Replies to This Discussion

Permalink Reply by Abhik Prasad on July 31, 2012 at 11:40pm

Hi Krishna,

Just curious about a few things which a potential investor might ask.

How is current burn rate of Rs 2.5 broken up (or what does it comprise of )

Are you now charging all customers or do you still have a free plan ?

Is the pricing in your current plan(s) operationally break even ? E.g. if you charge Rs 100 and are losing 10 bucks per order, then the problem potentially grows as you scale.

Are restaurants offering you a commission for deliveries ?If yes, how much ?

How many people do you have for deliveries and the average no of deliveries per person / per day ? Also how many in management and how many in operations.

What's your delivery model like ? Its it a hub and spoke where your delivery person goes from your office to a restaurant(s), picks up the order, delivers it to customer(s) and comes back to office. And Repeat.

Or is it a star model where the delivery guys are based around different restaurant clusters, orders sent to them and they pick up and deliver to customers

Your current website is pretty basic ? How much of an investment do you see happening in technology in the near future ?

If you aren't comfortable disclosing details in a public forum, you could probably send me an email at abhik@experiamedia.com

cheers

abhik

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Permalink Reply by Neil Bahal on August 1, 2012 at 12:38am

Hey guys,

I have sent you an email.

Regards

Neil Bahal

MediStation

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Permalink Reply by Pranay Srinivasan on August 1, 2012 at 1:16am

Hey Krishna,

Sent you an email. But to echo whats the common thread on the comments thread, is there a revenue model to get profitable off?

Also, have you considered memberships and offering a percentage of their memberships as a discount? Or charging a service fee to deliver?

Or to tie up with home-makers / house-wives who can become your kitchens? that saves you money from restaurants and offers you decent margins as well. Devise a menu and deliver within a neighborhood. Just need a cycle and a delivery walla and lots of phone followup.

happy to speak further.

Cheers,

Pranay

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Permalink Reply by Sai Pothuri on August 1, 2012 at 9:43am

I am sorry if i am being some thing rude . My Main thing is this  " And then something happened. We ran out of money  "  because let me tell you few points

1) you are good with numbers

2) you are good with market strategy

3) you are good with customer and increase in customer level

    if you are good with all above then y suddenly something happened and you lost all the money.. rather you might tell us what the wrong strategy lead it to empty the pockets or what ever the wrong finance you gone through that collapsed your earnings?

 You can up with scratch and built some thing and lost the finance and look for some other money like VC or angel or what ever and if tomorrow the same thing happens the you respond like the same " And then something happened. We ran out of money "   

My straight question is.. if your strategy is not good then you might collapse at early days of business but you came across good orders, good volumes, good customers who might give you more for small items like coffee etc etc then suddenly what happened? is it miracle or with bad strategy you followed and not willing to expose to people ?

Thanks

Sai

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Permalink Reply by Krishna Chidambaresh on August 1, 2012 at 2:51pm

Hi Sai,

Thanks for asking those questions. When we started Yo! Potato, the model was a bit different. We were going to make a lot of money from restaurants and keep it free for consumers and wow them. We eventually realized that wasn't going to work for various reasons including price wars which was going to get worse as more entrants come in, less differentiators between players from restaurant's point of view, etc. The plan in the first few months was to understand the customer ordering pattern, figure out the top restaurants most orders go to, partner with them, make loads of money from those orders. But, since we offer customers to order from any restaurant, there's always going to be a lot of restaurants they want food from that we don't make money. Hence that model could have worked only if we get higher kickbacks from restaurants we partner with to compensate for orders that's not going to make us money.This we figured was not going to happen from restaurants anytime soon.. The current model charges customers but retains all the differentiators consumers value. Since the new model fell in place only in July, it is going to take us a few months before we will see serious money.

Hope this clarifies.

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Permalink Reply by Rohit Naidu on August 1, 2012 at 4:51pm

Krishna,How many delivery boys you have?how much salaries you paying?how much money you spending on fuel and other expenses?Cuz,2-2.5 lakh burnout per month for a food devilery portal seems quite high.Are you adding you and your co-founder's salaries too?

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Permalink Reply by Krishna Chidambaresh on August 1, 2012 at 4:55pm

Thats inclusive of everything Rohit. The burn rate just for COGS will be around a lac. We have 10 riders, 2 order takers, 1 Business manager and 2 promoters. Thank you.

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Permalink Reply by Deepak Shenoy on August 3, 2012 at 2:42pm

But you recover the COGS, no? I mean when people get the food, they pay you, right?

So the real burn rate is 1.5 lakhs? For 10 riders I assume it's like 8k pm or such, and the rest as establishment cost.

Next, math on orders. 30 days in a month, 10 riders, 900 orders p.m. = 3 orders per rider per day? Even that is likely to be something concentrated on weekends etc. That's very very little, no - why do you even need 10 riders? (Just something to think about)

Third, riders use petrol bikes? That's gotta cost serious moolah. Why not use lunas/mopeds, or even bicycles (if you're local)?

Let me be blunt. I think you're way outspending and you're way early in the process to get large funding, so it has to be a personal thing (i.e. someone trusts you, likes you and will fund you). For that, a forum like this will have stupid guys like me who keep poking holes, and which is not of great help to you. Let me assume that you find a godfather and get money, and offer you some suggestions instead.

a) Get to a location where there are small offices and offer lunch menus of local or other restaurants (non ala-carte) in a simple one pager, for delivery. Avoid shops or large commercial complexes which have their own caterers.

b) Offer to pick up lunch dabbas of people in offices. 

c) create custom "specials" of popular restaurants and offer them on your web site, a different one each week. Like a biryani special including a side dish and coke, with a 1, 2 and 3 item types.Hopefully if the demand improves the restaurant will find it meaningful to give you a piece of the pie for the business and the pre-planning. 

d) Get fundoofied containers on the cheap through mass production. Use them instead of restaurants, hopefully get them to pay you. Sell advertising on the container. 

e) When you know you'll lose money, refuse the business. That's the real lean thing about business. 

Hopefully, this is of some help. Sorry for my bluntness. That's how I am.

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Permalink Reply by Bhavya Sahni on October 14, 2012 at 11:40pm

If I might, what is the role of the business manager?

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Permalink Reply by Krishna Chidambaresh on August 16, 2012 at 3:56pm

We were providing the service for free for consumers till Jul which got us a lot of traffic so much so that we even had to capacitate ourselves expecting jump in volumes consecutive months.We were almost growing at 50% m-o-m. Hence higher staff strength and burn rate. We will be able to manage with half of that currently given that we have pivoted into a "premium" model. We can bootstrap like crazy like we do currently and keep it at 1L. But, this is only good as long as we strive to keep the sales volume low. If we market ourselves through restaurants, we would need more people and need them quick.

If interested, I'd be happy to share our financials if you are considering an investment. 

Thanks for the inputs!

Cheers,

Krishna

 

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Permalink Reply by Sai Pothuri on August 1, 2012 at 8:15pm

Dear Krishna As Expected... Good and

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Permalink Reply by Ashish Kothari on August 1, 2012 at 7:31pm

Hey Krishna, i guess you have landed up at right place. Just go across the blog you will find a recent post which is from a guy in US or UK and he is willing to invest in people like you even in small bits, he even has lot of his friends who are willing to invest. So may be this be of certain help to you and keep going buddy you will eventually figure out the right thing for you.

Rgds,

Ashish Kothari

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