Steve Blank

Entrepreneurs see opportunity where others see obstacles and why hubris is an entrepreneur’s worst enemy, were two topics of discussion on my SiriusXM radio show, Entrepreneurs are Everywhere.

The show airs on SiriusXM Channel 111 (weekly Thursdays at 1 pm Pacific, 4 pm Eastern). It follows the journeys of innovators sharing what it takes to build a startup – from restaurants to rocket scientists, to online gifts to online groceries and more. The program examines the DNA of entrepreneurs: what makes them tick, how they came up with their ideas; and explores the habits that make them successful, and the highs and lows that pushed them forward.

Joining me in the Stanford University studio were

• Ajay Kshatriya, co-founder and CEO of Biota Technology, which applies DNA sequencing technology to the energy industry
• Steven Cohn, founder and CEO of Validately, which helps user researchers, product managers and others validate demand or usability for prototypes and live sites.

Listen to the full interviews with Ajay and Steven by downloading them from SoundCloud here and here.

(And download any of the past shows here.)

Clips from their interview are below.

Ajay Kshatriya has 15 years of experience in biotechnology in energy, healthcare, and software. Before co-founding Biota Technology, he was an investor and entrepreneur-in-residence at Seed Capital, a investing in science-based innovation. Prior, he was a senior manager at Genentech in operations and project management.

Switching from venture capital to startup founder required a different mindset, Ajay said:

All day in a VC firm, you’re saying ‘no’. That’s how your brain’s oriented. You’re constantly critically analyze the gaps in someone’s business plan.

When you’re an entrepreneur, yeah, there’s 100 gaps. But you go figure out how to solve them. It’s kind of a brain switch that you have to make in order to be successful as an entrepreneur.

You really have to take that optimistic lens and say, “This can work, and here’s how we can do it.”

If you can’t hear the clip, click here. 

Before becoming a founder at Validately Steven Cohn was an executive at Quantcast and DoubleClick and had started and sold two companies. The first, Buy Your Friend a Drink, was a success and Steven was eager to start up again.

However, his second venture, Irrive, quickly failed. Here’s why:

Steven: We did everything wrong. We built before testing. We over-designed the product, overbuilt the product, and we built something really beautiful that no one wanted. … 

Steve:  Was it that you didn’t know what you got right the first time?

Steven: Nope, hubris. … Once I had a success in my first company with my second I raised $2 million of seed capital with just a PowerPoint presentation. I didn’t even have a team or anything. People were like, “Wow, you just hit a home run with your exit to LivingSocial. … “You must be a genius. It must be you.”

I’d drunk my own Kool-Aid, I believed it, and so I did everything wrong from a product perspective. …

If you can’t hear the clip, click here.

—

Biota, Ajay explained, is using DNA sequencing of microbes found underground to help oil companies optimize production when hydraulic fracturing.

Here’s how his team validated whether there was a need to increase efficiency in the energy market and how he found Biota’s target market: 

Ajay: We had  done some customer discovery to validate that there was a need in the American energy market to become dramatically more efficient with hydraulic fracturing. They’re wasting a million dollars an oil well, and they’d like to lower that direct cost. Oh, and by the way, if they could, there’s a huge environmental benefit, too. There’s a double bottom line, so we knew that was the case.

Steve:  What’s the environmental benefit?

Ajay: If you know where to fracture, you also know where not to fracture, so you could save 3 million gallons of fresh water a well. There’s 125,000 wells, so that’s billions of gallons of water that you can save.

We started by doing customer discovery –  talking to 75 people in the oil industry over the first four months which was extremely helpful. I mean, what does a guy who’s been in biotech for 15 years applying DNA and software know about the oil industry that’s been around for about 120 years? 

Steve:  Hopefully after 75 people, you know a bit more. Right?

Ajay: (Nods.) I have the world’s biggest hammer looking for a nail. So how do I articulate that value proposition in a way that the customer gets? That was one of the biggest challenges that we had. They hear exactly what you heard. ‘DNA sequencing in the oil?”, what the hell does that mean?

Steve: You needed to translate that to a real customer problem? It took you a while to understand the problem.

Ajay: You got it.

If you can’t hear the clip, click here.

Business comes down to relationships and building trust, said Ajay, who is the son of Indian immigrants and grew up in Texas. His early life taught him how to make personal connections:

Ajay: One day you’re eating ribs, the next day you’re eating chicken curry, and you know, you kind of wear two different hats. You have two faces: inside the home, and outside the home. You learn that pretty quickly. That was probably one of the most formative parts of growing up in a place like that, with that background. 

Steve:  How do you think that affected you?

Ajay: To relate you have to find commonalities between people. If I’m hanging out with a bunch of guys in Texas, how can I connect and relate to them? Then if I go hang out with all my dad’s friends who grew up in India, how do I connect and relate to them? It kind of creates a chameleon-like personality you develop in connecting with people in different ways. 

Learning how to connect helped me a lot as an entrepreneur  When you’re a founder you got to sell all the time – to a wide variety of people.  You got to convince people that you’re crazy idea can work, you got to hire people, you got to get investors to write you checks, customers to give you money to do what you say you can do. The most important part of sales is building trust, and you can’t build trust if you you’re not able to connect with people.

If you can’t hear the clip, click here.

Ajay also shared his recipe for success:

The three rules of a career that have helped me and I continue to follow:

1.  find mentors who are 10, 20, 30 years your senior that you aspire to be when you get to that age. Ask them for advice and do what they tell you to do. …
2. surround yourself with people way smarter than you. It’s not a sign that you’re dumb; it’s a sign that you have perspective and maturity.
3. most importantly, out-work everybody. Look to the person to your left, look to the person to your right. The only way to guarantee your success is just to work harder than they do. 

If you can’t hear the clip, click here.

—

Despite having a Harvard Business School education, Steven learned some of his biggest business lessons outside the classroom:

Steven: I went to business school at Harvard but when I graduated I said, “There’s a couple of things I want to learn before I start my own business.” I think I was hesitant because of the experience my father had where he tried a bunch of businesses that were unsuccessful.

So my first job out of business school I wanted to learn finance and I went to Merrill Lynch in investment banking. There I learned about how to raise capital.  I also learned how to sell a company — the process, the steps to sell a company. Both of those skills – raising capital and selling companies have helped me throughout my career because I’ve sold two companies of my own prior to starting my current company.

Working at Merrill Lynch I realized I’m not a big company guy. Even today when I’m interviewing people I say, “You know what? You’re great, and our company is great, but it’s just not a fit.” Sometimes when I interview people I think they’re very talented, I just don’t think they’re going to fit within our company culture, what we need to do. That’s just as important as their skills. I think there are some people who are builders, there are some people who are creators, and there are some people who are managers, they like to manage big organizations. I think those are very different skill sets.

If you can’t hear the clip, click here.

In starting his first company, Steven found himself talking to customers in an unlikely place:

Steven: I went into bars and I said, “My name is Steve Cohn, I’m thinking about starting a company called ‘Buy Your Friend a Drink,’ and the way my product would work is, people would walk in here with a gift certificate that’s pre-bought for a drink.”

I remember the first bar I went into — I didn’t have a website, I didn’t have anything … The bar manager said, “That sounds great. I’ll sign up. Where’s your contract?” I said, “Uh, contract? I’ll be back in two weeks!”

I found that the first thing I did — the bars and restaurants, and supply-side of the market — was very easy to do.

Steve:  That’s a big win, right? To figure that out – 

Steven: Yeah, a big win. … The first day … I just literally walked around. … I had nothing behind me besides me and what I could say to people.

I didn’t have business cards, I didn’t have anything (and) I was able to sign up a half-dozen bars in one day.

Steven also discussed one of the darkest times he encountered while building Buy Your Friend a Drink:

I can’t tell you how painful it was (during the financial crisis) in January of 2009, in December of 2008, when you see everything that you had built crumbling because of macro-factors you have no control of.

My wife was pregnant at the time, we were running out of cash. I hadn’t taken a salary in two years just from when I started the company and we were low on capital, our personal wealth. I was getting a tremendous amount of pressure.

Shareholders were yelling at me because I was running out of cash. I’m like, “Do you realize what’s going on in the world? CitiBank is trading at $2 a share. If we knew that, I would have put the cash in and shorted CitiBank, right?”  

No one knew what was going on but I persevered through and it turned out to be a very good outcome

If you can’t hear the clip, click here.

Listen to my full interviews with Ajay and Steven by downloading them from SoundCloud here and here. (And download any of the past shows here.)

Next on Entrepreneurs are Everywhere: Guido Kovalskys, co-founder and CEO of Nearpod; and Doris Korda, associate head of school and director of entrepreneurial studies at the Hawken School.

Tune in Thursday at 1 pm PT, 4 pm ET on Sirius XM Channel 111. 

Want to be a guest on the show?  Entrepreneurship stretches from Main Street to Silicon Valley, from startups to big companies. Send an email to terri@kandsranch.com describing your entrepreneurial journey.

Filed under: Customer Development, SiriusXM Radio Show |