Dunzo- Learnings
What made dunzo fall so bad. They seemed to be doing good. Can someone share what major mistakes they made that have led to such heavy cash flow issues.
Aaron Carmden
Stealth
a year ago
Taking money from reliance
1. Heavily relying on VC funds
2. Competing with cash-rich players in a tough market in a low-margin business
3. Really short-term plans with no long term vision
Actually when they launched - their initial version or model was good and attractive. Even though it was small market but still it was new and a real problem to solve were users wouldn’t mind to pay for the service.
But as soon they started to enter the competitive market like grocery delivery etc.. it’s started their downfall.
The courier pick up and drop service had a really low TAM so no chance for them to have more funding with the same business unless they pivoted to grocery delivery.
Did not leverage as the first movers
Did not differentiate to retain customer or acquire new customers
Example - I use Swiggy .. so started using Swiggy genie ..why use Dunzo ?
Should have targeted particular customer segments , markets to scale and keep competition away .
Difficult space to be in, but full credit to it for coming out with the model and getting it established
Difficult business model. That’s pretty much it. Never made economic sense at sub scale. And not enough money pumped in to scale with burn.
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