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May 5, 2020 · 15m · top-founders

1746 Infusionsoft Employee #8 Launches New Venture, Passes $175k in MRR, 2500 SMB Customers

Dave Lee · 8m 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, Dave Lee, CEO of Plus This and former early Infusionsoft executive, details how he bootstrapped his marketing automation add-on suite to $175,000 in monthly recurring revenue across 2,500 SMB customers with a lean eight-person team.

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 35.3% of the talking time here. How this is scored →

Nathan as informed peer 4.8 Guest teaching 2.6 Guest disagreement 1.6 Nathan pushing back 3.0
05100:0010:000:57–3:46 · Nathan as informed peer 5/10 Discussion on Lee's Book and Publishing Strategy Nathan presses Dave on why a marketing automation expert used an outside publisher rather than his own tool suite to sell books. Dave clarifies that book publishing is an entirely different beast, and Nathan quickly pivots into drilling down on SaaS metrics and pricing tiers.3:46–6:56 · Nathan as informed peer 5/10 Bootstrapping, Acquisition Channels, and Team Structure Nathan digs into team compensation, hiring tactics, and churn classification (logo vs. revenue). Dave educates on the realities of SMB SaaS churn, noting January credit card expirations and platform-dependency turnover.6:56–10:27 · Nathan as informed peer 6/10 Multi-Platform Expansion, Unit Economics, and Stickiness Nathan shows deep context by referencing Infusionsoft founder Clate Mask and the Goldman Sachs secondary liquidity event Dave participated in. Dave details his rationale for running a profitable lifestyle business rather than riding the venture hamster wheel.10:27–13:59 · Nathan as informed peer 7/10 Exploring Capital Options and Strategic Growth Nathan actively challenges Dave on why he has not taken non-dilutive capital and questions whether customer pricing resistance is Dave's own fault in value communication. Dave pushes back by explaining the irrational psychology of SMB buyers when add-on costs equal core platform costs.13:59–14:44 · Nathan as informed peer 1/10 The Famous Five Rapid-Fire Questions Standard Famous Five rapid-fire closing questions with concise, agreeable responses.0:57–3:46 · Guest teaching 2/10 Discussion on Lee's Book and Publishing Strategy Nathan presses Dave on why a marketing automation expert used an outside publisher rather than his own tool suite to sell books. Dave clarifies that book publishing is an entirely different beast, and Nathan quickly pivots into drilling down on SaaS metrics and pricing tiers.3:46–6:56 · Guest teaching 4/10 Bootstrapping, Acquisition Channels, and Team Structure Nathan digs into team compensation, hiring tactics, and churn classification (logo vs. revenue). Dave educates on the realities of SMB SaaS churn, noting January credit card expirations and platform-dependency turnover.6:56–10:27 · Guest teaching 3/10 Multi-Platform Expansion, Unit Economics, and Stickiness Nathan shows deep context by referencing Infusionsoft founder Clate Mask and the Goldman Sachs secondary liquidity event Dave participated in. Dave details his rationale for running a profitable lifestyle business rather than riding the venture hamster wheel.10:27–13:59 · Guest teaching 4/10 Exploring Capital Options and Strategic Growth Nathan actively challenges Dave on why he has not taken non-dilutive capital and questions whether customer pricing resistance is Dave's own fault in value communication. Dave pushes back by explaining the irrational psychology of SMB buyers when add-on costs equal core platform costs.13:59–14:44 · Guest teaching 0/10 The Famous Five Rapid-Fire Questions Standard Famous Five rapid-fire closing questions with concise, agreeable responses.0:57–3:46 · Guest disagreement 2/10 Discussion on Lee's Book and Publishing Strategy Nathan presses Dave on why a marketing automation expert used an outside publisher rather than his own tool suite to sell books. Dave clarifies that book publishing is an entirely different beast, and Nathan quickly pivots into drilling down on SaaS metrics and pricing tiers.3:46–6:56 · Guest disagreement 1/10 Bootstrapping, Acquisition Channels, and Team Structure Nathan digs into team compensation, hiring tactics, and churn classification (logo vs. revenue). Dave educates on the realities of SMB SaaS churn, noting January credit card expirations and platform-dependency turnover.6:56–10:27 · Guest disagreement 1/10 Multi-Platform Expansion, Unit Economics, and Stickiness Nathan shows deep context by referencing Infusionsoft founder Clate Mask and the Goldman Sachs secondary liquidity event Dave participated in. Dave details his rationale for running a profitable lifestyle business rather than riding the venture hamster wheel.10:27–13:59 · Guest disagreement 4/10 Exploring Capital Options and Strategic Growth Nathan actively challenges Dave on why he has not taken non-dilutive capital and questions whether customer pricing resistance is Dave's own fault in value communication. Dave pushes back by explaining the irrational psychology of SMB buyers when add-on costs equal core platform costs.13:59–14:44 · Guest disagreement 0/10 The Famous Five Rapid-Fire Questions Standard Famous Five rapid-fire closing questions with concise, agreeable responses.0:57–3:46 · Nathan pushing back 4/10 Discussion on Lee's Book and Publishing Strategy Nathan presses Dave on why a marketing automation expert used an outside publisher rather than his own tool suite to sell books. Dave clarifies that book publishing is an entirely different beast, and Nathan quickly pivots into drilling down on SaaS metrics and pricing tiers.3:46–6:56 · Nathan pushing back 3/10 Bootstrapping, Acquisition Channels, and Team Structure Nathan digs into team compensation, hiring tactics, and churn classification (logo vs. revenue). Dave educates on the realities of SMB SaaS churn, noting January credit card expirations and platform-dependency turnover.6:56–10:27 · Nathan pushing back 2/10 Multi-Platform Expansion, Unit Economics, and Stickiness Nathan shows deep context by referencing Infusionsoft founder Clate Mask and the Goldman Sachs secondary liquidity event Dave participated in. Dave details his rationale for running a profitable lifestyle business rather than riding the venture hamster wheel.10:27–13:59 · Nathan pushing back 6/10 Exploring Capital Options and Strategic Growth Nathan actively challenges Dave on why he has not taken non-dilutive capital and questions whether customer pricing resistance is Dave's own fault in value communication. Dave pushes back by explaining the irrational psychology of SMB buyers when add-on costs equal core platform costs.13:59–14:44 · Nathan pushing back 0/10 The Famous Five Rapid-Fire Questions Standard Famous Five rapid-fire closing questions with concise, agreeable responses.

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

0:00 · Nathan 54.5% · guest 45.5%0:00 · Nathan 54.5% · guest 45.5%3:00 · Nathan 36.3% · guest 63.7%3:00 · Nathan 36.3% · guest 63.7%6:00 · Nathan 22.1% · guest 77.9%6:00 · Nathan 22.1% · guest 77.9%9:00 · Nathan 27.1% · guest 72.9%9:00 · Nathan 27.1% · guest 72.9%12:00 · Nathan 30% · guest 70%12:00 · Nathan 30% · guest 70%15:00 · Nathan 93% · guest 7%15:00 · Nathan 93% · guest 7%
Sharpest disagreement ▶ 13:08 Entrepreneurs are not sane about add-on pricing

Dave rejects Nathan's assumption that SMB customers evaluate software with pure ROI logic, asserting that most small business owners irrationally refuse to pay more for add-ons than base platforms.

 Hardest push from Nathan ▶ 13:03 Nathan challenges value communication and pricing

Nathan refuses Dave's framing that customers won't pay $79/month for an add-on, arguing that any sane person would pay it for $20k in revenue and asking if it is Dave's fault for poor communication.

 Biggest teaching moment ▶ 6:00 Dave outlines inherent SMB churn drivers

Dave breaks down why 4.5% monthly churn is effectively a structural floor for SMB tools due to post-holiday credit card max-outs and native platform attrition.

 Nathan holds their own ▶ 9:53 Nathan references Infusionsoft Goldman Sachs liquidity details

Nathan demonstrates insider knowledge of Infusionsoft's capital history and employee option buybacks during the Goldman Sachs round.
the scores for every segment, with the reasoning behind each
ChapterTopicNathan as informed peerGuest teachingGuest disagreementNathan pushing backWhy
Discussion on Lee's Book and Publishing Strategy 5224 Nathan presses Dave on why a marketing automation expert used an outside publisher rather than his own tool suite to sell books. Dave clarifies that book publishing is an entirely different beast, and Nathan quickly pivots into drilling down on SaaS metrics and pricing tiers.
Bootstrapping, Acquisition Channels, and Team Structure 5413 Nathan digs into team compensation, hiring tactics, and churn classification (logo vs. revenue). Dave educates on the realities of SMB SaaS churn, noting January credit card expirations and platform-dependency turnover.
Multi-Platform Expansion, Unit Economics, and Stickiness 6312 Nathan shows deep context by referencing Infusionsoft founder Clate Mask and the Goldman Sachs secondary liquidity event Dave participated in. Dave details his rationale for running a profitable lifestyle business rather than riding the venture hamster wheel.
Exploring Capital Options and Strategic Growth 7446 Nathan actively challenges Dave on why he has not taken non-dilutive capital and questions whether customer pricing resistance is Dave's own fault in value communication. Dave pushes back by explaining the irrational psychology of SMB buyers when add-on costs equal core platform costs.
The Famous Five Rapid-Fire Questions 1000 Standard Famous Five rapid-fire closing questions with concise, agreeable responses.

Statements from this episode (13)

Assertion Not checkable as stated
Plus This serves 2,500 customers and processes 25 million monthly transactions
“We've got over 2500 customers, and we process over twenty five million transactions a month.”
Dave Lee May 5, 2020 ▶ 3:07
Disclosure
Plus This acquires customers by providing free software to marketing consultants
“There are thousands of consultants out there and we give them a free version of our software so that they can play with it and then refer it to their to their clients. So we use them as a channel.”
Dave Lee May 5, 2020 ▶ 4:07
Disclosure
Dave Lee: Plus This is 100% bootstrapped with no debt or outside capital
“Bootstrapped, a hundred percent. No debt, no financing.”
Dave Lee May 5, 2020 ▶ 4:22
Assertion Not checkable as stated
Plus This operates with four support staff, three developers, and one marketer
“Yeah, we've got four kind of on the client love onboarding support side, tech support side. We've got three developers and one marketer.”
Dave Lee May 5, 2020 ▶ 5:25
Assertion Not checkable as stated
Plus This reduced monthly revenue churn from 9% to under 5%
“When we started out, we were like at eight, nine percent and then spent a couple of years really driving hard. And it's bottomed out pretty well, right around 4.5 to 4.9%.”
Dave Lee May 5, 2020 ▶ 5:59
Insight
Dave Lee says SaaS add-on tools inherit their host platform churn rates
“When it comes down to it, although we have a lot of tools that could be full standalone tools we are really reliant on the platforms. So if Entreport, for example, has a huge turnover and those customers are using plus this as well. That is built in turnover f…”
Dave Lee May 5, 2020 ▶ 6:31
Assertion Not checkable as stated
Plus This maintains a fully weighted CAC of about $170
“No, fully weighted CAC is about a 170 bucks.”
Dave Lee May 5, 2020 ▶ 7:47
Assertion Not checkable as stated
Dave Lee says platform customers using add-ons are three times more valuable
“They learn quickly that customers, their customers that have an add-on like ours are three times more valuable as a customer.”
Dave Lee May 5, 2020 ▶ 8:18
Assertion Not checkable as stated
Dave Lee: Plus This has been profitable since day one
“We've been profitable since day one.”
Dave Lee May 5, 2020 ▶ 8:37
Disclosure
Plus This is exploring a structured equity partnership to accelerate growth
“We're actually exploring something right now that would get cash in, we'd give up some equity, but think of it as a structured partnership that would then lead us to faster growth and then a larger exit for us.”
Dave Lee May 5, 2020 ▶ 10:48
Assertion Not checkable as stated
Dave Lee says VCs ignore 40% profit margins to focus on growth
“I do stay in touch with PE firms and VCs and investment bankers And they, you know, they could care less if we're 40% profitable. They really only care about the growth rate right now.”
Dave Lee May 5, 2020 ▶ 11:36
Assertion Not checkable as stated
Dave Lee notes downward pricing pressure among marketing automation platforms
“At the same time, there's been a downward pressure on, on pricing. These marketing automation platforms are going after a smaller and smaller customer”
Dave Lee May 5, 2020 ▶ 12:31
Insight
Dave Lee says SMB buyers anchor add-on prices to base software costs
“They look at, hey, I'm paying 70 bucks for this platform. I should only have to pay 19 or 29 for a series of add-ons, regardless of how valuable they might be.”
Dave Lee May 5, 2020 ▶ 13:18
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