| Log in

The Making Of Flipkart Story

19 August, 2010

VCCircle Ecommerce Investment Forum 2010 featured India’s most watched and exciting e-commerce company, Flipkart. Founders of Flipkart, Sachin Bansal & Binny Bansal, were in an engaging conversation with Mohanjit Jolly, Executive Director, Draper Fisher Jurvetson. Read on for the duo’s business story, the Flipkart ‘Aha’ moments and the nuts and bolts of raising an e-commerce company.

Mohanjit Jolly (MJ): When was the brainstorm? And where did the idea of Flipkart come from?

Binny Bansal (BB): I joined Amazon in 2007. Sachin was already working here. We were roommates too. We were bored with our jobs and thought why don’t we do something of our own. If work at Amazon can’t offer satisfaction, then hardly elsewhere.

Sachin Bansal (SB): After that we thought of doing something…something simple, easy from home and which could get us money. An idea came up of a comparative shopping engine. We started looking at websites we could compare. Then it struck us: there aren’t sites to compare! This followed with another question: Can two guys working from home do a better job at providing service than what exists in the market? We quit our jobs and started working on this.

MJ: Did you put together a power point presentation and went asking for funds?

SB: We assumed that we would start with VC funding. That is what we had read on a lot of blogs. We attended events like Proto, Headstart etc. Within a couple of months it was clear that it isn’t working out! It wasn’t a smooth ride. We stopped reading the blogs, stopped going to startup events and just started focusing on building the company.

MJ: How did you come up with the roles and responsibilities and made sure that you don’t step on each other’s toe?

BB: It evolved on need basis. Both of us were techies. Sachin is good at organization. I took care of catalogs and supplier relations. It was very much on need basis. And this evolved over time. No conscious effort.

MJ: Exactly when did you decide to raise money? Did the VCs come knocking? Or you went out?

BB: It was a mix of both.

SB: They came to us. It is like that inflection point stuff. We approached a few people too. We started talking to Accel Partners by end of 2008.

MJ: How long was the Accel process?

BB: 6 months.

MJ: VCs are a double edged sword. They talk about topline. They say you got to think big. Was the vision there throughout? Or did that come after interactions with VCs that it is going to be truly large?

BB: We got in with an idea that it will be big. We will make it big. We didn’t have capital to grow inorganically. We had to be profitable. It was a part of strategy that as soon as we have some breathing room we would want to grow as soon as possible.

MJ: How much thought went into deciding on books?

BB: We gave a lot of thought to it. There were some advantages with books- no damages, no touch-and-feel problem. We were unknown to people and trusting us with a Rs 100 transaction of Chetan Bhagat book was much more easier.

MJ: ABCD is my acronym in ecommerce context for A: Access B: behaviour C: collections D: delivery. So question is- pick any of them, or all of them. What are the challenges that you faced? What sort of challenges operationally, externally that you ran into. Give some specifics.

BB: We faced all the challenges that arise in dealing with third party. You won’t get a payment gateway unless you have an office, phones etc. So we started with Paypal’s service. We had to work closely with courier companies across India. Then, getting data from suppliers is difficult. We now have a large team for supplier relations.

MJ: When you were talking to delivery/logistics providers, what problems arose? Did you ever fail to deliver on SLAs?

BB: We didn’t care about the costs. We started with two companies. We chose the best couriers and paid them retail rates. Started with Bluedart. Even if you lose some money choose the best.

SB: For third party we weren’t negotiating on price, we were on service. Prices will happen later. There is enough competition to ensure that prices come down.

MJ: Recruiting and Retention. India is still very cash compensation based economy. Lately some feel equity options are good and attractive and so this challenge gets mitigated in some manner. But still in India it really comes down to teams. Talk about that. How were you able to incentivize, attract, retain and train a team?

BB: An exciting thing about being an Indian company operating in Indian market is that they can explain the stuff to their parents, friends and people around them. Every entrepreneur should try to sell this to their employees.

MJ: Do you guys think that a pureplay online business at least in near future can be created in India? Is that something you fundamentally believe in?

SB: It is possible. I will not call our business a pureplay ecommerce business. This is not what we do everyday. If you only concentrate on online then also the opportunity is big.

Sachin Tiwari & Prateek Singh covered this Keynote Interview at the VCCircle Ecommerce Investment Forum 2010. They run an early stage startup in Vellore which is into developing technology applications for process improvements in healthcare and environment sectors. They blog at www.detailtalk.org.

View Comments
Flipkart names Sachin Bansal executive chairman, Binny Bansal CEO

Flipkart names Sachin Bansal executive chairman, Binny Bansal CEO

Manu P Toms 3 years ago
Binny Bansal, co-founder and COO of India’s largest e-commerce company,...
Our investment in Flipkart is now worth a little less than 300 times: Subrata Mitra, partner, Accel Partners

Our investment in Flipkart is now worth a little less than 300 times: Subrata Mitra, partner, Accel Partners

Shrija Agrawal 4 years ago
Walmart buying majority stake in Flipkart: All you want to know

Walmart buying majority stake in Flipkart: All you want to know

TEAM VCC 2 months ago
Walmart Inc. has signed definitive agreements to become the largest shareholder...
Sumit . 6 years ago

Well I think its just another site, I delivery times, service, etc. almost what I met else where. The new movie & mobile section is hopeless.

truth is . 6 years ago

it is lol. press releases by flipkart founders is as inspiring as dubba-walas. When is prince charles visiting them. hehe

Rajesh Dey . 6 years ago

Mr. Truth is not sure about what he wants to say but by writing against him,flipkart guys are doing only themselves a harm and negative publicity.Father of one of the guys at flipkart is one of the largest distributors of books and hence getting the initial catalogues and supplier details was easy.After that, it is definitely their hard work but they have to become profitable.

aniruddha . 6 years ago

i was a child when infosys grew into INFOSYS, was at school when google became GOOGLE, but now i’m seeing the growth of flipkart. i can tell the future generation that i was there when flipkart grew into FLIPKART. kudo guys you are doing a great job…

Shantanu Chatterjee . 6 years ago

Mr Mumbaiker, I absolutely agree with you and your philosophy and about Flipkart, they are next to none among Indian e-commerce sites, their service is the best, even in the remote North-Eastern corner of our country where nothing reaches in time except flipkart deliveries. Also availability of good books is also a big problem in our place and Flipkart has helped the students tremendously.

Bhalkikar Dattaraj . 6 years ago

Flipkart has set new standards in E.Com/Internet Business.They are truly professional and service and Prices are excellent and truly competetive.I wish Flipkart a very bright and long innings.

SVL Narayan . 6 years ago

I use Flipkart regularly and I am amazed at their efficiency.Initially I was sceptical,but I think the guys have really put in a lot of hardwork.

The Making Of Flipkart Story

Powered by WordPress.com VIP