Book Review. A worm’s-eye view of Flipkart

If there is one sliver of India’s commercial sector that is seemingly immune to the ups and downs in the economy and consumer sentiment, it is online retail. Amid a consumption slowdown where conventional firms have been complaining about consumers economising on glucose biscuits and inner-wear, e-commerce majors clocked sales volumes of nearly $3 billion (₹19,000 crore) in their recent six-day festival jamboree.

Established industrial houses have struggled to raise equity in the last five years, but Indian start-ups have had access to a gusher of private capital with over 30 of them having attained Unicorn status (a $1 billion valuation) by 2019.

How do wet-behind-the-ears IIT graduates manage to not only conceive, but also rapidly scale up e-commerce platforms that shake up the established names? Why do India’s Internet start-ups have venture capital investors lining up at their doors, when MSMEs in other sectors walk over hot coals to get a fraction of their funding? The book Big Billion Startup: The Untold Flipkart Story by journalist Mihir Dalal provides answers to such questions.

Though the book presents an insider’s account of Flipkart’s journey and has rich detail on events within the company, it isn’t an official biography. Dalal makes it clear in his acknowledgements that Flipkart and its founders declined to participate in the production of this book.

As a result, he pieced it together from over 250 interviews, emails, news reports and video interviews, tapping into the sources he cultivated at Flipkart during his five-year stint as a journalist covering start-ups.

This is in fact a good thing. Steering clear of the hyperbole that usually characterises corporate biographies in general and start-up writing in particular, the author manages to paint a vivid word picture of Flipkart’s journey without air-brushing its mis-steps.

The IIT factor

The initial chapters of the book present a charming account of how Sachin and Binny Bansal, considered only middling students in the rarefied atmosphere of IIT Delhi, cobble together an unlikely Internet book-selling business with a princely capital contribution of ₹4 lakh despite active scepticism from their peers.

More at home with coding and Search Engine Optimisation, than finance or supply chain management, the Bansals (not related to each other in any way) start out with the simple credo of bagging customers first and figuring how to cater to them later.

The book recounts how after listing a wide variety of books on their site and securing customer orders for them, the Bansals used to dash around Bengaluru book-stores trying to find these books, giving a new meaning to the phrase just-in-time.

The story of Flipkart’s first few recruits is fascinating too — from Iyappa, the courier company employee who comes into his own after joining the firm and took on the role of its ‘human ERP’ system, to Tapas, a rolling stone who proved exceptionally talented at wooing and retaining customers.

In the account of Flipkart’s journey from this rudimentary state to a venture viable enough to secure its first round of funding from Accel Partners, one also gets a glimpse into how the IIT old-boys-network sets up its new members for success. Many of the Bansals’ initial breaks, whether in hiring talented engineers or getting meetings with venture capitalists, seem to have come from seniors and batchmates at IIT Delhi going out of their way to mentor the newbies.

From passion to valuation

While offering a rather sketchy account of Flipkart’s financials, the book does a good job of marking the key tactical and strategic milestones that transformed it from an obscure online book-seller into the poster-boy of the start-up ecosystem.

In the initial years, it was the Bansals’ customer obsession that powered its success. For instance, realising that card-only payments were keeping most consumers off the platform, the firm implemented cash-on-delivery though this stretched its working capital needs.

Recognising that the trust deficit that Indians had with Internet platforms was the biggest stumbling block to adoption, Flipkart rolled out a liberal product return policy though it meant dealing with logistical nightmares.

Similarly, it was Flipkart’s audacious pursuit of Motorola and Xiaomi for exclusive mobile phone deals that powered the ten-fold growth in its GMV (gross merchandise volumes) to the $1 billion mark between 2011 and 2014. The story also makes it clear that it was when Flipkart abandoned this manic customer focus in its chase for size and valuation, that it ceded ground to Amazon.

Light on the founders

Though this book is mainly about Sachin and Binny Bansal — the key protagonists who made Flipkart click — it doesn’t eulogise the founders. In the initial chapters, Sachin comes across as a geeky engineer, more comfortable with computer games than corporate power games, who is driven by his passion to build an e-commerce platform that is the toast of its customers.

But later chapters chronicle his transition into an abrasive CEO who makes strategic business decisions based on gut feel and confronts his senior management team with ‘my way or highway’ ultimatums.

Some of Flipkart’s strategic mis-steps, such as the one to forcibly transition shoppers from its desktop site to its mobile app, or to discontinue the sales of electronics, are attributed to this intransigence.

One’s main quibble with the book though, is that it is far too engrossed in profiling the personalities of every contributor — big and small — to the Flipkart journey and fails to trace the evolution of the firm in sufficient detail.

Despite its title, this book is more about the journey of Flipkart’s mercurial founders than about the e-commerce platform. But the human-interest element makes it a breezy read, giving it a fiction-like quality.

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