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Jun 1, 2018 · 27m · top-founders

1042 "We're selling the company right now" for $10m+

Mike Lapchick · 14m spoken Nathan Latka · 9m spoken
0:00 / 0:00

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In this episode of The Top Entrepreneurs, host Nathan Latka interviews Shotfarm founder Mike Lapchick about navigating competitive market pressures, scaling a two-sided e-commerce digital asset clearinghouse to profitability, and finalizing an acquisition exceeding $10 million.

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 40.5% of the talking time here. How this is scored →

Nathan as informed peer 6.1 Guest teaching 3.8 Guest disagreement 3.6 Nathan pushing back 4.9
05100:0010:0020:000:49–3:57 · Nathan as informed peer 6/10 Introducing Mike Lapchick and Shotfarm's Core Offering Mike immediately puts up a defensive wall when Nathan asks about ARPU, confusing it with overall revenue. Nathan pushes back to clarify the distinction between contract size and top-line revenue.3:57–6:37 · Nathan as informed peer 5/10 Founding Shotfarm and Philanthropic Motivation Nathan presses Mike on his emotional and financial state when leaving his previous company. Mike is initially slightly guarded before sharing his personal philanthropic motivation.6:37–10:28 · Nathan as informed peer 6/10 Market Dynamics, First-Mover Disadvantage, and Exit Timing Mike reveals Shotfarm is in acquisition talks and explains the dynamics of first-mover disadvantage against better-funded rivals like Salsify. Nathan demonstrates solid grasp of SaaS growth curves and plateau timing.10:29–13:02 · Nathan as informed peer 7/10 Building a Sticky Network and Navigating Chicago's Investor Climate Nathan frames the venture capital funding pattern (triple-triple, double-double) and Mike agrees, elaborating on the friction of raising early-stage tech capital in a conservative Chicago investor market.13:02–17:10 · Nathan as informed peer 7/10 Platform Monetization and SaaS Retention Metrics Mike outlines their storage-based pricing model and monthly net revenue churn of negative 0.5 percent. Nathan quickly calculates annualized negative net churn and presses Mike to narrow down customer counts.17:11–20:04 · Nathan as informed peer 4/10 Network Viral Loop and Distribution Strategy Mike explains the push and self-service distribution dynamics that create a LinkedIn-style viral loop across brands and retailers. The segment also includes a mid-roll advertisement read.20:06–24:03 · Nathan as informed peer 7/10 Customer Acquisition Economics and Sales Execution Challenges Nathan repeatedly drills into customer acquisition cost and payback periods. Mike actively dodges exact figures to protect proprietary data while openly admitting their in-app upsell conversion was a botched execution.24:05–26:53 · Nathan as informed peer 7/10 Financial Standing, Capital Structure, and Exit Expectations Nathan synthesizes the disclosed data points to estimate a floor revenue of 1.4 million dollars and evaluates liquidation preference math for common shareholders before moving into the closing questions.0:49–3:57 · Guest teaching 3/10 Introducing Mike Lapchick and Shotfarm's Core Offering Mike immediately puts up a defensive wall when Nathan asks about ARPU, confusing it with overall revenue. Nathan pushes back to clarify the distinction between contract size and top-line revenue.3:57–6:37 · Guest teaching 3/10 Founding Shotfarm and Philanthropic Motivation Nathan presses Mike on his emotional and financial state when leaving his previous company. Mike is initially slightly guarded before sharing his personal philanthropic motivation.6:37–10:28 · Guest teaching 6/10 Market Dynamics, First-Mover Disadvantage, and Exit Timing Mike reveals Shotfarm is in acquisition talks and explains the dynamics of first-mover disadvantage against better-funded rivals like Salsify. Nathan demonstrates solid grasp of SaaS growth curves and plateau timing.10:29–13:02 · Guest teaching 4/10 Building a Sticky Network and Navigating Chicago's Investor Climate Nathan frames the venture capital funding pattern (triple-triple, double-double) and Mike agrees, elaborating on the friction of raising early-stage tech capital in a conservative Chicago investor market.13:02–17:10 · Guest teaching 3/10 Platform Monetization and SaaS Retention Metrics Mike outlines their storage-based pricing model and monthly net revenue churn of negative 0.5 percent. Nathan quickly calculates annualized negative net churn and presses Mike to narrow down customer counts.17:11–20:04 · Guest teaching 5/10 Network Viral Loop and Distribution Strategy Mike explains the push and self-service distribution dynamics that create a LinkedIn-style viral loop across brands and retailers. The segment also includes a mid-roll advertisement read.20:06–24:03 · Guest teaching 4/10 Customer Acquisition Economics and Sales Execution Challenges Nathan repeatedly drills into customer acquisition cost and payback periods. Mike actively dodges exact figures to protect proprietary data while openly admitting their in-app upsell conversion was a botched execution.24:05–26:53 · Guest teaching 2/10 Financial Standing, Capital Structure, and Exit Expectations Nathan synthesizes the disclosed data points to estimate a floor revenue of 1.4 million dollars and evaluates liquidation preference math for common shareholders before moving into the closing questions.0:49–3:57 · Guest disagreement 6/10 Introducing Mike Lapchick and Shotfarm's Core Offering Mike immediately puts up a defensive wall when Nathan asks about ARPU, confusing it with overall revenue. Nathan pushes back to clarify the distinction between contract size and top-line revenue.3:57–6:37 · Guest disagreement 4/10 Founding Shotfarm and Philanthropic Motivation Nathan presses Mike on his emotional and financial state when leaving his previous company. Mike is initially slightly guarded before sharing his personal philanthropic motivation.6:37–10:28 · Guest disagreement 3/10 Market Dynamics, First-Mover Disadvantage, and Exit Timing Mike reveals Shotfarm is in acquisition talks and explains the dynamics of first-mover disadvantage against better-funded rivals like Salsify. Nathan demonstrates solid grasp of SaaS growth curves and plateau timing.10:29–13:02 · Guest disagreement 2/10 Building a Sticky Network and Navigating Chicago's Investor Climate Nathan frames the venture capital funding pattern (triple-triple, double-double) and Mike agrees, elaborating on the friction of raising early-stage tech capital in a conservative Chicago investor market.13:02–17:10 · Guest disagreement 3/10 Platform Monetization and SaaS Retention Metrics Mike outlines their storage-based pricing model and monthly net revenue churn of negative 0.5 percent. Nathan quickly calculates annualized negative net churn and presses Mike to narrow down customer counts.17:11–20:04 · Guest disagreement 1/10 Network Viral Loop and Distribution Strategy Mike explains the push and self-service distribution dynamics that create a LinkedIn-style viral loop across brands and retailers. The segment also includes a mid-roll advertisement read.20:06–24:03 · Guest disagreement 6/10 Customer Acquisition Economics and Sales Execution Challenges Nathan repeatedly drills into customer acquisition cost and payback periods. Mike actively dodges exact figures to protect proprietary data while openly admitting their in-app upsell conversion was a botched execution.24:05–26:53 · Guest disagreement 4/10 Financial Standing, Capital Structure, and Exit Expectations Nathan synthesizes the disclosed data points to estimate a floor revenue of 1.4 million dollars and evaluates liquidation preference math for common shareholders before moving into the closing questions.0:49–3:57 · Nathan pushing back 6/10 Introducing Mike Lapchick and Shotfarm's Core Offering Mike immediately puts up a defensive wall when Nathan asks about ARPU, confusing it with overall revenue. Nathan pushes back to clarify the distinction between contract size and top-line revenue.3:57–6:37 · Nathan pushing back 5/10 Founding Shotfarm and Philanthropic Motivation Nathan presses Mike on his emotional and financial state when leaving his previous company. Mike is initially slightly guarded before sharing his personal philanthropic motivation.6:37–10:28 · Nathan pushing back 4/10 Market Dynamics, First-Mover Disadvantage, and Exit Timing Mike reveals Shotfarm is in acquisition talks and explains the dynamics of first-mover disadvantage against better-funded rivals like Salsify. Nathan demonstrates solid grasp of SaaS growth curves and plateau timing.10:29–13:02 · Nathan pushing back 3/10 Building a Sticky Network and Navigating Chicago's Investor Climate Nathan frames the venture capital funding pattern (triple-triple, double-double) and Mike agrees, elaborating on the friction of raising early-stage tech capital in a conservative Chicago investor market.13:02–17:10 · Nathan pushing back 5/10 Platform Monetization and SaaS Retention Metrics Mike outlines their storage-based pricing model and monthly net revenue churn of negative 0.5 percent. Nathan quickly calculates annualized negative net churn and presses Mike to narrow down customer counts.17:11–20:04 · Nathan pushing back 2/10 Network Viral Loop and Distribution Strategy Mike explains the push and self-service distribution dynamics that create a LinkedIn-style viral loop across brands and retailers. The segment also includes a mid-roll advertisement read.20:06–24:03 · Nathan pushing back 8/10 Customer Acquisition Economics and Sales Execution Challenges Nathan repeatedly drills into customer acquisition cost and payback periods. Mike actively dodges exact figures to protect proprietary data while openly admitting their in-app upsell conversion was a botched execution.24:05–26:53 · Nathan pushing back 6/10 Financial Standing, Capital Structure, and Exit Expectations Nathan synthesizes the disclosed data points to estimate a floor revenue of 1.4 million dollars and evaluates liquidation preference math for common shareholders before moving into the closing questions.

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

0:00 · Nathan 53.7% · guest 46.3%0:00 · Nathan 53.7% · guest 46.3%3:00 · Nathan 37.2% · guest 62.8%3:00 · Nathan 37.2% · guest 62.8%6:00 · Nathan 33% · guest 67%6:00 · Nathan 33% · guest 67%9:00 · Nathan 23.3% · guest 76.7%9:00 · Nathan 23.3% · guest 76.7%12:00 · Nathan 30.3% · guest 69.7%12:00 · Nathan 30.3% · guest 69.7%15:00 · Nathan 50.6% · guest 49.4%15:00 · Nathan 50.6% · guest 49.4%18:00 · Nathan 44.7% · guest 55.3%18:00 · Nathan 44.7% · guest 55.3%21:00 · Nathan 29.6% · guest 70.4%21:00 · Nathan 29.6% · guest 70.4%24:00 · Nathan 50.7% · guest 49.3%24:00 · Nathan 50.7% · guest 49.3%27:00 · Nathan 100% · guest 0%27:00 · Nathan 100% · guest 0%
Sharpest disagreement ▶ 3:04 Mike bluntly shuts down revenue inquiries

Mike abruptly cuts Nathan off, refusing to share revenue figures before Nathan clarifies he is asking for ARPU rather than total revenue.

 Hardest push from Nathan ▶ 23:00 Nathan refuses to let Mike dodge the payback period question

When Mike provides vague answers about conversion carrying costs, Nathan directly restates and pushes for an exact payback period range under six months.

 Biggest teaching moment ▶ 7:18 Mike explains first-mover disadvantage

Mike educates Nathan on why pioneering a category without existing proof points allowed later competitors like Salsify to raise massive capital and leverage their groundwork.

 Nathan holds their own ▶ 24:23 Nathan computes minimum revenue and cap table outcome

Nathan uses Mike's fragmented disclosures to calculate a 1.4 million dollar minimum ARR and tests whether an exit would clear 1x liquidation preferences for common stockholders.
the scores for every segment, with the reasoning behind each
ChapterTopicNathan as informed peerGuest teachingGuest disagreementNathan pushing backWhy
Introducing Mike Lapchick and Shotfarm's Core Offering 6366 Mike immediately puts up a defensive wall when Nathan asks about ARPU, confusing it with overall revenue. Nathan pushes back to clarify the distinction between contract size and top-line revenue.
Founding Shotfarm and Philanthropic Motivation 5345 Nathan presses Mike on his emotional and financial state when leaving his previous company. Mike is initially slightly guarded before sharing his personal philanthropic motivation.
Market Dynamics, First-Mover Disadvantage, and Exit Timing 6634 Mike reveals Shotfarm is in acquisition talks and explains the dynamics of first-mover disadvantage against better-funded rivals like Salsify. Nathan demonstrates solid grasp of SaaS growth curves and plateau timing.
Building a Sticky Network and Navigating Chicago's Investor Climate 7423 Nathan frames the venture capital funding pattern (triple-triple, double-double) and Mike agrees, elaborating on the friction of raising early-stage tech capital in a conservative Chicago investor market.
Platform Monetization and SaaS Retention Metrics 7335 Mike outlines their storage-based pricing model and monthly net revenue churn of negative 0.5 percent. Nathan quickly calculates annualized negative net churn and presses Mike to narrow down customer counts.
Network Viral Loop and Distribution Strategy 4512 Mike explains the push and self-service distribution dynamics that create a LinkedIn-style viral loop across brands and retailers. The segment also includes a mid-roll advertisement read.
Customer Acquisition Economics and Sales Execution Challenges 7468 Nathan repeatedly drills into customer acquisition cost and payback periods. Mike actively dodges exact figures to protect proprietary data while openly admitting their in-app upsell conversion was a botched execution.
Financial Standing, Capital Structure, and Exit Expectations 7246 Nathan synthesizes the disclosed data points to estimate a floor revenue of 1.4 million dollars and evaluates liquidation preference math for common shareholders before moving into the closing questions.

Statements from this episode (12)

Assertion Not checkable as stated
Lapchick: Shotfarm's average customer pays $1,200 per month
“Our average MRR is 1200 a month.”
Mike Lapchick Jun 1, 2018 ▶ 3:21
Disclosure
Lapchick: Shotfarm was founded to fund philanthropic checks after previous exit
“The real deal is that I had a number of checks written out to various charities and personal interests. But they were, they're all checks out to they were giving. It was philanthropic. And I started this company so that I could sign those checks, and I made en…”
Mike Lapchick Jun 1, 2018 ▶ 5:31
Insight
Lapchick: Founders Should Sell on the Upside Before Growth Plateaus
“Well, what you look for is, is you look at your growth trajectory, right? You look for that hockey stick or anything that approximately is a hockey stick. And as soon as you can start predicting when the plateau is going to occur, you want to sell on, on the u…”
Mike Lapchick Jun 1, 2018 ▶ 6:51
Assertion Partly supported
Lapchick: Shotfarm Raised $10M While Competitor Salsify Raised $57M
“So and then, so we raised 10, we got competitors in now at fifty-seven million in funding.”
Mike Lapchick Jun 1, 2018 ▶ 8:13
Opinion
Lapchick: Chicago has the most conservative investors in the US
“The only difference that I would make is that I wouldn't do it in Chicago. I wouldn't fund it in Chicago. It's the most conservative bed of investors in the country. These guys are bankers, you know, you go in with that.”
Mike Lapchick Jun 1, 2018 ▶ 11:50
Disclosure
Shotfarm Indexes Brand Pricing on Storage Rather Than Product Records
“Primarily, it's the brands who foot the bill for this service. Not per record. They pay, we index everything off of storage instead of the number of products that go across.”
Mike Lapchick Jun 1, 2018 ▶ 13:46
Assertion Not checkable as stated
Shotfarm Maintains Negative 0.5% Monthly Net Revenue Churn
“Right now we are at negative half a point.”
Mike Lapchick Jun 1, 2018 ▶ 15:20
Assertion Not checkable as stated
Shotfarm Has 12,000 Platform Users and Over 100 Paying Customers
“Well, so we have 12,000, we have 12,000 companies using the platform. Not all of them are paying, but more than a hundred are paying.”
Mike Lapchick Jun 1, 2018 ▶ 16:34
Assertion Not checkable as stated
Lapchick: Shotfarm incurs $20 to $30 annual cost per free user
“My carrying costs for a free customer is about 30 bucks a year, 20 bucks a year, and around there. maybe even a little bit less, depending on how much storage, free storage they're using, or how much of the free storage they're using.”
Mike Lapchick Jun 1, 2018 ▶ 20:32
Opinion
Lapchick: Free-to-paid in-app conversion was Shotfarm's biggest failure
“I'll tell you where we failed is in the in-app marketing. This is the biggest botched opportunity that we've, that we had was converting the free to paying users, right?”
Mike Lapchick Jun 1, 2018 ▶ 21:48
Assertion Not checkable as stated
Lapchick: Shotfarm sales team never targeted 9,000 free platform companies
“So, so the sales team started in 2016 and they, we had so much inbound interest that that's what they sold. We did, they never even looked at the 9000 companies at the time as an upsell.”
Mike Lapchick Jun 1, 2018 ▶ 22:25
Opinion
Lapchick: SaaS investor David Skok is brilliant despite backing Shotfarm's rival
“No, I'm not a CEO, but I do follow David Skok quite, Closely. So North bridge. So these guys are ironically investors in, in my biggest competitor, but the guy's freaking brilliant.”
Mike Lapchick Jun 1, 2018 ▶ 25:11
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