Why TinyOwl couldn’t fly high and failed as a startup

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This might be the first time you hear about a food delivery platform called TinyOwl. This is because before the food ordering market could reach the booming levels, the company had to shut its services due to the company’s failure in managing money.

 

The start of startup

TinyOwl founders
TinyOwl founders

Marked as one of the most prominent startups in India, TinyOwl started its operations with five members in the company – Harshvardhan Mandad, Tanuj Khandelwal, Gaurav Choudhary, Shikhar Paliwal, and Sourabh Goyal. They aimed at developing an app that would combine food and tech to ensure excellent food delivery options. The company planned to work in the market at a time when the investors were willing to invest, and the Indian market was fresh in this area.

Tiny Owl started had four different funding rounds from 2014 to 2015, and big investors decided to pitch in to help them. By the end of 2 years, the investors helped them by raising $27.7 million, which gave the company a good start. With vast amounts of funding at disposal, they went all out with the hiring, scaling, and expansion process irrespective of the capacity. This lazy approach resulted in operations in 11 cities with about 600 employees.

 

The crash of the Tiny Owl

An alert was sent to the users in 2016, which involved information regarding the shut down of the company from 22nd May onwards. The warning was sent to people who lived in the 11 cities where they expanded their operations; however, people in Mumbai didn’t receive the notification. People were shocked to see this notification, but the investors and industry experts were not surprised to see this because of the way the company was spending money from the past two years.

 

Here are some of the reasons that lead to the downfalls of the company:

1. Lack of experience of founders

All the co-founders were under 25 years of age, and when they received the funding, they blew up all of it as they had 600 employees and multiple cities to take care of, but only one thing was missing – knowledge and experience to handle all this.

 

2. Too many funds to handle

With such a considerable investment in their hands, this put a lot of pressure on the company and the founders, and they thought that the best way to do this would be by hiring more people and spending more money on more resources. They over-hired and over-expanded but didn’t have the right plans for its management.

Hostage situation at TinyOwl office where co-founder Gaurav Choudhary was held hostage
Hostage situation at TinyOwl office where co-founder Gaurav Choudhary was held hostage

Later on, to reduce the costs, they had to practice vast rounds of layoffs, which didn’t help them as the employees protested this move. It was reported that employees in Delhi and Pune kept two CEOs hostage to protest the layoffs.

TinyOwl didn’t know about its core metrics, and core metrics are essential for a company as they set the core according to which the company will carry out all its operations.

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Vineet Chaudhary is a content writer with computer applications as his background field. His interests range from writing and photography to going out for trips and rides on weekends.

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