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Sep 17, 2018 · 20m · top-founders

1150 Detroit Based Referral Program software passes $600k in MRR

Jeff Epstein · 11m spoken Nathan Latka · 6m spoken Podcast Intro Snippet · 3s spoken
0:00 / 0:00

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

Host Nathan Latka interviews Jeff Epstein, founder and CEO of Detroit-based Ambassador, exploring how the referral marketing SaaS company scaled to $750,000 in monthly recurring revenue with only $3 million in venture capital. Epstein breaks down the company's upmarket shift, conservative unit economics, and equity-driven Midwest culture.

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 38% of the talking time here. How this is scored →

Nathan as informed peer 5.3 Guest teaching 1.2 Guest disagreement 1.2 Nathan pushing back 3.2
05100:0010:0020:001:42–5:34 · Nathan as informed peer 5/10 Introducing Jeff Epstein and Ambassador Nathan probes Jeff on customer numbers, capital efficiency, and historical revenue. When Jeff cites multi-year Inc 5000 growth percentages, Nathan pushes back to demand specific year-over-year growth metrics.5:35–8:26 · Nathan as informed peer 6/10 Up-Market Transition and Approaching Milestone MRR Nathan highlights his insider perspective as an early paying customer who experienced Ambassador's price changes firsthand. He then pushes Jeff to state whether reaching $1M in MRR within the year is an attainable goal.8:26–11:00 · Nathan as informed peer 6/10 Employee Equity and Company Culture in Detroit The conversation covers Detroit startup culture, equity grant vesting schedules, and customer acquisition costs. Nathan quickly calculates a three-month payback period based on Jeff's stated $7,000 CAC and $2,000 monthly ARPU.11:03–14:30 · Nathan as informed peer 6/10 Sponsor Advertisement: Emma Email Marketing Platform Following a sponsor ad read for Emma, Nathan drills into gross versus net revenue churn and expansion dynamics. Jeff details why per-install software pricing makes gross churn their primary operating metric over unpredictable net expansions.14:30–18:05 · Nathan as informed peer 5/10 Venture Partnership with Arthur Ventures Jeff explains partnering with Arthur Ventures due to their non-Valley, sustainable growth thesis. Nathan poses a hypothetical acquisition offer from Leadpages, prompting Jeff to reject simplistic binary acquisition decisions.18:05–20:23 · Nathan as informed peer 4/10 The Famous Five Rapid-Fire Questions Nathan walks Jeff through the Famous Five rapid-fire format before closing the interview with an analytical recap of Ambassador's unit economics and growth metrics.1:42–5:34 · Guest teaching 1/10 Introducing Jeff Epstein and Ambassador Nathan probes Jeff on customer numbers, capital efficiency, and historical revenue. When Jeff cites multi-year Inc 5000 growth percentages, Nathan pushes back to demand specific year-over-year growth metrics.5:35–8:26 · Guest teaching 1/10 Up-Market Transition and Approaching Milestone MRR Nathan highlights his insider perspective as an early paying customer who experienced Ambassador's price changes firsthand. He then pushes Jeff to state whether reaching $1M in MRR within the year is an attainable goal.8:26–11:00 · Guest teaching 1/10 Employee Equity and Company Culture in Detroit The conversation covers Detroit startup culture, equity grant vesting schedules, and customer acquisition costs. Nathan quickly calculates a three-month payback period based on Jeff's stated $7,000 CAC and $2,000 monthly ARPU.11:03–14:30 · Guest teaching 2/10 Sponsor Advertisement: Emma Email Marketing Platform Following a sponsor ad read for Emma, Nathan drills into gross versus net revenue churn and expansion dynamics. Jeff details why per-install software pricing makes gross churn their primary operating metric over unpredictable net expansions.14:30–18:05 · Guest teaching 2/10 Venture Partnership with Arthur Ventures Jeff explains partnering with Arthur Ventures due to their non-Valley, sustainable growth thesis. Nathan poses a hypothetical acquisition offer from Leadpages, prompting Jeff to reject simplistic binary acquisition decisions.18:05–20:23 · Guest teaching 0/10 The Famous Five Rapid-Fire Questions Nathan walks Jeff through the Famous Five rapid-fire format before closing the interview with an analytical recap of Ambassador's unit economics and growth metrics.1:42–5:34 · Guest disagreement 1/10 Introducing Jeff Epstein and Ambassador Nathan probes Jeff on customer numbers, capital efficiency, and historical revenue. When Jeff cites multi-year Inc 5000 growth percentages, Nathan pushes back to demand specific year-over-year growth metrics.5:35–8:26 · Guest disagreement 1/10 Up-Market Transition and Approaching Milestone MRR Nathan highlights his insider perspective as an early paying customer who experienced Ambassador's price changes firsthand. He then pushes Jeff to state whether reaching $1M in MRR within the year is an attainable goal.8:26–11:00 · Guest disagreement 1/10 Employee Equity and Company Culture in Detroit The conversation covers Detroit startup culture, equity grant vesting schedules, and customer acquisition costs. Nathan quickly calculates a three-month payback period based on Jeff's stated $7,000 CAC and $2,000 monthly ARPU.11:03–14:30 · Guest disagreement 1/10 Sponsor Advertisement: Emma Email Marketing Platform Following a sponsor ad read for Emma, Nathan drills into gross versus net revenue churn and expansion dynamics. Jeff details why per-install software pricing makes gross churn their primary operating metric over unpredictable net expansions.14:30–18:05 · Guest disagreement 2/10 Venture Partnership with Arthur Ventures Jeff explains partnering with Arthur Ventures due to their non-Valley, sustainable growth thesis. Nathan poses a hypothetical acquisition offer from Leadpages, prompting Jeff to reject simplistic binary acquisition decisions.18:05–20:23 · Guest disagreement 1/10 The Famous Five Rapid-Fire Questions Nathan walks Jeff through the Famous Five rapid-fire format before closing the interview with an analytical recap of Ambassador's unit economics and growth metrics.1:42–5:34 · Nathan pushing back 4/10 Introducing Jeff Epstein and Ambassador Nathan probes Jeff on customer numbers, capital efficiency, and historical revenue. When Jeff cites multi-year Inc 5000 growth percentages, Nathan pushes back to demand specific year-over-year growth metrics.5:35–8:26 · Nathan pushing back 4/10 Up-Market Transition and Approaching Milestone MRR Nathan highlights his insider perspective as an early paying customer who experienced Ambassador's price changes firsthand. He then pushes Jeff to state whether reaching $1M in MRR within the year is an attainable goal.8:26–11:00 · Nathan pushing back 3/10 Employee Equity and Company Culture in Detroit The conversation covers Detroit startup culture, equity grant vesting schedules, and customer acquisition costs. Nathan quickly calculates a three-month payback period based on Jeff's stated $7,000 CAC and $2,000 monthly ARPU.11:03–14:30 · Nathan pushing back 3/10 Sponsor Advertisement: Emma Email Marketing Platform Following a sponsor ad read for Emma, Nathan drills into gross versus net revenue churn and expansion dynamics. Jeff details why per-install software pricing makes gross churn their primary operating metric over unpredictable net expansions.14:30–18:05 · Nathan pushing back 4/10 Venture Partnership with Arthur Ventures Jeff explains partnering with Arthur Ventures due to their non-Valley, sustainable growth thesis. Nathan poses a hypothetical acquisition offer from Leadpages, prompting Jeff to reject simplistic binary acquisition decisions.18:05–20:23 · Nathan pushing back 1/10 The Famous Five Rapid-Fire Questions Nathan walks Jeff through the Famous Five rapid-fire format before closing the interview with an analytical recap of Ambassador's unit economics and growth metrics.

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

0:00 · Nathan 75.7% · guest 24.3%0:00 · Nathan 75.7% · guest 24.3%3:00 · Nathan 23.4% · guest 76.6%3:00 · Nathan 23.4% · guest 76.6%6:00 · Nathan 26.9% · guest 73.1%6:00 · Nathan 26.9% · guest 73.1%9:00 · Nathan 47% · guest 53%9:00 · Nathan 47% · guest 53%12:00 · Nathan 25.7% · guest 74.3%12:00 · Nathan 25.7% · guest 74.3%15:00 · Nathan 7.6% · guest 92.4%15:00 · Nathan 7.6% · guest 92.4%18:00 · Nathan 67.4% · guest 32.6%18:00 · Nathan 67.4% · guest 32.6%
Sharpest disagreement ▶ 17:17 Rejecting binary acquisition hypotheticals

Jeff resists Nathan's $40M acquisition hypothetical, calling it naive to answer yes or no without broader context around business options.

 Hardest push from Nathan ▶ 5:02 Pushing past vanity Inc 5000 statistics

Nathan cuts through Jeff's mention of three-year cumulative Inc 5000 rankings to press for exact year-over-year growth rates.

 Biggest teaching moment ▶ 10:09 Deconstructing fully loaded CAC accounting

Jeff educates the audience on how Ambassador loads customer success and engineering overhead into their $7,000 CAC rather than presenting cosmetically low figures.

 Nathan holds their own ▶ 6:26 Host leverages customer experience

Nathan demonstrates firsthand knowledge of Ambassador's pricing pivot by mentioning he received their price hike notices as an early paying subscriber.
the scores for every segment, with the reasoning behind each
ChapterTopicNathan as informed peerGuest teachingGuest disagreementNathan pushing backWhy
Introducing Jeff Epstein and Ambassador 5114 Nathan probes Jeff on customer numbers, capital efficiency, and historical revenue. When Jeff cites multi-year Inc 5000 growth percentages, Nathan pushes back to demand specific year-over-year growth metrics.
Up-Market Transition and Approaching Milestone MRR 6114 Nathan highlights his insider perspective as an early paying customer who experienced Ambassador's price changes firsthand. He then pushes Jeff to state whether reaching $1M in MRR within the year is an attainable goal.
Employee Equity and Company Culture in Detroit 6113 The conversation covers Detroit startup culture, equity grant vesting schedules, and customer acquisition costs. Nathan quickly calculates a three-month payback period based on Jeff's stated $7,000 CAC and $2,000 monthly ARPU.
Sponsor Advertisement: Emma Email Marketing Platform 6213 Following a sponsor ad read for Emma, Nathan drills into gross versus net revenue churn and expansion dynamics. Jeff details why per-install software pricing makes gross churn their primary operating metric over unpredictable net expansions.
Venture Partnership with Arthur Ventures 5224 Jeff explains partnering with Arthur Ventures due to their non-Valley, sustainable growth thesis. Nathan poses a hypothetical acquisition offer from Leadpages, prompting Jeff to reject simplistic binary acquisition decisions.
The Famous Five Rapid-Fire Questions 4011 Nathan walks Jeff through the Famous Five rapid-fire format before closing the interview with an analytical recap of Ambassador's unit economics and growth metrics.

Statements from this episode (13)

Assertion Not checkable as stated
Epstein: Ambassador's average customer pays about $2,000 per month
“Average customers paying us about 2000 per month.”
Jeff Epstein Sep 17, 2018 ▶ 2:48
Disclosure
Epstein: Ambassador will be cash-flow positive in 2018
“We've operated super, you know, capital efficiently being profitable today. We will be this year cashflow from a cashflow perspective last year, we were a little bit in the red year before we were in the black.”
Jeff Epstein Sep 17, 2018 ▶ 4:09
Disclosure
Epstein: Ambassador is growing year-over-year at under 100%
“Not quite doubling. So we're not, not quite there, but you know, for us, it's a matter of not just growth at all costs.”
Jeff Epstein Sep 17, 2018 ▶ 5:17
Disclosure
Ambassador could have raised $30M but chose to cap funding at $3M
“And again, we haven't raised, it's three million is a lot of money for a lot of people, and it is for us too, but as you know, for most venture-backed companies, I mean, a company our size could have raised 10 or 20 or thirty million dollars, and you can build…”
Jeff Epstein Sep 17, 2018 ▶ 6:39
Assertion Not checkable as stated
Epstein: Ambassador generates well over $3M in ARR
“We obviously do way more than three million dollars a year.”
Jeff Epstein Sep 17, 2018 ▶ 7:10
Insight
Epstein: Small SaaS customers demand as much support time as enterprise accounts
“Every person has to answer a question they have to spend as much time, potentially more time with a small customer as they do with an enterprise customer.”
Jeff Epstein Sep 17, 2018 ▶ 7:18
Assertion Not checkable as stated
Epstein: Most Detroit Companies Do Not Offer Stock Options
“Most companies, In our area don't give equity or stock options, right?”
Jeff Epstein Sep 17, 2018 ▶ 8:39
Disclosure
Epstein: Ambassador's customer acquisition cost is approximately $7,000
“I think we, it's funny. We just did one. I think it was seven, seven, basically seven.”
Jeff Epstein Sep 17, 2018 ▶ 9:43
Disclosure
Ambassador includes customer success and engineering costs in its CAC calculation
“We basically tried to do like the most fully loaded version, which was a portion of, it was all of sales, a portion of success, and even a portion of engineering. So it was like a pretty, and then obviously like marketing too.”
Jeff Epstein Sep 17, 2018 ▶ 10:14
Assertion Not checkable as stated
Epstein: Ambassador Experiences Low Single-Digit Monthly Gross Revenue Churn
“We're in the low, you know, low single digits per month.”
Jeff Epstein Sep 17, 2018 ▶ 12:16
Assertion Not checkable as stated
Epstein: Ambassador's Customer Lifetime Value Exceeds $50,000
“I mean, we're north of 50,000 now in terms of lifetime value, which is pretty great.”
Jeff Epstein Sep 17, 2018 ▶ 13:31
Disclosure
Epstein chose sustainable Detroit business growth over chasing a billion-dollar valuation
“I wasn't willing to leverage the business to maybe become a billion dollar company that I'd rather build a sustainable lasting business in an area that hasn't seen success.”
Jeff Epstein Sep 17, 2018 ▶ 15:54
Insight
Epstein: Non-dilutive debt is a great option overlooked by traditional VCs
“VCs aren't typically telling people to do that, but it's a really great option for companies that are sharing enough capital where they don't need to worry about being diluted.”
Jeff Epstein Sep 17, 2018 ▶ 16:56
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