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Jan 10, 2019 · 19m · top-founders

1265 How $100m ARR HotSchedules Passed 160,000 Restaruant Customers, 110% Net Annual Dollar Retention

Mike Arendt · 10m spoken Nathan Latka · 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

HotSchedules CEO Mike Arendt joins Nathan Latka to break down how the restaurant management SaaS platform scaled to a $100 million ARR, 160,000 locations, and 110% net dollar retention by unifying fragmented back-of-house operations.

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 40.5% of the talking time here. How this is scored →

Nathan as informed peer 5.2 Guest teaching 2.3 Guest disagreement 0.5 Nathan pushing back 2.8
05100:0010:002:11–5:43 · Nathan as informed peer 6/10 HotSchedules Value Proposition and Customer Base Nathan breaks down the business model mathematically by calculating average locations per concept and drawing parallels to vertical SaaS rollups like Ministry Brands and Mindbody. Mike elaborates collaboratively on their land-and-expand approach across single operators versus multinational franchises.5:43–8:04 · Nathan as informed peer 5/10 Retention Dynamics, NPS, and Workforce Reach Nathan inquires about SMB churn, prompting Mike to share healthy gross retention (90%) and net dollar retention (110%) numbers. The conversation remains friendly as Mike explains their high NPS and app store rankings.8:04–11:27 · Nathan as informed peer 6/10 Scale, Growth Velocity, and Launching Clarify Nathan translates the 20% growth rate on a $100M ARR base into monthly revenue figures. Mike walks through the technical and operational thesis behind their unified platform Clarify.11:29–14:11 · Nathan as informed peer 6/10 Sponsor Message: HostGator After an opening sponsor read, Nathan asks for CAC payback metrics; when Mike pivots to talking about customer ROI, Nathan firmly interrupts to re-center the question on the company's own payback duration.14:11–17:42 · Nathan as informed peer 5/10 Capital History, Company Origins, and Team Footprint Nathan asks about historical fundraising and suggests a $20M figure, which Mike corrects while declining to disclose specific updated capital numbers. Nathan tests whether private equity rollups or IPO plans are in play.17:43–18:43 · Nathan as informed peer 3/10 Famous Five Rapid-Fire Questions The rapid-fire Famous Five concludes the interview smoothly with light personal banter about family and sleep.2:11–5:43 · Guest teaching 2/10 HotSchedules Value Proposition and Customer Base Nathan breaks down the business model mathematically by calculating average locations per concept and drawing parallels to vertical SaaS rollups like Ministry Brands and Mindbody. Mike elaborates collaboratively on their land-and-expand approach across single operators versus multinational franchises.5:43–8:04 · Guest teaching 2/10 Retention Dynamics, NPS, and Workforce Reach Nathan inquires about SMB churn, prompting Mike to share healthy gross retention (90%) and net dollar retention (110%) numbers. The conversation remains friendly as Mike explains their high NPS and app store rankings.8:04–11:27 · Guest teaching 3/10 Scale, Growth Velocity, and Launching Clarify Nathan translates the 20% growth rate on a $100M ARR base into monthly revenue figures. Mike walks through the technical and operational thesis behind their unified platform Clarify.11:29–14:11 · Guest teaching 2/10 Sponsor Message: HostGator After an opening sponsor read, Nathan asks for CAC payback metrics; when Mike pivots to talking about customer ROI, Nathan firmly interrupts to re-center the question on the company's own payback duration.14:11–17:42 · Guest teaching 4/10 Capital History, Company Origins, and Team Footprint Nathan asks about historical fundraising and suggests a $20M figure, which Mike corrects while declining to disclose specific updated capital numbers. Nathan tests whether private equity rollups or IPO plans are in play.17:43–18:43 · Guest teaching 1/10 Famous Five Rapid-Fire Questions The rapid-fire Famous Five concludes the interview smoothly with light personal banter about family and sleep.2:11–5:43 · Guest disagreement 0/10 HotSchedules Value Proposition and Customer Base Nathan breaks down the business model mathematically by calculating average locations per concept and drawing parallels to vertical SaaS rollups like Ministry Brands and Mindbody. Mike elaborates collaboratively on their land-and-expand approach across single operators versus multinational franchises.5:43–8:04 · Guest disagreement 0/10 Retention Dynamics, NPS, and Workforce Reach Nathan inquires about SMB churn, prompting Mike to share healthy gross retention (90%) and net dollar retention (110%) numbers. The conversation remains friendly as Mike explains their high NPS and app store rankings.8:04–11:27 · Guest disagreement 0/10 Scale, Growth Velocity, and Launching Clarify Nathan translates the 20% growth rate on a $100M ARR base into monthly revenue figures. Mike walks through the technical and operational thesis behind their unified platform Clarify.11:29–14:11 · Guest disagreement 1/10 Sponsor Message: HostGator After an opening sponsor read, Nathan asks for CAC payback metrics; when Mike pivots to talking about customer ROI, Nathan firmly interrupts to re-center the question on the company's own payback duration.14:11–17:42 · Guest disagreement 2/10 Capital History, Company Origins, and Team Footprint Nathan asks about historical fundraising and suggests a $20M figure, which Mike corrects while declining to disclose specific updated capital numbers. Nathan tests whether private equity rollups or IPO plans are in play.17:43–18:43 · Guest disagreement 0/10 Famous Five Rapid-Fire Questions The rapid-fire Famous Five concludes the interview smoothly with light personal banter about family and sleep.2:11–5:43 · Nathan pushing back 3/10 HotSchedules Value Proposition and Customer Base Nathan breaks down the business model mathematically by calculating average locations per concept and drawing parallels to vertical SaaS rollups like Ministry Brands and Mindbody. Mike elaborates collaboratively on their land-and-expand approach across single operators versus multinational franchises.5:43–8:04 · Nathan pushing back 2/10 Retention Dynamics, NPS, and Workforce Reach Nathan inquires about SMB churn, prompting Mike to share healthy gross retention (90%) and net dollar retention (110%) numbers. The conversation remains friendly as Mike explains their high NPS and app store rankings.8:04–11:27 · Nathan pushing back 2/10 Scale, Growth Velocity, and Launching Clarify Nathan translates the 20% growth rate on a $100M ARR base into monthly revenue figures. Mike walks through the technical and operational thesis behind their unified platform Clarify.11:29–14:11 · Nathan pushing back 5/10 Sponsor Message: HostGator After an opening sponsor read, Nathan asks for CAC payback metrics; when Mike pivots to talking about customer ROI, Nathan firmly interrupts to re-center the question on the company's own payback duration.14:11–17:42 · Nathan pushing back 4/10 Capital History, Company Origins, and Team Footprint Nathan asks about historical fundraising and suggests a $20M figure, which Mike corrects while declining to disclose specific updated capital numbers. Nathan tests whether private equity rollups or IPO plans are in play.17:43–18:43 · Nathan pushing back 1/10 Famous Five Rapid-Fire Questions The rapid-fire Famous Five concludes the interview smoothly with light personal banter about family and sleep.

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

0:00 · Nathan 77.1% · guest 22.9%0:00 · Nathan 77.1% · guest 22.9%3:00 · Nathan 39.2% · guest 60.8%3:00 · Nathan 39.2% · guest 60.8%6:00 · Nathan 23.7% · guest 76.3%6:00 · Nathan 23.7% · guest 76.3%9:00 · Nathan 23.5% · guest 76.5%9:00 · Nathan 23.5% · guest 76.5%12:00 · Nathan 33.8% · guest 66.2%12:00 · Nathan 33.8% · guest 66.2%15:00 · Nathan 27.5% · guest 72.5%15:00 · Nathan 27.5% · guest 72.5%18:00 · Nathan 75.1% · guest 24.9%18:00 · Nathan 75.1% · guest 24.9%
Sharpest disagreement ▶ 14:52 Guest politely refutes funding estimate and withholds total capital

When Nathan asserts that HotSchedules raised around $20M, Mike directly corrects the premise ('Well, no...') and refuses to disclose exact fundraising totals.

 Hardest push from Nathan ▶ 13:48 Host demands exact payback timelines after guest deflection

Mike discusses client-side cost savings, so Nathan cuts in to demand specific vendor payback windows in months (4, 6, or 12 months).

 Biggest teaching moment ▶ 10:08 Guest explains ERP vs intelligent workflow paradigm

Mike educates Nathan on why frontline restaurant workers reject traditional enterprise ERP workflows and require consumer-grade mobile engagement like Waze.

 Nathan holds their own ▶ 8:24 Host performs instant financial reverse-engineering

Nathan instantly parses HotSchedules' $100M run rate and 20% YoY growth into monthly cohort metrics ($8.3M vs $6.5M/mo prior).
the scores for every segment, with the reasoning behind each
ChapterTopicNathan as informed peerGuest teachingGuest disagreementNathan pushing backWhy
HotSchedules Value Proposition and Customer Base 6203 Nathan breaks down the business model mathematically by calculating average locations per concept and drawing parallels to vertical SaaS rollups like Ministry Brands and Mindbody. Mike elaborates collaboratively on their land-and-expand approach across single operators versus multinational franchises.
Retention Dynamics, NPS, and Workforce Reach 5202 Nathan inquires about SMB churn, prompting Mike to share healthy gross retention (90%) and net dollar retention (110%) numbers. The conversation remains friendly as Mike explains their high NPS and app store rankings.
Scale, Growth Velocity, and Launching Clarify 6302 Nathan translates the 20% growth rate on a $100M ARR base into monthly revenue figures. Mike walks through the technical and operational thesis behind their unified platform Clarify.
Sponsor Message: HostGator 6215 After an opening sponsor read, Nathan asks for CAC payback metrics; when Mike pivots to talking about customer ROI, Nathan firmly interrupts to re-center the question on the company's own payback duration.
Capital History, Company Origins, and Team Footprint 5424 Nathan asks about historical fundraising and suggests a $20M figure, which Mike corrects while declining to disclose specific updated capital numbers. Nathan tests whether private equity rollups or IPO plans are in play.
Famous Five Rapid-Fire Questions 3101 The rapid-fire Famous Five concludes the interview smoothly with light personal banter about family and sleep.

Statements from this episode (13)

Assertion Not checkable as stated
Arendt: HotSchedules reaches 160,000 locations across 60 countries
“We're in a 160,000 locations. 60 countries, 35,000 different concepts, and we have three million team members that are connected to our network.”
Mike Arendt Jan 10, 2019 ▶ 2:34
Disclosure
Mike Arendt: HotSchedules charges restaurants up to $400 monthly per store
“We actually sell the products individually as best in breed, whether that's our labor, inventory, or operations management, task management, right? That can be anywhere from a hundred to 150 dollars, right, per store per month. The entire suite, that could be …”
Mike Arendt Jan 10, 2019 ▶ 4:09
Insight
Arendt: Restaurateurs prefer simplicity over functionality in software platforms
“We believe that you have to have actually a platform in place because restaurateurs are looking to sacrifice functionality for simplicity.”
Mike Arendt Jan 10, 2019 ▶ 4:55
Assertion Not checkable as stated
Mike Arendt: HotSchedules hits 110 percent net retention despite restaurant closures
“Our gross retention is like 90% and our net dollar retention is a 110%, which is pretty amazing when four to five percent of our churn is uninfluenciable, right?”
Mike Arendt Jan 10, 2019 ▶ 5:52
Assertion Supported
Arendt: HotSchedules was the #3 overall paid App Store app in 2017
“We're the number one downloaded paid app on the app store. Number three, overall paid app in the app store in 2017.”
Mike Arendt Jan 10, 2019 ▶ 6:49
Assertion Not checkable as stated
Mike Arendt: HotSchedules has reached a $100 million revenue run rate
“We're on a hundred million dollar run rate.”
Mike Arendt Jan 10, 2019 ▶ 7:28
Assertion Not checkable as stated
Mike Arendt: HotSchedules is growing revenue at 20 percent annually
“Actually, if you look at our ARR, we'll be close to 20% right year over year, which is pretty good given how big we are and we're still growing at a fast pace.”
Mike Arendt Jan 10, 2019 ▶ 8:17
Opinion
Arendt: Restaurant workers love HotSchedules because it enables shift pickup
“When you talk to a team member, someone that works in the restaurant, they'll tell you they love it. They love it because they don't look at it as I'm optimizing the business process for the manager operator. It's my method of engagement with the restaurant. I…”
Mike Arendt Jan 10, 2019 ▶ 11:05
Assertion Not checkable as stated
Mike Arendt: HotSchedules maintains an LTV-to-CAC ratio of up to 5-to-1
“So we pretty, we have a good LTV to CAC, right? It's four to five.”
Mike Arendt Jan 10, 2019 ▶ 12:26
Assertion Not checkable as stated
Mike Arendt: HotSchedules delivers 2 percent labor savings within two months
“One to two percent labor savings within the first one to two months of using our application.”
Mike Arendt Jan 10, 2019 ▶ 13:31
Assertion Supported
Mike Arendt: Labor and inventory consume two-thirds of all restaurant spending
“And once again, when you think about two thirds of all spent in a restaurant is on labor and inventory, we help them on the labor cost and the food cost, right?”
Mike Arendt Jan 10, 2019 ▶ 13:36
Assertion Not checkable as stated
Arendt: HotSchedules is currently profitable while scaling
“Yeah. We're profitable in”
Mike Arendt Jan 10, 2019 ▶ 14:35
Prediction Not checkable as stated
Arendt: Restaurant technology market fragmentation will drive an industry roll-up
“Given the fragmentation, there's a roll up strategy to happen, whether we're the ones driving it or someone else.”
Mike Arendt Jan 10, 2019 ▶ 14:43
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