Align your product with the business model of the customer
Published in FirstFewCustomers
Arun Athiappan, Co Founder and CEO of Ticketgoose, began the company along with Karthi Easwaramoorthy and Vasudevan Ramaswamy. Arun was an entrepreneur in the past from 1992 till 2000 and was an IT consultant for a few years before stating once again With his neighbor Karthi who was in the US for almost 15 years, Karthi had worked with very large companies such as Sun, Cisco, HP etc. Vasu who was an entrepreneur all through his life was Karthi’s classmate. The story began when Karthi had to spend one whole day of his 15 day vacation from the US to buy a bus ticket to meet Arun in Chennai. Frustrated, he called Arun to check if there was something like expedia in India for bus tickets. Realizing that nothing else was there, they decided to build one and that is how Ticketgoose began by Aug 2007.
Ticketgoose was a two sided marketplace that aggregates tickets from the operators on one side and has customers on the other side. The usual practice was that the bus operators would share the inventory(ticket availability per route) to the agents and the agents will inform the operators two to three hours ahead of the departure of the bus. The founding team was very excited that they were going to disrupt the entire industry with a new way to do business. They went with full enthusiasm to all the bus operators and began pushing the internet way of selling and getting access to a new generation of customers who will only use website as a way to buy tickets. They were doing this for a few months but found out that no bus operators were willing to sign up in-spite of a good value proposition that they offered. Arun, in a chance meeting with his friend was discussing this and realized that what the bus operators wanted was to sell tickets and not at all interested in a disruptive and a next generation technology or buyers. Arun and team repositioned their services and went back to the operators and spoke to them like they are another agent and asked them to give them a quota like they would give to another agent and that began working. Now the business began taking off and they began making money.Based on them selling better, the operators began giving them additional quota of tickets. Arun says that the lesson leant here was not to build a product that would disrupt the business models of the customers but to layer it in such a way that this product works along with the existing model. A product needs to have enormous clout and traction in the market to be able to disrupt models which no startup will have.
Arun recollects the day when the team decided to flip back to their earlier business model and no longer wanted quota of tickets but wanted to see the real time availability of tickets on the net for their subscribers to buy online. Arun realized that to be able to access the inventory real time, the operators also needed to be on a software platform into which Ticketgoose can hook into. Less than 1% of the operators were online and even the larger ones were not willing to work on the API model. Ticktgoose began building the software platform and hosted it on the cloud and began offering free of cost software to the operators so that they can go online. The product called “Vahana” enabled the operators to manage the tickets, the backend process, phone booking, manage P&L etc. Arun was surprised that only 5 to 6 operators signed up for the entire one year inspite of them giving it free. They took another decision and began charging the operators on usage model(Per month Per bus) and suddenly they got around 40 new operators within one year. When they went in and quizzed the operators on why they did not choose the free software, they were surprised that the operators had perceived the product value to be low when it is given free and equated free to unreliable and low quality products/services. Once Ticketgoose started charging, the operators felt that Ticketgoose was serious about this business and could be relied upon to provide quality support. Arun says that the second lesson the team learnt was that free products always does not mean that the product will sell well. Often the reverse could be true and the free tag can create a perception of low value among customers.
Now Ticketgoose (www.ticketgoose.com), has 80 operators on the platform and has around 4,50,000 subscribers who have used the Ticketgoose for their bus ticket booking needs. TiE has chosen Ticketgoose founders as the best upcoming entrepreneurs in the associate member category for 2013