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Aug 1, 2020 · 21m · top-founders

NoteAffect MVP Cost $1.6m, Founder Bootstrapping Using Cash From Last Exit

Jay Tokosch · 13m spoken Nathan Latka · 5m spoken
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Serial entrepreneur Jay Tokosch sits down with Nathan Latka to discuss launching NoteAffect, detailing how he self-funded a $1.6 million MVP following his successful CoreApps exit and how the company is scaling interactive software across higher education and corporate markets.

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 30.8% of the talking time here. How this is scored →

Nathan as informed peer 5.4 Guest teaching 3.0 Guest disagreement 1.3 Nathan pushing back 2.3
05100:0010:0020:001:35–3:42 · Nathan as informed peer 6/10 Jay Tokosch's Background and Multi-Million Dollar CoreApps Exit Nathan introduces Jay and demonstrates industry knowledge by asking specific questions about his previous company CoreApps, its exit to Community Brands, and whether competitors like Cvent were considered.3:42–6:45 · Nathan as informed peer 6/10 NoteAffect Product Capabilities and Per-Student Pricing Model Nathan actively calculates unit economics and ACV based on Jay's per-student per-semester pricing model ($5-$10 per student). Jay clarifies high school vs college deployment dynamics.6:45–10:38 · Nathan as informed peer 5/10 Open Educational Resources Integration and Higher Education Focus Jay explains Open Educational Resources (OER) integration and why edtech VC interest is strong. Nathan challenges the necessity of VC funding over customer revenue, but Jay explains the PR and validation value.10:39–13:10 · Nathan as informed peer 7/10 Current Customer Metrics, Class Deployments, and Budget Cycles Nathan drills into NoteAffect's metrics, deriving class sizes, total active students, and monthly recurring revenue ($1k–$5k MRR) based on 12 schools and 32 classes.13:10–15:15 · Nathan as informed peer 4/10 NoteAffect Team Composition and Sales Performance Targets Nathan asks for the exact breakdown of the 10-person team and inquires how sales targets are established for startup sales reps without established historical data.15:15–18:05 · Nathan as informed peer 5/10 Evaluating Marketing Experiments, Trade Shows, and Executive Summits Jay shares insights from spending $60k on failed trade magazine ads and moving away from general trade shows toward curated executive matchmaking events like University Summit.18:06–20:01 · Nathan as informed peer 5/10 Burn Rate, Operating Budgets, and Corporate Expansion Features Nathan probes Jay's monthly burn rate and comfort levels after spending $1.6M on the initial MVP. Jay explains how expanding into corporate and government sectors will shorten the sales cycle.1:35–3:42 · Guest teaching 3/10 Jay Tokosch's Background and Multi-Million Dollar CoreApps Exit Nathan introduces Jay and demonstrates industry knowledge by asking specific questions about his previous company CoreApps, its exit to Community Brands, and whether competitors like Cvent were considered.3:42–6:45 · Guest teaching 2/10 NoteAffect Product Capabilities and Per-Student Pricing Model Nathan actively calculates unit economics and ACV based on Jay's per-student per-semester pricing model ($5-$10 per student). Jay clarifies high school vs college deployment dynamics.6:45–10:38 · Guest teaching 4/10 Open Educational Resources Integration and Higher Education Focus Jay explains Open Educational Resources (OER) integration and why edtech VC interest is strong. Nathan challenges the necessity of VC funding over customer revenue, but Jay explains the PR and validation value.10:39–13:10 · Guest teaching 2/10 Current Customer Metrics, Class Deployments, and Budget Cycles Nathan drills into NoteAffect's metrics, deriving class sizes, total active students, and monthly recurring revenue ($1k–$5k MRR) based on 12 schools and 32 classes.13:10–15:15 · Guest teaching 3/10 NoteAffect Team Composition and Sales Performance Targets Nathan asks for the exact breakdown of the 10-person team and inquires how sales targets are established for startup sales reps without established historical data.15:15–18:05 · Guest teaching 4/10 Evaluating Marketing Experiments, Trade Shows, and Executive Summits Jay shares insights from spending $60k on failed trade magazine ads and moving away from general trade shows toward curated executive matchmaking events like University Summit.18:06–20:01 · Guest teaching 3/10 Burn Rate, Operating Budgets, and Corporate Expansion Features Nathan probes Jay's monthly burn rate and comfort levels after spending $1.6M on the initial MVP. Jay explains how expanding into corporate and government sectors will shorten the sales cycle.1:35–3:42 · Guest disagreement 1/10 Jay Tokosch's Background and Multi-Million Dollar CoreApps Exit Nathan introduces Jay and demonstrates industry knowledge by asking specific questions about his previous company CoreApps, its exit to Community Brands, and whether competitors like Cvent were considered.3:42–6:45 · Guest disagreement 1/10 NoteAffect Product Capabilities and Per-Student Pricing Model Nathan actively calculates unit economics and ACV based on Jay's per-student per-semester pricing model ($5-$10 per student). Jay clarifies high school vs college deployment dynamics.6:45–10:38 · Guest disagreement 2/10 Open Educational Resources Integration and Higher Education Focus Jay explains Open Educational Resources (OER) integration and why edtech VC interest is strong. Nathan challenges the necessity of VC funding over customer revenue, but Jay explains the PR and validation value.10:39–13:10 · Guest disagreement 1/10 Current Customer Metrics, Class Deployments, and Budget Cycles Nathan drills into NoteAffect's metrics, deriving class sizes, total active students, and monthly recurring revenue ($1k–$5k MRR) based on 12 schools and 32 classes.13:10–15:15 · Guest disagreement 1/10 NoteAffect Team Composition and Sales Performance Targets Nathan asks for the exact breakdown of the 10-person team and inquires how sales targets are established for startup sales reps without established historical data.15:15–18:05 · Guest disagreement 2/10 Evaluating Marketing Experiments, Trade Shows, and Executive Summits Jay shares insights from spending $60k on failed trade magazine ads and moving away from general trade shows toward curated executive matchmaking events like University Summit.18:06–20:01 · Guest disagreement 1/10 Burn Rate, Operating Budgets, and Corporate Expansion Features Nathan probes Jay's monthly burn rate and comfort levels after spending $1.6M on the initial MVP. Jay explains how expanding into corporate and government sectors will shorten the sales cycle.1:35–3:42 · Nathan pushing back 2/10 Jay Tokosch's Background and Multi-Million Dollar CoreApps Exit Nathan introduces Jay and demonstrates industry knowledge by asking specific questions about his previous company CoreApps, its exit to Community Brands, and whether competitors like Cvent were considered.3:42–6:45 · Nathan pushing back 2/10 NoteAffect Product Capabilities and Per-Student Pricing Model Nathan actively calculates unit economics and ACV based on Jay's per-student per-semester pricing model ($5-$10 per student). Jay clarifies high school vs college deployment dynamics.6:45–10:38 · Nathan pushing back 3/10 Open Educational Resources Integration and Higher Education Focus Jay explains Open Educational Resources (OER) integration and why edtech VC interest is strong. Nathan challenges the necessity of VC funding over customer revenue, but Jay explains the PR and validation value.10:39–13:10 · Nathan pushing back 3/10 Current Customer Metrics, Class Deployments, and Budget Cycles Nathan drills into NoteAffect's metrics, deriving class sizes, total active students, and monthly recurring revenue ($1k–$5k MRR) based on 12 schools and 32 classes.13:10–15:15 · Nathan pushing back 2/10 NoteAffect Team Composition and Sales Performance Targets Nathan asks for the exact breakdown of the 10-person team and inquires how sales targets are established for startup sales reps without established historical data.15:15–18:05 · Nathan pushing back 2/10 Evaluating Marketing Experiments, Trade Shows, and Executive Summits Jay shares insights from spending $60k on failed trade magazine ads and moving away from general trade shows toward curated executive matchmaking events like University Summit.18:06–20:01 · Nathan pushing back 2/10 Burn Rate, Operating Budgets, and Corporate Expansion Features Nathan probes Jay's monthly burn rate and comfort levels after spending $1.6M on the initial MVP. Jay explains how expanding into corporate and government sectors will shorten the sales cycle.

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

0:00 · Nathan 56.4% · guest 43.6%0:00 · Nathan 56.4% · guest 43.6%3:00 · Nathan 20.1% · guest 79.9%3:00 · Nathan 20.1% · guest 79.9%6:00 · Nathan 25.8% · guest 74.2%6:00 · Nathan 25.8% · guest 74.2%9:00 · Nathan 31.5% · guest 68.5%9:00 · Nathan 31.5% · guest 68.5%12:00 · Nathan 30.2% · guest 69.8%12:00 · Nathan 30.2% · guest 69.8%15:00 · Nathan 15.3% · guest 84.7%15:00 · Nathan 15.3% · guest 84.7%18:00 · Nathan 26.6% · guest 73.4%18:00 · Nathan 26.6% · guest 73.4%21:00 · Nathan 94.4% · guest 5.6%21:00 · Nathan 94.4% · guest 5.6%
Sharpest disagreement ▶ 8:39 VC capital validation disagreement

Jay defends looking for venture capital backing for PR and market validation despite Nathan insisting customer revenue should be enough.

 Hardest push from Nathan ▶ 8:39 Host pushes back on raising VC capital

Nathan directly challenges Jay's rationale for raising outside capital when bootstrapping from previous exit proceeds and customer cash should suffice.

 Biggest teaching moment ▶ 6:54 OER ecosystem breakdown

Jay educates Nathan on Open Educational Resources (OER) adoption across universities and how NoteAffect measures real-time engagement to optimize curriculum content.

 Nathan holds their own ▶ 12:06 Host calculates MRR range on the fly

Nathan synthesizes class numbers, student headcounts, and price points to pinpoint Jay's unstated current MRR range of $1,000 to $5,000.
the scores for every segment, with the reasoning behind each
ChapterTopicNathan as informed peerGuest teachingGuest disagreementNathan pushing backWhy
Jay Tokosch's Background and Multi-Million Dollar CoreApps Exit 6312 Nathan introduces Jay and demonstrates industry knowledge by asking specific questions about his previous company CoreApps, its exit to Community Brands, and whether competitors like Cvent were considered.
NoteAffect Product Capabilities and Per-Student Pricing Model 6212 Nathan actively calculates unit economics and ACV based on Jay's per-student per-semester pricing model ($5-$10 per student). Jay clarifies high school vs college deployment dynamics.
Open Educational Resources Integration and Higher Education Focus 5423 Jay explains Open Educational Resources (OER) integration and why edtech VC interest is strong. Nathan challenges the necessity of VC funding over customer revenue, but Jay explains the PR and validation value.
Current Customer Metrics, Class Deployments, and Budget Cycles 7213 Nathan drills into NoteAffect's metrics, deriving class sizes, total active students, and monthly recurring revenue ($1k–$5k MRR) based on 12 schools and 32 classes.
NoteAffect Team Composition and Sales Performance Targets 4312 Nathan asks for the exact breakdown of the 10-person team and inquires how sales targets are established for startup sales reps without established historical data.
Evaluating Marketing Experiments, Trade Shows, and Executive Summits 5422 Jay shares insights from spending $60k on failed trade magazine ads and moving away from general trade shows toward curated executive matchmaking events like University Summit.
Burn Rate, Operating Budgets, and Corporate Expansion Features 5312 Nathan probes Jay's monthly burn rate and comfort levels after spending $1.6M on the initial MVP. Jay explains how expanding into corporate and government sectors will shorten the sales cycle.

Statements from this episode (12)

Assertion Not checkable as stated
Tokosch bootstrapped CoreApps to 800+ clients and 1,600 annual events before exit
“I bootstrapped that company. I was very fortunate to get it going that way and getting it started. Doing a bootstrap on that one, and when we finished, we had a little over 800 clients, and we did about 1600 events a year.”
Jay Tokosch Aug 1, 2020 ▶ 2:46
Assertion Not checkable as stated
Tokosch: CoreApps approached $10M in revenue prior to acquisition
“Oh, yeah, we were we were close to ten million.”
Jay Tokosch Aug 1, 2020 ▶ 3:05
Assertion Not checkable as stated
Tokosch: NoteAffect charges schools $5 to $10 per student per semester
“Oh it's really inexpensive. They're paying anywhere from five to 10 dollars per student per semester.”
Jay Tokosch Aug 1, 2020 ▶ 5:51
Assertion Not checkable as stated
Tokosch: NoteAffect deployments span 1,200-student high schools to 6,000-student colleges
“Like, we have one school that's a high school that's about 1200 students, and then we have one of our colleges up in New York that is What is it? 6000 students. So yeah, we arranged the gambit across the board there.”
Jay Tokosch Aug 1, 2020 ▶ 6:04
Disclosure
Tokosch plans to raise $1M for NoteAffect because software is complete
“Yeah, we're talking about a million. I don't need a lot. The software's done.”
Jay Tokosch Aug 1, 2020 ▶ 8:55
Assertion Not checkable as stated
Tokosch spent $1.6M self-funding NoteAffect's MVP before initial revenue
“It's like, what? A 1,000,006.”
Jay Tokosch Aug 1, 2020 ▶ 9:59
Assertion Not checkable as stated
NoteAffect is currently deployed across 12 schools and 32 classes
“So right now we have 12 schools. And we're doing I think it's 32 classes. That's what it's turned out to be.”
Jay Tokosch Aug 1, 2020 ▶ 10:54
Prediction Not checkable as stated
Tokosch predicts NoteAffect will reach $10K monthly revenue next quarter
“Yeah, absolutely. We've got we've got the 12 signed up and I probably have another 17 or 18 that are outstanding that I, that will pop.”
Jay Tokosch Aug 1, 2020 ▶ 12:22
Insight
Tokosch outlines education sales cycle challenges tied to July school budgets
“The biggest thing with the education and the biggest is the drawback is the sales cycle. And this is so long. There's a short window for you to get involved in it. And then you know, you're looking at them putting it into their budgets, which most of them are …”
Jay Tokosch Aug 1, 2020 ▶ 12:33
Disclosure
Tokosch: NoteAffect measures early sales reps by demo volume, not revenue quota
“You know, I haven't given them a quota at this point. It's hard to do that with a startup. You know, what we're doing here today is I'm measuring them based on, you know, the amount of appointments that they're doing, the demos that they're doing that, that ty…”
Jay Tokosch Aug 1, 2020 ▶ 14:08
Insight
Tokosch: Early sales targets should be set at 50% of founder output
“Well, so I always like to be the person who does it myself first to see how well I do with it, right? Because if I'm, then I measure against myself. So if I'm able to do, let's say, 10 demos a month, right, I'm not always going to expect the salesperson who, y…”
Jay Tokosch Aug 1, 2020 ▶ 14:38
Disclosure
Tokosch: NoteAffect spent $60,000 testing trade magazine advertising
“At the beginning we were doing a bunch of things in the trade show, I'm sorry, in the trade magazines. Educause ISTE... It was it was 60,000 dollars that we spent.”
Jay Tokosch Aug 1, 2020 ▶ 15:47
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