Why sometimes the idea can matter less than the execution

 
Annabel Denham
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Annabel Palmer talks home cooking with Deepinder Goyal, founder of online restaurant and nightlife guide Zomato

THE key to creating a successful startup often lies with having the idea before anyone else gets there. Countless wannabe entrepreneurs have claimed “I had the idea for Facebook long before Zuckerberg,” yet didn’t deem it worth pursuing. But sometimes the reverse is true: a banal idea may be executed so well, it cannot fail to succeed.

Zomato is South-Asia’s largest restaurant and nightlife guide, and made its way to London earlier this year. Headquartered in New Delhi, it provides information on over 17,000 restaurants in the greater London area. It is now five years old, is in eight countries, and sees more than 500,000 people use its London platform each day. Its founder, Deepinder Goyal, hopes to double this figure by December.

By Goyal’s own admission, the concept for Zomato is not the most revolutionary. Nor was he the first: Michelin guides have been around since the turn of the 20th century; TripAdvisor, the world’s largest travel site, was founded in February 2000. But Goyal thinks he has a key advantage: “No one else provides the depth of research that Zomato has”. He believes that “you can disrupt an industry, simply by making it easier for people to use the product.”

Zomato has 350 people working on the ground across eight countries. They are carrying out crucial research: identifying new restaurants, updating information on existing restaurants, and noting those that have shut down.

It all sounds like good news, but Zomato faces a number of challenges. It is currently launching in Brazil and Turkey, and is considering other Latin American markets. But launching in a new market involves huge upfront cost, with no uptake guarantee. Only once regular traffic starts visiting the website (which can take up to a year), can the website start to monetise. It does so by selling advertising space to restaurant owners. A rigorous vetting process, however, is in place to ensure such establishments cannot bribe their way to a good review. “We have an internal code of conduct. If any staff member was seen influencing reviews, he or she would be fired the next day.”

Depending on how these markets respond, Goyal may seek investment of $50m (£32.7m) later this year. For Zomato’s first two years, Goyal and his two co-founders continued their day jobs, and ploughed earnings into building the platform. It was in these jobs (at management consultants Bain & Company) that the idea for Zomato was conceived. Foreign business partners would visit New Delhi, each asking for restaurant recommendations during their stay. Rather than keep repeating himself, Goyal designed a website.

In its third year, the trio sought seed investment of $1m. “It was 2009, and people were incredibly risk-averse. Fortunately, we found two investors here in India who believed our business model would succeed.” Since then, the company has raised $16m.

Goyal knows that to survive, he will need to diversify. Once Zomato has opened in its target markets, it may start to list recipes on its website. He has also considered providing an online reservations platform, but knows he will have to be cautious which markets he chooses. “In the UK, for example, that market is dominated by Toptable. We would be far better off trying to collaborate with them, than working against them.” It may not be long before homemakers across the globe turn to his website for cookery advice. But for now, Goyal will settle for 5 to 7 per cent growth each month.

CV DEEPINDER GOYAL
Company Name: Zomato Media

Founded: 2008

Number of staff: 350

Job Title: Founder and chief executive

Age: 30

Born: Punjab, India

Lives: Delhi, India

Studied: Integrated Masters in mathematics and computing from IIT Delhi

Drinking: Wheat beer

Favourite Business Book: The World is Flat, by Thomas L Friedman

Talents: Recognising and hiring the right talent

Heroes: My father

First ambition: To make a strong impact with anything I attempt

Awards: Named one of the Top 30 Youth Icons in India by a leading national daily