Being a first time founder is hard. But some would say being a second time founder is a bit harder. You have some experience of what to do the second time around, and a LOT of experience of what NOT to do.
Hi, I'm Nishtha and this is the Sketchnote Startup Podcast. Here's where we talk to you about the world of startups, productivity tools, personal developments, stories and a lot more. And for this very special episode, I’m joined by Ronak Massand, the co-founder of adaptive and a second-time entrepreneur.
A little about our guest today: Ronak got his engineering degree in Mumbai, India, before moving to Brown University for an M.Sc. He cofounded Parkloco, a parking data analytics startup, which then got acquired by Volley Automation. At Volley, Ronak took over the role of COO, where he helped the company raise over $10 million from institutional real estate companies. He also worked as a VC Fellow for Waterman Ventures, a part of Alumni Ventures. Now, with Adaptive, Ronak’s helping companies build their own internal Ops platforms.
While chatting with me, Ronak talks about the challenges that come along with problem identification and which ones are really worth fighting for, how he enjoys the process of fundraising, and more. As he gives us tips you need as first-time startuppers, Ronak also tells us why he dislikes the term “serial entrepreneur”. Here we go!
Q: We’ve been talking about Adaptive for a long time now. Can you tell us how his journey started for you? Not just with your current startup, but the one in the world of entrepreneurship. Where did it all come from?
A: It just happened by chance if you ask me, honestly. Like every other student that was decent in academics, I chose engineering. As soon as I got there, I realized I wasn’t cut out for it. On the side, I was also trying to play professional soccer. My entire life I’ve done things people haven’t expected me to do. If you ask my parents, they’ll go on and on about it (laughs).
So I got to engineering, and was about to drop off and pursue soccer, start doing B.Com. I said I don’t care about academics and I’ll make my career in professional soccer.
Didn’t end up doing it. Thankfully. I had a knee surgery in my final year and after that I couldn’t play. That’s when I started reshifting my focus to academics. It was terrible but I knew I didn’t want to do engineering.
I had a couple of friends in my class who had gone to the US and started transitioning to the business side—of technology. I still wanted to stay close to technology, I had invested a lot of time studying it, and understanding it. Even though I wasn’t great at it, but I managed somehow.
So I decided to actually go to Brown (University) to study business entrepreneurship. It was under their school of engineering, so it would still retain a lot of my technical skills. And that was the foray for me into actual business, startups, etc. The program focused a lot on technical skills for early stage companies. It was during Brown that I started thinking of my first startup, ParkLoco. It was a parking analytics company.
Right as I graduated, I had to take a decision of whether I wanted to take up a job, or do my own startup. With immigration in the mix, it gets harder. But I thought, you know what? I’ll give this four months, we’ll see what happens. If not, I haven’t lost much time. It‘s the least amount of risk I can take. That’s how I started my first company.
Q: You said you figured the need for ParkLoco while still studying. When did you realize there was a problem and that you may know how to solve it? Where was the first revelation?
A: There were two milestones or inflection points for me. ParkLoco was actually a capstone project at Brown. I was doing it to get grades. During that process, we had to interview 25-30 parking management companies or ownership groups; they were supposed to be the customers for the product we intended to build. During the interviews, I realized there was a deep rooted problem here. The data in the parking industry is extremely old school. No one’s taking any data driven decisions. The pricing is based on what the next door garage is charging, instead of what they should be charging, themselves, based on their own data. That was the first point I realized the problem is deep and real and something could be built out of this.
But obviously, as a founder, you’re constantly questioning yourself. I was thinking, “Is this a bias in my head? Is this just me who’s seeing it?” But then we actually got through an accelerator—Dreamit Ventures. I had given myself four months saying if I get someone else to invest in the venture, it becomes real. If not, then it’s probably all in my head.
When we got the first accelerator investor, they were part of Comcast Ventures out of Philadelphia, that’s when I knew this was real and I thought this was really happening.
Q: It’s a feeling mutual between a lot of founders—when you get your first investment, it starts to seem real. How frequently do you see it in startup circles? Does it still ring true with you, now that you’re a second time founder?
A: I think—no. The goalpost keeps shifting as you start companies. When I was starting Adaptive, I knew that the first fundraise wouldn’t be a problem. I knew I had done enough to give investors a chance to invest when I started this company. With Adaptive, the golden terminology—like it is for a lot of founders—is product-market fit. The satisfaction of knowing that your product is working all the time. For us, we’ve raised the bar at Adaptive—it’s the product-market fit.
Q: When you finally found your problem the second time round—I want to know how you even figured this was also a problem. When was it that you found your product-market fit? Was it easier this time around because you already had some experience?
A: The first part—how did we find the problem. My co-founder Debarshi (Basak) and I had worked together at ParkLoco. He was my co-founder there too. Back then, we used to obsess over DevOps and infrastructure engineering. Back in 2017, we used Kubernetes. People thought we were nuts to use such an experimental technology for managing infrastructure. But we geeked out about it a lot.
Eventually, ParkLoco got acquired and I started working at the parent company. Debarshi stayed in the Netherlands, and was about to become a citizen. He was also working at another startup, which was actually in the infrastructure DevOps space. I knew I wanted to do something next, around March 2021.
Debarshi and I started chatting about what next. We started discussing infrastructure and DevOps problems and we realized one thing. There was a lot of technology that had matured and the DevOps landscape had completely changed in the last 4-5 years. But the complexity hadn’t gone down. It was still complex to manage DevOps process and cloud infrastructure.
In fact, we thought the complexity had only increased. We started conducting a lot of interviews and talked to a lot of engineers at early stage companies—basically our target market. We spoke to over a 100 startups and realized the problem is real. We validated the problem statement. The goal was to make DevOps and infrastructure engineering super easy for non-DevOps folks and that’s the mission statement for the company.
Q: Have you found it easier to isolate the problem, what the product-market fit should ideally look like with experience? Also, how has working with the same co-founder helped?
A: I think it helped a lot. Debarshi is one of the top 1% people I’ve met in this space. He’s been in this space for over 10 years and has seen the landscape. Having a subject market expert as part of the founding team was great.
But also as a second time founder, you learn how to cut out the noise well. Being able to focus on the core problem statement, how to go about validating the problem, the scale at which and the sample set at which you need to for customer interviews... You know that playbook because you’ve done that before.
It might not be easier, but you learn to do that faster.
I think startups are hard—even the second time isn’t easier. The stage at which we are at, we’ve done the problem validation, but are still looking for the product-market fit. It’s only considered a solution when it’s working every single time for every single customer. We’re still tweaking the product still to find that. And that’s hard. Despite knowing the problem is real and validating it, the fit isn’t an easy one to get, even as a second time founder.
Q: What’s your definition of “knowing” when you’ve found the fit, especially as a second time entrepreneur? Or is it a mythical beast founders keep chasing, without knowing when they’ve hit on it?
A: It’s a moving goalpost, if you ask me. As a second time founder, you’re much more ambitious for the company and what you want it to be, compared to the first time. Often, at ParkLoco, my thought was, “I want to learn everything there is. I want to go as far as I can.” But the confidence level isn’t as high. It’s the first time you’re doing ANYTHING! Whether it’s building the team, or validating the problem statement, trying to build something from scratch...
The second time around, 50-60% of things you know how to do. And I think that makes it easier. But that also makes the goalposts change. Like, for me now, raising capital isn’t a goalpost. I want to be able to have 50 customers who love the product, jump on it every single day. Once we get to that stage, we know we have an early fit.
Once we get that we can recalibrate and think, “Oh, how do we go from 50 to 500 customers?” And that becomes the goal we chase. It’s a constant iterative process. At least until companies get to Series A or Series B. Before that, you’re still somewhere in the product market fit. The problem statements might keep changing, but it’s a constant process till you exit the early stage and enter the growth stage.
Q: Pardon me if I sound philosophical with this question, but as someone who wants to be an entrepreneur, you probably see a lot of problem statements around you all the time. If you’re innovative and have an entrepreneurial mindset, you may think of finding solutions of so many problems out there. How does one identify, filter and know what’s a problem statement you should be chasing after?
A: Lately, this term’s become pretty popular—founder-market fit. Product-market fit’s been a very popular term, but this is a new one. This stems from most companies wanting to raise VC capital and that’s when this terminology got introduced in the Venture backed world.
You should ask yourself if the company has a good founder-market fit. What that means is—what gives the founder the unfair advantage that not anyone and everyone can go attack the solution as the same level as the current set of founders are trying to do. When you’re chasing external capital, you’re constantly convincing investors that this is the team to invest in. Especially at an early stage when all the data points are not there. They invest in the team and the founders. That’s where this fit comes into picture. You should chase problems where this fit will be high.
Where is it that you bring something special and where do you have an advantage through your experience that gives you the ability to crack the problem really well.
Q: Talking about fundraising, how difficult was the process for you the first time around?
A: The first time around, someone invested in the company by complete chance. And I was looking back—this was seven or eight years ago—I was so ignorant! There was a Brown alumnus in Boston, who we started a conversation with via a faculty member. We started the conversation informally so he could give us feedback on what we’re building at ParkLoco. We stayed in touch for about six-eight months.
Then I started getting frustrated. I thought we were doing the right things but the external capital was not coming in. And I go to this investor and ask him, “Okay, where can I get a bank loan?” And he just starts laughing in the meeting! “What bank loan are you talking about?” he asked. I said I was doing all the right things and now just needed capital to execute. And he explained I won’t get a loan for an early stage startup. At the end of the meeting, he decided to invest in us himself! He put in $25k and that was the first check we collected at ParkLoco.
Call it sympathy or my ignorance, he just took a chance and invested in us.
Q: That’s an amazing story! But you didn’t stop there, right? Even when ParkLoco was acquired, you were very hands on with the fundraising. How was the experience? It’s something you learn on the job and no B School can prepare you for, right? It’s a real world scenario—sitting across the table with a potential investor. What did you learn?
A: ParkLoco gave me that confidence. After that first $25k check, we went on to raise a little over $1 million. We were trying to raise in Boston, which everyone says is a tough market to raise capital in. It’s not Silicon Valley; you don’t have as much capital to go around. The fact that we were able to raise there gave me the confidence that maybe I could be okay at it!
When I started working at Volley, I somehow felt I was weird because I enjoyed the process of fundraising that most founders don’t like. I wasn’t even supposed to be involved in fundraising there, but voluntarily started connecting investors to the founders and started getting more involved in the process.
Q: No one’s gonna say no to someone volunteering for fundraising!
A: Yes, no one would say no to that! I started very subtly. I said, “Hey, there are some folks who invested in my previous company. They’re venture investors. Let me just introduce you.” That’s how I started getting involved. The founders realized I was decent at it. So he started involving me more and more.
At Volley we were raising from real estate companies and it’s incredibly difficult to raise venture money from them. They’re not venture investors; they don’t quite have the same risk appetite—they do real estate deals and they’re not as risky as ventures.
When we raised capital from real estate, I realized, okay I have a knack for this. Then I started working at a VC firm—as just a venture fellow on the side. There, everyone was interested in how to deploy capital, how to do diligence in early stage companies. And I was interested in how to raise capital for the VC firm, how to target limited partners. That’s when I thought I’m wired a little weird that way. I do enjoy the process of fundraising, actually!
Q: What did you learn by working with a VC fund on the side? It’s like you worked on both sides of the table!
A: That’s exactly why I wanted to do it! I knew that I was going to start another company and thought I wanted to get this framework as an investor to see how they evaluate companies. It was incredible working at the VC firm. I was involved in obviously raising capital for the firm from high net worth individuals and families. But also, we had a diligence scoring mechanism on companies, where there was a matrix of things we looked at and then scored them on it. It’s incredibly helpful to do that because now when I’m raising capital at Adaptive again, I know how the VC is going to evaluate us again. I know the scoring frameworks. Not every VC will have the same framework, but at least I know how they think about this on a high level.
Q: It’s a moot question but I’m not going to ask you how “easy or difficult” this was. I’m going to ask you how easy was it to raise capital now with Adaptive?
A: I don’t want to say it was easy, but it wasn’t as hard as it was with ParkLoco. I sort of knew what I was doing and that definitely helped. I was realistic with the amount of capital we were looking to raise, who to go after...
As a founder, you keep changing the goalposts. At ParkLoco, I was trying to raise capital. At adaptive I’m trying to raise capital from folks who can actually help the company. That really shrinks the sample set of investors you can really go after. And then again, it increases the difficulty—you’re not asking anyone and everyone for capital. You’re asking a group of specific people. So you do end up making it slightly difficult for yourself to raise capital by putting all these filters in place.
Q: You mentioned earlier you’d worked with your co-founder before. You both come from technical backgrounds too. How important it is to segregate roles between two co-founders, especially when it comes to important stuff like fundraising and handling day-to day functions. Fundraising is obviously a full time job. How important is it and how do you do this?
A: I honestly feel it’s extremely critical to have a clear distribution of roles in the founding team. It’s just so much more efficient for the startup. At Adaptive, Debarshi leads the tech. He’s the subject matter expert there. I do more fundraising and business. And we share the product role.
Because product is something you’re shaping from the market but it’s also based off what he’s seen in the industry. He has a lot of experience and knows a lot of tools out there.
Q: Is that a little unconventional?
A: As in sharing the product role?
A: I don’t think so. I think as a founder, in the team, everyone obsesses over the product. And if you don’t... How can you not? Everyone’s so emotional about the product all the time. Even within the product there are so many decisions I defer to Debarshi. I know he’s much better at it, he has a lot more experience. There are certain things you share like roadmap prioritization. That’s something that gets influenced by both, the business and the tech side.
As long as both founders know what you’re doing and are clear in the roles, I think it’s a sign of a very healthy founding team. And I feel it’s extremely important in early stage startups to have two founders with diverse backgrounds handling different things in the company.
Q: How do you feel about being called a serial entrepreneur yet?
A: (Laughs) I don’t know, it sounds like a boomer terminology. I like the term “founder”, I don’t know about serial entrepreneur. We’ll see when we get there! I’m not a fan of the word.
Q: If you had to, from personal experience, give top three or five tips to anybody who wants to be a founder, what would they be?
A: Hmm. I think the first would be: Obsess about the problem. At an early stage the solution doesn’t matter. Obsess about the problem a lot. If there’s no problem in the industry, there’s no business. So you have to obsess. While doing that, be self critical and self doubting because there are a lot of biases that each of us have and it’s extremely important to keep challenging those biases while talking to the market.
The second thing is: Always keep talking to your customers. You’d be shocked at the amount of assumptions that go wrong when you’re starting your company. And the only way to validate is to talk to who you’re going to sell to.
The third thing is: Be clear about whether you’re starting a venture backed business or you’re starting an organically grown business. I don’t like the term “lifestyle business”. Be very clear if you want a bootstrapped business or a venture backed one. The frameworks of operating these two are quite different. If that clarity is there upfront, it’s super helpful for early decisions.
Q: Are you enjoying being a second time founder now? Or do you dread some bits?
A: You ALWAYS dread some bits. Because, again, you’re changing goalposts all the time. The expectations are very different when you’re running your second company and that again makes it harder. Mentally, psychologically it never gets easier. You do have to stay calm while doing it but there are aspects of it I still dread. But those are different from what I was dreading the first time.
The first time I was dreading, “WILL we be able to raise capital?”. Now, I’m dreading about, “Can I turn this into a huge business? Is this a unicorn play? You again change the goalposts and you want very different things from it, but the amount of stress and amount of things you obsess about—those don’t decrease.