How loss of focus and a lawsuit brought about the slow growth and loss of momentum of KISSmetrics

Andrew: Hey there, freedom fighters. My name is Andrew Warner. I’m the founder of Mixergy where I interview entrepreneurs about how they built their businesses. I’ve done this so many times that I don’t get nervous anymore, but I am. Hiten, you were right, I am nervous now. And the reason I’m nervous is . . .

Hiten: That’s called inception.

Andrew: The reason I’m nervous is because I’m actually recording this for the first time on my own in person in my office. I bought my own equipment, tested it myself, called tech support a zillion times.

Hiten: Wow.

Andrew: Yeah, man.

Hiten: So I’m a first for you. That’s great.

Andrew: Yeah. And the reason I’m doing this in person is because I found that when I have conversations with people in person, we get more relaxed, more open. And I was hoping to get that with you. But I’m already sensing that I’m not going to get that with you.

Hiten: Why is that?

Andrew: Let me give people a quick intro. Hiten Shah is the founder of several companies. Most notably, KISSmetrics.

Hiten: Sure.

Andrew: Right? That’s the one that you raised money for?

Hiten: Yeah.

Andrew: Crazy Egg also?

Hiten: Yeah.

Andrew: What else? AC . . .

Hiten: I used to run a consulting community ACS, that’s probably when we first met. And then more recently, I have a newsletter called Product Habits. And then I have a new product called FYI.

Andrew: And FYI is a product that allows people to search among all of their different tools like Google Docs, Slack, and everything else for the files that they’re looking for.

Hiten: Yeah. Well, we have now like probably a dozen or almost two dozen integrations. You can integrate with them and our message is that like you can find your documents in three clicks or less. And it’s at usefyi.com because this better be an ad since you said I’m not going to tell the truth.

Andrew: Here’s what I want to find out with Hiten Shah.

Hiten: Yeah, what’s up?

Andrew: Two things. Number one, KISSmetrics closed and that’s the one that was the highest profile . . .

Hiten: Technically as of this date, it is not closed. And I’m happy to talk about anything you want about it.

Andrew: Okay. The URL is redirecting to something.

Hiten: Yeah, all kinds of happening, yes.

Andrew: KISSmetrics is an analytics company.

Hiten: Correct.

Andrew: You first did an interview with me about how you launched it, what happened with it.

Hiten: A long time ago.

Andrew: That’s KISSmetrics. And then I also want to find out about the fact that I was doing something with Hello Bar. The team at Hello Bar introduced it as a creation that was made by Neil Patel and Mike Kamo. I said, “Wait a minute, what happened to Hiten Shah? Hiten used to be partners with Neil Patel on everything.” Let’s find out if there’s dirt here.

Hiten: Sure. No dirt, but okay.

Andrew: All right. I actually don’t want to find the dirt. But I do get the sense that you’re worried and you’re . . . I think you’re very not closed off but you’re very well managed. All right, we’re going to find out all that thanks to two phenomenal companies. The first will host your website right, it’s called the HostGator. I want to know what you think of HostGator as somebody who’s in the hosting space. And the second one is a company that will help you hire phenomenal developers, it’s called Toptal.

Hiten, let’s talk KISSmetrics. I feel like that’s what you’re going to be the most open about. How much money did you raise for KISSmetrics?

Hiten: I’ll be open about anything.

Andrew: No, you won’t.

Hiten: Yeah, I will.

Andrew: All right, we’ll see.

Hiten: I think we ended up like raising like $27 million in total. During my time it was probably closer to $17 to $20 when I was working on it or something like that.

Andrew: And then you left and they still kept going?

Hiten: A little bit, yeah.

Andrew: The original vision for KISSmetrics was what?

Hiten: Help people understand what people are actually doing with their products in their apps and on their websites. While when you look at Google Analytics, all you can see is page views and unique visitors and things like that. But you don’t actually know who’s doing what.

Andrew: Give me an example.

Hiten: So an example would be if you have a software as a service product, you’d want to know that this person, Hiten, who signed up, ended up doing these 10 things or comes back like, you know, five times a day, things like that.

Andrew: So I want to be open with you because I want you to be open with me.

Hiten: Sure.

Andrew: I tried KISSmetrics so much. And then I felt like an idiot for not being able to make it work. Like this stuff that you had, the visuals of here is what your funnel looks like, like a graph of how many people came to your site, a graph of how many people entered the email, how many people did this and that. I wanted that so badly and I didn’t know how to implement. Was I the only one?

Hiten: It’s a good question. So we learned really quickly that analytics is a space where people have to instrument the data properly in order to get the value. And so just like most analytics products that are out there now, they’re either focused on developers implementing analytics, or they’re focused on like so it could be like early stage developers and engineers in startups, or they’re focused on servicing larger companies that they can kind of put more resources towards to help them get set up. So setup has always been an issue with analytics and it still continues to be.

Andrew: Okay, so it’s not just me, it’s always been an issue. It’s even an issue for Google Analytics, right?

Hiten: It’s an issue for Google Analytics. It’s an issue for Amplitude. It’s an issue for Mixpanel. It’s even an issue for a company called Heap Analytics that claims to track every automatically, but then you have all this data, and you don’t know what to do with it. So analytics is a space where I would say because people’s websites and mobile apps and all that are custom, and all these random things are happening that are not the same as some other website or app, people have to get developers to instrument certain things and instrument basically exactly what their users are doing. And so if you don’t do that correctly . . .

Andrew: You’re screwed. Let me make a change to your mic. I’m going to this mic up. This is me . . . oh, look at that. I’m getting so close to Hiten. What I’m doing is I’m going to try to move it up because you and I are big talkers with our hands. And I find that when you move your hands, your shirt is rustling. Let’s see if that helps it. We’ll.

Hiten: If not, I’ll keep coming because it’s helping it. Is it good?

Andrew: No. I actually found a better spot right there. I’m going to do that.

Hiten: Do it.

Andrew: Yeah, man. Okay. I felt that when you guys started KISSmetrics, it was you and Neil Patel. Super smart guys. But on edge of respectability within Silicon Valley, that I felt that Neil, your brother-in-law and business partner for a long time, was itching to get in. And if somebody gave him advisor shares, he was really excited to get them. And I always wondered, did that make sense or not? And then it hit me, “It’s not about that. Neil is trying to level up. Super smart guy. Hiten is super smart guy.” Was that true?

Hiten: I would say that Neil is always looking to become better and definitely level himself up. And like based on the fact that either arguably or not, he’s one of the top marketers, if not the top marketer in the world today based on the way that he’s established his brand and what he’s been wanting to focus on.

Andrew: And so do you feel the same thing? Did you also feel like I’ve got to level up and go to Silicon Valley level, raise money, start a company, sell . . . No?

Hiten: I don’t think either of us viewed it the way that you’re describing it. We never viewed it, like, we’re going to go raise money and we’re going to be in the Bay Area or Silicon Valley. I mean, I’m still here. I’m probably not leaving for a long time.

Andrew: But it wasn’t you trying to do that?

Hiten: Even for him it wasn’t leveling up. It’s like it’s more of ideology around self-improvement and growth and the growth mindset and less so like we want to be like someone else, or we want to be in a certain environment, or we want to raise 100 million bucks or anything like that. Our goals are more personal and less outwardly than appearances might seem.

Andrew: Or maybe it’s me projecting my personality on you. I’m going to go ahead and try to adjust the mic. Okay, let’s see if that works. Is it weird that we just like . . . I keep wanting to get the mics to be out of the way so that you forget them. And one of the things I’ve learned is I’ve got to practice this with someone who’s more of a professional when it comes to audio.

Hiten: Yeah. You can keep doing whatever you want. It doesn’t bother me.

Andrew: I’m going to keep doing it then.

Hiten: Come closer, it’s okay. I don’t care.

Andrew: So then what was the motivation? It was just, “I want the next step.” You really like the analytics?

Hiten: Okay. We built Crazy Egg. We built Crazy Egg out of our consulting company. It was one of 12 products that ended up working. It was the only one that worked. And so what happened is a story is at our consulting company back in 2003, when we started it, within the first year to 18 months, we started making money. Part of the reason is because Neil already had a brand for doing marketing for people even back then. So this is now like 16 years ago. And so we started the company. He was just getting into college, I was getting out of college.

My now wife and his sister decided that we should be introduced in the professional sense and say, “Hey, you guys should work together.” And so we started the consulting company. And then we just tried to build products because we knew that consulting at the time was very much we put in our time, we make money, and we wanted something more scalable. So Crazy Egg ended up working. It still exists today. We were one of the first if not the first. A nicer way to say it is, “Excuse me, we helped pioneer the category of heat maps on your website to help you understand where people are clicking on a page.”

Andrew: And scrolling and what they’re looking at. The whole thing.

Hiten: All that stuff, right? And so we had a very visual analytics. And so what ended up happening is we actually did try to raise money for that business and never got anywhere. We pitched lots of investors and stuff. And people just couldn’t grok the idea that we can get people to sign up online and pay for it without a sales team at the time.

Andrew: Oh, really, okay.

Hiten: They just couldn’t understand that, right? And that was like 2004, 2005, and 2006. And then we hit 2007 and by then we had a new idea. And we were going to build a new brand, and ended up being KISSmetrics. And some of the folks who we pitched Crazy Egg to were really interested in KISSmetrics and thought that there was a new opportunity for analytics. The original KISSmetrics opportunity was actually building analytics for Facebook application developers.

Andrew: Okay, because people were building apps on Facebook. They were going to be the next Microsoft Windows type of thing.

Hiten: Yeah, and they didn’t analytics. So we built that. It didn’t work because all those people that are building the apps were building analytics internally, and were also just looking to make ad dollars. They didn’t need us, and they didn’t want to pay us to do analytics for them at all. They were happy with what they were doing.

Andrew: Okay. They weren’t big marketers.

Hiten: No. And even the larger companies, they were doing it internally. So then we’re like, “Oh, crap, what do we do?” So then we built a business intelligence tool where we actually were had TechCrunch using us at one point where they were able to see the comments, and this was back in the day, but the comments and the traffic and everything all in one place for every blog post and start making decisions around that, including like the search terms that were coming to the site and stuff like that. That failed as well because it required a ton of hand holding for people to customize it.

Andrew: Was this all KISSmetrics still?

Hiten: This was all KISSmetrics.

Andrew: Let me go back a step.

Hiten: Sure.

Andrew: When you did Crazy Egg and you wanted to raise money, what were you going to do with the money?

Hiten: Grow it.

Andrew: Meaning just buy more ads or improve the tool?

Hiten: Marketing, yeah.

Andrew: You had a vision for beyond heat maps.

Hiten: Higher engineering and do that. Well, we think, well, it’s still heat maps. And for the most part, there’s other features, too. But the idea was that we were going to find increasingly interesting and useful ways for people to increase the effectiveness of their website. That was the pitch back then.

Andrew: Okay. You weren’t sure what. You just kept saying, “We’re going to keep improving this thing.” Then you get into KISSmetrics, it does Facebook. Facebook platform developers are not that interested. You test a bunch of different things. What’s the product that you knew hit?

Hiten: Yeah. So the product we knew hit was after we spent a lot of time failing twice, the Facebook application tool, and then the business intelligence tool. And then we basically built out based on going deeper into Google Analytics, which ironically we had done to build Crazy Egg in the first place. One of the problems with Google Analytics that still exists today is they don’t track where everybody clicks on a page. So if you have two links going to the same spot, one at the top one in the bottom, top one gets 10 clicks, bottom one gets 5, Google Analytics shows you both as 15. So it’s inaccurate.

Andrew: They don’t have heat maps to do more than that?

Hiten: No they don’t, even today. And that’s like many years later. And so we wanted to build a more accurate version of that. And that’s what Crazy Egg was. So with KISSmetrics, we went what I would call back to basics, studied Google Analytics, realized that marketers use Google Analytics. They have a hard time tracking data into the system and auditing it and knowing it’s accurate. And it’s not person-based, so they can’t figure out who’s doing what. And it’s not very simple. So we ended up . . . and also another problem is you would attract data into Google Analytics, then you would have to wait 24 hours to see that data, then if something’s wrong, you’d have to wait another 24 hours because you’d have to get a developer to change it. We hit on each of those points very accurately with that third version of KISSmetrics, which ended up being the funnel tool that you mentioned earlier.

Andrew: And at what point did you raise money?

Hiten: We raised money before we launched the first version, which was a Facebook application system.

Andrew: Okay. And who is the first investor in the company?

Hiten: True Ventures.

Andrew: Oh, really?

Hiten: Yeah.

Andrew: And then at what point did Dave McClure come in?

Hiten: He was an advisor pretty early on as well.

Andrew: Because he just respected the way that you guys were thinking.

Hiten: And then he invested later once he did 500 Startups and stuff like that, I believe.

Andrew: And he was an advisor. Advisor shares, what do you make of those?

Hiten: I have a lot of them in a bunch of companies. I think that it’s a common system to get help from people who want to support you. And the onus is on you as the business owner, CEO, founders to get value from anyone who’s advising you.

Andrew: But are they valuable to you as an owner of advisor shares?

Hiten: Absolutely. They can be. They can be. Yeah.

Andrew: Have they been?

Hiten: Yeah, absolutely.

Andrew: In what?

Hiten: We had Eric Ries as advisor. Sean Ellis as advisor.

Andrew: No, no, no, I get for you as entrepreneur, you really did have killer advisors.

Hiten: Yeah, and we used them. Like we used them in a great way.

Andrew: What about for you as someone who owns advisor shares? Have you gotten a big . . .

Hiten: You’d have to ask whoever . . .

Andrew: Without mentioning their name?

Hiten: Oh, do you mean like the exit or something?

Andrew: Have you made money? Yeah.

Hiten: Yeah, absolutely.

Andrew: Oh, you did? So they end up being valuable to you?

Hiten: I mean, it’s just like investment, right? Like if you’re investing in startups, what is it? One of 10 end up succeeding, so it’s kind of the same thing. And you can only have, at best, usually some marginal impact on their outcome. You’re not going to change the game for them.

Andrew: So with someone who could only have marginal impact, not changed the game, is the profit that you get from that significant?

Hiten: It can be.

Andrew: Has it been for you?

Hiten: I’m happy with it. But like I don’t view it like that. I don’t view it like . . .

Andrew: Tell me how you view it.

Hiten: I don’t view it like I’m going to get these advisory shares, I’m going to make money on it. I view it like they want my help and there’s a transaction of equity. And someday that might be interesting. And along the way, interesting meaning from a money standpoint, but along the way, I get to learn, and they get to learn too.

Andrew: That’s the benefit.

Hiten: Yeah. I like to learn.

Andrew: You’re not really making a big windfall from it.

Hiten: I’m not trying to. Other people might view it like that but if you’re trying to take equities in companies as an advisor and you’re trying to think that you’re going to make money on that, I think you’re doing it wrong. You should do it because you enjoy working with those people or helping them out.

Andrew: I feel like at one point, Neil was thinking that way. And I always wanted to like zoom fast forward and have a . . . I will have a conversation with him at some point in the next couple of weeks and ask him did that actually pan out? Did it make sense? And I’m still curious about that. And I think you’re giving me some direction, some answer.

Hiten: I think that him and I view the world very differently and . . .

Andrew: What’s the view? I’m actually going to adjust this, even though it’s going to take you out of the moment for a minute . . .

Hiten: No, that’s fine.

Andrew: . . . because I want to get this right. Okay.

Hiten: I’ll stop moving my arms around.

Andrew: Will you please just not animate at all and just sit still? No, this is going to . . . I see what the problem is. This way maybe it’s a little bit better. Okay. No, it’s not. We’ll just deal with that. No, we’re not. We’re going to try there. Oh, maybe that’s the answer right there. Okay, what’s the difference between the two of you?

Hiten: He’s very focused on what he’s looking to accomplish in any situation. Like what he’s personally looking to accomplish.

Andrew: Like outcome based?

Hiten: Yeah, I think he’s very outcome based, right. And I really admire that about him.

Andrew: Me too.

Hiten: And I’m not as outcome based as I’d like to be.

Andrew: I feel the same way. And only feel that way because of my conversations with Neil. Like I remember there was something that he bought, it was an event. And I asked him, “Is this good? Are you enjoying yourself?” And he was sitting there with his laptop, really making sure that he saw profit. Now, was he so selfish that he just needed money for him from this thing? No. He was genuinely concerned about the other people who were part of it. I could tell you. But he was concerned about that. He wasn’t in the moment going, “Forget the profit. Make sure people are enjoying themselves.” And then the next thing. No, it was, “Did I let these guys down? Did I fuck up for them?”

Hiten: So that’s what’s interesting, right? Like you can say someone who’s that outcome-driven is greedy. That I would never call Neil greedy. And that’s the kind of like the thin line that he’s always on the right side of that, like, I don’t think you would understand if you met him for five minutes. Or if you just saw what he’s doing online, right? Because, you know, you’d have to really grok it and be like, “Oh, he’s doing these videos to help people.” But it helps him too because he does a lot of videos online about marketing, right?

Andrew: You know where I sensed it?

Hiten: But it’s hard to like really grok it.

Andrew: I sensed it when we were at a bar after he spoke at one of my events. And there was a show off part of the conversation where people were showing off and he went for it and he showed off with the things that people are giving him like a computer. And I said, “What are you going to do with this computer?” And he said, “I’m going to raffle it off and get more traffic.” And then it was something like, “So someone’s giving you this or offering this. Are you going to take advantage of it?” He went from laughing and being like in the moment to absolutely not. I am not. Like in that moment, there’s a micro tell that you can see. Just like with you, I could tell you’re very guarded because of your micro tells. All right. I get the sense of the difference between the two of you. You go into this business together. You finally nail it. Things are good. And then something happened that’s not good. Let me take a moment talk about my first sponsor.

Hiten: Please.

Andrew: It’s a company called Toptal. Let me tell you something that stuck out for me with . . . there are few things that stuck out for me about one of our past interviews. One of them was that you came on the KISSmetrics interview with me wearing a Google Analytics shirt, which I liked, even though they were competitors of yours. Were they competitors? Kind of?

Hiten: Yeah, pretty much. Yeah.

Andrew: And then the second thing that I liked was, I asked you, how can you as a non-developer hire developers well? And you had a bunch of really insightful answers to me and I don’t know if it was in that conversation or not. But in that conversation, you gave me a really clear answer. It was, “Do a project with them. See if you’re on track.” So this is a Toptal ad where Toptal is paying me to talk about the fact that people can go and hire from Toptal.

Hiten: Nailed it.

Andrew: Give me another tip.

Hiten: Another tip?

Andrew: Another tip for hiring developers as someone who’s not a developer yourself.

Hiten: Absolutely. I think the amount of rigor you put into the requirements is really important. How specific you are about what this button should do or what this interface should look like and think . . .

Andrew: You had to tell them?

Hiten: Absolutely.

Andrew: Even if they’re great like the best of the best?

Hiten: You still should be as specific as you possibly can be. And I think that’s where either I’ve gone wrong or right. The reason is you have to have empathy for the engineer. They’re sitting there having to make so many little decisions that you’re not privy to, that you won’t understand. And so the last decisions that they have to make without them feeling micromanaged, the better. And so what I do is I get very specific and then if they have questions and think we should do things differently, I’m always open to it.

Andrew: Okay, I’m with you on that. And so when you do that, how do you give it to them? How do you pass on these tip . . .

Hiten: I’ll write it up.

Andrew: . . . text and screenshots?

Hiten: As much as possible.

Andrew: Are you using any tool that’s especially helpful for doing that? No? Which is . . .

Hiten: Google Docs.

Andrew: Screenshots . . . a Google Doc with you drawing using what? What are you using to draw?

Hiten: I actually have . . . there’s an edit bookmarklet for websites that you can hit the edit button and then edit almost anything on the website. Like the copy and things like that. You can even use like, if you want to get a little geeky, you can use the Inspectlet, and replace images and all kinds of fun stuff. All in your browser.

Andrew: And that’s what you’re doing. So you’re finding a website that makes sense . . .

Hiten: I’m just messing around.

Andrew: . . . and you just go on and messing it.

Hiten: Yeah. That’s one way. Another way is like, I like your question but I don’t care about the tools. I’m just trying to get the job done. You know what I mean? Like I’ll use Preview on my Mac that’s like the paint app or whatever, and like, draw it up. It doesn’t matter to me. I’m just trying to get the job done.

Andrew: No, I get it. I’m not asking because of that.

Hiten: These days I use Sketch though if you really want an answer.

Andrew: No. You know? Because when it comes to video editing, I was wondering why so many video editing companies use it use Wrike for project management. And then I used it with someone who edits my videos . . .

Hiten: And it made sense.

Andrew: . . . and I understood because in Wrike it’s very basic, very much like Basecamp, but they have one advantage. Anytime you upload a video, they give you arrows and text so that someone who’s not a video editor who doesn’t know what voiceover is or any of that can just put an arrow and I find that that tells me a lot about who they’re working with. So I was curious about how you do it.

All right, so anyone who wants to hire developers, even the best of the best developers, need clear direction. And if you hire from Toptal, you get the best of the best developers and you’ll get a go-between frankly. Have you ever heard from Toptal?

Hiten: I have. Yeah.

Andrew: Oh, you have?

Hiten: Yeah.

Andrew: Why didn’t I ask you about that?

Hiten: I don’t know.

Andrew: What was your experience with them?

Hiten: It was great.

Andrew: It was?

Hiten: Yeah.

Andrew: Why did you go to Toptal when you have such a good network of developers?

Hiten: The intermediary is really valuable.

Andrew: They call them the matcher to be able to talk it through and get . . . All right, guys. Fuck the rest that I said. In fact, Toptal, please use this as your model on the website on toptal.com/mixergy. Fuck everything else that Andrew said. Hiten Shah used Toptal, you should too.

Hiten: Why not?

Andrew: Toptal.com/mixergy will give you . . . Hiten probably didn’t get this because you don’t even need this, 80 hours of Toptal developer credit free when you pay for your first 80 hours.

Hiten: I’ll take it.

Andrew: Of course you will. Who am I talking about, right?

Hiten: Why wouldn’t I not? What do you mean I don’t need it? Everyone needs extra stuff for free. Free stuff, bring it on. What do you mean?

Andrew: All right. Me, I don’t have a problem with being given free stuff. So I’ve got this bottle of whiskey from a listener who’s now creating his whiskey brand. I’m kicking myself for not knowing the name. I won’t open it because it has to be like this special moment to open it where I could do like some kind of photo because I’m guilty about getting free stuff. All right. That’s not you.

Hiten: No, no, that is me.

Andrew: Oh, it is. You feel guilty too.

Hiten: Yeah, yeah. Well, like I’ll take it because like my wife would get pissed if I don’t take free stuff. It’s free stuff, right? I don’t want to make her mad. I want to make happy. Happy wife, happy life. Come on.

Andrew: I guess in my situation, what I do to Olivia is I say, “No, you were wrong to want that.” She came home one time. She went to a party. She brought something. I guess they don’t have it there. She brought it home. I shamed her so much for bringing it back. I’m an awful, awful person that way. All right.

Hiten: That explains a lot.

Andrew: Really? What do you think? I feel like one of the strengths that you have is deep insight into people and maybe you’re too nice of a person or you’re worried about getting diverted so you won’t go into it. Go ahead. Be insightful. Your downfall is a little bit that you’re nice.

Hiten: Maybe.

Andrew: So go ahead.

Hiten: Maybe you don’t really know me.

Andrew: Don’t hold back.

Hiten: Yeah, I’m actually more direct than you’d imagine.

Andrew: So go ahead. Why are you holding back?

Hiten: Who cares? Who cares? Why do you care so much? What happened during your childhood that made you care so much about that? That’s all.

Andrew: I can totally tell you why I care, but I’ll tell you why in this. First of all, I can totally tell you what happened in my childhood. But I can tell you why I care in this moment.

Hiten: I can too. Yeah.

Andrew: I hate when I’m listening to interviews and I don’t get a sense of the person. There’s someone just firing off questions and there’s someone else who just giving the academic answer. And I want to make sure to take a moment when it comes up to let people know me in an insightful way and at the same time get to know my guest. I just talked to a person who’s angry at his girlfriend because she won’t let him be polyamorous. Now that kind of openness is important to me to get someone that way. But I don’t sense you care about that.

Hiten: What do you mean?

Andrew: Let’s continue.

Hiten: We’re not going to continue. We’re going to get the insights you want. What do you want?

Andrew: No, I guess that you’re not going around going, “Oh, my God, my wife won’t let me be polyamorous.” You’re just happy.

Hiten: I think my situation is more like to give the insight is that and this is evolving learning and probably more recent so it’s raw, which is I have a tendency to, yes, have an ability to be like, okay, you know, somebody says something, I can in my head dig in and be like, “Oh, what does that really mean?” And get to a pretty accurate answer of what it really means. And that curiosity about people is a strength. And it’s a major weakness because it makes me stop caring about myself and my own needs. And for the longest time, in my life with my wife, she really wants security and a great foundation. And so for many years, I was making decisions, almost unbeknownst to me, that we’re optimizing around her needs for security and a foundation, which is really a financial foundation because I think if you have that in her eyes, like that’s great, right?

Andrew: What’s an example of that decision making process?

Hiten: An example that she would say is like, “Go to the cheaper gas station.” And I’m like, “I don’t care. I’m driving. I’m going to go to the gas station once I run out of gas.” And then eventually, I’m like, “I’ll go to the cheaper gas station. That makes sense,” right? I probably didn’t make investments that were as risky.

Andrew: For example?

Hiten: Investments in a company or something like that.

Andrew: Is there one that comes to mind?

Hiten: I don’t have any specific ones that come to mind because like I don’t have FOMO about that.

Andrew: But you don’t have like a thing that haunts you.

Hiten: No, no, no. Anything in the past to me needs to be treated like a dream. But that’s a whole different level of worry. We don’t need to go into that.

Andrew: That’s a really good approach to life. It also makes for harder interviews when people don’t tap into that. Like Jason Fried was the worst for me. He would never go into what’s a big mistake that he made in the past. And I find it interesting that Gary Vaynerchuk now says, “The world, you want one of my mistakes, I never harp on them, I never linger but I got one for you. I almost invested in Uber, I didn’t and it’s painful.” But you don’t have that. Okay.

Hiten: I don’t care about money in that way where it’s like I could have invested. Like I could have. I could have before him. But like I don’t sit there and say I met Ryan Graves right before he was getting the job and he was excited about the job. And I had tea with him and I could have invested.

Andrew: And why didn’t you invest?

Hiten: I just didn’t think of it. I wasn’t investing a lot at the time.

Andrew: And he wasn’t asking. Got it. Okay.

Hiten: And he wasn’t really asking but I could have. Like it doesn’t matter to me.

Andrew: Do you feel like part of your investment for security is what led you to not make those kinds of crazy investments?

Hiten: Possibly. But then I learned later, she’s like, “I’ve never said no to you.” So then the real depth of it is like I have these things in my head about people that might not be 100% accurate.

Andrew: Okay, so here’s an opportunity to go open. The only reason she would have said, “I’ve never said no to you,” is if you personally were a little resentful, right? Otherwise she’s not going to say, “Hey, you know what? I never would have said no.”

Hiten: It’s not that. I was just like . . . actually, that’s not true. We were having a conversation about how I felt in hindsight about some of the decisions we’ve made. There’s no resentment. I don’t believe in having resentment because if I did, then I shouldn’t be around that person. That means I need to work on myself to not have the resentment. So it was more so like a review of your life, a postmortem. How do I want to change and become better? That’s my viewpoint on the world.

Andrew: That’s it.

Hiten: Because all these other things are like weighing you down. I don’t want to be emotional about these things.

Andrew: I feel like one of your problems is you’re very well adjusted. Like you asked me what my big issue is, I’ve got a ton of them. And they’re constantly like dealing with me staying and working late right here tonight, for example. I feel like you don’t have that. Did you have child . . . like a good childhood . . .

Hiten: I like how you’re trying.

Andrew: I’m not trying. I’m being completely genuine.

Hiten: Trying meaning like everyone has that.

Andrew: What’s your big issue?

Hiten: What’s my big issues? I get caught up with people. I said it already and . . .

Andrew: That’s it?

Hiten: That’s the thing . . .

Andrew: No, you didn’t have like a hit like a painful childhood that way?

Hiten: All right. All right.

Andrew: Go ahead.

Hiten: I’ll tell you, it doesn’t matter. I don’t mind talking about it. When I was two years old, my mom and dad told me that my mother was going to die because she had breast cancer. When I was eight, she passed away. I didn’t cry. Hang on. And then my dad asked me, “Are you going to go to school the next day? Do you want to go to school?” I said, “Yes.” So then the poor guy goes to work. And they asked him, “Why are you here today?” And he says, “My son went to school today.” So I am the product of that experience today. And all I’m looking to do is figure out how do I get past that?

Andrew: Oh, the my obligation is to go to school?

Hiten: No, two years old being told that your mom is going to die one day and having to live with that. And then at eight not actually truthfully morning her passing.

Andrew: Why do you think you didn’t mourn the date?

Hiten: In my head I was like I need to be strong. I need to be strong for her. I need to be strong for my dad and they told me when I was two.

Andrew: Oh, really?

Hiten: What do I know when I’m two? Whatever they tell me I process it in ways I probably barely understand.

Andrew: Now that you’ve had a kid who is two years old, isn’t it interesting? They do know a lot. They process much more than you realize and it’s scary too.

Hiten: Right. So you want real talk? I’ll give it to you. What else do you want?

Andrew: Did you cry yet about your mom?

Hiten: Yeah, many times.

Andrew: Oh, you did since then?

Hiten: Yeah.

Andrew: I have a hard time crying. I really . . . there’s something that this guy showed me that immediately it was I thought because of his English that he didn’t explain right that the school that he was supporting with $15,000 helping to open was a school that kids don’t get hit. I thought the guy doesn’t speak English. He means don’t get hit with hard lessons here. He means literally, he was pointed. And I suddenly flashed to my kid, I suddenly . . . he was tearing up at other parts. My eyes welled up but I couldn’t cry. Even though I wanted to. I have no embarrassment about it.

Okay, all right. Back to this. Nobody gives a rat . . . Actually I do believe people care and if they don’t, fuck them. You tweeted out that you had this realization about mistakes that you made. You started talking about it here in the office before we started recording. Tell me about it. Like your decision making process at KISSmetrics was what?

Hiten: Yeah. I’ve shared this on private email lists of mine and I haven’t shared it publicly. But I am soon. So it might already be done by the time this goes out. And so I call it my billion dollar mistake. And what it basically is, is this thing that our Head of Product and Engineering, Steve at KISSmetrics, wrote a long memo about and he basically said, “I figured it out.” You might call it a Hiten bomb, or Hiten tornado or Hiten storm or whatever. It’s when Hiten gives you a call or comes to you in the office and just tells you his next random great idea, or whatever it is and basically, completely derails you and you don’t know what you should be doing.

And so Steve is a very good manager. I’ve learned a lot from him. And his whole explanation of it was basically explaining what I would say a CEO, a founder, an executive at a company is dealing with all the time, which is here are the 20 things that they’re managing and juggling and why sometimes it feels like it’s a bomb going off when they talk to you. And that was really, honestly, a turning point for me because I realized what I was doing to my team and I didn’t want to do that anymore.

Andrew: And you feel because you kept throwing ideas at them and every time they were on track for something derailing them?

Hiten: And we got distracted as a company.

Andrew: What’s an example of something like that? Because from the outside, everything looks so clean.

Hiten: Everything always looks clean everywhere. Everywhere all the time.

Andrew: You had a conversation once with a mutual friend at my suite in Vegas.

Hiten: Yeah. I did.

Andrew: And you said . . . I won’t name the person.

Hiten: Sure.

Andrew: But you said your site is doing you a disservice because it doesn’t look good. And I realize I value companies differently because of their design. And I think of the people behind them different because of their design. Because your site KISSmetrics’ design was so elegant, I just figured everything was super organized and smooth. And what was I missing? What’s an example of a curveball that you threw?

Hiten: Perception is reality. So that’s the first thing I’ll say, right. And so for us, we could have taken the feature set and the product market fit we created through the feature set we had and extended it in a number of ways that would have helped us capitalize on the opportunity we created and the kind of innovation we started. We didn’t capitalize on that. Instead, we got distracted by shiny objects and ideas that I had or advisors or investors whoever I was talking to, not that they had bad ideas . . .

Andrew: Can you be specific?

Hiten: . . . but my filter was not that good.

So we chased like we started . . . okay. So today, I think about product development a lot, probably more than most things I think about in business. And instead of building a cohort analysis or what we used to call a power report, which are all great features, we should have doubled down on our funnel, or doubled down on the insight that people don’t know what to track so we could introduce automated tracking. And instead, other companies came out years after we had those ideas and even prototyped them, but never launched them with that idea and built bigger businesses than we did off those ideas.

Andrew: Of automated analytics.

Hiten: Automated analytics like Heap Analytics really took that and we had experiments around it, but we never really double down on it because our focus was not there. And we were distracted. It was my fault.

Andrew: And I thought cohort analysis made sense because at the time people started to understand cohort analysis. Cohort analysis is where you say, “I just bought ads from this place, bought ads from this place. They both seem to be doing okay. One is a little more expensive than the other. Are the users still as valuable? What are they doing as they go through the site? What’s the difference between someone who comes in last year versus someone who’s coming in this year in the way that they’re using the site?” That was a big need. And so that’s why you got into it. You would have said, “Look, that’s a big need. Somebody should start a company and I’d love to advise them on how to do it. My business is the funnel tracking and . . . ”

Hiten: I wouldn’t have advised anyone on anything analytics at the time. More accurately, we would have saved it and instead focused on doubling down on the core value prop that we had, which we didn’t do. Instead we added features.

Andrew: Which was?

Hiten: Which is basically help people understand how people are moving through their websites and apps.

Andrew: That’s it.

Hiten: And we should have doubled down on that. There’s so many things we could have done that we didn’t do that still don’t exist in the market that like one day maybe I’ll work on, but like I don’t have any dreams about that.

Andrew: Okay. All right, second sponsor and then we’re going to come back in and find out what happened that made the . . . actually, let’s talk about what happened that made the company go away?

Hiten: Sure.

Andrew: I had this conversation I told you with Eric Ries in person. Our wives are friends. We talked and then I said to him, “By the way, what happened to KISSmetrics?” And he went from being just casual, like, “I’m going through my day here,” to ramrod straight. I saw in his eyes that I breached a relationship by asking and he said, “You should ask Hiten. I’m sure he’ll be open to telling you but I can’t.” And I’ve always felt like it’s not that it ruined my relationship with him. But I’ve always felt there was a knock on my relationship because there was a sense of, “Maybe Andrew is working me to get information for something which I don’t do.”

Hiten: Sure.

Andrew: I’m here with you.

Hiten: Yeah.

Andrew: What happened to the company? Why is it not there anymore?

Hiten: So the story I was saying was we really screwed up in our product direction, and losing focus on what we should be doing, and doubling down on what we had created. So that was one thing. Another thing is we had a class action lawsuit with us and 25 customers. And so because our customers were in the lawsuit as well with us and we created it, we stayed in the lawsuit and got it to a settlement. And we had an obligation that we personally felt, Neil and I, in order to complete that instead of like find other alternatives of getting out of it.

Andrew: But so the situation was at the time, everyone was worried about privacy with websites, and specifically . . .

Hiten: We were doing a bunch tracking that would look really bad if we were ad-based business.

Andrew: Give me an example.

Hiten: So an example would be it appeared like we were tracking people across our customers’ websites.

Andrew: And weren’t you?

Hiten: We were not. And technology looked like we could because of the way we had implemented it. That’s the short answer. And we had really good engineers and we thought that technology might have been important not to track people across sites, but to have really accurate tracking of people on your own site. And that was like 2010 and 2011. This actually lawsuit hit my door, literally, on my birthday, my 30th birthday. So it’s a very fond memory. Not really. So basically, that lawsuit was very important to us because it was something that because our customers who are some of the larger companies on the internet, like SlideShare and Spotify and Hulu and Spokeo and a bunch of these top 10, top 20 sites on the internet, we felt an obligation to do right by them.

Andrew: Meaning?

Hiten: We would stay in the lawsuit and take the brunt of . . .

Andrew: What else could you have done?

Hiten: There’s a number of things you can do because they are using our technology to supposedly do something that . . . supposedly, because it’s a class action lawsuit, not an actual like crazy type of litigation or anything like that. They would be liable if we got out of it somehow. Because they wanted to . . . the privacy folks care about not us as a technology provider, they care about the large sites that have millions and millions of users because they can charge those large sites, the class action folks, hypothetically, for every single user that’s been affected.

Andrew: And so you’re saying as long as you were around, you could take the hit?

Hiten: Yeah. And that’s what we did.

Andrew: And Hulu was not sued over it?

Hiten: They were in the lawsuit, but because we stayed in it, it was almost impossible for them to go after those companies directly.

Andrew: Okay. And so . . .

Hiten: Again, it’s all in the legalese and all that stuff. Yeah.

Andrew: And if you would have wanted to wiggle out of it, what could you have done? Close up shop?

Hiten: Yeah, there’s all kinds of thing . . . Yeah, we could’ve done . . .

Andrew: That’s it. That’s the only thing. I felt like you could have continued as long as you didn’t have the money to fight it.

Hiten: Look, there’s a . . . it would have been unethical to get out of it in our opinion. Like get out of it in any way except the way we did, which was fight it out and wait.

Andrew: And so meanwhile, you couldn’t raise any money.

Hiten: And also we weren’t doing anything illegal with that information or that technology. So that gave us a certain ground to fight it. And that’s what we assess with our lawyers. So when I have a legal problem like that, I go to the best lawyers I can find. And they assess the situation. If they assess the situation in a different way, we would have made different decisions.

Andrew: How do you find the best lawyers?

Hiten: Ask friends.

Andrew: Just keep asking around to see who it is.

Hiten: Ask [in tech 00:38:52]. Ask your friends depending on the situation. I always look for multiple opinions and find the best lawyers. That’s really important.

Andrew: Okay, and so you couldn’t raise money. You guys were losing money at the time because you were a fund company.

Hiten: Yeah, venture funded. Yeah.

Andrew: Right? And so you have to. And you’re basically at a point where you say, “I could either win this and get back on track or we’re done.”

Hiten: Yeah. Or settle it and keep running the company. So we went towards settling it and kept running the company for the two years that we were settling it, but in that time, the market was moving really fast. And our competitor, Mixpanel, was very aggressive about using our sort of wound against us and putting salt in it with every sales call they had. They would be like, “Oh, can you trust them?” and things like that. So they are putting fear, uncertainty, and doubt into the customers minds. I wouldn’t say that’s why we failed because of what they did, but they were definitely the things we heard were very aggressive in terms of what they were saying about us.

Andrew: And can you keep hiring when you’re going through that? Can you keep personally manage?

Hiten: We were able to keep hiring.

Andrew: You could?

Hiten: Yeah, because we had . . . I wrote a whole blog post on the situation. We weren’t in a black and white wrong. There was a massive gray area that we were stuck in with that lawsuit and what we were doing.

Andrew: How did you stay focused?

Hiten: It was partially where all the scattering came on. I think, honestly, like we were backed into a corner and there’s only one way to go.

Andrew: Okay.

Hiten: We need a corner and you’re not can turn on a look at the corner of like I’m in a corner and try to move into the corner, right? You’re going to turn around and look at, “Well, there’s one way to go which is survive.” The company went into an unnatural survival mode. And that’s how we just approached it.

Andrew: And you didn’t lash out at people. You weren’t . . . none of that. No, that’s not you?

Hiten: No.

Andrew: I would. When I’m like uncomfortable I would. That’s not you?

Hiten: No. It’s not their fault. Whose fault is it? My fault.

Andrew: No, it’s that’s a very rational answer. But when we’re feeling hurt, when we’re feeling frustrated we’re not being rational.

Hiten: Yeah but nobody did it to me, I did it to myself. I took the ownership because I ran the company. I was a CEO. I was a founder.

Andrew: And so did you beat yourself up?

Hiten: No.

Andrew: No. Did you have hard time getting up?

Hiten: No. I had a problem to solve and I knew what I had to do.

Andrew: That’s the way you think?

Hiten: So for me it’s as simple as, do I know what to do next? If I don’t know what to do next, when will I know what to do next? And what do I need to know or do to know what to do next? And so it’s always about when you . . . It’s almost like if the inevitable is going to happen, I just want to know what it looks like as soon as I can and what the options are. So like . . . yeah.

Andrew: No, Hiten, this is a very rational way to think. Most of us are human beings who can’t think that rationally. But you don’t use . . .

Hiten: It was my 30th birthday. I was super sad and things like that . . .

Andrew: But that was it?

Hiten: . . . and I was bummed out. But like the thing is to me there’s a very big difference between pragmatic handling of a situation and your emotions. And so, yeah, if I’m super emotional about something, the worst you’ll see in me is I will go talk to my friends about things that I never talked to them about.

Andrew: Like what?

Hiten: My problem.

Andrew: Oh, that’s it.

Hiten: Yeah, that’s it.

Andrew: That’s it?

Hiten: The worst I do is they see my emotion and that is it.

Andrew: Because you hold it back? Were you waking up in the middle of night worried? No.

Hiten: Here’s the funny thing. For me, I only don’t sleep when I have a problem in an important relationship of mine in life.

Andrew: Oh, really?

Hiten: That’s it. I figured this out about me.

Andrew: So you and a good friend, Sean Ellis, for example, thinks that you just snubbed him somewhere and you are in the middle of night and go . . .

Hiten: And I can’t fix it. I already didn’t fix it got it.

Andrew: Got it. Wow. All right. Second sponsor, HostGator, hosting company. Do blogs still make sense? Does somebody makes sense to go to HostGator . . .

Hiten: Blogs makes sense. So you should find a host and if HostGator is your choice, good for you.

Andrew: Let me ask you this question. If you had nothing but like Hiten Shah is now starting from scratch. The government comes takes everything away. You got nothing. HostGator account to host any website Hiten wants. What would it be? What’s the first thing?

Hiten: Let’s start a blog?

Andrew: A blog on what?

Hiten: Honestly, today, probably something related to a category around consumer goods.

Andrew: Because?

Hiten: It’s fun.

Andrew: That’s it? And then where would you make money and build up from there?

Hiten: Affiliate revenue from Amazon. And I’d write interesting things about products.

Andrew: What’s a product example?

Hiten: A blog about . . .

Andrew: Like 360 cameras. I’m really kind of fascinated by them. It would just be something that simple.

Hiten: There you go. Right. Yeah. So it’s something that simple but I’d do some research and study and be like, “Okay, what’s a good category to be in?” I’d probably try to find something more consumable than that and see if I can go after it.

Andrew: What do you mean by consumable? Where people would need more of it than one.

Hiten: So the ideal thing would be people need more and more of it and will keep ordering it and it costs a lot of money.

Andrew: Like what?

Hiten: I don’t know. I haven’t thought through it.

Andrew: Maybe shaving is a good example.

Hiten: Shaving is a good example. Anything like that because like I’m just thinking through it, right?

Andrew: Got it. Got it. Diapers is another good example.

Hiten: Yeah. Do some research on it. So like kids targeted stuff is always great. Toys, toys are good.

Andrew: Because they just keep having a kid.

Hiten: People buy more toys.

Andrew: All right. Hostgator.com/mixergy. When you go there, you can start your account inexpensively. Basically, this stuff cost nothing.

Hiten: That’s awesome.

Andrew: Number one and number two, you’re going to get the lowest price because you use that URL. And frankly, number three, which we’re going to do is do your old buddy, Andrew, a solid by signing up using my link. That way they know that they came from you for me. And of course what we do, here is what we do. I stand behind all my sponsors. So if anyone has a problem, they contact me and then I will reach out to the sponsor on their behalf. Anyone who buys an ad, there’s a form they fill out and one of them is if there’s a problem, who does Andrew yell at? And that’s the field.

Hiten: I like it.

Andrew: And so we always stand behind them.

Hiten: That’s great.

Andrew: Okay.

Hiten: So you’ll never go wrong if you use those recommendations is what he’s saying.

Andrew: That’s right. KISSmetrics is closed.

Hiten: Yeah. Well, it hasn’t closed yet, but yes.

Andrew: The URL doesn’t redirect but it redirects to neilpatel.com or something.

Hiten: Because he bought it.

Andrew: He bought the URL?

Hiten: And he said he bought it for half a million dollars. He said that on a blog post.

Andrew: Wow. It was worth half a million dollars for that URL?

Hiten: To him it was because it gets a lot of traffic.

Andrew: Okay, and it’s his type of traffic.

Hiten: Yeah, marketing.

Andrew: Wow. Okay. Super smart guy.

Hiten: He’s very smart.

Andrew: You guys like to have Thanksgiving dinner or something because you’re still family?

Hiten: We meet up together. Yeah.

Andrew: You do?

Hiten: But usually weddings or certain events. He had a baby shower because he’s going to have a baby.

Andrew: Wow. I can’t believe he did an interview with me and he said he was not going to fall in love because it’s a distraction for work. I swear to God he said that.

Hiten: I’m not sure how he thinks about love. Right?

Andrew: I’ll find out.

Hiten: But like the amazing thing about him is that he’s outcome-driven and has a . . . he’s definitely like me in this which is like strong opinions loosely held. So if he said something one day, he’s willing to change his mind if need be.

Andrew: Yeah, I could see that.

Hiten: Yeah.

Andrew: The day that it was done. Did you know what you’re going to do next? The day that you knew this is it. I get it walk away.

Hiten: So this is where I think why Eric didn’t want to share things with you because it’s my story to tell, not his, right? And he knows the whole story. The day that . . . So we had an independent board member at KISSmetrics and he was an ex Comscore . . . actually, he was still at Comscore at the time and he was in sales, I believe, or business development or something like that. And he was an independent board member. And literally, the day or whatever that we settled, he became CEO of the company. And I had gotten a lot of advice from people and founder friends of mine that have been through that transition. And that transition doesn’t usually work well.

So what ended up happening is he took over the company and did the best he could on scaling it and growing sales and things like that. And ultimately, he was unable to do it at acceptable pays for the board. That includes myself. I was still at the company. And then . . . I’m trying to remember the timeline exactly. It was years ago now. And then I believe I had either left or I was still there doing something. And then . . . I think I’d left actually for a short period of time. And then they decided that they wanted a new CEO. And for me, my obligation to that business at the time was to the investors who trusted us with their money.

And so I went in for six months as an interim CEO in order to find his replacement. And so I found his replacement and I stayed on at the company doing some product stuff and things like that. And ultimately, the new CEO, so the . . . technically the third CEO but second hired CEO. And I just didn’t see eye to eye in terms of what happens next with the company and I decided to . . . and this was my decision, just because of the way the boards are set up to actually leave the board and not be working in the company anymore. I don’t remember what year that was but that was definitely four years ago or something like that or may be more, four or five.

Andrew: And why did you leave the first time?

Hiten: I don’t remember if I left anywhere because I don’t recall.

Andrew: No. I mean, why did you stop being the CEO at the time? They lost trust in you?

Hiten: Because the lawsuit was over and they wanted to scale the company and they wanted to add sales and . . .

Andrew: Had the experience doing it.

Hiten: . . . he definitely had the experience I didn’t have at the time. And there’s a lot of things I would have changed in hindsight like not accepted that decision. But at that time, I was just accepting of whatever decision they wanted to make because honestly I was tired after those two years of just not being able to grow the business.

Andrew: I get it.

Hiten: But the chance that I had to grow the business was taken away from me, not by anyone else, but like just by my own acceptance because he took over.

Andrew: That makes sense.

Hiten: Right? So in hindsight, I probably would have, for lack of a better word, fought for my right to have that opportunity considering the time I had spent in it, but like I didn’t know any better. I didn’t think through it.

Andrew: Okay. So you started the company with Neil Patel.

Hiten: Yeah.

Andrew: Like other companies, I went and did that thing with Hello Bar. We did a webinar. That’s what it was. It was introducing Hello Bar to my audience. And they said that it was founded by Neil Patel and Mike Kamo. And I said, “What happened to Hiten?” And I had the sense that something happened. Why aren’t you guys working together and what happened?

Hiten: Okay. So for people that don’t know, at Crazy Egg, my other business, it’s self-funded and has been running since 2005 while we were doing KISSmetrics as well, my wife actually had been running it at the time and now she’s COO there and we have a General Manager. And we had bought Hello Bar. We had bought it from this gentleman named Chuck at . . .

Andrew: Longanecker. Yes.

Hiten: Digital Telepathy who is great. And he had built it up and built the original thing. And it was literally an original idea at the time.

Andrew: The idea was this.

Hiten: There was not bars at the top of the page.

Andrew: Bar at the top of the page? It says, “If you want more information about this or you want to sign up for my PDF, enter your email address.” People would enter their email address.

Hiten: Actually, Chuck never had email collection in that bar.

Andrew: Oh, it’s just a button that would lead to a form on your site. Really?

Hiten: It was only directing people.

Andrew: You know what else he told me that blew my mind? After he sold it to you, he told me two things. Number one, he said, “I built the whole thing on WordPress.” So it was just nothing but WordPress. I saw your eyes roll on it.

Hiten: OMG.

Andrew: And then the second thing he said was once he . . .

Hiten: I love WordPress, by the way, for content but not for building apps. Just to be clear.

Andrew: He said, “Once these guys got in, it was beautiful to watch how they turned the engineering into something that just worked crisply. They redid the whole thing from scratch and they did it beautifully.”

Hiten: Yeah.

Andrew: By the way, this whole light just went off in the middle of this conversation. I think we’re supposed to wiggle arms or something but screw it.

Hiten: It was just a moment. It’s your fault. It was what you said. Okay, so I appreciate that compliment through you from Chuck because you never told me that. But that’s great. We work with some really talented engineers and definitely know how to work with them to get really great products. That’s even back then. So we had Hello Bar. And honestly, we missed . . . even though we rebuilt the tech for a while we had a lead but then we missed a bunch of opportunities. And a lot of companies came into that market. And we just didn’t capitalize on the early excitement from the customers that we had.

Andrew: What was the opportunity you missed?

Hiten: Adding email to the bar quick enough or figuring out how to grow the business by doing services. Or adding like exit pop-ups and just iterating the product . . .

Andrew: More . . . Which you have now.

Hiten: Yeah, well, I don’t have it. I don’t own it.

Andrew: But the software has it now.

Hiten: So what happened fast forwarding is we ended up deciding we wanted to sell it. And Neil and Mike worked together on a business that Neil started based on his blogging that where he could generate a lot of leads for doing consulting. So he started a consulting business called Neil . . . now it’s called Neil Patel Digital and Mike is the CEO of it last I checked. And then Neil, obviously, is owner as well and maybe chairman or whatever the role is. I don’t know. And so they’ve been growing that consulting business.

Andrew: What they have been doing is that I think he told me that Mike came to him and said, “You’re missing an opportunity. You’re selling these freaking e-books or these courses or something. That’s not the big money. The big money is do services for your audience, charge higher price points and that’s the model.” And that’s what they have. Okay. And so . . .

Hiten: I’ll accept the story they told you. That’s fine. I don’t know. Whatever they say is their story. For example, and I think this is worth going into, we didn’t create Hello Bar. We are not the founders of Hello Bar. We purchased it. So there’s no way Neil and Mike are the founders.

Andrew: I know.

Hiten: And I’m not trying to blow up their spot but like you could just do some research and figure that out. So there’s a lot of revisionist history that sometimes happens.

Andrew: I wonder if this is intentional or things just happened.

Hiten: I don’t care. Intentional or not, I don’t care. I like telling the truth of the matter because we are talking about it. And I have no like resentment or anything but like the truth is the truth. We bought . . . we’re not founders of it. Chuck and his team founded it and created it.

Andrew: You mentioned what you could have done was services. It’s kind of amazing but I’m seeing companies now. I won’t open up anyone’s stuff but what they’re . . . by being open when they when they don’t want to do it, but what they’re doing is they’re selling software. But anytime they see . . . what do you use Clearbit or something to see . . .

Hiten: Clearbit. Clearbit. Yeah.

Andrew: Clearbit. Thank you. Clearbit to see who’s a big company who’s using their software, get an SDR to set up a call with a salesperson and then level them up and say, “Okay, did you sign for the $50 a month subscription? Did you know that for $500 a month or a $1,000 a month . . .

Hiten: We could do XYZ.

Andrew: . . . we do all this plus we’ll . . . ”

Hiten: It’s a great model.

Andrew: That’s the model. I have no idea.

Hiten: And if you can service those people at that price and they’re willing to pay and you can keep them happy, there’s nothing wrong with it. It’s great.

Andrew: Not at all.

Hiten: Love it.

Andrew: I just didn’t know that services were becoming a big part of software.

Hiten: So in the business of pop-ups and Hello bars and stuff like that. I would say that Bounce Exchange is probably the most impressive company because of their software plus services model.

Andrew: Okay. But that’s the model now that it’s you sell software. What do you think for . . .

Hiten: It’s a model. Yeah.

Andrew: In general, from what you’re seeing, is it a substantial portion of their business? Except for Bounce Exchange which is killing it.

Hiten: Bounce Exchange is a substantial portion. I mean, if you think about it, even HubSpot, when you sign up for HubSpot on a paid plan, they require you to pay for training. Isn’t that services?

Andrew: I guess so. Okay. But so it’s becoming like a bigger . . . would you say, for some companies it’s becoming . . . how big a trend is this that we’re not noticing because we don’t look at the people’s . . . ?

Hiten: I geek out on this stuff. It’s just evolution.

Andrew: That’s why I’m asking you.

Hiten: It’s just evolution. The easier it got to build software, the harder we try to make money with software, and then we realized that services and software go together. And so there’s just more and more of that. It’s just I wish I could have seen that in hindsight, right. But like when you think about like old school enterprise products or on-premise products, there was always a services component to it.

Andrew: I think we always wanted to beat them. We didn’t want to have salespeople, and we didn’t want to have a service people, right?

Hiten: Where are we?

Andrew: And then meanwhile . . .

Hiten: Yeah, the companies that are growing the fastest have sales people and they’re freemium.

Andrew: I feel like even if like KISSmetrics would . . . even though it was an enterprise, if KISSmetrics would have had $1,000 thing set up . . .

Hiten: Set you up, good to go.

Andrew: . . . Andrew, I would have said, “Okay, great. Go for it. Set me up.” Okay . . .

Hiten: I wish we would have done that.

Andrew: So you and Neil not working together because?

Hiten: It happened naturally. I think he has attraction to the business model of providing services and I really love software and products and building products. And like that . . .

Andrew: But his other product you guys are not working together on [subscribe 00:55:24] . .

Hiten: So we worked together on Crazy Egg. And everything else we’ve separated out so that he works on his consulting thing. I have nothing to do with it. And I work on building more software products and my email newsletter.

Andrew: One is a big focus. Actually, you know what? As I as I kept pushing I realized now going into gossip territory which I don’t give a rat’s ass about.

Hiten: Whatever you want.

Andrew: You know what I want and I don’t think we’re getting it today so we’re going to skip it, whenever I have conversations with people over dinner, they eat steak, I eat vegetables, right?

Hiten: I’m a vegetarian.

Andrew: Oh, you are? Okay.

Hiten: Since I was born.

Andrew: Wow. You know what? My kids are raised vegetarian. My parents keep going, “Are you sure . . . ” or they did for little bit? Just like I know like every time I’m in line at a party at one of Olivia’s company that you work for, there’s always all these lines of Indians. They come in from out of the country. They’re killing it over here. They’re healthy and they’re eating vegetarian ahead of me in line. There’s a reason that’s . . . don’t worry, the kids are going to be fine. Olivia is a lifelong vegetarian too. That’s another example.

Hiten: Yeah.

Andrew: So I forget what I was going with this.

Hiten: You wanted something from me and I’m willing to give it to you. So tell what you want.

Andrew: Oh no. Here’s what I want. We’re not getting into it today. I don’t think . . . I can read people. I don’t think we’re going into it. When I have dinner with people . . .

Hiten: You can try.

Andrew: . . . they have steak, I have salad, they will talk about the frustration and the anger with co-founders in the most open way. It’s not like I have to turn you against my co-founder. It’s not that petty thing that you see. But it’s a real talk conversation about what happens. And also it’s a real conversation about how to overcome that, which is always so enlightening for other people at the table because we’re all in partnerships and that I haven’t been able to get on.

Hiten: Here’s the thing, here’s what you don’t understand, right? Like your upbringing is going to dictate how you view the world and your perspective on it. And either you’re trying to undo it because you realize the parts of it that like you can’t accept or don’t want to accept or want to improve, or you’re just living it out over and over again, right? So, for me, which I talked about earlier, the real talk, and this is for me, that’s why I don’t know how valuable it is for anyone else, I lost my mother at a young age. I knew that before I could like really understand anything and that drives me. So, yes, like when I stopped working with somebody or have . . . I would call not working with Neil on everything a personal like disappointment not in him and not in anger but in myself. And all I think about is, “What did I do wrong?”

Andrew: What do you think you did wrong when you think about it, when you analyze it?

Hiten: When I analyze it, I think we never figured out how to . . . we always figured how to manage and balance the situations that came up and divide and conquer and things like that really well. But I don’t think we ever really figured out how to work together towards a cohesive goal. And being at KISSmetrics, specifically being the CEO of the company, that was my job. So I think I failed at directing him towards what he could do that’s best for us. That being said, when we had the lawsuit, after literally talking to all the customers and us dividing that up, he managed the whole lawsuit with very little involvement from me.

Andrew: Managing the lawsuit with lawyers?

Hiten: Yeah. He took that while I did my best to keep the company running. So I can’t say the relationship was negative or bad. But if you were to really want the real talk, for me, there’s always going to be a level of what if and disappointment that in myself for not figuring out how to have a better situation. That being said, I really believe in the fact that whatever happens happens for a reason and there are lessons that we learned from it. So I’m learning how to feel more independent, and not have that emotion and actually get through it. So that’s about as real as I can get. I don’t have anything against him or anything where I’m upset at him or anything like that.

Andrew: I didn’t think that at all. I felt like there was some kind of personality clash or something where you guys were diverting in your attention? I think if I would have thought about it as just knowing you guys a little bit, very little bit, I would have thought he was aggressively hunting towards something and you found like stability and calm. Both like as a dad and as someone who even at an early age in your 20s. In your fucking 20s, you were looked at as an elder statesman to people in their 30s. Like the calm voice. The one who is just going to tell you, “You’re going to have mood swings up and down.” Your job is to level off to not be the high crazy great, not be the low everything sucks level. You were there and I felt like maybe that’s a divergence, that you got even more into that . . . okay, you’re nodding.

Hiten: That’s probably true. Yeah, I mean, that’s a solid assessment. He’s definitely a go getter in a way that I’m not.

Andrew: FYI. I love the idea behind FYI. I was searching for something like this for a long time when I was using Slack, and Slack just pissed me off and I moved away. The problem I have is I spend a lot of time looking for stuff. And then what I do is because I’m the founder of the company and people put up with my bullshit, I text somebody and I say, “Text them. Where is this thing?” I did that earlier today. I could have just freaking looked. It was this Keynote deck because I do a lot of my thinking in Keynote. “Where is the goddamn deck?” Before they texted, I said, “I’m too angry to wait for them to respond. I’m going to go.” And I looked and I found it and I was like, “Big boy,” and I had it.

We’ve been trying to do this organization that you’re doing for a long time. Several companies have failed. I forget there was one on Jason Calacanis’ podcast we talked about it. There was a kid who was like the wunderkind who’s in his teenage. You’ve seen some people do this, right? Why did they fail? And what are you going to do to succeed where they failed? I don’t know why they even failed actually.

Hiten: We don’t even care about them. Not out of disrespect or anything. We love that they tried.

Andrew: You’re just seeing a problem. But you’re not saying where they go wrong and we’re going to fix it.

Hiten: There’s a problem. We don’t care where they went wrong. This problem is the number one challenge people have with documents, and we’re going to go solve it. And that’s it. And the reason we’re going to solve it is that thing you just said, I’ve heard just the same story over and over again. And then there’s 20 other stories like that. And you’ve experienced that in the last year 100 times. Why wouldn’t I want to solve it? It’s not solved.

Andrew: Here’s where there’s a problem. I guess I would pay for it. But . . .

Hiten: But we’re not going to make you pay for it. Go try it. It’s free.

Andrew: I saw that. I can’t use it. You know why? I’m now on Basecamp.

Hiten: Then we’ll get Basecamp in there. No problem.

Andrew: You really will?

Hiten: Yeah. We’re working on it. We’re going to get everything you integrate with over time. We have to. We have no choice.

Andrew: I need Basecamp in Google Docs. We spend a fuck ton of money. Like having every Google Doc we create turned into an Airtable and then somebody on the team said . . .

Hiten: So you use Airtable too? We just integrated with them.

Andrew: I’m done Airtable. No, I love it. I love it for certain things. But I’m done with . . . here’s the crazy thing that we did. I said I need this solved. I hired somebody who’s like our VP of operations not like, that’s what it is. I said, “One of your jobs is every doc that I have everyone has to find it and people don’t live in Google Docs and this the way that I do. Make it so it’s searchable.” She hired a bunch of consultants. She came up with every Google Doc that’s created automatically if it’s the right kind of Google Doc, not just some BS thing based on a criteria, gets into an Airtable. Everyone on the team should go search in Airtable.

I go, “No one is going to go to Airtable. I might like Airtable. You might like it. They don’t give a rat’s ass.” So we had it. Nobody uses it. It’s just automatically in the background there. The reason I was doubting that . . . I kept checking your site to see if Basecamp is in there. I feel like Basecamp is making a mistake because they don’t have a freemium version. So there are two problems. Number one, no one on the team wants to go and sign up for something and then have the boss say, “You paid money for this?” They’d rather go sign up for free and then they’d inch their way into, “Hey, we should pay money to get this.”

Hiten: Of course. Yeah.

Andrew: And then the other problem is because it’s not free, there aren’t a lot of people using it which means there are no like incentive for these APIs to do it. And so I always assume nothing is going to get broke. That’s all going to be Zapier.

Hiten: No. No, no we love Basecamp. I’m a 37 Signals because I still call them that fanboy. And my businesses wouldn’t exist without them and the Rails movement.

Andrew: Okay. So you going to integrate it?

Hiten: Absolutely.

Andrew: So then if you’re not charging, where’s the money going to come from?

Hiten: We charge once you hit a certain point and you want to go back like further and further in your document history. So we do charge, it’s just like freemium so you can try it out.

Andrew: Here’s why that makes sense here. The reason it makes sense here is it’s not a bad enough problem when I’m not thinking about it. When I’m not thinking about it, it’s stupid and I go, “Of course, I’ll just look at Google Docs where I already signed up.” When I’m experiencing it, that’s when it’s a problem. And if you at some point stop me and say, “Andrew, you like this so far. Those old stuff you got to pay for?” That would be enough of a problem that I would pay for it.

Hiten: Yeah. And we’ve done research on the problem. So we know what the problem is. We also know the way we think about it is find your documents in three clicks or less. We don’t think about it like, “Go search for anything.”

Andrew: So wait, do I have to go to a different site now to . . . what is it called? It’s like I’m never going to remember, getfyi.com?

Hiten: It’s just usefyi.com.

Andrew: Use FYI.

Hiten: Yeah. Sure.

Andrew: Oh, you couldn’t get a fyi.co?

Hiten: Not yet. Oh, no we don’t use .co only .coms. So we would have never got fyi.co.

Andrew: .co doesn’t work?

Hiten: We have use.fyi though. First time I’ve ever told anyone that.

Andrew: Wow. All right.

Hiten: There you go.

Andrew: You know what I know and how I know it, I just go to your freaking Twitter account.

Hiten: Yeah. It’s right there. Yeah.

Andrew: Your Twitter account is always there. And I always know it’s there because you’re like number one on Product Hunt and you’ve got the little FYI on your . . .

Hiten: We have a desktop app and we have a Chrome extension. And so you don’t have to go to the website. The Chrome extension takes over your new tab. And the funny effect of that is some people hate it for the first two or three days and after that they’re like, “I can’t live without it.”

Andrew: I get it. Here’s why I can’t live with it.

Hiten: Yeah. Momentum? What do you got?

Andrew: An iPad person.

Hiten: Oh, yeah. Sure.

Andrew: You’ll come to the . . . ?

Hiten: You can go to the website.

Andrew: You know where I would like you to be?

Hiten: Yeah. We will come to all that.

Andrew: Be in Basecamp. Go into Basecamp. When I search in Basecamp it should be there.

Hiten: We have . . .

Andrew: But I don’t know that Basecamp will let you do that.

Hiten: I will say this that for this product based on the research and the way that both Marie, my co-founder, and I think about this stuff, we have a very clear roadmap of what needs to be done. And some of those things that you mentioned are unfortunately not on the top of the priority because there’s like a bunch of core stuff we want to figure out . . .

Andrew: And you are not going to let me throw a curveball at you?

Hiten: You can throw as many curveballs as you want.

Andrew: No. I feel like you don’t want that. Like before, right? You want to stay focused.

Hiten: What do you want? Where’s the curveball? No, bring it on. What do you want?

Andrew: No the curve ball is, “Hey, can I also search my iPad?” No. Here’s the thing.

Hiten: It’s on the list. There’s lots of stuff on the list.

Andrew: The reason I’m passionate Hiten is, this clearly as a business problem.

Hiten: Thank you. Yeah. I’ll take that.

Andrew: I clearly spend a lot of time, I’ll show you my emails, going to different companies saying, “Can everything just be put into Slack?” when I was in Slack. Then Slack got too noisy, I said, “Screw that.” Okay. Let’s analyze how this one here today. I’m so glad that you’re willing to come into the office.

Hiten: Yeah, why not?

Andrew: I feel like coming into the office puts a little more pressure and then it becomes less pressure, right? What do you think? Let’s analyze this as an outsider who’s . . .

Hiten: So we doing a post mortem on what we just did.

Andrew: Postmortem on the take.

Hiten: I like postmortems.

Andrew: I do too. While we’re still recording. Number one, I don’t even know if the iPhone is recording the video. So I’m going to assume we’re just recording the audio.

Hiten: So you have a way to make me uncomfortable and you don’t know it.

Andrew: Really?

Hiten: And that’s not because of what you think, that’s what always bugs me. Even when we did one a long time ago or when I see you and you’re in this mode, right? You’re in an interview mode. Not a bad mode. That’s what you do. That’s your thing.

Andrew: Even when you were at my house I was like this. Go ahead.

Hiten: Yeah. Yeah, yeah, right. So it’s almost like your energy and your discomfort or your need to get something out of me causes me to be like, “Yo, like can we just chill?” Like I’ll tell you whatever you want to know, Andrew.

Andrew: Just stop putting pressure on me.

Hiten: You don’t need to not believe that. Because if you believe that, I will definitely be freer.

Andrew: If I believe that something good will come, you’ll freer?

Hiten: If you believe that I will tell you whatever you want to know.

Andrew: Do you want to know something? There’s very little except for I hanging out with the kids, I know that I’m a pain in the ass father in the sense that everyone else complaining. It’s the easiest thing. It comes natural to me. I don’t sweat a single thing of it. Every other thing in my life, I sweat to this degree of pressure willing to even suffocate it with my . . . not anxiety, with my determination and my New York energy.

Hiten: Yeah, determination. That’s what it is.

Andrew: The only place where I don’t have this full on energy is in New York. Because they’re all like this. And I go, “What the hell is with you guys? You’re crazy.” That’s the only thing. So you’re saying this makes you a little feel uncomfortable. It’s like . . .

Hiten: And it’s not what you think. It’s not the fact that, “Oh, Andrew is going to get some stuff out of me.” It’s more like your agendaness makes me uncomfortable and I don’t need that. Meaning like I don’t need any pressure. I’m already going to tell you what you want to know, just ask me the question. That’s how I feel.

Andrew: Do you think that this is unique to you or am I [ruining 01:07:51] with everybody with that?

Hiten: I think most things in life between people are energetic. So I’d say that, yeah, there’s some uniqueness to me, which is like, you know, I will tell you the truth, as close as I can get to it.

Andrew: Where with other people . . .

Hiten: Well, with other people maybe there’s some level of it but it’s still energetic where like they’re going to feel that. And like, you know, this experience to me would have been different if I didn’t feel that.

Andrew: I don’t have that. You’re going to have to . . . yeah, I get it . . .

Hiten: Yeah, and I’m okay with that. But like every time I’m around you I feel that.

Andrew: Always, yes.

Hiten: And I want the real Andrew.

Andrew: I feel like this is the real Andrew. And I also feel like this why Noah Kagan and I aren’t friends. That he’s very the opposite of this, right? “Things are going to work out. It’s going to be great.” I’m very not and it’s very energetically clashing. That’s all I got to add about that. What about the whole in person? Why’d you decide to come in person when we could have done this on Zoom remotely?

Hiten: Because I live 30 minutes from here. I come to San Francisco pretty often a lot of weekdays, and I haven’t hung out with you in a while.

Andrew: Okay.

Hiten: Yeah. So why not? And apparently it’s an experiment.

Andrew: I’m really glad that you did this. I’ve had such good conversations with people in person, and I’ve been looking for a way to record it. I’m going to Santiago, Chile next week and I’m going to be recording in person. I want to have this type of sit back situation like this. When I was in Mexico I really liked the in-person conversation despite the language barrier, the cultural barrier, the whole thing. It became a lot easier because we were in person and I feel like if I could hide some of the mics a little bit. Right now we’ve got it on us and it kept touching you, which I think was fine.

Hiten: No, that’s fine. Yeah. Totally fine, of course.

Andrew: If we could just get rid of it, we could be more present. You know what I wonder what would have help? Maybe I should have had the scotch.

Hiten: Sure.

Andrew: That might have loosened it up.

Hiten: Sure.

Andrew: Okay.

Hiten: I like it.

Andrew: Next time whenever you want. Use.fyi for anyone who wants to go check it out.

Hiten: That’s right. That’s a secret URL.

Andrew: Look at us. Secret URL. Use.fyi.

Hiten: See I gave you something I haven’t given anyone else ever.

Andrew: Holy crap. And in my head I’m going to think . . .

Hiten: Just bought it months ago.

Andrew: . . . like, “What’s he’s ulterior motive? Does he want to see how many people come from my site to there? Is this the way?”

Hiten: No.

Andrew: No?

Hiten: No. I can’t track it.

Andrew: What?

Hiten: I mean, if you put the URL in your on your site, which hopefully you do, I can track it obviously but I can’t track it from this. I don’t care . . .

Andrew: If someone goes to use.fyi, it’s not the only place?

Hiten: I don’t care if. It’s just redirected. There’s no . . .

Andrew: Yeah.

Hiten: You don’t even know. We don’t care.

Andrew: Actually I’m thinking to hear that that you are that thought out. All right. I’m curious to see if the phone is recording. I tested it and it recorded for two hours earlier today. We’ll see if it works out. If it does, it’s nice. If not, this is just an audio interview. I really liked having this conversation. I want to thank the two sponsors who made this interview happen. The first will host your website right, it’s called HostGator. Check them out at hostgtor.com/mixergy. The second . . . I like that. Very Zen. Breathe in breathe out. It’s over. The second . . .

Hiten: That’s not why.

Andrew: I wonder . . . what do you think it is?

Hiten: HostGator?

Andrew: What do you think of them? Be open.

Hiten: They’re one of many.

Andrew: And?

Hiten: There’s a lot of hosting services. And so not to give you a hard time but like I think the reason someone who’s thinking about a website should go to HostGator is because you’re going to make sure they get the best service possible.

Andrew: I do think that’s a big thing.

Hiten: And I think that’s a big thing because otherwise like they are a commodity. Honestly, that market is it commoditized. There’s many of them.

Andrew: You know how to commoditized they are? People will argue with me about a service that’s better. They’ll say,” BlueHost is way better. You’re making a mistake.” I go, “Are you out of your freaking mind?”

Hiten: They’re all same.

Andrew: Literally the same company owns them.

Hiten: Yeah, that too. Yeah. That’s right.

Andrew: Literally the same company.

Hiten: They all bought them up. Yeah.

Andrew: They’re selling the service and then internally they argue with each other or they compete with each other, which I love that the guy who works for HostGator took me to breakfast to figure out how we can crush the BlueHost but it’s the same service. It’s just different marketing.

Hiten: It is amazing.

Andrew: Yeah. All right. So you’re right. Yes, you will get the referral through me, which we take care of you.

Hiten: It’s like shampoo.

Andrew: Is shampoo that way too?

Hiten: It’s like shampoo. Yeah.

Andrew: hostgator.com/mixergy and to hire developers just go with who Hiten Shah uses and so many others.

Hiten: Toptal for sure.

Andrew: Toptal.com/mixergy. That was good.

Hiten: Good. I’m glad you liked it.

Andrew: Thank you. I love it.