How This Poster Boy of Foodtech Kept the Hunger Game Alive
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Last two years have not been the best time for the Zomato Founder and CEO Deepinder Goyal. From being the most loved company in foodtech to receiving flak, he has risen above all this to conquer it all again.
Soon after its inception, Zomato immediately became the poster boy of start-ups. Though the ball bounced high from the floor, the sooner it came down. There were murmurs doing the rounds about Zomato.
Words spread that they were finding it hard to raise funds and having a tough time to sustain. Goyal shared, “Nothing was wrong with us in general. It’s just that there were few things that went wrong. We were expanding in overseas and we were doing that very fast, which needed a lot of cash. Suddenly the market dried up. So we had to shut down a few markets.”
Talking about the developments in last two years, Goyal cautioned, “I think all the noise about foodtech not doing well is actually a noise. If 400 companies get funded in the foodtech space, not all of them can survive. At the end of the day, it’s a two-three player market.”
When asked if he lost sight of the little details, Goyal averred, “I think all big things are a sum total of small things. Strategy is more about the execution at large. So you have to actually execute all the little things until it takes a shape.”
On how Goyal as the founder and Zomato as an organization grew in the last two years, Goyal affirmed, “From operating things in extremes v/s doing things in moderation is what has changed. Tracking whether you are doing fine or whether you are successful, these are two different things. So I think those were the biggest changes in the organisation.”
While earning a lot of flak, the people in the orgnasation do get affected. Goyal admitted, “There are some people who would get affected by such things. And at the end, people who matter to the organisation are the ones who don’t get affected.”
Goyal said, as an organization they spoke more about its failures but now, they wanted to concentrate on the positives. From the growth and funding perspective, the start-up bubble was about to burst. And, Zomato got affected. The start-up bubble came to a rest and saw corrections in 2016.
May 2016 also saw HSBC slashing the valuation of Zomato to half of its value making it $500 million. Talking about the disagreement he felt, Goyal said, “It was disappointing more than demotivating because it’s like you know nothing about the business.”
When asked if he had clashes with investors, Goyal answered, “There were logical debates and discussions but there were no illogical clashes. No ego battles as such.” “There is no their way or my way. It’s about the right way,” he added.
When Zomato was being repeatedly negatively reported, Goyal spoke to Sanjeev Bikhchandani, Founder of Infoedge, who gave Zomato its seed round in 2010.
His advice was to refrain himself to speak to the media and concentrate on his work. Goyal said, “You cannot change optics just because a sector chose to comment about you and if you are doing well you can stay quiet and share the numbers and that will change the sentiment. When things are low, no matter whatever you speak people will never believe you.”
Goyal further shared, “I stopped reading and we completely started ignoring what the press used to say. Bad times does not matter. I did not read any article about Zomato for about six months.” The last quarter of 2015 saw Zomato laying off 300 people, which amounted to 10 per cent of its team.
The company came out with a clarification at that time that majority of these were from the US and other markets where operations were relatively small. Remembering the layoff period, Goyal averred, “Layoffs were hard. 2015 was tough because I had hired a lot people whom I knew personally. It's extremely painful but you just have to do what you have to," he said.
Talking about the decisions that have gone awry, Goyal admitted, “There are certain things that I did wrong. Maybe the people mistake and the capital allocation, product mistakes, launching in few countries that we should not have, it was wrong timing.” On his learnings as a founder, Goyal said, “I think there are decisions I should have taken. I should have said no to certain things. For example, a couple of country launches should have been stopped.” Answering if Zomato needs another round of funding, Goyal claimed, “We don’t need to. We have 150 weeks of runway right now.”
(This article was first published in the September 2017 issue of Entrepreneur Magazine. To subscribe, click here)