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Havish Gupta
Figuring Out • 3m
I saw a video 1-2 years back where the speaker said that all those 'middleman' businesses like Zomato, Ola, and MMT would never really succeed! The problem, he said, is that you have to deal with 3-4 entities: first, the customer; second, the client (restaurants, hotels, drivers, etc.); third, the investors (who fund the business); and also the government (depending on your business). What he said was that if you increase the prices of your product to make money and give better commissions to clients, customers will leave your product. If you reduce costs by lowering commissions for clients, they will leave. And if you offer products at lower prices while also giving higher commissions to clients, you will incur losses, risking your company, and investors won't fund you. Additionally, the government often tries to interfere in this business by changing regulations, imposing taxes, fines, etc., creating yet another entity to deal with. Back then, I somewhat agreed with this, as all these Platforms were bleeding money and just one price change use to shift customers from moving to different app. But now it seems to make no sense. That’s because Zomato has turned profitable, Ola Cabs’ losses are reducing every year, OTA platforms like EMT have been profitable for so long, and even Meesho recently announced its first profitable quarter. In the last few years, only these types of businesses have worked and It’sbetter to deal with 2-3 entities than to buy all the assets and risk scaling. What do you think?
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