~

Evolution of online consumer services industry, in particular the restaurant search and
discovery, with focus on Zomato.com

Table of Contents
Acknowledgement
Executive Summary
1.

Startups
A. Birth Pangs
B. Disruptive Innovation
C. Crossing the Chasm
D. Funding
E. Critical Success Factors
F.

Increasing Returns to Scale

G. Scalability
H. Technological Advancement
I.
2.

Globalization Strategies
Zomato.com

A. Inception
B. Business Model
C. Product Offerings
D. Funding
E. Scalability
F.

Global Ambition

3.

Competitors

5.

The Road Ahead

6.

References

7.

Appendix-1 (classroom presentation)

8.

Appendix-2 (calculation excel)

Acknowledgement

We take this opportunity to express our profound gratitude and regards to Prof. (Dr.) Arun Kumar Jain,
distinguished personality in the academia and corporate. His exemplary guidance and constant
encouragement throughout the course of Managing Global Competition is commendable. The
motivation, help and guidance given by him have been a constant source of inspiration to all of us. The
intermediate project reviews not only helped us in timely and smooth work completion by avoiding last
minute rush but also helped in applying the concepts into the project more effectively by reflecting upon
the learnings through application.

Executive Summary

In this project we have attempted to study the evolution of online consumer services industry, which are
mostly startups, in particular the restaurant search and discovery, with focus on Zomato. We have
analysed how a small Indian firm like Zomato became global. We also tried to study the overall
perspective on its present scenario (domestic market) and subsequent probable paths (overseas market),
and the key critical success factors. The report tries to analyse the effect of various factors through
different frameworks including PESTEL Analysis (Macro Environment), Global Competition Matrix
etc,

on

the

Zomatos

business.

The report is prepared keeping in mind the global competition and Zomotos strategy to manage it
successfully.

Introduction
A. Birth Pangs/Inception

The idea about something like Zomato came into existence in early 2008, when Deepinder Goyal was in
IIT Delhi. He saw a need such a process arising for his colleagues who used to have trouble by
undergoing a bit of time consuming process while ordering food and researching on where to go for
dinner. The idea took off well and Deepinder officially launched it on a website in July 2008 by the
name of Foodiebay.com. Initially at the time of launch it had about 1200+ restaurants listed on the
platform which further grew to 2000+ by end of 2008. Foodiebay further expanded to other cities like
Kolkata and Mumbai.
Zomato currently operates in 23 countries, including India, Australia and the United States. It features
restaurant information such as scanned menus and photos sourced by local street teams, as well as user
reviews and ratings. The company also provides cashless payment, online ordering, white-label apps,
table reservation and point-of-sale systems.
B. Vision and Mission of Zomato
Vision:To be the global platform when someone is looking for food locally.
Mission: ission is to ensure nobody has a bad meal.
The above vision and mission is achieved by:
Helping people discover great places around them.
Building amazing experiences around dining.
Enabling restaurants to create amazing experiences.

C. Business Model
Zomato has quite a straight and simple business model which a lot of internet based companies also
follow. Zomato is a content based system wherein they are involved in content curation from
restaurants and clubs in a city. This data is then shown on the digital system in a more structured and
readable format. Further tools for researching and recommendations are built on the same platform.
As far as revenues are concerned, Zomato earns 95% of its revenue through advertising from local
restaurants and clubs. Rest 5% comes from event-ticketing and restaurant booking.

Perspective of stakeholders:
Customers Benefits
1. Zomato provides details of numerous eateries including Menu offerings, prices, budget selection, contact
information, operational hours, location of eateries, etc.
2. It also shares the reviews from fellow users to the visitor.
3. It has a mobile app for various mobile platforms, giving access to the offerings on the fly to users.
Restaurants Benefits
1. Using Zomato, eateries have got access to a large pool of customers registered with Zomato.
2. Using Zomato eateries get a platform for online visibility. This is very useful for the small eateries
which have promotion budget constraints and are not located on prime location.
3. Eateries get customers feedback through ratings and reviews on Zomato.
4. Eateries have a option to get additional visibility using dedicated marketing campaigns by Zomato by
investing small amount.
Zomatos Benefits
1. Zomato earns revenues by selling available advertising spaces to eateries on its website and mobile app.
2. By analysing the changing user trends & sales performance of eateries, Zomato encourage the eateries
to invest more and increase ROI.
3. Zomato also earns revenues through various paid marketing campaigns for its clients.
4. Zomato has also initiated table booking service, which will lead to further increase in revenue.
5. Zomato has also come up with its white-label solutions. It is a suite of technologies required to operate
an internet presence, which is integrated with eateries business operations.
A. Product Offerings
a. Advertising: Allows local restaurants to register on Zomato database.
b. DataBase: Zomato has a cloud-based POS system which enables to manage ones
restaurant operations from a centralized backend system with all necessary tools.
c. Bookings: A table management and reservation system that allows bookings for tables.
d. Business App: A free app that allows to manage a restaurants Zomato listing directly from
a smartphone.
e. Food Ordering: Online food ordering and processing system.
f. Zomato White Label: Custom built suite of technologies for restaurants.

B. Funding
a. Zomato has raised a total of $223.8 million in the following sequence (recent shown first):-

Date

Amount / Round

Lead Investor

No. of Investors

Sep, 2015

$60M / Series G

Temasek Holdings

Apr, 2015

$50M / Series F

Info Edge

Vy Capital
Nov, 2014

$60M / Series E

Info Edge

Vy Capital
Nov, 2013

$37M / Series D

Sequoia Capital

Feb, 2013

$10M / Series C

Info Edge

Sep, 2012

$2.3M / Series B

Info Edge

Sep, 2011

$3.5M / Series A

Info Edge

Aug, 2010

$1M / Venture

Since inception, 4 investors have invested in Zomato, with Info Edge being the lead investor
with 51% of equity share capital.
B. Globalization Strategies
a. Zomato wants to be the Google of food.
b. Zomatos strategy is to expand across the globe as a leading service provider. The company is touted as
an Indian startup acquiring the world
c. As part of further Globalization Strategy, Zomato has recently started online food delivery system using
Zomato money, making it an end to end experience for its customers.
d. The strategy is to hire skilled local people, to understand local preferences better.
e. Zomato believes in having a robust IT software system for seamless integration of activities and
f.

components.
Thier focus is on local tie ups, mergers & acquisition.
The entry modes adopted by Zomato for expansion include:
Mergers & Acquisitions

Localization

New Zealands MenuMania

1.4 million restaurants in 10000 cities of 22

countries

US based Restaurant search engine Urbanspoon

Developing & customizing website and app in

local languages

Italys restaurant search portal Cibando, Turkey

based Mekanist

Local language communication with customers

Lunchtime in Czech Republic, Obedovat in

Slovakia and Gastronauci in Poland

More visibility in the market as compared to their

competitors like Yelp, Burrp, Just Eat, Timeout,
etc.

C. 2EE or 3EE?

Zomato operates in a specific segment by offering details about eateries to the foodies w.r.to menu and
location. It also provides ratings and reviews on eatries. Zomato lies in the 3EE economy as it has the
ability to spread arms, think innovatively and to take a leap with confidence, as it has disrupted the
conventional restaurant delivery service. It is interesting to note that Zomato doesnt own a single
restaurant but controls businesses for 1.4 million restaurants. This has been made possible by strategic
innovations that Zomato has carried out over the years in various dimensions of its operations.
This turnaround strategy was employed in the spheres of Marketing, Operations and IT infrastructure.
Zomato found creative solutions to some of the key problems evident in the sector.
Marketing Interventions
1. The key requirement was to make masses aware about Zomato and its offerings.
2. Zomato employed both Below the Line[BTL] (advertising) and TV ads to remain on top of consumer's
mind.
3. Many of Zomatos marketing campaigns went viral due to creativity in their ads, on all platforms
ranging from print, online, social media and television.
4. Zomato believes in the fact that Content is the King. They never spam their followers wall with
inappropriate posts and use ads only around food.
5. They ensure that reply is made to each and every fan post.
6. Now a days sentiments/contents in reviews present on Zomato have the power to make or break a
7.
a.
b.
c.

restaurants business.
In 2010 Foodiebay was renamed as Zomato because of following reasons:Foodiebay was containing ebay in its name and promoters didnt want users to get confused.
A large part of series A funding from Info Edge was used for marketing activities.
Zomato used this as an opportunity to adopt a different identity and laid out its formal organizational
structure and culture.
Operational Interventions

1. Zomatos operations were less intensive as compared to the manufacturing [2EE type].
2. The challenges faced by Zomato were mostly growth pangs.
3. Zomatos operational strategy was to implement things on priority instead of creating new processes to
be accomplished.

4. Zomatos teams were getting expanded exponentially and controlling them and infusing order in the
chaos was becoming difficult.
5. The company followed global strategy and started opening business in Singapore and Dubai.
6. Question whether to hire Indians for overseas operations or hire local personnel was always been at the
back of the mind.
IT Infrastructure Interventions
1. Zomatos website is visited by 20 million visitors every month.
2. The website provides visitors with innovative features like sharing of their stories about being a foodie
and facilitates them to maintain and share their personal food diary.
3. The website automatically detects the foodies location and customizes the site automatically depending
on the foodies locations.
4. Zomato maintains an active blog. which is updated by the CEO himself.
5. New features and existing features enhancements are done almost every week.
6. Maintaining such a huge traffic is backed by a robust infrastructure and Zomato is constantly working to
improving it.
7. To mitigate the risk of spam and fake reviews, Zomato developed automated spam filters using
sophisticated pattern matching algorithms.

a.
b.
c.
d.
e.
f.
g.

C. Critical Success Factors

Merger & Acquisitions route for global entry
Strong content platform
Hiring highly motivated and enthusiastic employees
Local management reporting to Head office
Culture fit
Highly product focused
Data Analytics
D. Digital Promotions
Zomato as a startup was having low budgets and therefore majorly focused on free or cheap
media marketing platforms. It started with direct marketing techniques in the beginning like
sending SMS communication, email marketing. Zomato blasted its users with almost about 6
SMS to a user in a day, further sending direct communication mailers with catchy creatives
which increased its reach. Further, Zomato put in quite a lot of effort on their SEO techniques
which helped them rank on Google search results and attain maximum share of their traffic
through organic google traffic.

Further ahead, in the current era - Zomato has started strongly focussing on Social Media and
Mobile advertising platforms. It keeps a strong hold on the content quality on their interface and
ensures they share top quality content through their platform.
As part of social media strategy they treat the channels differently, be it Facebook, Twitter
Instagram or Pinterest. They run different types of contests, events on all social media channels.
As a test strategy, Zomato did an advertising campaign on porn sites as advertising on such
channels is way more cheaper than Facebook, Twitter or Google Plus. India ranks 4th among the
user base on such channels.
E. Culture
According to Deepinder Goyal, Founder of Zomato, it took approximately six years to establish his
companys culture.
While discussing on our project with people from Zomato, we came to know about a very innovative
concept of deskless culture. This concept is in place to communicate to people working at Zomato that
they need to be ultra flexible in their roles, locations, and reporting structures. In a recent interview of
Mr. Deepinder Goyal, published in yourstory.com, he defined his learnings on evolution of Zomatos
culture in the below mentioned manner
a. Lifestyles, motivations, communication all of these work differently from the perspective of each
country.
b. Sensitive to the local work culture, and built Zomato in these markets around such sensitivities.
c. Some countries that are culturally accustomed to working hard. And then there are some that simply
arent.
d. People in some countries are very open to candid feedback and confrontational conversations. Not in the
others.
e. People in some countries are very open to constant change. Not in the others.
f. People in some countries are generally frugal with their lifestyles. Not in the others.
g. People in some countries push boundaries all the time. Not in others.
After mentioning above points, he said that One of our biggest learnings in 2015 is that all of
the things I said above are wrong. You cant generalise anything for any country.

If you are an organisation and have built a certain kind of culture, you can always find people in
any country who will want to be a part of what you are building. You just have to look hard
enough. And look beyond the first few people who will tell you that it simply cannot be done.
You have to be a place thats more than a paycheck for people.
Further he said that we made six-day work weeks possible in the UK, in Australia, and in Europe
all markets where we were told that this cannot be done. It just came down to finding a set of
the few passionate people who wanted to make Zomato the biggest priority in their lives, and are
happy doing it. There might be an accepted way of running a business in a country, but there is
only one way to build a business anywhere in the world find talented people who arent afraid
to work hard, and give them a space to live and grow together.
He concluded by saying that when you are still building an organisation just as we are dont
be defensive about your culture. Wear it proudly on your sleeve, ignore the naysayers, and find
people who have the same DNA as yours. They are everywhere, just hard to find.
Competitors
a. Local

Swiggy

Burrp

Capital

$53.5 Million

$2.15 Million

$27.8 Million Undisclosed

$223.8
Amount
- Million
Part of Times
Internet now

Revenue

$1 Million

$5 Million

$1 Million

$1.5 Million

$20 Million

Employees

450

50

425

400

1500

890000

80000

150000

4600000

Traffic (per 640000

month)

b. Global

Tinyowl

Dineout

Zomato

Opentable

Yelp

Zomato

Capital

$ 60 Million

$ 163.3 Million

$223.8 Million

Revenue

$ 198.3 Million

$ 498.4 Million

$20 Million

Employees

625

2711

1500

77200000

4600000

Traffic
month)

(per 8600000

Zomatos Expenses: Based on the Income Statement for FY-2013-14 (downloaded from the Prowess
database) and attached as Exhibit-1, it is seen that the expenditures incurred by Zomato are mainly on
employee compensation (46.60%) and advertisement (15.71%). Travel expenses (12.61%) and rent &
lease (8.46%) constitute the other two main expenses.
These expenses show that Zomato operates in a labour intensive industry. Food business is
predominantly culture centric and consequently labour cannot be arbitraged. Therefore, only local
workforce is hired which pushes the employee compensation figures upward.

Zomato - Has it crossed the chasm?

Presently Zomato is trying hard to cross the chasm in the global markets, while it has became profitable
in Indian and UAE markets. Zomato is investing the funding resources in getting hold of pragmatic
users in a sustained manner to reach the scale and disrupt the restaurant search, discovery and ordering
ecosystem.
In Global market Zomato is competing with some already established big players like Yelp. It is
at the second stage of the Adoption Life Cycle, they are significantly investing in reaching more
markets and making the product more adaptive among user.
Zomato is currently looking on to inverting its market share on a global level It is this giant
leap that Zomato has to go through to cross this chasm and make its product adaptive to the third
phase users.
With continuous innovations and customizations in its product and business strategies Zomato
will be able to overcome this phase.
Moving ahead of the chasm

At such a level Zomato will be self-sustaining and can be the global market leader, further they
will be able to make it product adaptive to every user in the cycle and as the rule of the game is
Winner takes all in the end.

The Road Ahead

a.
b.
c.
d.

So far Zomato is profitable in the UAE and India markets.

Its biggest acquisition of Urbanspoon Is yet to publish fruitful results.
2015 will be showing greater impacts of its Acquisition strategy
As per company Zomato will continue to focus on acquisitions of companies which have a strategic
fit.
e. Zomato is currently valued at about Rs. 1000 Crore. With keen focus on global expansion it aims to
become a global brand in the internet segment.
f. With their last investment Zomato plans to enter 22 more countries within next two years along in lines
with this Zomato plans to get themselves listed on the public exchange.

Sustainable
Based upon our analysis, we feel that :
Zomato should focus on increasing their market share in the countries it has entered.
Keep eyes open for new evolving markets.
Further, it should focus on workforce management in terms of easing out work pressure for employees
to reduce churn rate.
Customized product and continuous innovation on business processes as well.
Keep growing its market share in India and UAE so that it increases its evaluation and enable them to
raise future money for future growth plans.

Culture

Startup enthusiasm: is a sort of environment which focuses on solving problems in a creative

manner, it has open communication culture and a simple flat transparent hierarchy structure.

Flexible values: Encourages a team to set their values as per convenience what matters most
is the speed and quality of work and values are formed around this only.

Hardworking culture: Zomato has a work culture which is not time bound there is no
specific hours of time that an employee has to work for the entire team at Zomato works with a
single vision to be the market leader and ensure quality and efficient delivery of every work they do.
The team has a culture of working day in and day out

Entrepreneurial Spirit: It is the attitude and approach that every employee of Zomato has they are independent, high spirited, goal bearing and passionate about Zomato in every sense.
Strategy

Top down bottom up approach: Zomato has a mix of both these concepts with its fitment as
per the business requirement. Example: Executive decision making is Top down, Workforce ideas,
communication follows a bottom up approach

Flat organization structure: Zomato has an organizational structure with very few levels of
middle management is kept between the employees and the management this helps in faster
information flow.

Startup: Fast paced, growth oriented, flexible, learned organization.

Process

Moderate and evolving: Zomato has implemented processes only where they are utmost
required currently as an organization Zomato has minimal processes which are evolving for future.

Policies implemented where they are required

Strong feedback process: Zomato rigorously listens to every feedback they receive everyone
in the management closely looks at the feedback they receive they use this continuous feedback
mechanism for future product innovations.
Strategy

Customer Focused: Zomato very actively listens to their customers feedback and adequately
measures the success of its product based upon their customers response


Data Driven: Zomato is a strong data driven company they use some smart analytics tool
like Google Analytics, Crazy Egg (Heat Maps), SPSS, Comscore, Facebook opengraph insights,
comScore etc.

Strong on social media: Zomato has a strong social media presence with 1.2 million people on
Facebook and 245000 followers on Twitter Zomato strongly frames its content strategy for social
media and uses it as a medium for feedback and customer reviews

End to end solution provider: Zomato which started as content based research engine for the
food tech industry had further built products that offer end to end solutions covering both consumer
ends and business ends.

Content is king: The core of Zomato is purely made of content all its visitors use zomato for
top quality useful content Zomato realizes this at its fundamental root and at Zomato they treat the
quality and quantity of content at the most important concern.
People: All of this is centered around the people power at Zomato.
PESTLE AnalysisSince Zomoto has major presence in India and USA, therefore the effect of Macro environment factors
of these two countries on Zomotos business is analysed below:i) EFFECT ON ZOMOTOS BUSINESS DUE TO MACRO ENVIRONMENTAL
FACTORS (USA):-

Sl. No.

FACTOR

DETAIL

POLITICAL USA like India is a democratic country and has a consistent record of
uninterrupted democratic elections.
Stable political country. Elections are held freely and fairly contested
and have been held on schedule. General elections are held every 4
years.
No major labour/trade union unrest.
One of the least corrupt country (ranked 16th out of 168 countries in
Corruption Perception Index, as per Transparency International 2015).

EFFECT
ON
ZOMOT
OS
BUSINES
S
+
++

+
++

ECONOMIC There are no exchange controls in USA. Profits can be freely remitted
and capital moved in and out of the country without restriction.

SOCIOCULTURAL

High per capita income, GDP Per Capita 54 629 USD.

USA has a high level of business freedom (7th rank in ease of doing
business out of 189 countries)

High economic freedom (12th rank out of 178 countries) (Index of

Economic Freedom determines whether individuals in a country are
free to work, produce, consume, and invest without being constrained
by the state).

++

Member of NAFTA (The North American Free Trade Agreement is a

treaty entered into by the United States, Canada, and Mexico; it went
into effect on January 1, 1994) and APEC (Asia-Pacific Economic
Cooperation is a forum for 21 Pacific Rim member economies that
promotes free trade throughout the Asia-Pacific region).

High literacy rate

Only 14.80% of the total population of 32 Million is under poverty +

line
Culture of USA is different from India. Religion, customs, food habits + / _
are different though language is common (English).

TECHNOLOGICAL

ENVIRONMENTAL

LEGAL

Highly technology based and innovative country. R&D expenditure is +

2.8% of GDP.
92% of US youths (15-34 years of age) have access to computers (as
on 2013).

++

USA is 34th in KOF Index of globalisation (out of 185 countries)

(KOF Index of Globalization measures the economic, social, and
political dimensions of globalization in each country) (As per Swiss
Federal Institute of Technology, Zurich) .

USA is a part of the Basel Convention (reg. disposal of hazardous

waste), the Convention on Biological Diversity (Ramsar Convention),
the Kyoto Protocol, the Montral Protocol, the Nuclear Test Ban
Treaty, and the UN Conventions on the Law of the Sea, Climate
Change, and Desertification etc.
Robust legal system and strict enforcement of laws.

Approval of

food items and drugs are routed through FDA (The Food and Drug
Administration is an agency within the U.S. Department of Health
and Human Services). Highest quality standards are followed and
stringent punishment (including blanket ban on product) is awarded
for the defaulters.
As per world bank data, Strength of Legal Rights Index of USA is very +
good (11 at a 12 point scale. (Strength of legal rights index measures
the degree to which collateral and bankruptcy laws protect the rights of
borrowers and lenders and thus facilitate lending. The index ranges
from 0 to 12, with higher scores indicating that these laws are better
designed to expand access to credit).
As per World Justice Project, USA is ranked 19 th out of 102 countries
(The World Justice Project is an independent, multidisciplinary
organization working to advance the rule of law around the world. The
rule of law provides the foundation for communities of opportunity
and equity communities that offer sustainable economic
development, accountable government, and respect for fundamental
rights).

++

ii) EFFECT ON ZOMOTOS BUSINESS DUE TO MACRO ENVIRONMENTAL

FACTORS (INDIA):-

Sl. No.

FACTOR

POLITICAL

DETAIL

EFFECT
ON
ZOMOTOS
BUSINESS

Since independence in 1947, India has maintained a strong

belief in democracy (world's largest democracy), with a
consistent record of uninterrupted democratic elections since
its independence.

Stable political country. Except for a short duration in 1977,

elections are held freely and fairly and on schedule at every
5 years.

No labour union unrest since independence

Moderately corrupt country (ranked 76th out of 168 countries

in Corruption Perception Index, as per Transparency

International 2015).
ECONOMI India has low level of business freedom (142 nd rank in ease
of doing business out of 189 countries) (world bank data)

GDP growth of 6.5%, Imports 479 Bn. USD, Exports 291

Bn. USD. Per capita Income is 1596 USD (World Bank
Data)
Low economic freedom (128th rank out of 178 countries)
(Index of Economic Freedom determines whether individuals
in a country are free to work, produce, consume, and invest
without being constrained by the state).

Availability of skilled manpower at a cheaper rate.

3

SOCI
Adult literacy rate is 65% (as per 2011 Census).
OCULTURA
L

As per 2011 Census, 41% of the populations is under 18

years of age.
Comprises of different customs, religions, languages
(though English is the common language) and food habits.

TECHNOLOGICAL

As per Mckinsey report, technology sector in India is one

the fastest growing sector , the most potent of these is the
mobile Internet, will likely reach 700 million to 900 million
Indians by 2025.Collectively, the technological sector in
India could contribute $550 billion to $1 trillion of
economic impact per year in India by 2025.

ENVIRONMENTAL

Extensive laws to safeguard environment viz. Air

(Prevention and Control of Pollution) Act, 1981, Biological
Diversity Act, 2002, Environment (Protection) Act,
1986,Forest Conservation Act, 1980, Indian Forest Act,
1927, National Green Tribunal Act, 2010 etc.

LEGAL

As per World Justice Project, India is ranked 59th out of 102

countries (The World Justice Project is an independent,
multidisciplinary organization working to advance the rule of
law around the world. The rule of law provides the
foundation for communities of opportunity and equity

+
-+

+/_

communities that offer sustainable economic development,

accountable government, and respect for fundamental rights).
As per world bank data, Strength of Legal Rights Index of
India is moderate (6 at a 12 point scale. Strength of legal
rights index measures the degree to which collateral and
bankruptcy laws protect the rights of borrowers and lenders
and thus facilitate lending. The index ranges from 0 to 12,
with higher scores indicating that these laws are better
designed to expand access to credit).

+/_

References
https://data.gov.in/catalog/india-macro-economic-indicators-summary-table
http://indiaenergy.gov.in/supply_coalpower.php
www.thehindu.com Business Industry
http://www.transparency.org/cpi2012/results
http://data.worldbank.org/indicator/IC.BUS.EASE.XQ
http://www.censusindia.gov.in/2011census/population_enumeration.html

www.mckinsey.com/.../High%20Tech%20Internet/Indias%20tech%20op...
http://globaledge.msu.edu/countries/india/indices
http://data.worldbank.org/indicator/IC.LGL.CRED.XQ
http://worldjusticeproject.org/rule-law-aroundworldwww.infosys.com/careers/americas/about/our-values/
http://data.worldbank.org/indicator/GB.XPD.RSDhV.GD.ZS
http://globaledge.msu.edu/countries/united-states/usresources
https://www.census.gov/hhes/www/poverty/data/incpovhlth/2014/figure4.pdf
http://www.census.gov/content/dam/Census/library/publications/2014/acs/acs-28.pdf
http://globaledge.msu.edu/countries/united-states/indices
http://data.worldbank.org/indicator/IC.LGL.CRED.XQ
http://data.worldjusticeproject.org/#/groups/USA
http://yourstory.com/2016/02/zomato-learning-2015/

ANNEXURE
What are Startups?
The term startup has been kicked around with increasing frequency over the past few years to describe
young ventures, innovative apps and huge tech companies. But what exactly is a startup?

A startup is a company working to solve a problem where the solution is not obvious and success is not
guaranteed, says Neil Blumenthal, cofounder and co-CEO of Warby Parker.
Various startup enthusiast define it as a culture and thought process of innovating on existing ideas to
solve ignored pain points of the focused ecosystem.
Startup is a state of mind, says Adora Cheung, co-founder and CEO of Homejoy, among the leading
U.S. Startups. Its when people join your company and are still making the explicit decision to
compromise stability in exchange for the promise of tremendous growth and the excitement of making
instant impact.
According to Webster, startup is defined as the act or an instance of setting in operation or motion.
According to the American Heritage Dictionary startup is a business or undertaking that has recently
started operation.
Almost all online consumer services industry came into being as startups.

D. VUCA
The term VUCA was formulated by the US Army War College. VUCA describes the dynamic nature of
the world today and represent a business environment which is characterized by:

Volatility The nature, speed, volume, dynamics and magnitude of change;

Uncertainty The lack of predictability of issues and events;

Complexity The coexistence of issues and chaos surrounding all organisations; and

Ambiguity The haziness of reality and the mixed meanings of conditions.

The above mentioned elements present the context to view the current and future state to organisations.
Top leaderships executives [CxOs] are struggling with how best to lead in a VUCA world. Today a
leader does not have one strategy or action to create and sustain organizational success.
Most of the old rules do not apply now in the evolving online consumer services industry ecosystem.
Boundaries around companies are shifting, forming global networks of complex stakeholder
relationships and restructuring the value chain elements.
E. Disruptive Innovation

A disruptive innovation is defined as any innovation which begins a new market and value network
and eventually disrupts an existing market, rearranging the value network, displacing established market
leaders and alliances. In 1995, the term was defined and phenomenon analyzed by Clayton M.
Christensen. Disruptive Innovation is a new business paradigm. It focuses on how to do more with less.
In online services, unlike brick and mortar, no physical infrastructure is required, also variable cost is
much less,and no physical product is needed at Point of Sales[POS].
Disruptive Innovation Model
The image below shows what product performance trajectories are:
Red lines show how products and services improve over time
Blue lines show the customers willingness to pay for that performance
As companies improve and innovate on their products and service the red line moves on the upper side
showing an increase in the profitability and coverage to high end customers, as these companies start
catering to high end users, the lower end again gets opened for the new entrants in the market with low
profitability share, further as these new entrants start growing they challenge the dominance of the
predecessor.

F. Can startups cross the chasm?

Online start ups are the brainchild of Technology enthusiasts (Innovators) and with the help of early
adopters (visionaries) like few venture capitalists (@ 15%) try to come out in the market. However after
the launch, the investors try to recover the investment as fast as possible. In this process, management is
put on tremendous pressure to deliver. When expectations are not met, management is blamed for the
shortfall and finally there comes a point from which innovations never recover. This is one of the
reasons why only about 2% of the startups succeed and rest are lost in abyss (chasm). Even crossing the
chasm does not guarantee success, the success depends upon the many factors like adoption by market
(external factor), what business strategy is selected i.e. whether to serve the niche or the mass market
(internal factor)?.

G. Funding
In the beginning, it is an uphill task for an idea to raise money, as investors are very cautious to part
with their money. There are enumerable small and micro players at any time trying to grow in online
services segment, jostling for a pie of the funds. Only a few of these see the light. As mentioned above,
very few investors are ready to provide back up to startups. Funding a startup is more like a chicken and
egg story. When you are successful, may investors are keen to pump in money, but to become a
successful startup, you need money. Something of a catch twenty two situation. Funding is generally
raised by either Crowdfunding, Venture Capitalist or Angel Investor.

H. Increasing Returns to Scale

Increasing returns characteristics of service companies are strengthening steadily as everything is going
software. Centralized software facilities are being developed and the user-base network effect is kicking
in. With Zomato moving into more B2B solutions like the white label applications, integrated POS
system are the next gen products that adds more value to its revenue and increases the scale for Zomato
I. Technological Advancement
All these startups came into being because of technological advancement in the field of communication,
foremost being the advent of internet. Its growing usage and far reaching effect on masses has made it
the most convenient and economical communication base used by all online service providers.
Decreasing cost of telecommunication services and increasing bandwidth has also helped in carrying the
journey forward.