Flipkart Forbes story: Most startups are like toddlers, cute for 15-30 min, but messy and noisy otherwise

I love kids. I have 4 of them. They are so sweet and fun when guests come home that most folks claim I have it easy.

They dont know the half of it.

If you have ever been with toddlers (or even been a baby-sitter once, you’ll relate to this), you know they can be “Oh so cute for 15 min in front of strangers and give you hours of tantrums later.

Startups are the same.

Great on the outside, messy in the inside.

Well behaved when people are visiting, painful to deal with when the guests leave.

Quite as a mouse when grandparents are baby-sitting, but tear the house apart otherwise.

Then when everyone else realizes they are being kids, they express shock. That’s the story with Flipkart’s Forbes piece.

Flipkart is a 5-year-old company.

Do they have culture issues? Possibly.

Do they have growing pains? Definitely.

Are they trying to figure out what they want to be when they grow up? Sure.

Will they go through more pain before they grow up into “role model” that everyone expects them to be? Absolutely.

I have only heard the podcast and am still to read the entire piece.

Here’s what I believe the story will have <Begin conjecture>

1. Flipkart has management challenges in scaling up and has alienated a few folks who were not part of the original team.

– Happens. Is that a call for the company to “go under” – not sure.

2. Flipkart is obsessed with great customer service, so their prices are higher. Competition provides better pricing.

– Lame. If you have a business model that’s predicated on better service and hence you command a premium price, there are customers who will come. May not justify their valuation, because growth might stall, but there’s a market for great customer service – FOREVER.

3. Flipkart has nose-bleed valuation and some VC’s are shying away from paying those valuations.

– Lame. I dont know a single VC who likes large valuations. This is an absolutely useless point.

<End conjecture>

Do I think the journalist did a poor job?

Nope, he’s just chasing PageHitsVille.

Post my facebook discussion with Rashmi:

4. Flipkart’s acquisition of Letsbuy was driven by the VC’s and was a total waste.

– Sure. Total waste is your point of view, but I called the synergies a few months ago. It was smart for Flipkart to get the customers and more importantly the relationships and the purchasing power from larger numbers.

7 thoughts on “Flipkart Forbes story: Most startups are like toddlers, cute for 15-30 min, but messy and noisy otherwise”

  1. I still see no reason (logical/sane) for acquiring letsbuy only to shut it down after 3 months. People who were on letsbuy would simply not move to flipkart just because FK has put in a redirect on letsbuy homepage. They would go to HS18, yebhi et al for the discounts.

  2. 1) Flipkart would have the customer database of all those who bought from letsbuy.com or ever registered there. Note that these are actual or potential e-customers.
    2) Some of those who come onto the letsbuy.com website would purchase from flipkart website after being redirected there.
    3) Flipkart gets access to the people and institutional knowledge of letsbuy.com. Please understand that there are not too many people with experience of web based retailing in India.

    1. 1) We all know there is hardly any loyalty amongst the online customers today. Soo, people who bought on letsbuy purchased from it because of the great deals. They would have gone to other sites and registered / bought from there as well. I hardly doubt there were a few 1000s who have just registered on letsbuy and not on FK. If they did not go to FK when letsbuy was around why would they go there now ? Just redirecting the users would IMHO not do any good.
      2) If FK was really interested in getting the know-how it would have retained people and not let them go just like that. People across board from junior to senior level were not even asked once before they were let go. I wish FK had understood the worth of letsbuy employees.

      1. Not true at all. I have been purchasing with Ebay for a long time, and now I totally left it for flipkart only because of their service quality.

      2. You should try yebhi and / or jabong. They are almost at par wrt customer service to FK. My point is if I am getting a mobile for 14k @ HS18 and same mobile for 17k @ FK, I would most probably but it from HS18. Similarly, tomorrow if Jabong offers me a Reebok sandal @ 1100 while HS18 offers it for 1500, why should I not buy it from Jabong ?

  3. strong signals, and intuition says, Buying letsbuy was a investor led decision. but agree this cannot lead to the fall of flipkart. The question here is, not whether this, or some other decision of theirs would lead to their fall. Is there a fundamental system issue, that would trouble them? And are they in here, only for the eventual IPO?

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