Incidental Introduction To Ecommerce
After a one-year stint at Sarnoff as a software engineer, Binny Bansal was referred to Amazon in a similar role by Sachin in 2007. Here, their alignment of thoughts and “soul-searching” led them towards ecommerce. But what we don’t know is that before arriving at the idea of Flipkart, the duo explored opportunities around improving Google Maps and launching a comparison shopping engine similar to Amazon’s Junglee.
“Google Maps at that time was quite bad. But the ecommerce sites in India were crappy. We found this while researching for the launch of a comparison shopping engine, so the discovery was incidental. Nobody was doing ecommerce right,” chuckled Binny.
And doing it “right”, according to Binny, was keeping it simple. This meant when customers look for a product, they should get the right listing and be directed to the item quickly. When they order, they should get what they want. Last but not the least, if they have any problems or issues, the company should be responsible and resolve them.
Flipkart was launched as an online bookstore in 2007. The startup’s mantra was to provide simple and seamless ecommerce services. One of their USPs — which worked majorly in their favour — was to deliver on or before time. For instance, they would promise a delivery in four days but the products usually made it to the customer before that.
Some of Flipkart’s core principles, which have remained strong over the years, are:
- Keeping the customer first by doing “right” by the customer
- Keeping things focused and simple
- Focusing on technology
As Binny Bansal explained, the duo knew intuitively that trust in the brand was going to be the key to success and not the next month’s numbers. Also, keeping things simple was important even with an expanding category base. “It was important to be focused on technology, as we believed that the only way to scale was tech; we had to be audacious,” he added.
The Beginning: $8,000 And A Bike
Back in 2007, with just $8K (INR 5.69 Lakh) in their pocket, the two Bansals would not have given much thought to dreams such as reaching a valuation of $16 Bn in just over a decade. This was the time when their biggest achievement was convincing two booksellers to share their inventory list with them.
In the early days, Binny Bansal and Sachin Bansal were their own logistics team, riding around Bengaluru on bikes every alternate day, delivering orders. Within a few months, the orders were up from 8-10 a day to 30-40.
The cofounders also had the task of sourcing the books, and they spent hours on end scourging through book warehouses when they couldn’t get a book on their list. After a year or so, when they could finally pay salaries, they finally hired one or two runners to do these time-consuming tasks.
“And our courier partners knew we would be on their heads if they didn’t deliver on time, so they kept it straight,” Binny laughed. At the same time, the lack of funds helped them get their act straight, hire only as many people as they needed, source everything for free, etc.
The Bansals: Sharing The Responsibilities
As the ambit of their entrepreneurial responsibilities widened, Sachin Bansal and Binny Bansal also grew into their respective roles with ease. As Binny described, their thinking frequency was the same, but their skills were different — which is a great combination in cofounders.
“We both did what we were good at. Sachin’s thinking was always ahead of time — he was thinking hard about marketing (he was an SEO god within one year of Flipkart), he was very good at thinking design, website design, floating the website — basically the demand side,” Binny explained.
Binny Bansal himself took up the supply side as it matched his core strength and looked after the technology and the backend systems. The two effortlessly fell into a rhythm, their roles complementing each other.
When Sale Of Electronics Was Zero For 6 Months
After Flipkart’s book business had reached a month-on-month growth rate of 30%, the team decided to venture into a new category — electronics. However, to their surprise, in the first six months, sales in category remained zero.
“We were just selling a phone like a book, thinking customers would buy an INR 10K item just like that…so, we went back to drawing board. Sachin got deep into how to sell electronics…we decided we really need to build a brand, build trust,” explained Binny.
Cash On Delivery: The Game Changer
The trick to gaining trust turned out to be COD or cash on delivery. “Cash on delivery became very important as the customers wanted to get the product first and then pay,” Binny said.
The company launched COD, 24-hour customer support, and 30-day returns to gain customer trust. It also ran its first big TV campaign soon after hiring Ravi Vora as marketing head in 2011. The Flipkart kids ads, refreshing, funny and recall-worthy, drove the point home — Flipkart was a site users could trust. Eventually, they became a symbol of the company.
Need Of The Hour: Logistics With Ekart
Another key addition to the company’s growth plans was Ekart, Flipkart’s logistics unit. Binny Bansal explained, “It was the need of the hour, and not necessarily a very well-thought-of move as people say, but we couldn’t have scaled without our own logistics.”
Flipkart knew that to sell electronics, it needed a high Net Promoter Score (NPS) and this was possible only through cash on delivery, to offer which they needed their own logistics.
The move paid off. Ekart, which started with a team of 20 in Koramangala in 2010, recorded a 50% repeat rate within a few months. The company was serving 20 cities across India with 1,000 delivery executives in the next year.
There was no stopping them, Binny said.
A Stylish Choice: Myntra
Flipkart entered the fashion sector late and took a few years to learn from its rival online fashion store Myntra and grow. “Even as we thought we could match up Myntra, we examined Myntra and realised what it was doing differently,” said Binny Bansal about Flipkart’s foray into fashion.
The cofounders noted that Myntra was a more premium fashion brand than Flipkart, with fashion-forward, premium brand customers. The DNA of Myntra was fashion and technology, while Flipkart believed in technology and supply.
Identifying the value it would add to their company, Flipkart acquired Myntra in 2014 for $280 Mn. Myntra was founded by Mukesh Bansal, Ashutosh Lawania, and Vineet Saxena in 2007.
Three Failed Attempts At Digital Payments
Binny and Sachin have been digital payments enthusiasts and experimented with the sector through acquisitions. However, after three failed attempts (PayZippy, Ngpay and FXMart), they finally got it right when they acquired digital payments startup PhonePe in 2015.
PhonePe’s numbers speak for its success — it crossed 100 Mn transactions in July 2018. It is also building solutions that are correlated to its knowledge and expertise. Today, PhonePe claims to have over 150 Mn users and offers them its “super-app” which integrates 25 large digital apps including Goibibo and OYO.
Building The ‘Flipkart Mafia’
Flipkart has not only grown as a company but also touched the lives of its employees with the proverbial Midas touch. It set off the spark of entrepreneurship among many former employees, giving rise to the “Flipkart Mafia. Inc42 in its research found that over 250 startups have been founded by former ‘Flipsters’.
Also, these employees imbibed everything that Flipkart has stood for and the core principles that have brought it its success. They, in turn, created a new wave of startups and implemented these learnings.
Binny reminisced that in 2008, Flipkart hired Sujeet Kumar, who went on to start B2B ecommerce company Udaan in 2017 — which became the fastest unicorn in India in 26 months. Sujeet joined as the head of operations and Binny said he found it easy to hand over the reins to him, as, within a week, he was doing what even the founders hadn’t thought of.
Binny Bansal recalls another hire — Tapas Rudrapatna — who introduced himself as a circus clown in the job interview. He was hired without being assigned a fixed role, but went on to lead Flipkart’s Delhi office in 2009; Tapas even wrote an HTML code for the company.
Another Flipkart veteran was Mekin Maheshwari, who was hired to lead the technology function after the founders realised they had other things to do and that Flipkart needed an expert as it was growing. He went on to launch Udhyam Learning in 2017.
Some other successful names of the Flipkart Mafia are Punit Soni, founder of Suki); Ankit Nagori, cofounder of Cure.Fit; Ajinkya Malasane, Siddharth Mall, and Akshay Lal, cofounders of Playment; and Manish S Sugandhi, who founded GrabOnRent.
2016 to 2018: Big Leaps For Flipkart
2016 was a year of doom for Indian internet startups as several shut shop and many others struggled to stay afloat due to a dearth of funding in the ecosystem. In such turbulent times, Flipkart roped in Kalyan Krishnamurthy as Head, Category Design Organization, at Flipkart. He was later promoted as chief executive in 2017.
On Krishnamurthy’s role in turning around Flipkart, he said: “Every company goes through phases…sometimes to scale a business, you need different skill sets. Kalyan fits well in everything from that perspective. He came in 2016 — it was a tough time for the whole internet ecosystem. He did a good job of getting things on track and that’s what was his strength.”
Binny Bansal emphasised that when companies require to scale, founders can either do it themselves or get somebody else who to do it for them.
He cited another such example in which they roped in someone else to do the job: When Myntra founder Mukesh Bansal left the company, they roped in Ananth Narayanan as chief executive to scale Myntra.
“He came and scaled Myntra from 8x to 10x. Once you establish trust and work closely with them for months, then you have to let go and let them lead the change,” Binny said about how he let Ananth lead the charge at Myntra.
However, after Binny’s sudden and surprising exit from Flipkart amid personal misconduct allegations in November 2018, some of his trusted lieutenants also left Flipkart or been reshuffled. Recently, Ananth also exited from the company and was replaced by Amar Nagaram.
The Future: XTo10X
An exit doesn’t take away the zeal of entrepreneurship from an entrepreneur. Having been at the core of the startup ecosystem for more than 12 years, Binny was unlikely to sit quiet for long. Soon after his exit, he announced a new venture and also took a big step ahead in his entrepreneurial journey.
He will now help companies scale with his new venture, XTo10X. “I would rather help 100 people do 100 things, but not a startup on my own. But that is the direction I will go forward in,” Binny concluded.
A Legacy For Life
Flipkart and its founders were like a force of nature. They surged into the startup ecosystem and changed the direction of the wave of Indian ecommerce. The irony is that both the cofounders were cornered into exiting Flipkart after the Walmart takeover — Sachin Bansal left because the US retailer didn’t want two cofounders on the board and Binny Bansal resigned amid allegations that didn’t stand the ground within a week.
But Flipkart — the brand they created — stands tall, despite continuously weathering government interventions, traders’ protest, sellers’ complaints, and much more. Flipkart has been the face of what the Indian startup ecosystem stands for — solving India’s problems the Indian way.
With Walmart coming in and the company losing its #desi edge, the brainchild of the Bansals has embarked on the second phase of its journey. It has miles to go to live up to its Version 0.1.
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