Sachin And Binny Bansal: Lessons on Life And Leadership From The Founders Of Flipkart
Originally published at lmt-lss.com on October 22, 2015.
The first e-commerce company to focus on customer service as their core theme.
In 2007, two twenty-something IIT, Delhi graduates quit their cushy jobs at Amazon to turn entrepreneurs. Backed only by their passion, Sachin and Binny Bansal were determined to start an e-commerce company in India. As expected, the news of them quitting their job to become entrepreneurs did not receive a warm welcome by their parents, who reacted fiercely to their outrageously impractical idea of leaving their jobs and risking their future.
Back in 2007, companies were struggling with poor internet penetration, limited engineering skills and scratchy customer experience. After weeks of planning and rethinking their plan, they started Flipkart in a two-bedroom apartment in a residential locality in Koramangala, Bangalore. They spent several sleepless nights but were persistent in their decision as they envisioned the flourishing opportunity in e-commerce in India. Like Jeff Bezos, founder of Amazon, they started off with selling books and eventually, by the end of 2008, they started receiving more than a thousand orders a day. Flipkart has been on the rise since then and has raised over $1 billion in funding.
In September 2015, Sachin Bansal along with the co-founder of Flipkart, Binny Bansal, was named the 86th richest person in India with a net worth of $1.3 billion by Forbes India Rich List. The Bansals have fought hard to raise the bar of e-commerce buying experience in India.
Here are seven lessons we can learn from the duo responsible for the creation of one of India’s largest e-commerce companies.
Your business should delight your customer.
When the Bansals began their e-commerce journey in India in 2007, customer experience was poor. E-commerce was just beginning to bloom with travel sites such as IRCTC and makemytrip gaining traction. Flipkart wasn’t the first in the business but they definitely were the first to focus on customer service as their core theme. They knew that building trust would take them a long way in the e-commerce game.
Diversify where you need to.
During their initial years, Sachin and Binny struggled with logistics, relying on creaky logistics of India Posts and private courier companies. But things began to go sideways with Flipkart’s foray into electronics. They realised that they could not depend on third party logistics partners if they wanted to do diversify their product range. So they built their own logistics network called ekart which enabled them to add a lot of value added services like cash on delivery, returns management, try-and-buy in fashion.
Always experiment.
The Bansals, since the very beginning, believed that focusing on customer experience will differentiate them from the clutter and help them capture a larger market share. They used the Flipkart platform as their playground and didn’t hesitate to experiment. They did small changes in design and UI, sometimes every couple of hours, to see how it impacted consumer behaviour. Being an online portal, they would get instant feedback which they used to better their customers’ buying experience.
Start with building depth.
For the first three years, Flipkart was known as an online books vendor. Before they expanded into other product segments, the Bansals wanted to ensure they could provide the best customer experience, management bandwidth, and capital and infrastructure. They only sold 100 books in 2007 and on December 31, 2007 they even had a zero order day. However, by end of 2008, Flipkart had crossed over a thousand orders a day and in 2009, they started getting noticed in the book business.
Expansion will take a toll, but learn to adapt.
When Sachin and Binny took the big leap and diversified into electronics, their customer service experience dropped sharply. When buying a relatively low-value item like a book, one can deliver it to a neighbour or the watchman of the building. The same wouldn’t work for expensive electronics. The Bansals had to completely re-engineer their business model which took a year’s worth of work on technology, supply chain, logistics and marketing.
Shift quickly from execution to ideation and strategy.
Initially, as a small company selling books, both Sachin and Binny would be involved with day-today execution. They even handled customer support. They admit that they never had a forecast of the business for over two or three months at any given point in time. They realized their shortcomings in 2008 when they were trying to raise funds and were rejected by several prospective investors. This experience led them to divert their focus from execution to strategy.
Work with people who believe in your vision.
The Bansals faced a lot of rejection from the investor community when they were looking for funding. Tiger Global, a global investment firm, was much more entrepreneur-friendly than most other VCs and believed in the Bansals’ vision for Flipkart. Sachin and Binny said in an interview that Tiger brought a long-term thought process to the table, rather than accounting for every dollar spent. When Tiger Global invested in Flipkart, investors woke up to the potential in this sector.
