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Mar 1, 2021 · 16m · top-founders

They Grew 60% YoY to $4.2m Revenue By Spending $300k on FB Ads

Steven Morrell · 9m spoken Nathan Latka · 4m 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, AX Semantics CRO Steven Morrell details how the natural language generation SaaS platform scaled to a $4.2 million run rate with 60% year-over-year growth. Morrell breaks down the agency-to-SaaS pivot, paid advertising unit economics, collaborative sales leadership, and the onboarding overhauls that turned high churn into strong net expansion.

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 32.5% of the talking time here. How this is scored →

Nathan as informed peer 5.6 Guest teaching 2.2 Guest disagreement 1.4 Nathan pushing back 3.2
05100:0010:001:58–4:20 · Nathan as informed peer 5/10 AX Semantics Platform Overview and Pricing Structure Nathan guides the conversation through product pricing and origin story. Steven is collaborative, transparent about average contract values, and explains how the company evolved from an agency.4:20–8:06 · Nathan as informed peer 6/10 Early Customer Coercion and Scaling to 800 Global Clients Steven outlines their paid acquisition funnel and sales stages. Nathan actively tracks the conversion steps and synthesizes the exact customer acquisition unit economics back to Steven.8:07–11:40 · Nathan as informed peer 6/10 Revenue Performance and Capital Strategy for High-Tech NLP Nathan presses on revenue run rates and asks specifically for quota-carrying sales reps. Steven rejects the conventional individual quota and hire-and-fire sales structure in favor of team-driven KPIs.11:41–13:50 · Nathan as informed peer 7/10 Overcoming Severe Churn and Achieving Net Expansion Steven shares historical dark days of 90% monthly churn before reaching net expansion. When Steven explains current growth with an unconventional ratio, Nathan pushes back to translate it into standard gross and net retention metrics.13:50–16:44 · Nathan as informed peer 4/10 Product Personalization and Expansion into Outbound Sales Steven describes product personalization and outbound sales plans. Nathan transitions into the Famous Five, briefly pushing for concrete answers on sleep before delivering the final outro summary.1:58–4:20 · Guest teaching 1/10 AX Semantics Platform Overview and Pricing Structure Nathan guides the conversation through product pricing and origin story. Steven is collaborative, transparent about average contract values, and explains how the company evolved from an agency.4:20–8:06 · Guest teaching 2/10 Early Customer Coercion and Scaling to 800 Global Clients Steven outlines their paid acquisition funnel and sales stages. Nathan actively tracks the conversion steps and synthesizes the exact customer acquisition unit economics back to Steven.8:07–11:40 · Guest teaching 4/10 Revenue Performance and Capital Strategy for High-Tech NLP Nathan presses on revenue run rates and asks specifically for quota-carrying sales reps. Steven rejects the conventional individual quota and hire-and-fire sales structure in favor of team-driven KPIs.11:41–13:50 · Guest teaching 3/10 Overcoming Severe Churn and Achieving Net Expansion Steven shares historical dark days of 90% monthly churn before reaching net expansion. When Steven explains current growth with an unconventional ratio, Nathan pushes back to translate it into standard gross and net retention metrics.13:50–16:44 · Guest teaching 1/10 Product Personalization and Expansion into Outbound Sales Steven describes product personalization and outbound sales plans. Nathan transitions into the Famous Five, briefly pushing for concrete answers on sleep before delivering the final outro summary.1:58–4:20 · Guest disagreement 0/10 AX Semantics Platform Overview and Pricing Structure Nathan guides the conversation through product pricing and origin story. Steven is collaborative, transparent about average contract values, and explains how the company evolved from an agency.4:20–8:06 · Guest disagreement 1/10 Early Customer Coercion and Scaling to 800 Global Clients Steven outlines their paid acquisition funnel and sales stages. Nathan actively tracks the conversion steps and synthesizes the exact customer acquisition unit economics back to Steven.8:07–11:40 · Guest disagreement 3/10 Revenue Performance and Capital Strategy for High-Tech NLP Nathan presses on revenue run rates and asks specifically for quota-carrying sales reps. Steven rejects the conventional individual quota and hire-and-fire sales structure in favor of team-driven KPIs.11:41–13:50 · Guest disagreement 2/10 Overcoming Severe Churn and Achieving Net Expansion Steven shares historical dark days of 90% monthly churn before reaching net expansion. When Steven explains current growth with an unconventional ratio, Nathan pushes back to translate it into standard gross and net retention metrics.13:50–16:44 · Guest disagreement 1/10 Product Personalization and Expansion into Outbound Sales Steven describes product personalization and outbound sales plans. Nathan transitions into the Famous Five, briefly pushing for concrete answers on sleep before delivering the final outro summary.1:58–4:20 · Nathan pushing back 1/10 AX Semantics Platform Overview and Pricing Structure Nathan guides the conversation through product pricing and origin story. Steven is collaborative, transparent about average contract values, and explains how the company evolved from an agency.4:20–8:06 · Nathan pushing back 2/10 Early Customer Coercion and Scaling to 800 Global Clients Steven outlines their paid acquisition funnel and sales stages. Nathan actively tracks the conversion steps and synthesizes the exact customer acquisition unit economics back to Steven.8:07–11:40 · Nathan pushing back 4/10 Revenue Performance and Capital Strategy for High-Tech NLP Nathan presses on revenue run rates and asks specifically for quota-carrying sales reps. Steven rejects the conventional individual quota and hire-and-fire sales structure in favor of team-driven KPIs.11:41–13:50 · Nathan pushing back 6/10 Overcoming Severe Churn and Achieving Net Expansion Steven shares historical dark days of 90% monthly churn before reaching net expansion. When Steven explains current growth with an unconventional ratio, Nathan pushes back to translate it into standard gross and net retention metrics.13:50–16:44 · Nathan pushing back 3/10 Product Personalization and Expansion into Outbound Sales Steven describes product personalization and outbound sales plans. Nathan transitions into the Famous Five, briefly pushing for concrete answers on sleep before delivering the final outro summary.

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

0:00 · Nathan 63.1% · guest 36.9%0:00 · Nathan 63.1% · guest 36.9%3:00 · Nathan 15.5% · guest 84.5%3:00 · Nathan 15.5% · guest 84.5%6:00 · Nathan 34.6% · guest 65.4%6:00 · Nathan 34.6% · guest 65.4%9:00 · Nathan 12.4% · guest 87.6%9:00 · Nathan 12.4% · guest 87.6%12:00 · Nathan 23.4% · guest 76.6%12:00 · Nathan 23.4% · guest 76.6%15:00 · Nathan 62.6% · guest 37.4%15:00 · Nathan 62.6% · guest 37.4%
Sharpest disagreement ▶ 10:15 Rejection of conventional quota-carrying sales structure

Steven rejects Nathan's assumption about quota-carrying reps, arguing that conventional SaaS hire-and-fire sales tactics are wrong.

 Hardest push from Nathan ▶ 12:43 Challenging confusing churn and expansion math

Nathan halts Steven's 1-to-2 ratio explanation, bluntly calling it a complex framing and forcing the conversation back to standard SaaS net dollar retention.

 Biggest teaching moment ▶ 12:05 Exposing the reality of 90% monthly churn

Steven educates Nathan on the brutal realities of early complex natural language software, revealing they operated with 90% monthly churn like an agency before fixing onboarding.

 Nathan holds their own ▶ 7:47 Synthesizing multi-step CAC math on the fly

Nathan demonstrates sharp domain expertise by condensing Steven's multi-stage conversion funnel into an exact, clean summary of their customer acquisition cost.
the scores for every segment, with the reasoning behind each
ChapterTopicNathan as informed peerGuest teachingGuest disagreementNathan pushing backWhy
AX Semantics Platform Overview and Pricing Structure 5101 Nathan guides the conversation through product pricing and origin story. Steven is collaborative, transparent about average contract values, and explains how the company evolved from an agency.
Early Customer Coercion and Scaling to 800 Global Clients 6212 Steven outlines their paid acquisition funnel and sales stages. Nathan actively tracks the conversion steps and synthesizes the exact customer acquisition unit economics back to Steven.
Revenue Performance and Capital Strategy for High-Tech NLP 6434 Nathan presses on revenue run rates and asks specifically for quota-carrying sales reps. Steven rejects the conventional individual quota and hire-and-fire sales structure in favor of team-driven KPIs.
Overcoming Severe Churn and Achieving Net Expansion 7326 Steven shares historical dark days of 90% monthly churn before reaching net expansion. When Steven explains current growth with an unconventional ratio, Nathan pushes back to translate it into standard gross and net retention metrics.
Product Personalization and Expansion into Outbound Sales 4113 Steven describes product personalization and outbound sales plans. Nathan transitions into the Famous Five, briefly pushing for concrete answers on sleep before delivering the final outro summary.

Statements from this episode (17)

Insight
Morrell: Machines write repetitive, data-based content better than humans
“Everything that is repetitive and based on data the machine can write better than the human.”
Steven Morrell Mar 1, 2021 ▶ 2:40
Assertion Not checkable as stated
AX Semantics has an average monthly contract value of €761
“Well, we have an average sales price of 761. I know because I just calculated this two days ago. Because we're always looking on customer lifetime value that I was asking myself, how much do we get in the first year? So if you take the first year divided by 12…”
Steven Morrell Mar 1, 2021 ▶ 2:49
Assertion Supported
AX Semantics pivoted from a content writing agency to pure SaaS
“His evolved into a content writing agency and some point he started developing a software for his own needs to scale. And then he pivoted from content writing agency into pure SaaS A high tech company.”
Steven Morrell Mar 1, 2021 ▶ 3:29
Opinion
AX Semantics claims to be the only self-service NLG tool
“We are like the only natural language generation product out there that is reef for the rest of us. Everybody can just go there, have a trial, try it out.”
Steven Morrell Mar 1, 2021 ▶ 5:08
Assertion Not checkable as stated
AX Semantics has roughly 800 customers
“Today we would have around 800.”
Steven Morrell Mar 1, 2021 ▶ 5:25
Disclosure
AX Semantics spends roughly €250k annually on paid ads
“I wouldn't know on a monthly basis, but I can tell you that it's a probably 250 K I'm talking euros. Yeah. So at 10, 15%. Yeah. 250 K a year.”
Steven Morrell Mar 1, 2021 ▶ 6:30
Assertion Not checkable as stated
AX Semantics pays €25 to €35 per lead on paid ads
“Well, and a fresh lead is about 25 to 35 euros per lead. From there, we have 25 to 30% conversion into an appointment. From the appointment, we have 70% conversion into an opportunity in the good stage”
Steven Morrell Mar 1, 2021 ▶ 6:50
Assertion Not publicly verifiable
AX Semantics generates €3.5 million in annual revenue
“We are doing about three and a half million a year.”
Steven Morrell Mar 1, 2021 ▶ 8:16
Assertion Not publicly verifiable
AX Semantics is growing 60% year-over-year
“60% growth year over year.”
Steven Morrell Mar 1, 2021 ▶ 8:30
Insight
Morrell: Natural language generation companies cannot be bootstrapped
“The thing is you cannot bootstrap energy because you have to put in years of software development. And that's very, very difficult to do.”
Steven Morrell Mar 1, 2021 ▶ 9:04
Assertion Not checkable as stated
Only about five companies worldwide do natural language generation
“There's only like five companies out there who do natural language generation at all.”
Steven Morrell Mar 1, 2021 ▶ 9:18
Assertion Not checkable as stated
Morrell: AX Semantics employs roughly 40 people
“Roughly around 40.”
Steven Morrell Mar 1, 2021 ▶ 9:47
Disclosure
AX Semantics sales reps do not carry individual competing quotas
“This is not how we built we, how we built our sales team. The sales team works as a team and not as sales reps who compete against each other.”
Steven Morrell Mar 1, 2021 ▶ 10:15
Insight
Sales performance requires training and product knowledge, not natural talent
“I believe you have to develop people and to train them and to build a team based on experience and knowledge of this product, this company, this customer type. It's not, I see a lot of others are just hiring and firing till they find this guy who does it well.…”
Steven Morrell Mar 1, 2021 ▶ 11:09
Assertion Not checkable as stated
Users require two weeks to learn the AX Semantics software
“Because the software is, yeah, you have to learn it. There is less, you have to put in two weeks to learn how to use it.”
Steven Morrell Mar 1, 2021 ▶ 11:53
Disclosure
AX Semantics previously suffered 90% monthly customer churn
“We had in, in, in the darkest days and those were really dark days. We had like 90%.”
Steven Morrell Mar 1, 2021 ▶ 12:05
Disclosure
AX Semantics generates $200 in expansion for every $100 from new customers
“Now it's in, in total numbers, it's zero. So we hardly lose any customers and we have in, in growth numbers, we have a one to two relation ratio of growth. So for every hundred bucks that come in with new customers, we grow existing customers by 200 bucks.”
Steven Morrell Mar 1, 2021 ▶ 12:53
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