After a career in the US, we returned to India in 2009-10. It was a hot market back then with lots of businesses coming up and the initial signs of the digital revolution could be seen. The policy change of 1991 has had its effect and significant wealth had been created. So, coming from a background in investing, we started asking our friends and relatives what they do with their money.
The answers they gave surprised us. The most popular asset classes for them were fixed deposits, land and gold (because it doubles up as jewellery). This totally flew in face of our experience from the US where more than 40% of the population invests in public equities. The practice prevalent here didn’t make much sense because the returns of the Indian stock market had been phenomenal. Indian equities had shown solid returns of around 14% if one takes a long term view.
They say that the best ideas come to you when something in front of you is not working properly and that’s how it germinated for us as well.
We started trying to teach our friends and relatives that investment is something that they should be doing. One day, I took one of my uncles to a brokerage house. Opening an account took almost half a day with all the paperwork that was involved. A good one hour was spent on bargaining on what prices we can get. Another hour was spent on giving us the phone numbers which we needed to call in order to execute a trade.
That’s when we realized that despite there being so many things getting reinvented and innovated upon in this country on so many fronts, no one is really trying to do anything in FinTech. It wasn’t the sexiest sector back then but it seemed like a problem that we can solve. And that gave birth to our mission.
India is not new to saving – the household saving rate across India is almost 30% which is much higher than what’s observed in other countries. But the problem is that people are not saving optimally. So this is where we saw a massive opportunity. We are technologists and designers at heart and our belief is that technology and design can change a lot of things.
So we formed an online only brokerage company and started an initiative called Upstox which is a mobile-first heavily disruptive application that makes it super simple for one to begin investing in equity markets. It’s completely free to use if one is doing delivery trading on stocks. For futures, options and other advanced products, one is charged Rs. 20 an order.
The philosophy with Upstox is that we are going to build a slew of products within Upstox to make the investment process really easy for everyone. Our goal is to get anyone who’s putting their money under a so-called mattress to channel some of that into the stock market. We live in a country where there’s zero percent tax charged on long term equity gain from the stock market. Yet most people are not even aware of this.
Of course, one has to be careful about how one invests. With Upstox, we are trying is make it simple for the user to structure investments in a way that makes it as safe as possible. We believe that taking a long term view on the equity market is key to realizing high returns. Everyone has unique goals and risk appetites and it’s important to structure the portfolio accordingly. With Upstox, we hope to revolutionize the way investing occurs in this country.
When we initially started this, it was just the three of us sitting in a room, hashing out ideas on how to approach this. As we progressed, we found it really important to find those two things we really wanted to focus on. So, for us, those two things have always been customer support and product. We have finite hours in a day and we can only focus on so much. Narrowing it down to the two essentials is what we believe has helped us stay on track while growing.
Finally, in closing, a piece of advice to the entrepreneurs out there. Remember that the best ideas come from looking closely at your everyday processes and industries, no matter how boring they appear to be. Try finding something that doesn’t seem to work right. Something which you feel you can disrupt and change. And, if you happen to find that special something, then go for it and give it your best shot. If you work really hard at it, you may just find something that clicks.