Business model innovation is an underrated aspect that receives scant attention when we talk about winning businesses. There are common aspects of a business that easily grab our attention. Business model is one of them. We understand business models in a straightforward manner. You have a revenue model and other aspects of the business. But we rarely pay attention to potential innovation we can bring to an existing business model.
Consider Homefectionery, the company we featured last month in our founder story series. To a regular viewer, Homefectionery is a lunch delivery business. It works with home chefs who cook homemade healthy meals, Homefectionery uses its online platform/website to take orders for lunch from officegoers using a subscription model and then delivers the food to these people. It is your regular lunch delivery business.
Homefectionery pays home chefs a certain price for each meal, it sells the meal at a certain price by adding a margin. But soon after launching its lunch delivery business, Homefectionery realized that if it continued on the path of the traditional lunch delivery business model, it wouldn’t work.
So the Homefectionery team focused on business model innovation that has since resulted in a series of intricate business model innovations. These innovations have since added extraordinary benefits to its business.
In this article, we take a look into the intricate business model insights and ideas from Homefectionery in the hope that it will ignite a passion for and willingness in ourselves to explore potential business model innovation even when we operate on an established model and it appears that no more innovation is feasible in our vertical.
Homefectionery connects three groups to create a solution: home chefs living near commercial areas cook food, riders who are usually idle during lunch hours deliver the food, and office workers receive quality lunches. This model solves problems for all three groups: home chefs get income, riders get work during slow hours, and office workers get good food.
The company provides both monetary and non-monetary benefits to its partners. For example, riders get free lunch and some cash for deliveries, while home chefs receive cooking essentials at bulk-purchase prices. This approach helps Homefectionery maintain thin margins while still providing value to its partners.
Unlike traditional food delivery services, Homefectionery operates on a subscription model. Customers pay upfront for their meals, which solves the cash flow problems common in the industry. This model allows the company to pay its partners on time and maintain a cash-positive business.
Homefectionery has an R&D kitchen where professional chefs develop and test new recipes. This process allows them to standardize recipes, calculate costs accurately, and ensure consistent quality across all home kitchens.
Homefectionery has implemented a unique system for onboarding new home chefs. Every new cook must be vetted by an existing chef on the platform. This community-driven approach ensures quality control and creates a sense of ownership among the chefs.
