GREAT LAKES GUEST LECTURE SERIES – Mr VIVEK KAPOOR
Co-FOUNDER – DINEOUT
14th July 2018
On a particularly hot summer Friday afternoon, the Ninjas and Aztecs – the PGPM and PGDM 2019 batches of Great Lakes Institute of Management, Gurgaon – came together to welcome Mr Vivek Kapoor, a sailor-turned-entrepreneur and co-founder of the flourishing start-up – Dineout.
Mr Vivek Kapoor: At the age of 18, Mr Kapoor joined the Merchant Navy and sailed as a Cadet for 2 years on Italian-owned vessels. He sailed for almost 30 months as a 2nd Officer and has a Chief Officers Certificate of Competency from DG Shipping, India, before he set out to be an entrepreneur.
Inception of Dineout
Mr Kapoor took the students on a 90-minute journey to showcase how he started the company with three of his friends, who all had been working with international MNCs. They planned to launch Dineout as a restaurant reservation system on February 29th, 2012, after having partnered with 80 restaurants in Delhi with zero on-boarding fees.
As is the case with any start-up, the initial days were not as smooth as they might have imagined. In a pre-Jio era, when smartphones were still becoming popular, getting users on their website was a Herculean task. So was getting a response from the restaurants. In order to tackle this, they set up a hotline for booking reservations along with shifting their email-based system to SMS based. Six months down the line, in August 2012, they landed their first investor, who interestingly happened to be one of their early customers. Within a year of being in operation, their team grew from 4 to 30 and their user base grew from 3,000 diners a month to over 8,000 diners.
Partnership & Acquisition
Soon after, they were approached by Times Internet (formerly known as TimesCity), the “Yellow Pages for restaurants” as he called them, for a partnership requiring them to power the “Book Table” button on their website. Within just two months of partnership, they offered to acquire Dineout. In Mr Kapoor’s words, “As entrepreneurs, it was a very difficult and confusing time, because no entrepreneur would start his company and think that within one or two years of the company’s existence, he would have to wash his hands off the company”. Times Internet, however, had different plans. They still wanted the founders to run the company even after the acquisition.
Transition from Table Reservations to A Leading Restaurant Technology Provider
Post-acquisition, from 12,000 diners a month in April 2014, they grew to 54,000 diners a month by April 2015. They scaled to 8 cities, and the team grew from 30 people to 150 which included a 45-people call-centre team. However, booking tables via calls wasn’t a sustainable way to move forward. A software-based system was the need of the hour, and that’s when they acquired Inresto, a small Bengaluru-based technology company.
With Inresto in their portfolio, Dineout grew to be a company that builds technology for restaurants and not just facilitates table reservations for diners. Inresto developed into a tool that catered to all the needs of a restaurant, from Feedback Management, Table Reservation to Order Management and Campaigns. Along with having a user base of over a million users, Dineout currently is the leading technology provider to the restaurants.
Dineout did face a lot of challenges such as lack of inter-partner chemistry, lack of clarity, organizational structure, infrastructural issues and doubts on their validity. Mr Kapoor brought to light the fact that one needs to be aware of one’s strengths and weaknesses. Equity shares amongst the partners prior to the acquisition were not equal and this kind of disparity can be brutal. This was overcome after the acquisition by keeping in mind the future growth of the company.
While talking about Dineout’s strategy for acquiring users, Mr Kapoor said that closing the loop, or completing the transaction, is important. To attain this, Dineout introduced Dineout SmartPay, a brainchild of co-founder Sahil Jain, to identify customers on Inresto and make payments easier. They have also aggregated various delivery services like Zomato, Swiggy, Food Panda along with payment services like Paytm, Freecharge, PhonePe, Visa, etc. He also mentioned that if discounts are considered the right way to go, they are actually not. Simply providing discounts is not the right way, but how the discounts are positioned is more important.
Rising above the Competition
On being asked about how Dineout is trying to create a different position for itself among companies such as Zomato, Nearbuy and EazyDiner operating within the same space, Mr Kapoor responded by stating that the USP of the company is Adaptability. Dineout is focused on doing what the restaurant wants them to do and what the diner expects them to do. Zomato has the highest restaurant discovery rate but it lags behind Dineout in table reservations. Dineout SmartPay has recorded more transactions than Paytm in restaurants. From the restaurants perspective, Dineout is far deeper in providing technology than any other competitor. Dineout is also getting into Big Data and Analytics, working with around 40,000 data points, helping partner restaurants with expansion and customer data analysis.
Author: Arpit Gupta
PGPM, Class of 2019, Great Lakes, Gurgaon