Mikhail Dia built FunnelAnalytics after leaving civil engineering for online marketing. A lifetime-deal launch generated $200k in 48 hours, but he later pivoted to subscription pricing and raised venture capital. He cut a $1.5M education business to focus on the core product and shifted to product-led growth.
Chapters
Are you a technical founder? Like, are you able to code?
So no, I am not a technical founder. I do not know how to write a single line of code.
What was it like? Walk us through the journey and frustration.
It did cause a lot of issues. It caused a lot of problems over time.
That's kind of the scariest night.
Absolutely. It's crazy, right?
Are you integrating artificial intelligence into Phonetics by any chance?
95% of the AI process products or features have AI capabilities are useless.
Why do you wake up every day and get to work?
Innovation, constantly solving problems.
What's going on? What's going on, everybody who's actually listening to this podcast right now? First of all, guys, welcome back to another episode of The Nikhil Sai Show, which is hosted by me, The Nikhil Sai, and guest. What's going on today? We're back with another amazing guest. The guy who's actually— we're getting on is a marketing genius. I mean, he's created some decent software tools which actually help you analyze and visualize your customer journey and get all your stats in one place. And he has served thousands of entrepreneurs with the software. And people like Russell Brunson, Anik Singhal, and many other well-known entrepreneurs have been praising this software for the ability it has changed overall. And we are excited to dive into the journey of Mikael Dia. Founder at Funnelitix. Hey, Mikhail.
Hey, how are you, Nik? How are you doing?
I'm doing great, brother. Appreciate you jumping on and we see your cool-looking Sneaky Connection behind it and, you know, a lot more things to talk about. So before we get into the nitty-gritty of why Funnelitix and how did you scale the software company and, you know, the actual business stuff, can you walk us through, you know, you were a civil engineer before, if I'm not mistaken, and that's how you kind of got into the career. So walk us through your backstory. How did you get started? What was your childhood like? Why did you pick entrepreneurship in the first place?
Yeah, sure. So to be honest, my childhood was a very normal, you know, suburban kid childhood. I moved a lot. I was born in Montreal, Canada, so my first language is French, and I moved a lot back and forth between Montreal and Toronto as a kid for my dad's work. Yeah, I mean, I had a normal childhood. I played a lot of soccer and sports all the time. I was always outside just playing sports. And eventually I got to grade 12 and it was time for me to decide what university I wanted to go to and what I wanted to do. And I had no clue, no clue what I wanted to do. I was good at math. I enjoyed kind of physics and science. And my dad, who was a banker and worked at a bank, he had, he, his original career was engineering. And he basically kind of gave me the advice of, look, you can't go wrong with engineering, even just as a foundation and as a base, even if you don't become an engineer, at least it's a, it's a really good foundation for things because it's analytical and, and the way you kind of learn how to think and solve problems, et cetera. So with that, uh, I kind of said, okay, yeah, I'm going to do it. I used to love doing Lego and building stuff as a kid. So I was like, okay, well, civil engineering. Seems like it might work, so let's go with it. And that's literally the reason I started as an engineer. I knew, I knew literally within 2 years of being in engineering school that I'm not going to be an engineer. I have no desire to be an engineer, but I was already 2 years in and I also had no desire to restart or find a new, you know, a new path or something like that. So I stuck it out. I worked as an engineer for a few months. I quit, and then I kind of started diving into this whole make money online, building online businesses space. And man, a lot of things happened in between that time, but that's when things like really started for me in this journey of online marketing.
Hmm. Interesting. Now you are running a software company. I'm curious, are you a technical founder? Like, are you able to code? Are you the one who is creating the product? Wow. I mean, I burned my hands trying to build a software product, not being a technical guy. I'm curious, what was it like? Walk us through the journey and frustrations of not being a technical founder and still building a software product.
Yeah, so no, I am not a technical founder. I do not know how to write a single line of code. I, and I've never written a single line of code. Instead, I am the marketer. I know how to market and I know how to position products. I know how to get customers and, and all that stuff. When I originally built Funnelitix, I built it for me, right? So I built it for when I was running my agency. I hired an engineer developer around 2016, I think is when like the first prototype and ideas of Funnelitix started to form. My agency was growing and I was kind of in this stage where I was like, very excited by this, this idea. So I just hired an engineer and I started down this rabbit hole. I was fortunate enough to find a really, really smart, young, ambitious engineer who lacked some kind of, some leadership and experience skills, but was a problem solver and was able to kind of build that first prototype and that first version of FunnelLytics. It, it, he kind of acted as like a co-founder to some degree. He kind of acted as like that CTO, even though again, we weren't at a CTO level, but he kind of acted as a technical lead. And I was fortunate enough to find somebody like that. However, because he wasn't technically a co-founder, it did cause a lot of issues. It caused a lot of problems over time. He ended up leaving the company and that caused a lot of problems because I had no I don't know how to code and we have this software with thousands of customers and he's gone. And so there were a lot of challenges that occurred without that, with that process.
Yeah, I mean, that's kind of the scariest nightmare, right? Like, you know, when you are like a non-technical co-founder, you have active customers and you have a piece of software somebody else is taking care of and then leaves suddenly, you feel like you got punched in the gut.
My God, absolutely. It's crazy, right? Especially, especially a tool like FunnelLytics where it's analytics and basically we're capturing millions and millions and millions of data points every week. And at any given time it could stop and it could break and analytics could stop loading and stuff like that. So yeah, I remember one time. This was in our first launch in 2018, like the, the second round of beta group that we, we did. Basically we opened up the beta group, but for some reason, I, I think the first email went out later in the evening or something like that. And, and I don't know why I sent it out late in the evening. I can't quite remember. However, my engineer, like my, the person who has built the platform, was already gone and offline and I couldn't get ahold of him, but the cart didn't work. People weren't being upgraded and we weren't able to collect payments.
Wow.
So emails, so we started getting flooded with messages saying, you know, we, I can't pay, it's not working. I didn't get upgraded, whatever. So literally from about like 9:00 PM until like 7:00 AM when he got back up. I was up all night with 2 support people that I paid them extra and we were sending out PayPal invoices, literally one by one by one by one.
And anyway, wow.
We still ended up collecting like $250,000 in that, in that like—
with launch.
Yeah. With that launch. But imagine if we didn't have to send out manual PayPal invoices, it would've been Significantly better. But anyways, little things like this when you don't have a technical person can really cause challenges.
I mean, that sounds scary to me actually, like as a guy who's been behind the scenes of building software funnels, that's kind of the scariest thing. If your order page is not working, it's like you have a big leak happening right there. You might have lost at least $200,000 to $300,000 that night.
I'll never know and I'm not going to dwell on it because Yeah, you gotta move on for sure.
You still don't have a technical co-founder, do you? You're still running the company in the same structure?
Yep. So at this stage, we had a VP of engineering and he's still kind of a part-time VP of engineering. We have our principal engineers, so they've been with us for years at this stage. So nobody's got the kind of co-founder title at this particular stage. We've been around for a long, long time. But we've got some extremely, you know, great and dedicated, you know, engineers who've been with us for years at this stage.
Mikhail, like my question is, you were in this, you started with engineering, then you got into different agency stuff. Why did you even choose to building a SaaS product in the first place? What was like the intention? Is it like the agency burnout or the grind, you know, you didn't enjoy or the recurring revenue sounded like more cooler? Or is it like the exit plan you're trying to get or the valuation game? What was like the main intention you're trying to build a SaaS? I know it's solving your own problem. That was the first thing you started with, but I'm curious why SaaS.
Yeah, I think, I think a little bit of all of the above. I knew I didn't want to keep running an agency for sure. That was kind of a big motivator and I didn't know what kind of was next. Obviously the SaaS side of things has the valuations, you have the potential of raising capital and and exit potentials and all that stuff. But I think it was more really the sheer excitement about this idea, right? Like this concept of, you know, I've always had a kind of get shit done and kind of like a screw it, let's just do it mentality. I learned that from Richard Branson, the—
Richard Branson.
Yeah.
Yeah. The cool billionaire.
Yeah, exactly. So just the idea of, you know, just screw it. Let's just, let's just go for it. Let's just try it. That was really more of the driving force, like the idea of like, you know, what if it does work and what if other people care about it? And, and worst comes to worst is it'll at least make my life easier to run my agency. But that's the main reason. I love the idea of what we can innovate. And to be honest, now that I'm fully in, in SaaS and we've, we've, you know, scaled this product. The thing that motivates me the most, the thing that fulfills me the most about this entire thing is, is the actual product side, the innovation, the constant thinking about how can we improve this, what can we do next? The thing that frustrates me the most is not being able to do it faster and not being able to do it, you know, quicker with more, you know, you need more engineers and all this stuff. But yeah, ultimately that is one of the biggest driving forces, the innovation aspect.
Interesting. Yeah. I mean, we always love challenges, right? And when we are innovating to solve real problems, that just keeps the momentum up. I'm stoked. I'm glad that you actually got into software. And I'm curious, what was it like actually like launching? I mean, you have Billie Jean, Anik Singhal, and Russell Brunson, like all of these amazing marketers, you know, who are like the go-to guys in the space using Funneletics and praising it. So I'm curious to kind of understand you know, what's like the, what was like the game plan for you to put this together and actually launch it? So give us like a rundown on what worked when you were actually, you know, getting your first 1,000 customers.
Yeah, it's funny, actually I have this little thing here that I wrote. It's called the Funnel Analytics Chronicles: The Year of Launch. I wrote this, it's like a 50-page or so guide on just documenting my first first year of FunnelLytics. And I just documented how we went from basically zero, nobody knew anything about me, nobody knew who I was, nobody knew what FunnelLytics was because it didn't exist to about $1.5 million in collected revenue in 12 months. So we grew pretty quickly and this book kind of documents, or this, whatever, I don't know what you want to call it, this little guide here, that's that whole first year. And really it came down to two things. Number one, we— okay, first I want to make sure that it's clear in the first year of FunnelLytics, every customer was basically a one-time sale. So it was a lifetime deal that we would sell. I never went through AppSumo or anything like that, but I did my own kind of one-time payment. And the reason for that was very simple. Our analytics tool, which is what people pay for, was not very good at the very beginning. In that first year, it didn't really work. So when I sold it, it was more so to get people as beta members and to get bought into the vision, knowing full well that if I charge, let's say $99 a month, they're not sticking more than a month because it didn't really work. So what I decided to do is basically buy the lifetime value of those people upfront. If they would've paid me, maybe they would've paid for, I don't know, 7 months. So I was like, okay, $700 lifetime, you get access to this tool. So that's, that's how we, we started. So 2 core things I did to kind of grow this business in the beginning. So number 1 is I needed to figure out how do I get something valuable for free that people want to sign up to and, and share. And I can use paid advertising to drive and get leads in the early days. For us, it was very simple. We have this mapping tool that we want to overlay analytics on top. So let's give away the mapping tool for free. So that's what we started. We started off with ads pushing this mapping tool. And I would push everybody who signed up to the mapping tool into a Facebook group. That was kind of our, our first strategy. And throughout that, I built a pretty big community and I started kind of just talking about that Facebook group. I started posting a lot of content in that Facebook group and giving value, et cetera. So when it came time to launch that first beta group for, for the analytics, that, that Facebook group was really, really warm. People had gotten a ton of value for, from, from my mapping tool. They were already using it for different things and they got it all for free. So there was all sorts of goodwill and reciprocity and built-in and people knew, liked, and trusted me. So we were able to generate about $200,000, just north of $200,000 in 48 hours when we first opened up that cart. And that's a testament to not my marketing skills, is a testament to the idea of building a community, the idea of giving a lot of value upfront and delaying the kind of ask until the pressure has built up enough where people want this thing, right? And that's really what happened with, with that. And then after that first launch, I knew I couldn't kind of keep spending dollars on paid ads without any sort of recouping that money. I built a kind of break-even funnel where basically every time we got somebody to sign up to our free mapping tool on the thank you page, we offered like this template pack. We called it the Funnel-lytics Vault, which was basically me having hacked all sorts of marketers and looked at what they did and kind of remapped it in Funnel-lytics and took this pages and all that stuff. And that was kind of a one-time offer upsell for anybody who signed up to the mapping tool. And then anybody who bought that, we sold them on that lifetime deal on the backend. The nice thing with that is actually, I actually have the numbers. I wrote 'em in this book. I'll have to share a link if the nice thing with that is like we, oh, in March of that first launch year, we spent $7,000. We made $13,500 back. In April, we spent $13,000. We made $34,000 back. In May, we spent $18 and made $40 back, right? So the funnel started to work. We, we added people into the FunnelX ecosystem. We were getting about 2x return on our ad spend. So I just kept scaling. I just kept scaling that and kept growing it and kept growing it, getting more mapping users. They buy the template pack and then they would buy the lifetime deal. And that's how we kind of launched FunnelX. So those two things, and everyone still kept pushing. We kept pushing everybody back into that Facebook group. Fundamentally, that is how we, we started and launched FunnelLytics. And, and yeah, we kind of grew from there. Then at some stage we ended up switching to SaaS and we ended up actually, you know, raising money and all that stuff. And things went kind of sideways and changed quite quickly. A SaaS model is very, very, very different than a one-time purchase front-end funnel type of models. Numbers started to churn and all sorts of things, which we can talk about as well.
Yeah, definitely. That's an exciting journey, Mikhail. Like you have done some interesting stuff there. So I mean, you are like, there's a lot of like 2024 right now, like as we speak, there's a lot of analytical tools right there, you know, like in AppSumo, the lifetime user competition. And you guys are not like the cheapest. You guys are very like premium price, but at the same time, value for money deal overall. So I'm curious, like what's actually working for you in terms of maintaining that customer relationship? Keep them on the radar to continue using Funnelatics and walk us through like what are the strategies you're using inside the product to keep them hooked to it so it's almost impossible for them to cancel.
That's a very, very Very good question. And also very difficult thing to solve. We, it is, we have not fully solved it, to be honest, even after all these years. Yeah, it really doesn't. It, because FunnelLytics is a user-led product, not a business-led product. So here's what I mean. A user-led product means that it is highly dependent on the individual person who's constantly using this tool. A business-led product, you can call it that, but basically it is irrelevant who's using the, the tool. What matters is that it powers something in the business. So for example, say that I'm, I'm talking about like hosting, for example, or a CRM process is like hosting or a CRM, right? Like HubSpot. At the end of the day, it's powering a part of the business. Which means that if you, you can't turn it off. If you turn it off, it means you're losing that part of the business and you're gonna have to replace it with something else. Something like Google Analytics, analytics, it helps somebody do their job easier, do their job better, but it still is very much dependent on that person doing their job and, and, and it has to solve that job to be done. So the, the, challenge with a tool like that is now it's about getting somebody bought in and it's about getting somebody to get to a stage where they can't do their job without it. Right. But the challenge there is also that it is now dependent on that individual. So give you some examples. We've had lots of companies who have great names, great logos, and they use Funnellytics and they loved it, but it was because of the user who loved Funnellytics and gave a lot of insights. Then that person leaves the company and now nobody else is there to replace them in with the tool because whoever comes in next maybe has their own methodology, maybe they use their own set of tools, whatever it may be, right?
Yeah.
So, um, we end up losing that customer. We end up churning because again, it's tied to that thing. So, a few things that we've had to kind of do to try and tie it to the company a little bit more. Number one, increasing the price has helped a lot with making it less about a trial and more about a commitment. So getting people to commit at a higher price and onboarding them properly, like we have a customer success manager and, and well, multiple, and we have basically a process where we, we help, help you get onboarded. We also have very specific like tutorials and trainings that you can kind of go through that show you the ins and outs of the platform. But the biggest thing for us was always how do we get that first win for somebody, right? So that person comes in, they want their job to be easier. They're hoping that FunnelLytics will help them make their job easier. So the question you have to ask yourself is their job is consistently looking at, let's say, the strategy and looking at the results and reporting on those results and all that stuff. That could take, you know, 2+ months for them to get fully adopted to this methodology, this canvas, et cetera. So what can we do in those first 12, uh, you know, 14 days to get them a win so that they know that if they at very minimum keep using this tool in this way, it gives them that win. Yeah. So for us it was basically helping them create these kind of simple We call them contribution reports, basically simple reports in FunnelLytics that allow you to see how your different traffic sources are contributing to the key thing that you care about, how your different pages are contributing to this. And then we started saying, okay, now that you've got these core reports and that's giving you some real-time feedback, now we can dive into how do you map a whole journey? How do you analyze the data? How do you make decisions? How do you basically do all of that stuff that will make your job easier? But how do we find that first quick win and get them to kind of be like, okay, at least I get this and I got a win in a short term?
Yeah, yeah. I believe that's like key component for any software success because like most software companies who have churn to the roof, the reason is they're not able to give that quick outcome to the user or the business in general. And I'm glad you're actually trying to solve that, you know, with your analytical platform. So I'm kind of curious how much of, you know, with the AI and, you know, the kind of upgrades every software, like I believe I'm bullish on this, like companies who don't use AI in their product in the next 3 to 5 years will most likely be irrelevant. You know, like it's not even an option. So I'm curious, how are you integrating artificial intelligence into Funnelatics by any chance? Are you giving any recommendations? Do you have anything happening on the product side as an upgrade? I'm curious what's happening behind the scenes.
So I don't fully agree with you. So you may be bullish on this. I am not as bullish as you are. I do believe that AI, like I use ChatGPT every day and I'm fully bought into AI helping and solving some problems. However, I will also say that 95% of the AI products or features in products that have AI capabilities are useless, right? They don't actually drive much value.
Yeah. Yeah.
And, and that's the key here is, is it driving actual value that somebody wants to use over and over and over again? Like ChatGPT is giving you value every time you use it, right? But there's a lot that do not. There's a lot where you're, it's there for strictly the purpose of marketing. And to be on trend. And at the end of the day, that's just going to fall by the wayside because yeah, people are going to come in, but then they're not going to use the product and then it doesn't really make a difference. That said, we do 100% are building AI capabilities into Funnellytics. However, we want them to be very, very useful. Where can some, how can AI help you when it comes to planning, measuring, and optimizing your customer journeys or your marketing funnels? And when you start asking yourself that question, you can kind of start to work backwards. Well, on the optimization side, it could do, let's say, a page analysis and basically be your conversion copilot in a sense, right? It could look at all of the data that Funnelics provides. It could look at a whole layout of a page, have some strict guidelines on on optimization benchmarks and rules and all that stuff. And then based on this, give you some suggestions of what you could split test or test next. Another thing it could do is look at your entire kind of funnel. And again, because we have our data, give you recommendations of, okay, well, if you increase this by this, this is the potential outcome that you can have. Here's your best opportunities to kind of optimize. On the other aspects, like the mapping side, the planning side, et cetera, you could, you know, come up with some probably interesting use cases, but certainly not any that I can think of right now that would be like, wow, this is a game changer. So the way I look at AI is, is it going to have an exponential game-changing capability that our users will love. And, and here's the key to this: it has to help our core users, not try to drive new users. That's something that I think a lot of people make a mistake on. They bring in AI or they bring in new features because they're thinking of expanding, and, and sometimes it's too soon, right? You should be thinking about, can I If, if somebody's already paying me, let's say $1,500 a month for my software or $2,000, whatever it is, or, or it doesn't matter whatever your price point is, right? Your job should be to think about, can I A, get more of that, those people, and B, what features are gonna make sure that they never leave, right? What are they requesting that is gonna make sure that they never go away? As opposed to a lot of times we look at it the other way. We say, oh, they're already paying us $2,000 a month, or they're already paying us this amount of money. They're already power users and they already love our product. So let's not build for them. Let's build for others, right?
The new ones.
The new ones. And then in this case, that's where you're like, yeah, AI would attract new people, but is it gonna attract the right people? Is it gonna attract the people who will pay the $2,000 eventually? Probably not, right? So for us, like I said, uh, as we're building AI features, we are looking at our our core users, our primary users, and we're saying, look, this is what we're thinking about doing with AI. Would this be useful to you, or would this actually not be useful? Like, would you even use this? Yeah, that's how we kind of go through our decision-making process.
I love that. I love that, Mikhail. I mean, I could see you are actually not just a founder and CEO, but you're more like clarity officer inside your company. You know, you're just like customer obsessed, customer focused, and trying to add more value to enterprises, you know, clients of yours. I love it. It's refreshing because most software companies, like, I've consulted with a lot of them, worked with a lot of them closely. They're always trying to— like, it's— software is a very valuation-oriented game, right? Like, you just, you know, you want to increase the users and you want to increase the valuation and revenue as much as possible. You know, churn and all these metrics are— they are coming into the play but not very key. But for you, like, looks like you're more centric on the customer and adding value part. And yeah, I completely agree. Adding AI component just to add AI to the name of the company doesn't make sense, but it needs to serve a purpose. And I believe as long as you're doing that, it should be really, really good. Now I'm curious, Mikhail, in terms of customer acquisition, you have a very unique type of user. When you're talking about somebody who is paying $1,000, $2,000 for analytical tool, right? We are talking about somebody who is spending tens of thousands on advertising or traffic generation. And this is a specific type of user inside the company. Probably the founder is not the guy who's running, you know, like, or managing the marketing most of the time. So what's working for you in customer acquisition side in 2024? Because I believe, I'm not, correct me if I'm wrong, the self-liquidating funnel might not be like the best form of, because it might not be giving you the two-way return like it used to be, or maybe I'm wrong here. I would love to know what's working for your customer acquisition side right now.
Yeah, so you're right, it doesn't work the same way and it doesn't attract the right customers, right? It doesn't. So that's one of the things that we had to learn and it took a long time. So in those first 2 years, even though we made a lot of money, well, relatively, I guess that's relative, depends on who you ask. But even though we did well, the customers that we were bringing in were people who were signing up for a free tool who are then paying for a $47 like bump upsell offer, and then who really wanted a lifetime deal, right? You can kind of imagine that that is not the same as somebody who cares about a robust analytics tool.
Yeah.
So for those first 2, first, first 2 years, we were basically serving that audience. Then when we raised money, we started to think about how do we pivot towards a bigger audience? Who is that bigger audience? Now, luckily for us, we had a lot of traffic already and, you know, there were a lot of people who signed up to our mapping tools. So we had a pool of, you know, over 300,000 people to fish from to see like who exactly is somebody who cares about analytics enough where we can look at our competitors and we can look at, you know, the Hiroses of the world. We can look at, uh, AgMetrics, whatever other true analytics platforms, how much are they charging, right? They're charging $500, $1,000-ish a month for, for their, you know, main plans. Okay. If that's the case, what does our product need to be and who do we have to go after in order to make sure that we can also charge that kind of price? Because analytics is expensive. Like our AWS bills skyrocketed with these founding members and these first, you know, small businesses, 'cause we had thousands and thousands of them install FunnelLytics on thousands of websites. Our AWS bill at one point, we've been able to optimize it since then, but at one point was like, you know, $30 grand a month just to pay Amazon. Which, if you think about that, you need quite a lot of people where if that's just your AWS bill, like that's not, that's not our marketing spend. That's not our, yeah, literally our AWS or our Amazon bill. So we needed to kind of sit back and say, okay, with these types of costs, like there's no way we can go at scale like that. Like we, we, we need to have people paying $500, $1,000, et cetera. So for us, We started off with finding these people in our group, in our audience. And then, and then overall in the last kind of couple of years, it's been really just focusing on content and putting out the right type of content, less about mapping, less about funnels and strategy. We reshifted our messaging towards customer journeys as opposed to marketing funnels and attracting kind of the ClickFunnels, Um, you know, Russell Brunson type audience. By kind of positioning it a little bit more around customer journeys, we started seeing that people were a little bit more sophisticated. They were more like directors of marketing and, and stuff like this. Um, and really then continuously putting out content and blogs and articles that were more centered around measuring and optimizing and, and looking at customer journey data. So that's really been kind of our core acquisition strategy at this stage.
So you almost like rebuilt your company technically because you have changed your ideal client and changed the positioning and changed the product because you had that first base of 300,000 free users and had enough pool for you to get the data from, you know, that actually helped you to pivot. That was an interesting move.
Yeah, it was interesting. It was painful. It's still like, I'm still recovering from that. It was really, We launched Funnelics 2.0 in May of 2022. So if I look at this cycle of Funnelics, it's been basically first 2 years, 2018, 2019 was founding members, small businesses, et cetera. 2020 to 2021, like 2020 to 2022 was us building Funnelics 2.0 on the engineering side. We'd raised money and figuring out who is that ideal customer profile. 2022 to now has been basically transitioning and eliminating FunnelLytics 1.0, growing FunnelLytics 2.0, and doubling down on that ideal customer profile for FunnelLytics 2.0. So it's really, it's been like almost 3 phases of this company.
Wow.
Which is, it's weird and crazy to look back on, but yeah. It's been challenging for sure.
Yeah, I mean, you're doing whatever it takes to win, bro. Like, that's massive respect for you. That's interesting overall because you already, you kind of made this. It's tough to change the product and client in software business and still be alive. Like, you know, it's like rebuilding a different company and I'm glad you're pushing through, brother. That's really, you know, something inspirational for us overall. Yeah, like if you could point to like one of the toughest points you have gone through and how did you make it through in that situation? What would that be? Is it the launch exactly where your customers were shocked a little bit that your previous product is no longer available? Or what was like the toughest situation for Funlytics? We talked about your developer leaving you when you have paying users, and we talked about a launch where you had to send manual billing for your customers. Anything else you would like to share here?
Yeah, those, those weren't tough. Those were more inconveniences than, than tough.
Hmm.
The true tough parts. Of Funnellytics were the first one I can think of is when we decided to kind of transition from 1.0 to 2.0, we got a lot of backlash from all of our 1.0 customers, especially the founding members in the founding members group, like the, that those first kind of beta members. When I first started selling Funnellytics, I had no idea. Like I had no idea what it was. I had no idea what it took to build a software company. I didn't even know about AWS bills. At the time, right? And remember, I was selling lifetime licenses and it was just unlimited. It was just like you get unlimited workspaces, unlimited tracking. And I didn't know, I had no clue. I'd never built a software company. So we had so many people who basically took that, their lifetime license and started selling accounts under their own account, right? So there were like, they would have hundreds of like workspace, kind of like a, a go-high-level model, but they weren't paying us monthly. They paid us one time and they were just collecting monthly payments from other people.
That's scary.
So when we decided to launch FunnelX 2.0, we said, okay, every founding member only gets 5 workspaces. So as you can imagine, some of them had like hundreds of workspaces. They weren't very happy, right? So we got a lot of bad reviews on, on Trustpilot and stuff that you know, didn't go in our favor because of this. So that was, that was a pretty challenging time just for me, cuz it felt like a weird emotionally, right?
Mainly.
Yeah. Like I'm giving up on the people that actually supported me in the very early days, but for the sustainability of this company, I didn't have a choice. Another one was when we basically started like, so raising money changes your perception a lot. It changes how you approach a problem significantly. You know, we went from having, from being bootstrapped and basically me hustling, selling courses, selling all sorts of stuff to make money on top of the software to then having millions of dollars in the bank account overnight.
Hmm.
And so we kind of got to a stage where we were in the transition between 1.0 and 2.0, where we had a lot of non-recurring revenue. It was all education. It was all centered around me, right?
Yeah.
And I had to make a decision as to whether or not we keep that revenue and we keep selling the coaching and the, the education side, knowing full well that these people weren't actually using the software for what it needed to be and what Fonlix 2.0 was. And I made the call to basically cut off that education side and that cut, you know, close to like $1.5 million of revenue, not overnight because it started to kind of, it dipped over time, but we, my attention was too divided, right? So I was basically focusing on, you know, 80% of my time on the education, 20% on the software, but I really needed to flip it. I needed to actually stop my time on the, and just really focus on growing the software now that we were starting to see traction. And again, remember I have VCs now, they don't care about the $1.5 million of education.
They want the valuation.
They just want the software. So getting into that, those weekly, monthly board meetings, or sorry, quarterly board meetings, you know, it, it started kind of creating this weird dynamics. So I decided to go all in on that. But obviously now you're playing the cash flow game because this is going down. You're trying to bring this up. You're kind of always staying balanced here. Yeah. But you're burning money because your team is higher than it needs to be, et cetera. So that was extremely stressful because we got to a stage where we ran out of cash. With our, like, in basically at the end of 2022, we completely ran out of cash and we were growing on the software side. The education side was going down. So we were still like flat in terms of net and same revenue, but we weren't growing fast enough on the software side to hit our next milestone to raise our Series A. So we weren't hot enough at that level on, on the, at least 2.0 version of the software. Oh, the VCs weren't ready to put in more money because of the way it kind of fluctuated. And because of that, it kind of put us in a situation where we needed to take a step back. We needed to let go of a bunch of people, cut our, our expenses significantly, get back to more of a break-even and growth model. And that was extremely stressful as well. So we had to kind of transition and navigate through that in the last year and a bit. I'm happy to say that we're kind of on the other side now and FunnelX is operating profitably and we've kind of pivoted from that. However, it's been a challenge to say the least.
Yeah, I mean, as a founder myself, I could relate to the situations you're going through and like everything sounds a little scary to you. Whoa, whoa, whoa. That's just, a lot of ups and downs. And now, uh, have you raised the series A or are you on the plan, uh, on the, on the trench to be doing that? Or what's like the plan? Or because the growth model is working very well, do you like to continue growing the value, growing the revenue and user base before you do that? What's like the vision, uh, you know, you're, you're running after?
Yeah, it's interesting. It's changed over the years. It, well, it hasn't changed, uh, so much in terms of vision of what this product and what we want this product to be. What has changed over the years is where I'm at in this journey personally, right? As a founder, where am I at and what am I looking at? What do I want to do and how do I want to kind of grow this? And when I wasn't able to raise the kind of next round of funding last time and I had to kind of cut a lot of my team, it made me kind of start thinking about, do I want to raise again? Or do I want to kind of grow this in a profitable, scalable, not as fast as, as what you would normally grow if you had, you know, millions of dollars in the bank. And it fluctuates because there's part of me that knows that if we raise money, we can really truly hit our vision and grow and impact a lot more businesses and, and get a lot more people using our tool. And we know that the tool really does help once you're, you're, you're the right type of business. Like our case studies are incredible. On the flip side, I also know what it means to raise money. Raising money is a full-time job. It takes a lot of effort, it takes a lot of time, and it's very distracting. And I actually really do not like it. It's not fun. It's not a—
You're running away from the product.
Yeah, you're— I'm running away from the product. I'm focusing on something completely different. And there's some CEOs that are incredible at raising money, and that's really what they love. It's not what I love, right? I, I, in fact, dislike it a lot.
You're the product guy.
Yeah, I'm a product guy. So, you know, it, it, it changes in terms, I know where we want to be and right now we're growing and we're moving in the right direction in general. So I'm not pressed to go and raise the next round. If we do, it would be sometime next year and it will be because you know what, there's just too big of an opportunity. To not kind of step on the gas and invest in some stuff. But we'll see. For now, 2024, I'm enjoying getting out of all that craziness.
Craziness of cash flow. Yeah.
And getting back to normal.
Yeah, that is very insightful. I think a lot of software partners will kind of relate to you a lot who are listening to this show. And thank you for your vulnerability. Michael, like, you know, it definitely helps a lot of us overall who are listening. So let's get to the next set of questions. What are the tools you use on a daily basis to manage your project and clients and your personal productivity?
I mean, Slack is an everyday tool for us. We use— I use ChatGPT daily. Our core CRM is HubSpot. So we use HubSpot and do a lot of stuff there. Obviously Funnelitics I use every day and we look at our stats and our data every day. What else do I have? Use— we've been experimenting with like outbound lately. So I've been playing with like SmartLead and Clay and Dripify. So that's more for the outbound side of things.
Do you do demos? Sorry to cut you off. Do you do demos for selling the software? Is that like the primary channel right now?
No. So the way we've done it. Is interesting is so far it's working pretty well. So we, we started playing around with interactive demos and the way that my interactive demo works, unlike, like, you know, you, you've seen probably these interactive demos where you click it and then there's like little prompts and you click them and, and you could still see with dummy data or whatever dummy info in there.
Hmm.
But you can't really do anything. So how do you— what we've What we've done with FunnelLytics is we've taken our free mapping tool. It's no longer free, but what we've created is basically a dummy canvas and we have lots of them, but basically dummy canvases where there's fake data in there and you can actually play with it. It won't save, but then in the bottom right corner, there's a little video where you can follow along what I do on that video and you can kind of click, you can play, you can see and, and actually experience the full product, uh, and ultimately map whatever you want. So it's kind of our free mapping tool. You just can't save it anymore. And if you want to save it, it's— we have our paid mapping product now, um, or, or kind of our higher-level analytics. And that has worked so far very, very well because people don't really want to book a demo and schedule a demo, uh, and this gives them the opportunity to actually play with the tool with dummy data, fake data before they go and install it. And then that still leads them to a free trial and then they can go put in a credit card and start their 14-day free trial to install Finalix. And then we have more of a CSM process on the backend. Now people can still schedule demos with us, but we don't see as many demos now. We're seeing our growth, you know, move in the right direction.
Yeah, I like it. So you're, you're more of a product-led growth company. Instead of a marketing or sales-led approach, which is key component I believe in, in, in SaaS environment. I believe it's definitely going to help you in the valuation as well because you don't have a lot of friction. You just need to get more people to experience the interactive demo and that's 10x easier than getting people on a sales call because software demos are like boring things right now and people are not very interested. So appreciate you sharing that.
I would call it a product-led acquisition model with a sales-assisted ascension. Promotion, right? So we basically use our CSMs to basically ascend people and we use them to kind of take, you know, onboard the free trials and then ascend them to the next level or, or wherever it goes. But everybody kind of comes in through a product-led motion. They're experiencing the product before and they can again, still schedule a call, however, We see that it's working pretty well to just get them to experience the product, then start their own free trial, and then we use CSMs to assist them.
I like it, I like it, Nikhil. I mean, the reason being is the biggest problem when you sell just demo on a call and without software knowledge, you convert them into a customer is you see high churn after a few months because they bought because of you, not because of the product, but because of the interactive demo. They're sold on the product first. And now your client success team becomes the sales team indirectly and helps you with Ascension. I love that. So I would love to kind of understand like your typical day. Where is your focus? When do you wake up? When do you sleep? What's like your typical daily routine?
Sure. So I'm not overly consistent. I wish I was, and I wish I was a little bit more consistent, but in an ideal day, this is what happens. I've got 2 kids. I've got a 4-year-old boy and an 8-year-old girl.
Now it's a different—
it changes because of that. And sometimes, you know, they wake up in the middle of the night, whatever, right? So because of that, my days aren't that consistent. But typically it's like a 5:45, 6:00 AM wake up. I, you know, I have kind of my morning high-level morning routine. That's just my kind of quiet time. I do a little bit of exercise. Till the kids get up, kids get up, we, you know, breakfast, get 'em ready for school, et cetera. Then I drive down to my office. I don't work from home anymore. I used to, but I drive down to my office. I will sit down and look at my calendar. My assistant organizes my calendar using, oh, that's another software that we use a lot is Motion. So Motion is incredible AI-assisted kind of soft calendar. Manager, so my assistant will manage kind of that. I'll look at my day. I'll, I'll meet with my team. We do 2 meetings a week, like high-level meetings, one on the product side, one kind of on our weekly insights. I'll do a lot of these types of calls, just, uh, podcasts or host podcasts. And yeah, I mean, other than that, it's a lot on the product side, a lot, or on the marketing strategy side. That's really where I focus most of my efforts is speaking to the product team, looking at where the product is and making some strategic decisions around that or on the marketing side, you know, how are we getting more customers? How do we kind of grow, et cetera? So just looking at that as well.
Makes sense. Love that. Appreciate the walkthrough. Mikhail, if you could go back and give a suggestion to 20-year-old yourself, you know, who is probably in the graduation time and you're trying to do that civil engineering thingy or maybe starting an agency. What would the number one advice be if you want to go back and talk to yourself?
Interesting question. I've never really thought about this question before. I've never really kind of answered this. I like the journey I've done. I like everything, you know, I like where, where we've gone through and what I've gone through in terms of, you know, what decisions I made, you know, maybe party a little less and, you know, get, get to work a little bit sooner and focus on, on trying to make some of these goals happen. And start your business maybe a little sooner. But truthfully, like kind of how everything lined up, you know, when I was 20 would've been 2006. So I was just about to finish graduating and then I moved to London, to the UK. I lived there for 3 years. So there's, there's a lot of cool things that I've done. So I wouldn't say specifically I'd give myself a different piece of advice. Maybe don't raise money yet for Funnelitik. That would be maybe something that I would look at. Yeah, I don't know. Overall, like I, I've liked the journey that I've gone through. I look back on it. One thing that I think most people make a mistake on is they focus on their goal and the gap between where they are to the goal and the goal that they want to achieve, when in reality they should be thinking about the gain that they've had from where they started to where they are, right? Like that, that because you're going to start here, you're going to always want to have a goal over here. And as you move, you're somewhere in the middle, right? You're somewhere in between those two things. You'll never really always like, even if you do achieve your goal, you're just going to end up having a new goal and you're going to like keep pushing that back. And anybody who focuses on the gap between where they are to what they want to achieve, they're always chasing something. I've learned over the years to kind of focus on the gain, which is I started here, I'm here, look what I've gained. Even if there are challenges, even if our business is not where the ARR that I wanted it to be or anything like that, you can kind of take a step back and focus on that gain instead.
I love that. Yeah. I mean, rare that founders are satisfied with their growth and I believe tracking progress is a good metric for us to keep in the momentum because it is hard to show up every day to work. And if you're always looking at the goal and disappointed that you're not reaching it, then the likeliness of your performance will go down dramatically. So appreciate you sharing a wonderful advice here. And I'm curious, what's like the biggest achievement so far and what's your next big goal?
Personally or business?
Anything you would like to share.
I mean, personally is very simple. My biggest achievement is my kids and my, you know, what I've been able to, our family life. And I couldn't be more proud of all that stuff. Stuff. And that to me is the most important. In terms of business, I mean, what we've built at Funnel Analytics is my biggest achievement, you know, our tool, the amount of people we've impacted. I'm, I'm still extremely humbled by every time I go to any sort of conference that's in the digital marketing space. Many people know me or know of Funnel Analytics and have been impacted by Funnel Analytics in some way, shape, or form over the last few years. That's extremely humbling. So I would say that's my biggest achievement for sure. Yeah.
Appreciate that. What excites you? Why do you wake up every day and get to work?
Yeah. Innovation for sure is something that super excites me a lot. Constantly solving problems and like those challenges and trying to solve a specific puzzle excites me. Learning. And working with a team that is like basically smarter than me and also like looking to solve the same problem together. That's exciting. That motivates me. Those are really kind of the core things I would say.
Love that. I know, Mikhail, I would love to take this forward, but we have a hard stop. So any last one before we conclude the whole show?
No, I appreciate your time. I appreciate the conversation.
Yeah, that was really sweet. And this is a true story of grit and real entrepreneurship. And thank you so much for being vulnerable. And transparently sharing the learnings and ups and downs you have gone through. And I believe this is a great journey and you have a lot more to achieve. And I believe you're building a great product and I can't wait to see where you will end up in the next 5, 10 years. I'm, I'm, I'm always looking at you. So it, it, it was so exciting to have you on, Mikhail. Appreciate you showing up. And guys, I hope you enjoyed what you have heard so far. And please take 5 actionable things from this podcast and do it. Okay? Don't just let this be another motivational talk. Act on what you've learned. Mikhail has given a lot of practical advice on what you could do in entrepreneurship and given you many more things to actually go and execute on. The outbound strategies, it could be the customer acquisition strategy, it could be building a product, like good software company and whatnot, and building a better tech team as well. And he's given a lot of insight. So stay tuned for the podcast, share it with friends, and I'll be back with another amazing guest. Just like Mikhail, appreciate you showing up, brother. Have a good one. Bye-bye.
Thank you.
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BURNED $1.5M in his 17years online #digitalmarketing #entrepreneur #onlinebusiness
