In a recent conversation with Shekhar Tomar, Assistant Professor of Economics and Public Policy at the Indian School of Business (ISB), Nithin Kamath, co-founder of Zerodha, shed light on why the popular stock brokerage firm doesn’t typically have alumni from premier institutions like IITs and IIMs among its workforce. While dispelling any notion of an explicit policy against hiring from these institutions, Kamath highlighted the misalignment between the priorities of such graduates and the ethos of Zerodha.
Kamath clarified, “It’s not that we don’t hire IIT, IIM students. It’s just that there are no IIT, IIMs [alumni] in this company. And the reason is when we started, the first many years, there was not enough money on the table. So, we couldn’t afford any IIMs. Because people come with the price tag.”
The Zerodha co-founder pointed out the inherent challenge in hiring business school graduates, stating, “The way MBA schools work is that you get wired to think about where you want to get to life in how much time.” He emphasized the difficulty in making promises about future positions and salaries, given the dynamic nature of the business and the uncertainty it entails.
Kamath acknowledged the financial burden on students pursuing courses at prestigious institutions. “People are spending a lot of money to do these courses. They’re right in a way. They can’t just come out and say ‘I’m okay to be in a place which says you do well, you’ll make some money at the end of it’,” he explained. The essence of Zerodha’s culture, as per Kamath, lies in the commitment to continuous improvement and adaptability: “The culture has been every day we get up, we’ll do something better and wherever we have to get to life, we’ll get to.”
The discussion also touched upon Kamath’s experience with day trading in the early years of his career. He demystified the perception that day trading is an easy path to wealth, stating, “Day trading is probably the toughest place on the planet to make money. It gives you an illusion that it’s easy, but I think the only easy thing about day trading is opening an account. Otherwise, it’s the law of the jungle.”
Kamath highlighted the zero-sum nature of day trading, where one’s gains come at the expense of others. He cautioned against underestimating the competition, ranging from retail investors to highly skilled individuals with advanced mathematical backgrounds and substantial resources.
In conclusion, Nithin Kamath provided valuable insights into Zerodha’s distinctive work culture and the challenges associated with hiring individuals from premier institutions, shedding light on the dynamics of the financial industry and the demanding nature of day trading.
