IDEAS ARE EASY, IMPLEMENTATION IS NOT

“Your unhappy customers are your greatest source of learning” -Bill Gates, Microsoft co-founder. 

Dreaming of a lucrative startup is normal. Failing the desire for a successful startup is normal. Not trying again after failing, that my friends are not normal at all. India has the third-largest ecosystem for startups. On an average based on the last few years, 1,350 new startups are launched every year in India. Of these around 80-90% fail within their lifespan of 5 years. Similar is the case of a startup named Yumist. 

Founded by the ex-CMO of Zomato, Alok Jain, Yumist was supposed to be a service that would help clear the clutter in the food delivery space. Alok Jain also had the partnership of Abhimanyu Maheshwari, who had a fair amount of knowledge and experience in the food and beverage sector.

 So what is Yumist? 

In 2014, Yumist came into the market as a food delivery company. You see, their main point of differentiation from food agents like Swiggy and Zomato in Yumist was that instead of acting as a mere mediator among restaurants and customers, they prepared the meals themselves to give them a homely touch. Their main motive was to venture into delivering comforting, simple, and home cooked meals. They didn’t just want to just limit their roles to delivering food from restaurants to customers. In fact, their brand offering was as follows: 

“We make delicious, homely meals available in under 30 minutes through the use of technology and a sophisticated logistics infrastructure.”

 Nothing is more inspirational than the journey of a startup. The hurdles, the second thoughts about everything, it’s all very exciting. To be completely honest, the journey is much more invigorating and compelling than the destination. Similar was the case of Yumist. In 2014, there were several other startups similar to or almost replica to Yumist. But no company had established a monopoly in 2014 for a tech enabled food preparation service. Yumist would offer a proper ordering system, a systemized central kitchen and customer servicing. They had plans for expansion, even opened another headquarter in Bengaluru. By march 2016, they had plans to spread out in 5 more cities. Namely Mumbai, Pune, Hyderabad, Chennai and Kolkata. 

What went wrong? What led to the failure of this extraordinarily differentiated startup?

 For a company that had plans for the next few years, it just didn’t have enough funds for its venture ahead. They had two funding rounds. The first one lent them 1 million USD and the second one 2 million USD. 

However, the failure was not completely limited to funding. In fact, it was the littlest of the many reasons why it had failed. 

Their mistake was trying to expand to other cities, when their current operational cities themselves had a lot more scope and potential for growth. In simpler words they didn’t explore the full potential of the cities they were operating in and went on to bigger things too fast and this put a lot of strain on the company. 

They also tried to expand to woo investors. But 2016 was a very ominous year for the food tech industry and this led to a downfall in the marginal revenue of Yumist. This scared away their investors. And not just Yumist, several others like itiffin, eazymeals and giants like Swiggy incurred losses. It’s just that the scenario of Yumist was much worse than these. Here are some of their blogposts from these difficult times:

 “We failed to raise the kind of capital that was required for this business. While staying true to the customer’s problems.”

 “From launching in a second city prematurely, or committing to a high growth, high burn model simply because investors wanted to see that, we’ve made our mistakes.” 

Lastly, all that can be said is that its failure was the result of its circumstances.

Written by – Chirag Sharma 

( Member of Thrust : E-cell )