"Zero to Billions - The Zerodha Story" By Abhish B Book Review: Profile Traders

It is human nature that most people may be attracted to the tagline “Rags to Riches”. Nitin

Zerodha is one such story that made it to be a Unicorn. I’m sure everyone who has the zeal to make it big in life will be inspired by the Zerodha journey.

How Did it All Start?

Nitin, like the other kids in the town, joined IIT. If you were not into engineering in the late 1990s, you were considered to be doing nothing much in life.

Nithin’s interest in trading was drawn from his Marwari friends, who were already making money in their late teens.

His studies were affected by trading, and Nithin was an average student. He was more interested to make quick money through trading. His parents, however, never discouraged him from trading, and they had complete confidence in him.

Nithin was no stranger to initial gains and losses in the stock market. He too went through a tough journey of gains, losses, and costly lessons. By losing it all in the 2001-2002 market crash, Nithin joined a call center job. He would work in the night, save up, and start trading in derivatives again.

It was by chance that he started trading for a fellow gym mate. He was impressed by his trading performance they discussed it over a drink. Nithin’s client base grew and he eventually became a sub-broker to make it easier to trade in multiple accounts.

He had traded with almost 12 leading brokerage firms but wanted to give a shot to build his long-pending idea of building a brokerage firm himself.

It all Starts with Passion

To succeed as a business, you need to have a purpose behind it. A purpose is to solve a common man’s problem. That is what exactly was in the mind of the Kamaths' when they wanted to make the trading business barrier-free and convenient for the traders.

The journey began with a young trader, Nitin Kamath, who became a sub-broker. He realized the problems and limitations the newly aged traders faced and wanted to come up with a solution. That is when the right side of your brain is tickled to innovate.

Nithin wanted to build a brokerage firm that was a “Customer first” in the true sense. With lessons learned from trading himself and selling skills when working in the call center, he was ready for this new venture.

The Launch Pad

Nithin’s business plan and vision were all clear. He wanted to provide the best trading experience to its users and give value for money. His vision to provide no barriers to traders in trading resulted in the name of the company being coined “Zerodha”.

He started disrupting the brokerage industry with the transparency he brought to brokerage charges. Zerodha came up with a simple brokerage calculator to put up on their webpage.

This coupled with the flat Rs.20 brokerages, irrespective of the traded amount, was just the right recipe needed for Nithin.

Bootstrapping without any external investors meant that Nithin could be flexible, independent, and innovative in making decisions. Nithin initially looked for external funding, but the lack of it resulted in being a boon for Zerodha.

Their focus was limited to providing quality products to their clients and enhancing their trading experience.

The first tipping point

The first tipping point came when Zerodha was mentioned in an article in the Economic Times as the first discount broker in India. This gave a big credibility boost to Nithin and his team, helping them grow faster.

The number of new account openings grew month on month, and soon Zerodha would be among the top 10 brokers in South India in terms of turnover per day. This was just the beginning, and Zerodha created Customer connects with Q&A blogs on their website.

Nithin’s quest to provide the best trading experience required that they provide their customers with the most reliable trading platforms. Zerodha launched the ZT, Z5, and ZM platforms, some of the fastest trading platforms available at those times.

Nithin even traveled to Wall Street in search of technological partners. However, none were ready and simply wanted to invest in Zerodha, which Nithin was not game for. He returned to Bangalore determined to build an in-house tech team to do the job.

With Kailash Nadh and Karthik Rangappa on his side, there was no stopping Nithin from making Zerodha one of the best trading and investing platforms. Kailash built a tech team of passionate coders to build the in-house technology. Karthik took a special interest in building Varsity, an online interactive online learning platform for trading and investing.

The Game Changer

The “Kite” platform proved to be a game changer for Zerodha. It simply focused on using only those options that traders would regularly use and removed all the other clutter.

With innovations galore, Zerodha started competing with big names like HDFC and ICICI. The big names were not quick to adapt to new technologies, which was Nithin’s biggest advantage.

With zero brokerage announced for investments, there was no stopping Zerodha. They did not see a need to invest in marketing their products as they saw their client base grow simply by word of mouth.

Zerodha went on to launch new products to expand the Zerodha universe. Zerodha’s audience increased to people who used to invest in mutual funds to look to Coin as a platform to invest.

With technological breakthroughs and a seamless trading experience, Zerodha was already the second-largest broker in India by November 2018.

Nithin went on to create Rainmatter to fund start-ups that showed the potential of tapping future technologies. Rainmatter acted as an incubator, partner, investor, and co-founder for different fin-tech start-ups. Until now, 11 start-ups have been incubated by Rainmatter, and many of them have disrupted their niche markets.

Nithin believed in innovation and going beyond the impossible, which formed the base and core value of Zerodha and its success. He applied lessons from his trading days to building Zerodha into what it is now.

Conclusion

An idea remains an idea until its tested, implemented, and improvised. If you have an idea and aim to make it big in life, Nithin Kamath’s Zerodha is all you need for inspiration.

Get your copy now if you would like to be inspired.

(Amazon paid link)

Guest Post - Written by Mr. Lal Bajaj, Bangalore

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