Prologue: Failing the Flipkart Bechdel test
If you are a fan of the cinemas, you would have undoubtedly heard of the Bechdel test. If you haven’t, fret not. Named after the American cartoonist, Alison Bechdel, the Bechdel test is a method for evaluating gender parity in a movie. It looks for three things. One, there should be two women in a movie. Second, they have to talk to each other. Third, they have to talk to each other about something that isn’t about a man.
If you have read any startup story in any publication in the last few months, chances are that the story failed the startup equivalent of this test—the Flipkart Bechdel Test.
Every story is inevitably centred around Flipkart and its mega-exit to Walmart or references it in some way. The breathless euphoria in the media around this deal shows no sign of waning. You could perhaps say that this euphoria is justified—an exit of $15 billion or Rs 1,00,000 crore—the founders Sachin Bansal and Binny Bansal becoming dollar billionaires and a once-in-a-lifetime windfall for the company’s investors and senior employees. The surprising thing though is that if you have ever talked to any startup founder, employee or observer in India in this period, you would’ve noticed that reactions about the Flipkart deal seem to be much more muted.
While there is admiration for what Flipkart’s founders have achieved and genuine cheer, there is nothing that resembles the breathless euphoria that the media displays in painting them as “technology superheroes” who deserve to be idolised and apotheosised.
This lack of enthusiasm is in stark contrast to the reactions from the startup community two years back around an event concerning one of the Flipkart founders. This event was covered rather cursorily in the press and involved an amount that was far lower than the billions of dollars bandied around currently.
Rs 32 crore or $4.6 million.
Yet, the excitement was palpable.
The house that Binny built
If you ask any average Joe on any street in India to name the most famous house in the country, chances are, that in most cases, the answer will be Antilla—Mukesh Ambani’s ziggurat, a 27-storey billion-dollar mansion owned by the richest man in India. Four residents with 600 staff to wait on them. Depending on how you see it, a house that epitomises entrepreneurial enterprise or crony capitalism. But if you ask the same question to the average Startup Joe in any street in Bengaluru today, there is a good chance that the answer will be something else. Flipkart co-founder, Binny Bansal’s home.
Two years back, Binny Bansal purchased a Rs 32 crore house in Koramangala, an upscale locality and the hub of startup activity in Bengaluru. The house is on a road where several other marquee entrepreneurs already have homes—the likes of Nandan Nilekani of Infosys and Dr Devi Shetty of Narayana Hrudayalaya are Binny Bansal’s neighbours. Binny’s purchase was met with a seemingly unprecedented level of excitement in Bengaluru’s startup circles. Every conversation seemed to include some reference to the purchase either in the form of a sense of awe or in the form of founders self-deprecatingly yet jokingly comparing this home to their own humble homesteads. This thread persisted for a long period of time and it is not uncommon for an odd reference or two to make an appearance even today in startup conversations.
In contrast, the Flipkart acquisition is already yesterday’s news.
It is a fascinating contrast. Consider the fact that Rs 32 crore is less than $5 million, making it an infinitesimally small fraction of the $15 billion Flipkart exit price tag. Yet, the excitement was palpable.
What explains this?
Disposable heroes – Hero today, gone tomorrow
There was a time when startup heroes were revered and idolised. Names such as Narayana Murthy and Sabeer Bhatia evoked admiration, pride and inspired thousands of young Indians to attempt to emulate them.
The problem though is that in today’s world, flesh-and-blood heroes are disposable and fungible.
Take Kunal Bahl for instance. Until recently, Bahl, the founder of once-unicorn Snapdeal, was lauded as a technology superhero. India’s leading business publications anointed him as “Entrepreneur of the Year”. Investors called him a “six-sigma entrepreneur” and sang hosannas about his “market smarts” and “vision”. Yet today, Bahl is completely ignored and largely forgotten. The only time his name appears in the press is when he writes an editorial himself.
But the problem goes beyond erstwhile media darlings like Bahl. Over the last few years, we have witnessed an increasing number of entrepreneurs, once hailed with Jobsian praise, reveal themselves to be, if anything, less than mortal. From scamsters such as Elizabeth Holmes of Theranos to shucksters such as Rahul Yadav of Housing, founders who were deified based on wisps of unproven ideas by venture capitalists and the media alike, were shown up as being fallible if not outright venal. Media-propped heroes made entirely of clay.
But what about “heroes” like the founders of Flipkart who have “succeeded”? Surely, their achievements need to count for something?
Fungible heroes – Seeing through survivorship bias toward “heroes”
The image below is one that represents the dynamic between the founders at Flipkart for many years.
Sachin Bansal was the showman, the alpha male, the CEO who was the public face of the company. Binny Bansal, in the background, the introvert, the wallflower who worked behind the scenes.
For a long period of time, Sachin Bansal was hailed as a startup hero, the one who cocked a snook at arguably the world’s most powerful tech company and lived to tell the tale. And yet, when the Walmart deal finally happened, through a quirk of fate, it was Binny who was at the foreground representing Flipkart as Sachin exited the company. It is tempting to paint this as a defeat for Sachin and a victory for Binny, the backroom boy who came in from the cold to script a heroic victory as the last man standing.
But that would be a forced narrative. One that reeks of survivorship bias.
This narrative paints Sachin as the loser who got his just comeuppance. Which is completely false. The fact that Sachin was not with the company at the moment of its exit does not mean that all his contributions towards Flipkart were for naught.
That Binny was the survivor has a lot less to do with any specific “heroic” qualities of his and far more to do with that one vexingly quixotic aspect of life. Luck. The importance of luck in Flipkart’s success can’t be understated. To their credit, Sachin and Binny rode their luck but to overlook it is a cognitive failure called survivorship bias. The temptation to attribute extraordinary qualities to entrepreneurs to hold out the fantasy that emulating the habits and practices of these heroic entrepreneurs will enable all the imitators to the exalted levels. The press helps perpetuate survivorship bias by incessantly writing about entrepreneurs and painting them as being fascinating and inspirational.
Another matter altogether though that most, if not all, of these startup heroes are not significantly different from the thousands of other equally capable founders who toil in day after night but don’t see even a fraction of the success because they are not as lucky. We seem hardwired to discount/ignore luck because it’s hard to accept that like many things in life, entrepreneurial success is not predictable even in hindsight. There is no framework that we can use to reduce success and failure to a series of pithy aphorisms. We attempt to conjure narratives that explain why someone succeeded, but in our hearts, we know that outcomes are closer to being random than to any sort of predictable pattern. Rather than being a leadership-god or else a venal shark, most startup founders, including the wildly successful ones, are mostly-regular persons who got lucky along the way.
All said and done, Sachin’s absence and Binny’s presence has less to do with their own strengths and weaknesses and more to do with the dynamic that in today’s world, startup winners and losers are often incidental and determined by VC fiat—the shape of the cut decided by the whims and fancies of dispassionate investors chasing the next big exit. Against this prism of human fallibility, a man like Binny Bansal is regarded with a much more sober disposition.
His house, on the other hand, is another story.
We don’t need a hero…we need a leitmotif
The average middle-class Indian has only one dream—to own a house of her own. To the generations of Indians who preceded us, this usually meant slogging their entire lives so that they saved enough to buy a small house of their own that they could retire to. While we have arguably progressed far from that, our collective proclivity to “own a place that we call home” burns bright and strong within.
Binny’s house feeds off that feeling. It represents a new world where even ordinary middle-class Indians can create enough wealth to own a residence amongst the celebrities we grew up admiring. Unlike Mukesh Ambani’s Antilla, which in a way represents the stilted nature of entrepreneurship in India in the 70s and 80s where cornering a license was the only way to compete, in today’s world, a person like Binny can create wealth purely by the dint of his ambitions and hard work, without resorting to any kind of skulduggery or chicanery. But unlike Binny himself, who is admired but not revered as his “heroic” nature is, if anything, is all but fleeting, his house represents a tangible and visible victory—a physical monument to an abstract entrepreneurship journey.
Equally importantly, the house that Binny built is not just the one he lives in.
The Flipster houses
Since Flipkart’s founding days, Sachin and Binny were generous in offering stock options to their team members. Rather than use it merely as a device to attract senior talent, the original ESOP program was broad and all-encompassing. Every developer and executive above the rank of assistant manager was eligible. While this was later on restricted, it had already created a large number of millionaires.
As many as 5,000 Flipkart employees (current and past) will end up richer by anything from tens of lakhs to tens of crores of rupees. More than 50 of these employees will be dollar millionaires with some early employees and founders of acquired companies raking in as many as hundreds of crores. According to informed sources, as much as 10% of the total equity pool was part of the ESOP pool. Even after dilution, the total amount of this pool is said to be well over a billion dollars (close to Rs 10,000 crore by some estimates).
All of these people now presumably own homes of their own. Binny’s house is not just one but is a synecdoche—a prototype that defines the collective—for these thousands of homes.
And this goes beyond Flipkart.
The Startup houses
In the last few years, Binny has emerged as a prolific angel investor. Tracxn, Zopper, SigTuple, Roposo Unacademy, Sheroes and Ather Energy are some of Binny Bansal’s portfolio companies. A partial list of companies he has invested in is below:
What is notable about these investments is that several of these are moonshots or bets that traditional VCs or angels would be loath to back. Beyond the usual suspects like healthtech, edtech and networking, Binny’s portfolio stretches to less-fancied domains such as content, networking and even literal moonshots like Team Indus.
It is quite evident that these investments are not the result of Binny thinking about financial portfolio diversification but led by a sense of “pay it forward” backing entrepreneurs without worrying about financial returns. While some of these bets have failed, several of them, like Ather Energy, are now large companies that employ hundreds of people with tens of millions of dollars in VC funding behind them.
In a sense, all of these startups and jobs are “houses” that Binny has helped build and collectively, they represent a far more significant source of inspiration and heroism than any flesh-and-blood figure can hope to project individually. In the years to come, don’t be surprised if there is a new type of Flipkart Bechdel test whenever a startup conversation is brewing in any coffee house or pub in India—entrepreneurs and wannabe entrepreneurs making a reference not to Flipkart itself but to Binny’s house as an aspirational totem.
Editorial illustrations for The Ken by Rohit Bhasi.