A Tryst With Skepticism – Round 3

Believers, not skeptics, build businesses. I am yet to meet a successful company or entrepreneur in the world, that has never been written off by some skeptic. Besides all the love from millions of customers and hundreds of thousands of sellers, we have had our share of skeptics along the way since we started the business.

Our first tryst with them, or Round 1 as I like to call it, was when Kunal & I had just started the business, with all the people telling us to go back to our jobs. ’23 year olds do not build businesses’, ‘How will you hire people older than yourself to work with you?’, ‘You’re stupid to leave a stable salary and be working out of the basement of a house’, ‘Coupons? Who uses them?’ etc. Many of those voices are still fresh in our heads. We heard everything, but at the same time kept our heads down and kept going. Regardless of this commentary, our entire team worked hard to build a coupons business for four years from 2007-2011, beating all of the coupon businesses that mushroomed in India along with us in 2010. All the skeptics were silenced. And how could they not be? Our actions and outcomes are far louder than their words.

By end of 2011 though, while our business was doing really well and all the people around us were celebrating and egging us on, we realised two things:  – Though our business was doing really well, we felt our ambitions of building a business were much larger than what the couponing space in India allowed for. – We realised that product e-commerce would be a MASSIVE opportunity in India, and marketplace would be the right business model not only for us, but for the country.

Keeping this in mind, we starting pivoting our business (before the word ‘pivoting’ became super popular) to a marketplace in early 2012.

Enter Skeptics Round 2. This was gala time for them. ‘An internet company pulling off a pivot? Are you crazy?’, ‘Why would you defocus from something where you’re the largest player?’, ‘Changing your business model after raising $40 million is the stupidest thing I’ve ever heard’, ‘Marketplace? You have NO chance! No one does that, and with all the inventory players around, you’ll never be able to provide a good customer experience’, ‘You’re player #560 in e-commerce to enter at this time. Why are you even trying?’ We, nonetheless, had strong conviction in our plans, and an even stronger confidence in our teams’ ability to pull this off. Yes, we had the anxiety about whether we will be able to deliver or not, but we definitely knew we were on the right track. I’m quite certain most people, in hindsight, would agree that we are in a much better place today, as compared to where we would have been had we heard the skeptics and continued our coupons business. And also, it seems most people would agree today that marketplace is the right business model for India, with every e-commerce company wanting to be a marketplace (or claiming to be so).

We also met many believers on our way with this pivot, including our stellar team who stuck together to pull this off, and people who believed us – our earliest Angel & VC investors, eBay, Temasek, Softbank amongst others. Intact our first angel investor who put in $100,000 in the coupons business right when we started continues to be a shareholder 9 years hence. All of us worked very very hard to break out of the pack from being player #560 in e-commerce to being definitely one of the top three players in the market. Some people call us lucky, but we’ve seen time and again that the most hardworking and missionary people tend to be the luckiest too ?

2014 and 2015 were very interesting year for eCommerce. Many many companies got financed with millions of dollars. The funding took the fledgling industry to a multi-billion dollar market in India, and made eCommerce as mainstream as it can get. Skeptics were quiet and there was enormous euphoria about eCommerce. In a phase of euphoria, people tend to make mistakes too. Companies spent more money than they should have on marketing, built infrastructure ahead of time, ran a lot of sales when they weren’t supposed to, launched too many things and got distracted from the core, focused on vanity metrics like GMV etc. We made many many mistakes too. But again, they weren’t fatal, and I’m yet to meet a growing company that hasn’t made mistakes.

Come 2016. Skeptics Round 3. All of us are hearing the voices again. ‘eCommerce in India is dead’. ‘Flipkart is overvalued’. ‘Flipkart, Snapdeal and other homegrown companies are dying’. ‘When discounts disappear, consumers will disappear’ etc. Skeptics are having a field day this year – but not for long.

Thankfully, a few months before this started, towards mid-2015 we too realised that we were getting carried away by the euphoria and doing too many things we shouldn’t be doing. Euphoria and skepticism always tend to blow things out of proportion either way – the reality is almost always somewhere in the middle. We realised that we needed to focus our energy, on doing things that were RIGHT for our business. Many a times, the right thing and the most popular thing, are not the same. It is ALWAYS more important to do the right thing. We spent time looking at our data and introspecting, to decide what we should focus on.

We came up with the conclusion that there are only three things that matter for our business. And for the last many months, our entire team has been RELENTLESSLY focused on delivering on just three things, in that order:

1. Build the most reliable and frictionless customer experience.
2. Focus on unit economics, and make sure our costs stay low so we can continue to provide the best prices to consumers.
3. Use #1 and #2 to grow, Grow and GROW. And to us, growth means growth in our net revenue, not some vanity metrics (like GMV).

Here are a few charts to represent how we have done in the last one year on these three things. Everyone in the company been working VERY HARD to achieve this and we have made TREMENDOUS progress.

1. Build the most reliable and frictionless customer experience – we are the only pure-play marketplace in the world to have pulled off these metrics. Take a look:

• Focus on unit economics, and make sure our costs stay low so we can continue to provide the best prices to consumers. Take a look on how reducing fulfilment costs significantly increases our net margin per order (graphs are to scale):

• Use #1 and #2 to grow, Grow and GROW. And to us, growth means growth in net revenue, not some vanity metrics (like GMV). Here you go (graphs are to scale):

That said, the best is yet to come. We’ve just gotten started and covered 5% of the journey, and are yet to touch the last round of capital we raised, which gives us more than enough time to keep our heads down and execute on our priorities. Building Snapdeal is the most important thing we will do in our lifetime, and we are giving it everything we have.

Businesses are built by believers who believe in doing the right thing, not skeptics. I would encourage the skeptics to believe in the entrepreneurial zeal that our country and companies like Snapdeal have, and the magic it can create. We will make mistakes, but we will also make it right and create great impact. Finally, I want to congratulate each and every one of our team members and partners who’ve made the journey possible, and continue to believe in our vision of building the most reliable and frictionless commerce ecosystem in India.

[Originally published on Linkedin by Rohit Bansal, reposted with permission.]