Yesterday, I was chatting with a relatively new member on the team about what makes Zerodha different, and what I do for a job. What struck me was that his understanding of what makes Zerodha different was superficial. He knew we don’t incite customers to trade, but not much beyond that. And this got me thinking: this probably isn’t just them and is likely true of more of our recent hires; and that’s an onboarding gap we need to fix.

Zerodha only exists in its current form because of the culture, mission, and philosophy at the top. Lakhs of people follow our every move, read everything we write, and are die-hard fans who believe in us and would kill for a chance to work with us. If people inside the business don’t carry that context, we risk losing the very thing that makes us who we are.

One thing that came up in our chat was, “Zerodha is a nice place to work!” So the question is: how does a business continue to be a nice place to work after 16 years, with many on the team who have been here for 10+ years, and still have people say the same thing?

This post was originally written for our internal employee forum, but I realised it would be nice for the world to also know how we run Zerodha. I’ve talked a lot about how we treat our customers, but a big part of being able to do so is also having a team that understands why we should always put the customer first. So here’s an excerpt from the internal post:

Slowing down, deliberately

Anyone who has worked with me from the start would remember that there was a phase, maybe until 2019, when I used to send and respond to emails at strange hours. I used to be at the office till late, sometimes on weekends as well. Then came the realisation that, as a business, we would soon be old, and there was a very real risk of burnout. Our team’s strength had increased significantly from 2014/15 onwards. The question was, “Do you risk burnout and end up relying on continuous hiring and firing?” I knew that for someone to actually start contributing to the business, it takes at least 1.5 to 2 years. The issue with most firms is that people typically leave after about 2 years. And the idea of taking care of everybody also just makes sense. What’s the point of building a business and making money if it doesn’t make the employees’ lives better?

But people follow the person who is leading; it percolates from the top down. This was possible only if I changed as a person. So I started going home early, started jotting down random thoughts in Google Keep rather than emailing someone on the team at 3 AM, and so on.

The reason we are still just a 1,000-odd people team is because of this. People who have stayed longer have compounded their contribution to the business over time. Staying small has been a critical factor in our success.

This is also why we invested in smallcase, Zerodha AMC, Tijori, Sensibull, Ditto, Streak, Financialist, and Pensionbox instead of attempting to build these in-house. The main objective was to stay small as a company and take shots at the adjacencies through good partners rather than try to build it all ourselves and lose focus on the core operations.

By the way, credit for this has to go to K, our CTO. When I started the business, I too believed in the idea that more people can solve more problems. I never realised that more people also mean more inefficiencies. The way he built the tech team since 2014, the way they contributed while improving their skill sets, and the fact that we could actually see this because the team was small, I was sold on K’s idea of building Zerodha while staying as small as possible.

Patience, and the absence of fear

I have infinite patience. People really have to keep making mistakes for me to react adversely, and a lot of folks who’ve worked with me can probably vouch for it. While patience comes naturally to me, giving a second or third chance means people don’t have to live in fear after making a mistake. If there is no fear, mistakes get discussed openly and corrected. Hidden mistakes (unless they are ethical lapses) are far more costly for the business than the mistakes themselves.

This is a big part of how we maintain quality — not through threats, but giving people the space to own up to their mistakes and correct them.

Getting out of the way

Until around 2017, most of my time was spent with the tech team. I used to believe I was helping with product development. This was until K spoke to me one day and asked, “Do you realise that you are constantly bouncing new ideas and derailing the team?” That was my last day of interfering with the tech team. 🙂 It was also around then that I decided it is best to let tech make technical decisions for the business, with no one from the business side involved. It seems like a simple thing everyone should follow, but strangely, most don’t. It is funny how most CTOs are more managers than actual engineers.

One issue, maybe because of the bootstrapped nature of our business, has been micromanagement. I have been slowly and steadily fixing it over time, especially after my stroke. That is when it really hit me that micromanagement is hugely detrimental to the business; decision-making can’t be choked because of me.

As of today, most decisions are taken by the respective teams, and I jump in wherever my input is required. Of course, there are decisions where I am involved, like whether we should apply for a banking license. Even Rainmatter investment decisions are not mine alone; they are taken together as a team.

The thing is, realising you can make mistakes and when you do, acknowledging and fixing them: that too flows as culture from the top. The issue with most founders is that they stay in a bubble, surrounded by people who only say pleasant things. And with success, the pleasantness of the people around you only increases.

I love K for this; whenever I misstep, he is always there to tell me I’m wrong.

No targets, no guns to heads

Ensuring that no one is chasing revenue numbers has also been key to getting the culture right. It is really simple to give someone a target and then hold a gun to their head to get there. We have not taken that approach. If people were running behind targets that never end, with a higher one every time you reach the previous, I don’t know if you could then call it a nice place to work.

The same applies to customers. As Munger said, “Show me the incentive and I will show you the outcome.” The reason so many people look up to us as a business is because we don’t do wrong by our customers. And let me tell you, it is extremely toxic working in a company that doesn’t care for its customers.

Choosing your influences

I have consciously stayed away from the startup and business crowd, because it is extremely tough not to get influenced by peers who are constantly speaking of growth, revenue, profitability, and so on. As someone said, “Show me your friends, and I will show you your future.” When I speak to founders, I can sense a constant urge to catch up with other founders who are more successful. And this eventually seeps into the culture of the organisation they are building.

That said, you can build businesses in different ways and follow different approaches. Whatever fits the nature of the founder, he or she has to build the business that way. We did it the way that best fit us culturally, and hopefully it will be our moat, as most businesses aren’t built this way.

The point I am making is that “it is a nice place to work” doesn’t just happen. It is the result of hundreds of deliberate choices and many sleepless nights over 16 years.

“A nice place to work is not a perk we offer. It is kind of a business model in itself.”

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