Development of Strategies to Reposition the Startup ‘O Mummy’
Ashish Raja Founder of “OMUMMY”
OVERVIEW OF STUDY: 1. Introduction- which includes knowing about startups in Bengaluru and developing an understanding of the startup ‘O Mummy’. Secondary sources of information have been employed here. 2. Survey- Questions are framed and sent to people via e mail. The answers will indicate the reasons why the startup failed and on further analyzing will help develop strategies to revive it. 3. Research Methodology- will answer why some methods are employed for survey and others are not. 4. Conclusion- which will have the suggested strategies. INTRODUCTION: According to ‘Principles of Marketing’ by Philip Kotler and Gary Armstrong, marketing research is the systematic design, collection, analysis and reporting of data relevant to a specific marketing situation facing an organization. (Philip Kotler, 2016) In this case, the organization is a startup called ‘O Mummy’ which offers food delivery and a helmet rental services. It was started by Ashish Raja, a student of Fashion Communication department in National Institute of Fashion Technology, Bengaluru. It ran successfully for four months after which it closed down. The objectives of the research which follows from the above section are as follows. 1. To understand the growth, challenges and success rates of startups in Bengaluru. 2. To identify the factors that led to the failure of the startup ‘O Mummy’. 3. To ascertain people’s perception of the name ‘O Mummy’ as a i. Food delivery service ii. Helmet rental service 4. To develop strategies to revive it. Objective 1: To understand the growth, challenges and success rates of startups in Bengaluru. How popular are startups in Bengaluru? ([1], 2016) According to an article in the Huffington Post in 2015, Bengaluru is the world’s second fastest growing start up system. Bengaluru has risen four places in the latest Global Startup Ecosystem Ranking by San Francisco-based Compass, a research firm that provides global benchmarking tools.
Figure 1: Bengaluru ranks 15 as a startup hub. ([1], 2016)
Venture capital funds also favoured Bengaluru over most other cities, with a 4x rise in the amount of funding, which is an indicator of a thriving startup scene. A total of $2.256 billion (Rs. 14,428 crores) of venture investment was made in Bengaluru last year, which made it the 7th biggest investment destination in the report. Clearly the huge amounts raised by India's e-commerce players such as Flipkart and Snapdeal made a difference. As a result of high exit values and sharp growth in venture funding, Bengaluru was ranked second only to Berlin in the Global Startup Ecosystem Growth Index. Bengaluru also had the youngest entrepreneurs, with an average age of 28.5 years, compared with Silicon Valley’s 36.2 years. Popular startups in Bengaluru: And if one looks closer to the trend which is being followed in startups, there is a certain area of market which is taken by majority of people, which are as follows: • • • •
Technology Sector Food sector Apparel Sector Car/ bike rentals
Being a metropolitan city which houses mostly students or young professionals, the startups which aim at making people's life easier, be it serving their hunger at 2:00 am in the night or helping them Zoom-a-car for the weekend are gaining importance with every passing minute. Challenges, growth and success rates of startups in Bengaluru: Challenges:-
1. Sales & Marketing - In Bangalore, many of the non-tech skills are hard to come by, as many smart minds end up becoming engineers. 2. The Fairchild alumni, Google mafia and later Paypal mafia invested in 100s of startups while also lending a lot of support. In India, such mafia are completely absent. 3. Venture investing is still in very early stages. 4. Family pressures are high. 5. Peer pressure is far more visible in a connected/gossip-loving society like India's. 6. Startup incubators of the likes of YC & 500 startups are yet to come. A few such as Morpheus are doing good job, but long way to go. 7. In the US, the majority of the startups are concentrated in the valley. However, in India the startup ecosystem is thinly spread between BLR, NCR, Pune-Mumbai and Chennai. 8. Challenges faced specifically by tech-based startups in India I. Geographical Location Challenges- One of the biggest challenges faced by an Indian tech start up is the location dilemma. India is a land of distinct culture and taste. The challenge before any tech start up is to make sure it offers a product which is universally accepted pan India across varied cultures and demographics. Not every product is welcome in every area brining tough challenges for the startup team especially for tech startups II. Challenges Attracting Global Bigwigs- While Bengaluru is considered to be a front runner in technology product startup ecosystem, not all startups have been able to attract global majors. Being discovered by top technological companies remains a big challenge for the majority of Indian tech startups. Many international global technology bigwigs find innovative tech startups through various analyst reports in their respective countries rather than through the Indian startup ecosystem. The fact that Indian tech startups are driven my technology oriented people at the top handling organizational and financial diligence is often overlooked. Since mergers and acquisitions along with being discovered by global bigwigs is part of an organizational challenge, Indian tech startups are lagging behind compared to other nations III. Lack of Strong Tech Community Pan India: Bengaluru may have a large number of technology graduates but there is a definite lack of strong tech community. For startups not located in the prime hubs of Bangalore or Hyderabad getting to meet and interact with fellow startups, people with technical proficiency, passionate about similar issues and ideas remain a distant dream. Finding developers, partners, co-founders are therefore far more difficult for an Indian tech startups compared to a startup located in say Silicon Valley. There remains a case to build a strong pan India tech support community where tech startup owners can interact and exchange thoughts in real time. IV. Taxation Challenges: The long standing demands of tech startups have been the number of taxation roadblocks that do not allow tech startups to flourish. Various agencies including the National Association of Software and Services Companies (NASSCOM) have been proactive in the past in ensuring that the taxation challenge is sorted out with the help of the finance ministry. NASSCOM on its part has said that it believes new relaxing norms for tech startups can act as catalyst for government initiatives like Make in India and Digital India campaigns. The extenuation of provisions on deduction for employment and skill development (Section 80JJAA) and R&D credits for example is one such aspect that can make sure tech
V.
startups do not have any difficulty in accessing funds and are steered cleared from taxation roadblocks Regulation Challenges: If you have a unique business idea and you are willing to take a risk and develop a technological product for the market make sure no government regulations act as a barrier. Many tech startups have witnessed the brunt of government regulations in various sectors not allowing them to fulfill their technological reach and potential. Tech startups offering financial service have been the worst affected as there is a definite opportunity for such finance tech startups if only regulations were not in place.
Success stories of startups in Bengaluru:Koramangala, a niche hub of India's Silicon Valley Bangalore has seen a huge number of start-ups sprouting up in the last few years. From IT solutions, customer-oriented websites to businesses that cater to homely demands, Koramangala teems with inspirational stories of many who are earning well with their entrepreneurial streak. 1. Rajneet Vimal created Dreamstarts.in, a free platform for startups, where employers can interact directly with their potential talents. DreamStarts.in is a social enterprise platform for Indian entrepreneurs. DreamStarts started in August 2011 with an initial investment of Rs. 30,00040,000. The aim is to popularize and boost the startups job ecosystem in India. There are more than 170 Indian startups that have used DreamStarts.in and more than 2,000 candidates have applied to the jobs listed on the portal. At Dreamstarts companies post their job ads and potential employees apply to those jobs. They do not charge anything from the employees or the employers; it's absolutely free for both. Whenever any company posts their jobs on DreamStarts, it goes through their authentication. 2. Toptomato.in is an online platform for ordering all household items. It’s not a new concept but the founders aim to make it unique with its grocery subscription. One can subscribe for regular needs like milk, butter, etc and can specify required frequency. TopTomato was launched in the month of September, 2012 by Sneha Roy and Sananda Misra, graduates from Indian Institute of Technology, Kharagpur, with varied experience of working in the FMCG sectors. The venture is self-funded and the seed capital was about Rs 5 lakhs. The initial capital was used for building the website and setting up the back-end and delivery networks. 3. Sagar Chaudhuri is the CEO and Co-Founder of an online venture, HiFives.in that operates in the employee rewards and recognition space. HiFives.in can be outsourced by any company to provide rewards and gifts to their employees. It is an online platform which helps organizations streamline and transform their rewarding and gifting process to reduce administrative overheads for the human resource team. The company was founded in 2010 by professionals from Genpact, Infosys, JP Morgan and ICICI. The investment stood at Rs 20 lakhs for first year. 4. What started off as baking for loved ones soon transformed into a business for Vaishali Maniar, 30, founder of Crumbs, a home bakery based in Koramangala. Crumbs were launched on 15 May 2012.
5. With Koramangala having a good customer base for all niche business affairs, Shobitha Kedlaya decided to start her own designer boutique, Inspira, along with her partner Smitha Rao in 2008. And today, her business is growing steadily at 40 per cent every year. 6. Uniza Tasneem is the founder and director of Koramangala-headquartered Daria System, a hospital management solution enterprise. In 2012, Tasneem started Daria System with an initial investment of Rs 5 lakh. Their domain expertise lies in managing financials of healthcare sector mainly superspeciality & multispeciality, large & medium hospitals, nursing homes, diagnostic centers, laboratories, multispecialty clinics and pharmacies by providing customized software solutions. 7. Indian Startup Hubs: According to Angel List, Bangalore boasts more than 1700 startups. Home of companies like Flipkart and InMobi, the city has seen growth of numerous startups in the past few years. Following are some of the growth stage startups, the startups that have raised huge sums of capital and the ecosystem builders in Bangalore. a. Zoomcar: Founder(s): David Back and Greg Moran Founded in: 2012 Funding: $8 Mn Series A round of funding from Sequoia Capital in October 2014, $1 Mn Seed funding from Basset Investment Group, Funders Club, Empire Angels and Lady Barbara Judge, $1.6 Mn Seed funding from A. Lloyd Thomas and Blue Cloud Ventures on Oct 4, 2013, $600k in Convertible Note in April 2013 from Rajkumar Elango, Lady Barbara Judge and Empire Angels. Zoomcar is a Self-Drive car rental service which allows you to rent cars by the hour, day, week, or month. Basically, they save you the cost and hassle of owning a car while giving you all the good parts: convenience, mobility, and independence. The company currently operates in Bangalore, Pune, NCR, Hyderabad, Mumbai and Chennai. b. Hackerearth: Founder(s): Sachin Gupta and Vivek Prakash Founded in: 2012 Funding: $500k in Seed in February 2014 from AngelPrime and Undisclosed amount in June 2013 from TA Ventures. HackerEarth is a product company that provides technical recruitment solutions for talent sourcing and skill assessment. HackerEarth allows recruiters to quickly identify and hire the right candidate from its thriving community of developers. The ranking system uses two tools to identify a developer’s skill sets: Online Programming Challenges – Programmers from around the world participate in online programming challenges, compete against each other and get ranked based on their coding abilities. c. Dailyrounds Founder(s): Nimmi Cherian and Deepu Sebin Founded in: 2013 Funding: Undisclosed amount in Seed funding in July2014 and $500k.
DailyRounds is a clinical case based academic network for Doctors which provides Pharma Analytics and e-detailing. Built by a team of doctors and coders, DailyRounds now reaches 48,000+ doctors. While 300+ new Doctors join every day. With clinical case focus the company is building a free academic network for Doctors. The app offers doctor analytics, sentiments and sponsored case studies for the Pharma and medical devices industry. Case from 50+ Med Schools including AIIMS, Beth Israel Harvard and 300+ clinical case repositories. d. Qikwell Founder(s): Raghavendra Prasad and Krishna Prasad Chitrapura Founded in: 2011 Funding: $3 Mn in Series A in November 2014 from SAIF Partners Qikwell is a startup focused on helping people be healthy and feel well. Qikwell is used every day by thousands of patients to easily access their healthcare providers. They are a healthcare professional and would like to know how Qikwell can help you connect better with your patients. e. Moonfrog Founder(s): Kumar Puspesh, Dimpalkumar Maisuriya, Oliver Jones andTanay Tayal Founded in: 2013 Funding: $15 Mn in Series A in March 2015 from Sequoia Capital and Tiger Global Management Moonfrog Labs is a startup which develops mobile gaming’s and brings engaging entertainment for everyone. They’re the team who has worked on games such as Mafia Wars, CastleVille, Bubble Safari, Cafe World, Yoville, Hidden Chronicles, Empires & Allies, games loved by hundreds of millions of people. At Moonfrog labs, they intend to squeeze their collective experience from building multiple number 1 games on Facebook into Mobile with creative new products and tools. f.
Wooplr Founder(s): Ankit Sabharwal, Praveen Rajaretnam, Arjun Zacharia,Soumen Sarkar Founded in: 2012 Funding: $5 Mn Series A in February 2015 from Helion Venture Partners Wooplr is a Bangalore-based hyper-local discovery platform which connects people with local businesses based on interests, location and social circles. And on the other side it provides businesses a credible online presence and provides them with a platform to reach out to new customers through word of mouth marketing.
g. Smartpocket Founder(s): Mayank Shah, Kiran Shastri Founded in: 2014 Funding: $240k in February 2015 from Sol Primero and Rajiv Mehta SmartPocket is a mobile app connects brick-and-mortar businesses to their loyal customers. The company was started out as a digital pocket of loyalty cards, automatically figures out the
loyalty memberships a user holds using her phone number. These cards are stacked on SmartPocket app updated with points and personalized offers.
h. PlaySimple Founder(s): Siddharth Jain, Preeti Reddy, Suraj Nalin and Siddhanth Jain Founded in: 2014 Funding: Undisclosed amount from IDG Ventures Play Simple is a Bangalore-based startup which is behind the game Guess Up where users have to guess things and they are given emojis which are seen by everyone on messaging services Facebook and WhatsApp. The game over 5 lakh downloads and the company is coming up with more games soon. i.
Avekshaa Founder(s): Rajinder Gandotra, Arun Ramu, Ashutosh Shinde Founded in: 2012 Funding: $500K in Seed Funding in December 2014 from V Balakrishnan and KITVEN Fund Bangalore-based Avekshaa provides performance, availability (ensuring continuous service to a client’s customers), scalability and security (PASS) solutions to enterprises. It made its key business verticals banking, financial services, insurance, telecom, retail and energy but later restricted its services to the PASS space alone.
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Blowhorn Founder(s): Nikhil Shivaprasad, Mithun Srivatsa Founded in: 2013 Funding: Undisclosed amount in Seed funding in November 2014 from Unit us Seed Fund Blowhorn is a Bangalore-based online marketplace for last mile logistics. Blowhorn offers a tech platform connecting customers who want to move goods quickly and effortlessly to owners of mini-trucks. It is organizing a massive disorganized market: mini-truck drivers. Mini-truck drivers suffer from inefficient utilization, sometimes not getting a booking for a load to carry for a day or more. At the same time, consumers have ever-increasing needs to move things around the crowded streets of India’s major metros. That’s where Blowhorn comes into play.
k. Swiggy Founder(s): Sriharsha Majety and Rahul Jaimini Founded in: 2014 Funding: $15 Mn in Series A in May 2015 from Norwest Venture Partners – NVP and $2 Mn in Seed funding in April 2015 from SAIF Partners and Accel Partners. Swiggy delivers food from your favorite restaurants. Their aim is on customer experience thereby they are making engagement metrics pretty uncanny for this industry.
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FXcart.com Founder(s): Mushtaq Shah Founded in: 2014 Funding: $2 Mn Seed round in March 2015 from Faraz Naqvi and Mushtaq Shah. Fxkart.com is a Bengaluru based online aggregator of Foreign Exchange Dealers. It is an online platform for exchange of foreign currency that helps to improve the consumer experience of carrying out their Forex transactions. Fxkart.com FZ LLC is a UAE based Free Zone Company having its R&D Centre at Bangalore.
m. Furlenco Founder(s): Ajith Mohan Karimpana Founded in: 2012 Funding: $6 Mn in Series A in March 2015 from Lightbox Ventures. Furlenco is India’s first and only Home Furniture Subscription Program based out of Bangalore. The company was born out of Ajith’s frustration at finding well-designed, sophisticated and affordable furniture to rent for his home. Furlenco offers a range of curated home furniture experiences, designed to suit the lifestyle needs of varied audiences spanning students to families and expatriates. It aims at offering a convenient, cost-effective and offer access to quality furniture with the added advantage of being able to exchange it at will depending on your requirements.
n. Nest away Founder(s): Jitendra Jagadev and Amarendra Sahu Founded in: 2015 Funding: $1.2 Mn in Seed funding in March 2015 from InMobi and IDG Ventures India. Nest away is a Bangalore-based online managed home rental marketplace. It is a managed online home rental marketplace which turns unfurnished houses into fully-furnished and managed apartments and provides them at affordable prices to pre-verified tenants.
o. RiverSilica Technologies Founder(s): Jagannathan Balaji & Jagadish Kamath K Founded in: 2009 Funding: $1.5 Mn from Exfinity Technology Fund RiverSilica Technologies Private Limited is an innovation driven startup located in Bangalore, India. RiverSilica’s product line PIXFIX range of Servers deliver best in class quality IP Video at lowest cost per stream using its TRU-TRANSCODE algorithms. PIXFIX Servers helps its customers to deliver video for consumer to watch anywhere and everywhere. Developing an understanding of the startup ‘O Mummy’: (Mummy', 2016)
Objective:
Their plan is to provide quality food to the students and working class people at reasonable price. Never compromise with the quality and hygiene of the food. Ensure that right food is delivered to right person at right time. Offer variety of North Indian meals. We are Customer Friendly. Vision:
Vision is to expand business across Bengaluru and Karnataka. Are planning to expand in the food sector. Planning to cover all the top notched colleges of Bangalore as their food partner. Also looking to setup the franchises all over the India. Basic Moto:-” We take care of their customer’s diet and they take care of my business.” Business Strategy:
‘O Mummy’ has categorized their business Strategies into various segments: Managerial Basically as a startup they hire as a staff 3 people:•
Cooking
•
Delivery
•
Accountant
Marketing People of all age group need food and in affordable price. On the basis of daily working we have segmented the society into following Categories:•
Student
•
Working class
•
Startups companies
•
Night Crowded people
Primary target customers are Students and night crowded people.
Production •
also offer regular meal monthly tariffs
•
serve both Veg & Non-Veg Meals
•
constantly add New varieties in their menu
Planning
Standard Operating Procedure(SOP) Order Receiving
Verification
Availability
Delivery
Technical Logistics Logistics in the food service industry is the backbone. People like their food when it is fresh and warm. •
Are tied up with the Swiggy for their logistics.
•
Also provide their delivery service in nearby areas.
•
Provide good and quality packaging so that the customer eats fresh and well.
Finance Month 1
Swiggy 10 customer per day
NIFT 10 customer per day
Total 32 per day
Personal Contacts 12 per day
Food Distribution
Vegetarian Meal 33.33 Category
No. customers
Non-Veg. Meal Veg. Meal
of
Avg. Selling Cost
Profit
21
Rs. 1100 @ Rs. 53
Rs. 1700 @ Rs. 81
Rs. 600
11
Rs. 350 @ Rs. 32
Rs. 720 @ Rs. 65
Rs. 365
Profit @ Rs. 965 per day. At the end of the month total Income
Overhead Expenses
66.66% Avg. Mfg. cost
Month 1 Summary
= Rs. 28,950.00
Non Vegetarian Meal
Rent:
Rs. 10,000/-
Delivery:
Rs. 5,000/-
Cook:
Rs. 5,000/-
Petrol:
Rs. 1,500/-
Electricity Bill:
Rs. 1,000/-
Extra Maintenance:
Rs. 1,000/-
Total:
Rs. 23,500/-
Total Profit:- Rs. 6,500/-
Month 2
Swiggy 15 customer per day
NIFT 15 customer per day
Total 47 per day
Personal Contacts 17 per day Category
No. of customers
Avg. Mfg. cost
Avg. Selling Cost
Profit
Non-Veg. Meal
31
Rs. 1700 @ Rs. 53
Rs. 2511 @ Rs. 81
Rs. 810
Veg. Meal
16
Rs. 512 @ Rs. 32
Rs. 1040 @ Rs. 65
Rs.530
Food Distribution
Vegetarian Meal 33.33
Non Vegetarian Meal 66.66%
Month 2 Summary Profit @ Rs. 1340 per day. At the end of the month total Income = Rs. 40,200.00/Overhead Expenses Rent:
Rs. 10,000/-
Delivery:
Rs. 5,000/-
Cook:
Rs. 5,000/-
Petrol:
Rs. 2,000/-
Electricity Bill:
Rs. 1,000/-
Extra Maintenance:
Rs. 1,000/-
Total:
Rs. 24,000/-
Month 3
Swiggy 20 customer per day
Total Profit:- Rs. 16,200/-
NIFT 25 customer per day
Total 65 per day
NIFT 25 customer per day Category
No. customers
Non-Veg. Meal Veg. Meal
of
Avg. Mfg. cost
Avg. Selling Cost
Profit
43
Rs. 2300 @ Rs. 53
Rs. 3500 @ Rs. 81
Rs. 1200
22
Rs. 700 @ Rs. 32
Rs. 1450 @ Rs. 65
Rs.750
Food Distribution
Vegetarian Meal
Non Vegetarian Meal
33.33
66.66%
Month 3 Summary Profit @ Rs. 1950 per day. At the end of the month total Income = Rs. 58,500.00/Overhead Expenses Rent:
Rs. 10,000/-
Delivery:
Rs. 5,000/-
Cook:
Rs. 5,000/-
Petrol:
Rs. 3,000/-
Electricity Bill:
Rs. 1,000/-
Total Profit:- Rs. 33,500/-
Extra Maintenance:
Rs. 1,000/-
Total:
Rs. 25,000/-
Profit Graph:
Analytics 80000 70000 60000 50000 40000 30000 20000 10000 0 Month 1
Month 2 Income
Average monthly growth rate Month 1-2:- 49% Month 2-3:-7% Projected cost: Roti Maker-2000/ Utensil-600/ Billing Machine-4000/-
Expenses
Month 3 Savings
Month 4
Packaging-20000/ Advertising-10000/ Table & chair-5000/ Kitchen equipment-5000/ Mobile Phone-5000/ Grocery Stock-20000/ Rent/-10000/Other:
Looking into the other segments of the market ‘O Mummy’ is also providing helmet rental service within HSR Layout, Bengaluru targeting pillion rider among students and Office goers.
RESEARCH METHODOLOGY: Both secondary and primary sources of information have been employed. To develop an understanding of startups, online sources like websites and newspaper articles have been referred to. To ascertain the reasons for failure of the startup and suggest strategies to revive it, a survey has been conducted. Nonprobability method of sampling has been employed. A combination of convenience sampling, i.e. choosing the easiest population members and judgement sampling, i.e. judging the select population based on some characteristics and then giving them the questionnaire has been used here. (Philip Kotler, 2016)
Convenience sampling: Students in NIFT have been targeted. Judgement sampling: Selecting the students who have heard about O Mummy among the students of NIFT. MARKET SURVEY:
([2], 2016)
DATA ANALYSIS: Most of the people who order from here have less than Rs.10000 as their monthly personal income. Not many people are aware about it, rather NIFTians or people staying near NIFT know about it, either through social networking sites or their friends. People who have availed their service (food) are happy with the quality, quantity and service provided to them but their response towards the price range, time taken for delivery and variety is not very favourable. Whereas, O Mummy as a helmet rental service, not many people (including NIFTians and people who have availed their food service) are aware of it. Also, the ones who know about it are doubtful about the availability of the helmets when needed. People with a monthly expenditure of less than Rs.10000 use bikes; they need to use helmets frequently and can rent from here. CONCLUSION: •
•
• • •
Primary target market is for college students. i. Therefore, the price range for food as well as helmet rentals should be pocket friendly (students in general). There is a need for proper marketing. i. They should bank more on Digital Marketing but also emphasise on, on-ground promotions, example: Posters, pamphlets, word of mouth, etc. People are more interested in Indian cuisine. i. So, they should get more variety in the same. The best time for people to avail their food service would be evenings since they are looking for dining options and that too, at very cheap “ghar ka khana” price and taste. As far as helmet rental is concerned, a lot of people don’t know about it: i. because of the name of the service ii. lack of promotions
O Mummy as a food delivery and helmet rental service need to keep the above points in their mind if they want to revive themselves.
Hence, all the four objectives of the research has been fulfilled.
BIBLIOGRAPHY: [1]. (2016, 11 22). Retrieved from Huffington Post: http://www.huffingtonpost.in/2015/07/29/bangalore-is-worlds-2nd-fastest-growing-startup-ecosystemhas/ [2]. (2016, 11 22). Retrieved from Google: https://docs.google.com/forms/d/19VCLf4HWWPhilip Kotler, G. A. (2016). Principles of Marketing. Bengaluru: Pearson.