Ashish Mistry launched a computer technology company when he knew little about computers. He was a new Emory University grad who had majored in religion, yet he and his fellow entrepreneurs managed to attract more than $2.5 million from investors.
That was the first in a string of businesses Mistry started or helped build though he had no expertise in their industries. Now, 37-year-old Mistry is a partner in BLH Venture Partners, which invests primarily in startups. He's also chief executive of KontrolFreek, a Midtown company that makes plastic and rubber extensions for the thumbsticks on Xbox and PlayStation controllers. The little widgets generated nearly $5 million in revenue last year for the six-person operation.
Here’s how Mistry says he did it.
I grew up in an entrepreneurial household. My dad started selling school bags door-to-door in Florida, then progressed to digital watches. And then starting his own small chain of stores. We were one of the early guys selling car stereos and home theater equipment. I grew up going to the store after school.
That was my way of spending time with my dad and my uncles. My father and his two brothers were of Indian decent. They had to start over in the Americas when they got here. What I learned is you have to be adaptable and you have to listen.
Mistry wanted to be a doctor, but he failed organic chemistry at Emory and ended up getting a degree in religion, a subject he was interested in but didn’t want as a career.
When I got out of school I was sitting in a cube working away [in a marketing job at a sports management firm] and the computers weren’t working. You had to wait until Thursday for a guy to show up to fix a computer that had been down since Monday. I realized there were more small businesses that had these issues.
I started doing research on network management. I didn't know anything about technology, but I decided to find someone who did and then partner up with him. I started talking and saying how do you solve this problem for small businesses? That was the premise behind which started Virtex Networks.
We were 20-some-odd-year-old guys. We were trying trying to figure out how to do it. I spent more time in the Emory library between age 22 and 24 than I did when I was in college. I was just tactical reading and researching that helped formulate the business plan that we used to capture some investors.
Mistry tried to build contacts at a local business association meeting. Two guys he met at the registration table pushed him to do volunteer work with the association. Later, one became Mistry’s mentor, first investor and a crucial link to other investors.
Investors want to develop a relationship with the people they are investing money in. It’s relationships that have helped me to do what I’ve done. Going back to what my dad and uncles were telling me at the store: Listen — you are trying to develop a relationship with these folks. You are not trying to push a car stereo at them.
We launched the business in ‘99. We were off to a great start. Signing up customers. We had 25 employees we hired in a short period of time. We were ready to go to start the next round of fund-raising. And then 2000 happened. The dot-com bust. We are burning cash at a rate that exceeds our revenue. Within 90 days we would have been insolvent. We’ve got these employees. We’ve got these investors. But, most critically, these customers depend on us. If their computer networks go down, they have the potential to be out of business. It was extremely scary.
We started trying to figure out how to salvage the business and sell the company. Take every measure you can possibly take to land your customers and your employees softly and safely. We were able to put a deal together over a period of weeks. [A local company in the same industry] bought the assets.
Our investors lost money. All of it. We lost money as entrepreneurs. It sucked. When at 22 you’ve raised 2-something million dollars and you’ve had employees that you’ve never had before. You go from showing up at an office where you are at the top of the world to: What am I supposed to do today? I started thinking about how I was going to get engaged in something that would get me that sense of euphoria back.
One of the earlier investors, a successful entrepreneur, asked Mistry to take a leadership role in a young startup company called AirDefense, which aimed to help businesses secure their Wi-Fi networks.
I sat outside his door for five years and just did what he told me to do. Everything from get the website up and running, make sure that you are able to generate leads, how does email marketing work? How do you sell training services? Slowly but surely I learned the enterprise software business. I ran the marketing group. I ran sales. I did the international business.
I pulled it off because I really didn’t know better. I would search around the web or stay up late tinkering and trying to figure out how to do it. As much as anything, I was given the opportunities and I took them. You have to take ownership of things and you have to ask for more.
Mistry and the owner of an international construction firm, who he met in a previous venture, decided to launch in 2010 a firm, BLH, that would invest in small companies. The construction firm owner provides most of the money. Mistry handles the operations. They have nearly $10 million invested in 19 businesses. Both men also invested in KontrolFreek, with Mistry serving as its chief executive. It makes accessories for gaming controllers that allow players to act faster and play more comfortably.
The team that was working on the product, they were a bunch of designers. They had never really brought it to market.
Annual revenues have shot up 50 percent each of the last three years, Mistry says. Most of the nearly $5 million in annual sales is generated online.
I don’t play video games. I didn’t know how to sell thumbstick extenders. I started screwing around with it, put it on a website and as a result of seeing where traffic came from, I would try to find more traffic. I’ve tried to really listen and understand who the customer is. Because most of the time the customer will tell you want to do. That isn’t new. I think in some of these businesses they forget about it. When they get really successful. And when you are starting out, it’s really easy to not remember that you are there for the customer, not for yourself.
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