Big Billion Startup: The Untold Flipkart Story

For my grandparents


CONTENTS
1 Breeding Ground
2 The Bansals Go to IIT
3 Exodus from Amazon
4 The Desertion
5 Up, Down, Hello, Goodbye
6 The Kart Gets Rolling
7 The Eye of the Tiger
8 ‛Binny Ke Batch Se Ho?’
9 Boom
10 The King of Shaktipeeth
11 Setback
12 The Tiger Cub
13 Hello, Moto
14 Another Bansal Joins the Family
15 A Billion Dreams
16 The Comeback
17 Reinventing the Kart
18 Chaos and Confusion
19 After Bansal, Bansal
20 The Tiger Cub Returns
21 Kalyan Raj
22 The Son
23 A Journey to Bentonville
24 Breeding Ground
Epilogue
Author’s Note and Acknowledgements
Notes
Index


1
BREEDING GROUND
One morning in August 2004, a few days ahead of his twenty-first birthday, Ajay Bhutani was woken up by a persistent knock on the door. It was 7 a.m. and Ajay was lying exhausted in his small hostel room at the Indian Institute of Technology in Delhi.
Ajay had dropped into bed only two hours ago, after a gruelling night at the computer laboratory on campus. He was in the penultimate semester of his four-year programme in computer science. Campus recruitment – the reason IIT students had put carefree college life on hold – was just days away. Ajay, a Punjabi boy from Faridabad, had been preparing for recruitment season for the last three years. He needed to sleep to be awake for it.
But the knocking wouldn’t stop. Outside, one of his hostelmates called out, ‘Abey, uth ja, ek company aayi hai.’ Hey, wake up, a company’s here.
Ajay rubbed his eyes. ‘Kaun si?’ Which one?
‘Amazon.’
‘Amazon?’
‘Kitaabe bechti hai online.’ They sell books online.
‘Usse kya hota hai?’ What’s the use of that?
‘Paise bahut de rahi hai.’ They’re offering high salaries.
‘Achha? Chalo.’ Really? I’m coming.
AMAZON, THE AMERICAN online retail pioneer, had opened its India offices in the southern city of Bangalore the previous month. In the early 2000s, dozens of dotcoms – as internet companies were then known – had gone bankrupt. Amazon, which had been one of the prominent faces of the technology boom and bust, had managed to emerge from this gloom, albeit with a diminished reputation and stock price.
In August 2004, the young search engine Google listed its shares, fetching a valuation that was far higher than that of Amazon.1 EBay, an online marketplace and auctions site and Amazon’s rival, earned higher profits and was considered a better-run company.
This may not have bothered Amazon’s founder Jeff Bezos, who coincidentally was an early investor in Google. Bezos was known to mainly be obsessed with keeping Amazon’s customers happy rather than worry about rivals or stock-market valuations. But there was one other goal that kept him occupied – he wanted to transform Amazon, a hawker of books, toys and electronics, into an all-purpose technology company. Yet, all Amazon seemed to be doing was selling books, toys and electronics. It was time the company started experimenting and venturing onto new avenues. One of these initial experiments happened to be a search engine called A9. Introduced in September 2004, A9 set out to be a more advanced version of Google.
Bezos put Udi Manber, an accomplished Israeli technologist he had lured away from Yahoo, in charge of A9. In turn, Udi persuaded Bharat Vijay, one of Yahoo’s early employees and a brilliant engineer, to join the A9 team in 2004. After working at Yahoo’s headquarters in San Francisco for nearly five years, Bharat had moved back to his country in 2000 to set up Yahoo’s India office in his home city of Bangalore. Four years on, Bharat’s mandate now was to launch Amazon’s India office. He had to assemble and lead a team that could make image searches on the internet easier, an area in which Google wasn’t exactly breaking new ground.
Bangalore seemed like a good place to hire engineers for A9. Some of the smartest employees at technology companies in the US were Indians, many of whom were graduates of the Indian Institutes of Technology, a chain of government-subsidized engineering colleges that Jawaharlal Nehru had established in the 1950s. Amazon had arrived armed with the knowledge that IIT-educated engineers could become real assets to a company. After all, it was a group of IIT engineers who had started Junglee – a website that allowed people to compare product prices across shopping sites – which Amazon had acquired in the late 1990s. Determined to recruit the exceptionally talented, Amazon was keen to open its doors to more such inventive engineers.
The company had another reason to set up shop in India: it was an unrealized market. Since the early nineties, when India opened its economy to foreign investment, brands and retailers had swarmed the country from overseas, buying into the notion that hundreds of millions of Indians had money to spend and were raring to devour all kinds of consumer goods after decades of forced socialist deprivation. Consultant firms and research agencies happily fed the naivete of foreign companies with wild estimates of the potential of India’s retail market. The local media even labelled Kishore Biyani – the founder of Pantaloons and Big Bazaar – India’s Sam Walton.2 In 2004, Amazon’s arch-rival eBay would buy Bazee, an Indian clone of eBay, for $50 million.3 Gradually, after the dawn of liberalization, the forbidding, socialist India of the last forty years had transformed into a virgin consumerist paradise for American and European brands.
Indians, of course, had their own view about this representation of their reality. In 2004, the Indian people ousted a coalition led by the Hindu nationalist Bhartiya Janata Party. The BJP had campaigned on the premise that until the party’s most recent tenure in the central government, Indians had never had it so good, an idea encapsulated in its election slogan ‘India Shining’.4 Shockingly, in a country where nearly forty per cent of the population was poor and most of the rest just got by, Indians didn’t think their hunger to consume was a cause for celebration. It wasn’t that life under the BJP hadn’t