Nov 14, 2019 · 19m · top-founders

1573 How Activtrak Hit $4.5M ARR With No Outside Capital

Anton Seidler · 11m spoken Nathan Latka · 5m 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 SaaS podcast interview, host Nathan Latka speaks with ActivTrak co-founder Anton Seidler to break down how the workplace productivity software scaled to $4.5 million ARR completely bootstrapped. Seidler details the company's negative net churn dynamics, organic freemium acquisition model, and disciplined operational philosophy.

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 34.7% of the talking time here. How this is scored →

Nathan as informed peer 5.2 Guest teaching 3.3 Guest disagreement 2.5 Nathan pushing back 4.7
05100:0010:001:25–4:06 · Nathan as informed peer 6/10 Customer Pricing, Headcount, and ARR Growth Latka pushes for exact customer counts and revenue figures, performing quick mental math that Anton acknowledges. Anton pushes back on Latka's reliance on average pricing metrics by comparing average payment to average hospital body temperature.4:08–7:40 · Nathan as informed peer 6/10 Churn Economics and Segmented Retention Behaviors Latka refuses Anton's initial net churn answer and insists on isolating gross revenue churn. Once Anton provides the 2% gross figure, Latka instantly deduces the 3% expansion rate to reach net negative churn.7:40–10:46 · Nathan as informed peer 4/10 Company Origins, Co-Founder Synergy, and In-Office Culture Latka cuts Anton off during his narrative regarding early partnership days to keep the interview on a tight timeline, steering directly into team headcount and office location.10:49–14:41 · Nathan as informed peer 6/10 Casual Discussion on Dallas and Deep Ellum Latka challenges Anton's assumption of organic growth by pointing out that 13 staff members in sales and marketing must be factored into fully weighted CAC, then presses for step-by-step funnel conversion percentages.14:41–17:04 · Nathan as informed peer 6/10 Bootstrapping Philosophy Versus Venture Debt Financing Latka pushes back on Anton describing their growth as purely organic given the dedicated go-to-market team. Anton agrees that success requires incremental improvements across all channels rather than a single silver bullet.17:06–18:41 · Nathan as informed peer 3/10 Famous Five Rapid-Fire Business and Personal Questions Anton subverts the Famous Five format by stating he hates business books and rejects the premise of following individual CEOs, citing Outliers to argue that studying single leaders is misleading.1:25–4:06 · Guest teaching 4/10 Customer Pricing, Headcount, and ARR Growth Latka pushes for exact customer counts and revenue figures, performing quick mental math that Anton acknowledges. Anton pushes back on Latka's reliance on average pricing metrics by comparing average payment to average hospital body temperature.4:08–7:40 · Guest teaching 4/10 Churn Economics and Segmented Retention Behaviors Latka refuses Anton's initial net churn answer and insists on isolating gross revenue churn. Once Anton provides the 2% gross figure, Latka instantly deduces the 3% expansion rate to reach net negative churn.7:40–10:46 · Guest teaching 2/10 Company Origins, Co-Founder Synergy, and In-Office Culture Latka cuts Anton off during his narrative regarding early partnership days to keep the interview on a tight timeline, steering directly into team headcount and office location.10:49–14:41 · Guest teaching 3/10 Casual Discussion on Dallas and Deep Ellum Latka challenges Anton's assumption of organic growth by pointing out that 13 staff members in sales and marketing must be factored into fully weighted CAC, then presses for step-by-step funnel conversion percentages.14:41–17:04 · Guest teaching 3/10 Bootstrapping Philosophy Versus Venture Debt Financing Latka pushes back on Anton describing their growth as purely organic given the dedicated go-to-market team. Anton agrees that success requires incremental improvements across all channels rather than a single silver bullet.17:06–18:41 · Guest teaching 4/10 Famous Five Rapid-Fire Business and Personal Questions Anton subverts the Famous Five format by stating he hates business books and rejects the premise of following individual CEOs, citing Outliers to argue that studying single leaders is misleading.1:25–4:06 · Guest disagreement 3/10 Customer Pricing, Headcount, and ARR Growth Latka pushes for exact customer counts and revenue figures, performing quick mental math that Anton acknowledges. Anton pushes back on Latka's reliance on average pricing metrics by comparing average payment to average hospital body temperature.4:08–7:40 · Guest disagreement 2/10 Churn Economics and Segmented Retention Behaviors Latka refuses Anton's initial net churn answer and insists on isolating gross revenue churn. Once Anton provides the 2% gross figure, Latka instantly deduces the 3% expansion rate to reach net negative churn.7:40–10:46 · Guest disagreement 2/10 Company Origins, Co-Founder Synergy, and In-Office Culture Latka cuts Anton off during his narrative regarding early partnership days to keep the interview on a tight timeline, steering directly into team headcount and office location.10:49–14:41 · Guest disagreement 2/10 Casual Discussion on Dallas and Deep Ellum Latka challenges Anton's assumption of organic growth by pointing out that 13 staff members in sales and marketing must be factored into fully weighted CAC, then presses for step-by-step funnel conversion percentages.14:41–17:04 · Guest disagreement 2/10 Bootstrapping Philosophy Versus Venture Debt Financing Latka pushes back on Anton describing their growth as purely organic given the dedicated go-to-market team. Anton agrees that success requires incremental improvements across all channels rather than a single silver bullet.17:06–18:41 · Guest disagreement 4/10 Famous Five Rapid-Fire Business and Personal Questions Anton subverts the Famous Five format by stating he hates business books and rejects the premise of following individual CEOs, citing Outliers to argue that studying single leaders is misleading.1:25–4:06 · Nathan pushing back 5/10 Customer Pricing, Headcount, and ARR Growth Latka pushes for exact customer counts and revenue figures, performing quick mental math that Anton acknowledges. Anton pushes back on Latka's reliance on average pricing metrics by comparing average payment to average hospital body temperature.4:08–7:40 · Nathan pushing back 5/10 Churn Economics and Segmented Retention Behaviors Latka refuses Anton's initial net churn answer and insists on isolating gross revenue churn. Once Anton provides the 2% gross figure, Latka instantly deduces the 3% expansion rate to reach net negative churn.7:40–10:46 · Nathan pushing back 5/10 Company Origins, Co-Founder Synergy, and In-Office Culture Latka cuts Anton off during his narrative regarding early partnership days to keep the interview on a tight timeline, steering directly into team headcount and office location.10:49–14:41 · Nathan pushing back 5/10 Casual Discussion on Dallas and Deep Ellum Latka challenges Anton's assumption of organic growth by pointing out that 13 staff members in sales and marketing must be factored into fully weighted CAC, then presses for step-by-step funnel conversion percentages.14:41–17:04 · Nathan pushing back 5/10 Bootstrapping Philosophy Versus Venture Debt Financing Latka pushes back on Anton describing their growth as purely organic given the dedicated go-to-market team. Anton agrees that success requires incremental improvements across all channels rather than a single silver bullet.17:06–18:41 · Nathan pushing back 3/10 Famous Five Rapid-Fire Business and Personal Questions Anton subverts the Famous Five format by stating he hates business books and rejects the premise of following individual CEOs, citing Outliers to argue that studying single leaders is misleading.

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

0:00 · Nathan 52.8% · guest 47.2%0:00 · Nathan 52.8% · guest 47.2%3:00 · Nathan 14.3% · guest 85.7%3:00 · Nathan 14.3% · guest 85.7%6:00 · Nathan 11.5% · guest 88.5%6:00 · Nathan 11.5% · guest 88.5%9:00 · Nathan 69.4% · guest 30.6%9:00 · Nathan 69.4% · guest 30.6%12:00 · Nathan 20.9% · guest 79.1%12:00 · Nathan 20.9% · guest 79.1%15:00 · Nathan 24.7% · guest 75.3%15:00 · Nathan 24.7% · guest 75.3%18:00 · Nathan 69.4% · guest 30.6%18:00 · Nathan 69.4% · guest 30.6%
Sharpest disagreement ▶ 17:09 Rejection of business books and CEO worship

Anton flatly refuses standard interview conventions by stating he hates business books and dismisses the utility of following specific CEOs.

Hardest push from Nathan ▶ 5:43 Latka demands gross revenue churn

Latka cuts off Anton's deflection about negative net churn to repeatedly demand the unvarnished gross revenue churn rate.

Biggest teaching moment ▶ 1:28 Hospital body temperature analogy

Anton reframes Latka's average pricing question by explaining why blended averages mislead in SaaS cohorts with diverse enterprise and self-serve tiers.

Nathan holds their own ▶ 5:56 Instant expansion rate deduction

Latka demonstrates SaaS metric fluency by calculating Anton's monthly expansion rate in real-time from the 2% gross churn and net negative figures.

the scores for every segment, with the reasoning behind each
ChapterTopicNathan as informed peerGuest teachingGuest disagreementNathan pushing backWhy
Customer Pricing, Headcount, and ARR Growth 6435 Latka pushes for exact customer counts and revenue figures, performing quick mental math that Anton acknowledges. Anton pushes back on Latka's reliance on average pricing metrics by comparing average payment to average hospital body temperature.
Churn Economics and Segmented Retention Behaviors 6425 Latka refuses Anton's initial net churn answer and insists on isolating gross revenue churn. Once Anton provides the 2% gross figure, Latka instantly deduces the 3% expansion rate to reach net negative churn.
Company Origins, Co-Founder Synergy, and In-Office Culture 4225 Latka cuts Anton off during his narrative regarding early partnership days to keep the interview on a tight timeline, steering directly into team headcount and office location.
Casual Discussion on Dallas and Deep Ellum 6325 Latka challenges Anton's assumption of organic growth by pointing out that 13 staff members in sales and marketing must be factored into fully weighted CAC, then presses for step-by-step funnel conversion percentages.
Bootstrapping Philosophy Versus Venture Debt Financing 6325 Latka pushes back on Anton describing their growth as purely organic given the dedicated go-to-market team. Anton agrees that success requires incremental improvements across all channels rather than a single silver bullet.
Famous Five Rapid-Fire Business and Personal Questions 3443 Anton subverts the Famous Five format by stating he hates business books and rejects the premise of following individual CEOs, citing Outliers to argue that studying single leaders is misleading.

Statements from this episode (15)

Assertion Not checkable as stated
ActivTrak has 4,456 customers as of November 2019
“It's a 4456 customers as of now.”
Anton Seidler Nov 14, 2019 ▶ 2:15
Assertion Not checkable as stated
ActivTrak is at $4.5M ARR, targeting $5M in January 2020
“So technically we are at 4.5 million ARR and we are looking to hit five in January.”
Anton Seidler Nov 14, 2019 ▶ 3:24
Assertion Not checkable as stated
ActivTrak added as much MRR in October as its first 18 months
“I've been reflecting on our numbers last month, and like last month in October, we've actually added the same number of MRR as we've added in first 18 months.”
Anton Seidler Nov 14, 2019 ▶ 4:16
Assertion Not checkable as stated
ActivTrak recorded a net MRR churn of negative 1.5% in October 2019
“In October it was 1.5 negative.”
Anton Seidler Nov 14, 2019 ▶ 5:37
Assertion Not checkable as stated
ActivTrak's gross MRR churn was 2% in September and October 2019
“It was two percent in October. It was two percent in September. It was 2.8 in August.”
Anton Seidler Nov 14, 2019 ▶ 5:50
Assertion Not checkable as stated
ActivTrak's SMB monthly plan customers typically retain for four to six months
“Small customers who are signing up for monthly plans. And they stay with us for like four, five, six months.”
Anton Seidler Nov 14, 2019 ▶ 6:21
Disclosure
ActivTrak established an intentional company policy against building a remote team
“Yeah, we intentionally decided, decided not to build a remote team, so it's like rule and the policy.”
Anton Seidler Nov 14, 2019 ▶ 8:56
Disclosure
ActivTrak paused almost all paid acquisition campaigns to test channel dependence
“On January first this year, we've decided to almost kind of stop all our paid acquisition campaigns just to see how dependent are we, like from Google, Bing, and that kind of stuff.”
Anton Seidler Nov 14, 2019 ▶ 11:28
Assertion Not checkable as stated
ActivTrak spent up to 30% of revenue on early paid acquisition
“We decided that we want to spend, like, up to 30% of our revenue on paid acquisition, and for the first couple of years, we were operating in this way.”
Anton Seidler Nov 14, 2019 ▶ 11:49
Assertion Not checkable as stated
ActivTrak's team is split equally between go-to-market and engineering
“We have our team split almost equally in our office. Like about 13 guys are in sales and marketing and customer success and support and like 13 guys are developers.”
Anton Seidler Nov 14, 2019 ▶ 12:47
Assertion Not checkable as stated
33% of new ActivTrak website visitors create an account
“33% of our new visitors are actually creating an account at ActiveTrack.”
Anton Seidler Nov 14, 2019 ▶ 13:45
Assertion Not checkable as stated
About 50% of registered ActivTrak accounts download and install the software
“About 50% of those who created an account actually download and install a software.”
Anton Seidler Nov 14, 2019 ▶ 14:08
Assertion Not checkable as stated
About 3% to 4% of ActivTrak users convert to paid plans
“Depending on Scale of our marketing aggressiveness, it's about like three, four percent on, on, on, on average can convert to pay.”
Anton Seidler Nov 14, 2019 ▶ 14:29
Assertion Not checkable as stated
ActivTrak reached $1.5M ARR with only two founders and an AWS account
“We were able to reach 1.5 million in annual recurring revenue basically staying in like two guys in the track mode mode. Like it was just two of us and AWS account and that's it.”
Anton Seidler Nov 14, 2019 ▶ 14:51
Assertion Not checkable as stated
ActivTrak took 18 months to reach its first $20,000 in revenue
“It took us 18 months just to get like first 20 K.”
Anton Seidler Nov 14, 2019 ▶ 16:13
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