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    Nithin Kamath on how Zerodha grew without advertising, fund-raising

    Nithin Kamath on how Zerodha grew without advertising, fund-raising

    Nithin Kamath on how Zerodha grew without advertising, fund-raising
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    By CNBCTV18.com  IST (Published)

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    “I want to tell people that it is possible to be successful at business by questioning the true cost of revenue, valuations, and growth, instead of continuously chasing them,” writes Nithin Kamath, Founder and CEO, Zerodha.

    Reproduced with permission from NithinKamath.me.
    I am Nithin, and I founded Zerodha.
    I love trading (although not actively anymore) and capital markets. At Zerodha, we focus on building the best tools and services for traders and investors in India. Alongside Zerodha, I also help startups through our Rainmatter fintech fund and more recently, have setup the Rainmatter Foundation to give back to the society, the success we have had at Zerodha.
    Apart from work, I particularly enjoy playing guitar and singing along with my son Kiaan who plays drums, working out with my wife, Seema, spending time with my biological brother Nik (Nikhil) and my brothers-from-other-mothers K (Kailash), Venu, Karthik, Hanan, and our families. I love running, cycling, and swimming in nature, playing basketball and poker, and enjoy all genres of music.
    In school, I was a below average student academically. I discovered trading and the markets by accident at the age of 17. I’ve been through the boom and bust journey every good trader experiences. In the early 2000s, I borrowed money and blew up my trading account and then worked in a call center for 4 years trying to make up for the debt, while also trading on the side. I met Seema while working there. I quit my job when I met the first person who asked me to manage their portfolio.
    I became a franchisee of Reliance Money (brokerage firm) to start a formal advisory business. Around this time, Nik, who is a much better trader than I am, joined me. With him trading, we figured I could set aside some time building a brokerage firm that we felt we needed as traders. As we were figuring this out, we came across NOW, a free trading platform that NSE was offering to brokers. Finally, in 2010, we hustled and pulled together just enough money to start Zerodha. Venu, who had been our friend for a long time, and was working with us since our Reliance Money times, handled operations. Hanan, who had been trading with us, started taking care of support. We started out as a small team, had no pedigree education, no background in tech, no experience, but had a passion for capital markets and the intent to help other traders like us.
    With Zerodha, we were the first to introduce a flat fee model (a maximum of ₹20 per trade), helping traders save upto ~90% of brokerage charges compared to the exorbitant percentage fees which was common at the time. In addition, we offered this single pricing plan to all our clients unlike the then incumbent players who had opaque offerings for different groups of clients. While we started from zero, this transparency slowly got us attention on online communities and via word of mouth.
    However, our fintech journey really started when K joined us in 2013 and we started our tech team. We should ideally be called FinKech. Our still tiny tech team continues to build products which are unmatched, not just in the Indian brokerage industry, but internationally as well.
    Nik continued to do what he does best, trade and take care of risk management. He has now set up a very successful hedge fund called True Beacon.
    Karthik joined us in 2014 and wrote Varsity single handedly, which is now among the top capital market education initiatives in the world.
    Prakash my first customer, Austin who helped Zerodha get started, Om and Bharat our CAs (who really are CFOs), and my parents who have always supported my life decisions, have been key in this journey.
    I have a team of young boys and girls, the Z team, with whom I spend a lot of time at work. We discuss, debate, and ideate everything business and fun. And behind the scenes, our ~1100 member strong team runs various parts of Zerodha.
    Today, Zerodha is the largest retail brokerage firm in India by all measures, and one of the largest retail trading platforms in the world by activity. We have achieved this without ever advertising, or raising any external capital or debt. We focused on innovative products and services, and it took us a slow and steady 10 years along with a lot of luck.
    It isn’t about the big beating the small anymore, but the fast beating the slow, as we have proven. Having a nimble organisational structure focused on creating value for customers without chasing revenue, growth, or valuations, is our big moat, our secret sauce. This sounds counterintuitive and goes against what is taught to entrepreneurs today who are constantly pushed to continuously raise capital, and to measure success and growth in terms of notional valuation and meaningless growth metrics, instead of creating businesses that are profitable and sustainable.
    After the success of Zerodha, and more recently, the media bestowing on us glamourised labels like “unicorn” and “billionaires”, I felt I should share my personal perspective on business and life, and what success really means to me, beyond the labels. If nothing else, I want to tell people that it is possible to be successful at business by questioning the true cost of revenue, valuations, and growth, instead of continuously chasing them. And that success is relative, impermanent, and a lot of luck too.
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