Big Billion Startup: The Untold Flipkart Story

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by Mihir Dalal


  Ram Singla, one of Sachin’s hostelmates at Jwala and a fellow involuntary member of the CCA, would lose to Sachin every time, often within seconds. Ram would ask Sachin, ‘What’s the point, man? Why are you even playing with me?’

  ‘Koi aur hai nahi. Tu hi khel le,’ Sachin would say. (There’s no one else around. So, I have to make do with you.)

  In 2003, Sachin and three of his hostelmates, Harsh Dhand, Ankit Agarwal and Pankaj Garg, were selected for a two-and-a-half-month research internship at the University of Essen in Germany. The city of Essen lies on Germany’s border with Belgium and the Netherlands. For the four young men, the internship turned into a pleasure trip. On a university-allocated budget of €1,500 each, they embarked on a Europe trip, visiting more than a dozen countries including France, Italy and Spain. In the early 2000s, very few young Indians had the means or the opportunity to travel to the West. It wouldn’t be surprising if this trip had stirred and broadened Sachin’s imagination to some extent.

  Although, on returning in the summer of 2003 for his fourth and final year at IIT Delhi, Sachin quickly resumed his manic gaming. He was possessed by video games. His friends speculated that he sometimes leftexams early just so he could return to his games. He had lost interest in the programme, and a few months into his final year, it became clear that he wasn’t going to pass – a calamitous outcome. Getting into an IIT is considered a momentous, life-changing event. But this is based on the assumption that one will obtain the degree that fetches the big jobs. It was a reasonable assumption – most students attained passing grades without great difficulty.

  Sachin, however, was so consumed by video games that he considered quitting IIT altogether to take up gaming professionally. It was an absurd plan. IITians are known to rave about the excellence of their education, but it is often only later in life. It isn’t necessarily for the quality of the institute’s education or for intellectual enrichment that multitudes of aspiring young Indians seek admission into the IITs. The higher goal, for both the aspirants and their parents, is for the former to obtain the best-paying jobs and ward off a proverbial life on the streets. In the early years of the new millennium, dropping out just wasn’t considered acceptable.

  But Sachin didn’t care. He informed his friends of his latest accomplishment – he had apparently clinched one of the highest ranks in a national gaming competition. The aim was to win the next time. Only at the end of his fourth year at IIT, as he watched his classmates land jobs at marquee companies like McKinsey and Microsoft or move abroad for post-graduate studies, did Sachin change track and vow to get his degree. Like a chain smoker quitting determinedly, he withdrew himself from gaming.

  Over the next year, Sachin experienced the humiliation of staying behind for an additional year. He worked diligently, spending hours at the computer lab rather than thinking of ways to improve his gaming scores. He finished his final-year research project, completed the mandatory courses and finally secured his degree. In July 2005, he joined the small Indian software firm Techspan in Bangalore. It was hardly a dream job, but at least he wasn’t killing it or getting killed by video game characters. And he wasn’t out on the streets either.

  Outside IIT campuses, Sachin may have come across as an extreme character, unusually passionate, an eccentric who would consider giving up an IIT degree for gaming. But not at the IITs, where students like Sachin were hardly uncommon. As Ram Singla succinctly puts it, ‘There’s another guy [bestselling paperback writer Chetan Bhagat] from IIT who wrote a book called Five Point Someone.5 He could’ve been describing Sachin.’

  THERE WAS NOTHING eccentric about Binny Bansal. He truly was a regular campus guy.

  Binny joined the computer science programme in 2001, one year after Sachin. He was a ‘full toss’, securing admission in the first attempt. His classmates included Rohit Bansal, who would go on to launch Snapdeal, Flipkart’s arch-rival for many years. Binny and Rohit were ‘best buddies’6 in their first year at IIT but they drifted apart after that. Their class came to be notorious for low attendance and relatively poor grades. Their seniors would scoff at them. ‘Tum log yahaan kahaan se aa gaye?’ How did you guys end up here?

  The four years Binny spent at IIT Delhi passed satisfactorily. He was overall a bright student, even though his grades slipped in later years. He played sports – basketball and squash were his favourites. Despite being introverted and a tad socially awkward, like the stereotypical Indian software engineer, Binny had a mild, pleasant personality. His peers found him likeable. One of his classmates recalls, ‘Binny was not impulsive; he was analytical, logical. And he generally came across as a nice guy. He was one of the few who had a normal life at IIT.’ Like Sachin, he had a small group of friends, and he, too, was made a member of the CCA.

  Binny’s reputation, however, rested on something else entirely: he had a girlfriend. He was dating Aparna, one of his three female classmates in the computer science department, and considered attractive. The men in his class numbered more than fifty. Being in a relationship was ‘the rarest of the rare thing’ at IIT. Binny was of average height and had what is considered quintessential Punjabi good looks – clear green eyes, fair skin and a sportsman’s lean physique. He often invited jealousy but such ill feeling would never escalate thanks to his agreeable personality.

  Engineering students are often known to lack rounded personalities, as they spend their late teens confined in the bleak rooms of Taylorist7 coaching institutes in the single-minded pursuit of securing admission into a reputed college. Very few of these aspirants make it to the college of their choice, or in many cases, of their parents’ choice. Many of those who do, spend their college years in a vacuum of sorts. Their conditioning is such that education is seen strictly as a utilitarian means towards the end goal – a respectable job. Humanities programmes – there is one at IIT – are dismissed as superfluous. Social development in this environment is thus stunted, and gender sensitivity is nearly absent. Many male engineering students struggle to hold a basic conversation, much less form friendships, with women.

  In this abnormal environment, it was hardly surprising that Binny was one of the few men who led a ‘normal’ life.

  Binny lived in the Shivalik hostel. In other hostels, first-years had to share their rooms with a roommate. Shivalik was the only hostel where every student had a room to themselves from the beginning. It was the least distinguished of the ten IIT Delhi hostels. It had been opened up to students in the four-year programmes only a couple of years before Binny came to the campus (IIT Delhi also offers a five-year programme). Anil Kumar, Binny’s hostelmate, describes Shivalik as a ‘very laid-back kind of place, a sleepy hostel, almost like for retired people’.

  Anil and Binny worked together on the student publications board which published the campus magazine. The magazine contained student profiles, information about events, study groups and other on-campus activities. Anil, who came from a small town in Bihar, was in the civil engineering programme. He and Binny had joined IIT in the same semester. Unlike Binny, whose involvement in the publication board’s activities seemed perfunctory, Anil was an energetic member of the group. He organized events, put together a literature festival that boasted Keki N. Daruwalla as one of the speakers, and won praise across hostels for his efforts. Binny, on the other hand, ‘was a bit in his hostel’s image,’ says Anil. ‘He was not too enterprising and he didn’t really show any signs of leadership then.’

  One of Binny’s teachers at IIT Delhi was Professor M. Balakrishnan, who had graded his main research project in the programme’s final year. Professor Balakrishnan has no recollection of either Binny or Sachin being his student. He only realized years later that he had taught Binny, as he watched an interview of the Bansals with journalist Shekhar Gupta on NDTV’s show Walk the Talk, where Binny mentioned his project.8 According to Professor Balakrishnan, it is largely the mediocre, anonymous students such as the Bansals who excel at entrepreneurship.

  It hasn’t
escaped Anil Kumar’s attention either that the highest scorers in his batch may have done well in their careers but they weren’t the standouts. The people who truly excelled were the average students, nearly anonymous in college.

  3

  EXODUS FROM AMAZON

  This is the story of how Sachin Bansal and Binny Bansal met, an extraordinary tale as befits all matters of grave importance such as politics, caste, religion and war.

  There are often varying accounts of the same historical event. This isn’t unreasonable – memory is fickle, events lend themselves to different interpretations, old opinions get coloured by newer perceptions that are bound to evolve with time. But what Sachin has said publicly about how he met Binny differs so much from the accounts of people who knew them during Flipkart’s early days, that one must delve into the concept of the ‘creation myth’ to understand Sachin’s claims.

  In Flipkart’s later years, Sachin came to idolize Steve Jobs. He treated the Jobs biography, Steve Jobs by Walter Isaacson,1 like the gospel. Closely associated with Jobs and Apple Inc, the company he co-founded in California, is the idea of the creation myth, a practice entrepreneurs often follow, whereby the story behind their company’s creation is embellished by at least some imaginary element.2 The purpose is to pad up the romance, glamour and providence already associated with the company and its founders. The fact that Job and his friend Steve Wozniak built the Apple computer in a garage all by themselves is only a half-truth. Such accounts presented as the real and romantic version of how a company was founded become a source of inspiration to aspiring entrepreneurs who look up to these successful entrepreneurs as business icons and role models. Most founders perpetuate the creation myth to some degree, even if they add minor imaginary touches. It is but expected that an innovative entrepreneur who has founded a business worth billions of dollars, will be able to creatively present their founding story to the public. Jack Dorsey, co-founder of Twitter, who, like Sachin, also idolized Jobs, has been known to fabricate his own creation myth around Twitter. It has been alleged that Dorsey gave the impression that he was the sole person responsible for the founding of the online social networking company, thus erasing the role of his partners.3 In telling the story of how he met Binny, Sachin certainly has no such intention. His purpose is simply to tell a good story. It’s the inventive details in his account that make it intriguing.

  In 2015, during the Walk the Talk interview, Shekhar Gupta asked Sachin and Binny how they had met. Sachin’s version went thus:

  ‘[It was during] one of the summers in IIT Delhi. In [the] IITs, what happens is that when your project is unfinished during a semester, your professor asks you to stay over for a summer project to finish that project. And I had an unfinished project during one of my semesters. And Binny also accidentally had an unfinished project. Our professors asked us to stay back. We were alone. I actually did not expect anyone to be in the college at that time and I was surprised to see Binny in the lab. I think for the first few days we just maybe thought the other person would go away and they’re just there for a few days. But then we started talking and we actually realized that we’re from the same city.’4

  Sachin’s ‘unfinished project’ was a euphemism for the classes he had failed at IIT Delhi. After most of his classmates graduated in 2004, Sachin had to stay back and retake some of the mandatory courses so he could achieve a minimum score of 190 points. He also needed to submit a mandatory research project. This is what would lead to Sachin finally getting his degree in 2005, nearly one year after most of his classmates had graduated.5 Despite idolizing Jobs, Sachin was clearly embarrassed by his failure at college. Not only Jobs, many famous entrepreneurs, Bill Gates and Mark Zuckerberg included, have spoken openly about dropping out to become entrepreneurs. Indeed, this was one of the essential ingredients that went into the making of their very own creation myths. But the IITs have such strong significance for the Indian middle class that even the country’s most radical internet entrepreneur who otherwise embraced Silicon Valley values wholesale, couldn’t find it in himself to admit to relative failure at the hallowed institution.

  The other loophole in Sachin’s account had revealed itself previously, in 2010, at a startup event called UnPluggd, in Bangalore. While delivering a talk about Flipkart, he had said, ‘We were batchmates from IIT Delhi – 2005 batch ...’ Faltering noticeably, he continued, ‘Uh ... right, so this is how we started.’6 Sachin’s unease with public speaking is sympathetically evident. It is clear he is not comfortable in the limelight, speaks without affectation, and is ultimately a passionate champion of his company. One feels willing to excuse him for saying that his co-founder was also his classmate.

  It is a known fact that Sachin came to IIT Delhi in 2000, and Binny in 2001. By all accounts, the Bansals didn’t know each other in Chandigarh. So, where did they actually meet?

  It is clear that even if they had met in the IIT Delhi computer lab in 2005, this meeting had no bearing on their later friendship and partnership, both of which developed only in Bangalore.

  THE BANSALS TRULY got to know each other at the NGV complex in late 2005 after Sachin moved to Bangalore to work at Techspan. They cultivated an easy friendship without becoming particularly close, as is often the case in a large group. Sachin and Binny had become part of a group of eight IIT graduates of similar age. The friends would meet often, go out for movies, dinner and drinks. Some of them, including Sachin, owned cars, which they would take on long drives around or away from Bangalore. A favourite destination was Hampi, an ancient town in Karnataka known for its temple ruins and hippie scene. The sports enthusiasts of the group, which included Binny, played squash and football together. Geeks like Sachin took up hobbies such as coding challenges and puzzle-solving which one commonly faced at job interviews. Sachin also resumed gaming, although not with the obsessiveness of his IIT days.

  After graduating from IIT, Binny had taken a job as a programmer at Sarnoff Corporation, an American technology hardware-maker. His stint there lasted eighteen months. Towards the end of 2006, he applied for a job at Google – which had just set up shop in India – and a few other tech companies. Google rejected Binny.7 Around the same time, Sachin referred him to Amazon. If Binny made the cut, Sachin would earn a small referral bonus.

  Binny was almost rejected by Amazon, too. Another Sachin, a Sachin Dalal, was one of the several Amazon employees who had interviewed Binny. Binny was so nervous that he trembled while writing the code that had been asked of him. Sachin Dalal had to leave the room so Binny could feel at ease. He describes Binny’s candidature as ‘borderline’. A few positives, such as Binny’s IIT degree, ultimately worked in his favour. In late 2006, Amazon gave Binny a job offer.

  Right from the start, Binny came across as shy to his colleagues, addressing his superiors as ‘sir’ even though they were barely older than him. There was no doubt, however, that his technical proficiency was impressive. Sachin Dalal could see that Binny was a highly skilled engineer, better than even Sachin Bansal.

  By the time Binny started at Amazon in January 2007, the Indian outpost had evolved vastly from a year ago when Sachin had joined the ranks. Work on the search engine A9, and the payments product Flexible Payment Service, had crept along. Amazon leaders in Seattle had initially found that the India team had done a stellar job with FPS. But there were procedural gaps as certain technical processes were impermissible given that payments was a tightly regulated space. The FPS team was asked to plug these gaps and make a few other changes. FPS was finally launched to a few merchants in the US in 2007 but Amazon didn’t promote it enthusiastically. The search engine project was a mess. It had suddenly been thrown into turmoil in February 2006 – soon after Sachin had started at Amazon – when the A9 CEO, Udi Manber, left Amazon to join Google.8

  Just days later in India, Bharat Vijay, who had been hired by Manber, also quit Amazon. Over the next month, some of the most consequential leaders at Amazon India followed suit. Vikas Gupta, th
e head of FPS, returned to the US to launch a startup called Jambool, which built payments software for online games. (Jambool would be acquired by Google in 2010 for $70 million.)9 Vikas was frustrated with the pace of work at the office and didn’t get along with his boss Amit Agarwal either. He was independent-minded and no longer cared for a long career at Amazon or any other corporation. He became the first engineer to leave Amazon India to be an entrepreneur. At the same time, Krishna Motukuri, another important Amazon executive, also leftto start a comparison-shopping website called uGenie. This company, too, would be acquired by Lulu.com a few years later.10

  The departures of these leaders marked the beginning of the end for Amazon’s experiments building innovative products at the India base. Technical skills aside, Bharat, Vikas and Krishna were also popular, charismatic leaders. Amazon had turned out to be a rewarding workplace for many employees, but the peculiarity of its work culture was grating and could lead to burnout. Bharat and Vikas’ easygoing personalities as well as Amazon’s initial extravagance had made working here seem gainful to its employees. As these two well-liked leaders made their exits, the environment of bonhomie at the office began to disintegrate.

  By this time, Amazon had also decided against launching its operations in India. Its China venture was faltering, so the company chose to sort out those issues rather than rush into another difficult market. Amazon had evaluated the benefits of buying Indian online retailers such as Indiaplaza. But it passed up the opportunity to buy these firms, realizing they were too small and shoddily run. Amazon had also initially considered starting its own operations; they would’ve just had to find ways to circumvent the prohibitive foreign investment laws. But the risk of being trapped in a regulatory minefield overshadowed this temptation. Amazon’s decision to abandon its India plan was a pivotal factor in the launch of startups like Flipkart and Infibeam. It is doubtful if the Bansals and the Infibeam founders would have launched e-commerce ventures with Amazon as a rival.

 

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