Entrepreneurship: Dimensions, Challenges and Innovations

Entrepreneurship: Dimensions, Challenges and Innovations

Introduction

Start-ups seem to have exploded in India over the past few years. Scarcely a day goes by without news of another new red hot business that is poised to take the market by storm. We are all familiar with success stories like Flipkart, OyoRooms or Paytm. However, for every success there are ten or more failures. In this article, we shall take a look at some of the most important aspects to keep in mind while discussing entrepreneurship opportunities. We shall also take a look at one of the success stories in the Indian startup context, the story of Wow! Momo.

WOW! What a Story

The story of WOW! Momo began in 2008, with Binod Kumar Homgai and Sagar Daryani, two batch mates who were pursuing B.Com degree from St. Xavier’s College in Kolkata.

Both Homgai and Daryani were offered lucrative jobs during campus placements, but turned it down to open their own restaurant. Both of them loved momos (steamed dumplings) and wanted to try their luck at turning their favourite dish into a business model.

The two men started their business with a meagre investment of Rs 30,000 (from Daryani’s father) and set up their first kitchen in a relative’s house in Jadavpur. With the investment they bought utensils and hired two part time cooks. The two were able to rent a kiosk at a mall in Tollygunge and Wow! Momo officially opened on 29th August 2008.

Homgai and Daryani faced an uphill battle from the very beginning. Most of their ingredients and raw materials were taken on credit from local grocery shops. They also had to travel everywhere by auto. To promote their business they used to stand at the entrance of the mall and hand out leaflets and free samples of their offerings. On their first day, the duo earned about Rs.2, 000 and by the end of the month they had earned over Rs.50, 000. Seeing their success and amidst a positive response from customers, the managers of the mall offered them kiosks in other branches across the city. Over the next two years, Homgai and Daryani opened similar kiosks across six different locations, in malls and supermarkets across Kolkata. In 2010, the first independent outlet of Wow! Momo opened its doors in Sector V in Salt Lake, Kolkata.

Today, Wow! Momo has 117 outlets across India, in Kolkata, Delhi, Gurgaon, Noida, Bengaluru, Chennai, Pune and Kochin. The company sells over 2.5 lakh momos across the country every day, employs over 850 people, boasts an annual turnover of Rs 30 crore and is currently valued at over Rs.100 million. The Jadavpur house where Homgai and Daryani set up their first kitchen is now the company’s headquarters.

Despite all their accomplishments, the duo is not resting on their laurels. They plan to open another 500 outlets across India by 2021, expanding to cities like Mumbai, Hyderabad, Patna and Bhubaneshwar. Also in the works is a plan to expand to foreign markets in U.K. and U.S.A., with frozen momos.

 An opportunity to kill for

If there is one primary takeaway from Wow! Momo’s success, it’s that the fast food sector along with quick service restaurants (QSR) is poised to make a big impact in the Indian market. According to a report by Euromonitor International, fast food industry grew in India by 12% in 2016.Also, according to another to another report from the Economist Intelligence Unit, the Indian fast food market was projected to double in size between 2013 and 2016, to around $1.2 billion .It seems that despite growing health awareness among consumers, the fast food industry remains relatively unaffected. One explanation could be that consumers these days rarely have the time to stop and take leisurely meals anymore. Customers are keen to spend as little time as possible waiting for their food to be prepared and prefer to have their meals on the go. Additionally, a projected CAGR of 22.1 % for QSR by 2021 and a rapid growth of India’s middle class (estimated at 267 million) make it a lucrative market for any entrepreneur looking to make it big.

The fast food and QSR industry in India is one that rewards risks and constant innovation. Also, making the menu offerings appealing for different types of customers is a big challenge. Going back to Wow! Momo, we can see that they kept offering new products (like momo burgers and chocolate momos) to cater to the tastes of different customers. In the upcoming section, we shall take this example of business model innovation further and discuss how a prospective entrant into this market can hope to improve and innovate on the currently existing models.

Business Model Innovations

The remarkable growth of fast food market in India has attracted a whole host of major players like McDonalds, KFC and Subway to name a few. It’s pretty evident that a new, up and coming entrepreneur cannot hope to match these giants in terms of finances, marketing and sheer volume. Hence, bringing any form of innovation to the table should be the primary goal of an entrepreneur. It can be in terms of the product or services offered. Anything new that an entrepreneur can offer will help set him apart from both major and minor players.

Here we can again go back to Wow! Momo for a few examples. The product that they focused on, the humble momo, was generally popular in Bengal and some parts of the North East. Many restaurants and fast food stalls used to sell two or three varieties of momos. However, Wow! Momo immediately set themselves apart from the rest through the sheer variety they offered in their menu. Their offerings included the traditional veg and non-veg chicken momos and unique dishes like paneer momos, prawn momos and stir fried momos. Today their menu has expanded significantly and includes unique dishes like momo au gratin, momo burgers and even chocolate cake filled momos! By constantly expanding the limits of what was possible with a simple dumpling, Wow! Momo has brought several new, fresh ideas to the field. Judging from the customers’ responses across India, we can definitely say that Wow! Momo has lived upto its name.