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Sunday, October 12, 2014

Big Billion Day by Flipkart.com

Flipkart.com announced Big Billion Day sale on 6th Oct 2014.  What followed is known to most of us. FK sent a letter of apology to all its customers.  The letter is reproduced here at the end of this post.  I am posting my reply in response to their letter which is here:

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Dear Sachin & Binny

I am really delighted getting this mail from you. This is what I was expecting when I kept receiving many messages through my FB page and twitter handle, about the unfortunate experiences of many customers, especially through my students. Some of them called Flipkart ... a FakeKart. Believe me I felt hurt as I have been experiencing excellent services by Flipkart ever since you started operations. The gesture of admission and sense of humility that your mail portrays, shall help you grow better when we look at long term perspective for the firm as a whole. 

I have been using FK for last many years, rather from the very initial time when you started your operation. Initially my focus was books and you supplied them at your best capability and beyond my expectations so far as delivery time is concerned. That helped me spread the word to my colleagues, friends and students and FK became my friend in need. As a teacher of Strategy to my masters students, the case of FK came very handy and my rich collection of news and articles published in different magazines and periodicals about FK including many interviews of both of you helped me understand your company, commitment, and concern. 

The entry of Amazon provided you with unprecedented competition and I think you have done remarkable well in order to maintain your market share and expanding the size of the pie. For the customers there can not be a better time than this. And their expectations are really high and that is a greater challenge that you are posed with and you know you have the ability and competence to converting this challenge into an opportunity.

I read some people calling you both as ALIBABAs of India and even sometime Jeff Bezos of India. I do not think that you identities can be compared.

I shall look forward for your recovery and reconciliation with bright colors and hope that FK shall toil hard to become a Great company in the real sense of the term as Jim Collins put it (Good to Great) and honest spirit of Humility shall make both of you Level 5 Leader. Good luck.

best wishes

vijay

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The copy of the letter sent by Flipkart on 7th Oct 2014, to all its customers

Dear Customer,

Yesterday was a big day for us. And we really wanted it to be a great day for you. But at the end of the day, we know that your experience was less than pleasant. We did not live up to the promises we made and for that we are really and truly sorry.

It took enormous effort from everyone at Flipkart, many months of preparation and pushing our capabilities and systems to the limit to be able to create this day. We were looking at fulfilling the dreams of millions of Indian consumers through deals and offers we had painstakingly put together for months.

And though we saw unprecedented interest in our products and traffic like never before, we also realized that we were not adequately prepared for the sheer scale of the event. We didn't source enough products and deals in advance to cater to your requirements. To add to this, the load on our server led to intermittent outages, further impacting your shopping experience on our site.

An unprecedented 1.5 million people shopped at Flipkart yesterday. While we stand humbled by the sheer faith that such a large number of customers have shown in us, we are unhappy that we were unable to live up to the expectations of millions more who wanted to buy from us yesterday.

And this is not acceptable to us.

Delighting you, and every single one of our customers, is absolutely the top most priority for Flipkart and we have worked very hard over the last seven years to earn your trust. Yesterday, we failed that trust. We have learnt some valuable lessons from this and have started working doubly hard to address all the issues that cropped up during this sale.

Price Changes As we were preparing various deals and promotional pricing in the lead up to the sale, the pricing of several products got ​changed to their non-discounted rates for a few hours​. We realise that this breaks the trust our customers have put in us. We are truly sorry for this and will ensure that this never happens again.

Out-of-stock Issues We ran out of the stock for many products within a few minutes (and in some cases, seconds) of the sale going live. For example, most of our special deals were sold out as soon as they went live. We had ensured availability, anywhere from hundreds to a few lakh units for various products, but it was nowhere near the actual demand. We promise to plan much better for future promotions and ensure that we minimise the out-of-stock issues.

Cancellations We had large number of people buying specific products simultaneously. This led to some instances of an order getting over-booked for a product that was sold out just a few seconds ago. We are working round-the-clock to ensure availability of additional units for these products and will do our level best to ensure that we minimise any cancellations.

Website Issues ​We realise that the shopping experience for many of you was frustrating due to errors and unavailability of the website at times. We had deployed nearly 5000 servers and had prepared for 20 times the traffic growth - but the volume of traffic at different times of the day was much higher than this. We are continuing to significantly scale up all our back end systems so that we do a much, much better job next time.

Everything that we have achieved at Flipkart is purely on the basis of our customer's trust and faith. This is why we come to work each day and continue to remain extremely passionate about building the best possible customer experience for Indian consumers. We failed to live up to this promise yesterday and would like to apologise once again to every single customer for our failure.

Thank you.

Sachin and Binny

Tuesday, October 07, 2014

Blue Ocean Entrepreneurship: an idea worth pursuing

Kim and Renee brought out the concept of Blue Ocean Strategy in 2004 through their research and writings and popularised it. That was related to the organizations that were trying to compete and were finding it difficult to sustain in the market full of related products and services and the pressures of the market in improving quality, reducing prices, designing well defended promotional schemes etc.  This is where BOS proposed to create a new market, develop a new product, convert noncustomers to customers, convey a new message, so that one does not feel the pressure of competition.  It was to kill competition and create a blue ocean where there is no competition.  And when in this blue ocean, competitors take birth, participate and compete and start hitting and eating your share it converts the blue ocean into red ocean.  This is the time one needs to come out of it and create another blue ocean. This strategy helped many companies to learn lessons and create blue oceans.

Now, Kim and Renee expand BOS towards focusing on individuals as they propose Blue Ocean Leadership for attention and practice which opens new way of looking at the problem of leadership at different levels. Traditionally most of the leadership development programs have been focusing on the values, qualities, and behavioural styles, generic practices in isolation of market/customer requirements, and the impact of executive's potential on organizational performance.  BOL questions it and suggests to concentrate on the acts and activities, developing different ways to face market realities, and to engage and empower employees to lead and take appropriate decisions at their level.

I think we need to concentrate on developing Blue Ocean Entrepreneurship (BOE) in India which could be conceptualized and practiced through the learning of BOS and BOL. The primary learning of BOS is to develop new products and services and make competition irrelevant; however it has many other facets as well. It is not merely developing new and innovative products and services but also to create and follow new modes of delivery to reach out to the customers and to explore new markets and play role in this ‘uncontested market space’.  The whole focus is on creating, adding and delivering value to the customer.  This opens new kind of thinking in the minds of entrepreneurs who toil hard to sustain themselves in the competitive market. The untapped customers have to be studied and accordingly products and services have to be innovated and served in order to create a new market segment.

When I look at the young entrepreneurs, I tend to believe that the energy and enthusiasm that they possess and depict would guide them to explore new markets and converting non-customers to customers through value added products and services would be one of their focus areas.  The use of technology for establishing backward as well as forward linkages has been possible through the innovative ideas and their effective implementation in this direction.  If one looks at some of the products which are prominent and market leaders, it can be easily observed that they had out-of-the-box thinking which made them a key driver in their success.

The success stories of Flipkart and TravelKhana, naukri.com and makemytrip.com, VLCC and Shehnaz Herbals, Shyam Antenna and SuKam and many others tell the tale of exploring uncontested markets and delivering value to the customers to their satisfaction.  In fact in one or the other way they have been the result of Blue Ocean Entrepreneurship.  It really becomes more important in the light of one of Bloomberg surveys which concluded that 80% of the startups get closed down within 18 months of their starting up.  One of the important reasons for their failure could be their venture adding to the size of red ocean and competing with the existing brands.

And another important reason for failure is leadership crisis.  Not all the entrepreneurs who ideate and long for sustaining a good business plan might be good leaders. Leadership all together is a different kind of activity as compared to developing a creative idea and seeing it through. Hence one need to understand product and people through the same eye and travel through the journey focusing on both of them successfully, and that is really a greater challenge for every entrepreneur who does not want to fall within that 80% of closing down startups.    

The workforce in the non-traditional blue ocean organizations is required to possess different set of skills, talent and drive.  Their passion towards their job drives them contribute positively towards product architecture, ownership of their decisions and achieving set goals within a given timeframe. They do not require conventional leadership training focusing on better skill orientations and behavioural dispositions; rather they visualize larger goals of life, larger contributions in product building, concern about leaving behind memorable, profitable and sustainable legacies. They have to be equipped with corresponding acts and activities in order to deal with day to day market realities. This is where BOL tends to guide them.

The idea of BOE primarily focuses on two important Ps, one Product (or service) and another People.  The approach of the entrepreneur has to be such that both of them are aligned to the larger goal of the business proposition and in that direction one has to look beyond short term gains and concentrate on long term sustainability.  We grew up with a thinking of starting small and thinking big.  Though this still holds true I have began to believe that in the times of easy availability of funds one can afford to start big as well as keep thinking big.  BOE shall be an excellent concept to be practiced by the entrepreneurs for the long life of their venture.  I shall dwell upon its practical aspect in my future posts.