The SaaS Podcast

How This Non-Technical Founder Launched Two Successful SaaS Startups – with Hiten Shah [031]

How This Non-Technical Founder Launched Two Successful SaaS Startups - with Hiten Shah

Hiten Shah is the co-founder and president of analytics companies KISSmetrics & Crazy Egg. He founded KISSmetrics with Neil Patel in 2008. The company has raised over $10M in funding and is used by thousands of companies around the world. Hiten is also an advisor and investor who's actively involved in the software industry.

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Host: Omer Khan

Guest: Hiten Shah

This is the ConversionAid podcast, Episode 31. Welcome to the ConversionAid podcast, where we help software entrepreneurs to take their business to the next level. Each week, we interview proven industry experts who share their strategies and insights to help you create software that sells. Here's your host, Omer Khan.

Omer: Hey everyone, welcome to the ConversionAid podcast. I am your host Omer Khan and this is the podcast for software entrepreneurs and companies who want to grow their business to the next level and create software that sells. Today's interview is with Hiten Shah. Hiten is the co-founder and president of analytics companies KISSmetrics & CrazyEgg. He founded KISSmetrics with Neil Patel back in 2008 and the company has raised over 10 million dollars in funding to date. It's used by thousands of companies around the world. Hiten is also an advisor and investor who is actively involved in the startup community. Hiten, welcome to the show.

Hiten: Glad to be here.

Omer: Now, before we talk about CrazyEgg and KISSmetrics, tell our audience a little bit about yourself personally. Who is Hiten, when he is not working on the business?

Hiten: Sure. I tend to enjoy helping other people; maybe to a fault, and more than most other people, so my hobby tends to be just actually meeting with other entrepreneurs, whether formally or informally and then advising them, more than anything else, that's been what gets me sort of excited and gets my blood going.

Omer: Great! Now before we dive into more details and talk about the business, we like to kick things off with a success quote to better understand what drives and motivates our guests. What is one of your favorite success quotes?

Hiten: Yeah. So I have a quote right in the, sort of, my emails; they are in every email and I call it, “The Words I live By” and it's a quote by Zig Ziglar and it basically says, “You'll get all you want in life, if you help enough for other people to get what they want.”

Omer: Could you give me an example of how that quote has helped you in your life?

Hiten: I think a lot of times people will…it's a little bit different when you are a founder and you start companies, but generally speaking, helping other people isn't a normal thing for people to do on a regular basis. I know that sounds kind of weird, but you are so like in tune with what you want to do and what you are trying to get done, and so the way this helps me is …I mean, it's just a reminder that I, in many experiences of my own, whether it's, you know, just random way helping a stranger all the way, you know. I was actually at a conference yesterday and speaking and we were at a sort of mentor session, where there is like a speed mentoring basically. You meet with entrepreneurs for 10 minutes and before that, one of the other mentors are sitting there and you know, he now works at a Startup and he said, “Do you remember me?” I am like, “I remember your face.” I am actually very good at faces, very bad at names! And he…because I meet so many people and I am very visual person when it comes down to it and basically he said, “Well, you had coffee with me 5 years ago and you gave me some advice on starting my career here in Silicon Valley.”

And so, you know, I am sure he is…with me; obviously he remembered me and he made it a point to tell me. Now honestly, I barely remember the meeting. I remember like a little bit about it because we actually ended up going the [rising store] and stuff like that, but like, it's not something I would have recalled any other way, except the fact that he reminded me.

So I think that, just this fact that people remember when you help them, that leads to a lot of good things, you know, that are derivative of that and you know, if you are going into meetings or you are going into meeting people and thinking that, you know, you want something from them, it's typically not going to be as fruitful as just going in with a more open mind. And obviously the caveats are, there can be specifically business meetings and other things that, you know, you have some kind of mutual agenda or whatever, but most of the time I go into meetings pretty open, yeah, even though it is just meetings for myself atleast, just to see kind of where things go.

Omer: So you said that, you know, you love to help people and sometimes to a fault! How does that workout for you? I mean, I am sure you are a busy guy anyway in, you know, just with running your own business and the more people you help, I guess it attracts even more people, right? So how do you manage your time?

Hiten: Yeah, that's a great question. I think I know a lot about myself at this point; that's probably one of the keys. Managing my time, so yeah, I may tell another story, because I actually met someone else yesterday, one of the people I was mentoring, although he could have been a mentor there. And I have a lot of different businesses that I work on at the same time, and we were just talking and I was sort of explaining to him my philosophy about things and it's very similar to his. He didn't describe it the same way, but basically, it is just nice to know that someone else thinks the way I do, and he has about 5 different businesses that he runs. I am probably somewhere in that range, of 3 to 5, that I am involved in or running or whatever. And the one thing that I basically said was like, I actually tried to keep my time as free as possible and the reason I try to keep my time as free as possible is, in just a few tenets or a few… and even rules, just concepts and obviously these kind of things are meant to be broken, but one of them is the idea that if I am doing work, like actual, real, sitting down in front of a computer and doing work, it's like we had somebody else in my company that is not doing work! And what I mean by that is, there is always going to be somebody better than me at doing the work and that's a conclusion I have come to.

So I think this question has more to do with someone's personality and so my personality type is more, like I said, the helper, so if I want to help somebody, if that is what I am optimizing for, then what I try to do is keep my time free, so that if any of those people that are working in my companies and it could be someone as, like, you know, a marketing person at one of my companies or one of the VPs or our CRO or whatever it may be and just try to keep my time as open as possible, so that when they have a problem they can't solve, I can help them think clear. And you know, this is one of the debates that this guy and I had yesterday, but I was just saying that I can help them solve any problem. He is like, “Well, you can try!” and I am like, “No, I can help them solve any problem. That's my goal.” And so, to me, it's like I think every problem solvable. A lot of times, when these people in companies are, sort of, actually working on the work, they tend to be really deep in their work and they just need somebody to help them think about it, so I optimize the way I think about things, the way I do things, the way I work with people around this idea that their hardest problems are my problem and they just need to be able to bring those to me and understand that I am available for that at any time. And that is the sort of way that I have optimized the work I do and how I do these things.

Omer: I love that philosophy! Alright, let's talk by giving the listeners a better understanding of KISSmetrics and CrazyEgg. Who are your target customers for these products and what are the top pain-points that you are trying to solve?

Hiten: Sure. So CrazyEgg was actually the first business that we tried; my co-founder Neil and I tried in 2005, that actually worked. We tried many other before that, but this one was the one that worked, and worked meaning, customers loved it and they started signing up or even paying us, and what it does is it creates heatmaps for people that are clicking on a page, so it gives you a visual representation of data and at that time, there weren't any other tools that gave you this kind of, sort of, visual representation of data. There were a few others that started around the same time as us, but they all went in different directions. We've stayed true to the fact that we want to help people understand data visually;' see where people are clicking on top of, sort of, a webpage, as kind of the quick, sort of, pitch, but the target customer usually was actually web designers because they tend to, you know, not necessarily pay attention to analytics too much, atleast historically, and also where an opportunity for us to get an early audience. And since then, the company has progressed, the products progressed and I think the world has also evolved, where many people care about web pages and where people are clicking and are trying to make these pages better optimized and test them etc. So it's expanded from, you know, designers to marketers to even product people, anybody responsible for a website, is basically where we are at now. So yeah, that's CrazyEgg. And, then, with KISSmetrics, we were essentially building a second product, outside of CrazyEgg, or as part of CrazyEgg and we decided to spin it out and make it a separate company and then it ended up being KISSmetrics.

The story before creating KISSmetrics is probably will give you good idea of or I mean the audience, a good idea of kind of how we thought about things, but we were running our marketing consulting company and we were basically..do marketing for other people. And so our initial audience for KISSmetrics ended up being marketers. And our goal there was to help people measure their marketing better and the premise which, you know, I am happy to say is what a lot of products do now, is at the time it was…we noticed the pattern that people are building, a lot of analytics tools in-house and so, in-house meaning like, they were just building them themselves with their own engineers and we were wondering why they were doing that, considering the fact that Google Analytics existed, Ominture and all these tools existed, and in the case of an alternative like Google Analytics compared to building it themselves, Google Analytics didn't tie the data to their users while Omniture did do that, but it made it very very difficult and it was also very expensive solution to…or our whole thesis was there is a very large market of people, website owners or even marketers that are looking for a better solution and are willing to pay more than free, which is like Google Analytics was at the time, and the advantage we had was we would tie the data to individual users, so you can understand things like the lifetime value of your customer and everything that a single person did and interacted with in your, sort of, on your website or even with your business outside of just your website. So that was a thesis which is, sort of, person-based analytics tool.

Omer: So I want to talk about how you guys, you and Neil got started probably initially with CrazyEgg, but before we do that, you know, it was interesting you said that CrazyEgg was the first product or business…product, I think, that actually worked. Can you give me one example of a product that you tried to build before that, that didn't work?

Hiten: Sure. We have had a bunch of it. One was a failed web-hosting business and we spent about a million dollars, trying to get a web-hosting business running off the ground and it never launched. So that was probably one of the bigger failures, from a monetary standpoint. Another one was a podcast advertising network and the story there is like, this isn't when podcasting was…, I think it's making a resurgence, but this was like 2007-2008; may be 2006 even, around that time, and it was just…people felt all kinds of things would be awesome and so we tried doing it, and what we learned, after spending like, I think, $50000-$60000 and then like 6 months, that we actually found out that it wasn't going to work monetarily. So yeah, so as a result, we basically shut that one down, we shut down the web-hosting company as well and one of the biggest lessons from that was was just that, “You that shouldn't invest so much time and energy, whether it's engineering resources or money or whatever, until you've actually figured out whether it's good idea” and a good idea isn't like, because you think it's a good idea! A good idea would be a good idea because customers actually wanting to buy something from you and because you are generally solving a problem for them, it's not just like a vitamin, but actual pain-killer!

Omer: Did you get funding for the web-hosting business?

Hiten: No, we did not. It was all our own money.

Omer: So you guys personally lost a million dollars?

Hiten: That is correct, yeah.

Omer: That sure is an expensive lesson!

Hiten: Yeah, that was the most expensive one, but the cumulative is probably around 2 or 3 million range…

Omer: Okay. So let's go on to where the idea for CrazyEgg came from, so you and Neil were working on this consulting business. You were seeing a potential opportunity around you for this product. Just tell me a little bit more about where that idea, sort of, evolved?

Hiten: Yeah, sure. So in Google Analytics and Omniture, they have this thing called ‘Site Overlay' and basically if you had, and there is a big problem with it. If you had dynamic things on the page, so this is when we used to call like some, you know, like all the fancy things we can do on the webpage or java script, we used to call that AJAX and so I am sure you remember, being a product manager or program manager, but yeah, so we used to call it AJAX and the overlays didn't work well with AJAX, so they couldn't really understand that people were clicking on things and they weren't going to a new page. So that was one problem. Another problem we noticed is that, these are technical problems, but they made overlay inaccurate, that is, if you are…working out a product and you know, you see a lot of inaccuracies in existing products, it is an opportunity to think about it a little deeper and so another thing that we noticed was that if you had two links on a page and they went to the same next page, the site overlays would make the data for the links cumulative, so if the top one got 30 clicks and the bottom one got 10, the data in that site overlay will show 40 for each, which was very deceiving and wrong. And so we started building technology that actually differentiates which one was clicked on and if it's the fast forward today, this is like trivial stuff to do. Back then though, it wasn't even trivial to do, so I will not say it was rocket science, but it was definitely not as easy as it is today and has a lot to do with modern browsers and all these other technical things I won't get into, but…so we just noticed those two problems are more of a technical problem which made the site overlay grossly inaccurate.

We were able to understand this because we were using the product, but we also had a lot of friends as well as customers and other folks that were using the products and complaining about this. So I think complaints from existing products is always a potential gateway to start a product; that is something we were able to…especially the one that we used in that case and then the other, third thing was this higher level, sort of, issue where people had a hard time understanding numbers, data and tables, and that is all, the analytics tools will tell you. And even though site overlays were very data-heavy, and so, what we did is, we actually first started by building a better site overlay, because we knew that the technical risk of being able to actually do all that stuff I mentioned accurately, was a key to the product and so we started building that, built a better site overlay and then we were like, in what I like to call “Early Access Period”; I don't really like beta analysis terminology, because it's very geeky and also inaccurate and so we basically called that ‘Early Access' and had a bunch of designers from a community that we knew really well, which was the ‘9 Rules community'. It was really a large design community and we had a lot of those folks trying the product. You know, what we realized at the time was that we needed something better than just a site overlay and that is where we sort of invented the heatmap, because we wanted to come up with a better way to represent that data, not just to side over and so, it was actually the overlay, that was first in the concept from other tools that we took to make it better and then we extended from there. So now, that was literally how this whole category of heatmapping and stuff like that was created.

Omer: Okay, so you had this idea. How did you go about building the product? Neither you or Neil are developers, right, by trade?

Hiten: That's right.

Omer: So how did you get the product built?

Hiten: Yeah, we had already worked with a bunch of designers, so we had some designers helping us. So that was relatively easy. And then we had some engineers that they actually knew at the time, and we also knew enough about engineering too ..pretty dangerous at this time and at this point I would say I am very dangerous, but at that point I was a little dangerous and so, we found some engineers and they actually started building it and we actually ran into a pretty big issue with the way they were doing it. So what they were doing is if you clicked anything on the page that went to a new page, you would actually redirect directly in the browser the data to our server, so basically go, do a redirect to a CrazyEgg URL and then taking you back to where you were supposed to go, if you are visiting these sites and that was a pretty inefficient way to do it and also caused some issues, where we had downtime and other things like that. And this is very early and so what we did was, I went on a hunt to find engineers, other engineers and I got real lucky and the engineers working on CrazyEgg have been with us since then, and he actually owned a percentage of the company and everything now and yeah. So we have…we got lucky finding somebody, but I did put the work in to get lucky, so I probably talked to about a 100 engineers that knew ‘Ruby on Rails' because that was the hot thing at the time and there was on RubyonRails.org or probably still is, but there was a directory at the time and I could just go down the directory and find a way to contact these folks and that's what I did, one by one and I told them my problem and I told them I needed help and I tried to figure out if they had any time to help me or can even talk about it and …what I was looking for was someone that could basically talk to me about the problem in my terms, being a non-engineer, based on my description and taking a quick look at the product. And we found somebody who said he can do it better and we can do it better in a very relatively fast amount of time and he took a over that whole product.

Omer: Okay. So you know I think a lot of people who may be non-technical are kind of held back by building a software product because they just, you know…”I just don't know that stuff, I can't write code, I can't do all of these things.” That clearly hasn't held you, but what advice would you give those people?

Hiten: Yeah, so you have a few options, you know. One, you can learn to code or two, you can find a co-founder who can code. If you have a friend from college or anything like that, those are always great options and then three, if you have money or you know how to make money, in some other way like consulting or whatever, you can pay outsourced or insourced or whatever, you can basically pay a development shop to work with you. So those are the three options and from my perspective today, I might do a combination of them, if I were to start today, just because it is really easy to learn the program now. You can even go to like these Bootcamps and stuff like that. It's also pretty easy to learn on your own online because there are just so many things like Code Academy and all these tutorial sites and all that stuff. It was much harder when I started to even learn how to program. So I would do that for sure, because that will usually get a faster ramp up to the terminology, but you know, the product entirely was like, when I was talking to these people, I was in front of my computer and I was googling all kinds of crap, and the reason I was googling this stuff is because I was trying to understand what they were talking about, really fast. I was just Googling. I am really good at using Google at this point, but you know, at that time, I was pretty good, but yeah…

So you know, I guess the high-level thing for me, is like, you know, we are all…I mean, at the end of the day, we are all human beings, right? We all have some base level intelligence, so there is no reason you can't figure something out just because you are non-engineer. What you really need is you need to be able to know to ask the right questions; Google things, obviously! And get a good understanding of the basics of engineering, no matter what, right? I won't even say my understanding as formal! My understanding is very loose, like you put me in front of any engineer and I can ask them right questions to understand what the hell are they talking about, and a lot of times, lot of cases, I even help them with their problems, even though I know nothing about how to write a code. I can read a little bit of code, but I can't read too much of it. I don't know how to make my own code from scratch; I made multiple attempts to try the code and just, I don't know, it doesn't stick for me right now. It's not even because I can't; it's because I don't have the patience, to be honest. And so, you know, my advice is like don't get over yourself and don't think you can't learn it or don't think you can't have a reasonable conversation with an engineer. At the end of the day, the best engineers are the ones that can talk to non-engineering people!

Omer: That's great advice! Okay, so you've got the CrazyEgg product built. What kind of validation did you do at that time, before you built the product?

Hiten: Yeah, we did what a lot of people do now, and I didn't really see a lot of people do that back then, which is, we threw up a landing page, and we have…yes, we threw up a landing page and then we had a lot of people sign up with just their email address and basically we had a big pool of ‘Early Access' folks. We also happen to have money because we had a consulting company and we basically bought some traffic from the CSS Galleries. You might remember those, if you were looking around back in the days when CSS…I don't mean CSS 3 HTML5. I mean CSS and this is when my Zencart and all these sites were really popular and they had a lot of traffic and honestly, the advertising on those sites was very inexpensive. Like it was a couple of hundred bucks a month and really get thousands of visitors to our website. And so we got a few ads and we also just promoted it in the ‘9 Rules network' and we basically got about 23000 email addresses for ‘Early Access' before we even launched the product, and we used that pool to get people or, you know, to start using the product.

Omer: Did you charge for the product when you launched?

Hiten: Yeah, actually we did! We had a Free Plan for a while; that was when we were in ‘Early Access' and not everyone could…we weren't letting everyone sign-up then, and then, literally when we launched, we had Free Plan and Paid Plan.

Omer: Alright. So you've got this product in market and as you mentioned earlier, you started to sort of work on the next…initially, did it start out as kind of like the next version of CrazyEgg, what eventually evolved into KISSmetrics?

Hiten: Yeah, I mean, we … at that time, like it was a trend where a lot of the SaaS businesses would create multiple products, instead of doubling down on the single product and so, we had the same notion that, “Oh, let's create more products because we've this user base and they'll use other product too,” so we just literally started building that other product and tried to think about it. And it wasn't really out of CrazyEgg; it is just an idea that we got pretty good at building analytics products and with CrazyEgg, and knew a lot about Java script and stuff like that and ‘Big Data' – before, it was called that; so yeah, that's kind of how we thought about it.

Omer: Now for KISSmetrics, you actually decided to find investors and get funding for the business. What was the reason for taking a different approach here?

Hiten: Yeah, CrazyEgg always, and even to this day, if it's in a relatively small market, just because it's just a heatmapping tool, it isn't a broader analytics market, but it is certainly the niche tool at the moment, it still is! And we like it that way because it's really simple; people will sign-up online; we have no sales people and there was a self-service product back then, like you know, '05, when nobody was really building those; very few people were! And so we just wanted more things out there like that and we sort of just started building something else.

Omer: And so how did you go about finding your investors?

Hiten: Yeah, we had talked to investors in, I would say, 2006. A lot of them actually had old decks of CrazyEgg that I saw the other day, when we were approaching them and nobody would give us money because it was a niche product. And so when we started building KISSmetrics, either we got smarter or we got lucky, however you want to look at it, and it was just…people felt like it was a broader opportunity.

Omer: Got It.

Hiten: And so we were able to get money. Actually, the same people we approached for..the folks at ‘True Ventures' that turned us down for CrazyEgg, ended up funding us for KISSmetrics on our first round, and a bunch of other folks, but they were the first.

Omer: Okay. So tell me a little bit about what happened with, sort of, the KISSmetrics early days? So you've got the idea, you've got investors on board. Did you build out a different, a separate team as well?

Hiten: So there were some people we took over from CrazyEgg. We also had our consulting business still running at the time, and we took a bunch of people over from there and we had our founding team, of about 4 or 5 people for KISSmetrics and once we raised the money, we focused all our energies on that business and all those people's energies on that business, and then obviously started having new people too!

Omer: Okay. How did you go about acquiring customers for KISSmetrics? Did you guys bring on a sales force for that or were you focusing on sort of inbound marketing? What was the things that worked for you guys?

Hiten: Yeah. First couple of years, actually just trying to figure out what the right product was, so we had…we actually started with Facebook Analytics, so for Facebook applications, because we saw that they didn't have anything. We moved away from that pretty fast, because we didn't see that as a long term market, and we were very dependent on Facebook. I would rather be dependent on the Internet than Facebook, so that was…and it has proven to be the right call, because there is no Facebook Analytics tool now, atleast for the applications because they killed the applications. And so there was this influx, we noticed that, so we stopped doing that and then we pivoted to something that looked more like a Business Intelligence tool. I knew there was a bunch of other tools on the market like that, but what we realized about that is, it wasn't really solving the person-based analytics problem and so that's when we hit the current version of KISSmetrics, actually in a very similar way to CrazyEgg; started out as, “Oh, the funnels in analytics tools really suck and we can make them better!” So KISSmetrics actually started out as a funnel tool and we did funnels. Again, just like with heatmaps and…I am not tooting my horn, this is what people said, that we did it better than anyone else at the time, and that whole model of how we did funnels has been adopted by a lot of analytics tools and the idea was, most people think of a funnel as a top to bottom. We actually invented the idea of a left to right funnel and the ability to add steps at any time and basically just trap data and you can build out as many funnels as you want.

And at the time, the way that funnels were built, it was much different, where you would have to trap the data, hope that it works, set up the funnel and it is actually set up the funnel, trap the data, hope it works and there was like this whole 7 to 10 day period, just to figure out whether you had an accurate sum or not. A lot of…the way Google Analytics still works is like that, and we just saw that was pathetic and so we decided to do it better. So in our case, we made it so that you just trap data first, and then you can build out the reports on the fly, after you have trapped the data and that's how the system works, that's how the whole…. I think the whole industry has gone in that direction, especially the new players and the new companies like us. But to answer your question of how we started, like the way we always thought about it is, we will know when our customers are raving about something we built and we were able to get a lot of early customers that are not paying into ‘Early Access' programs, just because you know, we were marketers and we knew how to get people's attention and get them to start using our product. So we actually started, we always tend to start off with a small number of customers, make them very happy and they might not even be paying for a period of time; keep iterating the product until it gets to that point where people loved it and then we would, sort of, at the same time, we would have the landing page and getting more and more emails and more and more information about people that are interested in learning more about them and then once we knew that we had a resemblance of something that was early, and that people would be happy with, after we iterated it quite a bit, we would then put it out and start getting more customers.

And so, early on, it was just very similar to CrazyEgg and then over time, that business evolved so that we actually started doing Inbound Marketing, if you want to call it that. I would just say all we did was start a blog and had a really strong Twitter presence. I don't know if that is called Inbound Marketing or not; I don't really care, but we wanted traffic, we wanted attention and we knew that we can be a top marketing blog and that's why we did that. And it's still a top marketing blog today, and it is the way we get most of our leads, so it was a early strategy that we started, I would say, like 18 months or 2 years into the business and it's been…continued for a very long time because it is the way to do it. So we generally try to find these emerging trends in marketing and try to be early in them. I think blogging, business blogging and especially this marketing blog was a easy big trend for us. But for us actually, the story that people don't really know too much is that it actually started with a Twitter account, so we found that the KISSmetrics Twitter account, we could share links about analytics and marketing and people were, you know, to retweet it and then we get more followers from this and Twitter was still in a high growth mode. I wouldn't say they are in high growth right now, and so, a lot of new people are coming on, they were all very tech-oriented people and there was this hashtag, the measure hashtag, so it's #measure – m–e–a–s–u–r–e, and that is where all the marketers and analytics folks would hang out, and so we will start hash-tagging that, sharing a lot of their content. And then over time, you know, we built our own blog and then we started sharing our own content and now, you know, the blog trumps the Twitter account in terms of the influence it has, but it actually started with Twitter for us. So I would just say like your potential customer are hanging out somewhere and you know, the strategy we tend to use is obviously keep working in your product and we like to do that somewhere behind the scenes in that sense of not trying to, you know, get thousands of customers before the product actually is awesome. Just try to get hundreds and test it with them and these are your, sort of, early evangelist people that really want to solve the problem badly and will deal with your bullshit, like bugs and stuff like that. And you know, from there, when you are ready, just blow it out and be ready too, and if you've engaged with these communities online, you'll be, sort of, ready to do that and ready to get more of users, once the product is there and people love it.

Omer: I am glad you mentioned about the Twitter account, right, in terms of just being very agile and lightweight as you started your marketing efforts. I think, you know, some people listening to this might think, “Okay, Hiten had a ton of money to do all the things that he did.” Right? I mean, “We are bootstrapping; these guys even had a million dollars when they bootstrapped their own business! But we don't have that. It's a lot harder for us to do these things and to go and acquire customers,” and so, what would you say to them and what sort of advice would you give them?

Hiten: Yeah. I would say that like, it's not the money, it's the thinking. And so, you know, we just knew there is customers out there and we can learn to engage them. Twitter didn't cost us any money; we were just engaging with audience because they were there. So if you want to build an audience, and engage with them, I would say today it's easier than ever to do it, a very inexpensive way. And so, I mean, you could just put out a blog, pop out a blog, even if it's not on your own site, you could do a Tumblr or Medium or a WordPress blog. I usually recommend self-hosted, but that is a little more work and does cost some money, but if you can't, just go to WordPress.com and get a blog, right and then start blogging to your audience about…and even if you don't have any ideas on what to blog about, just start talking about what you are working on and why you are working on it, and why are you excited about it and people will come to you, right? And make sure you are collecting their email address and then start and engaging with them. I don't know. It's effort! If you don't have money, you can put effort in. I mean, you know, it's like, I don't want to give, you know…I have been called ‘Mr. Tough Love' on occasions, but like, I don't know. I think that it is just an excuse. “I don't have money.” – that's an excuse. It's like, “Okay, you don't have money, do you have time?” “I don't have time and money.” “Well, then you are not ready.” So it's usually one or the other that you have, in every scenario I've seen, so you have to have the desire you want to do this and if you don't, then no one can help you. It doesn't matter how much money or time you have, so I think the desire is important and then, you tend to figure it out and like I said, today, it is easier than ever to start and even get some resemblance of, you know, hundreds of customers. It's not rocket science and the content is even out there, how you can do that. My co-founder blogs about stuff like this all the time and his blog, in my email newsletter, I share links about this kind of stuff and that is just two of us! I mean, there is hundreds of people, even lot of the content on your site is…these people are telling you how to do this. All you have to do is, you know, for lack of a better way to say it is, “Stop reading and start doing.” I would encourage everyone that is just not started yet, to just start, you know, just…and read only things that are going to help you do things.

Omer: Yeah, I think that is great advice. I think it is very easy, and personally I find that as well is just to get into this mode where you are just consuming content all the time and at some point, it just becomes too much noise, right? It just distracts you from getting started, taking action and I think you have to make that decision at some point in terms of, you know, you are going to spend most of your time consuming content or you are going to just start creating something?

Hiten: That's correct.

Omer: Okay, so you launched KISSmetrics back in 2008. Do you remember what the growth trajectory look like?

Hiten: We didn't focus on growth till about 2010, because we were still working on the product and we didn't really…yeah, the short answer is ‘No'.

Omer: Okay. And so how long did it take you to get to a sizeable audience? What was the big milestone for you in terms of customer acquisition?

Hiten: Yeah, we just never thought of it, the way you are describing it. So I don't really have a good answer. It was more like building channels and things like that, so I don't have any dates or any idea of the time when we got to like x, y or z.

Omer: So why was that not important to you guys, like what was driving you instead?

Hiten: I wouldn't say I would do it the same way again, but for us, what was driving us is we knew our kind of audience and so we tended to start building an audience really early, usually first, because you tend to think that if you have an audience first, atleast you have people that can try whatever you put out there and so we focused on the audience. And then after that, it was like focusing on the product, because sometimes you will get a product, right, but you know, you have a lot more work to really make it actually feasible; whether you are doing hacking stuff first and stuff like that, so we do a lot of hacking stuff just to see what would work. And then once we figured our work, that is when sometimes a bunch of the engineers would have to, you know, spend a month or two, upto a month or two to just fix our mess and now that they have to scale it…and so if we have a blog, if we have a Twitter account, if we have an audience always coming, we can feed that, we are not wasting time and we are not waiting and what I mean by that is not waiting on growing the audience. So for us, these milestones weren't important; what was really important is that knowing that we wanted audience first, knowing that we needed the right product before we can even hit the gas and so yeah, we never really thought of it like that.

I think in today's world, a lot of those things that we did back then, are the norm for people that would actually understand how to build software businesses now and so the milestones are much easier to figure out. For example, if you assess that there is an opportunity for creating a blog, I don't think everyone should necessarily create one, but if you do assess that in your market, then your first milestone is probably like “Can we get 50,000 unique visitors?” And the next milestone is like, 250,000 or maybe it is a 100,000 first, right? And so you've these milestones on the amount of traffic you can get and in some cases, it might even be the amount of emails you are getting off of your blog because at this point, we all know that emails are really important and a great way to engage an audience. And so, I would say milestones are more important now just because there is a lot more you can do and a lot more predictability and control. Back then, we just didn't worry about, thinking about it like that.

Omer: Okay. So you've got the product in market; it's growing. Tell me about a particular challenge you faced as the business and the product started to grow, either on the business or the product side?

Hiten: I think there is a new challenges all the time, so I don't really have..yeah. And I don't…I probably view these things different than other people, so it's very hard for me to remember any of them, to be honest. There is something new every day, so if you want me to get more specific to…kind of will be useful; let me know what's on your mind about challenges.

Omer: Yeah, I guess when I am thinking about a challenge is, is that you know, once you go from, sort of, idea and launching the business, you've a certain set of challenges and then you, sort of, go into a next phase where, you know, may be you are building out a team or a bigger team, the business and product is starting to grow, but quite often you start to face a different set of challenges. It could be may be around, you know, now your problems are on hiring or maybe it's around, you've issues around how you communicate effectively in an organization which is becoming bigger. Were there those kinds of challenges that you faced along the way with KISSmetrics?

Hiten: Yeah, again it is a generic question, and there is quite a lot of content out there about all these challenges; I don't really…the truth is like I don't care about the challenges; I invite them! And I think there is new challenges all the time. Every time when you try to grow your business and you start getting more and more people in the company, one thing I like to say is there is always more people, which means more problems and I am not saying that means you shouldn't have more people. It just means that you should be sort of more conscious about who you are hiring and all that kind of stuff, so I'd say one of the biggest mistakes I see other people making and I make this mistake too, has everything to do with sort of hiring and making sure you are hiring the right people and then not letting go of people that are not a good fit, even if they sort of somehow got into the company. So those are the types of things that I probably think about more than anything else, which is, how do you scale a business and how do you make sure that it's healthy, from a culture standpoint?

Omer: Okay. When we started this conversation by going back to where the idea for these two business came from, and then we have sort of taken this journey together on how you guys turned those ideas into successful products. Let's talk about the business today. What sort of revenue are you guys doing?

Hiten: Yeah, we don't talk about that.

Omer: So are you doing over a million dollars?

Hiten: We just won't talk about that at all. It's not public! If it was public, I am happy to talk about it, but it's not!

Omer: Okay, so tell me a little bit about the size of the team. How big are the teams now?

Hiten: So at CrazyEgg, we've maintained a pretty small team. It's 5 full-time people, and then at KISSmetrics, it's…we are getting close to 70 people now.

Omer: Okay, alright. What is the one thing in your business that you are most excited about right now?

Hiten: You are good at asking these generic questions! Ask me something more specific.

Omer: Tell me about one specific initiative around the product or something you guys are investing..

Hiten: Same question asked a different way! You can do better.

Omer: [Laughter]

Hiten: I am going to push you to do better because it's like…again, I am not a fan of generic questions, because then you are making me do the work. I want you to do the work. What do you think your audience wants to know from me that I haven't said yet?

Omer: I want to know what the next big thing is that you are doing with KISSmetrics.

Hiten: Yeah, I am not going to answer that. It doesn't matter. Like, it's not helpful to anybody, right? I am talking about myself and my business is not…like I want to be helpful to your audience, whatever they need to know.

Omer: Well, I think what they needed to know is what are the challenges that you faced along the way and what they can learn from that, so for example, it would be really helpful to talk about one specific example that you can tell me and said, “Hey, you know, this is a big mistake we made along the way,” right and “This is the lesson that we learned from that.”

Hiten: Yeah, I guess you haven't read enough of my stuff, so yeah, here is the deal. I don't really like talking about myself because I don't think that most of the time that applies to other people. I also like getting context before I give anyone any advice or feedback and so like, you know, if I were to give you one, it's like I will give you one, I will! I will enter something for you, right, but my point is, and this is a private thing I am going to talk about, I think, and hopefully it will help; more applicable than some of the things you are suggesting. So basically the way to think about it is that you…in any situation, what I see the mistake most people are making is that whether it's in the meaning, when thinking about someone else's product, when thinking about competitors, when thinking about their own business; there is all these things, there is more things you don't know, than things that you do know in most cases. And even when you think you know a lot of things about a specific scenario or something, you're probably wrong, all the time!

And so what I tend to try to do is, instead of thinking about what do I know or what do I not know, I just think more practically and it is probably the fact that I am very rational about things, like just breaking things down in such a way that it's like, I am able to make sort of what I would call “Binary decisions” one at a time. And what I mean by that is let us say you think you need funding, right?, for your business. The first question I would ask you is, why do you think you need funding? And then you might come up with something; it doesn't actually matter to me what you say about that, but what really matters is how you are thinking about it. And you know, in that process, some people will say, “Well, I don't know how to get started without money.” Right? They won't really say that, people don't like admitting that, but a lot of people are in that scenario. So in that case, I'll be like, “Well, you don't necessarily need money. you need to know how to get started. So do you want to get started or not?” And that's a binary decision, right? You want to actually have your own business or not, or you are just saying that because everyone is doing it. Once you make that decision, you start making more and more binary choices, based on…it is almost a lot of these things is mapped to a flow-chart in my head and so what I see a lot of people doing is, they start making all these decisions compounded together. It's like, “Shall I start a business? Should I raise money? Should it be a B2B business or a B2C business?” or even the famous one that I love it, is like, “I don't have any ideas.” Right?

And the real answer to all of that is like, literally, ‘Just get started”, right, in any direction. It doesn't really matter. If you have the desire to start something and you don't like where you are at, like you want more for yourself, you just get started. So what my biggest piece of advice is just get started. But when I talk about the way these decisions are confounded, I think that like it's really about being able to diligently break down whatever next thing you are trying to do or whatever challenge you have into it's components and actually thinking about “What decisions do I need to make first, before anything else?” So now I am going to give you a very practical example against that. So at KISsmetrics, we have, you know, just like any other company, we have a lot of directions we can go in next. In this specific case, we have a direction we want to go in next. I can't really talk about it yet; it's not mine to say, but we have a direction we want to go next and it'll be, you know, revealed soon enough and it's not like…it's pretty awesome, I think! But the question that I posed to the company in general was, you know, “Let us decide whether we want to go in this specific direction or not? Right? And that is the first decision we need to make.” And the reason is everyone else was trying to tactically figure out how are we going to do that? And we hadn't even decided that we are going to do it yet, which I know sounds really elementary and basic, but like, we hadn't decided! I couldn't see it; I didn't see the conviction. I just saw these tactics and all these ideas getting thrown around, and so I just basically said,”Well, are we going to do that?” And I got a “Yes, yes, we are going to do that.”

And it came from enough people that, you know…It was like, “Okay, great! We are going to do that.” And now, all the decisions started making so much more sense, once we actually had the conviction and said, “Yes, we are going to do that.” And because we were thinking about all kinds of ways to do it…”Do we need to hire more engineers? Can we build it with existing engineers? Do we go, buy a company? Do we, you know, go, hire a development shops? So there is all these things and it's like we can't really decide, unless we decide how we are going to do it. And then the way you evaluate all these things is, you know, which one is the right way to get to whatever your end goal? And if you want to build this thing, you know, or whatever, add this capability, whatever it is, there're a lot of ways to do it. But if you are debating the ways to do it, you don't have the conviction, or you haven't decided that you're going to do it, I think that's…you're doing it the wrong way. So yeah, I really believe in this idea like breaking things down and having this easier ways for us to make decisions, because I think even when, us, as human beings are presented with more than two options, you start getting confused and then that slows us down and I do believe that when you are working on a startup and trying to build a business, speed is number one.

Omer: Okay. Now you also stepped down from the CEO role a few years ago and brought in somebody to be the new CEO. What were the reasons behind that? Are you, are you,… How involved are you still with KISSmetrics? You mentioned that you were involved with somewhere 3 to 5 companies. Is that to allow you to spend more time in other areas?

Hiten: Yeah. Simply put, at KISSmetrics specifically, we had an opportunity to bring on somebody who we thought could do a better job than we were doing at certain parts of the business, and so, we made the decision to do that. In our case, we've also always had CrazyEgg as a self-funded business and we wanted to just personally spend more time on it. It's been a while with KISSmetrics and there's been all kinds of road bumps as well as sort of milestones and stuff like that, that we met, and so, it was basically time for us to sort of, you know, find someone who wants to run it for another 5 or 6, 7 years as the leader of the company.

Omer: Got it! Okay. Alright, it's time for our lightening round. I am going to ask you a series of questions and I would just like you to answer them as quickly as you can. Does that work?

Hiten: Sounds good.

Omer: Great! What's the best piece of business advice that you ever received?

Hiten: Sure. “Just get started.”

Omer: What book would you recommend to our audience and why?

Hiten: ‘The 5 Elements of Effective Thinking” because I think everyone can think better.

Omer: I actually read that book a few months ago; I love it. Okay, what's one attribute or characteristic in your mind of a successful entrepreneur?

Hiten: Somebody posted this on Facebook; I am going to use the word, it's “Figure out ability”, so they can figure anything out.

Omer: What's your favorite personal productivity tool or habit?

Hiten: I really love ‘Sanebox'. Sanebox makes it so that a lot of the stuff coming into my email box basically doesn't get into my email box, so it's very hard to actually get in my main email box and that lets me stay prioritized on things that are most important.

Omer: If you had to start over tomorrow, how would you go about finding that next business opportunity?

Hiten: I will just explore the things that are growing the fastest right now, even though they might be small, so mobile is obviously one that, a couple of years ago, you would look at; I think there is other areas where there is markets that are growing really fast that you can get into and sort of look at, so it's basically just look at early trends and having some definition of how you look at early trends.

Omer: What is an interesting or fun fact about you that most people don't know?

Hiten: It's a good question. Yeah, I don't think I've talked about this too much. I can eat really really spicy food! I can eat chillies raw! I grow Ghost Peppers in my backyard and I can eat, like literally one whole one a day with all my meals, and I really like it and yeah, so I can eat very very hot stuff.

Omer: Alright, finally what is one of your most important passions outside of your work?

Hiten: I know you'll see me a little cliche, but I have a four and a half year old son and I have now a 9 month old daughter and after having my four and a half year old son, watching him grow up so fast, I am just trying to spend as much time as I can with them.

Omer: Yeah, I totally agree with you there. I don't know what it is about having kids, but suddenly you just seem to feel like you are getting older a lot faster.

Hiten: Well, at some point you know that they are not going to care about you, like in the same way like they do right now, like, I mean, I will just leave with one more…like it still crushes me, every time I come home later than he likes and he looks at me, “Daddy, why are you late today?” and it is just…enough times of that, you know, like, “Alright, I probably shouldn't be late in his mind,” right? So yeah, things like that.

Omer: Awesome! Those are great answers. Hiten, I want to thank you for joining me today and sharing your experiences and insights with our audience. Thank you for letting us get to know you a little better personally as well. Now if folks want to find out about CrazyEgg or KISSmetrics, or they want to get in touch with you, what is the best way for them to do that?

Hiten: Yeah, sure, my email is pretty public. It's my Twitter handle which is: [hnshah AT gmail.com], so seriously email me. It might take me a little bit to get to you, because I do use ‘Sanebox'; it does filter, and I check that about once a week, sometimes once every day, and again, it is to prioritize all those folks that are working in my companies and you know, really need me at that time. And besides that, it's CrazyEgg.com; KISSmetrics.com. I also have a SaaS email newsletter, in case you are interested in software where I am sharing links, so I am not writing my own content there; I am just sharing links to other people's content, things that I am learning from, and it's Hiten.com.

Omer: Yeah, and I signed up for that newsletter a couple of months ago and I definitely recommend that. There is a ton of great content that you are sharing there.

Hiten: Great! You are an early adopter, thank you.

Omer: Cool! Alright, it was a pleasure talking to you and I wish you continued success.

Hiten: Same here.

Omer: Thank you. Take care. Alright, I hope you enjoyed that interview with Hiten Shah of CrazyEgg and KISSmetrics. You can get to the show notes for this episode by going to ConversionAid.com/31 where you will find all the links and resources that we discussed today. If you would like to get in touch with me, you can find me on Twitter: @omerkhan or you can email me at: [omer AT conversionaid.com]. And if you enjoyed this episode, then I would really appreciate you taking a couple of minutes to submit a review on iTunes. Just go to ConversionAid.com/itunes. Thanks for listening. Until next time, take care.

[0:56:17].8

Transcription sponsored by Karooya – Negative Keywords Tool

Success Quote

  • “You will get all you want in life, if you help enough other people get what they want.” — Zig Ziglar

Book Recommendation

Links & Resources Mentioned

Contact Information

  • Hiten Shah – @hnshah | hnshah [at] gmail [dot] com
  • Omer Khan – @omerkhan

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Omer Khan

Hi, I'm Omer, the founder of SaaS Club and host of The SaaS Podcast. I help early stage founders and entrepreneurs to build, launch and grow successful SaaS businesses. Join me on this journey.