Mixmax Revenue, Valuation & Funding (2023)

hello everybody my guest today is olaf mate he's the ceo and co-founder of comic con mix max a company that is bringing the power of web to email by creating richer email experiences with embeddable slack style commands to trigger polls videos calendar invites and more without leaving the message they were founded in 2014 and received 1.5 million seed investment from a number of individual investors in april 2015. after finishing his engineering degree in france he then worked at skype and mckinsey and also helped he also helped grow inkling habitat a cloud-based authoring environment for writers and publishers olaf are you ready to take us to the top sure let's do it all right so i think people who know mix max probably know you because they saw someone send them an attachment or something and it was in this beautiful kind of purple highlighted box and looked much cleaner than any other kind of email they'd gotten with something embedded in it help us understand what the company does and what your revenue model is how do you make money yeah abs process business words like on month monthly plan by basis and at mixmax is x we think about it much broader than email even though that's how we started we're kind of a communications platform mainly for people in sales and success and we help you automate kind of your most common workflows not just in email but across slack crm phone document signing apps even so the product's grown a lot that's great and help us understand you know i'm sure you have a lot of different customer cohorts but just because we're short on time what would you like the average maybe team pays you per year would you say uh the average person probably pays us on average like 40 bucks a month okay and then perhaps average team size is like 10 10 people something like that okay well this is these are very different though so that's bottom up versus tops down are you typically selling directly to a 40 one-time user are you going directly to the cmo or cro directly and selling a 10-seat plan great question the kind of the the overall like core of the company has always been a really strong self-serve virally growing business where people pay out of pocket and incidentally over time those courts tend to mature into team licenses uh which is also why we started to build out a sales team actually so it could be a fun topic to touch upon definitely the biggest issue i've seen with this model frankly is is when people are paying personally because it's so valuable it comes a time where you go literally go and do a database query and you say wow we have six people from uber using us but they're all in different credit cards and it's very tricky to get all of them from an architecture architecture perspective on one corporate credit card have you figured this out bane of my existence yeah have you figured it out or no i uh no we have not i think there is actually where is there so many sas products off the shelf for finance and accounting and whatnot i think this problem is unique to actually to mixmax and potentially a product like dropbox most anyone who's bottoms up yeah i think it's actually there are a lot of sas companies that are bottoms up like asanas spot on black bottoms up you know low signs bottoms up the issue with a lot of the advantage that like donna and slack has or even like an intercom you pay for your company straight up you always buy a company license from the get-go even if you self-served whereas with a product like dropbox you might just be using it on your own uh and mixmax is similar in that regard so yeah really tricky one is but you have no solution what's your billing system what do you use uh well we use stripe out of the box and then for finance metrics we use a software called uh profitwell that sets on top of stripe uh and then good old spreadsheets man okay so you don't have a really good solution yet this is literally just your sales team calling saying we saw you have six different credit cards let's put them all in one pretty pretty much we have just a little bit of automation we've started to build in in salesforce so this is something huge that we're really excited to build out okay fair enough all right let's put all this on on a timeline you said launched in 2014 i think we created the company in 2014 we launched the product in 2015. okay and you did some funding then i think you've raised more as well how much total have you raised to date uh probably around 13 million okay and why go the funded route why not really stay disciplined try and stay bootstrapped uh amazing so uh in my mind a little bit i think bootstrap is actually a code word for founder wealth and so i'm not sure we had some runway as founders to start with we didn't have um at least for the type of product we were building we uh we needed some seed funding in order to uh yeah just be able to like keep the lights on and so that was the kind of original impetus for our a round which we closed earlier this year that was kind of a different story and and we had up until then run the business on kind of a cash flow neutral basis and for us that was just we were excited about accelerating growth and building out like a bigger uh go-to-market team yeah obviously you know raising that much money unless it's just gonna sit in the bank which makes for interesting board meetings you're obviously burning cash now at this point correct yes yeah yeah makes good sense where is most investment going towards engineering or somewhere else it's pretty much across the board i'd say the kind of new area we start to invest in is go to marquette team so we just brought on a really amazing marketing leader two three months ago uh similarly for sales and so yeah it's really exciting in a way it's a little bit ironic because obviously mixmax is a product for people in sales and success and we didn't even used to have anyone in-house who worked in those functions and so the joke was that mix-mex was our sales team yeah that's funny what's your team size today total uh total will 48 people of which 11 are distributed oh great okay so so remote and san fran uh yeah so we're like whatever that turns out to be 37 people in san francisco and 11 remote and they're kind of spread out in the us canada mexico yeah you guys have a fun little spot i always eat right there on the sweet green and i know when i go up and down about kind of optimizely or or unbounce on kind of one end you walk down the street and you see the little mix mac kind of brick brick facade there at the bat that start with the nice orange neon or sorry purple neon light on the inside oh nice you saw that the best invested thousand dollars we ever did i think it is some cool factor to it maybe maybe helps your hiring and recruiting a little bit right all right 48 folks sam did have at least one yeah we did have at least one engineer who's like yeah i heard about mixmax since i walked past the sign it works it's cheaper than a recruiter so yep all right good all right 48 people san fran remote um and over the past four or five years how many customers have you scaled to uh we are so if you think about in credit cards we're north of 10 000 credit cards that's kind of the public number is that how you guys measure it and that is currently how we measure it and that's actually not technically great because ideally you'd measure it in like per credit card like what's a single seed what's actually a huge team behind it etc uh we definitely have some bi uh debt uh we need to need to address it listen it's not an easy problem i mean i i've interviewed again about three thousand bb ceos everyone that has a model like this has this exact same problem and um do you measure by logos by individual seats or all the way down to just the pure credit card numbers yeah yeah and now we actually what we do in excel which has been kind of a long exercise which is part where i'm trying to hire someone and finance so i don't have to do this is and we have like this huge excel spreadsheet to try to get actually domain or like account based metrics on everything to address that issue that you yeah yeah it it um macbooks just aren't powerful enough to like chug through that excel sheet and good i mean look um you gave me two numbers ten thousand credit cards forty dollar arpu i can kind of back into a minimum mrr there are about four hundred grand is that a you know is that a fair minimum uh that would be understating it yeah but unless you want to give me more accurate numbers but minimum 10 000 times 40 is 400 grand a month yeah yeah that's directionally right okay do you want to share something that's more accurate or you just want to leave it at that minimum uh we can leave it at that i think what we shared before is that we're north of five and uh five million and ten thousand customers so is ten in sight like that's driving distance in the next six months or twelve months or no i'm sorry if what is is 10 10 million are is that in striking distance or it still feels like a stretch goal uh i think for 20 2018 that's definitely a stretch goal yeah i'd like to think about it within striking distance though that's good fair enough i like the aggressiveness and help me understand growth so if you're north of call it 5 million are today where were you a year ago uh a year ago well we've kind of had a trajectory of 3x3x and like a little bit north of 2x in the in the past year okay so fair to say about 2.5 million ar a year ago yeah okay good um and most that growth what's it coming from is it coming from kind of expanding on the team accounts or is it still all just individual kind of one-off people putting in a credit card for 40 bucks you know what actually i wish i had like a really really fur metric on that yeah related to our bi debt yeah it's a it's a mix of both we have really healthy expansion characteristics yeah i'm sorry around the expansion's around what pricing axes obviously number of seats is one of them are there other pricing axes related to data usage or product modules yeah the other one would be like type of tier typically expansion comes in seats okay yeah because up until very recently remember we didn't have like anyone really running sales or doing like active sales and so it's always harder for someone to graduate from one plan to the next unless they get a little nudge yeah and so where seed expansion kind of like happens on its own that's great churn is critical in any sas company what is your churn and how do you think about minimizing it today we don't actually focus that much on churn minimization because it we did an analysis and we just figured out that it wasn't like the most impactful lever for us uh at least right right now uh we take a we separate out churn depending on if you're like a alice at gmail versus if you're like alice at uber and so we really care about turn if you're alice at uber and we don't really care about churn if you're alice at gmail and so this is something that's very unique to mixmax because our funnel is top of funnel is like the entire universe similar to a dropbox like anyone can get value from the product which is both a blessing and a curse uh and so um in teams we have really healthy expansion mechanics and then in the kind of you know alice and bob's at gmail we have like a good a couple of percentage points of of churn as you'd expect on like a consumer credit card based business you're talking like three or four percent per month something like that yeah how do you by the way that analysis seems very dangerous to me because the person that works at uber if they're signing up for you personally they could use their gmail account and you would just discredited someone that's potentially worth way more to you how do you account for that yeah a great question and the way we kind of think about it if alice signs up at gmail and she the way this works is actually fellas signs up in gmail and she's paying with her at gmail address she's actually not using mixmax for work how do you know uh because we the account is always tied you owe often with gmail okay so there's no way for alice to use mixmax on her you know uber address if she's actually paying uh on her at gmail i guess what i'm saying though is i have like my gmail account and then i have like our our team all has at getlacka.com accounts i sign up for all the time that i use for business using my at gmail account and i and that's what i'm saying is if those companies ignored me and thought i was just a single person they're ignoring the whole business side you're you're basically missing that value do you have any way to capture that or no yeah we don't really we know that occasionally for like businesses like yourself right which are the like kind of traditional smb in in some some sense we might be missing out on value there uh our kind of take is alice at uber she's not really conducting her uber business on her personal gmail address yeah no it's not i'm not saying that that's what's happening i'm just saying when like when you sign up for something that says oauth with gmail it then literally lists all your gmail addresses like at uber if it's google sweet it's very easy to just click one that's not the actual company that you're at today and that's all i'm trying to figure out is have you figured out some way to understand those those parent child relationships uh yeah not not really actually we do some scoring on sign ups yep so we can figure out if you know alice at gmail actually is you know vp sales or vp success at uber um and then hopefully now we actually do something about that and like reach out from a sales perspective yeah we'll see if that's worth if that's worth the time if there's enough points there to gain right um real quick because we're out of time uh i want to understand growth right so so in order to get a new 40 a month customer typically how aggressive are you comfortable being on terms in terms of cac it's a really interesting question so uh now we do spend uh to acquire customers that cac is like so news i think we actually don't really have a really firm metric on it because we started spending you know two three months ago at best up until then it was all zero cache well did you have you know did you have customer success people uh we have support uh and i guess we had one person in success who did an amazing job dealing with our our bigger bigger accounts so yeah i guess you could they're kind of more they're not so much cost to acquire a customer as cost to you know nurture yeah the thing is that someone signs up and never clicks the schedule with mixed max or send attachment with mixmax or never activates right which is what really a support function or does that potentially then they churn right that's what i was asking um okay so you're just really launching you're just now hiring really salespeople it sounds like and you're just really now testing kind of cac stuff so ignore what your actual metrics are i'm just curious you as a ceo how aggressive would you be willing if someone said pay me a thousand bucks for a 40 a month customer would you take that deal er probably not because those ma that math wouldn't work out right however if that's a team license behind the hood then absolutely yes so that's what i'm asking right how many months of kind of our poo are you willing to spend to acquire the customer up front yeah um i mean aren't there pretty standard like metrics for that right and the way you could think about it just off the top of your head if someone's paying you 40 bucks a month then you can spend like you know in the course of the year that's 480 bucks how much would you be willing to spend assuming like very conservatively they would just spend a year which would be like stay a year which would be pretty bad churn right yes yeah you'd still be willing to spend up to 500 bucks yeah yeah no that's exactly why i asked you right is how aggressive would you be willing to spend that interesting very good all right and when was that you you mentioned you did your uh the bigger kind of round recently when did you do that it was april and that was in early january this year early okay good um and last question before we wrap up from a product perspective you know i've tried mixed max and the reason i just couldn't i i didn't become an active active user was because it just changed the entire gmail format like it was almost it was really overwhelming even though i liked individual functions i mean how do you deal with that do you just say you know what either take it or leave it yeah uh well we actually have a new mixmax 2.0 coming up for you soon that you might really enjoy and that's okay so are you using inbox sdk on this stuff uh we do not actually yeah yeah we built it uh we built all of this our own in part because their inbox sdk just has its own whole set of bugs there's some advantages to it well and then you're really very beholden to obviously our friends at uh at streak which you know can be good or bad yes yeah if your core if part of your core business is an extension you might not want to use it it's fine if it's like a totally ancillary thing all right let's wrap up with the famous five one word answers here number one what's your favorite business book uh my favorite business book would probably be the hard thing about hard things i'm probably like the hundredth person to say this on this podcast that's okay that's okay number two is there a ceo you're following or studying right now uh not a particular one actually i have a number of friend founder ceos who i really like name one jewelry one yeah yeah that would be at like ivan zhao at notion or matilda that front app um those are yeah two examples of folks i like chatting to yeah matilda is great she's been on three times all since like there no revenue up to you know well north of where she is at like 1.3 1.4 per month and it's been fascinating uh number three uh what is your favorite online tool for building your business mixmax no besides mixmax that might actually be profitwell okay very good patrick's obviously a great guy too number four how many hours to sleep to get every night two few seven okay and situation what's your situation married single kiddos uh partnered since five years okay so not married any kids no okay not married partnered no kiddos and how old are you at 39 39 last question off what do you wish your 20 year old self knew uh my 20 year old self um wow that's like a a while ago um i wish i i wish i had a sense of where i wanted to go back then and what i wanted to achieve i think i wanted to be an academic back then but that world was just too slow for me yeah guys he wanted a better sense of what he wanted to do earlier on ideally obviously not academic anymore launched mixmax back in 2015 now over 10 000 credit cards or individual folks using the platform paying 40 bucks per month they're north of 5 million bucks in ar at this point 10 million feels in striking distance in terms of the next uh you know year two years four percent logo turn per month on again they're kind of individual kind of consumer prosumer basis uh they raise 13 million bucks to drive this growth growing about 100 percent year over year so healthy growth just now turning on some of the acquisition channels that are paid and you know willing to spend maybe up to first year of lifetime value on cac pretty standard there are 48 folks on their team in san fran and remote locations olaf thanks for taking us to the top awesome nathan have a go on