Anyone and everyone even remotely interested in the Indian internet space has heard of Housing.com. The company and its controversial co-founder Rahul Yadav became a household name amongst start-up enthusiasts. Every Ram, Ratan and Hari in the start-up scene has at one point had animated discussions whether Yadav was legitimate or just another flash in the pan. For a brief but memorable period, Housing had captured the imagination of young, entrepreneurial India. The brash energy of the founders epitomised what many young Indians were striving for and inspired them. But after some time and millions of dollars spent on glitzy ads, the frenzied excitement for Housing started to dissipate. Funding became difficult to acquire and that seemed to take the wind out of the enterprise’s sails. People realized that raising vast amounts of funding was not the end all and be all of start-up success. What was much more important was whether the start-up had built a viable business which could stand the test of time.

While everyone and their granny were caught up with the Housing mania, one of their competitors was building a real estate platform which effectively matched the requirements of buyers with sellers. The company, 99acres, was also intently observing Housing but did not share the same excitement as other members of the start-up citizenry. Hitesh Oberoi, the CEO of Info Edge (the parent company of 99acres) was constantly fretting and complaining during every investor conference call around then, that their competition had lost its marbles. The disproportionate and irrational expense on marketing was distorting the real-estate portal market and this kind of intensity in the name of competition would be injurious in the long run. Yet, 99acres had no choice but to follow suit in marketing so as to maintain its market share. It did not help matters that the real estate market was going through a severe downturn and thus further eroding the return on such market spending. There was just not enough bang for buck to merit such humungous spending.

Eventually, sanity prevailed when the investors of Housing decided that enough was enough and the antics of Yadav had to come to an end. He was fired unceremoniously and a new CEO was installed. A more dignified version of the same story is playing out in the Cyrus Mistry-Ratan Tata saga. With the departure of Yadav and the acquisition of another competitor commonfloor, the expenditure on marketing declined drastically. Housing and other loosely funded start-ups started losing out to companies with better fundamentals and smoother organisational practices. A jazzy design and elegant interface were great but what the customers really demanded was a closure of their real-estate transactions. That was what Housing could not provide while 99acres excelled at it. Now Housing is on a slow decline (its million dollar valuation is steadily turning fictional) while 99acres is steadily takes over the real estate platform market.

A careful analysis of the situation shows that 99acres was following a template designed by Info Edge which had earlier entered the jobs classified market and is dominating it through Naukri. The framework can be simplistically described as:

A minimalistic yet user-friendly interface.

Focus on the supply-side.

Build a hard-working enterprise sales team.

And finally, focus on the demand-side through quirky and humorous marketing (remember the Hari Sadu ad?).

The important milestones lie on the supply side; the demand side would eventually follow once that is sorted. Naukri’s template is working well for 99acres. Though it is too early to declare a winner in the market as Magicbricks is providing tough competition, it is undeniable that 99acres is on firm footing.

Even for Naukri, it was not all smooth sailing. It was battling with another local start-up, JobsAhead founded by Alok Mittal. What changed the tide was the acquisition of JobsAhead in 2004 by the US-based employment platform Monster. For Naukri, it was as if someone had just taken their foot off the brake in terms of competition intensity. Naukri raced ahead while Monster was acclimatising itself to the Indian market. Naukri has not looked back since. Even currently, Naukri is miles ahead of its competitors like Shine, Timesjobs and Monster. It still faces competition from LinkedIn which is garnering a sizeable share in the recruitment market. Also, Naukri is taking steps to adapt to the changing landscape by becoming a major part of the recruiting ecosystem rather than simply enabling handshakes between recruiters and job hunters.

The success of Naukri has made it a virtual cash-cow which generates around Rs 250 Crore yearly through which Info Edge bankrolls other consumer internet companies like 99acres, Jeevansathi and Shiksha. It also uses the cash to invest in start-ups and has succeeded in hitting pay dirt through Zomato and Policybazaar. Zomato looks especially promising with its global presence in restaurant discovery and an online ordering business in India. Zomato seems to have borrowed and benefited from the Info Edge handbook that 99acres followed and Naukri laid out. Of course, Deepinder Goyal and Pankaj Chaddah, the founders of Zomato have added their own unique approach especially with regards to aggressive global expansion and acquisitions. Zomato may or may not live up to its unicorn tag (which means a company has a valuation of a billion US dollars or more) but it has a lot going for it in terms of loyal customer base and decent unit economics. While it does not face too much competition in its major markets in restaurant discovery, it does face stiff competition in the form of Swiggy in the online ordering business. Zomato was criticised for being a late entrant to the online ordering business but its stance seems vindicated with the disintegration of companies like Foodpanda. Food delivery start-ups invested millions of dollars in creating awareness of the product and Zomato is reaping the benefit by swooping in like a vulture while the carcass of competition is rotting away.

With diligent execution and time-tested principles, Info Edge has managed to create a quintessential consumer internet company in India worth more than Rs 10,000 crore. While many billion dollar valuation tags turn out to be a figment of the imagination of private investors, Info Edge has created sustainable shareholder wealth as a listed entity. While many unicorns turn unicorpse at the slightest hint of trouble, Info Edge looks well poised to handle the next economic downturn whenever it occurs. Sanjeev Bikhchandani and Oberoi, the duo at the helm complement each other quite well. While Bhikchandani is a big picture guy who projects the vision for the future, Oberoi is the engine for the vision with his data driven and execution mindset. Both seem to share an affinity for being slightly paranoid and their eagerness to respond nimbly to the changing dynamics of consumer internet.  The new age start-ups can learn a thing or two from these veterans on how to survive, succeed and even thrive in the treacherous and highly competitive consumer internet space. On the whole, the odds are that Info Edge will play a further winning and pivotal role in the ongoing consumer internet revolution in India.