Meesho doing things that don't scale

In the bustling landscape of Indian e-commerce, few stories are as compelling as that of Meesho. Founded in 2015 by IIT Delhi graduates Vidit Aatrey and Sanjeev Barnwal, Meesho has grown from a simple WhatsApp group into India’s largest social commerce platform, valued at billions of dollars. But the journey wasn’t always smooth, and the company’s early growth strategy exemplifies Paul Graham’s famous advice to startups: “Do things that don’t scale.”

The Genesis: From Failed Venture to WhatsApp Innovation

Before Meesho became a household name in India, Aatrey and Barnwal were working on a hyperlocal, on-demand fashion marketplace in Bangalore. Despite their technical expertise and determination, this initial venture failed to gain traction. However, this failure would ultimately lead them to a much more successful idea.

During their time working on the fashion marketplace, the founders noticed something interesting: small business owners and individuals without physical stores were struggling to promote their products online. The existing e-commerce platforms were too complex and expensive for these small entrepreneurs, particularly women who wanted to start home-based businesses.

This observation led to a pivotal insight: in India, people were already using social media platforms, particularly WhatsApp, to share products and conduct informal business. What if they could create a platform that formalized and enhanced this existing behavior?

The Unscalable Beginning: Facebook Pages and WhatsApp Groups

Instead of immediately building a sophisticated platform, Aatrey and Barnwal started with a remarkably simple approach. They created a Facebook page where they would post pictures of products, primarily focusing on fashion items. When customers expressed interest, the founders would connect with them through WhatsApp to complete the transaction.

This manual, labor-intensive process was far from scalable. The founders personally managed these conversations, handled orders, and coordinated with suppliers. They created WhatsApp groups to manage orders and communicate with customers, spending countless hours on their phones responding to inquiries, processing orders, and resolving issues.

“In the early days, we were essentially running a business through WhatsApp,” Aatrey later recalled in interviews. “We would post products on our Facebook page, and then move the conversation to WhatsApp to finalize orders. It was exhausting but gave us invaluable insights into our customers’ needs.”

This hands-on approach allowed them to understand the pain points of both buyers and sellers in intimate detail. They learned that many potential entrepreneurs, particularly women in smaller towns and cities, wanted to start businesses but lacked the resources, technical knowledge, or inventory to do so.

The WhatsApp Group Limitation and the Pivot

As their customer base grew, the founders quickly hit a fundamental limitation: WhatsApp groups could only accommodate a limited number of members, and managing multiple groups became increasingly unwieldy. They were doing something that clearly couldn’t scale, but it was providing them with crucial market validation and customer insights.

“We soon had more customers than WhatsApp could handle,” Barnwal explained in a later interview. “That’s when we knew we needed to build something more robust.”

This limitation prompted the development of what they called “V2 of Meesho,” which was designed to enable the behavior of setting up a “boutique” on WhatsApp. Rather than just facilitating transactions through their own WhatsApp groups, they created a platform that would allow anyone to become a reseller by promoting products through their own social networks.

“As soon as we launched V2 of Meesho, which was to enable the behavior of setting up a boutique on WhatsApp, we saw a crazy amount of growth,” Aatrey noted. This was the turning point for the company.

The Social Reselling Model: Empowering Entrepreneurs

The new model was simple yet powerful: Meesho would connect suppliers with resellers, who could then sell products through their social media channels without having to invest in inventory or logistics. The platform provided resellers with a catalog of products, images, and descriptions that they could share with their WhatsApp contacts, Facebook friends, or Instagram followers.

When a customer placed an order through a reseller, Meesho would handle the backend operations—sourcing the product from suppliers, managing shipping, and handling returns. The reseller would earn a commission on each sale without having to deal with inventory management or delivery logistics.

This model was particularly appealing to women in smaller towns and cities who wanted to earn additional income without leaving their homes. It required no upfront investment, minimal technical knowledge, and leveraged existing social networks.

The Power of Personal Connections

What made Meesho’s approach so effective was that it tapped into the power of personal connections and trust. In India, particularly in smaller communities, people often prefer to buy from someone they know and trust rather than from an anonymous online platform.

By enabling resellers to sell to their own social circles, Meesho created a commerce ecosystem built on existing relationships. A housewife in a small town could become an entrepreneur overnight, selling fashion items to her friends, family members, and neighbors through WhatsApp.

The founders’ early experience of manually managing WhatsApp groups had given them deep insights into this dynamic. They understood that commerce in India was inherently social and that any successful platform would need to embrace this reality rather than fight against it.

Scaling Beyond WhatsApp: Building the Platform

While the WhatsApp-centric approach was effective for initial growth, the founders knew they needed to build a more robust platform to scale. They developed a mobile app that would make it easier for resellers to browse catalogs, share products, and manage orders.

However, they maintained the social aspect that had made their WhatsApp strategy so successful. The app was designed to integrate seamlessly with WhatsApp, Facebook, and other social platforms, allowing resellers to continue leveraging their social networks.

This evolution from WhatsApp groups to a dedicated platform was a natural progression, but it was informed by the countless hours the founders had spent personally managing WhatsApp conversations in the early days. They built features that addressed the pain points they had experienced firsthand.

Y Combinator and Beyond

The founders’ commitment to doing things that didn’t scale caught the attention of Y Combinator, the prestigious startup accelerator. Meesho was accepted into Y Combinator’s Summer 2016 batch, becoming one of the few Indian startups to make it into the program at that time.

During their time at Y Combinator, the founders refined their business model and prepared for scale. However, they maintained their focus on the core insight that had emerged from their WhatsApp days: commerce in India is social, and any successful platform would need to embrace this reality.

After graduating from Y Combinator, Meesho continued to grow rapidly. The platform expanded beyond fashion to include home decor, electronics, and other categories. It also began to attract significant venture capital investment, including from Facebook (now Meta), which made its first investment in an Indian startup by backing Meesho.

The Impact: Creating Entrepreneurs at Scale

Today, Meesho has moved far beyond its humble WhatsApp beginnings. The platform has millions of resellers across India, the majority of whom are women from smaller towns and cities. It has processed billions of orders and raised hundreds of millions of dollars in funding.

But perhaps the most significant impact of Meesho has been its role in democratizing entrepreneurship in India. By starting with a simple, unscalable approach of managing WhatsApp groups, the founders gained insights that allowed them to build a platform that has enabled millions of people to become entrepreneurs without any upfront investment.

“We’ve created over 10 million entrepreneurs in India,” Aatrey proudly stated in a recent interview. “Many of these are women who previously had limited opportunities to earn income. Now they’re running successful businesses from their homes.”

Lessons for Entrepreneurs: The Value of Not Scaling

Meesho’s journey offers several valuable lessons for entrepreneurs:

1. Start with what works, even if it doesn’t scale: By beginning with Facebook pages and WhatsApp groups, the founders were able to validate their concept and gain deep customer insights without building a complex platform.
2. Embrace existing behaviors: Rather than trying to change how people shop and sell, Meesho built on the existing behavior of sharing products through social networks.
3. Personal involvement yields insights: The founders’ direct involvement in managing WhatsApp conversations gave them a nuanced understanding of customer needs that would have been difficult to obtain through market research alone.
4. Solve real problems: Meesho addressed a genuine need for both resellers (who wanted to earn income without investment) and customers (who preferred to buy from people they trusted).
5. Evolution, not revolution: The transition from WhatsApp groups to a dedicated platform was a natural evolution informed by firsthand experience, not a radical pivot.

The Future: Beyond the Unscalable Beginnings

While Meesho has long since moved beyond its WhatsApp group origins, the insights gained during that period continue to inform the company’s strategy. The platform remains focused on making entrepreneurship accessible to everyone, particularly in smaller towns and cities where economic opportunities are limited.

As Meesho continues to grow and evolve, it stands as a powerful example of how starting with an unscalable, manual approach can lead to transformative insights. By embracing the messy, labor-intensive work of managing WhatsApp groups in the early days, Aatrey and Barnwal laid the foundation for a platform that has changed the face of e-commerce in India.

In the world of startups, there’s often pressure to build sophisticated platforms and scale quickly. Meesho’s story reminds us that sometimes the most valuable insights come from doing things that don’t scale—like managing a WhatsApp group one message at a time.