Aug 14, 2023 · 22m · top-founders
ECommerce SaaS Hits $1.5m after Co-Founder Replaced Herself
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gold bands on the timeline = statements, start to end. Hover to read, click to jump. CC turns on captions
Host Nathan Latka interviews Elliot DGML, co-CEO of Material Retail, exploring how the former boutique operator transitioned to tech leadership, pivoted the platform away from venture burn to profitability, and built a multi-stream SaaS, POS, and marketplace ecosystem reaching $1.5 million in annual revenue.
How this conversation actually went
Every chapter scored 0–10 on four independent dynamics. Hover any point for the reasoning behind the score. Nathan holds 37.6% of the talking time here. How this is scored →
Nathan as informed peer 5.9 Guest teaching 2.6 Guest disagreement 1.3 Nathan pushing back 3.4
speaking balance: gold is Nathan, purple is the guest (3 minute bins)
Sharpest disagreement ▶ 19:47 Defending conservative growth vs burning cash
Elliot firmly resists Nathan's suggestion that they should be growing much faster, explaining the need to avoid burning cash with a lean team.
Hardest push from Nathan ▶ 19:44 Challenging revenue projections and growth paceNathan adds up the three revenue lines to show they are already near the target run-rate, challenging why Elliot's target isn't higher.
Biggest teaching moment ▶ 15:37 Correcting basis point calculation on POS GMVElliot stops Nathan from miscalculating processing take revenue as 25% ($18M) rather than 0.25% ($180k) on $72M GMV.
Nathan holds their own ▶ 19:19 Live multi-stream revenue synthesisNathan demonstrates mastery of SaaS and marketplace economics by quickly synthesizing all three monetization models live to determine the company's baseline run-rate.
the scores for every segment, with the reasoning behind each
| Chapter | Topic | Nathan as informed peer | Guest teaching | Guest disagreement | Nathan pushing back | Why |
|---|---|---|---|---|---|---|
| Overview of Material Retail's Business Model and Performance | 5 | 2 | 1 | 2 | Nathan introduces the company background and probes Elliot about how his retail store Dor La Door started using Shopteeks. Elliot cooperatively clarifies the business setup, spelling, and background history. | |
| Transitioning from Store Owner to Tech Startup Co-CEO | 4 | 2 | 0 | 2 | Nathan drills into the transition from customer to paid consultant to co-CEO during COVID. Elliot provides straightforward context about his path into executive leadership. | |
| Rebranding, Venture Funding History, and Reaching Profitability | 6 | 3 | 1 | 3 | Nathan explores the rebrand, venture funding history ($19M raised), and pivot to profitability. Elliot explains the trade-offs of shifting from high-growth venture-backed startup to sustainable profitability. | |
| Platform Pricing Structure, Hardware Logistics, and Take Rates | 6 | 2 | 1 | 4 | Nathan questions why they don't force marketplace sellers to buy the software subscription. Elliot explains their tiered pricing logic and POS hardware distribution model. | |
| GMV Volumes, Processing Cut Realities, and Marketplace Margins | 8 | 4 | 2 | 5 | Nathan performs rapid mental math on marketplace take rates, payment processing cuts, and GMV, briefly making an arithmetic error (25% vs 0.25%) which Elliot quickly corrects before Nathan explains why he dislikes low-margin hardware businesses. | |
| Agency Services Arm and Balancing Growth with Margins | 5 | 2 | 1 | 2 | Elliot explains the agency/services revenue stream and why material retail targets boutique owners differently than Shopify, with Nathan probing team structure in the US and Philippines. | |
| Financial Growth Targets, Re-Platforming, and Sustainable Scaling | 7 | 3 | 3 | 6 | Nathan aggregates all revenue streams from the interview to challenge Elliot's conservative $1.5M revenue target, asking why he isn't more aggressive; Elliot defends his methodical, risk-managed approach. |
Statements from this episode (16)
Fashion retail styles should be treated purely as spreadsheet sales data
“There's definitely a lot of ways to look at fashion retail. So if it's by like, what's fashionable, the other is looking at numbers and see what's selling. And at the end of the day, a style is just a number and a spreadsheet and see what's selling.”
Shoptiques board installed Elliot DGML and Mark as co-CEOs in 2020
“So it was like, 20, 20, early 20, 20, right when COVID was happening. Kind of happened really, really quickly. Me and my co-CEO Mark were kind of put in place by the old CEO and founder and the board.”
Shoptiques rebranded to Material Retail in 2022 alongside new software suite
“So, Shoptix we rebranded to Material Retail in 2022. Oh, same company. So, yeah, Shoptix is the marketplace that Material Retail owns. Shoptix.com was the only business that we had for about eight, nine years, and then we launched a software suite, which is Ma…”
Software now accounts for roughly 70% of Material Retail's revenue
“So the software is like, 70% of the revenue.”
Shopteeks marketplace website receives about 200,000 unique hits per month
“So it gets like 200,000 unique hits a month.”
DGML: Shopteeks marketplace has approximately 500 active boutique sellers
“So we have like 500 boutiques selling on the marketplace.”
Material Retail previously raised $19 million in venture funding as Shopteeks
“It was like nineteen million in total.”
Material Retail shifted its strategy and achieved profitability in 2022
“We kind of shifted to profitability and we got there, which was great.”
Material Retail takes a 0.25% to 0.50% cut of credit card processing
“So it depends on the boutique, but it's a minimal amount. Let's say a quarter of a percent to a half a percent. But the beauty is we also have a deal with our credit card partner that they beat the merchant's current rates.”
Material Retail has 200 software subscribers and 300 marketplace boutiques
“So we have like, 200 boutiques who are using the, like, full software suite, and then like another, call it, 300 on top of that, who are selling on the marketplace.”
Material Retail charges 30% marketplace fee and 25% for POS users
“So we charge usually a 30% commission on marketplace sales. We do pay for shipping and things like that. So we ended up making like called 10% to the bottom line. But for boutique, on the mark, on the POS, we'll charge them 25%, and we, you know, probably brea…”
Material Retail: Shoptiques marketplace did $2.5M in GMV last year
“So it was called two and a half million.”
Material Retail: Total platform GMV reaches approximately $75M
“In-store sale is much higher. So including like the whole ecosystem, it's like seventy-five million.”
Shopify is one-size-fits-all, whereas Material Retail prioritizes brick-and-mortar
“Shopify is just one size fits all, right? It's e-commerce first, brick and mortar second. It's like, kind of, jump in and figure it out for yourself. Whereas material retail is a very specific set of tools for a very specific customer. So brick and mortar firs…”