Deep Dive: At A Valuation Of $724 Million, Nykaa’s Path To Profitability Is Driven By Its Entrepreneurial Culture
Nykaa’s path to profitability and its “soonicorn” status is not surprising, given how rapidly the beauty products e-tailer has scaled. Founded in 2012 by Falguni Nayar, former Managing Director of Kotak Mahindra Capital, the company has scripted a successful growth story with strong year-on-year growth and closed FY 19 with ₹1,200 crore revenue. The high-growth e-tailer valued at $724 million is now building new initiatives with Nykaa Fashion and Nykaa Man. India’s largest multi-brand beauty platform is far ahead of its competitors Purplle and MyGlamm with over 40 million visitors per month. But behind this growth story is a strong technology backbone architected by Sanjay Suri, ex-Amazon and Oracle executive who before taking the reins at Nykaa co-founded two startups — Videocrux Inc and Clearsenses. Suri, CTO and CPO, who’s been spearheading both the product and technology division at Nykaa since 2016 built the highly scalable multi-tenant platform that powers multiple businesses. Right from the start, he was given the complete ownership of the roadmap to power Nykaa’s growth for the next five years. This week’s column gives an insider look at Nykaa’s highly scalable technology stack that allows playing with new business models, new innovations rolled out by Product, Tech and QA teams and how Nykaa attracts the best minds by going where the talent is. Also, we cast a look at how Suri played a pivotal role in turning Nykaa into the dominant online beauty platform with a substantial consumer base. And one of the perks of being the dominant beauty e-commerce major is that you get to bet on other growing verticals like Fashion. Building A Product Roadmap And An Agile Engineering Culture For companies to be successful, there needs to be a product or tech roadmap and a deterministic plan on how to achieve it. “And for technology to become perfectly coherent with the business, you need both telescopic and microscopic views. The telescopic view starts with a deep understanding of strategic business goals. From here you work out the product spread that needs to be built and then you derive the technical architecture. This architecture becomes the blueprint for the entire execution,” said Suri. Then come the microscopic view where you break down the entire blueprint into independent components that work in unison. For each component, you need to define its product objectives and key technology SLAs. Once you have components with their key objectives defined, you set up independent Product, Tech, QA teams and give them complete ownership to achieve their target, explains Suri. Taking a cue from the agile engineering culture popularised by Spotify, Nykaa’s team and ownership structure is what motivates and empowers individuals to deliver their best. “Our teams are fully empowered with success metrics defined. One big emphasis area for us is deciding what to build internally and what can be bought or built outside. We have been very good at this and have been able to leverage consultants and outsourcing companies to give speed to business and gained at least 12 months in revamping our earlier stack and building new products,” he shared. Tech Stack @ Nykaa Nykaa boasts of a multi-tenant web services platform that can power multiple businesses on the same stack — for example, Nykaa.com, Nykaafashion.com and Nykaaman.com. The technology stack enables to open up more business models to play with. The main technologies used are Python and Java for API development, MySQL MongoDB and Dynamo for databases. “There’s also massive use of caching strategies with multiple CDNs all the way down to Memcached and Redis,” he shared. On the front end, the team has native apps and also experiments with React Native. The web apps are on React, are multi-tenant and are moving towards PWA. “It’s worth mentioning that our apps are also multi-tenant and we’re very proud of this fact. For instance, NykaaMan and Nykaa apps have 80% common codebase. And from a technology standpoint, we’re quite open and comfortable with adopting new technologies,” he said. At Nykaa, analytics is the key focus for engineering and product teams. The high-growth company empowers engineers and product guys to also act as analysts and be data-driven. Analytics doesn’t function as a centralised group in Nykaa, but is distributed across functions.  For example, the product catalogue team uses it to extract metadata out of images, whereas the reviews and rating team extracts user sentiments. The search and recommendation group comes up with a library of product recommendations that are presented to the users depending on where they are in the journey. Lesson For CXOs On Aligning Tech Leadership With Business Goals Suri outlines four critical points on building a deterministic plan to achieve a product roadmap, building a motivated talent pipeline and delivering upon corporate goals. Start with a joint exercise with all stakeholders and write down business priorities for years One, Three and Five Accurate budgeting exercise, keeping the business financial plan in mind. If one is asking for too little, you may not succeed; and asking for too much is not realistic Come up with the product/tech roadmap and a deterministic plan on how to achieve it. A very important step for us was to decide to go where the talent is. In our case, we decided to go to Gurgaon so we could accelerate the hiring of the engineering team. We now have two high-performing engineering teams in Mumbai and Gurgaon Setting up the initial teams and giving direction is the toughest task. The approach we took was we hired very strong initial 10 engineers from a startup that was tapering off, gave them the charter of building core web services and rewriting our web apps from scratch and completely empowered them to deliver on the goals. This team was bolstered by developers from Mumbai who knew the existing monolith system. This gave us great results as this lean team built reliable systems, made pragmatic choices and launched fast. Also, the word of mouth of our entrepreneurial culture spread really fast and today we have 100+ development centres in Gurgaon and 45+ in Mumbai Going Forward In closing, the company will continue to invest in its entrepreneurial culture and keep the organisation lean with a keen eye on the total cost of ownership. From an engineering standpoint, Suri shares the team will work on improving their ability to build launch features faster. The team shall also double down on personalisation across the user journey both on-site and off-site. For those looking to join this fast-growing e-commerce company, sharpen problem-solving ability and deliver a good code quality as this is what the team looks for during interviews. “Strong CS fundamentals are the most important aspect. We focus a lot on code quality in our interviews. In general, I look for – energy, problem-solving, humility and a very strong work ethic,” said Suri, in closing.
Nykaa’s path to profitability and its “soonicorn” status is not surprising, given how rapidly the beauty products e-tailer has scaled. Founded in 2012 by Falguni Nayar, former Managing Director of Kotak Mahindra Capital, the company has scripted a successful growth story with strong year-on-year growth and closed FY 19 with ₹1,200 crore revenue. The high-growth […]
We give an insider look at Nykaa’s highly scalable technology stack that allows playing with new business models and how Nykaa attracts the best talent
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["Go", "AI", "MongoDB", "RAG", "Python", "analytics", "SQL", "R", "Java", "Redis"]
["AI", "analytics", "RAG", "Redis", "MongoDB", "Python", "R", "SQL", "Go", "Java"]
Richa Bhatia is a seasoned journalist with six-years experience in reportage and news coverage and has had stints at Times of India and The Indian Express. She is an avid reader, mum to a feisty two-year-old and loves writing about the next-gen technology that is shaping our world.