Tiffinwalla 2.0

The dubbawallas of Mumbai are an iconic cog in the city’s complex infrastructure. Their persistence defies reason, and has earned them a certain celebrity in a city defined by its larger-than-life characters and institutions. The changing fortunes of the city have not dampened the prospects of the dubbawallas, whose business model has survived stock market crashes, train blasts, monsoonal ire, and even the arrival of the food court across city malls. Everyday, nearly 200,000 of Mumbai’s working class opt to have their home-cooked lunches couriered to their offices (and later have the empty containers collected and delivered home), all for a reasonable stipend. This simple value proposition masks a complex logistical undertaking. One that is all the more admirable considering that many dubbawallas are illiterate, and rely solely on a colour coding system that assigns each lunch box to a unique address.

Of late, I have observed my local dubbawalla negotiating his way through busy intersections, ignoring bemused pedestrians as he wheels his tricycle packed with lunch deliveries, onto the footpath. With a sense of urgency he frequently jumps off his tricycle to offload lunch boxes, and hurries into office buildings to make deliveries. What is remarkable is that my local dubbawalla is a German backpacker named Toby, holidaying (and now working part-time) in Melbourne, Australia. A cycling enthusiast, he’s forgone the cycle courier jobs he probably anticipated he’d be doing, for a “tiffinwalla” job (another name for dubbawalla). Besides, this job includes a hot meal.

Tiffins.com.au is the brainchild of Melbourne-based entrepreneurs Mikhil Kotak, 31, and his younger brother Maddy, 26. Now in their second year of operation, the brothers run their business from an industrial kitchen / office located in one of Melbourne’s trendier inner city suburbs, Docklands. Averaging 1500 deliveries a week, the business is adding on average 250 new customers to their database every month. Having taken twelve months to break even, the brothers have set the audacious target of over $800,000 in revenue for the next twelve months.

Founders Maddy and Mikhil

This is heady stuff for the brothers, who, while joking about owning beach front properties someday, are mindful of their humble origins. Both grew up in an industrial and decidedly middle-class district about 80 km from Mumbai. To help make ends meet, the boys would cycle around their local neighbourhood after school, delivering lunch boxes prepared by their mother. The popularity of their mother’s curries notwithstanding, the additional income from this family business was meagre. Years later, motivated by a greater sense of purpose, the brothers would save what they could, and borrow the rest to arrive in Melbourne as overseas students.

After graduating from University, neither brother seemed content with the monotony of a nine-to-five job. Mikhil would often stay awake at night imagining a different life. It was on one such occasion that he had what he calls his “unconscious dream”. What if they adapted the dubbawallas’ lunch delivery business for Australia? After all, they already had some experience operating such a business in India. Could it work in Australia? South Asian immigration was on the rise. Indian food was always a popular choice amongst locals. And, besides the crowded food court or last night’s leftovers, office workers had few alternatives for a healthy, nutritious and wholesome lunch meal.

Mikhil wasted no time in calling his younger brother. Both agreed the risks were enormous. Between them, they had a few thousand dollars, were still paying off student loans, and didn’t have an asset to their name. More important, if things soured in the business, what would it mean for their own relationship? And yet, their gut instinct was to put everything on the line. They’d borrow from friends and family. They’d max out their credit cards. And if in twelve months everything failed, they’d get ‘regular jobs’ and spend the next five to seven years paying it all off.

Six months later, they scraped together $150,000 – just enough money to lease an industrial kitchen, hire a chef, order tiffin containers from India, and buy 5 tricycles for deliveries. Calling in a few favours from their mates in IT, they spent a $100 on a web template and built their first website. The service officially launched on 5 April 2007, with Mikhil sending out a promotional email to his former colleagues at the bank where he’d worked. Their value proposition was simple – a vegetarian meal for $6, or a non-vegetarian meal for $7, delivered to your workplace every week day. In the first week, about fifteen orders trickled in, some of which ended up at the wrong address.

Tiffin Squad

Today, though not quite on the scale of their Mumbai brethren, the brothers have built an operation that works with clockwork precision. Sitting in their Docklands kitchen / office, trying not to get distracted by the sound of industrial strength dishwashers cleaning hundreds of tiffin boxes behind me, I begin to appreciate the effort and personal sacrifices that fuel their ambition. Mikhil and Maddy explain how they researched the Melbourne CBD lunch market, right down to timing how long it takes for the average office worker to make the trip to the nearest food court, order a meal, and return to their desk. They talk about how they’ve continuously refined their market penetration strategies, realising early in the game that it wasn’t local Indians who were their biggest customers, but Australians, who account for 60% of all orders. They emphasise their decision to forgo any advertising and rely on word of mouth awareness, investing instead – in a stroke of brilliance – on custom fitted and eye-catching Danish tricycles for deliveries, that do all the advertising for them. They take me through a typical work day, starting at 7:00 am when their kitchen opens, and finishing well past 9:30 pm, every week day.

The novelty of their venture has earned them favourable local press coverage, the free publicity raising their brand awareness across Melbourne. Feeling vindicated, this public recognition has only fanned their ambitions. When on an episode of Gordon Ramsey’s “Kitchen Nightmares” the celebrity chef attempted to transform the fortunes of an Indian restaurant by starting a tiffin lunch delivery service for local office workers, Mikhil and Maddy received phone calls from loyal customers the following day saying Gordon Ramsey had pinched their idea.

The brothers have no plans to slow down. They’ve planned a café on the banks of the Yarra River (ironically, within walking distance from where Gordon Ramsey will be opening his own fine dining establishment). They’re working on taking their business beyond Melbourne’s CBD to other business districts. They’ve set up an offshore call centre in India to handle customer queries 24/7. And they’re in the process of overhauling their entire website – still a cornerstone of their operations – so it can handle the rapid increase in online orders coming through daily.

As I wrap up my interview, the brothers let slip something that conveys more than they perhaps intended. I understand at once what continues to motivate them, and gives them their sense of accomplishment. The person who got them started in this business back when they were still teenagers on bicycles is making her maiden trip to Australia.

The Long Tail and social networks

In Chris Anderson’s best-selling thesis “The Long Tail” , he lauded online businesses that go to market with niche offerings, positing that a sizeable (and profitable) opportunity exists that mainstream businesses typically ignore.  Last week, Anita Elberse, in her HBR article titled “Should you invest in the Long Tail?” countered that argument, citing data that showed that mainstream demand continues to trump obscure, niche interests for wallet share.

While a healthy debate has ensued online between the authors, clearly both notions are plausible. Indeed, their relevance even impacts the strategies corporate decision makers pursue when deciding on how best to participate in online social networks.

At mainstream social networks like Facebook, My Space and Orkut, millions of members connect with friends to communicate and share experiences, forming clusters of people who have either something they identify with, or someone they know, in common.  Individual clusters expand and combine to form thriving online communities, where, as in the case of Facebook, over 250,000 new users sign up every day to participate.  The network effect inherent in sites like Facebook has challenged marketeers to embed their brands in the social experiences of their members.

The Long Tail theory applies spectacularly to online social networks too.  No matter how obscure your interest, idea, or obsession, there is likely a niche social network waiting to sign you up.  And where none exists, it is effortless to start one of your own, thanks to open platforms such like Ning (which had over 275,000 social networks as of May this year).

Niche online social networks can become a potent force, when they transition to full-fledged multi-sided platforms.  Consider LinkedIn, a professional networking site with more than 19 million members that renders the traditional Rolodex obsolete. Adding people to your LinkedIn network is akin to collecting business cards, except you get to view the person’s work history, and get a sneak peak at their network of contacts. And, whereas a business card is useless the moment a contact changes jobs, LinkedIn profiles are assiduously updated to ensure no achievement or career transition goes unnoticed. LinkedIn is well positioned to transform into a multi-sided platform serving the needs of individuals, recruitment firms, and employers.

As in the euphoric dotcom years, it is once again web start-ups who are rewriting the rules across industries. Still, significant opportunities do exist for traditional brands to extend their reach by embracing social networks, whether they participate in a mainstream social network like Facebook, or create their very own niche network. Last year, I posted a blog on how Choice magazine (a not-for-profit consumer reviews publication based in Australia) had squandered an opportunity to extend its brand online and tap into the collective wisdom of online Australians.

An equally compelling opportunity exists for another Australian publication – Vive magazine. This bi-monthly magazine for “women who mean business” has carefully cultivated it’s brand. Ambitious, sophisticated, and an astute sense of balance aren’t just Vive’s brand attributes -they could just as easily be traits their niche audience aspires to. The publishers of Vive have a tremendous opportunity to extend their brand values online, and to become an influential online destination for their key demographic. A hypothetical Vive online social network for women could allow members to comment on articles; authors and contributors could blog more frequently and initiate discussions on various topics; and, clusters of interest could emerge around subjects as varied as ‘working mothers’ to ‘starting my own business’.  Even the potential for advertising revenues would be amplified given the target audience at the site. 

There have been attempts by incumbent industry leaders – albeit limited in scale and ambition -  to extend their brands online via social networks (examples include Ernst & Young’s Facebook group to start a conversation with new grads, the HSBC Business Network, and Amex’s Open Forum). Perhaps the debate ignited by Elberse’s rebuttal of Chris Anderson’s The Long Tail will inspire corporate decision makers to revisit their own online social networking ambitions, and, who knows, maybe the next LinkedIn or Facebook will be the wilful foray of an old world company, attempting to rewrite the rules online.