Not many people have the luxury of working with the Paypal “Mafia,” the big shots from early days of the payment company that sold to eBay for $US1.5 billion in 2002.
But for those who do, like Mixpanel’s 26-year old CEO Suhail Doshi, it meant the difference between zero and $US835 million.
In the spring of 2008, Suhail Doshi received an unexpected message through IRC, a chat forum popular among hackers and computer engineers: “Come intern at Slide.”
Slide, an app widget-making startup founded by ex-PayPal CTO Max Levchin, was one of the hottest startups back then, worth roughly $US500 million (it was later acquired by Google). Doshi was a self-taught programmer, majoring in computer systems engineering at Arizona State University. It was a no-brainer for him to take the offer.
At Slide, Doshi wasn’t assigned to any specific project, working almost independently on different ideas. But he really liked his time there — so much that he would work past midnight every day.
Slide’s CEO Levchin took an immediate liking to Doshi. Levchin loved that kind of intensity. Almost every day, Levchin would sit next to him, hearing new ideas and pitches.”I don’t know why he did it, but I got to build this great working relationship with Max,” Doshi tells Business Insider.
Levchin liked him so much that he tried to get Doshi out of school and hire him full-time when the three-month internship was over. He even called Doshi’s mother and tried to convince her that it would be OK for Doshi to drop out of college. But it was a tough sell, and Doshi ended up returning to Arizona State at the end of the summer.
The Startup Bug
Doshi returned to school, but his mind was already back in Silicon Valley. “I got the [startup] bug. I got bit really hard,” Doshi tells us.
He tried many different things, but eventually settled on tan idea he got from working at Slide: building a sophisticated analytics software that helps apps track and learn more about its users. Although general analytics software like Google Analytics were available, Doshi noticed Slide was spending over $US1 million on building its own customised, internal analytics software.
“At Slide, they would measure crazy things. It was like they were quantifying every part of what they did,” Doshi says.
Mixpanel is designed to do exactly that. It measures more detailed “engagement” numbers, such as when the user clicks “likes” on Facebook or “filters” on Instagram, not the more traditional pageviews or install figures. He believes pageviews and uniques are “BS metrics” that fail to gauge the true value of your product.
When Doshi built his first prototype, he sent it to Levchin. The feedback was crushing: “The Slides of the world would build this themselves,” Levchin told him.
But Doshi didn’t stop there. He soon found a cofounder, Tim Trefren, from the maths course he was taking. The two became close friends, spending almost 16 hours a day and every Friday night at the computer lab, working on Mixpanel.
“It was just rapid product iteration. Every day, we were just cranking,” Doshi says.
Eventually, the work paid off. In the summer of 2009, they came up with a much improved product. It won them a spot on Y Combinator and $US15,000 in seed funding. A few months later, even Levchin bought in: Slide became Mixpanel’s first big-time customer, nearly 10 months after Doshi got that first feedback from Levchin.
But the $US15,000 YC money didn’t last long. Even though Doshi and Trefren didn’t spend much — they rented a small one-bedroom apartment, living out of a suitcase and a $US200 grocery budget – they reached a point where they were a week away from going bankrupt.
At the time, investors were lukewarm on business software, and the economic downturn wasn’t helpful either.
“Half of our YC batch died in 2009. Today, 90% get funded,” Doshi says.
But Levchin, after using Maxpanel for a few months, saw its potential and decided to invest $US500,000 (alongside Bebo founder Michael Birch) into a seed round in 2010. “If Max and Michael didn’t put in $US500,000, there would be no Mixpanel,” Doshi says.
Levchin helped in future rounds too. In 2011, when Mixpanel struggled to find Series A investors, Levchin brokered a deal with Sequoia to get a $US1.25 million “bridge round,” where another Paypal mafia member Keith Rabois joined as well.
A year later, Levchin helped again, connecting them with VCs like Andreessen Horowitz, who ended up leading a $US10.25 million Series A round. Andreessen Horowitz also led the $US65 million Series B round in December that gave Mixpanel a $US835 million valuation.
“Max has helped us with every funding round in the history of the company,” Doshi says. “I don’t know if we’d be here without him, honestly.”
Mixpanel continues to be one of the fastest growing business analytics apps today. It now caters to 3,000 paying customers, analysing over 43 billion data points, including clicks, swipes, and taps (Mixpanel calls this “actions). It’s putting a lot more emphasis on mobile, and is even experimenting with predictive analytics.
But there’s lots of competition, too. Companies like Google Analytics, Omniture, and KISSmetrics are all vying for market share. Yet, Doshi seems undeterred by any of them. When asked about those competitors, Doshi pointed back to the first feedback he received from Levchin.
“Our competitor is someone building this themselves,” he says. “Max is still kind of right.”
And he knows if things ever get tough, he’ll have someone to turn to. “Most people are scared of their investors, but you can pretty much go to Max even with your worst problems,” Doshi says. “He’s like my business dad.”