FoodRocket — How a second year student started a food delivery service in 6 days
This is the first story of the Startup Academy Stories series. Anish Krishnan, a final year student at O.P. Jindal Global University, takes us through his experience running a food startup on campus.
Launched on 8th April, 2015, FoodRocket was a service which aimed to bring students at O.P. Jindal Global University quality food at a pocket-friendly price. It enabled students to order a great meal for lunch or dinner, Monday through Friday. In this story, FoodRocket founder Anish Krishnan narrates the successes and challenges of starting up at JGU.
While examining existing food options that delivered to campus, we noticed that although the quality of food was great, the prices weren’t reasonable for a student on a budget. We knew that quality needn’t be sacrificed to match the price, so we decided to give it a shot ourselves.
We started by negotiating with a dhaba at an area close to the university, which would prepare the food for us. Taking into consideration that we did not have the scope for a huge initial investment and aiming to limit our risk, we negotiated terms to claim a commission on a per-order basis rather than upfront cash payments from our side.
Now that the stage was set, it was time to create an experience!
We had a beautifully designed website to make placing your order a very smooth process. Log in, choose your meal and checkout!
Our idea was to spend minimal time in getting the site up and running but have all the essential features necessary for end-to-end order fulfillment.
Key Resource: The entire customer experience online was powered using Shopify, an e-commerce platform that helps you to sell online, on social media sites, or in person. We used GoDaddy to register our domain name foodrocket.co, which forwarded users to the Shopify website.
All in all, it cost us Rs. 2000 to set up on Shopify’s basic plan and Rs. 600 for the domain name.
Customers could choose from a mix of 3 vegetarian and 3 non-vegetarian dishes apart from choice of rotis and rice. They could place an order two hours prior to when they wanted to have it.
This was necessary to limit our overhead costs— increase quantity and reduce time in preparing the food. This also ensured that we could keep the meal warm up until the point of collection while still taking the maximum number of orders.
Key Resource: We used Google Forms to conduct an initial market survey to know what the most preferred vegetarian and non-vegetarian dishes were. We also used the survey to gauge the preferred time for delivery and price range of our meals.
In starting FoodRocket, we wanted it to be convenient for our customers to collect their food and for them to lose no time in doing so. However, we encountered two pain points:
- At JGU, all food deliveries are done at the main gate, with students having to walk a fair distance from their hostels to collect it.
- Vendors frequently did not have exact change to return, which made the entire process even more cumbersome.
Being a new company, you need to always find ways to improve your customer experience. Even if not radically better it should atleast beat the experince as provided by your competitors.
To solve the first pain point, we ensured that the orders could be collected from the student ‘common room’ in the academic block as opposed to the main gate. Further, Shopify’s mobile app helped keep track of the customer’s exact order, which vastly improved efficiency.
In order to address the second pain point, we reduced the need to transact with cash on a per order basis to the extent possible and instead instituted a subscription service with advance payments at the start of the week.
In an operations-heavy business, cash flow is like oxygen. It helps your company breathe and stay alive. A subscription plan ensures that you receive cash up front and thus keeps your cash flow steady. This cash can then be deployed to stabilise your day-to-day operations while you look for other growth opportunities.
Our meal plans were designed to be economical, with plans including 5 Meals-a-Week, 3 Meals-a-Week and Pay Per Meal.
Word of Mouth
FoodRocket took advantage of the fact that there weren’t too many outlets in the Sonipat area selling quality food at a reasonable price. Our early customers realised this advantage, so most of our sales were driven through students recommending us to their friends.
Word-of-mouth marketing is the most economic method to drive business growth. When starting up, look to create an experience so compelling that your customers will talk about it to their friends and family.
WhatsApp Broadcasts were used for three main purposes: to inform our customers about discounts, to keep track of their meal plans, and to intimate them when their orders had reached campus.
We made the important distinction to use the Broadcast feature instead of Groups with the purpose of having a reliable platform to convey information to our customers but not draw them into a conversation — as often happens with Groups.
Customers were free to raise any further queries with us by messaging us directly on Whatsapp.
FoodRocket shut its operations on May 25th, 2015 after a solid one and a half month stint. During this time, it had catered to approximately 300 students and had processed over 700 orders.
As FoodRocket grew, it needed more resources, especially human resources, to keep the business running smooth. We realised that operating a business within a university, especially when you’re a student, limits your freedom to make certain strategy choices — in our case, hiring staff.
In addition, an operations-intensive business is bound to take up much of the founders’ time. Particularly for sole founders, managing all aspects of the business is extremely time-consuming. This factor, coupled with being unable to hire more people, created a time conflict with my academic schedule.
At the end of the day, the key to running a successful business is having a sustainable business model which includes revenue sources and streamlined operations. Although FoodRocket had a solid revenue model, it did not have the necessary operational model to sustain the business.
FoodRocket is a prime example for those who wish to start a venture while still at University. Students often fail to recognize that they do possess a degree of autonomy and an opportunity-rich environment to start up. On the other hand, there are real constraints on student founders. The key is to figure out how to creatively work around the constraints and turn a challenge into an opportunity.