I started reading "The Golden Tap" during the Initial Public offer of Infibeam-the first e-commerce
company in India. They were aggressively marketing, but I was very skeptical as their proposition
was not compelling. Its a coincidence, that this book refers to the story of Internet IPOs in India
during 2005-2008. Only three companies were well funded during that period, later none of them
got significant funds. May be the Infibeam promoters understood the timing well and investors
didn't.
As we all know e-commerce business is a red hot sector for Venture Capital (VC) industry. I always
had this question -what makes VCs to veer towards a startup and lavishly fund them? Hence, I was
very keen to read this book. The book captivated me, when i read a section on This-of-That
investing. This=established market spaces. That=emerging market countries. Ideas that are
successful in the US, pick the ones that will apply in the Indian Market and then infuse funds. My
view this investment strategy is very naive one. Its similar to using copy & paste function in an MS
Excel sheet to copy a formulae. A razor-sharp section explaining the VC investment process.
Mr.Deorah's journey from IIT-Bombay to Silicon Valley and then back to Mumbai is a breezy read
but with lots of substance. I liked the way he started his new business venture- Chaupaati Bazaar
and sold his venture to Mr.Kishore Biyani. It was inspiring the way he set up the firm, and the way
the deal was closed with FutureBazaar.com.
Mr.Deorah has shared an interesting observation about early days of Flipkart.com, they were fanatical
about customer experience (CX) at any cost. Mr.Bansal, co-founder owned up the entire brand
experience for his customer. I felt, Flipkart implemented CX culture in early days (2009) where in
most of large corporates may have realized it only post 2013. No wonder, they have a great brand loyalty.
The kernel of this book is about perspectives on valuation of Flipkart, Housing.com and the way
the speculative funds are flowing into the start-up ecosystem. His view on Unicorns made me
realise about valuation game. I agree with Mr.Deorah's view on Housing.com episode. Getting
excess funds alone cannot drive success, leadership skill at the top is key success.
Now, I started respecting Zomato as a firm - they had not raised money from global funds in its
journey to becoming a unicorn. The section on Unit Economics is a very prized one. In a funding driven
e-commerce companies the operating losses (loss per transaction excluding fixed costs)
ranged from -15% to -30%.
Lots to insights from Mr.Deorah's venture - Chalo app - customers could use this in restaurants for
a seamless experience. The way he went about striking a deal with OpenTable was brilliant. My
take away from both Chalo App & Chaupaati Bazaar was Mr.Deorah knew the significance of
product which most Indian tech entrepreneurs don't attach importance. After completing the book
its tacit now what drives the VCs to gaze at start-ups. A must-read for all start-ups.
It appears to me that the story has not ended as the Golden Tap has not gone dry yet. The
question is - After the tap goes dry - who will pay for the "convenience" e-commerce companies or
Indian consumers?
