Business Leadership is nothing but being profitable. This is the foundation for businesses to know if they have the business acumen and, more importantly, if they are doing their work and homework well.
New-age entrepreneurs with dynamic business models in India are making waves in the business world. They try to understand the impact of industry growth trends on businesses.
We have two case studies: Wework India and Zerodha, a fintech startup that is now the most profitable finance company in India in recent times.
From a loss of 120 crore in 2021 to turning profitable with Rs.200 crore from 2025 to IPO, WeWork India’s journey is laudable.
The CEO of WeWork India stated that there is no need for further funds as their bottom line is becoming stronger and they are self-sufficient financially. He expects the company to grow in 2025 with a topline growth of 1500 crore, which is growing by leaps and bounds. . Interestingly, old-school commercial real estate also saw a boom of 40% in the last two years as companies returned to grow and scale up.
These are dynamic times for business. The business dynamics have changed drastically post - pandemic. The commercial real estate sector, where both old-school and new-school commercial players are seeing rising growth, is noteworthy and tells a tale of changing times and transforming business landscapes.
Dynamic Leadership is understanding the next wave of dynamism in your industry and in future industries, which will absolutely change the way business will be done. It involves identifying the key components of an entrepreneurial ecosystem and the latest industry growth trends and analysis
If you are leading the change, like WeWork, great.
If not, you need to be aware of who and how the player in your industry is bringing the change and quickly adapt to the requisite changes to be at the forefront of the race. Additionally, understand the impact of global economic changes on industry growth.
The next growth for WeWork could be to get Welive (co-living), which is in a fledgling state in New York, to India.
Under Adam Neumann, Welive was all set to take wings and bring a revolutionary change in the co-living space. Since he was ousted from the company, this project has been on the back burner for the WeWork Group.
With co-living, accommodation is shared with others and is better, if not cheaper, than renting a living space. Co-living is a shared space for living, which brings the cost down. Sometimes, it is not the case, as you can have a roommate while renting a flat, ensuring the rents are not steep.
A combo of co-working and co-living! Zillionite envisages that this space will have the best of both worlds, equipping the workforce and giving them the proverbial work-life balance in one sense if not the other. Even if the next pandemic hits, it will not put brakes on work, as you can jump out of your bed and, lo, you have entered your office!
Zerodha declared a 100 crore salary for its promoting team.
It is a bootstrapped firm that is profitable in today’s bleeding times in the unicorn era.
A 100 crore salary is an eye-popping or mind-boggling compensation. This is a case study about finance for entrepreneurs – Thought Leadership.
Zerodha, an online brokerage firm, has decided to compensate its three promoters with an INR 100 crore salary. A salary of 100 crore means ending up in a higher tax bracket.
So, does this make sense?
Compensation is difficult to structure, even more so in start-ups. Zerodha is a private company and has the liberty to add zeroes as it deems fit.
Let’s look at the strategic outlook in different cases:
Option 1: Salary income tax: Take a salary and pay 43% of taxes. So, cash in hand will be INR 57 crores.
Option 2: Dividend tax: The corporate tax rate is 25%. The individual dividend tax rate is 34.5%. So, after the corporate tax and individual tax, they will get INR 49 crores.
Option 3: Selling shares through funding, IPO, or any such route: This is ruled out for now as it is a zero-debt company with a profit of INR 1000 cr. Yet, with valuations, it will be a lucrative option with less stake and more money in hand. The leaders at Zerodha state that they want to give back to society by being the highest taxpayers with this compensation.
All in all, it is definitely not a zero-sum game with all the zeroes in place and growing without obstacles for all! Leadership is a game where you lead from zero to one, and you have won with winning leadership skills for sure.
The success stories of Wework India and Zerodha highlight the importance of visionary leadership, adaptability, and strategic financial planning. Business leadership is about more than just profitability; it’s about navigating dynamic business landscapes, embracing innovation, and leading change. As we look to the future, the integration of co-working and co-living spaces, and the strategic compensation models, serve as examples of how entrepreneurs can achieve sustainable growth and wealth.
Zillionite
At Zillionite, we believe that education is the key to evolution which brings true revolution. With our AI based financial tool – Wealth Map, we are looking to empower each to become a financial leader achieving financial freedom.
We build Leadership Skills for emerging leaders of tomorrow with Experiential Learning.
www.zillionite.com
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