Business Models Built To Fail

21 Oct

As an entrepreneur, I am hooked to the “What the business model” game! It goes like this.

In your day-to-day life you will encounter a lot of businesses. Right from a grocery seller, to a petrol pump to a movie hall to even a college, your own workplace or the parking lot. Try and build the P&L statement of that business, in your head.

You will be amazed at usually the following – how little you know about the costs and revenue assumptions of the business, or that there is money in a lot of things in the world, if handled effectively, even at the smaller scale! There are very few businesses that are fundamentally still existing and are designed to fail. And I had the fortune of coming across one this weekend!

Delhi as a city doesnt have a lot to offer its citizens in terms of good past-time. There are movies, there are malls and there is food. Thats just about it. No beaches, no mega parks (even India Gate os out of bounds now), few theater opportunities and even lesser live shows!

So when the Kingdom of Dreams was launched (in gurgaon, and for the last time, THAT IS DELHI) with much fanfare sometime back, it seemed like an excellent idea. Never mind the fact that it has been co-founded by an event management company and an auto dealership!! You would think it requires a different set of expertise to run the concept of an amusement park and Broadway theater, but no – event management and auto dealership is just fine! Afterall its just a grand event, happening every day…! Just get salesguys convincing people to buy once they have entered the dealership.

And what a mess of a business it is!! Designed to fail

Rs 750 per person – includes Rs 100 entry fee and Rs 600 that is mandatory spend on food or retail (and Rs 50 refundable deposit). The zone of the ticket is something called Culture Gully, which houses food and retail of 14 Indian states. Over an area that takes about 20 mins to cover.

So figure this.

1. A place that has BOTH an entry fee and a cover charge!! (Have anyone of you heard that before?)

2. A family of 4 spends 3K to enter – and have to compulsarily spend 2,400 on food or retail. So you HAVE to HAVE lunch or dinner, because snacks will not get you anywhere.

3. A place that has NO IDEA what the prices are outside of the place! So yeah, a ballpen (possibly the cheapest item) sells for Rs 150 and a 6inch Shiva Brass Statue will offer by that extension be priced at 3,300! Not to mention funny looking stuff toys the size of one’s palm selling for 250!

4. A place that has NOTHING to offer after 30 mins, once the grandeur of the place has been consumed.

5. And ofcourse, food that is priced expensive (but not as obnoxious as retail) and tastes as good as your worst day in kitchen!


Why would you make such a place that will never have any repeat visit. Whats the idea? Charge the customer out of their wits the first time, because hey, they arent gonna come back! Now it makes sense, it had to be an event management company behind this. They are still treating it one day at a time…and no one is going to come back for the same event – cmon!!

Its like some dude out there thought –

Ok, so whats one thing where I will charge the customer a dollar less than a spacetrip, give them shitty food to eat, offer them culture items at prices that would make the weavers millionaires (just that it wont reach them), make sure that people only come around lunch and dinner time and hey hey hey…thats not it..also get them to compulsorily spend! Because hey, no one is going to spend at this place willingly!



Its a F***ing overhyped Delhi-Haat, you moron! Give me my 50 bucks back.

India is such a stage right now that everything sells. But its unfortunate that even then businesses are created that do not understand customer needs. Businesses in India have succeeded on price points. Ask whosoever you want to – McDonalds, LG, Maruti or Reliance! A good product at the right price. And while KOD delivers the first wow factor, the product sucks and its not been thought through to sustain. And its a horrible business model if you are resting on the “1 Billion People, even if .001% convert I have made my money” logic!!

Misses me completely! How much good money can chase bad businesses!

12 Responses to Business Models Built To Fail


Kamal Kumar

October 28th, 2010 at 9:15 am

Dude, you are forgetting the most revenue stream for this place, ZANGOORA and other larger than life musicals and plays which would follow. The food court is only an add on, so what you are saying is that you are judging the snacks counter at PVR to judge the business model of running the cinema .

Delhi is in desperate need of more such places which encourage live shows, else people are bound to say Delhi has nothing to offer but malls and food.

I think Kingdom of Dreams is here to stay and there will be many more similar concepts following suit.



October 29th, 2010 at 2:36 pm

@Kamal: Dont dispute the fact that such places are needed. But that doesnt take away the fact that KOD is a bad business idea, purely in terms of execution and pricing. The current occupancy of its Nautanki theater is less than 20%, because its priced as high as a hit Broadway musical (which again is elitist and is NOT watched by US locals but by tourists more – something that Delhi doesnt have).

Your comparison to a movie hall is funny, because thats exactly how it runs. Movie halls dont make money in the business of showing movies. They make money on the F&B and peripheral advertising & rental revenue. So what KOD is doing is that its making the entry barrier for the main business AND the peripheral so high that it will never make sense as a business.

My prediction – KOD will see a major price revamp. Or will alter its product combo completely. Or better still, a competitor will come and show them how its meant to be done! Its Definitely not here to stay!



October 29th, 2010 at 4:43 pm

Kamal you are talking about a different thing all together. For zangoora the ticket is separate and the audience is different. How many people you know have been to KOD and out of them have you seen Zangoora. They are overcharging for a food court which is just sooooooooooooooooo anal.



March 11th, 2011 at 11:41 pm

what i think is.. gurgaon is quite expensive place to live…. and people here are really rich, some has got harley davidson, rolls royce, and many other classic models which in India is quite less. so, if we look at strategy which kod is following is not that bad also. atleast it will attract people for lets say once or twice. and people who are really richie rich would love to spend lavishly on the places where they can have fun.
for instance lets assume that people who havent been to kod will definitely like to visit that place atleast once. which will add to their revenue.



June 13th, 2011 at 10:43 am

I fully agree that KOD is an over-priced and over-hyped business model which is not feasible.It is a complete wastage of money to go to.No paisa wasool for visitors.An absolute time waste.A sure shot no go.Better visit a mall than KOD.



April 1st, 2012 at 11:18 am


Your posts are interesting to say the least! Read a few including the one on Business Models Built to Fail. For so many years now i have been talking of the Nestle Mithai launch around 2007 that was a business destined to fail.

Large full color glossy ads spread across India’s most expensive newspaper to sell “mithai”. Told the shopkeeper who tried to sell it to me that he can dump the brand – it wouldn’t see the next summer but no one believed it. Highly paid execs and a successful company can’t be wrong – after all these guys do Market Research.

Well no one apparently told them that in most homes, mithai is bought when guests drop in. “ja munna, daud ke ja. gali ke halwai ke yahan se 500 gram barfi le aa……..Aur haan sunn….tazzi lana.” Unfortunately none of the whiz kids were munnas – they were the dudes in fancy homes else how could they ignore the words “Taazi” and “gali ka halwai”.

Nestle packaged mitha would be anything but Taazi and if the company overcame that the sheer volume of maintaining inventory in every gali of India would kill them. Well, when some Headhoncho offers you a job paying the sky to sell Mithai, how many of them would tell the seth – Sirji – this won’t sell.

Nice posts from you, even nicer photographs, God knows how you make time for so much – keep them coming.




April 1st, 2012 at 9:06 pm

GP – hahaha! Nestle Mithai! Reminds me of the Amul Pizza extravagance sometime back! Suddenly within 3 weeks, Indians were having pizza on bread, roolamli roti and what have you!! Horrible horrible business model! :)


Rohit Agarwal

May 23rd, 2012 at 2:23 am

KOD will work in NCR because of lack of competition. As of now, entertainment in NCR means either malls or movies. There is no theater, no parks, no activity spots. KOD is the only respite to the crowd bored of malls and movies.

Also, the beauty of KOD lies in the ambiance of the place… I’ve seen people visiting the place just to get their photos clicked. A family of four spending Rs.3000 is doing that to experience the ambiance, not to eat or shop.

Also, they have chosen their TG well – Women – and targeted them well by bombarding them with the kind of experience they would relish. It is like an upscale Delhi Haat. This hypothesis is also reinforced by their decision to hire male leads of Zangoora and Jhumroo. Talk to any female about Hussain and you’ll hear infinite admirations, irrespective of the fact that he has sold toilet cleaners on TV (remember the intrusive Harpic ads) for a living. God damn it, AFAIR, he also cleaned peoples’ toilets on TV. But still, girls will go flat just by hearing his name.


Ravi Richharya

August 30th, 2012 at 3:04 pm

nicely written article Ankur.

You are right about KOD failing if they are to continue the same way. Which I think will not be so.

Your article seems to be an assessment of business model only as a consumer.

Here is a lay-down of most businesses entering into blue ocean… given they have starter’s edge and competition is not available, KOD can live on ripping people off because of how they are placed and they don’t intend to cater mass-market right now. Remember Reynolds… when it started, it only sold the pen and not refill.

I think that they in-fact are waiting for demand to dip below certain point or a competitor to appear before they evolve/shift into next business model.

Also, in entertainment space, concepts become stale faster than food on your plate. So maybe you milk the product from the starting.


Dev Pratap Singh

January 7th, 2015 at 11:30 am

Wow what a place to enjoy with friend and family realy like KOD I WISH EVERY ONE SHOULD VISIT OVER THERE AND ENJOY THE DREAM WHICH COME TRUE


Pawan Singhal

March 8th, 2015 at 8:01 pm

I like the way the idea is presented but I have strong reservations on the net outcome of inference you have drawn of the business model. The inference is not supported by hard facts data. Like very easily I can say that with almost full shows and a repeat telecast of the same hit show running for so many years the place is bound to make loads of money. Please present some hard facts and not mere assumptions.


Hari Om

April 13th, 2015 at 8:02 pm

So, After 5 years of the story written..

Ankur, Can you please come up with Either contradicting your own thesis or Proving it ?

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