Betting on New Technology Paid Off with Paul Canetti of MAZ

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. They identified a massive new technology market while it was still relatively nascent and built a platform that enables over a thousand companies, including Fortune 100s, to create their own apps without using code.

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 its 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, is 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.

Other lessons in this episode: balancing volume vs. value and notes on managing a team across three time zones.

If you like this podcast episode, listen to our conversation Turning a side hustle into a profitable marketplace with Mark Steiner of GigSalad.

Check out Paul’s app recommendation: Waking Up with Sam Harris.

Photo of Paul Canetti

Professor at Columbia Business School, founder, and startup investor.

Maren Kate
Hello. Welcome to From 5 to 50., the podcast dedicated to helping startups and founders survive and thrive through the early stages. I'm your host, Maren Kate, and we're here with Paul Canetti of MAZ. Welcome to the show, Paul.

Paul Canetti
Thanks so much for having me.

Maren Kate
Awesome. So first off, when did you found MAZ?

Paul Canetti
So we've actually been around since 2010 so its been a while. We just passed our nine-year mazversary, as we call it. A lot has changed in the tech landscape and also in the startup landscape, especially here in New York, over these past nine years.

Maren Kate
Seriously. So just in 90 seconds or less, tell the audience what was the why behind starting MAZ and what you guys do.

Paul Canetti
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 so 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 it actually wasn't obvious at all that that was the case. So if you remember in 2009/2010 the most popular apps were like an app that made it look like you were drinking a beer or a Zippo app that had like a lighter.

Maren Kate
I remember that app.

Paul Canetti
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 Shikha, we really believed in the potential of the app universe and we thought that this was going to be like the next web and that apps were going to sort of replaced the internet as we knew it. What sort of validated that is we were making apps for hire. We were running a small agency here in New York and none of the big agencies were doing apps. So if you were a company and you wanted an app in 2009 you basically had to find weird 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 companies like WordPress had done that for websites. Before that everybody had to code a website 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 MAZ was born.

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

Paul Canetti
Yeah, so our customers pay us to use our software. It's a web-based SaaS dashboard and if you've ever used something like WordPress or Squarespace where you're choosing from different templates, and dragging and dropping different things, sort of customize it to look and feel like your brand, our customers use the MAZ 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 the MAZ of today, you could create apps for your TV, like Apple TV, or Roku, or Amazon Fire, or Apple Watch and a variety of other platforms. And so they're basically paying us like a monthly SaaS style fee to access that dashboard.

Maren Kate
Ok. And then how do you guys price that?

Paul Canetti
It varies. So the pricing on the low end is around a thousand dollars a month and that's for smaller media companies that want to get up and running. But that's still a pretty high ceiling for your average company and certainly average individual. So it's actually a really interesting question about pricing. And I should mention, we also have big enterprise accounts. Bloomberg, Hearst, Business Insider just came on and they're paying significantly more because they're integrating with their existing database or CMS solutions using some advanced features around subscription management and all sorts of enterprise-y things. So I have a lot to say about sort of selling a SaaS product to multiple types of users. So we go all the way to big enterprise but then we also cater to S&B types but not really much below that. It's funny, when we actually started we thought that everyone in the world was going to need an app. We thought that everyone that had a blog was going to need 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 there was sort of a minimum threshold of the size of company that actually required it. That took us a couple of years to figure out. We found our niche with media companies, and publishers, content producers that had a steady stream of content and wanted an app to deliver that content. So we settled into the pricing over time based on the market that ended up actually using the product. So some of those customers that came to us in those early days really got a sweetheart deal compared to our customers today.

Maren Kate
So why do you continue to service…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&Bs and not just focus on enterprise?

Paul Canetti
Yeah, so you're right, I mean, the enterprise pricing can be significantly higher than that but the trouble is that there's not that many enterprise-level companies. One of the things that's interesting about serving the enterprise is that your potential market size becomes limited especially if you're playing 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 MAZ 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. One thing that any 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. For instance, one of our favorite customers is this company called Yoga International. In a 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 MAZ to do that. You can go on your Apple TV, or other sorts of smart TV devices, you can download Yoga International right now and sign up as a subscriber. They have an unbelievable selection of really high-quality yoga videos that you can do at home watching on your TV. What's so exciting about a customer like that is that they're now running their business on the MAZ tech stack. There are so many small businesses like that where we could never write down all of the possible customers because it's an infinite long tail there so I think about that a lot. Of course, we love our enterprise customers and they really push the technology forward because they have very specific needs and push the whole platform but then we sort of take all the power that we create for those big accounts and give it to all of the smaller folks. 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 MAZ has moved into other areas. You can host your podcast with MAZ, you can publish to Apple news with MAZ, you can create an Alexa skill with MAZ and so trying to really think about how we can continue to drive further down market. And roughly the further down market 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. So for any startup, it's this balancing act of volume versus value.

Maren Kate
Yeah, that's a very good point and something to keep in mind. So nine years old, in startup land that's pretty legit, how did you fund this? Did you bootstrap, self-fund? Did you take on investment at any time?

Paul Canetti
Yeah, so we've raised $5 million to date but kind of in a weird story that I think is fairly unique to the startup world in that when we started out we were bootstrapped. Initially, we raised little friends and family money, which we burned through way too fast because we didn't know. Like, did I really have to pay for that custom privacy policy? But anyway, then we went and raise a seed round in 2012. We raised a million-dollar seed round and our intention was really to go firmly in the VC track. We’re out there pitching we’re the next Adobe and my co-founder and our CTO, Shikha Aurora, was from Adobe and so we basically said, look, she left Adobe to build the next Adobe and that’s what we're doing 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 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 every day just pitching, meeting investors nonstop on both coasts, going to their offices, having coffee, getting breakfast, getting drinks, networking. I have this sort of mantra of 1,000 coffees and 1,000 coffees are how many coffees it takes to create a really robust network and I've had well over 1,000. Anyway, all of that effort, nobody wanted to invest and there were a couple of reasons for that but the world of media technology had sort of cooled off. When we first hit the scene in 2011/2012 there were a ton of startups getting funded in the media space. Everyone really was bought into this idea of mobile revamping the media landscape. We certainly did. But within the next couple of years, a 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 and instead to get to break even and to run the company profitably. So that's what we did. And for four or five years we ran the company self sustainably where we were ramping up the team and spending incrementally more as we had profits coming in but really running it breakeven. That's a really different 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. 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 had been talking to them about a distribution deal, a reseller agreement, where their sales folks would go out and try to sell MAZ to their customers and others. They wanted to add a digital layer to their print offerings and it totally made sense. All these companies are already giving them all of their content. 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 went back into the investment trajectory. And now over the last year, we've scaled up significantly using that investment and putting it to good use. We have sort of an uncommon story as far as the fundraising track. Generally, people are in the bootstrap, slower growth, quote-unquote lifestyle track or they’re in the VC track which is go to the moon or die trying and die pretty quick and we've always sort of been in the gray zone between the two.

Maren Kate
I like seeing different examples. I think that we just, I mean, it's like we hear about one kind of track but there are so many more than I realized the more times I speak to founders. So what is your current size right now?

Paul Canetti
So the team is just about 40 people. So we're right in your sweet spot but coming up on that 50 mark. It's interesting as a team scales one thing that's really apparent to me is that not everyone talks to everyone on any given day. I certainly don't and that's really different than when a team is really small and everyone's in everyone's business. The other thing is that we have three offices so we're actually divided between New York, LA, and New Delhi so 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, 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.

Maren Kate
So how do you guys do that? How do you manage a distributed team over three geographies and very different time zones?

Paul Canetti
Yeah, it's interesting, I mean, some of the normal tools you would imagine Slack, we use Asana for task management, we recently got into Notion.

Maren Kate
I use that. I like it.

Paul Canetti
Yeah, I like it too. You know, Google Docs and all the tools that we possibly can. We also really try to do a good amount of video conferencing phone calls and it is tricky with the three-time zones. For instance, every Thursday we have our weekly all-hands, which New York and LA tune into, but then we record and our Indian team watches it on Fridays. Then we do some late night calls, some early morning calls, and we make it work. The interesting thing about MAZ is that it's always been in our culture. When we started, I lived in New York, Shikha lived in India, and our third co-founder Simon actually lived in Hawaii at the time. Now he's in the LA office but the timezone split between Hawaii and New Delhi is like sixteen and a half-hour time difference.

Maren Kate
And how did you guys get connected?

Paul Canetti
So Simon and I went to high school together, we were college roommates, so we were 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 seemed to care about early web development. You can imagine how cool we were. So we were always a bit of a tag team working on projects together. Then Shikha was actually a very different story. We met her on LinkedIn. I know a very modern…it almost sounds fake 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 sort of trolling for beta testers and trying to create some hype and I got a message on LinkedIn from this woman. She said, “I'm a senior engineer at Adobe and I think what you’re working on is really interesting. Can we get on a call?” and I was like, “Yes, we definitely can do that” and the next thing I knew she was flying out to New York. The story goes that her husband thought we were going to murder her and my wife, my girlfriend at the time, thought she was going to murder us, like, this is such an elaborate way for everyone to murder everyone.

Maren Kate
With such a paper trail.

Paul Canetti
Exactly. Terrible, terrible plan but the idea was this was truly a stranger from the other side of the world that I had just been chatting with online. We could have been catfishing each other. Who knows? But, as it turns out she was legit, we were legit and that started a decade-long partnership. For a long time, it's just the three of us. Simon had lived in Hawaii 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. So now Shikha actually lives in LA with Simon and we have a UX Dev presence as well but the India team is still really strong and our biggest team of the three actually.

Maren Kate
That's awesome. I think it's so neat to hear founder meeting stories that aren't just the traditional we went to Stanford together, or we were in…. I love that. 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 that it's just going out there and sorting and finding them and being open.

Paul Canetti
Yeah, absolutely, and just to add to that we didn't even know that we were starting a startup, like, talk about YC, or something. We were so polar opposite. We had no idea that's what we were doing. We didn't even know that startups were a thing. 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. We really didn't know until a year or two after we had started that we were running a startup. It's a little different today. I also teach part-time at Columbia Business School and my students, I teach a couple of classes in the evenings, they all have startup ideas. 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 unwilling, or not unwilling, but unknowing participants in the New York startup culture.

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

Paul Canetti
Yeah, for sure. We don't publicly share revenue numbers but there are definitely some things I can throw out there. Some of the numbers that we like to talk about are that over 1000 apps have been launched with MAZ. You might have one on your phone right now. If you open Cosmo or Harvard Business Review you'll see a little “Powered by MAS” at the bottom as the app launches. That means that no one actually coded that app. They built it using our tools. Another sort of staggering number is that half a billion pieces of content, so 500 million pieces of content, have actually been processed through our system. So a piece of content is like an article or video or podcast episode. So it's just an insane amount of stuff piping through MAZ every day and out into the world which is really just sort of wild. We have this dashboard internally where we can see a console of everything that's happening and there's just a lot of stuff being created and put out there. 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 B2C, at least in my experience, 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 some of the metrics that they talked about feel more like B2C metrics but then, actually, if you look at the numbers they’re way way way lower than a B2C. So like, actually, I don’t have the numbers in front of me but I remember when I read Slack’s S1 for their IPO I was like they're paying customers are in the tens or hundreds of thousands, not the millions the way that Facebook has 2 billion users but none of them are paying Facebook anything. So as soon as you get into the world of B2B the scale changes dramatically. But anyway, I just think it's an interesting observation that more and more companies are in the B2B space but acting more consumer-y. And we're trying to sort of make that transition as well, where, right now you can't even go on the MAZ website and just sign up for an account. There's no self-service offering. Something we haven't talked about yet…

Maren Kate
It’s all demos.

Paul Canetti
Exactly. It's request a 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. 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. I think if we were starting today we would really think of it in those terms.

Maren Kate
That's cool. I mean, yeah we do see that with Slack, we do see that with other offerings, and it makes it easier to start in and then scale from there, and then it gets super integrated into your company and as you grow it's just part of the stack, so to speak.

Paul Canetti
Exactly. Exactly.

Maren Kate
Cool. This has been so interesting. Final three questions. What's your favorite book or podcast in the last year?

Paul Canetti
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. I think it's really interesting. He mostly interviews scientists and researchers from a variety of fields from astrophysicists to medical professionals and just things that I really know nothing about and have no frame of reference for. I'm sure like you and a lot of other New Yorkers I listen to podcasts just walking around and I sort of love getting out of the tech world on my commute and hearing about, I just listened to one about disease like antibiotic-resistant diseases or something horrifying but just a space that I know absolutely nothing about. I really try to avoid startup or tech podcasts 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 Kate
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
A business tool that cannot live without is not strictly a business tool but is my most vital business tool which is 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 a big one AirPod guy. I'm just on calls constantly, internally, externally and so, yeah, if I forget them or if they lose their charge or something I really feel like I'm like…

Maren Kate
Your day is just over.

Paul Canetti
Yeah, exactly.

Maren Kate
That's awesome. Okay, so lastly, for founders who are listening that are somewhere between that 5 to 50 stage, what's the best piece of advice you've either received or have given?

Paul Canetti
So the advice that I would give any startup founder anywhere between 5 and 50, which is about where I am today, is really to be intentional about what the goal is. What are you actually trying to do? Because nine years can go really fast and I'm sure 20 years can go really fast. A lot of people I meet are thinking mostly just about what's happening next month or the next six months so something that I really encourage young founders to do when I talk to them is, especially on founding teams is, every three or certainly six months to gather with your co-founders and just 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 a passion project? If you're still in your full-time day job and running this on the side is the goal to leave your job? 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. Anyone that comes to me and says, like, I have this idea for an app and I sort of just want to like do it on the side. Like, that's not a thing so it's going to end up taking a ton of your energy and time and money and everything else so you have to know why you're doing it.

Maren Kate
I love that. Something I always say with my team is even when assigning the project I'm like start with why. It's so important to remind yourself because we can get 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?

Paul Canetti
So MAZ is mazsystems.com, M-A-Z systems dot com. I hang out mostly on Twitter, just my full name @PaulCanetti, C-A-N-E-T-T-I, on Twitter. I mostly tweet things that are pretty dumb but occasionally a smart thing or two, I like to think, but that's the best place to find me.

Maren Kate
Awesome. Thanks again.

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