How Piwik PRO Reached $6.3M ARR and 200 Enterprise Customers as a Privacy-Friendly Google Analytics Alternative (Interview with Founder Maciej Zawadzinski)

Introduction and Privacy-Friendly Analytics Pitch

Nathan Latka

00:00Hey folks, my guest today is Maciek Zawadzinski and he's building a company called piwikpro, p I w I k dot pro. It's a privacy friendly alternative to Google Analytics. Maciek, you ready to take us to the top?

Maciej Zawadzinski

00:12>> Yes, thanks for having me.

Nathan Latka

00:14Competing with Google Analytics is not easy. So help us understand why are you different? Why are people switching to you?

Maciej Zawadzinski

00:19>> Sure, so the shortest way we can call piwik pro, it's a privacy friendly analytics platform that is alternative to Google Analytics. And we fight by giving the users control over the data and complying with the privacy laws.

Nathan Latka

00:38Very cool. Now give us a sense of growth here. How many customers are on the platform today?

Customer Count and Enterprise Definition

Maciej Zawadzinski

00:43>> We work primarily with enterprise customers and we have over 200 of large organizations as our customers.

Nathan Latka

00:51And what does enterprise mean? What are they all paying you per month on average?

Average Contract Value and Pricing Model

Maciej Zawadzinski

00:55>> So I would say, let's start with the organization size. So typically these are organization that have more than 5,000, more than 10,000 employees. Sometimes they have hundreds of thousands, but let's say that's probably minimum size of the organization that I would call enterprise. And our average contracts is way above 20,000 annual recurring revenue.

Monthly Recurring Revenue and Growth Rate

Nathan Latka

01:22Okay, and what did you do or what are you doing right now in terms of monthly recurring revenue?

Maciej Zawadzinski

01:27>> So in terms of monthly recurring revenue, we do somewhere in the vicinity of $525,000, $530,000.

Nathan Latka

01:38A thousand US dollars?

Maciej Zawadzinski

01:40>> Yes, that's in US dollars.

Nathan Latka

01:42Okay. And where were you exactly a year ago? So we can calculate growth rate.

Maciej Zawadzinski

01:45>> So we if you take a look at the year over year growth, that's somewhere around 30% that we did compared to the last year.

Nathan Latka

01:55Okay. What does that mean? I mean, do you know what your revenue was monthly about a year ago?

Maciej Zawadzinski

01:59>> So we start it was somewhere around

02:04>> 400, 400 something monthly recurring revenue.

Nathan Latka

02:09That's great. Well, this is great growth. So where is most of the growth coming from? Are you expanding old customers or finding brand new customers?

Net Dollar Retention, Churn, and Upsells

Maciej Zawadzinski

02:17>> So we have both. So we have actually quite nice success last year with our net retention rate. So we did over 110% we are on track to do more than 110 this year as well.

Nathan Latka

02:29Congrats, that's big.

Maciej Zawadzinski

02:31>> So we are like, of course, this includes churn and upsells.

Nathan Latka

02:36What were those percents? How much churn and how much upsell?

Maciej Zawadzinski

02:40>> I don't have this number at hand, but probably around less than 10% churn and then more than 15% of upsells that Yeah.

Nathan Latka

02:5220% upsell, 10% churn will be one ten net.

Maciej Zawadzinski

02:56>> Yeah. Yeah. Yeah.

Nathan Latka

02:57Okay, and what are you upselling? So why would someone pay you a thousand bucks a month versus $2 a month?

Volume-Based Pricing and CDP Module

Maciej Zawadzinski

03:03>> So there are a couple of reasons, but the largest two contributors were the traffic increases and as COVID-nineteen unfolded, we have seen a lot in the government sector, finance sector, healthcare sector, which are among our top sectors when it comes to the customers. So our pricing is volume based, so this increases. We also increased our pricing plans itself for the new business, which had some impact also for the renewal of the contracts. And we do a

03:37>> bit of the upsells of the modules, but currently you have just the analytics platform or analytics platform with CDP. So for those customers that don't have CDP yet, we upsell them additional module.

Nathan Latka

03:54Well, this is a great story, Maciek. I wanna 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 2,000,000 in 2017?

Capital Efficiency and Clearcode Origin Story

Maciej Zawadzinski

04:03>> Actually, our story is that we spent off piwik pro as a product business from our services business. And this services business contributed over the years around 2,000,000 as well. So in total of the capital that we raised, that is somewhere in the vicinity of 4,100,000.

Nathan Latka

04:24But the 2,000,000 raised in 2017, that was from investors, the service.

Maciej Zawadzinski

04:28>> From investors, that was outside new money. And the 2,000,000 were basically the profits from the services business that's where we spin this company.

Nathan Latka

04:39How much did the service business do in 2017 in total revenue?

Maciej Zawadzinski

04:44>> I mean, this is, I guess this is not related revenue to piwik process.

Nathan Latka

04:49I understand that, but the profits feed into piwik pro, that's what I wanna understand.

Maciej Zawadzinski

04:52>> Yeah. So the services business was doing anywhere from 500,000 to 1,500,000 profit per year.

Nathan Latka

05:02And is that still going today or you shut it down?

Maciej Zawadzinski

05:05>> No, no. We we spin it off and it's still going on. It's it's actually grew. It's it's doing even better now.

Nathan Latka

05:11What's the website to the agency?

Maciej Zawadzinski

05:13>> Clearcode.cc.

Nathan Latka

05:14Clear what?

Maciej Zawadzinski

05:15>> ClearCode, like coding. Clearcode.cc. And this is the company that specializes in building custom advertising and marketing technology. And because we had this experience in their marketing technology space, 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.

05:39>> Makes a lot of sense.

Nathan Latka

05:40Now does clearcode.cc own equity in piwik pro?

Maciej Zawadzinski

05:43>> No.

Nathan Latka

05:44Okay. So how did you put 2,000,000 from the agency into piwik

Maciej Zawadzinski

05:47>> That's pro without any of that a state from now, but it used to own the equity when we were adding the capital. But right now, after the spin off, it's a same shareholder structure pretty much,

06:03>> this is a completely separate entity.

Nathan Latka

06:05Maciek, how much equity do you own currently in piwik pro?

Equity Ownership and Cap Table Breakdown

Maciej Zawadzinski

06:09>> So I own over 40% with additional voting rights that gives me the control.

Nathan Latka

06:16So you control the company. Who owns the other 60% of the equity though?

Maciej Zawadzinski

06:21>> It's employees,

06:24>> former founders as well as investors.

Nathan Latka

06:27How much do investors We

Maciej Zawadzinski

06:30>> have investors

06:33>> own somewhere around 20%. But it's not only for the primary, but they also did some buybacks from inactive Founder, as well as we have a sizable employee pool, well as management pool of like 10 plus percent.

Nathan Latka

06:49Okay, 10% there. So 10% employee option pool, Maciek owns more than 40% investors own, 20% that 70 there. So former founders still own about 30%?

Maciej Zawadzinski

06:59>> Yes, yes. So there is still one inactive founder that owns, it's probably, I probably there is some miscalculation, but he still have like a double digit percentage in the company.

2017 Funding Round and Its Valuation

Nathan Latka

07:13Understood. And the 2,000,000 you raised in 2017, do you remember what valuation you raised that at?

Maciej Zawadzinski

07:18>> We raised it at,

07:22>> I will have to recalculate it to US dollars because it was in Polish zlotis, but that was in the vicinity of 7,000,000 pre money. $7,500,000 pre money.

Nathan Latka

07:33Okay, interesting. And then are you looking at raising capital today or no?

Maciej Zawadzinski

07:37>> So actually we got quite nice offers, term sheets for our next series, but we decided because we've just launched our freemium model and we see a big upside potential in that in accelerating our growth, we decided to use that facility from our existing investors to accelerate this growth and raise at a much higher value

Nathan Latka

08:03So existing investors put in more than the $2,000,000 No,

Maciej Zawadzinski

08:08>> they haven't put, but we have an option to raise debt from them right now for the next year.

Nathan Latka

08:14How much debt would you raise if you did do it?

Bridge Round and Series B Plans

Maciej Zawadzinski

08:17>> We will rise probably, so this will be some bridge between the Now and Series B. And we'll probably need another 2 to 3,000,000 to accelerate the traction of our premium model, and then we'll raise a proper Series B next year.

Term Sheets Turned Down and the 10x Multiple

Nathan Latka

08:36And what would you value the company at today? What are some of the term sheets that you turned down?

Maciej Zawadzinski

08:41>> So I think I will leave it up. So the multipliers were in the vicinity of 10x annual recurring revenue. And we feel that we can raise at a much higher valuation if we execute flawlessly on the premium model.

Nathan Latka

08:57So you feel like, I mean, those offers at a 10x multiple, then you're talking like 65 to $70,000,000 pre money?

Maciej Zawadzinski

09:01>> Yeah, yeah, exactly, exactly.

Nathan Latka

09:03Very

09:04interesting. Now, if you did raise debt, what interest rate would you pay on that debt from investors?

Maciej Zawadzinski

09:10>> So the debt which have the components of interest as well as convertible if we don't pay it back and then interest rate is super attractive so it's under 8%.

Nathan Latka

09:25Under 8% interest. If someone gave you debt at 10%, but you didn't have to like, there were no covenants, no warrants, no crazy terms. Would you look at a little higher interest rate for cleaner terms or no?

Breakeven, Debt Options and Cash in the Bank

Maciej Zawadzinski

09:37>> I think we might. And we actually spoke with a couple of companies about that. And that's probably So we have actually three options for that. So we have this option from our existing investors. We have a bank financing that is quite attractive because we were pretty much breakeven for the last twelve months. So we were quite cautious over the COVID with spending, but still to grow well. And the last option would be the loans based on

10:12>> the monthly recurring revenue, which I think you are referring to.

Nathan Latka

10:16Yep, 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. Mean, you don't have millions of dollars sitting in the bank, do you?

Maciej Zawadzinski

10:25>> We still have over 2 millions in the bank.

Nathan Latka

10:29Oh wow, okay, okay got it.

Maciej Zawadzinski

10:30>> Like over maybe between 1.5 and 2 millions. But we really want to like double down on what we are doing now. So there will be significant marketing and sales spending coming up next year, which we are ramping up for.

Team Size, Engineers, and Sales Reps

Nathan Latka

10:47So How many people at Piwik PRO are on the team today?

Maciej Zawadzinski

10:51>> We have 100 people.

Nathan Latka

10:52100 people. How many engineers?

Maciej Zawadzinski

10:55>> Around half of that are engineers.

Nathan Latka

10:56Wow, okay. How many salespeople to quota?

Maciej Zawadzinski

11:00>> Sales people, eight, seven people and me because I'm actually interim head of sales. I'm very close to the customer.

Nathan Latka

11:10What's their quota target?

Maciej Zawadzinski

11:12>> Depends, like this is 400 k, 500 k of ARR per year.

CAC and Organic Growth Strategy

Nathan Latka

11:20Yeah, makes a lot of sense. This is a great story. Listen, and is your CAC still around $7,000 to get a new 2,000 a month customer?

Maciej Zawadzinski

11:30>> Can you repeat that?

Nathan Latka

11:31You told me last year in April that your CAC was $7,000 to get a $2,000 a month customer, is that still accurate?

Maciej Zawadzinski

11:37>> Yeah, it's still accurate and that's because we didn't really ramp up spending on sales and marketing yet. So we rely a lot on organic channels and inbound and that CAC hasn't changed.

Famous Five Rapid Fire

Nathan Latka

11:51Okay, Maciek, let's wrap up with the Famous Five. Number one, favorite business book.

Maciej Zawadzinski

11:55>> Good to Great.

11:56>> That's a good one.

Nathan Latka

11:57Number two, is there a CEO you're following or studying?

Maciej Zawadzinski

12:00>> Julian Shapiro, the angel investor and founder of Demand Curve.

Nathan Latka

12:05Number three, is there an online tool that you're following or studying?

Maciej Zawadzinski

12:09>> Yeah, I mean, this is trivial, but I would say LinkedIn, which gives so much information about organizations that we work with.

Nathan Latka

12:17Number four, how many hours of sleep do you get every night?

Maciej Zawadzinski

12:20>> I try to get seven, eight and usually I'm successful at that.

Nathan Latka

12:25What's And your situation? Married, single, kids?

Maciej Zawadzinski

12:28>> Single with two cats.

12:29>> Two cats.

Nathan Latka

12:30Okay, no kids. And how old are you?

Maciej Zawadzinski

12:34>> Once again?

Nathan Latka

12:35How old are you?

Maciej Zawadzinski

12:36>> Yeah, I'm 35.

12:38>> 35.

Nathan Latka

12:39Last question, Maciek, what's something you wish you knew when you were 20?

Lessons from Founding First Company at 20

Maciej Zawadzinski

12:44>> Probably 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 knew nothing about creating the business then. It was a lot of faults on the way to get where I am today.

Nathan Latka

13:02Guys, you have it, piwik pro and alternative 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 $6,300,000 run rate, serving about 200 customers. Maciek still owns over 40% of the business, controls it with shares, but they've got investors that put in $2,000,000 with a $7,500,000 pre money valuation in 2017. And they turned down recently term sheets in the 60 to $70,000,000

13:25raise as they look to bootstrap to see how their premium model performance before thinking about a raise in 2022. We'll see what happens. Maciek, thanks for taking us to the top.

Maciej Zawadzinski

13:32>> Yeah. Yeah. Thanks.

Nathan Latka

13:35One more thing before you go. We have a brand new show every Thursday at 1PM Central. It's called Shark Tank for SaaS. 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 one

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