A brand is as good as the quality and consistency of work and service, said Deepinder Goyal, Founder and CEO of food delivery app Zomato, during TechSparks 2023 in Delhi.
“If you have that, you don’t need much marketing. We don’t have many marketing processes, like budgets or rules. We just have the right people in the marketing team,” he continued during a fireside chat with YourStory Founder and CEO, Shradha Sharma.
The only mandate given to Zomato’s marketing team is that every push notification through the app should make the user smile, Deepinder noted.
“Whatever we do, we think of ourselves as consumers first. When you build what the audience wants, you will resonate with them,” Akshant Goyal, Chief Financial Officer at Zomato, added.
The food ordering firm reported a profit of Rs 36 crore in the July to September period, marking a positive bottomline for the second straight quarter in FY24. But the achievement didn’t come easy.
“We’ve been doing this for 15 years. There is a different type of pressure at different points in time in a startup. Cash flow and profitability have been the flavour of the season in the last two years, and startups have had to reposition themselves to make it work,” Akshant said.
Zomato, too, underwent several changes and realised that “we can make money only if the underlying customer value proposition is strong enough,” according to Akshant.
“Eventually, the fact that our business is profitable is a reflection of the value of the product and service we have built for restaurants and customers,” he added.
However, the cycle will continue. “Earlier, the pressure was from investors about when we will make profits. Now, it is about when the share buyback will happen. So, there will always be a camp who will not be happy with what you do, but you must filter the noise and continue doing what you do,” Deepinder noted.
Talking about the public listing, Zomato’s CFO believes that building a business is a more arduous endeavour than listing on the exchanges, given that Zomato’s initial public offering (IPO) in 2021 catalysed several other such public market bids by tech startups.
“A lot of founders think that an IPO is a very scary thing, but there’s nothing complicated about it. Building a business takes much more effort,” he quipped.
Deepinder vehemently agrees. Building a business involves a lot of variables, such as dealing with investors, customers, employees, partners, etc. But an IPO is prescriptive. The stock exchange regulator, SEBI, has a list of essential boxes prospective companies have to tick to launch a stock market bid, he said.
It can be tough for startups to be consistently relevant in a world that’s constantly changing. “Zomato has run out of money six times in 15 years of existence. When our share hit a low last year, it felt like rock bottom. It’s a two-year cycle we lived through,” Deepinder noted, adding that the cycle happens because founders often think they have cracked it.
He suggested that at these points, founders must go back to the drawing board and rethink decisions. “It will feel like you are running a new startup every few years, even though it may look like the same company from the outside.”
Deepinder believes that Zomato still has a lot to achieve. “In terms of product and service, we have attained just three out of 10 things. There’s so much more to do. If happiness becomes a goal, then that’s the end of life.”
Edited by Suman Singh
