SaaS Interviews with CEOs, Startups, Founders
1561 How To Get 5 Team Members Paying Personally Onto One Team Account with $5m ARR MixMax
02 Nov 2019
Chapter 1: What is Mixmax and how did it start?
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 year, two years. 4% logo turn per month on, again, their kind of individual kind of consumer, prosumer basis.
They raised 13 million bucks to drive this growth, growing about 100% year over year. So healthy growth. Just now turning on some of the acquisition channels that are paid and willing to spend maybe up to first year of lifetime value on CAC. Pretty standard there. 48 folks on their team.
Chapter 2: What is the current revenue model for Mixmax?
in San Fran. Hello, everybody. My guest today is Olaf Mattei. He's the CEO and co-founder of a company called Mixmax, 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 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 Mixmax 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.
Chapter 3: How does Mixmax handle customer acquisition and growth?
How do you make money? Yeah, SaaS business where it's like... monthly plan basis. And MixMix is actually, 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 say 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 or are you going directly to the CMO or CRO directly and selling a 10 seat plan?
Great question. The overall 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. Totally.
Chapter 4: What challenges does Mixmax face with team account billing?
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 into a database square and you say wow we have six people from uber using us but they're all on 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? No, we have not. I think there's actually, whereas there's so many SaaS 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. Anyone who's bottoms up.
Yeah, I think it's actually, there are a lot of SaaS companies that are bottoms up, like Asana's
bottom slack bottoms up you know hello signs bottoms up they shoot with a lot of the advantage that like an on 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 mix max is similar in that regard so yeah really tricky one is it but you have no solution what's your billing system what do you use
Well, we use Stripe out of the box and then for finance metrics, we use a software called ProfitWell that sits on top of Stripe. And then good old spreadsheets, man. Okay, so you don't have really a 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 on one. Pretty much.
We have just a little bit of automation we've started to build 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 a timeline. You said launched in 2014? I think we created the company in 2014.
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Chapter 5: How has Mixmax's funding strategy evolved over time?
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? Probably around 13 million. Okay. And why go the funded route? Why not really stay disciplined, try and stay bootstrapped? Amazing. So in my mind, a little bit, I think bootstrapped 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, at least for the type of product we were building, we needed some seed funding in order to 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 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.
Chapter 6: What is the churn rate for Mixmax and how is it managed?
Yeah. It makes good sense. Where's most the 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-market teams. So we just brought on a really amazing marketing leader two, three months ago, 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 Mixmax was our sales team. Yeah, that's funny. What's your team size today total? Total, well, 48 people of which 11 are distributed. Oh, great. Okay. So remote and San Fran? Yeah.
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.
Chapter 7: How does Mixmax measure its customer metrics?
I always eat right there on the sweet green. And I know when I go up and down, you got kind of optimizely or unbalanced on kind of one end and you walk down the street and you see the little mixed mat kind of brick facade there at the start with the nice orange neon, or sorry, purple neon light on the inside. Oh, nice. You saw that the best invested $1,000 we ever did, I think.
It is some cool factor to it. Maybe it helps your hiring and recruiting a little bit, right? All right, 48 folks. Well, we did have at least one. Yeah, we did have at least one engineer who was 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.
And over the past four or five years, how many customers have you scaled to? We are... So if you think about it, 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, though? 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, et cetera.
Chapter 8: What future developments are planned for Mixmax?
We definitely have some BI debt we need to address. Listen, it's not an easy problem. I mean, I've interviewed again about 3,000 B2B SaaS CEOs. Everyone that has a model like this has this exact same problem. And it's like, 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 in finance 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 oh that's to address that issue that you yeah yeah it it um
And MacBooks just aren't powerful enough to like chug through that Excel sheet. And I mean, look, you gave me two numbers, 10,000 credit cards, $40 ARPU. I can kind of back into a minimum MRR. There are about 400 grand. Is that a, you know, is that a fair minimum? That would be understating it.
But I'm not, I don't want to push you for more accurate numbers unless you want to give me more accurate numbers, but minimum 10,000 times 40 is 400 grand a month. 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? We can leave it at that.
I think what we shared before is that we're north of 5 million and 10,000 customers. Is 10 in sight? Do you think it's in striking distance in the next six months or 12 months or no? I'm sorry, if what is? Is 10 million ARR, is that in striking distance or it still feels like a stretch goal? I think for 2018, that's definitely a stretch goal.
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 ARR today, where were you a year ago? A year ago, well, we've kind of had a trajectory of 3X, 3X, and like a little bit north of 2X in the past year. Okay. So fair to say about 2.5 million ARR a year ago? Yeah.
Okay, good. 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 firm metric on that related to our BI debt. It's a mix of both. We have really healthy expansion characteristics in our cohorts.
Around what pricing axes? I'm sorry. The expansions 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 a seat expansion kind of like happens on its own. That's great. Churn is critical in any SaaS company.
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