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May 20, 2019 · 20m · top-founders

1395 Kahuna Helps Marketplaces Keep Buyers and Sellers Engaged, Way more than $3m in ARR

Samir Patel · 11m spoken Nathan Latka · 6m spoken
0:00 / 0:00

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In this episode of The Top Entrepreneurs Podcast, Nathan Latka interviews Kahuna CEO Samir Patel to explore how the SaaS platform drives engagement for two-sided consumer marketplaces, scales through usage-based pricing, and targets over $50 million in ARR backed by $50 million in venture funding.

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 37.3% of the talking time here. How this is scored →

Nathan as informed peer 4.3 Guest teaching 2.7 Guest disagreement 1.5 Nathan pushing back 2.7
05100:0010:0020:000:01–2:01 · Nathan as informed peer 0/10 Promotion of Nathan Latka's Bestselling Book Solo promotional monologue by the host reading reviews and advertising his book and summarizing episode stats.2:02–5:49 · Nathan as informed peer 4/10 The Top Entrepreneurs Podcast Show Introduction Friendly introduction and overview where Latka asks how Kahuna handles marketplace supply and demand, and Patel explains their onboarding mechanisms using Curb as a concrete example.5:49–8:20 · Nathan as informed peer 5/10 Kahuna's Usage-Based Pricing and Customer Contract Tiers Latka pushes Patel to pin down a realistic average monthly contract value, but Patel resists averaging by pointing out variance between domestic and international market sizes.8:20–13:15 · Nathan as informed peer 6/10 Global Market Expansion and Fifty Million Dollars in Equity Funding Latka drills into financing details, quickly catching and correcting Patel's slip of 'net churn' to 'net retention', and presses him to define specific usage-based pricing metrics.13:15–16:07 · Nathan as informed peer 6/10 Sales Velocity, CAC Payback, and Real-Time Infrastructure Costs Latka investigates CAC payback periods and whether heavy real-time computing costs compress gross margins below typical SaaS benchmarks, which Patel refutes.16:07–19:36 · Nathan as informed peer 5/10 Financial Runway, ARR Run-Rate, and Scaling Toward Fifty Million Latka triangulates an ARR bracket between 3 million and 36 million dollars based on earlier data points, and finishes with standard 'Famous Five' questions.0:01–2:01 · Guest teaching 0/10 Promotion of Nathan Latka's Bestselling Book Solo promotional monologue by the host reading reviews and advertising his book and summarizing episode stats.2:02–5:49 · Guest teaching 3/10 The Top Entrepreneurs Podcast Show Introduction Friendly introduction and overview where Latka asks how Kahuna handles marketplace supply and demand, and Patel explains their onboarding mechanisms using Curb as a concrete example.5:49–8:20 · Guest teaching 3/10 Kahuna's Usage-Based Pricing and Customer Contract Tiers Latka pushes Patel to pin down a realistic average monthly contract value, but Patel resists averaging by pointing out variance between domestic and international market sizes.8:20–13:15 · Guest teaching 4/10 Global Market Expansion and Fifty Million Dollars in Equity Funding Latka drills into financing details, quickly catching and correcting Patel's slip of 'net churn' to 'net retention', and presses him to define specific usage-based pricing metrics.13:15–16:07 · Guest teaching 4/10 Sales Velocity, CAC Payback, and Real-Time Infrastructure Costs Latka investigates CAC payback periods and whether heavy real-time computing costs compress gross margins below typical SaaS benchmarks, which Patel refutes.16:07–19:36 · Guest teaching 2/10 Financial Runway, ARR Run-Rate, and Scaling Toward Fifty Million Latka triangulates an ARR bracket between 3 million and 36 million dollars based on earlier data points, and finishes with standard 'Famous Five' questions.0:01–2:01 · Guest disagreement 0/10 Promotion of Nathan Latka's Bestselling Book Solo promotional monologue by the host reading reviews and advertising his book and summarizing episode stats.2:02–5:49 · Guest disagreement 1/10 The Top Entrepreneurs Podcast Show Introduction Friendly introduction and overview where Latka asks how Kahuna handles marketplace supply and demand, and Patel explains their onboarding mechanisms using Curb as a concrete example.5:49–8:20 · Guest disagreement 2/10 Kahuna's Usage-Based Pricing and Customer Contract Tiers Latka pushes Patel to pin down a realistic average monthly contract value, but Patel resists averaging by pointing out variance between domestic and international market sizes.8:20–13:15 · Guest disagreement 3/10 Global Market Expansion and Fifty Million Dollars in Equity Funding Latka drills into financing details, quickly catching and correcting Patel's slip of 'net churn' to 'net retention', and presses him to define specific usage-based pricing metrics.13:15–16:07 · Guest disagreement 2/10 Sales Velocity, CAC Payback, and Real-Time Infrastructure Costs Latka investigates CAC payback periods and whether heavy real-time computing costs compress gross margins below typical SaaS benchmarks, which Patel refutes.16:07–19:36 · Guest disagreement 1/10 Financial Runway, ARR Run-Rate, and Scaling Toward Fifty Million Latka triangulates an ARR bracket between 3 million and 36 million dollars based on earlier data points, and finishes with standard 'Famous Five' questions.0:01–2:01 · Nathan pushing back 0/10 Promotion of Nathan Latka's Bestselling Book Solo promotional monologue by the host reading reviews and advertising his book and summarizing episode stats.2:02–5:49 · Nathan pushing back 1/10 The Top Entrepreneurs Podcast Show Introduction Friendly introduction and overview where Latka asks how Kahuna handles marketplace supply and demand, and Patel explains their onboarding mechanisms using Curb as a concrete example.5:49–8:20 · Nathan pushing back 4/10 Kahuna's Usage-Based Pricing and Customer Contract Tiers Latka pushes Patel to pin down a realistic average monthly contract value, but Patel resists averaging by pointing out variance between domestic and international market sizes.8:20–13:15 · Nathan pushing back 5/10 Global Market Expansion and Fifty Million Dollars in Equity Funding Latka drills into financing details, quickly catching and correcting Patel's slip of 'net churn' to 'net retention', and presses him to define specific usage-based pricing metrics.13:15–16:07 · Nathan pushing back 3/10 Sales Velocity, CAC Payback, and Real-Time Infrastructure Costs Latka investigates CAC payback periods and whether heavy real-time computing costs compress gross margins below typical SaaS benchmarks, which Patel refutes.16:07–19:36 · Nathan pushing back 3/10 Financial Runway, ARR Run-Rate, and Scaling Toward Fifty Million Latka triangulates an ARR bracket between 3 million and 36 million dollars based on earlier data points, and finishes with standard 'Famous Five' questions.

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

0:00 · Nathan 95.5% · guest 4.5%0:00 · Nathan 95.5% · guest 4.5%3:00 · Nathan 22% · guest 78%3:00 · Nathan 22% · guest 78%6:00 · Nathan 19.3% · guest 80.7%6:00 · Nathan 19.3% · guest 80.7%9:00 · Nathan 25.3% · guest 74.7%9:00 · Nathan 25.3% · guest 74.7%12:00 · Nathan 19.4% · guest 80.6%12:00 · Nathan 19.4% · guest 80.6%15:00 · Nathan 27% · guest 73%15:00 · Nathan 27% · guest 73%18:00 · Nathan 55.9% · guest 44.1%18:00 · Nathan 55.9% · guest 44.1%
Sharpest disagreement ▶ 6:06 Patel rejects providing an average ACV

Patel pushes back on Latka's attempt to force a single average price point, arguing it makes no sense given their global scale differences.

 Hardest push from Nathan ▶ 11:40 Latka clarifies net retention versus net churn

Latka immediately steps in to correct Patel when he mistakenly says 'net churn is easily over a hundred percent'.

 Biggest teaching moment ▶ 13:27 Patel explains why enterprise marketplace sales cycles are faster

Patel educates Latka on why high six-figure marketplace deals close in weeks rather than nine months due to urgent competitive land grabs.

 Nathan holds their own ▶ 12:14 Latka cites HubSpot's Brian Halligan on pricing axes

Latka demonstrates deep SaaS domain knowledge by referencing Brian Halligan's multi-axis pricing model to demand specific usage metrics.
the scores for every segment, with the reasoning behind each
ChapterTopicNathan as informed peerGuest teachingGuest disagreementNathan pushing backWhy
Promotion of Nathan Latka's Bestselling Book 0000 Solo promotional monologue by the host reading reviews and advertising his book and summarizing episode stats.
The Top Entrepreneurs Podcast Show Introduction 4311 Friendly introduction and overview where Latka asks how Kahuna handles marketplace supply and demand, and Patel explains their onboarding mechanisms using Curb as a concrete example.
Kahuna's Usage-Based Pricing and Customer Contract Tiers 5324 Latka pushes Patel to pin down a realistic average monthly contract value, but Patel resists averaging by pointing out variance between domestic and international market sizes.
Global Market Expansion and Fifty Million Dollars in Equity Funding 6435 Latka drills into financing details, quickly catching and correcting Patel's slip of 'net churn' to 'net retention', and presses him to define specific usage-based pricing metrics.
Sales Velocity, CAC Payback, and Real-Time Infrastructure Costs 6423 Latka investigates CAC payback periods and whether heavy real-time computing costs compress gross margins below typical SaaS benchmarks, which Patel refutes.
Financial Runway, ARR Run-Rate, and Scaling Toward Fifty Million 5213 Latka triangulates an ARR bracket between 3 million and 36 million dollars based on earlier data points, and finishes with standard 'Famous Five' questions.

Statements from this episode (11)

Disclosure
Patel: Kahuna customer contracts range from $3,000 to $30,000 per month
“It's all a, it's all an activity in a volume base, right? We've got customers who pay us You know, 3000 dollars a month, the customers will pay us 30,000 dollars.”
Samir Patel May 20, 2019 ▶ 5:59
Assertion Not checkable as stated
Patel: Kahuna has under 40 employees and opened Asia offices
“We got about a little shy of 40 people. The team is based in Redwood city. We have, we've just opened offices in Asia on the sales and customer success side. And but we're pretty concentrated as a team, you know, all of engineering right here in Redwood city.”
Samir Patel May 20, 2019 ▶ 8:03
Assertion Not checkable as stated
Kahuna has close to 100 customers using its platform
“We have, you know, close to a hundred customers using the platform.”
Samir Patel May 20, 2019 ▶ 8:29
Disclosure
Kahuna has raised close to $50M from Sequoia and Tenaya Capital
“Kavuna is backed by Softech, Sequoia Capital, and Tanaya Capital and we've raised close to fifty million.”
Samir Patel May 20, 2019 ▶ 9:51
Assertion Not checkable as stated
Patel: Kahuna's Net Revenue Retention Rate Exceeds 100%
“Our net churn is, is, easily becomes over a hundred percent, just because, you know. Right. So yeah. So if you're, I mean, whichever way you want to go with that, but yes, for the idea of being that our internal growth within each customer in this business is …”
Samir Patel May 20, 2019 ▶ 11:31
Disclosure
Patel: Kahuna Prices on Usage and Converts Overages into Higher ARR
“Kahuna charges you based on the usage of the platform. So as your business is growing, you know, we'll come to you and say, look, you know, this is kind of the estimate based on what you bought, right? It looks like your usage is trending in different directio…”
Samir Patel May 20, 2019 ▶ 12:43
Disclosure
Patel: Kahuna targets CAC payback period under one year
“Definitely less than a year. You know, definitely less than a year.”
Samir Patel May 20, 2019 ▶ 13:23
Insight
Patel: Marketplace enterprise SaaS deals close much faster than typical nine-month cycles
“So whether you're spending 20,000 dollars ARR or 250,000 dollars ARR, it doesn't follow the usual tax economics of, well, a 300,000 dollar deal should take nine months to close. Not true. Nobody has nine months in this market. If you're trying to like keep Ube…”
Samir Patel May 20, 2019 ▶ 13:59
Disclosure
Patel: Kahuna closed an inside funding round in Q4 with all existing investors
“We did an inside round in Q four, not really talking about the numbers, but we did an inside round. All the investors came back to do a round for us in Q four.”
Samir Patel May 20, 2019 ▶ 16:14
Assertion Not checkable as stated
Patel: Kahuna is growing revenue at a 100% to 200% rate
“We are, we're growing in the hundred to 200% growth range, and that's something that I just want to keep consistent through, you know, through the life of the business.”
Samir Patel May 20, 2019 ▶ 17:14
Prediction Not checkable as stated
Patel: Kahuna could surpass $50M in revenue before 2020
“Yeah, we could. You know, I think we could.”
Samir Patel May 20, 2019 ▶ 17:25
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