Interesting Startup: GROFERS

GROFERS

Grofers is an on-demand delivery service connecting local shops with consumers. It was one of the first companies in India to create a hyperlocal marketplace for goods, starting with groceries. It has raised a lot of funding and has shown good growth in the Indian market.

Why I find this interesting?

- Essentially a delivery service; Fulfilling orders by procuring from local vendors; Scalable
- No capital required for buying inventory
- Shortest delivery time since goods are purchased from vendors closest to the customer's location
- Strong competitive advantage since big e-commerce players like Amazon & Flipkart will find it difficult to establish last mile logistics
- Lower delivery costs since delivery is done locally and does not involve large distance/intra-city logistics

My Concerns

- Margins are limited since goods procured from through retailers primarily
- Limited products for customers since only products which are available locally are shown
- Profitability is more difficult to achieve

Grofers and other startups operating with this model have seen a lot of interest from investors in the past. Profitability will be a key concern going forward. I feel the model has a lot of value and is here to stay in the long run.

Interesting Startups: UBER

UBER

An on demand transportation system which connects users to taxis based on their preferences. Users can use the app to select and book a taxi category (cost efficient/luxury). The taxi in the selected category closest to the user is alerted and attends to the customer. Fare estimates are also given to customers beforehand on the app.

Why I find this Interesting?

- Low capital required since taxis are not bought; Scaling is easier and faster

- Technology backend useful for optimizing the entire process and checks on the system; Backbone can be replicated to any geography 

- Customer gets a taxi in the shortest period since the closest taxi driver is alerted

- Customer selects the taxi category he/she wants and has an idea about the costs involved

- Drivers can focus on driving and leave customer acquisition on Uber

- More business for Drivers as better marketing by Uber

My Concerns

- Safety since drivers are not on Uber's payrolls; Uber does a detailed verification of the drivers though

- Customer Experience may take a beating as model is dependent on vendors (taxi drivers)

Overall, the UBER model is an awesome model and has been able to disrupt the public transportation system in the world.