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Aug 8, 2018 · 21m · top-founders

1110 Why His $1.2m ARR SaaS Company Shut Down

Hank Leber · 13m spoken Nathan Latka · 5m 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 entrepreneur Hank Leber about the dramatic collapse of his $1.2M ARR SaaS startup Vitamin following a Twitter API crackdown, his subsequent agency turnaround and exit, and his leadership in blockchain tokenization at CoinCircle.

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 30.3% of the talking time here. How this is scored →

Nathan as informed peer 6.0 Guest teaching 3.8 Guest disagreement 1.8 Nathan pushing back 4.6
05100:0010:0020:002:14–4:57 · Nathan as informed peer 5/10 How Twitter Changes Crushed Vitamin Overnight Latka accurately recalls and corrects the timeline of Vitamin's collapse and asks direct questions about cash reserves and burn rate. Leber openly shares how Twitter's sudden platform automation restrictions wiped out thousands of managed accounts overnight.4:57–7:45 · Nathan as informed peer 7/10 Managing Shutdown, Team Decisions, and Platform Risk When Leber suggests that building a company on top of a third-party platform is fatal and inevitably doomed, Latka pushes back with specific industry data by citing Matt Russell building TSheets on Intuit AppExchange before selling for 340 million dollars.7:46–10:56 · Nathan as informed peer 7/10 Building execute.la and Selling to Hawk Media Latka repeatedly interrupts Leber's theoretical musings on scaling agencies to force him to answer what happened to the company. Latka brings in specific knowledge of agency valuation multiples of 0.5x top line revenue and earnout structures, which Leber pushes back against as inadequate for his deal.10:57–16:35 · Nathan as informed peer 5/10 Navigating Token Sales and Compliance at CoinCircle Leber breaks down token presales, SAFT compliance, and exchange listing dynamics. Latka pushes on the fundamental lack of accountability and governance in ICOs, pointing out the risk of founders cashing out to fiat without recourse.16:36–20:36 · Nathan as informed peer 6/10 Crypto Governance and Scaling CoinCircle's Hybrid Model Leber details CoinCircle's operational shift from custom agency services to software workflows and cites Messari's reporting initiative. During the wrap-up, Latka demonstrates SaaS domain knowledge by mentioning Smartsheet's CEO Mark Mader, their ARR, and Chrome store distribution strategy.2:14–4:57 · Guest teaching 3/10 How Twitter Changes Crushed Vitamin Overnight Latka accurately recalls and corrects the timeline of Vitamin's collapse and asks direct questions about cash reserves and burn rate. Leber openly shares how Twitter's sudden platform automation restrictions wiped out thousands of managed accounts overnight.4:57–7:45 · Guest teaching 4/10 Managing Shutdown, Team Decisions, and Platform Risk When Leber suggests that building a company on top of a third-party platform is fatal and inevitably doomed, Latka pushes back with specific industry data by citing Matt Russell building TSheets on Intuit AppExchange before selling for 340 million dollars.7:46–10:56 · Guest teaching 3/10 Building execute.la and Selling to Hawk Media Latka repeatedly interrupts Leber's theoretical musings on scaling agencies to force him to answer what happened to the company. Latka brings in specific knowledge of agency valuation multiples of 0.5x top line revenue and earnout structures, which Leber pushes back against as inadequate for his deal.10:57–16:35 · Guest teaching 6/10 Navigating Token Sales and Compliance at CoinCircle Leber breaks down token presales, SAFT compliance, and exchange listing dynamics. Latka pushes on the fundamental lack of accountability and governance in ICOs, pointing out the risk of founders cashing out to fiat without recourse.16:36–20:36 · Guest teaching 3/10 Crypto Governance and Scaling CoinCircle's Hybrid Model Leber details CoinCircle's operational shift from custom agency services to software workflows and cites Messari's reporting initiative. During the wrap-up, Latka demonstrates SaaS domain knowledge by mentioning Smartsheet's CEO Mark Mader, their ARR, and Chrome store distribution strategy.2:14–4:57 · Guest disagreement 1/10 How Twitter Changes Crushed Vitamin Overnight Latka accurately recalls and corrects the timeline of Vitamin's collapse and asks direct questions about cash reserves and burn rate. Leber openly shares how Twitter's sudden platform automation restrictions wiped out thousands of managed accounts overnight.4:57–7:45 · Guest disagreement 2/10 Managing Shutdown, Team Decisions, and Platform Risk When Leber suggests that building a company on top of a third-party platform is fatal and inevitably doomed, Latka pushes back with specific industry data by citing Matt Russell building TSheets on Intuit AppExchange before selling for 340 million dollars.7:46–10:56 · Guest disagreement 4/10 Building execute.la and Selling to Hawk Media Latka repeatedly interrupts Leber's theoretical musings on scaling agencies to force him to answer what happened to the company. Latka brings in specific knowledge of agency valuation multiples of 0.5x top line revenue and earnout structures, which Leber pushes back against as inadequate for his deal.10:57–16:35 · Guest disagreement 1/10 Navigating Token Sales and Compliance at CoinCircle Leber breaks down token presales, SAFT compliance, and exchange listing dynamics. Latka pushes on the fundamental lack of accountability and governance in ICOs, pointing out the risk of founders cashing out to fiat without recourse.16:36–20:36 · Guest disagreement 1/10 Crypto Governance and Scaling CoinCircle's Hybrid Model Leber details CoinCircle's operational shift from custom agency services to software workflows and cites Messari's reporting initiative. During the wrap-up, Latka demonstrates SaaS domain knowledge by mentioning Smartsheet's CEO Mark Mader, their ARR, and Chrome store distribution strategy.2:14–4:57 · Nathan pushing back 3/10 How Twitter Changes Crushed Vitamin Overnight Latka accurately recalls and corrects the timeline of Vitamin's collapse and asks direct questions about cash reserves and burn rate. Leber openly shares how Twitter's sudden platform automation restrictions wiped out thousands of managed accounts overnight.4:57–7:45 · Nathan pushing back 6/10 Managing Shutdown, Team Decisions, and Platform Risk When Leber suggests that building a company on top of a third-party platform is fatal and inevitably doomed, Latka pushes back with specific industry data by citing Matt Russell building TSheets on Intuit AppExchange before selling for 340 million dollars.7:46–10:56 · Nathan pushing back 7/10 Building execute.la and Selling to Hawk Media Latka repeatedly interrupts Leber's theoretical musings on scaling agencies to force him to answer what happened to the company. Latka brings in specific knowledge of agency valuation multiples of 0.5x top line revenue and earnout structures, which Leber pushes back against as inadequate for his deal.10:57–16:35 · Nathan pushing back 5/10 Navigating Token Sales and Compliance at CoinCircle Leber breaks down token presales, SAFT compliance, and exchange listing dynamics. Latka pushes on the fundamental lack of accountability and governance in ICOs, pointing out the risk of founders cashing out to fiat without recourse.16:36–20:36 · Nathan pushing back 2/10 Crypto Governance and Scaling CoinCircle's Hybrid Model Leber details CoinCircle's operational shift from custom agency services to software workflows and cites Messari's reporting initiative. During the wrap-up, Latka demonstrates SaaS domain knowledge by mentioning Smartsheet's CEO Mark Mader, their ARR, and Chrome store distribution strategy.

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

0:00 · Nathan 72% · guest 28%0:00 · Nathan 72% · guest 28%3:00 · Nathan 8.2% · guest 91.8%3:00 · Nathan 8.2% · guest 91.8%6:00 · Nathan 9.9% · guest 90.1%6:00 · Nathan 9.9% · guest 90.1%9:00 · Nathan 19.6% · guest 80.4%9:00 · Nathan 19.6% · guest 80.4%12:00 · Nathan 20.7% · guest 79.3%12:00 · Nathan 20.7% · guest 79.3%15:00 · Nathan 37.9% · guest 62.1%15:00 · Nathan 37.9% · guest 62.1%18:00 · Nathan 39.2% · guest 60.8%18:00 · Nathan 39.2% · guest 60.8%21:00 · Nathan 93.5% · guest 6.5%21:00 · Nathan 93.5% · guest 6.5%
Sharpest disagreement ▶ 10:19 Leber rejects agency valuation multiple framing

Leber rejects Latka's assumption that the agency sold for a low multiple of 0.5x top line, asserting the deal was structured around ongoing and future value.

 Hardest push from Nathan ▶ 9:12 Latka interrupts to demand exact agency outcome

Latka cuts off Leber's broader commentary on agency scalability to demand concrete answers on whether the company was shut down or sold.

 Biggest teaching moment ▶ 13:24 Leber explains token exchange mechanics and post-sale pricing

Leber clarifies how token sale valuations transition from initial Ether raises to exchange trading volume and speculative price surges.

 Nathan holds their own ▶ 7:26 Latka cites Matt Russell and TSheets 340M exit

Latka challenges Leber's conclusion on platform dependency risk by citing TSheets building on Intuit's AppExchange and achieving a 340 million dollar exit.
the scores for every segment, with the reasoning behind each
ChapterTopicNathan as informed peerGuest teachingGuest disagreementNathan pushing backWhy
How Twitter Changes Crushed Vitamin Overnight 5313 Latka accurately recalls and corrects the timeline of Vitamin's collapse and asks direct questions about cash reserves and burn rate. Leber openly shares how Twitter's sudden platform automation restrictions wiped out thousands of managed accounts overnight.
Managing Shutdown, Team Decisions, and Platform Risk 7426 When Leber suggests that building a company on top of a third-party platform is fatal and inevitably doomed, Latka pushes back with specific industry data by citing Matt Russell building TSheets on Intuit AppExchange before selling for 340 million dollars.
Building execute.la and Selling to Hawk Media 7347 Latka repeatedly interrupts Leber's theoretical musings on scaling agencies to force him to answer what happened to the company. Latka brings in specific knowledge of agency valuation multiples of 0.5x top line revenue and earnout structures, which Leber pushes back against as inadequate for his deal.
Navigating Token Sales and Compliance at CoinCircle 5615 Leber breaks down token presales, SAFT compliance, and exchange listing dynamics. Latka pushes on the fundamental lack of accountability and governance in ICOs, pointing out the risk of founders cashing out to fiat without recourse.
Crypto Governance and Scaling CoinCircle's Hybrid Model 6312 Leber details CoinCircle's operational shift from custom agency services to software workflows and cites Messari's reporting initiative. During the wrap-up, Latka demonstrates SaaS domain knowledge by mentioning Smartsheet's CEO Mark Mader, their ARR, and Chrome store distribution strategy.

Statements from this episode (8)

Assertion Not checkable as stated
Leber: Twitter suspended thousands of Vitamin's accounts overnight in May 2016
“So May 2920 16. We literally had zeros across our dashboard on the back end looking at all the accounts, and I thought, oh, man, something must be wrong with the dashboard, because there's just no way we could have lost thousands of accounts overnight, and it …”
Hank Leber Aug 8, 2018 ▶ 3:07
Assertion Not checkable as stated
Leber: Vitamin burned its remaining $70K runway in 3.5 weeks
“We had raised about 650 and we had gotten just that month. We got into cashflow positive by about a hundred dollars. So I was like, Hey, this is great. I'm going to go out and fundraise like this. You know, arms crossed instead of like this with hands outstret…”
Hank Leber Aug 8, 2018 ▶ 4:37
Assertion Contradicted
Leber: Twitter cut automation tolerance by 80% to 200 actions daily
“It took longer than three weeks to figure out that it was a reduction in the automation threshold. It went from a thousand actions per day down to about 200 per day. So they did an 80% reduction in their tolerance.”
Hank Leber Aug 8, 2018 ▶ 5:56
Insight
Leber: Building SaaS entirely dependent on third-party platforms is fatally dangerous
“Building a SaaS company on the back of another platform that could kill you is a very dangerous thing to do. And my million run rate business died, but I've, you know, there are 10,000,020 million run rate businesses that also died. Same fate, building on the …”
Hank Leber Aug 8, 2018 ▶ 7:02
Assertion Supported
Latka: Intuit acquired AppExchange-dependent TSheets for $340 million
“Matt Russell with TSheets built his whole company inside the Intuit AppExchange. He banked on it. He was ranked number one, and then Intuit acquired him for three hundred and forty million bucks, right?”
Nathan Latka Aug 8, 2018 ▶ 7:27
Insight
Leber: Early-stage growth marketing cannot be automated
“The learning there about six months in was early stage companies are so needy that that's not really a thing. It has to be a custom build every time across the entire spectrum because they don't know their early stage company, you think about 500 K to a millio…”
Hank Leber Aug 8, 2018 ▶ 8:49
Assertion Supported
Leber: Unicoin Gold raised $31M and 6-7x'd on exchanges
“Unicoin Gold did a thirty one million dollar token sale. And once they hit the exchanges that did a six or seven X”
Hank Leber Aug 8, 2018 ▶ 12:21
Assertion Supported
Latka: Smartsheet hit $70M ARR by monopolizing the Google Chrome store
“I believe they are killing it. I mean, I think he's over 60 or seventy million now in ARR. It shocks me how fast they're growing. It's because they monopolized one distribution channel being The Google Chrome store.”
Nathan Latka Aug 8, 2018 ▶ 19:17
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