This week, Zomato launched its social features that is live across the web and mobile apps. Leaving the good stuff (which you can find here), this is what you need to know about the new design/experience: you need to login/register to use the product.
At a high level, Zomato’s business model revolves around gatekeeping of information (read this detailed piece : The Rise of Gatekeeping As A Service). That is, a restaurant’s phone number is masked and your calls are redirected via Zomato’s pipe so that Zomato can track leads and monetize it.
But that’s about the business model. Coming back to user experience, Zomato expects you to register/login via Facebook/Google+ to use the product, which is a gatekeeping feature.
The basic hypothesis is you want to discover foodies/food and you are NOT using Zomato to search for restaurants/menus – which in my opinion is definitely a flawed hypothesis (and that’s why I will switch to Justdial).
Why Is Zomato Doing This?
Reason #1 : Increase Engagement.
@cnha upside of social in terms of usage > drop at the sign in screen.
— Deepinder Goyal (@deepigoyal) April 9, 2014
Reason #2 : Google : Zomato is competing with Google, which recently is going after aggregators and has launched full restaurant menus (in US right now). Plus, Google is pushing Google+ reviews in restaurant search results and Zomato needs a strong social feature that balances its dependency on search.
Why Is Zomato *Actually* Doing This?
Zomato needs more registrations. Period. Having raised $37mn in the last round of funding, the company (maybe) is gearing up for the next big deal, i.e. acquisition. And these days, you get massive valuation for users (heard of WhatsApp’s $19Bn deal?).
When it comes to M&A for a content (product), what’ll matter is the impact – and that can only be measured with registered users and their activity/engagement on the site.
The valuation on traffic is old school and what matters is number of users, average engagement and virality of the product.
The new design is a prelude to next set of actions, which surely involves a possible acquisition deal (isn’t Yelp already in touch with Zomato?). And Zomato needs to start preparing for the A-day (A = acquisition) today!
And Finally, Why Zomato Doesn’t Need to Worry About People Like Me
Zomato has already gone mainstream and while some of us will crib about the login gatekeeping, the truth is that the world (at large) doesn’t really care about these things. People are happy to use their Facebook logins without thinking twice and features like leaderboard etc will enable more engagement.
As long as Zomato continues to focus on data and great experience, *fence sitters* don’t matter. Don’t believe me? See this data from Zomato CEO, Deepinder:
3x reviews. 6x photos. On the #NewZomato – love it when a plan comes together.
— Deepinder Goyal (@deepigoyal) April 11, 2014
For Zomato, this could work either ways – they will get more registered users and engagement (translates to massive valuation), while early adopters/geeks will start looking for an alternative – i.e. Zomato of 2010.
The risk is definitely worth the reward!
What do you think?