No Sachin and Bhavish : There is a lot more to ‘Phoren Competition’ than money

So Sachin Bansal (Flipkart) and Bhavish (Ola) want a China like environment, i.e. support from the govt to battle foreign rivals, i.e.Amazon and Uber.

..international companies, with their huge cache of funds, can afford to buy out customers by offering better deals, and added that the battle is not about innovation, but about capital.

“What we need to do is what China did and tell the world we need your capital, but we don’t need your companies [Sachin Bansal]

“..battle is not about innovation, but about capital.”

Really? Maybe, focus on the war then? And for whatever it is worth, Flipkart is a Singapore firm and Ola is a mix of Canada, Russia and Japan!

And they were the one who started the ‘capital battle’ in the country, killing many startups.

Flipkart and Ola’s survival guide : ‘Excessive’ Funding

So one of the ex-Unicorn startup founder’s hiring mantra was to give so much salary to employees that the salary becomes an exit-barrier.

“No one else in the market can afford to hire these smart fellas”, is a mantra that has worked for all excessively-funded startups.

And who are the losers here? Several startups who had to shut shop because they couldn’t afford to bring in great talent, thanks to the talent-hoarding war by the likes of Flipkart and Ola.

Maybe these startups should have asked the government to step in and regulate salaries?

Maybe, these startups should have asked the government to step in and regulate discounts offered by Flipkart and Ola?

The Unicorns Vs. Phoren Competition
Lado, maro and let others win this?

Ola, Flipkart and several unicorn startups are unicorns because of the fact that they were over-funded and had the liberty to sell products / services at discounted rates. It’s a vicious loop – the more funding you raise, the more you can discount and the more you discount, the more you can show off (fancy metrics like GMV).

This is how Ola killed TaxiForSure and Flipkart killed so many *karts.

Nobody cried when this was happening and now that these companies are getting a taste of their medicine, they want govt to jump in?

The Lack of Product Leadership

Flipkart’s major IP (till 2013) was logistics (you can watch this fireside chat with Sachin @UnPluggd) and with logistics becoming a commodity, Flipkart’s lack of product leadership has showed up quite openly.

Hiring a CPO, launching *app-only* product, rolling it back (without any explanation), firing the CPO – these are all signs of the emptiness that the company has in its product ranks.

What about Ola ? Till date, they haven’t managed to fix the service predictability. Look at Uber – they started late, started slow..very slow, experimented a lot, created a playbook and is a much more predictable service than others.

Ola’s lack of product leadership shows in the launch of Ola Play, which I believe is totally driven by founder’s attempt to position Ola as a tech company and has nothing to do with market insights / needs.

Ola needs to position itself as a tech company in order to raise the next round at a better valuation (FYI : Ola is currently raising $600mn at 40% lesser valuation).

Where is the product ? Well, like the last round – we will talk product after we have raise the new round. Let’s focus on gimmicks for now.

If there is one thing Indian startups can learn from phoren competition, it is ‘thinking slow and fast’, and come out of the typical ‘chalta hai’ attitude.

With due credits to Amazon and Ubers of the world, there is a much more calmer execution than just cheap growth hacking that we often see otherwise.

Where do we go from here?

Of course, none of the Indian startups have a role model to look up to and it must be a lonely feeling out there – but the least Flipkart and Ola can do now is to cut the flab* and focus on the product / experience.

Whatever the IP Flipkart and Ola had is now commoditized and it’s time for them to think ahead of the curve (but NOT Ola Play or Myntra’s app-only, please).

As they say, Eat the breakfast or Be the breakfast. But don’t cry when someone moves your cheese.

*flab : For many product managers in Flipkart, ‘working closely with Bansals’ is the biggest highlight of their stint!

Sigh !!

And the radio sings.

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21 comments
  1. Very good article. One only knows when his arse is on fire. The lines between local and global are very thin. By the way Predatory price has killed many offline stores. The govt should think about this. The day is not far when the aggregators will not be required when there is an open platform to share their services and products. Anything which has a pattern to it will be replaced. This world is now evolving like never before.

  2. Well written. Such hypocrites to demand “level-playing field” when they did the exact same thing all these years to other startups/offline stores. Rather than crying foul, they should concentrate on what customer needs and why they are moving away. Just to write my personal experience, Amazon has started reverse pick-up at my location (a small town in Kerala) where as Flipkart still doesn’t offer delivery after all these years. Never bothered to go back to FK.

  3. Cannot but agree – do not understand the foul play being called out by FK and Ola – besides these are made in India – yes but are funded by Japan/ China/ US – so how do they become ‘Indian’ companies….to be honest I too wanted to promote Indian home grown brands and was on Ola for two years till last year my loyalties lie with Uber – only because of Uber’s service. Hey Ola – i tried to stay with you – but you have terrible, OK awful customer support and not there when you are needed. I am not an online shopper so my experience does not count but i have my friends swear by the experience they get with Amazon. Ola and FK should spend their energies in fixing customer service and loyalty than crying out.

  4. You nailed it Ashish. If you serve your customer well, you stay ahead of the competition. It’s still not too late, Fk and Ola should focus on beating the competition, money is and was never a problem. At the end of the day, these are all phoren companies themselves (with the kind of equity held by VCs) with Indian CEOs trying to dominate Indian market. As per ownership, for me Amazon, Fk, Uber and Ola are all the same.

  5. I dont mind paying a premium of 5~10% as long as the service is trustworthy and fulfill my expectations at the needy time. Indian startups are failing at these metrics on a continuous basis. One reason could be pressure from investors to show the growth and second could be hogging the limelight through aggressive advertisements and PR management. At the end, are they focusing on customer ? Instead they are going head and tail in pleasing their bosses (i.e., Investors). Unless there is a fundamental change in attitude, we keep seeing Olas and Flipkart type companies generation after generation.

  6. very well captured…if you see through the maze and hype around the so called unicorns and the larger startup ecosystem in India, you realise that “Product Innovation”, the core component of a tech startup ecosystem, just doesn’t exist here…I mean the foundation is so damn weak that the flashy high-rises that have been built are bound to collapse sooner or later….and then these lame duck reasons are the only recourse to survival.

  7. e-commerce sites per say, will have more or less similar features on products showcase, features, and their discount abilities decided by strength of its selling strength based on marketing reach, that’s defined by money. Consumer loyalties aren’t permanent in this era. Neither Ola, nor Uber, can rest assured. Ditto for eCom, or food delivery, grocery delivery sites. That’s why we see many fail. Most of these services do not need great tech talent once platforms / app designs stabilize. Later it’s pure content projection and buying strength to bring the best products on their platforms. I found FK selling phones which were poor quality, for big discount, without company providing any quality service. Many such experiences with other e-commerce sites. If you are unable to sell old stocks, push them to India thru e-commerce sites.

    Indian tech talent must focus on building services for bigger needs here, than chase low hanging valuation fruits on me too e-commerce sites. Food delivery sites falling fast is something we got to remember.

    To me, Ola, Uber, Flipkart, Snapdeal, Amazon all same. Plus or minus a few points. The real value add for customers is when they get great products, at attractive rates, than obsolete stuff or shoddy service. Ola’s shared use algorithm is flawed. I have seen it a few times. Spoken to Ola drivers often. Surprisingly, Ola doesn’t seem to listen to driver’s feedback. It cuts their commissions often. Uber too may be in same boat.

  8. @Flipkart: They why not register your company in India. Your’s is a foreign company too. And when you stepped in, you too destroyed the local vendors using your then deep pockets, which day by day are becoming shallow

  9. Most people on social media and Commentary as well as over enthusiastic writers have zero understanding on world business & politics and how everything is interconnected. When one see things from this perspective, it becomes clear what Sachin and Bhavish is talking about. Until you get the right perspective keep enjoying your ignorance 😉

  10. It just means brain drain or no brain drain, the status quo remains the same.

    Sachin and Bhavesh could any day move to America….Then Indians will say..ohh look they are leaving Bharat Ma and working abroad which is what these IIT’ians are accused of.

    Now, when they work in India, they are accused of evoking patriot card to gain points when they start losing the game …..which is also unfair as pointed out by the author of this article.

    Eventually they will be sold out or close shop as no one can match the money of uber and Amazon in the entire world except China because they have protectionist laws.

    Earlier the IIT’ian complained about laws not conducive to business now they want more laws in the business to stop foreign companies from entering India in which they have worked anyways if they moved abroad 🙂

    I don’t understand what they teach in IIT, IIM but 90% of their startup fail in India ..However, if you look at MIT and Harvard..They too have a 90% failure rate. There is definitively an X factor which the religion based science refused to accept and its God and Destiny thingy.

  11. Very well crafted Ashish. Love the Video at the end. Very apt summation. I met some one from the Flipkart CRM team..it seems they have close to 3000 people in CRM, Social media …Now thats an area that they need to Automate, Automate and automate and rationalise this flab to start with.. John

  12. “When one see things from this perspective, it becomes clear what Sachin and Bhavish is talking about” – lets be clear about one thing – nothing is fair in this world. FK and Ola are getting a taste of their medicine.

    Crying foul is public acceptance of defeat – least they should be doing at this stage.

  13. I’m not sure why Ola is pushing PR on vague products like Ola Play, when they some real innovations doing well, like Ola Share Pass. Ola Share pass has been a very successful product for them, and I know a lot of customers who shifted loyalty to Ola with this.

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