Betting on New Technology Paid Off with Paul Canetti of MAZ

Almost a decade ago, Paul and his MAZ cofounders bet on the fact that companies big and small would need their own apps. Learn how they identified a massive market while it was still relatively nascent and how they built a platform that enables over a thousand companies, including Fortune 100s, to create their own apps without using code. Other lessons: balancing volume vs. value and notes on managing a team across three time zones.

The time: 2009. The place: NYC.

Paul Canetti worked at Apple until 2009 and was present when the iPhone was released. He saw from the inside the potential of the iPhone and, more importantly, the potential for the App Store. Being a software guy, he immediately spotted a yet unrealized market and took a leap of faith with this new technology. And so, MAZ was born – a platform that allows people and companies to build their own world-class mobile apps with personalized functionality and feeds, and without any code. (Think what WordPress is to websites, but for apps.) Much has changed in the technology and startup landscape since then, but the need that Paul identified and took a wild bet on hasn’t.

“We settled into our pricing over time based on the market that ended up actually using the product.”

Over the years, MAZ has found a definite minimum threshold of size for companies that actually require their service. With that realization came their unique nook and cranny of the market: “We found our niche with media companies, publishers, and content producers that had a sort of steady stream of content, and wanted an app to deliver that content.” Finding your opening, leveraging potential market size, and balancing the ups and downs are all critical pieces of building a company. “One thing that any VC will tell you is that market size is everything.”

To date, MAZ provides services for both small and large enterprise accounts. With the latter, they provide integration with their own custom “enterprisey things,” creating an even bigger potential. Over 1000 apps have been launched and 500 million pieces of content processed through their system.

Serving the Market with a Distributed Team

With a current team of 40 people, quickly closing in on 50, and three offices in three very different time zones, Paul has noticed that everyone can’t talk to everyone anymore. As the company gets bigger, the daily conversations with the whole team, everyone being in everyone’s business, just doesn’t happen anymore. The other tough thing, Paul says, is acquiring the skill to coordinate what 40 different people are doing on any given day.

Yet, MAZ manages their remote teams quite well. They use the typical stack of tools: Slack, Asana, Notion, Google, video conferencing tools, phone calls, and more. One critical way in which the distributed teams are unified and managed is through weekly standups. The US time zones (NY and LA) tune in for a standup every Thursday that they record and send to the third team in India, who watches it in their own standup on Fridays. Late night and early morning calls are par for the course, and their team makes it work. Paul goes on to note that his absolute go-to tool is his Apple AirPods: “I don’t remember what life was like before them. I’m a big one AirPod guy.” 

Those in the 5 to 50 Stage, Take Note:

Paul’s advice to any startup founder anywhere, especially in the 5 and 50 stage, to be intentional about what your goal is. Think and ask, “What are you actually trying to do?” Often times it’s easy to get trapped in the cycle of thinking only about what’s happening next month, or in the next six months. He encourages young founders and founding teams to gather together often and get straight about the really big picture. Not the next product release, not the next customer, but the why. 

 

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Highlights + Hacks

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Full Show Notes 

Maren Donovan  0:04  

Hello. Welcome to from five to 15. The podcast dedicated to helping startups and founders survive and thrive through the early stages. I’m your host, Marin Kate. And we’re here with Paul Canetti of mass. Welcome to the show, Paul. Thanks so much for having me. Awesome. So first off, when did you found mass?

Paul Canetti  1:07  

So we’ve actually been around since 2010. That’s a while we just passed our nine-year Meza bursary, as we call it. And, yeah, a lot, a lot has changed in the tech landscape. And also just like in the startup landscape, especially here in New York over these past nine years,

Maren Donovan  1:27  

So just in 90 seconds or less, tell the audience kind of what was the why behind starting NAS and what you guys do.

Paul Canetti  1:36  

Yeah, so sort of flashing back to this moment in time. I actually worked at Apple until 2009. And I was at Apple during the time that they released the iPhone. And so sort of saw from the inside the potential that the iPhone had and the App Store specifically. Although, like most people at Apple, I had nothing to do with the App Store. But I worked there while it was happening. I was like this is really, really sort of a paradigm shift, but actually wasn’t obvious at all, that that was the case. So if you remember, in 2009 2010, the most popular apps for like an app that made it look like you were drinking a beer, or like that was like a Zippo app that had like a lighter member, that app. Yes, it was all of these sorts of novelty things. And it really was not obvious that smartphones were going to be used for real communication for real content consumption. There was no social media on smartphones at the time. The cameras weren’t that good. There wasn’t a lot of video. So it wasn’t that long ago. But it really was a completely different era. As far as that goes. And me and my two co founders named Simon and Chica, we really believed in the potential of the app universe. And we thought that this was going to be like The Next Web. And and that apps were going to sort of replaced the internet as we knew it. And, and really what sort of validated that is we were making apps for hire like we were running a small agency here in New York, and none of the big agencies were doing app. So if you were a company and you wanted an app, in 2009, you basically had to find weird, like hackers like us working out of our apartment, because no one else was really doing it at that time. And we just really felt like there was a lot of demand coming there. So we decided to build a platform that would allow people to make their own apps without any code, the same way that, you know, companies like WordPress had done them or websites were before that everybody had to code a website. So from scratch, and then there came these tools that allowed anybody and everybody to create a website without needing to know how to code. And we believe strongly that there is going to be that same need for apps. And so mass was born.

Maren Donovan  4:14  

That’s awesome. And what’s the business model? How do you guys make money?

Paul Canetti  4:20  

Yeah, so our customers pay us to use our software. It’s a web based SAS dashboard. And if you’ve ever used something like WordPress, or Squarespace, where you’re sort of, you know, choosing some different templates, and dragging and dropping different things, and sort of customize it to look and feel like your brand, our customers use the Mad dashboard to do that. But at the end, when they click publish, it’s actually generating a complete iOS app or Android app, or now, skipping ahead to them. As of today, you could create apps for your TV, like Apple TV, or Roku, or Amazon Fire to UB or Apple Watch, and a variety of other platforms. And so they’re basically paying us like a monthly SAS style fee to access that dashboard.

Maren Donovan  5:12  

Ok. And then. So what’s a How do you guys price that?

Paul Canetti  5:19  

It varies. And so the pricing on the low end is, you know, maybe around thousand dollars a month. And that’s smaller media companies that want to get up and running. But that’s still pretty high feeling for your average company, and certainly average individual. And so it’s actually a really interesting question about pricing. And and I should mention, we also have big enterprise accounts, you know, Bloomberg, Nast, Hearst Business Insider just came on. And they’re paying significantly more because they’re sort of integrating with their existing database or something TMS solutions, using some advanced features around subscription management, and all sorts of sort of enterprise the things and so I have a lot to say about sort of selling fast product to multiple types of users. But so we sort of go all the way to big enterprise. But then we also cater to sort of SMB types, but not really much below that. And it’s funny, when we actually started, we thought that everyone in the world was going to need an app, we thought that had a blog. Yeah, an app. And we thought that every pizzeria that had a website was going to need an app. And I like to say that we were sort of right. So it turned out that our original price point was $100 a month. And what we found is there’s just nobody there at the bottom of the market that actually wanted or needed an app. And then there was sort of a minimum threshold of size of coming company that actually required it. And so and so that was that took us a couple of years to figure out. And really, we found our niche with media companies and publishers content producers that had a sort of steady stream of content, and wanted an app to deliver that content. And, and so we sort of settled into the pricing over time based on the market that ended up actually using the product. And so some of those customers that came in those early days really got a sweetheart deal at that, compared to our customers today.

Maren Donovan  7:39  

And so why do you Why do you continue to service kind of, you know, even $1,000 a month, I would assume, compared to a massive media conglomerate, that’s on the low end, why do you still service the s and B’s and not just focus on enterprise?

Paul Canetti  7:54  

Yeah, so you’re right. I mean, the the enterprise pricing can, you know, be as significantly higher than that. But the trouble is that there’s not that many enterprise level companies. And so one of the things that’s interesting about serving the enterprise is that your potential market size becomes limited, especially if you’re playing sort of within a particular industry. So for us, we’re looking at enterprise media companies. And, again, we have almost all of the big logos on our website already, if I were to write down on a piece of paper, let’s take just the US like all of the remaining American media companies at that scale, that mass does not work with yet, you and I could think of them off the top of our head, like write them on a napkin right now. And one thing that any, you know, VC will tell you, for instance, is that market size is everything. And if you can write down your potential market on a single napkin, then it’s too small. Whereas the low end of the market sort of goes and goes and goes, you know, for instance, like one of our favorite customers is this company called YOGA INTERNATIONAL, it’s tiny, sort of rural, one street town in Pennsylvania, there was a yoga studio, and they started video recording their yoga sessions and putting them on YouTube, started to get sort of following internationally, hence the name. And then they want to launch a subscription service, kind of like the Netflix of yoga videos. And they’re using mass to do that. And you can on your Apple TV, or other sort of smart TV device, you can download YOGA INTERNATIONAL right now and sign up as a subscriber. And they have unbelievable selection of really high quality yoga videos that you can do at home watching on your TV. And what’s so exciting about a customer like that is that they’re now running their business on in the tech stack.

Yeah. And there are so many small businesses like that, where we could never write down all of the possible customers, because it’s infinite long tail there. And so I think about that a lot. You know, that that, of course, we love our enterprise customers, and, and they really push the technology forward, because they have very specific needs and sort of push the whole platform, but then we sort of take all the power that we create for those big accounts and sort of like, you know, give it to all of the smaller folks. And actually, one of the big things we’re working on now, is really trying to see how much further we can push down market. As we sort of move beyond only working with apps. Now NAS has moved into other areas, you can host your podcast with NAS, you can publish to Apple news with NAS, you can create an Alexa skill with math. Yeah, and so trying to really think about how we can continue to drive further down market. And roughly the further down mark, you go, the higher volume of customers you potentially can reach and the more up market you go, you’re sort of limiting your customers, but each one is worth a lot more. And so for any startup, it’s this balancing act of volume versus value.

Maren Donovan  11:21  

Yeah, that’s a very good point. And something to keep in mind. So nine years old, and startup land, that’s like, you know, that’s pretty legit. A witness? did you how did you fund this? Did you bootstrap self fund? Did you take on investment in any time?

Paul Canetti  11:40  

Yeah, so we’ve raised $5 million to date. And but kind of in a weird story, that that I think, is fairly unique to the startup world, in that when we started out, we were bootstrapped. Initially, we raised a little friends and family money, which, you know, we we burned through way too fast, because we didn’t know exactly like, Did I really have to pay for that custom privacy policy.

But, but anyway, then we went to raise the seed round in 2012, we raised a million dollar seed round. And our intention was really to go firmly in the VC track, or sort of out there pitching, where the next Adobe and my my co founder and our CTO chic Aurora was from Adobe. And so we basically said, look like she left Adobe to build the next Adobe. And that’s what, what, what we’re doing and, and we really believed that that was sort of the path we were on, we thought we’d raise a series A Series B, and really sort of, you know, go for the stars. What happened was in 2013, maybe into 14, we tried to raise a series A, and I spent probably over a year of my life, oh my gosh, just pitching just meeting investors, nonstop on both coasts, going to their offices, having coffee, getting breakfast, getting drinks, networking, I have this sort of mantra of 1000 coffees, and 1000 copies is how many copies it takes to create a really robust network. And I’ve had well over 1000. And anyway, all of that effort, nobody wanted to invest. And there were a couple of reasons for that. But, you know, the sort of World of media technology had sort of cooled off, when we first hit the scene, 2011 2012, there were a ton of startups getting funded. In the media space, everyone sort of really was bought into this idea of, of mobile, sort of, you know, revamping the media landscape, we certainly did. But within the next couple years old, lot of those startups had already failed. And almost all of our competitors have already failed. And VCs were just really squeamish about it. But meanwhile, revenue is coming in, we had real customers that really loved what we were doing. And they were really paying us real money. And so we made a really tough decision, which was to stop attempting to raise money instead to get to break even and to run the company, profitably. And so that’s what we did. And for four or five years, we ran the company, self sustainably, where we were just, you know, we were ramping up the team and spending incrementally more as we had profits coming in, but really running it breakeven. And that’s a really different sort of model than sort of grow as fast as you can. And don’t worry about losing money, because you’re just going to raise another round, it’s a totally different mentality. And then last year, in 2018, sort of by chance, we did a partnership with a company called LSC communications. It’s a big publicly traded company. They’re one of the biggest printing companies in the world. And so they print magazines, newspapers, catalogs, and we have been talking to them about sort of distribution deal, a reseller agreement, where their sales folks would go out and try to sell mass to their customers and others, they wanted to sort of add a digital layer to their print offerings. And it totally made sense, all these companies are already giving them all of their content. And so in that conversation, we ended up pairing it with a strategic investment, and they invested $3 million into the business just last year. And so after about five years of running, essentially back at bootstrap, we sort of went back into the investment sort of trajectory. And now over the last year, we’ve scaled up significant using that investment and putting it to good use. And so yeah, we have sort of an uncommon story, as far as the fundraising track, generally people sort of are in the bootstrap, slower growth, you know, quote, unquote, lifestyle track over there, and the VC track, which is like, you know, go to the moon or die trying and died pretty quick. Yeah. And we’ve always sort of been in the gray zone between the two.

Maren Donovan  16:28  

I like seeing different examples. I think that we just, I mean, it’s like we hear about one kind of trap. But there are so many more that I realized the more times I speak to founders. So what is your What is your current size right now?

Paul Canetti  16:45  

So the team is just about 40 people. So we’re right in your your sweet spot.

Yeah, it’s a it’s interesting, sort of as a team scales, one thing that’s really apparent to me is that not everyone talks to everyone on any given day. And I certainly don’t, and that’s really different than when a team is really small. And everyone’s just sort of in everyone’s business. Yeah. The other thing is that we have three offices. And so we’re actually divided between New York, LA, and New Delhi. And so, so there’s, there’s sort of the team grows, but then also, as you have multiple locations, which is more and more common in the startup world, with remote teams and remote workers. You know, trying to coordinate, what 40 people are doing on any given day, is actually a very different skill than designing software, for instance, which is how I came into this in the first place. And so,

Maren Donovan  17:56  

so how do you guys do that? How do you manage a distributed no team over over three geographies and very different time zones?

Paul Canetti  18:05  

Yeah, it’s interesting. I mean, you know, some of the normal tools you would imagine slack. We use Asana for task management. We recently got into notion.

Maren Donovan  18:17  

That I like.

Paul Canetti  18:18  

Yeah, I like it, too, you know, Google Docs, and all of the all of the all the tools that we possibly can. But um, we also really try to do a good amount of video conferencing phone calls. And it is tricky with the three time zones like for instance, every Thursday, we have our weekly all hands, which New York and LA tune into, then we record. And our Indian team watches it on Fridays, though, you know, but then we do some late night calls, some early morning calls, and, and we make it work. The interesting thing about NAS is that it’s always been in our culture when we when we started, I lived in New York, she lived in India, and our third co founder Simon actually lived in Hawaii at the time. Interesting. Now he’s in the LA office, but you know, the timezone split between Hawaii and the deli is like 16 and a half hour time difference.

Maren Donovan  19:19  

And how did you how did you guys get connected?

Paul Canetti  19:23  

So Simon and I went to high school together, we were we were college roommates. So we’re always sort of a tag team. You know, as 90s kids, we were basically the only two kids in our school that learned HTML and seem to care about early web development. can imagine how cool we were. And, and so we were always a bit of a tag team working on projects together. And then she goes actually very different story. We met her on LinkedIn. I know a very modern, it almost sounds fake. When I yeah, even to myself, because it seems so random. But basically, in the very early days, when Simon and I were messing around with some of these concepts, I was in the LinkedIn forums, just sort of trolling for beta testers and trying to, to just create some hype. And I got a message on LinkedIn from this woman. She said, you know, I’m a senior engineer at Adobe, and I think we’re working on is really interesting. Can we like, you know, get on a call? And I was like, Yes, we definitely can do that. And next thing, I knew she was flying out to New York. And, you know, the story goes that her husband, like thought we were going to murder her. And my wife, my girlfriend at the time, thought she was going, Omarosa, like this is such an elaborate way for everyone to murder everyone.

Maren Donovan  20:52  

But please, such a paper trail.

Paul Canetti  20:56  

Terrible, terrible plan. But the idea was like, this was truly a stranger from the other side of the world that I just been chatting with online, like, we could have been catfishing each other who knows. But as it turns out, she was legit, we were legit. And that started, you know, a decade long partnership. And so for a long time, it’s just the three of us. Simon has lived in YE before we started the company, so he was already there. And then when it came time to build out a team, it sort of made sense to build out the business side, the marketing sales side here in New York, and the development team out in India. And so now she actually lives in LA and Simon, and we have a UF dev presence as well. But the India team is still really strong. And our biggest team of the three actually.

Maren Donovan  21:48  

That’s awesome. I actually, I think it’s, it’s so neat to hear founder meeting stories that aren’t just the traditional, we went to Stanford together, or we were in white comedy. I love that. Um, I think that’s it. I mean, there’s a whole world of talent. And I think a lot of times in New York and San Francisco, wherever we are, we tend to just forget that they’re incredibly smart, incredibly talented people all over. And you know, that it’s just going out there and sorting and finding them and being open.

Paul Canetti  22:23  

Yeah, absolutely. And, and just to add to that, like the, we didn’t even know that we were starting startup, like, you know, that’s how they talk about like yc, or something we were so polar opposite. Like, we had no idea. That’s what we were doing. We didn’t even know that startups were a thing. Like we weren’t in that culture at all. It was more like, we realized there was some real demand in the world for this, we had some strong beliefs about sort of how the world was going to progress. And we just wanted to build something that we really didn’t know, until, you know, a year or two after we had started that we were running a startup. And so it’s a little differently today.

I also I teach part time at Columbia Business School, and, and my students, I teach a couple classes in the evenings. And I mean, they all have startup ideas like it’s it wasn’t that long ago, but especially here in New York, there wasn’t such a strong startup scene, and just the whole culture that exists today around entrepreneurship wasn’t really there. We were We were unwilling, or not unwilling that unknowing participants in really New York startup culture. scene.

Maren Donovan  23:47  

Yeah, yeah. Okay, taking it taking it nine years from when you started, are there any growth numbers you can share in terms of revenue users just to give the audience a better sense of what you’ve built and inspire them as well? 

Paul Canetti  24:02  

Yeah, for sure. We don’t publicly share revenue numbers. But there are definitely some things I can, I can sort of throw out there. And, you know, some of the numbers that we’d like to talk about that over 1000 apps have been launched with ads. So you might have one on your phone right now, if you open, you know, whatever. Cosmo or or Harvard Business Review, or you’ll see a little powered by NAS at the bottom right is the app launches. And that means that no one actually quoted that out, they, they built it using our tools. Another sort of staggering numbers, that half a billion pieces of contents of 500 million pieces of content have actually been processed through our system. And so a piece of content, like an article or video or podcast episode. And so it’s just insane amount of stuff, sort of piping through mass every day and out into the world, which is really just sort of wild, we have this dashboard internally, for like, see, like a console of like, everything that’s happening. And there’s just just lot of stuff being created and put out there. And so, you know, it’s, it’s interesting when you talk about startup metrics, by the way, because when you’re a b2b company, there’s always a bit more of a veil of secrecy than to be to see, at least in my experience, and, and one thing that I think is kind of cool is that you’re seeing that barrier broken down, like with companies like Slack, or something where the metrics that they talked about, feel sort of more like B to C metrics. But then actually, if you look at the numbers there, they’re way, way, way lower than A, B to C. So like, actually, I know the numbers in front of environment when I read slaps, like f1, for their, for their IPO. And I was like, oh, like they’re paying customers are in like, you know, the 10s, or hundreds of thousands, not the millions. The way that you know, Facebook has 2 billion users, but none of them are paying Facebook, anything. And so soon as you get into the world of b2b, the, the scale changes dramatically. But anyway, I just think it’s an interesting observation like that more and more companies are sort of in the b2b space, that acting more consumer. And we’re trying to sort of make that transition as well, where, you know, right now, you can’t even go on the vows website and just like, sign up for an account, there’s no self service, offering something we haven’t talked about yet. demos. Exactly. It’s requested demo, and you get on the line with one of our sales team reps, and we talked to you and we send you a contract. And so in the end, the software is self service, but the sales process is still quite manual. And it’s fairly common for enterprise software. At the big enterprise level, I think that’ll always be the case. But we’ve been really inspired by that sort of consumerization of enterprise sales. And rolling out like a self service product is a big priority of ours right now. And I think if we were starting today, we would really think of it in those terms.

Maren Donovan  27:39  

That’s cool. Yeah, I could see how I mean, yet, we do see that with slack. We do see that with other offerings. And it makes it easier to kind of start in and then scale from there. And then you get really, it gets super integrated into your company. And as you grow, it’s just part of the stack, so to speak.

Paul Canetti  27:57  

Exactly. Exactly.

Maren Donovan  28:00  

Cool. This has been so interesting. final three questions. What’s your favorite book or podcast in the last year?

Paul Canetti  28:07  

Oh, man, I’m more of a podcast guy than a book guy, although I do have a couple of good books, but my favorite podcast is waking up with Sam Harris. And I think it’s it’s really interesting. He mostly interviews scientists, and researchers from a variety of fields from, you know, astrophysicist to medical professionals, just things that really I know nothing about and have no frame of reference for. And I really, I don’t know, I’m sure like you and a lot of other New Yorkers. I listen to podcasts just walking around. Yeah. And I sort of love getting out of tech world on my commute. And hearing about, you know, I just listened to one about like, like, you know, like, disease, like, like, like antibiotic resistant diseases or something horrifying, but just a space that I know absolutely nothing about. And, and I really try to avoid, like startup or tech podcast, because that’s what I’m doing all the rest of the day. Yes, so I really like the versatility of waking up where every episode is about a completely different topic.

Maren Donovan  29:25  

Awesome. I’m gonna check that out. I’ve heard about it, but I haven’t listened to it yet. I like that, too. Okay, so the next one is what business tool could you not live without?

Paul Canetti  29:35  

Business tool that cannot live without, is not strictly a business tool, but is my most vital business tool, which my AirPods. I’m talking to you right now on them. I just live and die by my AirPods. And I don’t remember what life was like before them. I’m big, like one AirPod guy. I’m just on call constantly, internally, externally. And so yeah, that’s what if I forget them? Or if they lose their charge? or something? I really feel like I’m like,

Maren Donovan  30:11  

it does just over.

Paul Canetti  30:13  

Yeah, exactly.

Maren Donovan  30:14  

That’s awesome. Okay, so lastly, for founders who are listening that are somewhere between that five to 50 stage, what’s the best piece of advice you’ve either received or have given?

Paul Canetti  30:27  

So the advice that I would give any startup founder anywhere, sort of between five and and 50, which is about where I am today, is really to be intentional about what the goal is like, what are you actually trying to do, because nine years can go really fast. And I’m sure 20 years can go really fast. And, and a lot of people I need are thinking mostly just about like what’s happening next month, or next six months. And so something that I really encourage young founders to do when I talk to them as especially on founding teams is, you know, every three, or certainly six months like to gather with your co founders and just sort of get straight about the really big picture. Not this next product release, not this next customer. But why are we doing this is the goal to sell our company is the goal to make a salary is the goal just to have sort of passion projects, you know, is the goal, if you’re still in your full time, day job, and running this on the side is the goal to leave your job. Like, I feel like people don’t talk about and might not even know what those goals are. And meanwhile, the years can just tick away before you sort of get intentional about what you’re doing. And so, you know, anyone that comes to me and says, like I have this idea for an app, I sort of just want to like do it on the died. Like that’s not a thing.

So it’s going to end up taking a ton of your energy and time and money and, and everything else. And so you have to know why you’re doing it.

Maren Donovan  32:14  

I love that I something I always say with my team is even when assigning the project. I’m like start with why. And I it’s it’s so important to remind yourself because we can see it sucked into the day to day, but thinking about the goal. I think that’s an amazing piece of advice. All right, Paul, thank you so much. Where can people find you your work? What’s the URL? Yeah, your web stuff.

Paul Canetti  32:42  

So mad is mad systems. com MAZ systems. com. I hang out mostly on Twitter. Just my full name Paul Canetti. CANETTI on Twitter, and I mostly tweet things that are pretty dumb, but occasionally, part thing. A smart thing or two, I like to think. But yeah, that’s the best place to find me.

Maren Donovan  33:06  

Awesome. Thanks again.

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