Michael Balyasny, CEO Attendify: “Entrepreneurship is a disproportionate result when using the limited resources. Ukraine is going in the opposite direction.”
Tell us a little about yourself: where were you born, when did you move to the US?
I was born in Kiev in 1983, my family immigrated to the United States in 1989, shortly before the fall of the Soviet Union. We were able to leave the Soviet Union because my family is Jewish, and starting in the 1970s people of Jewish heritage were allowed to immigrate from the USSR.
My family decided to leave in search of a better life, but it was a very different process than immigrating these days. Today there’s access to information, you know where you’re going and what life is like in that country, you can take your possessions and money with you. We didn’t have that opportunity.
We left with almost nothing and arrived with even less, selling most of our belongings to finance the journey.
I mention that because it’s the ultimate leap of faith, a bigger risk than any startup venture, perhaps that’s why I’m so comfortable with risk.
We were among the lucky ones and landed in San Francisco, where I grew up. I eventually moved to Los Angeles to attend the University of Southern California (USC) where I studied International Relations. While at USC, I met my wife, Marianna and eventually moved back to the San Francisco Bay Area. Today we live in San Jose and are expecting our first child later this month!
How did you become an entrepreneur?
I have been an entrepreneur my whole career. Before Attendify I founded an offshore software development company in Ukraine in 2005. This was my first professional experience out of college.
The company grew to about 65 employees and incubated several product ideas internally. We used outsourcing revenue to try to develop our own products, those experiments gave me my first taste of how exciting product development can be. I discovered how much I love building things, exploring new markets, wireframing, prototyping, and driving a long-term vision that can hopefully make a difference.
Why did you start a business in Ukraine?
Initially it was for personal reasons… I felt a connection to the country and wanted to explore that part of my heritage. I was always interested in Eastern Europe, that was a big part of why I studied international relations in college. I was very curious about what I may have missed out on. I was drawn by the rapid pace of change, the uncertainty… I felt it was a place where lots of opportunities would emerge.
How did you meet your co-founder Artem Yaremchuk? How did you two come up with the idea to create KitApps?
I met Artem in 2007 or 2008, towards the end of the lifecycle of my first company, and we connected by pure chance. He was working on a project and pitching his first startup idea, which was a local search company, similar to Yelp, but for the Ukrainian market. Artem ended up coming to work with me at the outsourcing company and helped us with one of our in-house projects, a real-estate search engine. Not much came of that project, but we hit it off.
While I didn’t know him very well at the time, it was clear that Artem was entrepreneurial and wanted to build something, entrepreneurs recognize that in each other. That was a rare quality in Ukraine, unfortunately, so it was a really easy and exciting connection to make.
When the 2008 recession hit my business had to close, that was a particularly challenging and formative time for me, but I came away with some good relationships and a lot of experience. Artem and I kept in touch with over the next few years and sure enough another opportunity to work together presented itself.
What were you doing for living after your first business closed?
I just continued doing what comes naturally… I started another company. I wanted to do something very different after my outsourcing company failed, I needed to reboot. I decided to look beyond the technology industry and discovered that it’s very easy for me to get deeply engaged and find passion for almost any kind of innovation.
I started a consumer goods company called Echo. We pioneered an eco-friendly packaging for beverages and launched our own product which got distribution in Whole Foods and around 150 others stores across Southern California. We won packaging design awards, which I was very proud of, and distribution took off very quickly. Despite that initial success and the excitement of building something new, I realized how incompatible I was with the industry. After the product development and launch phase, I almost immediately started thinking about going back to tech. I learned a lot, including the lesson of how valuable it is to work on something you truly love and make the most of every day. Eventually I sold the company and just moved on. I should never have diverted my focus away from technology, so I was happy to be done.
So Attendify was your comeback to tech? How did it start?
In 2010 I was inspired by the incredible growth in mobile, there were possibilities everywhere you looked. The App Store was still in its nascency and I saw the opportunity to help small businesses go mobile. The high-level concept was straightforward… mobile apps are much harder to develop than a website, so small businesses (SMBs) would have a very hard time competing with large enterprises that have in-house product and engineering teams, or the resources to hire consultants. SMBs would be at a significant disadvantage as end-users shifted to spending more of their time on mobile devices, we wanted to do something about that looming problem.
I was also interested in business models that were truly scalable and product-driven, that was a lesson I learned having been in a service business for a few years. Creating high-quality, vertically focused mobile solutions to help small businesses drive success seemed really appealing. There wasn’t much competition at the time, the few companies in the mobile app creation market had unappealing products that were following the same gameplan as website creation tools did years ago… That struck me as the wrong approach and only emboldened my desire to explore the opportunity.
I put the idea in an email to Artem and he was inspired by it, so we immediately started collaborating. I was actually on a flight to Mexico heading on vacation and started drafting an executive summary which I shared with him. That back-and-forth rekindled our collaboration and things moved quickly from there.
Tell about your first steps, successes and failures on your startup-path.
The first steps were very typical, wireframing, building a prototype, getting our first customers to believe in us, recruiting people, etc. Artem did a great job pulling the team together and we were in the right space at the right time, so we made it past that formative stage.
While it’s often romanticised, there’s nothing mystical about early stage startups. Sure, it’s extremely challenging, but the kinds of things you have to do are straightforward and there are literally unlimited resources to help you learn. Blogs, conferences, books, podcasts, incubators, mentor groups, etc. The rest is up to you, there’s no substitute for hard work and open mindedness.
Were all the team members from Ukraine? Tell us about your and Artem’s roles back then.
Early on everyone except myself was in Ukraine. That’s no longer the case, we have a growing team in Scottsdale Arizona and we’re very proud of the team we’ve been able to build. We have incredible people spread out in a few offices and are hiring in every department. In the beginning we had only a few people: myself, Artem, Andriy Zhovner, Eugene Petrash and one of our very early hires was Olexiy Kachayev, who became our CTO.
Artem was actually the first CEO and worked on the idea full-time at the beginning. I wasn’t able to join full-time at first because I still had my other company and was working to to sell it. I joined full-time a few months later, eventually we switched roles and I became the CEO.
How did you collaborate with the team in Ukraine while you lived in US?
Collaborating remotely was never a big problem, although distance certainly has an impact. It was easy to manage day-to-day work in 2011 and is even easier today with so many great collaboration tools.
We use Slack for almost all our day-to-day communications, we have lots of Slackbots and have done a great job leveraging their integrations. I’m happy to say that we rarely use email for internal purposes. We also use Jira, Confluence and are very active Trello users.
As the business started to scale I began traveling to Ukraine much more often. Today I’m on a pace of about 6 visits per year. That will slow down temporarily for personal reasons, but I take every opportunity to be with the Kyiv team that I can. There’s no substitute for face-to-face collaboration, so we’re trying to find creative ways to bring people together as often as possible.
Did you face any difficulties in first few years that made you consider giving up?
There were no challenges that would cause us to give up, thankfully we were lucky in the sense that nothing overwhelming happened. We were able to stay focused on our priorities of building the product and learning to solve our customers’ problems.
Frankly the biggest challenge day-to-day is unavoidable… it’s distance. We have learned to be very efficient collaborating remotely between the Phoenix, San Jose and Kyiv, but there’s no question we would be even better in one space. With that said, the leverage we get from distributed teams is undeniable and is more than worth any managerial overhead.
What about investors, how did you attract capital back then? How much money did Attendify raise and in how many rounds? Name your biggest investors.
The market was very different in 2010. There was virtually no investor ecosystem in Ukraine and to be honest access to capital is still very limited locally.
We had little chance of raising capital in the US because most of our team was in Ukraine. Attitudes around fundraising with remote teams were not like they are today.
Investing in Ukraine was a scary idea for most seed stage investors, whereas today that’s much less of a concern.
We’ve raised a very modest amount of outside capital, just over $2m to date. Our investors have been a very important part of our journey, but we’ve bootstrapped the company to a large extent. Some of the investors your readers may be familiar with are Digital Future and TMT, but we’ve also raised from a few other angel investors and funds.
What was the biggest success of your startup in its first year? When did you realize that it’s truly alive?
In the first year our biggest success we had was selling the first subscriptions, I remember those moments well. They were a formative experience in my life as an entrepreneur because those transactions represent trust. Trust that Attendify can deliver, trust in our product, service and support. We got $49 and then eventually $249 from someone at the Retail Asia Expo. I don’t remember all the underlying details about their event, but this was one of our first unaffiliated customers.
Those early transactions meant the business was alive. If one person bought a subscription that meant there were at least 100 other potential clients… then 1000, and so on. We realized we can acquire customers cost-effectively and reinvest in the business, chipping away at a big opportunity in a huge market.
How did you get your first big client? Describe your efforts to make them believe in you.
There were two types of clients early on:
- Custom Development – we did some contract engineering work to help build core features and drive revenue to keep the lights on. Some of these clients were events, others were not… so this kind of client was much less rewarding and important in the long run.
- Product Customers – once we launched our self-service app creation platform every transaction was incredibly rewarding. There aren’t many relationship driven stories because customer acquisition and service was almost entirely product driven.
Initially we offered our apps for $249, which seems like such a small price today. We could have definitely charged more 🙂 Eventually we built relationships with some of these clients that came back again and again. A few of our earliest clients are still with us today, 6 years later! That’s amazing and something I feel really good about personally.
How did KitApps transform into Attendify? What did you change and why?
KitApps mission was to help small businesses go mobile, we just happened to launch our first template for the event industry. Our initial plan was to create solutions for other verticals, but we started to get lots of traction with the event product.
We got around 100 customers through the platform in the first year with almost $0 invested in sales and marketing. We knew we had a business.
Having seen some of that early growth we realized how much upside there was in the event market. We also identified lots of interesting problems to solve with our mobile-first event platform and the vision for a truly impactful business started to crystalize. In 2013 we decided to focus exclusively on the event industry and rebranded to Attendify.
If I was doing it all over again we would have focused on events from day 1, but that’s 20/20 hindsight, unfortunately life doesn’t work that way. I’m just happy that we’re in a really fascinating market that is often overlooked and in position to do great work and have a big impact.
Tell about your product. What kind of services do you provide for your clients and what value do their customers get with your help?
Attendify is a mobile-first event management platform. We started with mobile event apps but now we offer event registration, data management, lead retrieval and event websites. Our mobile product is the centerpiece because it allows our customers to capture event engagement data in real-time and that’s central to how we see the future of our industry.
Our company’s mission is to “bridge the gap between digital and event marketing” by bringing the same level of measurability that you find on the web, which drives opportunities to optimize and personalize event experiences. Ultimately we’re helping our customers run more successful, engaging events. We’ve served over 14,000 events and 3,500 customers.
What is your business model today, how has it changed? Tell us about your current prices.
You can find our pricing online, that’s one thing that has always made Attendify unique in our market… we have open pricing and a transparent business model. Our pricing has changed over the years, but the core model has remained the same.
How fast is revenue growing year-over-year in percentage terms? How many new clients did you get every year? Name your biggest clients.
I can’t disclose that, but we’ve served over 3,500 clients. Among our biggest clients are companies like Google, Uber, PayPal, Coursera, Princeton and Harvard Universities. You can find more customer names and case studies here.
Do you have clients in Ukraine?
We have a few clients in Ukraine, but they’re a tiny percentage of our overall customer base. Less 0.79% to be exact.
Almost 60% of our business is in the US. We also do very well in the UK, Australia, Canada and other English speaking countries. About 22% of our business is from the rest of the world, which is a significant chunk. It’s great to see that diversity.
Do you work in China? That event market is booming they say.
We don’t work with China too much because Google services are unavailable and it’s a very difficult market for western companies to crack. It’s just not a priority for us at this stage and I would not recommend that early stage companies spend much time thinking about China.
What about the competition: who are your competitors? What countries do you focus on and what is your market estimated volume in general?
Event technology is roughly a $30 billion dollar market, and it’s growing. I think the best days are ahead for our industry and the level of innovation we’re seeing today is unprecedented. I’m proud that Attendify is an important part of this market, we’re working hard to accelerate into the exciting trends we’re seeing.
We have lots of competitors including companies like DoubleDutch, Guidebook and Eventmobi, but also larger event management solutions like Cvent. We even compete with Eventbrite on some level, but I feel we’re uniquely positioned to take advantage of the longer tail of the event management software market.
How big is Attendify today? How many offices do you have and where?
Attendify has just over 70 people today, and 57 of them are Ukrainians.
We have 3 offices, San Jose, Phoenix, and Kyiv. We have a flat organizational structure and are very process driven, so everyone knows their role. The Kyiv office houses our engineering and product teams, but also other roles as well like sales, customer success, research, support, operations, etc. Our marketing team is in Phoenix as well as people in customer success, support, and operations roles.
How important is Ukrainian team? Do you have plans to growing that office?
The Ukrainian team is essential, I’m really proud of the people we’ve been able to bring together and we’re hiring for every team. You can see a list of open positions on our website.
What do you think about current situation and changes in Ukraine? From business and political perspective.
First a disclaimer: I’m not an avid observer of the political situation in Ukraine and spend very little time thinking about it. What I can share are personal observations from the time I’ve spent in Kyiv over the years, as someone who feels a deep connection to Ukraine… It’s hard to see so many missed opportunities.
Entrepreneurship is about making the most of limited resources to achieve disproportionate results. Ukraine is arguably going in the opposite direction at the macro level, there’s so much untapped potential.
I’m hopeful because there is so much amazing talent in Ukraine, but the business and social environment is not very conducive to innovation.
I don’t think the solution can come from the top, we need to find a way to foster entrepreneurship at the cultural level among the next generation of Ukrainians.
There are some encouraging signs, but I know we can do much better.