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Reuters/Punit Paranjpe
Learning on the job.
SEEDS OF SUCCESS

When the redBus “mafia” split, they painted the startup town red

By Itika Sharma Punit

Several successful startups across the world have been founded by former employees of other startups. The best example is the “PayPal mafia“—or the 13 men who have given birth to companies such as YouTube, Tesla Motors, LinkedIn, SpaceX, and Yelp.

In India, a similar “mafia” has emerged out of redBus, an online bus ticket-booking company.

Founded in 2006 by Phanindra Reddy Sama, Sudhakar Pasupunuri and Charan Padmaraju, redBus was one of the first Indian technology startups to see a successful acquisition by a global player. In June 2013, it was acquired by Ibibo Group, a subsidiary of South Africa-based media firm Naspers, for a reported $135 million.

redBus is an inspirational story for the Indian startup community, which has not seen many global acquisitions till date. But for those who worked at redBus, it was a hands-on lesson in entrepreneurship.

“I believe, being a part of a startup gives the confidence that’s needed to set up your own startup,” redBus co-founder Sama told Quartz. ”None of us—me or others who were working at redBus—were any different from each other. So if I could do it, they all could do it too.”

Here are some of the companies founded by former redBus employees.

Goodbox

Abey Zachariah was among the first few redBus employees. In 2007, he was working with Standard Chartered Bank and wanted to launch a ticketing business of his own. But when he heard about redBus, he reached out to Sama expressing his wish to work with the company.

Zachariah worked as vice-president of business development at redBus for five years before taking to entrepreneurship. After quitting redBus, he experimented with several ideas before co-founding a chat-based shopping startup, Goodbox, in 2015. Goodbox’s founding team includes another former redBus employee, Mayank Bidawatka.

“Having been a part of redBus works in our favour,” Zachariah, now CEO of Goodbox, told Quartz. ”If we go to the market today—and these are times when it isn’t really easy to raise funds—we have some value. We have worked and created a company, how many people have done that?”

In May 2015, Goodbox raised $200,000 (Rs1.3 crore) in seed funding from Manipal Media Networks. The company raised a series A funding of $2.5 million last November from Nexus Venture Partners. In January, it acquired another startup, SmartPocket, for an undisclosed amount. SmartPocket allows customers to digitise their loyalty cards.

Media Ant

Zachariah’s fellow founder Bidawatka came to redBus from ICICI Bank in 2007 as its marketing and product head. Since quitting redBus in 2012, he has been a serial entrepreneur and angel investor.

Besides Goodbox, Bidawatka is also co-founder of The Media Ant—a marketplace to discover media in India. The company connects owners of media outlets with advertisers.

“We were a very efficient team at redBus, always at a 150% of our capacity and never overhired. We always felt crunched as far as spending was concerned. This brought out the best in us. We would never throw money at a problem. I think this is a great thing and no team should be given the leisure of abundant resources. It doesn’t lead to innovative solutions,” Bidawatka told Quartz. “The other important thing you should avoid is building an average team. The initial team can decide the fate of a young startup. Always hire A players. A wrong hire costs you more than just money.”

As an angel investor, Bidawatka backed Dazo, a curated meal marketplace started by Shashaank Shekhar Singhal, a former redBus colleague. Dazo has now been discontinued.

Dazo

Singhal had already been an entrepreneur before he joined redBus in May 2013. The former head of mobile products business at redBus had co-founded a web products company, DesignChords.com, in 2009. But redBus taught him something new about building and running a business.

“Very often startups build products based on assumptions without involving the actual end consumer, which results in a product no one wants. At redBus, I learnt how to build relevant products that solve a real problem,” Singhal told Quartz. “My team and I would frequently visit different bus stops to talk to customers and also travel with them, which helped us understand their pain points and come up with a relevant solution.”

Founded in October 2014, the food startup was discontinued a year later. Singhal is now working on another startup in stealth mode.

Snaxsmart

Shankar Prasad had been a top executive at Bharti Airtel and Tata Communications before he decided to join startups. Despite his work experience, Prasad wanted to work with a young company before taking to entrepreneurship. In August 2011, he joined redBus—taking a salary cut—as its chief operating officer. In the one year that Prasad spent there, he said, he learnt the intricacies of running a startup, which come handy even today.

Launched in October 2013, Snaxsmart provides health food-vending machines. For the first few months after setting up Snaxsmart, Prasad handled marketing, sales, and customer care by himself. He would go to refill Snaxsmart vending machines at several locations in Bengaluru every morning, taking just one helper along. Snaxsmart also did not have an office for some months as Prasad worked from a home office to keep costs low.

“If I had started my own startup right after I quit my big corporate job, I would have set up a big, swanky office, and hired many people for marketing, sales and other functions. But my redBus experience taught me that startups don’t work like that. You need to keep a light model, and everyone you hire needs to do multiple things,” Prasad told Quartz.

Another lesson Prasad learnt at redBus, he said, was about the timing of raising funds. “I realised that raising money too soon may not be the best thing to do because you would not get much value for your business. So I decided to depend on bank loans and my personal savings to build Snaxsmart to a certain scale before reaching out for venture capital funds,” he said.

Pipemonk

This data integration platform was co-founded by Ravi Madabhushi, earlier a technical lead at redBus. In 2014, Pipemonk raised angel investment from Orios Venture Partners, investor Anupam Mittal, among others. Last year, it raised $2 million ‪from Helion Venture Partners and Orios Venture Partners.

SellerworX

Ganesamurthi, a former Steel Authority of India, Indian Railways, and Hewlett-Packard employee, worked on scaling up operations at redBus during the 14 months he spent there. His key takeaway from this experience, he said, was to “use technology to solve problems that affect people and business, as it is the only way you can impact a large number of people and business.”

In April 2014, Ganesamurthi set up SellerworX, which provides e-commerce technology solutions and services that help vendors sell more through online marketplaces such as Flipkart, Amazon, Snapdeal and eBay. SellerworX has raised $1 million from Axilor Ventures.

Ganesamurthi also learnt the importance of building a great team at redBus. “I had the privilege of working with the best team ever in scaling redBus. I wish to build a similar team in my venture,” he told Quartz. “You can fight any war as long as you have the trust and backing of your team.”

TouringTalkies

Naveen Krishnaswamy was a program manager with Wipro when Sama approached him to join redBus. The startup was already four years old when Krishnaswamy came on board as engineering head. “We scaled the business from around 8,000 ticket bookings per day when I joined to around 15,000,” Krishnaswamy told Quartz.

TouringTalkies, started in November 2011, provides personal entertainment systems in buses that lets passengers access movies, promos, advertisements, TV shows, music, games, books and newsletters while travelling.

Besides work, Krishnaswamy said he made some close friends who have helped him in his entrepreneurial journey. “I joined redBus at a senior level and at that stage there is a lot of competition and you can’t really make friends like you do in school or college. But I made some friends who I know I can reach out at any time. One of them is Abey (of Goodbox),” he said.