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Jan 17, 2020 · 15m · top-founders

1637 The Art of Shifting $60M in 1991 Revenue to Pure SaaS

Bob Alves · 6m spoken
0:00 / 0:00

gold bands on the timeline = statements, start to end. Hover to read, click to jump. CC turns on captions

Bob Alves, co-founder and CEO of Advanced Solutions International (ASI), details how the company generates $60 million in annual revenue while successfully transitioning its legacy 1991 nonprofit enterprise software into a modern cloud SaaS platform. He discusses key SaaS financial metrics, migration complexities, hybrid global distribution channels, and a disciplined approach to private capital management.

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 48.4% of the talking time here. How this is scored →

Nathan as informed peer 5.8 Guest teaching 1.8 Guest disagreement 1.8 Nathan pushing back 3.8
05100:0010:000:00–3:40 · Nathan as informed peer 6/10 Host Overview of Advanced Solutions International Nathan introduces the company's financial breakdown and drills Bob on their transition from on-prem to pure SaaS. Bob clarifies the distinction between their pure cloud ARR ($5M) and their $25M in legacy update subscriptions.3:41–7:18 · Nathan as informed peer 6/10 ASI's Nonprofit Product Suite and Origin Story Nathan performs rapid mental math to calculate monthly SaaS run rate ($415k) and estimates year-ago revenue based on Bob's 60% growth rate figure.7:19–10:40 · Nathan as informed peer 8/10 Organizational Structure and Global Team Breakdown Nathan directly challenges Bob when Bob claims a goal of 'over 101% revenue churn.' Nathan interrupts to point out that over 100% churn makes no mathematical sense, educating Bob that the metric he means is net revenue retention or net negative churn.10:40–12:46 · Nathan as informed peer 5/10 Customer Acquisition and Distribution Channels When Bob brushes off the CAC inquiry saying it cannot be answered off the top of his head, Nathan quickly pivots and reframes the question around sales channels and funding history.12:47–14:30 · Nathan as informed peer 4/10 The Famous Five Rapid-Fire Questions Nathan runs through the Famous Five, lightly teasing Bob about getting only 4-5 hours of sleep before wrapping up.0:00–3:40 · Guest teaching 4/10 Host Overview of Advanced Solutions International Nathan introduces the company's financial breakdown and drills Bob on their transition from on-prem to pure SaaS. Bob clarifies the distinction between their pure cloud ARR ($5M) and their $25M in legacy update subscriptions.3:41–7:18 · Guest teaching 2/10 ASI's Nonprofit Product Suite and Origin Story Nathan performs rapid mental math to calculate monthly SaaS run rate ($415k) and estimates year-ago revenue based on Bob's 60% growth rate figure.7:19–10:40 · Guest teaching 1/10 Organizational Structure and Global Team Breakdown Nathan directly challenges Bob when Bob claims a goal of 'over 101% revenue churn.' Nathan interrupts to point out that over 100% churn makes no mathematical sense, educating Bob that the metric he means is net revenue retention or net negative churn.10:40–12:46 · Guest teaching 1/10 Customer Acquisition and Distribution Channels When Bob brushes off the CAC inquiry saying it cannot be answered off the top of his head, Nathan quickly pivots and reframes the question around sales channels and funding history.12:47–14:30 · Guest teaching 1/10 The Famous Five Rapid-Fire Questions Nathan runs through the Famous Five, lightly teasing Bob about getting only 4-5 hours of sleep before wrapping up.0:00–3:40 · Guest disagreement 1/10 Host Overview of Advanced Solutions International Nathan introduces the company's financial breakdown and drills Bob on their transition from on-prem to pure SaaS. Bob clarifies the distinction between their pure cloud ARR ($5M) and their $25M in legacy update subscriptions.3:41–7:18 · Guest disagreement 1/10 ASI's Nonprofit Product Suite and Origin Story Nathan performs rapid mental math to calculate monthly SaaS run rate ($415k) and estimates year-ago revenue based on Bob's 60% growth rate figure.7:19–10:40 · Guest disagreement 3/10 Organizational Structure and Global Team Breakdown Nathan directly challenges Bob when Bob claims a goal of 'over 101% revenue churn.' Nathan interrupts to point out that over 100% churn makes no mathematical sense, educating Bob that the metric he means is net revenue retention or net negative churn.10:40–12:46 · Guest disagreement 3/10 Customer Acquisition and Distribution Channels When Bob brushes off the CAC inquiry saying it cannot be answered off the top of his head, Nathan quickly pivots and reframes the question around sales channels and funding history.12:47–14:30 · Guest disagreement 1/10 The Famous Five Rapid-Fire Questions Nathan runs through the Famous Five, lightly teasing Bob about getting only 4-5 hours of sleep before wrapping up.0:00–3:40 · Nathan pushing back 3/10 Host Overview of Advanced Solutions International Nathan introduces the company's financial breakdown and drills Bob on their transition from on-prem to pure SaaS. Bob clarifies the distinction between their pure cloud ARR ($5M) and their $25M in legacy update subscriptions.3:41–7:18 · Nathan pushing back 2/10 ASI's Nonprofit Product Suite and Origin Story Nathan performs rapid mental math to calculate monthly SaaS run rate ($415k) and estimates year-ago revenue based on Bob's 60% growth rate figure.7:19–10:40 · Nathan pushing back 7/10 Organizational Structure and Global Team Breakdown Nathan directly challenges Bob when Bob claims a goal of 'over 101% revenue churn.' Nathan interrupts to point out that over 100% churn makes no mathematical sense, educating Bob that the metric he means is net revenue retention or net negative churn.10:40–12:46 · Nathan pushing back 4/10 Customer Acquisition and Distribution Channels When Bob brushes off the CAC inquiry saying it cannot be answered off the top of his head, Nathan quickly pivots and reframes the question around sales channels and funding history.12:47–14:30 · Nathan pushing back 3/10 The Famous Five Rapid-Fire Questions Nathan runs through the Famous Five, lightly teasing Bob about getting only 4-5 hours of sleep before wrapping up.

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

0:00 · Nathan 58.4% · guest 41.6%0:00 · Nathan 58.4% · guest 41.6%3:00 · Nathan 43.3% · guest 56.7%3:00 · Nathan 43.3% · guest 56.7%6:00 · Nathan 34.4% · guest 65.6%6:00 · Nathan 34.4% · guest 65.6%9:00 · Nathan 45.3% · guest 54.7%9:00 · Nathan 45.3% · guest 54.7%12:00 · Nathan 55.3% · guest 44.7%12:00 · Nathan 55.3% · guest 44.7%15:00 · Nathan 97.8% · guest 2.2%15:00 · Nathan 97.8% · guest 2.2%
Sharpest disagreement ▶ 9:11 Defending confused churn terminology

Bob dismisses Nathan's request for clarification on his churn figures by claiming it is a complicated formula better left off the call.

 Hardest push from Nathan ▶ 9:37 Refusing nonsensical churn metric

Nathan explicitly stops Bob to repeat back his exact words, telling him bluntly that having over 100% churn makes no sense.

 Biggest teaching moment ▶ 2:05 Explaining update subscriptions versus pure SaaS

Bob educates Nathan on ASI's legacy model, explaining that $25M of their non-cloud revenue functions as a subscription for software update licenses rather than standard SLA maintenance.

 Nathan holds their own ▶ 9:00 Correcting net negative churn and retention terminology

Nathan demonstrates command of SaaS metrics by translating Bob's confusing churn claims into standard industry terms of net negative churn and net revenue retention.
the scores for every segment, with the reasoning behind each
ChapterTopicNathan as informed peerGuest teachingGuest disagreementNathan pushing backWhy
Host Overview of Advanced Solutions International 6413 Nathan introduces the company's financial breakdown and drills Bob on their transition from on-prem to pure SaaS. Bob clarifies the distinction between their pure cloud ARR ($5M) and their $25M in legacy update subscriptions.
ASI's Nonprofit Product Suite and Origin Story 6212 Nathan performs rapid mental math to calculate monthly SaaS run rate ($415k) and estimates year-ago revenue based on Bob's 60% growth rate figure.
Organizational Structure and Global Team Breakdown 8137 Nathan directly challenges Bob when Bob claims a goal of 'over 101% revenue churn.' Nathan interrupts to point out that over 100% churn makes no mathematical sense, educating Bob that the metric he means is net revenue retention or net negative churn.
Customer Acquisition and Distribution Channels 5134 When Bob brushes off the CAC inquiry saying it cannot be answered off the top of his head, Nathan quickly pivots and reframes the question around sales channels and funding history.
The Famous Five Rapid-Fire Questions 4113 Nathan runs through the Famous Five, lightly teasing Bob about getting only 4-5 hours of sleep before wrapping up.

Statements from this episode (13)

Disclosure
Alves says all new ASI sales are cloud subscriptions
“Today, all of our new sales are a subscription, you know, in the cloud.”
Bob Alves Jan 17, 2020 ▶ 1:35
Disclosure
ASI generates $5M pure SaaS out of $60M total revenue
“About five million, which is about our new sales number, you know, out of about sixty million.”
Bob Alves Jan 17, 2020 ▶ 1:53
Disclosure
ASI earns $25M from on-premise software update subscriptions
“People bought our software as a traditional license, but then had to pay a 25% of list price fee. So another twenty-five million is a subscription, even for people who are not in a pure place SAS structure.”
Bob Alves Jan 17, 2020 ▶ 2:14
Disclosure
ASI serves 600 cloud clients and over 1,000 on-premise clients
“So we do have five or 600 clients in the cloud. And then you know, more than a thousand that are on the, in the field on premise.”
Bob Alves Jan 17, 2020 ▶ 2:57
Assertion Supported
ASI built the first Windows software package for nonprofits
“Windows was emerging, so we built a package, the first package for Windows and it took the company, you know, really literally in three years all over the world.”
Bob Alves Jan 17, 2020 ▶ 4:41
Disclosure
ASI had zero cloud revenue until three to four years ago
“Back about three or four years ago, there was, it was zero.”
Bob Alves Jan 17, 2020 ▶ 5:33
Disclosure
ASI's SaaS business is growing approximately 60% year-over-year
“Our SaaS business is growing about 60%.”
Bob Alves Jan 17, 2020 ▶ 6:08
Assertion Not checkable as stated
ASI experiences roughly 2% annual gross revenue churn
“I said pro plus 95, so it's probably more like two percent revenue churn.”
Bob Alves Jan 17, 2020 ▶ 8:43
Disclosure
ASI targets 101% net revenue retention this year
“I can tell you this year, we have a goal to have a positive revenue churn, a 101% revenue churn.”
Bob Alves Jan 17, 2020 ▶ 8:49
Disclosure
ASI charges clients an upcharge to migrate to the cloud
“When people move from on-premise to the cloud, they pay an upcharge.”
Bob Alves Jan 17, 2020 ▶ 10:30
Assertion Not checkable as stated
ASI relies on 100 channel partners and 25 salespeople globally
“So we have about a hundred business partners that sell out, sell and service our products. And we have roughly 25 salespeople around the world for new and existing clients.”
Bob Alves Jan 17, 2020 ▶ 11:19
Assertion Partly supported
ASI has raised $56M in total capital to date
“Fifty-six million dollars.”
Bob Alves Jan 17, 2020 ▶ 11:43
Assertion Not checkable as stated
Advanced Solutions International is currently cash flow positive
“Yes, we are.”
Bob Alves Jan 17, 2020 ▶ 12:27
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