Why Foodpanda Treat Leaves Workers With Bitter Taste

Amit Seth (name changed), 32 years, an IIM graduate, with expertise in digital, had joined online food ordering start-up Foodpanda earlier this year with the hope of making it big in the bourgeoning startup ecosystem. However, all his hopes shattered when he joined the company only to realise that there is chaos within and in about two months he quit. Well, this is how it began.

"I was quite excited when the billionaire investor himself approached me over an email, for the position of MD India," recalls Seth. "But, during discussions, he told me that he was looking for a chief marketing officer for India, and that he was confident about my candidature for the role."

However, when the final appointment letter arrived, he was given to understand that the CMO's role had been split into two - digital and non-digital - and that Seth was being hired as the chief digital officer instead. Although taken aback, he decided to give it a try. A plump pay package beckoned, as did a fancy designation and an equity that could run up to several crores in a few years, - all these factors were enticing enough for him to lap up the offer.

However, they were only on paper. Things changed drastically the day he joined the food ordering startup, backed by Rocket Internet. "On my first day, I discovered that there was already a CMO in the organisation who was inducted three months earlier and that there was no clear role defined for either of us," says Seth. "This led to continuous conflicts and confusion within the team and that, in turn, resulted in an overall negative work atmosphere." Though the digital head for India, Seth did not have any control over the digital agenda and the shots were actually being called by the fund abroad. Seth realised that he had become a victim of hiring sans planning. And that's when he exited.

Foodpanda has been in news for laying off 50 per cent of its workforce and sources within the company say the number could be around 300. It is understood that the retrenchment has happened across all business segments within the organisation such as sales, marketing, vendor service, customer delight, automation, business intelligence and the call centre in Gurgaon. Going forward, in the coming year, the startup is looking to also stop food delivery in six cities such as metros Kolkata, Chennai.

Tearing Hurry
"Slow and steady wins the race." This ideally is a mantra that has been long forgotten by the emerging businesses of today that are by nature, in a huge hurry, rushing in headlong to build an app, get surprising amounts of funding, acquire customers by the millions, and set unreasonable targets. In the process, they also rush to hire. The result, as one is beginning to see, is a fair bit of chaos, a failure to scale after the first one or two rounds of funding, a mess of logistics, and often the absence of a sound revenue source. This is prompting fund managers to tighten their purses and become more wary.

Food Portals In Trouble
Recently, TinyOwl Technology, a Mumbai-based online food ordering firm, back by a clutch of marquee venture funds, Matrix Partners, Sequoia Capital and Nexus Venture hit the headlines for slashing over 110 jobs. Pioneering restaurant-finder app startup, Zomato, also announced lay-offs of a reported 300 employees. While these were in news for trimming expansion plans, there are others who have shut down shop. Bangalore-based food tech startup, Dazo recently decided to wind up operations within a mere year of launching. It failed to keep pace with its competitors and was short of capital even after raising its first round of funding in April this year. Similarly, SpoonJoy, an online restaurant, announced that it will be shutting down its operations in Delhi and in parts of its headquarters city.

However, food portals are not the only one to be in trouble. In other sectors too, certain startups are struggling to keep pace with their competitors and are finding it difficult to scale their businesses and take them to the next level.