Richie Khandelwal, Co-founder, PriceLabs interview on Building Revenue Management Tool for Short Term Rentals

Rental property owners can increase their revenue with Data-Driven Pricing using PriceLabs.Co by Richie Khandelwal.

Richie is someone who speaks his mind appropriately. He is logical, smart and easy to talk to!

Let us read through his story… 

YC – Welcome to Yellow Chapter

The idea is to talk about “you”. Understand the choices that you have made from the very beginning. Why have you made those choices? What was your learning? Can we start from the very beginning?  

Adaptability…

Richie – Okay, I don’t know if all the choices are conscious or if they just happen to be. I was born in Alwar, Rajasthan. My dad was in judicial services. So we moved every three years or so. I lived in a bunch of cities across Rajasthan while growing up. 

Honestly, I don’t remember any conversation about career per se or what we should grow up to be till grade nine and tenth. Of course, we were expected to do well in school. 

In sixth grade, in our school, we talked about career counseling. I thought I might want to become a psychiatrist at the time, although I had no idea what that meant.🤣🤣

And then, fortunately, or unfortunately, my dad got transferred to Kota. And once you’re in Kota, you can’t avoid one of those things, engineering or medical, if you’re good at studies. I was no different.

Both my sister (Kirti) and I had a very normal childhood. No performance pressure, no comparisons etc. We were supposed to do well in our studies; thankfully, we both did well in school. 

Both of our parents were very, very hardworking. When I was in fourth grade, my mother enrolled for B.Ed. She then did her M.Ed and got into the teaching profession, ended up becoming a principal and now she consults with a few schools.

YC – What was the significant learning from engineering? What would you suggest to engineering students? The reason I’m asking this is that a lot of engineering students read YC blog. They find these stories very inspirational and relatable. They think if someone like them can do it, even they can.

Discover yourself…

Richie – I will go one step before the four years of engineering. I had a very normal childhood, but also an exciting childhood in the sense that we moved every three or four years. So it was constantly new surroundings. We’d have to find and make new friends every three years. Every time schools were also very different. So, adapting was just something that was very ingrained. 

The other thing I appreciate now, but I hated growing up, was that my dad would make us write essays or stories about everything. 

1994 elections, I accompanied him to the voting booth. I was in the fourth standard. We returned, and he was like, now write a 1000-word essay about your experience today. We’d go to a train station, or we’d go to a circus, and then every time we came back, we had to write an essay. 

Growing up, we didn’t appreciate it as much. But reflecting now it’s an excellent skill as it helps with structure thinking. Writing makes you more coherent in your thoughts.

Coming back to engineering, Good in (Maths + Physics) = Engineering. Though, if not engineering, the fallback option was LAW.

I got through Indian Institute of Technology, Madras – Bachelor of Technology, Metallurgical and Materials Engineering on my first attempt.

IIT, for me, was a different experience, perhaps, compared to my peers. A lot of people are intimidated by new surroundings, new settings, and new friends. But as I said earlier, adapting was just something very ingrained. 

IIT for me was sports + friends + relax + no stress = Great days!

Suggestion: Honestly speaking, I would not do anything differently than I did back in the day. It depends a little bit on your life and life goals. To me, those were great days. We played sports every evening from 4 pm till 9 pm. 

I was with friends, relaxing, chatting and getting to know those around me. That’s what we did. Didn’t worry about anything.

Today, I see many students are good at the subjects and coding etc. They have studied many other things besides their coursework and are job-ready. But they haven’t truly learned to be friends. They haven’t learned to be friends with themselves more than anyone else.

So, I suggest – Take that time in college to discover yourself. It’s one of those no-stress times of your life. Make friends with yourself and with people around you.

Participate in events around, be it performances or coordination. It helps in building character. Do not take too much pressure. Life is going to come to you anyways.

YC – Can we talk about your professional journey post IIT?

Richie – 2007! Sure, I started my journey with Shell as – ​​Associate engineer (India, Malaysia, and the Netherlands)

Learnings from Shell – Shell was tremendous. 

1. Sense of responsibility – Shell gave us responsibility very, very early on. Our decisions could impact people’s lives (on plants/rigs) or millions or billions of dollars. 

2. Work-life balance – Work-life balance was not very popular in India. We used to go to work at 7:30 in the morning and wrap up work by 4 pm. And then the rest of the day was our day. 

So, it gave me that understanding of showing up to work, getting your job done, and creating that boundary between work and personal life. Many of my peers in other companies struggled to have a work-life balance.

YC – Why MBA?

Richie – 2012! The first time in my life when FOMO kicked in. A bunch of people around me were applying for MBA. And so far, I’ve been living a very, very relaxed life. With Shell, I have lived in six or seven countries. But then I started seeing some of my peers. The startup ecosystem started picking up and becoming a little bit known.

2011- 2012, Ola and Flipkart started to raise money. Some of my peers were at McKinsey, BCG or Bain and were now going to VC firms. At that point, the oil industry was slightly in the doldrums. 2007 was at its peak, 2009 – 2010, we had the recession years, and then 2011- 2012, it was still in the doldrums. 

I knew it was time for a change. 

At that point, I was not growing fast enough in Shell. To grow fast enough, I knew I had to move from a core technical role to a more commercial one. In a commercial role, you get to meet country ambassadors etc. And so the commercial role seemed very, very exciting. So the intent was to come back in some kind of commercial role at Shell.

A couple of things happened before I got into B-School. When I first applied for an MBA, I did it without any seriousness. I’d applied to Harvard, Stanford, MIT, and ISB. I did not get through the three US schools but got through Indian School of Business (ISB). I was living in the US back then. I came back to India. I went for a day or two to ISB, even before the session started. And in those two days, I realized I didn’t want to attend ISB – I wanted more global education. 

I joined Shell again. I applied for an MBA again. This time, my application was a little more thought-through. I found a good fit at  Kellogg School of Management.

YC – How was Kellogg’s? What were the significant learnings from Kellogg?

Richie – Kellogg was mind-blowing. Major learnings:

 1. Diversity – I learned what true diversity means—diversity of thoughts and people. My peers in MBA from such diverse professional backgrounds, which I had never known existed. One of my friends at Kellogg played Poker professionally; another acquaintance was a priest at a catholic church. Several people came from military backgrounds. People were not just from very diverse backgrounds but also from various countries.

2. Exposure – At Shell, I was living in my cocoon. I only knew oil and gas. But once I went there, I realized the world is so big. There is a world of luxury retail, there’s the world of startups, and there’s the world of the tech ecosystem. I am a person who truly enjoys all of this.

3. Vulnerability – I learned a little bit more about being vulnerable. In my engineering days, I had close friends, but I wouldn’t necessarily say they knew full well what was going on in my head. I mean, they knew what was going on in my head fairly well but sometimes not entirely. 

But at Kellogg, I realized the value of being vulnerable with people with whom you’re close. Maybe part of it was age, but part was just like the people we had around.

4. Collaboration – I learned the value of collaboration. Growing up, it was always about competition: rank, CGP, package. India is resource-constrained; we have too many people at every stage. So it’s always about competition, although it shouldn’t be. Kellogg was just super high on collaboration.

YC – So post Kellogg, Bain & Company. How was Bain & Company and significant learning? 

Richie – 2014! Bain & Company, Boston. Bain was amazing. Colleagues were so intelligent, structured thinkers, and lovely to work with. My learning from Bain was being able not to be intimidated by a problem, to take a problem and be able to break it down into pieces of smaller chunks to be able to solve it. I mean, and that’s what consultants do day in and day out. And that’s what Bain truly taught me.

YC – I saw that PriceLabs was started in 2014. How?

Richie – I had a spare bedroom and was trying to rent it. And since I was hosting my extra bedroom online, I realized that I’m pricing flat; everyone else’s is also pricing flat. The prices should change based on supply and demand. We’ve all seen it through Uber, Ola, or booking a flight. And so that’s kind of how PriceLabs- Dynamic Pricing Tool, started.

We (Anurag Verma, my current co-founder from IITM & Sana Hassan, another co-founder from IIT Madras and Kellogg) built an algorithm for my house. Then we asked other people if they wanted to use it and posted it in specific forums as a free-to-use tool. And a lot of people wanted to use it. And so that’s kind of how we got our beta customers. (Though, I was not aware of this term, then 😜).

YC – Why Mindtickle? What were the significant learnings?

Richie – So Bain to Mindtickle, two things happened:

Number 1 – I was at Bain – Boston. I did not get a visa to stay in the US. Bain relocated me to Canada, and I was in Bain – Toronto. Another year was coming up, and now it was time to decide whether I was going to move back to the US or am I going to stay in Canada. 

For the first time in my life, when I did not get a visa for the US, I felt very helpless. I realized everything in my life has been in my control so far. But this, no matter what I could do, it was just a lottery still, like it was a gamble. And I didn’t feel very comfortable with that. 

I also spoke to other people and realized that even if I manage visas now, there are many challenges with permits and authorizations later. The journey was not a pleasant experience, so I decided I didn’t want this to happen again. I knew I wanted something where I was controlling my destiny. 

Number 2 – My parents were ageing. I wanted to be around them. Right. And so, a combination of those two factors made me return to India.

Once decided, I had four options:

1. Continue with Bain & Company – India?

2. Look for a new job in India?

3. Do I run PriceLabs? 2016! Though it started making some money but not substantial enough. We were making approx. $50,000 to $100,000 annually. We had some discussions about pursuing PriceLabs full-time, but we were not comfortable. And decided to keep it as a side weekend project.

4. Start something new?

I liked consulting, but working on PriceLabs during weekends, I realized I enjoyed working on problems from scratch. I like doing things more, rather than just documenting. 

I was now convinced to join a startup. Aug 2016 –  Mindtickle Inc – Sales Readiness Platform as Director, Business Operations, and Chief of Staff was a good fit.

Learnings from Mindtickle :

1. As a leader, how important is it to be vulnerable? Not just showing the vision but also vulnerability to the team is the key to bringing people together + Keeping everyone aligned to the goal.

2. Founding team of Mintickle was terrific. They truly cared about the team. I was working very closely with the founding team. I learned what truly employee-friendly meant. 

3. Though I had led projects in my previous job at Mindtickle, I was a leader for the first time. The role helped me to discover myself as a leader.

YC – 2020, PriceLabs, how did this happen?

Richie – Again, a couple of reasons:

1. The pace at which MindTickle was growing was phenomenal. But it was a path to the US, and I wanted to be in India.

2. My wife’s job was in Mumbai, with limited possibility of relocation. Also, as said earlier, I wanted to stay around my parents.

3. PriceLabs started to find its feet. We had a good idea of what we could potentially do with PriceLabs. 

4. Lastly, I was out of my FOMO zone.

YC – Can we talk about some typical metrics of a SaaS startup? Competition?

Richie – Anurag has joined PriceLabs by mid-2018. Sana and I joined around early 2020. 

At PriceLabs, we do dynamic pricing for short-term accommodation. 

Our ideal customer is someone who has a rental property. Be it one room, ten rooms, 500 rooms or 1000 rooms. We do not work with enterprises like Taj Group, Oberoi Group, Marriott Group etc.

We are right now eight-figure ARR. We have 15000+ paying customers. Our customers are spread across 100+ countries. 

Our business model is a typical free trial, freemium model. We have around 60 people, a globally distributed team. We have team members in 8 countries today. 

Our market is vast; it’s about several billion dollars. We have a couple of competitors, Beyond Pricing, one of our closet competitors. 

YC – How was the journey of PMF? What was the marketing and sales strategy for PriceLabs?

Richie – From 2014 to 2019, we were just three co-founders. We were working at our own pace, trying to figure out the product-market fit. There were no major pivots. We are still solving the same issue. The prices should change based on supply and demand. Though, there were some tweaks. 

Marketing and Sales – 2020, when we stepped on the gear, we got ourselves into customer service before marketing and sales. Till now, our customers have been receiving sporadic customer service from us. But we knew now was the time to build a strong team.

Being in business since 2014, we had some customers and a tag of good product + good customer support. We knew we had to pull this string to get things growing. Word of mouth has been our biggest channel. 

We started with Google Ads very recently. SEO also we picked up last year. Ours is a large global market. We have started investing in content quite a bit lately. 

YC – Richie, I will ask a few philosophical questions and will be wrapping up the interview shortly. What keeps you going in tough times?

Richie – Truly speaking, I am blessed to have a lot of loved ones. It is good to have co-founders. I remember my parents always saying, if you are feeling low, just see how far you have come. Just simply keep going.

Book recommendation – If you are a manager struggling to lead your team, I highly recommend ‘Drive by Daniel Pink. | If you struggle with personal time management, I highly recommend ‘Atomic Habits by James Clear’. Lastly, I would recommend ‘The 4-Hour Workweek’.

YC – Quickly suggestions for fellow founders.

Richie – Sure:

1. Don’t fall into the trap of FOMO – If anyone else is doing something, it does not mean it’s right for you. Figure out the right thing for you.

2. Raising funding is not suitable for your business or product is not right.

3. Have co-founders. If you do not have co-founders, do have some pillar people.

4. There will be downs. It’s okay. After every down, there is potentially an up. And after every up, be prepared for a down as well. 

5. Take care of your employees, and take care of your customers. They are the ones believing in you.

6. Lastly, love yourself, and be true to yourself.

YC – People you would like to thank in your journey so far? Family, friends, teachers, mentors etc. 

Richie – There are so many to thank and I wouldn’t be doing justice with a shortlist. I hope one day, I can sit back and write thank you letters. Having said above, I have learned that if you ask for help, many people are willing to help. We are too afraid to ask.

Richie, it was a great conversation. Thank you for your time. Yellow Chapter wishes you all the very best in your future journey.

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