There would also be a new finance chief at Flipkart: Kalyan Krishnamurthy. Karandeep Singh, who had joined as CFO less than a year ago, was leaving after a disappointing stint. Flipkart had decided to appoint Kalyan, a Tiger Global executive, as interim CFO. It was, in a way, a rebuke to the Bansals – when investor representatives enter their portfolio companies, it is usually because the founders and their management team have stumbled.
Another startling outcome of the restructuring was the near-complete diminishment of Sujeet Kumar’s role. While he had ostensibly moved to WS Retail a few months ago, it was assumed that Sujeet would continue in his role at Flipkart. But now that Binny had taken over sales and operations – Sujeet’s dominion ever since he joined the company in 2008 – the erstwhile president was like a king without a kingdom.
Not surprisingly, in the months before the restructuring, Sachin and Binny had grown more and more uneasy about the influence Sujeet exerted at Flipkart. For some time, they had had concerns that Sujeet’s crude manner could hurt Flipkart’s image of a pioneering technology company. Their anxieties may even have been amplified by the Forbes story that had painted Sujeet as an insecure, power-hungry executive, an ultra-constitutional authority to whom even Sachin and Binny deferred because he was their senior from IIT Delhi. It was an implausible theory. The Bansals were the founders of the company; it is hard to imagine that seniority in college can solely determine the stature of an employee when billions of dollars are at stake. Rather, they had let him have a free hand mostly because he excelled in areas that neither of them had a knack for. Still, Forbes’ presentation of the Bansals as weak and Sujeet as all-powerful was disconcerting.
It was a tricky situation for Sachin and Binny. On the one hand, Sujeet was a popular leader who had contributed more than anyone else towards establishing Flipkart’s command in sales and operations. The functions he ran had been tremendously successful, apart from the last six months. The extroverted Sujeet had also been instrumental in cultivating a sense of fellowship at the company. On the other hand were the Bansals’ fears about Sujeet’s untamed manner and their insecurities about the outsized authority of any employee. Soon, in a decisive act, they would send a clear message to all employees that no one at Flipkart was indispensable.
13
THE TIGER CUB
In 2011, Lee Fixel had brought Kalyan Krishnamurthy over to Tiger Global from eBay. Kalyan had begun his career at Procter & Gamble, before moving to eBay where he worked in the company’s finance operations for seven years.1 Lee had initially interviewed Kalyan for the CFO position at Souq.com, a Dubai-based online retailer in which Tiger Global had invested. But Kalyan was hesitant about moving to Dubai, so Lee had asked him to join Tiger Global instead. Within a few months, Lee developed great confidence in Kalyan. He had sent Kalyan to Souq on assignment. The startup needed help in expanding its business. Kalyan had taken charge and turned Souq into a thriving, fast-growing firm, impressing Lee with his dynamism and acumen in sales and finance.
Now, Lee asked him to repeat his performance at Flipkart. The forty-one-year-old Kalyan was expected to bring his expertise to bear on matters such as sales management and setting profit margins. Sachin and Binny initially welcomed Kalyan’s appointment as they knew that the company was weak in these areas. But not wanting to lose control, they would watch his moves carefully.
Kalyan was familiar with Flipkart. He had been on its board of directors as the second representative from Tiger Global. Along with a junior Tiger Global colleague, he had also spent time with Flipkart’s marketing team in the second part of 2012. Kalyan had tried to get Flipkart to cut its spending on brand advertising and focus on performance marketing instead. This would increase sales immediately – performance marketing was like an ad informing viewers about a discount sale. Brand advertising, on the other hand, mainly enhances a company’s image; it may or may not deliver an immediate improvement in sales but is considered an important tool in enhancing a product or company’s appeal. Kalyan believed that brand advertising was a largely wasteful exercise. On this matter, he would often clash with Flipkart’s marketing head, Ravi Vora. What was the point of spending heavily on ads that didn’t achieve much? Citing the example of the Kids campaign of 2011 that had transformed Flipkart’s brand, Ravi would protest that the exact benefits of brand advertising could not always be quantified. ‘But it’s a well-established method of building a brand and customer loyalty,’ he would say to Kalyan.
Kalyan had also pressed the Flipkart team to cut their budget for books and increase spending on promoting fashion products. Flipkart had started selling clothing and other fashion items in 2011 but the category hadn’t taken off. This frustrated Lee Fixel, who had been urging the Bansals to develop the category. Of all products, it had the highest margins. By increasing fashion sales, Lee believed Flipkart could move towards generating profits without sacrificing sales growth. Books, on the other hand, were a drain on finances. Flipkart lost money on every book order and it was unlikely that the category would ever yield profits. In 2012, Kalyan urged the Flipkart marketing team, ‘Forget books. Get people to buy T-shirts and shoes.’ Flipkart did increase spending on fashion products, but it also continued to promote books.
When Kalyan formally moved to Flipkart in early 2013, it was hard to question his authority. In fact, many executives at the company feared for their jobs on learning that Kalyan would come on board in a full-fledged role. He was introduced to senior Flipkart leaders in January that year. Kalyan had appeared peremptory, belligerent. Right after the customary introductions,
