New business

A serial entrepreneur on what makes and breaks a new business

Shirish Nadkarni is one of the few serial entrepreneurs who can say he has successfully emerged from all the startups he has started.

His first company, TeamOn Systems, was one of the early pioneers of the SaaS model, providing customers with E-mail and the agenda in the cloud. Although not everyone understood the value of the idea in 1999, and the company then had to switch to a slightly different product, it was bought out by BlackBerry a few years later.

In 2007, Nadkarni founded Livemocha, the first language learning company to take a conversational approach to teaching. Although it was never profitable, Livemocha quickly racked up millions of users and was eventually snapped up by Rosetta Stone.

Finally, there was Zoomingo, a mobile app that helped shoppers identify stores with sales in their area. At one point, the app managed to make it to the top ten in Apple’s App Store (and the top 25 on Android), and it was also acquired.

However, Nadkarni suggests that his brilliant newsletter doesn’t necessarily give the full picture; he made many fundamental mistakes along the way. And while exit is the goal of almost every entrepreneur, Nadkarni never enjoyed the luxury of selling on his own terms, precisely when he wanted.

Training at Microsoft

Nadkarni came to the United States in the early 1980s to study computer science, which was not widely taught in India. “I was fascinated by computers; what you could do with them, what you could build, ”he explained.

After graduating from the University of Michigan, he embarked on an MBA at Harvard Business School, with an eye on entrepreneurship. He hoped to learn how to combine technical skills with business know-how, a formula that was being applied successfully in Silicon Valley.

However, Nadkarni suggests that his upbringing does really started after landing a job at Microsoft. It was here that he gained practical experience and an appreciation for the qualities that separate a brilliant idea from a poor idea.

“I learned a lot at Microsoft,” he said. “I learned how to create, launch and market great products, and I understood business models. So I had a very good foundation that I could use to be successful in the startup environment. “

It’s hard to imagine, but Microsoft was itself a startup when Nardkarni joined Nardkarni, with only around 1,000 employees. At the time, the company was looking to diversify into new product areas, beyond hardware, office software and its Windows operating system.

Initially, Nadkarni was recruited to help launch the company’s first email product, Microsoft Mail, but ended up working on a wide range of major projects during his twelve-year tenure.

In 1997, Nadkarni took charge of Microsoft’s first foray into the search market. After some discussion, the company made the decision to partner with a third party, Inktomi, instead of creating its own in-house search engine. Nadkarni says he tried to convince Bill Gates to invest more resources in research, but Gates “wasn’t ready at this point.” It’s fun to imagine what could have been if his decision had been different.

MSN

(Image credit: Microsoft)

Around the same time, he designed the launch of MSN.com. Microsoft was late to the party and looking to close the gap on Yahoo! and Excite, but Nadkarni had a trick up his sleeve: the $ 500 million acquisition of Hotmail, Microsoft’s biggest purchase at the time.

The reason was that Hotmail, the first service to allow users to access their inbox through Web browser, would give people a reason to come back to MSN time and time again. “We wanted to create a persistent solution that would keep users coming back. And email is a very sticky application; people check their emails several times a day, ”he explained.

Eventually, MSN became one of the largest web portals in the world, and it remains so today. But it wasn’t just Hotmail’s strategic value that got Nadkarni excited – he had fallen in love with the product as well.

“I thought Hotmail was a brilliant idea; providing web e-mails to consumers. So I thought, why not deliver professional looking email in the cloud? “

At the height of the dotcom boom, Nadkarni said goodbye to Microsoft to start his own business: TeamOn Systems.

Misconceptions and mistakes

Although Nadkarni has now retired from entrepreneurship, he is busy with a new activity: writing. His first book, titled From start to exit, aims to provide a comprehensive resource for new founders.

Many start-up manuals focus on a specific aspect, says Nadkarni, but very few detail every step of the entrepreneurial journey. One of the first hurdles, of course, is deciding to start a business in the first place.

“There are many misconceptions about what makes an entrepreneur; you don’t need to have started a business before the age of 15 or be a visionary leader like Bill Gates or Elon Musk, ”Nadkarni said.

He concedes that leadership skills are important, but says there are other equally essential attributes: a talent for the product, a sales ability and a tenacity in the face of adversity.

“In some ways, entrepreneurs are all cut from the same fabric because they share a pool of common traits. But you can be still and be successful, as long as you compensate in these other areas.

When asked about the most common mistakes new founders make, Nadkarni told us that many people approach business in the wrong direction, creating a product before they have a problem to solve.

Bill Gates

Bill Gates, under whom Nadkarni worked at Microsoft (Image credit: Shutterstock / Paolo Bona)

“A lot of times technologists come up with a solution and don’t find out if there are clients until later. But the most exciting companies today – like UiPath, Apptio, etc. – are all built around specific problems identified by their founders, ”he explained.

This is a mistake Nadkarni admits to having made. He says he was convinced that a cloud-based messaging system would be extremely popular with businesses, but he didn’t do the necessary market research. “I was the typical arrogant technologist.”

This backward-looking approach to product design also tends to create other issues down the line, especially when it comes to fundraising. It’s all well and good to present VC firms with compelling technology and tell a compelling story, but without proof of traction they are unlikely to invest.

Nadkarni believes that many startups are trying to raise capital too early. Starting a new business has a lot to do with timing, he says, and so does when to leave one behind.

To sell or not to sell

When Nadkarni talks about the sale of TeamOn Systems and Livemocha, two significant achievements of his entrepreneurial career, it is with a surprising touch of melancholy.

Many business veterans have written about the difficulty of knowing when to sell, but in practice many founders find that the decision is indeed made for them. Such was the case with Nadkarni, who always found himself at the mercy of circumstances.

In the case of TeamOn Systems, the dot-com bubble had burst and the company had to make a choice between accepting an unfavorable financing offer or selling to BlackBerry.

A few years later, the sale of Livemocha was made necessary by the financial crash. Although the company had built up a large user base, it was not yet making a profit, making fundraising nearly impossible in the new climate.

Over the past eighteen months, meanwhile, many other Founders will have found themselves in equally difficult positions, thanks to the Black Swan’s latest event: the pandemic. And many of them will have had no other decision than to completely shut down their activities.

The silver lining, suggests Nadkarni, is that from the ashes of an event like the pandemic a new wave of innovation almost always arises. Specifically, he anticipates an increase in the adoption of automation and other AI-based technologies, a permanent abandonment of full-time office work, and the continued increase in direct-to-consumer sales. e-commerce models.

Currently, Nadkarni spends the majority of his time helping other people start new businesses. When asked if he might start another business on his own someday – perhaps to take advantage of these new trends – he laughed and shook his head. “But I’m definitely working on another book.”


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