I Did It My Way Podcast Ep 3: NoBroker founder shares his mantra with entrepreneurs

NoBroker Founder Amit Agarwal is a well-known name in the startup world and has gone on to build a company that has grown by leaps and bounds. It is almost sitting at ₹1,000 crore revenues, catering to 3 crore people, and has over 3000 employees at his firm.

In episode 3 of ‘I Did It Way Way Podcast’ with Sonia Shenoy, Agarwal shares his experience after leaving an ultra-comfy bank job to become a founder, and sure it was not easy.

Sonia Shenoy: Hello and welcome to another episode of My Way. My guest on the show today is Amit Agarwal. He's the founder of NoBroker and as the name suggests, NoBroker is a company that connects the buyer to the seller of a home without any broker in between. Now, this is a company that has grown by leaps and bounds. It's almost sitting at ₹1,000 crores revenues, cater to 3 crore people, have 3,000 employees and this is his story. Thank you so much for joining us on the show, Amit.

Amit Agarwal: Thank you for having me.

Sonia Shenoy: I think the big story here is that from being someone who had a very cushy corporate job, you catapulted to the startup world, 9-10 years ago, tell us about your journey.

Amit Agarwal: So I was good in studies, I did my engineering from IIT Kanpur & MBA from Ahmedabad. I was doing management consulting for almost 10 years, then I joined a foreign bank as a Head of Strategy in Bombay itself. So a very comfortable job.

But then I started feeling that if I don't take any risk, then I will be in the same orbit of chasing jobs with higher increments, and I ended up giving an interview with another startup, wherein the founder who interviewed me, and then selected me, had this quote behind him on the wall, by Mark Zuckerberg, which says, "The biggest risk in life is not taking risk". So I felt that when he can take risk why isn't it that I am taking risk... So that was a trigger point, and then I left my job. And then Two of my friends and I, we started NoBroker.

Sonia Shenoy: So from having a very cushy job in a bank to starting NoBroker, which is the first of its kind real estate prop tech firm, which is now a unicorn, and has a very different business model, how has the journey been for you so far?

Amit Agarwal: So the journey has had all ups and downs. So when we left our jobs and started NoBroker, for more than a year no one invested in us because the concept is very new. In the entire world, this concept has not been copied from US or China. So there is no one in the world that does non-brokerage in real estate, we are the only one. So when we started, the investors basically asked that if it is such a good idea, then why hasn't somebody else done it? We said we don't know... But people don't love Indian real estate brokers.

Some are good, but many of them don't provide great services and charge a huge amount of money, so we think it should work in India. But there was a huge struggle because other start-ups haven't had a huge success in real estate so it's a tough category to have. But then we started, we were funded and then ups and downs happened. So for the first five years, we were extremely frugal. We did not use to spend money at all. Three of us, the founders in our mid 30s... whenever we used to travel, despite having ₹18 crores in the bank, three of us used to share a hotel room with an extra bed. So we were very frugal. But then slowly the compounding happened.

Sonia Shenoy: I think frugality is a common trait of all startup founders, I have realised.

Amit Agarwal: No no, you are right and it's extremely important to respect money. So I know that many a times it is assumed that startup basically means burning a lot of cash and raising a lot of money. But respecting money is one of the core things which at least for NoBroker has worked well.

Sonia Shenoy: So now you're sitting on almost ₹1,000 crores of revenues, you have 3000 employees, and you cater to three crore people across the country. To reach this level, what has the journey been for you like? I'm asking in the sense that, how many years did it take to reach this phase... what was the struggle period like... how long was the incubation period for the business?

Amit Agarwal: Sure. So the initial 1.5 years were when we started and when we started getting some bit of customers, but not much traction, because we didn't have much funds to market with. Then after our first funding, since we didn't have an office, we established our first office, which was nothing but a simple house that we basically rented in Bengaluru. And then we faced an issue, a group of 70-80 brokers attacked our office. We did not expect this but, I think many of the clients started saying that they will first try NoBroker and then check with brokers.

So it basically instigated some of the brokers. So our office was attacked, many employees were basically thrashed, they wanted to break computers, thankfully we call police and we were able to save that situation. But then almost overnight, we had to vacate that office because the broker started chasing woman employees in the late evening, they damaged many of the bikes which were parked outside. So almost overnight, we had to vacate and we were in a temporary office for the next few months, which disrupted business. But it also gave the team a purpose that whatever we are doing, is for the good of common people. So... that happened. So these were basically a couple of ups and downs that we faced

Sonia Shenoy: How did you come up with this business idea? I mean, as you said, you don't have any peer even now either in India or globally, right? So what was the eureka moment for you?

Amit Agarwal: So I along with my Co-Founders Saurabh and Akhil, all three of us had our independent experiences. We dealt with brokers in different cities and we basically felt that... why is it that I'm paying the broker so much amount... full one month of rent for renting and two percentage for buy and sell? While he is only connecting two parties? So the question which we asked was that why can't technology do it? If today I can send a Facebook request to anyone in the world, why can't I basically connect the owner with a buyer or with a tenant? So we started with a very simple hypothesis, and because we have had no real estate background, there was no baggage as to why it can't be done. So while everybody else doubted and said, "How can you do it"? Our question was, why can't it be done?

Sonia Shenoy: You looked at it from a pure customer perspective, which I think, is the best way to do it, but what is the business model? You connect the buyer to the seller, there is no broker in between. So the brokerage is eliminated entirely. But then how do you make your money?

Amit Agarwal: So what we do is we start with platform as a freemium platform, it basically means it's free plus paid. So as a default, as an owner, you come and you post your property on no broker for free. As a tenant as a buyer, you can come in, you can contact this owner directly. So there is no broker or brokerage in between. But if you want value added services, suppose if you want your property to be among the top slots, as an owner, then you basically pay us a nominal fee, ₹3,000-4,000, a flat fee is independent of the price of the property. And as a tenant as a buyer, if you want more contacts, premium filters, then you pay us a flat fee.

Sonia Shenoy: Why this startup was, of course, started about nine years ago, since then you have no competitors at all, no peers.

Amit Agarwal: So we have, we have other illicit platforms, which work with brokers, but there is no one who has done this. So we are the only one in India, and we are the largest one in the world.

Sonia Shenoy: But why is that the case? You think because there's a very big broker Nexus, which is hard to crack is that the issue?

Amit Agarwal: Yeah. So one thing is that across the world, in other countries, brokers are much more regulated. So, there is an examination, there is law. In India, there is no examination a panwalla, a grocery wallah can also be a part time broker, and they collect money in cash. So, there is no income tax implication, there is no law which, which basically asks you to do certain steps. And a typical Indian broker will not help you the moment the deal is closed, he will just vanish from the scene.

So globally versus India, this is the problem within India, I think it is much easier to start a platform by asking brokers to pay and advertisement fees on a platform. Building a C to C network is very painful. It takes years to basically get good traction. Because what you want is micro locality matchmaking. Suppose if you want a property in Bandra, you don't really care whether how many properties NoBroker has in Thane, you want only Bandra that also today, and that to X Price. So this takes years. So I think it's building stuff.

Sonia Shenoy: So you know, there's one more issue that you might face, right? In that sense, because the brokers or the local community know who is buying who is selling where the, you know, flats are opening up, but you as a platform, how do you do your research? Have you made any investment on that front?

Amit Agarwal: So what we basically do it, we have made it open for every owner, every buyer, and you will be surprised that today, no broker is the first port of call. So as an owner, I will give my property to broker and I will also post my property or no broker, whichever whoever does it faster, cheaper wins. And that's all that we want. And does the thing that we have been chasing

Sonia Shenoy: Just visibility, right is what the owner homeowner wants.

Amit Agarwal: And what the problem which a broker faces is that he's living in that street, as you rightly said, but it's very difficult for him to get a buyer or a renter from other city or from other parts of the city unless it person actually visits. But now the searching process for buyer, a tenant is now moving online. I'm not sure last time when you researched for buying a property. But I'm sure you first of all went to Google and searched for the properties. So the search process become online. And the moment you go online, you find us, while for a broker you need to physically visit. So that's why we are able to rent out a property very fast. So now especially now sitting in Bombay, within four to five hours, we are able to rent a property.

Sonia Shenoy: Okay, wow, that's fast. And that's, you know, but there is of course, this human angle right? Every time someone buys or sells something, they sometimes want that intermediary to do a lot of the dirty work as we call it. So if you sort of are buying a house then if there's a broker involved, all the legal the paperwork the running around is done by that broker, how are you solving that gap?

Amit Agarwal: So for example, in Maharashtra if you need to do a rental agreement, you need to go to government office, get the thing done. In our case, you can get it done sitting at home. So on a Sunday, our guy will come with a laptop, he will take your Aadhaar card, thumbprint. biometric, if you click a photo, it will, this data will match with government server. And all the rental process will be done completely offline.

But having said that, there is no, you're absolutely right in saying that there are cases in which a broker adds value. And in those cases, so there are brokers who have been helping customers for generations, no one can take their business. And we also don't want 100% market share we are, we are very, very happy with 70% market share. So, brokers who add value to their clients will always flourish.

Our main purpose is that brokers who are here for quick money, and who are not adding value, we want the technology should take over that piece of business and make customers lives much, much easier. So customers should be able to do the transaction at a very lower cost.

Sonia Shenoy: What's the next leg of growth for the business? I do know that you are into aggregating of moving and packing as well. You're the largest aggregators in the Packers and Movers business. What else are you doing?

Amit Agarwal: So we started with real estate. And then we realised that there are many pieces of real estate journey, which are broken, for example, Packers and Movers- only couple of brands in the country. So that we are doing through our partners, and we are India's largest aggregator packet mover. We also do painting. So we are India's largest in painting. We do home cleaning, we do home interiors, we do home loan, we do Furniture Rental, we have a no broker hood entity, which is is which is a very large player in the software for visitor management in gated apartment societies.

Sonia Shenoy: Okay, this is about your business. But let's come back to your own journey. Right? What has the biggest learning been for you, from your corporate job to the success of your startup?

Amit Agarwal: So I think that people generally talk about perseverance, and, and patience. But I think the learning which I have had is, is the emotional stability. So I'll explain you why. So in a corporate job, if something goes wrong - suppose you don't get a promotion, you have a lot of time to be sad about and curse somebody else, and so on, so forth. But when you are running your own business, and the bad news comes, you has no time for self pretty. You quickly process that information, think about what needs to be done, and move on. So I think what basically startup has taught me is to take information, be extremely rational as you can, because being emotional doesn't help and quickly make decision and move on.

Sonia Shenoy: And resilience as well. You have been in both ends of the spectrum and successful in both. You had a very good job in ANZ Bank. And now your of course, is very successful in the startup. What do you prefer a corporate job or being a founder.

Amit Agarwal: So being a founder, a successful founder, if I can say, is the best job in the entire world. But if I was doing a corporate job, I'm sure I would have been happy there also, because as we were discussing, happiness is more of a state of mind. But yes, running a startup - being able to do something that you want. No politics, no favoritism, complete independence has a huge amount of joy.

Sonia Shenoy: And you said there was some reasons for which you decided to leave your corporate job, what were they?

Amit Agarwal: So I basically felt that when I was doing corporate job, I felt that what I'm doing is I'm basically chasing one job with another job with some increments. And my career would basically be in the same orbit. So I felt that if I want to change the orbit, it can only be done if I take risk. So the main decision point was it can you take risk, and generally the startup founders, they take risk in their early 20s. When I started VI, I was mid 30s. And that is typically a late time to start your own journey. But I felt that if I don't start now, I can perhaps never start. And I basically tricked myself into saying that even if I spent two years chasing it, that's still only 10 percentage of the work life. So I tricked myself into saying that let's give it a try.

Sonia Shenoy: You convinced yourself sab theek ho jayega. Okay, for all the young people out there who you know, I mean, startup is become like a sort of a sexy word. Nowadays, everybody wants to be an entrepreneur, everyone who wants to start a startup, what would your advice be to them?

Amit Agarwal: My advice would be would be very, very practical advice. First, is it before you start a startup - It should not be because you don't like your job, or you don't like your boss or did not get a good increment this year. You should start a startup only when you are convinced about this idea. And you are sure that you want to dedicate one to two years to your life. So this is not a shark tank industry where you come and quickly get success. It takes nine to 10 years to really build something. So it's not a sprint, it's a marathon. So first of all, be sure why you are coming.

Second, gather some money. Either you can gather it from friends, family - make sure that your financials are in order. Because if you are if you are a fundable company and you are not able to raise money for next 1-2 years, you should have enough cash to make sure that you can survive because business also requires money. And your living expenses also requires money.

Sonia Shenoy: And how long were you bootstrapped before you got funding?

Amit Agarwal: So we were bootstrapped for almost a year. And then the funding came through. So for a year, we didn't have any office. And when I left my job, many people called me and said, hey, great, you're starting something of your own. But then you are just sitting alone in your home, on your bed with the legs folded,

Sonia Shenoy: And there's no salary coming every month.

Amit Agarwal: And you're wondering, had you gone to office today, you would have made so much money. So all that hawa goes away.

Sonia Shenoy: And you also have a family to feed, you were telling me that you had your second child on the way when you took this plunge. So it was a very courageous move at that time, I'm sure yeah.

Amit Agarwal: And you basically need a huge amount of support from your spouse. So my wife, Priyanka is my batchmate. And unless you have support, it is very difficult because startup journey, although from outside, it seems as if it's a very confident, smooth journey, but it's filled with insecurity, anxiety, being unsure. And the only thing which basically works is perseverance. If you keep on trying, and if you survive long enough, then the luck factor basically vanishes. And then the skill factor takes over. Because the ups and downs they basically even out. So the objective is to basically survive long, and if your idea is good, and keep on chasing it.

Sonia Shenoy: But you need conviction with that idea as well, right. And in your case, there were no experiences, prior experiences to suggest that this could be a workable idea.

Amit Agarwal: So this is a tricky part that if you are doing a startup, then most probably you are doing something which has never been done before. So how do you know whether this idea will work? And the investors also have a limited view about what they have seen? So I think the trick is that you ask customer, you ask customer that if I offered you this, will you pay for it? Will you take the service?

Customers are the final decision makers, neither your friends nor investors, nobody knows. Only the customer knows. So when we started no broker, we asked complete strangers that if there's a service like this, will you really use the service? They said, yes. So I think the trick is that, first is if it can, personally resonate with you the cause, then your conviction is higher, because you have personally faced that problem. And then you want to basically pursue it longer. And second, when you are in doubt, then ask customers, not investors.

Sonia Shenoy: I do know a lot of young people immediately list their homes on no broker before even you know going and asking their neighborhood broker. So you have a great business model on hand. What is your next plan, I'm sure looking to do an IPO by when any kind of timeline?

Amit Agarwal: So we are right now in six cities. So the objective is to basically expand to at least 20 cities. So but yes, it is on the cards. So I think the next three to five years, we would go

Sonia Shenoy: And any plans to expand internationally?

Amit Agarwal: Right now we think India is a very large market, although we had done a small experiment in Philippines long time back, which was pretty successful. And we have an office in Dubai also. But the initial focus is India is a very large one.

Sonia Shenoy: Okay, so the Indian market, what kind of growth are you seeing? Because you know, this real estate space is very tricky. On one hand, it's growing, the premium end of the market is growing by leaps and bounds. But on the other hand, affordability is also a bit of an issue in the mass market and you know, affordable segment. Now interest rates are rising, then there is this rapid urbanisation that's happening. So there's so much supply coming into the market as well. What do you see as the dynamics of the industry?

Amit Agarwal: I think, see, what happens is one is consumer behavior. So Indian consumers love real estate. So if you look around this office, also, I'm sure if you ask your colleagues, lots of people have bought houses or applying to buy houses. Same thing happens in my office also. So real estate, in general, and vs Indians is a very, very big plus. Real estate generally sees a 10 year cycle.

So if you would have noticed, 2000-2010 was a great time for real estate. Past 10 years were not that great. But from COVID onwards, again, the cycle is on the upmove. Unfortunately, supply hasn't come much because of COVID. So right now, if you look at rentals in the metros, they are hugely they've increased. Today is a seller's market where buyers are wanting to buy a good property, but there are less properties which are available. So I think it's a 10 year cycle, we think the next 10 years are going to be really good for real estate. So hoping for the best

Sonia Shenoy: And that'd be good for you as well. Let's come back to before we wrap up right let's come back to the behavioral aspects of being a founder. I'm sure your relationship with money has changed a lot from being a corporate employee to now being a successful startup founder, what was your relationship earlier and what is it today?

Amit Agarwal: I think earlier, the thought of Rs 100 crore would basically mean a lot. But today we basically manage 1000s of crores of funds on behalf of investors for NoBroker. So, I have started to respect money even more. Earlier it was just my own personal money and basically managing it. But now it feels a huge responsibility that Investors across the globe have given you these funds. And they have placed their trust in us personally and also in the no broker real estate and as a startup. So now I basically feel much more responsible as far as money is concerned.

Sonia Shenoy: And do you invest a lot in equities? Or do you mean this just by virtue of being in the real estate business? Do you invest a lot more in real estate?

Amit Agarwal: I invest in both, but surprisingly, despite being a real estate founder, I love equity, and I'm a huge believer of equity.

Sonia Shenoy: Okay, that's great to hear. And equity has I mean, you know, if you map the last 15-20 years, because of the cycles that we've been through equity has been a consistent performer compared to real estate, right?

Amit Agarwal: So for long term wealth creation, equity is best. But you need a house which you can enjoy, which you can live in. For example, one of my colleagues says mutual funds mein rah to nahin sakte na?

Sonia Shenoy: You own the home that you live in. Okay, so you believe more in owning a home than renting one? Okay. Oh, finally, Amit, what is the recipe for being a successful startup founder?

Amit Agarwal: I think the biggest is perseverance, conviction, as you said, and patience. This is not something that you can get done fast, doing something new, chasing it, trying to make it big, will have lots of issues, either at customer end at your end building team, ensuring that customers trust you, ensuring word of mouth happens. This is a long haul. So it's at least a 10 year journey.

Sonia Shenoy: And your 10 year journey began at a time when the startup ecosystem was also growing. So you grew along with it. Do you think this is a bit more of a mature phase, and it will become harder for newer startup founders to sort of achieve success?

Amit Agarwal: So it's a mature phase. But there are many advantages. For example, when I started along with my friends, it was difficult to get people as a startup employee. So I remember I had to convince parents that No, no, your son can join startup and job is still going to be there. Today, it is much more glamorous, it is not at all difficult to basically encourage a young person to work in a startup. So that has improved.

Second, consumers have also become very, very tech friendly. So imagine 10 years back how many people were ordering food through app, or how many people ordering cabs through app now everybody's on different apps, so consumers have also become extremely app friendly, tech friendly, that is also very positive.

And many startups have seen success, which basically means lots of money is also coming from across from overseas for good ideas. So ideas basically, I think, in India, still a developing country, broken processes, huge number of problems to be solved.

Sonia Shenoy: Okay. And if you had to put your mind, you know, together to create another startup, perhaps, since - once a founder, always a founder, right? Any other new startup ideas that you're thinking of?

Amit Agarwal: So I think two three areas which basically excite me, one is climate. So I think the next five to 10 years will be about how the environment can be made more sustainable and what climate initiatives can be done. So that is one thing which basically excites me. Second, I think, which is another extreme is I think a lot of good ideas are required in pets. So huge amount of basically inclination and fondness of Indian customers towards taking care of their pets.

Sonia Shenoy: Another generation as you know, the Gen generations progress, people having less and less children, so they're having more pets. And, you know, that's, of course a great idea, by the way. I hope you work on it. Thank you so much for joining us, Amit - a pleasure having you here on CNBC-TV18, and all the best with your journey looking forward to your IPO plans as well. Thank you.