Jun 24, 2019 · 23m · top-founders
1430 Can You Do 50% Consulting, 50% SaaS On Top of Open Source CRM Framework?
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gold bands on the timeline = statements, start to end. Hover to read, click to jump. CC turns on captions
Nathan Latka interviews SalesAgility founder Greg Soper on growing SuiteCRM into a bootstrapped, $5 million company that leverages free open-source software to drive enterprise consulting contracts while expanding its SaaS subscription tier.
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 42% of the talking time here. How this is scored →
Nathan as informed peer 4.7 Guest teaching 2.7 Guest disagreement 4.6 Nathan pushing back 5.6
speaking balance: gold is Nathan, purple is the guest (3 minute bins)
Sharpest disagreement ▶ 4:35 Greg vehemently rejects Nathan's Salesforce assumption
Greg interrupts Nathan's assertion that buying Salesforce saves time and money with an emphatic 'No, wrong, wrong, wrong, wrong,' arguing enterprise buyers waste huge sums trying to customize it.
Hardest push from Nathan ▶ 15:32 Nathan challenges the logic of charging without tracking MRRNathan refuses to accept Greg's deflection about not knowing MRR, pushing back hard on why they even charge for a product that contributes negligible revenue.
Biggest teaching moment ▶ 5:20 Greg explains enterprise license cost trapsGreg educates Nathan on enterprise software realities by citing a $2.5B corporate client spending $3M annually on licenses, leaving zero budget for business process innovation.
Nathan holds their own ▶ 19:17 Nathan distinguishes gross margin from operating expensesWhen Greg argues Salesforce has low gross margins due to net losses, Nathan immediately corrects the financial misconception by explaining above-the-line SaaS margins versus sales and marketing expenditure.
the scores for every segment, with the reasoning behind each
| Chapter | Topic | Nathan as informed peer | Guest teaching | Guest disagreement | Nathan pushing back | Why |
|---|---|---|---|---|---|---|
| Promotion of Nathan Latka's Audible Book Release | 0 | 0 | 0 | 0 | Solo host introductory monologue and promotion for his new book, including a brief summary of the upcoming interview. | |
| Open Source CRM Philosophy Versus Proprietary Salesforce Licensing | 5 | 5 | 7 | 6 | Nathan challenges the buzzwords in Greg's bio and questions why businesses would code open-source software instead of buying Salesforce. Greg bluntly rejects Nathan's framing with an emphatic 'wrong, wrong, wrong, wrong' and explains the reality of enterprise custom modeling costs. | |
| SuiteCRM Business Model, Data Ownership, and Infrastructure | 6 | 4 | 5 | 7 | Nathan presses Greg on whether SalesAgility is truly a SaaS company or just a consulting agency on top of an open-source framework. Greg defends his server-based pricing model and data sovereignty, while Nathan pushes back on the practical appeal of cloud convenience. | |
| Analysis of SuiteCRM SaaS Pricing and Monetization | 6 | 3 | 6 | 8 | Nathan insists on drilling down exclusively into the pure-play SaaS pricing, whereas Greg openly tries to redirect away from SaaS because it is a tiny part of the company. Nathan leverages his interview with Matt Mullenweg of WordPress to assert his authority on open-source commercialization. | |
| SuiteCRM SaaS Re-Architecture, Containerization, and Revenue Split | 6 | 3 | 6 | 8 | Nathan aggressively interrogates Greg for precise SaaS subscriber numbers and MRR, pressing Greg on why he doesn't make SaaS free if he does not track the revenue. Greg stands his ground, defending the container re-architecture and eventually sharing the $5M total business revenue baseline. | |
| Debating Simultaneous Scaling of Services and Pure-Play SaaS | 8 | 3 | 7 | 8 | Nathan asserts that scaling custom consulting alongside SaaS simultaneously is structurally unsustainable, using WordPress as a counterexample. When Greg claims Salesforce does not have 80% gross margins because they are loss-making, Nathan sharply hits back by correcting him on the difference between gross margin and operating expenses. | |
| The Famous Five Rapid-Fire Business Questions | 2 | 1 | 1 | 2 | The interview winds down smoothly with Nathan's standard rapid-fire Famous Five business questions and a cordial outro. |
Statements from this episode (15)
Salesforce buyers spend millions customizing the platform for their processes
“Most companies out there who buy Salesforce spend hundreds of thousands, if not millions of dollars modeling Salesforce to fit the business processes.”
SuiteCRM matches all Salesforce features without licensing fees
“The alternative is to take a, an open source CRM like SweetCRM that SalesJilish provides. It does everything that Salesforce does, but the code is open.”
1% of open-source SuiteCRM downloaders convert to paying consulting clients
“99% of people who download it don't engage with us at all. We don't even know who they are. All we know is that they've downloaded it. But one percent of the user population out there knows that they need to get this baby modified to really drive value from it…”
SuiteCRM prices per server, costing 10% of Salesforce Enterprise
“The other difference is the, we charge on a per server basis, not on our per user basis. So we're sizing servers. It's according to user populations. And whereas Salesforce are up to somewhere around 200 dollars a month for their enterprise version, we're a 10…”
Soper: Salesforce customers lack application ownership and on-premise flexibility
“With Salesforce, you don't own the application. You don't own the changes to the application. You can't move to on-premise. You don't own your own data.”
Soper: Enterprise customization is the largest part of SalesAgility's business
“The biggest part of our business is customizing sweet CRM for enterprises internationally.”
Soper: SuiteCRM SaaS tier costs an average of $10 to $15 monthly
“I'd say between 10, 15 dollars a month.”
Soper: Open-source businesses need service revenue to fund product development
“See, there's a dichotomy in running an open source business. You need to drive service revenue so you can build the product.”
Soper: SuiteCRM SaaS has approximately 100 customer companies
“Probably only a hundred.
[898] Nathan Latka: Okay, about a hundred people.
[899] Nathan Latka: So you had about a hundred people paying 15 bucks a month.
[901] Greg Soper: A hundred companies.
[902] Greg Soper: Some of those companies are substantial.
[904] Gr…”
SaaS subscriptions drive less than 5% of SalesAgility's total revenue
“No, because it forms, I think, probably less than five percent of our overall revenues.”
SalesAgility grew to $5M in revenue entirely without venture capital
“No, nothing. ... Everything we have done has been organic.”
Soper: CRM software adoption requires hands-on business process modeling
“You can do both. Especially in CRM, where it really is about business process. And unless you can model business processes for your customers, you ain't going to get adoption of the product.”
Salesforce protects 80%+ gross margins by outsourcing professional services
“They do very little professional services in-house, which is why their gross margin is above 80%.”
Soper: Custom enterprise projects create superior product feedback loops
“If we're not, I think if we're doing projects, we get very close to the requirements of our customers because our customers drive our thinking and market intelligence about what the, what they're looking for. And that feeds back into projects. Or product. If w…”