How The “Disruptors” Are Failing
Reams have been written about the adverse impact of aggregator services on local economies. In India, Uber has been blamed for devastating traditional taxi systems and trapping it’s “driver partners” in debt. Food Delivery platforms Swiggy and Zomato have been criticized for pressuring restaurants to the extent that a “logout” campaign last year put both delivery platforms into aggressive damage control mode.
This week, Oyo, a so-called desi unicorn fired 3000 employees by Email. This single event makes me think that surviving this disruption is all about the human touch — something that quantitative management styles can never accomplish. Sure, everybody talks about Jim Simons of Renaissance Technologies and his billions made from “taking the emotion out of investing”, but businesses that thrive on customer experience — dining, accommodation, art, rely on managing subjectivity and require a high level of emotional intelligence that these quantitative management methods cannot yet furnish.
The Joint Café is a restaurant in Gurgaon, India, that serves the most indulgent burgers that I have ever experienced. Since 2015 I have visited dozens of times, and know people who dine there on a weekly basis. Friends from out of town who have accompanied me to this place now schedule their flights and Gurgaon meetings so that they can load up on one of TJC’s humongous burgers, top it off with their incomparable chocolate cake, and giggle in amusement at the airline stewardess who asks for their choice of in-flight meal three hours later. Though TJC does deliver through Zomato, they have cultivated an identity and loyal clientele. They have done this through outstanding products, consistent quality, and a motivated, empowered, and caring staff that will indulge you for the entire time that you spend in the restaurant.
I occasionally order from a Swiggy-only cloud kitchen called “The Fit Food”. This place that claims to serve healthy food is a bit of a joke — though they have nutritional data on their menu items, the gross weight of their “Chicken Caesar Salad” has fluctuated by over 50 per cent over several weight tests that I conducted to confirm my suspicions. The quality of the dressing is inconsistent, and consequently, they’re my low carb meal of last resort. In recent time, I’ve chosen the chicken tikka from a nearby tandoori place over the trayf that The Fit Food serves up.
When Swiggy dies, The Fit Food will perish with it, perhaps even before. No matter how the Food Delivery disruption turns out, The Joint Café will endure on the affection of fans who cherish the experience of their gigantic burgers with the perfect aioli. So if you’re concerned about surviving the disruption, be The Joint Café. Have a great product that will make people come to you to be wowed. That’s how reputations were built in the old days, and this method will remain as timeless as the gentleman’s two-button suit.
Two weeks before the date of my writing this, my wife and I, with out 19 month old daughter in tow, visited the Collection O 44177 hotel in Hyderabad, India. Collection O is an Oyo sub-brand — and we had looked at the app and knew they had rooms available. We were hoping to see if the area was child friendly before finalizing our booking. We were NOT greeted at the counter — which was manned by an unshaven, scowling desk clerk in a rumpled suit, who took his time to look up from his phone to even acknowledge our presence. When I asked about the rooms, he muttered something incoherent, and when I asked him to repeat himself, told us that all rooms are booked. One look around the place — the dusty reception, the grimy “restaurant” floor, and the desk employees who seemed to be held there against their will, and we decided that this was not the place for us. This is not the first time I’ve had a bad experience with Oyo. A couple of years ago, an Oyo in Gurgaon was about to cancel the booking of a couple with an 18-month old child on a technicality at 10 PM — effectively casting them out on the street at night. It was only when I threatened to raise hell on Twitter that they backed down and allowed them to stay. That’s obviously the Oyo way — you’re just a number — a lead that’s “funneled” into a sale and a transaction that’s to be processed and done with. Nobody in the system is geared towards customer experience, reputation, or relationships.
At the time of writing, we’re at the Siesta Hitech Hotel. When we booked through Agoda, our hopes weren’t too high given the price point, which was about the same as that hideous “Collection O”. We chose this hotel because it is in the perfect location for us as we set up our new apartment. We are pleasantly surprised. The staff are warm and accommodating; the room service is prompt and responsive; and the front desk staff are empowered to take instantaneous calls on things outside SOP — such as chopping apples and cucumbers on request for Vivien’s lunch. This is obviously working well for them. At the moment, the number of the residents of the hotel are long-stay guests — interns engaged by a well-known technology company.
Oyo’s layoffs are perhaps a result of the visceral dread that Oyo Agarwal may feel, being USD 1.5 billion in debt thanks to his latest share buyback. Agarwal must start giving serious thought to how he’s going to repay the banks that funded his gambit. The buyback, that gave a clutch of Private Equity funds an absurdly profitable exit, seems a re-hash of a transaction mentioned in Coffee Day Siddhartha’s suicide note, and only time will tell what the actual story behind the Oyo buyback is. If our Collection O 44177 experience is consistent with Oyo standards — which it probably is — Oyo will wither, and so will Collection O 44177. The Siesta, with its awesome staff and great location will endure, if it keeps wowing customers like us. So don’t be Oyo — be the Siesta, and you’ll never have to worry about “disruption” for long.