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May 31, 2019 · 22m · top-founders

1406 How Continuous Improvement Platform 15Five Hit $10m ARR using Land and Expand

David Hassel · 11m spoken Nathan Latka · 8m 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 15Five co-founder and CEO David Hassel on how the continuous performance management platform scaled to nearly $10 million in ARR on just $3.7 million in outside capital through disciplined operations, strong retention, and a land-and-expand sales model.

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 43.3% of the talking time here. How this is scored →

Nathan as informed peer 4.3 Guest teaching 2.3 Guest disagreement 1.4 Nathan pushing back 2.6
05100:0010:0020:000:01–2:02 · Nathan as informed peer 0/10 Nathan Latka Promotes Wall Street Journal Bestselling Book Nathan delivers a solo promotional monologue for his bestselling book followed by a preliminary metrics overview of 15Five.2:03–5:53 · Nathan as informed peer 5/10 The Top Entrepreneurs Podcast Show Intro Nathan introduces David and probes the friction of user adoption by drawing a comparison to CRM data entry challenges before breaking down pricing tiers.5:53–11:26 · Nathan as informed peer 7/10 15Five Timeline, Headcount Inflection, and Capital Efficiency When David initially declines to disclose ARR, Nathan pushes for a vague range and drills deeply into logo versus net MRR churn, payback periods, and net revenue retention.11:26–14:02 · Nathan as informed peer 5/10 Organic Distribution Strategy and In-App Review Acquisition Nathan presses David on tactical in-app triggers used to generate hundreds of G2 Crowd reviews, clarifying he wants the onboarding mechanics rather than bribes.14:02–18:04 · Nathan as informed peer 7/10 Market Trends, Enterprise LTV, and Distributed Team Structure Nathan calculates LTV using inverse churn multipliers on the fly and models blended ARPU across 1500 accounts while David clarifies tier variances.18:04–21:07 · Nathan as informed peer 6/10 Series A Fundraising Strategy and Capital Allocation Nathan rapidly assesses Series A dilution terms based on current run rate and completes the interview with the standard rapid-fire Famous Five questions.21:07–22:00 · Nathan as informed peer 0/10 Nathan Latka Summarizes 15Five Metrics and Concludes Interview Nathan delivers a solo recap summarizing 15Five's ARR growth, churn metrics, and headcount before concluding the episode.0:01–2:02 · Guest teaching 0/10 Nathan Latka Promotes Wall Street Journal Bestselling Book Nathan delivers a solo promotional monologue for his bestselling book followed by a preliminary metrics overview of 15Five.2:03–5:53 · Guest teaching 3/10 The Top Entrepreneurs Podcast Show Intro Nathan introduces David and probes the friction of user adoption by drawing a comparison to CRM data entry challenges before breaking down pricing tiers.5:53–11:26 · Guest teaching 4/10 15Five Timeline, Headcount Inflection, and Capital Efficiency When David initially declines to disclose ARR, Nathan pushes for a vague range and drills deeply into logo versus net MRR churn, payback periods, and net revenue retention.11:26–14:02 · Guest teaching 3/10 Organic Distribution Strategy and In-App Review Acquisition Nathan presses David on tactical in-app triggers used to generate hundreds of G2 Crowd reviews, clarifying he wants the onboarding mechanics rather than bribes.14:02–18:04 · Guest teaching 4/10 Market Trends, Enterprise LTV, and Distributed Team Structure Nathan calculates LTV using inverse churn multipliers on the fly and models blended ARPU across 1500 accounts while David clarifies tier variances.18:04–21:07 · Guest teaching 2/10 Series A Fundraising Strategy and Capital Allocation Nathan rapidly assesses Series A dilution terms based on current run rate and completes the interview with the standard rapid-fire Famous Five questions.21:07–22:00 · Guest teaching 0/10 Nathan Latka Summarizes 15Five Metrics and Concludes Interview Nathan delivers a solo recap summarizing 15Five's ARR growth, churn metrics, and headcount before concluding the episode.0:01–2:02 · Guest disagreement 0/10 Nathan Latka Promotes Wall Street Journal Bestselling Book Nathan delivers a solo promotional monologue for his bestselling book followed by a preliminary metrics overview of 15Five.2:03–5:53 · Guest disagreement 2/10 The Top Entrepreneurs Podcast Show Intro Nathan introduces David and probes the friction of user adoption by drawing a comparison to CRM data entry challenges before breaking down pricing tiers.5:53–11:26 · Guest disagreement 3/10 15Five Timeline, Headcount Inflection, and Capital Efficiency When David initially declines to disclose ARR, Nathan pushes for a vague range and drills deeply into logo versus net MRR churn, payback periods, and net revenue retention.11:26–14:02 · Guest disagreement 2/10 Organic Distribution Strategy and In-App Review Acquisition Nathan presses David on tactical in-app triggers used to generate hundreds of G2 Crowd reviews, clarifying he wants the onboarding mechanics rather than bribes.14:02–18:04 · Guest disagreement 2/10 Market Trends, Enterprise LTV, and Distributed Team Structure Nathan calculates LTV using inverse churn multipliers on the fly and models blended ARPU across 1500 accounts while David clarifies tier variances.18:04–21:07 · Guest disagreement 1/10 Series A Fundraising Strategy and Capital Allocation Nathan rapidly assesses Series A dilution terms based on current run rate and completes the interview with the standard rapid-fire Famous Five questions.21:07–22:00 · Guest disagreement 0/10 Nathan Latka Summarizes 15Five Metrics and Concludes Interview Nathan delivers a solo recap summarizing 15Five's ARR growth, churn metrics, and headcount before concluding the episode.0:01–2:02 · Nathan pushing back 0/10 Nathan Latka Promotes Wall Street Journal Bestselling Book Nathan delivers a solo promotional monologue for his bestselling book followed by a preliminary metrics overview of 15Five.2:03–5:53 · Nathan pushing back 3/10 The Top Entrepreneurs Podcast Show Intro Nathan introduces David and probes the friction of user adoption by drawing a comparison to CRM data entry challenges before breaking down pricing tiers.5:53–11:26 · Nathan pushing back 6/10 15Five Timeline, Headcount Inflection, and Capital Efficiency When David initially declines to disclose ARR, Nathan pushes for a vague range and drills deeply into logo versus net MRR churn, payback periods, and net revenue retention.11:26–14:02 · Nathan pushing back 4/10 Organic Distribution Strategy and In-App Review Acquisition Nathan presses David on tactical in-app triggers used to generate hundreds of G2 Crowd reviews, clarifying he wants the onboarding mechanics rather than bribes.14:02–18:04 · Nathan pushing back 4/10 Market Trends, Enterprise LTV, and Distributed Team Structure Nathan calculates LTV using inverse churn multipliers on the fly and models blended ARPU across 1500 accounts while David clarifies tier variances.18:04–21:07 · Nathan pushing back 1/10 Series A Fundraising Strategy and Capital Allocation Nathan rapidly assesses Series A dilution terms based on current run rate and completes the interview with the standard rapid-fire Famous Five questions.21:07–22:00 · Nathan pushing back 0/10 Nathan Latka Summarizes 15Five Metrics and Concludes Interview Nathan delivers a solo recap summarizing 15Five's ARR growth, churn metrics, and headcount before concluding the episode.

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

0:00 · Nathan 100% · guest 0%0:00 · Nathan 100% · guest 0%3:00 · Nathan 38.1% · guest 61.9%3:00 · Nathan 38.1% · guest 61.9%6:00 · Nathan 38.4% · guest 61.6%6:00 · Nathan 38.4% · guest 61.6%9:00 · Nathan 35.8% · guest 64.2%9:00 · Nathan 35.8% · guest 64.2%12:00 · Nathan 17.3% · guest 82.7%12:00 · Nathan 17.3% · guest 82.7%15:00 · Nathan 34.2% · guest 65.8%15:00 · Nathan 34.2% · guest 65.8%18:00 · Nathan 19.9% · guest 80.1%18:00 · Nathan 19.9% · guest 80.1%21:00 · Nathan 90.9% · guest 9.1%21:00 · Nathan 90.9% · guest 9.1%
Sharpest disagreement ▶ 7:16 Deflection on ARR Disclosure

David pushes back against answering financial questions directly, stating that he cannot disclose current ARR.

 Hardest push from Nathan ▶ 7:21 Refusal to Accept Non-Disclosure

Nathan refuses to drop the revenue inquiry after David's refusal, insisting David provide any broad range to establish the scale.

 Biggest teaching moment ▶ 9:19 Capital-Efficient Hiring in Arrears

David explains his strategy of hiring in arrears to maintain cash flow positivity versus competitors who front-load venture capital.

 Nathan holds their own ▶ 15:35 Host Calculates LTV and Churn Formula

Nathan demonstrates SaaS fluency by immediately applying the 1/churn formula to derive a 50-month enterprise customer lifespan.
the scores for every segment, with the reasoning behind each
ChapterTopicNathan as informed peerGuest teachingGuest disagreementNathan pushing backWhy
Nathan Latka Promotes Wall Street Journal Bestselling Book 0000 Nathan delivers a solo promotional monologue for his bestselling book followed by a preliminary metrics overview of 15Five.
The Top Entrepreneurs Podcast Show Intro 5323 Nathan introduces David and probes the friction of user adoption by drawing a comparison to CRM data entry challenges before breaking down pricing tiers.
15Five Timeline, Headcount Inflection, and Capital Efficiency 7436 When David initially declines to disclose ARR, Nathan pushes for a vague range and drills deeply into logo versus net MRR churn, payback periods, and net revenue retention.
Organic Distribution Strategy and In-App Review Acquisition 5324 Nathan presses David on tactical in-app triggers used to generate hundreds of G2 Crowd reviews, clarifying he wants the onboarding mechanics rather than bribes.
Market Trends, Enterprise LTV, and Distributed Team Structure 7424 Nathan calculates LTV using inverse churn multipliers on the fly and models blended ARPU across 1500 accounts while David clarifies tier variances.
Series A Fundraising Strategy and Capital Allocation 6211 Nathan rapidly assesses Series A dilution terms based on current run rate and completes the interview with the standard rapid-fire Famous Five questions.
Nathan Latka Summarizes 15Five Metrics and Concludes Interview 0000 Nathan delivers a solo recap summarizing 15Five's ARR growth, churn metrics, and headcount before concluding the episode.

Statements from this episode (16)

Assertion Supported
15Five charges $7 to $14 per seat monthly on average
“Anywhere between seven and 14 bucks a month.”
David Hassel May 31, 2019 ▶ 5:11
Assertion Not checkable as stated
15Five has over 1,500 active customers
“We've got a little over 1500 customers.”
David Hassel May 31, 2019 ▶ 6:16
Disclosure
15Five expects to grow headcount to 120 within a year
“We were 50 people last month will be 65 next month and, you know, a 120 by this time next year.”
David Hassel May 31, 2019 ▶ 6:25
Assertion Not checkable as stated
15Five funds its ongoing hiring spree entirely from revenue
“Currently it's all funded by revenue.”
David Hassel May 31, 2019 ▶ 6:36
Assertion Contradicted
15Five has raised only $3.7 million in total capital to date
“Relative to our competition, we've raised a very small amount of capital, raised about 3.7 million to date.”
David Hassel May 31, 2019 ▶ 6:44
Assertion Supported
15Five's direct competitors have raised between $40 million and $100 million
“We have, you know, some of our, you know, kind of head tech competitors have raised between 40 and a hundred million dollars.”
David Hassel May 31, 2019 ▶ 6:51
Assertion Not checkable as stated
15Five's main competitors are Reflektive, Lattice, and Betterworks
“I'd say the three most, the three companies we bump into most often are a company called Reflective, another company called Lattice, and a third called Betterworks.”
David Hassel May 31, 2019 ▶ 7:00
Assertion Not checkable as stated
15Five is currently nearing $10 million in annual recurring revenue
“W I would say near eight figures at the moment.”
David Hassel May 31, 2019 ▶ 7:31
Assertion Not checkable as stated
15Five operates at a highly efficient 5:1 to 6:1 LTV:CAC ratio
“I think right now our CAC to LTV anyway, which would, you know, would be a good measure of that is probably a five or six to one.”
David Hassel May 31, 2019 ▶ 8:47
Assertion Not checkable as stated
15Five maintains a customer acquisition payback period under 12 months
“I would say today we're below 12 months.”
David Hassel May 31, 2019 ▶ 9:16
Disclosure
Hassel: 15Five likely needs to raise additional capital in near term
“What I think it probably makes sense to raise additional capital in the near term.”
David Hassel May 31, 2019 ▶ 9:43
Assertion Not checkable as stated
15Five maintains a 120% to 130% annual net revenue retention rate
“Yeah. A hundred and like, you know, a 120%, a 130%.”
David Hassel May 31, 2019 ▶ 10:57
Disclosure
15Five drives growth through content and word-of-mouth rather than paid ads
“Our most effective distribution channels have been content marketing and word of mouth. And that's why we've been able to build a very capital efficient business. We actually haven't spent a lot on paid acquisition.”
David Hassel May 31, 2019 ▶ 11:47
Assertion Not checkable as stated
15Five's mid-market sales segment is growing over 100% year-over-year
“We've grown we've grown the business probably about 75, 80% across the board. The, what we call our mid-market business, the sales business has grown north of a hundred percent year over year.”
David Hassel May 31, 2019 ▶ 14:08
Assertion Not checkable as stated
Hassel: 15Five sales-driven accounts pay 10x self-service accounts
“So, so our sales driven accounts roughly pay 10 X what the self-service accounts pay.”
David Hassel May 31, 2019 ▶ 17:14
Assertion Contradicted
15Five reached near $10 million ARR without raising a formal Series A
“We've never done a formal series A.”
David Hassel May 31, 2019 ▶ 18:12
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