TastyKhana has started as an online food ordering website. TastyKhana is a Pune based startup that offers online food ordering and home delivery from restaurants of your choice through-out the city. Where all restaurants add menus and customers choose online and give order. As the time progressed, there was a need to offer the complete package: an end-to-end solution for any food requirement in the city of Pune.
TastyKhana now offers its customer food delivery, table reservation, information about offers, deals, events, directions, buffet, facilities, photo galleries and probably anything that would help you make the right choice. TastyKhana sounds tasty in the very first place of its concept.
So, if you like a soup from a restaurant from other side of the town and are in mood to save the time to traveling there, you can have it from the comfort of your home – just visit TastyKhana and order it online or call their home delivery number. With over 350+ restaurants to choose from, consumers have wide array of food choices to satiate their hunger.
The company started as an online food ordering website that offered menus of restaurants so that customers could easily order from the menu. Khana is the Hindi word for “food”– services expanded to include food delivery anywhere in Pune (the company picks up and delivers food through any of its associated restaurants), table reservations at any of the restaurants on the site, and party venues for those who wish to hold private events.
Last week I met up with TastyKhana founders Shachin Bhardwaj and Sheldon D’Souza at their office and had a quick chat with them about Tastykhana’s progress and to understand whether online food ordering is catching up. Both founders grew up in Pune and graduated from the Maharashtra Institute of Technology at Pune University, and both had a totally different career before taking this path Bhardwaj was working as a quality control specialist in Synygy Inc and Dsouza was a software developer at an embedded system company called Codito.
It is interesting to note that according to founders, online ordering on Tastykhana has increased to over 50 percent in past couple of years and is expected to increase further. Tastykhana currently clocks over 5000 orders in a month.
TastyKhana was initially started with personal savings from founders, angel investors, and the help of friends. According to Bhardwaj, a combination of bootstrapping, angel funding, and extraordinary mentorship were key to the making of this company. The first time of funding was a pre-revenue stage, yet the big change occurred in Oct 2008 when the business model was changed to incorporate a food delivery service with delivery managed by TastyKhana. This change was done through the acquisition of a small delivery service provider called Food on Wheels.
Bhardwaj’s roles in the company include being involved in building relations, marketing, strategy, and operations. Dzousa handles the technical sector by focusing on building a scalable architecture for the company’s back end.
There are currently about 30 employees including with 20 delivery boys. TastyKhana averages 60 orders per day and has catered to about 20,000 customers to date. Annual revenues are approximately $100,000. Goals to meet by this year’s end are to stabilize the business, prepare the infrastructure in the terms of technology and people, and eventually go to a pan India level. The company is and has been online partners with brands such as Kingfisher and BigFlix in Pune and recently signed up with McDonald’s to manage McDelivery from one of the restaurant’s outlets in Pune.
We had an email interview with Shachin, the founder of TastyKhana.
Q1. The brand name itself sounds very tasty? Tell us how you thought of starting tastykhana.com?
It was a personal need. When was working in Synygy I was usually responsible for managing all team parties, food ordering and getting deals and discounts. The only way I could do this was either call each restaurant ask for the menus and prices or visit nearby places and negotiate the rates. The thought came in that, life would be much easier if I had all this information online, that’s how it started.
Q2. What’s in the name! I mean could it be tastybhojan.com or tastyfood.com or something like that: Was it a choice or just domain name limitation?
It was a choice that we made. The idea was to have a generic name related to food; we didn’t want to restrict it to food ordering, restaurant guide or Pune city. The thought was we should be able to help people have the right food at the right place. Tastyfood was also an option but the domain was not available.
Q3. Who are your customers or targeted audience? Is there a market size that you are targeting? Do you collaborate with corporate houses or companies to advertise on your website?
Our customers are typically 25+ year olds, working couples, with average income of 50,000 per month (entire family). The restaurants we have online are mostly non-fast food outlets (whole meal places) so the student audience is less. We plan to primarily focus on this group as the average spending per order/meal is higher. We haven’t actively pursued corporate tie-ups but have a very good list of companies (their employees) ordering from us. Kingfisher and BigFlix are the only companies that have advertised via TK (Food + Beer and Movies + Food â€“ there was a match). We don’t actively pursue advertisements from companies.
Q4. What is your business strategy?
Our primary revenue model today is food ordering and we process orders worth more than Rs.1.5mil/month today. Our focus today is to automate our processes and achieve scale of operations. The strategy is to get this system right in Pune and then replicate the same across cities in India. Once this system is in place we will also look at the catering to the Quick Service Restaurants (fast food) with high volumes.
Q5. Food is a very popular business right from streets to starred hotels. Do you feel you have the first-mover advantage for an online shop?
There were/are others who are in the same space, but we did certain things differently that helped us grow. There are various online shops catering to various needs, but we identified one pain point that we thought affected both customers and restaurants. The pain point was food delivery (or logistics), customers could order food from only neighboring food joints (typically 1-2 Km) and that too was not very reliable. Restaurants at the same time could not invest in bikes, fuel and manpower to manage deliveries. We merged technology and logistics to have business model where we charge both the customer and the restaurant for the service we provide.
Q6. Do you feel there is a space for competition in it and is there anybody presently in the Indian market venturing into this segment?
There definitely is space for competition and we already have local competition in Pune. With regards to other cities, there are sites which offer subset of our services but we are yet to come across a site that provides complete end to end solutions. Logistics is the most difficult part and hence the entry barrier for most new comers.
Q7. What you feel is the value of innovation in your business?
Innovation lies in execution, as I mentioned earlier we were not the first ones but we focused better delivery of services. I believe we have innovated in the following
A robust and scalable back-end: This allowed us to focus on details of customer usage and improve as per their needs. This is the most important point and has innumerable advantages today. Helps us in statistics, usage, complaint tracking etc.
Offline touch points: Phone service, in house restaurant branding, door drops, delivery boys with TK bags roaming across the city, all added to our customer base.
Since ours is a service business, value of innovation is pretty high, only if you add value will you be able to grow.
Q8. What is the scope of expansion and what is your vision about it?
If you had asked me this is the first year, I would not have had much clue… only when we got into the delivery business did I realize the huge potential of this business. My vision is to make TK the one point destination for food ordering. If you want to order food, be it Dominos or your next door restaurant, you must think of TK. With this being the primary driver we will have many other value adds (such as deals, offers, reservations etc) for customers to make TK their first choice for any food related information.
Q9. How you liked the journey till now as an entrepreneur, being able to start an online concept that appears unique?
What I have loved most is the steep learning curve, you think you know things but what actually happens is invariably something else. You get advice from 100s of people/books/blogs etc., but the best learning is your own mistakes. When I was testing software all I knew was my small world of module/domain or code, with TK I learnt what happens when your bank balance is nearing zero and you have to shut business. From finance, recruitment, raising money, selling your idea, strategy, planning to be the delivery boy handing food at customer doorstep, have seen it all.
With regards uniqueness, that was accidental! As I said the first year we had no clue where we were heading, starting the delivery service was the turning point and this again was something that we learnt when we were almost broke!
Q10. Any advice for future entrepreneurs from your personal and professional experience?
Focus on revenues from day 1, may not be profit, but money has to come in month on month. Have seen many friends focusing on how to handle scale, having that perfect code (before release) etc. only to realize that neither the customer volume is there immediately nor is perfect product accepted, as planned by you.
Second–listen to your customers and change when needed. Your entire plan may change: do that if needed, but donâ€™t be headstrong that your idea is perfect and doesn’t need any change.
Both these points have been oft written and documented but not only am I guilty of making both mistakes (learnt on time!) but also seen others go down because of this.
Q11. Thanks for talking to us, Shachin. You recently celebrated four years of TastyKhana. How has been the journey so far?
It has been a fantastic journey! We started coding on the steps of Gold Adlabs multiplex (working from morning 6am to 9.30am and then heading to our full time job), were 20 days away from bankruptcy in first 6 months of business and today we deliver orders in excess of Rs.3 crores annually. Right from fund raising, building a team, tweaking the business model to adapt to customer needs and building a scalable technology platform it has been a great learning experience.
Q12. As we can see TastyKhana has some awesome presence on social networks. But what was the initial thought process when you guys had launched yourself on social media?
To start off with, we were not completely convinced by Social Media as a medium to engage customers (Yes, sounds really stupid when you think of it in hindsight!) We first started with Facebook and took us a long time to understand how to engage customers on FB. The 100 fans required to claim your URL took us few months! But then we learnt from other brands on FB and started sharing content that helped users engage with us.
We were very late to join Twitter and in fact it was started just to try our hands on the same. With initially having no clue as to what we could share on this media, we started conversations with other popular tweeters. Our loyal customers who were on FB helped us a great deal to spread the word. Today we feel Twitter is more powerful when it comes to customer engagement.
Q13. Engagement on Facebook and Twitter is not easy and you guys have done a great job. Would you like to share the secret with us?
Some parts have been answered above. With regards to Twitter we started tracking certain keywords and realized that a lot of people used to post food related tweets (where to eat, food suggestion etc) we started conversations with these people and provided genuine answers (rather than trying to push TK as a business identity). I think the key in twitter is to not to keep broadcasting your brand with no conversation, you need to respond to people’s questions and not just react to responses to your tweets.
With regards to FB I feel we still are some distance away from having a good engagement platform…but till date the approach we have followed there is based on the theory that a picture speaks 1000 words. We started posting a lot of images and gave users an insight into the working environment at TK. I think that people like this transparency and like to see the people behind the brand. This gives a personal touch to your customers.
In any social media I feel the key is to have that personal connect with your customers.
Q14. You also have a blog but that hasn’t been as active. How important do you think a blog is for you guys and any plans to revive it?
This has been something which have slipped on and we got really slow on this once FB and Twitter came into picture. Blog is definitely a great medium to share detailed insights of your business with your customers. In fact off lately we have seen lot of brands using blog as a medium to discuss business processes and not particularly related to their own company.
Yes we plan to revive our blogs and would like the founders to share their experiences via blogs.
Q15. TastyKhana has some Facebook apps. How effective have they been and would you say apps are a must for brands?
This was something that we tried to engage users on our FB page. Rather than just come and view or share feedback we thought it would be nice if they could also book a table or order their food using FB itself. I think it has been very effective from a branding perspective, restaurants were very eager to have this app on their fan pages and we have some very popular restaurant pages using our app to help user’s book table or order food directly via FB.
Also apps are something that needs to be built based on the kind of brand you have. If you have a pure online identity then having a good app is a must, but if you are a business that finally caters to customers in person then apps help you from a branding perspective
Q16. The industry you are might have led to certain level of criticism. So how have you handled negative criticism? If you can share any example it would be great.
LOTS of criticism! Right from day 1 we have had critics who said that this will never work. In our business the service standards depend very heavily on the kind of service the restaurants provide to us. So the greatest challenge has been to ensure that we get restaurants to work at similar levels and provide the best possible experience to the end user.
Would like to share a specific example of an investor whom I had met in mid-2008. He is angel investor with Mumbai Angels (won’t name him) and I was pitching to him about our idea. He heard me out patiently and said the following “You are currently just 25yrs or so and in few years you do not want to think that you wasted the prime years of your life in doing something which will not work” He went on to say “I will be surprised if you can manage to have revenues of even Rs.50000 per month”
This statement hurt me a LOT but at the same time hit at the right place – our EGO. My entire effort from that day was to ensure that I will prove him wrong and write to him someday on numbers that would be many multiples of what he spoke off And I did write back to him few years down the line. So basically negative criticism initially helped us a great deal to work towards proving people wrong! I guess when you are young and just starting off the blocks you believe that everything is possible, and every negative feedback is simply brushed aside thinking that it is possible.
Q17. Lastly, since you manage your social media in-house, how challenging has it been and would you recommend it to other SME’s too?
It is becoming very challenging to manage this internally now. Social media is completely managed by the founders and the directors of the company today, but as we now plan to scale to other cities in India, it will not be possible for us to keep the same level of engagement which was possible earlier. So we are looking at mix of founders plus other office staff (such as customer care etc) being involved in managing this media and not outsource it completely.
For SMEs I would recommend that they manage their social media in-house till they don’t reach numbers like 1000+ fans/followers.
Some interesting thoughts that were well expressed by Shachin! I am in awe with the sincerity that TastyKhana has shown while handling social media. In social media, you have to accept things and move ahead as some things may work and some may not. It’s all about experimenting. Another thing that has impressed me about TastyKhana is that it is not posting the same content across all networks. There’s definitely inspiring work happening in social media at TastyKhana while they are delivering food too.