From €1M raised to a Cease and Desist letter from Facebook and 5 Layoffs: the crazy last year at PixelMe.
By: Tom Benattar
Tags: Boostrap, Transparency, Startup, Facebook, Raising Capital

From €1M raised to a Cease and Desist letter from Facebook and 5 Layoffs: the crazy last year at PixelMe. Tom Benattar Follow Jan 7 · 9 min read

2018–2019, was fun 😄

Our last transparency article was in August 2019 😱 it seems it’s always easier to be transparent when everything is going great…

As a quick reminder, in October 2018 we decided to raise €1M after 1 year bootstrapping. At the time our MRR was at $ 10K with a €4M+ pre-money valuation! So our investors got 22% of the company and each of us got 26%.

The goal of this fundraising was to build a simple and easy to use attribution platform for SMBs! At the beginning, we thought it would be easy to build on top of our URL shortener embedding retargeting pixels an attribution platform! Just because the common link was the pixel (cookie)! That was our first mistake!

After raising our seed round we hired 5 full-time employees full remote, we grew from 200 to 400 paying customers. We organized a retreat for 1 month in Corsica, to motivate the troops and we worked hard on our Customer Attribution platform.

October 2019 — We stopped working on Attribution and made our first Layoffs

What is an attribution platform?

Marketing attribution is a method for letting a website owner identify and assign credit to each marketing touchpoint that leads to a conversion to their service.

Our goal was to help SMBs with a super simple platform that would let them understand what are their best sources of acquisition? What is their typical customer touchpoint before a conversion? Where did they acquire their best leads?

Our first Layoffs, from 8 to 5 people

In October 2019, one year after raising our seed round, We were in Paris with Max, working at WeWork. Then we came to realized 2 things:

Attribution is more challenging than expected! When we started working on the attribution product we thought attribution would be the logical next step to our URL shortener. A platform where marketers could manage all their links and track all their conversions at the same place from any sources like advertising or social media.

We definitely forgot that we were not targeting the same customers. PixelMe customers are mostly Amazon sellers, Youtubers, or Kickstarters who do not own a website.

But the Attribution platform was tracking the traffic directly from a website. We were installing our tracker on the website and were started to track a lot of organic traffic, not only the one coming from PixelMe links. We had to educate people about adding UTMs parameters into any links linking to their website.

In terms of product and engineering, we found it very challenging to combine a link builder and web analytics platform. We believe it was a new mistake. We would have gained an invaluable time building them separately. We had spent €700K in one year! 😳 We still had €700K in the bank and our MRR was $16K. That meant, the company would have run out of money in a year if we had not done something. Our burn rate was way too high for the product-market fit research phase we were in and the URL shortener MRR was not enough to cover our expenses.

After a really long call with Max & Jérèm, we decided to let go of a part of the team 😕 (our content marketer, our customer support manager, and one of our engineers). Probably one of the most difficult days at PixelMe, and probably a very brutal decision for our employees. But thinking about it now, I am convinced that it was the best decision to save the company.

From 8 to 5 people and learning from our previous mistakes, we tried to elaborate a plan to built a new attribution product MVP (minimum viable product) as soon as possible.

Why did we stop working on the Attribution platform?

At the end of November 2019, we hosted a board meeting in Montpellier (our official office) with Max, Jerem, Kamel (our partner at Serena), and I. Previous to this meeting, for 2 months, we worked hard to create our MVP and collected very valuable feedbacks. After another looooonnnnnnng chat with Max and Jerem, we decided to explain to the board that the best decision for the company was to stop working on the Attribution product, mainly for the following 3 reasons:

Cross-device tracking, Unfortunately, being able to track 100% of visitors on a website is more challenging than it looks. Cross-device, cross-platform, browser anonymization, offline tracking, etc… are the four biggest challenges when it comes to properly track people’s navigation on a website or web application. Post view data. Another parameter to take into consideration, paid platforms are making the game of attribution less easy for competitors. The mobile attribution market is a closed market, and it’s impossible for newcomers to enter it. It means solutions like Appsflyer, Branch, Adjust, etc have access to post-click and post-view attribution thanks to their partnership with Facebook and Google. Unfortunately, Facebook doesn’t accept any new partner anymore. Attribution is nice to have for most marketers. Talking to hundreds of Marketers in the SMBs and Enterprise space. We even spoke with people working for the Facebook Attribution team. We heard many many interesting feedbacks. Most of the Marketers we talked to, know today that they have a 20% overlap of data between Google and Facebook.

Does it mean they need a tool every month to make sure they can optimize this 20 %?

Of course not. They just live with it.

Especially if because of these technicals issues you’re only able to properly track 50% of this 20 %!

The board was tense but went really well and lucky for us, Kamel totally understood our decision to stop working on attribution!

During the board, Kamel said exactly this: “Ok guys, so what are we going to do next then? Pizza? “ 😂

Ok maybe before opening a Pizza place, we would like to explore a few other trends first!

Adinbox! shut down by Facebook

Adinbox, our next product?

Aside from PixelMe and back in August 2019, we launched a tool called Adinbox. It was a tool to alert you when one of your competitors launched an ad on Facebook. We built Adinbox as a side project marketing. Its goal was to generate leads for our attribution product! And it was an amazing product-market fit, we got +5,000 signups in one week! It all went super fast and after just a few days, It completely crashed (scrapper, server, and app).

At this time the engineering team was 100% focused on Attribution, so we decided to put Adinbox on pause.

However, after the board meeting in November 2019, we talked about Adinbox and were convinced it had a strong product-market fit. We thought it could be our next focus in addition to the PixelMe URL shortener (still live and still growing). And Kamel came across a company named Brandtotal, which was doing something similar to Adinbox and was really famous in the VC world.

Altogether we decided to build Adinbox as a proper SaaS product and add other networks. We would launch the product with paid plans to test its product Market Fit.

January 2020 — Cease and Desist Abuse of Facebook — AdInboxMe & PixelMe Inc.

So we took the time to clean up PixelMe, deleted the attribution part, handled our beta testers, and build Adinbox from scratch!

In January, Adinbox went back to life again! We sent an email to our 5,000 customers and we’re very excited to welcome them back to Adinbox. We had 700 trial starts in less than 24h 🚀

But on January 11th at 12:37 AM in France (I’m was on my way to sleep..) we received an email from Facebook’s lawyers.

In short, the letter said we were violating Facebook’s terms because we obtained, stored advertisements and related information from Facebook without authorization. It was true, Adinbox was built on top of the Facebook Ad Library that we were scrapping every day and were storing all the data in a database in order to show them in our new fresh Saas Dashboard.

‘Facebook has taken technical steps to deactivate your Facebook and Instagram accounts and hereby revokes your limited license to access or use the Facebook website and services. This means that you, your agents, your employees and/or anyone acting on your behalf (collectively “You” or “Your”) are no longer authorized to access the Facebook website, use the Facebook Platform, advertise on Facebook, or use any of the services offered by Facebook for any reason whatsoever. Facebook will treat further activity by You on Facebook’s website or Platform as unauthorized access to their protected computer networks.’

During that night, Facebook blocked all our personals accounts, our ad manager, our PixelMe page and blocked our domain PixelMe.me on Facebook 😱

They gave us 48 hours to confirm that we:

‘Stopped and will not in the future access Facebook’s website, services, Platform, or network for any reason whatsoever;

Will account for and disgorge any and all revenue earned from Your unauthorized activities on Facebook;

Have stopped and will not in the future offer any services connected to Facebook through any means.’

We immediately shut down Adinbox! And sent an email to our lawyers BOLD! Éléonore and Arthur from BOLD were really helpful during this period and they helped us negotiate with Facebook’s lawyers.

Our goal was to obtain the reactivation of our personal accounts and unblock the PixelMe page and Ad Manager.

It took us 8 months to negotiate with Facebook’s lawyers! And in August 2020 we signed an agreement letter. We agreed, represented, and warranted that PixelMe:

Did not profit from AdInboxMe activities;

Have deleted and destroyed any data obtained from Facebook or Instagram through AdInboxMe;

Have stopped and will not again provide, market, or offer any product or service, directly or indirectly through agents or affiliates that /Accesses Facebook and/or collect users’ content or information using automated /means without Facebook’s prior permission; etc…

Finally, all our accounts, page, etc.. were reactivated! 😍

Thanks again to the BOLD team, you did an amazing job! A few weeks ago, we knew we took the best decision ever to shut down Adinbox 😅

Facebook announcement ‘Facebook today says it has filed a lawsuit in the U.S. against two companies that had engaged in an international “data scraping” operation. The businesses named in the lawsuit are Israeli-based BrandTotal Ltd. and Unimania Inc., a business incorporated in Delaware.’ Learn more on Techcrunch.

Nobody wants a lawsuit with Facebook…right? 😉

Layoffs again, from 5 to 3

So beginning of January 2020, our attribution product was stopped, Adinbox was blocked by Facebook, our URL shortener was still live but we knew it will never become a unicorn and the future of PixelMe was vague.

We took the difficult decision to let go of our two latest employees. We got lucky again, they were both Entrepreneurs and totally understood the reason why we had to let them go. We are still in contact and very glad to be friends with them.

End of January, 1 URL shortener, 3 co-founders and €550K left in the bank. Want to know the rest of the story? Stay tuned! It’s coming soon! 🔥