Jul 14, 2018 · 22m · top-founders
1085 We're #1 In Salesforce for Call Routing, Tech with $10m+ in ARR
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gold bands on the timeline = statements, start to end. Hover to read, click to jump. CC turns on captions
Dial Source founder and CEO Josh Tillman joins Nathan Latka to discuss how he built a proprietary, native CRM enterprise communications platform generating over $10 million in ARR with negative 15% 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 32.8% of the talking time here. How this is scored →
Nathan as informed peer 5.5 Guest teaching 2.8 Guest disagreement 1.8 Nathan pushing back 3.3
speaking balance: gold is Nathan, purple is the guest (3 minute bins)
Sharpest disagreement ▶ 20:05 Refusing hypothetical $250M acquisition
Josh boldly rejects the premise of cashing out, claiming his parents would only be disappointed in him if he actually accepted a quarter-billion dollar buyout.
Hardest push from Nathan ▶ 6:24 Pressing on Salesforce acquisition talksWhen Josh deflects an acquisition question citing confidentiality, Nathan immediately pivots to challenge him on why he hasn't sold yet.
Biggest teaching moment ▶ 12:03 Explaining full-stack carrier moatJosh educates Nathan on why competitors using Twilio API layers cannot match Dial Source's hardware-level security, routing control, and regulatory compliance.
Nathan holds their own ▶ 16:22 Rapid-fire payback period calculationNathan instantly models the unit economics on the fly, multiplying seat counts by ARPU against customer acquisition cost to derive an under-three-month payback.
the scores for every segment, with the reasoning behind each
| Chapter | Topic | Nathan as informed peer | Guest teaching | Guest disagreement | Nathan pushing back | Why |
|---|---|---|---|---|---|---|
| Introducing Josh Tillman and Dial Source | 4 | 3 | 1 | 2 | Nathan prompts Josh for an overview of Dial Source's product and revenue model. When Josh uses industry jargon, Nathan steps in to ask him to spell out acronyms for the audience. | |
| SaaS Pricing Model and Enterprise Seat Scale | 5 | 2 | 2 | 4 | Josh outlines his tiered per-seat pricing and the origin of Dial Source from UC Davis into Salesforce's top app ecosystem. Nathan immediately pushes when Josh deflects whether Salesforce has made an acquisition offer. | |
| Bootstrapping, Capital Raised, and MRR Growth | 6 | 2 | 1 | 3 | Nathan drills into capital raised and growth rates, synthesizing seat counts and rack rates to pin Josh down on doing $1M to $2M in MRR. | |
| Customer Acquisition and Competitive Technology Moat | 4 | 5 | 2 | 2 | Josh details customer acquisition via conferences and explains their moat, contrasting proprietary full-stack telecommunications against basic Twilio wrappers and emphasizing compliance. | |
| Churn Analysis, Net Expansion, and Team Size | 8 | 3 | 2 | 5 | Nathan breaks down net seat retention and unit economics, gently correcting Josh when he confuses customer CAC with recruiting costs and computing payback period and lifetime value live. | |
| Market Valuation and Acquisition Perspectives | 6 | 2 | 3 | 4 | Nathan constructs a hypothetical $250M acquisition scenario to test Josh's valuation expectations, and finishes with the Famous Five speed round. |
Statements from this episode (19)
Dial Source automates state-level call recording compliance inside CRMs
“Yes, we do, and we can do all kinds of things like maintaining compliance on state, federal, and national levels so we can automatically identify is the leader contact in a one-party consent state versus a two-party consent state and automatically not only rec…”
Dial Source seat licensing starts at $115 per month
“The rack rate starts at 115 dollars per month per seat and then drives down based on, like mentioned, the amount of seats and the term of contract.”
Tillman: Dial Source has Fortune 250 enterprise accounts with thousands of seats
“We do have accounts that are sub fortune two 50 of the fortune 500 that do have seats that are into the many thousands that do have price points is in that range.”
Dial Source has tens of thousands of seats across hundreds of accounts
“We're well into the tens of thousands of seats on dial source or into the high hundreds ish in terms of accounts.”
Dial Source ranks sixth overall on the Salesforce AppExchange
“For sales and rank as the number one sales application on the Salesforce app exchange, the number two support application on the Salesforce app exchange, and the sixth ranked application of thousands worldwide as a result of that technology.”
Tillman expects to raise more funding before reaching an acceptable exit valuation
“I don't believe that our business is in the right position to warrant the dollar amount that I would accept for an exit. I believe that we have another couple hard years of work in front of us perhaps another round of two of funding in front of us to build the…”
Dial Source deployed its Microsoft Dynamics product across Madison Square Garden
“We recently just finished launching all of Madison Square Garden holdings on our Microsoft product of dial source.”
Tillman: Dial Source has raised about $7M in total funding
“Today we've done about seven million in funding.”
Dial Source generated millions in revenue before raising outside capital
“We were already doing millions of dollars in revenue before a single dollar was ever raised.”
Tillman: Dial Source grew ACV by 121% year-over-year
“We closed last year at a 121% growth of ACV of the year prior.”
Marketing launched 18 months ago now generates 30% of Dial Source leads
“We didn't really even have a marketing presence just a year and a half ago. It's something that's new to our organization, which now drives 30% of our lead traffic.”
Unlike competitors using Twilio, Dial Source built its own proprietary carrier network
“Because other technologies have integrated the telephony and a large component of that is whether they're using something like Twilio to integrate the telephony into Salesforce. They can't control the actual ecosystem since we designed our own hardware and our…”
Dial Source infrastructure prevents it from seeing or extracting client data
“We purposefully built unique security controllers into our ecosystem. So we cannot log into the client's org. We cannot see any of the client's data. And unlike an integration, we do not pull any of that data out of Salesforce and Microsoft.”
Tillman claims no competitor can pass enterprise security reviews without data access
“So when you're getting into the large enterprise organizations that are publicly traded and heavily regulated on socks or HIPAA, this is an area that we can only hit on and none of our competitors can walk through these global security reviews, not touching no…”
Dial Source CAC is roughly $12,000 per account and decreasing
“So, I would say it's probably somewhere around 12,000 dollars per account to land that account right now, but that is reducing.”