The sale started off well. In the smartphone category in particular, Flipkart had easily beaten Amazon. On smartphones day, Flipkart claimed that its gross sales had touched ₹1,400 crore, the highest single-day figure ever for an Indian e-commerce firm. Binny called it a ‘historic moment’.13 This feat was a validation of Kalyan’s high-risk tactics.
The pattern continued through the sale, and by the end of the week, Flipkart had emerged as the clear winner. It had sold 15.5 million units compared to Amazon’s 15 million; the gap in value was even more widely in Flipkart’s favour.14 Binny taunted his rival in media interviews, saying that Flipkart had sold products that people loved to buy during festival season – smartphones and TVs, as opposed to the ‘churan, hing, detergent’ and other grocery items Amazon claimed to be selling in high volumes. Amit Agarwal shot back with the counter that in a little over three years, Amazon had accomplished what Flipkart, despite launching much earlier, hadn’t ‘come close to doing’.15
But there was no denying that Flipkart had won this round. Confidence restored, morale raised, it would live to carry on the war with Amazon. Flipkart milked the moment. In another interview, Binny pointed out how important the win had been for the company. ‘One thing that is heartening in the wide lead established by Flipkart is that a homegrown company can successfully fend off a twenty-two-year-old global behemoth pouring in money to buy market share. This is very important as it’s a question on everyone’s mind today, especially on the minds of entrepreneurs: how will we take on global giants if they come into India? The answer is that you can. You need to do it with the right customer focus, local innovation and local knowledge. And that would always win against just pure capital.’16
Those were rousing words. Evidently, Flipkart’s mojo was back; Binny’s certainly was. But behind the curtains, as far as Flipkart’s investors were concerned, there was only one man who would get the credit for the turnaround.
22
KALYAN RAJ
After the Diwali battle, it was Kalyan Krishnamurthy who became the main man at Flipkart. He had taken charge of the Big Billion Days sale and delivered a stupendous performance under the circumstances. His standing with the company’s investors, already strong on account of his status as a Tiger Global representative and his successful first stint at Flipkart, was elevated further. It was an opportune time for Kalyan to show his hand. A few weeks after Diwali, in December 2016, Kalyan made his move. He declared that he wanted to be the CEO of Flipkart.1 Kalyan, still nominally a Tiger Global employee, made it clear to the Flipkart board that if they wanted him to stay on, his role would have to be formalized and expanded. He contended that it was only fair, and even logical: to create maximum impact, he would need to have control over the whole company, not just parts of it.
In fact, Kalyan’s proposed ascension had been months in the making. When he had re-joined Flipkart in June, Kalyan had made a promise to himself: this time he wasn’t leaving, this time, he would stay for good. It wasn’t just his ambition, Lee Fixel had also foreordained it.
In early 2016, Lee had come to believe that the Bansals were no longer suited to run Flipkart. In the short history of software and internet businesses, very few entrepreneurs – the same figures that the Bansals idolized – had displayed the endurance and capacity to keep improving by magnitudes every few years as their startups burgeoned into huge companies. Jeff Bezos, Bill Gates, Mark Zuckerberg, Jack Ma – they were the exceptions, the rarest of the rare entrepreneurs. Even Steve Jobs had failed to cope the first time at Apple, which led to his ouster from the company. It was Lee’s assessment that the Bansals belonged in that group which didn’t measure up, not where the running of a gargantuan company was concerned. There was hardly any shame in it. Binny and Sachin had already proved to be outstanding entrepreneurs. But it was now time for them to give way to a ‘professional CEO’. This view was, of course, not shared by either of the Bansals, each of whom had no doubt that only he – individually – could run Flipkart.
This undercurrent of dissonance necessitated a somewhat gradual approach by Lee. It was this compulsion that had prompted him to enlist the services of some influential Flipkart executives close to Binny in his endeavour to bring Kalyan back. Though Lee had assented to Binny’s elevation as CEO, it soon turned out to be of secondary importance in his scheme. It mostly served to lay the groundwork – through the removal of Sachin from the CEO position – for the essential feature of his plan: the re-entry of Kalyan. Now that Kalyan had repaid his faith by reviving Flipkart’s flailing business, Lee’s belief turned into conviction. Kalyan would have to continue at Flipkart – as far as Lee was concerned, the turnaround was in its infancy. Kalyan’s agility and sales acumen had won the day. But the struggle to take Flipkart to a position where it could go public or attract a buyer had just started; Lee’s struggle to extricate himself from Flipkart was only just beginning.
There was strong evidence that the mistakes Flipkart had made in 2015 had caused serious damage, had derailed it for years perhaps. Alibaba, which had become the world’s most valuable e-commerce firm since its stock market listing in 2014, had shown interest in buying a minority stake in Flipkart in early 2016.2 Joseph Tsai, the Alibaba co-founder and executive vice chairman, had flown to Bangalore to meet the Bansals. The discussions were pleasant but they went nowhere. Tsai had indicated that a deal could happen only at a significantly lower valuation than
