Feb 13, 2022 · 23m · top-founders
B2B Hardware Plus SaaS Business Breaks $4.5m in Sales Volume, Super Sticky SaaS Revenues
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, Limb.io founder Marcos Kern discusses building a Munich-based interactive fitness startup that achieved $4.5 million in hardware sales across 600 units while successfully launching a high-retention B2B SaaS model and preparing for a Series A fundraise.
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 42.7% of the talking time here. How this is scored →
Nathan as informed peer 5.4 Guest teaching 2.0 Guest disagreement 0.9 Nathan pushing back 2.6
speaking balance: gold is Nathan, purple is the guest (3 minute bins)
Sharpest disagreement ▶ 18:14 Kern attempts to keep valuation target secret
Kern initially stonewalls Latka's valuation query by declaring it a secret before reluctantly giving a broad valuation range under questioning.
Hardest push from Nathan ▶ 18:18 Latka refuses valuation deflectionLatka rejects Kern's attempt to keep his fundraising target private and reframes the question to force a clear valuation target.
Biggest teaching moment ▶ 16:17 Kern explains hardware supply chain realitiesKern corrects Latka's standard 30% margin assumption by outlining how component brokers demand double payment or cancel orders during shortages.
Nathan holds their own ▶ 7:06 Latka questions Kickstarter unit loss riskLatka immediately calculates total pre-order revenue and calls out the structural risk of losing money on hardware commitments amid fluctuating COVID supply costs.
the scores for every segment, with the reasoning behind each
| Chapter | Topic | Nathan as informed peer | Guest teaching | Guest disagreement | Nathan pushing back | Why |
|---|---|---|---|---|---|---|
| Hardware Pricing, Production Margins, and Gross Sales | 6 | 3 | 1 | 3 | Latka immediately digs into the unit economics, calculating gross hardware sales and estimating margins from retail pricing. Kern clarifies his actual SaaS run rate and explains the tiered pricing across classroom units and commercial LED installations. | |
| Founding Timeline, Kickstarter Launch, and Supply Chain Hurdles | 6 | 2 | 1 | 4 | Latka challenges Kern on the economics of Kickstarter pre-orders, asking if selling at $600 a unit causes direct losses amid supply chain inflation. Kern candidly admits early units lose money due to lack of economies of scale. | |
| Transitioning Customers from Lifetime Licenses to SaaS | 6 | 2 | 1 | 2 | Latka probes why hardware buyers previously avoided SaaS subscriptions, summarizing how Kern pulled future cash flow forward via lifetime licensing. He then quizzes Kern on cap table dilution and ESOP structures. | |
| Sponsor Break: Founderpath Startup Valuation Tool | 5 | 1 | 0 | 1 | Following a sponsor ad read, Latka proposes raising debt financing to subsidize hardware and accelerate SaaS MRR. Kern affirms the viability of subscription-bundled hardware while noting capital requirements. | |
| Freemium Software, Supply Chain Surcharges, and 0% Churn | 5 | 3 | 1 | 3 | Latka calculates margin on the newest console retail price, prompting Kern to explain the volatile broker market for electronic components. Kern also highlights their zero percent customer churn record. | |
| Series A Target Valuation, Patents, and App Developer Platform | 6 | 2 | 2 | 5 | When Kern attempts to keep target Series A valuation figures secret, Latka pushes him to state what number would make him happy, extracting a low double-digit millions range before discussing platform app dev shares. | |
| The Famous Five Rapid-Fire Questions | 4 | 1 | 0 | 0 | Latka runs through standard Famous Five rapid-fire questions and provides a precise summary of the company's trajectory, which Kern praises as an accurate pitch. |
Statements from this episode (22)
Kern: Limb.io expands from B2B customers to B2C home consoles
“Well, right now we're very strong in the business to business market. So it's sports teams, clubs, facilities, even kindergartens, a lot of offices, but now we're also launching our B to C console. So it's also going to jump into your living room.”
Kern: Limb.io is in 45 countries with 500 console pre-orders
“So far right now we're in 45 countries and it's only B to B about 500 pre-orders for the console.”
Kern: Limb.io has maintained 100% retention on SaaS subscriptions
“And yeah, just like you said, it's a hard sell because it's hardware about so far we have a retention rate of a hundred percent.”
Kern: Limb.io generates roughly €6.5k monthly in SaaS revenue
“So we have around six and a half K per per month right now, actually.”
Kern: Limb.io hardware retails from €4.5k to €60k at 30% margin
“So the retail price is between, I think the cheapest one is four and a half grand. The biggest one is around 60 grand, which is full LED. The production cost is always about 70% of that. So we have a 30% margin.”
Kern: Limb.io is approaching €4.5m in lifetime revenue
“I think right now we're like approaching around the four, four and a half. No, it must be close to four and a half million in lifetime revenue, which probably we made two and a half last year.”
Kern: Limb.io grew 2.9x over the past year
“And now the last year we've grown 2.9% 2.9 times the size that we had before.”
Kern: Limb.io raised unit price from $800-$900 to $1,400 due to production costs
“Well, at the Kickstarter campaign, we started with around 800 to 900 bucks, which is also the retail price that we're aiming for. Right now we had to go up quite a lot because production is insane. So we're now selling it at around 1400 for the first year at l…”
Kern: Limb.io loses money on Kickstarter units due to manufacturing scale
“To be honest, on the Kickstarter ones, definitely. Yes, absolutely. We factored that in already in the beginning, and this is also what we're compensating with the new price for, but obviously the very first batches, when you produce something, you always have…”
Kern: Fitness industry and schools hate recurring subscription payments
“People hate in that business, like the fitness industry and schools, they hate monthly payments. They hate yearly payments.”
Kern: Limb.io initially sold lifetime software access for $1,000 upfront
“Instead of charging them, let's say 99 bucks per month, let's just charge them a thousand and say that you never have to pay again.”
Kern: Limb.io has spent zero dollars on advertising to date
“So we've never spent any money on advertising. We're very happy that so far the inbound is much more than we can actually do.”
Kern: Limb.io has raised $2.8M total over five years
“Like we only raised 2.8 over the whole five years.”
Kern: Limb.io sold roughly 35% equity to outside investors
“Over the time, over the whole time, we sold about 35 over the whole process until today.”
Kern allocated 10% ESOP and retains remaining Limb.io founder equity
“I'm still the only founder. So I still hold the rest of the percentages and we blocked about 10%, which we now slowly give out to the employees.”
Kern: Limb.io tests $299/month hardware-included subscription model
“We're already experimenting with giving out systems only for subscriptions. So you don't pay, let's say the seven grand that you need for a multi ball, which is a small system for school. And instead of saying paying seven seven grand and 59 bucks per month fo…”
Kern: Limb.io hardware works without a software subscription, unlike Peloton
“So it's not going to be a model like with the usual Peloton. Or you say like, Hey, listen, if you buy the hardware and you're not paying the subscription, you can't do anything with it. Because our clients also are families, their elderly care facilities. They…”
Kern: Limb.io component costs inflated tenfold during supply chain crisis
“Not at this time, to be honest, we're planning to go there again with the current crisis right now. It's actually much worse than that. It's like you buy some components and they would normally be like one and a half dollars and they're like 15 bucks.”
Kern: Zero Limb.io systems returned, all remain active
“So every single system that we still sold. None have returned, have been returned and all of them are still active.”