The tables are turned as host Sanjay Parekh is interviewed by friend, colleague, and podcast co-host Adam Walker. Sanjay started his first entrepreneurial venture in 2000 and has lived in the startup world ever since. Riding the ups and downs of startup culture, securing funding, and hiring staff, Sanjay has focused on being an advocate for other entrepreneurs in his roles as a VC, mentor, speaker, and podcast host.
Episode 17 – Sanjay Parekh
[00:00:00] Adam Walker: Welcome to the Side Hustle to Small Business Podcast, brought to you by Hiscox. Today we’re turning the tables while interviewing the host of this show, Sanjay Parekh. But who am I? I’m Adam Walker. You may be used to hearing my voice during the mid-roll ad, but I’m also Sanjay’s colleague, vco-founder, and friend. We’ve known each other for a few years and we host a weekly podcast together called Tech Talk Y’all.
Now we usually think of Sanjay as the question asker on this show. But in this episode, he’ll be answering the questions as we hear more about his entrepreneurial journey, what he’s learned, and where he’s going.
So, Sanjay, welcome to your own show.
[00:00:41] Sanjay Parekh: Thanks. It's kind of weird being on the other side of it. But this will be fun.
[00:00:45] Adam Walker: Well, man, this is gonna be great. So, I think in all the years we've known each other, you know, we've hosted Talk Y'all together for four years. Which by the way is a a tech news comedy podcast. But I've never interviewed you. So, this is going to be really fantastic. So, let's start the way we normally start. Give us your one-minute flyover. Who are you? And what are you about, man?
[00:01:05] Sanjay Parekh: Yeah. So, as listeners know my name's Sanjay Parekh. I'm born and raised from Kentucky. That's where I kind of grew up. Live in Atlanta now. Have lived in Atlanta since the late eighties. Georgia Tech grad. Went to school for electrical engineering.
Started working for a little bit after that and then started my first company. Came up with the idea in ‘99 left my job in 2000 and went full time and basically, ever since then, I've been just all about the entrepreneurship and startups and doing fun stuff. It's been nonstop ever since then.
[00:01:40] Adam Walker: All right. Well, two things. First of all, go Jackets, because I'm Tech guy as well. And secondly, let's talk about the first business that you started. How did you get the idea? Were you working full time at the time and sort of, what was that transition like for you?
[00:01:54] Sanjay Parekh: Well, I mean, if we're gonna talk first business, that was probably when I was a kid.
[00:01:58] Adam Walker: Okay.
[00:01:58] Sanjay Parekh: So, I mean, thinking back, I always like to talk about those early things. And I know previously on the podcast, I've talked about that candy arbitrage that a lot of entrepreneurs do, right. They buy candy bars at the convenience store, sell it to their friends and classmates in school with a markup and you make money that way.
That was probably not my first time actually doing something like that. A long time ago, back in those days, in comic books, they used to have ads back there that would tell you, ‘Hey kids do you want to make money or earn prizes?’ Right. They don't let you tell you what you're going to do.
So, I was like, yeah, sure. And I unfortunately ripped up a comic book and sent that in. What it turns out I was doing was selling custom imprinted holiday cards door to door. And so, my neighborhood was about 400 homes, and I would sell to them. And it wasn't so bad when you were doing the orders, when you got all those orders fulfilled and you had to deliver them, man, that was kind of a beast.
But you know, thinking through that, I actually realized like, well, if I'm already going to all of the houses, I should do other things as well at the same time.
[00:03:08] Adam Walker: Right.
[00:03:08] Sanjay Parekh: So I signed up and became a delivery person for Thrifty Nickel Newspapers, which were these free classified newspapers.
[00:03:16] Adam Walker: Yeah.
[00:03:16] Sanjay Parekh: And I think I think I got like a couple of cents per. Or maybe it was a nickel per. I don't remember now. But you know, I was already going to the 400 houses to sell them holiday cards, I might as well deliver a free newspaper at the same time and make double.
[00:03:28] Adam Walker: I love that you were like, I mean, not really, but like double dipping. Like it's like, I'm gonna get the most bang for my walking buck as I can.
[00:03:35] Sanjay Parekh: Absolutely.
[00:03:35] Adam Walker: Let me just make money in two. Like it's like multiple sales channels as a kid. That's brilliant. So let's get past that and I know you did the candy bar stuff too. But like what's the first business that you started? And tell me about that transition.
[00:03:49] Sanjay Parekh: Yeah. So, the first business was in the .com days. So, it was the late nineties. When I was in school at Georgia Tech, that was really at the beginning of kind of the public internet. We had access to the internet in the nineties when I was at Georgia Tech, and I got online and met a lot of people. But that was before web browsers were a thing. But while I was at Georgia Tech, web browsers came up and then, you know, the access to the internet happened.
And so I saw kind of this transition happen and things happening. And, you know I didn't think about it. I went and got a job, you know, like a good engineer and started working at a very early-stage company. But at some point there I started getting restless and I realized I was kind of tapping out.
I wasn't learning anything anymore. I was the one that people came to with questions. I didn't really have questions to ask anybody because I knew all the things I needed to know to do my job. And so, one night - it was March 17th, '99. You remember those days. I was at home, and I hit the FedEx and the Ikea website.
And the first thing that both sites ask you is what country you're in. And I thought that was the dumbest thing. Because when you go to the store, you know, like they know, and you know where you are, they don't ask you like, ‘Hey, are you gonna use English in dollars when you're in the US?’ Like that's obvious, right?
[00:05:03] Adam Walker: Yeah. So, right. Yeah.
[00:05:04] Sanjay Parekh: Why would we not do that on the internet? So that night I kind of architected the solution to that problem of how to fix that. And the next day I went in and one of the guys that I'd been bouncing ideas off of back and forth happened to be the general counsel of the company.
So, the sole lawyer that was at that company, we're talking ideas. And I told him this idea of like, I think we could figure out a way to let people know where somebody is based on their IP address.
[00:05:29] Adam Walker: Right.
[00:05:30] Sanjay Parekh: And his first response was, well either it's impossible to do or somebody else has done it. Like that sounds like too obvious of an idea. And so, we talked to his brother who was a west coast guy and some of his friends and they all said, ‘Yeah, it's possible to do. It's a great idea. And we don't know anybody that's doing it. And this is definitely worth something.’ So that's basically how it all started.
I started writing a patent application right away and that's a function of having a lawyer as your co-founder. They pushed you into doing that. That was painful. It took me months and months to, to kind of perfect that and then the rest of '99 was basically doing two jobs. At night working on code and trying to figure this all out.
And then during the day I would be, you know, in body, maybe not in mind at work, you know, working for that thing. And then at the end of '99, I ended up taking a three-week vacation to India. We had a bunch of weddings to go to and that was a good time for me to take a break. We were actually fundraising at that point with the goal of raising a million dollars. We ended up raising a million and a half. But that was my time to take a step back, be away from everything and kind of contemplate what I wanted to do. And if I wanted to quit my job and kind of go all in.
And I came to the decision that if by the time I got back, we had at least a half a million dollars, I was going to quit on that first working day of 2000 and go all in. And my calculation was, even if everything went wrong, like we had enough money that I would be okay for a while and then I could just go find another job, so.
[00:07:02] Adam Walker: Right. Yeah.
[00:07:03] Sanjay Parekh: That's how it all happened.
[00:07:04] Adam Walker: Man. I mean, that's some good math right there, like that you have enough money to give you some runway. Right? You wanted some runway.
[00:07:09] Sanjay Parekh: I got some personal runway. The company could pay me for a little bit, and I could move on.
[00:07:13] Adam Walker: I just want to make sure that I call this out to listeners. So, what I think I'm hearing you say — I just want to be sure — is that you invented IP address geolocation. And that was your first company. That's what you're saying, right?
[00:07:25] Sanjay Parekh: Yeah. Yeah, exactly. So, I was the one that invented that. So when you get ads targeted to you based on your location, when you are not allowed to see the video that you want to watch on a streaming service, it's probably my technology.
Most of the major sites use it. Now before listeners get mad at me, I’ve got to say, without this technology, your favorite streaming service would not be possible online because they would not have the access and ability to negotiate those contracts, to get that content, to be able to even stream it online because all of those folks require geographical limitations on that content. And so, you're welcome even though you're upset at me. You're still welcome.
[00:08:06] Adam Walker: Nobody's really upset at you. I think we're all just impressed at this point. All right. So, then you started the company. It was IP address geo location. You're no longer at that company. So, I presume there was an exit or of some sort? Can you just kind of give us the details or at least some details about that?
[00:08:22] Sanjay Parekh: So, I was there for a good while. We, like I said, we raised the million and half at the end of '99, beginning of 2000. Then in July 2001 we raised 10 and a half million dollars to further accelerate the company.
I stuck around until 2005. I got tired. This was, you know, many years in, at this point and I needed a break from working. So, I decided to take a break. Stopped working full time. I stayed on the board of Digital Envoy, Digital Envoy's the name of the company. I stayed on the board, but I took a year off and did a one-year MBA at Emory.
And then after I graduated in 2006 from Emory, I did some consulting work and whatnot. Stayed on the board. We ended up exiting and selling the company in 2007. And both of my, I had two co-founders, both of them stuck around through the exit. One stayed around for a few more years and then left. And then the other one actually just left. I think he’s still involved, but he left his full-time role at the company. Like, yeah, 22 years later.
[00:09:23] Adam Walker: Wow.
[00:09:24] Sanjay Parekh: From working full time. I like, I can't even wrap my head around being at the same place for 22 years. It's incredible.
[00:09:30] Adam Walker: That is wild. So, that's pretty amazing. So, you did that, and I know that now you're also involved — you talked about fundraising. You're involved on the funding side of things, and I'm curious, how has investing in entrepreneurs and side hustles changed your perspective? What have you learned through that process?
[00:09:50] Sanjay Parekh: Yeah, so, you know, I learned a lot from Digital Envoy in those early days. And I learned, and I'm not going to name the VCs, but I learned what kind of investor I didn’t want to be because of the treatment that I sometimes got from some of the investors that I did have as VCs. And so, you know, I decided when I started investing that, even though I was going to be an investor and I had this kind of, you know, responsibility or I guess duty as an investor to my own investment and my financial outcome, that my interest is going to be aligned with the entrepreneur.
Because I strongly believe that, as an investor, if you align with the entrepreneur and do whatever you can to make them successful, then in the end you should be fine as an investor, right? Maybe you don't maximize and optimize every single dollar. You don't really need to as an investor, I don't think. I look at the long game for that.
[00:10:45] Adam Walker: And if you increase the odds of the entrepreneur being successful, you're increasing the odds of your investment being successful as well.
[00:10:51] Sanjay Parekh: Right, exactly.
[00:10:51] Adam Walker: The whole ship rises, right?
[00:10:52] Sanjay Parekh: And sometimes, look, sometimes there are factors outside of the control of the entrepreneur where they're just not going to be successful. And I've had that with a number of my investments, and I have told a number of those that, look, whenever you're ready to go and do this again I am back to be an investor in you because I saw how you acted. I saw you were honorable. I saw you tried to do the right thing. Sometimes it just doesn't work out.
[00:11:16] Adam Walker: Yeah.
[00:11:16] Sanjay Parekh: And that's okay.
[00:11:17] Adam Walker: Yeah. And you and I have talked about investing before and you've also talked about how a lot of times you're investing more in the entrepreneur than in the business itself, sort of betting on them as a person. I mean, can you talk a little bit more about that as well?
[00:11:32] Sanjay Parekh: Yeah. I mean, it is exactly that. And it's funny because a lot of investors will stick to what they know. Like, look, I only know software as a service. I only invest in that. Or I only know, you know, NFTs and crypto stuff. So, I only invest that. I am not that. I invest in whatever vertical market that comes along.
If I find a founder that has a compelling idea and story and can explain to me the market and what they're going after and what they're trying to accomplish, and I end up taking a shine to the founder and I like them as human beings, then I'm in. That said I don't know if a lot of these founders should take my money because I can't really help them beyond the money for some of these because I don't know much about their industry.
I end up learning with them. And then I end up helping them with connections along the way or whatever I can. But, you know, if you're in some super niche industry that I don't know anything about, I'm not going to have connections there and I'm not going to be that useful. But, and I tell entrepreneurs that, but still they take my money, which you know, is fine. I appreciate being able to go on the ride with them.
[00:12:36] Adam Walker: Entrepreneurs are always good about taking people's money to further the cause.
[00:12:41] Sanjay Parekh: Well, I, they should be careful though. I think they should always be careful, and they should understand who they're taking money from. I tell entrepreneurs all a lot of times, a lot of times they won't ask me for references. But I've got a list of entrepreneurs that I've invested in that from a long time ago, from recently, from successes, from failures, and I tell them that you should call these people and make sure that I am the kind of investor you want along with you for the ride.
[00:13:04] Adam Walker: Yeah. All right. So ,Sanjay, I know you're involved in organizations that bring entrepreneurs together and you're very involved, I mean, with entrepreneurs in general, with coaching, and all that kind of stuff. So, so really two questions related to that. Number one. Why are you involved in those organizations? And number two, when you're talking to entrepreneurs, is there any like specific piece of advice that sort of always jumps out as like a starting point with a new entrepreneur that you're speaking with?
[00:13:31] Sanjay Parekh: Yeah. So why the organizations? So, I do definitely get involved with entrepreneurship organizations. But I also get involved specifically in organizations where entrepreneurs generally are not involved. You know, I particularly, I like to be in a room where nobody else is like me, because I feel like that's an opportunity to learn from people that are not like me.
As well as explain what it is that you do, right? Like a lot of these folks that may not have access or exposure to entrepreneurs. All they understand about what's happening in startups is what they read, right? And what they read in stories is not always the truth of what actually happens. There's so many stories that are just never told.
We hear about the horrific failures, and we hear about the tremendous successes. But the vast majority, the 90%, is just never covered there. And so, I think it's a good opportunity for that. So, I get excited by that. So by extension, I get excited by helping entrepreneurs as well. Because like we just talked about, getting involved in somebody's business where they're working in a market that you know, or you don't know, you end up learning so much about that market that I think it just makes you better as a human being, as a person. As well as better as a founder and an entrepreneur in your own thing in the future.
[00:14:50] Adam Walker: So, okay.
[00:14:51] Sanjay Parekh: That's the reason why for that. Now I already forgot your second question.
[00:14:54] Adam Walker: So, second question is what, like when you're talking to a new entrepreneur, what's your first piece of advice typically? Or kind of your starting point to sort of give them some direction?
[00:15:05] Sanjay Parekh: Yeah, so it depends on who the entrepreneur is and where they're at in terms of their stage. I end up talking a lot about taxes, if you can believe it. So, there's a couple of tax sections that really apply to startups and your ownership in startups. And not just for entrepreneurs, but also for investors, that can have very beneficial outcomes at the end of it.
So I'll just name the two. We won't go into detail here. But if listeners care, it's section 1202 of the tax code. And you can search up and search for a qualified small business stock, QSBS, and section 1045. So that's if you have section 1202 stock that's not fully tax deductible or tax free yet. You can actually roll over the money into a new company and keep going. So, it's a great way to kind of expand your kind of outcomes, your financial outcomes from investing or being a founder.
[00:16:29] Adam Walker: That's great. All right. So shifting gears just a little bit, you sort of started your first company, you know, '99, dot com bubble, lots of stuff happening. The birth of the internet in so many ways. It's 2022. We have a more, I think, a more mature internet in a sense in some ways. How has entrepreneurship changed over that time? Is it harder? Is it easier? Is it more complicated? Like what are your thoughts on that?
[00:16:56] Sanjay Parekh: Yeah I think it's just different. I think entrepreneurship is always hard. I think it's like we just talked about, like 90% of the stories are not told. And a lot of people fail. And a lot of it's a struggle. The people that are just, that are not in the industry that are just reading about it. Their view is probably like, Oh, it's just all, you know, ponies and ice cream.
It's all fun. And it's all great. And it's all easy, right. But it's not. It's so much hard work and nobody wants to be with you when you're in the valley of sorrow. Everybody wants to be with you when you're on the peak of the mountain and it's all celebrating and there's money going around. Like, you know, if you ever saw that video when Dr. Dre was selling Beats to Apple and they were partying and everything. And that lost, that cost them a couple hundred million dollars because they did that before the deal was announced. But it's easy to get everybody to hang out with you when things are good. It's a lot harder to get people to hang out with you when things are bad.
So, I think that part has changed. When you're talking about tech specifically. I think it's gotten a lot easier in terms of being able to spin up hardware. Like I remember for my first startup, I was buying servers, I was rack mounting them myself.
[00:17:40] Adam Walker: Yeah.
[00:17:40] Sanjay Parekh: Into a 19-inch rack in our office. I mean, like I haven't touched a rack mount server in a long time at this point.
[00:17:48] Adam Walker: Yeah.
[00:17:50] Sanjay Parekh: So things like that have gotten a lot easier. But I think those come along with things that have made it harder. Right? So it, it's not like it, things have just gotten easier and now everything's just all ponies. It's not that way.
[00:18:28] Adam Walker: Support for this podcast comes from Hiscox. Committed to helping small businesses protect their dreams since 1901. Quotes and information on customized insurance for specific risks are available at Hiscox.com. Hiscox, the business insurance experts.
[00:18:38] Adam Walker: All right. So, I know currently you're involved in a number of startups. I mean, you and I have got some startups together right now that we're working on. But I want to talk about your first physical product startup for a minute. I know it's brand new. I think I think first product just shipped if I'm not mistaken. Like give us the overview, what is it? Why are you doing it? What's the whole deal?
[00:18:45] Sanjay Parekh: Yeah. Yeah. So, it's funny because I think some of the inspiration of being able to do this has come from hosting this podcast and talking to so many people doing side hustles. And so part of it was like, you know, if I'm going to host a podcast about side hustles, I should probably do a side hustle and start something new.
But really the idea came from we were, you know, moving some stuff around and I happened to have some gift wrap paper in my hand. And I started thinking about gift wrap paper. I, which is I know a weird thing to think about, but I'm very particular.
[00:19:17] Adam Walker: I mean, people pontificate on it, you know.
[00:19:19] Sanjay Parekh: I know it happens. But I'm very particular about my gift wrap paper and unfortunately, I haven't been able to hit all these metrics with this. But I don't like gift wrap paper that's thin because it rips when you're wrapping a gift. I don't like gift wrap paper that has glitter on it because that gets everywhere, and I feel like I'm finding glitter for days on end afterwards. And then I really like the gift wrap paper that has a grid on the back of it because I cannot cut a straight line to save my life. And so that's great.
So, I started thinking about gift wrap paper and how I've never seen cultural holiday gift wrap paper. So, I decided to go online and search for the Diwali holiday paper. So, the Indian holiday of Diwali is usually near the end of the year. It's in October this year. And a lot of people, at least here in the US, end up giving gifts to kids and, and whatnot. And I'd never seen holiday paper for that. And so, I searched. I couldn't find it. And I said, well, I mean, how hard could it be? Famous last words. It's pretty hard.
[00:20:21] Adam Walker: How hard can it be?
[00:20:24] Sanjay Parekh: It is pretty hard. And so I decided to actually merge some of my loves. Because I also find a lot of gift wrap paper is, artistically uninspired is probably the kindest way I can say.
[00:20:34] Adam Walker: Yeah.
[00:20:35] Sanjay Parekh: So, I decided like, let me find an artist to design this. But let me not just find any artist, let me find an artist in the country of origin of this holiday. So let me find an artist in India to do this. And then what we're going to do is have this artist design it. We're going to develop and produce it and sell it. And then we're going to take a percentage of profits and give that back to the artist so that they benefit. But then also take another percentage of profits and give it back to a charity that serves the country of origin of the holiday we're supporting and celebrating.
[00:21:06] Adam Walker: I love that. Yeah.
[00:21:07] Sanjay Parekh: So, we went through all of this. I found an artist out of Bangalore. Her names is Kashmira Sarode. So she designed our first gift wrap paper for the Diwali it's available for sale. And we're in the process now we're going to keep sales open until, I think the end of September.
[00:21:25] Adam Walker: Okay.
[00:21:25] Sanjay Parekh: Because Diwali is kind of mid to late October.
And so I feel like we can get everybody their gift wrap paper before Diwali hits. But the idea is it's also going to be limited edition. So if you don't buy it this year, that's it. We're never going to produce this design again.
[00:21:40] Adam Walker: Yeah.
[00:21:40] Sanjay Parekh: It's a one and done type of thing.
[00:21:42] Adam Walker: Right.
[00:21:42] Sanjay Parekh: And so we're actually like, moving forward, we've already gotten people pushing us to do other holidays. And so we've now hired a artist out of Tel Aviv to do a Hanukkah gift wrap paper. And then we actually already have ideas for gift wrap paper happening next year.
[00:21:58] Adam Walker: Oh, man, I love this.
[00:22:00] Sanjay Parekh: The name of the company is Occasional Wraps, because it's different occasions and you do it every so often. So Occasional Wraps, W R AP S.
[00:22:09] Adam Walker: Yeah, I love, and I've already bought a roll, so I'm very excited about this. It's going to be great. I'll be able to assess the quality of this paper and, you know, and do some Instagram posts. It's going to be awesome.
[00:22:18] Sanjay Parekh: I will tell you, there is no grid on the back. We weren't able to get that figured out this time around, but in the future, we're going to do that too.
[00:22:24] Adam Walker: All right. Well, listen, Sanjay, I'm going to wrap this up, but I want, I want to ask you one final question. And maybe the most important question of this whole conversation. What one piece of advice would you give to someone that wants to start their own business or their own side hustle?
[00:22:40] Sanjay Parekh: Start today. And if you could, start yesterday. But unless your startup is a time machine thing it's going to be start today.
[00:22:48] Adam Walker: Why is that?
[00:22:48] Sanjay Parekh: I see too many people that, that kind of just keep dreaming and never start executing. I think that's the difference between an entrepreneur and, you know a dreamer and an entrepreneur really, right? Like an entrepreneur will come up with the idea and then start executing on it.
And I will freely admit. I'm a lot better with coming up with the ideas and figuring it all out than the execution part of it. Right now, with Occasional Wraps, I'm doing all the execution of it and it's tedious and it's painful. And as an entrepreneur, I think you need to do that you know, at least for some portion of it.
And so if listeners are thinking about doing something. Just do it. Just take the first step. We've had guests on this podcast say the same thing, take the first step, buy the domain name, you know, contact somebody, talk to them about it, figure out, you know, what it is that you're trying to do and how to do something to get yourself moving.
[00:23:39] Adam Walker: That's right. I mean, that you’ve go to start somewhere. Might as well start here and start might as well start today.
[00:23:45] Sanjay Parekh: Everybody had a first time at some point.
[00:23:47] Adam Walker: Yeah, that's right. Everybody's got a first time. Man, this has been amazing. I really appreciate you kind of sharing your world with us. Thank you for letting me sit in the host chair for the Side Hustle to Small Business Podcast. It's been so great. And thanks for just letting me join the show today.
[00:24:02] Sanjay Parekh: I think we might have a new host now.
[00:24:04] Adam Walker: Ooh, I don't know about all that.
[00:24:11] Sanjay Parekh: Thank you for listening to this week’s episode of the Side Hustle to Small Business Podcast, powered by Hiscox. To learn more about how Hiscox can help protect your small business through intelligent insurance solutions, visit hiscox.com. And if you have a story you want to hear on this podcast, please visit Hiscox.com/shareyourstory. I’m your host, Sanjay Parekh. You can find me on Twitter at @sanjay or on my website at sanjayparekh.com.