracted by an Indian intercity bus industry with revenues projected to grow to about $8bn over the next four years.”
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