‘Shutting Down Not The Right Approach For Startups’ Essay
The startup success rate in India is just a little more than 3 per cent. While most of the startups are shutting down, there are some that held to tough times and are now emerging winners as their profits grow and losses shrink. One such organization is Foodpanda, the food delivery app. According to Rocket Internet’s financial results for the first half of 2016 (calendar year), Foodpanda’s net revenues grew 72 per cent in H1 2016 as against the same period last year.
“If you believe in your business and you know it’s going to work and make money, there’s no backing down,” said Gagan Arora, CMO, Foodpanda, speaking at Samvaad, a leadership conclave organized by the students of Management Development Institute (MDI), Gurgaon. Gagan Arora, who was also the co-founder of PrintVenue, is now one of the top decision makers at Foodpanda. We spoke to him on entrepreneurship, coming out of tough times, technology and more on the sidelines of Samvaad 2016. Here’s what he told us in a quick candid chat:
Food startups are going through tough times. What would you say to entrepreneurs in such times?
Everybody is going through tough times because the situation is tough. One should never forget that for a business to be viable, it has to be profitable. As soon as one figures out how they are going to make money in a particular industry, they’ll be the winner. Fortunately, we are the ones who are operationally profitable and it puts us in a better situation to make profits in the near future. The clear focus for our company right now is how to make money in the next two years.
How do you see the food business of India in the next few years?
It is definitely one of the best businesses to get into. You don’t have to remind somebody that they need to eat. A person generally eats three times a day, so the potential in the food sector for these three times is already there. Given that more and more population is going busier, the need for delivering food is growing each day. We have a huge population that resides in cities. They are the target consumers. They are busy with jobs. We are focusing on how to get them food on time.
How far is technology helping in this whole revolution in food technology?
At no point, do we let a handshake go without an information shake. This, in the sense that if the food has been delivered from the vendor to the consumer, we keep a tab of it and each party involved is accountable. The role of technology is extremely important. It has taken us around one and a half years to come at this stage where every second moment, food gets ordered, it’s all real time.
Investors these days are following the herd approach. Do you think that’s affecting food startups?
This was the case six months back, but not as of now. Investors are getting more tactical about funding now. It’s a proactive call that I’ve seen that they are taking right now to conserve cash for the right opportunities. Earlier the race was about capturing e-commerce, but now the approach is to get hold of viable and sustainable opportunities.
One sentence for entrepreneurs/startups who are going through tough times.
If you know what you’re doing and you really care about it, give it your 100 per cent, don’t back down.
Does that mean shutting down is not an option?
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Shutting down is not the right way. If you know it in your head that it is going to work, never get away from your target.