About 18 months back I had written about the perils of misplaced goals at a start up.
Today , I see another cool outfit at a similar inflection point. Flipkart is great at doing what it claims to do, and customers(even my wife and close friends) love it. They are in the business of delivering books at your doorstep - free of cost. No shipping costs, you get discount coupons and prices are heavily discounted.They pride on having an excellent UX on their website and a simple checkout process and I can tell you that it is good. But then I got an opportunity to get close and I realized that they can screw themselves up if they are careless.
Ok, let me confess - their website is cool, the product is nice and when I got an opportunity to interview for a Product Manager, I took it up. I thought it was a great way to figure out what they are up to and how they handle product management. The person who interviewed me was apparently either the founder or some kind of Senior PM.
After the mandatory 'tell-me-about' yourself, he posed me the first PM question - "If you are the PM for www.google.com and in charge of their search algorithm, how would you measure the effectiveness of a change in the algorithm". I answered that I would measure the change in bounce rate(% of people leave without clicking a link) - an increase would be bad. And the average numbering of the link people click to leave the site to the page they were looking for - an increase in this number is bad.
Someone working @ Google can probably add more here but this is what I could come up with in about 30 secs. I don't think its that bad..but then there are ways to counter the answer if you want to prove you are smart.So the rebuttal was this - Is an increase in bounce rate always bad? I replied that in general it is true - even Google Analytics color coded an increase with red! To that the interviewer gave me the example at Flipkart - if you put prices of books on the search page, more people may leave the site. So can you conclude that putting prices was a bad idea. Gotcha, you got me there with an exception case.
Anyway, the rest of the interview proceeded on similar lines.When asked about improvement opportunities I told them that the number one thing for them to do is to use the website to improve customer acquisition effectiveness -i.e add hooks to social media and spread the word because at the rates they give books, they can't afford to do much marketing and their business model was built on focusing on the product and less on marketing.
Overall, it was not too great - I was of the opinion that their current website does precisely what it claims to do and not much should be changed just because they hired expensive software engineers but he wanted feature ideas. My final impression was that the company had assumed the identity of this uber-cool hi-tech start-up filled with techies wanting to create a great website. And I thought they were in the business of selling books.
Don't get me wrong.It is great to have some cool technology, but technology in case of Flipkart is just an enabler.Flipkart is in the business of selling books and their website is the best salesman they have got.Pamper him, reward him and enable him with tools to get more customers.But do you change your company's culture and goals to suit his whims and fancies? No. I think at this point, Flipkart has some good PR going on. Customers love it, they have a smooth working product.To grow from here they should focus on 3 important things
- Reduce costs to acquire customers - Incorporate social hooks on the website, have a referral program, get repeat customers, increase customer engagement on the site.How about having the author(for Indian books) launch books online at FlipKart.
- Improve operational effectiveness - I can't suggest much here - except that they need to start thinking of themselves as a logistics business(look at Amazon - not AWS).i.e reduce inventory costs, bargain better discounts from suppliers etc. How about using a group buying to ask for better discounts from publishers? (GroupOn meets FlipKart)
- Get into other businesses, but carefully - The interviewer told me that they wanted to be more than just a basic e-commerce site.I would be careful about this. They have a good thing going on and their #1 priority should be to not screw that up.
Flipkart is working on an established business model. They should look at not what Amazon is doing but what they did in 1999-2003. Getting into other business is a lucrative prospect but it is important to not mess up things which are working perfectly well.
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