Failing to Succeed: The Story of India’s First E-Commerce Company

by K. Vaitheeswaran

In 1999, when hardly anyone in India transacted on the Internet, K. Vaitheeswaran co-founded India’s first e-commerce company. Yet, years later, when e-commerce was exploding in India—despite enjoying first-mover advantage—Indiaplaza shut down. What went wrong? Lack of funding? Wrong strategies? Or was it ‘something else’?For the first time ever, Vaitheeswaran reveals that it was indeed something else—a set of inexplicable events that destroyed what could have been a profitable business (an extreme rarity among technology start-ups). He bares his extraordinary trials and tribulations while dealing with business failure and the impossible pressures that can threaten entrepreneurs in India. Coming at the back of stories of young start-ups raising billions of dollars in funding and creating unicorns in just a few years, as well as the recent setbacks in the e-commerce industry, Failing to Succeed delves deep into the dark side of starting up and its myriad pitfalls.Filled with interesting anecdotes, tongue-in-cheek observations, amazing customer insights, hard-hitting predictions and behind-the-scenes industry happenings, this book is an extraordinary unravelling of the challenges facing technology start-ups in India. It is a must-read for aspiring entrepreneurs, investors, industry professionals or business school students, and anyone interested in India’s start-up ecosystem.A powerful narration, Failing to Succeed is eventually about finding ways to move forward and succeed despite failures...

Genres: Business, Nonfiction, Entrepreneurship, Management, Memoir, Biography

223 pages, Kindle Edition

First published July 1, 2017

Reviews

[Abhaga · Rating 3 out of 5]

Reading this account of how IndiaPlaza started, ran and finally folded, your heart goes out to Vaithee. His resolve of seeing it through till the end, integrity in the face of sheer adversity is inspiring. IndiaPlaza being one of the early players in the field, has a lot of firsts to its name. The overall feeling you get after reading through the whole saga is that they were early to the market. And when the time came, too set in their ways to change course. Having been a vendor to them, we did lose some amount of our own when IndiaPlaza went down. Reading now about the horrible time that Vaithee had is very depressing as a startup founder.

Having started a company in 2008 and by virtue of having simultaneous vendor relationships with both IndianPlaza and other upcoming book retailers for 3-4 years, I did have my own view of how this unfolded. And on that account, I feel book is rather uncharitable to Flipkart. I saw dozens of online book retailers start and shutdown in that period. Flipkart won the book category from IndiaPlaza not on the back of copious capital and deep discounts but by superior execution. I completely agree that once the big money came in, it all went haywire but those first 2-3 years from 2008 to 2010 were different.

And that is my gripe with the book. Even when fully agreeing with him, it becomes tiresome to hear the same criticism over and over again. Also all the blame has been externalized. We hear about all the pioneering innovations IndiaPlaza/Fabmart did, most of them becoming popular, getting traction but in the end not resulting in enough business. Hardly any mention of things that they tried and were rejected by customers. Assumptions they made that didn't pan out. Calls they made that turned out to be wrong.

I had hoped that with the benefit of hindsight, Vaithee could take a more critical look at what ailed IndiaPlaza apart from the external forces out of their control. It is telling that Infibeam that didn't raise much funding and managed to survived through the same madness, doesn't get a mention. I agree with most of what he has to say about the LMS game that large ecom companies are busy playing. I think, FK has already ceded the battle to be a general retailer to Amazon. But all that should have been one chapter at the end of the book. This book was supposed to be the story of IndiaPlaza.

All said and done, this is an invaluable document of how one of the first internet companies in India lived and died.

[Surabhi Sharma · Rating 5 out of 5]

Failing to Succeed is not a guide book to succeed, it gives an insight into the entrepreneurship and startup. IndiaPlaza/Fabmart came into existence in 1999 as an online retailer when there was hardly any competition in online retail to give them a fight.

K. Vaitheeswaran tells the tale of the rise and fall of IndiaPlaza, India’s first e-commerce company lasted for 14 years. He discloses that an inexplicable set of events that destroyed what could have been a profitable business. He stumbled not only once but many times and trials and tribulations gave him a hard time dealing with business failures and pitfalls. An entrepreneur he was always remained hopeful and stayed till last.

If you are planning to launch a new venture or dream to become an entrepreneur or working in a start-up or a non-fiction or biography reader or a reader looking for a good book or a student. This book is for you.

A true and honest account everyone must read.

https://thereviewauthor.com/

[Ankit Agrawal · Rating 4 out of 5]

The heart breaking story of one of perhaps millions of entrepreneurs who have given everything in life to build something unique and worthwhile. Vaitheeswaran is the founder of the now shut down Indiaplaza.com (erstwhile Fabmart.com) and has penned the story of his failed business from beginning to end. His company was the pioneer of many of today's ecommerce business practices but seems to a case of being in the right place at the wrong time. The role of heartless investors who left the business paralysed and Vaitheeswaran to deal with the whole mess is amazing. The constant abuses, harassment and threats he faced are enough to leave one shaken to the core. At the end of the day, India is an unforgiving place to do business and there are no orderly shut downs or winding up of failed businesses. There is no legal protection from creditors and threat to one's life can be very real should one fail to pay dues owing to bankruptcy. It brings to mind the case of the founder of Stayzilla.com who was thrown in jail for inability to pay off vendors. Finally, the Indian start-up echo-system is largely a closed, cosy club where the IIT-IIM-Ivy League bunch scratch each others' backs. The educational pedigrees of the funded and the fund'ers' coincide to a large extent. In a world full of noise, this one filter enables those running funds to narrow down their choices and make decision making easier and difficult to question. The ecosystem is the poorer for it and may be harmed as well.

[Anirudh Jain · Rating 5 out of 5]

One word WOW! Someone needs to make a movie of this guy.

This guy pioneered an internet industry at a time when most people did not even know what the internet was. He is the OG of Indian e commerce and it is sad that most people do not even know about him. What Flipkart has done, he did it years before. Now Flipkart is getting into flight bookings, he was planning to do the same in 2005! Mad respect for this person.

Now lets talk about the book. I have long criticized that whenever books are written by Indian businessmen on their journey, like the 2 minute revolution or dreaming with your eyes open they always get into an incoherent ramble about their views on the industry or any general topic. They cannot maintain objectivity and stick to telling the story. If you compare it that will never work by Marc Randolph, he stuck to just telling the story, that's the way it should be. The incoherence rambling adds to the noise and reduces the consistency of the story and it always sidetracks from the main objective.

Not in this case, this guy practically revealed the playbook and the metrics by which e commerce companies should abide by. Additionally his views on business, profitability and nature of startups in general is worth gold. If he plans to write a book just on startups and business I will be like the meme and say "Shut up and take all my money".

The book not only chronicles his journey but is also sprinkled with acerbic renditions of the current state of affairs. His toxic views on the world of VC, clueless startups, founders that increase their own wealth is radical but it helps clear the rose tinted fog of startups and the valuations jump which the media helps build.

His journey from heights to depth of hell, his views on the startup culture and his points on how to run a business makes this book probably the best late night drunk purchase I have ever made.

[Nandini vaidyanathan · Rating 5 out of 5]

Prometheus didn't say: why me?!!

In 2011, at the same time that Vaitheeswaran was being first singed and then burnt on the stake, I was delivering a keynote in Riyadh at an international conference on The Art of Failure. I think I had about 6 slides. Those six slides essentially contained the horrific script of failure and my message was that although the startup community revels in romanticizing failure, in truth, there is nothing more debilitating and devastating to the human intellect than failing , despite and not because of.

As I read Vaitheeswaran's book, I realised all the things I spoke of, he lived them. Every single sordid, searing detail. It is a bruising book. He makes no bones about sharing how badly he is bruised and in doing so he actually makes you examine real and imaginary wounds on your own self. He doesn't allow himself the luxury of Band-aiding anything and in not doing so he denies you the luxury of reaching for one. Whoa!!!!

Somehow this book made me remember RD Burman.

[Vadassery Rakesh · Rating 4 out of 5]

My son was talking about starting a start-up since a year and today I have told him this is a must read for him and his friends before going a step forward. The author being known to me, I really consider my self lucky when i realize that this man would have been the equivalent of Jeff Bezos if lady luck had favored him. I am sure Goddess Lakshmi would bestow her kindness on him soon.
Author is calling a spade a spade at many instances in the book, which should be a learning for the aspiring entrepreneurs. The writing style is superb though the author gives the credit for this to the editors. But knowing the author well, I am sure he's being very humble here.
It was heartbreaking for someone to see the decline of his start up. But the success rate among start ups are very low. We see only maradona, messi, sachin or a napolean and tell the short people about how they became successful, so what is your problem. But the fact of the matter is, only one in a million becomes a success and the rest gets pushed down because of their miniature size. This is true with start ups also if they are not having that pedigree defined by the investors. A Dhirubhai or Gautam bhai is among millions, it is very difficult for people without a pedigree to get acceptance and hence succeed.
I really enjoyed the book and it broke my heart too.

[Karthik Kailash · Rating 4 out of 5]

Now there is Flipkart, Amazon and Snapdeal. Before this, There was Fabmall,the original E commerce daddy. Slim chance that you know this company. Coz they failed. Failed to succeed.

This book is the impact of failure.And how failure can teach you.

In a candidate manner, K. Vaitheeswaran bares his heart open on his roller coaster ride in co- founding India's original start up and how he was flung off the coaster even as he held tight. But how he held on is the story,and in it are invaluable lessons.

The story that begs the question. How important is timing in an entrepreneurial journey.As it turns out, timing is everything. And if you are ahead or behind the curve, you are bound to slip off.

[Anshul Sood · Rating 5 out of 5]

Invaluable book on how luck and timing is everything in entrepreneurship.

[Pradeep Rajiv · Rating 4 out of 5]

honest take at the e-commerce start-up environment through the prism of India Plaza..an insightful read for contemporary enterpreneurs

[Ayush Jain · Rating 5 out of 5]

Introduction
I was randomly browsing the new offers on the Kindle Store when I came across this book. The title of the book was quite apt and it did catch my eye.

Ever since I have started questioning the fundamentals of societal structure, one question that has always perplexed me has been the question of Success. What Success really is? I wrote a blog post about this titled, “Your Idea of Success. Is it really your Idea?”, way back in 2014. As you can see, it now has been almost 4 years and here we are, still exploring this concept of Success.

Anyway, coming back, so I found this book’s title interesting, read the brief on Goodreads and decided to buy.

The book is about the advent, success and shutdown of India’s first E-commerce start-up Fabmart/Indiaplaza. I am sure people from early days of Internet (90s) may have heard of those names. I had read some articles about Mr. Vaithee and hence had an overview about the venture.

Fabmart — India’s first E-commerce start-up begins
This book is narrated and authored by Mr. Vaithee himself which hence gives you a vivid experience (thanks to his writing style) of everything that happened. It begins with the author toying with the idea of starting up, leaving a well cushioned job at Wipro to venture into the world of entrepreneurship. He was mightily influenced by the experience of amazon.com which was, in those days, trying to pioneer the e-commerce world and perhaps was the only reference point.

Along with 5 other co-founders the first e-commerce site of India was born, named Fabmart.com selling audio cassettes and CDs. To give you a perspective, we are talking about creating an e-commerce company when internet penetration was extremely low, world-wide-web had recently entered India and getting connected to Internet was a painful process of using the Dial-up connection. A lot of us millennials may have never seen internet that slow, you could literally see the images / content load line by line on the screen in front of you!

The author then takes you through some first principles of starting up (most of which happen to be same for Product Management).

What problem are you solving?
Are you solving it for reasonably large set of customers?
Will these customers be willing to pay for your solution?
Are you the first one trying to solve or there have been others who have attempted?
If others have already solved, are you bringing something superior or unique?
The author then shares some really amazing learning about

The concept of Better, Faster, Cheaper to evaluate start-ups
Selecting your Co-founders
Deciding Co-founders’ responsibilities and compensation
Seed-funding
Fabmart — So many firsts
As is there in any product, while taking the crucial decisions, the team at Fabmart needed some really important inputs and they used the concepts of Product Management really well. This just tells me that the first principles are just timeless. The way they executed in the absence of all the modern tools we have today is just exemplary.

Stalking customers in offline stores to understand customer buying behavior.
Deciding on whether to sell books or music online.
Getting the meta-data of the Music labels was a challenge, then getting it online was another challenge, music companies didn’t have it in online format.
Anyway, so slowly and gradually things started moving and Fabmart started getting traction. It is not very well known but Fabmart team deserves the credit for a lot of innovative and first of its kind solutions executed in E-commerce world which now just seem to be a norm.

First PIN based Payment Gateway
First E-commerce client of Microsoft Azure in India
BlueDart’s first step in E-commerce logistics
First to execute Omnichannel retail
First to sign up a celebrity singer to launch a Single exclusively online
India’s first Electronic Gift Certificates
India’s first E-wallet
First Customer Loyalty Program
India’s first Online Grocery store
First time COD in India
Diversifying into Books, Jewellery
The book then takes us through some day to day challenges of deciding the KPIs when you don’t have any reference point, signing up more music labels, singers to get more traffic and all along sticking to the first principles of business to ensure that this is a self-sustainable business and not a VC money driven that now-a-days is.

Fabmart starts to expand beyond music and gets into books and jewellery. The author talks about the challenges faced and how they finally launch these online. In future, books become one of the bestselling categories for the business.

This was the time (around 2000) when the Dotcom bubble bust was happening in US and hence whenever Fabmart team was meeting the investors, they were interested in valuation more than anything else. The company was able to raise 25 Crores as Series A in this turbulent time.

Fabmart Goes in Offline Retail
The next part of the book is about how Fabmart goes in offline retail and builds the brand Fabmall. Most of you may not know this but Fabmall was acquired by Aditya Birla Group in 2006 and re-branded as More stores, fairly well known now.

In spite of the fact that Groceries as a category will be difficult and low margin venture, Fabmart went ahead and launched India’s first online grocery, along with selling it offline in Fabmall. Some really creative warehousing and supply chain strategies had to be executed by the team.

This was also the time when the team started off COD for groceries (in 2001) and then extended it to other products such as books, movies, music, watched etc. But because of all the challenges that COD brings with itself, the team decided to shut COD down in 2004.

Fast forward to Indiaplaza — Cash Crunch Begins — Investor Challenges
Author then talks about a lot of business challenges that were being faced because of which finally, the offline business and the online business were separated. Because of the recent Dotcom bust, no investors would even want to listen to anything that had “.com” in it raising funds for the online business was becoming daunting.

I would try to fast forward the summary here. There onwards, author details about tonnes of challenges that were faced because of the Investors, Cash Crunch etc.

What is commendable to read in the book is that in spite of owning around 2% or so of the company Indiaplaza, the author somehow became responsible for all the troubles that the company faced. The challenges of ever changing business conditions can be navigated well if there is money available. The responsibilities of the current investors were not executed and hence Indiaplaza had to face severe situations.

I am highly impressed by the way author keeps his morals and integrity standing strong in spite of the tough, nerve wrecking situations around him with vendors, creditors, police etc. Reading about all the struggles that he went through is highly inspirational. It gives a perspective into how most of the investors focus perhaps on the wrong metrics and how it is extremely important to be highly selective when choosing where you are taking the money from.

Conclusion
Overall, the book is really delightful and refreshing to read. The writing style is simple yet engaging. It provides a lot of ground reality perspectives about the start-up world. Media selectively glamorizes the start-up world with less focus on failures and the dark sides. It gives you a perspective of what all can go wrong in a start-up and can prove to be a guidepost to learn from the mistakes detailed in the book. I highly recommend this book to anyone who has interest in start-ups and/or e-commerce in general.

[Pratul Kalia · Rating 5 out of 5]

If you're part of the Indian startup industry in any form - entrepreneur or consultant or contractor - this is a must read. Incredibly honest and humbling experience of the author not just pioneering e-commerce in India... but also a record of how unsustainable the current VC model is.
There are pages where you will just constantly agree with every word, parts where you will laugh and sections where you might just cry. I wish this book was fiction - it would make an excellent Bollywood masala - but it isn't. It's all true and unfortunately for us in the industry, it is prophetic about its judgements of the current startup landscape.

[William Moses Jr. · Rating 4 out of 5]

This book is a mix up of the author's autobiography and a random assortment of advice to succeed as an e-commerce company. It felt more like reading a disjointed series of blog articles linked with some overarching theme per chapter and less like reading a purely autobiographical book or a history of Indiaplaza. Best to keep that in mind as you read.

However, the advice itself and its application to running an e-commerce company looks to be well thought out and you can tell when the author gives his opinions on something and when he's backing something up with facts. Further, it is interesting to see a book that talks about a homegrown company in India and what it was like running a pioneering company from 1999 to the present. A particularly jarring chapter was the final one that talked about near the end of Indiaplaza's run, it looked like the company's own investors were setting the company up to fail and vendors would bring thugs and actually threaten violence. It's good to know what can go wrong. When starting something, it's good to go in with your eyes wide open.

[Anandh Sundar · Rating 5 out of 5]

As an early shopper on Indiaplaza.in/Fabmall, I was quite surprised when they abruptly shut shop in 2013. This book now narrates that story from the first generation non IIT/IIM founder's perspective. Many of the points discussed are relevant even today whether it relates to profitability of Cash on Delivery(Hint: Usually not, hence they used to charge more for this), microsegmenting/hyperlocal/email list marketing, business ethics of selling customer database, liability of directors/shareholders when company goes up, possibility of 'employee light' ecommerce verticals, importance of creating unique differentiation such as merchandising etc. Interesting, he mentions that companies in Tata/Birla league were not willing to pay 10crs(settle debt) and purchase the website, but later spent multiples of that in unsuccessful ecommerce forays. Legal issues can crash a startup quickly as evident from their failed sale to Trent due to non trademark of 'Indiaplaza' which contained the word India. This shows the necessity of legal due diligence upfront.

A must read.

[Univpurpose · Rating 5 out of 5]

They say one's failure is another's learning. It cannot be more true from my after-feeling of reading this book. Vaithee has clearly written this book from heart and it shows in every word.

While going through the book and his experience, I had countless feelings running through - sometimes of amazement at the novelties of ideas, happiness when some of them worked, many times frustration about why this man is not ready to change the way he thinks, strike a balance, disappointment about the lack of support authorities when he was being bullied and sadness about how he was single handedly blamed for all that went wrong.

Lots of sound advice - almost sagely - sometimes almost like the well-meaning uncle of yours who wants to help out and I am sure he will be doing lots of that in the real like - without anything to expect in return. LOVED the analogies he puts out - especially about being a sniper vs machine gun, about the girl with two black stones and so on. Makes the book such an interesting read while being gripping all through.

[Sibi Keerthanan · Rating 5 out of 5]

E-COMMERCE today in India is still in its nascent stage .

One person before the dot com burst initiated and sown seeds of e-commerce in India .
Mr.Vaitheeswaran kothandaraman

A must read for someone who plans to get into online business . Vaithe sir shares his journey what it really takes to build an e-commerce business .

ONLINE diametrically opposite to OFFLINE . Vaithe sir makes us understand this in a simple , thought provoking way.


His insights what really takes to build a sustainable e-commerce business and future of e-commerce is amazing and eye opener for entrepreneurs.

Great fundings do not make uni(que)corns Great execution in a sustainable way do. Yes funding is important for innovations but it should not be the ultimate goal. In this way Vaithe sir and his venture is unique and
yes the book is also unique . It speaks the TRUTHS about business.

This is an all time book.

[An · Rating 5 out of 5]

Life lessons for entrepreneurs and working professionals

It is a real life story of survival, growth, passion and failure told in a balanced format with a lot of valuable advice, stories and puns. It exposes the brutal face of the industry and investor community, and gives you relevant food for thought about where you stand in the scope of things in the industry. It gives away a lot of learnings for startups that they can use to build the organization in the right way. I respect the views of the author, and respect him for creating a solid base of hope and success on the foundation of failure. It would be amazing to have him as my mentor in the industry and hope all the members of the industry are able to leverage from his experience to build the industry in the right way.

[Sanjay jha · Rating 4 out of 5]

Success is a lousy teacher . It seduces smart people into thinking they cannot lose. Failures teach us lot more than success . My 18th read for the year 2023 “ Failing to succeed “ The story of India’s first e-commerce company by K. Vaitheeswaran ( KV ) is a masterpiece and a perfect case study for start-ups . It’s a must read for all who wants to venture in start-ups .
With the current pace of my reading books ( one novel in 07 days ), some well wishers mentioned the other day “Sanjay one day you will be good writer “
KV writes in the Prologue section “I am a voracious reader ; I read anything I can lay my hands on, but I was not sure I could write to save my life . Accumulating millions of frequent flyer miles does not make one a pilot . “

Overall I enjoyed reading this book .

[Arathi Mohan · Rating 5 out of 5]

An honest insider's perspective on the functioning of e-commerce. The author is the pioneer of Indian e-commerce and one of the founders of Indiaplaza. He says it like it is and lays bare the landscape of unlimited merchandise, deep discounts, technology innovations and seamless customer experience. Read this book if you want to understand the industry - the past, present and future. And who better to learn this from than someone who's been there and seen it all - the good, the bad and the ugly.

[Vinayak Hegde · Rating 5 out of 5]

A very well-written and engaging story of India's first e-commerce company. I loved the author dry and sarcastic humour which drive some home truths that have been ignored for far too long by the current incumbents. The book is insightful about e-commerce and offline retails and demontsrate that vereything old is new again and vice versa is especially true in the e-commerce world. It also elucidates the importance of timing (and luck) in the startup work. A truly fascinating read.

[Pulkit Agarwal · Rating 4 out of 5]

The book is very depressing in parts and there are large parts of the philosophy of the writer that I do not subscribe to. That said, the real beauty lies in the fact that it talks a lot about things that most of us don't hear daily or would agree with in the first glance. Totally respect the fact that Mr V tried hard to create an ecommerce brand in India and was totally honest about what all he faced. Enough and more to learn from this book.

[Sarsij Nayanam · Rating 4 out of 5]

A fascinating read

This is a must read for anyone who is associated with startups or e-commerce in India. This book does a special service to its readers by taking him through the emotions, pains, and frustrations of an entrepreneur who misses the hallowed status of being 'successful in raising money'.

[Raja Sampath · Rating 5 out of 5]

One of the fascinating books I have read on a startup and Entrepreneur. It goes well with short sections and with only the interesting bits of IndiaPlaza (The Start-up) and Vaitheeswaran (The Entrepreneur). Though I felt the time period keeps shifting to and fro in the book, one would definitely get glued into and you would want to know what happens next which keeps you motivated to keep reading.

[Sagar Upadhyay · Rating 5 out of 5]

Must read

Wow. Just wow.
This is a book on a person's struggle, e-commerce and startups written in a fluid and interesting way. The book is full of wise advices and interesting anecdotes. The only thing that needs improvement is this book's cover to justify the seriousness and value that this book holds. But then we should not judge a book by its cover, isn't it?

[Manan · Rating 5 out of 5]

A good read for those interested in e-com/retailing business. Some important insights on the parameters/aspects to be kept a tab on while evaluating these businesses. At some points, the book also feels like author's rant on how nothing went his way and how a lot of people conspired against him. An interesting read nonetheless.

[Yellapu Pramodh · Rating 4 out of 5]

This is a good book which details the initial stages of Fabmall/IndiaPlaza and spreading the practice of buying on online to initial customers. Sad to hear that they had to fold in the end.

The stress on profitability compared to GMV is insightful.

[Anu Radha Boyapati · Rating 5 out of 5]

It helped me understand how the e-commerce company works and how hard an entrepreneur has to work in order to make his company successful . The author takes us through the enthralling journey in an intensely described journey of him and his company . Suggested read for aspiring entrepreneurs

[Sundar · Rating 4 out of 5]

Gives you good insight on the day to day operations of an ecommerce company and the industry. A must read if you are working for an ecommerce company or if you are trying to begin a ecommerce business.

[Latha · Rating 5 out of 5]

It is indeed a touching story of an honest, enthusiastic first generation entrepreneur, his small joy of creating a first ever e commerce firm and the pain he underwent. A must read for all who want to understand business, specifically about E commerce.

[Lakshmanan Ramanathan · Rating 3 out of 5]

Roller coster ride of India's first eCom (Indiaplaza). Online to Offline stores. Ethical issues faced in handling PII data sans regulation. Highlights erratic behavior of investors in wrongly tracking GMV (Gross Merchandise Value) without factoring deep discounts and returns.

[Soumyajit Pradhan · Rating 5 out of 5]

Refreshingly honest account of a non-pedigreed founder.
Well articulated opinions about startup ecosystem backed with data and anecdotes.
Recommended reading for anyone in the business of doing business.