From working in Amazon, to getting rejected by Google, Flipkart’s co-founder and CEO Binny Bansal enthralls audience with a lighthearted chat at the SAP StartupSocial event.
Why would two IIT-Delhi graduates quit their cosy jobs at Amazon to start from scratch? Are Flipkart Co-founders - both Bansal - related? What are their common traits? How did Flipkart get its name? How did Flipkart ship its first order? Did the founders deliver orders themselves? Can anyone beat Sachin at Quake and get free dinner? Did Sachin and Binny have a fall out?
Answering these, and many more questions at the SAP StartupSocial event on Thursday, Binny delighted the audience with stories around his early days in Chandigarh, life at IIT-Delhi, and the initial days of Flipkart.
“I was passionate about sports, and okay in studies,” said Binny, adding Machine Learning and Computer Vision interested him from the very beginning.
The days he spent at IIT-Delhi, he said, were some of his best years. “IIT Delhi has a unique hostel culture. You were more loyal to your hostel than your department, course or batchmates. The rivalry between the different hostels was intense and played out during sporting events, and cultural shows.”
A computer science student, Binny chose Sarnoff Technologies, a pioneer in computer vision in 2005. “In like a year, I kind-of realised that the work is great and the learning on our technology is great but Sarnoff is never going to be great business because the solution is just not ready for application, so they will never be able to make money.”
Binny interviewed twice at Google, but could not make it. “Next best option was Amazon, and within two months I was bored. The work was boring, and I was doing much more interesting stuff at Sarnoff. That’s when I thought why not start something?”
With no clear definition of a ‘career’ back then, Binny wanted to something meaningful. Seeing risk differently, he admits that, “Working within Amazon looked very risky, as against doing something on my own. A safe job looked way riskier than actually getting your hands dirty and learning something!”
The Flipkart story
Binny’s calculation was simple – his savings of Rs 4-5 lakh were enough to start and bootstrap a company for a few months. Flipkart didn't raise funds for the first two years of operations.
Binny had joined Amazon in 2007, and Sachin had already been there a year. “The funny story is, when I joined Amazon, Sachin had actually referred me, and got a referral bonus. However, he had to pay it back as I left in eight months. He is still bitter about that!”
One idea led to another, and Sachin and Binny started critically looking at the space, and had initially set out to start a comparison-shopping engine. “For two people who know how to code, the easiest thing to do is write code to compare different websites that are selling stuff, and send people to the lowest price or something like that. But, when we started building that out, we saw all ecommerce companies that existed at the time were very bad. There was no point in comparing bad companies.”
The duo then thought, why not build a good ecommerce company that just takes care of customers, and keeps things simple.
Binny revealed Sachin and he have a lot in common besides their surnames, and no, they were not related! Both hail from Chandigarh, studied at IIT-Delhi, graduated in 2005, worked at Amazon, and started Flipkart.
On Sachin’s gaming Binny said, “Right from college days, Sachin was a big gamer. He actually took one more year to complete his degree because he was gaming too much. He joined one year before me and passed out with me. Whenever freshers joined Flipkart, many thought they could beat Sachin to win a free dinner, but nobody could as Sachin is very good.”
The co-founders started Flipkart with their savings of Rs 7-8 lakh, and worked out of an apartment in Koramangala. “Initially when we started, we had to be very frugal. Our monthly operating cost was Rs 15,000-20,000.”
Their first order was for a book called ‘Leaving Microsoft to Change The World’. “It was our first real order. Before that, only our friends had ordered, but this was from a stranger. We were first wondering how did anyone find Flipkart, and had the guts to pay online in dollars (We had no payments gateway and we were using PayPal), we were very intrigued.”
Wanting to do a great job, the founders spent an entire day searching for the book, but had no luck. Over the next three to four days, they searched the book and found an old copy.
They had no choice to ask the customer if he was okay with a book that was not in mint condition. To this customer said, and Binny quoted, “I have been searching for this book for three-four years and if I can read it, send it to me. I don't care about the condition.”
That’s how Flipkart fulfilled its first order.
Binny said in the first year, going around warehouses looking for books was one of their core jobs. “It has also been a practice at Flipkart to visit customers and deliver items ourselves, to understand the service experience better and take feedback from them. As we don't reveal our identities, some customers recognise us, some don’t. Some also take photographs, there was also one customer who wouldn't let me go without feeding with chai and mithai.”
How did the name come about?
On whether there was a story behind the name Flipkart, Binny says, “As we did not have the money to buy a great domain name, we wanted the cheapest Rs 500 domain name, hence Sachin came up with the rules - it should not be more than eight characters as it becomes difficult to type, it should sound cool, make the brand stand out, and be available for cheap.”
After narrowing down 8-10 names, Flipkart with a K was available. Hence Flipkart.
Talking about its approach on advertising, Binny said they first worked with a startup advertising agency called Happy Creative, and loved the creatives made with them.
Giving the audience some advice, Binny said, “I think in the early stages, it is very important to iterate very quickly, and fail fast. Second is being very, very cost conscious. Very frugal in the early days sets the right culture, the right mindset, going forward. I think the third - once you have somewhat of a product market fit, once you decide to scale, looking at hiring the right people is important and I think what matters more in the early stages is really attitude and aptitude.”