Andrew: Hey everyone. It’s Andrew Warner, founder of Mixergy, where I interview entrepreneurs about how they built their businesses. Coming to you straight from a pod somewhere in the heart of San Francisco is today’s guest. He’s a guy who used to sell berries and now he sells software and he’s doing really well. It’s just growing and growing and growing. His name, this former berry salesman who’s coming to you from a pod is Mikita Mikado. He is the founder of PandaDoc. PandaDoc is an all-in-one solution to automate your contracts, proposals, quotes, and so much more. I invited him here to talk about how he started his business, how he grew it, and what we can all learn from him.
This interview is sponsored by two companies. The first will host your website. The second will get you beautiful designs. The hosting company is called HostGator. The design company is called DesignCrowd. I’ve got to tell you guys about my experience with DesignCrowd. I’ll do it later but first, Mikita. Good to have you on here, man.
Mikita: Absolutely, Andrew. It’s my pleasure.
Andrew: Dude, what’s the deal with the pod? You were walking me through the office and then like that you ended up in a pod. What is this pod that you’re sitting in?
Mikita: Oh man, it’s so comfy and it isolates a lot of noise. I really like it.
Andrew: That’s all it is? It’s just a seat with like an egg where the front is missing?
Mikita: It is an egg.
Andrew: It really does isolate a lot of noise. I asked you before if it was too much echo, and you said, “I’ve got a solution.” I didn’t realize that little seat could do so much.
Mikita: Yeah. This thing is very comfy, and I didn’t think it was very pricey. So if you’ve got an office with a lot of noise, get an egg.
Andrew: Sweet setup. Sit in an egg. All right. Let me hit you directly with the revenue number question. 2017, kind of three-quarters of the way in, what kind of revenues did you do so far this year?
Mikita: Yeah, we’re on target to hit our goal.
Andrew: Which is?
Mikita: Ten mil.
Andrew: $10 million? Just to give people perspective of the growth, I have what I think is your 2016 revenue. Can I share it with the audience and you tell me if you think it’s right or wrong or if I got it right or wrong?
Mikita: Sure.
Andrew: Four million dollars in 2016?
Mikita: Close enough. Very close.
Andrew: What do you mean? What was the actual number? I’d like to see if we’re right.
Mikita: It’s a couple points over $4 million, but it’s irrelevant. Let’s put it that way.
Andrew: So tell me about what this software does and then we’ll understand how you got here.
Mikita: We help organizations to accelerate the way they transact with electronic quotes, proposals, contracts, signatures, payments, and you name it. And actually, that’s PandaDoc, an all-in-one solution to help you make offers, negotiate on deals and close.
Andrew: Do you have a use case? Tell me if this is a good use case, actually. I wanted to get somebody to do our employee payment. A guy comes into my office, he tells me what he wants and then he says, “Okay, I’ll get you some paperwork.” Immediately I said, “I think I’m done with you” because I know what happens with paperwork. I leave it in the office, I forget to sign it, right? He would have just had one click, sent me a link with the quote, because the quote is pretty straightforward. He knows how many employees I have. He knows what I’m looking for, right? I get the quote, I okay it, he comes back to me with the contract. I don’t have to sign anything on paper. I probably just digitally type in my name, and it goes into the document along with a few other things and then he countersigns if he needs to, it comes back to me, and goes to him saved. Is that basically it?
Mikita: That’s pretty much and if your guy is super advanced or if you talked to anyone on our customer success team, we’d suggest that he take that quote, merge it with the contract and send you a beautiful proposal that also has some marketing information on his business and why he is better, why he is different and maybe he would even add a customer testimonial or a video testimonial, which is something that our product supports.
Andrew: In the proposal?
Mikita: Yeah, in the proposal because essentially the proposal can have anything you like. It could have a contract. It could have pricing information. It could have some marketing collateral and you’d review that. He’d know the moment you opened that proposal, so he would probably call you 30 minutes later to check on how well you received that proposal and he would close the deal on the spot. So that’s pretty much the workflow we’re after.
Andrew: I get it. I kind of feel like maybe this is what we should be using. We just started something called Bot Academy, where people can hire our team to create a chatbot for them and we are doing a lot of back and forth. I don’t know why I didn’t think of it. We could just create a simple proposal. We’ll get on a call with you, if you like it, shoot you the proposal. If you agree with it, boom, we send you a contract and they do want a contract now because people end up paying me and then they don’t follow up. I say, “Can I give you at least your money back?” I guess they’re worried I’m going to trash talk them, which I wouldn’t, but what you’re going to do is solve that if I use PandaDoc, right?
Mikita: Yeah, pretty much. They’d be [inaudible 00:05:21] to sign with legally binding, electronic signatures, which makes the deal as good as if you were to travel to their office and hand him the paper.
Andrew: Right. Let me ask you something. I’ve got to be honest with you. I kind of got the whole berry thing by looking you up in preparation for this interview and obviously, you had this whole berry thing that you did and we’ll ask about that, but I kind of feel as I looked at your face when I said that berry thing that I lost you, like “Oh my god, another clichéd interview with me. It’s the same fricking, god damned berry thing that they tell the story and they all think they’re interesting.” Am I right?
Mikita: Actually, no. I like that story. I was a kid, right? I’m from Belarus, and Belarus was recovering from a massive collapse. It was a part of the Soviet Union when I was growing up, right? So the average salary in the country was like $100 bucks a month or maybe like $150 a month, which is not much, so we never had any money. My family never had any money, so I had to be creative, and one of the businesses that I had, my first successful business, was to pick up berries and sell them. I learned a lot during that . . .
Andrew: What did you learn selling berries?
Mikita: Okay, so the first thing I learned is that you have to stand out of the crowd because when I first started selling them, I went to the Farmer’s Market and I stood in the corner where a bunch of other berry-selling people were sitting and I sold nothing. I was like in the very corner, people were not stopping by, and I was really upset. I had to pick up those berries and go back home. I sold maybe like one little bucket or whatever. Then I was sitting on the bus stop ready to go home and I was looking at those berries and I realized they were going to go bad by tomorrow if I don’t sell them. So I had to kind of man up and start selling them right on the bus stop, and the foot traffic was pretty good.
Now I don’t know if the passersby were in need of berries or if they were just keen to buy from a 10-year-old, but that’s what they did and I sold all the berries within like an hour. So then I also learned the importance of thinking through your go-to-market model and bringing your product in front of as many eyeballs as possible because your product is important. Your sales strategy is important, but getting your product in front of a bunch of customers is vital, otherwise, how else are you going to sell it? That’s another thing I learned.
Andrew: So you were selling these berries. Do you bring the money back home to your parents, or are you using it for yourself to go out?
Mikita: Yeah, we had a deal. It was half/half.
Andrew: Half for your parents because you got the berries from your grandfather, so you’ve got to kick some cash back to your family.
Mikita: Well, I actually got them from my grandmother. My grandfather was using those berries to produce wine, and my grandma was not cool with that because that wine was used to [inaudible 00:08:56] too many days a week and she was like, “We’ve got to sell them” but selling was not a respectable thing to do back in Belarus and the Soviet Union. It was pretty much illegal and had a lot of negative connotations. The Communist Party was deciding on what to produce, in which quantities, and how to distribute . . .
Andrew: Was this back in the Communist days?
Mikita: Yeah, but the culture gets built over the course of many, many years.
Andrew: It’s after the wall fell, right?
Mikita: Yeah.
Andrew: I see, but you’re saying, “Look, this is part of the culture, right? Just because they say there’s no more Soviet Union doesn’t mean tomorrow we’re all going to be the next billionaire.” I got it.
Mikita: People just think that selling . . . Well, I wouldn’t say they do think that now, but back in the day they thought that selling is something that is not a respectable thing to do.
Andrew: So how did you do it? How did you get past this shame or the feeling that you’re doing something weirdo in asking people for money?
Mikita: You know, through sweat and tears. It was not easy. It was my second business. The first one failed, actually.
Andrew: What was the first one?
Mikita: To wash people’s cars.
Andrew: Why do you think that one failed?
Mikita: Well, it failed because we were doing it on the territory owned by older kids and they kicked our asses out of their territory.
Andrew: I see. So it was kind of like a turf war. I thought you were going to say “Dude, Andrew, Belarus barely had money at this point, and I’m asking people at that time to give me money to wash their cars.”
Mikita: But do you know what’s cool?
Andrew: What?
Mikita: We figured out a premium model in that first car washing . . .
Andrew: What was the premium model?
Mikita: We were trying to sell car washing to people, and we were like seven or maybe eight, very young, right? We were trying to sell car washing, and nobody needs car washing, plus from the little kids because they were afraid we were going to mess up their cars. I don’t know. We were not able to sell that, and we were really shy to do that. But then when we did actually start washing expensive and dirty cars, that were parked nearby a shopping center and when the owner showed up, they were like pleasantly surprised and four out of five actually gave us some change. We got to that after a few hours of just trying to sell it the normal way and that didn’t work and then we almost got in a fight among ourselves, three kids. Anyway, but premium did work.
Andrew: I still don’t understand. When everybody says, “This is not the right thing to do, when culturally selling is looked down on, even in an environment like the U.S., where it’s accepted to be a salesperson, you still have to work on yourself to have the guts to ask someone to take money out of their pocket and give it to you in exchange for something that you have . . . When all that’s going against you, what do you think it is about your makeup that says, “I’m still going to sell, I need to sell, I can do this?”
Mikita: That’s a good question that is going to get me into the full searching mode. I don’t know. Maybe that’s . . .
Andrew: You don’t know, but it’s a part of who you are. It wasn’t like, “I need money?” It wasn’t, “I’m looking at my parents and I think . . .”
Mikita: Well, it was a part of “I need money.”
Andrew: It was that “I need money.”
Mikita: Yeah. It was a part of like . . . Again, my parents were divorced, so like we had not a lot of money. I would say we were kind of like middle class by Belarus standards.
Andrew: Was it stigmatizing to have parents who were divorced?
Mikita: Yeah. Actually, yes.
Andrew: Yeah, the countries had so many churches, like Belarus, I imagine, right?
Mikita: Belarus, again . . . Anything that was a part of Soviet Union has less religion than the United States.
Andrew: So it’s not as stigmatizing for the religion. It’s stigmatizing for why?
Mikita: I think like every kid in every corner in the world would want to live in a full family, right, if it’s possible? But I think the reason I got into sales was that I just wanted to do something in order to positively impact my life, the life of my family, and I was probably raised the way by my mom that I’m not afraid to take chances. Like I was probably given more freedom than my friends so that I was not afraid to take a chance at trying to go wash people’s cars or trying to go sell berries to the Farmer’s Market. I have no idea.
Andrew: I think I’m getting it. So, first of all, you’ve got this whole other stigma, which seems bigger than selling, which is your parents aren’t together. Number two, you’ve got lack of money. Number three, my guess is you have something inside you—and you can tell me if I’m wrong—that just makes you into a natural-born entrepreneur and you’ve got to express it. Am I right about all of this? I’m seeing a little smirk. Am I a little off? Am I being too much of an armchair psychologist? You can be open with me.
Mikita: Yeah, you sound like a guy who digs psychology. I like that.
Andrew: All right, let’s go into business, where I think I’ve got more standing.
Mikita: Oh, we can talk psychology all day long, I love that, just not about me, okay?
Andrew: I know. I want only you. That’s my problem. This is why I’d be good to date because all I would do is I just want to get to know the other person . . . deep, psychological understanding, but let’s forget about that. Let’s move on . . .
Mikita: Do you think you would be good to date? It’s like interesting. You can just ask.
Andrew: I can ask a lot of stuff. In 2007, you and your co-founder are building web content automation. What does that mean? What are you guys doing in 2007?
Mikita: Yeah, we’ve started our first business around building web applications and building software for other companies.
Andrew: Like what?
Mikita: Like anything from social networks for travel to portals for Microsoft. We even got that as a customer somehow.
Andrew: Oh, so you were doing consulting work, but you were getting paid by the project. I see. And you were doing this for your clients. You had 400 products, you told our producer. What does that mean, 400 products? Could you resell them? Were they products that you owned, like extensions?
Mikita: So here’s the story.
Andrew: Yeah, hit me.
Mikita: First of all, I got this wonderful opportunity to fly to the States. I got a visa and I got a working visa for three months, [inaudible 00:16:24]. So anyhow, I jump on the plane, flew to the States, built a few websites, which helped me to make a little bit of money to start a web design business there. I started a web design business, and that web design business grew into more of a software development type of business and that’s when my co-founder and I started working together. We’d known each other years back, but that’s when we started to cooperate.
And once upon a time, we had to build this little extension for a web content management system and once we had built it, we also found a marketplace, which was similar to the Apple App store. You could just submit your software and they would sell it for you and the thing started to sell. And then the creators of that content management system emailed us, asking us to outsource the extension because it was so critical, which for me it was like, “Oh my god. They got themselves [inaudible 00:17:32] to say hi to Mikita. Like, “I’ve got to pack my things to move back to Belarus and we’ve got to do this for real,” so that’s what we did. We brought many of our former classmates on board and started just cranking out those extensions for Web Content Management System.
Andrew: Which platforms?
Mikita: Yeah, it was [inaudible 00:17:59]. It was [inaudible 00:18:02] like Magento. We even built something for WordPress. I’m trying to think what else. We built something for Sharepoint.
Andrew: I see. You know all these different content management systems and e-commerce software. You’re building extensions for them. Are you selling the extensions?
Mikita: Yes.
Andrew: What are some of the features of the extensions? What do they do?
Mikita: Anything from a blog module to a video gallery module.
Andrew: Okay, so if I have a CMS that’s designed for text and I want to add video and multiple videos, I would buy your extension, your extension would allow me to present the videos in a gallery, so people could see them all. That’s what you were doing.
Mikita: Yes. Yeah, that’s exactly what we’ve done.
Andrew: From what I read, you got to about $30,000 in monthly revenue from that. Is that right?
Mikita: That’s right. Well, actually, it was a little better than that. At the peak, I think we were at like $700,000 to $800,000 per year, which in Belarus means that the staff we had was pretty . . . We had like 30 people on the team, so it was a sizeable, small technology business. We learned a lot of things while doing that, and we also learned that . . . The number one thing probably was that running a business that depends on a bunch of other technology platforms that change all the time with 400 plus meta extensions is going to get you gray hair really fast because . . .
Andrew: Because each one of them needs to be updated and each one of them needs a different sales page, different customer support for all of them. Lots of money, lots of little products. Okay. And then you make a big leap to a new product we’ll talk about in a second. First I’ve got to tell everyone about a company called DesignCrowd. Mikita, do you know DesignCrowd?
Mikita: I will find out all about it in a second.
Andrew: I thought I knew this. Here’s the idea behind DesignCrowd and this is what I thought made it special. DesignCrowd is a site where you go and you say “Here’s what I need,” and you describe it really simply. They have these forms that make it easy for you to describe. You just answer questions in the form, hit Submit and boom, there’s a proposal. For me, I needed new cover art for my podcast. I said, “Here’s what I want, here are the colors and here’s the layout, etc.”
Most recently we needed a new certification logo. People are learning how to build a chatbot from us and they get certified and I needed a logo they could put on their website to communicate that we stand behind them and that they can be trusted to build a great chatbot. So whatever it is, you go to their site and you fill out a form, answer a few questions, you hit Submit, and then you end up getting dozens of designs. All I did was pay for the cheapest option that I could. I got, in the first case, 97 designs. In the second one, 191 designs. It’s fantastic. Almost every single one of them is different. Some people think alike or some people submit variations that are a little too similar, but we’re talking about dozens and dozens of different designs and sometimes, when I see someone try something new that I hadn’t thought of, I feel like, “All right. You know what? That’s the direction I should have asked for.” It helps me not just see lots of options but see a different direction for what I want for my design.
What you do then is you start giving them feedback so they all learn what you like, what you don’t like, the direction you want to go, and what you don’t want to do, and then they go back and they do a little bit more work. And you can start interacting with the ones you like and dismissing the ones you don’t like and in the end, you only pick one design and that’s the one you pay for and you’re guaranteed to love it.
I heard this for a long time. It’s not until I actually saw 191 designs—this was just a few days ago—that I finally realized this is not like other services that are similar. This is a lot of great designs. These people are pulling in designers who are just rock stars and so I love it. I’m going to keep using them every time I need a design. If you’re out there and you want to try them, whether it’s for a web design, brochure, logo, cover art, new certification, or whatever it is . . . ebook covers, I’ve seen people do book covers.
All you have to do is go to this special URL, where they’re going to give you a phenomenal offer. It is designcrowd.com/mixergy. You’re going to save up to $100 bucks when you do that. It says very clearly in the center, “Trusted by Mixergy.” I’m going to tell you 100% . . . not just trusted by me, Andrew Warner, I stake my reputation on how fricking good they are. I love them. I’ve used them, I’ll continue to use them. I’m really happy with them, and I urge you to go check out for any design that you need, designcrowd.com/mixergy. Man, they’re that good. All right. There’s a sponsor and Mikita, I’m telling you . . . Now, you probably have a staff of designers, don’t you?
Mikita: You know what’s funny? I think my assistants used DesignCrowd for helping me to get [inaudible 00:23:33] for our head of finance and one of our analysts, [inaudible 00:23:39] pretty close to each other.
Andrew: You had designs just for them from DesignCrowd?
Mikita: Yes.
Andrew: Wow.
Mikita: Yes. It was like . . . I don’t really remember but anyway . . .
Andrew: You know, frankly, even teams that have big designers often will go to DesignCrowd for one simple reason. They want variety. They want to stop thinking the same way and have a new perspective. Actually, not a new perspective but dozens, sometimes hundreds of new perspectives from experienced, phenomenal designers. Anyway, DesignCrowd . . . I’m glad that they’re there as a sponsor.
Let’s go on to the next part of your story and that is Quote Roller. Where did you get the idea for Quote Roller? This took you on a whole new path, one product, one focus. Where did you get the idea for it?
Mikita: Internal pain.
Andrew: What was the pain that you had internally?
Mikita: Pending sales proposals.
Andrew: To whom?
Mikita: All those customers that needed customization of the hundreds of extensions that we built. Half of that business was to sell software. The other half was to provide services. Customization was only half of that software.
Andrew: I see. And so you said, “Look, I’m having trouble doing it.” But you know, in 2011 there was quote software out there on the internet, wasn’t there?
Mikita: Of course but nothing we liked.
Andrew: What didn’t you like? What’s one thing that you said none of these people get that we need to do ourselves?
Mikita: We did not find one solution that would allow you to build proposals, make edits to them, collaborate on them, and send them electronically to the end customer so that the whole experience seems like something that I want to experience myself. So there were a few [inaudible 00:25:35] that we tried. We didn’t really like them. But it was all very, very small. Like, those were the first days. It was 2010 and actually, we started to conceptualize it in 2009, like really early and finally we decided to build it. We thought we could do a better job building a product that allows you to put together a proposal and send it to a customer.
Andrew: I’m looking at an early version of the site. It says, “Create, track and send proposals. Easy way to sign up for free. Clear set of features embedded in this.” Everything looks like it makes sense and boy, your design style was spot on. And still, when our producer asked you, you said, “I made a lot last year,” but you said, “I made a lot of mistakes.” And then when they pushed you to say what kind of mistakes, you said, “You know, I should have sold it before writing the first line of code.” Why should you have sold it? What would you have gotten that you didn’t get as you built it for your own needs?
Mikita: Yeah, learning. I’d answer with one word, learning.
Andrew: What do you think you would have learned or what wouldn’t you have done or what would you have done differently if you had gotten that feedback earlier on?
Mikita: I’d learn a lot more about the market I’m trying to sell into. I’d learn a lot more about the feature effects I need to prioritize. I would learn a lot more about the best go-to-market model that we could put together and I would say predictability of all the go-to-market models that we’re trying to employ. I would also learn that the importance of having customers that act as your advocate and that work closely with you in order to make your product end business better.
Andrew: I see. So it’s not just about the features you would have learned by bringing in customers earlier on. It’s that they also would have been advocates for you and helped you promote this to other people.
Mikita: Absolutely, and not just that. They would also be very vocal about maybe changes to the business model or pricing or the way we do support, and they would have this like direct communication channel with me. The problem was that I was based in Belarus physically, and Belarus in electronic signing, the law, are such that you cannot use software like Quote Roller or now PandaDoc, so we had to do it all remotely and instead of like moving forward and just selling the product from one customer to another, we built actually a pretty good inbound marketing machine that attracted a ton of traffic and then that traffic was going through a free trial and then we were trying to convert those trials into paying customers.
Andrew: What was the end down process that you did that did so well for you?
Mikita: Yeah, lots of SEO, some SCM, lots of publishing, and lots of distribution of our product onto all kinds of software marketplaces. We’ve integrated the product with a few CRMs down the line so that we get into the App stores that most CRMs tap.
Andrew: I see. It’s not really a CRM product. It doesn’t call for CRM integration, but you’re saying by having a WordPress integration you ended up getting more customers. Is that right?
Mikita: Actually, it does.
Andrew: How?
Mikita: Well, whenever you have a deal within your CRM system, you’ve got to send a proposal to that client in order to close the deal. In order to make it [inaudible 00:29:56], you have to generate that proposal somehow and the data sits inside of your CRM system. So what’s the point of copying and pasting that data from the CRM into a document?
Andrew: You mean, like a form on my site which somebody would fill in some information about themselves? You’re saying no? What else?
Mikita: So let’s imagine you were a web developing agency and you got a sales team and that sales team needs to work out of some kind of database. It needs to hold all of the client account information. You need to process the information in some kind of database. That would be a CRM system and they would have deals and they would move those deals to different spaces. Like I reached out and there’s an interest and then I sent a proposal and then I closed the deal. So like at the “send-a-proposal” stage it requires to generate some kind of document and that document takes data out of the CRM system because “Hello, first name . . .” You have to copy and paste and replace and blah, blah, blah, and that integration through the CRM systems are very, very useful.
Andrew: Yeah, I guess I was thinking CMS, which is like WordPress, but you’re saying CRM, which is like my phone address book or Pipedrive or something. Got it. I see.
Mikita: Yeah, Pipedrive is a great partner of ours.
Andrew: Pipedrive?
Mikita: Yep.
Andrew: You know, we use Pipedrive to manage our sales. I’ve got to check out the integration. You mean PandaDoc does?
Mikita: You’ve got to check out the integration between Pipedrive and PandaDoc.
Andrew: Okay.
Mikita: That’s for sure and you can turn it on from I think either side, either from Pipedrive or from PandaDoc.
Andrew: I see. Okay, so you’re saying, “Look, we did a lot of content. We did some SEO on it, bought some ads, some SEM, search engine monetization, and we also integrated.” And I’ve known that too, that when you integrate, people are much more likely to find you because you were in our app a lot. It’s surprising that I didn’t see this and also sometimes the integration partners do a big promotional push where they help you out. I also saw that at the time you were doing some blogging. Am I right? Do I have my timing right?
Mikita: Yeah, that’s correct.
Andrew: Okay. You said to our producer, “We finally started to talk to customers and then we realized, ‘You know what? This product is kind of limited.'”
Mikita: Mm-hmm.
Andrew: What’s the limitation that you discovered, and how did talking to customers give you that realization?
Mikita: Yeah, thanks to the inbound, we had a lot of people signing up for the product and quite a few people using it, but the thing is not many found our product mission critical and the ones that did find it mission critical were missing a number of features. However, their feedback was diluted by the feedback we were getting from kind of like passersby, so I think that was a pretty big strategic mistake that I made back then.
Andrew: You know what? I’m looking for it and I can’t find it right now, but I saw at one point early on you were trying to get feedback from your customers and you embedded a Google form into your blog and the headline for it was something like—and this could be the exact phrase—”What should we build into Quote Roller?” And what you’re saying is, “When we’re opening ourselves up to everyone and this is the way we take our feedback in, we could get anyone asking for anything and the vast majority of people could be asking for something that the ones who are willing to pay, the small minority who are willing to pay, have no interest in and it wasn’t until you started talking to customers that you understood that differentiation. How did you start talking to customers? What was your process for doing that?
Mikita: Well, I started with the ones that were raising their hands.
Andrew: Who said, “I want to talk to you.”
Mikita: Yeah, “I want to talk to you,” so that was the first step. The second step was to reach out to ones that know of us, so they signed up for an account but never got anywhere. So that kind of like opens up your funnel a little wider. And then finally, go ahead and try to approach people that know of you personally but have no idea about your business but seem like a good profile, right? So like they were taken to meetings and then I had conversations with them and so on. And then finally, kind of the last step was to actually try to talk to people that seemed like a good fit but haven’t heard of either myself nor the business.
Andrew: And this was you making these phone calls, and you talking to potential customers? It was?
Mikita: Yep.
Andrew: Why did it have to be you? You had 30-plus people working in your office. Any one of them could have done it. You’re smiling as I say it. Why did it need to be you? There seems like a good reason for it.
Mikita: Well, not many of us were able to speak English. Let’s start with that.
Andrew: Okay.
Mikita: Well, [inaudible 00:35:48] were able to speak English, it’s just that I’ve spent more time in the U.S. so that I can kind of do it. Another reason is that again, selling is not a reputable thing to do in the Soviet Union, so asking people for feedback and then ending the call with “Well, would you consider . . .” is kind of selling. And finally, I don’t want to have any filters. I don’t want to have any filters when I’m trying to learn and make some decisions that are based on that learning.
Andrew: I see. You wanted to just go directly to the customer, understand, and see the little nuances. Was there anything that was especially insightful in that early batch of phone calls? Did you do it by phone or I’m imagining Skype, right?
Mikita: Yeah. I don’t really remember what we used but . . .
Andrew: Was there any specific insight that you remember?
Mikita: Actually, a lot of things. I remember that we somewhat [inaudible 00:36:57] our product. I think that was the time when we invested quite a bit in the CPQ module of Quote Roller. I do believe that that was the trigger for CRM integration as well as certain kinds of CRM integration but I’m not 100% sure. All I remember and I’m sorry . . .
Andrew: It’s okay. It’s been a few years.
Mikita: Yeah, it’s been a few years but I do remember that we changed our product pipeline as well as [inaudible 00:37:34] we just changed the attitude towards the way we run business, like we kind of like learned that we’re not Steve Jobs and we’ve got to actually be a little more humble and do not try to realign our vision and vision solely because [inaudible 00:37:59] customers need because we were in their shoes. Well, we were in our shoes but different from someone else’s shoes, so yeah.
Andrew: I get that and you know what? I can see why you would think that because you would know it. Again, going back, a lot of times I see people’s first versions are pretty ugly pieces of garbage that they’re kind of proud was ugly and still yours, your very first version, at least what I can see when I go to Internet Archive, looks really good. The design is of the time but it was really spot on of the time, so I could see how someone who would design this way, who would understand the features, who had the experience, would say, “I got this. I know it.” But even you needed to talk to your customers and as a result of talking to these customers, you said, “We need to change” and one thing that you did—tell me if I got this right—is you added electronic signatures. You decided, “You know what? We’re going to redesign the whole thing.”
Actually, you know what? I’m taking it back. I’m kind of going through my notes here and what I see is a redesign complete with UI Snapshot. It took you about a month to put this whole thing together and part of the new feature set was electronic signatures, which were important. No?
Mikita: Andrew, I do not remember. I do not actually think that the signatures or things were added or changed.
Andrew: What was it then?
Mikita: My intuition tells me that that was the CPQ or the in-depth development of the CPQ and the integration of the CRMs but again . . .
Andrew: It’s been a while.
Mikita: It’s been a while. I don’t remember.
Andrew: All right. You know what? It’s better that I’m asking you to go back in time and search your memory of the company than search your soul to understand why you’re a salesperson in Belarus, right? So the questions are at least getting a little bit more tactical, more directly related to business. What are you thinking?
Mikita: What am I thinking about jumping to the present days? Well, I’m going to be a little sharper, that’s for sure.
Andrew: Okay. All right. Let me take a moment here to talk about my sponsor and then we’re going to come back and see how that led to a whole new shift. From your understanding, somehow you ended up with PandaDoc and I’ll find out about that in a moment. First I’ve got to tell everybody about a company called HostGator.
If you’re out there and you’re listening to me, one of the things you might be noticing about Mikita’s story is that he tried a bunch of different things, a lot of different ideas, and he had the resources to do it. He had the wherewithal to do it, and he kept experimenting until he found the one that made the most sense and today he’s got a phenomenal business.
One of the things that I like about HostGator is that they have a hosting package that includes unlimited domains, which means if you have an idea on Monday, you could by Tuesday have it up on a new domain, new site, new design, new offer page, new landing page, new way of collecting email addresses and see does anyone even care about it? And then, maybe you don’t even care about it, so on Wednesday, you have a brand new site, brand new domain, brand new everything and you’re ready to roll. You just try something new. I’ve said this over and over. Mixergy was just one little thing. These interviews were one little thing that I tried and it just took off so much that I loved it and I focused on it and the only reason I was able to do it is I had unlimited domains.
So if you’re out there and you want to experiment, I urge you to check out this special URL where you can get unlimited domains, one-click install of things like WordPress, and unmetered bandwidth so you’re not like constantly making sure that you didn’t get too much bandwidth today and that you’re going to be charged too much next month. Here’s the URL. It’s hostgator.com/mixergy. For $4.98 per month, you’re going to get unlimited domains on that one hosting package and of course, if you have a hosting company and you hate them, switch over to HostGator. They will scale up with your business. I started with a lower plan and then we moved right up to one that can accommodate over 1,000 people hitting our site at once. A lot of stability and a lot of support. I really like them. It’s hostgator.com/mixergy.
All right, Mikita, so help me understand what took you from this business that was starting to go well, where everything made sense to PandaDoc.
Mikita: Yeah, at some point we looked at our customer base and it got to the critical mass of the conversations with the best customers of Quote Rollers. We got to the point where we realized, all right, so the product is used for more than just for proposals. It’s used for proposals and for contracts. People are asking if we are going to add forms. They’re asking if we’re going to add presentations, and it is actually used to close deals and in some cases, also get paid. At the time we were doing something like $30,000 in monthly recurring revenue, maybe like $40,000 and we looked at the amount in total proposals that Quote Roller was helping our clients [inaudible 00:43:14] and it was more than half-a-billion dollars a year. So, the opportunity of owning the entire transactional workflow, the process of selling anything expensive, anything that’s moved by paperwork was a really interesting opportunity and we decided to take on this opportunity. We thought we could do it.
Andrew: Were people starting to use your software beyond where you thought it would go?
Mikita: Yes.
Andrew: They were. I see. So it wasn’t meant to collect payment, but they found a way to do that.
Mikita: Yeah. Some people just figured it out on their own, and they were complaining that the product does proposals all over the place and then again, when you talk to clients, if you’re an internet entrepreneur, it’s easy to kind of like get caught and try to be 100% digital and never even talk to your clients, but the truth is you actually have to do that and it’s very, very valuable. It’s never just like one way or another. A combination of the old-world techniques and the new-world techniques is what helps to build a very healthy business.
Andrew: How do you do it today?
Mikita: How do we do it today?
Andrew: How do you talk to your clients today to continue that thread?
Mikita: Yeah, so I try to visit some of our clients when I leave the San Francisco Bay area and when I talk to them, I also ask if I can record the conversation in order to share with my product team, with my business leaders so that it’s not just me who absorbs that feedback, it’s the rest of the company.
Andrew: I see. And then, you’ll play back for the team excerpts of what you’ve heard?
Mikita: Yeah.
Andrew: Wow. To go in, are you sitting and interviewing them the way I am now, or are you watching them do what they do with your software and then the rest of the business?
Mikita: It depends on the goal.
Andrew: Okay. Wow. It’s still you doing it.
Mikita: I mean, like, not just me. Our customer success [inaudible 00:45:38] things, but I try to do that whenever I have time. I find those sessions very valuable and very useful.
Andrew: Do you have a script that you go through to understand what to ask or to keep it consistent?
Mikita: I make one before I get to someone, but again, it really depends on the goal. For instance, recently we made a major update to our product, which is not yet public, blah, blah, blah and in order to make sure that what we build makes sense to the end users, I’m going to do those sessions and those sessions are going to be solely focused on this particular part of the product that we’re about to launch. Otherwise, depending on like what’s happening inside of the business, I may be checking on how our customer’s success team interacts with this or that customer on the [audible 00:46:42] journey that they’ve gone through in order to become a customer or on the product itself, so it really depends.
Andrew: I see. Okay. So you’re checking in. You’re also getting a sense of what their experience is with the people on your team and so on. Roughly around that point in the story, the one where you’re doing $30,000 a month or so in sales, where you’ve started to figure it out, you started to raise money, right?
Mikita: That’s correct, yes.
Andrew: The first round, according to AngelList seems to be the seed to $650,000 from Kima Ventures. Is that right?
Mikita: Yeah.
Andrew: How did you hook up with them? That’s a French company, isn’t it?
Mikita: French/Israeli funds, yeah. I got introduced to Kima by one of our advisors. He’s the founder of [ 00:47:31], actually.
Andrew: Ah. Yeah, they’re from Belarus, aren’t they?
Mikita: Estonia.
Andrew: Estonia. Okay, got it.
Mikita: Close enough.
Andrew: Close enough, yeah. Are they even close to each other on the map? No, they’re not.
Mikita: Ah, kind of. It’s like San Francisco and San Diego, I guess.
Andrew: Yeah, I’ve got the map here with Belarus. I have tons of tabs open. Okay, so you get introduced to them and I’m guessing at that point they see you’ve got traction, you’ve got revenue, they make an investment in the business. How did it shape your business now to suddenly have investors?
Mikita: Yeah, you know, it allowed us to make a lot more mistakes and make a lot more moves that turned out to be the right ones. I think it accelerated our learning and it accelerated our growth.
Andrew: All right. So you get this funding, things are starting to get faster. We asked you about the challenge that you had and it’s working with people. How has working with people been a challenge for you?
Mikita: Well, I’m an engineer by education and every business is built/run by people. That’s really all that matters. Product is important. Eventually, go-to-market is important but all that is done by people and the ability to excite people, the ability to help them learn, the ability to influence people in a positive way, to resolve conflict within the team when they arise is something that is very, very hard to learn without doing it, so you actually have to do it. And that’s, from my perspective, so far from what I learned. That’s the biggest part of all and that’s the hardest part of any business.
Andrew: You’re an engineer but you’re not the CTO. Your co-founder is the CTO. You’re the CEO. You’re the guy in charge of dealing with people, of managing them, of growing them. You had an issue where two people on your team got into a fight. Was this a fist fight?
Mikita: No, no, no. It was just a . . .
Andrew: It’s just an argument.
Mikita: An argument.
Andrew: And what did you take away from that argument? What happened there and then what did you take away from it?
Mikita: [Inaudible 00:50:26]
Andrew: [Inaudible 00:50:28]?
Mikita: Yeah.
Andrew: What were they arguing about so loudly?
Mikita: I don’t want to get into that.
Andrew: What’s the topic of it? Does it have to do with work, or are they arguing about personal life?
Mikita: It was work that turned into the personal, but it doesn’t matter. What matters . . .
Andrew: Here’s what I have for my notes. I’m not going to overstep because this is what you’re telling our producer. You said, “Look, there was a micromanaging situation.” Somebody was micromanaging the other person, and you didn’t act fast enough on the issue.
Mikita: Yes and no. So there were two parts.
Andrew: Okay. I won’t let you get too deep into it, but you saw the two of them arguing and you said, “You know what? I’m going to step in and I’m going to let them go.” What did you learn about that experience that kept you from letting that kind of thing happen again in the future?
Mikita: Well, it set the business back quite a bit. Both employees were good employees that could have impacted the business in a positive way, and I could have been the mediation party that could help them work through the issue. And sometimes you’re successful at it. Sometimes, you’re not, but at least you’ve got to try. So that was just one of the HR stories that I think I could have done better.
Andrew: So how did you learn how to do this? I’m Glassdoor. I’m looking to see. Is Mikita considered an asshole by everyone? No. People like you.
Mikita: Well, Glassdoor is . . . I don’t know. I don’t trust Yelp much when it takes places to it and I get punished for that.
Andrew: You know what? I can’t fricking get a full Glassdoor account. Those people drive me fricking nuts. I’m trying to tell them I’m doing this for an interview. They say, “Well, put your salary in first, and then we’ll give you unlimited reviews of companies.” What salary do I have? I’m running Mixergy here. That’s all. There’s no salary, but they want you to put in your salary before you can get to see how other people rate other businesses. Maybe there’s someone listening who can help me with these Glassdoor people. But overall, it seems like people kind of like working with you. What did you learn? How did you become a better manager?
Mikita: Well, first of all, in the software business we all work using just our heads, right? And we’ve got to be creative. We have to be able to come up with different ideas and then execute on them, and creative jobs are not managed by fear. There are different parts of the human brain that are responsible for different types of reactions, but we’ll not go deep into that. What I learned personally is first of all, I have to try to give people as much ownership as possible. I do have to guide. I do have to show direction and share the vision and communicate that vision over and over. I have to do everything in my power so that the people that work with me feel that they own whatever they’re responsible for and feel empowered in order to make things happen.
Andrew: And so how do you do that?
Mikita: Step out of the way. Try to provide as much resources as possible. Try to hook my team members up with someone who’s been there, done that, and have them learn that way. Try to help them in the ways that are not confronting with what they do and that’s very, very difficult sometimes. You just want to get shit done and you want to do it fast and you know how to do it. But you know when that’s what’s going to happen, when you’re going to take a step forward and just do someone’s job for them, then they’re going to feel micromanaged and they will not learn. And like you said, sometimes you just have to let people make mistakes.
All that is very hard. Like, intuitively you’re trying to optimize for speed, you’re trying to take the fastest path toward the goal, and sometimes you have to do it. But like figuring out the cases when you should slow down and let people do their thing and maybe fail, if it’s not too costly, that’s the education budget that you have to [inaudible 00:55:52]. Those are just a few things that I think that were very important. So the importance of giving bad news early on is . . . I cannot emphasize this more. This was very, very important.
Andrew: The importance of getting what early on?
Mikita: Giving bad feedback early on.
Andrew: Let the person know, “This is not what I’m looking for.”
Mikita: Yeah.
Andrew: As early in the hiring process or . . .
Mikita: In any kind of process.
Andrew: Always. So as soon as I see a problem, I should be vocal about it?
Mikita: Exactly, but do it in a very, very smart way. Like problems happen. You know, like everyone makes mistakes. I make mistakes. We’re not perfect. No one is perfect and figuring out a way to turn mistakes into learning experiences is what . . . You know, I don’t think I’ll ever be done learning that, but that’s an important realization that I came to over the last few years.
Andrew: Okay. Is there a methodology? Is there someone who helped you learn this? Is there someone we could go learn from?
Mikita: Well, my colleague and a bunch of books. So I like to read books. I also use Audible to just listen to stuff while I’m getting to work or getting back home and let’s say, “15 Commitments of Conscious Leadership” is a fantastic book.
Andrew: What is it? 15 . . .
Mikita: “Commitments of Conscious Leadership.”
Andrew: Okay.
Mikita: “Quiet Leadership” is a really good one too. Anything that talks about management, influence and Euro science is something that I’d probably dig.
Andrew: I see it. Wow. I can’t believe you were helped that much from this book, and I never even heard of it. I thought that through doing these interviews I came up with a really good bookcase of books for business. There it is. “Quiet Leadership” is by David Rock and “15 Commitments of Conscious Leadership” is by Jim Dethmer, I guess is the pronunciation, and Diana Chapman.
Mikita: Yeah.
Andrew: Those are really good recommendations. By the way, we were talking about Glassdoor. I don’t know if you know VaynerMedia, but if you want to see some of the most interesting Glassdoor reviews . . . Hate working there. Some of them are just so pissed.
Mikita: Working with Gary? What?
Andrew: Yeah. I’ve nothing but positive experiences with Gary. I think he needs to address this whole Glassdoor thing. I know he’s talked about it a little bit, but man, he’s got to talk about it internally with his team. I’ll leave it to him. I’ve got to have him back on here and we’ve got to talk about that and a couple of other things. But for now, anyone who wants to check out your site can go to PandaDoc. I really dig the t-shirt, by the way. I think that it actually doesn’t look like a techy t-shirt. It just looks like a cool, San Francisco t-shirt.
Mikita: Do you want one?
Andrew: What’s on the bottom of it? “Smart document automation.”
Mikita: Yeah. It says, “San Francisco [Mensch].”
Andrew: All right. So there it is. PandaDoc and don’t forget my two sponsors, the company which gets you phenomenal designs. They showered me with so many different options I had a hard time picking one but I did. I picked it. It’s called DesignCrowd. We’re talking about designcrowd.com/mixergy and if you want to get your website hosted right, hostgator.com/mixergy. Thanks so much for doing this interview.
Mikita: My pleasure, Andrew. Thank you.
Andrew: Straight from the pod. Bye everyone.
