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Apr 17, 2019 · 22m · top-founders

1362 How Troops AI Became #1 Slack Integration, $1m+ in ARR, $17m Raised

Dan Reich · 12m spoken Nathan Latka · 7m spoken
0:00 / 0:00

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In this episode of The Top Entrepreneurs Podcast, host Nathan Latka interviews Dan Reich, co-founder and CEO of Troops AI, exploring how Reich leveraged his past startup exits to build an efficient, product-led conversational workflow platform for Slack that crossed $1 million in ARR within a year of monetizing.

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 37.9% of the talking time here. How this is scored →

Nathan as informed peer 3.9 Guest teaching 1.5 Guest disagreement 0.8 Nathan pushing back 2.3
05100:0010:0020:000:00–2:28 · Nathan as informed peer 0/10 Nathan Latka Promotes New Capitalist Book Introductory monologue and promotional spot for the host's book along with high-level stats on Troops AI.2:29–4:43 · Nathan as informed peer 4/10 Guest Introduction: Dan Reich of Troops AI Nathan introduces Dan Reich and presses him to qualify his first exit from Spinback to Buddy Media, clarifying whether it was true retirement money or just travel money.4:43–7:17 · Nathan as informed peer 3/10 Exploring Venture Capital and Starting TULA Dan recounts his post-exit transition working with a VC firm and identifying his passion for operational software over investing.7:17–9:30 · Nathan as informed peer 4/10 Founding Troops AI and Conversational Workflows Dan outlines the founding thesis of Troops bringing consumer-grade messaging ergonomics into enterprise CRM workflows, while Nathan interjects relevant product analogs.9:30–14:15 · Nathan as informed peer 6/10 Enterprise Clients, Slack Investment, and Value Metrics Nathan scrutinizes Dan's claim of being the top Slack app and calculates ARR based on customer counts, prompting Dan to correct Nathan's underestimated contract value.14:16–16:38 · Nathan as informed peer 5/10 Market Expansion and Team Structure Dan explains market expansion potential across enterprise leadership and describes Troops' product-led team composition.16:38–20:21 · Nathan as informed peer 6/10 Churn Management and Public Slack Workflows Nathan evaluates unit economics, pointing out that a 6-month payback is unusually conservative for a startup with $17M raised, while Dan explains why public Slack visibility lowers churn.20:22–22:23 · Nathan as informed peer 3/10 The Famous Five Rapid-Fire Questions Nathan runs through the Famous Five rapid-fire questions, quickly correcting Dan when he names his own company before wrapping up with a recap.0:00–2:28 · Guest teaching 0/10 Nathan Latka Promotes New Capitalist Book Introductory monologue and promotional spot for the host's book along with high-level stats on Troops AI.2:29–4:43 · Guest teaching 1/10 Guest Introduction: Dan Reich of Troops AI Nathan introduces Dan Reich and presses him to qualify his first exit from Spinback to Buddy Media, clarifying whether it was true retirement money or just travel money.4:43–7:17 · Guest teaching 1/10 Exploring Venture Capital and Starting TULA Dan recounts his post-exit transition working with a VC firm and identifying his passion for operational software over investing.7:17–9:30 · Guest teaching 2/10 Founding Troops AI and Conversational Workflows Dan outlines the founding thesis of Troops bringing consumer-grade messaging ergonomics into enterprise CRM workflows, while Nathan interjects relevant product analogs.9:30–14:15 · Guest teaching 3/10 Enterprise Clients, Slack Investment, and Value Metrics Nathan scrutinizes Dan's claim of being the top Slack app and calculates ARR based on customer counts, prompting Dan to correct Nathan's underestimated contract value.14:16–16:38 · Guest teaching 2/10 Market Expansion and Team Structure Dan explains market expansion potential across enterprise leadership and describes Troops' product-led team composition.16:38–20:21 · Guest teaching 3/10 Churn Management and Public Slack Workflows Nathan evaluates unit economics, pointing out that a 6-month payback is unusually conservative for a startup with $17M raised, while Dan explains why public Slack visibility lowers churn.20:22–22:23 · Guest teaching 0/10 The Famous Five Rapid-Fire Questions Nathan runs through the Famous Five rapid-fire questions, quickly correcting Dan when he names his own company before wrapping up with a recap.0:00–2:28 · Guest disagreement 0/10 Nathan Latka Promotes New Capitalist Book Introductory monologue and promotional spot for the host's book along with high-level stats on Troops AI.2:29–4:43 · Guest disagreement 1/10 Guest Introduction: Dan Reich of Troops AI Nathan introduces Dan Reich and presses him to qualify his first exit from Spinback to Buddy Media, clarifying whether it was true retirement money or just travel money.4:43–7:17 · Guest disagreement 0/10 Exploring Venture Capital and Starting TULA Dan recounts his post-exit transition working with a VC firm and identifying his passion for operational software over investing.7:17–9:30 · Guest disagreement 0/10 Founding Troops AI and Conversational Workflows Dan outlines the founding thesis of Troops bringing consumer-grade messaging ergonomics into enterprise CRM workflows, while Nathan interjects relevant product analogs.9:30–14:15 · Guest disagreement 2/10 Enterprise Clients, Slack Investment, and Value Metrics Nathan scrutinizes Dan's claim of being the top Slack app and calculates ARR based on customer counts, prompting Dan to correct Nathan's underestimated contract value.14:16–16:38 · Guest disagreement 1/10 Market Expansion and Team Structure Dan explains market expansion potential across enterprise leadership and describes Troops' product-led team composition.16:38–20:21 · Guest disagreement 1/10 Churn Management and Public Slack Workflows Nathan evaluates unit economics, pointing out that a 6-month payback is unusually conservative for a startup with $17M raised, while Dan explains why public Slack visibility lowers churn.20:22–22:23 · Guest disagreement 1/10 The Famous Five Rapid-Fire Questions Nathan runs through the Famous Five rapid-fire questions, quickly correcting Dan when he names his own company before wrapping up with a recap.0:00–2:28 · Nathan pushing back 0/10 Nathan Latka Promotes New Capitalist Book Introductory monologue and promotional spot for the host's book along with high-level stats on Troops AI.2:29–4:43 · Nathan pushing back 3/10 Guest Introduction: Dan Reich of Troops AI Nathan introduces Dan Reich and presses him to qualify his first exit from Spinback to Buddy Media, clarifying whether it was true retirement money or just travel money.4:43–7:17 · Nathan pushing back 1/10 Exploring Venture Capital and Starting TULA Dan recounts his post-exit transition working with a VC firm and identifying his passion for operational software over investing.7:17–9:30 · Nathan pushing back 1/10 Founding Troops AI and Conversational Workflows Dan outlines the founding thesis of Troops bringing consumer-grade messaging ergonomics into enterprise CRM workflows, while Nathan interjects relevant product analogs.9:30–14:15 · Nathan pushing back 5/10 Enterprise Clients, Slack Investment, and Value Metrics Nathan scrutinizes Dan's claim of being the top Slack app and calculates ARR based on customer counts, prompting Dan to correct Nathan's underestimated contract value.14:16–16:38 · Nathan pushing back 2/10 Market Expansion and Team Structure Dan explains market expansion potential across enterprise leadership and describes Troops' product-led team composition.16:38–20:21 · Nathan pushing back 4/10 Churn Management and Public Slack Workflows Nathan evaluates unit economics, pointing out that a 6-month payback is unusually conservative for a startup with $17M raised, while Dan explains why public Slack visibility lowers churn.20:22–22:23 · Nathan pushing back 2/10 The Famous Five Rapid-Fire Questions Nathan runs through the Famous Five rapid-fire questions, quickly correcting Dan when he names his own company before wrapping up with a recap.

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

0:00 · Nathan 95.3% · guest 4.7%0:00 · Nathan 95.3% · guest 4.7%3:00 · Nathan 38.6% · guest 61.4%3:00 · Nathan 38.6% · guest 61.4%6:00 · Nathan 7.9% · guest 92.1%6:00 · Nathan 7.9% · guest 92.1%9:00 · Nathan 31.6% · guest 68.4%9:00 · Nathan 31.6% · guest 68.4%12:00 · Nathan 24.6% · guest 75.4%12:00 · Nathan 24.6% · guest 75.4%15:00 · Nathan 17.6% · guest 82.4%15:00 · Nathan 17.6% · guest 82.4%18:00 · Nathan 27.9% · guest 72.1%18:00 · Nathan 27.9% · guest 72.1%21:00 · Nathan 80.4% · guest 19.6%21:00 · Nathan 80.4% · guest 19.6%
Sharpest disagreement ▶ 13:47 Dan refutes Nathan's conservative revenue calculation

Dan directly pushes back against Nathan's estimated revenue range of $600k-$700k ARR by asserting that contract values for their enterprise clients are significantly higher.

 Hardest push from Nathan ▶ 10:35 Nathan demands empirical proof of market leadership

Nathan immediately challenges Dan's assertion that Troops is the leading application on Slack, demanding clear metrics such as API calls.

 Biggest teaching moment ▶ 17:13 Dan explains public Slack visibility as a churn shield

Dan educates Nathan on why SaaS churn in Slack-integrated apps differs from back-office infrastructure like Segment, citing enterprise-wide visibility and workflow stickiness.

 Nathan holds their own ▶ 18:49 Nathan benchmarks unit economics against venture funding

Nathan demonstrates SaaS expertise by noting that a 6-month CAC payback period is unusually short for a startup sitting on $17M in venture backing.
the scores for every segment, with the reasoning behind each
ChapterTopicNathan as informed peerGuest teachingGuest disagreementNathan pushing backWhy
Nathan Latka Promotes New Capitalist Book 0000 Introductory monologue and promotional spot for the host's book along with high-level stats on Troops AI.
Guest Introduction: Dan Reich of Troops AI 4113 Nathan introduces Dan Reich and presses him to qualify his first exit from Spinback to Buddy Media, clarifying whether it was true retirement money or just travel money.
Exploring Venture Capital and Starting TULA 3101 Dan recounts his post-exit transition working with a VC firm and identifying his passion for operational software over investing.
Founding Troops AI and Conversational Workflows 4201 Dan outlines the founding thesis of Troops bringing consumer-grade messaging ergonomics into enterprise CRM workflows, while Nathan interjects relevant product analogs.
Enterprise Clients, Slack Investment, and Value Metrics 6325 Nathan scrutinizes Dan's claim of being the top Slack app and calculates ARR based on customer counts, prompting Dan to correct Nathan's underestimated contract value.
Market Expansion and Team Structure 5212 Dan explains market expansion potential across enterprise leadership and describes Troops' product-led team composition.
Churn Management and Public Slack Workflows 6314 Nathan evaluates unit economics, pointing out that a 6-month payback is unusually conservative for a startup with $17M raised, while Dan explains why public Slack visibility lowers churn.
The Famous Five Rapid-Fire Questions 3012 Nathan runs through the Famous Five rapid-fire questions, quickly correcting Dan when he names his own company before wrapping up with a recap.

Statements from this episode (14)

Insight
Reich: VC pitches left me jealous of founders or lamenting wasted time
“Either I'd have an amazing conversation with an entrepreneur and just be really jealous that I wasn't doing that. Or I'd have just a horrible conversation with an entrepreneur and say, man, where did that hour of my life go? And I'll never get that back. And s…”
Dan Reich Apr 17, 2019 ▶ 6:45
Opinion
Reich: Salesforce and legacy CRMs feature painful 1990s-style user interfaces
“A problem with it and many like it is it's incredibly painful to use, right? Like you log into an interface that looks like it's from the nineties with a bunch of fields, forms, buttons, and boxes.”
Dan Reich Apr 17, 2019 ▶ 7:44
Assertion Supported
Reich: Six of top ten apps were messaging apps in mid-2015
“You know, at the time we started the company, six of the top 10 apps in the world were messaging apps.”
Dan Reich Apr 17, 2019 ▶ 8:07
Assertion Supported
Reich: Troops AI counts WeWork, Slack, Square, and Flexport as customers
“Some of our customers include guys like WeWork, Looker, Slack, Envision, Flexport, Square.”
Dan Reich Apr 17, 2019 ▶ 10:22
Assertion Supported
Reich: Troops AI was likely Slack's first-ever Series A investment
“Slack is actually one of our investors. I think we're the first series A investment they ever made.”
Dan Reich Apr 17, 2019 ▶ 10:51
Assertion Not checkable as stated
Reich: Over 2,000 companies use Troops AI
“We've got about, we probably now have, you know, over, you know, 2000 companies using us in some way, shape, or form.”
Dan Reich Apr 17, 2019 ▶ 11:20
Disclosure
Reich: Troops scaled past $1M ARR without dedicated salespeople
“And to give you perspective for the bulk of the time, we didn't have any salespeople either. It was just me and my co-founder, Scott doing most of the customer calls.”
Dan Reich Apr 17, 2019 ▶ 15:40
Assertion Not checkable as stated
Reich: Troops AI's churn rate is under 4%
“Our churn is less than four percent today.”
Dan Reich Apr 17, 2019 ▶ 16:45
Insight
Reich: Overpriced SaaS companies inevitably get undercut by cheaper rivals
“I've seen many companies just price way too high and inevitably SaaS get undercut by the next startup and the next startup, then free, then some other alternative business model.”
Dan Reich Apr 17, 2019 ▶ 17:09
Assertion Not publicly verifiable
Reich: HubSpot routes all incoming global leads using Troops
“HubSpot is a good example. They're a customer of troops. They manage all of their leads using troops. The lead comes in, it gets it gets inspected and then routed intelligently to the right team member around the world.”
Dan Reich Apr 17, 2019 ▶ 17:32
Disclosure
Reich: Troops AI acquires customers without paid advertising
“We have three account executives now. We don't do any marketing. We don't do any paid advertising. It's all been word of mouth on searches, how we've been acquiring customers.”
Dan Reich Apr 17, 2019 ▶ 18:30
Assertion Not checkable as stated
Reich: Troops AI maintains a six-month CAC payback period
“Our payback period is it fluctuates, but it's called six months.”
Dan Reich Apr 17, 2019 ▶ 18:50
Disclosure
Reich: Troops AI retains most of its capital in the bank
“We have most of it still sitting in the bank.”
Dan Reich Apr 17, 2019 ▶ 20:05
Disclosure
Reich: Troops AI raised an unannounced $8 million Series B
“So believe it or not, we just did a series B a few weeks ago. It's public, but we didn't do any press around it. So we raised another about eight million just a few weeks ago.”
Dan Reich Apr 17, 2019 ▶ 20:13
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