Soon, the Bansals realized that a price comparison website would contain the most fundamental of flaws: when all suppliers are substandard, there’s no value in comparing them. The e-commerce landscape was laughably tiny with only a few well-known sites, among them Indiaplaza, Rediff and Indiatimes. These sites claimed to sell a wide variety of products including books, laptops and CDs. But altogether, the annual sales of products over the internet amounted to less than $40 million.2 In 2007, Amazon’s sales in North America alone exceeded $8 billion.3 The Indian market, on the other hand, had failed to pick up primarily because the shopping sites were notoriously poor in usability, product quality, delivery – nearly every aspect of e-commerce. Directing users to these sites would be akin to a search engine that inevitably throws up inaccurate, inadequate information.
About a month later, sometime in September 2007, the Bansals decided they would get their hands dirty. Sachin explained this move later while giving a talk at a 2010 startup conference, ‘We basically asked ourselves the question, “Can two people, working from home ...compete with bigger e-commerce players?” ... [We] did market research, talked to a few vendors, looked at revenues of current e-commerce players ... We basically found that the answer is yes. Because the problems that the bigger players were facing were really basic ... around technology, around service, which we thought were very simple problems. Technology was something we were good with. And the service was the only part where we thought that if we can make a difference ... we can probably compete with them.’4
The Bansals’ previous jobs had paid well and, aided by their frugal lifestyles – video games, puzzles and sports don’t require all that much upkeep – they had saved well. In all, Sachin and Binny put up ₹400,000 together to launch their startup.5 It wasn’t an insubstantial sum, even for young, well-paid engineers.
The news shocked their flatmates. What had seemed a passing fancy had turned into a purposeful, irreversible act. They had strongly discouraged the Bansals from taking up entrepreneurship. Moreover, online retail seemed like an especially foolish business idea. Their reaction was similar to Ajay Bhutani’s during campus recruitment season at IIT Delhi, when he learnt what kind of business Amazon did: who sells books online for a living! It was considered mad to start an internet company, especially when one’s career was advancing nicely. But the Bansals were determined to at least ‘try something’. They reasoned that even if their startup failed, they would get better jobs afterwards because they had ‘tried something different’.
After launching the company, Sachin and Binny continued to live in separate apartments at the NGV complex. In the short period between relinquishing the price-comparison idea and choosing to start an e-commerce firm, two momentous events transpired.
Sachin and Binny finalized the name of their website. Not having enough money to buy a domain of their preference, they settled for a name that cost them just ₹500. Sachin set the parameters – the name was to have no more than eight characters or it would be too much to type, it had to sound ‘cool’, make the brand stand out. A few brainstorming sessions later, ‘Flipkart’ was found to be suitable. They ran with it, hoping that ‘kart’ with its recall of shopping carts, would resonate with customers.6
The second event nearly caused the startup to fold up before it had even been launched: Sachin and Binny lost their third co-founder. When the Bansals had started working on their startup idea, they had enlisted a third entrepreneur in the team.
The story of how the Bansals ended up as Flipkart’s only two co-founders is rather comical. While the founding of Facebook and Twitter saw ideas being ‘borrowed’, people ruthlessly discarded, one-upmanship adopted by all sides as the norm – typical American stories of capitalist greed – the story of Flipkart’s founding is in the Indian middle-class idiom.
The third entrepreneur who was part of Flipkart’s founding team was Varun Sharma*, a friend of Binny. Unlike many of his NGV friends, Binny was a part of other social networks, too. It was not that he was especially social; he was just less socially awkward than the others. Binny had expressed his wish to start his own business to some of his friends outside the NGV circle, and Varun was one of the few who saw merit in the idea. He didn’t need much convincing.
It was decided that Sachin, Binny and Varun would be equal partners in the startup. Varun worked with them for a few weeks and their partnership got off to a promising start. He seemed to offer a way of thinking that was different from Sachin and Binny’s, something both Bansals valued. The trouble was that Varun had not revealed his entrepreneurial ambition to his parents.
Varun visited his parents sometime after he had started working with the Bansals. When he told his parents that he was going to quit his job to launch a startup, they were appalled. ‘Have you gone crazy?’ they said. ‘Forget about it and move on with your life.’
In the decades after India’s independence, when Varun’s parents were growing up, job security was paramount and getting a job was often a hard-won victory. To give one up, especially a job at a multinational corporation, and gamble on internet entrepreneurship instead, would have seemed ridiculous to them. Thus thwarted, Varun told the Bansals he was backing out.
Varun’s desertion deflated Sachin and Binny. They debated whether they should move forward at all. They were giving up stable, rewarding jobs, staking their savings on a venture which their friends had called foolish. Now, to have a co-founder leave even before the venture had begun, shook their confidence. It hit Sachin particularly hard. He had told his friends earlier that with him
