By Meenakshi Shivram

In a fascinating conversation with the CEO & Co-founder of Deyor, Chirag Gupta shares his secrets about building a successful business in a difficult industry, how the travel tech industry navigated the Covid era, what the funding prospects are…and of course, their takeaways from their stint on Shark Tank! Apart from being at the help of this successful startup, Chirag has also been recognised in Forbes 30 under 30, Asia list and is a Leader of Tomorrow at the St. Gallen Symposium. 

Read the edited excerpts from our conversation below for some prime entrepreneurial wisdom from Chirag.

Meenakshi: So as usual, let’s open with your story to where you are today. What’s your journey been like?

Chirag: Thanks, once again, for having me here. So we started off Deyor somewhere in 2016… honestly if I date back to 2016, what we were doing then versus what we are doing today are two completely different things. How a typical startup works is that we go through multiple pivots, right? And this is purely because some businesses just look amazing on excel sheets but when you come down to hardcore execution you realize that there’s a lot more, that there’s a lot of dynamic factors that were not considered at the time of starting a business.

When we first started off, we were more of a campsite aggregation business. We wanted to be the biggest platform in India where one could just go and book any camp, whether it was a camp in Rishikesh or Kasol or Manali or wherever they want to go to do backpacking – they could just visit a campsite booked through our platform which we scaled tremendously well in terms of the operations out of the business. But very soon, we realised that from a demand perspective, it’s not really there, right? We realised that even though there was some demand, that demand doesn’t justify the increased consumer acquisition cost. So, I mean just to give a back of the envelope unit economic calculation – a typical campsite sells for about 2,500 rupees a night which includes all meals. So, you can imagine –  my value of sale is going to be 2,500 rupees, the cost of customer acquisition is so high…of course, I’m not even going to get into the margins which is just around 25% in the best case scenario.

So, it was just a money-beating business and that’s how we started but of course, the journey has been great over the last eight years where we pivoted a couple of times to finding the right product market fit which is something that we’re scaling today!

Meenakshi: Wonderful. Why travel tech in the first place? Are you a passionate traveller yourself? 

Chirag: Yeah, absolutely. I mean, I think anybody who knows me very well  knows that I can’t keep my feet on the ground in one place! I do need to be traveling, I need to be roaming around all the time.  A lot of people often do ask me that, “oh, you are in the travel business, you must be traveling a lot.” The answer is yes and no, both. So,I mean, we do a lot of trips and I think at any given point in time more than 100 people are travelling. Even today if I see my check-ins or if I see the number of people that are roaming around the globe with my company it’s more than 100 people, right? But am I one of them? No. 

Meenakshi: Haha! I hope you get to travel a little more often soon. So, a little bit more about your company in itself. We definitely caught your feature in Shark Tank! What were your key takeaways from the whole experience? 

Just the fact that the process of getting into Shark Tank is quite tedious…we do pride ourselves on the fact that we got through and we were able to walk into the tank and then we were one of the few companies that were selected to air! Not everybody who’s selected and goes into the tank, not everybody’s episode airs, you know. Some of them come out as unseen pitches on Shark Tank on YouTube later on and some of them don’t ever air. So, we’re happy that we got that exposure.

I think that’s the silver lining we take out of it…that today we got those 15 to 20 minutes of primetime viewership that gave us that position to establish ourselves as a national brand. 

Now we are a holidays brand and we do a lot of experiences. Some of them are owned by us, some of them are curated by us. We’ve taken a route which is very different from a typical offline travel agency model. So, you won’t see any shop or any retail center in the country which says, well, this is a “Deyor ki Dukkan”, you know, this is a “Dior travel shop, let’s go there and book a holiday”. Everything is virtual, everything is very centralised to our Gurgaon office.

One of the biggest challenges that we used to face pre-Shark Tank was that a lot of our customers are based out of Mumbai, Bangalore, Pune, parts of Rajasthan and parts of Orissa. So, it’s all over the country, right? But they would not trust us in the first place. So, they would ask us, “Why don’t you video call us and show us that you actually have an office space, that you actually have people that are working with you”. Now, how things have really transformed is that people say, “Well, we saw you on Shark Tank, that’s reason enough for us to travel with you, we trust you”. So, in the travel space, establishing trust is a very important factor and we’ve been able to do that by going into the tank. 

Meenakshi: What sort of pain points do you face as a business in the travel tech industry? What would you say Deyor’s core challenges are? 

Chirag: First, I’ll come from a technology perspective. I love how MakeMyTrip has scaled up in India and I love how there are companies like EaseMyTrip, etc, which allow you to book flights and hotels online. Now, if tomorrow either of us had to book a ticket from here to Bali or to Dubai, the reflex would be to go on a MakeMyTrip or an EaseMyTrip and just book the ticket. But when you come into the holiday segment, things get a little bit more complex, right? 

So, when you want to book a trip to Bali, for example, a holiday or a honeymoon, which is something that we specialize in curating, what typically ends up happening is that there’s a lot of moving factors, a lot of moving variables, like the hotel, the flight, and there’s a lot of parts of Bali that people want to cover. So, for example, when we were launching Bali, and I still remember (when we were training our sales team for Bali – we talked about the places within Bali – like Seminyak, Kuta, Ubud, Nusa Dua, and these are words, until and unless somebody doesn’t go to Bali, they wouldn’t understand what is being talked about, right? It’s very complex.

Even for a first-time customer, when they’re planning their own itinerary, and they haven’t researched about the destination, they may not know where to stay.  Every part of the country has different offerings, and the holiday needs to be tailor-made for the taste of that consumer. So, for that reason, I think the biggest challenge that we face is that beyond office hours, business is really not happening because customers don’t know how to go online and book their own holiday experience. I think that will change with time. We’re also building up a new tech stack, which I will not talk about right now until it’s ready, which we’re doing to be able to help people be able to mitigate these challenges and be able to curate their own experiences themselves. 

So, I think that’s one of the key challenges that we’re facing as a company. But again, nothing very drastic, nothing that stops us from scaling to where we want to scale, but it’s just a consumer behavior and an offering problem that will be solved with time.

Meenakshi: Zooming out, what would you say the industry is facing as their key constraints? 

Chirag: We have to understand the composition of the industry, first. The major shareholders of the industry are the offering agents. So, these are the companies that you will find in every market that you go to. You go to a Karol Bagh in Delhi or you go to a Galleria market in Gurgaon, you will find these shops that say, XYZ tour and travel, etc.

These are the guys that own the majority of the market share. This is where traditionally business was happening. People would walk into these shops and personalize their holiday,  figure out which destination to go to, what the new offers are…that’s still where the majority of the market is. And this is just the B2C space.

Of course, there are companies like MakeMyTrip, which have a holiday section, EaseMyTrip, which has a holiday section and now companies like Deyor that are coming up, which are purely building on the holiday space, that are taking up a larger chunk of this market space and bringing it online. But I think maybe in the next five years, I do see the tilt happening where offline travel agents will have far lesser business and online companies like us and MakeMyTrip will have more share of the business.

Meenakshi: What are the current trends in the industry?

Chirag: I’ll talk about buying trends like purchase behaviour. One thing that we’re seeing is that for us also – and we’re very happy about this – is that a lot of business is coming from tier two and tier three cities. There are a lot of people for whom travel has become aspirational. I don’t know whether it is due to Instagram or not, but people love to go to new destinations and just explore. And everybody comes with different mindsets! So no travel itinerary will fit two people the same way, right? 

The other thing that we’re seeing is that the disposable income in India is rising The economy is booming and the way the countries are shaping up collectively is great to see. So, what we’re seeing that typically pre-COVID, the people that were the kind of customer archetype that would probably spend ~60 to 80,000 rupees on a holiday are now willing to spend about 1 Lakh rupees, right? So, we’re seeing that trend and that shift in behavior, which is something that’s exciting us.

There’s also a lot of companies in the market that have come with options for FinTech – providing loans on travel. That’s allowing people to increase the amount they’re spending on their holidays, knowing that that capital now needs to be paid back in six months instead of being paid upfront.

Meenakshi: How significant is short-term and long-term capital management within the sector?

Chirag: It’s been a while since the sector has seen an influx of cash, to be very honest, in terms of fundraising. I think the last we saw was during the 2016-2018 belt where Ritesh and Oyo did a fantastic job by raising significant capital. A lot of similar companies came up that did a great job in raising capital. But I think ever since COVID came in, investors are always at bay in terms of this segment. 

However, in the last 45 days there has been a lot of chatter around the travel space. There are a lot of investors that are actively reachingout to us also. We, at this moment, honestly haven’t gone out to the market with any plan to raise capital because we are profitable. But of course, this is a strategy that we are dabbling with internally. Having said all this, what we are seeing is that there is a certain uptick in terms of organic outreach from investors to us.

Businesses like Deyor are fundamentally proven that you can build up profitably within the holiday space, which was not done before actively by many companies. So that interest is rising, definitely.

Meenakshi: As a closing note, any advice to any budding entrepreneurs in our audience? 

Chirag: I was fortunate to start my journey in the travel space or at least in the venture space by joining an early stage investment fund by the name of Redcliffe Capital. I was fortunate to get that platform where I was able to expose myself to the entire startup community as an investor and get to know a lot of other co-investors, get to know a lot of amazing entrepreneurs who we invested a lot of capital in. I think because of that exposure for me, starting up was a little bit easier as I knew what and how to start a business and when to actually pivot.

And there are a lot of milestones that come across a journey where you need to take certain steps, right? I like to give back whatever I had. So pro bono, free of cost, if any entrepreneur is looking to start up and they need help in terms of, you know, hiring, in terms of technology, in terms of compliance, mitigating small issues that come in the early stage of the business, fundraising as well, I do try to connect them to the right people. 

Of course, from an execution perspective, I’m totally committed to Deyor, but as much as I can help these entrepreneurs, I do it. One thing that I do say to every entrepreneur is if possible, go to Shark Tank! And the sole reason why I say this is because the exposure that it gives your brand is something that will take a lot of time for you to build otherwise. A lot of time as well as a lot of money. 

I mean, a lot of people purely base their business and branding through influencer outreach and they do various other programs to be able to create a national brand. I think if you are building something unique and building something great, go onto Shark Tank! It doesn’t matter if you get funded or not!  What matters is that you get 15 minutes on primetime television and use it. Use it! I wouldn’t say abuse it, but use it to your advantage and see what wonders you can do out of it.