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Oct 6, 2018 · 19m · top-founders

1169 From $40CPA Model to $900/mo SaaS, 100% yoy growth

Will Fraser · 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

In this episode of The Top Entrepreneurs, host Nathan Latka interviews Sasquatch founder Will Fraser, exploring how the company pivoted from a $40 CPA performance model to a high-growth SaaS platform generating $90,000 MRR with negative net churn.

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 4.7 Guest teaching 1.3 Guest disagreement 0.3 Nathan pushing back 1.3
05100:0010:001:33–6:04 · Nathan as informed peer 5/10 Meet Will Fraser and the Founding of Sasquatch Latka inquires about Sasquatch's origin and probes how they secured initial customers. Fraser explains the transition from an affiliate-style $40 CPA pricing structure to SaaS due to marketing budget dynamics.6:04–8:18 · Nathan as informed peer 6/10 Sasquatch Metrics, Remote Team, and Growth Automation Suite Latka rapidly calculates monthly revenue run rate from customer numbers and ARPU. Fraser details their 100% year-over-year expansion and how customer workarounds led to the Growth Automation Suite.8:22–12:27 · Nathan as informed peer 6/10 Nathan Latka SaaStock Dublin Keynote Announcement Following the mid-roll announcement, Latka clarifies Fraser's net negative churn calculations and presses into the specifics of their funding structure, establishing that their debt is convertible note financing.12:27–15:03 · Nathan as informed peer 6/10 Unit Economics, CAC Payback, and Content-Driven Inbound Leads Latka breaks down the CAC payback period and long-term customer value, verifying an attractive 5x LTV-to-CAC ratio. Fraser shares how organic terminology posts generated inbound enterprise leads.15:04–18:11 · Nathan as informed peer 5/10 Scaling Towards $2M ARR and Strategic Investor Relations Latka and Fraser discuss ARR targets needed to achieve favorable equity valuations before going through the standard Famous Five closing questions.18:11–18:59 · Nathan as informed peer 0/10 Episode Conclusion and Sasquatch Performance Summary Latka recaps the interview takeaways and business metrics in a standard monologue outro.1:33–6:04 · Guest teaching 2/10 Meet Will Fraser and the Founding of Sasquatch Latka inquires about Sasquatch's origin and probes how they secured initial customers. Fraser explains the transition from an affiliate-style $40 CPA pricing structure to SaaS due to marketing budget dynamics.6:04–8:18 · Guest teaching 1/10 Sasquatch Metrics, Remote Team, and Growth Automation Suite Latka rapidly calculates monthly revenue run rate from customer numbers and ARPU. Fraser details their 100% year-over-year expansion and how customer workarounds led to the Growth Automation Suite.8:22–12:27 · Guest teaching 2/10 Nathan Latka SaaStock Dublin Keynote Announcement Following the mid-roll announcement, Latka clarifies Fraser's net negative churn calculations and presses into the specifics of their funding structure, establishing that their debt is convertible note financing.12:27–15:03 · Guest teaching 2/10 Unit Economics, CAC Payback, and Content-Driven Inbound Leads Latka breaks down the CAC payback period and long-term customer value, verifying an attractive 5x LTV-to-CAC ratio. Fraser shares how organic terminology posts generated inbound enterprise leads.15:04–18:11 · Guest teaching 1/10 Scaling Towards $2M ARR and Strategic Investor Relations Latka and Fraser discuss ARR targets needed to achieve favorable equity valuations before going through the standard Famous Five closing questions.18:11–18:59 · Guest teaching 0/10 Episode Conclusion and Sasquatch Performance Summary Latka recaps the interview takeaways and business metrics in a standard monologue outro.1:33–6:04 · Guest disagreement 1/10 Meet Will Fraser and the Founding of Sasquatch Latka inquires about Sasquatch's origin and probes how they secured initial customers. Fraser explains the transition from an affiliate-style $40 CPA pricing structure to SaaS due to marketing budget dynamics.6:04–8:18 · Guest disagreement 0/10 Sasquatch Metrics, Remote Team, and Growth Automation Suite Latka rapidly calculates monthly revenue run rate from customer numbers and ARPU. Fraser details their 100% year-over-year expansion and how customer workarounds led to the Growth Automation Suite.8:22–12:27 · Guest disagreement 1/10 Nathan Latka SaaStock Dublin Keynote Announcement Following the mid-roll announcement, Latka clarifies Fraser's net negative churn calculations and presses into the specifics of their funding structure, establishing that their debt is convertible note financing.12:27–15:03 · Guest disagreement 0/10 Unit Economics, CAC Payback, and Content-Driven Inbound Leads Latka breaks down the CAC payback period and long-term customer value, verifying an attractive 5x LTV-to-CAC ratio. Fraser shares how organic terminology posts generated inbound enterprise leads.15:04–18:11 · Guest disagreement 0/10 Scaling Towards $2M ARR and Strategic Investor Relations Latka and Fraser discuss ARR targets needed to achieve favorable equity valuations before going through the standard Famous Five closing questions.18:11–18:59 · Guest disagreement 0/10 Episode Conclusion and Sasquatch Performance Summary Latka recaps the interview takeaways and business metrics in a standard monologue outro.1:33–6:04 · Nathan pushing back 2/10 Meet Will Fraser and the Founding of Sasquatch Latka inquires about Sasquatch's origin and probes how they secured initial customers. Fraser explains the transition from an affiliate-style $40 CPA pricing structure to SaaS due to marketing budget dynamics.6:04–8:18 · Nathan pushing back 1/10 Sasquatch Metrics, Remote Team, and Growth Automation Suite Latka rapidly calculates monthly revenue run rate from customer numbers and ARPU. Fraser details their 100% year-over-year expansion and how customer workarounds led to the Growth Automation Suite.8:22–12:27 · Nathan pushing back 3/10 Nathan Latka SaaStock Dublin Keynote Announcement Following the mid-roll announcement, Latka clarifies Fraser's net negative churn calculations and presses into the specifics of their funding structure, establishing that their debt is convertible note financing.12:27–15:03 · Nathan pushing back 1/10 Unit Economics, CAC Payback, and Content-Driven Inbound Leads Latka breaks down the CAC payback period and long-term customer value, verifying an attractive 5x LTV-to-CAC ratio. Fraser shares how organic terminology posts generated inbound enterprise leads.15:04–18:11 · Nathan pushing back 1/10 Scaling Towards $2M ARR and Strategic Investor Relations Latka and Fraser discuss ARR targets needed to achieve favorable equity valuations before going through the standard Famous Five closing questions.18:11–18:59 · Nathan pushing back 0/10 Episode Conclusion and Sasquatch Performance Summary Latka recaps the interview takeaways and business metrics in a standard monologue outro.

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

0:00 · Nathan 67.9% · guest 32.1%0:00 · Nathan 67.9% · guest 32.1%3:00 · Nathan 16.2% · guest 83.8%3:00 · Nathan 16.2% · guest 83.8%6:00 · Nathan 32.1% · guest 67.9%6:00 · Nathan 32.1% · guest 67.9%9:00 · Nathan 32.9% · guest 67.1%9:00 · Nathan 32.9% · guest 67.1%12:00 · Nathan 19% · guest 81%12:00 · Nathan 19% · guest 81%15:00 · Nathan 33.5% · guest 66.5%15:00 · Nathan 33.5% · guest 66.5%18:00 · Nathan 87.6% · guest 12.4%18:00 · Nathan 87.6% · guest 12.4%
Sharpest disagreement ▶ 11:22 Defending Family Office Backing Over Traditional VCs

Fraser counters conventional venture capital timelines, arguing that family funds with patient capital are superior and founder-friendly to a fault.

 Hardest push from Nathan ▶ 11:50 Pressing on Debt vs Convertible Notes

Latka challenges Fraser's framing of debt financing, asking for the interest rate and clarifying that the structure is a convertible note looking for equity conversion.

 Biggest teaching moment ▶ 3:58 Why Product Marketers Require Subscription Pricing

Fraser educates Latka on why CPA models fail with product marketing buyers who lack customer acquisition budgets, forcing the pivot to SaaS.

 Nathan holds their own ▶ 11:53 Pinpointing Exact Capital Instrument

Latka quickly identifies that the investment is neither bank debt nor MRR financing, but standard venture convertible debt with equity conversion targets.
the scores for every segment, with the reasoning behind each
ChapterTopicNathan as informed peerGuest teachingGuest disagreementNathan pushing backWhy
Meet Will Fraser and the Founding of Sasquatch 5212 Latka inquires about Sasquatch's origin and probes how they secured initial customers. Fraser explains the transition from an affiliate-style $40 CPA pricing structure to SaaS due to marketing budget dynamics.
Sasquatch Metrics, Remote Team, and Growth Automation Suite 6101 Latka rapidly calculates monthly revenue run rate from customer numbers and ARPU. Fraser details their 100% year-over-year expansion and how customer workarounds led to the Growth Automation Suite.
Nathan Latka SaaStock Dublin Keynote Announcement 6213 Following the mid-roll announcement, Latka clarifies Fraser's net negative churn calculations and presses into the specifics of their funding structure, establishing that their debt is convertible note financing.
Unit Economics, CAC Payback, and Content-Driven Inbound Leads 6201 Latka breaks down the CAC payback period and long-term customer value, verifying an attractive 5x LTV-to-CAC ratio. Fraser shares how organic terminology posts generated inbound enterprise leads.
Scaling Towards $2M ARR and Strategic Investor Relations 5101 Latka and Fraser discuss ARR targets needed to achieve favorable equity valuations before going through the standard Famous Five closing questions.
Episode Conclusion and Sasquatch Performance Summary 0000 Latka recaps the interview takeaways and business metrics in a standard monologue outro.

Statements from this episode (13)

Assertion Not checkable as stated
SaaSquatch closed its first five customers within five days of ideating
“We gave ourselves five days to kind of start the company, and in those five days went through ideation, customer testing, and sold our first five customers.”
Will Fraser Oct 6, 2018 ▶ 2:51
Disclosure
SaaSquatch originally charged the first month of revenue per customer acquired
“So the price started originally as a cost per acquisition model. So we would take the first month revenue from each new customer.”
Will Fraser Oct 6, 2018 ▶ 3:45
Insight
Product marketers lack the budgets of acquisition marketers
“What we just discovered, the reason we made that shift was because we sell primarily to product marketers and product marketers don't have that same acquisition budget as the acquisition marketers do.”
Will Fraser Oct 6, 2018 ▶ 4:01
Disclosure
Early SaaSquatch client paid $40 per acquired customer under CPA model
“So that would be about 40 dollars a new customer.”
Will Fraser Oct 6, 2018 ▶ 5:27
Disclosure
SaaSquatch ARPU reaches approximately $900 per month
“The average customer today is closer to 900 a month.”
Will Fraser Oct 6, 2018 ▶ 6:07
Disclosure
SaaSquatch reaches just over 100 customers
“So we're just over a hundred customers right now.”
Will Fraser Oct 6, 2018 ▶ 7:03
Disclosure
SaaSquatch exceeds 100 percent YoY growth for two consecutive years
“So we've been seeing about a hundred percent year over year growth, a little greater than a hundred percent year over year growth for the last two years.”
Will Fraser Oct 6, 2018 ▶ 7:23
Assertion Not checkable as stated
SaaSquatch achieves negative two percent annual net revenue churn
“So we have net negative MRR churn. Nathan Latka: How negative? Will Fraser: Part of how negative? Will Fraser: About two percent.”
Will Fraser Oct 6, 2018 ▶ 9:37
Assertion Not checkable as stated
SaaSquatch maintains three to four percent annual gross revenue churn
“So gross revenue churn is pretty low. We look around like the four, three, four mark annually.”
Will Fraser Oct 6, 2018 ▶ 10:11
Disclosure
SaaSquatch raised a couple million CAD in debt from Wesley Clover
“So they fund us with a couple million dollars Canadian, and they've you know, really, we like working with them because they're extremely founder friendly.”
Will Fraser Oct 6, 2018 ▶ 11:22
Assertion Not checkable as stated
SaaSquatch spends six to nine months of revenue on CAC
“So we're spending about six to nine months revenue to acquire a customer right now.”
Will Fraser Oct 6, 2018 ▶ 12:35
Insight
SaaS startups trade at 4x-6x revenue with investors taking 10-15 percent
“We look at the basic economics out there today, you know, you would hear somewhere between four and optimistic six times on revenue, right? And you got to imagine that an investor is going to want to take no less than 10, but probably closer to 15% in that rou…”
Will Fraser Oct 6, 2018 ▶ 15:22
Disclosure
SaaSquatch targets at least $2M ARR by tripling revenue this year
“We would look to try to push for a triple of our revenue this year. And we think that would put us in a good place to go do that. But, you know, I mean, really, we are talking probably closer to two million at the minimum.”
Will Fraser Oct 6, 2018 ▶ 15:37
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