The co-founder of SplitMetrics talks about competitors, turning points in his life, and times when running a startup requires balls of steel.
SplitMetrics is a Belarusian startup that helps companies conduct A/B testing of their applications in the App Store and Google Play. Among its notable clients are Rakuten, Wargaming, and Rovio, which SplitMetrics helped by increasing the number of Angry Birds-2 downloads by 5 million in the first two weeks after the application was released. Co-founder Maxim Kamenkov recently spoke with The Heroes.
— Maxim, you graduated from BSUIR with a degree in Artificial Intelligence. But instead of becoming an AI developer in a large company, you started your own business. Why?
— I’ve always had a restlessness and a desire to do something. In many ways, the fact that I ended up in business was a matter of chance. My roommates in the hostel had the idea of creating MaeSens [a non-profit meeting platform]. It was my first experience with startups. Since I already knew how to write code at that time, they offered to let me join them. At that moment, my carefree life ended, and I stopped being a programmer who lives in greenhouse conditions and just writes code. The salary suddenly became three times smaller, sometimes I was slightly underpaid, and I had to do overnight what people were doing for months.
That’s how I slowly came into the business and got involved in it. I met my current business partner, Eugene Nevgen. We launched three-and-a-half barely living projects after the hackathons we visited together. Between them, there were many ideas that we sifted out. But I wouldn’t call them “unsuccessful” — these were tests that, together with our desire for innovation and the desire to try something new, helped to create SplitMetrics.
— How do you know when to weed out an idea—or abandon it altogether—in order to take on a different project?
— There’s a cartoon about a treasure hunter digging an underground tunnel who abandons it just before he almost reaches the treasure hidden in the ground. Because it’s not clear at what point to stop. There is no silver bullet to help you understand when to stop or, on the contrary, to continue with the struggle. It’s definitely important not to give up your business because of some new idea that is popular right now, you should always keep focused. If you grab for everything, nothing will come of it. It’s especially harmful to take on trendy ideas just because they’re trendy — blockchains, ICO, and so on. There’s a simple poker strategy — don’t sit at a table if you don’t know the rules of the game. Business is not always something trendy and “sexy”; sometimes it’s just dismal routine. But it is necessary in order to resolve issues that you have.
Some startup entrepreneurs expect quick success when they look, for example, at the creators of MSQRD. But this is the exception, rather than the rule of business. It’s foolish to expect that you’ll create a successful company in 4 months without a successful combination of circumstances. On average, it’s necessary to wait up to 7 years before an exit in the b2b sector. In the case of an IPO, you may need to wait for decades. The creators of Dropbox went public in the eleventh year of their work despite the fact that their company is not medium-sized. You should abandon what you’re doing only when obvious economic factors show you that you’re not making money on it.
— When you got deeply involved with your project, did you want more stability and guarantees? To return to steady employment? If so, how did you resist this desire and stick with something so risky?
— Parents hammer into their children’s heads that the main value in life is a sense of stability. I also had that mindset. But what is stability? In the usual sense, it’s when you have a good education, you work at a good job, you have enough money, and so on. But when you start a startup, you most likely have no money. You might already have an education. Or maybe you don’t — some leave university for a startup. A startup is a job in which it’s never clear what will happen tomorrow. So, I had to work on changing those mindsets.
I was raised without a father. My mother was able to teach me that I needed to achieve everything on my own. At some point, I realized that I had to move on by myself, that my mom had done everything she could for me. This feeling helped a lot. When you don’t have support, you understand that you have to play the all-or-nothing game. So, you play it.
A person grows while passing through crises. He changes his point of view on life when his old life values break down. I had several turning points in my life. The first happened when I suddenly had no money after going to a startup. Before that I worked as a programmer, I earned good money, I had an “airbag” in a bank account, but at some point, I began to run out of money. At that moment, you realize that there will be some time without the comforts that you got used to. That’s disturbing, but not too much. After all, today you sacrifice something for a long-term plan and future benefits.
The other turning point concerned me as a person. There was a time when it seemed to me, for some reason, that I was smarter than everyone else, that everyone owed me something. I had to get rid of this feeling — otherwise, it just destroys you as a person, you’re just acting like an asshole. Most people in Belarus think along these lines. Everyone owes them something, they cry about how bad their jobs are and just wait for happiness to fall in their hands. Subordinates believe that their bosses are fools, and vice versa. Do you have a bad job? It can always be changed. You have to work on yourself and strip away those silly expectations.
The third point was my realization of an important truth — you need to be open to people and learn to build relationships with them. Sales are building relationships. The most important thing is to be open to people, to your customers, employees, partners. In Belarus, nobody teaches you how to build relations, which is why it is so difficult to build partnerships in business. People seek to implement ideas alone, they don’t want to discuss them with anyone, they don’t share knowledge with others. But it’s always better to build a business with someone else because it is beneficial in the long run. I’m talking about mentors, investors, partners from other companies and, last but not least, co-founders.
Self-centeredness, self-confidence, unwillingness to change life often prevent understanding of this. You need to get rid of it — go to knowledgeable and intelligent people. There are people who have achieved a lot and know much more than you do. They will help you grow tenfold if you come to them with a request to teach you.
I myself once thought that I know how to do business, that I could cope with everything alone. But it was a mistake; I hope others don’t repeat it. Cooperate, ask for help. You can’t be a lone warrior on the battlefield.
— What do you want as a businessman now?
— At some point, I wanted to make a lot of money. Then I started thinking, Why do I need money? If there was a Maslow’s Pyramid for business, money would be at its very foundation; it’s the “physical need” of a company. It makes no sense to do something if it doesn’t provide you with a certain level of life. But after that, money no longer plays a special role — the need for self-realization and involvement in something more arise. OK, I’ll buy myself an apartment, buy a car, go travelling, and then what?
If money is the lowest level of needs in business, then the next one is building a mature company. I thought that, most likely, I would sell my current company at some point and start building a new one. But why start a new company if I can develop the one that already exists? The most important thing for me now is to create and develop. I want to “grow” a company. For me, the process is important.
After this statement, I sense criticism from those who are convinced that the result is more important than the process. But for now, it gets me high, lets me grow as a person and lets my team grow. We have good results and a cool culture within the team, and this is what I want to preserve and develop.
— What do you personally do with the money earned? And who in the company earns the most?
— I can say for sure that my salary is not the highest at SplitMetrics. I could easily pay myself $10,000 a month, starting today. But I think it is better to invest this money in the company’s growth, to hire more specialists, which will allow us to earn much more. I consider the money I spend on the team as an investment, not a cost. The fact that I’m underpaying myself today is also an investment. This way I can give my company more fuel for growth. Big money is at the exit.
This is a common practice in most healthy startups. The founder gets some spare cash only when he sells his business or when his company starts earning like Salesforce and gets a couple of billions in its account.
There’s an opinion that the business in which you are engaged 16 hours a day should bring you material gain and replenish your cash reserves. I hew to a different idea: growing the company to the maximum possible. Yes, you’ll have to play “all-in, ” you need balls of steel for this. Both approaches are working and are correct. The only difference is that one of the founders drives a Mercedes, and the other one rides an Uber, like me.
Among the most expensive employees at SplitMetrics are, perhaps, developers. Sometimes it happens that someone from sales who works on a commission basis earns twice as much as I do. And it’s right: the man has brought in money both for the company and for himself. In general, the market in Minsk is “warming up, ” thanks to the HTP, a massive influx of companies, and specialists in them.
— There are also more and more people who call themselves mentors, advisers. Some of them are really good at it. How do you find the "right" people for your company?
— Look for a person who is one or two steps higher than you. He will understand your problems very well because he recently passed through those steps. I’m the CEO of Splitmetrics, which employs 25 people. If I come up to the CEO of Salesforce where 10,000 people work, he will have nothing to talk to me about. They are thinking about how to colonize the Moon, and I will come to discuss my business model with them. It wouldn’t be productive. It is worth looking for those who did something similar to your project or achieved similar but better results in your industry. And you should know in advance what you need from them. Remember that the answers you get depend on the questions you ask.
For me, a telling example is our mentor Nikita Mikado, for whom I once worked at PandaDoc. He went through all the stages that we face now. I think, he has the most correct view on how to build and grow companies. I myself adhere to this approach. Growing a company and making a company for sale is not the same thing.
— How do you see SplitMetrics vis-à-vis competitors?
— The question of competition is a question about the approach to business in principle. The correct approach is to avoid competition initially. If you go into a business that already has tough competition, you’ve already lost. You will always have competitors, but it is always better to enter a market that is relatively free of competition.
I’m not worried when I see new competitors. Because I know the path that we have travelled, and I understand how much effort they need to apply in order to repeat it. Our niche requires good expertise and analytics. We spent a lot of time on it, and this is our advantage over those who are just beginning.
Making friends with competitors is also necessary because you may have different views on market segmentation. For example, your competitor works with SME, and you work with the enterprise. This creates the conditions for beneficial symbiosis — you can transfer clients to each other. In an environment where there’s competition, the partnership is the best alternative.
— The Belarusian media included you in a list of the most eligible bachelors and stylish businessmen. How does that make you feel?
— It’s just another reason to smile. If you ask about the conversion of all this, well, once a girl wrote to me, “You’re a desirable bachelor, let’s meet up.” That’s all. Those ratings don’t influence my way of life, although I go to clubs on weekends. There was a time when I could stay up all night partying but now it has all become more balanced.
I read a lot of books now. In the past two years, I’ve read more than I’ve read in 10 years of study, excluding textbooks. Now it is trendy to practice meditation, but for me, reading books is a way to meditate. After all the working information and emotional pressure that a person goes through every day, at some point comes a desire to just go to a suburban lake and just look at the water.
Some people look for fun and pleasure. For me, it’s interesting to build a company, to better understand how human relations work. Understanding human relations is the key thing in sales and in search of investments but I won’t get this information in nightclubs. Therefore, I choose private events, conferences and clubs where I can meet people who have risen a few steps higher than me.