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Sep 30, 2020 · 16m · top-founders

PlusThis Does $85k in Profit Every Month Selling Marketing Tools to 3,000 SMB's

Dave Lee · 8m spoken Nathan Latka · 5m spoken
0:00 / 0:00

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PlusThis founder Dave Lee explains how his bootstrapped marketing automation toolkit reached $197,400 in monthly recurring revenue with an impressive 48% profit margin across 3,000 SMB clients. Lee breaks down their usage-based pricing model, low-CAC ecosystem acquisition strategy, and how strong cash flow funds new software ventures.

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 38.1% of the talking time here. How this is scored →

Nathan as informed peer 5.4 Guest teaching 2.2 Guest disagreement 1.4 Nathan pushing back 2.0
05100:0010:001:32–5:45 · Nathan as informed peer 6/10 Financial Overview: Revenue and Strong Profit Margins Latka immediately calculates bottom-line profit dollar figures from percentages and does on-the-fly division of 50M transactions across 3,000 customers. The guest provides clear operational details on their product and pricing tier structure.5:45–8:35 · Nathan as informed peer 7/10 Transitioning to Usage Pricing and Managing Churn Latka drills down into expansion revenue metrics and rapidly annualizes the 2.9% monthly churn into a 36% run rate figure to estimate net revenue retention. Dave shares the evolution of their churn metrics and the impact of their Zoom integration.8:35–10:55 · Nathan as informed peer 5/10 PlusThis Customer Acquisition Channels and Partnerships After an ad break, Latka prompts Dave for his fully weighted CAC and instantly computes the payback period at roughly 3.5 months on a $70/mo ARPU. The exchange is straightforward and collaborative.10:56–12:59 · Nathan as informed peer 4/10 Bootstrapping Strategy and Launching New Ventures Dave explains how a TAM restricted to specific marketing platforms makes VC funding unnecessary. When Dave mentions upcoming ventures, Latka repeatedly probes for specifics, though Dave firmly deflects announcing them early.13:00–15:37 · Nathan as informed peer 5/10 Lean Team Management and Founder Capital Allocation Latka prompts Dave to think like a capital allocator managing substantial monthly cash flow. Dave details his diversification across real estate, charity, and an internal product incubator before transitioning smoothly through the Famous Five.1:32–5:45 · Guest teaching 2/10 Financial Overview: Revenue and Strong Profit Margins Latka immediately calculates bottom-line profit dollar figures from percentages and does on-the-fly division of 50M transactions across 3,000 customers. The guest provides clear operational details on their product and pricing tier structure.5:45–8:35 · Guest teaching 3/10 Transitioning to Usage Pricing and Managing Churn Latka drills down into expansion revenue metrics and rapidly annualizes the 2.9% monthly churn into a 36% run rate figure to estimate net revenue retention. Dave shares the evolution of their churn metrics and the impact of their Zoom integration.8:35–10:55 · Guest teaching 1/10 PlusThis Customer Acquisition Channels and Partnerships After an ad break, Latka prompts Dave for his fully weighted CAC and instantly computes the payback period at roughly 3.5 months on a $70/mo ARPU. The exchange is straightforward and collaborative.10:56–12:59 · Guest teaching 3/10 Bootstrapping Strategy and Launching New Ventures Dave explains how a TAM restricted to specific marketing platforms makes VC funding unnecessary. When Dave mentions upcoming ventures, Latka repeatedly probes for specifics, though Dave firmly deflects announcing them early.13:00–15:37 · Guest teaching 2/10 Lean Team Management and Founder Capital Allocation Latka prompts Dave to think like a capital allocator managing substantial monthly cash flow. Dave details his diversification across real estate, charity, and an internal product incubator before transitioning smoothly through the Famous Five.1:32–5:45 · Guest disagreement 1/10 Financial Overview: Revenue and Strong Profit Margins Latka immediately calculates bottom-line profit dollar figures from percentages and does on-the-fly division of 50M transactions across 3,000 customers. The guest provides clear operational details on their product and pricing tier structure.5:45–8:35 · Guest disagreement 1/10 Transitioning to Usage Pricing and Managing Churn Latka drills down into expansion revenue metrics and rapidly annualizes the 2.9% monthly churn into a 36% run rate figure to estimate net revenue retention. Dave shares the evolution of their churn metrics and the impact of their Zoom integration.8:35–10:55 · Guest disagreement 1/10 PlusThis Customer Acquisition Channels and Partnerships After an ad break, Latka prompts Dave for his fully weighted CAC and instantly computes the payback period at roughly 3.5 months on a $70/mo ARPU. The exchange is straightforward and collaborative.10:56–12:59 · Guest disagreement 3/10 Bootstrapping Strategy and Launching New Ventures Dave explains how a TAM restricted to specific marketing platforms makes VC funding unnecessary. When Dave mentions upcoming ventures, Latka repeatedly probes for specifics, though Dave firmly deflects announcing them early.13:00–15:37 · Guest disagreement 1/10 Lean Team Management and Founder Capital Allocation Latka prompts Dave to think like a capital allocator managing substantial monthly cash flow. Dave details his diversification across real estate, charity, and an internal product incubator before transitioning smoothly through the Famous Five.1:32–5:45 · Nathan pushing back 2/10 Financial Overview: Revenue and Strong Profit Margins Latka immediately calculates bottom-line profit dollar figures from percentages and does on-the-fly division of 50M transactions across 3,000 customers. The guest provides clear operational details on their product and pricing tier structure.5:45–8:35 · Nathan pushing back 2/10 Transitioning to Usage Pricing and Managing Churn Latka drills down into expansion revenue metrics and rapidly annualizes the 2.9% monthly churn into a 36% run rate figure to estimate net revenue retention. Dave shares the evolution of their churn metrics and the impact of their Zoom integration.8:35–10:55 · Nathan pushing back 1/10 PlusThis Customer Acquisition Channels and Partnerships After an ad break, Latka prompts Dave for his fully weighted CAC and instantly computes the payback period at roughly 3.5 months on a $70/mo ARPU. The exchange is straightforward and collaborative.10:56–12:59 · Nathan pushing back 4/10 Bootstrapping Strategy and Launching New Ventures Dave explains how a TAM restricted to specific marketing platforms makes VC funding unnecessary. When Dave mentions upcoming ventures, Latka repeatedly probes for specifics, though Dave firmly deflects announcing them early.13:00–15:37 · Nathan pushing back 1/10 Lean Team Management and Founder Capital Allocation Latka prompts Dave to think like a capital allocator managing substantial monthly cash flow. Dave details his diversification across real estate, charity, and an internal product incubator before transitioning smoothly through the Famous Five.

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

0:00 · Nathan 60.8% · guest 39.2%0:00 · Nathan 60.8% · guest 39.2%3:00 · Nathan 12.4% · guest 87.6%3:00 · Nathan 12.4% · guest 87.6%6:00 · Nathan 22% · guest 78%6:00 · Nathan 22% · guest 78%9:00 · Nathan 57.2% · guest 42.8%9:00 · Nathan 57.2% · guest 42.8%12:00 · Nathan 30.7% · guest 69.3%12:00 · Nathan 30.7% · guest 69.3%15:00 · Nathan 57% · guest 43%15:00 · Nathan 57% · guest 43%
Sharpest disagreement ▶ 12:12 Dave guards details on stealth launch

Dave resists Latka's repeated attempts to uncover details about his new standalone business ventures, declining to announce early.

 Hardest push from Nathan ▶ 12:14 Latka drills on upcoming ventures

Latka refuses to accept Dave's vague teaser and presses him twice to clarify whether these are separate standalone companies.

 Biggest teaching moment ▶ 11:10 Dave explains niche TAM economics

Dave reframes why bootstrapping is superior for PlusThis, pointing out that their TAM is constrained to specific platform ecosystems, removing the need for venture capital.

 Nathan holds their own ▶ 8:19 Latka calculates run-rate churn on the fly

Latka demonstrates deep SaaS financial mastery by instantly taking Dave's 2.9% monthly churn and mapping it out into run-rate revenue churn and net revenue retention.
the scores for every segment, with the reasoning behind each
ChapterTopicNathan as informed peerGuest teachingGuest disagreementNathan pushing backWhy
Financial Overview: Revenue and Strong Profit Margins 6212 Latka immediately calculates bottom-line profit dollar figures from percentages and does on-the-fly division of 50M transactions across 3,000 customers. The guest provides clear operational details on their product and pricing tier structure.
Transitioning to Usage Pricing and Managing Churn 7312 Latka drills down into expansion revenue metrics and rapidly annualizes the 2.9% monthly churn into a 36% run rate figure to estimate net revenue retention. Dave shares the evolution of their churn metrics and the impact of their Zoom integration.
PlusThis Customer Acquisition Channels and Partnerships 5111 After an ad break, Latka prompts Dave for his fully weighted CAC and instantly computes the payback period at roughly 3.5 months on a $70/mo ARPU. The exchange is straightforward and collaborative.
Bootstrapping Strategy and Launching New Ventures 4334 Dave explains how a TAM restricted to specific marketing platforms makes VC funding unnecessary. When Dave mentions upcoming ventures, Latka repeatedly probes for specifics, though Dave firmly deflects announcing them early.
Lean Team Management and Founder Capital Allocation 5211 Latka prompts Dave to think like a capital allocator managing substantial monthly cash flow. Dave details his diversification across real estate, charity, and an internal product incubator before transitioning smoothly through the Famous Five.

Statements from this episode (13)

Assertion Not checkable as stated
PlusThis Generated $2.1M in 2019 Revenue With Almost 50% Profit Margin
“2019 was a stellar year for us. We broke two million in revenue. So we did 2.1 in revenue. Almost half of which was profit”
Dave Lee Sep 30, 2020 ▶ 1:54
Assertion Not checkable as stated
PlusThis Reached $197,400 in Monthly Recurring Revenue
“MRR last month was one 97.4.”
Dave Lee Sep 30, 2020 ▶ 2:27
Assertion Not checkable as stated
PlusThis Serves Nearly 3,000 Paying Customers With Over 60 Marketing Tools
“We've got almost 3000 paying customers, and we've got over 60 tools in the toolkit.”
Dave Lee Sep 30, 2020 ▶ 3:22
Assertion Not checkable as stated
Switching to Usage-Based Pricing in 2019 Accelerated PlusThis MRR Growth
“However, during 2019, we did change our model a little bit. Where it is a blend between I guess you could call them levels, but also usage. We went to a more heavily usage-based model, and that has really helped drive MRR as well.”
Dave Lee Sep 30, 2020 ▶ 4:07
Assertion Not checkable as stated
PlusThis Processes About 50 Million Campaign Transactions Monthly For Its Customers
“So we do on average, we do about fifty million campaign transactions a month for our clients, for our customers.”
Dave Lee Sep 30, 2020 ▶ 4:27
Assertion Not checkable as stated
At Least 20% of PlusThis Monthly MRR Growth Comes From Expansion Revenue
“Of the monthly MRR growth, I would say 20% of it is at least 20% is expansion revenue.”
Dave Lee Sep 30, 2020 ▶ 6:59
Assertion Not checkable as stated
PlusThis Reduced Monthly Customer Churn From 9.8% to 4.5% Over Years
“When we started the company churn used to be monthly churn used to be about 9.8%. And we worked for years to get that down and we got it down to about four and a half percent monthly churn.”
Dave Lee Sep 30, 2020 ▶ 7:34
Assertion Not checkable as stated
PlusThis Achieved an All-Time Low Monthly Churn Rate of 2.9%
“Our churn now is down to 2.9%, which is, we've never seen it that low.”
Dave Lee Sep 30, 2020 ▶ 8:09
Disclosure
PlusThis Acquires Customers Through Marketing Consultants and Platform Marketplaces
“One is working from, with consultants, marketing automation consultants out there that are working with their clients and they become resellers either on a wholesale model or just a referral, like affiliate referral model. We also try to work directly with the…”
Dave Lee Sep 30, 2020 ▶ 8:43
Disclosure
PlusThis Maintains a Fully Weighted Customer Acquisition Cost of Around $250
“About 260 bucks. I'm sorry, no, no, no, that's not right. It's probably, no, that's about right. It's about two 52 52 51.”
Dave Lee Sep 30, 2020 ▶ 10:37
Disclosure
Dave Lee Plans to Keep PlusThis Bootstrapped Despite Exploring Other Ventures
“There are other ventures that, that we're doing and in the process of launching that, that could be a capital raise scenario, but plus this is not that.”
Dave Lee Sep 30, 2020 ▶ 12:01
Assertion Not checkable as stated
PlusThis Reached $2.1M in Revenue With a Team of Just Eight
“Eight. We're still at eight.”
Dave Lee Sep 30, 2020 ▶ 13:02
Disclosure
Dave Lee Uses PlusThis Profits for Personal Investments and Software Incubation
“Yeah, I look at it as an asset that needs to be diversified, and it goes across a number of different things. Personal investments, real estate the market, EFTs I do a lot of charity stuff, so I give away a significant chunk of it. We do fund things for the em…”
Dave Lee Sep 30, 2020 ▶ 13:45
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