UNSEEN- The Untold Story of Deepinder Goyal and The Making of Zomato
- 1 day ago
- 4 min read
After many years I have actually read a book completely; that by itself is the biggest compliment that I can give to any book.
This blog is not intended to provide a quick summary of the book (the book deserves to be read in full); it’s about sharing few key learning that I have had from it and some of the very interesting quotes & insights.
The biggest learning after reading this book and from the whole journey of Zomato and also Blinkit is around how important profitability and/or access to capital is in the highly competitive consumer tech startups space.
One would like to think that after being in existing for more than a decade, being a leader in the category and being valued at billions of dollars, survival is given; however that is not true.
Zomato was founded in 2008 as Foodiesbay.com and had its first near death experience (on the verge of running out of cash and closing down)in June 2015, till which point the company had already raised over $163 million was near unicorn. Then again in 2019, then again in 2020 covid period.
A consumer tech startup could be in existence for a decade or more, might have had raised billions of dollars and might even have turned unicorn; but that by itself does not means that the company will survive for the next decade. The only sure shot stamp of the business surviving for the coming decade is only when the business actually starts generating actual profits.
“Your best insurance is a profitable operation”- Sanjeev Bikhchandani
The playbook in the consumer start-up space requires a careful balance of chasing hypergrowth without blowing up. Slow scale-up is not an option because then others who chase hypergrowth will make you irrelevant; but you also know that chasing hypergrowth while burning money means you can blow-up anytime. And walking this tight rope is what is needed from these founders, wherein execution is what differentiates them in the end.
“Nothing beats thoughtful and hard execution. Smart, thoughtful and relentless execution is what an organization needs to consistently stay on top and produce great results”- Deepinder Goyal
Another interesting part of this book is around the role of Info Edge & Mr. Sanjeev Bikhchandani in Zomato’s journey and how good of an investment outcome it has been for them.
Infoedge made its first investment in Zomato in July 2010 when it invested Rs4.7 crores. On this investment, Info Edge has made a return of ~1050x when Zomato IPOed in 2021.
Till 2010, Zomato was working on a postpaid model wherein they ran campaigns for restaurants guaranteeing a certain number of leads and the restaurants then paid only if those targets were met. As soon as Info Edge came on board, they guided Zomato towards a pre-paid model which had been successful for their Naukri.com platform wherein restaurants paid upfront for leads and premium listing.
Another major guidance from Info Edge came at the time of IPO;
Some other interesting quotes from the book;
“It is our moral obligation to ourselves to stay curious, keep learning and pursue excellence while we still can”- Deepinder Goyal
“A start-up’s early success is often tied to the founders ability to sell. Be it their vision, building trust with investors and employees or winning over customers.”- Vivek Khare VP Info Edge
“The secret to early stage investing is to back companies and founders who will succeed anyway. With you or without you. No founder is worth his or her salt if they are looking for a new boss. If an investor is essential to their success then one has invested in the wrong person”- Sanjeev Bikhchandani
“The problem with raising too much money is that we build up high cost structures that are permanent and then if revenues does not respon or takes time to respond and then if capital is unavailable companies go under”- Sanjeev Bikhchandani
“Building a company to position it for a sale is a dangerous game and a losing proposition”- Sanjeev Bikhchandani
“There will always be naysayers and sceptics who will challenge the exuberance of founders. Yet, the wealth that founders create often benefits everyone even the critics”
“In tech, there exists something called tech debt. In essence, its shortcuts you take today that become structural weaknesses tomorrow. Culture has its version too, it decays, just as subtly. Cultural debt can be viewed as the slow accumulation of behaviours, norms and attitudes that no longer serve you but stick around anyway”
“If the service is sticky, the economics will catch up”- Deepinder Goyal
“And remember all growth begins with discomfort. Without it, there is no reason to change. We mature when we finally realize that life is not about achieving absolute peace but about effectively managing tension”- Deepinder Goyal
Ramanujan Thesis in Investing 🔗
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