When VCs dictate product decisions, an ex-employee perspective on Snapdeal VIP

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I was watching a video by Backstage With Millionaires about Snapdeal's collapse when something clicked. The host had perfectly diagnosed the macro failures—the strategy pivots, the competitive losses, the capital burn. But he missed the part that actually haunts me.

Video Link - How Snapdeal became irrelevant?

The part where a PM watches a broken product ship because nobody at the company level wants to admit it's broken.

I was a product analyst on Snapdeal's VIP subscription program from October 2023. My job: make subscribers stick around. Build recurring revenue. Save Snapdeal from irrelevance. We had dashboards. We had data. We had authority.

We failed spectacularly. But not in the way you'd think.

How Shareholder Pressure Built A Product That Shouldn't Have Existed

Let me trace back to how VIP even got greenlit.

By late 2020-2021, Snapdeal had stabilized (barely). The valuations had collapsed. SoftBank needed a narrative. Investors needed to see growth. And the company had just pivoted to "value e-commerce" -> a thesis that actually made sense, atleast on paper.

Own the Tier 2 and Tier 3 segment. Build recurring revenue. Compete on something other than logistics speed.

The VIP subscription program was that narrative.

Simple math: if 1% of 8-10 lakh users paid monthly, recurring revenue would transform the unit economics. On a spreadsheet, it worked. Investors would see growth. Founders would have a comeback story.

Nobody asked the obvious question: Do value-conscious users in Tier 2 and Tier 3 cities actually want a loyalty subscription?

I love to talk about the bank manager for a failing restaurant business logic here; where the only solution of the bank manager is to raise the prices of each dish without understanding the product or service.

That question would have killed the entire project. So it never got asked.

When Backend Fragments and Discount Logic Collide

Here's what actually building VIP looked like:

The backend team would ship "placeholder fragments." Features half-built. Logic incomplete. But deployed anyway because the roadmap had to show velocity. A checkout optimization here. A referral system there. Each one broken on its own, somehow held together by duct tape and dashboards.

I'd flag it. "This discount logic is incoherent." Response: "It's based on a simplified logic." No. It wasn't. It was optimized for "let's have something in place to say we have discounts"

Then the users could game it. VIP subscribers would order ₹500 worth of products, get a 20% discount, then cancel half the order because they realized they only needed some of it. The subscription benefit stayed. They'd keep the discount on the stuff they wanted, abort the rest.

So they got the VIP benefit without the commitment. Without the stickiness. Without any of the value exchange we were supposed to be building.

The Fundamental Question Nobody Asked

Here's the thing that kills me: we never asked whether loyalty subscriptions are even relevant for value-focused Tier 2 and Tier 3 users.

Think about who this customer is. They're bargain hunting. They're comparison shopping. They're price-sensitive. They care about the deal. Not the brand. Not the exclusivity. The deal.

A loyalty subscription in that market is like, if IndiGo (InterGlobe Aviation Ltd) offered a frequent flyer card to someone who only flies when tickets are under ₹2000. Why would they lock in with you when they could just check Meesho, Flipkart , and Snapdeal every morning?

Meesho understood this. They didn't sell loyalty. They sold opportunity. "Build your own business." Completely different value exchange.

The Souled Store understood it. They didn't sell discounts. They sold belonging. "You're part of a community of Harry Potter fans" Emotional stickiness, not price stickiness.

Snapdeal tried to sell discounts. To bargain hunters. Through a subscription model. (It didn't come with any bundled benefit, I'm not even talking about OTT, Snapdeal had a collaboration credit card with Bank of Baroda, even that didn't entail any special privileges)

That's not a product. That's a investor sentiment masquerading as growth.

The Dashboard That Lied Every Day

I'm good at my job. I can segment cohorts. I can build retention curves. I can make a failing product look stable in Mixpanel , SQL.

And that's exactly the problem.

Every day I'd log in and the metrics would look fine. Subscriber growth was up. Cohort retention was "industry standard". Revenue was tracking. Finance had their number. Growth had their number. Retention had their number.

Everyone looked right. The product was dying.

The trap is this: you can be executing perfectly on the wrong strategy.

I optimized the wrong variable. The whole team optimized the wrong variable. Not because we were incompetent. Because nobody with actual authority wanted to admit the core assumption was broken, or even if they did, it continued because it was a "strategic leadership" enforcement.

The IPO Is The Admission

Snapdeal's preparing for an IPO. Not because the business is booming. But because investors need an exit. SoftBank Investment Advisers 's been waiting since 2016. The IPO prospectus will talk about "untapped value e-commerce opportunity" and "deep Tier 2/3 penetration."

What it won't say: VIP was a failed experiment built under shareholder pressure, executed by fragmented teams, shipped despite fundamental product misalignment, and ultimately proved that loyalty subscriptions don't work for bargain hunters.

The company is approaching profitability not because VIP succeeded. Because they shut down the parts that didn't work and doubled down on what barely works.

What I Should Have Said (But Didn't)

I had the data. I saw the pattern. I knew the product was broken. But raising your hand in a company where every unit of growth matters—where investors need the narrative costs you capital in ways that are subtle and real. For a fact, it wasn't just me, most of my team, or even my extended team, knew the reason behind us working on VIP.

The real lesson isn't about Snapdeal. It's about how easy it is to be a PM solving the wrong problem really well.

If you're working on a loyalty subscription, ask yourself: Does this customer actually want to be loyal? Or do they just want the best deal?

If it's the latter, you're not building a subscription. You're building a discount button. And you'll never make it stick.

Snapdeal learned that. Just took ₹1.8B and a decade, or even more, to figure it out.

What VIP Taught Me:

• Shareholder pressure kills honesty about whether the product should exist at all.

• You can optimize metrics and still be completely wrong about the thing you're building.

• Fragment-based execution (half-built features, simplistic logic) doesn't compound—it collapses.

• Loyalty subscriptions for bargain hunters is a contradiction in terms.

• The metrics that look good at standup are often the ones hiding the biggest problems.

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