Flipkart: Million-Dollar Hiring Mistakes Translate Into Billion-Dollar Valuation Erosions

As the week drew to a close, a story that broke headlines in the world of Indian e-commerce was the departure of Flipkart’s Chief Product Officer, Punit Soni. Rumours had started swirling about Punit Soni’s impending exit since the beginning of the year (link), almost immediately after Mukesh Bansal had taken over from Binny Bansal as Flipkart’s CEO (link).

Punit Soni's LinkedIn profile

Punit Soni was among a clutch of high-profile hires made by Flipkart in 2015, rumoured to have been paid a million dollar salary (amounting to 6.2 crores at then prevailing currency exchange rates — see this and this). This was in addition to any stock options he and other similar high-profile hires earned.

One decision that Punit Soni was most closely associated with was the neutering of Flipkart’s mobile-web execution, where he killed Flipkart’s mobile site, forcing users to download the app on smartphones. The mobile app itself was poorly designed, had a mostly unusable interface, and was riddled with bugs to the point of crashing every few minutes. I had written in detail on its mobile app’s state in 2015 (see this article in dna, or from my blog). At the time I had expressed my astonishment that Myntra, the fashion e-tailer that Flipkart acquired and which had gone app-only, had a mobile app that was NOT optimized for the iPad. The same was the story with the Flipkart app — no iPad-optimized app, but a “universal” app that ran on both the iPhone and iPad devices. Even today, the Flipkart iPad app does not support landscape-mode orientation, even as Amazon’s iPad app has grown from strength to strength.

Twitter, Saudi Billions, and India

His Royal Highness Prince Alwaleed Bin Talal Bin Abdulaziz Alsaud is a member of the Saudi royal family. Per Wikipedia, he is a "nephew of the late Saudi King Abdullah, a grandson of Ibn Saud, the first Saudi king, and a grandson of Riad Al Solh, Lebanon's first Prime Minister." To say he is an influential person would be an understatement.

Oh, and he is also the largest individual shareholder in Citigroup. He bought more than half a billion dollars ($590 million to be precise) in a preferred-stock issue. (link). This investment "represents the largest proportion of" Alwaleed Bin Talal's person wealth.(link). Citi has paid fines almost every year to different regulatory authorities the world over for violating perhaps every single regulation there is in the book - in 2005, it agreed to pay the US SEC (Securities and Exchange Commission) $20 million for failing to provide its customers with "material information." Two months later, the same year, it agreed to pay more than $200 million to settle more charges. The same year, the UK's FSA (Financial Services Authority) fined Citi more than ten million pounds for "violations of bond trading regulations."  Citi paid fines in 2006, 2007, 2008, 2009, 2011, 2012 over various violations.

But this post is not about Citi. It is about Alwaleed Bin Talal. Actually, it is not even about him, but it is important to look at Talal's past to understand the present.