Whenever someone laments across the table that their startup is not taking off, they usually mean that they are unable to get gullible investors who will bite.
When they ask me for a solution, I quip, “They day you want to create a company and not a startup, it will definitely work.”
There has been a mad rush to fund companies where IITians and IIMers spout fractured management jargon and pretend that it is their birthright to receive funding from private and institutional investors and spend it all but a few pennies on arbitrarily chosen media space.
The only return such investment can bring about is during an exit to another investor who operates with an equally blinkered approach and does not mind if the venture is not making an iota of profit.
Well, the days of merry making where you completely ignore a venture’s viability seem to be petering off. Investors are now forced to look at profitability – that last word in corporate culture.
It was fashionable for a long time to call oneself a start up. That way, a lot of sins were forgiven. If your employees were not provided with a toilet during work, oh well, hardships were a way of life with a start up. Right?
If most of your secretary’s pay was stock options and only a little cash made her sit outside your own cubby hole in the egalitarian garage floor; well that is the way of the world until those stock options make her a millionaire. Right?
Well, the secretary has been waiting for a decade to become a millionaire. Lately, she has been considering selling off that useless bundle of stocks for even a few thousand if she could. Hey, no dice. The company is still a start up with no cohesive revenue model or even business model.
Just gathering a bunch of wayward teenagers in your rent free aunt’s garage to code aggregator apps may be an expensive hobby but it is in no way a good way to earn revenue.
NO CONTROL OVER QUALITY / INVENTORY / MERCHANDISE
An aggregator app is created in a closed door environment. Some sales agents may help the app connect with service providers but largely the owner of the app has no control over what the service provider supplies the consumer.
Foodpanda, Zomato help you order food online. Uber and Ola gather car owners with commercial car number plates who are willing to ply with a meter given by the app provider for customers who connect with the app. Practo is a place for physicians to provide services to patients. Oyo Rooms is used to find budget home stays in one place. Droom is for used cars.
However, none of these businesses can ensure quality as that lies in the hands of the service provider. Until the equation or cycle of aggregation, payment and profit sharing is complete, everything is hunky dory. However, the moment a deficiency of service takes place, the aggregator startup washes its hands of the matter saying that the quality of service entirely depends on the service provider and they are not to blame.
The problem lies in this anomaly. When such deficiencies pile up, the business model suffers as the customer becomes wary and shy on parting with money.
I shall illustrate with two examples:
First: I ordered a jar of prawn pickle from Amazon. The seller packed a glass jar in a thin wrapping of corrugated paper, which was totally inadequate for protecting the jar from shocks. During the journey in the hands of the callous logistics provider, we are all aware as to how many times the packages are thrown about. The result was as expected. The jar arrived with the prawn pickle mashed with shards of glass from the broken jar.
Now, the seller is a home style operation. I suspect it must be manned by some benevolent aunt and her minions who have no knowledge of packing something and protecting it from shocks. However, when I receive it from Amazon, I shall associate the shoddy product and service with Amazon. Right?
However, initially Amazon told me to get in touch directly with the seller. Well, if I have to do my dirty work with the seller myself then I would rather choose Flipkart, which at least assures standard redressal through its SOPs in such cases.
Second: I bought tickets from Yatra.com from New Delhi to Udaipur and back on Spicejet. Then I wanted to change the return date. It so happened, that we loved the hotel – the Trident, Udaipur and wanted to stay another day. We called up Yatra and they said they could not help us in any manner and that we should talk to the airline directly. My question remains that if they are unable to help in any way during a crisis then why should I buy through Yatra.com and pay them a commission?
The aggregator is just that – an aggregator of junk. Delivery of quality products and experience is just a matter of chance and luck if you buy through an aggregator. The perception is that you at least get a cheaper price. However with the surge pricing introduced by Ola Cabs and Uber cabs, (more aggregators) even that is not assured.
Now what you are assured from an aggregator is a cheaper experience and a dearer price. Is it worth sharing your contact details with these online devils then?
Well, it is the purchasing public which is to blame. Till the date they insist on buying cheaper, any aggregator app will act as their agent. The day they insist of buying better no aggregator without quality assurance component is going to work. Touche!
DISCLAIMER : Views expressed above are the author’s own.