A few trips to India ago, I wrote a piece on Deep Kalra of MakeMyTrip.com, an Indian online travel company that I guessed would be the first big Indian ecommerce IPO. Yesterday, the company made good on that—listing on Nasdaq and surging nearly 90%. It fell 5% today, but that’s not bad considering yesterday was the best one-day pop of any American IPO since 2007.

Does that mean a flood of Indian Internet IPOs will follow? Not necessarily. MakeMyTrip is a rare company in India, where Internet penetration is low and more money has been lost than made hoping it would take off faster. Here’s what Indian entrepreneurs should learn from what Kalra did right.

1. He was committed. Kalra started MakeMyTrip in 2000—when Web mania and private equity funding first swept through India. After the crash, foreign investors either sold off stakes or outright reneged on deals countrywide and only the most stubborn entrepreneurs survived, among them Indiagames, Indiabulls and MakeMyTrip.

In MakeMyTrip’s case, SARS also tanked the Asian travel market, making the environment even worse. With a background in banking and a wife and newborn baby, getting a real job was the sensible thing to do. But great entrepreneurs don’t do the sensible thing. Kalra and two other managers bought back their equity and worked without salaries for 18 months. More than a third of the staff walked out when he asked them to take 40% paycuts. But a year later, the company broke even and he raised money to invest in growth again.

I’ve met at least 50 Web entrepreneurs over a few trips to India. Most are based in Bangalore, most worked at a multinational, made a huge salary saved up money and quit to start a company. Nothing wrong with that. What worries me is how many of them have said the equivalent of, “If this doesn’t work out in a year or two, I can always get another multinational job.” As Kalra’s example shows, that’s not how it works. Entrepreneurship is about commitment, even in the Internet where products can be launched over night– especially in India where the online market is growing, but it’s growing slowly.

2. Invest in Culture. It’s worth noting that when Kalra asked his staff to take paycuts in those dark days, 17 left but about 25 stayed. He wanted to make sure he rewarded them for their loyalty and invested in the company’s culture, inspired greatly by Zappos’ culture book. He organizes annual staff retreats and offered to pay half for any employees that wanted to attend TEDx when it came to Bangalore in 2009. Frequently startups in India complain that multinational jobs have lead to a culture of mercenaries who don’t value stock and will leave for a higher paycheck. But Kalra’s experience has proved that like anywhere else, retention is possible if you build the right culture.

Read the rest at:

http://techcrunch.com/2010/08/13/what-indian-entrepreneurs-should-learn-from-…