[Podcast] Koramangala diaries: Exploring the first 500 days of Swiggy

The co-founders of Swiggy— Harsha Majety and Nandan Reddy — met at BITS Pilani where the former was two years senior to the latter. The two of them already worked together at the photography club in BITS Pilani campus and happened to become close friends. Nandan was already meddling with his second startup at the time and Harsha was just returning from a backpacking trip in Europe. They were jamming with ideas and opportunities in ecommerce.

With a little naivety, they happened to agree that consumer commerce was already a taken opportunity with players with Amazon and Flipkart. Hence, alternatively, they came up with the idea for Bundl Technologies, which was about helping small and medium businesses and sellers with logistics services. Bundl was aggregating various courier partners across India and was providing a one-stop solution for them. They had come to understand the actual size of the market for this product, which was supposedly not very large. Nandan and Harsha then came back to the drawing board to identify a rather larger market opportunity.

“It was the best call to shut down Bundl, after seeing the opportunity costs and smaller market opportunity. Thereafter, we looked for other bigger opportunities in logistics and came across some solutions in Urban logistics. There were no such epiphanies around food delivery being broken but the North Star was about solving for Urban logistics.”

Rahul Jaimini, a senior software engineer at Myntraat the time, met with Harsha and Nandan through a close common friend. Rahul was excited enough to leave his job at Myntra, and now there were three co-founders trying to build what would end up being Swiggy today.

Good olden days

At Bundl, since there was not a lot of action in terms of operations, Harsha and Nandan outsourced all the technology to an agency. The only expenses were confined to cost-of-living. In the August of 2013, Bundl took its shape and form but winded up in June 2014. This was also a period when Swiggy was in its early stages.

Bundl was a B2B business that gave a bitter experience and it was an entirely different way of life for the founders’ liking. Realising that they would be bad at it, the founders wanted to focus on the consumer. Nandan and Harsha were living the bachelor life at the time and they had to order food often from outside. There were enough players in the market to deliver food, groceries and medicines on the premises of hyperlocal delivery with fast turnarounds. A few select restaurants would deliver but charge a lot for the same or not deliver unless the order size was Rs 500. Besides, the packaging was never up to the mark.

“We wondered why this was such a big problem because Domino’s cracked it really well. After peeling the onion, we found out that food delivery was a relatively easy problem to solve. Perhaps we were also naive enough to believe that there was no real competition.”

The founding team was diligently taking a logistics-first approach and hacking away at the problem. 

• They were confident that they would like building it and using it, and wanted to check if other users would, too.

• The restaurant players in the market, with their own set of problems, would offer deliveries in one hour, but Swiggy set a cap of 30 minutes for its deliveries.

• On a fundamental level, the founders believed that the category can truly be disrupted with this approach, and were not swayed by other factors like competition.

• The team stuck to its own belief system, values and strategy and continued to build the company to what it is now.

• In hindsight, all large-scale success formulae and businesses around the world have been built on marketplace models.

"India was new to the first-party logistics trend, compared to merchants relying on their own logistics delivery models, and the need was very acute. But we stuck to its customer-first approach irrespective of the market challenges.”

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The Koramangala model

Swiggy started off with five to six delivery partners and 15-20 restaurants within Koramangala, Bengaluru. At this point, it was natural to not be able to differentiate between a good restaurant and a bad one. So the team picked only the good restaurants that did not have their in-house delivery services.

• They went on to partner with a few restaurants and for the ones that did not want to, the founders took the food parcels home taking the pictures and listed them on Swiggy.

• Until April 2015, there was hardly any user traction with no mobile application but a mere website.

• They had to go to the popular food lane near Jyoti Nivas college in Koramangala and distribute pamphlets to the users visiting the restaurants anyway.

• A friend of Harsha’s who worked at Flipkart at the time, circulated the news about Swiggy in the company’s internal groups. The next day, there were around 35 users on the website, which saw Swiggy’s first taste of scale.

• With word-of-mouth and repeat users, traction grew. But eventually, restaurants started to notice Swiggy since they were losing their own business otherwise. 

• Subsequently, Swiggy had to give out 100s of pamphlets to these restaurant owners who would then push out the service to their visiting customers. Over time, the wheels started running faster at Swiggy.

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• Until December of 2014, the team was only Nandan, Harsha and Rahul and a few delivery partners. The job was split between the three. Nandan would do Sales, Customer Success, Firefighting and also help the delivery partners navigate through the Koramangala streets.

Harsha would carry out the deliveries himself, which is more than a 100 deliveries. The team would convert physical menus from the restaurants into excel sheets. At the time when things weren’t so data-heavy, the reliable metric was seeing a few dozen people continuing to visit Swiggy and eat out often. This was considered to be a proven thesis that the product was working and had attained a market fit.

What really went right

Swiggy was able to get a really good set of key hires in the first few phases, who still continue to work with the company now. Being a critical part of any business, Harsha says they managed to get the part just right, which otherwise would have been a crumbling journey.

Most of these hires were first and second order connections from BITS Pilani and IIM-C.

"I think Nandan and I were at a place where we allowed people to do their jobs and not be keen on managing them. It also meant that we were able to move faster and respond to the market immediately.”

What did not work out

At one point, Swiggy went to employ a few hundreds of employees from 30-40 of them in a matter of only six to seven months. The version of culture was very unstructured and not very well articulated in this time. The key hires and the concerned vertical heads went on to hire more people, and the startup took ample amount of time to hire a Head of Finance and a Head of HR. There was a phase of expanding from a single neighborhood to seven cities rapidly with a lot of hustle and good intentions. But several things were overlooked and neglected in the process, in terms of finances and budget allocation. z

The learning curve

A large part of core values at Swiggy is to be consistently curious and constantly learn. Most of the founders’ learning at Swiggy was through insightful books and from the people that would join the startup. At every stage of Swiggy’s growth, there were hires solid enough to teach the founders how-to around a certain aspect.‍

“Whenever there was a specific theme that I wanted to get better at, which was not possible through any other means, I often buy half a dozen books that sum up that part of learning and just read them all. I wish I did more of that earlier but it’s something I picked up along with Swiggy which only turned out to be a constant. They are the biggest source of my learning.”

Anand Daniel is a seed/early-stage venture investor with Accel Partners.