Aug 19, 2020 · 1h 33m · top-founders
How Wil Schroter Made Money at 22 years Old to Eventually Launch Startups.com
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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 extensive interview with Nathan Latka, serial entrepreneur Will Schroter details his journey from launching a 1990s digital agency and achieving a $300 million exit to bootstrapping Startups.com into an eight-figure founder platform through strategic acquisitions and disciplined operational execution.
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 29.2% of the talking time here. How this is scored →
Nathan as informed peer 5.4 Guest teaching 3.5 Guest disagreement 1.4 Nathan pushing back 2.5
speaking balance: gold is Nathan, purple is the guest (3 minute bins)
Sharpest disagreement ▶ 1:09:00 Rejecting the W-2 cost narrative of Zirtual's demise
Will directly dismisses Nathan's theory that W-2 conversion sunk Zirtual, stating flatly that none of that narrative is true and explaining that employment status was irrelevant to the underlying failure.
Hardest push from Nathan ▶ 1:01:38 Pressing on stagnant active mentor numbersNathan confronts Will with historical 2014 call metrics compared to 2019 active counts, pointing out that the platform only added a couple thousand entrepreneurs in five years and shows stale profile reviews.
Biggest teaching moment ▶ 1:10:01 Explaining agency utilization mathWill breaks down the mechanics of professional services, showing that having 400 full-time employees billing at 75% capacity mathematically equals 100 people billing at 0%, which destroyed Zirtual's unit economics.
Nathan holds their own ▶ 1:00:12 Citing historical take rates and blog evidenceNathan demonstrates deep preparation by citing Dan Martell's original 30% take rate from 2012 interviews alongside Nick Loper's reported 15% rate to question margin compression on Clarity.fm.
the scores for every segment, with the reasoning behind each
| Chapter | Topic | Nathan as informed peer | Guest teaching | Guest disagreement | Nathan pushing back | Why |
|---|---|---|---|---|---|---|
| Overview of Will Schroter's Entrepreneurial Journey | 6 | 1 | 0 | 0 | Nathan introduces the interview with an extensive, highly researched biographical summary detailing Will's exits and current revenue numbers. Will confirms the framing and succinctly introduces Startups.com's broad mission. | |
| Early Tech Fascination and Bulletin Board Systems | 2 | 2 | 1 | 1 | Will recounts his childhood discovery of modems and bulletin board systems through a peer. Nathan primarily serves as an active listener checking age and dates. | |
| Working Double Shifts and Moving to Ohio State | 3 | 2 | 0 | 1 | Will describes working double shifts at D'Angelo's and telemarketing before transferring to Ohio State. Nathan asks straightforward factual questions regarding early savings and academic intentions. | |
| Founding NextGen Digital Advertising in 1994 | 4 | 2 | 0 | 1 | Will details starting NextGen Digital Advertising in 1994 and selling websites door-to-door before the internet was widespread. Nathan prompts him on first-year booking numbers and pricing structures. | |
| Scaling NGDA, Blaine Walter Merger, and First Exit | 7 | 3 | 1 | 3 | Nathan demonstrates significant research by quoting historical local interviews regarding NGDA's bookings and Blaine Walter's background at GSW. Will clarifies the merger mechanics and how his first seven-figure cash event shifted his personal financial baseline. | |
| The Eli Lilly Win and Hypergrowth at Blue Diesel | 5 | 3 | 1 | 2 | Will describes winning a massive $250M Eli Lilly account for Prozac and rebranding NGDA into Blue Diesel under the Incord holding company. Nathan probes into the equity splits and management hierarchy between Blaine and Will. | |
| Agency Economics and $300M Sale to Dan Snyder | 5 | 4 | 1 | 2 | Will explains agency economics, illustrating how $700M in media pass-through billings translated to $150M gross revenue and $25M net income before selling to Dan Snyder for $300M in 2002. Nathan clarifies the net margin dynamics of large ad agencies. | |
| The Psychology of Wealth and Imposter Syndrome | 5 | 4 | 2 | 4 | Will articulates that his post-exit motivation stemmed from imposter syndrome and insecurity rather than having investment capital. Nathan pushes back, arguing that capital combined with passion is what truly enables founders to take larger swings. | |
| Launching an Incubator and Early VC Experiments | 6 | 3 | 1 | 2 | Will discusses launching an early incubator in 2002 to test SaaS ideas using early PPC advertising, highlighting GotCast and Affordit. Nathan demonstrates industry knowledge by naming early LA venture capitalists and drawing parallels to Affirm. | |
| Studio Portfolio Experiments from Swapalease to Unsubscribe | 6 | 3 | 1 | 1 | Will recounts the studio projects including Swapalease and Unsubscribe with Jamie Siminoff. Nathan tracks the funding totals and queries the financial outcome of the Unsubscribe sale. | |
| Structuring Startups.com and Acquiring LaunchRock | 6 | 4 | 2 | 3 | Will details why he believed standalone equity crowdfunding had an addressable market cap, driving Startups.com to acquire LaunchRock. Nathan questions his skepticism given Will's White House access, while Will defends his conservative TAM thesis. | |
| Acquiring Clarity.fm and Expert Marketplace Dynamics | 8 | 5 | 2 | 6 | Nathan interrogates the Clarity.fm acquisition by citing historical fee structures, past interview quotes from Dan Martell, and Nick Loper's reviews, pressing Will on why expert user growth appeared flat over five years. Will explains that the priority was quality curation and pruning inactive profiles. | |
| The 24-Hour Acquisition and Restructuring of Zirtual | 7 | 8 | 5 | 6 | Nathan challenges the narrative around Zirtual's sudden failure by attributing it to fixed W-2 reclassification costs. Will forcefully rejects the premise, delivering an expert breakdown of utilization rates and showing how unbilled capacity, not employment classification, caused the collapse. | |
| Equity Crowdfunding Realities and Fundable's Focus | 6 | 6 | 3 | 4 | Will details Fundable's SaaS model and explains why retail crowdfunding lacks liquidity for repeated investing. Nathan drills into the discrepancy between committed capital figures and actual closed capital transferred off-platform. | |
| Startups.com SaaS Model and Remote Operations | 5 | 2 | 1 | 1 | Nathan clarifies Startups.com's $29/month subscription pricing model, $10M+ ARR baseline, and 200-person remote team structure, inquiring about their content licensing deal with Sarah Lacy before wrapping up. |
Statements from this episode (23)
Schroeder: Startups.com is a bootstrapped, eight-figure business with over 200 employees
“We've got a little over a million companies in the platform. We're bootstrapped started in 2012. It's an eight figure business with a little over 200 employees.”
Schroeder: The practical difference between being broke and wealthy is remarkably small
“The difference between being broke and wealthy is a very small sum of money. In other words, especially early in your career, I was 22 at the time. If you can pull together enough cash to buy a house, to buy a car, to furnish your house, which by the way is no…”
Schroeder: 50-person Blue Diesel won a $250M annual Eli Lilly account
“And this scrappy 50 person company ends up winning a two hundred and fifty million dollar a year piece of business.”
Schroeder: Blue Diesel scaled to 700 employees in just four years
“All of a sudden we went from this tiny little agency to, you know, then become a 700 plus person company all within the next four years, maybe.”
Schroeder: Agencies are a terrible business model due to infrastructure costs
“Agencies are a really shitty business model. It's the easiest business to get into and the hardest business to get out of because once you're in it, And once you have that much infrastructure, we had ten million dollars a month worth of payroll. Think of what …”
Schroeder: Only invest or hold equity in businesses you can control
“I only really want to invest in or have stake in What I can control. Yeah. Right. So I, at my, at the time, and maybe I would have made more money. I don't think so. But at the time I distinctly remember thinking, I don't know what you guys are doing with thos…”
Schroeder: InChord sold to Washington Redskins owner Dan Snyder for 'ungodly' sum
“Well, it sold in 2001, 2002. It sold to a guy named Dan Snyder who owned the Washington Redskins and had made an ungodly amount of money which is why he owns the Redskins in in the, in a, I think a pharmaceutical sales outsource sales organization or something…”
Schroeder: Successful founders often feel like frauds unless they repeat their success
“I felt like, unless I could do it again, that I was a one-time hit, that I was a fraud, that I just happened to be lucky, I was in the right place at the right time, and I have to do it again. This is a completely unwarranted, idiotic feeling, That most founde…”
Schroeder: Affordit raised early capital from Mike Jones and Mark Suster
“And so guys like Mike Jones, who runs science, Mark Suster, who had just gotten there that is, you know, running upfront, upfront.
Yep.
had, had all put money into my company.
And it was the first time I'd ever taken on outside capital.”
Schroeder: Founders Fund joined Affordit's roughly $800,000 funding round
“It was maybe closer to 800
K.
I know founders fund was in the deal.”
Schroeder: Self-funding multiple studio startups simultaneously creates severe capital drain
“An interesting thing happens when you start burying all these children that are these startup companies, whether they're going good or bad, they need lots of money. And when you're doing one or two, it just doesn't seem like that big of a deal. But when you ge…”
Schroeder: Swapalease reached $3M revenue and $1M EBITDA within a couple years
“Within a couple years they got to about three million dollars of revenue on about a million dollars of EBITDA.”
Schroeder: Studio infrastructure advantages faded with the rise of off-the-shelf tools
“It was also back in a time where you had to build everything from scratch, whereas now there's so much off the self stuff, it doesn't have the same advantage.”
Schroeder: Unsubscribe.com, co-founded with Jamie Siminoff, yielded little financial return
“We didn't really make much off that. That was just, that was interesting learning. That was me and Jamie Siminoff who started ring. And in is an idea I had for a long time, Jamie and another guy, Josh wanted to go in and start it, but I was busy doing too many…”
Schroeder: Clarity.fm features a community of over 20,000 mentors
“We've got clarity.fm, which is a community of over 20,000 mentors that we use to connect people and kind of help them through the process and coach them.”
Schroeder: Startups.com conducted diligence on 40 companies and acquired six
“And we looked at, I mean, I probably talked to hundreds of founders, but we looked at, ah, 40 companies closely. In other words, we did our diligence on 40 companies, and we ended up acquiring six.”
Schroeder: Clarity takes a 15% fee and absorbs payment processing costs
“And even within that 15, 15%, we're also paying the processing fees. So we pay another three percent in processing fees, and then marketing fees, administration fees, et cetera. It's not a huge margin product, but it's actually one of our best products, like o…”
Schroeder: Clarity wins on expert quality rather than total expert headcount
“Clarity doesn't win by having more experts. Like, we have 20,000. We're long past the point where we have saturation in almost every category. Our issue now is the quality. Right? So are those folks attacking enough quality? The number of people we had would b…”
Schroeder: VC valuations are worth zero when evaluating potential startup acquisitions
“Also, personally, I don't care about VC valuations. So if, you know, if you were to say, Hey, this, the VC say it's worth sixty million dollars. I'm like, yeah, it's worth zero to me.”
Schroeder: Collapsed Zirtual had 400 assistants effectively billing at 75% capacity
“They had 400 people that were full-time billing at 75% capacity. You work that backward, that means they have a hundred people billing at zero percent capacity.”
Schroeder: Zirtual has been consistently profitable since Startups.com acquired it
“It's been profitable ever since we bought it.”