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Aug 7, 2019 · 17m · top-founders

1474 Advantages of IoT+SaaS with $2.5m Revenue CEO of Senorberg

Nathan Latka · 8m spoken Michael Von Roeder · 6m spoken
0:00 / 0:00

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In this episode of The Top Entrepreneurs, host Nathan Latka interviews Sensorberg CEO Michael Von Roeder to discuss how the Berlin-based IoT and SaaS company reached €2.5 million in revenue with 5,000 connected doors and zero customer churn. Von Roeder details their hardware-subsidized business model, co-working go-to-market strategy, and ongoing €3 million capital raise to reach profitability.

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 54.3% of the talking time here. How this is scored →

Nathan as informed peer 5.4 Guest teaching 2.6 Guest disagreement 1.6 Nathan pushing back 3.1
05100:0010:000:54–3:09 · Nathan as informed peer 5/10 Executive Summary: Sensorberg's Key Metrics and IoT Business Nathan introduces the company metrics before questioning Michael on taking over the CEO seat from the original founder and restructuring the team. The exchange is cordial and introductory.3:10–6:39 · Nathan as informed peer 7/10 Sensorberg Product Overview: Interactive Buildings and Dual Monetization Michael describes the hardware/SaaS model and explains how European real estate customers prepay multi-year contracts because they do not understand SaaS. Nathan rapidly calculates ARR based on 5,000 doors and €2.5M gross revenue.6:43–9:05 · Nathan as informed peer 6/10 Supply Chain Optimization, Hardware Unit Economics, and Funding Michael explains batch economics in China to drive door controller unit costs below €100 and outlines his upcoming capital raise to reach cash flow breakeven.9:13–11:33 · Nathan as informed peer 6/10 The Trojan Horse Advantage: Zero Churn and Building Expansion Michael introduces the concept of door controllers as Trojan horses leading to zero churn. Nathan presses to convert building counts into concrete door expansion numbers.11:34–13:56 · Nathan as informed peer 7/10 Sales Dynamics, Enterprise CAC, and 10x Revenue Projections Nathan breaks down the enterprise unit economics, calculating that each account pays around $2,400 monthly for roughly 250 doors, and probes Michael on allowable CAC for that contract size.13:56–16:26 · Nathan as informed peer 7/10 Remote Berlin Team, Valuation Expectations, and SaaS Multiples When Michael conflates pre- and post-money on a €20M target, Nathan calls out the multi-million dollar difference and warns him about investors pricing them as hardware rather than SaaS multiples.16:26–17:06 · Nathan as informed peer 0/10 Host Breakdown and Conclusion of the Sensorberg Interview Nathan delivers a brief solo outro summarizing Sensorberg's key revenue metrics, customer count, and target valuation.0:54–3:09 · Guest teaching 2/10 Executive Summary: Sensorberg's Key Metrics and IoT Business Nathan introduces the company metrics before questioning Michael on taking over the CEO seat from the original founder and restructuring the team. The exchange is cordial and introductory.3:10–6:39 · Guest teaching 4/10 Sensorberg Product Overview: Interactive Buildings and Dual Monetization Michael describes the hardware/SaaS model and explains how European real estate customers prepay multi-year contracts because they do not understand SaaS. Nathan rapidly calculates ARR based on 5,000 doors and €2.5M gross revenue.6:43–9:05 · Guest teaching 4/10 Supply Chain Optimization, Hardware Unit Economics, and Funding Michael explains batch economics in China to drive door controller unit costs below €100 and outlines his upcoming capital raise to reach cash flow breakeven.9:13–11:33 · Guest teaching 3/10 The Trojan Horse Advantage: Zero Churn and Building Expansion Michael introduces the concept of door controllers as Trojan horses leading to zero churn. Nathan presses to convert building counts into concrete door expansion numbers.11:34–13:56 · Guest teaching 3/10 Sales Dynamics, Enterprise CAC, and 10x Revenue Projections Nathan breaks down the enterprise unit economics, calculating that each account pays around $2,400 monthly for roughly 250 doors, and probes Michael on allowable CAC for that contract size.13:56–16:26 · Guest teaching 2/10 Remote Berlin Team, Valuation Expectations, and SaaS Multiples When Michael conflates pre- and post-money on a €20M target, Nathan calls out the multi-million dollar difference and warns him about investors pricing them as hardware rather than SaaS multiples.16:26–17:06 · Guest teaching 0/10 Host Breakdown and Conclusion of the Sensorberg Interview Nathan delivers a brief solo outro summarizing Sensorberg's key revenue metrics, customer count, and target valuation.0:54–3:09 · Guest disagreement 1/10 Executive Summary: Sensorberg's Key Metrics and IoT Business Nathan introduces the company metrics before questioning Michael on taking over the CEO seat from the original founder and restructuring the team. The exchange is cordial and introductory.3:10–6:39 · Guest disagreement 2/10 Sensorberg Product Overview: Interactive Buildings and Dual Monetization Michael describes the hardware/SaaS model and explains how European real estate customers prepay multi-year contracts because they do not understand SaaS. Nathan rapidly calculates ARR based on 5,000 doors and €2.5M gross revenue.6:43–9:05 · Guest disagreement 1/10 Supply Chain Optimization, Hardware Unit Economics, and Funding Michael explains batch economics in China to drive door controller unit costs below €100 and outlines his upcoming capital raise to reach cash flow breakeven.9:13–11:33 · Guest disagreement 2/10 The Trojan Horse Advantage: Zero Churn and Building Expansion Michael introduces the concept of door controllers as Trojan horses leading to zero churn. Nathan presses to convert building counts into concrete door expansion numbers.11:34–13:56 · Guest disagreement 2/10 Sales Dynamics, Enterprise CAC, and 10x Revenue Projections Nathan breaks down the enterprise unit economics, calculating that each account pays around $2,400 monthly for roughly 250 doors, and probes Michael on allowable CAC for that contract size.13:56–16:26 · Guest disagreement 3/10 Remote Berlin Team, Valuation Expectations, and SaaS Multiples When Michael conflates pre- and post-money on a €20M target, Nathan calls out the multi-million dollar difference and warns him about investors pricing them as hardware rather than SaaS multiples.16:26–17:06 · Guest disagreement 0/10 Host Breakdown and Conclusion of the Sensorberg Interview Nathan delivers a brief solo outro summarizing Sensorberg's key revenue metrics, customer count, and target valuation.0:54–3:09 · Nathan pushing back 2/10 Executive Summary: Sensorberg's Key Metrics and IoT Business Nathan introduces the company metrics before questioning Michael on taking over the CEO seat from the original founder and restructuring the team. The exchange is cordial and introductory.3:10–6:39 · Nathan pushing back 4/10 Sensorberg Product Overview: Interactive Buildings and Dual Monetization Michael describes the hardware/SaaS model and explains how European real estate customers prepay multi-year contracts because they do not understand SaaS. Nathan rapidly calculates ARR based on 5,000 doors and €2.5M gross revenue.6:43–9:05 · Nathan pushing back 2/10 Supply Chain Optimization, Hardware Unit Economics, and Funding Michael explains batch economics in China to drive door controller unit costs below €100 and outlines his upcoming capital raise to reach cash flow breakeven.9:13–11:33 · Nathan pushing back 4/10 The Trojan Horse Advantage: Zero Churn and Building Expansion Michael introduces the concept of door controllers as Trojan horses leading to zero churn. Nathan presses to convert building counts into concrete door expansion numbers.11:34–13:56 · Nathan pushing back 4/10 Sales Dynamics, Enterprise CAC, and 10x Revenue Projections Nathan breaks down the enterprise unit economics, calculating that each account pays around $2,400 monthly for roughly 250 doors, and probes Michael on allowable CAC for that contract size.13:56–16:26 · Nathan pushing back 6/10 Remote Berlin Team, Valuation Expectations, and SaaS Multiples When Michael conflates pre- and post-money on a €20M target, Nathan calls out the multi-million dollar difference and warns him about investors pricing them as hardware rather than SaaS multiples.16:26–17:06 · Nathan pushing back 0/10 Host Breakdown and Conclusion of the Sensorberg Interview Nathan delivers a brief solo outro summarizing Sensorberg's key revenue metrics, customer count, and target valuation.

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

0:00 · Nathan 92.1% · guest 7.9%0:00 · Nathan 92.1% · guest 7.9%3:00 · Nathan 24.7% · guest 75.3%3:00 · Nathan 24.7% · guest 75.3%6:00 · Nathan 59% · guest 41%6:00 · Nathan 59% · guest 41%9:00 · Nathan 45.2% · guest 54.8%9:00 · Nathan 45.2% · guest 54.8%12:00 · Nathan 37.9% · guest 62.1%12:00 · Nathan 37.9% · guest 62.1%15:00 · Nathan 71.2% · guest 28.8%15:00 · Nathan 71.2% · guest 28.8%
Sharpest disagreement ▶ 14:46 Michael brushes off pre versus post valuation distinction

When Nathan asks whether the €20 million target is pre- or post-money, Michael casually replies 'Pre post. Yeah', brushing off the structural difference.

 Hardest push from Nathan ▶ 14:48 Nathan challenges the six million dollar valuation swing

Nathan refuses Michael's casual dismissal of pre vs post money, explaining that it represents a six million dollar difference in founder equity.

 Biggest teaching moment ▶ 5:36 Michael explains European real estate 7-year prepayments

Michael educates Nathan on why pure SaaS pricing fails in conservative European real estate markets, necessitating upfront 7-year prepaid contracts instead.

 Nathan holds their own ▶ 12:32 Nathan deconstructs account economics and CAC threshold

Nathan executes instant mental math across 20 logos, 50k MRR, and per-door rates to determine the exact average account value and test Michael's payback limits.
the scores for every segment, with the reasoning behind each
ChapterTopicNathan as informed peerGuest teachingGuest disagreementNathan pushing backWhy
Executive Summary: Sensorberg's Key Metrics and IoT Business 5212 Nathan introduces the company metrics before questioning Michael on taking over the CEO seat from the original founder and restructuring the team. The exchange is cordial and introductory.
Sensorberg Product Overview: Interactive Buildings and Dual Monetization 7424 Michael describes the hardware/SaaS model and explains how European real estate customers prepay multi-year contracts because they do not understand SaaS. Nathan rapidly calculates ARR based on 5,000 doors and €2.5M gross revenue.
Supply Chain Optimization, Hardware Unit Economics, and Funding 6412 Michael explains batch economics in China to drive door controller unit costs below €100 and outlines his upcoming capital raise to reach cash flow breakeven.
The Trojan Horse Advantage: Zero Churn and Building Expansion 6324 Michael introduces the concept of door controllers as Trojan horses leading to zero churn. Nathan presses to convert building counts into concrete door expansion numbers.
Sales Dynamics, Enterprise CAC, and 10x Revenue Projections 7324 Nathan breaks down the enterprise unit economics, calculating that each account pays around $2,400 monthly for roughly 250 doors, and probes Michael on allowable CAC for that contract size.
Remote Berlin Team, Valuation Expectations, and SaaS Multiples 7236 When Michael conflates pre- and post-money on a €20M target, Nathan calls out the multi-million dollar difference and warns him about investors pricing them as hardware rather than SaaS multiples.
Host Breakdown and Conclusion of the Sensorberg Interview 0000 Nathan delivers a brief solo outro summarizing Sensorberg's key revenue metrics, customer count, and target valuation.

Statements from this episode (15)

Assertion Not checkable as stated
Sensorberg maintained headcount of 30 but replaced most staff during turnaround
“I took over the company with 30 people. It's now 30 again, but the people are different mostly.”
Michael Von Roeder Aug 7, 2019 ▶ 3:02
Prediction Not checkable as stated
Sensorberg CEO: Open platforms will beat GE and Siemens in smart buildings
“In the future, it's not going to be like the GE or Siemens doing all that with a proprietary solution, but it's, you know, many folks can contribute.”
Michael Von Roeder Aug 7, 2019 ▶ 3:41
Assertion Not checkable as stated
Sensorberg earns 50% hardware margins but CEO prefers making hardware free
“Well, 50% right now, but actually in my ideal world, I would give away the hardware for free and just make money with the second part, which is the SaaS model.”
Michael Von Roeder Aug 7, 2019 ▶ 4:00
Assertion Not checkable as stated
Von Roeder: Sensorberg has roughly 5,000 total doors installed
“Let's say 5000.”
Michael Von Roeder Aug 7, 2019 ▶ 4:40
Opinion
Von Roeder: European real estate sector is conservative and doesn't understand SaaS
“Because in the retail in the, sorry, in the real estate industry, at least in Europe, very conservative, so they don't understand SaaS.”
Michael Von Roeder Aug 7, 2019 ▶ 5:44
Prediction Not checkable as stated
Von Roeder: Sensorberg will generate €2.5M in 2019 revenue, 20% recurring
“We make this year, we make round about two and a half million euros overall. And I would guess 20% is recurring for now.”
Michael Von Roeder Aug 7, 2019 ▶ 6:05
Assertion Not checkable as stated
Sensorberg door controller costs more than €200 per unit to manufacture
“More than 200 if you just take the door controller.”
Michael Von Roeder Aug 7, 2019 ▶ 7:17
Assertion Supported
Sensorberg has raised more than €5 million in total capital
“Overall, more than five million.”
Michael Von Roeder Aug 7, 2019 ▶ 7:27
Disclosure
Von Roeder: Sensorberg raising low single-digit million round to break even
“I'm currently raising another round of you know, low single million digit because I want actually us to be able to go break even late next year, early,”
Michael Von Roeder Aug 7, 2019 ▶ 7:36
Insight
Latka: Pairing IoT hardware with SaaS generates far higher customer retention
“One of the patterns I see whenever I see kind of an IoT device paired with a SaaS product on the back end is retention tends to be way higher because there's actually a physical piece of hardware installed.”
Nathan Latka Aug 7, 2019 ▶ 9:35
Assertion Not checkable as stated
Sensorberg has maintained zero customer churn in its entire company history
“We have zero churn so far in the whole history of the company.”
Michael Von Roeder Aug 7, 2019 ▶ 9:56
Assertion Not checkable as stated
Von Roeder: Sensorberg enterprise sales cycle takes one year
“Yeah, it's a year.”
Michael Von Roeder Aug 7, 2019 ▶ 11:41
Assertion Not publicly verifiable
Von Roeder: Sensorberg grew from €100k to €2–3M revenue, targeting €7M
“The first year I took over, we made overall a hundred K revenues overall recurring in one time. Last year we made, I don't know, let's say 700. This year we make between two and three million. Next year we want to do seven.”
Michael Von Roeder Aug 7, 2019 ▶ 13:40
Opinion
Von Roeder: Berlin offers the best engineering talent in Europe
“Most are actually based in Berlin because you get, you know, the best engineers in Germany or probably I would say in Europe you get in Berlin.”
Michael Von Roeder Aug 7, 2019 ▶ 14:29
Disclosure
Sensorberg targets a €20M valuation for its current funding round
“I would say we're in the ballpark of around twenty million.”
Michael Von Roeder Aug 7, 2019 ▶ 14:43
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