Escaped Belarus, Built $100M ARR Business | PandaDoc, Mikita Mikado

00:00belus is a totalitarian state I wanted to be free the guy worked in it advised me if you get that job you will be free you can get out of belus you won't be dependent on rules of the country where your parents are where your relatives are and and you were looking to get free so that worked totally work everything is working out I'm so happy in my life but that changed dramatically with Revolution B we had a raid in our office government took four people hostage how did I navigate that so you recently crossed 100 million of AR how did that

00:30feel when you notice that actually happening there's a brand value of the 100 million brand value of becoming a unicorn company yeah you feel good but my name is Taye I'm a partner at altto ventures we are very excited to have Makita here with us today such a pleasure to have you here and to hear your story so thank you for being here thank you Tay maybe just a quick introduction of yourself and Pad do my name is mik Mikado I'm the CEO and co-founder of Pand benad do helps dozens of thousands of companies to streamline their work with contract quotes proposals forms get those documents sent

01:08to customers signed electronically hundreds of thousands of people that use our product Makita tell us the story of starting padon it wasn't even called pandadoc in the beginning when was it what were your observations why did you decide to start the company pandadoc is a step function of web design business I've run Landing in America some thing like oh my God it's been such a long time 22 years ago it started as very simple tool to address an internal need transformed into something bigger as we learned along the way so let's just

01:41start with the very early days actually even before the 22-year Journey of panda do you're from Eastern Europe where were you born what was your upbringing like I was born and raised in bellarus which is a small country between Poland and Russia I always wanted to have an opportunity to using my passion energy to try to build something Belarus is a totalitarian state I want it to be free I wanted to be able to unleash my energy maybe my creativity at the age of 19 I got an opportunity to enroll into a student Exchange program and I came to

02:19us to flip burgers at Han airport that was the first place where I landed to do variety of random jobs I also learned to design and build website that was my first small business in America that small business helped to pay for college here in the US it also funded with later became our first software service company and then kedu wow so much unpack there you said you wanted to be free was that something that was unique in your yearning that even your friends or your families notice where they were like H Makita is a little different than most

02:54people in bellarus or was that a common sentiment in your community I think most teenagers just want to be free so therefore it's not unique maybe what was unique and different is timeline of circumstances that happen in my life the people that I met along the way that helped me to believe that sort of the sky is the limit anything is possible so I wouldn't say there's something way different in my character there are likely certain things that help me to make the move give me that energy give me that to leave at anything's possible but there's also a lot of luck and a lot

03:26of circumstances LED my path the way it yeah were some of those examples let's say when I was 15 years old for a long time I've been I've been getting really sick and my mom decided to send me to Crimea so that I can get exposed to the Sun and hopefully not be sick anymore a guy who was her colleague he was an intern at the place where she worked was actually going to Crimea she asked whether I can tag along the guy worked in it it was his first job he was an intern he over the course of the month

04:00being there in Crimea became my role model I loved computers my entire childhood he pursued me to learn to coach try to become software engineer the pitch that worked with me at the time was like if you get that job you will be free you can go anywhere and you'll be in demand and you can get a job anywhere in the world you can get out of bellus you won't be dependent on rules of the country who your parents are or who your relatives are and and you were looking to get free I was looking to get free so that worked that totally worked how old was this person

04:29he was 19 at that time maybe 20 at that time something like that I was 15 turning 16 we went to Crimea did you live together with them yes we were roommates most importantly like I've seen a role model who was just like a few years ahead of me was already able to pay his own bills and travel and be free that's what I was looking for so that was one Turning Point yeah why was he going there oh just to have a good time vacation vacation for it was was total happen stance yeah then I think the next Turning Point point when I got

05:01a US Visa and was able to come here for summer it was a mind-blowing experience which is a wonderful program that allowed a lot of Eastern European kids to come to America work for summer and see what America is all about maybe some of the propaganda I've seen on like belus and TV it just has shown a different side of America not Hollywood but hardworking and Earnest down to earth the side of it that I really really liked do you remember how you heard of the program yes it was a big deal in Belarus like

05:32all friends of my friends who I thought are really cool they all either wanted to get into the program or have gone through the program but yeah a lot of kids participated a lot of people went to us so yeah I've seen how big America is compared to Belarus how much opportunity is here the second pivotal meeting at the time for me was meeting my first landlord in America this Japanese guy he rented his house to exchange two three students per room we were all cramped in that place but it was wonderful time 14 16 hours a day but

06:04somehow we also found time to see the US the place where we work and have a good time he was the first guy who said look if you somehow stay in this country you will be very successful you will become a millionaire at the time it all felt like a bit of a BS cuz I was flipping burgers and cleaning toilets and I was making $725 an hour his whole rationale was like as long as you work hard as hard as you do you will be successful in this country he just kept repeating and repeating and repeating and at some

06:35point I started believing it I think that was the second the second kind of big pivot and he was saying this to everybody or just to you in a side conversation to all the exchange students that did work H 14 16 hours a day got it so he saw something in some of the folks there who are like working really hard maybe he was able to relate you grow up on a farm he worked really hard growing up maybe there was something else but yeah there were a few folks whom he kept repeating this to who he helped I remember there were many many times when he had someone got sick

07:11he took us to a pharmacy or he drove us to work but he was helping here and there and yeah that was the only support system we had coming here so that was for a full summer yeah that was the first summer and then the second summer I came with a goal to transition from an exchange student to a student through the summer I made me enough money to pay for a community college it was $3,500 and I stayed I went to school onah in Hawaii okay so this is back in Hawaii I was back in Hawaii I studied for about a year I learned to actually speak English

07:43versus just read and then I started building website I connected with a few of my former classmates from Belarus we built little software products we put them online and people started buying those little things at that point I thought okay we buil five or 10 of them what if we build hundreds of them I pack my things move back to bellus so you go back to belus you have this initial idea that was kind of like a side project but it was working do you remember like how many sales you made or how many products you had like what was the scale of that

08:15quote unquote business that gave you the light bubb of oh this could maybe work it's a very small business the first little Adon we built that was back in Hawaii cost was 10 bucks $9.99 to be per genius marketers we sold d thousands of copies of this thing but the peculiar thing for us at the time was that we didn't have to do anything for this thing to sell and generate Revenue prior to that I built websites it was a service I was paid on an hourly basis therefore in order to earn money I had to put in the time now we built something and it just sold it crazy was

08:52unbelievable yeah today we live in this app economy software economy this is not a novice type of thing but for a kid from bellarus that doesn't really know much about business that was a mindblowing expl we sold thousands of those copies of the software then we built another thing and another thing that was like okay I'm getting a passive income of $5,000 a month maybe $10,000 a month that was more than enough to fly back to belus rante a studio sleep in that studio and wake up make my bed and

09:24then transform it into an office which was frequented by my former thean classmate who we partnered with to build more of those little software pieces little addons we were employing some like 35 people and the business was generating $700,000 per year which again is not much for the us but it was a lot of money back Ben in Belarus why I decide to go back to belus to do this rather than stay in Oahu talent I would be able to hire engineers in us to do this for like $220,000 a year those is too expensive so you rationally thought it

09:59was better to go back to bellarus did you have any like personal reasons that you wanted to go back to your home country at that time primary reason was I didn't see a path towards building a software business I had no idea how the like this whole Adventure ecosystem operates and works I didn't know Venture funds exist so in order to build a software company that sell online which is amazing yeah I thought I have to go back try to hire my friends that's what I did wow what was the best selling or the most used app in that initial software like what was the actual software supposed to do I can

10:35tell you what the first thing did yeah was the first one it was an extension for webcon management system exported data what I mean by webcon management system imagine something that sits behind a website and then updates content y y they just didn't build something that was needed by a lot of other web designers or user we created a little extension little adult it exported data into CSV format the idea was on the surface it was not something incredibly smart kind of like Plumbing with that CMS system then we created a

11:07bunch of like designs for it so that you can install a new design into your website then we created a bunch of little addons that integrate things like Twitter that just came out or Facebook that at the time just came out and yada y yada we didn't really have an overnight success or like brilliant idea little software product that got us rich fast everything was like a little step function little stair so there's not much to Brock about you know it's just big boring business so you're back in bellarus 700k Revenue per year 35 people

11:40life is pretty good oh yeah life was wonderful and what year was this we started this business in 2007 we operated it for 3 and A2 years so that's through the financial crisis anything that happened there we service very low end of the market with very cheap product although we did have Microsoft as a client wow we got lucky with tell us about that somebody within Microsoft bought one of those little extensions wanted a customization they came to us I tried my best to present ourselves something bigger that we really were we were a 15 people two-bedroom apartment

12:14turned into an office that's what it was if they knew that they' never do any business with us yeah we powered part of microsoft.com did they also pay $9.99 a month we build them maybe $10,000 wow so 2010 you have Microsoft as a client 700k 35 people and then what happened whenever vendors of that con management system that would built for changed something without thinking things through our software broke our extensions broke clients thought it's our fault so we were getting PS in the

12:48middle of the night whenever that happened that just started to become at least once in a couple of months we had that search we had to wake up try to fix things at the time there was a Blog by one of the pioneers of software as a service company called 37 signals which built software that was Standalone and had a credit card swipe form and my co-founder was like oh my God it would be so wonderful not to be dependent on anyone just be dependent on ourselves so that whenever our stuff goes down it's on US versus it's because of someone

13:21else that never happened because you know we're hosting AWS now and at the time that was a good enough idea and we wanted to build tool pool where user can swipe their credit card use software online and we get paid that sounded like a dream again we had no idea that software as a service is going to explode we didn't think we're going to be able to raise money at any point in the future we had no idea we're going to this little thing is going to progress into padoc is today but we decided to pursue that path of Independence we got really really lucky so there's this

13:57existing business though so how did did you balance this new initiative with was already generating oh poor we hired a CEO who's a former client from a highly profitable business within a year became a highly unprofitable with a lot of internal turmoil and conflict at some point we were bleeding cast this first business and then we were bleeding cash in what later became pad do it was a really stressful time the original team in this first business which consisted of our friends former classmates like folks that we were in trenches with they

14:30were Fed Up the new management our decision to kind of step aside and start this new thing they put an ultimatum in front of us saying like look if you guys are going to keep the new management you're not going to fix this thing we're out when a company is like 35 employees and your core team like five seven people exits then the company's done we ask like okayy do you know how to fix it they said yes we do we asked whether they want to run it they said yes we do we asked whether they want to buy it they said we have money to buy it and we asked what if you were to make that

15:02money over the course of next however many years we settled on a price of $40,000 for that business wow which is not much but it was bleeding cash and those were our friends and they turned it around and turned this company into successful operation with at this point more than 100 employees so it's still going it's still going yeah it has a different name but it is still going this like founding team who we worked with at the time has done really well for themselves we're still friends yeah the story had a happy ending so you

15:31decide to start P roller effectively sold or hand it off the original business to your other colleague tell us about origin of that idea like what did you see in the market why that specific problem we had a few ideas running actually in parallel me and my co-founder and I got to mention you asked me what were the pivotal Moment In the Journey I think pivotal moment was actually starting to work with my co-founder we are very different people but I got really lucky meeting this guy we met back in University in bellarus

16:03played in the same band he was a drummer I was base over the Journey of going to us and coming down he was brightest of all my friends not just one of those very smart Engineers but also a very empathetic person very down to earth and very leveled very balanced the third pivotal moment was actually meeting him and persuading him to go into business with me he had a great career at a large company I was able to convince him to to go into starting a company with me so he wasn't involved in the first he was oh he was he started the first company oh

16:37okay so he was already involved he was part of the 35 yeah the two of you took the lead of hey we got to try this new thing we were looking at a bunch of different ideas some of the ideas were my ideas some of the ideas were his ideas there were a few things we were trying to like tickle with quot troller which later became Panda do was among all probably the most feasible to execute it just made them all sense I'm on everything we we Tred to pursue we tried to build Airbnb for Eastern Europe Airbnb I want to say it was at the time

17:08was launching here okay it was a really tough business we tried to build a scheduling system for small businesses like brick and mortar businesses it was a good business but Michaela didn't like the code base there and he just trashed it was trying to do a project management system and I trashed that one because at the time there were just too many other options felt it's a red ocean type of market and we shouldn't do that and then there was a summer I had to go to the US he had to stay in bellus and and hold a fortress D got him into sales because he

17:39needed to build sales proposals and he hated how much time that process take originally qu troller was his idea and later I translated into pandadoc we expanded it Beyond sales proposals into all kinds of standard bureaucratic document that we can automate that idea kind of just kept at it what was the existing process that he and most people in this field took take a Boer plate agreement copy paste back and forth forever and then send it out never knowing whether it gets open the recipient really cares and really spends time on that on that document that was

18:11the process that preceded creation of quad roller and some of the pains that we experienced in that sales process we Tred to Sol so it was really built for his own use case and then there must have been a moment where you and he were like we should productize this or sell this to others we were looking for something to productize from the get therefore we've been sort of looking inwards at problems that existed in our business at the time this was one of the problems and we were building it as a product and The Way We Were building it is it's the wrong way to do things we

18:43know everything we're going to build it they're going to come and they'll pay us a lot of money that was wrong we we spend countless hours arguing about the colors of the buttons or the where this tab goes or whatever some nonsense I remember spending all of our money draining all of our savings to launch this thing then see how people that come to the appication end up paying that was Soul wrecking but it helped us to learn that we know nothing about like the the market the problem the pain points have to check our egos go talk to the market

19:20go talk to customers tell them their ideas and their pains and then their thoughts I think that first failure was in this particular product was very impactful very helpful towards building the the bigger Vision way it was set up was similar to your prior version where people could just come in sign up download get access to it and just start using with the credit cards it was first just a free tool and we thought okay the moment we're going to attach billing to it people are going to pay us that was not the case we had okay some like 3,000 premium users only six ended up paying

19:51some like 9 or 18 bucks a month which considering the money we spent to build this thing was was nothing how are they even finding out about this though like the 3000 do you remember how they even came myod of different techniques that were the result of the natural anxiety I had at the time Su I was in a constant fear and I was trying to run different experiments and get the word out there was this uh targeted to the Bellis Community or was it Global from day one it was Global from the day one in fact we were building a tool for sales proposals it

20:25wasn't applicable to belus Market in any way we didn't build it in native language it was English from the day w got it and so no real funding yet right you were self-funding it at that point I didn't know that funding that it exists I only later learned that it exists weend kind of a Meetup that we randomly read about online and we decided to show up oh where was it it was in bellarus it was in men I remember that a bunch of people told us that what we're working on is DS um but there were people called investors at this thing and I was like oh wow that's how things could work but

21:05it's been at least a year between that and our first financing when was that our first financing happened 11 and 1/2 years ago do you remember the moment you decided that you should raise I presume there was some inklings of the idea from meetups like that but then from a business standpoint you probably wanted to get to a certain point before tapping that opportunity we needed the money we on a Ramen diet for sure I've been trying to fundraise for at least a year we're talking like hundreds of conversations hundreds of leads hundreds of investors dozens of trips to here or

21:40there because B doesn't have any Venture scene it all kind of came together I had a baby on the way I really wanted my daughter to have a passport of a free country so I really wanted to make a move here I really wanted to be able to start learning the Bay Area and growing the business here the business was on a CP to hit break even so all of this happened sort of at the same time but first I made a move I had to sell everything in valo so that the baby can be born here it was very stressful like short period of time but there was a happy ending eight investors chipped in

22:16a little bit which amounted to $650,000 which at the time I thought they're crazy you can't even touch it some piece of software a bunch of kids in a third world country put together it's somewhere out there in the cloud it can break it can be hacked so many things can go wrong why would they do this I didn't misrepresent anything but you tell some facts but then in the back of your mind my mind was still not really exposed to everything that's possible the world of software in Silicon Valley I was still a belarusan kid that didn't know much so 650k do you

22:53remember the pre-money post money I do remember the post money what was it valuation cap it was 3 and half million do you remember how big the company was at that time both from a p&l financial standpoint as well as Personnel wise we were making 20 grand a month we were growing fast and we were a team of I want to say 10 people at the time maybe seven people at the time but definitely less than 20 got it all in bellus still somewhere outside of barus those were remote contractor types that were with the company so it seems like you already

23:23knew that you wanted to build a global company building business in bellus is is I don't think it's feasible in the software or Hightech sphere B is kind of like Estonia or Israel internal Market is Tiny there's so much bureaucracy and so much corruption there was a lot of talent but there's not much Market therefore if you want to build a software business you have to do something globally so you had that and then from a employee standpoint there was some concentration in belus but you already employing people from outside

23:55how did you manage that because that's a very intentional decision to have a remote Workforce even at that stage of a company well we didn't have money to rent an office didn't have a know how to run a payroll again didn't have money and brand to recruit very tough Talent so we had to be hacky and figure out how do we find good people that for whatever reason ended up being in place where can't get a full-time job at a great software company employing full-time and we found them wow so you moved to San Francisco where's your co-founder at

24:31this time belus so he stayed yeah is he still there he moved 2 years after me okay so he followed suit so you both come to San Francisco and then share with us the journey from there so what is the quote roller journey and then when does the panda do name come into play started our first office was townhouse I rent it in s Francisco okay pretty much the same as like the way we started our affer business in bellaro during the night that's where we flap during the day that was where we worked our first sales guy was trying to pursue customers that that called in that it's

25:07not the baby crying on the background it's something oh cuz you had a baby yeah it that was the case the baby was crying in the background and then we were sitting in the living room trying to be the m h or write some code then that progressed into a small office in the middle of nowhere then it progressed into a small office San Francisco one of those live work Apartments townhouse then that progressed to a tiny office on cnie Street then AG Gro so you're starting to have some center of gravity in San Francisco was that intentional you were hiring here and you have a

25:42separate team in bellus and you wanted this to be the center I read a lot of dech crunch and um they said that's where software companies in retrospective I think that was another good decision because it put me into environment where I was able to learn so much so quickly from so many people that had experience that I didn't have or had a Kno how that never exposed to it was so much easier to surround myself with people smarter than I am here in the Bay Area compared to Belarus I stayed here however we kept hiring people all around the United States we had American living

26:22in Europe who worked for us we try to scramble and figure out all kinds of like hacky Solutions towards Talent as you're scaling you have a global team and you've had some very interesting and tricky situations to navigate Wars are involved tell us about some of those big struggles or challenges that you faced over the years I think the first struggle is what is I'm supposed to do in my role it was rough trying to hire people here in America it was rough trying to lead people I made so many

26:53mistakes if I was to go back I would do a lot of things differently what is one thing you would do differently the biggest mistake you probably made I micromanaged so many times yeah you know what I'd leave you with this too um I think lack of patience is a lot of mistakes a lot of challenges came from maybe at times some Bor headedness I know like how to do better Clos mindness there's a lot I got to learn and I have to learn while doing while keeping an open mind that helped quite a bit there are some challenges outside of our domain our control there was covid which

27:29happened to to everyone but then during Co there was a revolution in Belarus we sided with the Democratic side of it a video that I posted in response to violence at the government induced on people got way more Abus than I expected we had a raid in our office a way to retaliate the government took four people hostage the last one was released after 11 months in prison that was a really really hard time we had to exit bellus we survived and the team there has shown so much resilience how many people in Bel at the time at the time we had 220 people in B wow what are you

28:10actually doing to get them out we had to employ lobbyist here in the US that was hard that was a process it was really tough so they leave where did they go Ukraine we scale operations out of Ukraine and then the war in Ukraine breaks out and for another year and a half we become a migration company which enables people to migrate to Poland Portugal then in belus and Ukraine completely changed our pnl we had to do a lot of catchup it's been a tough year and a half but we migrated to over 300 people out of sight of dictators out of

28:43sight of the war how do you balance like perspectives on life you're running a software company it's growing well things are going well and you have all these people hundreds of employees contributing to that and you're like very grateful for their contributions and then you're also faced with this situation where you're the leader of hundreds of people who are going through a war actually in this case two separate types of Wars right how do you navigate that it feels like a very tricky in the

29:07summer of 2020 at the time I was here in the US and I was for the first time visiting Yellowstone and as I walk into a lake into the lake with kids I'm thinking oh my God life is so wonderful I am so lucky everything is working out I'm so happy in my life and that's changed dramatically with Revolution B about 2 weeks after that I started doing therapy but it was a pretty rough time yes one last question so you recently crossed 100 million of AR how did that feel when you noticed that actually happening it did feel good it was not

29:41something that kind of blew my mind pan back is a very repeatable and predictable business so we knew when we're going to hit that Milestone there's a brand value of this like 100 million AR there's a brand value of the Unicorn company but it's a you know it's a short dopamin head yeah you feel good but for a much longer period of time is having a positive impact on people that surround me I be that customers or customers try your product and you use it and they love it and they say thank you that has a more impact Milestones Milestones are Milestones they feel good

30:15what's your next big milestone that you're looking forward to I millions of people to use our product and I love it that's what I really really want we've been at it for like 14 years at this point with this business and we've built so much I want more people to use it to like it there is a recent research we've done on like how many trees we save because but door paper list with pad do and they get to sign electronically or notorized documents electronically we discover there like dozens of thousands of Acres of forest that are saved uh thanks to that that's cool you know

30:45imagine 10 Xing that that's wonderful but what it feels even better is millions of people using the thing and benefiting from the thing and enjoying the product that's great thank you Makita really appreciate it