Big Billion Startup: The Untold Flipkart Story

by Mihir Dalal

Amazon had found its India office; now it needed people. Bharat, Anand and a few of their colleagues spent July and August visiting engineering colleges and research institutes while also soliciting candidates from other technology companies.

  Each candidate was put through many rounds of interviews. Aspirants were judged on their academic and professional record, intellect, skills and temperament. Amazon only hired people it considered truly elite engineers who would also unquestioningly adapt to the company’s distinct ethos. Its recruitment process was especially rigorous in the US and it would be no different in India. Even though India was known to have hordes of cheap engineers, Amazon’s primary purpose was to gather the smartest ones available. This limited its options as there were few Indian firms doing high-level technical work. The IT services champions, Infosys and Wipro, weren’t known for their technical proficiency. The reservoirs of India’s best engineers were to be found at two companies – Trilogy Software and Yahoo India, Bharat’s former employer. But Bharat, who knew the Yahoo founders Jerry Yang and David Filo personally, was reluctant to raid their troops. Besides, it was possible that Yahoo, already upset by Bharat’s defection, would go on to sue Amazon. So, in the months of July and August, it was Trilogy’s employees who received job offers from Amazon. Very few engineers were found to be suitably equipped, and those who were thought fit would need a month or two to move jobs. Amazon’s high recruitment standards had come at a price: delay. Bharat was eager to get started with A9 but there wasn’t enough of a workforce to build the search engine.

  A solution was sought and found. From its Seattle headquarters, Amazon sent back a few of its many Indian-origin employees to Bangalore. These were highly skilled engineers, already schooled in the Amazon worldview. Chief amongst them were Vijay Subramanian, a tall, imposing Tamilian who, many would observe, had adopted the manner of a stereotypical south Indian film star; Vikas Gupta, who was considered a tech genius within the company; and Amit Agarwal, who had joined Amazon in 1999 after studying computer science at IIT Kanpur and then at Stanford University, the mecca of technology learning. Amit was considered part of a species that Amazon insiders called Jeff Bot. The term referred to employees who had so wholly internalized the ways of the company and its founder that they may as well have been robots programmed in the Bezos school of thought.

  Sujayath Ali, who was hired by Amazon from the Indian School of Business in 2005 and worked for nearly seven years at the company, recalls how Amit was ‘a true Amazonian’. In fact, he isn’t sure if Amit was any different even outside the office. There were quite a few people like Amit who measured everything in life by ‘Amazon values’. After leaving Amazon, Sujayath founded an online shopping site called Voonik in 2013.

  Amit, Vijay and Vikas were joined by more than a dozen others from Seattle in the second half of 2004. By now, there was an additional project that needed attention. Apart from A9, Amazon had decided that it would work on another initiative in Bangalore, a micro-payments product called Flexible Payments Service that would let any small merchant receive money online immediately after a sale. One could sell something for even a cent or a rupee and receive payment for it. This service would have to be so sturdy, so fast, so secure as to be able to handle tens of millions of transactions on any given day. If it worked, it could transform commerce – all kinds of everyday buying and selling may then be done over the internet using Amazon’s payments service. The goal was to make this payment mechanism an integral part of Amazon Web Services (AWS), a new division of Amazon that would later settle the question of whether the company was simply a retailer or the most elitist of tech companies.

  Vikas, the tech genius, and Amit ‘JeffBot’ Agarwal, took charge of the payments unit while Bharat oversaw the search engine. Vikas reported to Amit even though he was widely seen as the brains behind the payments unit.

  Slowly, over the next nine months, after interviewing more than 1,000 people, Amazon painstakingly accumulated a team of about sixty by the middle of 2005. One fourth of this workforce had come from the company’s Seattle headquarters, others came from software companies like Trilogy and Tavant Technologies, and the rest straight from colleges, business schools and research institutes. Even a small number from Infosys passed through Amazon’s fine sieve. Most of the recruits were in their mid-to-late twenties, a couple in their early forties, and almost all were men, in conformity with the unwritten mores of the early twenty-first-century tech era.

  Amazon’s recruiters believed that every single engineer from that initial team of sixty had the ability to start their own business; they had chosen to join Amazon only because they relished working with other young, driven, overachievers like themselves.

  In fact, it so happened that more than three dozen people out of Amazon’s early hires, along with the Bansals who joined later, would go on to become entrepreneurs, influential tech leaders and investors in India’s startup world. Apart from Flipkart, many of the founding members of notable early startups including Infibeam, TutorVista and Chakpak, came from this batch. It was in part Amazon’s insistence on hiring only the most superior engineers that inadvertently fostered the entrepreneurship spirit in this group.

  Gaurav Singh Kushwaha was one of the earliest members of the payments team at Amazon. In March 2006, eighteen months after he joined the company, Gaurav would become one of the first to leave in order to start his own business. His firm, a movie information site called Chakpak, would later be acquired by Flipkart. Gaurav’s co-founder at Chakpak, Nitin Rajput, was another early employee at Amazon India.

  To attract these talented engineers, Amazon had adopted an unfamiliar approach. In the US, the company was known for its extreme frugality. It used old doors to make desks. Junior and senior employees alike flew economy and stayed in cheap hotels. Amazon was an outlier in the US tech world, where companies were known to spoil their engineers with inflated compensation and perks. In India, however, Amazon broke its own rules and splurged in order to draw the smartest engineers. It offered outsized compensation packages to all employees; the salaries of mid-level and senior managers were sweetened by allotments of Amazon stock. The company created extravagant office spaces which shocked visiting executives from Seattle. Perks were offered in abundance: free cab travel, subsidized food from expensive caterers, the latest computers, fast internet. No other company could hope to match such lavishness.

  Within a few months of opening its first India office in July 2004, Amazon moved to the top floor of a three-storied building overlooking the Bangalore Race Course. Standing on the terrace of the third floor, employees could bet on horse races. That office was the most luxurious space the company’s new engineers had ever worked in. Everyone had large desks, comfortable chairs, powerful computers, lounge sofas and shower rooms. There were video games and a ping-pong table. But the clincher was the bar, always well stocked and frequently used. In the early years there were many parties, too, often thrown by Anand Rao, Amazon India’s second-ever employee and facilitator-in-chief of various vices. At one such party in 2005, nearly all employees who attended were pushed into the pool on the premises of O2, a rooftop bar on the uptown Residency Road. Even Bharat Vijay wasn’t spared (although Amit, ever the proper Amazonian, didn’t attend). Phones were damaged, wallets lost, clothes were discarded. Some people walked home in their underwear. Later, Amazon was forced to pay tens of thousands of rupees as recompense to O2.

  But more than anything else, employees remembered their time at Amazon for the absorbing assignments and the distinct work culture. Finding the best engineers was just the start; Yahoo India and Trilogy had hired the best engineering minds, too, in their day. What set Amazon India apart was the unusual way in which they made their employees work with each other. It was this corporate culture that almost permanently moulded the mindset of the many people who worked for the company in its early years.

  Amazon in India essentially operated like a startup filled with aggressively smart people who were given abund
ant cash to create innovative technological products. Their employees weren’t engaged in lowly back-office work; they didn’t have to kowtow (yet) to faceless superiors in the US. Instead, two newly put together teams, working independently of each other, had been charged with creating two exciting and complex products: a search engine and a payments system. These teams were further divided into smaller groups of five to six people. In Amazon parlance, the smaller groups were called ‘two pizza’ teams. A meal of two pizzas had to be sufficient for a team to be labelled thus. The Amazon engineers worked within the framework of the company’s processes, but apart from these fundamental strictures, they were unfettered and could function with little concern for organizational hierarchy, work hours, dress code or personal hygiene. The youngest engineers, college graduates like Ajay Bhutani, who had reacted with puzzlement on being told of a company that sells books online, were encouraged to challenge Jeff Bots and Tech Geniuses. There were even awards to be won for being unconventional. ‘The Emperor Has No Clothes’ award, for instance, would be conferred on individuals for pointing out fundamental flaws in products.

  Amazon thus created an environment that pushed its meticulously chosen employees to battle each other over ideas, so that the ones which emerged out of the process would have been comprehensively thought through and fought for passionately.

  Work at Amazon was informally organized according to a set of what it called ‘leadership principles’. These weren’t fluffy ideals; rather every employee was required to memorize and abide by these prescriptive directives. These principles urged one to ‘think big’, show ‘bias for action’, and demanded other such peculiar compliances. It was no surprise that the A9 project was deemed The Google Killer by some employees. They were not joking – having a sense of humour wasn’t one of Amazon’s leadership principles.

  But the supreme directive was the dogma of customer obsession. At the centre of everything at Amazon, acting like a centrifugal force governing ideas, processes and decisions was this principle: ‘Leaders start with the customer and work backwards. They work vigorously to earn and keep customer trust. Although leaders pay attention to competitors, they obsess over customers.’12

  Customer happiness achieved, business expanded prodigiously, this principle then acted as a centripetal force, self-validating and completing the cycle which was repeated every day, every hour within Amazon’s premises.

  At the India office, too, Amazon fashioned its Brave New World, making sure the customer obsession principle became a part of its employees’ consciousness. Abhishek Goyal, an early employee, recalls that if someone was late for an internal meeting, they would say, ‘Sorry, my customer obsession is a bit down today.’ Every meeting hosted an empty chair – for the customer. Every single employee had to talk about ‘customers, customers, customers.’ Abhishek later joined Accel Partners, where he would convince his bosses to become the first investors for Flipkart.

  It wasn’t surprising that the customer obsession principle was applied with such rigour in India – Jeff Bezos took a personal interest in the two Indian projects and would sometimes even conduct reviews. If one didn’t obsess over customers, it wouldn’t be easy to answer any of Bezos’ questions. The intensity with which this principle was applied deeply affected everyone who worked there, including the few who weren’t greenhorns. N. S. Amarnath (known to his colleagues as Amar), a senior engineer in the payments team, was by far the oldest employee at Amazon India. In his mid-forties, he was nearly fifteen years older than his managers and about two decades older than most of his colleagues. ‘That level of customer obsession ... it was very novel, very profound for us,’ says Amar. ‘At that time, IT services companies were the only other benchmark in India and that kind of customer obsession wasn’t there. They just weren’t used to thinking of it.’

  Indeed, this maniacal focus on pleasing customers and other characteristics of Amazon’s corporate culture – thinking big, hiring young people and letting them loose, creating a combative work environment, treating engineers like gods – would be later adopted at Flipkart by the Bansals. Sachin, in particular, was radicalized by Amazon’s dogma of customer obsession.

  OF THE BANSALS, Sachin joined Amazon first, in January 2006. A few months later, the company moved its office to Ali Asker Road. Named after the Persian horse trader who settled in Bangalore a few years after it was set up by the British,13 Ali Asker Road is a wide, tree-lined stretch of concrete. In the heart of colonial Bangalore where streets display their British lineage with names like Cunningham Road, Brigade Road and Richmond Road, Ali Asker Road stands out primarily for tracing a different ancestry.

  By the time Amazon hired Sachin, its employees had completely absorbed the company’s ethos. Sachin, then twenty-four, was placed in the payments team. After graduating from IIT Delhi, he had spent a few months at a Bangalore IT firm called Techspan.14 He came to Amazon as a young, intelligent, but somewhat naive man, eager to prove himself, but without much knowledge about how the world worked. He was also confident – getting into the IITs can take care of that – but had no idea of his worth. Amazon loved hiring people like Sachin; they were easily lured onto the company’s internal battlefield with temptations of wealth, power and glory, shown to be always within reach, but only attainable if one complied with Amazon’s methods and mandates.

  Sachin entered a team of overachieving men with supreme technical skills and attendant egos. Some of these men were engineering managers such as Amar Nath and Ashish Agrawal. Sujayath Ali and Raghu Lakkapragada, who had been hired straight from the Indian School of Business, worked as product managers. There was Ajay Bhutani, Sachin’s junior from IIT. The seniors – by experience – included Gaurav Kushwaha, Mohan Varadarajan and Aditya Lal, who would all soon start their own firms. Among the engineers Sachin worked closely with were Vijay Subramanian, the self-styled Tamilian film star, Sachin Dalal and Alok Chandra – all of whom would later help build Infibeam, an online retailer that played a small but nearly climactic role in Flipkart’s first year. And at the top of this pyramid were Amit the Jeff Bot, and Vikas the Tech Genius.

  In Amazon’s elite engineering crowd, Sachin had come to be regarded as a middling programmer, competent but not outstanding. There were several others like him, but many more were considered better. A former teammate of Sachin remembers him as a ‘regular’ guy, neither too quiet nor too shy and not very social either.

  Sujayath Ali, who was briefly Sachin’s colleague at Amazon, recalls that Sachin was as inclined towards understanding how a product would be used as he was towards writing code. The tech world broadly categorizes these two areas respectively as ‘product’ and ‘engineering’. A product-oriented worker prioritizes the ease of use, while an engineer cares more strongly about the strength of the code they write. Product and engineering work together but are often in conflict over what needs to be prioritized. ‘Coding-wise, Sachin was average but he had a sharp business sense ... if you gave a feature to him, he would develop it in a very consumer-friendly way, says Sujayath.

  Soon, these qualities would come together to propel the rise of a singular Indian startup.

  2

  THE BANSALS GO TO IIT

  The first few years of an engineer’s professional life can be like an extension of college. It is often the case that Indian college students – many of whom come from middle-class households – with certain proclivities gravitate towards classmates with similar interests. Once a student has moved to a new city with a new job, it isn’t uncommon for them to share their accommodation with friends from their college hostel who might have moved to the same city. A group of friends will often stay in the same flat, sometimes two or three people to each bedroom. The living arrangements aren’t necessarily salutary. Cheap furniture, bean bags and mattresses are common fixtures, arranged so weed and alcohol can be consumed and video games played with minimal expenditure of effort. It isn’t too unreasonable to say that in many cases, this extended adolescence is br
ought to a close only by marriage, often arranged by the engineer’s family. It can even be argued that some engineers never truly grow out of their adolescence.

  Sachin Bansal’s post-IIT life was no different. When he moved to Bangalore in 2005 after graduating with a B.Tech., he called upon one of his closest hostel friends, Ankit Agarwal. Ankit and two of his IIT friends, Kapil Makhija and Prayank Swaroop, shared a three-bedroom apartment at the National Games Village complex and worked at different tech companies. Soon after relocating, Sachin moved in with them. Located in the upcoming Bangalore suburb of Koramangala, the NGV was built in the 1990s to host the athletes participating in the 1996 National Games in Bangalore. It was a large apartment complex with dozens of buildings, many of them named after rivers. The flats were compact, but the complex boasted gardens, badminton courts, a swimming pool and walking lanes. In the nineties, the NGV had played an important role in the gentrification of Koramangala.

  Koramangala is situated a few miles away from Bangalore’s former cantonment area. Year 2008 onwards, this suburb developed into a thriving startup centre. Just two decades ago, however, its landscape had been dominated by an artificial lake. (Such lakes have been the major source of water in the city since it was established in the sixteenth century.) Koramangala’s gentrification began in earnest after Infosys launched operations in the suburb in the late 1980s. Over the next decade, as the IT industry burgeoned, many companies, including Infosys, moved their offices to the nearby Electronic City. Koramangala benefited from its proximity to this new IT hub. Wealthy IT businessmen like Nandan Nilekani and Ashok Soota took up residence in Koramangala. The construction of the NGV complex and the launch of the grand Forum Mall helped transform the area in the nineties into an exemplar of Indian suburbia.1 Now in the new millennium, Koramangala had become an attractive residential area for migrant engineers like Sachin. It had cheap, plentiful housing like the NGV complex, and many restaurants and bars had come up to meet the demands of the area’s new demographic. It also offered easy access to the city’s main business and entertainment sectors.