A Product Market Fit Show | Startup Podcast for Founders
00:00:00 · Pablo Srugo, Nazim Ahmed
[00:00:00] S0: So Nazim's story isn't like the classic unicorn fairytale. This is a real example of what it takes to build a solid business that does over $10 million in revenue and ultimately gets acquired, in his case, for $30 million, but it was not easygoing. It's like the real roller coaster that you can expect to ride if you decide to go through this. Actually, when Nazim started, he started as a side hustle, and that same year, his boss find out that he was doing a side hustle and fired him. That's how things got started. Luckily, two years later, he was doing a million dollars in revenue, but then just when he thought he had it, once again, things changed on him, and he goes super close to bankruptcy another time, flips it around, comes back. This is a 14-year journey, a 14-year roller coaster to ultimately bring his business to $15 million in top line revenue and, like I said, a $30 million exit. It's an amazing story, full ups and downs, and you're going to just learn some real lessons from what Nazim went through. Welcome to The Product Market Fit Show, brought to you by Mistral, a seed stage firm based in Canada. I'm Pablo. I'm a founder turned VC. My goal is to help early-stage founders like you find product-market fit. Naz, welcome to the show. [00:01:13] S1: Thanks for having me.
00:01:13 · Nazim Ahmed, Pablo Srugo
[00:01:13] S1: Thanks for having me. [00:01:14] S0: You went on a pretty incredible journey. I mean, we're talking a 16-year journey from beginning to – well, end is not really – you're still going on, let's say, a different journey but at least in terms of what we'll cover on this episode, and that's normal, I would say. In the world of startups, it's – you don't flip these quickly. These always take longer than you expect, and you started in a – I would say a humble way, right? I mean, 2005 was a crazy year for you. Just to maybe sum it up, you start a side hustle. You get fired from your full-time job, and you manage to almost go bankrupt all in the span of 12 months. Let's start there. I mean, take us back to that time and how you started what I guess was DNA11 and just maybe some context, and we can go from there.
00:02:03 · Nazim Ahmed
[00:02:03] S1: Yeah, absolutely. Yeah. My journey is definitely a little bit atypical in the startup world. My background was actually molecular genetics, so I finished my honors degree in genetics from the University of Western Ontario. I decided a life of academia was not the path, so I took a couple years of software engineering and ended up working at a Bay Area biotech company for about four years. My nights and weekends were all working on side hustle, side projects. For me, it was a creative outlet, number one, and number two, I had just a bunch of entrepreneurial friends. It was just a great opportunity to just work on ideas. After a bunch of ideas did not work, there was one idea that was never supposed to be a business, and my best friend and I at the time, Adrian Salamunovic, came up with an idea of taking people's DNA, so that was my world, and turning it into personalized pieces of artwork, and digital marketing was his world. We put our two worlds together, and we put up a website called DNA11.com, which we can get into the details in a moment. That business ended up miraculously turning into a million dollar a year e-commerce store with 75% gross margins and became my source of cash to start other companies. I can get into a little bit more of the details, if you want, on how that actually happened.
00:03:24 · Pablo Srugo, Nazim Ahmed
[00:03:24] S0: Yeah, maybe just the specifics around how you come up with that idea. I mean, it's kind of – it's out there. I know you can rationalize it because it is your world and his world. I'm just curious how did that actually happen? Hey, let's take people's DNA, take swabs of DNA, and then blow them up into art. [00:03:39] S1: Sure. First it was, Adrian and I, we’re always talking about ideas, and we tried to start a couple of things that didn't quite work out initially. Then we saw this trend of personalization happening. I think, at the time, M&M’s, for example, were personalizing their M&M’s, and that was starting to become a thing in 2005, I think. I think, at that time, Nike started personalizing their shoes. My whole world of DNA and Adrian's worlds of digital marketing, he looked at his DNA images on some of my technical documents, and to him, it looked like artwork, looked like really cool design. The first idea was actually taking people's DNA and putting it on t-shirts, but the DNA processing was so expensive that no one would spend 2, $300 on a T-shirt. Then we came up with this idea of printing it on artwork so your DNA from a mouth swab, brought to a lab, extracted, fingerprinted, brought into a photo shop, colorized, printed on large, four pieces of canvases, artwork. [00:04:47] S0: Did that just grow organically, or did you start running paid ads against it? How did you get it from – I guess, you started 2005. Couple years later, you’re doing a million in revenue, which is not trivial.
00:04:47 · Pablo Srugo, Nazim Ahmed
[00:04:47] S0: Did that just grow organically, or did you start running paid ads against it? How did you get it from – I guess, you started 2005. Couple years later, you’re doing a million in revenue, which is not trivial. [00:04:58] S1: When we launched a website, ended up doing this launch party, and Fashion Television actually covered the launch event. The first thing that happened was we got traffic through regular PR. Adrian, his whole background was muttering up PR, and then we started seeing people come to the website. Sales started trickling in, and at the same time, my manager for biotech company saw me on Fashion Television promoting DNA11, ended up firing me. He's like, “Okay, you can't run these two things at once.” At that moment, I had a decision to make: stop working on DNA11 and go back to the world of biotech, get another job, or cash in. I think I had $20,000 in savings, try to make a go of this DNA art thing. I ended up cashing out my savings, and we just start continuously working on the site. [00:05:47] S0: What was your thinking, by the way? Just how did you make that decision? It's not easy decision to just go all in. What gave you that push? What gave you that shove to just do it?
00:05:47 · Pablo Srugo, Nazim Ahmed
[00:05:47] S0: What was your thinking, by the way? Just how did you make that decision? It's not easy decision to just go all in. What gave you that push? What gave you that shove to just do it? [00:05:58] S1: I looked at the two options. Number one, option one – I was in my 20s at the time, so option one, I could take a lot of risk. Option one, burn through my $20 in savings. Worst case scenario, DNA11 doesn't work and then go back to option two, which was go back to the world of biotech. Then the other option was not even give it a try, still have $20,000 in the bank, and then go right into my job, which at that time, $20,000 could mean I could take a lot of risk. For me, it was a no-brainer to just carry this through. [00:06:32] S0: I think that's true. I think, especially when you're young, you really can't lose. Worst case scenario, you just go back to what you were doing anyways, and your experience, especially at that age, is going to be seriously valued by most employers. That makes sense to me. [00:06:46] S1: Yeah, correct. Even if it ends up failing, I think people on exterior, especially today, are going to respect the fact that you took risks. You tried something interesting. Even if it didn't work, exactly, you learn a lot, and then you just move on to the next milestone. [00:07:02] S0: Was it like you go all in? You obviously experienced some serious growth. You get to a million in revenue two years in. Everything's good at that point, I mean, high margin? Everything's going well, or what are the main challenges that happened around 2007, 2008?