Nov 5, 2021 · 24m · top-founders
Billion Dollar SaaS Founders Rely on This Secret Sales Strategy
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gold bands on the timeline = statements, start to end. Hover to read, click to jump. CC turns on captions
In this episode of Conversations with Nathan Latka, Directive Consulting CEO Garrett Mehrguth reveals how he bootstrapped his performance marketing agency into a $20M+ run rate by pioneering a direct 'Customer Generation' playbook for enterprise SaaS brands.
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 28.3% of the talking time here. How this is scored →
Nathan as informed peer 5.7 Guest teaching 5.0 Guest disagreement 3.9 Nathan pushing back 5.6
speaking balance: gold is Nathan, purple is the guest (3 minute bins)
Sharpest disagreement ▶ 19:51 Garrett refuses to share revenue after being mathematically trapped
Garrett stonewalls Latka by stating he does not share revenue figures right after Latka deduces his minimum revenue from payroll figures.
Hardest push from Nathan ▶ 5:33 Latka refuses agency self-case study and demands SaaS client metricsLatka flatly rejects Garrett's proposal to use Directive as the case study, insisting on SaaS examples to deliver value for software founders.
Biggest teaching moment ▶ 6:31 Garrett breaks down LinkedIn convo ad bidding and frequency constraintsGarrett educates Latka on LinkedIn's 30-day ad cap and explains why default 30-cent bids fail compared to aggressive $5 bid tactics.
Nathan holds their own ▶ 19:34 Latka reverse-engineers company revenue from employee base salariesLatka traps Garrett using Garrett's own disclosures, multiplying 135 employees by a $70k minimum salary floor to establish a $9M+ baseline revenue.
the scores for every segment, with the reasoning behind each
| Chapter | Topic | Nathan as informed peer | Guest teaching | Guest disagreement | Nathan pushing back | Why |
|---|---|---|---|---|---|---|
| Introducing Garrett Mehrguth and Directive's Origin Story | 4 | 5 | 2 | 3 | Latka introduces Directive and references high-profile SaaS clients to establish context. Garrett explains the limitations of standard Google and LinkedIn playbooks regarding intent versus firmographics. | |
| Paid Media Tactics: Review Sites, Convo Ads, and Incentives | 4 | 7 | 4 | 6 | Latka explicitly rejects Garrett's attempt to use his own agency as a case study instead of a software client. Garrett then details high-performing LinkedIn conversation ad mechanics and review site positioning. | |
| Breaking Down the $105 Gift Card Meeting Strategy | 5 | 7 | 4 | 6 | Latka presses Garrett for exact ad copy and persona details across multiple clients. Garrett explains why targeting champions rather than C-level decision makers generates higher conversion rates. | |
| Directive's Agency Pricing and First-Party Targeting Edge | 6 | 6 | 3 | 4 | Latka does rapid mental arithmetic on Directive's percentage of spend versus annual contract values. Garrett points out that half of LinkedIn's native industry classification data is inaccurate. | |
| Bootstrapping History, Agency Culture, and Headcount Expansion | 6 | 3 | 4 | 7 | Latka gets confused by Garrett's headcount math of hiring 150 people while currently having 135 employees, pressing him repeatedly on team churn before realizing it represents rapid recent expansion. | |
| Navigating COVID, Profitability, and Calculating Revenue | 8 | 2 | 6 | 8 | Latka deduces Directive's minimum revenue by multiplying 135 employees by Garrett's stated minimum salary of $70k. When Garrett insists he does not share revenue numbers, Latka points out he already gave away the equation. | |
| Month-over-Month Growth Strategy and Bootstrap Success | 7 | 5 | 4 | 5 | Garrett explains his preference for month-over-month relative OKRs over quarterly absolute goals. Latka calculates a $20M+ run rate from client numbers before transitioning to the standard closing questions. |
Statements from this episode (12)
Mehrguth: Google Ads offers search intent but lacks firmographic targeting
“The problem with Google ads is it has intent, but not firm graphics. And so what happens is it's very difficult to scale while controlling your life cycle stages down funnel.”
Mehrguth: LinkedIn advertising delivers firmographics but lacks buyer intent
“The problem with LinkedIn is it has firmographics, but it doesn't have intent.”
Mehrguth: Passing LinkedIn gated-content leads to SDRs fails
“Like you download an asset and then you try to send it to an SDR. And the SDR hates your guts because they call them and they've never read the asset before and the timing's not right.”
Mehrguth: Software companies can essentially pay review sites to rank number one
“What review sites let you do and what most people don't realize is you can essentially pay to be number one.”
Mehrguth: LinkedIn conversation ads are 70% cheaper than sponsored content
“We don't ever do a bid for less than five dollars, for example, because it's this valuable real estate, and it's about 70% cheaper than sponsored content.”
Mehrguth: $100 is the most effective gift card incentive for B2B meetings
“So we've tested millions of dollars of gift cards. The most effective price point is a hundred bucks.”
Mehrguth: Most SaaS companies fail by spreading small budgets across too many verticals
“Let's just say, honestly, frankly, like 99% of them have too small of a budget for an amount of verticals and personas they're trying to target. It's like the number one plague is killing them.”
Mehrguth: SaaS marketing should target champions over C-suite decision-makers
“The biggest problem in SAS is they all think the C level and the V level is how you market digitally. And it's actually not true. I have a saying that I believe the champion is more important than the decision maker.”
Mehrguth: 50% of LinkedIn Industry Targeting Data Is Inaccurate
“So like 99.9% of people who advertise on LinkedIn use the industries to target. You know, I'm talking about when you're running a LinkedIn ad and it's like industry computer software. What I found is 50% of that data is incorrect. And so most of our clients co…”
Mehrguth: Agency Revenue Is Uncorrelated With Client Results
“The money you make as an agency is indifferent from the results you drive for clients. And they're usually not correlated because the quickest way to make money in the agency is you just kill your people. Essentially, you just increase your capacity, but that …”
Mehrguth: Marketing agencies rarely spend on advertising their own services
“Agencies don't actually spend on advertising, despite that's what they're supposed to be good at.”
Mehrguth: Relative monthly growth targets outperform rigid quarterly goals
“Most people set goals and quarterly functions and they use absolutes. So we want to get X amount of revenue this quarter. Now, the problem is if you have a bad month to start the quarter, you have to reset and nobody, and then it's like, you're losing. So then…”