How Piwik CEO Michael A. grew to $21.3M revenue and 200 customers in 2024.

hey folks my guest today is matcha zava zinc oginski he's building a company called piwik pro p-i-w-i-k dot pro it's a privacy-friendly alternative to google analytics matcha are you ready to take it to the top yes uh thanks for having me competing with google analytics is not easy so help us understand why are you different why are people switching to you uh sure so uh uh the shortest way we can uh call piwik pro it's a privacy friendly analytics uh platform uh this alternative to google analytics and we fight by giving the users control over the data and uh complying with the privacy rules very cool now give us a sense of growth here how many customers are on the platform today um we work primarily with enterprise uh customers and we have over 200 of uh large organizations as our customers and what does enterprise mean what are they all paying you per month on average um so uh i i would say let's start with the organization size so typically these are organizations that have more than 5 000 more than 10 000 employees uh sometimes they have hundreds of thousands but let's say that's a probably minimum size of the organization that i would call enterprise and uh our average contracts uh is way above 20 000 annual requiring revenue okay and what did you do or what are you doing right now in terms of monthly recurring revenue um so in terms of monthly requiring revenue we do uh somewhere in the vicinity of uh 525 530 1000 us dollars yes that's in us dollars okay and where were you exactly a year ago so we can calculate growth rate um so we uh if you take a look at the year over year ago uh that's uh somewhere around 30 percent uh that we did compared to the last year okay what does that mean i mean do you know what your revenue was monthly about a year ago um so we start uh it was uh somewhere around uh 400 400 something uh monthly requiring revenue that's cool this is great growth so where is where is most of the growth coming from are you expanding old customers or finding brand new customers um so we have both so we have actually uh quite nice success last year with our net retention rate so we we did over 110 and we are on track to do more than 110 this year as well congrats that's big um so uh we are like of course uh this includes churn and upsells so what were those percents how much turn and how much upsell um i don't have this number at hand but probably around uh less than 10 churn and then uh more than uh 15 percent of uh absence that yeah 15 20 20 upsell 10 turnover 110 net yeah yeah yeah okay and um what are you upselling so why would someone pay you you know a thousand bucks a month versus two grand a month so there are a couple reasons but the the largest uh two uh contributors were the traffic increases and as covet 19 unfolded we have seen a lot in the government sector finance sector healthcare sector which are uh among our top sectors when it comes to the customers so our pricing is volume based so this increases we also increase our pricing plans itself for the new business which had some impact uh also for the renewal of the contracts and uh we do a bit of the absence of the modules but currently you have just you know uh the analytics platform or analytics platform with cdp uh so for those customers that don't have cdp yet uh we upsell them uh additional module well this is a great stream module i want to get more into pricing in a second but first tell me how capital efficient have you been have you raised additional capital outside of the 2 million in 2017 so we actually our story is that we uh spin off piwik pro as a product business from our services business and this services business contributed over the years around two million uh as well so in total uh of the the capital uh that we rise uh that is somewhere somewhere in the vicinity of four four comma one million uh but the two million raised in 2017 it was from investors not the services from investors that was outside new money and the two million were basically the profits from the services business uh that's uh where we spent this company how much did the service business do in 2017 in total revenue um i mean this is i i guess this is not related to revenue to public process i understand that but the profits feed into pick pro that's why i won't understand so er the services business was doing anywhere from uh half a million to uh one and a half million profit per year and is that still going today or you shut it down no no we we spin it off and it's still going wrong it's it's actually grew it's it's doing even better now what's the website to the agency ah clear code occ clear what clear code uh like a code code clear.cc okay yeah and this is the component that specializes in in building custom advertising and marketing technology and because we had this experience in their marketing technology space uh we started investing in the product and we built piwik pro and then finally at some point we spin it off as a separate component makes a lot of sense now does clearcode.cc own equity into it pro and no okay so how did you put two million from the agency into creation that's a state from now but it used to own the equity um when we were adding the capital but we right now we after the spin-off it's uh same shareholder structure pretty much uh but uh it's uh this is a completely separate entity magic how much equity do you own currently in viewing pro um so i i own uh over forty percent uh with uh additional voting rights uh that's that gives me the company so you control you control the company who owes the other 60 of the equity though uh it's uh employees of uh former founders as well as investors how much do investors own um we have uh uh investors uh own somewhere around 20 percent okay but it's not only for the primary but they also did some buybacks from inactive founder as well as we uh we have a sizeable employee pool of okay ten percent there so ten percent employee option full matrix you and more than forty percent investors own twenty percent uh that's seventy there so former founders still own about thirty percent yes yes so there's uh there is still one uh inactive founder that don't uh uh it's probably i i probably there is some miscalculation but yeah he still had like a double digit uh percentage in the company understood and the two million you raised in 2017 do you remember what valuation you raised that at uh we raised it at um uh i would have to recalculate it to the us dollars because it was in polish zlotys but that was in the vicinity of seven million free money seven seven half million free money okay interesting and then are you looking at raising capital today or no uh so actually we we we got uh uh quite nice offers uh term sheets uh for our next series but we decided because we we've just launched our freemium model and we want uh we see a big upside potential in that in accelerating our growth uh we decided to use depth facility from our existing investors uh to accelerate this growth and rise at at much higher value so existing investors put in more than the two million dollars uh no they haven't put but they we have an uh option to rise debt from them right now for the next year how much debt would you raise if you did do it um we will rise probably so this would be some some bridge between the now and series b um and we'll probably need another two to three million uh to accelerate the traction of our serial of our freemium model and then we'll rise proper series b next year and and what value what would you value the company at today what are some of the term sheets that you turn down um so i think i will i will leave it up so that the multipliers were uh in the vicinity of 10x annual requiring revenue uh and we feel that we can rise at much higher valuation if uh we execute flawlessly on the premium model so you feel like i mean those offers are the 10x multiple then you're trying like 65 to 70 million dollars premium yeah yeah exactly exactly very interesting now if you did raise debt um what what interest rate would you pay on that debt from investors um so the uh the debt would have the component of uh interest as well as convertible if we don't pay it back um and then interest rate is super uh super attractive so it's under under eight percent under eight percent interest if someone gave you debt at ten percent but you didn't have to like there were no no covenants no warrants no crazy terms would you look at a little higher interest rate for cleaner terms or no um i think we might and we we we actually spoke with a couple companies about that and that's uh that's probably so we have uh uh actually three options for that um so we have this option from our existing investors we have a bank uh financing that is uh quite attractive uh because we were pretty much break even for the last uh 12 months um so uh we're quite cautious over the copied with spending uh but still to group uh well and uh the the last option would be the the loans based on the monthly requiring revenue which i think you are referring to yeah the bank financing though they typically only do loans against a big cash chunk sitting in your bank account i mean i assume you operate around breakeven i mean you don't have millions of dollars sitting in the bank do you um we still have uh over the over two millions in the bank oh wow okay okay like over maybe between one and one and a half and two million so we uh but we really want to like uh double down on what we are doing now so there will be significant uh marketing and sales spending coming up next year which we are ramping up for um so how many people people and metric are on the team today uh we have hundreds of people 100 people how many engineers um around half of that are engineers wow okay how many sales people to quota uh sales people eight seven seven people and me because i'm actually interim a head of sales so uh so i'm i'm very close to the customer what's their quota target uh depends like this is uh 400k 500k uh of ar per year yeah it makes a lot of sense this is a great story listen and is your cac still around seven thousand dollars to get a new two thousand dollar a month customer um [Music] can you repeat that you told me last year in april that your cac was seven thousand dollars to get a two thousand dollar a month customer is that still accurate yeah it's still accurate and that's uh because we didn't really ramp up spending on sales and marketing yet so it's uh we rely a lot on organic channels and inbound and it's that that hasn't uh hasn't changed okay magic let's wrap up with the famous five number one favorite business book um good to great that's a good one number two is there a ceo you're following or studying um julian shapiro the the angel investor and founder of demand curve number three is there an online tool that you're following or studying yeah i mean this is trivial but i would say linkedin uh which gives so much information about organizations that we work with number four how many hours of sleep to get every night i try to uh get seven eight and usually i'm successful at that and what's your situation married single kids ah single with two cats two cats okay no kids and how old are you um yeah once again how old are you uh yeah i'm 35 35 last question matrix what's something you wish you knew when you were 20 um probably i i would like to knew how to build a company because that was the time i founded my first company at 20 years old so i i i knew nothing about creating the business then and it was a lot of uh faults on the on the way to to get where we where i am today guys there you have it piwik pro and i'll turn up to google analytics that cares about your privacy they were doing 400 000 a month a year ago now doing 530 000 a month or over a 6.3 million dollar run rate serving about 200 customers matrix still owns over 40 percent of business controls it with shares but they've got investors that put in 2 million bucks with a 7.5 million dollar pre-money evaluation in 2017 and they turned down recently term sheets in the 60 to 70 million dollar raises they look to bootstrap to see how their freemium model performance before thinking about a raise in 2022 we'll see what happens magic thanks for taking us to the top yeah yeah thanks one more thing before you go we have a brand new show every thursday at 1 pm central it's called shark tank for sas we call it deal or bust one founder comes on three hungry buyers they try and do a deal live and the founder shares back end dashboards their expenses their revenue arpu cac ltv you name it they share it and the buyers try and make a deal live it is fun to watch every thursday 1 pm central additionally remember these recorded founder interviews go live we release them here on youtube every day at 2 p.m central to make sure you don't miss any of that make sure you click the subscribe button below here on youtube the big red button and then click the little bell notification to make sure you get notifications when we do go live i wouldn't want you to miss breaking news in the sas world whether it's an acquisition a big fundraise a big sale a big profitability statement or something else i don't want you to miss it additionally if you want to take this conversation deeper and further we have by far the largest private slack community for b2b sas founders you want to get in there we've probably talked about your tool if you're running a company or your firm if you're investing you can go in there and quickly search and see what people are saying sign up for that at nathan lacka dot com forward slash slack in the meantime i'm hanging out with you here on youtube i'll be in the comments for the next 30 minutes feel free to let me know what you thought about this episode if you enjoyed it click the thumbs up we get a lot of haters that are mad at how aggressive i am on these shows but i do it so that we can all 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just got done editing this interview you guys are gonna love it before i do that though i want you to know that i'm going to be in the comments for the next 30 minutes or so answering your questions if there's additional questions you want me to ask the ceo next time i interview them leave them below or if you're just loving the data points i get ceos to share click the thumbs up button below that's your way of telling me you're loving this stuff and i'll get you more of it additionally again i'll be in the comments answering any questions you have all right for 30 minutes enjoy the interview hello everyone my guest today is amacha gzawajinski he is the ceo of piwik pro and clear code analytics and advertising technology expert entrepreneur and startup founder magic you ready to take us to the top yeah yeah all right thanks for having me you bet so privacy friendly alternative to google analytics p p i w i k dot p r o tell us how a customer's using you and how do you charge for the product sure sure so we are a privacy friendly alternative to google analytics and uh we uh we charged well like our average subscription is 20 to 50k a year it's a yearly subscription uh we host software either in cloud or private cloud or on-premise okay so just to be clear if you look at all your customers right now divided by your total turn your current revenue they're paying on average you know two thousand dollars a month something like that um it would be the average on the full portfolio would be probably uh a bit less than that but definitely that's true for the last uh 12 months of subscription so more maybe more like 1500 across your entire customer base yeah yeah yeah exactly and now you told us on the last episode which is episode 817 back in october of 2018. it's been a while man i'm glad to see you again but uh you said a company you founded in 2013 you were serving back then about 400 customers how many are you serving today so uh that's actually interesting because we saw despite our revenue grow grew uh we serve less customers so we have around 200 customers right now uh but since we spoke last time we closed our uh offering for the small business clients and we we focus entirely on the mid-market and corporate clients okay so what have you grown revenue to um so we we are over four million annual requiring revenue uh which uh basically should add up with this 2 over 200 clients times the average subscription that you mentioned yeah so now last time you came on you told me you were doing about 300 000 per month which would be about 3.6 million annually now it sounds like you're right around kind of maybe 4 million annually so and that's you know that's okay growth but certainly not growth that you'd expect from someone that's raised you raised two million dollars back then why hasn't growth been faster so uh the this uh last round uh was mainly dedicated it was partly dedicated to also buy out one of our former shareholders and founders that was uh that is no longer in the company um so we self-financed the growth uh till today uh pretty much like also two million over like uh six years isn't isn't that much uh of the the capital rise and we actually didn't uh glue that much but our portfolio of the clients has has changed plus we uh when we started uh the company we started as a a subscription service based also on the open source product piwik which is now called matomo and in the meantime we developed a new product uh which is a totally property platform developed from scratch on the newer technology and we were over this last two years we were also uh working on migrating these customers from the legacy product to the new product so uh when you look at the last two years we were maybe having like 10 percent or so revenue from the uh from the new product um and the rest was legacy two years ago and now the product is much more major and we have uh over two thirds of the customers and revenue uh going from the new product and that's a quite big achievement because if you look at the growth of the monthly recurring revenue from the new product it is actually like you know uh it went from like 10k to over 200 200 k so what do you think you'll finish 2020 with in terms of mrr um we should finish somewhere around 450 470k now that we we see that like our growth started we started growing again somewhere around like mid last year so we had uh last uh two quarters of the 2019 uh that went very well we are on target for q1 this year so it looks like this growth is sustainable and we'll see how it goes with the everything that is going on with uh coronavirus but uh i think we are on the good way to to actually uh make uh make the targets uh this year and so how much of that two million you raised previously actually left the company immediately to pay out i guess it sounds like an old founder mm-hmm um so uh that was uh so that was that was a bit more complicated because we also owned a software business part uh software services that doesn't count towards the the the webinar yeah so that so that uh there was uh the round was uh bigger than two million because there there was the uh what was the total round size so so the total the total was uh over uh four million out of two million more than two millions wants to buy out the the existing ic okay and have you raised any additional capital since then no no because we we self-finance everything that we need so you're profitable today um so we are not profitable in the product business but we have the services arm which is a software development focused on the marketing technology called clearcode which is the uh our uh let's say uh sister company and we everything that we uh make from the uh software uh development services we really invest in the product so much though just just to be clear because i don't want to be any confusion the the current 360 000 you're doing per month right now that's pure technology correct pure product uh uh revenue no agency no agency at all how much agency do you do per month agency revenue uh it makes uh somewhere around 400 to 500 depending on the amount okay so you'll then plow that money back into the tech product yeah i mean of course like the profit out of that uh maybe to give you a better sense of that so we burned last year one comma seven million uh us dollars yep and how much are you bringing per month today the profit from the company uh from the services company yep how much did you burn last month uh last month hundred twenty ish okay okay yeah and and how so 120 000 net burn which again you make up from from the agency revenue what is the mechanism that allows you to take cash from the agency and put it in the business are you essentially investing in yourself there or how does it actually work uh it's a a holding component so we we have the same uh shareholders in the holding company so we can move the money around so pretty efficiently without conflict of interest i see how many folks are on the team today just the tech side just the tech side is 105 people okay still but still 105. that's what it was that's what it was last to make him on you're consistent it also changed a bit like uh structure-wise so we invested a lot in the for example customer success teams and more like consultancy teams um so the the mix is a bit maybe different uh we do things more efficiently on the technology side but we are still around the same size when it comes to the head count and as a company we think that we will stay this size we we have pretty much all the walls that we need uh so uh except for natural electrician will will stay the the same size and we we plan to grow like we should be able to triple the business without uh growing much of the team of the 105 how many are engineers uh there is around 40. and how many are of quota carrying sales reps um quotas carrying sales reps will be around eight eight okay interesting now has your has your churn profile change so what's gross revenue turn on the tech product these days yeah so that's actually thing that has changed a lot because we uh manage finally to make upsells to work uh so we have last year we had 97 percent uh revenue retention net aggregation uh which is uh which is i think quite good net or gross uh so it's uh i'm not sure if i understood the correct so before before you add back expansion revenue right what was gross revenue churn okay so before we added expansion there was like 20 something so 22 and we had around uh we made up this uh 19 percent or so with the with the absence yeah so 20 lost rev from the cohort that was active exactly a year ago 20 of the revenue churn but you up sold 17 or 18 so net revenue retention is about 98 yeah and are you still i mean what's cac today to get these new higher value customers what are you spending to acquire them um so uh from the marketing uh spending itself uh it's around seven thousand uh dollars per customer um and uh on top of that we would have to add some sales uh expenses because sometimes it's partner traders sometimes it's inbound etc what kickback do you pay your partners uh for partners we pay anywhere from ten percent to uh 25 uh but it's worth to mention that we do still around 85 90 from our own channels mainly inbound yep and now do you pay those partners 10 to 25 uh affiliate fee in perpetuity or only for the first year or something else uh it depends on the relationship because we we do business with uh several agencies and in case they hold the billing relationship with the customer it's in perpetuity in case they just bring customers and the customer designs their contract directly with us it's only for the first year interesting and which agency can you name the agency that that is most effective for you brings you the most traffic so actually the largest partners because this partner program i think we talked about this uh when we when we spoke last time we were just starting that so the largest partners haven't brought yet big deals but there are some in the pipeline so the the partners that worked out really well were smaller uh smaller partners and we have agency for example in denmark called abstract or we have a partner in um in netherlands that's called candid goods so it's another big names uh but what we saw is these smaller partners are much more engaged and um and they bring actual deals we have another partner in spain that is specializing in government deals which is one of our biggest sectors and uh they are like you know in the last month i think there are three new topics with them that we are discussing so very good would you ever instead of continuing to fund the 120 000 a month losses in the technology side with market you know your agency revenue would you ever consider raising debt in the technology business and using someone else's money to pay off that burn to drive growth um so we we are considering splitting the companies all together in that case we will uh will probably think about rising depth uh but it's still something that we are going back and forth we are in a very comfortable position uh that we have uh almost no depth uh in the in the holding component and uh and we are break even at the holding company level yeah so uh that gives like you know you much more security than having a debt piling up and you need to go faster and then rise more money and so on so we we we took us this more sustainable uh uh approach which if the recession will come probably will be the the right decision uh to have yeah very good let's wrap up with the famous five number one favorite business book um so i don't have any specific business books except some like you know all classics like uh scaling up or good to great uh but i i really liked the books that tell the story and i think the last one i i uh i read that i really liked was about pixar to pixar and beyond and uh yeah i would recommend anyone who haven't read that to to take a look number two is there a ceo you're following or studying [Music] i'm not following too many ceos but i have a couple like uh and a couple of people known in the sas industry that i really know just name it um so christoph janz from 0.9 capital yep number uh three what's your favorite online tool for building your company uh linkedin number four how many hours i sleep to get every night seven eight hours and what's your situation married single kids um single okay no kids running around all right two cats how old are you um i'm uh 34 right now 34. last question what do you wish your 20 year old self knew my check i would say don't stress out too much like some things take will definitely take much more time than you would expect yup guys there you have it founded in 2013 they are a privacy friendly alternative to google analytics currently doing called 360 000 per month in revenue about 200 customers paying between 1500 and 2 000 per month they've done this by raising just two million dollars in capital they're currently burning about 120 000 per month but they make up that loss with revenues from a different company which is their agency that is fueling the growth of this tech company which is very exciting 105 people exclusively on the tech team of which 40 are engineers eight are quota carrying sales reps economics unit economics on this side of the business ninety-eight percent net revenue retention spending seven to ten thousand dollars to get a new customer for a five to eight month payback period matrix thank you for taking us to the top thanks these ceos rarely give these kinds of interviews i hit them hard i get the data and i want to do it more so if you want to get more of this stuff make sure you subscribe up here and then additionally go check out one of my other ceo interviews right now