Before there was Flipkart, Myntra, and Snapdeal, there was Fabmart. Before the Bansals, there was K Vaitheeswaran.
While we hail the current e-commerce majors for changing the way we shop, there was a man, quite ahead of time, who started India’s first e-commerce website Fabmart.com back in 1999.
Fabmart was acquired by Aditya Birla Group and rebranded to More. But Vaitheeswaran continued his marketplace under a new brand Indiaplaza.com.
“When we started, there were no shipping companies, no payment gateways. We had to do all of that on our own,” he says.
But then came the Bansals with their deep discounts and washed away Indiaplaza, which had to shut shop in 2013.
Four years later, Vaitheeswaran has penned down his journey of being a failed entrepreneur with his book ‘Failing to Succeed: The Story of India’s First E-Commerce Company’.
Vaitheewaran spoke to The News Minute on what prompted him to write the book, where entrepreneurs are going wrong today and what they could learn from his mistakes.
Below are some excerpts from the interview:
What prompted you to write the book?
There is a lot that’s going on in the startup ecosystem. There is a lot of glamour associated with it.
There are two sides to every coin. In this case, one side is the success and the glamour that comes with it and then there the other side where a large number of startups don’t do well. They shut down because the financial outcome was not as planned. And that’s because startups by nature are very high-risk high-reward.
But there is the third side of the coin as well. When the coin stands on its side. This third side is the dark side that destroys people completely. And I had to go through it with my startup.
The failure I talk about here is not merely the financial outcome or the lack of it but something that destroys the spirit of an entrepreneur. I had to go through the gamut of such spirit damaging experiences.
One of the trigger points was when I had to go and stand in the police station for three days because the company owed money to some people - not me but the company. I was stuck to handle the mess all alone with no support or help. And when that happened, I felt this is a story people needed to know.
This is just one instance. There were multiple triggers
It’s important for people to know that there is another side to startups and that prompted me to write. This is not about the first side or the second, it is about the third side, the dark underbelly.
Coming from your experience, how should entrepreneurs view failure? Is failure something they must keep in mind right from the beginning?
There is something I have been saying and have maintained for years: Over 95% startups will fail but 100% of entrepreneurs will succeed.
The act of starting up, the courage to go out on your own and try and do something that’s different from the normal course of signing up for a job - that itself is an act of success.
Entrepreneurs must not worry about failure, they should all go out and do their best to get the financial outcome they want and take as long as they want. The thought of failure should not hold them back.
The bigger issue here, in fact, is how the society deals with failure. In India, the success or failure of a startup is very closely associated with the entrepreneur. When the business succeeds, the entrepreneur is god and when it fails, he is a pariah.
Startups may not always meet the financial outcomes expected because the business and the financial outcome of a startup is dependent multiple factors, all of which are not in the entrepreneur's control.
I think that’s the problem. The stigma of failure is so high and change has to come there.
Success teaches us a few lessons but failure teaches us the entire course curriculum.
You started at a very initial stage. Coming from there to where we are today, how do you view the e-commerce industry currently?
First of all, the whole ecosystem has changed. When we started off, there were only three million people in India using the internet. That number has today changed to about 400-450 million.
At that point, very few people had an experience with shopping online. Today 40-50 million people have shopped online.
When we started, there were no shipping companies, no payment gateways. We had to do all of that on our own – build India’s first payment gateway, first ecommerce shipment, the first online marketplace was set up by us from scratch without knowing what exactly to do because there was no one doing that.
Then to now, the whole world has changed.
Making money seems to have gone out of the window. Entrepreneurs today believe -- and are fine with -- building businesses that are not sustainable. I’m not very impressed with the idea.
Now that so much money has come in and so many companies are practicing, maybe it is time for them to show the path to profitability and build businesses that are sustainable - businesses that can stand on their own legs and do not require an uninterrupted supply of venture capital. When we can do that, that's the point at which we can say e-commerce has arrived.
As someone who has tried and failed in ecommerce - what would you want to caution entrepreneurs about? Especially the bigger ones?
I have no message for the big ones. They have enough smart people around to advise them.
But I would certainly like to caution the smaller ones who are actually larger in number.
I’d tell them that irrespective of the promise of an exciting future, do not walk down a path that requires you to be supported by capital from outside at all times.
The best way to build a business is for the business to make money and it may take one, two, three years, but the intent to make money must be there right from when you start.
On the day you think you want to startup, and do something, remember that it must make money. Every entrepreneur must differentiate between a hobby and a business.
And that’s why I write this book. It’s a dramatic and brutal story. This is not an ordinary story of a business not working out and the entrepreneur moving on in life. Things that went wrong were very different.
I want people to read and find out and be careful, know that there are potholes and pitfalls we must avoid and move around.