Known for his one-liners of wisdom on social media and answering questions that start with ‘why’, Kunal Shah is the mastermind behind Freecharge and Cred. Being a philosophy graduate who founded two tech startups, he is regarded as one of the most successful entrepreneurs of the country.
Early Life
Kunal started working at a very young age of 15 to help his family during a financial crisis. He managed a full-time job while pursuing a Bachelor’s degree in Philosophy and some freelance work in the evening, making him financially independent at a very young age. Like a true entrepreneur, he has worked in various businesses from selling music CDs to mehandi, working in a SaaS business and even importing laptops.
He started working as a junior programmer at a BPO owned by Sandeep Tandon in 2000. Even as an employee, he approached things as an entrepreneur already making decisions and launching business lines. Kunal also joined the MBA program at Narsee Monjee Institute of Management Studies in Mumbai but soon dropped out as he was looking to learn and not just earn a degree.
In 2010 he started PaisaBack which provided cash-back promotions for organised retailers.
It was while working on PaisaBack that Kunal got the business idea for FreeCharge when he analysed that 95% of sales of a mobile store came from recharges.
Freecharge
Kunal is known to have deep insights into consumer psychology and behaviour and was convinced with the concept of ‘Free’ and wanted to capitalise that. Hence, Freecharge – a Pioneer in the segment was born.
Shah understood that in order to bring people on board, they had to be incentivised. Being a philosophy major, he understood consumer behaviour and understood that the money saved on a burger or a coffee could have multiplying effects on the pocket money of the youth which gave a big push to the app.
Originally supposed to be a B2B marketing company, this app which initially allowed users to do an online recharge and rewarded them for the same, turned into an e-commerce or payments company with 15,000 transactions in a day with zero customer acquisition cost.
As An Investor
After selling Freecharge to SnapDeal, Kunal spent some time at Y Combinator and Sequoia as an advisor. He has also been an advisor to the board of Bennett Coleman & Co Limited, the Chairman of the Internet and Mobile Association of Indian. As an Angel investor, he has invested in various startups like Unacademy, Innov8, Go-Jek, Zilingo, Razorpay, Bharat Bazaar, and many more. He has also mentored numerous startups across Asia.
In 2018 he stepped back into entrepreneurship with his new venture CRED.
CRED
A web-based application that helps its users to manage their outstanding credit card payments and earn coins that can be redeemed on various brands, benefits or bills.
The thought behind creating CRED as told by Shah in an interview with Forbes was the “good actors” who pay their dues and taxes should be rewarded. CRED membership depends on the credit score of the individuals.
This meant that its target market was a niche segment of the top 1% income earners of the nation. Shah believes that you got to move against the crowd and do the opposite. While everyone was targeting the masses this time, Shah’s target market was affluent. He wanted to build an ecosystem-based on trust through CRED.
He asserts that CRED is not a payments company, it’s here to stimulate consumption by fostering wealth creation and changing the way we live.
Interesting Insights
Kunal Shah is also known for his theory of ‘Delta 4’ which states that any product should create a delta of 4 or higher in value creation for its customers making the switch from old behaviour to new behaviour irreversible. This systematic change in consumer behaviour makes the product efficient and bragworthy. According to him, this ‘Unique Bragworthiness’ of a product is what makes it sell more than the USP.
Kunal often talks about the concept of a wealth-driven society as opposed to a status-driven one. Status games are zero-sum games as there is a hierarchy whereas wealth games are positive-sum games. Wealth creation benefits all the players engaged in the activity. He says ‘Don’t envy the wealth of successful people, envy the skills that made them successful.’
He also talks about how building trust for a product or a brand is a superpower. In a mistrust society like India, if one is able to generate trust, one can expand and grow further.
Our Favourite Startup Wisdom By Kunal Shah
“If you fully accept the worst that can ever happen in your journey, fear won’t ever be an obstacle in starting-up”
“Don’t bank on just marketing your idea, build value.”
“If you don’t go through the journey of failure… you are not going to have any probability of being successful.”
“The best one (way to raise funds) is where you are introduced by somebody else. True for dating and true for investments,”
“A few percentages of a $ 400MN business is better than 100% of shit”
If you don’t already we suggest following him on social media to get interesting insights into human behaviour and psychology. He is a firm believer of the Indian entrepreneurial spirit and stands by it in his actions.
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