StarZero All shows Try the podcast clipper →

Nov 6, 2018 · 18m · top-founders

1200 How He Got First 250 Customers, $65k in MRR from South Africa HQ

James Kennedy · 10m spoken Nathan Latka · 6m spoken
0:00 / 0:00

gold bands on the timeline = statements, start to end. Hover to read, click to jump. CC turns on captions

Procurement Express founder James Kennedy joins Nathan Latka to discuss how he scaled a remote B2B SaaS purchase order platform to $65,000 in monthly recurring revenue from rural South Africa.

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 37.7% of the talking time here. How this is scored →

Nathan as informed peer 5.8 Guest teaching 3.0 Guest disagreement 2.0 Nathan pushing back 3.8
05100:0010:001:21–5:33 · Nathan as informed peer 5/10 Living and Operating from Rural South Africa Nathan quickly establishes the business model and computes estimated MRR based on customer count and average ARPU. The exchange is cooperative and focused on James's transition from digital nomad to founder in rural South Africa.5:34–8:36 · Nathan as informed peer 4/10 First Customers and Early Bootstrapping Challenges James recounts early pre-sales to UNICEF and landing an initial $20k annual contract with Holloman Corporation. Nathan asks straightforward factual questions to map out their bootstrapping trajectory.8:37–14:14 · Nathan as informed peer 7/10 Sponsor Break: HostGator Website Builder Nathan pushes back strongly against James paying referral partners 30% lifetime commissions in perpetuity. James defends the strategy by distinguishing high-touch SaaS consultancy partners from one-off affiliate promoters.14:14–16:59 · Nathan as informed peer 7/10 Team Layout, Churn Metrics, and Future Growth Nathan drills into churn mechanics, forcing James to clarify between gross and net logo churn before calculating an implied $13,000 LTV on the fly. Nathan also tests James's valuation expectations against ARR multiples.1:21–5:33 · Guest teaching 2/10 Living and Operating from Rural South Africa Nathan quickly establishes the business model and computes estimated MRR based on customer count and average ARPU. The exchange is cooperative and focused on James's transition from digital nomad to founder in rural South Africa.5:34–8:36 · Guest teaching 2/10 First Customers and Early Bootstrapping Challenges James recounts early pre-sales to UNICEF and landing an initial $20k annual contract with Holloman Corporation. Nathan asks straightforward factual questions to map out their bootstrapping trajectory.8:37–14:14 · Guest teaching 5/10 Sponsor Break: HostGator Website Builder Nathan pushes back strongly against James paying referral partners 30% lifetime commissions in perpetuity. James defends the strategy by distinguishing high-touch SaaS consultancy partners from one-off affiliate promoters.14:14–16:59 · Guest teaching 3/10 Team Layout, Churn Metrics, and Future Growth Nathan drills into churn mechanics, forcing James to clarify between gross and net logo churn before calculating an implied $13,000 LTV on the fly. Nathan also tests James's valuation expectations against ARR multiples.1:21–5:33 · Guest disagreement 1/10 Living and Operating from Rural South Africa Nathan quickly establishes the business model and computes estimated MRR based on customer count and average ARPU. The exchange is cooperative and focused on James's transition from digital nomad to founder in rural South Africa.5:34–8:36 · Guest disagreement 1/10 First Customers and Early Bootstrapping Challenges James recounts early pre-sales to UNICEF and landing an initial $20k annual contract with Holloman Corporation. Nathan asks straightforward factual questions to map out their bootstrapping trajectory.8:37–14:14 · Guest disagreement 4/10 Sponsor Break: HostGator Website Builder Nathan pushes back strongly against James paying referral partners 30% lifetime commissions in perpetuity. James defends the strategy by distinguishing high-touch SaaS consultancy partners from one-off affiliate promoters.14:14–16:59 · Guest disagreement 2/10 Team Layout, Churn Metrics, and Future Growth Nathan drills into churn mechanics, forcing James to clarify between gross and net logo churn before calculating an implied $13,000 LTV on the fly. Nathan also tests James's valuation expectations against ARR multiples.1:21–5:33 · Nathan pushing back 2/10 Living and Operating from Rural South Africa Nathan quickly establishes the business model and computes estimated MRR based on customer count and average ARPU. The exchange is cooperative and focused on James's transition from digital nomad to founder in rural South Africa.5:34–8:36 · Nathan pushing back 2/10 First Customers and Early Bootstrapping Challenges James recounts early pre-sales to UNICEF and landing an initial $20k annual contract with Holloman Corporation. Nathan asks straightforward factual questions to map out their bootstrapping trajectory.8:37–14:14 · Nathan pushing back 6/10 Sponsor Break: HostGator Website Builder Nathan pushes back strongly against James paying referral partners 30% lifetime commissions in perpetuity. James defends the strategy by distinguishing high-touch SaaS consultancy partners from one-off affiliate promoters.14:14–16:59 · Nathan pushing back 5/10 Team Layout, Churn Metrics, and Future Growth Nathan drills into churn mechanics, forcing James to clarify between gross and net logo churn before calculating an implied $13,000 LTV on the fly. Nathan also tests James's valuation expectations against ARR multiples.

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

0:00 · Nathan 57.3% · guest 42.7%0:00 · Nathan 57.3% · guest 42.7%3:00 · Nathan 20.7% · guest 79.3%3:00 · Nathan 20.7% · guest 79.3%6:00 · Nathan 22.3% · guest 77.7%6:00 · Nathan 22.3% · guest 77.7%9:00 · Nathan 40% · guest 60%9:00 · Nathan 40% · guest 60%12:00 · Nathan 28.8% · guest 71.2%12:00 · Nathan 28.8% · guest 71.2%15:00 · Nathan 47.3% · guest 52.7%15:00 · Nathan 47.3% · guest 52.7%18:00 · Nathan 98.5% · guest 1.5%18:00 · Nathan 98.5% · guest 1.5%
Sharpest disagreement ▶ 13:30 James Counters Host's Partner Assumption

James directly rejects Nathan's claim that partners only provide upfront value, arguing that ongoing SaaS upsells and retention depend on partner involvement.

 Hardest push from Nathan ▶ 13:17 Nathan Challenges Lifetime Commissions

Nathan questions the economics of paying perpetual 30% revenue share, asserting that referral partners rarely engage with accounts after the initial sale.

 Biggest teaching moment ▶ 13:30 Consultancy Partners vs Affiliate Marketers

James educates Nathan on why enterprise SaaS reseller relationships differ fundamentally from standard affiliate channels due to ongoing business consultancy.

 Nathan holds their own ▶ 15:31 Instant Lifetime Value Calculation

Nathan demonstrates financial command by converting a 2% monthly churn figure and $260 ARPU into an implied 50-month customer lifetime and $13,000 LTV.
the scores for every segment, with the reasoning behind each
ChapterTopicNathan as informed peerGuest teachingGuest disagreementNathan pushing backWhy
Living and Operating from Rural South Africa 5212 Nathan quickly establishes the business model and computes estimated MRR based on customer count and average ARPU. The exchange is cooperative and focused on James's transition from digital nomad to founder in rural South Africa.
First Customers and Early Bootstrapping Challenges 4212 James recounts early pre-sales to UNICEF and landing an initial $20k annual contract with Holloman Corporation. Nathan asks straightforward factual questions to map out their bootstrapping trajectory.
Sponsor Break: HostGator Website Builder 7546 Nathan pushes back strongly against James paying referral partners 30% lifetime commissions in perpetuity. James defends the strategy by distinguishing high-touch SaaS consultancy partners from one-off affiliate promoters.
Team Layout, Churn Metrics, and Future Growth 7325 Nathan drills into churn mechanics, forcing James to clarify between gross and net logo churn before calculating an implied $13,000 LTV on the fly. Nathan also tests James's valuation expectations against ARR multiples.

Statements from this episode (10)

Disclosure
Kennedy: Procurement Express Operates from Rural South Africa
“We came here because we've always been You know digital nomads, if you like, for the last 1015 years, and when it came to settle down, we just wanted to be near, near, near family, and, but kind of had a world-class business, even from a small town like this, …”
James Kennedy Nov 6, 2018 ▶ 2:25
Assertion Not checkable as stated
Kennedy: Procurement Express Targets Businesses With $1M to $50M in Revenue
“Between one and fifty million in turnovers or typical customer.”
James Kennedy Nov 6, 2018 ▶ 3:54
Assertion Not checkable as stated
Procurement Express Pre-Sold Its Software for Thousands Before Building It
“They're all paying. So they pre, we charged them like a couple of grand each. Say, if we build this, will you buy it? You know, and they gave us the money, a down payment that gave us enough confidence just to say, okay.”
James Kennedy Nov 6, 2018 ▶ 6:17
Assertion Not checkable as stated
Kennedy: Holloman Corporation paid Procurement Express $20k upfront
“Big customer early on called Holloman Corporation based out in Texas. They cut us a check for 20 grand, which I didn't believe was even possible at the time.”
James Kennedy Nov 6, 2018 ▶ 7:30
Assertion Not checkable as stated
Kennedy: Procurement Express doubled its revenue over the past year
“We've about doubled in the last year.”
James Kennedy Nov 6, 2018 ▶ 9:38
Assertion Not checkable as stated
Kennedy: Procurement Express converts one in twenty product demos
“It's one in 20. That's what we do.”
James Kennedy Nov 6, 2018 ▶ 11:38
Disclosure
Procurement Express Pays Partners Up to 40% Lifetime Revenue Commission
“We have a quite extensive partner network, and we do pay up to 30, 40% kickback, depending on, but that's a kind of, we look at that differently.”
James Kennedy Nov 6, 2018 ▶ 12:18
Insight
Kennedy: All SaaS Economic Value Lies in Upsells and Cross-Sells
“Well, that was true for traditional products, but not for SaaS, because all of the value in SaaS is in the upsell and the cross-sell. So you've got to maintain that customer over time.”
James Kennedy Nov 6, 2018 ▶ 13:30
Assertion Not checkable as stated
Kennedy: Procurement Express Monthly Gross Logo Churn Is 1% to 2%
“So what we're talking about is total number of customers to churn divided by our total number of customers is one to two percent.”
James Kennedy Nov 6, 2018 ▶ 15:06
Disclosure
Kennedy Would Reject a $3M Acquisition Offer for Procurement Express
“No, of course not, but I think Intuit are a great example of the type of, you know, they're a great example of types company that, like us, that serve SMBs, kind of look up to, you know, for sure, because of their partner strategy, you know, they've grown most…”
James Kennedy Nov 6, 2018 ▶ 16:30
Made with StarZero

Turn any episode into a week of clips.

This entire site, over 2,600 episodes transcribed, diarized, checked and made playable, runs on the StarZero media pipeline. Drop in your own episode and the podcast clipper finds the moments worth sharing, cuts them, captions them, and reframes them for every feed.

Try the podcast clipper Learn more