About time, they were spending > Rs. 200/- for earning Rs.1. They need to relook at there markets and work on there strategy otherwise VC funding will vanish soon.
Yeah , there is an attempt to run a Sustainable Business Model as lot of cash burn has already been done . Focus is now more on improving the Unit Economics . Finally a realization has been made by these start-ups that CX eats Discount not Food the food which they deliver .
Once you first built a profitable model and then find a way to scale it. Now it happens the other way round, first scale and then find a way to be profitable. Guess profitability is coming back into fashion.
One positive outcome of this otherwise gloomy economic outlook is that continued recession may sweep out all these inefficient, cash guzzling failed businesses. Let only the fittest survive.
Dr Aniruddha Malpani Hard to understand , such type of cash burning and then back off , seems mostly founders are working on hypothetical instead to create real sustainability
Things like this sometimes scares me. Makes me wonder if trying to build a sustainable business and focusing on cashflow early is a crime.
But then when reality hits these folks I actually feel better.
With SwiggyGo, Dunzo will have tough fight. Either they for will have to burn cash for market share or have to have patience to built the company. Being a Dunzo customer I hate their half effort to serve me.
Lack of money or visibility to raise further capital…will make many of the start ups finally think about their cash burning ability. Economic slowdown will just make many of the start ups also realise the value of how Cash generation is integral to any business.
Why such anti-startup statements?
Even most successful and seasoned businessmen who are billionaires have failed at times and made wrong decisions.
There is no one formula for success, the only common element in all successful stories is hard work and always moving forward.
Its their journey and their story, there might be some setbacks at times which i think they will learn from their own experiences and mistakes, there is no point in judging them and making such statements, anyone can be a critic and be an analyst.. you dont need a degree or certication for that.
If we are not able to add any value lets not do the name calling and find pleasure in someones failure or setback and lets focus on our own journey and create a story worth sharing.
I disagree with this statement too Dr Aniruddha Malpani The secret to success will always remain a secret besides the definition of success is highly subjective. (Just because few have accumulated substantial wealth we cant just tag them as successful and agree to all of their views). And in this context when you say that we should learn from other people’s mistakes, this is just like consuming some information; the fact is unless one executes for oneself and commit their own mistakes they never learn.
What is the time schedule for delivery of parcel from A point to B. And how they charge to client. ?? Anyone can help me to understand ! I would really appreciate thanks
This is a good public service company but not a cash cow.
Google intends to gain data of users, probably buying reports from research companies would have better helped and saved investments.
Research companies cannot reach to million people fast to do the survey and collect information where hyper-local platforms have easy access to it. Research companies will give you result on small sample with their own hypothesis which google already know from your google search.
Google has done with its part by collecting million people buying habits. They don’t even care how much money they have burnt by investing in it.
Not sure or maybe. But it has to blame with investors. Morning headline today, “Paytm Parent One97 Secures Funding From SoftBank, AliPay, Others”, though paytm had record loss last year.
Dr Aniruddha Malpani
Even after they raised money from google and so many other key investors, shutting shop is like loosing ground and loosing face value.
I dont understand one thing- where are the investor’s senses gone????
What are they putting money into??
What they r visualizing???
Failures are the kind of milestones in this whole success journey.
I second the opinion of Suresh Rangarajan there’s nothing wrong on clawing back operations, so as to eventually build a sustainable business model.
Nearly 70% of the fastest growing startups, eventually failed (shutdown) because their current resources (operations) couldn’t match the growth rate of customers.
Interesting discussions.
Be it Zomato, Swiggy, Dunzo, etc., anyone, last mile logistics has always attracted completely opposing viewpoints. After all what is so complex about Delivering from Point-A to Point-B. You can apply all AI/ML A-Star algo, travelling salesman model, Simplex, Monte Carlo simulation, Tensor flow models etc. etc., the fundamental nature of the job does not change.
It all boils down to whether the customer will pay more than what it costs you to provide the service. There are 2 parameters – a) What the customer will pay? and, b) what it costs you?
As far as what the customer will pay is concerned, for whatever reason most companies have decided not not find out (instead they outdo each other in paying on behalf of the customer). So as of now no one knows what the customer will pay.
In respect of what it costs companies to provide the service, the truth is once again, murky. Delivery boys charge double what the earlier in-house guys used to charge. So who pays the difference? Swiggy / Zomato are noiw charging customers but customers may refuse. Then? who knows?
Tech by itself being a differentiator in India (where everyone and his uncle is doing AI/ML/DL)? I am not so sure.
We shall see.
Awesome analysis.. the bottom line is delivery guys will continue to be
Expensive bcoz majority of startups thrive on them. With everyone ready to burn cash to attract them. whether u r food delivery, ecomm, last mile delivery etc its the same delivery guy who everyone needs
With any failing & not working startups companies, their current Investors & VC due diligence, thesis, potential assesment and guessing power comes into questions. ?
Anyone who started their business with passion and a focus to grow, will succeed for sure, but no business stays forever either they die or they join hands with other players, that’s one of the trend in market. There is nothing wrong or right in global market, it’s always where when and how. Starting something is easy, sustaining is the key. Usually I see few business are looking for money when they don’t have backup. Actually, I suggest to ask for money when you don’t need money to sustain but to grow the organisation. It works best.
Dr Aniruddha Malpani Unfortunately this is the story so far whether it is food delivery, e-commerce, last mile delivery or payment apps.
No one is testing what customer is actually ready to pay rather luring customers with hefty discounts and offers.
The moment you charge for profit customers will switch or ready to go back to old traditional ways.
Instead of burning Investors money, concentrate on sound profit model
#asksuneel
In my opinion say Amazon could pull it off very well, because this has to be an ancillary service and not standalone. That way cost of last mile delivery gets distributed and this way consumers pay for the ease and convenience and Amazon already has the customer acquired so no more burning of cash!!
I think we should not be so critical about the initial business model of Dunzo. Particularly not when we have the example of Amazon, which started with a similar model of acquiring more and more happy customers, while going through losses year after year. When you have a huge market share of happy customers, investments and profits are bound to follow.
Interesting discussions 🙂
Can a hyperlocal lastmile delivery startups change their style? How about getting over this problem like YoLocal – Your friend in the Neighborhood ??
About time, they were spending > Rs. 200/- for earning Rs.1. They need to relook at there markets and work on there strategy otherwise VC funding will vanish soon.
Yeah , there is an attempt to run a Sustainable Business Model as lot of cash burn has already been done . Focus is now more on improving the Unit Economics . Finally a realization has been made by these start-ups that CX eats Discount not Food the food which they deliver .
I would rather term it as Consolidation.
Abhijnan Chaudhuri yes, that is the politically correct term ?
Till when you can keep alive your startup on gimmicks,you have to show real business.
Once you first built a profitable model and then find a way to scale it. Now it happens the other way round, first scale and then find a way to be profitable. Guess profitability is coming back into fashion.
Wework has woken up a few.
Need one more spectacular flop to wake up the rest.
One positive outcome of this otherwise gloomy economic outlook is that continued recession may sweep out all these inefficient, cash guzzling failed businesses. Let only the fittest survive.
Dunzo is now in the death spiral , Once they suspend operations in few places , network effects gone, once thats gone they are doomed
Finally
It’s not their fault, it’s the fault of VCs…Few ppl are so smart in their presentation skills!
Dr Aniruddha Malpani Hard to understand , such type of cash burning and then back off , seems mostly founders are working on hypothetical instead to create real sustainability
Things like this sometimes scares me. Makes me wonder if trying to build a sustainable business and focusing on cashflow early is a crime.
But then when reality hits these folks I actually feel better.
With Investors coming on board, strategies do change
Well said sir
With SwiggyGo, Dunzo will have tough fight. Either they for will have to burn cash for market share or have to have patience to built the company. Being a Dunzo customer I hate their half effort to serve me.
Lack of money or visibility to raise further capital…will make many of the start ups finally think about their cash burning ability. Economic slowdown will just make many of the start ups also realise the value of how Cash generation is integral to any business.
Why such anti-startup statements?
Even most successful and seasoned businessmen who are billionaires have failed at times and made wrong decisions.
There is no one formula for success, the only common element in all successful stories is hard work and always moving forward.
Its their journey and their story, there might be some setbacks at times which i think they will learn from their own experiences and mistakes, there is no point in judging them and making such statements, anyone can be a critic and be an analyst.. you dont need a degree or certication for that.
If we are not able to add any value lets not do the name calling and find pleasure in someones failure or setback and lets focus on our own journey and create a story worth sharing.
I disagree with this statement too Dr Aniruddha Malpani The secret to success will always remain a secret besides the definition of success is highly subjective. (Just because few have accumulated substantial wealth we cant just tag them as successful and agree to all of their views). And in this context when you say that we should learn from other people’s mistakes, this is just like consuming some information; the fact is unless one executes for oneself and commit their own mistakes they never learn.
What is the time schedule for delivery of parcel from A point to B. And how they charge to client. ?? Anyone can help me to understand ! I would really appreciate thanks
This is a good public service company but not a cash cow.
Google intends to gain data of users, probably buying reports from research companies would have better helped and saved investments.
Research companies cannot reach to million people fast to do the survey and collect information where hyper-local platforms have easy access to it. Research companies will give you result on small sample with their own hypothesis which google already know from your google search.
Google has done with its part by collecting million people buying habits. They don’t even care how much money they have burnt by investing in it.
They were funded by Google….
Not sure or maybe. But it has to blame with investors. Morning headline today, “Paytm Parent One97 Secures Funding From SoftBank, AliPay, Others”, though paytm had record loss last year.
Dr Aniruddha Malpani
Even after they raised money from google and so many other key investors, shutting shop is like loosing ground and loosing face value.
I dont understand one thing- where are the investor’s senses gone????
What are they putting money into??
What they r visualizing???
Valuation.
After 2 years, we are now expanding from Delhi to Mumbai.
Business expansion is an indicator of healthy business growth 🙂
Great
Dunzo is service I as an entrpreneur will not be able to live without..
Most of my hyperlocal delivery is handled by Dunzo
Yes. Till they start charging you for profit. As long as they are discounting the cost, you are with them. Minute the costs are passed on.. finished.
Arun Purohit you lived without them 3 years ago, right? You will find a way to manage ?
Common sense has prevailed
This came up few days ago:
https://www.edtimes.in/how-samir-modi-is-filling-his-own-vaults-through-dunzo/
Sounds similar story where in Flipkart’s primary seller for years was WS Retail owned by Flipkart founders themselves as separate entity
This happens when you scale first instead of focussing on generating revenue.
Failures are the kind of milestones in this whole success journey.
I second the opinion of Suresh Rangarajan there’s nothing wrong on clawing back operations, so as to eventually build a sustainable business model.
Nearly 70% of the fastest growing startups, eventually failed (shutdown) because their current resources (operations) couldn’t match the growth rate of customers.
Interesting discussions.
Be it Zomato, Swiggy, Dunzo, etc., anyone, last mile logistics has always attracted completely opposing viewpoints. After all what is so complex about Delivering from Point-A to Point-B. You can apply all AI/ML A-Star algo, travelling salesman model, Simplex, Monte Carlo simulation, Tensor flow models etc. etc., the fundamental nature of the job does not change.
It all boils down to whether the customer will pay more than what it costs you to provide the service. There are 2 parameters – a) What the customer will pay? and, b) what it costs you?
As far as what the customer will pay is concerned, for whatever reason most companies have decided not not find out (instead they outdo each other in paying on behalf of the customer). So as of now no one knows what the customer will pay.
In respect of what it costs companies to provide the service, the truth is once again, murky. Delivery boys charge double what the earlier in-house guys used to charge. So who pays the difference? Swiggy / Zomato are noiw charging customers but customers may refuse. Then? who knows?
Tech by itself being a differentiator in India (where everyone and his uncle is doing AI/ML/DL)? I am not so sure.
We shall see.
Awesome analysis.. the bottom line is delivery guys will continue to be
Expensive bcoz majority of startups thrive on them. With everyone ready to burn cash to attract them. whether u r food delivery, ecomm, last mile delivery etc its the same delivery guy who everyone needs
Dr Aniruddha Malpani profitable growth should be key
Chakshu
With any failing & not working startups companies, their current Investors & VC due diligence, thesis, potential assesment and guessing power comes into questions. ?
Anyone who started their business with passion and a focus to grow, will succeed for sure, but no business stays forever either they die or they join hands with other players, that’s one of the trend in market. There is nothing wrong or right in global market, it’s always where when and how. Starting something is easy, sustaining is the key. Usually I see few business are looking for money when they don’t have backup. Actually, I suggest to ask for money when you don’t need money to sustain but to grow the organisation. It works best.
Dr Aniruddha Malpani Unfortunately this is the story so far whether it is food delivery, e-commerce, last mile delivery or payment apps.
No one is testing what customer is actually ready to pay rather luring customers with hefty discounts and offers.
The moment you charge for profit customers will switch or ready to go back to old traditional ways.
Instead of burning Investors money, concentrate on sound profit model
#asksuneel
In my opinion say Amazon could pull it off very well, because this has to be an ancillary service and not standalone. That way cost of last mile delivery gets distributed and this way consumers pay for the ease and convenience and Amazon already has the customer acquired so no more burning of cash!!
I think we should not be so critical about the initial business model of Dunzo. Particularly not when we have the example of Amazon, which started with a similar model of acquiring more and more happy customers, while going through losses year after year. When you have a huge market share of happy customers, investments and profits are bound to follow.
Interesting discussions 🙂
Can a hyperlocal lastmile delivery startups change their style? How about getting over this problem like YoLocal – Your friend in the Neighborhood ??