What changes in the business would you make today if it was your own money? Is a question which I asked myself and my teams many times. This is a question which you need to ask yourself and your teams if you want to build a successful, profitable, sustainable business!
When I started my first company back in 2011, I had a total of 16 lac rupees. That was the total funding I had. I bought used laptops, furniture, stationery, got the company registered, hired the team, and paid for salaries. In 3 months’, time we had zero amount left in our bank, but luckily, we had the website ready. This meant that we needed to go out and sell our product and boy did we sell! Our first meeting we closed a deal for Rs. 40,000/- second meeting we closed the deal for Rs. 80,000/- The reason we were able to sell super quick is because restaurants at the time did not have any platform to advertise themselves and we were able to add value which they jumped onto quickly. (Below picture of our home office, Favad and Inez can be seen in fcpakistan merchandise!)
In the first year we had revenue of around 1.5 crore rupees (Most of which came from corporate business, keeping Kurkure at restaurants during Ramzan – well talk about it some other time). Our team had grown to around 16 people with a monthly payroll of around 500,000 and the money which we made all of it used to go to cover the payroll. This period taught me the value for money – every decision we took had to generate the maximum ROI otherwise the company will shut down. It added a lot of grit in my character and prudence in how we spend money – any money, whether it was our own or from investors.
“Even to this day when foodpanda in Pakistan had a GMV top line of around 500 million dollars per annum and the largest E-commerce company in the country no one in the company was allowed to fly business, including myself – we always flew Economy. I personally preferred staying in affordable hotels (Rs. 8,000 to 10,000 per day) and used careem and uber to travel. During business meetings when people would ask If I was staying in Serena or Marriott etc – I told them that I am staying in x-guest house. My priorities were clear, it was building a business with prudence, rather than showing off!”
Post raising Investments and eventually becoming part of a bigger group, we started getting talent across the company. One of the theme’s which I noticed was this prudent approach of spending money started getting diluted. One of the common understandings I would hear is “Startups are supposed to keep bleeding money for the first 10 years” and I did kill this thought process within the organization very quickly. A person whose thought process is that startups are supposed to keep bleeding money for years and years, will never see those 100 areas of opportunities where things can be optimized to save each penny. I remember few years ago when we had become part of food-panda and there was never problem with funding etc. – We were doing a sales drive in Lahore, and we booked a guest house which costed Rs. 2,000 per night and there were around 5 people sleeping in that one room – God bless each one of them and give them more success! Those who are familiar with history of foodpanda in Pakistan know that we were a profitable business producing one hundred thousand euros in profit each month in 2016, only a year after EatOye! and foodpanda were merged.
Again, I would emphasize on asking this question “What changes in the business would you make today if it was your own money?” When you are spending million’s and you realize that it’s your own money being spend – then it’s doesn’t stay as burn on P&L, it becomes a burn within you – which eventually drives prudence within the whole organization. Even to this day when foodpanda in Pakistan had a GMV top line of around 500 million dollars per annum and the largest E-commerce company in the country no one in the company was allowed to fly business, including myself – we always flew Economy. I personally preferred staying in affordable hotels (Rs. 8,000 to 10,000 per day) and used careem and uber to travel. There are 100’s of stories like this which enabled us to be very prudent with money and build a sustainable business.