- Just before I was leaving for Delhi to represent Airhob at SATTE in January 2018, I had a wild thought that shaped the next chapter of my life - I knew I couldn't alone source, onboard & scale the corporate travel business we were looking to start within Airhob, and that I needed a strong seasoned partner, because my strength was product, tech, design, strategy and branding, but the business also needed someone whose strength was marketing, sales, growth and partnerships. I started making cold reach-outs on LinkedIn to the most experienced C-suites, VPs, and Heads within the business travel industry. I figured that after growing someone else's business for 10-15 years, most executives get no inspiration in growing it more and are always welcoming of using their experience to build an interesting young startup within their industry. With that thought, I started writing direct & precise InMail messages on LinkedIn asking to become my partner with strong equity to lead the growth for Airhob corporate travel business.
- I was visited by someone (from a really big enterprise travel company) who was interested in the frequent flyer capability. I started noticing replies from all the key execs that I cold reached-out to.
- After I met with the enterprise travel management company (TMC), I shared that we were also building our corporate travel product and they were like we'd be interested in it on an urgent basis, and I was like WHAT?? Why and how would a TMC itself want a corporate travel product from other TMC (Airhob)? Do they mean acquisition? Without wanting to sound naive, I was like cool let's talk again next week and I bought some time.
- I met with another person who was GM at FCM India, he loved the product and asked me to meet his ex-boss in Mumbai was a VP at FCM India for over 20 years. This meeting in Mumbai on a Sunday afternoon on Feb 10, 2018 at The Lalit Hotel in Andheri East was the most important meeting of my travel-tech life. I pitched him our entire corporate travel product and asked him to come onboard as a partner. I still remember the way he looked at me for straight one hour with a laser focused look without uttering a single word. I thought he was totally dis-interested, and after I was done, he goes, 'Nikunj, do you have access to huge capital/funds for this business?', and I said 'NO, but the moment you come onboard, we'll start onboarding new clients and within 6 months raise venture funding'.
He mentioned two things that led to starting ZENMER:
1) If you want Airhob to become a Travel Management Company (TMC) running a corporate travel business in India, remember that it's like running a finance-lending business where 90% of enterprise clients prefer to pay on invoice and never pay on time, where the 14 day contracted cycle goes to 30/60/90 days. Because the profit margins from the airlines in India are always shrinking and your service fee to clients can hardly be over two digits, the only thing you're constantly doing in the business is running around to collect pending payments and making sure the cash-flow is even. Since you don't control the end product which is a flight ticket or hotel booking, it's really hard to demand a sustainable service fee and create a unique dent in the eyes of a corporate customer. The competition also ends up using bad tactics like offering zero/negligible service charge, which creates a bad feeling about everything. My immediate reaction was that because our product is so much better than everyone else, why don't we only accept those companies that are ready to pay by card/bank-debit immediately, and unless we have a decently profitable business, we don't accept invoice-based customers. He said yes that can be done, but I have another big idea/suggestion for you as an OPTION TWO.
2) 99% of the TMCs in India and abroad that offer corporate travel services do not have their own technology and the product (usually known as Corporate/Online/Self Booking Tool CBT/OBT/SBT) they offer and implement for their corporate clients is sourced from a third-party tech vendor. TMCs like CWT, FCM, BCD, AMEX GBT, Thomas Cook etc. that drives the majority of corporate travel business (over $30bn every year) don't have their in-house tech teams and rely on these tech vendors by licensing the CBT on a per-transaction model. Now here comes the behemoth of a secret I learnt for the first time: There's only one such tech vendor in India 'Zillious' that's used by all TMCs, making it a monopoly business which is driving ~300k+ bookings every month. He said that your product is still just 50% there in terms of features compared to Zillious but it's way better in UI & UX and the overall product focused strategy of it makes lot more sense. You should immediately go after Zillious and the market is badly looking for a competitor since last one year because of their monopolistic approach around pricing, service, support and they've started to take more of a dev-shop approach instead of becoming a SaaS based product company. I was at first, really taken aback by this model of not TMCs not building their own product and being dependent on a third-party with technology being one of the most important part of the customer experience and an USP while pitching to corporate customers. But given the unbelievable amount of market share owned by Zillious, the market crying for a competitor and the global market being no different, I decided to really put my head down and spend researching more about this. And of course, this is when it made sense why that Delhi based TMC wanted to take our corporate product because they too were using Zillious and were badly looking for an alternate.
- After researching online and speaking to more people for a week, the entire CBT world was right in front of me. Globally, the situation was same too - Concur from US owned the majority market share and SAP had recently acquired them for $8bn in 2014. Serko from NZ was listed and big in the ANZ market, i:Fao was acquired by Amadeus and its re-branded Amadeus Cytric was big in EU and MENA region, with few other products like KDS, Atriis, Traveldoo, Egencia, Sabs, Tramada, Quadlabs, Iween etc. For over hundreds of TMCs globally there were 10-15 products out of which the majority market share was driven by players that had bad UI-UX or where were only focused in a specific region due to various industry specific reasons like pricing, content etc. It was clear to me that in India at least, being a CBT SaaS company was more profitable than being a TMC and once we could get to a stage where the product-market-fit (PMF) was achieved in India with 2-3 good customers, we could easily expand outside India. Also, because our dev and other opex costs were so low in India compared to other international players, we could offer much lower pricing than the competition globally, but still be able to offer more capabilities than the established players. It seemed like a straight arrow to me and I immediately jumped on this.
- ZENMER was born: Since Airhob was more like a TMC, we decided to create a new company and brand that focused only on building travel technology solutions to avoid any conflicting thoughts with TMC clients. Though I'd be very clear and honest that Zenmer was born out of Airhob and that it's our family business. The thought was that Airhob was focused on leisure, B2B agents, APIs and not on corporate travel, it would never create any conflicting thought and it never did. In fact in hindsight, everyone found it better because they could trust me as the founder of a travel tech product whose past experience has been running a TMC and that I'd knew the small intricate details of running these complex travel processes. We had decided that as Airhob, we'll never get into the corporate travel market as a TMC ourselves, because then we'd start competing directly with the Zenmer clients.
- Since Airhob's B2B business operations was being managed by my father's team really well and only the API business was dependent on me, I decided to step back a little from Airhob's daily involvement and would only intervene in major technical decisions. I put the API business on auto-mode and decided to focus full-time on Zenmer.
- The strategy was - 1) to use the Airhob team to now fully focus on building Zenmer by creating the next level of features and functionalities that worked more like a Travel OBT SaaS product that supports multiple TMCs instead of being the TMC itself, 2) to start meeting the biggest TMCs in India to pitch the product in parallel.
- For the next 5 months I met the CXOs, VPs and key decision makers of major TMCs like FCM, ITH, Thomas Cook, BCD etc. and what happened was a little unexpected. Mar 2018 was still a little late entry into the market to immediately win deals, as 2 TMCs had already started building the CBT on their own because they couldn't find a good Zillious (had the largest monopoly market share) alternate for months and didn't want to depend so much on one company to drive their tech. Third one offered us acquisition and the fourth wanted full exclusivity within India. To be honest, I was really overwhelmed seeing these CXOs running large TMCs (doing $500mn+ sales annually) being interested in our product so much and the first 4 months, I was absolutely confused what to do.
- In parallel, there was another major problem that was starting to hurt my mental health a lot: high monthly burns and less profits. Because I was bootstrapping this business myself, Airhob's investment into this couldn't happen. And anyway, however strong our Airhob B2B agents & API business was growing, it was still a very volume-over-profit business where the profits would only start coming in after one/two years once you start crossing a certain high volume threshold. The P&L went negative and market debt was so high that getting urgent recurring revenues or raising quick funds was the only answer.
- Accepting an acquisition would mean a great quick end to all the financial issues, but getting acquired so early before even entering the CBT market would mean a huge missed opportunity to build a good business when the market really needed you. In July 2018, we had a great offer from an industry veteran to make an equity investment of $150k but just a week before the transaction was supposed to happen, it fell out due to unreasonable expectations from both ends.
- I was so confused, had insane decision-making fatigue, felt too lonely, full of depression and anxiety having suicidal thoughts, that I had cried and broke-down quite a few times around Jun-Jul 2018. I did remember the old mYwindow days where things were tough and by having persistence for a few months, calm mindful thoughts, reading good positive content really helped me come out of difficult times. But the high debt really played badly with my mind and might've easily made me take a few wrong decisions. I remember that at that time, I was reading Zero to One by Peter Theil, Principles by Ray Dalio and 'The Art of Thinking Clearly' by Rolf Dobelli. I also had unfollowed 80% of people on Twitter and Instagram which didn't post positive content. Because I had a huge habit of consuming lot of content on IG and TW daily, the content I'd see would really drive my subconscious mind to think in a certain way. Hence I unfollowed around 800 people out of 850 and only kept people like Jay Shetty, Tony Robbins, Goalcast, GaryVee, Oprah, Eric Thomas, The Secret community, Tom Bilyeu, using affirmations and more. This was the best thing I feel I had done that time because we're so use to opening these social apps and the only thing we see is people taking expensive luxury trips, attending parties, buying things we don't really need, promoting vanity metrics and all it does is makes us feel inferior and that we're missing onto something, where in reality they're also equally worried/depressed about something in their personal/professional life which they never post on social media. Everyone has their shit and it's your job to figure out a way to take care of your own shit.
- Finally on Sep 21st 2018, something good happened - one of the cold reach-outs I'd done was to the COO of ITQ India (ITQ represents the Travelport GDS in India) and he agreed for a meeting. I immediately flew to meet him in Delhi and showed him our CBT product. He was immediately impressed and made a phone call right there - he called up the main decision maker of a Delhi based mid-sized TMC who was urgently looking for such a CBT product. He shared good words about us and they agreed to meet.
- Why & How I got the first client: This TMC was asked by one if its biggest corporate client (1800+ employees) to give them an online cloud based travel booking tool, since they were facing lot of issues running these processes offline. They had already spoken to Zillious but were unhappy with their pricing and ignorance towards closing the deal fast as it was urgent for them. They loved our tool and the fact that we're a young startup and would be willing to work closely with them to retain their big corporate client. The pricing I was able to close the deal in, was absolutely unbelievable at that time and within one month on Oct 29th, we had our first cheque for the advance and I was speechless.