A food startup founder recently shared an honest story about the challenges of growing too fast. His post on Grapevine highlights his six-year journey, from a small kitchen in Gurgaon to managing 78 cloud kitchens across India. It offers valuable insights into the difficulties of rapid growth and becoming too reliant on third-party platforms.
Starting Small: The Beginning
The journey started in 2018 when the founder, frustrated with the lack of healthy food options in Gurgaon, began making fresh salads for himself and his coworkers. He rented a small kitchen in Galleria Market with Rs. 8 lakh in savings and started offering eight salad varieties. Initially, the business was slow, with only 12-15 daily orders, but customers appreciated the fresh ingredients and generous portions.
Growth and Success During the Pandemic
By 2020, orders grew to 180-200 daily. The pandemic boosted demand for healthy meals, and corporate orders helped the business grow even more. The founder’s unit economics improved, and the business expanded quickly.
The Cost of Rapid Expansion
However, scaling too fast brought new challenges. The startup became heavily dependent on third-party platforms, with commissions rising to 32%, plus 18% GST. This increased competition and reduced profits. As costs rose, the business burned through Rs. 80 lakh per month. The founder now regrets focusing on fast growth instead of sustainability, and they’re considering closing 40% of their kitchens.
Lessons Learned
Looking back, the founder believes it may have been better to stay small and focus on profitability. He remembered the early days when the team was close, and they knew their customers by name. The food quality was better, and the business felt more manageable.
Advice for Other Entrepreneurs
At a critical point in his journey, the founder shared advice with fellow entrepreneurs: “Sometimes the best way to build something big is to stay small enough to survive.” His experience is a reminder that scaling too quickly can bring unforeseen challenges.
