Outliers 77: Ananth Narayanan, CEO, Myntra on protecting “the founder’s mentality”

Pankaj Mishra November 2, 2018

India’s booming startup ecosystem has been mostly about the founders and the investors writing cheques to fund their ideas. But building a startup takes a lot more than just founders and investors. It takes exceptionally talented individuals who take the leap of faith to become part of these startup journeys as employers.

And while these professionals may not be the founders, they are highly entrepreneurial.

In this week’s Outliers Podcast I sat down with former McKinsey consultant Ananth Narayanan who’s been the CEO of Myntra since October 2015. What sets him apart as an outlier is his deep passion and sense of ownership for Myntra. So much that it’s difficult to tell that he’s not a founder.

Thanks to Kanika Berry for help with transcription of the conversation, which is produced lightly edited below:

Pankaj: Welcome to Outliers. This is a podcast with Outliers. We have had very interesting conversations, people from all walks of life, a lot of them business corporate leaders as well. I am really excited to sit down today with Ananth Narayanan who is the CEO of Myntra. Welcome to the podcast, Ananth.

Ananth: Thank you. Excited to be here.

Pankaj: Good. So, why are you an Outlier? I think the first time I was with The Economic Times and I was as usual tracking new companies and around that time I think you were appointed. One of the first things that hit me is, a lot of people talk about consultants and whether there can be good execution leaders… that was something that stayed with me. We haven’t had a chance to talk about that. This will be one the things we should refresh.

Ananth: Sure.

Pankaj: Let’s start from the start, Ananth. Tell me a bit about where did you grow up and what’s the foundation core?

Ananth: Sure. So I grew up in Chennai… in Madras as we used to call it at that point… sort of a very normal upbringing, I guess. I went to Vidya Mandir for my schooling, then went to engineering at the University of Madras. Then, like most people, went abroad, went to the University of Michigan. I always wanted to be an engineer and I always wanted to be in auto. My dad used to work in Hindustan Motors, so I had a fascination for cars and auto motors, always.

After Michigan, my choices were to join Cummins, which is an engine manufacturer, which I was very excited about or an unknown company for me at that time — McKinsey, which I had never heard of. I had to actually Google McKinsey at that point… I did a summer with them because they had come to interview. So, I actually joined as a manufacturing business analyst at McKinsey in the year 2000 and that was the first manufacturing business analyst that they ever hired. That’s when they started the manufacturing practice.

A mentor of mine called Felix Brooke started the practice at that point; he’s long since retired. So, I joined him, I joined the Cleveland office in McKinsey and the reason is, I could have joined Detroit but if you are half German, half Indian and in Detroit from the University of Michigan, you are a perfect fit. I was two of those three, I figured I shouldn’t join Detroit, so I joined Cleveland. It was the head of the operations practice at that time. I always wanted to stay for two years only. I wanted to do consulting for a couple of years and get into a real job. And you know that two turned out to be 15. It turned out to be a long time.

But the reason that worked for me is even in McKinsey, I was a bit, I know entrepreneurial is used very loosely but I felt like I was quite entrepreneurial, in the sense, I started there, three years and I went to China without ever having been to China. I’d never stepped foot in China, I’d never traveled to China yet my wife and I decided and we upped our… you know we gave up our apartment, packed our bags, moved and went and spent three years in China. And at that time, I didn’t know the language, I didn’t know any people there, I just went and joined the McKinsey office, helped with the Global Sourcing Center, starting the Global Sourcing Center for McKinsey at that point.

You saw, this was 2002-2005 and you saw a lot of entrepreneurial energy… multiple friends of mine incidentally left at that time and joined Tencent. They have done considerably well for themselves… you know, it was a great time to be in China because you saw all the entrepreneurial energy around you and I learnt a lot. Being in a different culture, working in a different culture, adapting to something that you that don’t know, was one thing that I learnt.

Pankaj: That’s entrepreneurial.

Ananth: Yes. So it was correct. I then came back to Chicago and the reason I came back to Chicago was my wife wanted to do business school. So we came back to Chicago and I spent five years there and I got elected partner there which is a milestone in the McKinsey context.

And then again I got bored. I wanted to do something else and I wanted to move. And even though there were a lot of people who advised me not to do it, as a two year partner, you know when I was doing well in Chicago, I moved to Chennai. And I moved to Chennai because I wanted to start the office there in Chennai, a couple of other colleagues, Ramesh and Rajeev had actually moved from Mumbai and it seemed like a great group of people to go start this with. Again from a risk-taking stand point, as a two-year principal in McKinsey or a two-year partner in McKinsey, it is the worst time to move because you know, you have momentum, you have clients.

But I felt like, you know, if I didn’t make the move and I didn’t change something, I would sort of regret it five years from now or 10 years from now, if I went back and looked back, it would be a regret. So I said, why not move and then I moved, I knew nobody. We started the Chennai office. In fact, I still remember, the first few days, we didn’t have an office, we had to work out of various peoples’ homes, then we finally found office space. And the office is doing terrific now.


I was there for five years, we built the office up. I did auto work and Chennai was a good place for auto work. So it was great fun, very entrepreneurial, we hired the first set of people, first set of clients. Lot of folks, well, they may have known McKinsey but never worked with McKinsey before, so it was fantastic to sort of do that.

I got elected senior partner there which was again a milestone in McKinsey and then lo and behold: two years into senior partner, I left. And this was three and a half years ago when I actually joined Myntra, which again at that time a lot of my mentors would have said was a bad move because one you make senior partner at McKinsey, you stay on.

But it’s actually turned out to be a great move. Again the reason for doing it, the ‘why’ behind it was: I wanted to try something new. I told you, every two years I wanted to leave. This seemed like a great opportunity. I had missed IT, I had missed telecom, I felt e-commerce was an industry that was going to be built and I wanted to be part of it, right! And when I did it, I didn’t know anything about fashion, anything about technology and certainly I’d never run a large business. I had done entrepreneurial things inside McKinsey in terms of starting new practices, starting new offices, etc. but I’d never run anything in scale.

Pankaj: How do you learn new things every time you make transitions?

Ananth: I think one is by talking to a lot of people in that particular space and listening well. I think listening well is an important skill, it’s underrated by many people but if you actually listen and you spend your first month talking to a lots of people and listening, you very quickly come up to speed with what’s working and also what the real problems are. And if you actually listen well, people will open up and talk to you about it. I think that’s one.

The key is not to have an ego, you ask the dumb questions because you want to know and you want to understand. You know, most people recognise genuineness, so if you are genuinely curious about something, want to understand it and you are not afraid to ask, it’s a great way to learn. Unfortunately, the more senior you become, the harder sometimes it feels to do it but I actually have never felt that, so I feel like even today I learn a lot and there’s almost no meeting where I actually don’t learn something. So, you ask the questions, I think that’s one big thing – ask questions and listen really carefully, that’s helped me.

The second is surround yourself with great people who know more than you. Again you know, very easy to say, hard to do. But in the Myntra system, when I came in, there was a set of folks who’d all been here for seven years, six years, five years. Mukesh Bansal who was actually the founder had just moved to Flipkart but was quite active, Sachin (Bansal) and Binny (Bansal) were also very active and just listening to all of them and hearing them out and understanding from their experiences really helped me learn about how e-commerce as an industry is run and I think the first few months of just doing that was invaluable for me in getting my own perspectives and saying, ‘how do you run this differently?’

Pankaj: One of things, Ananth, I always actually wanted to ask you is, you have not been an entrepreneur but you have had the first row seat when it comes to entrepreneurship and not just that, you have been able to work across transitions and with entrepreneurs and the names that you talked about are some of the great entrepreneurs, some of the best. What are the lessons because this thing about, everybody has to become an entrepreneur, everybody has to get to a startup but this is equally important what you are doing. So what are the key lessons?

Ananth: I would say that separated into two things. I think there is a question that do you act like an entrepreneur or are you an entrepreneur? And I think they are two different things. I would say I have always acted like an entrepreneur. The fact that I don’t have risk capital is one small element of it. But in all of the businesses like the ones in Myntra or Jabong, if you run it, you have to treat it like your own business, you have to treat like you own the business and that you are risking your business every time.

If you don’t have that ownership, that’s very hard. That’s one of the big lessons I learnt from all of the three people that I mentioned. All of them had enormous ownership, independent of what holding they had. They felt like they owned the business end to end. They took accountability for it. I think that’s one huge element of entrepreneurship which is independent of whether you are the actual entrepreneur in terms of risk capital, act like one and that makes you successful which means taking complete ownership and accountability from Day 1. Not worrying about somebody else’s problem.

I entered Myntra at a time when we had ups and downs. There was no point in saying, ‘ was not my problem’. You have to sort of immediately get into it and say, ‘you own the problem’, independent of whether you got it, inherited it, happened because of external circumstances, it doesn’t matter, what matters is how you deal with it. So if you have an ‘owner’ mindset and I actually by the way think it’s an important lesson, Pankaj, not just for people who are entrepreneurs or CEOs or whatever else, I think it’s important for every person in every organisation to feel like you own it which is something that I think, we try very hard and it’s not just the ESOPs, it’s the way you treat and listen to people, it’s the way you inculcate them saying, ‘they can make a big difference to the organisation’. If you feel that and if you have hundreds of entrepreneurs, that’s what creates great culture. That’s what makes a company entrepreneurial not just a person entrepreneurial. I don’t know if that makes sense. Lots of ownership and accountability and making sure that you feel like an entrepreneur independent of risk capital, I think that’s an important thing. And I think that you know, seeing Sachin, Binny, Mukesh, at least all in action, you certainly see that.

Pankaj: I am sure you would have read, BCG, some few years back came up with this thing called ‘The Founder’s Mentality’. Was that BCG’s?

Ananth: It was Bain’s.

Pankaj: It was Bain & Company. And, it created a lot of debates as usual and I remember talking to Subroto Bagchi of Mindtree, many years ago and the whole thing was from what you are saying, I am just picking a thread. How do you keep that Founder’s Mentality alive in a company and especially with the approach that you are talking about?

Ananth: So, I would say, may be four things for a Founder’s Mentality. I think the first is, you have to role model it, so it has to start with you. If you don’t think of yourself as founder like, an entrepreneur like and behave that way, I think people pick up cues; most folks are very intelligent. So, that’s one. First is start from the top, role model the behavior.

Second, I think is, you have to reward risk taking by definition, entrepreneurial journeys are risky. If you actually penalise every risk, then the organisation quickly picks up on it. So how do you celebrate failures? How do you ensure that you learn from every failure so you don’t repeat it? I think that balance is a hard one to achieve. So that’s number 2.

Number 3 is you hire people for learnability and risk taking. So when you look for the people, you look for things that they have learnt. Have they done a startup and failed? Have they had failures in life? Have they actually picked up and won with it? So you look for the right mindset in the people that you actually hire. Because no one person is going to build a Founder’s Mentality in an organisation, I think a team will.


Myntra has, may be, 2,000 odd people. If your top 100-150 folks don’t have the Founder’s Mentality or at least, a majority of them don’t, then it’s actually fairly difficult for the rest of the organisation. So that’s number 3.

I think number 4 in many ways is actually reward and I mean that in the best possible way. So startups work because a large part of your value creation is because of the stock that you actually have. You need to be compensated well but we don’t try and compensate the best. You would not pay as high as your top 10% in terms of quartile. But you do actually have to be in the top 10% in terms of stock and value creation because that then aligns incentives because you actually spread the value creation around.

Incidentally, Flipkart as a Group, Myntra for sure, have always had that philosophy. So really ensuring that everybody who comes into Myntra is not just a name but actually in terms of stock and stock options. Feel that way is the fourth big thing to actually create that.

In my mind, all of those four, working in tandem and reinforcing one another create the Founders Mentality.

Pankaj: And the other day when we were talking and we were discussing, in this space itself about the online fashion, there are a lot of new things happening, there are a lot of old things that are not working and things like that. So how do you live through these cycles of disruption? And if you can illustrate that with an example, that will help people understand.

Ananth: So I think there’s benefits to not being from the industry because you tend to think of it differently. I will start with a classic example. Fashion typically is in two seasons – you have spring summer season and you have an autumn winter season. We live in India, we live in the tropics, actually there is no season, I mean it’s hot, hotter, and hottest. There is some variations but it’s mostly summer with a little bit of spring and very little autumn, I don’t know, winter. Yet every buy, how we think of about it, all of the industry operates in these two seasons. So one of the things in Myntra, we asked ourselves is, ‘why do we need to do it that way?’ Right. ‘Why can’t we have 20 seasons?’, ‘why can’t you actually have monthly a different thing that actually comes up?’ So that was one question.


The second is, historically, fashion supply chains and lead times have been very long. You know, it takes two years to produce a garment because you know, it comes of the run way, you book the fabric, you’d finalise the design, blah, blah, blah. We again asked ourselves, ‘why do you need two years, when you actually can re-think the supply chain?’ These are some fundamental questions and we created a brand called Moda Rapido and another one called Here&Now, which is completely an AI-based brand.

What were the principles behind it? We said, machine vision is getting better, compute power is getting better, we have these fundamental questions on fashion, so why not look and make sure that we accurately identify trends. Why don’t we have machines design the garment? Why don’t we re-think the supply chain especially since we have the advantage of being in India, where a lot of textile manufacturing happens, to think of a 45-day supply chain instead of a two-year supply chain and why don’t we create intelligent fast fashion? And that is starting to disrupt a lot of how fashion actually operates.

Now in my view, 10 years from now, we will all be looking back and saying, 80%of the fashion operates the way we are actually describing how Moda Rapido does, even though it seems like an outlier. I think it will no longer be an outlier, it will be mainstream. In 10 years from now, maybe we will think of something very different. But the key is actually in fashion and perhaps in every industry to go in and ask: why is it being done a certain way? What are the original assumptions that hold true? (That’s) Number 1.

Number 2 is to ask what about technology can actually disrupt it. And there are two fundamental elements. One is, there is lot more data available than there used to be. Second is compute power is much better and third is algorithms are getting easier for people to use. So if you ask fundamental questions and then say technology is what it is and actually it’s accelerating everything, then you come up with some fascinating answers, so fashion and disrupting fashion is one big core of what we at Myntra and Jabong want to do, right, but we are doing it based on asking these fundamental questions.

Pankaj: The other thing which I was very interested to know more about is: are there mythbusters especially when it comes to this quintessential buyer? So what are such things?

Ananth: I think there are many, I mean we could have an entire conversation around the Indian fashion consumer but I will give you a couple of things. The first myth is that people in Tier II and Tier III towns shop very differently from people in Tier I towns. Actually the internet is the great leveller. In my view, the people with consumer internet access across towns shop very similarly. Our basket size and our brand mix is no different in a Tier II town, Tier III town than it is in the top 20 cities. That at least I found quite surprising.

The second thing that I am seeing now is the first 100 million customers that came on were mostly urban, were mostly male customers, were mostly in the sort of 18-35 type range. What I am finding now is the next 100 million customers that are coming online and are looking for fashion are more women, they are more from Tier II, Tier III towns, they are older, incidentally and therefore have more spending power than the sort of the college student who had internet access. So as we think about assortment and selection in fashion, we are starting to think very differently about what we do for the next set of customers.

So for example, vernacular is a big bet we are going to make, voice is a big bet we are going to make because the next hundred million are non-native English speakers. Or as you think about older folks who are actually buying fashion, how do you design the assortment for different sensibilities? So I think that’s the other thing which is changing dramatically which may not be most intuitive.

The third is actually trends and fashion, in general. It used to be defined by two-three big fashion influencers. That is changing. Fashion is becoming much more social, brands are being defined by what your friends think of it as opposed to what the brand director thinks of it. So as we think of brand building in the future, we are starting to think through how do we use social media to build brands very differently, how do we use influencers very differently, and how do we use the peer group very differently, in terms of how you actually shop and create a brand. So brand building is actually becoming more democratized which also fits in with our own mission of using technology re-democratized fashion. I think I see those three as things that are just new and different that are happening.

Pankaj: I never thought… especially the next 100 million that way. What I am trying to understand is a typical Netflix consumer or a buyer, a Flipkart or a Myntra buyer – are they same people?

Ananth: Yes and no. So, if you look at digital products, so the typical life cycle of a customer, digital customer used to be about 4-4.5 years. So, what I mean by that is, they get a smart phone, they start using WhatsApp, then they typically buy products that are digital products, so you buy a ticket for railways, you buy a Bookmyshow ticket, you start to book hotel rooms. Then over a period of time, you buy standardised products, so you buy something reasonably standard like a mobile phone, you know the plan, you know the price, you basically are looking either for a discount or for a distribution reach, whatever is convenience. Then you typically move into more involved categories like fashion where actually it’s personal, size and fit matters, how it looks on you matters etc. Incidentally, content consumption is actually the beginning of the journey, so Netflix, Hotstar, all of these are the middle of the journey.

Then, slightly before buying products is your apps like Uber, Ola, all of that. So that’s the digital journey that a typical consumer goes through. In India, the journey used to be 3.5-4 years, it’s now shrinking to 12-18 months. So the adoption of technology in the consumer journey is actually going up. That time frame is now shrinking to 12-18 months, so I think, therefore, there’s lots of opportunity, there’s lots of threats because you know, it’s a different customer, they think differently. I think it’s an exciting time to be a consumer, it’s actually an even more exciting time to be a consumer internet business serving these guys.

Pankaj: It’s almost like, you have to create a new Myntra every couple of years.

Ananth: Yes, you do. Unless you re-invent it, somebody will re-invent it for you. You know, you talked about Founder’s Mentality, you talked about risks, I think being able to at every point of time, independent of your market share, independent of your market position. Think of yourself as an underdog, is really important for companies to survive long-term. You have to learn to punch above your weight, you have to learn to sort of, be the underdog, even if you are not the underdog so that the mindset is one of hunger, innovation and risk taking.

Pankaj: And feeling like an underdog doesn’t necessarily mean in terms of confidence?

Ananth: Not at all. It means in terms of being paranoid about opportunities and going after them in an aggressive way. It means that you don’t sit pretty on your laurels, it means that every quarter, every half a year, every year, you ask yourself, ‘what else should I be doing to disrupt my own business?’, it means never being happy with mediocrity. I think it’s all of those things, it’s not about being more or less confident at all. It’s much more about how do you actually create this environment where you are paranoid in a positive manner.

Pankaj: On a more final note, Ananth, there are instances where things didn’t work for you, as a professional across the assignments that you’ve had. What did you learn and what were some of the toughest one in that sense?

Ananth: So, I think, many things. First philosophically, I think both failure and success are the same. At some level, they are two sides of the same coin, you either feel a high or a low, both are not particularly good for you. So I think, my view is, I think you have to sort of, learn to detach yourself from both extremes. Hard to do, meditation helps, I think having a family and friends helps… But I think it’s really important because I think, all of our lives is a cycle. I think there will be positive cycle, negative cycles.

You think, if I go back and say, what are specific lessons that I have learnt, there was a time in McKinsey where I felt that everything was going wrong. I mean I’d moved offices, I wasn’t getting any clients, you know, whoever I had, I didn’t particularly liked working with, so it was a tough time. And I think, the thing that I learned in that is a lot of it was mindset because I had got into a negative cycle, personally. It kept deteriorating. Therefore, I think, just recognizing that we go through cycles, recognising that you are in a down cycle and thus sort of correcting it, is really important for me, in terms of failure because you know, sometimes outcomes will be what they are.

You can’t control outcomes but you can certainly control how you feel about the outcomes. So I think that’s the big thing for me in terms of what would you do differently. So every time I have had a failure, my lesson learnt is, can I come out of it faster than anyone else? And that’s been really helpful for me because it’s a mind thing and I think the more you get at it, the better off you are. The same by the way is true for success. If you keep on thinking about successes and that becomes an obsession, which is also not a good thing. So I think both sides are bad for you.

Pankaj: Final one. What is science fiction view of things that you do today if we were to think of what you do now or anything? How far can you go?

Ananth: You know, very far in my view. So you could get through something where you have a complete virtual reality store, where you are able to actually try on clothes in the virtual environment, it fits you perfectly, you know exactly what the look is and then you actually are able to click on it and it actually gets 3D manufactured and delivered to you in a 2-3 hour time frame. Could it happen? Sure. Are there need states for that now? Absolutely not. But that’s not how science fiction or movies work, right. So I think there’s lots you can do.

Parts of imagining this possibility is while not all parts of it may happen simultaneously, I think some parts will get accelerated. So we often by the way, since you asked this question, we often go through one exercise where we say, ‘If you were to do a film 30 years from now, what would that film on Myntra look like?’ So we had this one offsite with the top 30-40 people and we asked ourselves that and people came up with some incredible stuff because they actually start imagining and movies are usually a good way to think of a reality, right and what will happen 10 years from now.

Pankaj: Yes, today’s science fiction is tomorrow’s reality.

Ananth: Yes, absolutely.

Pankaj: Thank you and more power to you Ananth and godspeed.

Ananth: Thank you.

(Kanika Berry has a Masters in Business Administration and has been a communications specialist for over eight years.)


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