Hot Analytics Start-Up Mixpanel Raises $10.25M Led by Andreessen Horowitz
All the start-ups I talk to these days seem to be using Mixpanel analytics. That’s the same experience the partners at Andreessen Horowitz had, so they anted up $10 million to lead a Series A round of funding for the company.
Mixpanel CEO Suhail Doshi said he aims for his products to be richer than Google Analytics and easier to grok than Omniture, while measuring modern things like engagement instead of old-school page views. Mixpanel has both Web and mobile products, and is used by companies like Path, Viddy, Socialcam, Jawbone and Airbnb.
Mixpanel’s three key product areas are: 1) segmentation — it’s extremely queriable, due to the way it built its data storage; 2) funnel analysis — it tries to explain where users came from; and 3) cohort analysis and retention — it explains what happens to users after they join. It charges based on amount of data. For example, 500,000 data points are $150.
Mixpanel is now on track to measure seven billion actions every month, up from four billion in February, Doshi said. That’s primarily based on growth in usage of existing customers’ products, but also because of new customers joining.
Along with Andreessen Horowitz, Salesforce CEO Marc Benioff and Yammer CEO David Sacks joined the Series A round.
Doshi said he wanted to let it be known that he’ll use the funding to pay his first 100 employees “way above market” and to “spoil our current employees to retain them.”
Prior to this round, Max Levchin, Michael Birch and Sequoia Capital had provided Mixpanel with $1.75 million in seed funding.
Doshi had been an intern at the social app maker Slide while in college, working on the metrics team at the highly analytically oriented start-up. Former Slide CEO Max Levchin told me he was so impressed by Doshi that he called his mom to try to get him to drop out of school. It didn’t work, but when Mixpanel started, he was there to fund it, and Levchin remains actively involved with the company.
Processing mountains of data and making it understandable is hard stuff. “The goal is always to make things eyeballable,” as Levchin put it. “There’s enormous complexity behind a very simple interface.”
Mixpanel, argued Levchin, is “a very large opportunity, because ultimately it’s not a traffic-analysis opportunity — it’s a data-mining opportunity. They’re building a product that allows humans to leverage algorithms and visualization to grasp the behavioral complexity of their customers.”
When I offered the critique that perhaps Slide — one of the original giants of the Facebook platform that missed the social gaming opportunity while it was continually analyzing and optimizing — was too metrics-driven, Levchin said he thought that was fair.
But Mixpanel doesn’t have that problem, he said — because it’s not producing anything creative, it’s just providing the numbers for other companies to make their own decisions.
When I asked him a similar question, Doshi agreed. “Analytics won’t tell you what product to build,” he said. “It will give you hypotheses, but you still have to have ideas.”
