Knowing the insights of the supply game

The quantity of traffic is what comes for deals and discounts or “I just require one thing instantly” and all of those things. And they may go wherever they can find a little bit of a deal but use Dunzo because it delivers quickly. They’re not gonna pay top dollar for it.

What defines our primary job?

Our primary job as a business is to make sure that we don’t lose money on this. What it does is it creates a great amount of highly dense supply on the ground. The density of demand creates a density of supply. What you do then is you take the density of supply and feed into the quality business.

The Ken: What is the quality business? Price-insensitive customers?

Biswas: Price-insensitive.

The Ken: So, get price-sensitive demand to drive supply, then use supply to fulfill price-insensitive demand?

Biswas: Yes. I’ll give you a small example, something that I’ve validated with Ola. The 5 min, 7 min, 10 min ETAs that you and I see is because of the density of Uber Pool or Ola Share.

Ola Share, by itself, runs on a loss, but what it does is it creates insane numbers of cars on the road. Because at 40-50% of traffic on the road, it allows these people to be busy all the time. Even if they lose a little bit of money on it, they make all of that money back on you and me.

So you and I are profitable for them, and the reason why we end up seeing a great amount of supply on the ground saying 5-7 mins availability is that Ola Share creates a lot of demand on the ground. These are people who are willing to travel in a cab for 50 bucks, instead of auto, by taking 30 minutes longer. And when those cabs get free, they become available for you and me to go singularly.

The only reason this works is when your supply network is the same. If the supply network is different, then we’ll never get economies of scale. That’s why we say we’ll always be bikes-only.

The supply game

The Ken: What if we look at your potential market as the supply side (partners), instead of the demand side (customers)?

Biswas: That’s the only way. Our competition, if you were to really sit back and think about it, looks like Swiggy and Ola. And that is why a Swiggy now wants to go ahead and say ‘what more can I do beyond food’. It’s why Ola, which is into the cabs business now, wants to do food and other things.

The honest thing, unfortunately, is that we are all dispatch businesses. We are not for food businesses, we are not logistics businesses. We are convenience businesses, sure, but at the core of it all, what we are doing really well is we’re dispatching really well.

The Ken: So what you’re really fighting for, “the market”, is attracting and retaining partners? And the real reason why you’re offering bike taxis is that you want your partners to be better utilized and more satisfied with the earnings and time. Usually, it’s the other way around, right?

Biswas: I don’t think that’s a revelation to anybody. I think everybody’s realized that once you go ahead and start pivoting into this, globally this seems to be like a supply business. This is literally the internal transition in this company. We started off as an extremely user-centric business, obsessed, etc. After a year of functioning, we quickly realized that this is a supply-side business. I have this product manager who puts it very interestingly, saying, if you’re delivering in 30 minutes’ time, you don’t need to build a user app, you can build a Google Form.

The Ken: Because users will put up with the friction?

Biswas: Because users will put up with the friction. I thought the Google Form analogy was very interesting because it tells you the power of the actual supply network. Because this is bound to happen. This is the way locals should function. This is the way that cities should actually go out and function, where every point in the city becomes transactable with or reachable – you can commute from there. Because this is the most efficient supply layer in the city, it travels at a buck and a half a kilometer. Cabs will never be the most efficient way to travel.