PAUL: It’s Paul.

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FLORIN: It’s Florin. What are we grinding today?

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PAUL: So, Florin, we are back after quite a while.

FLORIN: Yeah, definitely.

PAUL: What do you want to grind today and what we should discuss when we’re back? I would like to be a little bit mean. What do you think if we roast a little bit how FoodPanda acquired the Cloosh based HipMenu startup.

FLORIN: Yeah, I think that we need to be mean, green, and obscene with this episode.

PAUL: Yeah, because it was easy for us to order food at the office, and now it’s not anymore. So they hurt us personally.

FLORIN: Oh, yeah, that was really personal, to be honest. It was my top used app on the phone.

PAUL: Don’t mess.

FLORIN: With our food. Yeah, and don’t mess with sushi, got it? You can’t ever mess with that.

PAUL: And group ordering sushi because actually it all started from group ordering, which is funny.

FLORIN: I guess that’s right for most cases, but in my case, I really liked using the app even just for myself.

Preserving Brand Identity Post-Acquisition: A Missed Opportunity

PAUL: So should we give a little bit of background for the listeners to know? Yeah, we should. There was that awesome startup, HipMenu, which made a great app from a US perspective for food ordering.

FLORIN: They had a really great menu and they were really hip.

PAUL: In the specific of the closed market, they had an awesome feature which was group ordering, which allows you to group order food. Each one pays for his part or her part. So it was very easy to order food at the office.

FLORIN: Yeah, and you could easily share the links so that everybody could contribute and collaborate on the final tab that was being ordered.

PAUL: Yeah. And after that, they got appealing for FoodPanda, which acquired them.

FLORIN: Yeah. I guess everybody that I know was like, man, that was such a smart move because now if you want to order food in close, you will either go to FoodPanda or you would go to HipMenu. But the company that owns both is the biggest winner in the market. And everybody was like, man, that was a genius move because right now you can’t even compete with these guys because they’ve got the best players in town. They have both of them, they’re theirs and nobody else with or they’re using any other app for ordering food. And they won the game. They had a huge monopoly on this thing and it was impossible to compete with those guys. And everybody was like, yeah, let’s applaud them. That was a smart move. Come on.

The Importance of Preserving Brand Identity Post-Acquisition

PAUL: Yeah, actually. Moving a little bit forward, it came first of December last year when they closed HipMenu.

FLORIN: Yeah, it was worse than Disney acquiring Star Wars.

PAUL: And now I think from a smart person, you would think that, okay, they closed the old app, but they would have taken those awesome features and the group ordering, which every user loved, in the new app. And what happened?

FLORIN: So what happened was they’ve completely deleted everything. So they purchased the best technology with the best user experience with the best set of features that were fully validated in the Romanian market, and they’ve just deleted it. They’ve deleted everything that they’ve actually acquired, and the story goes a bit further to everything that they’ve deleted and we’re stupid about it. It was as if they never understood the importance of preserving brand identity post-acquisition. But the idea is that they’ve completely shut down HipMenu and nobody could use it from that day forward.

PAUL: And this would, from their point of view, acceptable if their mobile app would have been at least that good enough.

FLORIN: But it wasn’t. It really wasn’t. There was nothing good that you could do in the app. You didn’t know how to look at your bills.

What Happens When You Fail at Preserving Brand Identity Post-Acquisition

PAUL: I’m laughing because Florin actually loved the UX of the FoodPanda app.

FLORIN: Yeah, I guess it’s really hard for me to love UX because I usually have a lot of stuff to complain about when I see a new app, and I can really tell you what I don’t like about it because I dislike a lot of things, but I actually did like HipMenu. They messing this up was the most stupid thing that I’ve ever seen.

PAUL: Looking a little bit back at the first of December, it was funny because on social media, all the users were annoyed by this fact that they couldn’t group order anymore. Something interesting that the company started to cancel orders. The restaurant wasn’t happy. Basically, they annoyed anyone.

FLORIN: They’ve annoyed their customers and they’ve annoyed the partners that they had. So all of the restaurants because the orders went down because they decided to close HipMenu.

PAUL: And here comes the funny part from my point of view, which was a third player in the market that no one knew about, “What I’m Eating”. And given the fact that everyone was annoyed by FoodPanda and in all this noise, these third competitors started to gain visibility. It was funny because they were not gaining visibility from a marketing campaign or something like that. It was just people saying, Look, try this alternative.

Opportunities Created by Failing at Preserving Brand Identity Post-Acquisition

FLORIN: Basically, the idiot company that has done that, made the acquisition. So as I said in the beginning of the episode, they’ve basically managed to have a monopoly over the whole market and nobody was able to compete with them. But then they shot themselves in the foot and they’ve killed half of their business and now they’ve made an entry point for other players to get into their freaking market. They’ve paid a lot of money to get it and they’ve destroyed it and said, Yeah, let’s have new contenders because we won the game. We want it to be challenging for us again. And these guys came along and because everybody was complaining, they had zero resistance to joining this new thing that was out in town.

PAUL: Going a little bit more general, do you think you should keep an eye on the users of your competitors if they are, for example, annoyed by something or something like that, and you would go after them?

FLORIN: It depends. If a competitor does something as dumb as not preserving brand identity post-acquisition, yes, go after their users. I would go after them if something is as stupid as FoodPanda destroying HipMenu. Yeah, if that’s the case, definitely, because it’s pretty clear that they will never recover from that mistake. But if it’s like my competitor has a certain bug and I know that that bug can be fixed in about a month, there’s no point in me going after the users because I’ll be just distracting myself from my work on my own startup to go after the competitors that have bugs in their platforms and it’s not really useful. But even in my case, there was a moment when there was this competitor, they had a lifetime access to their SEO tool and because they’ve seen us doing monthly subscriptions, they immediately copied our model and they’ve annoyed all of their users and we went after their users because we convinced them that if they don’t want to pay monthly, R was the best option. And since they hated the other guy so much, they jumped ship over to our solution. So that was pretty profitable for us. And it was nice to see the trend in how stupid our competitors get and use that to our advantage.

But I think that this is even more of an advantage to anybody who was trying to get in the game of food ordering because they’ve done the worst mistake that you could possibly do. And it’s like, either you were Yochim An Nk or another startup, or Glovo, because Glovo didn’t have a chance on the market and Glovo started exploding as well after FoodPanda shot themselves in the leg. It’s like, okay, so it’s free for all. Let’s all join. Let’s all build food ordering apps now because there’s a huge market. It was already tested, validated and proven to make a lot of money.

PAUL: Yeah. And it’s also funny from another point of view because I remember in that period seeing a lot of advertisements for take away on billboards on the road and things like that. I didn’t install the app because, as you said, there was this already.

FLORIN: But.

The Downfall of Ignoring Customer Feedback

PAUL: With that move, I installed the app because I needed some alternative.

FLORIN: They turned their competitors’ weaknesses into strengths simply because they ignored the principles of preserving brand identity post-acquisition. They’ve basically turned something that their competitors had and wasn’t working for the competitors into something that the competitors had, and it started working amazingly well because they’ve ruined their own business.

PAUL: What I think also went even more bad for them was the fact that their customer support was so awful in that period. They were.

FLORIN: Just.

PAUL: Giving plain template messages for all these complaints.

FLORIN: Yeah, and in most cases, they didn’t even reply to the support messages. They were getting huge, tons of support messages, and they were not prepared for that. It’s like they were so stupid and arrogant that they thought they could close HipMenu and there would be no drawbacks from doing that. And they weren’t prepared. They should have been super prepared to answer everything because the one thing that you want to never do to your users is to make them feel invisible.

PAUL: I totally agree. Just by the way, you know that we are always saying that we are not your lawyers, not your consultants. We don’t have any interest in this new food ordering app in EUTC. But the funny part is that we were so angry on FoodPanda that we needed to…

FLORIN: Honestly, they created the perfect opening for new startups to thrive, all because they didn’t understand the importance of preserving brand identity post-acquisition. I almost had an interest in this because I’ve realized what a huge market they’ve opened. I was discussing with a couple of friends that we should totally get into food ordering because you can have the worst app and you will win just because FoodPanda did that to themselves. But yeah.

PAUL: I hope that I will get some free vouchers if you will at some point go into this.

FLORIN: Oh, yeah, definitely. No, I will not do group ordering, but this was the moment. An amazing opportunity created by a competitor who could no longer hold their ego inside.

PAUL: So I think the lesson here would be to listen to your users and if they’re complaining about something, do something about it.

FLORIN: And if you do manage to ever make an acquisition as big as that one, keep both companies alive.

PAUL: And FoodPanda, please don’t block us. We already deleted the app, so it’s useful for you.

FLORIN: And you’ve totally become irrelevant now.

PAUL: See you guys. See.