About the Guest Transcript

Mihir Dalal

Flipkart is indeed one of the biggest ecommerce giants that did not boom over night. This start up paved path to every entrepreneur, startups, and any budding young minds, and gave them the guarantee that they can make it big in business with bold moves. Lets go find out what happened behind the scenes that Flipkart reached the heights never imagined.

To break down the mighty mystery, Mihir Dalal, a revered start up wrieter and the chief of Bureau at Live mint, is here. Lets hear from him about the tricks and twists Flipkart had to make to beat and shake the ecommerce stream.


Shubham(00:01) -
As an Indian, what is the first name that comes to your mind when I say startups? I'm not sure about what you thought. But I definitely have Flipkart on mine. And I think most of you would have it too, right? And it's no surprise Flipkart does hold so much value for all of us. It is that teacher that you respect the love for entrepreneurship in me, which gave me the confidence that it is possible in India now. Well, I have made the call with us, the Revit, startup writer who has authored the book, big billion startup to talk to us about Flipkart, and much more.

Shubham(00:39) -
Good morning, you're listening to SOS secrets. Secrets of storytellers is a podcast, where I interview authors and writers from the world of business, literature and many more. Don't miss out the last section where we get to know secrets from the storyteller themselves. Hi, Mihir. Welcome to secrets as storytellers How are you?.

Mihir(00:57) -
Thanks. Thanks, Shubham. It's great to be here.

Shubham(00:59) -
Great pleasure to have you. So how has the lockdown been for you Mihir? Did it give you a lot of peaceful time to write?

Mihir(01:06) -
Well, actually, no, it's it's been extremely busy. Because there's so much so I apart from being an author, you know, I, my day job is to basically I write for mint, on internet companies and startups. Yeah, my two feature stories and long form reporters for them. So, you know, there's just so much happening in the startup space, because of the pandemic. So it's just been crazy busy the last four or five months for me, so we have very little time to do anything but you know, like work related stuff.

Shubham(01:35) -
Great. Great. So Mihir, you subtitle, the book, The Untold Flipkart story, do you think the behind the scenes picture is way too different than we know of, you know, on the outside?

Mihir(01:50) -
I think it depends on who's asking the question. For instance, say if you're already involved, or you've already been in the startup world for a while, you know, most often the god the real, such story doesn't come out all the time. And not, you know, in the daily news cycle. But still, despite that, if you've worked in a startup, then you know, while the details of a specific story may surprise you, or shock you, the larger ones will sound familiar. But to me, you know, if, if you're not familiar, or if you're not intimately familiar with a startup or with how startups work, or this whole, you know, startup space, then I would say yes, it is very, very, very different than what you've heard of, you know, a new stories or on television, etc. And I don't mean that in terms of facts, you know, what I mean, in terms of like, like, the narratives, and, you know, the interpersonal stuff that goes on. So, I think while, you know, we in the media do a pretty good job of bringing out just like plain news stories. I think, again, the interpersonal details that influence really big events at startups, you know, I've, I've really had the key of why many startups succeed or fail? I think those do not come out in, in any kind of meaningful detail at ease, of course, you know, you will know, like, say, for instance, in the Flipkart story, you know, that Sachin and binny fell out at the end of during Walmart stage. So, you know, yeah, that they fell out. But you won't really know that, you know, what had led what went behind? Yeah, so you won't have a Julie proper sense of what has gone on between the two of them for 11 years, till the time they write. So these are some of the things that, you know, like, it's not that easy for mainstream media to write in any meaningful detail about.

Shubham(03:50) -
Right, right. So I understand, you know, we only know probably the headlines, but the details of it, or what has really gone behind each incident, which we hear of are not probably known to the general public.

Mihir(04:03) -
Yeah, especially the interpersonal stuff. I mean, you know, the financial details, again, the the kind of big news stories, like the mainstream media covers it pretty extensively, even if you may find fault with, you know, the, the way the coverage comes across, etc. But

Shubham(04:18) -
Right, I understand.

Mihir(04:19) -
I think the bigger picture, yes, certainly, you would know, you would not know, you know, the story story, you know, the, what goes on behind the scenes between people, you know, what, what are the interpersonal events or interpersonal experiences that shaped, you know, the events that finally come out that we see as news stories. So those are things that, you know, do not really come out in any meaningful way.

Shubham(04:43) -
Right, right. Great that you could write those stories and about those internal interpersonal stories that you mentioned. So, thanks for that. So maybe you you have done about 250 or more interviews for the book, if I'm not wrong, right. Was there at any point During these interviews, you heard something totally bizarre for even you to believe.

Mihir(05:06) -
Often,I mean, certainly more than I was expecting. You know, one of the things again, was about this whole interpersonal thing, you know, I just could not believe that such big events eventually just come down to, like interpersonal relationships, you know, it's just like for him, you know, at the end of like when Flipkart was being sold, I mean, till about, what, 1518 days before the sale was finalized and was announced, I mean, the post Walmart sale Flipkart was going to look completely different than what it ended up looking, you know, okay. Or at least some key people in the story thought, in the sense that, you know, Sachin Bansal, who is one of the co founders, and who was the CEO of Flipkart, you know, he had played a pivotal role in stitching together the deal he was, he really thought that he was the face of the deal. And, you know, even the Walmart guys, were under the impression that this guy is going to continue, and is going to be bigger, you know, after the sale at Flipkart. But that just flipped. And that happened literally over, like, less than two days. And it was just, it was just bizarre to me that, you know, these basic things, you know, saying that I was going to leave the company, how is the structure going to look like? I mean, these things have not even been sorted out among the current, like, management of Flipkart, you know, that, that just struck me as truly bizarre that there was just so many different individual agendas over there, you know, that we're kind of colliding and that, you know, we're trying to, like, get their own way, and their own interests of so yeah, that was that was seriously bizarre for me that, you know, like, we're talking about the biggest m&a that India has ever seen. And it really hinges on something very, very like, like precarious things. And, I mean, there was there was a point in time where the sale was actually in danger of, not quote, yeah. And it could have been a very, very messy, a very, very long drawn out kind of battle. Public battle, like that, if, you know, some of the people involved had chosen to be blind. Yeah, I mean, it was like these kinds of dissolved things. And, you know, the other bizarre thing about how certain people, you know, they, they just, were obsessed with such small, small things like, you know, this media, like such and such media coverage, this story, that's totally it was, yeah, it was just an eye opener to, for me to work on this book. Because remember that out before I started working on this book I covering Flipkart for four years, correct? It's not as much, you know, I wasn't familiar with a lot of like, the bigger details or anything. So, you know, even for me, like it was an eye opening experience, to work on the book for that one year that I did.

Shubham(08:14) -
Wonderful. And were the people who were trying to deceive you in some manner.

Mihir(08:18) -
Of course, again, yeah, that and that is something that I had anticipated, and that I knew that would happen, because, you know, I mean, you have to remember that this is your first huge startup success story. That is nothing that compares with Tiger does not mean just to give you some context before the Flipkart sale, The biggest m&a in India in the Indian startup space was like some $400 million. Right now, we're talking about $400 million. And we're talking about a $16 billion sale correctly, there's just no comparison. So, I mean, it was just such level mistakes over here was so high. And it was basically done by, you know, the company was started and run by a set of people who weren't very experienced folks who weren't very mature people, either, you know, they were very young kids, like young guys weren't really learning and iterating as things came along. So, I mean, this was bound to happen where, you know, like, like, you put, like, a bunch of extremely aggressive, smart engineers, and smart people for so many years, together, the first time without any ecosystem, to kind of, you know, make it easier for them to deal with things and all that. I mean, there was bound to be, you know, that many, like, tried individual agendas of that sort. So yeah, I mean, I certainly had to be very wary of, you know, why someone is telling me that there's a difference between fact and interpretation. Yeah, you know, our facts and context. So, like a fact without its context can appear in a completely different light than when you know, the color So, more than facts, because facts are actually much, much easier to corroborate, and to, you know, confirm what is really difficult is to get, like the story behind, you know, the context of the facts.

Shubham(10:13) -
Why did it happen?

Mihir(10:16) -
Exactly. Why did it happen? You know, like, whose interests are being served by what happened? Who kind of orchestrated this who orchestrated that? Who kind of, you know, pushed, or, you know, sideline someone, and there was just like, in every single step of the reporting process, I had to be very, very mindful of these things.

Shubham(10:36) -
Right. Right. And you're right, when you say that, you know, two individuals, two engineers, starting to do business and that to when they were no rules, you know, the rules are not set of this game in India, at least they they are the ones who set the rules. Yeah. So I think beyond just the fact that, you know, they are the biggest m&a deal in India, that are much, much more for the entire startup scenario in India, I guess.

Mihir(10:57) -
Yeah, absolutely.

Shubham(10:59) -
Yeah. So in the book also has a lot about how ruthless the entire funding scenario at Flipkart was, like you were discussing, and why it sounds so glamorous on the outside. Is it generally this way for all of the startups is well, is it this complex and difficult?

Mihir(11:16) -
Um, so first of all, you know, when we talk to funded startups, the funded startups actually form an extremely small minority of the overall number of startups in India. So most startups, you know, do not get funded. Most startups actually fail, like, you know, you can just look up data about the site, more than 80 90% of startups, you know, either fail or do not end up doing much, you know, just so, so yeah. So that is one thing to remember, Flipkart, even in that small minority was in a league of its own, where the stakes are so high, you know, so I wouldn't say that venture investors are always so ruthless and all companies. Okay, I think it's about, you know, the specific context. And in general, you can certainly say that, the higher the money involved, like, you know, the more money that has gone into a startup, the higher valuation is, the more ruthless everyone will be in that situation, including entrepreneurs, right. So it's not as simplistic a narrative as, you know, greedy investors and, you know, poor entrepreneurs or, you know, super aggressive entrepreneurs, and kind of, you know, like these mature investors who try and deal with them, it's really not that simplistic at all, you know, that is just, there is a lot of that there's a lot of complexity that enters this kind of, you know, situation. So it's Yeah, but you can say that, the higher the investment, the higher the valuation of the startup, the more ruthless everyone is going to be in that situation.

Shubham(12:53) -
Right right, and Flipkart has often been called, you know, an Amazon copycat. In some ways, they might have taken some ideas given, you know, both Sachin and binny worked with the Amazon at some point. But do you think you're totally taking away the credit by doing so? And rather not just Flipkart, but from every other such startup who takes motivation from you know, other business models? In some ways?

Mihir(13:15) -
Yeah, certainly, I've Seen flipkarts case, it's, it's really foolish to call them an Amazon copycat. I mean, it's okay to call them an Amazon copycat in the sense that, you know, it allows us to think of like what they do, right, it's an easy identifier, but the actual reality on the ground is that it's order Amazon copycat, you know, like, I mean, first of all, we have to remember that Amazon did not invent the idea of online retailers, like Amazon was not the first company to you know, sell online, right? Before Amazon, there were dozens, if not hundreds of other companies that were selling online, in the US. And the other thing to remember is that, you know, retail is not really like a new concept. I mean, it's not like Walmart, we had doesn't.

Shubham(14:00) -
Yeah, and I think not just in the US in India, also, we had a couple of startups like India art, and all of those are, I think, India, india.com. And all of that, which never, never worked.

Mihir(14:11) -
Yeah, we had dozens of startups, we had, you know, first andĀ second.com, we had India Mart insideĀ india.com, we had India at times, we had eBay. I mean, there were just dozens. So, you know, the point is that, like, retail is not really a new concept. You know, it's not like Walmart advantage retailers like Amazon and Vantage retail, or online retail, for that matter. Beside, you know, Amazon kind of set the rules of online retail, because it was discovered a set of processes and, you know, set of rules that just can draw customers to them, and, you know, keep customers on their platform for many years. Right, right. So like, what are the rules that make this happen? That is what Amazon has really Where Amazon has innovated and kind of reinvented the rules of retail. And that is exactly what Flipkart did in India, from, say 2007 to 2014. You know, Flipkart was the one that was setting the rules of the game in India, like, you know, all these local innovations, like, you know, this idea of coming up with of launching cash on delivery at scale, then ability to actually execute it, right to actually execute it at scale. You know, how do you like market to customers? Right? How do you engage with customers online? I mean, these are not things that, like Indian startups were very good at. You know, Flipkart was outstanding at that rate. And it is Flipkart, which invented or which kind of figured out all these things on its own. You know, they may have been inspired by Amazon, certainly, because, you know, this whole the fact that Sachin and binny worked at Amazon, even though they weren't working the e commerce operation, they vote in a completely different side. But again, Amazon has a very singular culture. So, you know, even though they do not work in the e commerce operation, they had God imbibe the Amazon culture, and you have things like customer obsession, grow fast, grow big, fast, stuff like that. I mean, they had imbibed all of this, but imbibing pumping is one thing, and actually doing it. the right context is a completely different thing. So I would say that it is completely, you know, forget about it being unfair to Flipkart because I mean, that is really valuable secondary importance. It is misleading to say it, because it, it doesn't allow us to actually understand fully what Flipkart like the the scale of Flipkart achievement. So yeah, so I would say that, you know, it's not it's it's not right to say that Flipkart was an Amazon copycat.

Shubham(16:45) -
Besides the context. I mean, the US context is so much more developed already. Right? And with India, getting to tier two, tier three cities, setting up that kind of a supply chain is so much more difficult than just what looks on the outside the ecommerce platform. Right. So I think they've done much, much more than we probably even imagined or we understand.

Mihir(17:04) -
Yeah, absolutely. And, you know, again, if you just go back to 2000 789 10, you know, in flipkart formative years, at that time, even venture capital investors in India, you know, these guys who own startups, they never believed that engineers, you know, could, like, handle success. Yeah. Like, they had no faith that engineers could, like, you know, manage businesses that had very complex operations, right, their thing was that, you know, engineers are, like, very good at coding and, you know, running a digital only platform and all that, right. So, so Flipkart just kind of broke all these, like fallacies and, you know, just like showed that it's not like how it is, it's not like what investors think that, that you know, that no matter, you know, if they're engineers, or whoever, but they can actually run, like very complex operations, businesses as well, because this is again, you know, a very global phenomenon. Globally, we have seen it in US and China. And of course, in India, that, you know, it's not necessary that you need a certain degree, to run an internet business. Of course, the most famous example is Steve Jobs. But so many examples, you know, where even if you have an engineering degree, you actually can preside over a huge operations business. So Flipkart is the first one to actually, like, bring all these global trends to India, and show that, you know, these global trends will also be true in India.

Shubham(18:32) -
Right, right, Mihir, we often hear, you know, the way these startups in India are establishing themselves is probably not a recipe for a long run, you know, because it's still some time to see them prove themselves to make profits right. For for a business. Do you feel there? Is something fundamentally wrong in the approach? Or is it just that it's a different way of doing things and is yet to be proven?

Mihir(18:52) -
Um, so that's, that's a broad question. I think what you're seeing is probably true about many, many companies. It is certainly been true about most startups till now. But I think increasingly, you know, you are seeing this kind of financial discipline as a requirement, like with running startups. So it's not like ours was before, where, you know, you just invest in a company, and the company just like burns that money to grow by spending on marketing, discounts, etc, etc, without thinking too much about the costs. Because, you know, in the, in that period between 2014 and 2019, there was, again, there was a global trend where, you know, growth was just given a premium. So, if you were growing really fast, if you were capturing a bigger and bigger share of the market, that was of primary importance, not that you were losing insane amounts of money to get there, you know, the whole thinking was that if you capture the market, then you will anyway, later figure out how to make money, right. So that has been the kind of stuff You know, ideology in the startup world for at least five, six years, but not anymore. So now, you know, increasing news, you're seeing that, while investors are not asking for immediate bottom line, like say final profits, you know, this thing called adopter tax, but they are asking that, you know, the business needs to have very, very strong margins, the business to have a path to profitability, where I can see that if the trend that is there, right now, if it continues for two, three years, then you will become profitable, the bigger you get, that is a very different approach now than what it was for the past five, six years. So I would say there has been a shift in the mindset of investors and entrepreneurs, and that is because of a combination of a lot of things like, you know, the failure of the wework IPO, the discipline, Uber IPO, then, of course, the pandemic attack. So it's a it's a bunch of factors, but I would not say that things have changed, like things have not gone to the other side as well. So, you know, they will still even for growth, there will still be a lot of capital available for scale of startups that are still not profitable, you know, as long as they are able to show certain things. So, I would say that though, this whole requirement of this whole ideology of, you know, saying growth at all costs, that has been like changed, but not change to a degree where we can say that investors are only investing in companies that are profitable. Not the case at all, you know, so what is still of primary importance? Yeah, but now, they, you know, the path to profitability or margins, if that was like, say, you know, just like 10% in terms of wastage, that Vth has increased substantially.

Shubham(21:53) -
All right. Yeah. Right. Right, you know, my, my next question was actually, around that. The same thing that he said in the lawsuit, the startups have been heavily dependent on only funding to survive a lot of startups, and the pandemic kind of changes scenarios on that front. Do you think startups in general will have a tough time ahead in India?

Mihir(22:10) -
So surprisingly, I mean, so Okay, so let's talk about March, right, when the pandemic hit in it? Yeah. At that time, you know, what you're saying is absolute was absolutely true in the sense that many investors and many entrepreneurs were expecting that to be a very true long period of pain. And if you're down to funding down to an especially, and also for the first time in India, you know, by April, we realized that for the first time in like 3040 years, there is a question of a demand slowdown, like for soda consumption, that is actually never happened in India in the last 3040 years. Right. So that would also now, you know, making the prognosis and the picture look far bleaker. But not too late July, August. I mean, like, honestly, it doesn't seem to have affected a lot of startups at all. And certainly, you know, investors are now back in the market, they are hunting for new deals, deal volume is, especially at the early stage. So surprisingly, you know, this funding downturn hasn't been nearly as bad as previous funding downturns or previous funding down cycles. Right. So that was very surprising thing. And again, that is because of a bunch of factors, you know, some of which are that globally, there's just so much liquidity available, that and any investment area that is able to show some growth, right, that is where your money is starting to. And then there are some specific things about internet startups as well. Because you know, there is a secular digitization of many sectors that is happening. That is, you know, people are because people are forced to work from home, because people are afraid of transmission, they're increasingly using online services, rather than go to stores or use offline through services. So you know, these all these factors are coming together and making the downturn like, far less severe than what it should have been. So, you know, it's not like, they're not companies that are struggling, of course, there are companies that are struggling, but we have to remember that this is a, you know, once in a century situation. And given how bad the situation is, I would say that it's quite surprising as to how many startups have proved to be far more resilient than what one would have thought. So there are so many rounds happening as well, like, you know, that his company and a tech that accompanies in software, that are companies like that are consumer brand startups that are content startups, in all these sectors, you know, you're seeing a lot of are prompted, whereas, you know, in a funding downturn, you know, a decent India, it is very rare to see so many like up rounds happen. So I would say that, yeah, the downturn has been far less severe than what One would have expected at the start of the pandemic and say late March, even April, perhaps me. So it's only since July that since I think mid June onwards that it is emerging that, yeah, this funding downturn isn't going to be so severe as we thought.

Shubham(25:17) -
I hear actually a silver lining, you know, in while you're explaining it, so,

Mihir(25:22) -
Yeah, yeah, absolutely.

Shubham(25:24) -
Great. So, me, this brings us to the last in the concluding section of the podcast. This is an interesting one, it's common across all the episodes. And I asked you one secret about the book, or about your journey as an author while you were writing the book that you've probably never shared before. So what would you like to share with us?

Mihir(25:43) -
So I mean, you know, when I mean, not when I started working on the book, but before that period, when I took up the book project, I was actually supposed to write the book along with a co author, you know, so they were actually, us, who were supposed to do the book together. My colleague who I've been working with very closely for, no, four years, by then, okay, and we had, like, like, most of our stories, were joined by line stories. And, you know, we'd worked very closely together and on the startup team ferment together. So we were actually supposed to the book together. And I, I honestly did not think that your I would have been able to do the book, like by myself, okay. But then for a reason, you know, my colleague could not commit to the project, you know, because of personal reasons. And then, yeah, that was just me at the end. And yeah, I just happened that I am like a, you know, like a single author for this book.

Shubham(26:38) -
Okay. Okay. Yeah. Well, okay. That's, that's a good story. Great story. Great. Thank you so much for sharing that. And thank you so much for taking your time to do this. I hope you enjoyed this session. We loved it. And thank you for clarifying a lot of things, which probably or people would not have known. Thank you once again.

Mihir(26:57) -
Yeah. It was a pleasure to be here, Shubham. Thank you.

Shubham(26:59) -
Thank you. And thank you to all the listeners. This is Shubham. Signing off

Flipkart: The Big Billion Startup with Mihir Dalal


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