SaaS Interviews with CEOs, Startups, Founders
He Used Community to Hit $7m Revenue, VC's chased him
28 Apr 2022
Chapter 1: What insights can be gained from the founders' in-person event?
Founders, what's going on? You guys know I love in-person events and they are back. The recording you're about to hear is from our most recent event where we had hundreds of founders come together, share intimate details, templates, KPIs, OKRs about their business, and it was something special. Something special. We'd love to meet you in person.
If you want to see the next live events we have coming up via our schedule, the link will be down below in the description. If you're listening on iTunes, check this out on YouTube. You'll see the links in the description or you can just Google founder path or Latka next event. We'd love to see you in person. In the meantime, though, enjoy this recording. It's a good one.
You are listening to Conversations with Nathan Latka, where I sit down and interview the top SaaS founders, like Eric Wan from Zoom. If you'd like to subscribe, go to getlatka.com.
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Our business is about helping people build great companies. And the reality is, is every single one of you out here has an operating system. The question is, what kind of operating system do you have? There are about five operating system types that are out there if you think about it. First of all, when you start a company, you've got this thing called an accidental operating system, right?
So you've got papers and Excel and PowerPoints, and you're just trying to get your act together. And you're working like dogs, just trying to make things happen. And so a bunch of people are doing a bunch of different things, and you're probably not even using the same tools to figure it all out. And then all of a sudden, you're like, wait a second.
We can't have people's names in one document here and another document, another document here. Let's bring it all together. And that's called an intentional operating system. And then you're like, you know what? People have built businesses before. Someone's probably figured this out. Why are we sitting here creating all these tools when I'm sure someone's already done this?
There's books on how to do this. There's tools out there. Has someone figured this out? And if you go out and you look, there are a bunch of books out there. There's E-Myth, right? There's Traction. There's The Great Game of Business. There's The Advantage by Patrick Lencioni. I'm trying to think of some other names that are out there. There is Rockefeller Habits, Scaling Up.
There are a bunch of books that are out there, right? And they kind of lay out how people have been doing this for decades and decades. So that's called a designed operating system. And then after that, you come to a holistic operating system, because some of the systems don't have everything in it.
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Chapter 2: How does the guest define different types of operating systems in business?
All right.
So what I'm going to do here is share with you this three playbooks, right? So number one, we're going to talk about community, how we leverage community to get going, how we activate people when they get into our system, and then the top metrics that Insight Partners looked at and fell in love with.
And I'm going to share with you that they didn't actually understand our business as well as they loved our numbers, which is kind of a funny story. So how we use community. So we don't sell, we serve. And this is an important thing. I want to talk about this a bunch of different times because there's so much I'd love to share with you all, right?
But one of them is I believe we're moving into a new age of work, all right? And I believe that every single one of you, to succeed in this new age of work, you have to have high trust relationships with all of your stakeholders, all right? So think about that. You have to have high trust relationships with all of your stakeholders.
And obviously your employees and your customers and your vendors are all stakeholders. And ultimately society is a stakeholder because we're moving into this age where everybody pretty much knows what's going on. You can't hide anymore, all right? And so we don't sell, we serve. There are a bunch of books in the market about operating systems, and so people are aware of operating systems.
The market is aware of what it is we're selling, big picture-wise. And there are coaches. There are thousands of coaches. And they're all salespeople for us. And in particular, we've been close to the EOS community, the book Traction, which I'll show in a second. And there are millions of copies of Traction out there, which is super cool. And like I said, there are thousands of coaches.
And there literally were, up until recently, about 1,000 coaches just selling EOS. And so we're very close to those folks.
And Mark, so when you say selling EOS, what does that mean? Is EOS a website? Is it a template? Is it a playbook?
Yeah, so EOS is a book, and it describes the six key components of a business, and it teaches you how to master those six key components. So getting everybody on the same page in terms of the vision, getting right people, right seats, getting really good with data, getting really good at problem solving, getting really good at building out your processes.
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Chapter 3: What role does community play in driving business growth?
So going up, went the wrong direction. So there are somewhere, just in the United States alone, and it depends on whose data you look at. So if the Zoom info guys were here, right? But it's at least, our target target market is companies with 10 to 250 employees. And somewhere between one and three million small, mid-sized businesses fall in that category in the United States.
It depends on whose number you're looking at. And my research suggests that on average it's 40 people. And I think that the U.S. represents approximately a third of the world that's going to be interested in our product. And so you take that number times three. So let's just go in the middle and let's say 2 million times 40 is 80 million times three, 240 million people times 14.
You guys can get the size of the market from that math probably? So it's a big market. We've been growing at 5% to 8% month over month revenue. To be direct with you on the data you saw earlier, we put our first price increase in last month. February. So we never increased prices. So we were $12 up until last month. So that's part of the reason our numbers are growing.
We have grown as much as they have in the last couple of weeks. But we've been doing 5% to 8% month-over-month revenue growth for several years now. CAC payback period, we got coaches. We don't even pay them a referral fee. You can get the sense for that payback period. And then we have our marketing. But on average, our payback period is about three months.
The way to tap that coaching team, it sounds like it was the licensing fee you pay, right? Does that come with the licensing fee?
I don't have that included in the CAC.
Interesting. Good point. But what makes the coaches sell you?
Because we make their clients' lives so much easier.
So they can make more on their services if they get their clients on EOS 90 software.
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