Not everyone is born thinking that they can change the world, but most of us have dreamed about it. Entrepreneurs are first and foremost dreamers, but some think so big that they end up having a lasting impact on the world. Steve Jobs saw what Steve Wozniak couldn’t, changing the world of computing and music forever. Elon Musk dared to create a car company despite major competition and a high chance of failure from incumbent organizations, not only dominating the electric car industry but paving the way for self-driving cars.
In this week’s episode we interview serial entrepreneur Praful Mathur to understand how entrepreneurs can learn to think big, and what makes a true visionary. At just 19 years old as an engineering student at Northeastern University, Praful convinced hundreds of taxi owners to partner with him on an unproven software/hardware advertising solution, beating out Verifone, a multi-billion dollar company. Since then he has gone through some of the top accelerators in the word, including Techstars and YCombinator, raising millions of dollars for multiple ventures.
Praful talks about how he went from being a nervous engineer to learning how to sell, and how this new skill and knowledge is helping him execute on his next big ideas. His parting advice? Surround yourself with the types of people you want to be like and think like, and focus on working hard to solve the small problems first to eventually get to your big dream.
0:30 Vadim: Praful is a serial entrepreneur, currently CTO and partner at Comfreight, has raised millions of dollars, has gone through top accelerators like TechStars and YCombinator, sold a venture, and is one of our good friends that always has Big Ideas.
1:15 Sergei: We first met Praful when he was a Junior at Northeastern University – and ever since then he was a guy who had the biggest ideas for businesses and was able to run with them.
1:50 We talk a lot on our podcast about the fact that many successful entrepreneurs have no experience in the industries they start businesses in, and when they first start a lot of people laugh at them. But somehow they end up proving them wrong.
2:00 Because Praful has always been so consistent in thinking big and being able to execute on big ideas, and we wanted to find out from him how he has been able to do that.
2:45 Vadim: When most college kids were thinking of the next hot app idea, Praful was trying to sell software to taxi cabs. What is it that made you think that you should do something like that and gave you the confidence to do it?
3:00 Praful: I fell into it because of a cofounder. I had just been rejected from Y-Combinator with another idea, and my friend was going through some personal problems with a girlfriend, and we were just desperate to work on something that summer.
3:40 We tried a bunch of things, like something in video, then something for employee management for companies. We would have an idea then try to sell it to customers and would see if they wanted it – but many people told us the ideas were terrible.
4:40 One time my friend called to see if I want to do a cab advertising business. I thought it sounded terrible.
5:09 But the next day he called and said, I have 25 cabs lined up in Brookline, MA. So we decided it was worth to try it.
5:30 So this started off as a small idea: can we advertise inside of cabs. It got bigger iteratively. From, can we do a business, then can we do a specific type of business, then learned about ads and thought we might be able to do an advertising business, then from there the friend thought of where there aren’t currently ads and thought of cabs. Then executed.
6:00 Sergei: Did this friend of yours do all the sales to validate the ideas?
6:10 Praful: In the beginning we both did all the sales. Even though I was the worst person possible to do it. We had to.
6:20 I would sometimes call people and hang up the phone when they picked up. I was so nervous that I had to listen to my partner’s calls so I could just repeat exactly what he was saying.
6:30 Sergei: But still, even though you were nervous you were still able to make yourself do it. How’d you get the confidence to do it?
6:50 Praful: It’s like with anything, you start small with small steps that eventually become bigger.
7:00 At that point we were trying to sell to individual advertisers like bars and restaurants and they didn’t want it, but it had already been a year since we started trying different ideas, and we didn’t want to waste this summer trying new stuff because this seemed to be working. So we had to figure it out.
7:48 I wanted to make it work so bad that when we started calling people, I just tried to find any little way I can connect with them. At least about why I was interested in this idea.
8:10 At first I built up confidence by explaining the idea to vendors, then started talking to advertisers about it.
8:47 When some people listened to me probably because they felt sorry for me, I was building up my confidence to talk to more people about it.
9:05 Vadim: We talk a lot on this show about using anything you have to your advantage, in your case you used the student card to get people to listen to you. But how then did you close your first advertiser?
9:19 Praful: It took a while but here’s the agenda we had every day.
9:30 Woke up at 9:00am, had breakfast, then started the calls at 10am, went until 7pm EST because we called to the west coast. We focused on specific industries and got 90% rejection but 10% wanted more info, and we learned on our own.
10:00 It wasn’t until we started calling ad agencies where we realized we had something valuable. The ad agencies basically coached us through how to professionalize what we were selling because they knew what their clients wanted.
10:30 Sergei: so you got into Techstars at that point and then ended up selling the business. How did the sale come about?
11:00 Praful: Because we were inexperienced and didn’t know what we were doing, it helped us focus. We just woke up every day, and went to the people we needed to talk to because there was nothing else we could do.
11:30 Because we had no money we just had to focus on the one thing that would make or break the company, which is sell. At one point we had more medallion owners on our service than Verifone did. They’re a multibillion dollar company so it was embarrassing for them. They had 200 cabs signed up, we had 430.
12:20 At that point there were only a few companies who would want to buy our company and they were very aggressive about getting it.
12:33 Sergei: Did you actually have a product? Because Verifone did. So how did you outsell them?
12:40 We built the whole product in 40 hours of development time.
13:00 Sergei: So you built this software and would plug it into existing hardware?
13:40 Praful: That would be nice. We would have to actually spend $5 Million on the hardware and cab partition redesign to make it work. For 200 cabs it was about $3,000 per cab to build it out.
14:00 Vadim: did you actually deploy this hardware?
15:00 Praful: We weren’t due to deploy until March of that year, and what happened was the recession hit. No one wanted to continue investing in startups because their net worth was dropping.
15:20 Sergei: Did you end up buying the $5M in equipment?
15:30 Praful: No, we couldn’t do it. We were actually worried we’d get penalized by the city of Boston because we had all these contracts. What the contracts said was that the cab companies could only buy this software/hardware from us.
16:30 Sergei: sitting here even now listening to this, it sounds super intimidating. Trying to sell hardware and software to this behemoth of an industry. How did you not get intimidated?
17:10 Praful: We were too stupid to be intimidated. So we just knew what we wanted to do and we had to figure out how to take the steps to execute on it.
18:02 Sergei: Let’s fast forward to after you sold the business. I remember you moved to NYC to work as a software engineer, and when I asked you what you’re working on next you said you were going to build a self driving car.
18:17 This is in 2010-2011, well before most investors were talking about self driving vehicles, yet here you were again thinking of a crazy big idea. What made you decide to work on this over anything else?
18:37 Praful: I had been following the Darpa autonomous car challenge since high school and was thinking about how to do this. By this time it was becoming obvious to me that self driving cars were going to be the future. Uber was around and I knew the Taxi industry pretty well and where the cost was going to, and knew it wasn’t sustainable to just keep getting more drivers.
19:25 Cities are too congested with cars and that needs to change. Only way to resolve this is through small cars that are autonomous.
19:55 Cars were no longer the primary driver of freedom, it was the ability to connect with someone on the phone, which you can’t do while you’re driving.
20:10 Sergei: Yeah but why did you think you’re the one to do this?
20:20 Praful: Because if I didn’t then no one else would. Can’t wait for someone otherwise you’ll wait forever.
20:25 Sergei: Then what was your first step toward starting a self driving car company?
20:29 Praful: Reading as much as I could about what others were doing. Figure out what I don’t know, find people who know that stuff.
21:10 You have to be very deliberate about learning as much as you can.
21:12 Vadim: So as someone who’s a visionary with big ideas, what do you think is the number one skill that a visionary entrepreneur needs to have?
21:30 Praful: You need to not focus so much on the outcome as on the steps you need to take to get there. That’s a mistake that I’ve made and something I’ve had to relearn.
22:29 Sergei: But if the end goal is so far from today, how did you stay motivated every day?
22:50 Praful: At first I was really interested but the self driving car idea ended up morphing because a lot of people kept reinforcing how far away the dream is.
23:15 When you’re around people who continue to reinforce how far away you are, you will just focus on that. If you’re surrounded by people who just focus on the work that needs to be done every day, you’ll do that. When you’re around people who think no idea is too big, you will continue to think bigger and bigger.
24:00 Vadim: If you want to change who you surround yourself with, how do you start that process?
24:04 Praful: Go to wherever you may be most successful in finding that community.
24:15 You only really need 2-3 people who reinforce your desires. Even what you said in the beginning, us being each others champions, that goes a long way.
25:20 Sergei: Then how do you know whether you’re thinking big or you’re being delusional? and does it matter?
25:24 Praful: The difference between delusion and vision is execution.
26:20 Sergei: But ultimately, changing the idea to be a bit different did lead you to ultimately get into YCombinator and raise several million dollars. So what did you change in your approach?
26:48 Praful: We started thinking about where can self driving cars be most useful and we decided on logistics and cargo because more cargo gets moved than anything else.
27:10 A lot of problems need to be solved before you can get to self driving cars.
27:28 To make self driving trucks possible you first need to have a lot of automation in the warehouses themselves. We realized if we can solve any one of these problems first, it would get us closer to automation than a self driving car.
28:07 So we started to adjust it to be a bit more pragmatic.
28:30 Vadim: It sounds like eventually you need to be able to get other stakeholders to agree with you to achieve the big vision. So if you’re trying to achieve something big now should you pare it down to something more attainable first?
29:15 Praful: The idea that all of these inventors did something major right away with a breakthrough is part of the myth.
29:25 Even Edison had thousands of prototypes before he made the light bulb.
30:10 You have to start really small and iterate until you get it right.
30:30 Edison and Ford could have thought this is too big and we won’t solve it. It is too big if you just focus on the end. But they didn’t. First Edison focused on each component that would make the light bulb work, then the infrastructure to deliver light, then he popularized it.
30:52 Sergei: So you have faith that you’ll figure out everything else later on, and for now focus on what you need to solve today to survive to the next point.
31:20 Praful: focus on what can I do right now with the skills I have and what I already know to bring it to someone who can tell me if I’m on the right track.
31:50 Once we adjusted the self driving car idea, we built software for warehouses, then decided to see who else it would be useful for, then decided to deliver it via an API. So it was an iterative process.
32:30 Sergei: Now you’re a CTO of a company that works in the trucking space?
32:45 Praful: Yes, we’re a finance company for trucking companies to take over their accounts receivables at a discount. The interesting part of this business is how we can create credit markets with cryptocurrency.
33:30 Sergei: So you’re continuing to use your technical skills in another business, but you’re still thinking big and continue to surprise us with your new ideas every time we see you. Tell us why you decided to move in front of the ocean and why that’s related to what your next big idea is?
33:47 Praful: This is definitely starting off as more of a hobby than a company, partly to keep the stress levels low and allow me to iterate more without having to make money with it.
34:13 Ocean levels are rising, global warming is a thing, and we don’t know enough about the oceans. We can try to reverse it or figure out the worst case scenario and adapt.
34:30 I’ve had an obsession with wanting to live under water from a very young age, I don’t know why.
35:10 I need to go under water and figure out what’s happening
35:30 Studying killer whales and how similar they are to us made me realize that we need to study oceans more closely and understand them. This made me think about how we can create a situation where we can actually spend time living underwater.
36:32 The ultimate idea is to build giant submarines where we can live and interact with sea life for several years at a time.
37:05 To start super small I started scuba diving, now I’ll start to scuba dive with research groups who work with killer whales. Then I’ll figure out what the research groups need to improve their work and I’ll help them.
38:00 Vadim: There’s a lot to unpack here around what enabled you to think big. When you started with the cab business, you just wanted to build a business.
38:55 Next you worked on ideas like self driving cars which is something you were thinking about since High School. Now you’re also working on something that’s intrinsically interesting to you because you want to do something that’s a lot more impactful.
39:25 Aside from being interested you need to surround yourself with smart people, but also divide it into achievable steps you can take to make it real.
39:50 If someone wants to think bigger, what is some parting advice that you would give them?
39:54 Praful: Start small and iteratively improve. Even if your idea seems small now, you can develop it into something bigger.
41:04 And that’s part of why I live in front of the ocean now. Part of it is the view because I want to remind myself of the big vision, but ultimately I need to find a way to make it real.