If you sum up the modern startup MANTRA using a single line, it is:
Growth >> Profitability
So, startups will happily light a nice million dollars stash on fire as long as they get an upward curve of users & revenue.
But, what about the rare bootstrapped startups? Someone like Zerodha — who not only manages to grow their user base but also makes a bucket load of profits, INR 1600+ crores! 
How exactly did they grow while making so much money?
Well, let's find out how Zerodha grew to a revenue of INR 4300 crores  in just 12 years, by taking 0 VC money!
How to hunt those first 1000 customers?
So, before we get into the crux of this, let's first discuss some points we covered in the previous article.
- Zerodha's main goal was basically to democratize the broking industry, so
- The barrier of entry for traders is not HUGE!
- The system is more transparent and less SHADY (Remember how our parents thought investing in stocks is an elite sport?)
- They introduced a flat pricing model that's the same for all customers.
- Finally, they were curating financial content to get more people interested.
Now, like any other bootstrapped organization, Zerodha also had several realizations & course corrections during its 12-year run!
Having worked as a trader for 10+ years, Nithin Kamath was very clear on one thing — people don't really get interested in trading or start investing by coming across ads about investing. Most likely, you'll get interested in trading after having a conversation with a friend or a reliable/respected acquaintance or mentor.
So, all marketing would've to be through Word-of-Mouth. That's the first realization.
Zerodha's early marketing strategy!
Zerodha mainly had 2 ways of marketing their startup
- Community outreach
- Offline telemarketing
1) Community outreach
During his trading days, Nithin was part of quite a few trading communities. These are your simple groups on platforms like Reddit, Yahoo! Messenger, etc.
In fact, he himself was running a few of the large communities. So, basically, he was quite well-known.
He used this to his advantage by distributing the early version of Zerodha on these communities.
2) Offline telemarketing
Now, as we'd mentioned in the previous article, Nithin Kamath had spent most of his savings on buying the refundable deposits. Naturally, the early team was operating under a tight budget.
So, Nithin Kamath himself was going door to door dressed as "Sachin the salesman guy". He was working on getting prospective users & referrals signed up on the platform.
With community outreach and offline door-to-door marketing, Zerodha gained its first 1000 customers.
Being customer-obsessed is a good thing!
Zerodha's specialty had shifted by this point. It went from discounted prices to focusing on financial education. I am of course referring to their blogs and educational content. But, now competitors were catching up.
Their third realization was that ultimately to retain customers they had to create a superior trading platform.
Zerodha's main customers were day traders. Day trading is a very intensive vocation. So, they had very specific needs.
Their first product was barebones software based on NSE's NSE NOW. So, they designed a no-clutter, no-noise trading platform that showcased basic analytics, for superior user experience.
This essentially created an awesome feedback loop for them -
- Traders would come across Zerodha through communities.
- They'd love their platform's simple & intuitive interface
- They would tell their friends about the platform
- More users would show up!
This ultimately gave Zerodha push and the momentum to reach the 6.5M subs it has today!
The underrated world of bootstrapping
Zerodha's strength lies in its customer obsession. After trading for years, the Kamaths knew what the traders needed. So they built just that.
In trying to solve a real problem in a niche community they very miraculously created the world's largest stockbroking platform in volume.
Now, with hundreds of transactions made, Zerodha essentially sits on a goldmine of data that it's leveraging to buildd a financial ecosystem. Quite a jump from a simple trading platform, right?
But, this success story is a case for bootstrapping.
Now, there is definitely a case for pursuing VC funding. There is quite a serene, "let's have Shahrukh khan in our ads" view beyond the fundraising route. Things definitely get easier. So now why bootstrap? Well, here's why!
- Freedom - When you take the bootstrapping route you are only answerable to yourself and your customers. There is no board with external people questioning your decisions. This increased freedom helped Nithin take some rather unruly decisions that eventually worked out.
- Profitable growth - You need cash flow to run a company. Being profitable is not a secondary choice for bootstrapped startups. In the end, this incentivizes you to build a viable business.
- Become customer-obsessed - With no third party driving your decisions, you can now become truly customer-obsessed. All of Zerodha's decisions reflect that.
- No vanity metrics - Finally, although you might start out with a solution to a real problem, there is a high chance that with external influence your product also gets morphed to chase some vanity metrics. When you're bootstrapping, you're not chasing any vanity metrics.
At the end of it all, bootstrapping keeps you grounded & laser-focused on your business goals!