A couple of days back I heard about Ola starting food delivery services. One might think a couple of bright fresh MBA grads would have come up with a 100 slide PPT on how this would improve revenues while unlocking new value for the company. But in reality, it’s a fairly stupid move. The scary thing is that the Indian startup space is now filled with startups who are getting funded for ideas which are not monetizable and are wasting their investors monies to acquire users.
In a sense, Ola might have been thinking “Let’s just use our drivers who don’t have a fare” . But this would mean either decreasing the number of drivers available in an area, during peak lunch hours or would also entail spending more money to re-compensate the driver who is probably losing out on trips when he is delivering food. Unless of course, Ola has a designated team for delivery which means they have a separate fleet doing food delivery which is an additional fixed cost which may not even pay for itself. Maybe Ola wants to be the one stop solution for travel and food.
But all this boils down to one thing – Do I want to use my Ola app for everything? Will they start delivering groceries next? Followed by doctors and healthcare solutions for when I am unwell? Where does this one stop solution business end? Equally importantly, what happened to the old call for specialization in a particular domain so one could have barriers of entry for others.
My worry is that in the thought of applying learnings from one domain to another and getting economies of scale, Ola and other startups working on such concepts end up diluting service and failing to provide a certain quality output in any of the domains they are working.
UnWired 