Nithin Kamath states it as a freedom rather than a sacrifice: it is a good place to be when you do not have to look at customers in terms of acquisition cost and lifetime value, because then nothing forces you to push people into trading or to sell products that suit you rather than them. It began as a constraint, since Zerodha had no money to advertise at launch, and it survived on purpose: referral incentives started in 2010, changed repeatedly with regulation, were disallowed around 2018 and 2019, and today there are none at all, yet referrals stayed roughly flat. Sridhar Vembu makes the same argument from the product side, that venture capital forces you to grow faster by spending on sales and marketing instead of R&D, and if you do not invest enough in R&D you will not have long term growth. Zoho crossed a billion dollars in revenue profitably, and Mani Vembu confirms the spend on R&D is still a lot more than the spend on marketing.
4 hand-picked resources, 4 India-specific, 4 link-checked. Pick how you want to dig in.
Why we picked it The whole mental model in one short post: not measuring acquisition cost and lifetime value is the point, not an oversight, and he spells out what it buys him.
From Z-Connect by Zerodha by Nithin Kamath About 3 min read
Open zerodha.com →Why we picked it The referral history, including the years incentives existed, the regulatory ban, and the striking observation that referrals stayed roughly flat once the incentives went away.
From nithinkamath.me by Nithin Kamath About 4 min read
Open nithinkamath.me →Why we picked it The clearest statement of the tradeoff in his own words: venture capital pushes spend toward sales and marketing and away from R&D, and he names what that costs you later.
From Business Today by Sridhar Vembu About 8 min read
Open businesstoday.in →Why we picked it The present day proof that this is a policy and not a phase, with Mani Vembu confirming R&D spend still exceeds marketing spend at a billion dollar company.
From Forbes India by Naini Thaker About 7 min read
Open forbesindia.com →How how great operators think reads from a different seat.
