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Jun 21, 2019 · 17m · top-founders

1427 Tool Helps You Drive Expansion Revenue, Passes 30 Customers $700k in ARR

Alex Raymond · 9m spoken Nathan Latka · 6m spoken
0:00 / 0:00

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In this episode of The Top Entrepreneurs, host Nathan Latka interviews Alex Raymond, CEO of Kapta, examining how the company pivoted to strategic key account management software, achieved over 110% net revenue retention, and scaled to $62,000 in monthly recurring revenue with a lean three-person team.

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 39% of the talking time here. How this is scored →

Nathan as informed peer 3.9 Guest teaching 2.6 Guest disagreement 1.1 Nathan pushing back 2.0
05100:0010:000:00–2:04 · Nathan as informed peer 0/10 Nathan Latka Book Promotion: How to Be a Capitalist Solo intro segment where Nathan promotes his book and introduces Kapta's high-level business metrics before bringing on the guest.2:05–4:09 · Nathan as informed peer 4/10 Introducing Alex Raymond and Kapta's Account Platform Nathan introduces Alex Raymond and validates Kapta's pricing model with quick mental math on account expansion ROI.4:09–6:13 · Nathan as informed peer 5/10 Kapta's 2016 Pivot from HR Software to Account Management Alex explains how customer behavior drove Kapta's pivot from HR performance software to key account management, while Nathan probes into tracking net revenue retention.6:13–9:25 · Nathan as informed peer 5/10 Financial Systems Integration and Monthly Revenue Trajectory Alex educates Nathan on why mature industrial sectors like chemicals and manufacturing adopt Kapta faster than tech firms due to vendor market share dynamics.9:25–12:53 · Nathan as informed peer 6/10 Fundraising Background, Cap Table Alignment, and Churn Dynamics Nathan presses on unit economics, challenging Alex's reliance on theoretical LTV to CAC ratios by emphasizing the critical risk of multi-year cash payback periods.12:53–15:20 · Nathan as informed peer 5/10 Lean Three-Person Team Structure and Variable Cost Model Alex and Nathan discuss lean team structure and contrasting Series A fundraising multiples between Colorado regional norms and Bay Area valuations.15:20–16:23 · Nathan as informed peer 2/10 The Famous Five Rapid-Fire Questions Nathan conducts the standard Famous Five rapid-fire closing sequence covering books, sleep, and life lessons.0:00–2:04 · Guest teaching 0/10 Nathan Latka Book Promotion: How to Be a Capitalist Solo intro segment where Nathan promotes his book and introduces Kapta's high-level business metrics before bringing on the guest.2:05–4:09 · Guest teaching 2/10 Introducing Alex Raymond and Kapta's Account Platform Nathan introduces Alex Raymond and validates Kapta's pricing model with quick mental math on account expansion ROI.4:09–6:13 · Guest teaching 4/10 Kapta's 2016 Pivot from HR Software to Account Management Alex explains how customer behavior drove Kapta's pivot from HR performance software to key account management, while Nathan probes into tracking net revenue retention.6:13–9:25 · Guest teaching 4/10 Financial Systems Integration and Monthly Revenue Trajectory Alex educates Nathan on why mature industrial sectors like chemicals and manufacturing adopt Kapta faster than tech firms due to vendor market share dynamics.9:25–12:53 · Guest teaching 3/10 Fundraising Background, Cap Table Alignment, and Churn Dynamics Nathan presses on unit economics, challenging Alex's reliance on theoretical LTV to CAC ratios by emphasizing the critical risk of multi-year cash payback periods.12:53–15:20 · Guest teaching 4/10 Lean Three-Person Team Structure and Variable Cost Model Alex and Nathan discuss lean team structure and contrasting Series A fundraising multiples between Colorado regional norms and Bay Area valuations.15:20–16:23 · Guest teaching 1/10 The Famous Five Rapid-Fire Questions Nathan conducts the standard Famous Five rapid-fire closing sequence covering books, sleep, and life lessons.0:00–2:04 · Guest disagreement 0/10 Nathan Latka Book Promotion: How to Be a Capitalist Solo intro segment where Nathan promotes his book and introduces Kapta's high-level business metrics before bringing on the guest.2:05–4:09 · Guest disagreement 1/10 Introducing Alex Raymond and Kapta's Account Platform Nathan introduces Alex Raymond and validates Kapta's pricing model with quick mental math on account expansion ROI.4:09–6:13 · Guest disagreement 1/10 Kapta's 2016 Pivot from HR Software to Account Management Alex explains how customer behavior drove Kapta's pivot from HR performance software to key account management, while Nathan probes into tracking net revenue retention.6:13–9:25 · Guest disagreement 1/10 Financial Systems Integration and Monthly Revenue Trajectory Alex educates Nathan on why mature industrial sectors like chemicals and manufacturing adopt Kapta faster than tech firms due to vendor market share dynamics.9:25–12:53 · Guest disagreement 2/10 Fundraising Background, Cap Table Alignment, and Churn Dynamics Nathan presses on unit economics, challenging Alex's reliance on theoretical LTV to CAC ratios by emphasizing the critical risk of multi-year cash payback periods.12:53–15:20 · Guest disagreement 2/10 Lean Three-Person Team Structure and Variable Cost Model Alex and Nathan discuss lean team structure and contrasting Series A fundraising multiples between Colorado regional norms and Bay Area valuations.15:20–16:23 · Guest disagreement 1/10 The Famous Five Rapid-Fire Questions Nathan conducts the standard Famous Five rapid-fire closing sequence covering books, sleep, and life lessons.0:00–2:04 · Nathan pushing back 0/10 Nathan Latka Book Promotion: How to Be a Capitalist Solo intro segment where Nathan promotes his book and introduces Kapta's high-level business metrics before bringing on the guest.2:05–4:09 · Nathan pushing back 1/10 Introducing Alex Raymond and Kapta's Account Platform Nathan introduces Alex Raymond and validates Kapta's pricing model with quick mental math on account expansion ROI.4:09–6:13 · Nathan pushing back 2/10 Kapta's 2016 Pivot from HR Software to Account Management Alex explains how customer behavior drove Kapta's pivot from HR performance software to key account management, while Nathan probes into tracking net revenue retention.6:13–9:25 · Nathan pushing back 2/10 Financial Systems Integration and Monthly Revenue Trajectory Alex educates Nathan on why mature industrial sectors like chemicals and manufacturing adopt Kapta faster than tech firms due to vendor market share dynamics.9:25–12:53 · Nathan pushing back 5/10 Fundraising Background, Cap Table Alignment, and Churn Dynamics Nathan presses on unit economics, challenging Alex's reliance on theoretical LTV to CAC ratios by emphasizing the critical risk of multi-year cash payback periods.12:53–15:20 · Nathan pushing back 3/10 Lean Three-Person Team Structure and Variable Cost Model Alex and Nathan discuss lean team structure and contrasting Series A fundraising multiples between Colorado regional norms and Bay Area valuations.15:20–16:23 · Nathan pushing back 1/10 The Famous Five Rapid-Fire Questions Nathan conducts the standard Famous Five rapid-fire closing sequence covering books, sleep, and life lessons.

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

0:00 · Nathan 81.2% · guest 18.8%0:00 · Nathan 81.2% · guest 18.8%3:00 · Nathan 15.1% · guest 84.9%3:00 · Nathan 15.1% · guest 84.9%6:00 · Nathan 26.6% · guest 73.4%6:00 · Nathan 26.6% · guest 73.4%9:00 · Nathan 27.8% · guest 72.2%9:00 · Nathan 27.8% · guest 72.2%12:00 · Nathan 31.6% · guest 68.4%12:00 · Nathan 31.6% · guest 68.4%15:00 · Nathan 56.9% · guest 43.1%15:00 · Nathan 56.9% · guest 43.1%
Sharpest disagreement ▶ 14:49 Pushing back on Silicon Valley valuation expectations

Alex tempers Nathan's optimistic valuation estimates by firmly grounding Series A reality in lower Colorado regional deal terms.

 Hardest push from Nathan ▶ 12:35 Nathan rejects abstract LTV metrics

Nathan cuts into Alex's point about multi-year LTV multiples, reminding him that cash-flow gaps during extended payback periods kill SaaS companies.

 Biggest teaching moment ▶ 8:37 Industrial market share dynamics explained

Alex explains why legacy manufacturing and chemical clients gain massive ROI from small percentage share shifts among multi-sourcing vendors.

 Nathan holds their own ▶ 12:35 Highlighting working capital risks in payback periods

Nathan demonstrates his SaaS financial acumen by separating vanity LTV metrics from realistic cash-bridge constraints.
the scores for every segment, with the reasoning behind each
ChapterTopicNathan as informed peerGuest teachingGuest disagreementNathan pushing backWhy
Nathan Latka Book Promotion: How to Be a Capitalist 0000 Solo intro segment where Nathan promotes his book and introduces Kapta's high-level business metrics before bringing on the guest.
Introducing Alex Raymond and Kapta's Account Platform 4211 Nathan introduces Alex Raymond and validates Kapta's pricing model with quick mental math on account expansion ROI.
Kapta's 2016 Pivot from HR Software to Account Management 5412 Alex explains how customer behavior drove Kapta's pivot from HR performance software to key account management, while Nathan probes into tracking net revenue retention.
Financial Systems Integration and Monthly Revenue Trajectory 5412 Alex educates Nathan on why mature industrial sectors like chemicals and manufacturing adopt Kapta faster than tech firms due to vendor market share dynamics.
Fundraising Background, Cap Table Alignment, and Churn Dynamics 6325 Nathan presses on unit economics, challenging Alex's reliance on theoretical LTV to CAC ratios by emphasizing the critical risk of multi-year cash payback periods.
Lean Three-Person Team Structure and Variable Cost Model 5423 Alex and Nathan discuss lean team structure and contrasting Series A fundraising multiples between Colorado regional norms and Bay Area valuations.
The Famous Five Rapid-Fire Questions 2111 Nathan conducts the standard Famous Five rapid-fire closing sequence covering books, sleep, and life lessons.

Statements from this episode (11)

Assertion Not checkable as stated
Kapta pricing typically ranges from $25,000 to $100,000 annually per customer
“So typically our customers are paying today anywhere from about 25,000 to about a 100,000 dollars a year.”
Alex Raymond Jun 21, 2019 ▶ 3:25
Disclosure
Kapta's 30 customers track over $1B in revenue on the platform
“So we've got about 30 customers who are using CAPTA today. That accounts for something like a billion dollars or more in terms of total revenue that's being tracked inside the application today”
Alex Raymond Jun 21, 2019 ▶ 5:40
Prediction Not checkable as stated
Raymond: Kapta aims to hit $100K MRR by early 2019
“We'd love to get to a hundred K in MRR, right? So that's kind of an obvious target for us. I would like to do that by the beginning of the, of 2019, the beginning of next year.”
Alex Raymond Jun 21, 2019 ▶ 7:35
Assertion Not checkable as stated
Raymond: Kapta's customer base is primarily mature industrial companies
“It turns out that a lot of our customers today are actually more mature industrial companies.”
Alex Raymond Jun 21, 2019 ▶ 8:33
Disclosure
Raymond: Kapta raised $1.5M from Techstars, Access, and Rally Ventures
“We raised about a million and a half bucks three years ago. The investors in that round were tech stars and access venture partners and rally ventures.”
Alex Raymond Jun 21, 2019 ▶ 9:29
Insight
Raymond: Customer churn in account management software stems from onboarding failures
“Typically, if we have a churn issue, it's because we didn't boot them up properly. If we didn't boot the customer up properly, it typically is because they don't pay as much attention to strategic account management and As they think they do. So what I mean by…”
Alex Raymond Jun 21, 2019 ▶ 10:14
Assertion Not checkable as stated
Raymond: Kapta achieves 110% to 115% net revenue retention
“Probably 10 or 15 points above right now.”
Alex Raymond Jun 21, 2019 ▶ 11:10
Assertion Not checkable as stated
Raymond: Kapta customer acquisition cost is sub-$10,000
“I think last time we calculated CAC, it was sub 10,000.”
Alex Raymond Jun 21, 2019 ▶ 12:11
Disclosure
Kapta operates with three full-time employees, outsourcing marketing and design
“Everyone's in Boulder and we are doing, so I'm the CEO. I do a lot of the customer facing stuff. We have a customer success manager who helps with onboarding, setting them up for strategic account management, that kind of thing, and a CTO who does all the deve…”
Alex Raymond Jun 21, 2019 ▶ 12:58
Assertion Supported
Boulder Series A rounds average $3M-$5M versus $6M-$10M in the Bay Area
“Typical series A, you know, in Boulder standards, that's three to five million in the Bay area. That's six to ten million.”
Alex Raymond Jun 21, 2019 ▶ 14:00
Assertion Contradicted
Typical Colorado Series A rounds are $3M on $8M pre-money valuations
“I think in Colorado, we typically, and I'm just saying this based on people I've known raises that they've done. We're typically seeing three on eight.”
Alex Raymond Jun 21, 2019 ▶ 14:58
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