I first met Kunal Shah, the founder and CEO of fintech CRED, in March this year. Though we’d communicated a few times earlier over email and text, we’d never met in person. We were meeting at a studio in Bengaluru’s Indiranagar to record an episode of First Principles. 

Kunal rode up on a fairly ordinary scooter. He said it didn’t make any sense to drive a car just to get around Indiranagar (the CRED office is just a kilometre or two away). My first thought then: Kunal, in real life, came across as much more relaxed, equivocal, and organic than his online persona. I also noticed he liked using “boss” a lot in his conversations. 

Earlier this week, I spoke to Kunal again for today’s edition. He addressed me as “boss” a few times during our chat. It felt like a continuation of our conversation from March.

I asked Kunal about the mental models he most often finds himself relying on when faced with important decisions at CRED. 

He has two, he said. 

First, “Don’t build something we wouldn’t offer to our friends and family—even if it made sense financially,” he said. 

On the face of it, this was a principle I’ve seen numerous businesses profess. For instance, IDFC FIRST Bank applies something called a “Near and Dear” Test for its products “so that the employees of the Bank serve only such products they’d want for their own loved ones”.

How did this play out at CRED, I asked Kunal. Why was this so important to him?

“Because we want to build an enduring business that outlasts all of us. You’ll always figure out other ways to make money if you know how to make products and market them,” he said.

I sought from him a decision he had made guided by this principle.

“We’ve stayed away from offering trading of derivatives to CRED users, at least in the current form. Because nearly 90% of derivatives traders lose money, if you see SEBI [Securities and Exchange Board of India] data. It would be profitable for us but very hard to justify as something that is right for the customer,” Kunal replied. “I’m not saying people should not do those businesses,” he added.