Unlocking Business Potential: Advice and Insights from Mahesh Muralidhar.
When it comes to scaling startups and navigating business operations, Mahesh Muralidhar brings a breadth of experience and wisdom to the table. Known for his pivotal roles at Canva and Airtasker, Mahesh is now the founder of Phase One Ventures, a venture capital firm supporting early-stage startups. His career is a testament to his ability to shape the business landscape with resilience and leadership. In this interview, Mahesh shares his lessons and practical insights.
"Dream big, founders! You're my heroes! The world has so many problems that need your solutions."
- Mahesh Muralidhar
Can you tell us how your background has shaped your approach to business?
I think my Indian background gave me access to a set of framework stories passed on by hundreds of years of civilisation, and learnings around how to understand myself, so my own personal why, my point of existence, my relationship with each person, my relationship with community, society, and I suppose some sort of amorphous context. That was something that was passed on to me when I was really young, through Vedic scriptures, mythological stories, fables, etc. India and my Indian background gave me that, and I always try to reframe that anchoring and framework into everything that I see and do. I understand the world from that lens, which includes the business world.
Let me give you some examples. A person who understands their intention and their purpose is arguably a more powerful person because they're clear about their priorities, they're clear about decision making, and they understand even more how to resource different priorities and decisions. This is the same for an organisation. An organisation's mission, purpose, values, etc; are completely aligned with a person. Whether a young organisation is very similar to a young person in regards to its maturity around different things, it’s far more able to have a higher risk threshold. So, there's a consistent way that I understand the world, commerce, and economy by constantly looking at myself and my personal frameworks and then reapplying and reappropriating that.
And growing up in New Zealand - you learn that just gotta get things done. There is no need to fuss around, no pretence - just gotta get going and do the thing! :)
What led your interest in studying management and doing an MBA?
When I was really young, my mom instigated me to be a leader of sorts, and I thought learning management would effectively make you a leader. I suppose it was one of those economic tropes of “be a manager, and you're going to be successful”, which I now know is false.
Then, the Global Financial Crisis (GFC) hit. I recommend everyone watch 'The Big Short' to understand its impact. The GFC made me realise that I didn't understand how the economic and commercial world worked, so I didn't comprehend how marketing was connected to accounting, was connected to finance, was connected to strategy, operations, and supply chain. I didn't understand the vernacular; it was all a bit intimidating, so I did the MBA to make those connections, and it was incredibly useful for that.
You've spoken about the importance of grit and resilience in the face of adversity. Can you share some personal anecdotes about how you've applied these qualities in your own career?
Absolutely. I was on fire for 15 seconds after I won a reality TV show in New Zealand, Fear Factor New Zealand. They screwed up. I've had third-degree burns to about 12% of my body. Being on fire like that is very painful. After the skin is grafted from big chunks of your thigh, you're put into a burn's bath for those big raw areas of flesh to be cleaned without any anesthesia and just a toothbrush with salt and minerals hitting those big layers of flesh. That's a very painful experience.
Not having any money to get through the MBA program, sleeping in the MBA rooms, not being able to graduate with my classmates for a year because I couldn't pay my fees on time, you know, embarrassing. But all of this reaffirmed a clear opinion that was again passed on to me by my father around sovereignty and that it's very powerful to look towards the sovereignty of yourself and your person and be able to build enough confidence, credibility, capacity, and capability to stand for yourself. You can, in fact, serve others and follow a purpose and a mission when you've got yourself sorted.
After various management and consulting roles, you decided to start your own business - Ureferjobs, a job referral marketplace. What was that like? What did you learn?
Ureferjobs was an incredibly powerful learning experience. I learned so much. I learned that I was capable of things that I thought I wasn't, like creating a complex financial forecasting model. I remember doing it for the first time; it took me five days.
Showcasing it to a bunch of investment banking mates of mine, and watching his reactions- "Holy cow, this is really impressive." I learned that I could push myself really hard. I remember the way I got Uber onto our platform; back then, all I could afford was a three-piece packet of Tim Tams. So, every day for a week, I went to their doorstep and left that with a sales proposal. On the fifth day, I got a call from the then country manager, and he said, "Hey, who are you? What do you want? Sure, we'll use your platform, just please stop coming back." I learned the value of perseverance.
“In my opinion, startups fail because they don’t build a loved product, because founders are not customers and problem obsessed.”
What are some key lessons you learned about scaling a business that you think early-stage founders should keep in mind?
Canva is the example, right?
I had the fortune of being inside a black box as we went through hyperscale. The biggest thing is the founder and it’s so important. A founder who is customer-obsessed, mission and vision-obsessed, problem-obsessed, who is irrational, has huge amounts of grit, and is willing to learn. That’s really important. Everything’s a bit sucky everywhere. But at the end of the day, I’ve had the chance to advise and engage with so many startups. There are issues in every company, everywhere. But if you are fulfilling the core point of an organisation, which is to deliver customer market value, and you’re winning at that, everything is easier, and you can make things better across all the different challenges of scaling.
So you have to build a loved product. In my opinion, startups fail because they don’t build a loved product, because founders are not customers and problem obsessed. To be honest, they are arguably solution-obsessed, which is not the right thing. They need to be customer and problem-obsessed. So they don’t build a loved product, and then they’re never winning.
“Show me a founder that starts with the customer and their problem, their opening statement, as opposed to their solution.”
Outside of that, you have to have really high standards, and you have to call it and nail it.
Melanie Perkins, Cliff Obrecht, Cameron Adams, Zach Kitschke, all of these people are phenomenal operators. I mean, Mel and Cliff, beyond everything else, they’re fantastic. Your standards just have to be really high, and you have to execute to that extent.
What are some key considerations for founders when it comes to building their initial team, and how do you prioritise talent acquisition?
Your co-founders should not be a skills-based decision - It is a trust-based decision.
You cannot hard code future skills in your co-founder team. There are so many problems, trials, and tribulations you’re going to experience, where you have no idea. You cannot forecast. So bringing in the finance person, bringing in the operations person, bringing in even the CTO, it’s just silly. Whenever I see an early-stage founder and founding team go, “Hey, so this person’s going to be responsible for this. This person’s going to be responsible...” No. When you’re going at breakneck speed, and if you’re winning, the person with an accounting background is going to have to deal with the people issues, and the person with a technology background is going to have to do customer interviews.
So you just have to solve problems and get darn good at it. But it is that social pressure in regards to staying together because you’re university mates, or you’ve worked together, or you’re life partners, or you’re best friends, and you’re going to stand by each other through thick and thin for the next three to five years. Those first three to five years, that is what is critical. So common alignment in regards to priorities, incentives, and where you want to get to. That’s what’s important.
Outside of that, when you’re hiring talent for the first team, engineers and designers need to show signals of excellence by having very strong fundamentals. Designers who actually have a really good design background, as you can see in their portfolios, and engineers who have a four-year software engineering degree or a three-year computer science degree from solid universities where they love their craft and are passionate about their craft. That’s really important.
It is also important to bring on generalists who arguably believe in the founder, the person, even more than the venture.
These generalists are the ones who follow the founder through all phases of the venture. They possess a high but minimum skill set in verbal and numerical reasoning and would have exhibited some signal of excellence - there is a history of them delivering at the highest level in something. That’s what you’re looking for. Then founders have to onboard and engage that small team and build a cult-like, “it’s us against the world” kind of environment. Organisational culture from a mature perspective, a mature company perspective, is not relevant to startups.
Does everybody know what the mission is?
Does everybody know what the vision is?
Does everybody know what they contribute in regard to that?
Do they feel safe around each other?
Do they feel like they’re winning?
Do they feel like they’re progressing?
Are they tight on, in line, working towards achieving this? That’s what’s important.
How important do you think building a strong organisational culture is for startups, and what advice would you give founders on this topic?
Building a strong organisational culture is crucial for startups. It's about creating a high-performance team environment, similar to a sports team or a military unit. Everyone needs to know the mission and vision, and how they contribute to it. They should feel safe, like they’re winning and progressing. Organisational culture is less about broad principles and more about fostering a sense of unity and purpose.
What do you think are the biggest opportunities and challenges for Kiwi founders in the current global market?
Kiwis are amazing entrepreneurs. We’re two islands, and there’s this term, “number eight wire” in New Zealand, where you have to just solve problems. You’ve just got to figure stuff out. What we don’t see as much as Australia does is scale. We don’t access the US global markets faster and quicker, and that needs to change.
Once New Zealand entrepreneurs get very comfortable with connecting with global markets, even more, watch out, world. That’s the one thing. We need to understand that New Zealand entrepreneurs can conquer the world from New Zealand more and more. We need more Canva, Safety Culture, Simply Wall Street, Airtasker, and Atlassian – they have all had incredible role-modeling effects in Sydney. We need the same in New Zealand.
Can you tell us a bit about Phase One Ventures, where you are the CEO, and why you got into investing?
Phase One Ventures is an early-stage founder community, first and foremost.
As I said, I think we needed to create a few more role models of global-focused founders who are hitting best practices and best-in-class results. So I started off in a living room, and I always like starting things off lean, just giving free value strategy advice to a small group of founders. That grew and grew, and a community of founders formed.
I didn’t build it to get into the investment scene or venture scene, but we have a fund adjacent to that. We selectively invest in the community. I don’t believe that you need to have money for the first year to two years.
Eighty per cent of the companies, startups, and founders that we’ve invested in from the community have now raised venture funding, which is a crazy conversion rate, so clearly, we have something going. The metric we have for us is six unicorns from Phase One. That should make a dent in the New Zealand startup ecosystem, the Australian startup ecosystem, and also for New Zealand.
What are the main qualities or characteristics you look for in early-stage startups and founders? What questions do you ask them?
The key theses and key principles that we’ve always firmed and pushed is that I look for founders who are customer and problem-obsessed, who showcase incredible evidential amounts of grit, who are dreaming massive with USP from day one customer, who will grapple with their personal why, and that they are willing to understand the venture game.
“At the end of the day, the people who make huge amounts of difference in the world are the people who are customer, problem, and market-obsessed, who have a very deep grounding in regards to their personal why.”
Are there any particular industries, technologies, or trends that you are particularly excited about?
AI is going to be a transformational technology.
When electricity first came out, it was a point-level change. It just changed specific points of inflection. It came out in the 1800s. The light bulb came out in the late 1800s. Electricity started to become a bit more pervasive in the 1900s, and there were power stations. You had to live near the power stations. Eventually, there were gridlines and all of that. You could live anywhere to access electricity. In the same way, AI will go through the same journey.
Right now, it’s just point-based, but eventually, it’ll become systems-based when a doctor’s diagnosis for a treatment becomes incredibly cheap. It’s already starting to become incredibly cheap because computer capacity is really cheap, but the judgment in regard to the ratification of that diagnosis will become expensive. The supply-demand curve will shift there.
Action on the judgment may become a bit more expensive. Then what would be really valuable is the feedback loop and the data set in regards to what’s worked and what hasn’t worked. Amazon actually has patents already out on shipping things to people’s houses for free so that they can learn what people really want. AI will be transformational in the next three to five years.
You've mentioned a "community first" approach at Phase One Ventures. Can you elaborate on how this works in practice and why you think it's important?
A community-first approach is important because the startup world can be lonely as a founder and entrepreneur. I’ve been a founder before, so I empathize deeply. Having the Phase One community of founders, I’m able to see the successes and the trials and tribulations each other goes through.
They support each other through it. Importantly, they can also see benchmarking.
When a Phase One founder complains, “Oh, I’ve spoken to 50 engineers, I haven’t been able to speak to someone,” then another Phase One founder goes, “Hey, I had to speak to 350 engineers before I identified the right person,” or “I had to speak to five times the number of VCs.” That benchmarking is quite powerful, and the support system is really good.
I think that’s effectively what happened with the early YC group, and also as Canva, SafetyCulture, CultureAmp, and a range of what are now the Australian behemoths came through. They all kind of knew each other, and I’d say helped each other out.
You've recently been involved in politics. How do you think your business experience could be applied to improve policies that affect startups and innovation in New Zealand?
Business experience is an outcomes-first orientation, so I’d probably follow through with that policy. Outside of that, it’s really taking advantage of the AI revolution that’s coming, the technology revolution that’s coming.
Also, India as a country is going to be the driver of growth for the world in a really big way, a powerful driver of growth, so my Indian background should hopefully help with that. Lastly, policy construction. The closest thing to policy construction that I’ve come across is product construction.
The same frameworks, thinking, philosophies around product construction, the only other place I’ve seen it where it’s nearly identical is policy construction. You have to define the problem and scope the problem out incredibly well to then identify a solution that scales. You’ve got to do unscalable things. You’ve got to use cross-functional resources and work out what scales and assumptions are the killer ones.
Future plans: What’s in the works for you, in the coming year?
I am currently closing out another 200k for the Phase One fund. Just to anybody who’s interested, the Phase One fund is already delivering times two multiple within its first two years, and you’d get a chance to invest into effectively the original premise and the original fund and be part of an incredible story and where the mission of Phase One and the fund is to make New Zealand an even happier place by creating six unicorns and driving incredible economic gains.
I intend to close out the fund by the end of this month, so anybody who’s interested, please let me know.
Outside of that, I am supporting the Phase One communities, passing on all the IP I’ve learned as a founder, as a leader at Canva, Airtasker, and Simply Wall Street, and advising so many startups now and going on this journey. Probably I haven’t earned anything for the last three years, so I’m keen for any startups that would like advisory support. I’m happy to do that. Then I really want to focus on some community projects in New Zealand, social cohesion, social housing, crime, accessing global markets. These are all things I would like to focus on.
“Show me a founder who spends all their time with a customer problem in the market. I’ll show you a founder who’s going to win.”
Any final words of advice?
Go big, be brave. You can change the world.
You are the five people you hang out with.
Be customer and problem-obsessed.
Everybody, the majority of you in this room, think you are; you aren’t. You aren’t at the levels that you need to be.
Trust me, you’re not. I know I’ve been in your shoes. You are too occupied by your solution and your statement, and you're thinking that it’ll work. You have to have a huge ego around your vision and that larger story that you’re working towards, but incredible humility and subservience to today’s customer problem.
If you are on LinkedIn, liking things, sharing things, etc., that’s a bad signal. Show me a founder who spends all their time with a customer problem in the market. I’ll show you a founder who’s going to win.
