MixPanel has very generous free plan and many free users. Sales people were hired to try to convert free users into paying customers. Plan failed, sales people shown the door.
This is why companies need to think really hard about freemium model. In case of MixPanel, many of their free users keep adjusting so they send just enough data to stay under free plan. They are probably not going to be persuaded by sales people to pay.
As one of those free MixPanel users - their non-free plan is just too expensive.
I eventually stopped using MixPanel altogether. In a choice between "only get a small subset of data" and "get all the data, but super super expensively", I decided I just don't care enough and opted for no data. Or rather, the combination of gAnalytics and a few others is Good Enough (tm).
I had the same experience, and I have to say that I'm torn in that I can see both sides. MixPanel doesn't want to screw around with $10 or $20/month plans, but I have no interest in paying $150/month.
They want bigger customers than me, which is fine, but that also means that if and when I turn into a bigger customer, I might already be locked into a different solution.
For the reason you suggest (lock-in during growth), it seems to me that they are being foolish by not having a startup tier. Tens of thousands of $10/mo or $20/mo customers adds up to quite significant revenue.
Maybe this is where they are heading? The heavy sales team route requires larger customers for it to be worth their time converting them to paid users.
They might be looking to cut back on sales and try a more automated approach to convert people to smaller plans.
Either you really aren't getting value, or you don't have many users of your own. $150/mo is much cheaper than building and maintaining something equivalent. $150/mo is nothing compared to even payroll taxes, let alone payroll itself.
I hope folks realize that's ok. Mixpanel made a conscious decision to start at $150 and understands that for certain people theirs no ROI at that price point. I mean Apple could sell a $300 iPhone but they'll leave that to Android.
We were one of these potential bigger customers willing to fork over thousands per month, but the unit cost was still too expensive for us. We tried to negotiate a better bulk rate, but their team was unresponsive and so we eventually went with another service that was more responsive to our needs. According to the article they only have ~3k paying customers, which means they only care about giant top tier customers willing to pay top dollar. Seems like a mistake to me, but what I only know from the potential client perspective.
When I looked at MixPanel we were already at more than 8 million page views per month and wanting to track more events than that.
But as we wanted to try MixPanel, the best way was to start by sampling a small number of users and activities.
As our trial of the software progressed we found we got way more value out of sampling a smaller set that we could make sense of rather than measuring everything.
For us, MixPanel became one more tool in a wider toolset. We didn't see the value in jumping up to the paid level as we didn't feel it would replace all of the other tools.
This. We use Mixpanel's free plan and were recently hit up by their sales team. It's unfortunate because Mixpanel is an amazing product that we would be happy to pay for, but it's just too expensive relative to the value we get out of it.
I spent a day hooking up Mixpanel. Went over quota quickly and discovered that, instead of just dropping data when you go over quota, they lock your account and blackmail you to becoming a paying customer.
I can't remember my conversation with them, but it was clear they were a bunch of a-holes I didn't want to do business with.
I had a really bad experience where a Mixpanel salesman aggressively cold emailed me on my personal email (I'm guessing he got it through Linkedin?) and continued to do so even though I told him not to contact me multiple times and that I had no ability to make or influence purchasing decisions for analytics software. I understand hustling, but at the time it came off as really desperate.
I always kind of chuckle when people assume a salesperson tracked down their personal email vs the much more likely scenario that you used it during a trial signup and just forget. At my company a customer's assistant demanded to know why we charged her bosses personal CC for a subscription because "he never uses that for work ever!" Smh...
One of the things lots of people (including founders) don't understand is that when they're converting from early stage VC subsidized business models to "we need to actually be a real business and make money", maintaining freemium means that the subsidies move from the VCs to paid customers, and paying customers hate to cover freeloaders.
Hey everyone, I am one of the founders at Mixpanel. Layoffs were tough on us, we did over hire a bit, and wanted to make the company more lean. We are deeply sorry for those that are no longer part of Mixpanel - they were our friends and co-workers that we continue to miss.
It's easy to pay lip service like "We are deeply sorry for those that are no longer part of Mixpanel". I would be interested more in "Show me the money" like talks.
Hi Suhail! I love MixPanel and think you guys really know how to time your new features.
I'd love it if MixPanel could offer prices adjusted to foreign currency (similar to Steam?)
I live in Brazil and the recent devaluation of the BRL to the USD has made MixPanel prohibitively expensive.
Should the preverbal hit the fan, would you open-source the code and have a paid support plan... should all else fails to monetize this?
Not sure why the down votes. I don't know the balance sheet of the company. Also lots of other companies like Aerospike open source their code and make money from support plans.
We aren't having trouble monetizing the business. Our revenue projections remain the same even though we let some staff go and we are doing fine on that end. Mixpanel isn't going anywhere if that's your concern. If anything, we are investing a lot more in engineering, product, and design to make our products a lot better for all you.
It's too early to say what we'd do in an outcome like that. I certainly wouldn't want to see everything we've built go to waste.
Which is odd. Sales people don't cost much. They either pay for themselves or they're let go quickly. They're not usually let go in a group like that. Usually engineers are cut early; they cost more. Not trying to pick a fight, I've just been through layoffs before and this is how the finance team always justifies their cuts.
If things are going bad, the engineers become assets for a potential aquisition. I've never seen engineers let go when things get dicey. Almost everyone else is let go first.
That's probably a sign of frothy (dare I say bubble?) times. The opposite is usually the case. Cut the engineers and outsource the work was the M.O. for a decade+.
Did you fire after they finished development or during? At what point did you realize that you did not have enough income to support that many? How much were you expecting to make by this time?
You seem freindly but these questions are often left unanswered. Im usually led to believe companies are looking for contract workers but hire sallery because what is available isnt what they were looking for. Nothing personel, just a pattern
As I mentioned I just found the link in the venturebeat article, ask their CEO for more data.
About half of the numbers are redacted, but you can see if it's a single digit or a double digit number. And you can read in the 2015/2016 plan on page 10:
* 3x sales headcount and rapidly race towards distribution
* Reduce sales ramp time by 30-50% via sales enablement
* Double headcount every 6-9 months
It doesn't add up with the "He confirmed to TechCrunch that 18 people were laid off, mostly in sales"
That's a worrying sign - sales are generally the last people to go - if you're under financial stress you generally need revenue and customers.
Unless they somehow believe they can pull off another Atlassian (who actually spend a ton of money on marketing, despite being seen as a "no salesperson" business) I'd say the $65m funding they received is going down the gurgler.
That's not necessarily true, you could have also overhired on sales or realized that you need to increase sales quotas to hit your profitability targets which would result in letting go of underperforming folks.
'sales are generally the last people to go' - generally where? In startups , especially engineering driven ones, shredding parts of sales team first is not un-heard of.
Also, according to the CEO, they over-hired. Looks like they tried to expand more than they could handle.
Doesn't seem like a worrying sign to me.
Generally if it's an engineering focused set of founders they're most likely to get sales wrong. And sales driven leadership tends to get engineering hiring wrong. To way over simplify, both sides think "Well if we 2x headcount we'll 2x revenue/new features" They don't make that mistake on the discipline they came up with.
I ran a free service for a long while... they should just dump the free service or at least not accept any more free customers. They will save a lot of money and since the customers don't transition up anyway it won't really affect their business. A business isn't a charity. I learned that the hard way!
the CEO's three favorite things are talking about how much he likes to drink, comparing himself to a gangster rapper, and a juvenile lack of self-awareness
Based on his LinkedIn profile, he can't be older than 30 and has never held a real job. Why exactly is someone like this running a company that has raised $77M instead of working as a junior engineer?
Shhtttt don't ask, the YC president never held a real job but that doesn't stop him from talking like he knows everything from astrophysics to socioeconomic stuff either.
There's nothing fundamentally wrong with being young or not having ever held a real job. There are certainly great founders who have done an admirable job despite their youth and lack of work experience (Zuckerberg comes to mind), but they are few and far between. It's just that these sorts of complaints about juvenile behavior are entirely understandable when you consider the founder's profile.
And to be fair to sama, I haven't seen any comments from YC alumni about how he compares himself to a gangster rapper. However, the trend of VCs pontificating on Twitter about topics that they don't have a good grasp on is somewhat irritating. The only person who has truly demonstrated the ability to "go deep" on (multiple) extremely complicated subjects, and successfully put his time/money where his mouth is, is Elon Musk. And even he showed a typical lack of self-awareness in his younger days[0].
Mixpanel has a great product but suffers quite a bit from the curse of having a product everyone loves but nobody wants to pay for.
The layoffs are a likely a further materialization of their struggles to get people to pay for the product at the rate they were hoping.
There's a lot of competition in this space out there now. Mixpanel isn't as unique as it once was. There's also the elephant in the room of questioning how much of the revenue in this sector comes from other companies surviving only on VC cash (i.e. cat video site analyzing page traffic that shows ads for a toothpaste delivery iPhone app that analyzes its social media interactions with users that turn out to just be bots in some Russian guy's basement). Point being the rapid downturn in VC funding recently isn't exactly helping Mixpanel's revenue either.
If it's mostly sales people, it is perfectly reasonable to think they are reassessing their outbound marketing efforts. For example, perhaps their sales channel produced poorer quality leads compared to organic or the type of product they were selling was low enough margin that the sales commission removed any profit they were getting.
I checked out mixpanel couple years ago and I couldn't get tied down to a service which didn't have a cheaper than a $150 plan. What if I find it very useful and then ran out of the free tier quota. That scenario was unacceptable and thus, we are not a client.
I already see other's comments in this thread of this very scenario. We dodged that bullet.
MixPanel has very generous free plan and many free users. Sales people were hired to try to convert free users into paying customers. Plan failed, sales people shown the door.
This is why companies need to think really hard about freemium model. In case of MixPanel, many of their free users keep adjusting so they send just enough data to stay under free plan. They are probably not going to be persuaded by sales people to pay.
As one of those free MixPanel users - their non-free plan is just too expensive.
I eventually stopped using MixPanel altogether. In a choice between "only get a small subset of data" and "get all the data, but super super expensively", I decided I just don't care enough and opted for no data. Or rather, the combination of gAnalytics and a few others is Good Enough (tm).
This was exactly the path our startup took as well.
I had the same experience, and I have to say that I'm torn in that I can see both sides. MixPanel doesn't want to screw around with $10 or $20/month plans, but I have no interest in paying $150/month.
They want bigger customers than me, which is fine, but that also means that if and when I turn into a bigger customer, I might already be locked into a different solution.
For the reason you suggest (lock-in during growth), it seems to me that they are being foolish by not having a startup tier. Tens of thousands of $10/mo or $20/mo customers adds up to quite significant revenue.
Maybe this is where they are heading? The heavy sales team route requires larger customers for it to be worth their time converting them to paid users.
They might be looking to cut back on sales and try a more automated approach to convert people to smaller plans.
It can also add a significant customer support burden, which is likely why they haven't done it.
Either you really aren't getting value, or you don't have many users of your own. $150/mo is much cheaper than building and maintaining something equivalent. $150/mo is nothing compared to even payroll taxes, let alone payroll itself.
right. yet, hopefully.
I hope folks realize that's ok. Mixpanel made a conscious decision to start at $150 and understands that for certain people theirs no ROI at that price point. I mean Apple could sell a $300 iPhone but they'll leave that to Android.
We were one of these potential bigger customers willing to fork over thousands per month, but the unit cost was still too expensive for us. We tried to negotiate a better bulk rate, but their team was unresponsive and so we eventually went with another service that was more responsive to our needs. According to the article they only have ~3k paying customers, which means they only care about giant top tier customers willing to pay top dollar. Seems like a mistake to me, but what I only know from the potential client perspective.
If you are doing 25,000 of fewer events, you are probably not making much money.
You actually get 200,000 free events if you put their badge on your website. The next tier is 500,000 events for $150/mo.
That's not true.
When I looked at MixPanel we were already at more than 8 million page views per month and wanting to track more events than that.
But as we wanted to try MixPanel, the best way was to start by sampling a small number of users and activities.
As our trial of the software progressed we found we got way more value out of sampling a smaller set that we could make sense of rather than measuring everything.
For us, MixPanel became one more tool in a wider toolset. We didn't see the value in jumping up to the paid level as we didn't feel it would replace all of the other tools.
Can you elaborate on the tools in a 'wider toolset'? I'm always eager to learn about new tools/services.
It's not a population of 25k events, but a sample size of 25k.
News organisations pay a lot of money for polls of only 1000-2000 people. 25k data points is quite sufficient in most cases.
This. We use Mixpanel's free plan and were recently hit up by their sales team. It's unfortunate because Mixpanel is an amazing product that we would be happy to pay for, but it's just too expensive relative to the value we get out of it.
Sounds like broken freemium: margins too low to sustain, price too much of a leap.
I spent a day hooking up Mixpanel. Went over quota quickly and discovered that, instead of just dropping data when you go over quota, they lock your account and blackmail you to becoming a paying customer.
I can't remember my conversation with them, but it was clear they were a bunch of a-holes I didn't want to do business with.
I tell everybody I can to avoid them.
I had a really bad experience where a Mixpanel salesman aggressively cold emailed me on my personal email (I'm guessing he got it through Linkedin?) and continued to do so even though I told him not to contact me multiple times and that I had no ability to make or influence purchasing decisions for analytics software. I understand hustling, but at the time it came off as really desperate.
well it looks like his job was on the line
I always kind of chuckle when people assume a salesperson tracked down their personal email vs the much more likely scenario that you used it during a trial signup and just forget. At my company a customer's assistant demanded to know why we charged her bosses personal CC for a subscription because "he never uses that for work ever!" Smh...
One of the things lots of people (including founders) don't understand is that when they're converting from early stage VC subsidized business models to "we need to actually be a real business and make money", maintaining freemium means that the subsidies move from the VCs to paid customers, and paying customers hate to cover freeloaders.
Isn't Dropbox having the same problem?
Source article: http://venturebeat.com/2016/01/08/mixpanel-starts-2016-with-...
Hey everyone, I am one of the founders at Mixpanel. Layoffs were tough on us, we did over hire a bit, and wanted to make the company more lean. We are deeply sorry for those that are no longer part of Mixpanel - they were our friends and co-workers that we continue to miss.
I am happy to answer any questions that I can.
what package are you giving to the laid off?
Likely under NDA. Curious why you're curious :)
It's easy to pay lip service like "We are deeply sorry for those that are no longer part of Mixpanel". I would be interested more in "Show me the money" like talks.
Hi Suhail! I love MixPanel and think you guys really know how to time your new features. I'd love it if MixPanel could offer prices adjusted to foreign currency (similar to Steam?) I live in Brazil and the recent devaluation of the BRL to the USD has made MixPanel prohibitively expensive.
Should the preverbal hit the fan, would you open-source the code and have a paid support plan... should all else fails to monetize this?
Not sure why the down votes. I don't know the balance sheet of the company. Also lots of other companies like Aerospike open source their code and make money from support plans.
We aren't having trouble monetizing the business. Our revenue projections remain the same even though we let some staff go and we are doing fine on that end. Mixpanel isn't going anywhere if that's your concern. If anything, we are investing a lot more in engineering, product, and design to make our products a lot better for all you.
It's too early to say what we'd do in an outcome like that. I certainly wouldn't want to see everything we've built go to waste.
How are you investing a lot more if you let people go?
The article says they mostly fired sales people.
So they are hiring other people? That doesn't address my question.
From the original article
Which is odd. Sales people don't cost much. They either pay for themselves or they're let go quickly. They're not usually let go in a group like that. Usually engineers are cut early; they cost more. Not trying to pick a fight, I've just been through layoffs before and this is how the finance team always justifies their cuts.
If things are going bad, the engineers become assets for a potential aquisition. I've never seen engineers let go when things get dicey. Almost everyone else is let go first.
That's probably a sign of frothy (dare I say bubble?) times. The opposite is usually the case. Cut the engineers and outsource the work was the M.O. for a decade+.
Are you the person to contact if we have potential job leads for anyone that was let go?
Yes - email in my profile.
Did you fire after they finished development or during? At what point did you realize that you did not have enough income to support that many? How much were you expecting to make by this time?
You seem freindly but these questions are often left unanswered. Im usually led to believe companies are looking for contract workers but hire sallery because what is available isnt what they were looking for. Nothing personel, just a pattern
From the article most of the people let go were in sales.
Curious to know which Sales reps got let go. SDR's or AE's? or a mix?
Can you share the presentations you made to prospective investors? I'm particularly interested in how you estimate the market size for your product.
(Not related to them, just read the original source on VentureBeat)
presentation (2014): http://www.slideshare.net/metrics1/mixpanel-our-pitch-deck-t...
original source of the news: http://venturebeat.com/2016/01/08/mixpanel-starts-2016-with-...
Hey, all the numbers are redacted!!!
As I mentioned I just found the link in the venturebeat article, ask their CEO for more data.
About half of the numbers are redacted, but you can see if it's a single digit or a double digit number. And you can read in the 2015/2016 plan on page 10:
It doesn't add up with the "He confirmed to TechCrunch that 18 people were laid off, mostly in sales"
A company deviating from the plan they outlined 1-2 years ago. Shocker.
Wouldn't this negatively impact hiring in other depts like engineering in near future?
That's a worrying sign - sales are generally the last people to go - if you're under financial stress you generally need revenue and customers.
Unless they somehow believe they can pull off another Atlassian (who actually spend a ton of money on marketing, despite being seen as a "no salesperson" business) I'd say the $65m funding they received is going down the gurgler.
That's not necessarily true, you could have also overhired on sales or realized that you need to increase sales quotas to hit your profitability targets which would result in letting go of underperforming folks.
'sales are generally the last people to go' - generally where? In startups , especially engineering driven ones, shredding parts of sales team first is not un-heard of. Also, according to the CEO, they over-hired. Looks like they tried to expand more than they could handle. Doesn't seem like a worrying sign to me.
Generally if it's an engineering focused set of founders they're most likely to get sales wrong. And sales driven leadership tends to get engineering hiring wrong. To way over simplify, both sides think "Well if we 2x headcount we'll 2x revenue/new features" They don't make that mistake on the discipline they came up with.
The P isn't capitalized. It's Mixpanel.
I ran a free service for a long while... they should just dump the free service or at least not accept any more free customers. They will save a lot of money and since the customers don't transition up anyway it won't really affect their business. A business isn't a charity. I learned that the hard way!
Has anyone try both Gosquared and Mixpanel? How do they compare?
Mixpanel is a revolving door. It's only called layoffs because Suhail decided to fire many at once this time https://www.glassdoor.com/Reviews/Mixpanel-Reviews-E406910.h...
From a review posted on Nov 14, 2015:
Based on his LinkedIn profile, he can't be older than 30 and has never held a real job. Why exactly is someone like this running a company that has raised $77M instead of working as a junior engineer?
Shhtttt don't ask, the YC president never held a real job but that doesn't stop him from talking like he knows everything from astrophysics to socioeconomic stuff either.
There's nothing fundamentally wrong with being young or not having ever held a real job. There are certainly great founders who have done an admirable job despite their youth and lack of work experience (Zuckerberg comes to mind), but they are few and far between. It's just that these sorts of complaints about juvenile behavior are entirely understandable when you consider the founder's profile.
And to be fair to sama, I haven't seen any comments from YC alumni about how he compares himself to a gangster rapper. However, the trend of VCs pontificating on Twitter about topics that they don't have a good grasp on is somewhat irritating. The only person who has truly demonstrated the ability to "go deep" on (multiple) extremely complicated subjects, and successfully put his time/money where his mouth is, is Elon Musk. And even he showed a typical lack of self-awareness in his younger days[0].
0: https://www.youtube.com/watch?v=kSHUha9ABNY
Ouch.
Mixpanel has a great product but suffers quite a bit from the curse of having a product everyone loves but nobody wants to pay for.
The layoffs are a likely a further materialization of their struggles to get people to pay for the product at the rate they were hoping.
There's a lot of competition in this space out there now. Mixpanel isn't as unique as it once was. There's also the elephant in the room of questioning how much of the revenue in this sector comes from other companies surviving only on VC cash (i.e. cat video site analyzing page traffic that shows ads for a toothpaste delivery iPhone app that analyzes its social media interactions with users that turn out to just be bots in some Russian guy's basement). Point being the rapid downturn in VC funding recently isn't exactly helping Mixpanel's revenue either.
Yahoo,Mixpanel,Instacart,Jawbone,Tango,Hotels tonight,Maker media ..
And so it begins ... ?
http://techcrunch.com/2016/01/08/burn-slower-or-vaporize/
If it's mostly sales people, it is perfectly reasonable to think they are reassessing their outbound marketing efforts. For example, perhaps their sales channel produced poorer quality leads compared to organic or the type of product they were selling was low enough margin that the sales commission removed any profit they were getting.
I checked out mixpanel couple years ago and I couldn't get tied down to a service which didn't have a cheaper than a $150 plan. What if I find it very useful and then ran out of the free tier quota. That scenario was unacceptable and thus, we are not a client.
I already see other's comments in this thread of this very scenario. We dodged that bullet.