From customer research to founder resilience: Entrepreneur tips from Shirish Nadkarni, author of ‘From Startup to Exit’

Shirish Nadkarni is the author of From Startup to Exit: An Insider's Guide to Launching and Scaling Your Tech Business (see my book review here). He has over 20 years of experience in the tech startup space. His co-founded startups include Livemocha (acquired by RosettaStone) and TeamOn Systems (acquired by RIM).

See also YourStory’s Book Review section with takeaways from over 330 titles on creativity, entrepreneurship, innovation, social enterprise, and digital transformation. 

In this conversation, Shirish shares his views on customer empathy, product pivots, and IPO strategies.

Edited excerpts from the interview:

YourStory [YS]: In the time since your book was published, what are some notable new examples or frameworks you have come across that build upon the material in your book?

Shirish Nadkarni [SN]: I recently read a book called The Cold Start Problem by Andrew Chen. It articulates many of the challenges that marketplaces and social networks face getting started (hence the cold start problem). 

It provides a great framework to jumpstart a marketplace and create network effects to propel the growth of the marketplace.

YS: How was your book received? What were some of the unusual responses and reactions you got?

SN: The book has been very well received. It has won two awards in the business category (NYC Big Book Award and the Royal Dragonfly Award). The book is also highly rated on Amazon. 

What is amazing is that I have received unsolicited emails on LinkedIn from readers saying how much they liked the book!

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YS: How should entrepreneurs evaluate weak signals and anecdotal evidence which seem to contradict quantitative market trends?

SN: I am a big believer in conducting lots of customer interviews and really spending time understanding the customer's pain points. The signals that you can get from these customer interviews can be very valuable and should trump any quantitative market trends.

YS: It’s one thing to fail with a product, and a bigger dimension to fail with a company. How should founders regroup in these two situations?

SN: The best way to manage this process is to start with an MVP and continuously pivot your solution until it starts addressing your customer's problems. 

If after several pivots, you still haven't addressed your customer's needs and the product fails, then you need to go back to the drawing board and look at adjacent markets where your product could potentially succeed. 

If your company fails because you have run out of money, then you can go back to your investors to see if they feel there's still merit in your solution to target other markets.

If you have been disciplined about your approach, your investors may give you more money to test new markets for your product.

YS: Though there are many online resources for founders to learn about failure, several continue to make the same mistakes. Why is that, and how can this be reduced?

SN: Founders are often impatient and jump into developing products without doing the necessary customer research, which is where most of the mistakes happen. 

That’s why I have written my book. My goal is to cover the entire entrepreneurial journey and point out the common mistakes that founders make so they can avoid these mistakes.

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YS: How should founders evaluate whether to register for IPO in their country or abroad? What factors come into play here? 

SN: If yours is a domestic company, you should consider going IPO in your own country. 

On the other hand, if your company is a global company with a strong presence in the US or Europe, you should consider going public in these markets, where you will get significantly better liquidity for your stock.

YS: What forums are there for founders to collectively discuss some of the issues they face with investors, for example, board conflict?

SN: The main forums that exist today are Reddit and Quora. Each has an entrepreneurial section where you can discuss common startup issues.

YS: What is your take on the rise of startups in India? What should founders and government be doing to seize the opportunity and also overcome the challenges?

SN: The rise of startups in India has been simply amazing. Soon, India will be rivalling other tech centres in the world like Silicon Valley, Israel, and others. 

Founders should network with other successful founders and angels to get their advice before venturing on a new startup. They should join other startups (if they are not ready to take the plunge) to get startup experience. 

The government should set up technology funds to fund new startups. They should provide tax advantages to angels to invest in startups. For example, in the US, if a startup has an exit after five years, all capital gains are forgiven.

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YS: How can social entrepreneurs and non-profit organisations make use of your frameworks and tips? Are there some examples you can cite in this regard?

SN: Many of the same principles apply to social entrepreneurs. Social entrepreneurs also need to establish product-market fit like tech startups, which I talk about in my book. 

They need to track metrics on how their social venture is helping people. The fundraising process is also similar to raising funds from angels. My book talks about how to put together a killer investor pitch – many of the same ideas and framework can apply here as well.

YS: What books are on your reading list these days? Which were your favourite books of 2021?

SN: My favourite books are The Cold Start Problem by Andrew Chen, Educated by Tara Westover, and Amazon Unbound by Brad Stone. The book I am currently reading is Klara and the Sun by Kazuo Ishiguro.

YS: What is your next book going to be about?

SN: I haven't disclosed this yet! But I have started working on my next book.

YS: What is your parting message to the startups and innovators in our audience?

SN: Start early in your career when you have the ability to take risks. 

There are lots of opportunities to take advantage of. Even if your company fails, you will have had tremendous learning!