Groww Co-Founder on Building a Customer‑Obsessed Fintech in India

Lalit Keshre, co-founder of Groww, shared insights into building a successful consumer fintech company in India, emphasizing customer obsession, strategic choices, and the evolving landscape of technology.

The Genesis of Groww: From IS Officer Dreams to Startup Seeds

Keshre grew up in a small city in central India, where his grandmother envisioned him becoming an IAS officer. This traditional path was disrupted when he learned about Apple and Steve Jobs, which "wired his brain very differently." However, the concept of a "startup" was unknown to him in the late 90s. His exposure to the dot-com boom at IIT Bombay in 1999-2000, where many peers were starting their own ventures, ignited his interest in entrepreneurship and the idea of "being independent, doing your own stuff."

Iteration and Evolution: From Robo-Advisor to Transparent Platform

Groww was not Keshre's first entrepreneurial attempt; it was his second, with a student startup preceding it. His initial idea for Groww, launched in 2016, was a robo-advisor, inspired by the popularity of platforms like Wealthfront and Betterment in the US. The motivation stemmed from the observation that despite India's large population and growing online commerce, the number of investors was remarkably low (less than 20 million).

However, the robo-advisor model "did not work out." Customers consistently asked "why this product, why not that?" This feedback led to a pivotal realization: Indian customers valued choice and transparency. This insight, combined with lessons learned from Flipkart's model of offering a wide selection and full transparency, led to the current iteration of Groww. The platform, as it is known today, was launched in May 2017, a year after the initial concept, with the hypothesis of opening up everything with full transparency and seamless payments and onboarding.

The Power of Product-Market Fit and Organic Growth

The launch of the transparent platform yielded immediate and strong product-market fit. Keshre recalled expecting around 100 customers in the first month but instead acquiring 600. This early success provided a "very strong feeling" that customers were resonating with the product. The strategy became to "dig deeper on the fact what they are liking and keep doubling it down." This iterative process led to:

• Reduced customer acquisition cost
• Increased engagement
• Improved retention
• High customer love, as evidenced by a strong Net Promoter Score (NPS) and word-of-mouth growth.

Keshre highlighted that in the early days, almost 100% of Groww's growth was organic, driven by word-of-mouth referrals. Even today, a significant portion of their growth comes from friends, family, and even children recommending the platform to their parents.

Strategic Choices and Monetization

Groww made a crucial strategic choice early on: to operate exclusively within regulated zones. This meant proactively obtaining licenses and adhering to regulations, which Keshre believes simplifies decision-making and execution by "removing the variables."

Monetization was initially a "question mark." Groww started with mutual funds, earning a small commission. However, power users began demanding "direct mutual funds," which are zero-commission. This presented a challenge: how to make money if they moved to a zero-commission model? Keshre explained their bet: if a product has low customer acquisition cost, high retention, high engagement, high customer love, and facilitates the movement of significant capital, it's hard for it not to make money eventually. For the first four years, Groww operated as a "zero revenue company." The demand for stocks, which offered a clear monetization lever, ultimately unlocked their revenue streams.

Obsessing Over Design and Customer Connection

Groww operates with "10 commandments," one of which is "obsess over design." Keshre emphasized the importance of being a "power user of your own product." He personally uses the Groww app for over two hours daily and dedicates another two hours to speaking with customers. This direct engagement, especially with "super power customers," helps identify what truly resonates or falls flat. He tells his team that when a new feature is launched, he expects to receive either "this is just awesome, I love it" or "this is terrible, I hate it" messages. Indifference, he states, is the real problem. This commitment to direct customer interaction, even at Groww's current scale, reflects Paul Graham's advice to "do things that don't scale."

Navigating Competition and the Future with AI

Keshre views competition with a sense of "paranoia," especially from younger generations who understand their peers better. His approach to competition is to "not worry about the competition but focus on the customer." This involves understanding evolving preferences, trends, and how technology, including AI, will impact customer experience and productivity.

He believes that while AI will make the "how" of building products much easier, the "what" – understanding customer needs and wants – remains paramount. The barrier to entry for building a startup has significantly decreased. A single person with an idea can now leverage AI tools for design, product management, coding, and even operational automation, a stark contrast to the traditional need for a large team of engineers, product managers, designers, and business personnel.

Looking ahead, Groww, now a public company with millions of customers, is focused on wealth management. As their customers grow older and wealthier, their financial needs evolve. Groww aims to continue evolving its product to meet these changing needs, particularly for younger investors (starting from age 18 in India), striving to be the "most exciting choice for them."

The Co-Founder Dynamic: Alignment and Enjoyment

Keshre shared insights into managing a team of four co-founders, a situation often perceived as challenging. He attributes their success to:

1. Aligned Value Systems: They established a foundational document outlining their core values, with "customer first, customer obsess" as the guiding principle. This ensures that even as strategies change, their fundamental approach remains consistent, minimizing conflicts.
2. Clear Ownership: While everyone initially "does everything" in a startup, establishing clear ownership for different areas (e.g., tech) is crucial for accountability and decision-making.
3. Enjoying Each Other's Company: Keshre emphasized the importance of genuinely enjoying working with co-founders. He noted that even on weekends, they remain in constant communication, and he still looks forward to going to the office on Mondays, even during challenging times.

Parting Advice for Aspiring Founders

Keshre offered two pieces of advice to aspiring entrepreneurs:

1. Don't Listen to Older Folks: He humorously cautioned against taking advice from older generations, as the world is changing rapidly, and younger founders have a better grasp of current contexts.
2. Do Something You Love: His primary advice is to pursue something where "time should just be a blur," and you genuinely enjoy the process. He reflected that he couldn't recall any "sacrifices" made while building Groww because the entire journey was fun.