Industry

Startup journey is a marathon: Binny Bansal

Co-Founder of Flipkart, Binny Bansal. File photo   | Photo Credit: The Hindu

Startup journey is very hard and entrepreneurs need to focus on their health to gain an edge over competitors, saidBinny Bansal, the co-founder of homegrown e-commerce company Flipkart

“It [startup journey] is a marathon. I think physical and mental fitness is very important and gives a competitive edge against [rivals]….You can run much faster,” said Mr. Bansal, during a fireside chat with Sudhir Sethi, Founder and Chairman, Chiratae Ventures [formerly IDG Ventures India Advisors] earlier this week. Concentrating on customers, employees and company culture is also important, he added.

U.S retail giant Walmart’s $16 billion investment in Flipkart for about 77% stake in May this year not only provided blockbuster exits to the investors but also made the founders Binny Bansal and Sachin Bansal billionaires. The deal valued Flipkart at more than $20 billion.

Don’t run out of cash

Flipkart which competes with retail giant Amazon focused on its own journey and doubled down on categories where it was strong such as fashion, mobile and appliances. “Today our bigger bets [include] groceries,” said Mr.Bansal.

The company also acquired firms like online fashion retailers Myntra and Jabong, and mobile payments firm PhonePe which helped it to maintain leadership in different categories. Mr.Bansal said Flipkart consciously started with one category. Once it had enough management bandwidth, funding and technology, it was then the company entered into a new category.

“One key principle was not to run out of cash...We have been lucky to have partners [investors] like Accel, Tiger Global,” said Mr.Bansal.

Early struggle

Flipkart was founded by IIT-Delhi alumni and former Amazon employees Sachin Bansal and Binny Bansal [not related] in September 2007. Like Amazon, they started with selling books and initially had just three servers and 20 shipments. Their first book sold was ‘Leaving Microsoft to Change the World by John Wood.’

Recalling, early struggle, Mr.Bansal said they founded the company out of an apartment and the founders had no business experience and network. The first challenge was to convince the vendors to work with the firm and they had conversations with about 40 bookstores in Bengaluru. “Out of 40 two people agreed...In the first month, we sold less than 10 books,” said Mr. Bansal.

The other challenge was less internet penetration and lack of payment gateways which are now plenty in the country. The company’s first payment gateway was U.S-based PayPal. “We took money from customers in dollars, rather than rupees,” said Mr.Bansal.

Despite Walmart’s acquisition of Flipkart, Mr.Bansal says that he still considers himself as an entrepreneur. He says Walmart backs entrepreneurs in international markets as part of its strategy. “That was part of the deal… it really gelled well with us.”

However, Flipkart is not considering to go international as Mr.Bansal believes e-commerce and retail are very local businesses and the company might not have an edge in other markets. “India is the really the last big market…we believe there are so many opportunities to build an ecosystem around e-commerce and financial services.”

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Printable version | Nov 26, 2020 7:26:43 PM | https://www.thehindu.com/business/Industry/startup-journey-is-a-marathon-binny-bansal/article25189496.ece

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