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Sep 21, 2018 · 19m · top-founders

1154 How we hit net churn of -5% in Loyalty Program space

Nathan Latka · 8m spoken Jay Rawat · 7m spoken
0:00 / 0:00

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In this episode of The Top Entrepreneurs, Zinrelo CEO Jay Rawat discusses how he scaled his B2B loyalty platform to near $1 million in monthly recurring revenue with just $2 million in capital raised, maintaining 50% annual growth and net negative 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 50.5% of the talking time here. How this is scored →

Nathan as informed peer 6.0 Guest teaching 2.2 Guest disagreement 1.6 Nathan pushing back 3.8
05100:0010:002:04–4:41 · Nathan as informed peer 6/10 Zinrelo Platform Overview and Pricing Model Latka immediately probes Zinrelo's pricing structure and customer distribution, attempting to deduce their enterprise skew versus SMBs. Rawat cooperates generally but sets firm boundaries around disclosing exact cohort percentages or revenue figures.4:41–7:10 · Nathan as informed peer 5/10 Origins, B2C Pivot, and Early Fundraising Latka probes the company's 2009 origins, capital history, and cap table treatment following their pivot from B2C to B2B. Rawat explains how keeping early investors on the cap table was maintained despite pivoting the core product.7:13–11:16 · Nathan as informed peer 6/10 Sponsor Message: Freshworks Freshchat Latka questions why an enterprise software business would take on low-ticket SMB support overhead. Rawat explains their fully self-service infrastructure and provides nuanced operational insights into managing an offshore engineering team in Pune.11:17–14:38 · Nathan as informed peer 7/10 Enterprise Unit Economics: Churn, LTV, and CAC Latka drives rapid SaaS unit economic calculations covering net negative churn, customer lifetime value, and fully loaded CAC. Rawat provides foundational inputs while Latka computes metrics like the $72k LTV and $12k CAC in real time.14:38–18:15 · Nathan as informed peer 6/10 Revenue Trajectory and Future Capital Strategy Latka presses Rawat to confirm whether Zinrelo has crossed $1M per month in revenue, narrowing the range to just under that threshold based on prior customer counts. Rawat deflects exact numbers before moving into the Famous Five wrap-up.2:04–4:41 · Guest teaching 2/10 Zinrelo Platform Overview and Pricing Model Latka immediately probes Zinrelo's pricing structure and customer distribution, attempting to deduce their enterprise skew versus SMBs. Rawat cooperates generally but sets firm boundaries around disclosing exact cohort percentages or revenue figures.4:41–7:10 · Guest teaching 2/10 Origins, B2C Pivot, and Early Fundraising Latka probes the company's 2009 origins, capital history, and cap table treatment following their pivot from B2C to B2B. Rawat explains how keeping early investors on the cap table was maintained despite pivoting the core product.7:13–11:16 · Guest teaching 4/10 Sponsor Message: Freshworks Freshchat Latka questions why an enterprise software business would take on low-ticket SMB support overhead. Rawat explains their fully self-service infrastructure and provides nuanced operational insights into managing an offshore engineering team in Pune.11:17–14:38 · Guest teaching 2/10 Enterprise Unit Economics: Churn, LTV, and CAC Latka drives rapid SaaS unit economic calculations covering net negative churn, customer lifetime value, and fully loaded CAC. Rawat provides foundational inputs while Latka computes metrics like the $72k LTV and $12k CAC in real time.14:38–18:15 · Guest teaching 1/10 Revenue Trajectory and Future Capital Strategy Latka presses Rawat to confirm whether Zinrelo has crossed $1M per month in revenue, narrowing the range to just under that threshold based on prior customer counts. Rawat deflects exact numbers before moving into the Famous Five wrap-up.2:04–4:41 · Guest disagreement 2/10 Zinrelo Platform Overview and Pricing Model Latka immediately probes Zinrelo's pricing structure and customer distribution, attempting to deduce their enterprise skew versus SMBs. Rawat cooperates generally but sets firm boundaries around disclosing exact cohort percentages or revenue figures.4:41–7:10 · Guest disagreement 1/10 Origins, B2C Pivot, and Early Fundraising Latka probes the company's 2009 origins, capital history, and cap table treatment following their pivot from B2C to B2B. Rawat explains how keeping early investors on the cap table was maintained despite pivoting the core product.7:13–11:16 · Guest disagreement 2/10 Sponsor Message: Freshworks Freshchat Latka questions why an enterprise software business would take on low-ticket SMB support overhead. Rawat explains their fully self-service infrastructure and provides nuanced operational insights into managing an offshore engineering team in Pune.11:17–14:38 · Guest disagreement 1/10 Enterprise Unit Economics: Churn, LTV, and CAC Latka drives rapid SaaS unit economic calculations covering net negative churn, customer lifetime value, and fully loaded CAC. Rawat provides foundational inputs while Latka computes metrics like the $72k LTV and $12k CAC in real time.14:38–18:15 · Guest disagreement 2/10 Revenue Trajectory and Future Capital Strategy Latka presses Rawat to confirm whether Zinrelo has crossed $1M per month in revenue, narrowing the range to just under that threshold based on prior customer counts. Rawat deflects exact numbers before moving into the Famous Five wrap-up.2:04–4:41 · Nathan pushing back 4/10 Zinrelo Platform Overview and Pricing Model Latka immediately probes Zinrelo's pricing structure and customer distribution, attempting to deduce their enterprise skew versus SMBs. Rawat cooperates generally but sets firm boundaries around disclosing exact cohort percentages or revenue figures.4:41–7:10 · Nathan pushing back 2/10 Origins, B2C Pivot, and Early Fundraising Latka probes the company's 2009 origins, capital history, and cap table treatment following their pivot from B2C to B2B. Rawat explains how keeping early investors on the cap table was maintained despite pivoting the core product.7:13–11:16 · Nathan pushing back 5/10 Sponsor Message: Freshworks Freshchat Latka questions why an enterprise software business would take on low-ticket SMB support overhead. Rawat explains their fully self-service infrastructure and provides nuanced operational insights into managing an offshore engineering team in Pune.11:17–14:38 · Nathan pushing back 3/10 Enterprise Unit Economics: Churn, LTV, and CAC Latka drives rapid SaaS unit economic calculations covering net negative churn, customer lifetime value, and fully loaded CAC. Rawat provides foundational inputs while Latka computes metrics like the $72k LTV and $12k CAC in real time.14:38–18:15 · Nathan pushing back 5/10 Revenue Trajectory and Future Capital Strategy Latka presses Rawat to confirm whether Zinrelo has crossed $1M per month in revenue, narrowing the range to just under that threshold based on prior customer counts. Rawat deflects exact numbers before moving into the Famous Five wrap-up.

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

0:00 · Nathan 76.6% · guest 23.4%0:00 · Nathan 76.6% · guest 23.4%3:00 · Nathan 19.1% · guest 80.9%3:00 · Nathan 19.1% · guest 80.9%6:00 · Nathan 75.8% · guest 24.2%6:00 · Nathan 75.8% · guest 24.2%9:00 · Nathan 36.1% · guest 63.9%9:00 · Nathan 36.1% · guest 63.9%12:00 · Nathan 51.7% · guest 48.3%12:00 · Nathan 51.7% · guest 48.3%15:00 · Nathan 33.3% · guest 66.7%15:00 · Nathan 33.3% · guest 66.7%18:00 · Nathan 75.1% · guest 24.9%18:00 · Nathan 75.1% · guest 24.9%
Sharpest disagreement ▶ 14:48 Guest resists disclosing top-line monthly revenue

Rawat repeatedly refuses to give exact revenue numbers, forcing Latka to infer and guess their proximity to $1M MRR.

 Hardest push from Nathan ▶ 9:18 Latka challenges the rationale of going downstream to SMBs

Latka refuses to accept standard SaaS expansion logic, bluntly asking why Zinrelo would support small, immature businesses rather than letting external ecosystems nurture them first.

 Biggest teaching moment ▶ 10:27 Rawat details realities of offshore engineering management

Rawat educates Latka on why typical Indian dev hubs struggle with context and explains why having a long-term co-founder on the ground makes the model succeed.

 Nathan holds their own ▶ 11:58 Latka demonstrates rigorous net revenue churn math

When Rawat gives an imprecise answer regarding churn and retention duration, Latka steps in with exact mathematical framing separating gross churn from net expansion.
the scores for every segment, with the reasoning behind each
ChapterTopicNathan as informed peerGuest teachingGuest disagreementNathan pushing backWhy
Zinrelo Platform Overview and Pricing Model 6224 Latka immediately probes Zinrelo's pricing structure and customer distribution, attempting to deduce their enterprise skew versus SMBs. Rawat cooperates generally but sets firm boundaries around disclosing exact cohort percentages or revenue figures.
Origins, B2C Pivot, and Early Fundraising 5212 Latka probes the company's 2009 origins, capital history, and cap table treatment following their pivot from B2C to B2B. Rawat explains how keeping early investors on the cap table was maintained despite pivoting the core product.
Sponsor Message: Freshworks Freshchat 6425 Latka questions why an enterprise software business would take on low-ticket SMB support overhead. Rawat explains their fully self-service infrastructure and provides nuanced operational insights into managing an offshore engineering team in Pune.
Enterprise Unit Economics: Churn, LTV, and CAC 7213 Latka drives rapid SaaS unit economic calculations covering net negative churn, customer lifetime value, and fully loaded CAC. Rawat provides foundational inputs while Latka computes metrics like the $72k LTV and $12k CAC in real time.
Revenue Trajectory and Future Capital Strategy 6125 Latka presses Rawat to confirm whether Zinrelo has crossed $1M per month in revenue, narrowing the range to just under that threshold based on prior customer counts. Rawat deflects exact numbers before moving into the Famous Five wrap-up.

Statements from this episode (12)

Assertion Not checkable as stated
Rawat: Zinrelo self-service tier averages $150 monthly
“There's a self-service program for smaller retailers. There, I would say the average monthly fee is about 150 a month.”
Jay Rawat Sep 21, 2018 ▶ 2:31
Assertion Not checkable as stated
Rawat: Zinrelo enterprise plan averages $2,000 monthly
“And then we have an enterprise plan, which has more features and it comes with more support. There the average monthly price is about 2000 dollars.”
Jay Rawat Sep 21, 2018 ▶ 2:39
Assertion Not checkable as stated
Rawat: Zinrelo has over 500 customers
“So I cannot share the exact percentages of the customers in each bucket but in terms of the total number of customers, we have over 500 customers right now.”
Jay Rawat Sep 21, 2018 ▶ 3:55
Insight
Rawat: B2C businesses are binary with no middle ground
“You know, B to C businesses are binary, right? I mean, either you make it or You know, you don't. There's nothing in between.”
Jay Rawat Sep 21, 2018 ▶ 5:16
Assertion Not checkable as stated
Rawat: Zinrelo raised only $2 million and is profitable
“Yeah, we only raised two million dollars so far, and we are profitable.”
Jay Rawat Sep 21, 2018 ▶ 6:26
Assertion Not checkable as stated
Rawat: Zinrelo is sustaining close to 50% year-over-year revenue growth
“Closer to 50% right now.”
Jay Rawat Sep 21, 2018 ▶ 8:47
Assertion Not checkable as stated
Rawat: Zinrelo employs 30 people across its offices
“We are only 30 people right now.”
Jay Rawat Sep 21, 2018 ▶ 10:06
Insight
Rawat: The biggest offshore engineering challenge is understanding the target market
“The biggest challenge is if you have an offshore development team is communication and really making sure that they understand the market. They understand who we are trying to serve. Right. And that's an understanding which is very hard to come by.”
Jay Rawat Sep 21, 2018 ▶ 10:52
Disclosure
Rawat: Zinrelo achieved net negative churn via tiered user pricing
“So we have achieved net negative churn, which is great because the way the pricing is structured, as I said it's a land and expand kind of model where we can get in at a lower price, but then as the business grows, as more users sign up for the loyalty program…”
Jay Rawat Sep 21, 2018 ▶ 11:25
Assertion Not checkable as stated
Rawat: Zinrelo net negative churn is between -5% and -10%
“Yeah, between five and 10% right now.”
Jay Rawat Sep 21, 2018 ▶ 12:17
Assertion Not checkable as stated
Rawat: Zinrelo CAC payback period is about six months
“For us, the payback period is pretty quick. It's about six months.”
Jay Rawat Sep 21, 2018 ▶ 13:35
Assertion Not checkable as stated
Rawat: Zinrelo generates under $1M per month in revenue
“Yeah, we are under a million a month for sure.”
Jay Rawat Sep 21, 2018 ▶ 15:09
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