Business Secrets of Silicon Valley. How to build a successful business without attracting investment. Ilya Semin, founder of the startup Datanyze

Ilya, one of the young IT entrepreneurs who came to conquer Silicon Valley from a small town near Moscow - Troitsk, a few years ago. Ilya created his own company from scratch without attracting investments, which has recently become less and less common. Recently, an article about Datanyze was published in one of the most popular online publications of Silicon Valley VentureBeat , which was also translated and published by Zuckerberg Call.

A year ago, we already published an interview with Ilya , which caused a hush on Habré, leaving behind most other publications about Silicon Valley. Therefore, we decided to do another interview, where Illya talks about how he quit his job and started a business from scratch, how he attracted first clients, how he found a partner, began to delegate duties, etc.

Below is the full text of the interview - for those who prefer the text instead of video. Interview and decryption done by habraraaut - venture
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Interview with Ilya Semin
Moderator: Pavel Kholyavkin

Pavel: Hello everyone! With you Pavel Kholyavkin. And today our guest ...

Ilya: Ilya Semin.

Pavel: Ilya Semin. Hello!

Ilya: Great!

Pavel: Ilya is a co-founder and, one can say, the inspirer of one of the most sensational startups now. In VentureBeat you were recently, was there an article about you a week ago?

Ilya: Yes, the article was published on Monday. We have been on their homepage all this week.

Pavel: Tell us briefly about the company: what you do and how to find you.

Ilya: The company is called Datanyze. My mother says "detonize", so there is already as anyone. The company is committed to bypassing millions of sites every day and collecting information on the technologies that are used on these sites. That is, different widgets or analysts, all sorts of tools, buttons are different, and so on.
We look at the html-code of sites and based on it we already know what technologies are used on these sites. What are we doing next? We collect all this information in one database and then also can, for example, provide historical information.
That is, for example, we are looking at the site and yesterday we did not find any interesting technologies. Today we check again, we look - there is full of some kind of new technology. That is, we know that during the day they added some specific technologies with which, let's say, our customers may be interested.

Pavel: Great. Can you use some use case, that is, how can your product be used?

Ilya: Yes. Suppose our first client was a company called KISSmetrics and their main competitor is Mixpanel. And, actually, the guys from KISSmetrics tracked every day who started using Mixpanel. Since Mixpanel has a free period, two weeks, let's say ...

Pavel: Trial?

Ilya: Yes, trial. At this time, the KISSmetrics sales department simply called all those who started this period with Mixpanel and told them something like this: “It seems to us that you are now investing in web analytics and if you are ready, you can also consider our product. If you didn't know, it is three times better than Mixpanel. If you subscribe during the week, we will give you a 30% discount, since you are our favorite website, we visit you every day. ”
I explained in a very exaggerated way, but, in principle, they intercepted people at a very early stage, when they see that they are ready to invest in such a decision and thus the process has changed completely, as they did the sales.
That is, earlier they found some lists of people, tried to buy these lists and it worked very inefficiently. Then they completely switched to Datanyze and they completely built the whole process on the basis of the information we provided to them.

Pavel: Tell, please, when did you start, in what year and how many active users do you already have.

Ilya: I started this in May of 2012. A month later, I signed KISSmetrics, then I signed a second company, Dyn (this is a DNS provider). Then it began to increase more and more, customers began to come and come.
The second person who joined me was the head of the sales department at KISSmetrics, who saw how effective the product was and he immediately became my advisor. He helped me build a product, gave me ideas on what to add or how to improve the product. Then I persuaded him to quit KISSmetrics and come to my full time position, so to speak.
He joined me last year. We said that he was co-founder, too, because we did everything together initially. And now we have a third person who does marketing. His great merit is that we appeared on VentureBeat this week, he did all this work.

Pavel: Interesting. And how many active users do you have now?

Ilya: After the last week it's hard to say. Somewhere in the region of 50 customers who pay. That is, who pay money monthly. And there are many more clients who are negotiated. Somewhere else, probably the same.
Pavel: Potential customers?

Ilya: Yes.

Pavel: How much is your average subscription price?

Ilya: The cheapest plan is $ 250 a month, then $ 500 a month and $ 1,200 a month (for large companies). There is also depending on how many people in this company use the product. We are trying to sell large companies for big money, small companies - for small money. On average, now around $ 1000 is the average price that the customer pays us.

Pavel: That is, on average ... I'm trying to just count the number somehow. Still, about business conversation, the figure matters.

Ilya: Yes, you have presented something like this, but I cannot say the exact figure.

Pavel: You have only the first steps. Do you have any further?

Ilya: Yes, we just started, we have Napoleonic plans. It took us a lot of time to understand our target audience, understand who we will sell to, understand how much we can sell. That is, all these things, plus the company completely ... we did not take any investments. In order to grow quickly, you need to have a reserve of money: pay salaries to people, pay our expenses (servers, and so on) —it all require money.
At first, we tried to understand all these problems in some way, how we would solve them. Now we have understood a lot of problems, how will we solve it. Now we will have such a phase of very active growth, especially considering this heightened, just huge interest after the release of the article. Now a lot of people have become interested.

Pavel: Listen, I wonder, you are the whole project ... You say, you started it yourself?

Ilya: Yes.

Pavel: Programming involved?

Ilya: Yes, I was ... Six months ago, you would now look at the whole Datanyze company together, it was just me.

Pavel: You yourself have developed from scratch, so you did not attract any investments?

Ilya: No, initially I had a goal - to build a company myself and at least to reach a certain level. Because there are so many people now, I don’t want to criticize anyone, just very many people - their goal is to raise investments, and then how business will work, they try to understand later.
I tried to immediately find a way to make money. That is, for me, business is first and foremost a car for making money. That is, I set myself such criteria and it helped me a lot. That is, it helped me to focus, to focus on the main thing: on customers who pay money, and not on creating a brand or something else. Thus, the company very quickly became profitable.

Pavel: Interesting. Listen, but tell in general briefly your life story, life lessons that you could learn and tell our subscribers about this.

Ilya: History ... Starting from the cradle?

Pavel: From the moment you began your active life, an active appearance, some kind of training is possible.

Ilya: I was born in Moscow. He grew up in Troitsk near Moscow, now it has become Moscow, but at that time it was Moscow region. Then he graduated from the school there, went to the institute - the Moscow Institute of Radio Engineering, Electronics and Automation (in Moscow). There he learned five and a half years.
I started to go to America in summer programs, starting from the third year. Work and Travel, then I had Internship - this is also such a program (temporary) to come here and gain experience.

Pavel: That is, to work for some company?

Ilya: Yes, by specialty. This is a requirement of the program, that is, you can not just come here.

Pavel: And the specialty was related to the training that you received?

Ilya: Actually, I came to work as a programmer. That is, it should not be strictly for the specialty. It should be at least approximately similar. So I came, I found my first job (internship) there. They probably paid as much as McDonalds paid, if not less.

Pavel: But the fact itself!

Ilya: Yes, the fact itself. And there was the first of some working experience. It was very important. That's how I went for the summer. He came - he studied again for nine months, again he went to the summer. While I was studying in Moscow, I worked remotely for the same company. When the internship is over, they say: "Listen, let's work from home."
Thus, my first pocket money appeared on beer. The only thing was difficult - I studied in the morning, then I came and the rest of the day worked, went to bed - in the morning I got up, studied, worked. Then the institute had faded into the background, I slipped from a good student to, trog, a troechnik.

Pavel: But did you finish?

Ilya: I graduated, I got a diploma. In principle, what I wanted from my studies, I already got everything. Therefore, I already had priority work. As soon as I graduated, after two weeks I moved here. I was already waiting, I could not wait until all my studies were over. I collected some minimal things, moved to Boston (where my first internship was).
I lived in Boston for two and a half years. I changed a couple of companies there, I graduated from college in Boston, received a second degree (already in business) - MBA (Master of Business Administration).

Pavel: Your commercial vein?

Ilya: I've always had this interesting. I had a case when my visa ended and I had to do something about it. Almost everyone in this case goes somewhere to learn: who is for English courses, who else is somewhere. I thought that I was interested in business, entrepreneurship.
In Boston, turned out to be the best college in all world rankings on entrepreneurship. Stands above Harvard, Stanford, and so on. Very small. I filed there, they took me, I was very happy. There was an opportunity to take classes after work. That is, I worked during the day, and in the evening I took classes (classes). I studied there for two years, at that time I worked, changed a couple of companies. In Nokia, I worked.
I tried all this time to make a green card (residence permit). Nothing worked at all. He started several times - nothing worked. I threw everything, moved to California. At that moment I just won the green card in the lottery.

Pavel: Wow! This is great!

Ilya: I continued, I worked here in one startup. While the green card was being processed, I had to work somewhere, just to not violate my residence status in the country. As soon as we received a green card, I said: “Everything, I have enough work, I want to do my job”. Then, actually, I did Datanyze.

Pavel: Listen, interesting! That is, the success story from the very beginning to what is now. I understand you're on a peak? Tell me what's going on now? I understand that we somehow pulled you to the interview, are you very, very busy right now?

Ilya: Yes, now, after the article was published (exactly a week ago - it came out last Monday), we have a collapse. We have such a model that we do not allow customers to do something themselves. We simply say: “Ask us to dump. We will dump you, we want to talk with you, understand your needs and explain to you how the product will help you solve some of your problems. ”
On the button there is a form to fill in so that we can make it clear that they want to talk with us. On average, we had such requests about 2-3 per week. On the first day when the article was published, we had more than 150 requests.

Pavel: For a day?

Ilya: For the day, yes. On the second day - about a hundred. And further down the line, when the article went into the background. At the same time, we still have a popular forum where various articles are discussed - this is Y Combinator - this is a very popular incubator, this is his project. Called Hacker News.
We got to Hacker News on the first page, which in itself, in very many cases, ended in simply dropping the site referenced by Hacker News. We were simply afraid that our site would fall, and we could not just do anything.
Thank God, everything was fine, everything worked. Now just need a huge amount of calls. For example, today, we made about 8 calls with the co-founderom, and we had to work in parallel.
I have not been engaged in sales until the previous week, but now we just can’t cope, and I have to participate in all these demos, do it myself and so on.

Pavel: Co-founder, you say you have. What is his role and how did you start with it?

Ilya: He was the sales manager at KISSmetrics - my first client. I actually hired him for this, that he was engaged in sales already here in Datanyze.
I, in turn, am not an American, although I have learned a language here and can speak normally, but still people hear the accent. No matter how many years you have lived, you know, people still feel it.

Pavel: Culture is different.

Ilya: Yes, the culture is different, maybe. My co-founder cannot build a product. He can sell, he is good at it, let him be engaged in sales, I will deal with the product, I will add all sorts of new things to the product, some things to do, which our customers ask us.
Separation of such duties went, because before that I did everything, starting with sales of the product. And sweeping in the office, and throwing garbage, and everything else. That is, as I said, I was one person in the company.
Now the separation has gone and with the third person is even more separation. That is, everyone will do their work, and not that everything is dumped in a pile. I say, when we have already passed this stream, and I will already concentrate on the product.
That is, the goal was that he was engaged in sales, I would be engaged in the product. Since I built this whole product, I wrote all the code myself, this is what gives me the most pleasure, in fact,. I do not really like sales, frankly, but I had to learn this over the past two years.

Pavel: I wonder how you got this first client (KISSmetrics)? When you made the product, what were the steps? Moreover, if the sale - it was not yours?

Ilya: Yes, listen, there is a saying here that I really like: “If you want to get a client, ask for your opinion about your product. If you want to get an opinion on your product - ask them to buy your product - they will tell you why they will not buy and what is your problem. ”
Initially, I just all my ...

Pavel: So you asked for advice?

Ilya: Yes, I just came. I had a friend from Boston whom I knew. He came here and began working at KISSmetrics. I say: “Listen, can you imagine me, shall we go, have some coffee or beer? I just want to understand how this idea is interesting to someone. Because I do not want to build a product until they say that this is money, I’m ready to pay you if you build it. ”
He introduced me, we went with him, sat down (his name is Ben). He immediately told me: “Listen, we will buy 100% of this product. I do not know how much money we are willing to pay for it - it depends on what results we will have with this information. But the product will definitely be needed. Do not worry about that".
The product was not yet ready, I showed him just layouts. I did not tell him that he was not ready. I said everything works that way. I thought about what links I click on, but everything was static. He still does not know about it.
All my life I have been crawling sites, that is, writing such robots that go through sites. I had a lot of experience. This week I was able to make the first version of the product. I came to them, saying: “Here, everything is ready. Give me money". He says: “Wait, wait! Now I love you ... "
Then I had a long process - negotiations with a couple of their co-founders (KISSmetrics) - they also became very interested. I had to drop the price very much. I started with a thousand dollars, then in the end the first time was $ 300.

Pavel: Did you immediately sell them a subscription?

Ilya: Yes, I told them: "This will be a subscription." I say: "It will be $ 1000 a month." They say: "No, we are ready to pay $ 100 a month for this." I say: “What do you mean? We need at least 500! ”In general, as a result, we agreed on 300 for the first time, then their cost gradually increased, as far as they saw the results.

Pavel: Didn’t they want to buy this technology from you right away?

Ilya: They probably wanted to. But they did not want to do this. They wanted to check first how the technology works. They say: "Let's check." For them, $ 300 a month is a penny. They say: "Let's see what results we get from this all."
Then, naturally, I had another client who told me the same thing. After that, probably a month has passed, they wanted to immediately buy a company, so that it was just inside them. But then I said that it is very early, I just started, you want to chop off my wings, I have not had time to take off yet.
I did not sell the company, but yes, there were such offers, at first especially. Then it was too late because ...
Pavel: How did you start to find yourself? ?

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