Introduction
I was randomly browsing the new offers on the Kindle Store
when I came across this book. The title of the book was quite apt and it did
catch my eye.
Ever since I have started questioning the fundamentals of
societal structure, one question that has always perplexed me has been the
question of Success. What Success really is? I wrote a blog
post about this titled, “Your Idea of Success. Is it really your Idea?”,
way back in 2014. As you can see, it now has been almost 4 years and here we
are, still exploring this concept of Success.
Anyway, coming back, so I found this book’s title
interesting, read the brief on Goodreads
and decided to buy.
The book is about the advent, success and shutdown of India’s
first E-commerce start-up Fabmart/Indiaplaza. I am sure people from early days
of Internet (90s) may have heard of those names. I had read some articles about
Mr. Vaithee and hence had an overview about the venture.
Fabmart – India’s first E-commerce start-up begins
This book is narrated and authored by Mr. Vaithee himself
which hence gives you a vivid experience (thanks to his writing style) of everything
that happened. It begins with the author toying with the idea of starting up,
leaving a well cushioned job at Wipro to venture into the world of
entrepreneurship. He was mightily influenced by the experience of amazon.com
which was, in those days, trying to pioneer the e-commerce world and perhaps was
the only reference point.
Along with 5 other co-founders the first e-commerce site of
India was born, named Fabmart.com selling audio cassettes and CDs. To give you
a perspective, we are talking about creating an e-commerce company when
internet penetration was extremely low, world-wide-web had recently entered
India and getting connected to Internet was a painful process of using the Dial-up
connection. A lot of us millennials may have never seen internet that slow, you
could literally see the images / content load line by line on the screen in
front of you!
The author then takes you through some first principles of starting
up (most of which happen to be same for Product Management).
- What problem are you solving?
- Are you solving it for reasonably large set of customers?
- Will these customers be willing to pay for your solution?
- Are you the first one trying to solve or there have been others who have attempted?
- If others have already solved, are you bringing something superior or unique?
The author then shares some really amazing learning about
- The concept of Better, Faster, Cheaper to evaluate start-ups
- Selecting your Co-founders
- Deciding Co-founders’ responsibilities and compensation
- Seed-funding
Fabmart – So many firsts
As is there in any product, while taking the crucial
decisions, the team at Fabmart needed some really important inputs and they
used the concepts of Product Management really well. This just tells me that
the first principles are just timeless. The way they executed in the absence of
all the modern tools we have today is just exemplary.
- Stalking customers in offline stores to understand customer buying behavior.
- Deciding on whether to sell books or music online.
- Getting the meta-data of the Music labels was a challenge, then getting it online was another challenge, music companies didn’t have it in online format.
Anyway, so slowly and gradually things started moving and Fabmart
started getting traction. It is not very well known but Fabmart team deserves
the credit for a lot of innovative and first of its kind solutions executed in
E-commerce world which now just seem to be a norm.
- First PIN based Payment Gateway
- First E-commerce client of Microsoft Azure in India
- BlueDart’s first step in E-commerce logistics
- First to execute Omnichannel retail
- First to sign up a celebrity singer to launch a Single exclusively online
- India’s first Electronic Gift Certificates
- India’s first E-wallet
- First Customer Loyalty Program
- India’s first Online Grocery store
- First time COD in India
Diversifying into Books, Jewellery
The book then takes us through some day to day challenges of
deciding the KPIs when you don’t have any reference point, signing up more
music labels, singers to get more traffic and all along sticking to the first
principles of business to ensure that this is a self-sustainable business and
not a VC money driven that now-a-days is.
Fabmart starts to expand beyond music and gets into books
and jewellery. The author talks about the challenges faced and how they finally
launch these online. In future, books become one of the bestselling categories
for the business.
This was the time (around 2000) when the Dotcom bubble bust
was happening in US and hence whenever Fabmart team was meeting the investors,
they were interested in valuation more than anything else. The company was able
to raise 25 Crores as Series A in this turbulent time.
Fabmart Goes in Offline Retail
The next part of the book is about how Fabmart goes in
offline retail and builds the brand Fabmall. Most of you may not know this but
Fabmall was acquired by Aditya Birla Group in 2006 and re-branded as More
stores, fairly well known now.
In spite of the fact that Groceries as a category will be
difficult and low margin venture, Fabmart went ahead and launched India’s first
online grocery, along with selling it offline in Fabmall. Some really creative
warehousing and supply chain strategies had to be executed by the team.
This was also the time when the team started off COD for
groceries (in 2001) and then extended it to other products such as books,
movies, music, watched etc. But because of all the challenges that COD brings
with itself, the team decided to shut COD down in 2004.
Fast forward to Indiaplaza – Cash Crunch Begins – Investor Challenges
Author then talks about a lot of business challenges that
were being faced because of which finally, the offline business and the online
business were separated. Because of the
recent Dotcom bust, no investors would even want to listen to anything that had
“.com” in it raising funds for the online business was becoming daunting.
I would try to fast forward the summary here. There onwards,
author details about tonnes of challenges that were faced because of the
Investors, Cash Crunch etc.
What is commendable to read in the book is that in spite of
owning around 2% or so of the company Indiaplaza, the author somehow became
responsible for all the troubles that the company faced. The challenges of ever
changing business conditions can be navigated well if there is money available.
The responsibilities of the current investors were not executed and hence
Indiaplaza had to face severe situations.
I am highly impressed by the way author keeps his morals and
integrity standing strong in spite of the tough, nerve wrecking situations
around him with vendors, creditors, police etc. Reading about all the struggles
that he went through is highly inspirational. It gives a perspective into how
most of the investors focus perhaps on the wrong metrics and how it is
extremely important to be highly selective when choosing where you are taking
the money from.
Conclusion
Overall, the book is really delightful and refreshing to
read. The writing style is simple yet engaging. It provides a lot of ground
reality perspectives about the start-up world. Media selectively glamorizes the
start-up world with less focus on failures and the dark sides. It gives you a
perspective of what all can go wrong in a start-up and can prove to be a
guidepost to learn from the mistakes detailed in the book. I highly recommend
this book to anyone who has interest in start-ups and/or e-commerce in general.
