The story reads like an episode of the HBO television series Silicon Valley. Fearless (or naïve?) twenty-something entrepreneurs drop out of college to start a business developing web and mobile analytics against entrenched players like Google (much like Pied Piper nemesis Hooli). Fail, then succeed, and then go on to approach billion-dollar valuation status.
Only this story is true.
The company is Mixpanel and the co-founder and CEO is 27-year old Suhail Doshi.
The concept of Mixpanel was conceived after Doshi and his co-founder dropped out of college in 2009 and were then subsequently accepted to the highly regarded seed accelerator, Y Combinator. They went on to do the unthinkable at the time, raise venture capital during the Great Recession, which Doshi recalled as ‘ridiculous,’ especially considering 50 percent of their Y Combinator batch died.
“We raised money and failed multiple times before we succeeded,” says Doshi.
Mixpanel is a San Francisco-based analytics platform for web and mobile applications, enabling businesses to study consumer behavior. Tracking some 50 billion interactions a month, it now boasts more than 3,500 customers including Uber, Spotify and Healthcare.gov and employs 230 people at offices in New York and San Francisco. The company has raised over $77 million in funding on a valuation of $865 million, with major backing led by Andreesen Horowitz and Sequoia Capital.
Doshi and his co-founder Tim Trefren started the company with almost no network. Both were relatively unknowns in Silicon Valley and neither had connections following their stints at Arizona State (not exactly well-known as a hot-bed for tech entrepreneurs).
“When I look back at my life, I think ‘Wow, we really started from an infancy relative to others,’” he recalls.
Doshi and Trefren were not even considered data experts that focused on this specific category; rather they had the audacity and perhaps naivety to craft a better idea. “When Tim and I started the company, we were barely 20-years old and neither of us had ever had a full-time career. The closest I came was an internship at a tech startup,” said Doshi. “But I got a paycheck and I wrote some code. We weren’t data scientists or former Googlers. Hell, we weren’t even able to buy alcohol yet, so we, quite literally, were unable to ‘wine-and-dine’ customer prospects.”
Amazingly, it shows that if the founders of a company can be relentlessly resourceful at figuring out what the products need to do and work really hard, they can succeed against all notions of conventional wisdom and accepted practice.
“We beat people in our field who were experts – validating what people in the field actually deemed experts at the time. We had no management experience; we didn’t know how to raise money. We had no idea how to even get in contact with venture capitalists,” said Doshi, “Even if we did, we had no idea how we would raise money with them.”
So here you have two kids from ASU who have little to no experience, no formal degrees and no capital; dubbing them a risky bet to say the least. “I don’t even know if I would have invested in myself at that age now that I know what I know,” Doshi recalls.
So how did they get someone to believe in them?
While at Y Combinator, they raised funds while giving up 7 percent of the company. They then found their first investors in Max Levchin, one of the original co-founders of PayPal, and Michael Birch, co-founder of Bebo, who both put in $500,000 in October of ’09. Doshi had worked for Levchin during an internship at Slide and quickly recognized how hard Doshi was willing to work.
The Mixpanel co-founders then went on to build their company and eventually found themselves making $1 million a month, catapulting to profitability faster than most success stories you read about today. “Today, we are no longer considered profitable, because we’ve now invested in scaling the company instead,” interjects Doshi. “We now track about 50 billion actions per month. This is really important. We charge our customers on the volume of data that they send out, so that’s about 16 terabytes of data interactions per month, and that number is growing constantly. We have tens of thousands of premium customers.”
Doshi attributed the company’s dramatic growth to their focus on helping their clients track actions instead of page views. “It took some time for people to start to care about mobile versus desktop in everything they do.”
Mixpanel believes that tracking what Doshi refers to as ”BS metrics” does not create real value in today’s online environment. The technology prescribed the right metrics to track, which is really just actions, which people take – from uploading a photo in a sharing app, to playing a song in Spotify, or reserving a table on OpenTable.
Then, he says, mobile happened. And while today, the attention focused on mobile is obvious; it was not an immediate acceptance. Clearly, the investment was not being made in the less tech-savvy companies but he surmises they knew mobile mattered, they just didn’t know how it mattered.
“This became analogous to how the world treated the Internet when it first rose to acceptance,” Doshi deducts. “Mobile really transformed business because the perceptions of page views do not exist on mobile, which then minimizes the measuring of downloads and installs.”
Mixpanel was then able to prescribe the right metric that people should use.
But what about the future? What’s next for Mixpanel? As the company grows, does Doshi fear web and data analytics giants like Google, Adobe, Oracle or IBM?
“We built our company during one of the most tumultuous economic times in modern history and we have always faced an uphill battle fighting any number of incumbents,” he evokes. “You have to embrace your agility during your infancy to move faster than the incumbents.”
He claims that being a much smaller company has strategic advantages, allowing you to make faster decisions on the fly giving you the ability to outpace the level of product innovation, sales and marketing strategy.
“This battle will never change,” says Doshi. “We always had a different set of resources previously. When it was just Tim and I, we wondered how were we ever going to compete with Omniture. We didn’t even have money. So it’s really just about persevering and realizing you’re playing in a bigger pool and that’s perfectly fine.”
Mixpanel has no plans of slowing down, even as they grow.
“We’re going to be three or four years ahead of them in product innovation, so even if they have an enormous sales and marketing machine, they won’t be able to sell the same products,” says Doshi.
The company has already done a good job helping the world learn from its data, which, according to Doshi, is their mission. And now they’re starting to steadily push the company towards predicting the future, which is something many of the aforementioned companies do in a tangible, usable way.
Mixpanel recently launched its first product that can predict the future and over 2,000 business customers have already begun using it. Customers can ask Mixpanel’s new predictive analytics product, dubbed Predict, to help them answer previously unsolvable questions. A recipe website, for example, might want to know the number of times people will save a recipe. A dating website might ask whether a site visitor will eventually subscribe to its dating app. A fantasy sports site might ask, “Is this person going to ultimately enter a contest to compete with their friends?”
Doshi says his mission to help companies predict the future mirrors Elon Musk’s goal to achieve affordable space travel. It seems impossible – until you try really hard.
And few know more about the virtues of trying hard than Suhail Doshi.
With new articles added daily and loads of original content, Netfluence is your source for e-commerce news and trends. Be sure to bookmark us and check in regularly for the latest industry headlines.
Need help with a project? Visit our parent company: http://www.netfluencecorp.com