AfterWork Ventures are delighted to announce our participation in Avarni’s $2.5M pre-seed round. This is no ordinary decarb solution; Avarni can accurately calculate Scope 3 emissions (those generated by third parties, like suppliers, which account for over 75% of most companies’ emissions). Once calculated, Avarni then helps companies engage and incentivise their supplies to reduce their emissions, so they can remain preferred suppliers. In Australia, mid 2024, regulations to curtail Scope 3 emissions are coming into play - and we’re here to support Avarni as they take the stage. In this interview with friends and co-founders Misha Cajic and Anuj Paudel, we learn more about their journey to entrepreneurship, with a side of cold water plunging and flight simulation landscaping!
1. How did you two meet?
Misha: We met in high school as part of the same year level. Although we didn’t hang out much in early high school, our interests began to cross over a lot more in “Industrial Technology” class, where we had to submit a large technical project for our final exam. After high school, we stayed connected as part of the same friendship group, and began working together on various projects and startup ideas in 2017.
The first startup we worked on together was a dating app allowing you to join location based events and match with people at it! Unfortunately with this idea we had yet to learn the golden rule, “build it and they absolutely will not come”, as the app didn’t really go anywhere. We went through a few more ideas including a location based flight tracking app, virtual queuing during COVID, and eventually decided to join Antler in early 2021 to tackle a new idea.
2. Talk us through your journey…How did Avarni go from an idea to a living, breathing thing?
Misha: Avarni as it looks today is the result of brute force iteration. The company started with little more than a desire to find a compelling, real problem to solve in a space that interested us, sustainability. Our original idea was a bank card that would estimate the emissions of your personal spending, and give you options to offset it.
In the very early days, we were simply trying to do a “geography play” by finding a compelling idea that seemed to have grown legs overseas and could be replicated in Australia. Unfortunately, the unit economics of this idea were shocking, so we pivoted to offering the same product, but as an API for banks to implement instead with their customers. This idea made far more sense economically, and didn’t require spending a fortune on marketing to get people switching to a different bank card. However, the excitement we generated initially didn’t stick around for long. We found what we were offering sat squarely in the “nice to have” bucket rather than a “must have” which solves a real business problem for customers.
We had simultaneously begun experimenting with a “business product for carbon tracking”. This initial idea evolved into what Avarni has become today. Our first user was Jon Collins from KPMG, who we are still close with today and who played a pivotal role in sharing the insights needed to build our product. From this point, we worked hard to get Avarni in front of anyone who would listen, and now build our product tirelessly on their feedback. We have and are continuing to make mistakes and blunders along the way, but figuring it all out is what makes the process worth it!
3. What was the biggest barrier to getting your business off the ground? How did you overcome it?
Misha: We needed to get over the engineering/product building mindset of making something perfect before putting it in front of people. There’s no point making something perfect if you don’t understand whether it's what people actually want or need. The way I overcame this habit was by simply recognising that we were wasting our time by not spending it in front of users. We also had to move beyond the fear that our idea of the perfect solution may be wrong.
4. What inspired you to make Avarni work? Was there a pivotal moment where you were struck with a certain clarity? Or did you systematically work through the decision?
Misha: It was certainly a process involving a lot of conversations with many people over many calls. It was tedious, but seeing someone react positively for the first time to something you’ve built is a high that as a business owner you’ll just continue to chase. For the space Avarni operates in, seeing our investors, advisors and customers get excited about where we are headed simply furthers that feeling of clarity.
5. Outside of your company, what are you into right now?
Misha: I’m fortunate enough to live close to the beach in Sydney, so I love to start my mornings off slowly with a swim and reading a book, no matter the season! I’m certainly in a phase of my life where I like to read books which I can practically apply to my life to become more emotionally intelligent, further my self-understanding, and trick myself into following the habits I want to build. I am also a huge aviation nerd – this probably comes from travelling to see my family in Europe so much as a child which are my happiest childhood memories. When I can, I make use of my private pilot’s licence and go for a fly around Sydney.
Anuj: I've been delving deep into cold water immersion, exploring different approaches including the Wim Hof method. While I haven't mustered the courage to fully embrace an ice bath just yet, I've been taking gradual steps in that direction including cold showers and dipping into freezing cold lakes. I’ve also rekindled my passion for flamenco guitar which I find to be a great way to destress and challenge myself creatively.
6. Who or what inspires you and keeps you focused on your north star?
Misha: Our team, customers, investors, and everybody else who believes in what we’re doing by spending their time and/or money with us to make Avarni’s goals a reality. I’m humbled that they’ve placed their trust in us, and have stuck with us through the highs and lows of the journey including all our mistakes. I am endlessly grateful for my parents who have given me the opportunity to find my own way. I feel like I owe it to them to not squander that opportunity with mediocrity.
7. Talk us through a standard day in your life as a founder…
Misha: As one of our advisors wisely told us, as a founder you are the leader, manager and expert. I try everyday to have a healthy balance of all three by setting the company vision and reiterating it to the team and our investors whilst helping others buy into it. It’s my job to bring the energy whilst making sure we’re focused on improving company processes to ensure the team is working happily, effectively and with purpose. I undeniably love working in the “expert” bucket by remaining getting hands on with solutioning and coding. It’s a constant battle to find the best way to organise your day as a founder, but I’m getting better every day. The biggest challenge is finding time for anything other than the company, because it’s absolutely essential to proactively do so.
8. What unusual or childhood experiences prepared you for what you do today?
Misha: As a pre-teen I decided against spending time with peers from school, instead opting to spend my time in online communities of flight simulation nerds of which I am a proud member. One of my biggest joys was downloading and installing “add-ons” for Microsoft Flight Simulator X to make its landscapes look better. When the opportunity to join a team of mostly rookies learning how to build those add-ons came about in one of my online communities, I jumped at it. I became so obsessed with making these add-ons, that soon enough I had the Orbx founders, Alex Goff and Ken Hall, to help mentor me. Alex taught me how to build my first 3D models, and I remember the moment Ken suggested that I should begin selling my add-ons, as well as my reaction – “No, it’s not good enough to sell”. Thankfully he didn’t listen to me, and just over a year after beginning I put my first flight simulator add-on – “MCA Designs North American Airstrips Volume 1” – up for sale. Ken was my first customer. Soon after, I joined Orbx as an “indie developer”, entirely choosing and running my own projects, and publishing those add-ons through the very same company that I had been a huge fan of just a year and a half earlier. I released over a dozen products individually and in partnership with other developers over seven years, with the products I worked on generating over 60,000 sales. That undeniably made me realise that I could pave my own way, and made me hungry to take it to the next level with a new venture.
Anuj: My time as a high school tutor really opened my eyes to effective long-term leadership, emphasising the importance of empowering others. I vividly remember a moment when I was scolded for doing too much of the work myself, which hindered the learning process for my students. It’s still something I’m working on but leading a startup helps me satisfy my hands-on nature while also providing others with learning opportunities, which is crucial for the company's growth. It also made me realise the power of active learning compared to passive learning, which has given me more conviction that building a startup was the right move for my personal growth.
9. What is your golden rule that you try to live and work by?
Misha: Whatever you think you know, you’re probably wrong.
Anuj: As someone who tends to overthink, I've always struggled with the concept of taking action when you have only 70% of the information, but I've come to realise that it's essential to embrace.
10. What advice would you have for anyone looking to take the plunge?
Misha: I think the advice of “Don’t go into business with a friend” is ridiculous. Knowing the other people you go into business with well and having a deep amount of trust that you can work through problems you’ll face together in a healthy way is essential. Starting and running a business is an emotional journey and I can’t imagine not having someone that I can share the highs with and lean on when things get difficult.
Anuj: It's definitely a rollercoaster ride, and it's not a short journey. I'd advise against expecting to hit the bullseye on your initial attempt solely through research and contemplation. You need to have the confidence to introduce a partially developed idea into the market and prioritise the collection of authentic feedback and valuable insights. Trust that this feedback will catalyse a market-ready product.