It was the night of December 31, 2012. Fireworks burst over Bangalore, and the streets hummed with New Year’s revelry. But inside K. Vaitheeswaran’s modest home, dread hung thick. A gang of drunken men hammered on his door, their slurred threats slicing through the festive din. “You better pay up, or we’ll make you pay,” one bellowed, waving a bottle. “You have no idea what we can do.”
Inside, Vaitheeswaran’s young son gripped his mother’s leg, trembling, while his wife stood firm beside him. Vaitheeswaran planted himself in front, heart pounding. This wasn’t the future he’d envisioned when he set out to transform India’s retail landscape. Once celebrated as the “father of e-commerce in India,” he was now a hunted man, his trailblazing venture in ruins, his name a byword for failure. In an exclusive conversation with The Financial Express, Vaitheeswaran K, serial entrepreneur and author “Failing to Succeed”, shared this harrowing tale and the extraordinary journey that led to it—a story of daring innovation, crushing defeat, and an unbreakable will to rise again.
A vision ahead of its time
To grasp how Vaitheeswaran landed in that nightmare, rewind to 1999—a year when India’s internet was a faint pulse, reaching fewer than 1% of the population through sluggish dial-up lines. Undeterred, he co-founded Fabmart.com, the nation’s first e-commerce venture, with five partners and a dream sparked by Amazon. “We started with music cassettes, CDs, books, and watches,” he recalled. The mission? Bring shopping to a country where retail was a patchwork of corner stores and long treks.
Fabmart wasn’t just a store—it was a revolution. Vaitheeswaran and his team rolled out cash-on-delivery, PIN-based payments, e-wallets, and electronic gift certificates—ideas that would later define India’s online boom. By 2001, they had launched one of India’s earliest online grocery stores, a precursor to later successes like BigBasket, co-founded by some of his early partners. In 2002, they ventured offline with Fabmall, a supermarket chain weaving online and physical retail—an ahead-of-its-time omnichannel play.
Fabmall soared, becoming one of India’s largest chains by 2006, snapped up by the Aditya Birla Group and reborn as “More.” His co-founders shifted to that offline success, but Vaitheeswaran stuck with the online arm, rebranding it Indiaplaza. “I believed in the internet’s potential,” he said. He guided it through the 2008 financial crisis and secured venture capital in 2011. But by 2012, the foundation was crumbling.
The fall of a pioneer
Indiaplaza’s demise in 2013 was a brutal coda to a visionary run. Despite its early edge, it buckled under a barrage of obstacles. Vaitheeswaran had chased profitability, rejecting the deep-discount frenzy of rivals like Flipkart and Snapdeal. “I believed sanity would return to the sector,” he wrote in his book, Failing to Succeed. But in a market drunk on venture capital and rapid scale, sustainability couldn’t match splashy growth.
Funding was a constant struggle. Early backing from Reliance Industries in 1999 helped, but later rounds were meager compared to competitors’ billions. His low single-digit equity stake left him exposed, he said, as a “disastrous cleavage” in the board ousted him from his own creation. “I became the Chief Obedient Officer,” he quipped wryly in our talk.
Timing dealt a cruel blow too. Starting in 1999, Indiaplaza was a pioneer in a market not yet ripe—internet access was scarce, logistics shaky, and consumers sceptical. When India’s e-commerce wave crested in the 2010s, better-funded newcomers surged past. Boardroom chaos, investor bailouts, and a crushing competitive tide finished it off. “We ran out of money,” he said. In 2013, Indiaplaza folded, leaving creditors clamouring and a dream in tatters.
The dark days
Indiaplaza’s fall wasn’t just a corporate loss—it was a personal inferno. “Society often fails to differentiate between the company and the individual,” Vaitheeswaran explained. “When a startup succeeds, the founder gets all the credit, even though success is a collective effort. Conversely, when a startup fails, all the blame falls on the founder.” Creditors didn’t see a bankrupt firm—they saw him.
The reprisals were swift and vicious. “A vendor from Delhi sat in my Bangalore office, put his phone down, then pulled a dagger,” he recounted. “‘You can pay the easy way or the hard way,’ he told me.” Another threatened to fling babies under his car—“‘It doesn’t matter whose,’ they said,” he added, still shaken. He stopped driving for months. A Mumbai creditor filed a police case; a constable showed up with a grim ultimatum. “I know it’s a civil matter, but I have pressure from above,” the officer said. “Pay up, or it’s jail for the weekend.”
The torment hit home—literally. Ex-employees and vendors smeared his wife online, and that New Year’s Eve assault was one of many. “I lived in complete isolation,” he confessed. “I was ashamed to show my face.” His wife and son were his only refuge. “They stood by me when no one else did,” he said.
A turning point
For two years, Vaitheeswaran retreated, swallowed by shame and despair. Then, in July 2015, The Mint reached out, profiling 20 internet influencers for its 20-year milestone in India. They wanted him. “I pushed back,” he admitted. “My startup failed—why me?” But journalists Shutika Verma and Ashish Mishra pressed on. “This isn’t about the outcome,” they told him. “You were the first to pioneer e-commerce in India.”
Their piece, The Failure, erupted—one of The Mint’s most-read stories ever. “Readers messaged me: ‘We had no idea about your story. You should be proud,’” he recalled. Soon after, Professor Joes from IIM Bangalore called. “I teach corporate failures, but all my cases are foreign,” he said. “You’re the first Indian to talk. Teach my students.” Urged by his family, Vaitheeswaran relented. “I stood there, tears streaming, telling it all,” he said. “They cried too. It broke the shame.”
Rising again!
Today, Vaitheeswaran mentors startups advises titans like Deloitte and Tata, and speaks at TEDx and IIMs. In 2019, he co-founded Again Drinks, a health beverage venture, showing he’s still in the fight. His book, Failing to Succeed, is a no-holds-barred recounting—a “corporate postmortem” spiked with wit and wisdom.
He’s blunt about India’s startup world: “It’s not kinder to failure today. With more successes, the failures are just more hidden,” he said. The stats back him up—95-96% of startups die, yet the focus stays on the victors. “If you don’t fail, you don’t succeed,” he insisted.
His words to new founders resonate: “If you’ve chosen to start up, you’ve demonstrated incredible courage. That decision alone is a success,” he said. “99% of startups will fail, but 100% of entrepreneurs will succeed. The experience, the resilience—that’s the real victory,” he added.
From pioneer to pariah and back, Vaitheeswaran’s saga may not be a fairy-tale win but it shows human triumph over collapse, proving that even in the bleakest nights, resilience can light the way.