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Mar 14, 2019 · 20m · top-founders

1328 Can AppDirect with $245m in Funding Actually Go Public?

Dan Sachs · 11m spoken Nathan Latka · 6m spoken Intro Audio · 5s 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, AppDirect Co-CEO Dan Sachs discusses scaling his enterprise cloud commerce platform to 650 employees, detailing its hybrid SaaS and transaction revenue model, $245 million in venture funding, and long-term IPO readiness.

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 36.5% of the talking time here. How this is scored →

Nathan as informed peer 5.7 Guest teaching 1.9 Guest disagreement 1.7 Nathan pushing back 4.3
05100:0010:0020:001:24–3:46 · Nathan as informed peer 5/10 Introducing Dan Sachs and AppDirect's Cloud Commerce Model Nathan asks foundational questions about AppDirect's revenue split between platform subscriptions and transaction fees, allowing Dan to explain their marketplace and telco partnerships.3:46–6:00 · Nathan as informed peer 6/10 Platform Suite Strategy, Pricing, and Vertical Expansion Nathan probes how AppDirect defends against pure-play competitors across four product pillars and clarifies monthly ARPU ranges versus ACV.6:00–9:13 · Nathan as informed peer 6/10 Founding Story, Family Roots, and Landing Bell Canada Dan shares his family business inspiration and the Bell Canada deal. Nathan pushes for clarity on the difference between total reached users (35 million) and direct paying customers.9:13–12:30 · Nathan as informed peer 7/10 Fundraising, Enterprise Growth Trajectory, and IPO Considerations Nathan repeatedly attempts to pin Dan down on ARR milestones, citing leaked historical financials and questioning what vague terms like 'tremendous growth' mean in practice.12:30–15:07 · Nathan as informed peer 6/10 Net Dollar Retention, Automation, and Gross Market Value Nathan immediately catches Dan's broad claim about net dollar retention to clarify that he means expansion over 100%, then probes for the core pricing value metric.15:07–18:58 · Nathan as informed peer 6/10 Sales Organization, Acquisition Payback, and Lifetime Value Nathan pushes Dan on CAC payback windows and asks if their large cash cushion allows for payback periods beyond 18 months, concluding with an IPO timing inquiry.18:59–20:29 · Nathan as informed peer 4/10 The Famous Five Rapid Fire and Host Recap Nathan runs through the Famous Five questions quickly and delivers a comprehensive outro summarizing AppDirect's growth metrics.1:24–3:46 · Guest teaching 2/10 Introducing Dan Sachs and AppDirect's Cloud Commerce Model Nathan asks foundational questions about AppDirect's revenue split between platform subscriptions and transaction fees, allowing Dan to explain their marketplace and telco partnerships.3:46–6:00 · Guest teaching 2/10 Platform Suite Strategy, Pricing, and Vertical Expansion Nathan probes how AppDirect defends against pure-play competitors across four product pillars and clarifies monthly ARPU ranges versus ACV.6:00–9:13 · Guest teaching 2/10 Founding Story, Family Roots, and Landing Bell Canada Dan shares his family business inspiration and the Bell Canada deal. Nathan pushes for clarity on the difference between total reached users (35 million) and direct paying customers.9:13–12:30 · Guest teaching 2/10 Fundraising, Enterprise Growth Trajectory, and IPO Considerations Nathan repeatedly attempts to pin Dan down on ARR milestones, citing leaked historical financials and questioning what vague terms like 'tremendous growth' mean in practice.12:30–15:07 · Guest teaching 2/10 Net Dollar Retention, Automation, and Gross Market Value Nathan immediately catches Dan's broad claim about net dollar retention to clarify that he means expansion over 100%, then probes for the core pricing value metric.15:07–18:58 · Guest teaching 2/10 Sales Organization, Acquisition Payback, and Lifetime Value Nathan pushes Dan on CAC payback windows and asks if their large cash cushion allows for payback periods beyond 18 months, concluding with an IPO timing inquiry.18:59–20:29 · Guest teaching 1/10 The Famous Five Rapid Fire and Host Recap Nathan runs through the Famous Five questions quickly and delivers a comprehensive outro summarizing AppDirect's growth metrics.1:24–3:46 · Guest disagreement 1/10 Introducing Dan Sachs and AppDirect's Cloud Commerce Model Nathan asks foundational questions about AppDirect's revenue split between platform subscriptions and transaction fees, allowing Dan to explain their marketplace and telco partnerships.3:46–6:00 · Guest disagreement 1/10 Platform Suite Strategy, Pricing, and Vertical Expansion Nathan probes how AppDirect defends against pure-play competitors across four product pillars and clarifies monthly ARPU ranges versus ACV.6:00–9:13 · Guest disagreement 2/10 Founding Story, Family Roots, and Landing Bell Canada Dan shares his family business inspiration and the Bell Canada deal. Nathan pushes for clarity on the difference between total reached users (35 million) and direct paying customers.9:13–12:30 · Guest disagreement 3/10 Fundraising, Enterprise Growth Trajectory, and IPO Considerations Nathan repeatedly attempts to pin Dan down on ARR milestones, citing leaked historical financials and questioning what vague terms like 'tremendous growth' mean in practice.12:30–15:07 · Guest disagreement 2/10 Net Dollar Retention, Automation, and Gross Market Value Nathan immediately catches Dan's broad claim about net dollar retention to clarify that he means expansion over 100%, then probes for the core pricing value metric.15:07–18:58 · Guest disagreement 3/10 Sales Organization, Acquisition Payback, and Lifetime Value Nathan pushes Dan on CAC payback windows and asks if their large cash cushion allows for payback periods beyond 18 months, concluding with an IPO timing inquiry.18:59–20:29 · Guest disagreement 0/10 The Famous Five Rapid Fire and Host Recap Nathan runs through the Famous Five questions quickly and delivers a comprehensive outro summarizing AppDirect's growth metrics.1:24–3:46 · Nathan pushing back 2/10 Introducing Dan Sachs and AppDirect's Cloud Commerce Model Nathan asks foundational questions about AppDirect's revenue split between platform subscriptions and transaction fees, allowing Dan to explain their marketplace and telco partnerships.3:46–6:00 · Nathan pushing back 4/10 Platform Suite Strategy, Pricing, and Vertical Expansion Nathan probes how AppDirect defends against pure-play competitors across four product pillars and clarifies monthly ARPU ranges versus ACV.6:00–9:13 · Nathan pushing back 5/10 Founding Story, Family Roots, and Landing Bell Canada Dan shares his family business inspiration and the Bell Canada deal. Nathan pushes for clarity on the difference between total reached users (35 million) and direct paying customers.9:13–12:30 · Nathan pushing back 7/10 Fundraising, Enterprise Growth Trajectory, and IPO Considerations Nathan repeatedly attempts to pin Dan down on ARR milestones, citing leaked historical financials and questioning what vague terms like 'tremendous growth' mean in practice.12:30–15:07 · Nathan pushing back 5/10 Net Dollar Retention, Automation, and Gross Market Value Nathan immediately catches Dan's broad claim about net dollar retention to clarify that he means expansion over 100%, then probes for the core pricing value metric.15:07–18:58 · Nathan pushing back 6/10 Sales Organization, Acquisition Payback, and Lifetime Value Nathan pushes Dan on CAC payback windows and asks if their large cash cushion allows for payback periods beyond 18 months, concluding with an IPO timing inquiry.18:59–20:29 · Nathan pushing back 1/10 The Famous Five Rapid Fire and Host Recap Nathan runs through the Famous Five questions quickly and delivers a comprehensive outro summarizing AppDirect's growth metrics.

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

0:00 · Nathan 72.3% · guest 27.7%0:00 · Nathan 72.3% · guest 27.7%3:00 · Nathan 22.6% · guest 77.4%3:00 · Nathan 22.6% · guest 77.4%6:00 · Nathan 20% · guest 80%6:00 · Nathan 20% · guest 80%9:00 · Nathan 29.1% · guest 70.9%9:00 · Nathan 29.1% · guest 70.9%12:00 · Nathan 34.6% · guest 65.4%12:00 · Nathan 34.6% · guest 65.4%15:00 · Nathan 22.2% · guest 77.8%15:00 · Nathan 22.2% · guest 77.8%18:00 · Nathan 58.5% · guest 41.5%18:00 · Nathan 58.5% · guest 41.5%
Sharpest disagreement ▶ 11:45 Firm refusal to share revenue numbers

Dan directly stonewalls Nathan's probe regarding crossing the $100M ARR mark, refusing to validate specific revenue figures.

 Hardest push from Nathan ▶ 11:50 Challenging subjective growth claims

Nathan refuses to accept Dan's vague description of 'tremendous growth' and challenges him to define what growth actually means at scale.

 Biggest teaching moment ▶ 3:02 Explaining trusted channel distribution

Dan educates Nathan on why small businesses prefer buying SaaS bundled from trusted telco providers like Comcast rather than direct self-serve.

 Nathan holds their own ▶ 12:43 SaaS metric precision hit back

Nathan immediately interrupts and corrects Dan's phrasing, pointing out that everyone has net retention but the key question is whether it exceeds 100%.
the scores for every segment, with the reasoning behind each
ChapterTopicNathan as informed peerGuest teachingGuest disagreementNathan pushing backWhy
Introducing Dan Sachs and AppDirect's Cloud Commerce Model 5212 Nathan asks foundational questions about AppDirect's revenue split between platform subscriptions and transaction fees, allowing Dan to explain their marketplace and telco partnerships.
Platform Suite Strategy, Pricing, and Vertical Expansion 6214 Nathan probes how AppDirect defends against pure-play competitors across four product pillars and clarifies monthly ARPU ranges versus ACV.
Founding Story, Family Roots, and Landing Bell Canada 6225 Dan shares his family business inspiration and the Bell Canada deal. Nathan pushes for clarity on the difference between total reached users (35 million) and direct paying customers.
Fundraising, Enterprise Growth Trajectory, and IPO Considerations 7237 Nathan repeatedly attempts to pin Dan down on ARR milestones, citing leaked historical financials and questioning what vague terms like 'tremendous growth' mean in practice.
Net Dollar Retention, Automation, and Gross Market Value 6225 Nathan immediately catches Dan's broad claim about net dollar retention to clarify that he means expansion over 100%, then probes for the core pricing value metric.
Sales Organization, Acquisition Payback, and Lifetime Value 6236 Nathan pushes Dan on CAC payback windows and asks if their large cash cushion allows for payback periods beyond 18 months, concluding with an IPO timing inquiry.
The Famous Five Rapid Fire and Host Recap 4101 Nathan runs through the Famous Five questions quickly and delivers a comprehensive outro summarizing AppDirect's growth metrics.

Statements from this episode (12)

Disclosure
Sachs: AppDirect sees high growth in transaction fees versus platform fees
“A combo of both, but definitely the platform fee was the you know, line share of the initial product. And then we see really, really high growth in the transaction fees as well.”
Dan Sachs Mar 14, 2019 ▶ 2:29
Disclosure
Sachs: AppDirect powers cloud commerce for Comcast and global telcos
“We work with a lot of major telcos, Comcast and others around the world, helps them get to market faster.”
Dan Sachs Mar 14, 2019 ▶ 2:51
Insight
Sachs: Businesses prefer buying cloud software from a single trusted provider
“Most businesses don't necessarily want to just go online and subscribe to services. They want to buy everything they need from a trusted provider.”
Dan Sachs Mar 14, 2019 ▶ 3:14
Disclosure
Sachs: AppDirect license fees range from thousands to hundreds of thousands monthly
“Our license fees range you know, dramatically. But we have entry level, you know, perspectives that would start around a few K per month, depending on the complexity and going all the way up to, you know, the hundreds of thousands for more complex deployments.”
Dan Sachs Mar 14, 2019 ▶ 4:55
Assertion Not checkable as stated
Sachs: AppDirect reaches over 35 million customers globally
“So we reach now over thirty-five million customers around the world.”
Dan Sachs Mar 14, 2019 ▶ 7:27
Assertion Not checkable as stated
Sachs: AppDirect has millions of paid business users
“That's our reach. So that would be the customer customers of our customers that we have reached to. But we do have, you know, millions of paid business users.”
Dan Sachs Mar 14, 2019 ▶ 7:42
Assertion Supported
Sachs: AppDirect has raised $245 million to date
“Two hundred and forty-five million.”
Dan Sachs Mar 14, 2019 ▶ 10:25
Opinion
Sachs: AppDirect sees a 'bigger opening than ever' for an IPO
“We do see it being more attractive and there's a bigger opening than ever for enterprise companies of our profile to go public.”
Dan Sachs Mar 14, 2019 ▶ 10:57
Assertion Not checkable as stated
Sachs: AppDirect grew on a 'triple, triple, double, double, double' trajectory
“We used to call this thing called like the formula one track, which is if you can go triple, triple, double, double, double, double. So for a while that was, you know, the trajectory that we're on, and now we're falling nicely into what you'd see in public com…”
Dan Sachs Mar 14, 2019 ▶ 11:59
Assertion Not checkable as stated
Sachs: AppDirect maintains net dollar retention above 100% across cohorts
“One of the things that's unique about us is we have a net dollar retention across our customer cohorts. So because we have, you know, the potential upside within enterprises that we sign on.”
Dan Sachs Mar 14, 2019 ▶ 12:33
Assertion Not checkable as stated
Sachs: AppDirect employs approximately 650 people
“So overall we're about 650 people.”
Dan Sachs Mar 14, 2019 ▶ 15:53
Insight
Sachs: High customer retention allows flexibility on upfront sales compensation
“So if you know that your customers are signing up, there's a lot of value. You're going to stay for a long time. Then you can afford to be more flexible on the upside providing the market opportunity is really big.”
Dan Sachs Mar 14, 2019 ▶ 17:33
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