How a project management software found a gap in a crowded market

I almost wasn’t going to do this interview. I just couldn’t believe that yet another project management software company could be doing well. I thought we had all the project management software apps that we needed.

But then I saw who recommended today’s guest, a guy named Alex Dantas, who’s recommended several killer guests here for Mixergy and I said if Alex recommends it, it’s got to be both good and a business and entrepreneur that many people in my audience probably haven’t heard of and should hear about it. And then I dug in.

Here’s the deal. This company is doing well. It’s very young and it’s not the first company that the founder came up with. It’s the second one. The first company he sold, the second one is what we’re going to be talking about today. The entrepreneur is called Antonio Carlos Soares. He is the cofounder of It’s a project management software that does much more than that little name implies. His previous company–well, we’ll talk about that in the interview too…

Antonio Carlos Soares

Antonio Carlos Soares

Antonio Carlos Soares is the cofounder of, a project management software.


Full Interview Transcript

Andrew: Hey there, freedom fighters. My name is Andrew Warner. I’m the founder of and I almost wasn’t going to do this interview. I just couldn’t believe that yet another project management software company could be doing well. I thought we had all the project management software apps that we needed.

But then I saw who recommended today’s guest, a guy named Alex Dantas, who’s recommended several killer guests here for Mixergy and I said if Alex recommends it, it’s got to be both good and a business and entrepreneur that many people in my audience probably haven’t heard of and should hear about it. And then I dug in.

All right. Here’s the deal. This company is doing well. It’s very young and it’s not the first company that the founder came up with. It’s the second one. The first company he sold, the second one is what we’re going to be talking about today. The entrepreneur is called Antonio Carlos Soares. He is the cofounder of It’s a project management software that does much more than that little name implies. His previous company–well, we’ll talk about that in the interview too.

I also–actually, Antonio, since you’re open to it, I also want to talk about some of the harder, later stage issues of a business, like capital structure, like how to incentivize people. I know you’ve had both successes and challenges in all those later stage issues. I want to talk about that. I also want to talk about this. I know most people don’t want the video, so I will describe it. I got this plaid bag in the mail from Japan and none of it broke. Look at this. This handle looks so fragile. It didn’t break. I’ve got to open it up on camera.

We can do this interview and we can open up packages thanks to do two great companies that are very understanding. The first is Toptal. I’ll tell you later why Toptal will help you hire the next great developer or designer for your company and the second sponsor is Reactor Core. That’s a school where you learn to be a developer, really impressive school.

First, Antonio, welcome. Good to have you here.

Antonio: It’s my pleasure to be here, Andrew. Thank you.

Andrew: I swear, I really thought we had enough project management apps. I really thought maybe this guy Antonio was just starting out and he’s looking for some press to get things going. But I asked you what your revenues were before the interview started and you told me that they were…?

Antonio: $2 million.

Andrew: $2 million–and the company is how old?

Antonio: About three years.

Andrew: I want to get into the how you built the business, but first, I’ve got to ask you why. Why is this still surviving? What do you think sets you apart from the other project management apps that are out there?

Antonio: That’s quite a good question. Thanks for asking that. I never thought about doing another project management software or something like that. I had a previous company, as you mentioned because [inaudible 00:03:00]…

Andrew: Sorry. You and I have had impressive, terrific internet access and for a moment there it just stuttered. Let me see if you’re back. No. You’re frozen. Let me call you right back and we’ll piece this together.

Hey, before we start, I’ve got to tell you that had a big tech issue in this interview. Specifically right after I asked my guest the first question, his connection just got really bad. Most people don’t know it, but I do my interviews using video Skype and I actually publish the video on Mixergy.

For this one because my guest’s video and audio were just not working so well, we decided to switch to audio only and focus all of our bandwidth on just audio. So, that’s why this interview is audio only. As you’ll see, I promised that I’d open something, we weren’t able to do it because we were audio only. I’ll save it for another interview. All right. Here’s the interview.

Antonio: Okay. So, I actually never managed, never planned to do a project management software or anything like it. I was just running my previous company, which was a mobile application development company and the company was growing a lot and we had several management issues. It was very difficult to make priorities clear for everybody to understand what people were working on, when things are going to be delivered, how much did they cost once they’re delivered. And that was just a pain.

We use a project management software like JIRA on the IT department, but that kind of makes them isolated from the rest of the company and they were always complaining about changes in priority and changes in scope, which were a necessity in terms of customer servicing. It was just too painful. Then people started to look for lighter software like Basecamp. We used that for a while. Then we realized that it was kind of solving the wrong problem. It was solving a communication probably, which we actually didn’t–

Andrew: Let me pause right here. It sounds like what you’re saying is you saw a bunch of issues that were missing from the others. Can you just list the top two and then we’ll get into the story of how you built up the company?

Antonio: Yes.

Andrew: What are the top two things that you looked at other software that said, “They’re missing. I’ve got to create this from scratch?”

Antonio: Yeah. We needed to integrate task management with time management in a very easy way.

Andrew: Okay.

Antonio: We also needed to understand employee performance as comparing them to others in the company.

Andrew: Okay. I see. And so none of the software had that and they all had other issues too, like isolating certain teams from other teams, etc. and you said, “I’ve got to just build this for myself. Why don’t we spend a little bit of time on Aorta, that company you built? You sold it to RBS. What did you sell the business for?

Antonio: Can you ask that again?

Andrew: What did you sell the business for? How much money did you get when you sold the business?

Antonio: That is something I can’t say. RBS is a public company.

Andrew: Yeah. So, did that make you into–can you say if it made you into a millionaire, you and your cofounder?

Antonio: Yes.

Andrew: It did? So, you did really well from that. It wasn’t just a gracious exit. It was a successful one.

Antonio: No, not at all. It was a very nice exit from a company we have really struggled in making.

Andrew: Yeah. I heard that you struggled a lot. What was the big challenge you had there?

Antonio: I think that the biggest problem is probably where people can learn the most about our interview here is just that the capital structure was wrong. I think businesses will eventually migrate to the capital structure they actually have. So, we were trying to build a product there, a product that was a mobile application development platform. It was something like a titanium, but that was in 2008. So, it was really pioneering work being done there.

But we started the company with our own funds, me and my cofounders, and we built the company as far as we could and then we went for fundraising. But then, again, that was 2008 and that was the whole banking crisis in the US and that became a crisis everywhere in the world that VCs neither in Brazil or the US wanted to talk to us.

So, we eventually had to pay our bills. So, we started to move the company slowly to services. So, instead of just licensing the platform, we would licenses the platform and add service on top of that because we want to raise tickets. We want to raise how much each customer was spending with us.

Andrew: So, you guys both built a platform for yourselves and you were doing development work?

Antonio: Yes. The original idea was just to license that platform for the market to use it, but we never get that far and we started to us that as a way to improve our margins while we were actively moving the company from a product company into a service company because we had to pay our bills because we didn’t have the correct capital structure. So, the company grew a lot. It was very successful, but it never became the company that we imagined once we found it. It became a service company. A project that really helped us to be more predictive, more effective, to have better margins, but it’s still a service company.

Andrew: What was the problem with the capital structure specifically? What is it that we should be watching out for?

Antonio: When you are building licensing businesses, recurring revenue business, it probably takes a lot of time for you to have enough monthly recurring revenue to pay for your fixed costs. The slower you grow, the bigger is your cash needs. So, if you don’t have the capital structure to be in that game, you will end up trying to squeeze every dollar you can have from your customers. That probably means you will migrate to actually offering some kind of service. That’s something that is really hard to come back from once you start doing.

Andrew: Yeah. Why is it so hard to stop being a service company and go back to being a product company?

Antonio: Your focus will never be the same. The company is built completely different. A product company’s base is built around processes and a service company is built around relationships. That makes it completely different.

Andrew: I see. Actually, no, I don’t. Can you give me an example of a time where that was a problem?

Antonio: Yes. For instance, one of our most important customers was a Brazilian telecom, the largest Brazilian telecom. Basically, we would do whatever was mobile related that they asked us to do because we could increase our tickets with them from–we actually grew from $100,000 to $1.5 million in four years.

There was a kind of relationship we were building with large companies. We were actually building those kinds of relationships with banking groups and with retail companies, with beverage companies and things like that, but then you start doing whatever the customer wants because you don’t want to frustrate them.

Andrew: I see. And then you’re no longer sticking with your process. You’re no longer building the company you want. You’re building the work that they want.

Antonio: Yes. That’s what happens.

Andrew: Okay. You also said that you guys had to keep finding money everywhere you could and there was a period there where you couldn’t pay your taxes.

Antonio: Yeah. That’s totally true. Actually, we raised as much money as we could with banks. Then we asked for friends and family. I had my mother’s apartment as collateral for a loan. Then we had to stop paying our taxes so we would declare it but not pay them. So, we would incur in interest and fines and everything, but still it was cheaper. It was not a matter of financial cost. It was a matter that it was just needed. We didn’t have money to pay those bills.

Andrew: So, you earned a profit but you couldn’t find the cash to pay taxes? Is that because your clients were taking too long to pay?

Antonio: No. In 2008, the situation was like that. In 2009, that was when we get into those really deep financial problems. Then in 2009, profits were enough to pay our set costs and to start paying that. Then in 2010 and 2011–actually by 2011, then the company became very profitable and we were having like 37% EBITDA margins and the company was really becoming profitable.

Then by the beginning of 2012, the market was in far better conditions, totally different from what it was in 2008 and we started to try to raise money to raise what would effectively be a series B round, although it was our first time in the market. While we were doing that, we received their offer, that bid from RBS. That actually became very difficult to say no to their bidding.

Andrew: I bet. But going back to it, you earned money, but you didn’t have the money to pay taxes. I’m wondering why.

Antonio: In the beginning it was just because we were not selling fast enough.

Andrew: But then if you’re not making money, there are no taxes to be paid.

Antonio: No. In Brazil, there are.

Andrew: Really? Even if you’re not making money you have to pay taxes?

Antonio: Yes. I was not understanding your question.

Andrew: Like what kind of taxes did they charge you if you’re not making money in Brazil.

Antonio: On labor, on your payroll. So, you pay taxes on three things. Some taxes are related directly to your revenue. So, no matter the amount of revenue–

Andrew: Not even profit, revenue.

Antonio: On revenue or on the first line, top line. Then there are taxes that are related to your payroll. Those are actually probably the heaviest ones.

Andrew: Okay.

Antonio: And then there are taxes that are related to your actual profits. So, that’s the point, Andrew.

Andrew: Wow. So, every point of your income statement, they want to bite.

Antonio: Yes. They want to bite. That’s very complex.

Andrew: Yeah.

Antonio: But apart from being complex, it’s unfair, as you notice.

Andrew: Okay. So, then I can see you finally had another change after you sold this company to start a software company, but before you did, you finally went out and you celebrated a little bit. You had some parties. What else did you do to celebrate?

Antonio: Yeah. We stopped for about six months or so. I used to say that each one of the cofounders went to do what they liked the most. So, I went cycling. So, I was on cycling trips in Europe and Asia and everywhere. My cofounder, Patrick, he was traveling through Southeast Asia and Japan and other places and our third cofounder, Franklin, he was coding at home. So, everybody was happy. Everybody was doing what they liked the most.

Andrew: I see. I’m picturing the biggest smile in the world on your face for like three months straight.

Antonio: Yeah.

Andrew: And you guys came close to having the whole thing go away, close to disaster.

Antonio: Yeah, very close to disaster.

Andrew: When you started coding up, did you do it with the idea that you were just going to solve your problem or did you say, “Aha, finally we can get into the software business?”

Antonio: No. It was strictly about solving our own management problems.

Andrew: Okay.

Antonio: We never thought it was like a pet project, Franklin’s pet project. He was so glad when someone started asking if they could use the product, if they could use his little pet. He just started allowing people to do that.

Andrew: Was this after Aorta, after you sold?

Antonio: No. It was his project from the beginning. It was not an Aorta project. Aorta was just like our first customer, actually, a guinea pig, to be honest. But when we sold Aorta, it actually took a while for us to realize that could be our next company because I used to look at it as almost like an internal hack, as just something that we needed to build in order to deliver the projects that result. But then we I went to talk to Franklin, he was saying there were around 200 companies using the product. I said, “How is that even possible? How?”

Andrew: Right. I want to get into the how, but I’ve got to ask you–didn’t RBS say, “Hey, you guys built this while you were running this company. We bought this company. We now get with it.”

Antonio: No. It was clear from day zero that it was now included in the sale.

Andrew: I see. You said this was our pet project.

Antonio: That was exactly it. It was our pet project.

Andrew: Yeah. What a pet it grew up to be. All right. Let me take a moment here to talk about my sponsor and then I’m going to come back and ask you how did you get or how did he get the first 200 users. First, my sponsor is a company called Reactor Core. If you’ve been listening to me at all at Mixergy, you know that Reactor Core is the place where people who really want to learn how to develop go to learn.

We’re talking about a really intense program. If you’re just looking to dabble, just forget it. Fast forward through this. But if you or someone you know wants to really get into development, we’re talking about a 12-week program, 6 days a week. You’re going to be working from 9:00 a.m. until midnight. When was the last time anybody out there did anything from 9:00 a.m. until midnight. Antonio, did you right your bike from 9:00 a.m. until midnight when you got to do it for fun?

Antonio: Yes, I did.

Andrew: You did. There you go. You have to love programming that much from 9:00 a.m. I love riding, but I’ve never ridden from 9:00 to midnight. We’re talking about 9:00 to midnight six days a week, 12 weeks together.

The reason they do it is because they really want to create the best programmers they possibly could, the people who are going to have their lives completely changed by it. Many, if not almost all people who have gone through it have had their lives changed by this. The reason they do this is that’s who they are. I think Tony, one of the cofounders of Reactor Core, when he was starting said, “I want everyone to graduate and if you have any kind of problem and you can for some reason, let me know.” And one person did. They ended up staying at his house. We’re talking about deep commitment.

If that’s who you are, if that’s who someone you know is, you’ve got to go check out If you’re a developer, you’re going to appreciate the name there, They’re here in San Francisco, but they also have schools in person in other parts of the US.

So, get into one of those schools and go in person and really obsess about this. And if you can’t make it person, if you can’t do it, they have an online program that’s very similar to the in person program, one that basically has you working, not basically, exactly has you working long hours, 9:00 until midnight with somebody watching over you. Be prepared to get worked.

It’s an amazing program. They’re not looking for a huge number of students from Mixergy. They would like if they could just have one really good student. So, if that is you, go to I think there’s an application process. They want to make sure you can actually go through this and not break down, not be someone who couldn’t keep up with the program. If you think you can handle it, go check out

So, Antonio, how did he get his first few customers–the first 200 people?

Antonio: So, it was just by word of mouth, but it actually happened like that. So, the first customer was someone who was Aorta. So, the second customer was the guy that came into record some video for our end of the year party. So, he started asking what was that on everybody’s screen and I explained it to him and said, “Hey, I need that.” And then one of the other cofounders, he had a few bars in the city of Belo Horizonte and he started to coordinate the work of those different bars, especially marketing activities and like things they need to purchase.

Andrew: Bar, like where people drink beer?

Antonio: Pardon me?

Andrew: Bar, like a place where people drink beer?

Antonio: Yes.

Andrew: That’s what needed this kind of software? Okay.

Antonio: Yeah. So, he was using that to coordinate marketing actions among those three or four bars that he had at the time. Then it was really one by one and at some point, one of our former workers called into Franklin and say, “Hey, I started working on a company that is a mess. It looks like Aorta before we started using Can you open an account for me or something like that?” He was just opening those accounts and people were referring to each other and calling him and he would open an account for them.

At the time, I was very interested by a white paper that had been released by McKinsey, the consulting firm, saying there was something huge happening in what had been called social business software. Then there was much anxiety when it was bought by Microsoft. Everything seems to be happening in that space.

Then I went to talk to Franklin and said, “Hey, there seems to be a huge opportunity in work management software.” He says, “Yeah. We don’t need to start a company or start building software. We already have software for that.” And actually that was how much of an internal hack was to us at the time. It was not even something I would consider as a starting point for a company in the same area. So, that was how is started from this point on.

Andrew: Antonio, I’m looking at JIRA’s website now. It looks like they first translated their software into Portuguese on May 17th, 2011.

Antonio: Yes. That was probably when Aorta started using it or when Franklin started giving away licenses for people to start using it. So, the company itself was established in January, 2013.

Andrew: But the software was being used back before that. So what I’m wondering is, is one of the reasons why took off is that you guys were native Portuguese? It worked for people in Brazil, where other software makers hadn’t really addressed the Portuguese market.

Antonio: That certainly helps. You see lots of successful companies in the US translated into Portuguese and into other languages right from the beginning. I think that’s a very clever move because of course the Brazilian population, there are a lot of people who speak English, but there is a hell of a lot of people who don’t. So, being available in Portuguese certainly helps and you have support in Portuguese, it certainly helps a lot.

Andrew: Yeah. I can’t imagine today if somebody walked and saw on someone’s desktop project management software, that they would be as interested to look at understand more about it. But before, there was Portuguese project management software. I imagine that was just revolutionary, more exciting. Am I right?

Antonio: Yes. And that thing about mixing task management, time management and performance management into a single application, it was really convenient.

Andrew: I see. So, now you guys spun off. Was the company continuing to be run by your cofounder while you were out cycling?

Antonio: What happened is that after that six month period, we regrouped and the three of us started

Andrew: I see. You took some time. But people were still using the software on their own, largely for free and then you said, “Let’s turn this into our next big thing.”

Antonio: Yes.

Andrew: Okay.

Antonio: We started with a freemium model, just because we didn’t even have the payment gateway. People couldn’t pay for the software because it was not built yet. That part was not built yet. That turned out to be something that was without much thought in the beginning, but it was really, really helpful to get our names printed and to make the software really, really recognizable in Brazil, the brand to be recognizable in Brazil.

Everybody was talking about it and was using it. Of course, I personally don’t think freemium is the best business model. So, after two years, just a year from now, we switched it from freemium to trial model.

Andrew: So, sometime in May, 2015.

Antonio: Yeah.

Andrew: You guys switched over. I do see actually a version–I’m now on and I see a version of your site from May, 2003. Excuse me, May, 2010. So, that’s definitely before JIRA’s website says that they had Portuguese. On that site, I can see–actually, as I go over the next few weeks, you guys have a list of things that will be on the site in the future. One of them is plans and prices. So, there’s a plan at some point to offer that.

Antonio: Yes.

Andrew: Did you get any feedback from the free users or were they just using your software? Was it helpful to have them is what I’m trying to get at?

Antonio: Yeah. It was very helpful. To be honest, we didn’t have a quality assurance process and the software in the beginning, so we would just release it and those free users would be our quality control. So, they would locate bugs in the software. And from the beginning, we were using user voice and letting people know what they wanted on the software and we were always visiting a few customers just to have a pulse of what people were really–

Andrew: You mean going into their office and watching them?

Antonio: Yes, and asking them what their problems were. When we started, we just wanted to solve the problems we had as managers. So, it was extremely focused on solving problems that are crucial for managing people in the workplace and getting the right things delivered at the right time for the right cost, being able to give the manager the tools to really increase productivity. So, from that point on, we have always listened to their problems, real problems where I’m trying to be as objective as possible in solving for that.

Andrew: I see. It looks like you also shifted at some point early on within like a year and started emphasizing social networking inside the company, like people inside the company should be able to have a safe place to chat with each other the way they do with their friends on Facebook, right?

Antonio: Not really.

Andrew: No? It looks like that’s a major feature here on the site but maybe I’m exaggerating the significance of it.

Antonio: It’s not like Facebook. We are trying to get communication under context. So, communication, it always happens within the tasks and the projects and the customers they are related to so they can easily find in the future. The communication also works as a way to formalize internal demands.

So, we are trying to get the noise out of the conversation and to have important decisions being recorded. That’s something that is important. Everything that is written or everything that is made, to just have 15 minutes to undo it, otherwise it’s written and it cannot be delivered at any time in the future. That’s for you to understand what happened and to have the complete history and complete log of the decision that are made.

Andrew: I read that, so that nobody can say, “Hey, this person told me, but not have any proof that they really were told something. How did you know that that was an issue? I’ve seen you emphasize that as I went through the archive of your website over the years. I’ve seen you emphasize that quite a bit. How did you know that was a feature that people wanted, that that was an issue?

Antonio: That’s a major reason for rework, for reopening of tasks and from our experience, a major source of misunderstanding and even animosity between different company areas.

Andrew: You guys internally had that issue, you’re saying?

Antonio: Yes. People that were dealing with customers, they would have a meeting with the guys in the IT department and they would make a lot of decisions and say lots of things and then 15 days later or 30 days later when things show up, people would say that it was not exactly what was demanded and that they also said something else.

So, that issue about formalizing internal demands is so crucial. It just leads to so much rework, to so much animosity, to so much loss of time. It’s really, really something very simple. has lots of issues of features that are very simple, yet very effective. That was one of them. Another one, if you allow me to mention, is just being able to define who can open a task for whom and who can receive tasks from whom.

That is also a problem that we find in reality, which is agreeing with someone that something is going to be delivered and then realizing a week letter that he was not working on that, but working on something else that was demanded by one of the partners of the company or something like that or some urgent matter that just showed up. So, we stopped doing that and moved it to something else. Our best intention was to add value for the company and to solve problems, but it was just not was important to do.

Andrew: What was your process for beyond the user voice tab that you had on the site, which anyone can use to submit a request for a feature. What was your process for understanding people’s problems? I know one of the things you said was going into their office. Let’s start with that, then. When you would go into their office, how would you look at their work to understand their problems?

Antonio: I would just ask what’s their main headache? What is [inaudible 00:33:58] at that specific time?

Andrew: What if they said their main headache was not getting enough customers into the business? That’s completely outside of the scope of your software. How would you deal with that?

Antonio: I would still dig into that problem asking why was that happening or people were not being able to follow up with customers or not being able to build proposals. The product is not good. People are not being able to move the product forward. What is happening? What is happening inside the company? Andrew?

Andrew: Sorry. I think there was an issue there. You’re saying that you would still want to know how does inner office communication affect sales. Even though it doesn’t seem like an obvious connection, you’d still want to see if there was some connection that you wouldn’t have understood.

Antonio: Yes. I would probably not be asking–I would probably not be talking to the sales director, for instance. I would probably be talking to someone who’s responsible for operations or for marketing or for any service inside the company. So, like a shared financial center or something like that.

Andrew: Okay. Let me do another sponsorship message and then come back. I want to ask you about prices being too low. How you understood that they were too low and what you did to test better prices.

The second sponsor is a company everyone who listens to me knows. It’s called Toptal. Antonio, do you know about this company, Toptal?

Antonio: No. Can you explain a bit?

Andrew: Sure. It’s actually a company that has a network of developers. Anyone who’s looking to hire a developer can just contact them, let them know what they’re looking for–by the way, when I say let them know, I mean they’ve got a specialist that will talk to you to understand what your office is like, who will understand what kind of program you need, what the result needs to look like, how you communicate. Do you use to communicate with your team or something else?

Then they go and find the perfect person. They make the match and if you’re happy with them, you can get started within days. We got started I think within 48 hours when I hired someone from them. They’ve expanded beyond developers.

Antonio: That’s awesome.

Andrew: You’re right. That is awesome and I don’t stress that enough. It takes weeks, if not months to find an outrageously good developer. Well, with Toptal, you can do it within a couple of days. All you have to do is go to When you do that, they’re going to give you–here, let me go to it myself,

They’re going to give Mixergy listeners 80 hours of Toptal developer credit when they pay for their first 80 hours and that’s in addition to a no-risk trial period of up to two weeks. Go check them out. You can hire your first developer or your next developer or your next developer team. You can also now hire other freelancers like creatives, like if you need somebody to do your design work for you. They’re fantastic. Go check them out at

Pricing–what did you charge at first when you finally got a credit card processing system in place? What was your price?

Antonio: Yeah. The price was just outrageously low. It was R$20 for five users and that was, at the time, it was like less than $2.

Andrew: Less than $2 for up to five users?

Antonio: Yes.

Andrew: Okay.

Antonio: So, that was how shit it was. Today’s price was 12x that and it’s more in line with other software. And the reason for that was that in the beginning, we were offering a free software. We just wanted to understand the software was still very raw. It was not as beautiful and as elegant as it is today. So, people would really need to do a lot of work to understand and need to spend a lot of time to understand how the software worked at the time. But still, we wanted just to check if people would take their credit cards out of their wallets and pay anything for the product. So, we didn’t want the price itself to be a barrier, but just willing to pay something for it or just to switch immediately to another free option to be the test.

Andrew: I see. It looks like you did. You got rid of your free version when you did that, right?

Antonio: Yeah. We maintained the free version for a couple of years, as I mentioned. Then we started raising prices gradually as the product got better. At some point, we just got rid of our free version.

Andrew: Yeah. But I don’t even see looking at 2013, I don’t see you guys even offering the ability to–oh, you do. It’s underneath. That’s kind of what Basecamp did for a while. They took their free option and they just kind of hid it underneath all their paid versions.

Antonio: Yeah. So, in the beginning, the first version was the only one available. Then it was very welcoming. Then it started to be less welcoming. Then it was eventually we got rid of it.

Andrew: I see. And I guess you were measuring results and seeing that it didn’t impact your sales or that it actually increased your sales.

Antonio: Yeah. It didn’t impact, to be honest. We didn’t lose customers or gain customers because of that. I think the software is probably still very shit for what it does, for the value that it ads. But I don’t know if you are aware of that, but Brazil is in such a huge crisis right now, so we feel that it’s probably not appropriate to raise prices in the economic environment that we are in right now.

Andrew: I do know that. Actually, I know about it because event PR–I’m wondering, how much does it hurt you to be so focused on Brazil?

Antonio: Yes. It has [inaudible 00:40:38]…

Andrew: It has what, sorry?

Antonio: It has a really bad side of it on the prices, [inaudible 00:40:45]…

Andrew: Oh, the connection again is going bad. You were saying it has something and then I lost you.

Antonio: Okay. So, the crisis has two sides. One side is just that people were looking at their costs and shaving from their costs aggressively, even if they’re paying for something that is adding value, it’s just another check going out and some people are churning because the company has been bankrupt or because people have been fired, so the team is smaller. So, we are seeing companies going out of business and companies reducing the amount of licenses they have just because they have cut personal off. That is really bad for everybody involved for humanitarian reasons.

Andrew: Yeah.

Antonio: But on the other side, there’s a good thing that the crisis makes people look for ways of being more productive, of doing more with less people. That’s when any productivity software will gain momentum when the productivity issue has been discussed that widely.

Andrew: So, are you seeing sales growth month to month?

Antonio: Yes.

Andrew: You are?

Antonio: Yes.

Andrew: That’s for the last year?

Antonio: The crisis actually got really bad probably has not diminished month over month, except to honest for last month, but it was something [inaudible 00:42:42].

Andrew: I’m wondering why you feel so comfortable telling me your revenues. I remember interviewing someone and I wish I could think of who it was who said once a company goes through series A, they don’t give revenues anymore. I thought people on Mixergy give revenues all the time, even after going through series A the way that you did, Antonio, so why do you feel so comfortable sharing what your revenues are?

Antonio: I have been doing that from the beginning. It doesn’t seem like such a strategic issue. If you were asking what was CAC recovery, what was our churn, what was our LTV over CAC and other unit economics I would probably be more secretive about it, but not revenues.

Andrew: Okay. One of the challenges you had was hiring. You told our producer that you can’t go after some companies because they’re backed by the same VC. Is that such a big issue?

Antonio: Yes.

Andrew: It is?

Antonio: Yeah. That’s how small the Brazil market is. There are like six big VCs and there are probably like 100 or less than 200 tech companies that are being funded that didn’t have a relevant size. Sometimes, we do when we are hiring people, we get information that the best guy is someone but then he is working for a company that is already in the portfolio of our same investors. We don’t go after them, of course. We don’t do that.

Andrew: This is Monsashees Capital?

Antonio: It is Monashees Capital. Yes.

Andrew: You’re also backed by 500 Startups.

Antonio: Yes.

Andrew: It also says here in your AngelList profile that the other investor is Franklin, your cofounder. So, does that mean that you guys didn’t put in money but Franklin did?

Antonio: In the beginning, that was true.

Andrew: I see.

Antonio: Then I’m not sure. I should probably check AngelList because later on–so, it was Franklin’s pet project for a while. Then when we entered, then we put money in.

Andrew: I see.

Antonio: And then about six or nine months later, Monashees and 500 put money in.

Andrew: Okay. Another issue you told our producer, Brian Benson, that you had was changing the payment incentives because you weren’t sure what people wanted. Can you talk about that and how you got a healthy payment incentives structure in there?

Antonio: Yes. I should probably go back to Aorta to build the case because what happens is that you don’t see the same, not even close, the same level of companies exiting in the IT sector or in any sector in Brazil. So, the market is far less liquid. So, you probably view that as let’s say you are a developer or you are like a marketing manager. You probably don’t know anyone, you don’t have a friend who have earned money out of stock options.

Andrew: Okay.

Antonio: Just because there are like a hand full of successful exits in the Brazilian market.

Andrew: I see.

Antonio: So, it is not was attractive and it’s not as material as it is in the US. So, we used it at Aorta–

Andrew: Sorry. While the connection is breaking up, I’ll just ask my question and give your connection a chance to catch up. Are you saying that you still do options for your employees even though they don’t full value it because they hadn’t seen their friends cash our options? You still do it?

Antonio: Yes. We did it at Aorta.

Andrew: Why?

Antonio: For two reasons. First because we believe it’s fair. Second, we believe that we would have an exit and that people would earn money and they would understand, so it would help the market to build that perception.

So, when we sold Aorta, there were like probably six or seven individuals who had options on the company. Some of them make like one year of salary. Some made more. So, they received money and it’s kind of materialized the concept. So, when we built and we were hiring people and offering stock options, we actually told the stories that happened and we asked them to talk with people who received money and who really felt the benefit of it.

Andrew: I see. You were trying to show them this really is real. Okay. So, that’s how you helped align the teams’ interest with the company interest. What else did you do?

Antonio: Apart from the options themselves, we tried to establish our group that are the option holders. We share information with them, very detailed information about the company strategy and unit economics and every important metric in the company. We talked to them as if we were talking to our board members. So, that distinguishes them and that helps build a lot of commitment in delivering and working to fulfill the company’s vision.

Andrew: I see. What other issues have you had here at

Antonio: I think one of the issues we are facing right now, and then we will go back to the capital structure problem again is that in 2011, 2012, when we raised money for this company, for, the market was really liquid and Brazil was on the cover of The Economist magazine for the right reasons and not for the impeachment of the president or corruption scandals and things like that.

So, we were really on the top of the mountain at that time. It was easy to raise money at that time. Lots of companies did. Then again we are now at the same point that we were in 2008. So, there Brazil was being affected by the financial crisis, by the banking crisis. Right now Brazil is being impacted by lots of different issues. The impeachment of the president is one of them, so that brings a lot of political risk into any valuation that you would make for investing in Brazil. But there are also other issues that the Brazilian economy as a whole is in such a deep recession and that’s probably due to the commodity cycles for the super cycles.

So, commodities, Brazil is a commodity-dependent, export-dependent country. Both iron ore and soy prices and everything else, every other commodities has had historical low prices. The Brazilian economy as a whole is suffering a lot. So, people are really skeptical about investing in Brazil right now. That’s a crisis that are layered that sums up to the layer that you probably see in the US, that as far as can understand from what I see in companies like CB Insights reports and things like that, the US market as a whole has been investing in less.

So SaaS valuations in terms of multiples for publicly traded companies are right now at 3.9, where two years ago they were at 11x revenues. So, there was a perception in the US about what is the correct valuation for a SaaS company. That is not the best in years. Actually it’s the worst in years, probably not the lowest point in history, but very close to that. On top of that, you have the crisis in Brazil.

So, is very close to breakeven. It’s very close to becoming a profitable company. But that’s something that we even might have to pursue just because doing something else like raising a series B at a good valuation and raising the right about of capital is probably not available at the moment.

Andrew: I see. So, you’re not going to be able to do it and it sounds like you’ve been thinking about this a lot because you have been looking.

Antonio: Yes.

Andrew: I see.

Antonio: Actually, we didn’t put on our road show, but we taught it to a lot of people and we’re seeing the environment like that.

Andrew: I see. Wow. You guys, you’re not cash flow positive yet so you can’t self-sustain yet.

Antonio: Yeah. But we are very close to that. That’s something that we might need to do. So, we might need to turn the company profitable sooner that we wanted. There is a lot of growth stiff available in the Brazilian market even before we go to later American markets or even the US or other markets. There is a lot of growth to happen here. But we might have to slow things down and turn the company profitable and start to invest money that is generated by operations instead of venture capital money.

Andrew: We asked you about what books you recommend to entrepreneurs and one of the books is “The Hard Things About Hard Things” by Ben Horowitz, right?

Antonio: Yes.

Andrew: That’s so perfect for what you’re going through now. The other book you recommended is “The Diamond Cutter.” Why “The Diamond Cutter?”

Antonio: Well, I think it’s actually one of the most valuable books I have ever read in my life. I am a Buddhist, though it’s uncommon in Brazil. I really tried to lead by the beliefs. This book tells the story of that guy who is actually a monk. He went to work in the Diamond District in New York. He tried to get things right and get the business running according to his beliefs without anyone noticing that he is a Buddhist monk. I find the story very interesting.

Andrew: I do too. I remember just liking it as a good read. It’s him coming into the US and being, like you said, a diamond cutter. It was so fascinating to see how he kept his Buddhist beliefs while he was there and how they affected his business.

Antonio: Yes.

Andrew: Good recommendation by Michael Roach. Am I pronouncing his last night right? Is it Roach?

Antonio: Yeah.

Andrew: It looks like I read that book in 2011. Google now shows when you bought something. I did a Google search for it to refresh my memory and it brought up this big box that said you purchased this from Amazon in 2011.

Antonio: Awesome.

Andrew: All right. Thank you so much for doing this interview. Anyone who wants to check out your site should go to My two sponsors for this interview are the company that will help you or your employees or anyone you know become an incredible developer. They won’t take you on unless they believe they can do it, unless they know they can do it. It’s called And the second one is the company that will help you hire your next developer or designer. It’s called Toptal. Go to

It was kind of fun, actually, doing this interview without video. I like just being able to sit here kind of anonymously.

Antonio: Yes. You can do whatever you want.

Andrew: Yeah. I’m not worried about how I’m looking, how I’m slouching. I actually got to turn the lights off and relax a little bit more.

Antonio: Not bad at all.

Andrew: Frankly, I had somebody over to the office for scotch who’s not only a Mixergy listener but he’s a Mixergy member and he had no idea that I do video. For all he knew, we were just audio only because that’s the way he chooses to enjoy Mixergy. I know that a lot of people prefer it.

Antonio: Awesome.

Andrew: I’ll still bring back video. But it was fun to do it this way. I understand the appeal of it.

Antonio: Great.

Andrew: Cool. Thank you, Antonio. Thank you all for listening. Bye, everyone.

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