Zerodha has had the good fortune of ending up building a good product whilst the market needed it.
If the pandemic had not happened, the growth would not have been what it is right now and that is when “build it and the users will come” philosophy stops working.
The engagement metrics do work, but just like everything else in life, if you overoptimize for any one thing, it is detrimental (eg- drinking water in excess is harmful).
Zerodha was already India's largest broker more than a year before the pandemic happened[1]. The stuff mentioned in the post isn't something they're just starting to do now; they've been doing it since the beginning. They did benefit immensely from the pandemic stock frenzy, but they were very successful much before it happened.
I've been a user for more than three years, and have never seen a single pop-up or ad or basically any kind of nudge from Zerodha regarding signing up for any of their products. There are third-party add-ons (like Tickertape), but they explicitly make people aware that these are separate products with their own terms, conditions and fees if any. This is very much appreciated by users, and they tend to have fewer complaints per user in comparison to the competition[2].
They've grown primarily because they're good at what they do, and there is no catch regarding any of their products. Rest of the financial industry in India is a cesspool with a massive buyer-beware attitude, which is an instant turn-off for most people, but there weren't many other options until recently.
The one thing I find wrong about the post is that they aren't track-free; I notice Google Analytics being blocked on ublock origin. Hard to disagree with anything else.
As a happy Zerodha user since 2017, I agree with all of this. Even if the pandemic would not have happened, Zerodha would still be India's largest, most profitable broker.
I don't think "engagement metrics" work. I mean, the objective of any business should be to make profit, so the metric that should matter is ultimately the average revenue per user. Engagement may in some cases correlate but why use a proxy when you can use the most important metric directly?
"engagement" only comes into play when you don't have a business model to begin with (and instead hope to carry on raising more VC money or sell to a bigger sucker) so that's the "best" you can do because your actual ARPU is negative.
They do work. You can draw a straight line from “Engagement metrics” to a working business model that generates real revenue. There are several B2C products that derive their value from engagement. And it is frequently a leading indicator of how viable a product can be.
But like all metrics, one should not over optimize on any one metric - be it engagement, revenue, growth rate etc.
The biggest issue has been a lack of balance between engagement and usability which unfortunately has been dominated by engagement over usability.
I think engagement comes into play in both scenarios (having and not having a business model) and is really detrimental in the latter case.
But if you have a business model then looking at engagement metrics can be incredibly useful in informing a lot of product decisions and shouldn't be disregarded. Just a mistake IMO to optimize for it alone in the absence of other things.
If the pandemic had not happened, the growth would not have been what it is right now and that is when “build it and the users will come” philosophy stops working.
The engagement metrics do work, but just like everything else in life, if you overoptimize for any one thing, it is detrimental (eg- drinking water in excess is harmful).