How Small and Medium Businesses Can Turn Their Size Into Strength and Flourish with Sri Kaza

Ashish Kothari:

Sri, I am so excited to have you here, my friend, on our Happiness Squad Podcast, and share and learn from you, your story over the years, and the book that you're coming out with. It just so resonates with the work we've been doing. Thank you for being here. Thank you for fighting for the little man, the small and medium businesses that account for almost 50% of the employment and 50% of the GDP for the country.

Sri Kaza:

Thanks, Ashish. Really appreciate you having me out. Look forward to talking about what you're up to and how what I'm doing dovetails quite nicely.

Ashish Kothari:

Let’s start a little bit with your personal journey. You and I know each other from McKinsey. But start from your own journey—from an engineer to consulting, to a mission-driven financial company, and now to what finally led you to write this book. It’s such an interesting journey. Give a little bit of an overview of what that’s been like for you.

Sri Kaza:

Sure. I definitely have pursued opportunities as they’ve arisen. Coming out of undergrad I’d learned how to be a chemical engineer. I didn’t particularly pick it for this, but chemical engineering at the time was one of the top paying engineering jobs coming out of college. I had gotten some really attractive offers. But what caught my interest was a consulting firm that wanted to go and change the world and make businesses operate more efficiently.

s a few years before the year: 2000

Graduating from engineering, I didn’t realize this was even a thing. I wasn’t even worried about Y2K. But when I got to the consulting company, they said, “We’re going to teach you how to code. We’re going to teach you a different arcane language, a German one called ABAP. You’re going to learn how to do this. We’re going to install software at all these companies. We’re going to make millions, and you’ll get some pennies for your work.”

Right away I learned you can learn anything if you take the time to get smart on it. I could walk into a situation with no experience, know just a little bit more than the next guy, and be helpful. That really got me excited. I could actually be helpful, bring something to any of these situations, and that was fun.

After Y2K had been fixed or proven to not actually be a big deal, I jumped onto the dot-com boom. That was another fun ride to learn things I had no idea were possible. I sold million-dollar software without the software even existing, because that’s what people were doing—they were selling a dream. It turned out selling dreams is a ton of fun.

My career went on. I went to McKinsey because I wanted to learn real business. I knew what I was doing wasn’t real. I learned some “businessy” stuff at business school and then joined McKinsey, thinking I’d get to put it into practice and learn a ton from big companies. I did. I learned a lot, and it was a lot of fun. I really enjoyed my time with you and with everybody else I worked with.

At some point I got the itch to go chase another opportunity. This time it was with Torstein Hagen, the founder of Viking Cruises. At the time it was called Viking River Cruises because that’s what they did. His dream was to have an ocean cruise. He didn’t have one. And his challenge was: for me to have an ocean cruise, I need to sell out that cruise before I build the ship.

That was such an interesting challenge. I was inspired by his ambition. I said, that sounds awesome. I want to come on board and help sell out your ocean cruise ship so that you have enough deposits to build it. Working with these kinds of ideas from zero to sixty miles an hour—or whatever speed a business can get up to—has been a lot of fun.

Later, I went on to do more entrepreneurial ventures of my own. One was ForwardLine, where we were lending to small businesses. I didn’t get to hear every single story, but as a practice we worked to understand each business, their plans, their model. I got to engage with a lot of them just to hear their story: how did you get here, and what do you want to do next?

Those two conversations—very different and distinct—were an inspiration for me. They got me excited about the work I was doing then, and it translated into the work I’m doing with this book. Listening to people with vision, big or small. You don’t have to go build a cruise ship to have an exciting vision. What you need is a vision you’re personally excited about. That’s where the fun is.

Ashish Kothari:

I love it. There are so many parallels. You and I have known each other for a long while. I also came to the U.S. in ’97. I was a chemical engineer retrained by IBM in COBOL, brought to Chicago to solve Y2K. That was my first job. My second job, after IBM, was working for a company called Keane, where I was one of the three project managers leading the Y2K effort at ComEd, the largest utility in Illinois and that region.

 I was one of the three project leads. Talking about if you can learn something and know a little bit more than everybody else.

I was 24 years old, and I had people on my team whose kids were older than me. And with only six months of COBOL training, I was the project lead.

Sri Kaza:

Oh my gosh.

Ashish Kothari:

They had 30 years of experience.

Sri Kaza:

But it turns out you taking the time for those six months helped everybody around you. Going in and being helpful, saying, “I bring something unique and different.” Others could still do their job, but together you could do something bigger and better.

Even today, if you put someone young or inexperienced into the mix and give them responsibility, if they step up and deliver, they can make a big difference. It could change a lot. That is in our age, by the way—well, I’m still 20-something up here. Approaching the world that way gives you so much more enjoyment out of what you can create and do.

Ashish Kothari:

Absolutely. Especially now, the gap between knowledge and practice has shrunk. With AI, you don’t need ten years to learn digital marketing. It’s all there. You just need to be willing to take it, try it, learn from it, and significantly accelerate your own learning. That is such an important skill—adaptability, resilience, learning—has become so powerful.

Sri Kaza:

 Yeah.

Ashish Kothari:

But we go off, we diverge a bit. I’m really passionate about the small and medium business space, like you. They have it really hard. They’re much less productive because they struggle to attract talent. They don’t have the brand, they don’t have the scale. And all the advice out there is about trying to do better than the big guy by playing the same game. But you can’t defeat a sumo if you’re small by trying to act like a sumo.

Sri Kaza:

Right. You can eat all of the nabe and all of the fish that you want. You’re never going to get as big as those guys. You’re just going to get full.

Ashish Kothari:

Exactly. In your book you outline a very different approach. You call it the Underdog Principles. Don’t fight the big dog by pretending to be a bigger dog. Do it differently. Walk us through those three principles—propositioning, proximity, and purpose—and maybe bring it to life with a business story that captures it.

Sri Kaza:

Yeah. I think the principles—the reason I picked these and the reason the data and insights floated them to the top—is that every small business, successful or not, that I’d interacted with had these principles at their access. Big companies don’t.

When I talk about positioning, positioning is really how different you are and how unique you are to the rest of the world. In many cases, just as simple examples, your location is enough. That’s why I picked the word positioning. Your physical location is enough to differentiate you. You are the closest place for someone to get whatever they need in your neighborhood.

Positioning could also be about how unique you are relative to other competitors, or who you choose to serve. As a big company with shareholders to satisfy, investors with growth targets, profit margin expectations—you’ve got to pursue every customer. You’ve got to try to make as many people happy as you can.

But for a small business, if they try to do that, they spread themselves too thin. They don’t have the resources. Then they don’t gain the loyalty and commitment they could from their core customers.

When you see companies pursue their core customers and create deeper relationships and loyalty out of serving the ones who already appreciate them—or serving the people who have the potential to really appreciate them—when you see them do this, then when things go south, like during COVID or other challenges, their customers rally behind them.

Think about small businesses you rallied behind during COVID. There’s probably a restaurant you used to eat at, and maybe you’d never ordered takeout before. But then you found yourself ordering takeout two or three times a week just because you knew that restaurant needed your support, and you wanted them in your life.

So positioning is saying, “I’m important enough in the lives of enough small business customers to be unique and wanted and missed if I’m not there.” It doesn’t mean you have to be perfectly unique and that there’s no business like you. But there should be no business like you to these customers.

And then proximity is an extension of that, and is also unique in itself. Small businesses have closeness to their customers. They may not interact with every customer every day, maybe their team does, but they are much closer to what their customers want than large companies.

Large companies need data, analytics, exactly what you and I were trained to do at McKinsey—go by the numbers, look at all the data. But the numbers don’t tell you everything. You have to ask the right questions, set things up, analyze it, and it will tell you what’s most profitable. But what it doesn’t do is understand people. Data doesn’t understand your customers. It doesn’t anticipate what they will want or how they will change.

Small business owners can do that in a heartbeat. If they really know who their customers are, leveraging that proximity makes them much more adaptable than big businesses as trends and environments change.

Ashish Kothari:

Yeah. By the way, the other proximity that’s really relevant is they’re also very close to their employees. In many businesses, you know the lives of the people you’re leading. You know the person who’s delivering or in the front. The ability to be close to them and build that human relationship, to help them achieve their dreams and support them—that creates an unbelievable advantage.

Most employees in big companies feel like a cog in the wheel. They don’t feel seen. They don’t find meaning at work. It’s just a way to earn a paycheck.

Sri Kaza:

 Yep.

Ashish Kothari:

But by being in the lives of employees, by being close to them, I think there’s a force. I always talk about how you can take your people and turn them into Davids who take down the Goliaths. Because all the Goliath has is this big-sized, massive, slow-moving thing.

Sri Kaza:

Yeah. Today there are so many challenges with recruiting and talent, not just for big businesses but small businesses too. The labor market is shrinking—boomers retiring, immigrants leaving. Small businesses are struggling because the big guys are out there and they play all kinds of games.

If anyone in your audience has tried to apply for a job through digital means, it’s like 10,000 applications to get one read by a human. Now, because of the AI bigger businesses are using, small businesses don’t stand a shot competing here. You’ll get more ghosts in your hiring funnel than actual candidates.

So you have to use your connections to the community. You have to use your connections to people. You have to care about people to be able to hold onto them. It’s an opportunity today to start playing the game you’re better at than the big guys.

It comes back to what we talk about—positioning, proximity, and purpose. As a small business owner, your purpose isn’t purely profit and growth like shareholders want. You may have some stakeholders expecting earnings, but your stakeholders are also your employees, your community, and yourself.

So when I talk about purpose as one of the three Underdog Principles, it’s not about making up a purpose. It’s about being in tune with the purpose you already have. Why did you join this business? Why did you start it? Why are you still doing it? How have you evolved as an individual over the years? How should your business decisions contemplate satisfying your purpose, sometimes over your profit?

Simply being conscious of it and incorporating it into your thinking makes a night and day difference in your enjoyment and success as a business leader.

Ashish Kothari:

Yeah. And I also feel on this point of purpose, as you say, Sri, no person—maybe only the super young, because they’re just ignorant—no person really knows how hard entrepreneurship is or starting something from scratch. Most young people are just ignorant of that.

My son, who’s 15 turning 16, says, “I want to be an entrepreneur.”

Sri Kaza:

 Yeah.

Ashish Kothari:

And I tell him, that’s great, you should do it. But do you know how hard it is? You’re basically committing yourself to eating cups of ramen for a long time.

Sri Kaza:

Yeah. No, no. Your son—you’re going to make sure he gets well fed. See, that’s the other problem. I’ve got the same challenge at home. I think you’re getting to a really important point, which is: to be a successful entrepreneur, you have to persevere.

I don’t know any entrepreneurial story—aside from a few lightning-in-a-bottle stories—where the entrepreneur didn’t face existential challenges. Most of the small businesses I talked to during my research and the work I’ve done over the past 10 years, they’ve all suffered through really tough times. Every one of them—personal, professional, market-oriented, financial, or just overall economic conditions.

Purpose was a huge part of what kept them alive. Either because they gutted it out because their purpose mattered so much to them, or because their purpose was recognized by the community, by stakeholders, or partners.

Even the business that I ran, where we were lending to small businesses—you have to understand, there was a lot of money outstanding to these small businesses. And then COVID hit, and they all closed their doors at the same time. My business was toast. Every spreadsheet I ran, everything we did internally, showed this wasn’t going to work out. We had to let people go. We were going to start winding things down, do what we could for everybody we owed money to, and survive.

But when we flipped it around and talked to the people we worked with—the businesses supplying us capital, supplying us data, or the businesses we were lending to—every one of them recognized: “If we give these guys a pass here, if we make some adjustments, extend terms, do a little here and there, we can all still work together coming out of this.”

And I don’t know, maybe 20 different vendors, creditors, investors—they all pitched in and gave up or traded away a little of what their rights were. They collaborated because in the long run, they saw value in what we did. They saw value in us as a partner.

So when you get down to those trouble points, your purpose matters. If people believe in your purpose…

Ashish Kothari:

 Your purpose matters.

Sri Kaza:

 Yeah.

Ashish Kothari:

I love that story, Sri. I love that story. There’s a beautiful saying by Nietzsche: “Those who have a why can survive anyhow.” Those who have a why can survive anyhow. And it’s so true.

No person starts a business without a burning “why.” It might be, “I want to be independent. I don’t want to work for the man.” It might be, “I want to make an impact.” Oftentimes there’s an itch, a problem you’re trying to solve. Which is your problem, but also shared by others.

Sri Kaza:

 Yep.

Ashish Kothari:

And one of the biggest things that happens is people lose sight of that “why.” That “why” has power. The product can change, the service can change, you can pivot seven times around. But if the why is clear, it will keep guiding you forward. It will see you through the struggles that are part and parcel of an entrepreneur or small and medium business owner’s life.

Just like they’re a part of any life, even with big companies. That is a given.

Sri Kaza:

 Yep.

Ashish Kothari:

I want to delve into it because purpose is central to flourishing. It’s central to all of the work we do at Happiness Squad—helping people define a why at the company level, but most importantly, connect it to an individual why.

Every person who shows up. In fact, we don’t hire people unless there is complete mission alignment. That’s first. Skills can be learned. I don’t care about skills. Yes, they matter, but we have to be completely aligned on what we are trying to solve here.

So tell me a little bit about purpose and share some inspiring ways you’ve seen small and medium business founders use the power of purpose and values to create a different kind of engagement with customers and employees.

Sri Kaza:

Oh, fantastic example. I don’t think it’s the one every small business has to look to and say, “How do I do it that way?” I think it’s unique to this individual and business. But there’s a bookstore owner I met during my research.

His name is Jonah. He runs a bookstore called Words in Maplewood, New Jersey. Jonah was a successful lawyer, and he loved books and bookstores. But his son was diagnosed with a severe form of autism, and he and his wife decided one of them would stay home while the other kept working. He took care of his son.

At a point, when they learned how to manage and work with his disability, Jonah decided he wanted to go back to doing something he was passionate about. Having a bookstore was one of those ideas. He saw a bookstore for sale in his city and thought, “We need a better, more community-oriented bookstore.”

But he didn’t just want to buy it and keep it there. He wanted to move it to a place that was more of a community center. And not only that, he wanted to use the bookstore to invest not just in his son, but in anyone with severe autism. They do workshops, they hire people with these conditions, and they craft jobs to fit their skills.

When you walk into his store, you find great people, good service, a caring and understanding community. You find he is achieving his mission in a way you can touch and feel, whether you’re in the store or at one of their events. They also host social groups and use the bookstore as a community center.

He’s got this purpose. And even in the toughest times—COVID was really tough for them too, he had to let people go and shrink things down—the community rallied around him. They said, “We want this, we want to keep this.” He got national support because he was doing something for people with these challenges nationally.

It wasn’t easy. It required him to really care about his purpose to persevere through the challenges of COVID. But he managed to do that and got back to sales growth and impact. And for him, impact is more important—but he can’t run the business without sales growth.

Ashish Kothari:

Yeah. And for those listening who say, “Purpose is great, but I’m small, how do I do it?” Look, I think the research from Alex Edmans at London School of Economics is so clear. He says it beautifully—we’ve had him twice on our podcast. He has this line: “If you want to reach the land of profit, follow the road of purpose.”

Sri Kaza:

 Hmm. Beautiful line.

Ashish Kothari:

Because the results are clear. Companies that are mission-focused, connect that mission to employees, and really invest in them outperform everybody else. The incremental value they create by growing the pie is 2 to 3.5% higher alpha, year over year.

So you don’t have to choose between profit and purpose.

Sri Kaza:

 That's right.

Ashish Kothari:

Purpose can unlock massive profits because it makes people buy in. People who find purpose at work and are energized are willing to take lower compensation because they believe in it.

Sri Kaza:

 Yeah.

Ashish Kothari:

And by the way, you can reward them by giving them stock ownership. You make them part of it.

Sri Kaza:

Or you don’t have to take it away in comp. You keep paying them, and you’ll still get less turnover, more longevity, more customer satisfaction, better quality employees—because they believe in your purpose and mission.

Ashish Kothari:

Yeah. It was so beautiful. I loved your story also, by the way, because you were aligned around making a difference to small, medium businesses. They shut down. I loved how even though so many of your customers shut down, your investors, because of your why, stepped in to give you that longer length.

Sri Kaza:

Yeah, yeah.

Ashish Kothari:

The whole microloan business in India is a big part of that. Somebody believing that it's the capital that is keeping people in poverty. They have the skills, but if I can help them, they will pay back. They don’t have credit the way other big companies do, but I’m going to invest in them. And Grameen Bank is an example of a multi-billion-dollar enterprise that’s doing just that.

Let’s talk a little bit about proximity, and talk a little bit about a story of proximity—connection with customers and connection with employees that make a big difference.

Sri Kaza:

Yeah. I found something counterintuitive in doing my research that exemplifies proximity or being in tune with your customers. The research I was looking into was: what were the government intervention effects on small businesses, especially where they differed in different states, but the interventions were applied to the same kinds of businesses.

My first thought was that the hair salons and nail salons in LA would’ve gotten hammered while the hair salons and nail salons in Orlando, Florida would’ve been thriving. I quickly found that actually, no. There were some meaningful differences, and you saw speckled performance in some of the states where there’s a lot more flexibility for the businesses, and you saw generally consistent—not great, but generally consistent—performance in the more restrictive cities.

In the interviews I learned: in the restrictive cities, everybody’s on the same playing field. They made their adjustments. They let the staff go. They reduced their cost base to fit the revenue that was coming in and then moved on. Most people followed roughly the same playbook. They didn’t have a lot of freedom to do different things, so they didn’t.

But in other places, like the example I saw in Orlando, Florida, the owner of a nail salon decided that she was going to implement her own social distancing that was a little bit more constrained than what the guidance was. She was in a mall; there was even another nail salon in that mall.

What she told me was a number of her customers called to say, “Hey, what’s the deal? How are you going to take care of this?” What she picked up—what she knew—was that in the community she was serving, they were worried about some social distancing. They didn’t need the LA level of social distancing, but they didn’t want zero. They wanted to know that folks were wearing masks. They wanted to know that there were fewer people in the salon.

So she set up standards and rules, communicated them, and reduced the staff a little to make sure everything would balance out with the revenue and her costs. What she told me was the other folks waited by empty chairs for days because their customers probably had the same concerns, but they weren’t being addressed.

If you don’t address your customers’ concerns and you’ve got the freedom to do so, you’re going to have an issue. What I learned is: when you look at national chains or national businesses that tried to adjust, they have national policies—“we’re going to do this across the country”—and every community is different. Every customer base is different. Owners who are in tune with their customer base and make the adjustments their customers want are going to make a difference in their community, and their community will respond.

I’m not going to pound against regulation or be pro-regulation, but we take a lot of that away when you say, “This is how it’s going to be.” Businesses don’t have a choice; you don’t see a lot of differences; all businesses operate the same way. But when businesses have that creativity or freedom to do what they want to do, they can outperform—when they adapt to their customers the best.

Ashish Kothari:

Yeah. And adapt to it fast. Fast. Because you’re close, you get information way before everybody else if you are in tune with it. And empower your people to make the corrections pretty quickly. There is an element of speed.

If you’re able to activate the human magic that is often lying untapped in large organizations, that small unit—if you unleash that human magic—unbelievable things become possible. But only if you do it right. If, as a small business, you play the old big-company playbook, good luck. Good luck competing.

Sri Kaza:

 Yeah. Exactly.

Ashish Kothari:

In all of our research, what we find is: those businesses that flourish prioritize connection, prioritize meaning, and prioritize this human energy—how people feel, how aligned they feel with that business.

How do you see the parallels between, Sri, all of your research? Of course we talked a lot about purpose, but around positioning and proximity and talking to so many businesses that you have—how do you see these play out? Where do they reinforce each other? Where might there be tensions that many businesses face?

Sri Kaza:

 Yeah, so what I see is it's such an easy comparison for someone like you and I who go and work for a big company.

We pull together data, we do analysis. We take the time to interview. We can assemble a lot of insights and data, and then make a very, very informed decision. Almost every one of the small business owners I talk to does not have that luxury to go and inform every decision. But what happens when you ground yourself in your principles?

Who am I? Who do I serve? Who do I not serve? Right? Why am I here? Why are we here as a business? Why are my teammates here? What are we trying to accomplish? Right? And, what do my customers really want? Like knowing those things and incorporating them into, you'll know this as well, role modeling and behaviors as the leader of the business.

Yeah. What I see is it’s such an easy comparison for someone like you and me who go and work for a big company. We pull together data. We do analysis. We take the time to interview. We can assemble a lot of insights and data, and then make a very informed decision.

Almost every one of the small business owners I talk to does not have that luxury to inform every decision. But when you ground yourself in your principles—who am I, who do I serve, who do I not serve; why am I here, why are we here as a business, why are my teammates here, what are we trying to accomplish; and what do my customers really want—knowing those things and incorporating them into role modeling and behaviors as the leader of the business means your team will intuitively pick them up.

I would say to every business owner: you should write it all down. You should structure it. Once a quarter, reevaluate and make sure you’ve got this down and communicate really well to your team. Maybe have all-hands and Q&As. But there’s no small business owner who’s got the time or energy to do that.

So it starts with the principles. It starts with knowing these three things really well and acting on them. Then decisions—not just by you, but by others in the company—will pivot off those principles because they’re shared and people understand them. As opposed to saying, “Let me think about this, let me go do some analysis,” and getting stuck in the process. You don’t have time. They don’t have time.

So they’re always making these decisions off the cuff, but you bake responsiveness right away. They can act fast because that’s important, and they’re on the same page because of that role modeling. Everyone prioritizes a certain set of things over other things, and it’s visible to everybody.

Ashish Kothari:

Yeah. So the move you’re saying is: rather than focus on a lot of data and then policies that get rolled out, lead with principles and live them—role model them, live them. That becomes the playbook for people so they can intuitively move faster. They understand guardrails implicitly because they’re principles-driven.

Sri Kaza:

That’s right. I like the term playbook, because someone asked me that: “What’s the playbook for small businesses?” If you can’t put it on one piece of paper, it’s not going to get used. And then, of course, here I am writing a 300-page book—so not that I listen to advice.

What I thought was valuable was: you have to recognize they don’t have time. They just don’t have the time to do all these things. So how do you embrace what you’re great at, or what’s really great about you, and still get it done without the luxury of a complicated playbook to hand out to people? You do it off principles. You role model those principles.

Ashish Kothari:

So look, I want to talk a little bit about AI.

AI is everywhere. Everybody’s thinking about it. The big companies are adopting it a lot faster than small and medium businesses, who are maybe still at the level of, “Okay, I’m looking at ChatGPT, I’m going to do something.”

As a technology, I’ve never seen something so significant. It can actually be a massive tool, if used the right way, to close the competitive distance between small and medium businesses and large companies.

Sri Kaza:

 Yeah.

Ashish Kothari:

So my question for you is: what role do you see AI playing in helping underdog businesses scale without losing their soul?

Sri Kaza:

I think it’s a fantastic tool for small businesses. I don’t know how everybody is using it today. But we started off saying, “Don’t act big. Go be who you are.” This amplifies your reach and your abilities in ways that wouldn’t help big business. You get 10 times more capacity with AI, while some big businesses only use AI for cost cutting.

So you think about it differently. Imagine you had a call center behind you in your business. How many small businesses can afford a call center? But now, you can set one up. It’s not the core of your business, but it gives you more capacity to work on things you care about.

I want to dive in on one of the things I highlighted for my book’s purpose: bottlenecks in the business. Back when we were at the big firm, we would go into factories—like semiconductor factories—and figure out where the bottleneck was. How do we get more capacity at the bottleneck? How do we move non–value added things away from the bottleneck and over to other resources?

In the small business world, the owner is the bottleneck. Maybe a few other executives, or maybe some physical assets, are also bottlenecks. AI will open up that bottleneck. There are so many things now that you couldn’t do, or didn’t even think about doing, that you can now.

You could say, “I hate social media, it’s not my thing.” But now I can use AI to generate tweets, get something going, and have more of a presence online. Or, “I didn’t know how to respond to all of these inquiries—there were too many—so I just shut down my inbounds.” Now you can set something up to weed out the junk and focus on the customers that matter. You give customers more opportunities to connect with you in many ways. AI gives you more capacity to do the things you want to do.

Ashish Kothari:

Yeah. I love this provocation. I hadn’t thought about it this way, Sri. In every one of these conversations, I learn. Most big businesses today are thinking about AI as a way to cut costs. It’s true. Increase productivity, capitalize on it by cutting costs.

Small and medium businesses don’t have resources to cut. They don’t have that. What they can do, if you are a small or medium business, is take this as an opportunity to 10x your productivity, to go after more markets, bigger value—things you were bottlenecked on before.

I love that provocation. It’s a growth enabler for small and medium businesses. For the large companies, it’s a cost play. It should be a growth play for them too, but that’s where they’re operating. So now again, Underdog Principles: use AI for growth. Don’t use AI for cost.

And let me share this. There’s a story I want to read, because it’s such a powerful example of what’s possible today, which is unbelievable. This comes from a book called The Experimentation Machine. It’s about how you find product-market fit in the age of AI.

The story is about a company called Talktastic, which is a startup. The founder is non-technical, a pseudo-technical founder. They were launching a voice-first interface and realized they hadn’t figured out a voice-first support system available 24/7. He couldn’t hire a bunch of support reps, like most businesses. They don’t have the people. They can’t do a call center.

So here’s what he did. He created a system where customers are prompted to leave a voice message. Once the message is created, it’s fed into ChatGPT, which transcribes it.

Sri Kaza:

 Yeah.

Ashish Kothari:

It’s added to Intercom, which they use as their support system of record. It’s then fed into Claude, which writes out a personalized response. It feeds back into Intercom. In about five minutes, the customer receives a message back—all without human intervention. ChatGPT also analyzes it and logs it if it’s a bug fix.

Here’s what’s interesting: Mirrorless built this video-first, AI-powered support workflow in four hours, without writing a single line of code.

Sri Kaza:

 Yeah.

Ashish Kothari:

This would have been a multi-month, $100,000–$200,000+ investment. That’s what’s possible today. If we use AI the right way for small and medium businesses, invest in training people, give them this productivity tool, and let them transform the business.

Sri Kaza:

Right. How many businesses out there don’t have the resources to do some of these big things that the big guys do? Right now, the big guys are firing tons of people, shrinking assets, because they’re going to leverage AI.

There’s technology now—I was talking to a colleague implementing a voice-to-voice model for his call center. It turns out if you take the actual audio into your model, you can reflect and understand somebody’s feelings much better, the sentiment, and then respond with adjusted sentiment.

This technology is being proven out by the big guys. But at some point, my favorite idea I’m kicking around is: why not build a personal assistant? I’m sure we’ll see one soon. Say I’m a lawyer, an independent lawyer, and I need a receptionist. I want to sound like I’m at a big firm.

So I get a number, and it’s my personal assistant. It checks my calendar, sets appointments, does all this stuff. You can amplify your business with these tools. They’re out there. You just have to look for them.

Ashish Kothari:

Yeah. Well, look, in your new role you are a small business. You’ve launched a book, the book is launching, you’re out getting everything ready. I know what it is like to launch a book. This demands a lot of heart and energy.

I’m curious, Sri—what are some daily or weekly practices that help you stay grounded, renew yourself, and stay rooted in this purpose of really helping SMBs win?

Sri Kaza:

 Yeah. I don’t like to think about it like a business, but it absolutely is from a technical perspective and from some of the lessons I’ve learned and share in the book. For me, the big one I talk about is purpose. Without purpose, without knowing I’m having an impact on small businesses, this is a complete waste of time.

I could make so much more money doing ten other things than worrying about writing a book and talking about it. I’m not making money on it. I’m doing this for something better. To stay grounded, every time something comes up—“Hey, we want to do this, can you pay for shipping?” or “Can you take this many days out of your week to fly to this city for this thing?”—the first thing I ask myself is: “Am I going to reach more small businesses?”

We’re not going to sell more books if I do this. That question comes up all the time. You’re never going to sell more books just by flying somewhere or doing one of these things. But if I can reach more small businesses, if I can educate people on what I’ve learned, share inspiring stories, get people excited, and hopefully help people reground themselves in what they were trying to accomplish with their businesses—if I can do that—then I’ll get over the hump on all the other stuff: the investment, the time, the energy.

But I still have that McKinsey brain pop in every once in a while, because you can’t stop it. Sometimes it does the math. And gosh, the math never works out. You probably know this as well. If you’re just trying to sell a book, the math doesn’t work out. If you’re trying to help people and make a difference, then yeah, pour in a little more energy.

So for me, that’s one of the biggest lessons—eating my own cake here. The other thing I’ll admit is I’m not a big fan of social media and self-promotion. It just doesn’t feel right to me. I don’t enjoy it. But if I embrace what I like—having a conversation with a friend like this one—that’s actually fun. I can enjoy this.

So I’m going to embrace what I like. I’m going to outsource, offshore, or use AI for the things I have to do. And I’ll make sure I’m having fun and hitting my purpose.

Ashish Kothari:

Well, my friend, this has been such an amazing conversation. I can’t wait to host you in Boulder when your book comes out. We’d love to bring a community together here of entrepreneurs, startups, and small and medium businesses, and share the powerful three-part Underdog Principles you talk about in your book: positioning, proximity, and purpose.

Use them to help leaders make flourishing their competitive edge, integrate them to grow their businesses, and invest in their people. The future is small. I don’t believe the future is big. Yes, the biggest of the biggest will stay, but you don’t want to be in the middle.

My bet is on small and medium businesses. They’re really going to outcompete. The extra-large and large will get crushed. The XXLs you can’t do anything about. But the small and medium is where the magic is. It’s where the soul is.

Sri Kaza:

 Yeah, for sure.

Ashish Kothari:

And where the proximity is. Thank you for the work you’re doing. I’m really excited to see you in person in a couple of months.

Sri Kaza:

Yeah. I'm looking forward to it. Thanks, Ashish.

Ashish Kothari:

 See ya.