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Business News/ Companies / News/  Only if you have failed do you know what it takes to succeed: G.B.S. Bindra
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Only if you have failed do you know what it takes to succeed: G.B.S. Bindra

Bindra talks about running Firstandsecond.com, how the current start-up boom compares with the dotcom boom and bust, and his views on the current set of entrepreneurs

G.B.S. Bindra. Photo: Hemant Mishra/MintPremium
G.B.S. Bindra. Photo: Hemant Mishra/Mint

Bengaluru: Long before the Bansals and Bahls of e-commerce started up, G.B.S. Bindra was running Firstandsecond.com, India’s largest online book store, in the late 1990s and early 2000s. It was one of the victims of the dotcom bust, which claimed most online businesses in India.

After shutting Firstandsecond.com in 2003, Bindra joined information technology company Logica Plc and went on to hold senior global roles, including chief innovation officer and strategy leader. He currently runs a start-up called Tagos, which is trying to make online video more interactive.

In an interview, Bindra, one of the poster boys of the dotcom boom, talks about running Firstandsecond.com, how the current start-up boom compares with the dotcom boom and bust, and his views on the current set of entrepreneurs. Edited excerpts:

What are the significant similarities and differences between the dotcom boom and bust, and the ongoing start-up boom in terms of investor and entrepreneur behaviour?

At the entrepreneur level, even then a lot of smart people came out and wanted to make a difference. Smart people from large multinationals, large Indian companies gave up senior positions to start up. This time again that is happening. The difference is that in earlier years, you didn’t see very young people starting up. Now, very young people, even those right out of campuses, are starting up. At the investor level, there are huge differences. There were only one or two VCs (venture capitalists) earlier. Whereas now there are at least one dozen very well-respected funds and a couple of hundred angels. That’s huge change and it’s reflected in the (investor rush). Plus, there are hedge funds that are investing in start-ups now.

What are the lessons for start-ups in terms of dealing with a possible downturn?

Because of the uncertainty of markets, you have to spend money wisely. Money in the bank is absolutely crucial. A lot of young entrepreneurs, who are first-timers and have raised capital, don’t think two hoots about spending money.

How do you rate the current crop of entrepreneurs?

Some of them are extremely good. There are two things you need to have in order to build large businesses. One, you have to be very good. Two, you have to be extremely lucky. There are people out there now who are very smart and very well-funded. There are those who are very smart and are not yet funded. Some of them are right out of campuses. There are people who are solving problems in industries such as freight. These problems have been around in India for a long time and solving them would be great for the country, for the entrepreneurs and for the ecosystem. I’ve also met some stupid entrepreneurs. Entrepreneurs, in general, are a lot more confident these days. There are quite a few who lack the skill to back that confidence.

Do you see more acceptance of failure now?

Definitely. Only if you have failed do you know what it takes to succeed. One of my standard questions in every interview is: what is your biggest failure? Many people say they haven’t failed! I don’t judge (potential recruits) only on the basis of that, but it gives me an idea of how they think.

How quickly did the dotcom bust affect you?

In our case, we had a term sheet from a Fortune 100 company for a funding amount that was unheard of. After the term sheet, I was on my way to meet (the global chief executive officer) of that company to shake hands on the deal. At that time, I thought life was good. The first or second day the Nasdaq started crashing was the day I was on my flight. I thought it may be all right in a week. But unfortunately, that term sheet did not result in a cheque. The other company was equally embarrassed that it didn’t happen.

How big a company could Firstandsecond.com have become?

We had created something that was the first of its kind in India. We had millions of books, we were doing many of the things such as cash-on-delivery that e-commerce companies are doing now, we were selling both first- and second-hand books. And we hadn’t built our business on discounts. We had built our business on the fact that many of the books we had were just not available in India. So we were making them available. If the crash hadn’t happened, we’d have raised capital and created such a big entry barrier and deterrent that it would have been hard for anyone else to come up. We started out almost at the same time as Amazon. We’d have had a 10-year lead on the current companies, so the landscape would have been completely different.

How did you try and survive?

We said that let’s try and cut our costs in a manner that we can break even. We got close after a year. But any business needs capital to expand and there was zero capital available. I wasn’t willing to stay in the business for the next 10 years not knowing when the capital market would turn and capital would be available. And I also wasn’t willing to run a small business and just breaking even on a small scale.

Did you approach Amazon or eBay?

We had a chat with Amazon, but their view was that India wasn’t ready then given the low Internet penetration.

When you shut the company, did you have plans to restart it in case funding became available?

Yes, because I really believed in the business. When we launched, we got our first order after a couple of hours. Obviously, everyone was excited. And when we looked at the address, it was in Bihar! The book was on programming. Before closing, we experimented with other categories like apparel. The first order in that came from Jaipur and it was for a strapless dress. So I was convinced it was a great business. But it needed capital. If things had turned earlier (than 2007), I’d have come back.

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Published: 02 Jul 2015, 01:21 AM IST
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