The Art Of Mixing Technology And Relationships with Olof Mathé
I want to start this show with a question. What would happen to your business if you build better relationships with your prospects? Would you have more clients? It turns out that communication is the key to creating great relationships. Frankly, most of us suck at doing this consistently, regularly and with passion. That’s why I invited my guest to speak to us. As an American living in Sweden, he grew up in an academically-oriented family and went to France to study engineering and finance, but the startup bug bit hard. He found himself taking the risk to build not one, but two startups that didn’t quite make it and then moving to New York. After a stint at McKinsey, with that entrepreneurial fire still burning inside, he ended up hooking up with a couple of partners. Together, they realized the perfect business was a mix of both technology and relationships. His company, MixMax, has mastered the art of both. Welcome, Olof Mathé, to the show.
Thanks, Mitch. It’s great to be here.
I’m so glad to have you here. I used your product for six months. I loved it. I thought it was completely awesome and innovative. That’s why I jumped at the chance to get you on the show and talk to you. You’ve done something very special. We’re going to get into exactly how you did that and why, but as we do with every guest, let’s start at the beginning. How did you get here?
It started with a couple of solid relationships and a desire to continue to further them on a professional level. I’m talking about my co-founders.
The people that you built this company with, you met in New York I would assume.
We met in San Francisco. I started MixMax together with two former colleagues of mine, Brad Vogel and Chanpory Rith. MixMax is a technology company and we had worked as a product design and engineering leads at another company. We enjoyed working together and one of the emotional reasons for creating the company was that this was an opportunity to continue to work together.
Those types of things start great. You turn to somebody who you love and enjoy working with and say, “Someday we should start a company together.” All of a sudden, that seed gets planted and watch how it evolves as it did in you.
One of the aspects that makes that successful for us to be working together was not necessarily one of our friendship, although there’s friendship. It was one of strength and working relationship. I think about friendship versus working relationship as slightly different. Working relationships thrive when there is a fair amount of healthy tension and different viewpoints. That certainly can bring a lot of richness to friendship as well, but might not be the primary thing you seek having a friendship.
My friendship with Chet Holmes led us to want to work together as well. Chet and I then came together and I worked with Chet to help build his company. We went on to bring Tony Robbins into the company and together we built Business Breakthroughs, which is one of the most perfect examples of friends and associates coming together to create something wonderful, which is what you did. Let’s go back a little bit further. You’re a very educated guy.
Potentially, over-educated perhaps in retrospect. I could have gone started earlier tough.
I’ll say to you what I’ve always told my daughter. I don’t think education is ever wasted. It may not be used in exactly the way you thought you might, but education is about learning how to think. It’s not always about learning a skill or a set of procedures. The art of learning how to think as in finance or engineering, these things are tools that we develop and hone throughout our lives. You’ve got such a good start. You went to school in France, you must speak French. There you got one full step ahead of me. I don’t speak any other language. I barely speak English. That’s fantastic that you do that.
It was fun and also very humbling experience in a lot of ways. It’s interesting reflecting on my educational background. I always wanted to do research of some shape or form and I’ve discovered that that environment wasn’t fast-paced or what I perceived as dynamic enough. Fortunately, at the time I had a good friend I met in high school who had started his own business. He gave me the internet and startup bug. I discovered that startups and businesses are a great way to be creative and create something from scratch. That regardless had been probably the underlying motivation in wanting to do research in the first place.
I don’t know if you know this about me, but I started a software company many years ago back in 1985, which is the company that I grew to eight figures and sold. The premise was the same. My friend and I, we’re neighbors and became friends and spotted the opportunity and said, “I think we could do this,” and we did. That story I’ve told many times. The short version is that we came together to build a software tool to allow computers to be deducted from tax returns as a business tool. As we built the entire product out and as we collected research from both accounting firms and users as well, just as we finished the product, just as we quit our jobs, just as we were ready to print a documentation and launch, the IRS relaxed its rulings and now our product was completely without use.
We had to pivot and we had to figure out what we had created and where else could it be used. Thank God that happened because I don’t think we would have sold 25 copies if we would have started the way we did. It turned out that we pivoted into a very lucrative space called time in billing accounting, which allowed us to bring all new ideas into that space. Most of our industry was dominated by old-school companies running compiled Fortran on PCs, believe it or not. We brought modern tools and technology directly into that environment. We built some fantastically wonderful fun tools and we dominated the market. That was the best thing. That was so much fun doing.
There’s potentially a little bit of similar story with regards to MixMax in the early days, not so much in terms of the regulatory risk and hurdles that you had. More so in terms of starting out with a particular intention and then discovering that your customers actually see you as something else and then doubling down on that.In business, there are people that cannot provide anything but money, while there are others who offer a network to tap into. Click To Tweet
Why don’t we get into that a little bit? What was the original idea for MixMax?
It will make sense to share a little bit about what MixMax does. MixMax is a communication platform for people in sales, success and recruiting. What we do that’s unique is we integrate across all the tools you use in communication such as email, phone, your CRM, a chat app like Slack, even document signing products to automate all the workflows that you have to deal with if you’re in a sales or success role. A simple example of this is our integration with calendaring. Let’s say you need to set up a time to meet someone. You can just, on a keystroke inside of your existing email client, insert available times that show up in the message. When your recipient taps on a time, the meeting is automatically set up. You take what used to be ten steps back and forth to find time to meet and with MixMax, it’s just a one-click interaction. You save so much time through it. That’s what MixMax is to give a simple example. That’s also how MixMax started out as a product.
While we didn’t integrate with as many different tools as we do now, communications and especially email that we use for all of our externally facing communications when we want to talk to people outside of our team has literally not changed since its inception more than 40 years ago. We said, “Isn’t it time that email gets a refresh and upgrade?” How can we make email as awesome as all the other modes of communication that we used today? Be it text messaging or Facebook Messenger or Slack or task managers like Asana. For us, it was very much initially about bringing real expressiveness to this mode of communication and that was the original impetus. Since then, it’s evolved quite a bit. I’m happy to chat about that too.
I’ve had a chance to experience it and use it in the way that you’re describing. For the audience, this is a tool that is a Gmail add-on and there are many Gmail add-ons. Would you call it an extension, Olof?
A part of the product is an extension. You can use that directly on top of your existing Gmail. There’s also a web app where you set up most of the automation and where you get full analytics across your team and where you can collaborate within your team.
When I first started using it, one of the things I loved about it was that I was able to create basically a series of emails and then time them to go out as I needed. It was great for me because when I work with clients, I start with an education series. I used it to help automate that series, which I loved. I thought it was fantastic. We had some other team members who were using something else and they fought about which would be the best thing. I kept using it, I liked it and for me, it worked great. The person who ideally would use this product is probably someone who would find themselves email-centric or email-focused. Would you agree?
Yes, it’s anyone who has a role that somehow is related to sales or customer success or potentially even recruiting. Those are a lot of small business owners where you do all of the above and it’s also people in companies that specifically had those types of roles.
When you bring a new client onboard, what is that experience like?
In a lot of cases, and this is core to the product, the product is intuitive and it should be self-explanatory that you can get started off the bat on your own and to see the instant value. A core product principle for us is what we would almost call a success of discovery. You might start using the product for calendaring integration and then discover value in a whole host of other features, like what you mentioned around email campaigns, automated reminders, perhaps things like CRM sinks, Slack notifications. There’s an infinite depth of richness in the product in terms of its ability to automate your most common workflows. That being said, we want the initial experience to be so simple and delightful. They can get instant value even if you’re just using part of the product.
Let’s go back to when you first launched the company. You had a team, you develop the core product and it was ready to go. Talk a little bit about, for the sake of those out there who are thinking of launching a product or in the process, what did you do to launch it?
This will probably be very specific to our industry, which is San Francisco Tech. There are even now services that are specifically for helping people launch products. There is a service called Product Hunt for example. It depends on the type of product you have and your particular target audience. For us, since we started very much focused on people in tech and people at tech companies. We launched on this service called Product Hunt, which is like an announcement board for new tech products. This was probably in 2015, if not a little bit longer. There were a lot of early adopters and tech influencers monitoring that site early and so that was a good platform for us. I’d encourage the audience to figure out what their version of that platform is, where they can get early adopters specifically in their industry.
The idea was you made the announcement on Product Hunt. What else did you do? That’s a great place of course, but you must have done something else besides that.
Funnily enough, I can’t think of anything else we did. We used social quite a bit on our own accounts. Probably the bigger aspect of this was it was helpful for us to launch with early adopters. Early adopters like to talk about new products that they’re trying. We’ve got some natural buzz in the bay area around the product. The other thing I would say about MixMax is as a product it has a fair amount of word of mouth and also there is a number of experiences when you experienced them. They have a fair amount of delight. Perhaps you’re embedding times from your calendar in a message or you’re even embedding a survey or a poll or a video directly in the message. When people see that, they get excited as well. We had a fair amount of what I’d call product lead to growth.
The thing about your product is it’s viral. In other words, as you send an email and as it contains a component of your toolset, people who interact with it will wonder, “How did he do that? How does somebody embed a calendar in email?” What you’re doing is you’re showing off the product and you’re giving others the chance to potentially get a free trial as well.
That was something we did in the product that’s probably not in the normal toolchain of a marketer if you will. Whether or not you have a tech product right there, there are versions of that type of virality that you can try to emulate.An investor ends up being not just an investor but a colleague as well. Click To Tweet
For some contrast, back before there was an internet. When we were launching software in the days of floppy disks, it wasn’t quite Product Hunt but what I did is I went onto CompuServe and found the forums for the industries that I believed our software will be used in. I frequented those forums and found beta testers there.
It’s a great example of something of similar use case, which takes its form and the service I mentioned like Product Hunt and all the online forum that exists.
Take your product and find a group of passionate users or potential users and ask them to test it out and then give you suggestions. We chose the legal market, but we’re not lawyers. We didn’t know anything about the legal market. In fact, we don’t even like attorneys that much at all but yet, attorneys were going to be our main clients. Anything that an attorney said to do, we did. If we had beta testers who are lawyers and they were testing the product and they said, “We bill in 0.6-hour increments and you need to make sure that you can handle that.” We said, “Okay,” and we just did it. Every single suggestion that was offered, we were able to implement rapidly and send out a new version very quickly.
You’re making me realize there’s an important point I didn’t mention. Prior to launching, we had soft launched. Soft launch meant that we had a private beta and we let people use the product. We interacted frequently with these people in order to get product feedback and build a right level of advocacy among them. We had a set of fans even prior to launching.
From the time you launched to dollar one, how long did that take?
That probably didn’t take more than an hour or so. Setting up payments, there are a number of payment services you can use for building a technology product like Stripe or Braintree or something like that. We didn’t have any upsells in the product. We did however put up a pricing page and that was one of the conditions for us to launch. We are very attached to that. We never thought anyone was going to go on the pricing page and buy something in the product because we hadn’t even built real feature gates yet. It turned out that there were people who, either from the marketing side, decided that they wanted to purchase or because they had tested the product. We had some folks buy from the get-go, which was exciting.
I know that feeling so well. We were before the internet so we had fax machines. I would sometimes take my lunch in the fax room. We had a room filled with fax machines and we would send out a notice that the software upgrade was about to be released and offer people a discount if they bought early. I would sit there and eat my lunch and watch six fax machines churning out money. That’s the way I saw it. Every 30 seconds, a new order was coming in on the fax machines. It was very exciting.
That’s amazing. I love the physicality of the printing.
It’s the same idea as you start a business. You have no idea whether anyone’s going to like it. Then all of a sudden, and in your case an hour later, somebody pays for the product. When did you start to get to the point where you needed to raise money? How long did it take from the day you started to the day that you were able to raise money?
This is probably a little bit of a San Francisco Silicon Valley peculiarity. We raised money before the product was publicly launched, it was in private beta. One of the advantages if you build a technology company in terms of being based out in San Francisco is there is a full network of Angel investors that are excited to meet founding teams and invest in products that have some traction but might not even be publicly available yet. We raised before the product was publicly available.
That again is unique. I don’t know that a lot of companies have the ability to do that. Would it be okay if you shared with us how much money you raised and how much equity you gave away to do so?
This is 2018 and even back when we raised, 2014 or 2015, fundraising was frothy. We raised a total of $3 million in our seed round. It was a little bit spread out, I forget the exact equity that we gave up for it but it probably around about 25% or something like that, potentially a little bit more. A standard size of the company at a very favorable valuation. Technically, it was over the course of slightly two separate financings where some of the investors added in more money once they saw how much traction we were getting.
The lesson here is important. The lesson is that you need traction. While you were able to raise money relatively quickly and what some might say relatively easily, you did the research upfront. You knew what you were doing and you came out with a product that got a great reception from the beginning. Raising money in an environment that you were in, the Silicon Valley environment, makes everything look easy. For everyone else out there, we generally don’t advise trying to raise money until you have hit dollar one, until you have proven that there’s a business model that people will pay for and participate in. That’s the way most startups are now. It used to be you’ve got a great idea, you can go get it funded. Nowadays, you have a great idea, you build it, you test it. You put it in the hands of target users or beta users until eventually, somebody pays for it. Then you have a viable enterprise that can be funded by outside third parties and also increases the odds of success for them and the pre-money valuation for you.
There is no glamor or intrinsic value in raising money from outside investors to your point. Ideally, if you’re in an industry where the costs tickets started as low, there’s literally no reason to do it.
Let’s talk about this because there are people that are in a situation where they’d like to raise money or maybe have. Let’s get a little bit deeper into this. What about the investors themselves? Did they want a board seat? Did they want to participate as an advisor or did they simply want to make the investment and have that as an investment?There are a lot of ways you can grow revenue by more or less experimenting with ways people can purchase your product. Click To Tweet
In our case, we’ve been very lucky. We’ve worked with and one of the premier Angel investors out here. His name is Michael Dearing. It was a fund called Harrison Metal. Michael is on our board and was an incredibly helpful forcing function for us in a lot of different ways. Otherwise, you might not have a constant relationship with your investors. That’s how it worked for us. With our Angel round, we also had a whole set of other investors and not all investors worked that way. One question to ask oneself if anyone’s considering raising money is, “Do you want something else than just the money? If so, what is that?” That might help you in figuring out who the right investor might be.
That’s a great question and an essential one because there are people that cannot provide anything but money. Then there are others who offer a network to tap into. When we first started working with Zero Stage Capital in Cambridge, Massachusetts, one of the advantages of being funded by them is the fact that they had a lot of smart entrepreneurs and business people on staff. More importantly, they were plugged into a network of potential acquirers and also corporate customers. For us, when we raised money, our first round was $2.5 million and we just kept going. We raised $8 million but the point was we did it with the encouragement of our first seed investment and with all of the help required to make the introductions to bring us series A and then eventually series B to fruition. The quality of investors makes a big difference in your lives once you bring their money in.
To expand a little bit on the notion of quality, the overlooked or under-appreciated aspect of investors is how well do you get along with them personally. It’s easy before you get started to perhaps be seduced by a brand of the firm or something like that and perhaps be willing to compensate on your personal fit with someone. Personally, I would encourage people to go with an amazing partner, perhaps a firm that’s lesser known but amazing, in the sense that you jive with them from a working perspective rather than someone you have less of a good relationship with but who perhaps comes from a bigger brand name. The reason for this is an investor ends up being not just an investor, but ends up being a colleague and you’re going to be working with them for a very long time. Making sure you have a somewhat of a shared vocabulary or a fruitful relationship is important.
To our audience, we are talking to Olof Mathé who is the founder and CEO of MixMax, a technology company built around creating fantastic relationships with prospects and clients and teams. We’re talking about how he started his company, how he got funding, all of this stuff related to the things that many of you are doing right now. You said that there would be a free trial available. Can we offer that free trial to our audience?
We’d be super excited to have you go to MixMax.com and there you can get a free fourteen-day trial. I’m excited about that. I think that whatever your core audience that it can be a good fit.
I think so too, which is why I invited you to be a guest. Let’s go deeper a little bit now into the mechanics of running a company and I assume a rapid growth company. Can you give us an idea of scale? How have you grown from inception to now?
There are so many dimensions along in which to answer that question. For us, and this probably comes a little bit with our DNA in the founding team or professional forte where we’ve always worked, has been in product and this goes back to this notion of product lead growth. Perhaps almost we to a fault focused on how can we build a product that’s as easy to use and compelling and naturally adds as much value as possible so that people want to talk about it and share it. One of our core values as a company is to turn customers into heroes at work. We want the product to be so compelling that if I introduced MixMax to you, then you feel perpetual gratitude for that introduction. I placed this emphasis on the product in distinction to focusing on sales or partnerships or more traditional marketing levers.
That attitude and that perspective are great for building awareness and for creating a fan base, which is what you’ve done. Can you talk a little bit about revenue growth?
Experimenting on ways for people to buy your product is almost as important as building out the product itself. What I mean by that is there’s a lot of experimentation you can do in terms of pricing and packaging which doesn’t affect the fundamental feature set itself. By means of example, when we started, we had perhaps two paid plans. We introduced a third paid plan and revenue started to grow faster. There wasn’t a fundamental change in the product, there was just a change in the packaging. We’ve done other things throughout the lifetime of the company that helps spur growth. Some examples would be we’ve added or experimented with upsells inside of the product, which has helped us grow and also made people more aware of the value they get. We made it possible for people to add other teammates from their team onto the product and pay for other people. You’re getting my drift. There are a lot of ways you can grow revenue by more or less experimenting with ways people can purchase your product.
Can you talk about numbers? Can you tell us what your revenue is and how it’s grown from inception?
The revenue number, I’m not at liberty to share but we’re north of 10,000 customers and have grown at a healthy clip from between three to two X year-over-year.
10,000 customers is a fantastic base. Clearly, because you’re Gmail-centric, the conversation that has probably come up many times is wouldn’t it be nice if Google bought us?
That’s something more that customers say. It wouldn’t be something we say internally. Part of the impetus for creating the company was to be able to continue to work together and create a genre-defining company and self-sustaining business. It’s interesting that some customers say that. Someone said that on Twitter and I was like, “That wouldn’t necessarily be great for product development and the product. I’m not sure that’s even in your best interest.”
We’ve seen what Google can do to products. I’m a photographer and I remember when Google purchased my favorite suite of photography tools, they put it on a shelf. It used to be $449. They then opened it up for free to everybody, which was wonderful but then they neglected it and that pretty much went obsolete until they sold it off.
There’s an area of unique focus you can get when you’re independent and G Suite and Google overall is one of our most important business partners. Our integration with Salesforce or Pipedrive as a CRM is very important to us. Those are relationships we’re excited about.Changing the world is more than thinking about how to change it; it's also about what positive impact you can have on the people around you. Click To Tweet
Let’s talk about those relationships. If someone wanted to put together a relationship, a business joint venture with Google or with some of the companies that you have, how did you go about doing that?
In our case, the beauty of this is just like MixMax to large extent, you can go in and self-serve the product and use it for a lot of those types of partnerships there, click through terms of service and you can do it out of the box without necessarily needing to connect with anyone or talk to anyone. It’s smooth in that way. Now as your business grows, if you start to integrate very deeply or they noticed that this integration has a lot of usages and very often you’ll get a contact point at the company. It’s also worth noting that in a lot of cases if you integrate with companies, you can become even a reason why someone might want to buy another product because you add value to it. We like to think, especially for a lot of companies that switched from Exchange and Outlook 365 that’s just moving to Gmail and Google apps can lead some a little bit feature poor. When they also get MixMax, they get a whole set of additional value way above and beyond what They had on Microsoft Exchange. It makes the transition to a G Suite and Google Apps even more valuable for them.
I would bet that your investors have probably asked you this question. When I advise startups, one of the things that I say is think about who could buy you or should buy you five to ten years from now because that in some way might guide your path as you move forward in growing and building your company and your products. Who should buy you five to ten years from now?
I would almost turn that question around not to be too facetious about it. As a founder and entrepreneur, the core question that you want to focus on is who should your core customers be? I’m being a little bit flippant in saying who should buy you, which customers should buy the product. I’m a fundamental believer that if you build a business with the intent of being acquired, you want to end up anywhere because your mind is elsewhere. Opportunity costs are the most important thing to keep in mind as a founder. That means that you need to focus relentlessly on turning your customers into heroes. I hope that wasn’t too flippant as an answer.
I know this because number one, I’ve been an Angel investor. I’ve invested in 21 companies and it’s one of the questions that I would always ask when I sit down with entrepreneurs is, “Have you thought about where this goes at some point in a decade from now or more?” I figured one of your investors might have asked you that question.
Given the business we’re in, there are a lot of bigger companies that could get a lot of value from adding a product like MixMax to their product suite. It’s almost literally any SaaS company of the big ones like from a Google through to a Salesforce, through to a Zendesk, through to a HubSpot, through to whatever it might be. MixMax can add a lot of value to anyone’s product suite in that regard.
We’re at the point in the interview where we are going to dive a little bit deeper into you. The way I do that is with a question that I enjoy asking and I always love the answers. This is a question about what your values are about and the question is this. Who, in all of space and time, would you like to have one hour to enjoy a walk in the park, a quick lunch or an intense conversation with?
If you’re saying all space and time perhaps it’s too much of a twist, my future self, to figure out what mistakes I’m bound to make. Otherwise, this might be something completely outside of the scope of MixMax and in our business. This would be a historian and an author who’s alive today whose name is Mary Beard, who’s a professor of antiquity at Oxford. She wrote a well-known book about the history of ancient Rome called SPQR. She also has a bunch of TV shows on the BBC. She is iconoclastic and that she defies what a TV persona needs to look like and be like and has a very idiosyncratic style. She’s able to bring back ancient history and make it relatable to us today and show how in a lot of ways nothing’s really changed. The thing that has changed is the technology that we have available to us. That’s someone I’m fascinated by and I’ve read all of her books so that might be the one. Probably too much of a niche one for anyone to feel that they can relate to who I just mentioned but check her out.
Mary, if you’re listening, we have somebody who would like to meet you. Step up, Mary, we will make the intro for you. That’s great and you’re not the first one to say my future self, which is a great answer. Here comes the grand finale, the change the world question. What is it that you are doing or would like to do that truly has the potential to literally change the world?
Perhaps I could answer that into two things. One is I would like to get more involved in helping solve one of the big challenges we faced, which is climate change and that literally has the potential to change the world. Otherwise, perhaps this is my entrepreneurial self. This goes to when you start a company. It’s helpful to start small with a narrow target audience where you’re trying to help a particular customer. Thinking about changing the world, I perhaps think less about how am I going to change the world and more how can I have a positive impact on people in my immediate vicinity? A lot of emotions and change are contagious. If you’re next to someone who’s stressed, you tend to get stressed. If you’re next to someone who’s happy, you tend to be happy. For us and with regards to MixMax, it’s how can we create an amazing, open and positive work culture?
That makes a lot of sense and it’s a great place to invest your time and efforts because it would make the world a better place. Thanks again for the time. I enjoyed our conversation. If you enjoyed this conversation as well, go on to iTunes. How about give us five stars? Write a nice little review about the show or anything you like. Olof for you, we have only gratitude for being here with me and sharing your story and your wisdom with my audience. For our audience, go to MixMax.com, get ahold of that fourteen-day trial and check it out. It might be exactly what you’re looking for.
Thanks so much, Mitch. Thanks, everyone.
Resources Mentioned in This Episode:
- Olof Mathé
- Brad Vogel
- Chanpory Rith
- Harrison Metal
- Your First Thousand Clients on iTunes
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