Lesson for Startups - Frugality Amongst Others

There are only two ways to create revenue. Getting more business or by cutting/limiting your expenses while retaining clients. Frugality is thus very important for a startup where growth is not immediate and one might have to stretch their budgets again and again.

In the Economist article, success of some big Indian companies it describes is because of their focus on profitability, eschewing extravagant spending and nurturing paying customers.

Here are some examples of their frugality:

• Building using free software: Zerodha is a software company but uses in-house (probably built with free software) help desk software. This saves them millions yearly.

• Nurturing paying customers: Zerodha’s focus on nurturing paying customers is evident through their $2.50 account opening fee, a cost that clients willingly bear despite the potential for financial strain.

• Hiring graduates but training them: Zoho rigorously trains recruits.

• Advertising: Zerodha does not advertise or provide discounts.

Out here in the West where we’re all about consumption, frugality might not be easy but it definitely helps to build it as part of one’s organizational culture and perhaps in the company DNA.

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