Today, the 44-year-old Kalyanaraman Srinivasan is Chief Operating Officer, Groupon, a portmanteau for group coupon, and at one time, the fastest growing company in the world that grew from $1 million in seed money to $1 billion in two years. “Trillions of dollars went into valuations there but the customer experience only got better…so the irrationality of valuations is relative,” he points out, observing the Indian ecommerce market potential to be in the $100-200 range and with only $6 billion active market, excluding train and flight tickets, Flipkart’s valuation of $5 billion makes perfect sense. As a precursor, he points to the dotcom boom in the US in 1999-2000. “The rising tide will raise all the boats first and every company will get irrational valuations but those who focus on customer experience in the long term, will stay there and go higher, and those who don’t, will fall off,” says Srinivasan. In other words, there are not many tradable liquid securities out here, he reasons, adding that companies like Flipkart, Snapdeal and Infibeam, where he has personally invested, will raise the tide. After all, more than 20% of the GDP of the world comes from emerging markets with barely 3% of capital investment therein. Despite zero signs of profitability in the ecommerce eddies, Srinivasan remains positive.
Srinivasan’s advice bode well for the youngsters and made them very rich indeed but the operative word was “patient”. The duo turned out to be Sachin Bansal and Binny Bansal who founded Indian ecommerce giant Flipkart the very next year, recently raising a billion dollars from investors to take on Amazon’s Indian foray. “I took 1.5 seconds and said if they really wanted to be entrepreneurs, they must replicate Amazon in India and be patient about it,” says Srinivasan, in a southern accent cradling a Midwestern twang. They wanted to know which one they should focus on. The duo requested fifteen minutes of ‘we-time’ as they bubbled over a few ideas they considered path-breaking. In 2006, two freshmen from IIT-Delhi gathered enough spunk to knock at the door of Kalyanaraman Srinivasan, Amazon’s global technology head for retail, who was in India to set up a development center at Chennai and a regular at the Bangalore office of the global ecommerce biggie.
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