Food delivery startups are a dying breed!

Source: Unknown

Sitting on the bleachers and commenting on the game may seem like a fool's errand, but it's something that allows coaches and fans to see the larger picture of the entire field. From the outside, I can see why many 'food-tech' (you'll see why it's in quotes later) companies have failed in the recent past. Of course, some of them may have succumbed for reasons more personal or internal, but in a broader view, the issues dogging this sector have common parameters of failure.

Defining Food-tech as a concept

I am fastidious when it comes to using words. As much as possible, I use and I want others to use the right words to describe their ideas and so when I hear, "food-tech", it gets me shaking in my boots. Adding the word 'tech' after a noun doesn't make that a new line of industry and so, food-tech isn't anything new, and in my belief, anything great. Let me elaborate.

What's the name that comes to your mind when you think of food-tech? Swiggy? Foodpanda? If you did, the good news is that you are like a majority of the people out there. The bad news is that you are wrong.

Swiggy (and the likes) are not in food at all. They are in logistics. Just like Amazon is not in merchandizing, but in logistics. And just like Amazon, Swiggy is in the business of creating a framework of supply-chain for food deliveries.

Source: Shutterstock

When I think of food-tech, I think of rotimatic.com, a company that's (for years) developing a machine that can create food. Or I think of Vinturi, that created a device that uses scientific and mechanical principles to aerate the wine as you pour it in a glass. These are a marriage of food and tech. Converting menus and enabling tracking of your food parcel on your phone is not.

A logistics company without logistics?

One thing a new breed of food-logistics companies are doing is learning from the mistakes of the previous generation. The lack of understanding led many of the older generation companies to believe they were in the food business, while they were clearly in the logistics camp. This misbelief caused them to ignore building their operations and rely on other companies to actually take care of their deliveries (logistics). It's like outsourcing what was outsourced (to you).

Heavy dependence on logistics companies to deliver the food that you promised (your customers - the restaurants and their customers - the patrons) you'd deliver, is what caused most of these companies to fall short and die. One of Spark10's cohort companies failed exactly because of this reason.

Faasos is a company that is trying to do things differently. They own the kitchens and they own the logistics-chain. And so are controlling everything within bounds. No more reliance on others to make the food or deliver it. And no more touting that you do either when you clearly don't. Technically, they are not a food tech company, but they are a food logistics company that's doing something right.

Someone dumbed it down!

If my arguments seem reasonable (I had to do my best within word limits) and logical, why on Earth are people calling it 'food-tech' when most of the companies are anything but? Well, the bulk of this misnomer lies with the investors.

The problem with most investors (including the giants) is that they are good at one thing - making money based on some good decisions, but bad at everything else - like understanding someone else's business. And so, I am guessing the earliest thought process of the investors in this sector would be something like this:

"Hmmm, should I invest in this business? But what the heck is this business? They are not a restaurant? And they are not like FedEx? They are digitizing the menus and automating the processes involved? Hmmm... They are, I guess, in the food industry and they are using technology to automate stuff... I get it, they are a food-tech company (hallelujiah!)!"

Why did the first wave fail?

Primarily, these companies failed because they bought into the naive (or perhaps even ignorant) investor's BS and believed they were 'food-tech'. Had they considered themselves as being in the logistics of food supply, they perhaps would have strategized better.

Secondly, aggregation sucks. Yes, it's nice for all of us to find one single list for all of us to get things, but the concept's novelty wears out soon. It was time for us to get our food delivered by one (or few companies), but once that's done, then what?

The trend in Indian startups is to aggregate and/or automate everything that is/was done manually. This is very similar to the early days of IT boom where you could get an "X Management System" made. Remember the days when you saw 'Hospital Management Systems', 'Video Library Management Systems', 'Attendance Management Systems', etc.? Well, this is like those times. Eventually, aggregation/automation will die, if not dead already.

Thirdly, eventually, people will see through all the BS. There will be copy-cats and because people like being loyal in the face of lack of novelty, there will be a clear winner who'll take a piece of the pie so big, that it leaves nothing for anyone else. Investors are sensing this and are no longer excited about this.

What can you do?

If changing your business or line of work is not an option, here's something you can do.

1. Find a niche. Go to markets that are not being served. Like small towns.
2. Be a market-place aggregator for things that are not being aggregated (like laddoos).
3. Stop deluding yourself with fancy words. You are a delivery guy with a lot of menus. Of course, unless, you are not!

I would like to hear your comments on the subject. Post your comments here or reach out to me on twitter (@raviwarrier) if you want to talk more. Cheers!

3 Pointers for a Perfect Pitch

Here are my three pointers for making a perfect pitch.

1. Invest in your presentation deck

Unless you are a successful graphic designer, don't try to create your own decks. There are two options out there for people who are not creative (enough) or (which is more often the case) who don't have the time to spend 38 hours working on PowerPoint, Slides or Keynote.

a. Buy a template. Sites like www.graphicriver.net have tons of templates for business pitches. Pick one and start editing. (Disclaimer: You will end up spending upwards of an hour to select one from dozens of awesome templates. But this is much better than wasting eight at trying figure out the right font and color for your text.) Good templates cost between $40 - $65.

b. Hire a designer. You'll find good designers on sites like www.PeoplePerHour.com or www.deviantart.com. Of course, this option is a little more expensive with the minimum that you might end up spending is $150.

2. Get your facts and numbers straight, consistently

Very often, I see startups pitching number only to see a completely different number in the business plan. The excuse - "Oh, that's an old plan. I didn't get time to update it!" Now, as a consultant/coach, it doesn't matter to me much, but it doesn't really shout out, "Trust me, I know what I'm saying!"

Make sure all your collaterals say the same thing, including jargons/terms, tag lines, descriptions, etc. In other words, all your collaterals - brochures, decks, plan documents, flyers, banners, etc. have to be at the same version.

3. Rehearse like you were Bill Murray in Groundhog Day (or Tom Cruise in Edge of Tomorrow)

Practice makes perfect and if you want to make a perfect pitch, guess what... you have to practice. A lot. At Spark10, for the first cohort, we (the startups) practiced every day for one month. And what happened on Demo Day seemed like a miracle to the audience, with people exclaiming that the 9 pitches they heard were the best they ever heard.

There's another benefit, apart from delivering it perfectly, of practicing a lot - it helps you update your presentation, your story or narrative, your sequence, your tone, etc. based on what works best. Call it the evolution of your presentation by natural selection.

Preparing a Pitch Deck

The best pitch is when it flows naturally out of you. And the only way that can happen is when you narrate the story of your idea and/or startup and not when you talk numbers or facts.

Here are some tips to help you make a better pitch deck.

1. Remember the application is a tool that supports/betters the action - the presentation.
2. Take a notebook or better still, a long-pad (also known as a legal pad).
3. Draw a vertical line dividing the page into 2/3rd and 1/3rd sections. Do this for all the pages that you will consume.
4. Close your eyes and imagine the following:
• You are standing on the stage or in front of the room.
• You are wearing nice formal clothes (or clothes that are appropriate for the meeting).
• Your audience - the investors, are all sitting in front of you. They are eager to hear what you have to say.
• You are confident and poised. 
• And finally, you start your speech.
5. In the left section, start writing your speech, as the words come to you. Do not bother about grammar, correct words, jargons or impressive terms; just write them as you hear yourself talking in your imagination.
6. Do not stop writing until you have narrated your story and reached the end of your speech.
7. Take a fresh sheet/page.
8. Edit the speech. Move sections around to make your narrative more interesting. Swap lines. Add in words that you missed out the first time. (Don't forget to vertically divide the pages all the time)
9. Repeat until you are happy with what you have written.
10. Once you have written your speech, it's time to start thinking about your deck.
11. For every line, paragraph or section you have written, draw a mock screen in the right section. It doesn't have to be a work of art, but just some scribbles and doodles to give you a fair idea of what your screens should/would look like.
12. Once you have the sketch (and the related text), it's now time to fire up that presentation application and make the fluid pitch deck.

Some additional advice:

• Invest in a good presentation template. Use sites like graphicriver.net to find the right template.
• Invest in ensuring your casing is correct. Learn the difference between sentence case and Title Case.
• If you see a squiggly line below any word or sentence. Fix it right away.
• Be consistent with words and terms. Especially with currency values. If you use the currency designator code (INR, JPY, USD, GBP, etc.) or currency symbols ('₹', '¥', '$', '£', etc.) then use them through the deck. Do not interchange codes with symbols.
• Search the internet for must-have contents in a pitch deck. Make sure your story/narrative covers all those topics.
• Once your deck is ready, that's just 30% of work done. The 65% is the rehearsal and the 5% is the delivery.

What Makes an Entrepreneur an Entrepreneur

When anything goes beyond a tipping point and becomes a part of the vocabulary of people en mass, the word defining it or associated with it, are used with a liberal dose of poetic license. The term, "entrepreneur" is one such word.

I promised myself when I took on the Spark10 Insights project that I will not get into an endless tirades and become a definition nazi, and I so I won't go back on my word. Not yet, at least! But before we move on to my definition of the term, there's one bit of etymological deviation that we must take.

The word "entrepreneur" comes from the French language, in which it means - a businessman (or businessperson, to be gender neutral). And that's it - an entrepreneur is just another business-person.

Nowadays, of course, it doesn't just mean a business-person. It means a lot more. And rightly so! Words and their definitions evolve over time to encompass new meanings and usage based on how the people use it in common parlance. So, what's my take on the meaning of the word 'entrepreneur'? When can you call yourself that?

There's only one thing, in my view, that makes an entrepreneur different from a business-person. In essence, she's everything a business-woman is: a) a risk taker, b) wants to make money, c) wants to engage in commerce, d) creates jobs for others (directly or indirectly), e) adds to the economic growth of the society, etc.; but has one attribute that makes her different, special.

She wants to change the status-quo and that desire is the fuel that causes her to embark on the journey of doing business on her own.

The change could be anything - an improvement in the product or service, a reduction in prices, increase in the value perceived by her customers, making anyone's/someone's life better or bridging a long existing gap. It doesn't matter what it is, just that it needs to change.

So, if you are not changing the status-quo, you are just another business-person - think of another person opening a grocery store in the neighborhood. There's nothing new there. At least, until the first online stores opened up. That guy was an entrepreneur! Everyone else, who just copied his model, didn't change much of anything and hence, in my eyes, is just another business-person.

One-liner: You are an entrepreneur only if you are changing the status-quo, otherwise, you are just another business-person.