Razorpay’s hypergrowth journey: learning’s & what’s next?

Vikram Vaidyanathan
MANAGING DIRECTOR
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In today’s episode we have Shashank Kumar and Harshil Mathur, co-founders of Razorpay, along with Vikram Vaidyanathan, MD at Matrix Partners india. in this episode they talk about the evolution of Razorpay and learnings from its hypergrowth journey - tune in the find out.

Vikram:          

Hi, everyone. Welcome back to another edition of Matrix Moments, i'm super excited for this podcast. i have the Razorpay founders Harshil and Shashank with me, they need no introduction. We’re super privileged to be early investors  and partners in the Razorpay journey and we’ve seen them grow from sort of the youngest Fintech  founders when they started one or two years out of school to now Fintech  veterans who are inspiring the next set of Fintech  founders and they’re still pretty young but now they’re as old as the Fintech  ecosystem is in india.

So super excited for this. And let’s dive right in. i'm not going to introduce you guys, everyone knows you. So talk a little bit about the beginnings of Razorpay, you were very focused around Startups , small businesses, solved an acceptance problem. Then that became very big and you’ve gone on to large merchants and so on. And now the vision seems to be evolving back to the beginning with a focus again on small businesses and Startups  and so on. So just talk me through all that, how that vision has evolved.

Harshil:          

We started Razorpay and the idea for Razorpay came in without any thought of what a startup means or what funding means and everything. We were just two folks fresh out of college, two engineers who learned to code and we stumbled upon a problem of accepting payments and that's when we went around and found that like almost every startup founder, every person whose building something in india was facing that same problem.

Right, so i think the focus on payments came in because of the empathy that we had for startup founders because we were a startup founder ourselves and we felt that if we solved this problem we’ll solve the problem for so many new upcoming startup founders in the country and this will be one less problem for them to worry about. And that is how we started, of course as we grew and we expanded our vision broadened and we felt that we don’t need to limit ourselves as too small any particular segment and this solves the problem for almost everyone who wants to digitize themselves and want to accept digital payments in india.

But if you look at Razorpay’s journey almost all of our product launches, almost all of the things that we’ve built are built around a problem of a startup founder. Like that's the personality that we connected most to because we think like them. So when we started payments and then we felt a lot of people just wanted digital payments, they don’t care about building a website and all of those things and that's how payment links came into play, payment pay just came into play.

We felt a lot of Startups  were building in B2B space so that's something that Smart Collect was born, sufficient payments were born because there were a lot of startup founders building SaaS businesses so almost all of our products and services have been built around empathy for the startup founder whose building something and the focus earlier was to solve for the payments for a startup founder, how can we make it easy for them to accept money, how can we make it easy for them to monetize their business.

And i think as we kept going deeper and broader into that i think in the last couple of years we felt that we can go broader than just accepting money. Like a startup founder is spending a lot of time in multiple other financial operations that are needed when you setup that business and the empathy was always there because we remember our early days, we remember the challenges that we faced, we remember how it was so complicated for us to – i used to personally sit and do salary processing eight hours every month for all the folks who used to work at Razorpay till we’re at least 15-20 employees. i remember how complicated it was to pay TDS, pay PF, pay so many different things on so many different portals and face all of these issues.

So empathy was always there and as we reached that scale that okay, we could go broader than payments i think that's where our journey moved towards things like X, things like Capital which we’re now building on now.

Vikram:          

i think that's sort of a fantastic learning for most people building a product, which is actually develop this empathy for your core user and then identifying this pain point in that user’s life. So as you evolved as you started discovering more of these problems how did you decide that hey, i want to solve for this set of problems versus another set of problems. And talk to me about balancing hey, this is an acute pain point but maybe it can't be solved by product. i’ll come back to product ethos but can't be solved by product, it has been solved by a lot of operations. So how do you make sense of this, hey, this is big pain point and then we’re the best people to solve it.

Shashank:      

Actually a good question. Even when we started we were very much focused on here and now, right, like what can we solve right now for businesses and founders which is very unique and which will bring a lot of differentiation in the market. So when we had started there was nobody who was focusing on Startups  and the digital SMEs that i like to call and most of the incumbents are very much focused on enterprises.

So we thought like okay, how can we simplify the life for founders or for businesses that are starting up. So we’re the first ones to launch digital onboarding, we were the first ones to bring extreme amount of focus on design and usabilty around payments. Then as we scaled up two years later then we started approaching a lot of enterprises and they started coming back to us, hey, we also want similar kind of experiences that you guys bring but with the scale and the reliability and robustness. And at that point i think we were in the right place, right frame of mind to then start building towards them.

There are a lot of problems that we always knew are present but we couldn’t solve for them at a certain point of time like take an example of cross border payments. i’ve been tracking that problem since when we started like 2015-16 but we were never in a position to really solve for it in a good way with all the compliances and regulations and partnerships that it requires. And i think over time like 2018-19 we sort of kept chipping away at it and suddenly we were in a position that now we have like the best cross border payments stack in the country and anyone who is looking to solve for export payments and slowly starting to solve for import payments can work with Razorpay.

So that is to say that at any point of time it’s a question of our own abilities as well that what we can do and second, something that adds a lot of differentiation. Because just building something incrementally never works and honestly i think we build a lot of stuff and we build a lot of stuff and probably a lot of them we discard or just goes into maintenance and doesn’t do well.

Vikram:          

Just double click on that, right, you talk about differentiation and that's usually like a 10x solve versus like an existing solution in the market. How do you determine, hey, this is a 10x solve for this pain point and this is not?

Shashank:      

i think at the starting you can't really know whether it is a 10x solve, you know, you can do your research, you can talk to customers, you can read the data like these are the 3-4 things that are there like having good domain knowledge at least one thing that has worked well for me is to look at it very much from an outsiders perspective because the moment you are sort of embedded in the industry you also adopt the blind spots that the industry has. But the moment you sort of look at it from an outside perspective and evaluate it from first principles saying why is it something broken and why is it happening this way. Just keep asking why, why, why to get to the root of the problem and you might discover certain preps that will feel like it’s sort of in quadrant with the way things were happening and you can hit around that.

So if you look at the payments aspect itself when we did digital onboarding, when we launched digital onboarding like paper mandates, or paper signatures that was sort of a norm during the day and we asked like why is it like this. And there’s no clear answer like it’s just a way it happens. So that's like the situation for a lot of things and i think technology breakthrough helps. Like i know the scenario around payroll for example, i think payroll has been broken for a long time but taking a very deep tech approach to then saying look, we will simplify it and make it a single click with all kinds of product and tech solutioning or whatever you can do.

Now that's really a big delta and any time you talk to a founder and your own experience it sort of validates it. But how big can it get and whether the 10x really comes through that you can only know in practice. Like you have to back your gut and say okay, let’s just go and do this and then course correct if it doesn’t work out.

Harshil:          

Another lens on that is also knowing what our strengths are as a company and where can we produce a delta. So for example we know that our strengths is tech and product and using tech and product to build around financial flows, build around money flows. So wherever money flows we can tech and pivot to really make it seem less, make it simpler. But outside money flows it’s not our core strenght. To give an example when we look at payroll, payroll in the end is a money problem.

Vikram:          

Just hold that thought for a second, Harshil. You guys i remember maybe a year or maybe it’s been more than a year, it’s hard to keep track of Covid times. You guys framed what are all the opportunity sets and that opportunity set was very wide and most payment companies were into lending, then super apps and a bunch of things you guys could have done. But then you stuck to your ethos and said flows and transaction flows are who we are about. And then within that it seemed like RazorpayX just feels very natural and now you're really doubling the amount and saying okay, this is an integral part of the company or this is where the big vision for the company is going.

So what made it click versus all the other opportunities that you had?

Harshil:          

it was all about like cut off things, the first thing is of course knowing what our core segment of customers is and our core segment of customers have always been Startups . Right, so it is a problem that is very critical to the core segment that we serve. The second is it plays to our strengths, it is a money flow problem. How do you use tech and product to make money flow simpler and seamless. Like payments is all about how can we make it easier for a business to receive money X is broader than that, how can you use tech and product to make all aspects of money flow that a business needs to do seamless and secure.

And as we went deeper into it every problem becomes a subset of that so like Shashank was talking about payroll. Payroll in the end of the day is about how do you ensure that you pay an employee, how do you ensure that you pay all the compliance payments as well as the single salary payment. How do you ensure all those compliances and everything gets done with a single click. So in the end it becomes a money flow problem.

There are problems that are connected with this which a lot of companies might do because you have an opportunity to do that and it builds revenue for you, it builds larger space for you and we’ve been very clear that we wouldn’t get into the space like Shashank said we wouldn’t get into a space just because we can, unless we can find a way to differentiate. So unless it plays to our strength we will not be able to differentiate. Example i’ll give is when we built payroll we realized that a lot of people need insurance and we realized that insurance is not our core strength so we partnered with companies who do that well, we got into the platform.

We built tech and product to make it easy for these companies to get access to it but we don’t really need to manufacture the product ourselves, we can work with companies who do that well and make it on the platform. So there are things that are core to us which are around money flows and things that are not part of money flows that we’ll rather partner with other folks and bring it on the platform.

Vikram:          

And one of the things i’m always blown away by every interaction with you guys is how clear you are on what you won't do. And i think often in a lot of founder conversations there is an excitement that you can do this, you can do this and then you're not staying true to your ethos. Whereas we’re always true to your ethos on product centricity and this is what we’re good at. And therefore okay, this feels natural and really listening to okay, this is what we’re good at and therefore we’re going to do this. Sorry, i cut you off.

Shashank:      

No, i wanted to add on the RazorpayX piece on the banking part. i think we’ve evaluated a lot of opportunities in the past as you said. But look at banking, again a little bit from an outsider perspective, right, it’s a large market. Banks are like the largest institutions in the country but at the same time it’s not evolved and become like a sort of mobile first world that we’re into. in the level of experience that you get from let’s say a Whatsapp or instagram that's like kind of personalization that you get, that's not true for banking today. it’s the sort of ethos that is there, like it’s one size fits all.

And that's the burden that most large banks carry because they’re building for pretty much everyone in india so they have that burden that they have to serve and they have to craft a very well done general product. The kind of experiences that Startups  need from banking is significantly different. You know, whether you're a one person company or an enterprise company or you’re a growing startup the level of differentiation that banking can bring for your business any founder i talk to they always – it’s a place we store money, that's it. But in the end the way i think about it is like your bank account sort of forms the fundamental core of your financial operations.

And it can give the level of insights to you that probably what an enterprise business gets from an army of finance people. Your bank account is a sitting pool of genetic tremendous amount of data. We talk about our social data, and personal data, for a business what is their personal data, it’s the financial data which is really personal for them and something that can give tremendous value for them. And that's not something that is well done today in the ecosystem.

And the third thing that you look at, right, which is like beyond market side and the current problems which is our own ability. The expertise that i think Razorpay brings to a table is like marrying really good software with banking infrastructure and the money movement flows that are there. And banking sits right in the middle of it, right, you can build really great software, you know it’s core of financial infrastructure and there’s a lot of money movement involved in that whole thing. So it really sits well with the DNA that we have, so it’s just the combination of these three things that pushed us in that direction.

Vikram:          

i was going to ask you what is new about neo banking and you already defined it. i just want a recap for everyone. You said personalization, second that the bank account is the fundamental building block of all your financial and operating flows and third you said insights and sort of personal or genetic data of the business.

Shashank:      

And let me give a very good analogy, right, so like in india you have trains. So the trains have this job of getting you from point A to point B which is what i think the large banks do. They do the job of storing money and helping you initiate transactions. But the moment you get off from the train you have to get to your home or someone might want to go to a park, someone will take a rickshaw, someone will take a Mercedes, right, and someone might just live nearby and will walk. So that last level personalization, that last mile delivery of services on banking is something that is completely missing.

And it was not possible to do earlier because the technology didn’t allow for it but now everyone has a mobile phone, everyone has a mobile connection and that allows you to personalize banking services to the nth extent.

Vikram:          

i think it’s a fantastic articulation of sort of what is new about neobanking. Now how do you go from there to payroll which seems like one of the really very mundane activities. And there is lots of flows, right, so the way i think about it is that you guys solved an acceptance flow which is sort of inbound flows and then there’s a bunch of internal flows. it could be APAR, accounts payable accounts receivable flows, it could be payroll, there’s also a current account operations and opening of accounts flows. But – and i'm not – you're doing some of that at a hygiene level but this is something that you said okay, we’re going to solve it at a 10x level. So how did it go from this is the vision for neobanking but this is where we start.

Harshil:          

Yeah, so when we started building neobanking and the journey started about 2-3 years back. The idea was that we want to simplify all the money flows business and all of those were part of it. But we have to start somewhere, right, so the first basic thing you need around it is a central current account and the operations and the way to manage a current account. if we look at the way banks portals have evolved and the consumers side had changed massively in the last ten years.

But if you talk to any small businesses the way the portals that they interact with or the interface they have, most businesses they have not even any portals. They have to sign documents and paper work and even if there are portals they’re much much more terrible compared to what they would get on the consumer side. So first task was to change that, just the banking operations to something which looks modern and which looks of today’s day and needs where you can open a mobile app and do transfers.

And then we started going into the personalization aspect, how do we solve for specific flows and that is like the problem becomes far more deeper. So we had to pick a flow like flow by flow that a business does and i think the payroll was the first flow that we picked up because it’s the most common flow that every business has to do even if you have two employees or four employees or ten employees it’s extremely complex, it is very periodic, you have to do it on a monthly level and the starting point was our own empathy to a startup founder.

i remember my own journey when we were starting Razorpay and the most hated part of my job was to sit every month and make those salary payments, then sit on 7th of every month make those TDS payments, then sit again and make those PF payments. And i would just go back and think why doesn’t somebody make a single click way to do it. So that empathy build up gave way to that okay, we knew how deep of a work payroll is and how much every startup founder is wasting their time and energy and hating every moment that they’re doing this or looking for that solution that we’re trying to build.

So payroll became that first way into getting these startup founders financial lives that we know you face this problem, we have faced this problem, let’s take it out of the door and you have this one day extra every month that you're not going to spend on payroll. So that is how it started. And over time we’re constantly adding lot more things around it like vendor payments, like invoice payments. And actually a corporate credit card that we launched came from that same empathy because when we started Razorpay even when they see you have a half million dollars of funding no bank would give us a corporate credit card.

And i had to use my personal credit card to pay for Amazon bills, to pay for bills, to pay for Google bills and i would like just wish hey, i have $11.5 million lying in my account why can't they give me a corporate credit card on back of that but like the bank wouldn’t be convinced. So a lot of these things start from our own journey as startup founders and then connect back to the do you know how much pain it is and how much time you're wasting in it and we know that if we go to a founder and say if somebody had come to us that day and said that we’ll give you this software use this and you won't have to waste one day in a month doing this i know i would have bought that software on that day. So that's why it’s working the way it is.

Shashank:      

in fact i’ll tell you a story, i think Harshil was vacationing in Goa i think back in 2015 sometime and he had to carry a laptop and they had to come back to his room near midnight post 11 pm or something like that and he had to log into his laptop and make the payroll salaries during that vacation in Goa. And it was very interesting, you know, because he has to carry that laptop around because you can't make the salary payments using any other machine and nobody else can do it as well because onboarding someone else on that system is like equally tedious so he really hated it.

Vikram:          

And what was he doing while you were making the payments.

Harshil:          

All of them were partying, i had to go out, go down, go to the room and make the payments.

Shashank:      

And we were like that's your job, go do it.

Vikram:          

So switching gears a little bit when you think of this entire space of neo banking and you know all of us founders most of all, investors , everyone sort of creating this category of banks and everybody’s got some fantastic collaboration with a few partner banks, so something has gotten off the ground. But when you guys think of hey, this is what’s happening in Brazil, this is what’s happening in Europe, this is what’s happening even in closer markets like Singapore and so on. How do you see this sort of evolving where this truly becomes like a category of companies and so on.

Harshil:          

i think the way banking as an ecosystem has evolved like it started with what you call typical branch banking and initially banks were just a way to store your money safely that you have to be a large building in every city where you could park your money safely so that nobody steals it. And then over time it evolved because today you don’t go to a bank and deposit money just because they can hold it more safely than you do but because you can do a lot more with that money when it stays in the bank.

And i’ll give a consumer example of it but today the reason you put money in the bank is so that you can use UPi on it, you can have a credit card on it, you can make payments, you can do transfers, you can get access to loans, you can get access to so many more services. And that’s the way our personal issue with banking has changed rapidly. But even today when you look at most banking interfaces they’re built like the traditional branch was built. So if you open a bank interface, you log into it and you look at it like counters you would see in a branch, right, deposits, payments, loans, insurance.

it is like you’ve walked into a bank branch just in a digital world. But the point of digitalization, the point of technology is not just to bring the physical interface online it’s also about using technology to make those interfaces more personalized and more insightful. And i don’t think that has happened in banking yet, right, today’s digital interface of banks are still not really taking advantage of all the technology that we have available. And an example i will give is your credit card payments, right, like you would make a payment online you would type a lot of these things and everything and make your payment you're making a payment digitally but it’s not really using a modern mobile phone technology to do it and then UPi changed the game because UPi uses the modern stack that we have, the mobile phone that we have to make that process far more simpler than typing 20 figures and then completing a transaction.

i think that needs to go broader into banking itself that using today’s technology to ensure that you do authentication using that, you do uploads using that. When you open the interface the internet doesn’t ask which counter you want to go to today but it should say what do you want to do today. You want to make salary payments you can just button in and you have everything available when you want to make salary payment. You want to make a vendor payment you click this button and you get everything whether it is paying TDS, paying invoice, paying all of those things in a one single click. And that's the level of personalization that we need to head towards in banking.

So, yes, digitization of banking has happened but i don’t think the new age banking has really penetrated in the way it should be and that's what neobanks are all about, that's what they’re trying to do in personal space as well as business space.

Vikram:          

Before i just hand over to you, you know, in each segment, if i take consumer firstly there are different TGs you can go after. HNis, emerging HNis, or you can go after the low-income segment. Then you can go wealth first in some cases or spend first in some cases. Similarly in SME neobanking some people are just doing current account first, some people are doing payments first, some people are doing APAR first. How do you make for somebody new coming into this space what advice would you have when you say choose this target segment, choose an approach, how do you make sense of all this?

Shashank:      

i think that's the beauty about free market, right, like different people can take different approaches and ultimately like the customer decides which one is the best. i think the advice doesn’t change, whenever you're picking a problem you always work backward from customer pain point. What is a customer pain point that you can identify where you can create good amount of differentiation and that's the approach to take whether you have to solve any kind of problem that you're solving even in the neobanking space. i think the additional burden that i would put here is on the compliances side, the regulatory side, like what is doable from a regulatory perspective and what will not sort of run foul of the current landscape that is there to an extent.

So you have to be cognizant of the risks that are present but that's it, like identify a great problem statement that you think neobanking can solve for and just go from there.

Harshil:          

One thing i just wanted to add is that it’s important to know what your core customer base is, the reason most of the banks are built the way they are is because they’re universal. They’re trying to serve everyone and that's why they have to build like Shashank’s example like trains. They have to bring everything under the sun and you pick and choose what you want because they don’t know what kind of customer you are. But the differentiation and advantage of neobanking is that you’re going towards the personalization and the personalization can't happen till you focus on a specific segment.

You can't build personalization for all the masses in one go so you have to pick up certain segments and that's what everyone is trying to do. For us we picked up that segment as Startups  and startup founders, that we’re here to solve their problems. So we’ll pick up and choose the problems that they struggle with the most first and then go towards other problems over time and expand that market from there.

Vikram:          

i think it’s a great point and at least when we looked at this neobanking thesis from our point of view for us what changed was now it is possible to build for a million, 2 million consumers, customers in one segment and still build a large business. And it’ll be surprising but even if we take the top ten banks in the country some of them only have like a million to 2 million accounts, they don’t have more than that. And they’re big $5-10 billion type businesses and so it is actually now possible to take that sliver and as long as you serve this very sharply, build a humungous business and that's something that’s really changed the landscape.

Shashank:      

Right. And see, even i think one other big thing that i think the regulator is also slowly starting to recognize there is still a cost to opening a bank account and maintaining balance in that bank account. Like in a traditional world when you’re operating through people through branches it makes sense, like you have to be near to that customer to deliver your services. But today in a digital world i mean having a bank account is like having an entry in a database, literally it is like that and you have absolutely no cost associated with it. But there’s still like a requirement of minimum balances and stuff like that.

So while there’s been a lot of push in opening bank accounts and this whole thing that happened around Jan Dhan Yojana and – but ultimately like driving users of those bank accounts has still not happened because a lot of traditional mindset is still there like okay, like you need to have branches and people near to those customers. But the approach to neobanking is changing that fundamentally because your operations have become a lot more digital so your cost of opening a bank account and maintaining a bank account goes down drastically. And that's something that will as it translates to reality will change banking at a very fundamental level.

Vikram:

You talked a little bit about the regulator and obviously they’re going to have a big role to play in the evolution of this category. You guys are very big in payments therefore you have a seat at the table. You guys interact a lot with the regulator, what advice do you have for others in terms of a, how early or how late they should go to the regulator and how do you make sure it’s a pretty progressive regulator, how do you make sure that you're sort of not 2 years ahead of regulation or maybe 6 months to a year ahead of regulation?

Harshil:          

I think the advantage of India is you have a very progressive regulator and a lot of innovation that's happened in the Fintech system has been driven by regulator actually. Like if you look at UPI and even things like credit and everything there’s a lot of push being driven from regulator. So you have to understand that regulators have certain different objectives and those objectives might be different than yours, they have to worry about the bottom of the bottom of the bottom pyramid guy and you worry about the creamish cream guy and that's where a little bit of difference might come in.

What is important is a, I think at least in India the reputation with regulators is very important, right, so once you do something which you know is not fitting right with the regulations and it gets noticed that you lose all your edge and from that point onwards you're always holding your hand behind and trying to figure out how it works because you’ve spoiled your reputation. This is important to maintain and hold that reputation important to the regulator that they see you as a constructive player in the ecosystem, they understand they have problems as well they understand their objectives as well and its strength to build knowing those objectives.

So the other thing you can do to manage that and no matter how small or big you may be but if you're doing something that's really progressive and you've a certain world view that it can be good for the ecosystem and it solves for the risks it’s good to just go and tell the regulator, it is good to just – and the worst case write to the regulator explaining what you're doing, how it’s good for the ecosystem, how you are aware of the risks that it may have and how you're solving for those risks. They might not say yes or no, still but at least they’ll be aware and if tomorrow they come and question you on these things at least you have a standing to say that okay, we were doing this and this is how we thought about it. Versus blindsiding regulators and then they coming and noticing your audit and then coming to you it puts you in a very tough spot and it goes back to the reputation problem. And once that reputation is gone it’s very hard to build it back.

Vikram:          

I couldn’t agree more and you guys know that we see this across Fintechs especially in our portfolio and in the ecosystem. Whoever has gone to the regulator early and said this is what we’re doing and there will be tweaks that they add to the flows, there might be some friction initially but because you have done that even if something goes wrong later the regulator actually takes a more lenient view, give you some room to fix it versus you being doing something for a long period of time then it’s created a problem for them then it is immediately that's when you get a knee jerk reaction saying stop. And then it’s very hard to come out of that reputation low. So I actually wanted to define what are the core capabilities to winning in neobanking and I try to summarize some of the things that you guys said.

The first is the product experience which is as soon as you experience the product for the first time it’s wow, hey, this is built on a new stack, this is built on new tech, so that's one. Second was something which is sort of high frequency top of mind, it could be payroll, it could be daily spend, it’s something where you’re moving up in the wallet because for me users are already using banking solutions.

Harshil:          

Absolutely. Yeah.

Vikram:          

You have to move up in the wallet from being the third, fourth card in the wallet to being the number one option that they’re thinking about and I think being there at high frequency or periodicity like you said helps you get higher in that banking wallet.

And I think the third which is the most important thing that you guys touched on is compliance and governance earning. Because if you say you want to be a bank and you're not setting high standards of compliance and governance for yourself then you don’t belong in the system. It does take a big commitment to belong to the ecosystem. Anything I missed other than these three that you guys think about in terms of winning?

Harshil:          

No, pretty much. Of course there are lot of things that you spoke about like around personalization and then around using insights to your advantage that's one thing that neobanks can do far better than what traditional banks have been able to do, what Shashank spoke about. Just using the data to deliver the next level of experience and it was like the first thing that you said like a lot of the product experience is built using the data, the true data that you build around it and that's one thing that traditional ecosystems haven’t been able to do that well.

Now I have the most important question for Shashank which is how do you attract and retain them? This everybody would just be glued in to the answer because you guys have done a fantastic job of creating this culture for them without giving away the trade secrets, what are one or two things that you guys are doing.

Shashank:      

I wish there was like a big trade secret to it which we could protect, right, but well, at least for me it boils down to just basics of it. We put a high bar on whom we hire, right, we have a rigorous interview process but at the same time in that whole interview process we make the person really feel loved. We care about whoever we’re hiring, we care about the connect experience, we care about that person who is interviewing with us like we’re taking their time as well so they should get some value out of it. And right from there I think we set the expectation on the culture as well that we expect anyone who is interviewing that they’re representing Razorpay and they should the people who are there on the other side get a glimpse of what Razorpay is.

So it’s in some sense the whole process acts as a good filter for the kind of people that we attract. And once they’re inside just crafting that whole journey of people like from the point of like what is the problem statements that they’re working at, what are their own aspirations in terms of like how they want their career to grow in the organization. How we’re supporting them from a mentorship perspective, from a managerial perspective. One of the simple things is that if you don’t have good managers in the organization however good people that you have like it will somewhere fall down. At a scaled up level the moment you’re beyond that 150-200 people I think having very good managers is extremely important because they define the experience that their reportees are going to get.

So I think we invest a lot in training our managers and aligning them with the philosophy of the company which is taking care of employees but at the same time like having very high proactivity that is there.

Vikram:          

I think from this conversation it’s clear to me what is different, that is actually a labor of love for you guys to build this organization and you care about how this person’s life goes from the moment they start their first interaction and especially through sort of an onboarding process.

Shashank:      

Absolutely. It can't happen without that, right, between both me and Harshil from day 1 have always been like the people who are working with us like they’re giving us their time, their literally blood, sweat and tears and we should do right by them. And everything for us comes from that philosophy and hopefully people also recognize that and because that's the reason like even despite all these years like our best people and our oldest folks have kind of stayed with the organization.

Harshil:          

Yeah. One of the things that works from the engineering side for us is, right, like engineers today are smart. Like the salaries and everything is stable stakes we’re looking beyond that within the jobs. And a lot of orgs treat engineering as like this engineering team as a services company within their own company. The business team decides what the customer needs, okay, this is how the customer wants. And then they throw it to the engineering and say okay, just build this. Like nobody enjoys that kind of work environment, nobody likes to work at companies to work like a services arm of the product company. The first thing that we’re able to do is that both me and Shashank really understand it well that our core differentiation comes from engineering.

Right, at the end of the day people use Razorpay because our success rate is better, because our latency is better, because our algorithms that we’ve written, doubts that answers the best and those things around. And that definition isn’t happening because the sales guys said hey, improve your latency but it’s because the engineering on the ground was able to figure out how to improve their latency through this small interaction, through this micro interaction.

So first having that understanding that our differentiation at the end of the day is how we built up the word and the engineering that our product goes into. Second is then how do you give that freedom and flexibility to the engineer on the ground that whatever they’re building this is the problem that they’re solving and they’re aware of the problem that they’re solving and they’re able to use their own skillset if there is a way to figure out solutions to the problem and not just say that okay, just write this code and get this done.

Where you have those two things available that’s where people start feeling impact in the job that whatever I'm doing that's really producing differentiation for my company and that is producing the impact on the ecosystem and not just because the sales guys said that this needs to be built. So I think that culture has to flow down from the top and that is how people at the ground start feeling empowered and impactful in their jobs.

Shashank:      

And one thing that Harshil mentioned around impact I think that's a very important thing, we redesigned our whole review process around having asking people like hey, what is the impact that you’ve created. And there’s a good amount of conversations that happens in all our cars and corridors like the work that I'm doing like what is the impact that I'm creating and how is it useful for the ecosystem, for the company, for the customers that is there. And it’s very surprising like a lot of engineers when they come in and then slowly is like they have to figure out like okay what is the impact that I'm creating and then suddenly have a realization like I don’t just have to do like in just technical work but it needs to have some positive outcomes as well.

And then they sort of work backwards from it in some sense and try and produce the best output. So this whole thing around on the work side like having a very good customer focus to impact and culture and perculating to the juniormost folks in the organization. It’s a work in progress, I think it has stood us in good strait.

Vikram:          

I think the first time that I’ve heard you guys actually articulate this view of impact. And I think it’s incredibly powerful because most people want their work to have meaning and I think that impact is actually giving the meaning back to either somebody spending hours and hours of quote which is fantastic. So closing comments as you guys – I can't believe you guys are just getting started on this journey and I know how that’s how you think. But as you look forward to this next phase of this journey on Razorpay becoming potentially a new bank, becoming like a even larger platform what’s sort of exciting for you and what are the things that sort of think you as challenges.

Shashank:      

So you mentioned at the beginning that we’re now like Fintech veterans and whenever I hear Fintech veteran I feel absolutely weird. It’s somewhere like still don’t accept it fully that it’s been like 7-8 years in the industry because I look around. I still get excited every day with the kind of work that we’re doing and you know, that scale of problems that we’re solving. What really feels wonderful to me from a neobanking perspective is that even to this day like the business is right up there, they’re the heart and soul of the economy. And the businesses in the country, the tech startups, the digital SMEs all of them are on a digitization journey but fundamentally by and large broadly in the ecosystem digitalization today is none existent.

Most of the business are still operating very manually and I would say there’s like at least an opportunity for us to improve the productivity of businesses almost by 30-40 percent on a regular basis. And when you do that, when you help businesses become more productive I think it has a direct impact on the economy of the country in terms of producing more jobs, being more conpetitive at a global state. A lot of positive outcomes and I think like at a macro level you should more from a 5-6 year perspective help India become like a 5 trillion GDP economy.

So but connecting back to what we’re doing we want to take neo banking to a place where it will practically be doing the best service to a business if you're not using like modern day new banking products to make your business more efficient, modern like having access to a set of insights even when you're like a small business which wouldn’t have been positive at their rights.

Vikram:          

Yeah, Harshil, anything to add.

Harshil:          

No, I think on similar lines, right, I think as India is scaling of course the entrepreneurship in the country is going massive in the last 6-7 years but I think I truly believe that for the fact they didn’t do on GDP goal there will be a lot more entrepreneurs coming up in this country in the next couple of years. And if we can, if Razorpay can play a role in reducing the amount of time and energy and money that they’re spending in managing the business finance operations by even 20-30-40 percent and save that time and give it back to them. I think they would have done a great job, we would have created a massive impact on the entire ecosystem because that is time that is going to be going to building these businesses and scaling up all these businesses and contributing back to the GDP of the country.

So that's the impact that we both are really excited about and we honestly see that happening today like when customer is using payroll from Razorpay or they’re doing vendor payments from Razorpay and they call back and say you guys have just changed my life I'm spending one day less, two days less, every month or doing these things and that I'm going to back into my business that is the best outcome at the end of the day that we have to see.

Vikram:          

What I'm most excited about is that you guys are just beginning this journey and we continue to be partners along this journey and I can't wait for what’s coming up ahead for Razorpay. Thanks, everyone, for listening in. I'm pretty sure that this is one of those podcasts that everyone will have to listen to twice because it’s just unbelievable how they’ve said we got during this podcast. Thanks so much, guys, really appreciate the time and that's it from Matrix Moments here.

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