SINCE FLIPKART’S LAUNCH in October 2007, Sachin had become an expert at manipulating Google. The thousands of hours Sachin had spent on Quake and Age of Empires were finally coming in handy. Fixing a search engine, of course, wasn’t strictly like gaming. But their mechanisms weren’t entirely dissimilar. Deploying dozens of tricks, such as displaying the Indian flag on the website, Sachin made Flipkart into a prominent shopping destination without spending on marketing. In fact, Sachin’s excellence in coming up with these fixes in Flipkart’s early years not only made the website popular, it even ensured the company’s survival. By attracting large numbers of users to the site, Sachin helped bring in significant advertising revenues which provided the cash Flipkart needed to spend freely on pleasing customers.
From the second half of 2008, Flipkart was pulling in lakhs of rupees every month as the website appeared prominently on Google searches. If someone searched for a mobile phone they were likely to see Flipkart at the top of their search results, even though the company didn’t sell phones. As people converged on the website, it became an attractive advertisement platform. The Bansals even made money from their old employer. At the time, a small number of wealthy Indians were ordering products from Amazon.com. Amazon had a scheme which rewarded other internet firms that directed users to its site, and one of the participants in this scheme was Flipkart.
The Bansals had started out in October 2007 with a capital investment of four lakh rupees. That meagre sum couldn’t have sustained the company for the twenty months that it survived before its first successful financing round. The money from the sales of books wasn’t sufficient either. It was the advertising revenue that turned out to be crucial for the company’s sustenance. In essence, Google and Amazon bankrolled Flipkart’s early years. These three ingredients – Sachin’s search engine mastery, and internet giants Amazon and Google – would soon come together to serve up many other benefits to Flipkart.
IN NEW YORK, Lee Fixel, a Jewish-American fund manager, was looking to make investments in emerging international markets. Born in 1980, Lee was the eldest of three children. His father was a lawyer and his mother a fashion designer. After becoming a chartered financial analyst (CFA) and obtaining a management degree, Lee had joined an investment firm, Alkeon Capital, where he examined internet companies as an analyst. In 2006, he was lured to Tiger Global, which wanted to increase its investments in internet firms, especially in emerging markets such as India, China and Eastern Europe. Lee was peripatetic. He had investments in many countries, and he spent much of his time in aeroplanes.
Lee had travelled to India a few times and, in 2007, had invested in the online travel company MakeMyTrip. He was eager to add to his portfolio. India’s economy was booming, lifting middle-class incomes. Its retail sector was one of the largest in the world, and one of the least modern. This created a lot of room for new retail companies. The poor infrastructure, India’s infamous traffic in urban areas, especially in Bangalore, along with the fact that real-estate costs there were unusually high, had convinced Lee that offline retail would have limited reach in the country. The corollary was that the same forces would make for a hospitable environment for e-commerce. In 2009, Lee hired the consultancy firm McKinsey to conduct market research on the internet space in India.
The firms mentioned in McKinsey’s report did not impress Lee. He considered online retailers such as Infibeam and Indiaplaza but passed up on them. One day, restless in his New York office, he ventured online to conduct some armchair research of his own. On Amazon.com, he started looking up popular books that he thought an Indian might want to read. From there he transposed the book titles onto Google to see which Indian websites were selling them. Every search threw up Flipkart in the top results. Lee was surprised; the McKinsey report hadn’t mentioned Flipkart. Yet it seemed to be a popular search destination with a large assortment of books. On an impulse, Lee emailed Flipkart’s customer service team asking to speak with the company’s founders. But no one responded. He then called the customer service number mentioned on the Flipkart website. He introduced himself and asked to be put through to the Bansals. An employee told him that they weren’t available and hung up after assuring Lee that they would call back.
When Sachin and Binny were informed about Lee’s call, they were incredulous. In those days, venture lords didn’t call on fledgling entrepreneurs; entrepreneurs went to them. And even if they wanted to speak with a promising startup founder, no venture lord would demean himself by calling up customer care. And why would someone call Flipkart from New York anyway? All the US venture firms had Indian arms. The Bansals’ suspicions deepened after they looked up Lee and Tiger Global online and found little. In the US, Tiger Global was a famous name in the investment world. It traced its origins to Julian Robertson, one of the most successful investors on Wall Street in the eighties and nineties. The outstanding performance of Robertson’s firm, Tiger Management, had once earned him the nickname ‘The Wizard of Wall Street’.3 Even though Tiger Management shut shop in 2000, many of Robertson’s acolytes started investment firms of their own. One of these was Tiger Global. It was such a secretive and elite firm that it didn’t need a website. Of course the Bansals weren’t aware of this. To them, the name Lee Fixel didn’t even sound very American. Amused, they concluded it was a prank call and moved
