For the inaugural masterclass of the second edition of Lightspeed Extreme Entrepreneurs, we couldn’t think of a better person to enlighten the new cohort than somebody who has had a front-row seat to two of India’s most promising e-commerce ventures. Vaibhav Gupta (“VG”) belongs to the “Flipkart mafia” and is now a co-founder at Udaan, a Lightspeed portfolio company and the fastest unicorn in the Indian venture market. Building for a unique SME audience that are new to the internet, VG and team epitomize what it means to discover a market and operate with extreme clarity. We’ve tried to capture below some of the prized learnings that emerged from his highly authentic conversation with Harsha Kumar on “Building for Bharat, Building for Scale.”
The Clarity and Belief
“This is how trade operates today, but 15 years from now it won’t be the same. It has to be different — more tech-enabled, efficient, genuine and so on.” This is the conviction with which the Udaan team started their journey.
VG emphasized that as founders, you need to have the clarity and the imagination of where the world is going, and why is it going there? Not just the individual, but all co-founders need to be aligned on the vision. This isn’t just an academic exercise. It has very practical implications. Operating without this clarity will cause your teams to sense it soon; it’s often the first thing to come in the way of making progress. This clarity also gives you the confidence to invest resources today in the hope of future gains. Of course, the level of aggression gets governed by the amount of resources (capital, people etc.) that you have, but the direction needs to be set regardless.
When going after new markets, you can’t escape the question of “depth.” However, on some level, you need to “believe” that the market is there. If you’re listening carefully, you will start getting a sense of it from the environment (customers, employees etc.). If the team is feeling good, something is working. If they’re not, something needs fixing. Don’t wait for the market to adopt and give you the signal. In early markets you need to PUSH and be at the forefront of gradually shaping consumer behaviour. Yes — get the product right — think deeply about what the customers want — but once you’ve figured it out, just PUSH. The market won’t adopt by itself.
The Experimentation, Execution, Feedback loops, and “Feeling”
It was very compelling to hear how product discovery for Udaan happened entirely on ground. Even when the company was at a 300–400 buyer scale, VG would find a way to meet 30–40 of them in any given week. And it wasn’t just the founders. Even engineers spent time in the field (credit to Amod)! When you talk to customers and “feel the engagement”, you just know what to build.
Going down this path requires almost a complete shift in mindset. “All of us are very used to thinking and executing. Flip it. Execute, and then think.”, said VG. This reversal in perspective manifested in how Udaan has consciously and beautifully built the ability to conduct parallel experimentation. Even today, when the company launches new categories — a team goes out and starts working on it on the ground. They get orders, anywhere (on WhatsApp even). The product never gets built before the orders start flowing. When you find things that are working, scale them. Double it, triple it. If it’s not doubling, why not? Go back and fix it. There’s almost paranoia about understanding what is going on in the buyer’s head. No matter the means (visits, surveys etc.), do everything you can to collect even more information than you need. Someone’s meeting a customer? Just dump the notes on WhatsApp right after! The approach lets you get out of your head, and gives a lot of depth to your thinking. It enables you to chase the problem, not the solution.
Systems and capital are two cushions without which rapid experimentation often doesn’t sustain. If you’re going after growth and adoption while still figuring things out, you can’t escape thinking about capitalization. Also acknowledge that if you don’t build systems, things will start to fall apart. There will be debt and redundancy. Again, the takeaway is not to let this come in the way of experimentation. Don’t stop and design. Let people run, and empower them to progressively systematize over time. Finally, not every decision you make will be right. Being wrong is okay. Going through the ups and downs will be a natural psychological battle you have to fight. Just be honest in your gut — “Broadly, am I moving in a direction where things are working?”
The Org and People
“Team is one of the most critical ingredients to scale rapidly. We’re blessed to be working with the people that we have. Our philosophy has been to bring on excellent people and empower them.”
VG explained how what they look for in new hires evolves as the company grows. In the first 2–3 years, they looked for people that were very ambitious, AND, had a high degree of intellectual honesty. These people had the internal drive, as well the guts to say “VG — what you said was rubbish, it didn’t work. Here’s what I’m going to do instead.” Now that the company is scaling up, the founders look for people who ALSO have the ability to build systems. People who can turn what they’re doing into a machine. People who can find PMF, start seeing repetitive things, and then build the process/ capability to institutionalise it. Judgement is another trait to form a point of view on — “If I get this person in, do everything to make her successful; will she make the right decisions?”
Udaan also prides itself in a no-title lean operating model. That doesn’t necessarily mean lack of structure. As you run experiments and initiatives, you need to define ownership. But what it ensures is that roles get oriented around problem statements, not the titles.
The unique Indian SMB customer
“B2B is the new B2C”, is something that VG had remarked on LinkedIn in the early days of starting Udaan, partly to motivate themselves! However, he explained how India is so unique with a large number of small businesses. While the internet penetration is happening fast, purchasing power continues to be very low (reflected in ticket sizes). The team’s view was that large volume of trade in low ticket sizes is served much better in the B2B context than B2C. The statement is also underpinned in behavioural aspects. More than enterprise-y sales, SMBs emulate consumer behaviour more closely — they care for selection, price, reliability etc.
The SMB landscape in India is complex and highly diverse. A merchant sitting in Patna and another in Hyderabad behave differently, and optimize things differently. Yet, TRUST is a big thing. It’s heavily engrained into our culture. Can I rely on this person for my business? Will my business shut down if these guys don’t deliver? The bar is higher than consumer businesses where risk of trial is low and one can easily let go if it doesn’t work for them. Here, in all your interactions with the customer, more than anything else the business owner is trying to assess your personality and character. VG’s advice for founders is to figure out the most important metric for trust in their business and never compromise the quality on that attribute. In Udaan’s case, the team realized that payment security and timeliness is the #1 thing merchant cares about, and they invested heavily behind that capability. Errors with everything else (defective products, basket sizes etc.) have been forgiven, but when payments get delayed, merchant is very much shaken.
Finally, VG observed that the inherently repeat nature of the business changes things. It completely shifts how you think about product, business etc. The thinking is a lot more centred around the buyer, more than the transaction (as in the case of B2C). Udaan tries to insert itself into the merchant’s existing behaviour, and then closely shapes it over time.
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