Confessions of a Tech Founder

I recently sat down with Malur Narayan, an old friend from our Nortel years. Malur’s journey from AI research in the 1990’s to advising startups gives him deep insight into tech commercialization challenges. His career spans work at Bell Northern Research, then Nortel, transitioning from technical roles to business leadership in Asia. Then he moved to Tata Consultancy Services while advising various startups in parallel.

His experience investing in startups like Powerstores (now webware.io) and ventures such as Strides.ai, Cache AI and Latimer offers practical views on startup growth hurdles. His perspective combines technical depth with hands-on business strategy, emphasizing obsession with the problem.

Malur is now CEO and co-founder of XTRIUM, a groundbreaking startup focused on advancing material innovation through advanced AI technologies. XTRIUM’s mission is to bridge the gap between materials and their ideal applications, unlocking significant value across industries. They specialize in rapidly matching materials to innovative uses, identifying substitutes, and optimizing supply chains.

Here’s an edited version of the discussion we had last week.

Hi Malur, what observations do you see from the market when it comes to the growth challenges of B2B Tech Startups? Please give us a few examples.

Hey Philippe, thanks for having me. I observed that Tech startups often fail because founders rush to solutions without fully understanding the problem’s size or market demand. Many founders jump to build without knowing if the problem is large or pervasive enough to justify a product. They frequently assume customers will pay, but 90% of the time they don’t.

More specifically, B2B startups face added hurdles since buying decisions involve multiple stakeholders, making adoption harder than in B2C. The risk aversion in corporate buyers often favors established vendors (“no one ever got fired for buying Cisco or IBM”, the saying goes), creating a high barrier for startups to replace status quo solutions.

Is it a technology related issue or a market-related issue? What is the cost of not addressing this pain point properly?

Finding product-market fit requires deep problem analysis and early market validation, especially on willingness to pay. Founders must spend significant time understanding the user’s workflow and pain points before building their product.

As an example, you should test pricing early by putting up a paywall to see if real customers pay, rather than relying on friends or indirect assumptions. At Strides.ai, the team struggled to monetize because we delayed testing payment models, discovering too late that free signups did not equal paying customers. When you know why a paying customer converts, then you can find more users with similar profiles to scale revenue.

What is the best way to avoid this trap in your experience?

Successful startup founders balance focus on a core customer and problem with nimbleness to pivot solutions when needed. Focus means staying committed long enough to properly test a problem and market segment. This is the stage where the founders must be the “eyes and ears of the market”.

However, founders must remain nimble to shift their solution approach or business model if initial ideas don’t work. Importantly, they should pivot on the solution rather than on the problem itself, as the problem defines the startup’s core purpose. This approach provides clarity while allowing flexibility to find the best Product-Market Fit and minimize wasted effort.

Ok, but how do you practically achieve this?

The best way is manual, hands-on testing to prove market demand before investing in automation. You may know the Instacart story, where the founder manually created a product database and personally delivered first orders to test the grocery delivery concept. This “manual schlep” work is critical but often ignored due to being boring or tedious, as Paul Graham said after observing and advising hundreds of startups at Y Combinator.

Engaging in manual “schlep” work can lead to valuable insights about the market and customer needs, ultimately leading to better product development. Then, but only then, successful startups can differentiate by automating these tedious tasks, turning them into streamlined processes that enhance efficiency. This is to be done at the scale stage.

At XTRIUM, our team is painstakingly building a comprehensive product database manually to validate market needs before automating. This groundwork reduces risk and ensures technology investments solve real problems and attract paying customers.

I wish you every success at XTRIUM! Thank you Malur for sharing your invaluable insights with us today.

My pleasure, Philippe!

Malur’s first answers reminded me of some of my earlier articles on “playing Entrepreneurial Judo” against big competitors (here) and passing “the Mom Test” (here), where I dive deeper on the ways to overcome some of these challenges. I also borrowed the “schlep” concept from Paul Graham after discussing with Malur (here).

Thank you

Philippe

P.S.1. to B2B Tech founders: You may take the “From Tech To Growth” self-assessment scorecard. It is free, it only takes two minutes. It offers some reflective questions and provides some customized tips based on your score.

P.S.2. to B2B Tech founders: Whenever you are ready, you can take a short, complementary appointment with me to discuss your business growth issues at hand. Go to Recognition Call.