How Mixpanel Turned 50% Churn Into 90% Retention

At one point, Mixpanel was hemorrhaging 50% of its customers every year. While revenue kept growing and the metrics looked promising on the surface, CEO Amir Movafaghi knew they were sitting on a ticking time bomb.

Today, Mixpanel is a $1.05 billion event-based analytics company serving 9,000+ customers globally with over $100M in ARR. Under Movafaghi's leadership, they've transformed their customer retention from 50% to nearly 90%, while achieving an almost consumer-grade NPS score approaching 60.

Amir Movafaghi: Hello, my name is Amir Movafaghi. I'm the CEO here at Mixpanel. We are an event-based analytics company. Currently have 9000 customers globally distributed company crossed $100 million in revenue a little less than a couple of years ago. We're super proud to have our one other metric that we disclose in our customer NPS being almost a consumer grade approaching 60.

I was born in Tehran in Iran. I spent 7 years in Istanbul, Turkey, so I spent a good number of years there. We moved there when I was about 8, and then I came to the United States when I was 15.

When I was going through graduate school, it was a time when the financial crisis had hit in New York. It was right at the beginning of where social platforms were coming online and uprising in Iran. Couldn't get a hold of my parents because all the phone lines were shut down and email was not working and at the time Twitter was the only platform that was really reporting what was happening on the ground in Tehran and it was this sort of incredible moment of realizing just how powerful the social platforms were becoming at that point it was such a personal attachment to the product that was my lead in to tech.

Amir Movafaghi: So I joined Twitter in 2010. When I joined the company, we were about a little over 100 employees. We were pre ad revenue. It was an extraordinarily exciting time. Even Twitter at its height of success, every six months was like a completely different company. You had this company that you would wake up, you all of a sudden had an ad product that failed. You kind of had a moment of having to really have these moments of existential crisis, right? Hey, are we gonna have a company in 6 months? Is there gonna be, are we gonna be able to make it to the other side?

When I left Twitter, we had grown from nearly 100 employees to 4500 employees. It was from close to 0 to 2 billion in revenue. It was phenomenal, incredible growth that happened during that time.

Biggest lesson was the impact that user experience had on the success of the company and this obsession around delivering a better product, a better user experience, and sort of having that as a leading path into better monetization and better growth. Companies in enterprise software have invested quite a bit on technology, better utility, building a better technology as a first order of business. Being part of Twitter, it was getting a lot more closer to just how much the significance of making sure that you're always thinking of the user or the customer first before you go figure out everything else, because without the value, without that ultimate experience that you're delivering that's creating value, everything else can feel much more ephemeral and much weaker foundation.

Amir Movafaghi: I think in many ways when you're part of a great company that has a number of different opportunities to make an impact and connect and grow with, in many ways you want to make sure that your skill set is rich enough and mature enough to be able to deliver a bunch of impact, but hopefully if you're in the right position you're also gaining a bunch of new knowledge and new tools.

I think in many ways the growth comes from just having that sheer intellectual curiosity and a desire to make sure that you're influencing and impacting things that matter. And so the biggest one is this constant ability to ask, am I doing the thing that is the highest impact work that I could be doing? Am I focusing on things that actually will drive and make a difference? And then usually if you're in the right role and you have the right foundational skill set, then the rest of it will take care of itself.

Amir Movafaghi: At one point, Mixpanel, we were churning almost half of our customers every year, and it was this place where as a company that's growing fast, in some ways that metric can be overlooked. You're like, hey, we're still growing, things are still great, and you would show up and look at these numbers and you wouldn't even blink. You're like, yeah, we just had like half of our customers like walk out the door, but it's not a big deal because we're getting so much more and we're still growing.

But in many ways it was a time where we really came together and said, look, churning half the customers is a major, major problem in that we are clearly not driving and delivering the value as a company that we need to. And even though we're still growing, we have to go back and address churn as a way of making sure we have sustainable growth over time and that product needs to kind of get to this level of maturity over time.

The problem is actually this one was quite difficult because we were initially just trying to find easy answers. Maybe this is a segment problem like SMB has higher churn. Maybe we just need to go to enterprise and that'll be the fix to all of our problems, but the reality was much more complicated and nuanced, and what it required was a very, very diligent way of again segmenting and understanding the behavior from different customers in different segments.

Amir Movafaghi: It so happened that there wasn't one answer. It wasn't one thing. It was a set of a bunch of different things that we needed to do and the list was quite overwhelming. The way that we came at it was instead of putting some crazy insane kind of goal for where we wanted to be in a year time, we acknowledged that retention was a lagging indicator that it would take time for us to really move it.

So instead we said, what is the single kind of proxy leading indicator we can grab that would inspire the team, get them excited about making the right set of improvements in moving retention in the right direction and then we shifted our focus to NPS user NPS. We said look, if we are able to improve user sentiment, that's a much faster in product signal we're gonna get from our users that starts going up, then we know we can kind of move the dial on retention over time.

That's where our journey began and we literally made a series of categories of different priorities. We had a series of things that we're gonna go out and tackle. And everyone in the company from go to market to EPD sort of had this core mission to go out and get this done, and the result was really incredible.

We were in single digits NPS at the time, and we were able to move that 10 points every single year. And by the time we did our Series C, we were at 50, and this past spring we almost touched 60, which is really like now kind of consumer grade category. And then retention went from 50 to close to 90% as a result.

Amir Movafaghi: In a lot of ways, the way that we go through and fix things together as a team is this ability to really come together on a core problem, and we understand why we are focusing on what we're focusing. We have clarity around what objective and what outcome we're trying to get to, and then we're flexible about the how, and we're able to take feedback along the way from our customers, from our peers from our board, from everybody, investors, like we're able to learn and understand and then iterate and then hold ourselves accountable to these outcomes.

So I think fixing problems at its core comes down to first really centering ourselves on why this matters, why it takes precedent and priority over the 99 other problems you have, and then rallying and inspiring people to really get in and have clarity on how they can make an impact and difference on that journey.

Amir Movafaghi: Companies go through very, very different stages and challenges as they're going from no revenue to the initial signals that there's demand and there's a need for their product. They get 10 million milestone, they get the 50 million milestone, and there's huge drop offs from each of these stages.

Learning and experience that at least we've taken here at Mixpanel is the ability to really have a very rich signal coming in from the pool of customers that you don't have, because so much of your signal and constant feedback loop is around the core market that you're addressing and your core set of customers that are paying you today.

In the initial phase, you want to get as small as possible, solve the problem for the smallest audience that is able to get value and pay you for your product, but as you're scaling and getting to 50, 100 million plus, then you're really trying to also make sure you have a lens toward the set of the part of the market that you don't own, that you don't have, and make sure that you understand what opportunities you have to grow and continue to expand your offering.

Beyond product and signal from customers, the other dimension that's really critical as you're scaling is the way that teams operate internally. The way that your executive team and you as a CEO need to operate is going to change completely. As a 10 person startup you're in a very different capacity. Your need to then go create leverage, really create autonomy and ownership modularity within the organization is going to be key in driving growth and success you need past a certain scale.

Amir Movafaghi: I think product led growth is really important, and I think sometimes we oversimplify what it means. Even Mixpanel, we've had quite a bit of a journey in terms of understanding the nuances of what it entails, what works within product-led growth, and what you need to augment and layer on.

The fact of the matter is what's really awesome about product-led growth and what's so good about so many of the startups and different growth companies really leaning into this at its heart, the principles we have, we need to have a really amazing product that's self-servable that people can get value out of right away, that sort of speaks for itself. You barely need to sell, that's kind of the end all sort of goal of product led and that's awesome.

But there is so much more to being able to leveraging product led growth and actually creating sustainable growth over time and a big part of that is this element of market education. Everyone is gonna come in to your product with a very different set of maturity. They may be at a different part of the company, different understanding of the problem that you're trying to solve as a company.

Being very intellectually honest about truly segmenting and understanding where you have an opportunity to actually go drive product-led growth where you can deliver a self-serve experience that's really key, acknowledging that there's a space and there's absolutely an opportunity to be very sales-led in a way that you drive augmenting that product-led growth.

Amir Movafaghi: First one is about being open and being open to feedback. We as people get attached emotionally to our decisions about how to go from point A to point B and just knowing that having qualitative, quantitative feedback will let you course correct and make sure you get to the destination on time.

The second one is about being able to lead change and lead change has the element that Mixpanel 6 months is going to be a fundamentally different company and we want not only individuals to be OK with change or support it, but we want them to lead it. We want them to know that we're going to need to explore and find ways to go out and create ways that we can create more value in the marketplace.

Third is a customer focus, which at the end of the day we're only successful if our customers are getting value. And so any decision we make around what product we prioritize, how we do pricing and packaging, how we evolve our support organization is around this kind of long term value that we are creating for our customers.

The fourth one is results oriented, which acknowledges that the single best way for us to keep ourselves accountable on whether we are moving toward fulfilling our mission as a company to help the world learn from its data is people's willingness to pay us money to solve that problem. And so topline revenue growth we are driving in a sustainable fashion through the right margin profile.

And then finally is the one team which really emphasizes the importance of establishing meaningful connections among employees to move beyond the transactional Zoom interactions into a place where they know each other, they can trust one another, so when they do get into a position of conflict, there's a foundational trust and safety that allows them to work through those things productively.