The co-founder of Flipkart, in a free-wheeling chat on Thursday at SAP Labs India’s launch of its second accelerator programme, spoke on topics rarely touched, joked with the audience and gave colourful anecdotes about the company he built.
After IIT-Delhi, Binny had worked in Sarnoff Corp, a company doing R&D in vision technologies. Between 2005 and 2006, he applied twice to Google for technology roles and was rejected both times. “I was always interested in technology and had a wonderful run in Sarnoff. I thought Google might be a great fit.” In 2006, Sachin Bansal, who became his Flipkart co-founder later, got Binny into Amazon as a senior software engineer.
One of his key challenges today, Binny said, is to convince his wife to purchase fruits and vegetables from Flipkart instead of BigBasket. “So everyday, she goes online and buys off BigBasket and I try convincing her about our site. Hey, maybe you should try out some of our new features… But no, I still haven’t been able to convince her.”
Walmart’s acquisition of majority control in Indian e-commerce player Flipkart in a $16-billion deal is expected to help the government rake in up to Rs 13,000 crore, following the global retailer’s discussions with income tax authorities.
Binny spoke about his bonding with Sachin. “One of the stories that cracks us up is how Sachin was the one who referred me to Amazon and got a big fat bonus. And it gets funnier, because eight months later I quit. And Sachin had to cough up the money to pay back Amazon.” The referral bonus programme mandated that the referred employee must stay in the company for a certain minimum period.
The audience was in splits when Binny spoke about some unexpected consequences during their Big Billion Day sales, when Sachin and he would do some doorto-door deliveries to understand customers better. “Some people don’t recognise us and the conversation is casual. Others do, and take photographs. But there was one customer who just wouldn’t let me go. And not just him, but his entire family was keen on stuffing me. So I got plied with chai, mithai; more chai and mithai. And since customer is king, can’t say ‘No’,” he said.
About his early life and schooling, Binny said it was a surprise to him that he being a person passionate about sports and just okay in studies, went on to join IIT. He said the years in IIT-Delhi still remain some of the best years of his life. “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, cultural shows. There would be sloganeering, cheering and anticheering; more anti-cheering than anything. I was in Shivalik hostel and the bonds I forged there carried over later on in life. I ended up staying with 6-7 of my former hostel mates when I came to Bangalore, till we all moved on or got married,” he said.
Binny said in his initial years he was more keen on tech and took courses on augmented reality and machine learning. “Many of my friends were getting placed in Capital One, McKinsey. I got an offer letter from DE Shaw (investment firm). But I wanted to do something different and so came to Bangalore and worked for a tech company (Sarnoff). It was a great place and I was learning a lot. But their applications were not ready for the market. I didn’t see a future for myself there, so I quit.”
Asked how he got the courage to launch a startup, Binny agreed that it had been very comforting to take a regular salary home at an MNC. “But I was getting bored. I wanted something different. I was 24, I could take risks. I was very frugal then and did the math. I wanted to be able to last 18-24 months without a regular income. I saved Rs 4-5 lakh to start the journey. We were bootstrapped those first two-and-a-half years and I was confident. If it failed I could always go back to a tech company. My skills were not going to go away.”
Binny said Sachin and he were initially interested in a completely different business model. “We both had technical skills, so we were thinking of launching a comparison shopping engine for ecommerce. But when we were building it, we realised all the ecommerce companies back then were really bad. None of the customers liked any of them. There was no use reviewing them. Then we thought, why not build a good company! That’s how the Flipkart ecommerce idea started.”
On the common misunderstanding that he and Sachin were brothers, Binny said they have a lot in common so it is not far off the mark.
“We share a love for gaming. Sachin was an avid gamer and there was a challenge then that he’d buy dinner for the person who could beat him. Well, his purse was safe. No one could beat him and no one got dinner. We are both from Chandigarh. We both passed out of IIT-Delhi in 2005. He joined a year earlier than me, but I guess he was gaining so much in college that he stayed on and passed out with me; which eventually proved lucky for all of us.”
Sachin’s prowess in gaming wasn’t well known in the early days, he said. “So everytime a batch of freshers from college came, they would think: We are hardcore gamers, how will this old person beat us? And he would beat the s*** out of them.”
An important cultural aspect to Flipkart, he said, was its frugality. “When one thinks of data centres, we think of large farms spread over several acres. But our data centre was out of our tiny apartment in Bangalore. In the early days of Flipkart, the office rent was Rs 8,000. We had no power backup, no AC and almost no windows. Once, both our UPS ran out of power. And we had to print a lot of bills. So I remember running to the nearest cyber cafe to print out the bills and ship out packages. There were lots of jugaad,” he reminisced.
On the story of their very first order, which has become something of a legend, Binny said, “We were shocked when we got that order. Because till then we had only been able to convince our friends to order and that doesn’t count. So this was our first real order. We had not even advertised. How did the guy come to know about us? So then we realised that Sachin had commented on the person’s blog saying, `Really nice article. Please visit Flipkart.com.’ This was before the era of social media marketing. And this was his way of leaving a card. And this person had seen the comment and ordered.”
There were no payment gateways in India then. So someone actually had the guts to pay in dollars on PayPal for an unheard of Indian website, Binny noted.
And then the two went searching for the book that had been ordered. “In this book supplier’s inventory it showed there were 15 copies of the book. But he couldn’t find any. Then we convinced him to let Sachin and me search for the book in the warehouse. And even then no book. Actually in the first year, searching for books in warehouses was our core competency,” joked Binny.