Meanwhile, Amazon expanded at terrifying speed. Flipkart wasn’t in crisis yet, but the crisis wasn’t far.
Sensing that his management team had lost confidence in his vision, Sachin was becoming anxious. Lee Fixel and the other board members had been questioning him for nearly three months, demanding to know why Flipkart had missed its targets and how it was planning to get back on track. In the internet space, one poor quarter was bad, two catastrophic. Sachin would have to make some big adjustments.
20
AFTER BANSAL, BANSAL
It was a few days before Christmas. Sachin Bansal told Lee Fixel over a call that it was best for the company if he stepped down. He added that Binny, who was also part of the call, should be made CEO instead. ‘Binny is better at operations and execution and that is what we need right now.’1
Lee was taken aback, but he was also relieved.
Over the past few weeks, he had received damning feedback about the Flipkart management team from Kalyan Krishnamurthy and others. While Kalyan had leftthe company and resigned from its board of directors, he had kept in touch with many Flipkart managers. When in Bangalore, Kalyan often worked out of a Novotel just across the road from the Flipkart headquarters. He ensured that he received regular updates on all matters Flipkart from his former underlings. These employees had painted for him a picture of a company in turmoil, one that had lost it bearings. They called the new senior leaders hired from Google and McKinsey ‘clueless’. They also decried the leadership of Sachin and Mukesh, both of whom, they said, were operating in a make-believe world. Kalyan had relayed these reports to Lee. In addition, citing data and insights provided by a local market research firm that Tiger Global had engaged, Kalyan warned Lee that Flipkart was on the verge of being overtaken by Amazon.
At Kalyan’s prompting, Lee had also spoken with a small group of former Flipkart executives whom he held in high regard. These executives, including two of Kalyan’s closest associates, had left the company earlier in the year after falling out with Sachin. And just like Kalyan, they were also in touch with their friends at Flipkart. Lee found out that they had heard Sachin and Mukesh were out of their depth. ‘Flipkart is being ruined,’ one of them said to Lee. Like Kalyan, they had been seething after being cast aside by Sachin. Now they seized their chance to retaliate. Railing against Sachin’s radical plan to remake Flipkart, they told Lee that it was fundamentally flawed and ‘badly executed’. They presented Lee with a remedy: bring back Kalyan. They stressed that it was no coincidence that Flipkart’s best years – 2013 and 2014 – had come to pass under Kalyan’s stewardship. He was the only one who could rescue Flipkart, they claimed.
After noting the forcefulness with which so many of Sachin’s former colleagues and friends were attacking him, Lee was concerned, especially as the decline in Flipkart’s business was evident. The company had missed its sales targets for several months. The much-touted advertising business looked hopeless.
Before he had chosen to step down as CEO, Sachin had considered another option: to take over the daily running of the company himself. With his colleagues opposed to the app-only move and the total conversion to a marketplace, the only way Sachin could enforce the changes was by directly taking charge of the commerce platform – Mukesh’s role – himself.
When Sachin discussed this with Binny, he was surprised at his co-founder’s response. For much of 2015, Binny had been withdrawn. He had restricted himself to overseeing Ekart, the logistics service. Throughout the year, Binny hadn’t openly articulated his views about Sachin’s attempted overhaul of Flipkart, including the app-only move. Employees weren’t entirely sure if Binny was for or against it. He didn’t oppose Sachin, at least not in front of others, nor was he a proponent of Sachin’s ideas. Finally, in private, Binny rejected the option that Sachin put forward. Instead, he staked his claim, ‘You’ve been CEO for eight years. It’s my turn now.’2
Sachin knew he would have to give in. Binny was a co-founder, he knew the company as well as anyone, and he commanded respect. Sachin and Binny had always had a tacit understanding about handing over the reins of the company to each other if needed. This had happened roughly every fifteen to eighteen months in the recent past. Sachin had been in command for the first five years of Flipkart’s existence. Binny had taken over at the end of 2012, only to make way for Sachin in the second half of 2014. It was now Binny’s turn at the wheel. Although this time there was one big difference: Binny had insisted on the CEO tag, ensuring that his ascendance would be irreversibly formalized.
After the Bansals spoke with Lee, the other board members, including Subrata Mitra of Accel Partners and Oliver Rippel of Naspers, were informed. By Christmas, it was done. Binny would be promoted to CEO while Sachin would step aside and take up the role of Executive Chairman.
A few days after the first call, Sachin spoke with members of the Flipkart board again. He pitched the idea of making Mukesh Bansal CEO of Flipkart. He proposed a structure in which Binny would be the Group CEO, with the heads of Flipkart and Myntra reporting to him. But Lee immediately rebuffed Sachin. Not only
