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Mar 25, 2022 · 19m · top-founders

Productivity Tool Profits $15k/mo, Bootstrapped team of 3

Jeff Solomon · 10m spoken Nathan Latka · 6m spoken
0:00 / 0:00

gold bands on the timeline = statements, start to end. Hover to read, click to jump. CC turns on captions

In this interview with Nathan Latka, six-time founder Jeff Solomon compares the grueling fourteen-year journey of selling venture-backed Velocify for $128 million to running Markup Hero, a lean, bootstrapped three-person SaaS generating $20,000 MRR and $15,000 in monthly net profit.

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 38.8% of the talking time here. How this is scored →

Nathan as informed peer 5.6 Guest teaching 3.2 Guest disagreement 1.2 Nathan pushing back 2.8
05100:0010:001:42–3:43 · Nathan as informed peer 4/10 Markup Hero Overview and Embedded SaaS Strategy Latka inquires about Markup Hero's value proposition and entry into a crowded space. Solomon explains their embedded SaaS API distribution angle and low-cost self-serve model.3:46–7:57 · Nathan as informed peer 8/10 Deconstructing Venture Returns and the 2008 Crisis Latka demonstrates deep financial knowledge by calculating the exact waterfall liquidation preferences and net founder take-home from Solomon's previous $128M exit, which Solomon verifies before recounting surviving the 2008 crash.7:59–14:08 · Nathan as informed peer 6/10 Markup Hero Team Dynamics and Valuation Tool Break Latka explores Solomon's lean content production and SEO playbook, comparing it to his own content drafting process while Solomon explains his mandatory reciprocal backlink rules.14:11–17:20 · Nathan as informed peer 5/10 Conversion Drivers, AppSumo Deals, and Product Roadmap Latka assumes the company does $40k MRR based on user count, prompting Solomon to correct the figure down to $20k due to AppSumo lifetime deals. Latka probes the viability of lifetime discount platforms.17:20–18:09 · Nathan as informed peer 5/10 Financial Bottom Line, Profit Margins, and Tax Considerations Latka presses Solomon on net monthly margins, establishing that with minimal server costs of $3k, the team takes home roughly $15k per month in distributed profits.1:42–3:43 · Guest teaching 3/10 Markup Hero Overview and Embedded SaaS Strategy Latka inquires about Markup Hero's value proposition and entry into a crowded space. Solomon explains their embedded SaaS API distribution angle and low-cost self-serve model.3:46–7:57 · Guest teaching 3/10 Deconstructing Venture Returns and the 2008 Crisis Latka demonstrates deep financial knowledge by calculating the exact waterfall liquidation preferences and net founder take-home from Solomon's previous $128M exit, which Solomon verifies before recounting surviving the 2008 crash.7:59–14:08 · Guest teaching 4/10 Markup Hero Team Dynamics and Valuation Tool Break Latka explores Solomon's lean content production and SEO playbook, comparing it to his own content drafting process while Solomon explains his mandatory reciprocal backlink rules.14:11–17:20 · Guest teaching 5/10 Conversion Drivers, AppSumo Deals, and Product Roadmap Latka assumes the company does $40k MRR based on user count, prompting Solomon to correct the figure down to $20k due to AppSumo lifetime deals. Latka probes the viability of lifetime discount platforms.17:20–18:09 · Guest teaching 1/10 Financial Bottom Line, Profit Margins, and Tax Considerations Latka presses Solomon on net monthly margins, establishing that with minimal server costs of $3k, the team takes home roughly $15k per month in distributed profits.1:42–3:43 · Guest disagreement 1/10 Markup Hero Overview and Embedded SaaS Strategy Latka inquires about Markup Hero's value proposition and entry into a crowded space. Solomon explains their embedded SaaS API distribution angle and low-cost self-serve model.3:46–7:57 · Guest disagreement 1/10 Deconstructing Venture Returns and the 2008 Crisis Latka demonstrates deep financial knowledge by calculating the exact waterfall liquidation preferences and net founder take-home from Solomon's previous $128M exit, which Solomon verifies before recounting surviving the 2008 crash.7:59–14:08 · Guest disagreement 1/10 Markup Hero Team Dynamics and Valuation Tool Break Latka explores Solomon's lean content production and SEO playbook, comparing it to his own content drafting process while Solomon explains his mandatory reciprocal backlink rules.14:11–17:20 · Guest disagreement 2/10 Conversion Drivers, AppSumo Deals, and Product Roadmap Latka assumes the company does $40k MRR based on user count, prompting Solomon to correct the figure down to $20k due to AppSumo lifetime deals. Latka probes the viability of lifetime discount platforms.17:20–18:09 · Guest disagreement 1/10 Financial Bottom Line, Profit Margins, and Tax Considerations Latka presses Solomon on net monthly margins, establishing that with minimal server costs of $3k, the team takes home roughly $15k per month in distributed profits.1:42–3:43 · Nathan pushing back 1/10 Markup Hero Overview and Embedded SaaS Strategy Latka inquires about Markup Hero's value proposition and entry into a crowded space. Solomon explains their embedded SaaS API distribution angle and low-cost self-serve model.3:46–7:57 · Nathan pushing back 3/10 Deconstructing Venture Returns and the 2008 Crisis Latka demonstrates deep financial knowledge by calculating the exact waterfall liquidation preferences and net founder take-home from Solomon's previous $128M exit, which Solomon verifies before recounting surviving the 2008 crash.7:59–14:08 · Nathan pushing back 2/10 Markup Hero Team Dynamics and Valuation Tool Break Latka explores Solomon's lean content production and SEO playbook, comparing it to his own content drafting process while Solomon explains his mandatory reciprocal backlink rules.14:11–17:20 · Nathan pushing back 4/10 Conversion Drivers, AppSumo Deals, and Product Roadmap Latka assumes the company does $40k MRR based on user count, prompting Solomon to correct the figure down to $20k due to AppSumo lifetime deals. Latka probes the viability of lifetime discount platforms.17:20–18:09 · Nathan pushing back 4/10 Financial Bottom Line, Profit Margins, and Tax Considerations Latka presses Solomon on net monthly margins, establishing that with minimal server costs of $3k, the team takes home roughly $15k per month in distributed profits.

speaking balance: gold is Nathan, purple is the guest (3 minute bins)

0:00 · Nathan 39% · guest 61%0:00 · Nathan 39% · guest 61%3:00 · Nathan 37.7% · guest 62.3%3:00 · Nathan 37.7% · guest 62.3%6:00 · Nathan 33% · guest 67%6:00 · Nathan 33% · guest 67%9:00 · Nathan 46.5% · guest 53.5%9:00 · Nathan 46.5% · guest 53.5%12:00 · Nathan 40.9% · guest 59.1%12:00 · Nathan 40.9% · guest 59.1%15:00 · Nathan 30% · guest 70%15:00 · Nathan 30% · guest 70%18:00 · Nathan 48.5% · guest 51.5%18:00 · Nathan 48.5% · guest 51.5%
Sharpest disagreement ▶ 15:15 Solomon clarifies actual monthly revenue

Solomon politely pushes back on Latka's $40k MRR assumption, clarifying that because of lifetime deals, recurring monthly revenue is closer to $20k.

 Hardest push from Nathan ▶ 15:31 Latka challenges AppSumo strategy

Latka pushes back on using AppSumo for software businesses, arguing that lifetime discount structures are detrimental to building long-term recurring SaaS value.

 Biggest teaching moment ▶ 15:15 AppSumo deal mix reality check

Solomon educates Latka on how lifetime customer cohorts skew top-line subscriber counts away from direct monthly recurring revenue calculations.

 Nathan holds their own ▶ 5:14 Latka's waterfall cap table breakdown

Latka demonstrates sophisticated finance expertise by modeling out the liquidation preferences, ESOP pool, and co-founder payout structure from a $120M exit.
the scores for every segment, with the reasoning behind each
ChapterTopicNathan as informed peerGuest teachingGuest disagreementNathan pushing backWhy
Markup Hero Overview and Embedded SaaS Strategy 4311 Latka inquires about Markup Hero's value proposition and entry into a crowded space. Solomon explains their embedded SaaS API distribution angle and low-cost self-serve model.
Deconstructing Venture Returns and the 2008 Crisis 8313 Latka demonstrates deep financial knowledge by calculating the exact waterfall liquidation preferences and net founder take-home from Solomon's previous $128M exit, which Solomon verifies before recounting surviving the 2008 crash.
Markup Hero Team Dynamics and Valuation Tool Break 6412 Latka explores Solomon's lean content production and SEO playbook, comparing it to his own content drafting process while Solomon explains his mandatory reciprocal backlink rules.
Conversion Drivers, AppSumo Deals, and Product Roadmap 5524 Latka assumes the company does $40k MRR based on user count, prompting Solomon to correct the figure down to $20k due to AppSumo lifetime deals. Latka probes the viability of lifetime discount platforms.
Financial Bottom Line, Profit Margins, and Tax Considerations 5114 Latka presses Solomon on net monthly margins, establishing that with minimal server costs of $3k, the team takes home roughly $15k per month in distributed profits.

Statements from this episode (14)

Assertion Supported
Latka: Velocify sold in 2017 for $128M
“Velocify in 2017 for one hundred twenty-eight million is obviously probably the best known one.”
Nathan Latka Mar 25, 2022 ▶ 0:51
Assertion Supported
Solomon: Asana, Notion, and Monday.com Lack Built-In Image Annotation
“And none of the other products have that Asana doesn't have that, you know notion doesn't have that. Like there's so many, any of the product management, monday.com, all these guys.”
Jeff Solomon Mar 25, 2022 ▶ 2:27
Disclosure
Solomon: Markup Hero Core Product Costs $4 per Month
“Well, on the core product, when you just go to our site, it's like four bucks a month. It's a cheap, very low cost product high volume thing.”
Jeff Solomon Mar 25, 2022 ▶ 2:58
Assertion Not checkable as stated
Solomon: Founders selling for $150M often walk away with only $300k
“I've seen a lot of people sell for one hundred and fifty million bucks and walk away with like 300 grand.”
Jeff Solomon Mar 25, 2022 ▶ 6:15
Disclosure
Solomon: Velocify lost 100% of its mortgage clients in 2008
“It was 2008. We were going to go under, like we were entirely mortgage at that company and we cycled through a hundred percent of our clients. They all went belly up.”
Jeff Solomon Mar 25, 2022 ▶ 6:49
Disclosure
Solomon: Markup Hero Operates With Only Three Full-Time Team Members
“Just three of us. There's just three of us.”
Jeff Solomon Mar 25, 2022 ▶ 8:01
Assertion Not checkable as stated
Solomon: Markup Hero Has Around 10,000 Paying Customers
“We have maybe 10,000.”
Jeff Solomon Mar 25, 2022 ▶ 8:06
Disclosure
Solomon: Markup Hero Is Fully Bootstrapped With No Outside Funding
“There's no money at all. We just all bootstrapped.”
Jeff Solomon Mar 25, 2022 ▶ 8:25
Assertion Not checkable as stated
Solomon: Markup Hero gets six to seven inbound guest-post pitches daily
“So I get at least six to seven inquiries a day in inbound increase.”
Jeff Solomon Mar 25, 2022 ▶ 11:32
Disclosure
Solomon: Markup Hero pays $150 per draft and spends 90 minutes editing
“I've basically built out this model where I have these third parties writers create the first draft. And then I spend about an hour and a half editing. I found that to be the most cost effective. So I'll pay like a 150 bucks for a draft and it's good, but not …”
Jeff Solomon Mar 25, 2022 ▶ 12:11
Assertion Not checkable as stated
Solomon: Search volume for screenshot and annotation keywords is low
“Cause there's only so much traffic on like Annotation, image annotation, or, you know, screenshot, like it's small volume. So I can't count on that as my like keywords.”
Jeff Solomon Mar 25, 2022 ▶ 13:59
Assertion Not checkable as stated
Solomon: Monthly Screenshot Limit Is Markup Hero's Main Conversion Driver
“It's mostly people getting to their cap of screenshots per, per month, right? They hit their cap and they see like, oh, I need to do more.”
Jeff Solomon Mar 25, 2022 ▶ 14:43
Disclosure
Solomon: AppSumo Lifetime Deals Were Highly Profitable for Markup Hero
“We did a big campaign on AppSumo, which gives us some lifetime customers. Right. Which isn't like recurring, but it's still very, very profitable for three guys.”
Jeff Solomon Mar 25, 2022 ▶ 15:18
Disclosure
Solomon: Markup Hero costs about $3,000 monthly to run excluding salaries
“Oh, it costs us like three grand a month other than what we pay ourselves to run the hosting costs are, you know, it's very, very nice.”
Jeff Solomon Mar 25, 2022 ▶ 17:23
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