Blog: Pavan Muzumdar



Pavan Muzumdar is the managing director of Pieris Capital, LLC, and the Entrepreneur-in-Residence at Lawrence Technological University, where he fosters an entrepreneurial mindset in LTU students and faculty alike.  

In 2008, Pavan established Pieris Capital, LLC, a private equity advisory firm that bridges the gap between management consulting and investment banking. Managed with a global outlook, it focuses on wealth preservation and growth using innovative approaches in investment management.

He has over 15 years of experience as a CEO and COO, where he directed operations in IT and wholesale/retail distribution and handled other matters including capital raising, divestitures, litigation, and turnarounds.

Pavan also served as a senior consultant to Fortune 500 clients in the IT services, securities back-office processing, telecommunications, manufacturing, and healthcare industries.

He is currently active as either a founding member or financial advisor to startups in the financial services, healthcare, manufacturing technology, and social media realms.

He coaches award-winning companies in the GLEQ Business Plan competition and is a board member of the MIT Enterprise Forum of the Great Lakes, the local chapter of a global community of technology entrepreneurs.

Pavan holds master's degrees in Electrical Engineering and Computer Science from the University of Massachusetts and a bachelor's degree in Electronics Engineering from the University of Bombay.

He is a member of the CFA Institute and a CFA charter holder.

Pavan Muzumdar - Most Recent Posts:

Post 4: Putting It All Together

I have often struggled with the question:  How do you define success in entrepreneurship?  

After all, not all financially successful entrepreneurs are happy.  And, I know some happy entrepreneurs that aren't exactly wildly successful financially.  Sure, they make enough to pay the bills, but aren't really raking it in.  They do however, enjoy what they do and have been able to support their lifestyles and passions.  

So which one is successful?  A rich, unhappy entrepreneur, or a happy one with modest means?  I don't know the answer, but I have recently thought of one metric that works for me: Staying in the game.

To me, staying in the game is a function of having enough financial success and enough happiness (a catch-all for personal, professional, and emotional satisfaction, contentment, drive, etc.) to support you and keep you going.  It's that definition of success in entrepreneurship that brings me to my personal roadmap using the ideas in this blog.

Step 1:  Manage your personal portfolio

In my first entry I talked about taking small option-like risks.  That requires having a strong foundation on which to take these risks.  The risks that you then take don't take you out of the game.  The downside is a little lost time and/or money.  The upside should be limitless.  This is also the reason why I don't believe it's a good idea to "bet the farm" on any single venture.  Sure there are people who have mortgaged their homes and gone through hell to come out very successful on the other side.  But from a portfolio management standpoint, that's probably the last thing you should do.

The better approach would be to continue to risk small amounts of time and money.  Look for the 1-ft bars.  Some refer to this process as fail fast, fail often, and fail cheaply.  But learn from every failure, and redefine failure to be a successful learning experience.  Edison never gave up looking for the ideal incandescent light bulb filament material because each failure was notched as successfully proving one more material as inappropriate for that use.  That's what kept him going.

Step 2: Build your personal ecosystem

Whether it makes us dumber or smarter, the Internet gives us ways to connect with people that we never had before.  If used wisely these days it is easier than ever to build a personal ecosystem of resources and providers that can provide the critical nourishment a young company needs. ??We have so many opportunities and forums in which to do this today, online and in person.  All it takes is showing up and participating.  For example, the GLEQ (Great Lakes Entrepreneur's Quest) a Michigan-based business plan competition for which yours truly volunteers as a coach is an awesome forum in which to connect with other entrepreneurs, coaches, and judges.  

It's these kinds of connections and collaboration that really ramp-up the wealth creation, as I mentioned in my second and third posts.

Step 3: Execute

Create the foundation, take the risk, make the connection, and finally, take action.  That completes the circle.  To me, action is the process of transferring the value of your creation to someone else – in other words selling.  There's nothing like validating an idea as having someone pay for it.  If you can then continue to do it repeatedly and sustainably, you have a business.

Continue the process and redefine success and failure. Don't lose your shirt and eventually there will be enough financial success with which to create a larger foundation and take bigger option-like risks to do it all over again – if you want to.


Post 3: Human Triumph and the Cross-Pollination of Ideas

Think about this:  There is no single person in the entire world that knows all the steps to make a pencil.  There are people that know how to process the wood, others that know how to process the graphite, and yet others who know what goes into the paint and glue.  Finally there are the few that know how to put this all together into the final product.

This is the premise of a recent thought-provoking essay in the Wall Street Journal written by Matt Ridley, the noted science writer and journalist.  Mr. Ridley says that human technological progress was trudging along for the last two million years.  But all of a sudden, about 45,000 years ago there was an inflection point and sudden acceleration in technical development.  

Simple evolution cannot explain this because basic human intelligence as measured by brain size and other indicators such as use of speech did not undergo any substantial changes during that period.  What changed, he says, is collective intelligence, a result of increased interaction and collaboration between individuals within a cultural unit that led to an explosion of new ideas, technologies, processes, and abilities that he refers to as the "big bang of human consciousness".  Mr. Ridley refers to this as ideas having sex with each other to create other new ideas.

The benefit of collaboration is not a new concept. In fact it is taught in economics 101 as the law of comparative advantage.  If I can make a fishing net better than you, and you are better at fishing than I am; we both benefit if I make the nets and you do the fishing.  Of course this can only happen if we trade: I give you nets for some of the fish you catch.  But Mr. Ridley takes this one step further.  He says that the both of us working together can bring our respective knowledge of fishing and net making that can lead to newer ways of doing things that perhaps neither one of us could have individually conceived.

What makes things really interesting is that sharing ideas on the Internet with nobody in particular enables all of us to collaborate with people we don't even know!


Next:  Putting it all together…



Post 2: Does the Internet Make You Smarter or Dumber?

A couple of weeks ago in the Wall Street Journal there was a spirited debate about the impact of the Internet on human learning, education, and smarts.  On the one hand, Nicholas Carr, the author of The Shallows, says that the constant distraction, emailing, tweeting, facebooking, googling, and browsing in general is taking away depth of thought from our activities.  We are becoming superficial reactive entities incapable of insightful, comprehensive, and comprehending thought, he claims.

Clay Shirky, the author of Cognitive Surplus:… on the other hand says all this thought is rubbish.  The access, he says, to all this information can only make us smarter.  Sure, the ability to belt out a blog quickly and post it on the Internet leads to increasing amounts of mediocrity, but that doesn't mean that there aren't also more works of higher quality and more insight simply because of the access to ever-increasing information.

I tend to agree… with both of them.

Not long ago I found myself becoming a point and click junkie without paying deep attention to any one particular thing.  The constant emails coming in and my relentless pursuit of keeping a clean inbox meant that I kept going back to it, switching between tasks and not really getting anything done. Then one day I stumbled upon a change that has made my life a lot easier.

During a switchover to a new laptop, I also decided to change email programs.  It so happened that because of some network configuration quirk, every time this program checked for new mail every five minutes or so, the way I had initially set it up, my computer would lock up and I wouldn't be able to do anything.  This drove me nuts enough to set up the program to stop automatically downloading email.  What happened next was interesting.

Not only did the lock-ups stop because I was controlling when email was being downloaded, but I noticed that I was focusing more on work that I was doing and getting things done more and generally feeling less distracted.  I figured out what the problem was with the lock-ups, but I left the mail download setting the same way.  Now I check my email when I am ready and not when the computer wants to give it to me!

But on the other hand I find myself a lot smarter because of the immediate access to information that the 'Net gives me.  The other day, I was talking to a student who had an idea for a product that he was thinking of.  It was an add-on accessory for the iPhone.  He had obviously given it some thought and it seemed like a useful product.  

A quick Google search revealed that not only was this product available for purchase, but there were a couple of manufacturers making it.  We were not only able to validate that he had a good idea, but at what price point it could be sold.  Of course it probably didn't make sense to try to make it 'til he had the checked out the competition.  A little bit of a disappointment, but also what a confidence booster!  More importantly, we found this out in a matter of seconds.  A few years ago, this could have been an expensive marketing study.  

Next:  Human triumph and the cross pollination of ideas…


Post 1: Don't Lose Money

I am not much of a blogger. In fact, I barely tweet.  So putting together paragraphs of cogent prose for the consumption of nobody in particular is out of character for me.  When Metromode asked me to blog again after a few years, I wasn't sure of what to say.  The good thing is that after reviewing my earlier blog, I still believe in everything I said then, if not more so.  As a sidebar, "SueASpammer.com" would probably not make it today.  Spam filters are so effective, I barely get any.

Anyway, you're reading this, so I feel obligated that it be worth your time.  I thought I would present some ideas and thinking that I have found compelling and have shaped some of my thoughts and actions particularly as they relate to entrepreneurship.

The last time I blogged I said entrepreneurship is a mindset.  I am not the only one who thinks so.  In fact, my position as the Entrepreneur in Residence at Lawrence Technological University in Southfield is all about fostering this mindset among students, faculty, and pretty much anyone I come across.

Lawrence Tech (LTU) is one of the most entrepreneurial universities that I have encountered.  It makes perfect sense then that the forward thinking Kern Family Foundation decided to support LTU in promoting entrepreneurship via a very generous grant that also made my position possible.

Two specific initiatives supporting the entrepreneurial mindset are particularly pertinent to the topic of my post today:

  • Entrepreneurial Internships:  Eligible companies can hire talented students to work as interns for half the price.
  • Industry Sponsored Projects Lab:  Companies can hire students guided by faculty to work on a specific project or product for a very low administrative fee.

But first some background…


A couple of years ago as I was wrapping up the final level of the CFA exam, I read a book by Nassim Taleb called The Black Swan.  I found it particularly interesting within the context of my then academic pursuits of asset valuation and portfolio management.  There are many elements of this book that are so fascinating that you could write a book about them.  Wait... it is a book.  

Well, the term "Black Swan", refers to an unexpected event. The name was inspired by the restating of years of conventional knowledge – that all swans were white – until a black swan was discovered in Australia.  The take-away is that unpredictable events result in unforeseeable consequences in unpredictable places.  The current BP oil spill, for example, has resulted in somewhat of a boom in kitty litter scooper sales.

The practical element that stuck with me is his notion of taking option-like risks in investment decisions.  Options are derivative instruments that give you the right but not the obligation to purchase or sell an underlying security at a certain price.  The characteristics of options are that you can usually buy them for a small price, they are only valid for a specific period of time, and either they expire worthless or you break even or make a profit.  

The cool thing about options is that the profit may be modest, but in some cases can give the investor a return that is several times their original investment.  Yeah, these belong to the same class of derivative assets that it is fashionable to bash these days.  But saying options are dangerous is like saying guns are dangerous.  Sure they are. That's why you have to be careful when you use them.

Be that as it may, the investment philosophy has resulted in much success for Taleb, mostly making money for his investors, but almost never losing it.

Warren Buffet also has several rules for investment.  The following have a similar philosophy:  

  • Never lose money
  • I don't try to jump over 7-ft bars, I look for a 1-ft bar that I can step over

The way I look at it, you will succeed in entrepreneurship if you always stay in the game. Taking option-like risks often allows you to get enough exposure to the upside without risking the foundations, both financial and emotional, that keep you in the game.  

The two LTU programs that I mentioned specifically make this possible for Michigan companies.  Hire an intern for a low cost and investigate a new business initiative.  If it works, great!  If not, it's a learning experience.

Better yet, hire a bunch of students and give them a project that you have had in mind, but may not have the bandwidth to pursue.

Both are relatively modest investments – option like risks - that won't put your company out of business. But either one could potentially give it the upside that could change it forever!


* As an entrepreneur, Pavan is always looking for a sale.  If you want any more info on the LTU programs he has mentioned here, please feel free to contact him at:  pmuzumdar AT ltu.edu (replace AT with @)


Tomorrow:  Does the Internet make you smarter or dumber?