Zerodha co-founder and CEO Nithin Kamath, his brother and Zerodha co-founder Nikhil Kamath and CTO Kailash Nadh were recently at the company’s Bangalore office for a podcast. Speaking at the special for CNBC-TV18’s Young Turks Reloaded podcast, the trio discussed the challenges they face as their company continues to grow.
Nikhil Kamath highlighted the fear and uncertainty that pervades the startup ecosystem, emphasizing the need for a more collaborative approach between entrepreneurs, regulators, and the government.He argued that excessive regulations can stifle innovation and discourage entrepreneurship. “We are subject to regulators who we don’t really have any influence [with] or access to their decisions, who can reduce our revenues by 50% in one day. They can make us shut down,” he said.
However, Kamath is quick to add that Indian regulators have made the system more robust. But them he said that excessive regulations too can be bad. “In a classroom with 50 kids, where the teacher makes the rules and reprimands kids at will, will there be innovation coming out of those kids who are living in fear? Likely not,” he says.
Running a broking firm is a tough job
Nithin Kamath echoed these sentiments, noting that Zerodha’s recent revenue growth is likely to slow down due to new regulations imposed by the Securities & Exchange Board of India (SEBI). He cited the true-to-label circular as one example of a regulation that will negatively impact the company’s bottom line. “Running a broking firm is a tough job,” Nithin Kamath said.
Despite the challenges, the Zerodha founders remain optimistic about the future of the Indian startup ecosystem. They believe that by fostering a more collaborative and supportive environment, India can achieve significant growth and innovation.
His wry comment follows on the heels of Nikhil’s much more alarming declaration, “I feel like there’s a lot of fear, not just here but everywhere in the ecosystem. There are many people who are scared.” But Nikhil is not just talking about the broking business; he’s talking about the startup ecosystem and the innovation ecosystem. “If I were to look at what can help India go from A to B… having an ally mentality, where entrepreneurs work with regulators, work with the government, and if we are able to mitigate fear to a large degree, more people will go out and attempt entrepreneurship,” he elaborates.