StarZero All shows Try the podcast clipper →

Aug 16, 2019 · 19m · top-founders

1483 How to Bootstrap to $1M in ARR

Thomas van der Kleij · 9m spoken Nathan Latka · 7m 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 episode of The Top Entrepreneurs Podcast, host Nathan Latka interviews Tapfiliate founder Thomas van der Kleij about bootstrapping his affiliate tracking SaaS to $1 million in ARR. They discuss the company's unit economics, zero-commission pricing strategy, churn challenges, and the founder's deliberate choice to remain self-funded.

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 44.9% of the talking time here. How this is scored →

Nathan as informed peer 3.8 Guest teaching 1.3 Guest disagreement 1.5 Nathan pushing back 2.8
05100:0010:000:00–2:02 · Nathan as informed peer 0/10 Book Promotion: How to Be a Capitalist Without Any Capital Introductory monologue and promotional clip for Nathan's book. No interactive host-guest dialogue occurs.2:03–5:10 · Nathan as informed peer 4/10 Guest Introduction and Tapfiliate Overview Nathan introduces Thomas and explores Tapfiliate's customer base and business model. Nathan quickly runs basic ARR math, while Thomas explains the impact of their recent website redesign on conversions.5:10–7:13 · Nathan as informed peer 5/10 Bootstrapped Model, Team Structure, and CAC Economics Nathan drills into CAC economics, trial-to-paid conversion rates, and payback periods, validating the numbers. Thomas clarifies the ratio and explains his bootstrap philosophy.7:14–9:59 · Nathan as informed peer 3/10 Founder Backstory and Lessons from Past Venture Disputes Nathan presses Thomas repeatedly for specifics on his negative experience with past investors. Thomas politely keeps the details broad and recounts lessons learned from investor disputes.9:59–13:58 · Nathan as informed peer 6/10 Churn Dynamics and Subscription Tier Breakdown Nathan challenges Thomas on value-metric pricing and upsells, suggesting transaction fees or volume tiers. Thomas corrects Nathan's assumption about fee structures by differentiating network commission cuts (15%) from simple payment processing fees.13:58–16:00 · Nathan as informed peer 4/10 Affiliate Scale, Use Cases, and Direct Relationship Trends Nathan asks for total affiliate count and payouts. Thomas initially resists giving total affiliate numbers, explaining customer variance from referral programs to direct affiliate relationships.16:00–18:38 · Nathan as informed peer 6/10 Capital Raising Stance and Evaluating Opportunity Costs Nathan challenges Thomas's valuation expectations, arguing that a 5x ARR multiple will be tough given 7% monthly logo churn and 20-30% growth. Thomas concedes that growth needs to accelerate.18:38–19:26 · Nathan as informed peer 2/10 The Famous Five Rapid-Fire Questions Standard rapid-fire closing questions. Both parties are collaborative and friendly.0:00–2:02 · Guest teaching 0/10 Book Promotion: How to Be a Capitalist Without Any Capital Introductory monologue and promotional clip for Nathan's book. No interactive host-guest dialogue occurs.2:03–5:10 · Guest teaching 1/10 Guest Introduction and Tapfiliate Overview Nathan introduces Thomas and explores Tapfiliate's customer base and business model. Nathan quickly runs basic ARR math, while Thomas explains the impact of their recent website redesign on conversions.5:10–7:13 · Guest teaching 1/10 Bootstrapped Model, Team Structure, and CAC Economics Nathan drills into CAC economics, trial-to-paid conversion rates, and payback periods, validating the numbers. Thomas clarifies the ratio and explains his bootstrap philosophy.7:14–9:59 · Guest teaching 1/10 Founder Backstory and Lessons from Past Venture Disputes Nathan presses Thomas repeatedly for specifics on his negative experience with past investors. Thomas politely keeps the details broad and recounts lessons learned from investor disputes.9:59–13:58 · Guest teaching 4/10 Churn Dynamics and Subscription Tier Breakdown Nathan challenges Thomas on value-metric pricing and upsells, suggesting transaction fees or volume tiers. Thomas corrects Nathan's assumption about fee structures by differentiating network commission cuts (15%) from simple payment processing fees.13:58–16:00 · Guest teaching 2/10 Affiliate Scale, Use Cases, and Direct Relationship Trends Nathan asks for total affiliate count and payouts. Thomas initially resists giving total affiliate numbers, explaining customer variance from referral programs to direct affiliate relationships.16:00–18:38 · Guest teaching 1/10 Capital Raising Stance and Evaluating Opportunity Costs Nathan challenges Thomas's valuation expectations, arguing that a 5x ARR multiple will be tough given 7% monthly logo churn and 20-30% growth. Thomas concedes that growth needs to accelerate.18:38–19:26 · Guest teaching 0/10 The Famous Five Rapid-Fire Questions Standard rapid-fire closing questions. Both parties are collaborative and friendly.0:00–2:02 · Guest disagreement 0/10 Book Promotion: How to Be a Capitalist Without Any Capital Introductory monologue and promotional clip for Nathan's book. No interactive host-guest dialogue occurs.2:03–5:10 · Guest disagreement 1/10 Guest Introduction and Tapfiliate Overview Nathan introduces Thomas and explores Tapfiliate's customer base and business model. Nathan quickly runs basic ARR math, while Thomas explains the impact of their recent website redesign on conversions.5:10–7:13 · Guest disagreement 1/10 Bootstrapped Model, Team Structure, and CAC Economics Nathan drills into CAC economics, trial-to-paid conversion rates, and payback periods, validating the numbers. Thomas clarifies the ratio and explains his bootstrap philosophy.7:14–9:59 · Guest disagreement 2/10 Founder Backstory and Lessons from Past Venture Disputes Nathan presses Thomas repeatedly for specifics on his negative experience with past investors. Thomas politely keeps the details broad and recounts lessons learned from investor disputes.9:59–13:58 · Guest disagreement 3/10 Churn Dynamics and Subscription Tier Breakdown Nathan challenges Thomas on value-metric pricing and upsells, suggesting transaction fees or volume tiers. Thomas corrects Nathan's assumption about fee structures by differentiating network commission cuts (15%) from simple payment processing fees.13:58–16:00 · Guest disagreement 3/10 Affiliate Scale, Use Cases, and Direct Relationship Trends Nathan asks for total affiliate count and payouts. Thomas initially resists giving total affiliate numbers, explaining customer variance from referral programs to direct affiliate relationships.16:00–18:38 · Guest disagreement 2/10 Capital Raising Stance and Evaluating Opportunity Costs Nathan challenges Thomas's valuation expectations, arguing that a 5x ARR multiple will be tough given 7% monthly logo churn and 20-30% growth. Thomas concedes that growth needs to accelerate.18:38–19:26 · Guest disagreement 0/10 The Famous Five Rapid-Fire Questions Standard rapid-fire closing questions. Both parties are collaborative and friendly.0:00–2:02 · Nathan pushing back 0/10 Book Promotion: How to Be a Capitalist Without Any Capital Introductory monologue and promotional clip for Nathan's book. No interactive host-guest dialogue occurs.2:03–5:10 · Nathan pushing back 2/10 Guest Introduction and Tapfiliate Overview Nathan introduces Thomas and explores Tapfiliate's customer base and business model. Nathan quickly runs basic ARR math, while Thomas explains the impact of their recent website redesign on conversions.5:10–7:13 · Nathan pushing back 2/10 Bootstrapped Model, Team Structure, and CAC Economics Nathan drills into CAC economics, trial-to-paid conversion rates, and payback periods, validating the numbers. Thomas clarifies the ratio and explains his bootstrap philosophy.7:14–9:59 · Nathan pushing back 4/10 Founder Backstory and Lessons from Past Venture Disputes Nathan presses Thomas repeatedly for specifics on his negative experience with past investors. Thomas politely keeps the details broad and recounts lessons learned from investor disputes.9:59–13:58 · Nathan pushing back 5/10 Churn Dynamics and Subscription Tier Breakdown Nathan challenges Thomas on value-metric pricing and upsells, suggesting transaction fees or volume tiers. Thomas corrects Nathan's assumption about fee structures by differentiating network commission cuts (15%) from simple payment processing fees.13:58–16:00 · Nathan pushing back 3/10 Affiliate Scale, Use Cases, and Direct Relationship Trends Nathan asks for total affiliate count and payouts. Thomas initially resists giving total affiliate numbers, explaining customer variance from referral programs to direct affiliate relationships.16:00–18:38 · Nathan pushing back 5/10 Capital Raising Stance and Evaluating Opportunity Costs Nathan challenges Thomas's valuation expectations, arguing that a 5x ARR multiple will be tough given 7% monthly logo churn and 20-30% growth. Thomas concedes that growth needs to accelerate.18:38–19:26 · Nathan pushing back 1/10 The Famous Five Rapid-Fire Questions Standard rapid-fire closing questions. Both parties are collaborative and friendly.

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

0:00 · Nathan 86.4% · guest 13.6%0:00 · Nathan 86.4% · guest 13.6%3:00 · Nathan 36.3% · guest 63.7%3:00 · Nathan 36.3% · guest 63.7%6:00 · Nathan 22.4% · guest 77.6%6:00 · Nathan 22.4% · guest 77.6%9:00 · Nathan 43.2% · guest 56.8%9:00 · Nathan 43.2% · guest 56.8%12:00 · Nathan 33.6% · guest 66.4%12:00 · Nathan 33.6% · guest 66.4%15:00 · Nathan 31.6% · guest 68.4%15:00 · Nathan 31.6% · guest 68.4%18:00 · Nathan 70.8% · guest 29.2%18:00 · Nathan 70.8% · guest 29.2%
Sharpest disagreement ▶ 14:03 Refusal to disclose affiliate totals

Thomas directly declines to divulge total affiliate numbers across their customer base before explaining why an average is misleading.

 Hardest push from Nathan ▶ 18:19 Challenging valuation multiple against high churn

Nathan bluntly tells Thomas that a 5x multiple will be difficult to attain given 7% monthly churn and moderate 20-30% growth.

 Biggest teaching moment ▶ 13:28 Affiliate network commission vs payment fees

Thomas educates Nathan on the distinction between basic transaction fees and the 15% commission cuts taken by affiliate networks like Growth Sumo.

 Nathan holds their own ▶ 11:48 Diagnosing pricing strategy and value metrics

Nathan leverages SaaS industry patterns to critique Tapfiliate for missing value-based upsell levers like sales volume or link clicks.
the scores for every segment, with the reasoning behind each
ChapterTopicNathan as informed peerGuest teachingGuest disagreementNathan pushing backWhy
Book Promotion: How to Be a Capitalist Without Any Capital 0000 Introductory monologue and promotional clip for Nathan's book. No interactive host-guest dialogue occurs.
Guest Introduction and Tapfiliate Overview 4112 Nathan introduces Thomas and explores Tapfiliate's customer base and business model. Nathan quickly runs basic ARR math, while Thomas explains the impact of their recent website redesign on conversions.
Bootstrapped Model, Team Structure, and CAC Economics 5112 Nathan drills into CAC economics, trial-to-paid conversion rates, and payback periods, validating the numbers. Thomas clarifies the ratio and explains his bootstrap philosophy.
Founder Backstory and Lessons from Past Venture Disputes 3124 Nathan presses Thomas repeatedly for specifics on his negative experience with past investors. Thomas politely keeps the details broad and recounts lessons learned from investor disputes.
Churn Dynamics and Subscription Tier Breakdown 6435 Nathan challenges Thomas on value-metric pricing and upsells, suggesting transaction fees or volume tiers. Thomas corrects Nathan's assumption about fee structures by differentiating network commission cuts (15%) from simple payment processing fees.
Affiliate Scale, Use Cases, and Direct Relationship Trends 4233 Nathan asks for total affiliate count and payouts. Thomas initially resists giving total affiliate numbers, explaining customer variance from referral programs to direct affiliate relationships.
Capital Raising Stance and Evaluating Opportunity Costs 6125 Nathan challenges Thomas's valuation expectations, arguing that a 5x ARR multiple will be tough given 7% monthly logo churn and 20-30% growth. Thomas concedes that growth needs to accelerate.
The Famous Five Rapid-Fire Questions 2001 Standard rapid-fire closing questions. Both parties are collaborative and friendly.

Statements from this episode (17)

Assertion Not checkable as stated
Van der Kleij: Tapfiliate's average customer pays about $80 per month
“That's about 80 dollars.”
Thomas van der Kleij Aug 16, 2019 ▶ 2:51
Assertion Not checkable as stated
Van der Kleij: Tapfiliate reaches over 1,000 customers
“We're a little over a thousand.”
Thomas van der Kleij Aug 16, 2019 ▶ 4:10
Assertion Not checkable as stated
Van der Kleij: Tapfiliate's February website launch severely hurt conversion rates
“Well, we used to do 100% year over year. But we launched a new website in February of this year, and that completely, completely killed our conversion rates.”
Thomas van der Kleij Aug 16, 2019 ▶ 4:23
Assertion Not checkable as stated
Van der Kleij: Tapfiliate was making around $60k per month a year ago
“No, a year ago it was rather like I think it was like 60.”
Thomas van der Kleij Aug 16, 2019 ▶ 5:03
Assertion Not checkable as stated
Tapfiliate Operates With a Team of Five People
“We're five.”
Thomas van der Kleij Aug 16, 2019 ▶ 5:38
Assertion Not checkable as stated
Tapfiliate pays $20 to $30 per trial with 40% conversion
“So I think that's about, for a trial customer, it's about 20 to 30 dollars, and we have a trial to paying ratio of 40%.”
Thomas van der Kleij Aug 16, 2019 ▶ 5:58
Disclosure
Van der Kleij bootstrapped Tapfiliate after bad experiences with early investors
“In my first company, I had a very bad experience with an investor or with multiple investors actually.”
Thomas van der Kleij Aug 16, 2019 ▶ 7:06
Insight
Latka: Gorgeous websites often convert worse than ugly websites
“Many times they convert way worse than the ugliest websites you've ever seen.”
Nathan Latka Aug 16, 2019 ▶ 9:15
Disclosure
Van der Kleij requires his entire Tapfiliate team to work in-office
“Everyone is in Amsterdam. Yeah. I'm a bit of I'm a bit old school in that sense. I like everybody being together in an office.”
Thomas van der Kleij Aug 16, 2019 ▶ 9:39
Assertion Not checkable as stated
Van der Kleij: Tapfiliate has roughly 7% monthly logo churn
“So logo churn is about seven percent, which is quite high per month.”
Thomas van der Kleij Aug 16, 2019 ▶ 10:03
Assertion Not checkable as stated
Van der Kleij: Tapfiliate monthly revenue churn is around 5%
“The revenue churn is a little bit lower, it's around five percent, but that's because, you know, we've been on our current price points for quite a while, so we don't have a lot of, you know, we started out at 29 dollars, now the lowest price plan is 69 dollar…”
Thomas van der Kleij Aug 16, 2019 ▶ 10:29
Insight
Latka: $1M-$5M founders struggle to identify their single customer value metric
“There's so many founders that I talked to that are like in the million to four or five million range, and they're trying to figure out like expansion and pricing. And like the biggest issue I always see is They can't identify, like, a single, like, the single …”
Nathan Latka Aug 16, 2019 ▶ 11:56
Insight
Van der Kleij: Avoiding transaction fees lets businesses offer better affiliate payouts
“It gives you an extremely big edge if you don't have to, if you don't have to pay any per transaction fees, because you can use the money either, you know, for your own bottom line or even better to create a more enticing offer for your affiliates.”
Thomas van der Kleij Aug 16, 2019 ▶ 13:15
Assertion Supported
Van der Kleij: Growth Sumo takes a 15% commission fee
“For growth sumo, it's 15% off the commission.”
Thomas van der Kleij Aug 16, 2019 ▶ 13:39
Disclosure
Tapfiliate's Largest Customers Manage Around 40,000 Affiliates
“It ranges like, it goes like some people like our biggest customers are around like 40,000 affiliates. And then and then there's customers who only have one or two.”
Thomas van der Kleij Aug 16, 2019 ▶ 15:14
Assertion Not checkable as stated
Van der Kleij: Tapfiliate has been profitable since its second year
“We've been profitable since year two.”
Thomas van der Kleij Aug 16, 2019 ▶ 16:45
Disclosure
Van der Kleij targets a 5x ARR multiple to sell Tapfiliate
“No, I I'd say five times will be good.”
Thomas van der Kleij Aug 16, 2019 ▶ 18:14
Made with StarZero

Turn any episode into a week of clips.

This entire site, over 2,600 episodes transcribed, diarized, checked and made playable, runs on the StarZero media pipeline. Drop in your own episode and the podcast clipper finds the moments worth sharing, cuts them, captions them, and reframes them for every feed.

Try the podcast clipper Learn more