Interview with Mashhood Rastgar, CTO – Sastaticket.pk
“Sastaticket.pk stands for making travel easy in Pakistan.”
Mashhood Rastgar is the Chief Technology Officer at Sastaticket.pk - the online travel platform in Pakistan. He has over 10 years of experience in the industry to lead the engineering team, align the product, and design teams. Outside his CTO role, he is a speaker at different startup and technical conferences and also works with open-source communities. He is currently serving as the Google Developer Expert for web technologies.
Following are the edited transcripts of a recent conversation BR Research had with Mashhood Rastgar:
BR Research: Tell us about yourself and your association with Sastaticket.pk.
Mashhood Rastgar: I am the Chief Technology Officer at Sastaticket.pk and I joined three years ago as it aligned with the vision and objectives I had. Since then, I am here – responsible for building the best engineering, product and design team in the country, focused on how to make travel booking easier and a better experience for all.
BRR: Sastaticket.pk has been listed in Forbes’ Asia 100 to watch list. What does that signify for you and the tech startup space in Pakistan?
MR: It is a big achievement for Sastaticket.pk to be recognized at a global level for being the one to watch, because we have done all of the innovation in the travel space so far. Forbe’s accreditation is recognizing these innovations and it validates that Sastaticket.pk is growing and has a strong promise to thrive. We were selected out of 899 other applicants. Featuring in the top 100 means that we are doing better than 800 other participants from South Asia. Only two companies have been nominated from Pakistan, one is Sastaticket.pk, Pakistan’s largest online travel search and booking site, and the other is Safepay, digital payments solution for Pakistani merchants.
This is a big achievement for Pakistan's startup ecosystem as well. It has brought us in front of the world. People are looking at us, not just from an upcoming Pakistani startup point of view, but in fact, from a global business perspective. One day Sastaticket.pk plans to go to other regions, and this helps us build that process. It is true that where our neighbor has 22 companies listed, and we have only two. Yet on the bright side, the ecosystem is growing with many startups coming in and creating significant impact. Putting us on the map out there is a great deal and we are proud that we were among those that made their contribution.
BRR: The biggest challenge today to the travel industry is COVID. Being the leading travel online marketplaces in Pakistan, can you tell us how you the last year and a half been for Sastaticket.pk and how have you maneuvered through the choppy waters?
MR: This is a very important story for us especially when we are onboarding new employees. It was stressful yet an exciting journey. Starting last year, we had set very strong growth targets for ourselves, and we were in full gear. January and February 2020 were the best months we’ve had with highest gross revenues ever. We entered March 2020 with the same vigor and focus but unfortunately by mid-month, it started looking like we will be shutting down, and by end of March everything had actually shut down due to the lockdown.
Our basic focus has always been flights as a service, and that was the biggest challenge for us as flight operation was completely suspended between March and August. So, there was nothing to sell during this time. This was the most critical period for us. A few things happened during this time. First, we immediately went into firefighting mode. We weren’t thinking of existential crisis at that time because we understood that we had enough money from our funding to last us a few months easily. The biggest challenge for us at that time was handling all the cancellations that were coming in; we had thousands of cancellations to be processed as flights operations stopped end of March. We started looking at how to service these customers; there was a lot of confusion from our partners and airlines as to what could be refunded and what couldn’t be refunded, and how and when to process the refunds. Even though there was a complete lockdown, we were fully operationally in the sense that our call center was open to expedite the cancellation and refund process. ‘
Second, we started looking at the long-term picture as we went further into the pandemic. there were two scenarios in front of us. One was that things will open up in 2-3 months as soon as the infection spread was under control; and the second one was that the situation could extend beyond a year and flights remained closed for at least the year. Our primary focus during this time from operations point of view was to analyze how much funding we had and how much the runway could be extended to the maximum without letting go of staff. We took some strategic decisions on that front ensuring that we were able to get through the worst of these periods without any problems and at the same time continue to create some output to keep us afloat. We were not selling flights, but we continued to work on technology because at the end of the day people will come back online and travel will start one day – and we wanted to be ready for that.
We also started cutting down our costs to make sure that we had enough runway to last us during the toughest times. For a tech company, cloud cost is a big component and we wanted to bring that cost down as much as possible. Then we also cut our marketing and advertising costs aggressively as there was nothing to advertise or promote.
And third, once we knew we were safe and have enough money to get through, we started looking at the product itself. We started thinking about how the economy will change and what would travel look like post COVID, and we started adjusting for that already. Throughout June and July last year, we focused on things we felt would be different in the future. One of the opportunities that we found during this time was selling travel insurance. That’s something we have launched once flights kicked off again. Travel insurance has been fairly popular product on our website as this product is also backed by the response we got; there is still that fear that flights can still get cancelled and moved around.
When things opened u further in August 2020, we were relieved that people will be flying again but we understood that there still was that fear and resistance in travelling. We have been lucky however as the biggest change from that point on that we foresaw was that COVID had forced everyone to come online. This gave us a fantastic opportunity because it is exactly what we have been trying to do all this time for all our customers to give them transparency and easier access to all of the travel stuff we had available.
BRR: So how has it been since August 2020?
MR: Right from August last year, we saw a very strong demand and the numbers just kept growing. And in November 2020, we had already crossed our February numbers recording our strongest month. Since we have come back online, there has been a huge spike in demand. What has snowballed this growth further is that there has been the reduction in air fares and ticket prices by our partner airline in order to encourage people to fly. And since its easier to buy online on our platform, they are buying more from us. So, the past one year has been very exciting for us since the flights have opened up.
BRR: Where did most of this travel demand generate from? International travel still remains restricted, but we did see many people travelling up north domestically. Does this have any share for air travel spike that you are referring to?
MR: We used to have a fairly large international presence, and it’s picking up gradually post COVID as countries open up. But domestic travel is where majority of the growth has been. And as you mentioned, especially during June-July there has been a big load for domestic travel and tourism. We have also been working alongside on our other products like hotel bookings and busses. Other things are also coming up soon which will continue to help users find better deals and give them better experience in the coming months.
BRR: What is your revenue model?
MR: Effectively what we earn is from commission. Whether we are selling flights, hotels or any other service/product, we get a percentage of the revenue as commission to keep. Normally what happens for a traditional travel agent is that the number of bookings is small and so the commission is also pretty small. But as the companies grow, they get higher commissions because they are hitting some higher sales targets, and that’s what enables us to generate a lot of revenue on that site for ourselves.
This is the basic business model, but down the road we have a lot of new things that we are working on like adding additional value to the commission we get and charge higher. It could be packaging flights with hotels and transfers etc., we can charge additional fee for the service and get a better margin.
Also, we will have other verticals and revenue lines coming into as we launch new products. Sastaticket.pk stands for making travel easy in Pakistan not just in terms of flights and hotels but anything and everything related to travel. Even things that are very obscure right now like visas, we are exploring and trying to see how we can create great online experiences for our users applying for different visas by giving them information and helping them. This will also be a revenue generating source down the road.
BRR: What are your views of the startup landscape in Pakistan? there has been a surge in investment and fundings in the startups especially in the tech space. What explains this trend?
MR: The startup ecosystem has been growing in Pakistan for at least the las 10 years now. We have been slowly working on incubators and accelerators, and different models have been doing well all across the country. With all this, people are starting to get the sense of what startups are; how to build one; what is needed etc. What we can see in the last couple of years is that as people get more educated about entrepreneurship and startups, they are now experimenting and bringing innovative ideas to the table. As more startups come into this space, there will always be a few that would really take up and have a huge impact on the ecosystem and trigger more to emerge.
Fundings has gone significantly up in the last two years. This is not only because they see potential in Pakistan’s 220 million population but also as an ecosystem that is progressive with the rules and regulations and incentives in place by the central bank to give investors the confidence. Also, as the global economic growth slowed down, it allowed some of the funding to free up from its usual funnels this way
BRR: When do you see travel returning to pre-COVID levels? What is Sastaticket’s strategy and plans for the next couple of years?
MR: In terms of growth, we are easily going to hit pre-Covid levels in the coming months and go beyond that in the next year. We are expected to grow quite a bit in the tourism space in the next couple of years. These are big markets that definitely need to be tapped into and commercialized because right now there isn’t much digitalization and automation on that front such as the northern areas. And that’s where Sastaticket comes in.
As the international space opens up more, we will definitely be focusing on exceeding our pre-COVID levels to make sure that we are again able to bring in the best experiences at best prices for our customers. Our plan is to add more verticals so that whenever someone in Pakistan thinks of travel – international or domestic- they are thinking of Sastaticket.pk.
BRR: Do you foresee going for another round of funding?
MR: We are already in the process of raising Series B funding and this will continue for a couple of months into next year easily. We are not in a rush to get funding partly because markets haven’t opened up completely yet. We understand that in order to go to the next stage of our company where we become a complete platform, we need to have the setup and the necessary funding.
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