A special guest greets us when we walk into Zerodha’s office. She walks around the work floor area, sits next to us even as we wait for Nithin Kamath to join us. She wags her tail and walks away as soon as Kamath settles for the shoot. A staff member tells her "Zero, eekade ba" (Zero, come this side…).
Kamath, the founder of Zerodha, named the pet 'Zero' when he found her in the garage and took her in as a member. Zero comes across as a part of the team and has seen the journey of India’s largest platform grow over the last nine years or so.
The sense of purpose is clear as we get into the chat. Calm, clear and soft-spoken, Kamath is sure of what he wants to do. He is not a man in a hurry, not someone who wants to go in for mindless expansion and certainly not go for an IPO just to raise money.
"We don’t need capital now, but at some point we will look at it,"’ he said.
Predictability of a business is important once it is listed and predictability is not easy in the broking business, Kamath said.
"Our business is generating cash. We don't have any large ambitions and the second thing is philosophically, we have said that we will never spend to acquire customers."
So, how big is the Indian market? Not as big as it is made out to be. "The actual number is 3.5 crore, not 10 crore. So, it’s not such a large audience."
His peers tell him that he is very pessimistic to be an entrepreneur. But, "I think of myself as a rational optimist, usually factoring in the worst-case outcome so you know, I don't get disappointed because if I get disappointed, I'll probably not do the business well," he said.
In the course of 40-odd minutes of conversation, Kamath talks about practical issues in implementing a draft proposal like the Applications Supported by Blocked Amount or ASBA-type process in the secondary market. Or for that matter, a central bank digital currency or e-rupee "which will be of use for government programmes and not so much for you and me".
Kamath started the business with an idea that of helping traders "get over the basic problems, as the brokerage costs were high and broking as a business is very opaque and the need to make it transparent".
Starting the business as a problem statement, Zerodha has come a long way.
"As the business grew, we said we need to educate people because financial literacy is quite low. Then, it became other platforms. We said, it's not enough to have low-cost transparency and education. People need access to better tools, utilities, and better platforms and that's where, you know, Kite—our in-house app—started."
What about young investors? Spend now or save now? Both, he says.
"I think saving and investing is super important. I mean, like people who are in their 20s and 30s is how technology is taking away a lot of jobs. Technology is just making things more and more efficient and medical progress is increasing the lifespan. So, what it means by the time today's 20 years is 50 years old, it might become very hard to find a new job at 50 and we are already seeing it," he highlighted.
Watch the full conversation here:
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