When we put our mind to something, it just works out: Snapdeal CEO Kunal Bahl

Snapdeal co-founders Kunal Bahl and Rohit Bansal changed the company's line of business to transform it into the country's biggest online marketplace. Business Today speaks with Bahl, also CEO of Snapdeal, on the company's business model and more:

Q. You keep mentioning Mission 500. What exactly is Mission 500?

A. See, our company moves too fast. And we too move too fast for us to really plan very significantly. Do things today that will achieve a goal 12 months later, is what we do. It's very hard to run a business which is this fast moving. So from our perspective, we plan out the year in four quarters and every quarter we have a mission.

Mission 500 is about how we'll go about achieving that quarter's goals. And that mission is actually not necessarily created by putting in a lot of scientific thought behind it. It is what I call a BHAG (Big Hairy Audacious Goal). It should be so unachievable, that if you carry out a litmus test for it in the office, if you ask people for feedback on that goal, they should either get very anxious or they should laugh out loud at the ridiculousness of the goal.

Unless you're getting that reaction, you haven't aimed high enough. If someone can think of a way to get to your goal in five minutes, it's not high enough.  Only when you aim super high, it pushes people to try a bunch of things and move really, really fast in achieving their goals. And I feel that there are two types of companies in this world.

There are missionaries and there are mercenaries. Mercenaries are the ones who say let's quickly manufacture and sell and get over with it. Missionaries are the ones who are very clear about the broader objective, about why they exist.

Q. But what is Mission 500?

A. It's an internal goal. It is a sensitive Issue.

Q. What was the goal last quarter?

A. Last quarter's was Mission 24. No, that was last to last time. Last quarter's was Mission NPS or Net Promoter Score.

Q. What is that?

A. Basically it's a metric for customer satisfaction. How NPS is largely calculated is - whenever a transaction gets over, or any kind of interaction with our company gets over, whether it's with a seller or a buyer, or whoever, we ask: would you recommend Snapdeal to someone? And then on a scale of 0-10, they rate you. We didn't invent this. It was invented by some Bain guy and is now being used by companies all over the world.

Rating of 1-6, you're called a detractor, 7-8, you're called a moderator, and 9-10 is called a promoter. And then there is some math that you do out of those three data points and that is called your NPS score.

There is a buyer NPS, a seller NPS and we also have something that's called a team NPS. Like if you work here, would you recommend someone else to work here also? So we do a 360 degree thing.

Different teams had different goals about what their NPS should be at the end of the quarter. That was the mission for the last quarter.

Q. Talking about quarterly goals, how difficult is it to decide them? It's for three months, so you decide in the previous quarter?

A. Yes, generally in the last 15 days of the current quarter we would define the goal for the next one.

Q. And by when should you accomplish it?

A. We should do so by the end of the quarter. Typically the mission that we define is that when we exit the next quarter we should have hit it.

Q. And how difficult is it to achieve the goal in the short span of three months?

A. That's what drives speed. It is difficult, it's meant to be difficult. It's not meant to be easy.

Q. Is there any other company that you know of which does that?

A. I don't know.

Q. How much have you grown since you started defining quarterly goals?

A. I'll have to do the math, but it'll be a ridiculous number. I'll figure it out and I'll give it to you. Basically it'll be like orders of higher magnitude. We would've grown maybe 40X since then on a monthly sales basis. So the idea of doing this quarterly thing... I'm also trying to remember, reflecting on how it came about.

I remember, Rohit and I were having lunch, we have lunch together every day and he and I were just discussing how we could really break out of the pack. See, we knew we were late to start. We were late to the game, late to the product commerce game. People had come and gone also by then. And then we came.

The only thing that we had going for us was the fact that we had an existing brand but we had nothing in the business that was really very usable for a product market-place.

Yes, we had some customers, we had a brand and we had a team. So if we wanted to create hyper-velocity in this business we could not play the game that everyone else was playing.

Q. But the speed obsession seems to be there even before you turned into a marketplace.

A. Yeah. But we didn't have the resources then.

Q. But you were already the largest deal seller then. And that too happened very fast.

A. Yeah.

Q. So speed seems to be inherent?

A. It is. And I feel it is personality driven also. I'm reflecting... you're absolutely right. I'll tell you one of the reasons why I think we have always had a 'speed to scale' kind of mindset. I can't even tell you how much Rohit and I struggled in the early days. I mean it was crazy.

There was a time I remember, in 2008 or 2009 where we had to pay Rs 5 lakh of salaries the next day and we had Rs 50,000 or something and I think when you've seen such phases, the moment we hit on something that worked, it sparks a fire within you - the feeling that now we've hit on something which has a strong correlation of output and input.

Until then it was like running on a treadmill, where there was a lot of distance being covered but no displacement. And when we started Snapdeal, the original avatar of Snapdeal, we started seeing that the effort we put in, it did have a proportional amount of results.

Q. Are both of you very obsessive about certain things, especially speed, velocity?

A. Yeah, I think that's an understatement. You should ask our colleagues that question.

A lot of people have tried to do two things - retail and market - simultaneously. It's natural to not let go of what seems to be working and do something which has a lot of potential at the same time. So that you feel you're getting the best of both worlds.

I think our minds don't work like that. We have the deep intrinsic belief as a company that when we put our minds to something, it just works out. It's this obsessive confidence that we have, I won't call it arrogance. It's confidence that if we focus on something, we will be really good at it and probably the best, by virtue of the kind of talent and focus we have.

So I think that's an example where we said let's shut down the deals business even though we are the best. We went from the 7th player in that space when we entered the market in February 2010. There were 50 players by October. By May 2011, we had 70 per cent market share and by December we decided to shut down that business. So it was a pretty brave decision and in the process we raised $50 million. For that business which we said we were going to shut down. It's a fun conversation to have with the board.

Q. How did the board react?

A. They were surprised. I think they were really surprised.

Did they say you were immature? I don't think they said we were immature; people are a bit more polite. I think they said "think it through", "put more thought into it", "why are you doing this" and I think at that time all the e-commerce companies were inventory led.

READ ALL ABOUT SNAPDEAL: Supercharged

Q. What was your first goal in the products business?

A. I think one thing we were very clear about based on what we learnt of what had worked in China and our understanding of what may work in India as a result was our value-proposition to the consumer.

And that was the certainty of availability of products at best prices. We were very clear about this goal. You have to decide whether you're a squirrel with a tail or an elephant with a trunk. We were very clear that this was what we will be and this is what we will not be. We will not go by inventory and start promising three-hour delivery and all that stuff. We will not do that. Because companies in China like jd.com etc were doing that also.

So we said we are going to do more of the Alibaba type of business where it's a marketplace given that India like China has a fragmented supply side. We are going to get that on board. Have so much supply that if a consumer is looking for something, he will find it and we'll have multiple sellers for the same product so that they compete among themselves in a healthy manner and the price for the consumer becomes more efficient. And that's what we focused on doing. And as a result I think we started our efforts of bringing sellers on board really, really quickly, which is why right now we have almost 50,000 sellers and in the next 12 months we'll head towards 100,000 sellers. We just started really early on that front.

Q. How long did it take you to become India's largest marketplace?

A. I think, you know it's interesting because really the only other marketplace in India at that time when we started was eBay, and they'd been around a long time of course.

Q. But eBay is still bigger than you, isn't it?

A. Provocative question! I don't know the size of their business but on the basis of information that is publicly available.

Q. From the sellers' point of view?

A. Number of sellers is apples and oranges comparison between us and eBay because they also do consumer-to-consumer. So if you compare only B2C, then we are definitely large. That's really apples and apples.

Q. How do you reward people?

A. Yeah. It's a family. I think rewarding has multiple facets to it. There's of course the most obvious one which is the financial aspect, which is fine. Every company in the world should do that and does and we do it also.

Q. When did you decide to take up Safeship?

A. We announced mid-last year but we were doing it for a while before that. Because we wanted to be sure we first had all the courier companies integrated and all the sellers were using Safeship. But we started doing it probably beginning of 2013.

Q. What is the benefit now that everybody is on Safeship?

A. There's no other way to run the business, honestly. One, there is seamless trackability, irrespective of who's the seller, where it's being shipped from and through which courier company. Consumers don't care about where you shipped it from and through whom. They want to make sure it's trackable.

Secondly, because we are virtually consolidating all these orders right, where all the orders are going through the Safeship system, we are now the largest e-commerce customer of most of the logistics companies in India. So that gives us great leverage in terms of cost and service quality.

Q. Cash-On-Delivery is still 50 per cent of the business or has it gone it down?

A. I think it has never been 50, it used to be 70 and now it's gone down to 60. In China and Russia, it is 40 and 60 respectively.

Q. How many people have downloaded the Snapdeal app?

A. It's a fast increasing number but it's into millions. And 20 per cent of them open it everyday. And we aren't Twitter or Facebook, we're a shopping site. And I think it is because we offer that certainty - if you search for anything, chances are that you'll find it.

Q. Sixty per cent of viewing is happening on mobile?

A. That too, but 60 per cent of orders also. So 60 per cent of traffic, orders and 60 per cent of new customers. Basically if I fast forward one year, 75 per cent of our orders will be via mobile . If I fast forward two years, 80 per cent or 85 per cent PC is going to become minute as a relative though in absolute terms it may be a huge number.