Notable Comments this week [Site Engagement Roundup] is driven by a passionate community and from this week onwards, we will try to showcase some of the awesome comments/insights/passion shared by our readers* : is driven by a passionate community and from this week onwards, we will try to showcase some of the awesome comments/insights/passion shared by our readers* :


This seems like a very biased article. And I feel I should share some unshown/unknown facts…
First of all I’ld like to walk you through the whole scenario and then answer all your questions asked in this post.
The news of acquisition came to us employees as a little bit surprise. We were sad and excited at the same time. Sad because we always thought of Flipkart as our arch enemy and excited for being part of a bigger company Flipkart. No doubt Flipkart was a bigger brand than Letsbuy BUT how can you ignore that we were its biggest competitor while all we had was mere funding of 6mn$ as opposed to huge funds(~180mn$) with FK. We managed to become FK’s biggest competitor and even after we cut down on all our marketing and Coupons. We still grew our business at good rate…..

..And yes they are laying off employees. Directly or indirectly. For Tech, Design Product and Marketting, its “Go to Bangalore” or “Go home” and for others they conducted a little interview of half the people… selected half of those interviewed… at half the original salary… Way to be EVIL.
You see all those videos posted online kicking their CEO on his birthday to prove that we are a cool co. to work with goes in vain when you don’t realize you are playing with more than 300 people’s lives and careers. That’s not what a cool co. does… That’s the exact opposite… That’s what evil corporates do. Now I feel sorry for those who work for FK and for myself too that I once felt happy for becoming a part of this pseudo startup and to add to this, they earlier sweet talked a few employees, with new offer in hand, to stay as they said and I quote “Everything’s going to be fine” and they kept on saying they want to setup tech hub at NCR and all..
And its the effort of our founders who are trying to help us with the ouststation placements.. they daily come to office and personally forward employee’s resumes to their ally’s companies like smile group, snapdeal etc.. Had it been someone else.. they would be off to some tropical island by now and counting all the money they received…
Now lets see the strategy Flipkart took to first ruin the Letsbuy brand and then kill it eventually…
Their first order of business was no more stocking of products… just buy when the order come… Which directly lead to delay in shipments. Then buying was also stopped which again lead to the cancellations of pending orders and all the products were marked sold out on the site. And then they simply told to cancel all the orders.
So if @jodhbir blames Flipkart for his pain… Flipkart IS the one to be blamed… And not just jodhbit, I’m sure a lot many cases would have appeared in the last 4 months… essentially because what Fk did… plus high attrition and low morale of employees.

[Anon LetsBuy Employee, Title: Letsbuy – Bought! Now What?]


Assume AVP is investing in F and L a seed money of $1 Million for 26% stake in each.
F continues to perform above market expectations and hence raises funding from three different VC funds such that at Series C , they are effectively left with 25% on Founders, 10 % with Top management, and 65% with the investors out of which AVP is left with 40% for an invested capital of $50 M.
At this stage, AVP has invested $51 M for 40% stake , for which lets assume 40 Million shares have been issued. ( Let’s leave out preffered/ common stock fo the sake of convenience). Thus the “$/share” value at this stage would be 1.275.
At this exact timeline, the investment in L has soured ( due to N number of reasons) and AVP alone has invested about 10M in Series A for another 10%. Therefore, $/share for AVP in L would be : (11M/36%) = $11,000,000 / 36,000,000 shares = 0.3
Thus when the board of F (controlled by AVP and other investors) votes to acquire L , the cumulative $/share value in the new combined entity is bound to reduce from 1.275 due to the low $/share value of the acquired entity.
Since it is widely accepted that at around series A, the typical startup founders lose partial control of Board rights and that private market valuations of VCs with regard to StartUps tend to be biased in their interests, we can safely assume that the number of outstanding shares of F acquired in lieu of control over L’s assets will be overvalued if the investors want to maximise their interests in F, the market leader.Also we are here dealing with a few very important assumptions in our stride, which is that the number of outstanding shares in F and L suits our calculations, and we also assume that the valuation of L at acquistion would be biased in a frothy technology market.
Paying due considerations to these assumptions playing a logical role in the inclination of investors’ interests , I think it would be safe to conclude that when an acquisition effectively reduces the $/share that you have paid on an entity , it would be in effect paying less cash for acquiring more value in the combined entity than if say, AVP had to shed out cash at that stage to acquire that stake in the combined entity. It’s because AVP says that L (where they have invested $10m) is now worth $25m and hence they deserve more shares to the tune of that value in (F+L)
With due respect to your argument, I think we would need the precise number of outstanding shares and shares in founder’s/investor control to reach a conclusion along that logical line; an information , which neither Letsbuy nor Flipkart will reveal to us ,sadly.
What do you think?

[Vikram Dilip, Post: TaxiForSure Raises Funding From Accel Partners, Helion Venture Partners And Blume Ventures]


“I think we are doing the classic mistake of identifying a solution and then looking at a problem in this article. This starts on the premise that innovation => great startups. I don’t think that is the case – and I think the problem is with people NOT taking leap of faith bets.
Why don’t we have world class swimmers? Not because our body structures lack the necessary attributes – but because our government (and private enterprises) do not put enough money in. Crib as much as you want about a lack of innovation and culture of innovation (whatever that means) – try putting money in ventures with 1% chance of success liek Dave McLure – and then speak up. Till then Happy Ecommercing.”

[Pratyush Prasanna, Post: Is Indian Facebook A Distant Dream?]


“Though technically its good phone but….its not worth going for pre-order. If you really want to buy this phone wait for some more time… may be a month or two. Earlier samsung has shown that other phone users as sheeps, now its showing/making that their customers also sheeps only. They launch te product, take orders from public… funny is that they don’t fix the price…. I damn sure that they will not announe the price till the product arrives in the market…. also based on booking response… they may delay the product release by 7-10 days to pull more sheeps. Also they don’t offer pre-order cancellation or swap option because once they will get more/all committed customer then definitelly they will fix the price on premium, may be around 3-4k which will bring them good income. They might be doing this because they might be worried aboot…onece products reaches public then it would be difficult for them to fight the war with HTC One X, Sony S, LG etc and price may slip further and the profit margin too..
As a smart customer… wait for some more time as you waited for its launch…on our behalf HTC, sony and other will definitely fight with Samsung and bring the price down by 3-4k from launch price and make our life easier…”

[Preetham Sheni, Post: Samsung Galaxy S3 To Launch In India On May31st, Priced At Rs. 39,990]


It will be interesting to see where they go from here. There will be a lot of learning for Industry. As of now lot of folks are gunning for leadership in mobile IM space in India. RockeTalk, Mig33, eBuddy, whatsapp, Nimbuzz , BBM and many more. with the exception of RockeTalk , all of the other people have “discovered” / “Stumbled upon” India. Rocketalk has differentiation in terms of Product , which is MADE for india. but as of now all the other player are focusing on DISTRIBUTION and reaching more and more folks without a differentiated offering.I personally believe that unless you have a extreme focus on engagement..This distribution lead strategy often ends in a situation of lot of download and little usage /stickiness. which make these apps somewhat less suitable for Ad driven model. Rockertalk is having engagement so its commanding good Ad money also. but again if product start crafting feature for engagement on focus geographies than there is a problem of rapid scaling. I would be keen to see how these New companies will tackle this challenge. Its very much likely that these companies might resort to classic VAS tactics of slapping a subscription fee on user.50 INR/Month for unlimited chat. A product named Frenzo has done it successfully in past. Another thought : one could make a pretty strong case that pure play Jabber/XMPP clone aka IM companies with Usage driven biz model..are more or less done. Mundu from Geodesic did an excellent job of going OEM Embedding way. Strangely none of these companies are learning from mundu too.

[Prashant Singh, Post: Nimbuzz to relocate its HQ to India] .


Although, most of the analysis seems anecdotal and based more on perception, but this is by far the best written article on It is so good that I couldn’t stop myself from writing this. Keep it up! (no sarcasm)

[Sachin Bansal/ Post: Letsbuy – Bought! Now What?]


“the culture in u.s. isn’t cuz of the universities. its cuz of the media and the financing. how many big companies have you seen come out of university entrepreneurship programs? or “research programs” for that matter?
its whats glorified that drives peoples’ behavior. i knew a bunch of rednecks who were proud of being innovative despite never having been to college. and they were pretty innovative and socially smart.
another problem in india is the “make-do” and “anything goes” culture that makes people never attempt to solve a problem that doesnt even exist for them. indians also lack the informational resources that can teach them fundamentals required to build new products. the ability to team-work is also lacking. its hard to find reliable partners too.
in u.s. one’d generally do “one thing well” that doesnt fare well in india where one has to do a whole lot more oneself.”

[Anu Anand, Post: Is Indian Facebook A Distant Dream?



* Comments are reproduced as-is (with grammatical errors/typos etc. and recommend that you take the in the right spirit!).

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