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Apr 14, 2019 · 18m · top-founders

1359 Will This Quiz Based Lead Capture Platform Grow Into It's Valuation?

Nathan Latka · 8m spoken Mike Hawkins · 7m 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 Riddle co-founder Mike Hawkins to examine the interactive quiz platform's business model, customer retention strategies, and financial metrics. The discussion explores Riddle's journey from a 2015 B2B pivot to managing over 700 paying clients profitably with a distributed five-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 51.3% of the talking time here. How this is scored →

Nathan as informed peer 4.7 Guest teaching 1.4 Guest disagreement 2.4 Nathan pushing back 3.9
05100:0010:000:00–2:10 · Nathan as informed peer 0/10 Nathan Latka's Book Launch on Audible Solo host monologue promoting his book 'How to Be a Capitalist Without Any Capital' and introducing the podcast.2:11–4:27 · Nathan as informed peer 4/10 Introducing Mike Hawkins and Riddle's Business Model Nathan introduces Mike Hawkins and establishes Riddle's business model, breaking down their tier pricing and estimating average ARPU.4:27–6:45 · Nathan as informed peer 5/10 Founding Story, Product Pivot, and Early Funding Nathan probes funding structure and convertible notes versus equity, but Mike deflects discussion of cap table mechanics to his co-founder.6:45–10:44 · Nathan as informed peer 7/10 Managing Churn, Data Lock-In, and Customer Lifetime Value Nathan demonstrates SaaS metrics mastery by clarifying logo vs revenue churn and calculating implied lifetime value from churn rates, while challenging Mike on vendor lock-in risks.10:44–14:05 · Nathan as informed peer 6/10 Organic Customer Acquisition and High-Touch Support Nathan pushes Mike on vague 'organic growth' claims and calculates Riddle's approximate monthly revenue (~$35k MRR), pushing back when Mike hesitates to confirm his own math.14:05–16:48 · Nathan as informed peer 7/10 Growth Trajectory, Cap Table Discussion, and Future Book Nathan challenges the modest 10% YoY growth given $2M in funding, pressing on how founders retain full control without giving up equity, which Mike repeatedly refuses to disclose.16:49–17:38 · Nathan as informed peer 4/10 The Famous Five Rapid-Fire Questions Standard rapid-fire questions where Nathan jokingly corrects Mike when he confuses several famous business book titles into one.0:00–2:10 · Guest teaching 0/10 Nathan Latka's Book Launch on Audible Solo host monologue promoting his book 'How to Be a Capitalist Without Any Capital' and introducing the podcast.2:11–4:27 · Guest teaching 2/10 Introducing Mike Hawkins and Riddle's Business Model Nathan introduces Mike Hawkins and establishes Riddle's business model, breaking down their tier pricing and estimating average ARPU.4:27–6:45 · Guest teaching 1/10 Founding Story, Product Pivot, and Early Funding Nathan probes funding structure and convertible notes versus equity, but Mike deflects discussion of cap table mechanics to his co-founder.6:45–10:44 · Guest teaching 3/10 Managing Churn, Data Lock-In, and Customer Lifetime Value Nathan demonstrates SaaS metrics mastery by clarifying logo vs revenue churn and calculating implied lifetime value from churn rates, while challenging Mike on vendor lock-in risks.10:44–14:05 · Guest teaching 2/10 Organic Customer Acquisition and High-Touch Support Nathan pushes Mike on vague 'organic growth' claims and calculates Riddle's approximate monthly revenue (~$35k MRR), pushing back when Mike hesitates to confirm his own math.14:05–16:48 · Guest teaching 1/10 Growth Trajectory, Cap Table Discussion, and Future Book Nathan challenges the modest 10% YoY growth given $2M in funding, pressing on how founders retain full control without giving up equity, which Mike repeatedly refuses to disclose.16:49–17:38 · Guest teaching 1/10 The Famous Five Rapid-Fire Questions Standard rapid-fire questions where Nathan jokingly corrects Mike when he confuses several famous business book titles into one.0:00–2:10 · Guest disagreement 0/10 Nathan Latka's Book Launch on Audible Solo host monologue promoting his book 'How to Be a Capitalist Without Any Capital' and introducing the podcast.2:11–4:27 · Guest disagreement 1/10 Introducing Mike Hawkins and Riddle's Business Model Nathan introduces Mike Hawkins and establishes Riddle's business model, breaking down their tier pricing and estimating average ARPU.4:27–6:45 · Guest disagreement 4/10 Founding Story, Product Pivot, and Early Funding Nathan probes funding structure and convertible notes versus equity, but Mike deflects discussion of cap table mechanics to his co-founder.6:45–10:44 · Guest disagreement 2/10 Managing Churn, Data Lock-In, and Customer Lifetime Value Nathan demonstrates SaaS metrics mastery by clarifying logo vs revenue churn and calculating implied lifetime value from churn rates, while challenging Mike on vendor lock-in risks.10:44–14:05 · Guest disagreement 3/10 Organic Customer Acquisition and High-Touch Support Nathan pushes Mike on vague 'organic growth' claims and calculates Riddle's approximate monthly revenue (~$35k MRR), pushing back when Mike hesitates to confirm his own math.14:05–16:48 · Guest disagreement 6/10 Growth Trajectory, Cap Table Discussion, and Future Book Nathan challenges the modest 10% YoY growth given $2M in funding, pressing on how founders retain full control without giving up equity, which Mike repeatedly refuses to disclose.16:49–17:38 · Guest disagreement 1/10 The Famous Five Rapid-Fire Questions Standard rapid-fire questions where Nathan jokingly corrects Mike when he confuses several famous business book titles into one.0:00–2:10 · Nathan pushing back 0/10 Nathan Latka's Book Launch on Audible Solo host monologue promoting his book 'How to Be a Capitalist Without Any Capital' and introducing the podcast.2:11–4:27 · Nathan pushing back 2/10 Introducing Mike Hawkins and Riddle's Business Model Nathan introduces Mike Hawkins and establishes Riddle's business model, breaking down their tier pricing and estimating average ARPU.4:27–6:45 · Nathan pushing back 5/10 Founding Story, Product Pivot, and Early Funding Nathan probes funding structure and convertible notes versus equity, but Mike deflects discussion of cap table mechanics to his co-founder.6:45–10:44 · Nathan pushing back 5/10 Managing Churn, Data Lock-In, and Customer Lifetime Value Nathan demonstrates SaaS metrics mastery by clarifying logo vs revenue churn and calculating implied lifetime value from churn rates, while challenging Mike on vendor lock-in risks.10:44–14:05 · Nathan pushing back 5/10 Organic Customer Acquisition and High-Touch Support Nathan pushes Mike on vague 'organic growth' claims and calculates Riddle's approximate monthly revenue (~$35k MRR), pushing back when Mike hesitates to confirm his own math.14:05–16:48 · Nathan pushing back 7/10 Growth Trajectory, Cap Table Discussion, and Future Book Nathan challenges the modest 10% YoY growth given $2M in funding, pressing on how founders retain full control without giving up equity, which Mike repeatedly refuses to disclose.16:49–17:38 · Nathan pushing back 3/10 The Famous Five Rapid-Fire Questions Standard rapid-fire questions where Nathan jokingly corrects Mike when he confuses several famous business book titles into one.

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

0:00 · Nathan 88.3% · guest 11.7%0:00 · Nathan 88.3% · guest 11.7%3:00 · Nathan 27.8% · guest 72.2%3:00 · Nathan 27.8% · guest 72.2%6:00 · Nathan 38.7% · guest 61.3%6:00 · Nathan 38.7% · guest 61.3%9:00 · Nathan 45.1% · guest 54.9%9:00 · Nathan 45.1% · guest 54.9%12:00 · Nathan 46.7% · guest 53.3%12:00 · Nathan 46.7% · guest 53.3%15:00 · Nathan 56.2% · guest 43.8%15:00 · Nathan 56.2% · guest 43.8%18:00 · Nathan 92.8% · guest 7.2%18:00 · Nathan 92.8% · guest 7.2%
Sharpest disagreement ▶ 14:57 Refusing to disclose cap table structure

Mike directly shuts down Nathan's line of questioning regarding company ownership, stating he knows the cap table but explicitly refuses to discuss it on air.

 Hardest push from Nathan ▶ 14:46 Challenging funding logic without equity dilution

Nathan refuses to accept the premise that Riddle controls all its stock after raising two million dollars, pressing on why any investor would provide capital for nothing.

 Biggest teaching moment ▶ 8:23 Explaining Riddle's continuous lock-in strategy

Mike explains their dual lock-in mechanism: live quizzes remain active if customers churn, but branding reverts and lead capture data shuts off, driving strong retention.

 Nathan holds their own ▶ 10:24 Educating on churn to lifetime value formulas

Nathan demonstrates core SaaS finance knowledge by contrasting Mike's 21-month LTV estimate with the mathematical inverse churn calculation of 33 months.
the scores for every segment, with the reasoning behind each
ChapterTopicNathan as informed peerGuest teachingGuest disagreementNathan pushing backWhy
Nathan Latka's Book Launch on Audible 0000 Solo host monologue promoting his book 'How to Be a Capitalist Without Any Capital' and introducing the podcast.
Introducing Mike Hawkins and Riddle's Business Model 4212 Nathan introduces Mike Hawkins and establishes Riddle's business model, breaking down their tier pricing and estimating average ARPU.
Founding Story, Product Pivot, and Early Funding 5145 Nathan probes funding structure and convertible notes versus equity, but Mike deflects discussion of cap table mechanics to his co-founder.
Managing Churn, Data Lock-In, and Customer Lifetime Value 7325 Nathan demonstrates SaaS metrics mastery by clarifying logo vs revenue churn and calculating implied lifetime value from churn rates, while challenging Mike on vendor lock-in risks.
Organic Customer Acquisition and High-Touch Support 6235 Nathan pushes Mike on vague 'organic growth' claims and calculates Riddle's approximate monthly revenue (~$35k MRR), pushing back when Mike hesitates to confirm his own math.
Growth Trajectory, Cap Table Discussion, and Future Book 7167 Nathan challenges the modest 10% YoY growth given $2M in funding, pressing on how founders retain full control without giving up equity, which Mike repeatedly refuses to disclose.
The Famous Five Rapid-Fire Questions 4113 Standard rapid-fire questions where Nathan jokingly corrects Mike when he confuses several famous business book titles into one.

Statements from this episode (10)

Assertion Not checkable as stated
Hawkins: About 75% of Riddle Customers Choose the Pro Plan
“I would say probably about 75% of our businesses fall into the pro pro plan. We started. Approved is 49 dollars a month, and then enterprise is two 49.”
Mike Hawkins Apr 14, 2019 ▶ 4:12
Assertion Contradicted
Hawkins: Riddle Raised About $2 Million in Capital
“We raised, I think about two million.”
Mike Hawkins Apr 14, 2019 ▶ 5:29
Assertion Not checkable as stated
Hawkins: Riddle monthly subscriber churn is down to 3%
“It turns about three percent. We were at about five.”
Mike Hawkins Apr 14, 2019 ▶ 6:57
Disclosure
Hawkins: Riddle always grandfathers existing subscribers during price increases
“If we decide to raise our prices, we always grandfather in the people who've been with us.”
Mike Hawkins Apr 14, 2019 ▶ 9:30
Assertion Not checkable as stated
Hawkins: Riddle average customer lifetime value is around $600
“Generally across, this is across all three plans. So generally our lifetime value is around 600 bucks.”
Mike Hawkins Apr 14, 2019 ▶ 9:56
Assertion Not checkable as stated
Hawkins: Riddle is profitable and has done zero paid marketing
“We've been around four years. We're profitable, but in terms of actual paid marketing, we actually haven't actually tipped our toe into that.”
Mike Hawkins Apr 14, 2019 ▶ 10:46
Assertion Not checkable as stated
Hawkins: Riddle operates with a team of five people
“We are five folks.”
Mike Hawkins Apr 14, 2019 ▶ 11:40
Assertion Not checkable as stated
Hawkins: Riddle has grown to 700 to 800 paying customers
“So we have to have, I think, let's see, 707, 800.”
Mike Hawkins Apr 14, 2019 ▶ 12:14
Assertion Not checkable as stated
Hawkins: Riddle is growing about 10% year-over-year
“So we're about, I think we've grown about 10% year on year.”
Mike Hawkins Apr 14, 2019 ▶ 14:12
Assertion Not checkable as stated
Hawkins claims founders retain total stock control despite $2 million raise
“Essentially we control all of our stock. And so we control the direction. And so basically we decide what we want to do.”
Mike Hawkins Apr 14, 2019 ▶ 14:33
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