Aspiring entrepreneurs looking for insights on how to proceed from start to scale and navigate the turbulent journey will find a wealth of advice in the book, Saying No to Jugaad: The Making of Bigbasket by TN Hari and MS Subramanian. It is a practical blend of storytelling and business tips in various steps of the startup journey.
TN Hari, a graduate of IIT Madras and IIM Calcutta, heads HR at Bigbasket. His other book, coauthored with YourStory founder Shradha Sharma, is Cut the Crap and Jargon (see my book review here). MS Subramanian is head of analytics and Bigbasket, and was earlier at Dell, McKinsey, Infosys, EY, and PwC.
The 15 chapters span 170 pages (including eight pages of photographs), and make for an informative and entertaining read. A chronology or timeline of key events in the company’s history would have been a welcome addition to the material.
Here are my 12 key clusters of takeaways from the book, summarised below. See also my reviews of the related books Why I Stopped Wearing My Socks, No Short Cuts, Failing to Succeed, Young Turks, Startup Land, I Love Mondays, and Arise, Awake.
1. Founding teams: extroverts and introverts
Not all startups are flashy with a high-profile media presence; many started off away from the limelight. “It was only when some of the unicorns began facing trouble because of excessive cash burn, poor unit economics and recurrent issues which were far in excess of their toplines that Bigbasket drew attention,” the authors explain.
Bigbasket CEO Hari Menon is charismatic. and also was lead guitarist with a rock band, whereas VS Sudhakar stays away from the limelight and has an unwavering focus on process excellence. None of the founders are active on social media either.
The founding team should be cohesive, and balance multiple roles, personalities, and strengths. At scale stage, it may help to have one founder play a leading role, though others may choose to have well-coordinated founder teams working together.
2. Learning and unlearning
As multiple generations of startup founders rub shoulders in the new business wave, it is important to draw lessons from the past while also being willing to learn new lessons and unlearn some old ones. These include changing consumer behaviours, and the core fundamentals of unit economics.
It is important to distinguish between tech-led and tech-enabled companies, the authors explain. In online commerce, retail companies have to learn tech (Walmart) and tech companies have to learn retail (Amazon). The starting DNA plays an important role in determining the nature of the journey.
The Bigbasket founders also learnt vital lessons about profit margins and money management from their previous startup, FabMart, as well as ‘dotcom era’ failures like WebVan. “The years 2014 and 2015 witnessed mindless cash burns and collective loss of rational thinking in the startup community in India,” the authors recall.
In such a wave of collective loss of conservatism, it is important to stand up to groupthink and take the right calls, the authors advise. At the same time, this needs to be balanced with the need to raise funds and incur some “good” costs.
3. Culture and values
“Rapid scaling can tear apart the culture,” the authors caution. They advise founders to explicitly define the elements of their culture, create a code of conduct, communicate this widely and frequently, and abide by the principles each day. “If the senior leadership understands how culture can drive business, the results are magical,” the authors advise.
The organisational values should blend current status and future aspirations. In the case of Bigbasket, these elements were speed, agility, customer focus, ownership, freedom, fairness, and responsibility. Care was taken to make the environment inclusive, and ensure safety and welfare of women employees.
Values and performance are celebrated during annual events through awards such as Beacon of Values and Bigbasket Rockstar. The rewards are given purely on merit, without regard to rotating awards.
Having a solid work culture helps handle the tough journey of a scaling business. “In effect, every professional ends up having two families – one at home and one at work,” the authors explain. Joining a startup is like marrying into the team.
While frugal principles are important for startups, one must stay away from using ‘band-aid’ solutions or quick-fixes without addressing root causes. Too much ‘jugaad’ may lead to tech debt in the long run, though it may help speed to market in the short run.
Bigbasket learnt this the hard way, and had to implement practices like including a regional business unit in the headquarters (Bengaluru), and having separate heads for Mumbai and Pune, though the cities are close to each other. It also had to hire a separate General Counsel to manage legal issues.
Frugality also extended to marketing. Good service was seen as the best marketing, but digital techniques like SEO/SEM also helped, along with ads on vans and bus-stops. Web and app platforms were equally leveraged by Bigbasket, despite the temporary market madness when some companies began to shut down their websites.
Series B funding led Bigbasket to invest in celebrity endorsement with Shah Rukh Khan as well, given the image of his professionalism and dedication to work. It brought a sense of pride to delivery personnel and pickers as well.
5. Talent and innovation
Bigbasket recruits people not just from premium educational institutes or corporate backgrounds, but those with ground-up problem-solving skills, ability to collaborate with humility, and willingness to be coached. Non-performers are given extra coaching, and leaders are expected to groom individuals to scale their abilities. Employees are not expected to badmouth competitors either.
A National Training Head was hired to drive customer-centricity across all levels of the company, and keep a focus on quality even in the face of rapid scale in business lines and geography. Special programmes were devised for employees, supervisors and leaders.
Certification was introduced for trainees and trainers, along with refresher training for those who slipped in performance. Creative storytelling approaches used storyboards and videos. Mindful leadership and conflict management were also addressed.
An employee satisfaction survey is administered for the blue-collared workforce as well. Basic respect for dignity is what they crave, according to the authors. Jobs at this level will only continue to increase, hence the importance of skill-building and creating a culture of respect, loyalty, and love.
An innovation team was formed in 2016, for activities spanning cold chain solutions, quality of produce, and warehouse automation. Insightful questions and data-centric framing are encouraged. Trends to watch are use of image processing technology to assess quality of produce.
The company has a culture of continuous improvement, with regular updates to processes and metrics. This includes planograms (product and shelf layout) to optimise selection times and fill rates.
6. Customer focus
The authors explain the intricacies and customer needs for the grocery business in great detail. For example, high fill rate calls for deep understanding of inventory, supply chains, manufacturers, farmers, and distributors. Customers have high expectations with respect to selection, quality, price, delivery times, packaging, digital user experience, options like chopped fruits/vegetables, and refunds/returns.
Bigbasket devised ways to deal with customer fraud without causing inconvenience to honest customers. It has a ‘no questions asked’ policy for customers to return items if they are not satisfied with them. In every meeting, its employees are required to imagine that they were standing in the imaginary shoes of the customer.
Customer empathy and effective engagement processes have improved Net Promoter Scores for Bigbasket. This applies to the online ordering process, product quality, delivery, and resolution of complaints. Thorough training is given to the customer experience executive (delivery person), right down to use of cutters for opening crates.
The authors also identify a range of trends in customer habits with respect to food consumption in India. These include increased uptake of millets, fruits, organics, dairy, and animal-based proteins. There is an “explosion of choice” with respect to international brands and exotic products. Bigbasket designed new offerings and services for customers to reflect these trends.
Though fruit consumption is increasing, it is still lower than WHO recommended levels of 400 grams per person per day. Bigbasket aims to boost fruit consumption, particularly since India is the second largest producers of fruits and vegetables in the world (300 million tons per year).
7. E-commerce myths and trends
The authors debunk three common e-commerce myths with regard to discounts, profits, and scale. Cashbacks and discounts are effective only to accelerate channel switching, or to induce habits in new greenfield territory (eg. Uber, Ola). In contrast, online retail competes with modern retail and kirana stores, and offers convenience.
The online grocery business has narrow margins, and does not offer “super profits.” Online businesses have broad reach but also challenges in terms of visibility, discoverability, transactions, and delivery, the authors caution. “Offline to online and vice versa will be the norm,” they predict.
Other trends to watch are the positioning of tech-driven marketplaces (eg. Alibaba), store brands, private labels, and mergers and acquisitions in this space. Regulators are also trying to find the fine balance between promoting innovation and protecting local players.
The chapter on home-grown technology break down its components into phases of the company’s journey, along with profiles of tech managers and their backgrounds. A combination of directional leadership and participative leadership is called for. Tech skills must be combined with the right roles, processes, mindset and culture. Regular stocktaking and reflection helps address challenges like technical debt.
For example, Bigbasket hired VPs for Engineering and Product at scale stage (other options were to create a position for CTO). Design thinking and ERP skills were brought in to ensure robust micro-services architecture, quality assurance, and capacity building of engineering managers.
In addition to IT, tech issues arise in packing together materials at different temperatures, eg gels, insulation boxes, mini warehouses. Other solutions described include a mix of van and bike delivery.
Bigbasket has a razor-sharp focus on analytics as a strategic differentiator and force multiplier. It spans conversion rates, customer experience, delivery routes, and warehouse management. Effective use of analytics helps create a culture of hypothesis-driven problem-solving, and could even improve understanding of the customer better than humans can do.
Phase 1 of analytics addressed personalisation, push notifications, and visualisation. Phase 2 (for growth from $50 million to $250 million) focused on clickstream analytics, customer segmentation, and sales performance. Phase 3 ($250 million to $500 million) addressed the use of actionable insights for recommendation systems, shopping assistants, pricing solutions, and forecasting.
Phase 4 (beyond $500 million) will address deep learning techniques to reduce variability and wastage, and extend earlier successes to acquired companies as well. Challenges can arise with respect to explainability of AI and ML, and in getting employees to accept automation of certain processes.
10. Ecosystem and partnerships
Bigbasket has entered a number of ecosystem partnerships for its line of business such as CFTRI for technology to chop vegetables. There are farmer-connect programmes, structured like a “cooperative within a corporate”. This includes collection centres, storage facilities, support from agronomists, and prompt payment services.
National/local supply and distribution are coordinated via collection centres in 35 locations as well as distribution centres across 25 cities. Other experts also gave valuable insights, eg. on the importance of supplying tender coconut, aloe vera, and fresh raw turmeric.
Suppliers and vendors are treated as partners, and challenges are collaboratively solved. Delivery slots are scheduled, with set targets for turnaround times. Trends to watch are use of IoT and robotics for picking.
In keeping with the environmental movement, returnable crates are being used in order to reduce wastage of packaging material. Ideas are also being tested from startups in YES Bank’s entrepreneur initiatives.
11. Funding and acquisitions
Bigbasket had a strong faith in its inventory model for groceries though it was asset-heavy. This model did not appeal to investors like Tiger Global, who ended up investing in Grofers (in addition to Sequoia and SoftBank). But the asset-light model did not work out for many competitors, who eventually pivoted to an inventory model or shut shop, the authors observe.
Bigbasket also bought four startups: Delyver (hyper-local delivery via bikers), Savis Retail (smart vending machines), RainCan, and Morning Cart (morning deliveries, eg. newspapers, milk). The acquisitions helped expand into express delivery, subscription models, and a marketplace of specialty stores.
Well-assessed and assimilated acquisitions can reignite the entrepreneurial spirits of the acquired startups, the authors recommend. There should be culture fit, and the new founders need to have empowerment and freedom to collaborate on new ideas.
12. The road ahead
“The last 10 years, particularly, have witnessed a tectonic shift in the overall startup ecosystem,” the authors observe. They are going beyond global wage-arbitrage models of earlier entrepreneur waves, and are embracing cutting-edge technologies, solving local problems, and attracting international investors. Companies like Flipkart have inspired many more to launch their own startups.
The authors sum up with some parting words of advice for aspiring entrepreneurs: stay grounded, connect to your purpose, delegate but do not abdicate, avoid jargon, value face-time with teams, and never forget the importance of the customer. “The big picture is important, but don’t lose touch of the ground reality,” they sign off.
The book is packed with a number of inspiring quotes, and it would be appropriate to end this review with the sample below.
There is only one boss. The customer. And he can fire everybody in the company from the chairman on down, simply by spending his money somewhere else. – Sam Walton
Technology, like art, is a soaring exercise of the human imagination. – Daniel Bell
Planning is everything. The plan is nothing. – Dwight Eisenhower
Without data, you’re just another person with an opinion. – W. Edwards Deming
The universe is made of stories, not of atoms. – Muriel Rukeyser
YourStory has also published the pocketbook ‘Proverbs and Quotes for Entrepreneurs: A World of Inspiration for Startups’ as a creative and motivational guide for innovators (downloadable as apps here: Apple, Android).