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Aug 14, 2018 · 19m · top-founders

1116 CEO: "We're definitely too cheap"

Mike Donnelly · 9m 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

In this episode of The Top Entrepreneurs, host Nathan Latka interviews Seventh Sense founder Mike Donnelly to explore how his lean, bootstrapped SaaS platform optimizes email delivery times and scaled to $30,000 in monthly recurring revenue.

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 45.2% of the talking time here. How this is scored →

Nathan as informed peer 5.5 Guest teaching 4.3 Guest disagreement 2.0 Nathan pushing back 4.0
05100:0010:003:28–6:35 · Nathan as informed peer 5/10 Bootstrapping, Revenue Growth, and Founding Story Nathan drills into Seventh Sense's revenue metrics, customer concentration, and funding history. Mike answers transparently regarding his bootstrapping and previous enterprise sales nest egg.6:35–9:29 · Nathan as informed peer 4/10 Product Workflow, Algorithmic Send Timing, and Engagement Mike explains the core product workflow, differentiating automated send-time optimization and machine-learning frequency controls from simple Gmail send-later plugins.9:31–15:47 · Nathan as informed peer 7/10 Sponsor Spotlight: Sideline Mobile Communication Solution Following the sponsor read, Nathan challenges Mike's low pricing tiers and questions whether 136 customers provide enough training data. Mike defends the statistical validity with customer event volumes and detailed A/B test lift statistics, while Nathan insists the tool is massively underpriced.15:48–18:53 · Nathan as informed peer 6/10 Analyzing Customer Acquisition Costs and Churn Dynamics Nathan presses on unit economics, calculating CAC payback time, while Mike reveals their low churn and user-champion rehire dynamics before moving through the Famous Five.3:28–6:35 · Guest teaching 2/10 Bootstrapping, Revenue Growth, and Founding Story Nathan drills into Seventh Sense's revenue metrics, customer concentration, and funding history. Mike answers transparently regarding his bootstrapping and previous enterprise sales nest egg.6:35–9:29 · Guest teaching 5/10 Product Workflow, Algorithmic Send Timing, and Engagement Mike explains the core product workflow, differentiating automated send-time optimization and machine-learning frequency controls from simple Gmail send-later plugins.9:31–15:47 · Guest teaching 6/10 Sponsor Spotlight: Sideline Mobile Communication Solution Following the sponsor read, Nathan challenges Mike's low pricing tiers and questions whether 136 customers provide enough training data. Mike defends the statistical validity with customer event volumes and detailed A/B test lift statistics, while Nathan insists the tool is massively underpriced.15:48–18:53 · Guest teaching 4/10 Analyzing Customer Acquisition Costs and Churn Dynamics Nathan presses on unit economics, calculating CAC payback time, while Mike reveals their low churn and user-champion rehire dynamics before moving through the Famous Five.3:28–6:35 · Guest disagreement 1/10 Bootstrapping, Revenue Growth, and Founding Story Nathan drills into Seventh Sense's revenue metrics, customer concentration, and funding history. Mike answers transparently regarding his bootstrapping and previous enterprise sales nest egg.6:35–9:29 · Guest disagreement 1/10 Product Workflow, Algorithmic Send Timing, and Engagement Mike explains the core product workflow, differentiating automated send-time optimization and machine-learning frequency controls from simple Gmail send-later plugins.9:31–15:47 · Guest disagreement 4/10 Sponsor Spotlight: Sideline Mobile Communication Solution Following the sponsor read, Nathan challenges Mike's low pricing tiers and questions whether 136 customers provide enough training data. Mike defends the statistical validity with customer event volumes and detailed A/B test lift statistics, while Nathan insists the tool is massively underpriced.15:48–18:53 · Guest disagreement 2/10 Analyzing Customer Acquisition Costs and Churn Dynamics Nathan presses on unit economics, calculating CAC payback time, while Mike reveals their low churn and user-champion rehire dynamics before moving through the Famous Five.3:28–6:35 · Nathan pushing back 3/10 Bootstrapping, Revenue Growth, and Founding Story Nathan drills into Seventh Sense's revenue metrics, customer concentration, and funding history. Mike answers transparently regarding his bootstrapping and previous enterprise sales nest egg.6:35–9:29 · Nathan pushing back 2/10 Product Workflow, Algorithmic Send Timing, and Engagement Mike explains the core product workflow, differentiating automated send-time optimization and machine-learning frequency controls from simple Gmail send-later plugins.9:31–15:47 · Nathan pushing back 7/10 Sponsor Spotlight: Sideline Mobile Communication Solution Following the sponsor read, Nathan challenges Mike's low pricing tiers and questions whether 136 customers provide enough training data. Mike defends the statistical validity with customer event volumes and detailed A/B test lift statistics, while Nathan insists the tool is massively underpriced.15:48–18:53 · Nathan pushing back 4/10 Analyzing Customer Acquisition Costs and Churn Dynamics Nathan presses on unit economics, calculating CAC payback time, while Mike reveals their low churn and user-champion rehire dynamics before moving through the Famous Five.

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

0:00 · Nathan 65.6% · guest 34.4%0:00 · Nathan 65.6% · guest 34.4%3:00 · Nathan 38.7% · guest 61.3%3:00 · Nathan 38.7% · guest 61.3%6:00 · Nathan 15.5% · guest 84.5%6:00 · Nathan 15.5% · guest 84.5%9:00 · Nathan 71.3% · guest 28.7%9:00 · Nathan 71.3% · guest 28.7%12:00 · Nathan 34.6% · guest 65.4%12:00 · Nathan 34.6% · guest 65.4%15:00 · Nathan 28.8% · guest 71.2%15:00 · Nathan 28.8% · guest 71.2%18:00 · Nathan 79.4% · guest 20.6%18:00 · Nathan 79.4% · guest 20.6%
Sharpest disagreement ▶ 11:51 Mike defends SMB market focus over enterprise complexity

Mike counters Nathan's suggestion to immediately 10x prices and sell enterprise deals by detailing the significant hurdles of enterprise compliance such as SOC 2 certification.

 Hardest push from Nathan ▶ 13:16 Nathan questions the machine learning training sample size

Nathan directly challenges Mike's core algorithm, arguing that 136 customers cannot provide enough data to outperform competitors with 100,000 users.

 Biggest teaching moment ▶ 13:56 Mike breaks down empirical A/B test lift data

Mike educates Nathan on Seventh Sense's concrete performance metrics, citing specific percentage gains in open rates, clicks, conversions, and website bounce reductions.

 Nathan holds their own ▶ 14:53 Nathan models customer ROI against software pricing

Nathan uses Mike's stated performance metrics to demonstrate on the fly that customers generate tens of thousands in extra sales while only paying $200 a month.
the scores for every segment, with the reasoning behind each
ChapterTopicNathan as informed peerGuest teachingGuest disagreementNathan pushing backWhy
Bootstrapping, Revenue Growth, and Founding Story 5213 Nathan drills into Seventh Sense's revenue metrics, customer concentration, and funding history. Mike answers transparently regarding his bootstrapping and previous enterprise sales nest egg.
Product Workflow, Algorithmic Send Timing, and Engagement 4512 Mike explains the core product workflow, differentiating automated send-time optimization and machine-learning frequency controls from simple Gmail send-later plugins.
Sponsor Spotlight: Sideline Mobile Communication Solution 7647 Following the sponsor read, Nathan challenges Mike's low pricing tiers and questions whether 136 customers provide enough training data. Mike defends the statistical validity with customer event volumes and detailed A/B test lift statistics, while Nathan insists the tool is massively underpriced.
Analyzing Customer Acquisition Costs and Churn Dynamics 6424 Nathan presses on unit economics, calculating CAC payback time, while Mike reveals their low churn and user-champion rehire dynamics before moving through the Famous Five.

Statements from this episode (10)

Assertion Not checkable as stated
Donnelly: Seventh Sense pays nothing to HubSpot, Marketo, or Google
“We don't give anything to HubSpot or Marketo or Google.”
Mike Donnelly Aug 14, 2018 ▶ 3:01
Assertion Not checkable as stated
Seventh Sense generates $30K MRR across 136 customers
“Our poos are around 220 bucks a month. We've got 136 customers today. So around 30 K and annual recurring or sorry, monthly recurring revenue.”
Mike Donnelly Aug 14, 2018 ▶ 3:38
Assertion Not checkable as stated
Seventh Sense grew MRR from $10K to $30K in 13 months
“13 months ago, we were around 10 K in MR.”
Mike Donnelly Aug 14, 2018 ▶ 4:35
Assertion Not checkable as stated
Donnelly: Seventh Sense customer contact lists range from 2,000 to 10M emails
“I think our smallest customer probably has 2000 email addresses. Our largest has around ten million email addresses.”
Mike Donnelly Aug 14, 2018 ▶ 7:04
Assertion Not checkable as stated
Donnelly: Seventh Sense delivers 18% to 24% average click rate increases
“And then where the system has the biggest impact is click rates and conversions where we on average see anywhere from an 18 to 24% average increase in click rates.”
Mike Donnelly Aug 14, 2018 ▶ 14:14
Assertion Not checkable as stated
Donnelly: Optimal send times reduce website bounce rates by 30% to 40%
“We've actually seen bounce rage drop. In an order of 30 to 40%, because again, they're willing to spend more time on your website because you've connected with them at a, you know, at a more optimal time.”
Mike Donnelly Aug 14, 2018 ▶ 14:43
Disclosure
Donnelly: Seventh Sense pricing ranges from $100 to $3,000 monthly
“Our smallest subscription starts at a hundred a month. And then our largest today is three grand a month. And then, so if you've got a list of a 100,000 people, that's 600 dollars a month.”
Mike Donnelly Aug 14, 2018 ▶ 15:20
Assertion Not checkable as stated
Donnelly: Seventh Sense had not seen customer churn in five months
“So churn we, I think the last customer we had churn was maybe five months ago.”
Mike Donnelly Aug 14, 2018 ▶ 16:42
Assertion Not checkable as stated
60% of churned Seventh Sense users resubscribe at new jobs
“And what's interesting is we have seen probably 60% of our churn has actually signed back up with us when they go to a different company.”
Mike Donnelly Aug 14, 2018 ▶ 17:16
Disclosure
Donnelly: Seventh Sense would reject a $1M acquisition offer
“Absolutely not.”
Mike Donnelly Aug 14, 2018 ▶ 18:27
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