Stories from the trenches: The remarkable journey of Indian start-ups

  • Suveen Sinha, Hindustan Times
  • Updated: Aug 16, 2016 16:46 IST
Escheresque: Caught in a bizarre landscape, early Indian ecommerce entrepreneurs were robbed, ridiculed, and even imprisoned. (iStockphoto)

By the end of the third day it had dawned on Avnish Bajaj that India was a country straight out of Kafka.

He had been quite cool when the ordeal began. He was in Delhi and a policeman had come calling. The visitor looked like the quintessential Delhi policeman: the belly and beret were not perfect, and the speech was earthy. Actually, he could have been a policeman anywhere in India.

“Saab has asked for you,” he said. “He wants to do a joint press conference with you.’

This was late in the afternoon of 17 December 2004, a Friday. Avnish was one of the founders of, an online auction site and marketplace. He had sold it six months ago to eBay, the United States-based online marketplace, but continued to run it as the country manager.

Not bad, Avnish thought. Finally, he was going to get some recognition for all the hard work his team had done to help the police arrest the young IIT Kharagpur student who had put up video CDs for sale showing teen porn on Baazee. This CD showed a boy, 17, and a girl, 16, engaged in oral sex. Both were students of Delhi Public School, Mathura Road. Apparently, the boy had recorded the act and circulated it on mobile phones. The two-minute, thirty-seven-second clip was burned on to video CDs, which were put up on Baazee for Rs 125 apiece.

Baazee’s checks and balances kicked in, and the CD was taken off within 36 hours, before the weekend ended. But a random Google search could still throw it up because of the layers of indexing and cache. A journalist googled it. It showed up as a listing on Baazee. A tabloid ran a big story. The Delhi police took suo motu action and filed an FIR.

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At the time Avnish was innocent enough not to know that if the police call you on a Friday afternoon, it is nothing but ominous. The office of the economic offences wing to which he was being taken could never be the venue of a press conference. Less naive Indians, when they get such invitations, leave for Dubai.

Avnish did call his lawyer, who said it was fine to go.

Sure enough, upon his arrival at the office he was put under arrest. The cyber laws, or whatever semblance of it existed back then, said the CEO of the website was liable. It did not matter who put the offending video CD on it.

No matter, Avnish thought. Slim and dapper, he remained his suave self, laughing and joking with the policemen. There was much mirth when his wife Tina Kapur arrived and signed her name in the register.

“She has a different surname,” one of the cops had observed. “Are you really married?”

They were, said Avnish, and that Tina was to change her surname at the end of the probation. “That is not going to happen, now that I have been arrested.”

Amid guffaws, one of the policemen said they had never met someone who was so jovial in custody.

“But I have not done anything wrong. Why worry?” thought Avnish. “I am in a new industry and these things happen. Surely, they will understand the logic of it.” was an open marketplace. Anybody could attempt to sell almost anything on it. What’s more, Avnish and his team had worked hard through the weekend to identify the fellow who had put up the porn clip, and had him arrested. Avnish really deserved that joint press conference, not the arrest.

The next day, they shifted him to Tihar. And everything changed.

The place was freaking scary. “I am completely innocent and I have been put here in this awful place. Who pays for this?” he had demanded of his lawyer.

“Welcome to India,” said the lawyer. “This is the system, deal with it.”

He is no longer Avnish’s lawyer.

Soon, Avnish was talking to the United States embassy in New Delhi. He was lucky that he was a US citizen, a fact that no doubt escaped the Delhi police.

The Americans intervened through the diplomatic channel. They also tried to educate the Indian authorities about how the cyber laws worked in other countries. With the case now being reported in the global media, the Indian government and authorities became supportive. Soon it looked like the police were nuts, probably trying to divert public attention from other issues.

Avnish got bail after three days—three gruelling, soul-sapping days. But it would be eight years before he got out of it completely. The case went right up to the Supreme Court, whose three-judge bench quashed the whole thing.

Today, Avnish thinks of it as one of the things that shaped him, made him man up. “In some ways I am proud of it. You feel like a martyr when you go to jail for an industry.”

That industry is flourishing today: Flipkart, Snapdeal, Paytm, ShopClues, and Amazon’s India arm operate online marketplaces, helped by the understanding created by the case against Avnish.

Not just that, most of today’s entrepreneurs share Avnish’s self-confidence. They face adversity knowing that they have dealt with it before.

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Kunal Bahl, much before he set up Snapdeal, scraped plastic off things at a factory near Delhi for Rs 6,550 a month. He was deported while working in the United States. Vijay Shekhar Sharma, in a phase before he became the celebrated CEO of Paytm, used to go back to his house only in the dead of the night, so he did not have to face the landlord. The stress rose so high for Phanindra Sama, who founded RedBus, he had to take shelter in Vipassana. Yogendra Vasupal, founder of Stayzilla, almost smoked and drank himself into the ground. The first chartered accountant Suchi Mukherjee approached, when she wanted to set up LimeRoad, told her to go back to London. Shashank ND, in the early years of Practo, used to place his bed strategically close to his work desk, so when he collapsed, he did not hit the ground. Bhavish Aggarwal, when he decided to set up Ola, was berated by his father for becoming a travel agent. Mu Sigma founder Dhiraj Rajaram went to a dinner on a day he had three of his wisdom teeth taken out; he did not want to miss the deal. The founders of ShopClues gave a contractor Rs 9 lakh to do up their first office; he ran away with the money.

All of them bounced back. No wonder a recent blog on LinkedIn by Snapdeal’s co-founder, Rohit Bansal, crackles with silent laughter as it talks about questions over the future of ecommerce. “The best is yet to come. We’ve just gotten started and covered 5% of the journey,” Bansal writes.

The Tip of the Iceberg is about the remarkable journey of India’s start-ups. Some found their destination, some did not.

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