Business models that work

A few days ago, at dinner with friends, where all the items had been ordered-in using various food-delivery apps, one friend, a long-time Mumbai resident, talked about how so many startups are essentially trying to recreate the Bombay Model of doing business. In Mumbai, almost everything is delivered home, much like newspapers are everywhere else. Groceries, medicines, even liquor, all from your local kirana shop. You just call them over the phone.

A health-conscious friend of mine staying in Parel, would get a daily delivery of tender coconuts. And also ironically enough, cigarettes. People in Mumbai have their default kaali peeli (cab) guy, or auto guy depending on where they stay (or how moneyed they are, but it is pretty much the same thing in Mumbai), even if they do not use them every day. And payment methods vary from cash-on-delivery, to various sorts of subscription models — things that many startups tout as innovations.

A lot of what many popular startups in India do, on the surface, looks a lot like the Bombay Model. But there are some important differences. For ease of reference, and given their presence in the city, I am going to call these startups’ way of doing business as the Bangalore Model. The Bombay Model is very clearly hyperlocal. If you live in Andheri, you are never going to get your home deliveries from Worli.

The Bangalore Model aspires to be hyperlocal, but they want to be hyperlocal across localities. This is not easy, which is why true ‘hyperlocal’ remains a pipe dream for most startups. Another key difference is that the Bombay Model depends heavily on interpersonal relationships . If I like Santhosh from Jai Bhavani Wine Stores, and I like him for he has been delivering me liquor each time that I order from the shop, then I am going to be far more accommodating of occasional transgressions. But if a Swiggy or a Dunzo slips up even a little, I am likely to go crib very loudly on social media. Try as they might, , it is near impossible to build a relationship with an organisation so large that standardisation works much better for them

However, one advantage that the Bangalore Model may have over the Bombay Model is that startups here love collecting a lot of data and acting upon it. Some of those turn out to be delightful for the customer, and more turn out to be just plain creepy. But the charm of data science is that these startups, based on how customers are reacting, keep getting better and better at experiences they deliver using data.

Meanwhile, another friend who grew up in Kolkata pointed out the Calcutta Model. Fresh fish gets delivered home like clockwork, but for everything else, you are on your own. They definitely are sure about their priorities.

The author heads product at a mid-sized startup in the real estate space


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