When Walmart bought up a tiny Silicon Valley startup called Kosmix in April last year, it left a lot of tech watchers scratching their heads. About nine months on, the little company's role within the mega retailer is coming into focus. Kosmix—now called WalmartLabs—is leading mobile and social research and development at Walmart, with the goal of pushing the company forward in mobile and online retail. And increasingly, it looks like Kosmix will play a key role in the retail behemoth's international efforts.
For Venky Harinarayan and Anand Rajaraman, the company's two cofounders, Walmart's purchase of Kosmix was their second startup deal. They'd sold their first company, Junglee, to that other massive retailer, Amazon. Kosmix became WalmartLabs and Harinarayan and Rajaraman joined Walmart as heads of mobile and online retail. The key, it seems, is that Walmart is giving the tiny crew the space to create and innovate. "We've been given a lot of flexibility…and have been empowered," Rajaraman tells Fast Company.
That independence has allowed WalmartLabs to innovate at a snappy pace. A few months into moving in at Walmart and a few weeks shy of Christmas, the Labs released their first product. Shopycat, an app for Facebook, made gift recommendations based on your friends' tastes. It saw 120,000 downloads, which Harinarayan and Rajaraman consider a healthy success. The team also re-did the search feature on Walmart's website. Last week, they launched an online contest called Get On The Shelf, win which products could be voted on to be included on Walmart store shelves. It wasn't specifically requested by Walmart—it emerged organically from a WalmartLabs engineer. Even so, "Walmart believed us and allowed us to launch this effort within a very short time," Rajaraman explains.
WalmartLabs has also been actively beefing up staff. They've been hiring from competitors and have been snatching up small companies, like iOS app maker Small Society, that have grown around the core Kosmix team. The trick is to keep things personal and equitable, Rajaraman explains. A throwback to their days with Jeff Bezos at Amazon, projects are assigned to "two-pizza teams," groups of engineers small enough for them to be fed on two large pies. "We want the team to be flat and allow everyone to communicate with each other," Rajaraman says.
In November last year, WalmartLabs announced that they were planning a second campus in Bangalore, India. "We' want to find the most talented people wherever they are," Rajaraman says—just as there's a good concentration of such people in the Bay Area, so also there's a healthy concentration in India's IT capital. They've already hired their first dozen employees. "Our expectation is to be about 100 people in two years," Rajaraman says. "It's our second campus."
Their second campus, Rajaraman admits, is conveniently located. With a core group of skilled tech folk in Bangalore, should Walmart think of dipping a toe in Indian turf, they can be of use to the San Francisco group while also remaining uniquely poised to take on India's operations. "E-commerce in India is a very exciting area," Rajaraman says. "That's one of the reasons having a WalmartLabs in India makes sense."