Success Quotient is a weekly feature that appears every Friday on Firstpost, which looks at the pains and joys en route to success for a head honcho - whether a CEO, MD or an entrepreneur. The column looks at the ideas that helped launch a company, its highs and lows.
Jaydeep Barman, 40, co-founder and CEO of Faasos moved to London to work as a strategy consultant at McKinsey & Co. for five years before moving back to India. Faasos came about as a quick meal to be eaten in a jiffy--which was what they were looking for. The Pune-based entrepreneur shares his journey with Firstpost and his plans for the future.
Excerpts from the interview:
What led to the founding of Faasos?
Faasos is the brainchild of my friend Kallol Banerjee and I. Incorporated in 2011, we started it with the vision of being the first and largest food technology business in the country at an affordable cost. We, along with our spouses, invested our life’s saving of Rs 35 lakh as initial investment in Faasos.
Why the name Faasos?
We didn't do any market research to zero in on a name but we knew that we didn't want one of the typical names associated with pizzas and burgers. The name was a product of our long-standing annoyance: Fanatic Activism Against Substandard Occidental Shit, or Faasos! As soon as we opened our first restaurant in Pune, people went, What the hell is this? The name generated curiosity and intrigued people and that served our purpose.
What is your share of the food segment in India?
The total food market in India is Rs 2.5 lakh crore and is expected to touch Rs 4.5 lakh crore by 2020. This chunk comprises of a variety of segments like QSRs, fine-dining restaurants, etc. Faasos is a food first restaurant and hence the entire food business is our playground. We are attempting to create an environment where a consumer is able to think food first instead of restaurant first. If we are able to capture even a small part of the Rs 2.5 lakh crore business, we will be a substantial player in the market place.
You expanded from wraps to other offerings.
With wraps we were able to create an offering that could capture the audience pulse. After this, we quickly expanded to biryanis and other rice offerings. Today we pride ourselves on being a one-stop solution catering to all of our customer’s meals -- breakfast, lunch, dinner, evening tea and snacks, with a variety of cuisines. We have our own label of teas. Chai and snacks is our most accepted offering pan-India. We have a presence in 14 cities, and tier-II cities too -- Indore and Vadodara.
How much has the expanded offering improved your revenues?
We have served four million customers so far and are doing 300,000 per month. We intend to serve one million orders by next year. We went app-only about two months ago. About 97 percent of our business always came through our app vis-à-vis our web version, and so we felt the time was right to go app only. The app has seen over 1.5 million downloads since July 2014. We currently process around 12,000 orders per day on the app and are witnessing a growth of 20-25 percent month-on-month basis. This set of customers are also very tech savvy and spend a lot of time on their mobile phones. This is mainly between 20 years – 35 years. Even tier-II cities have shown tremendous traction for ordering via the app. Bangalore as a market have done very well for us. Currently we are witnessing a growth rate of 20-25 percent on a month-on-month basis.
Our USP is that we are a food first brand. We have a team of menu curators who work with the food team to cater and fine-tune our offerings based on market insights.
What is the most popular food ordered from Faasos?
Chai and snacks is the most popular item and has received tremendous response pan-India. We started the service in Mumbai first and its initial success led us to launch the service across the country. We are currently the only player who delivers chai pan-India. Our snack time sales have increased by 20 percent post the launch of chai. Our chai for four, sold at Rs 99, has been a customer favorite. Our dessert options are also doing very well. Some of our other popular offerings are royal chicken rice feast and the veg buffet. The average ticket size of an order at Faasos for a meal for one is Rs 275 - Rs 300.
What are the challenges of operating in this sector?
The major challenge is that customers are open to adapting new options but are extremely sensitive about the price. So for brands like Faasos, it is important to keep in mind that while customers make choices based on flavor and food options, price-tag sensitivity also needs to be tackled carefully. Having said that, as long as our customers consider our products worth their hard-earned money, it’s a win.
What do you look upon as mistakes, on hindsight?
Since we are not from the food industry, we were looking for people who are from the food industry. After our initial few hires, we realized that that was not working for us. This was mainly because they came with pre-conceived notions of how a food business should be run and scaled up and we wanted to do things our way.
After this, we started changing things. The senior management and the second tier at Faasos are not people from the food industry but mostly entrepreneurs who wanted to build something different on their own and are willing to take a risk. In a startup environment, there is no clear structure or process. You are given real life problems and you solve it. We then recruited six people. In the last one year, those six have recruited their own teams and they have also gone about the same way, where experience in a particular function was not as important as the willingness to do things differently.
Many food start-ups are shutting down. Your views.
Everybody has a different take on their business. We have always attempted to build a full-stack model. We started by building the business and then developed technology to support the business as per the requirements. Most players attempt to develop the technology and then build the business around it. That is where most of them fail. Around 95 percent of start-ups fail in their execution stage.
As the only vertically integrated food business in the country, Faasos technologically controls all the three important aspects of a ‘Food on Demand’ business, viz. Ordering (the most convenient ordering app in the country), Distribution (availability of food across different cities) and Fulfillment (delivery through the company’s own logistics or delivery boys). Having said that, there are a lot of players in the current market who are doing things very uniquely and have great potential.
What are your plans for the future?
We plan to expand our customer base and pan-India distribution. We also aim to extend operations to Nashik, Raipur, Vizag and Jaipur in this quarter and be present in top 25 cities by March 2016
Does the business give you time to pursue a hobby?
When you are running a business, there is no leisure time. I love mountaineering and try and pursue this whenever I find time.
Updated Date: Nov 02, 2015 12:30 PM