StarZero All shows Try the podcast clipper →

Mar 19, 2018 · 17m · top-founders

968 How Tumult Hit $5m in Sales, Handled Co-Founder Leaving for Apple

Jonathan Deutsch · 8m spoken Nathan Latka · 6m spoken
0:00 / 0:00

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

Nathan Latka interviews Tumult founder Jonathan Deutsch to discuss how he bootstrapped his macOS animation tool, Tumult Hype, to over $5 million in lifetime sales. Deutsch shares insights on managing a departed co-founder's equity, maintaining an ultra-lean two-person team, and prioritizing cash-flow profitability over rapid venture expansion.

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 45.8% of the talking time here. How this is scored →

Nathan as informed peer 4.3 Guest teaching 3.0 Guest disagreement 1.3 Nathan pushing back 3.8
05100:0010:001:09–6:46 · Nathan as informed peer 5/10 Tumult Hype Product Overview and Pricing Strategy Nathan presses aggressively on the awkward dynamic of Jonathan's co-founder leaving for Apple while retaining over 30% equity. Jonathan calmly explains the mechanics of their vesting schedule and reframes the business as a cash-generating model rather than an equity-growth vehicle.6:47–10:55 · Nathan as informed peer 5/10 Team Operations, Profit Sharing, and Operating Costs Nathan drills into Jonathan's cost structure, personal rent in San Francisco, and customer acquisition costs. When Jonathan mentions a 10-dollar CAC, Nathan pushes back on why that would be considered unsuccessful on a 50-dollar product.10:58–15:12 · Nathan as informed peer 5/10 Sponsor Message: Acuity Scheduling for Interview Batching Following a mid-roll sponsor read, Nathan extracts Jonathan's monthly marketing spend, trial volume, and calculates estimated lifetime revenue of 5 to 7 million dollars, asking what multiple would be needed to sell.15:14–17:30 · Nathan as informed peer 2/10 Famous Five Questions and Episode Conclusion Nathan runs through the standard Famous Five rapid-fire questions and concludes with a concise recap of Tumult's cash-flow business model.1:09–6:46 · Guest teaching 4/10 Tumult Hype Product Overview and Pricing Strategy Nathan presses aggressively on the awkward dynamic of Jonathan's co-founder leaving for Apple while retaining over 30% equity. Jonathan calmly explains the mechanics of their vesting schedule and reframes the business as a cash-generating model rather than an equity-growth vehicle.6:47–10:55 · Guest teaching 4/10 Team Operations, Profit Sharing, and Operating Costs Nathan drills into Jonathan's cost structure, personal rent in San Francisco, and customer acquisition costs. When Jonathan mentions a 10-dollar CAC, Nathan pushes back on why that would be considered unsuccessful on a 50-dollar product.10:58–15:12 · Guest teaching 3/10 Sponsor Message: Acuity Scheduling for Interview Batching Following a mid-roll sponsor read, Nathan extracts Jonathan's monthly marketing spend, trial volume, and calculates estimated lifetime revenue of 5 to 7 million dollars, asking what multiple would be needed to sell.15:14–17:30 · Guest teaching 1/10 Famous Five Questions and Episode Conclusion Nathan runs through the standard Famous Five rapid-fire questions and concludes with a concise recap of Tumult's cash-flow business model.1:09–6:46 · Guest disagreement 2/10 Tumult Hype Product Overview and Pricing Strategy Nathan presses aggressively on the awkward dynamic of Jonathan's co-founder leaving for Apple while retaining over 30% equity. Jonathan calmly explains the mechanics of their vesting schedule and reframes the business as a cash-generating model rather than an equity-growth vehicle.6:47–10:55 · Guest disagreement 2/10 Team Operations, Profit Sharing, and Operating Costs Nathan drills into Jonathan's cost structure, personal rent in San Francisco, and customer acquisition costs. When Jonathan mentions a 10-dollar CAC, Nathan pushes back on why that would be considered unsuccessful on a 50-dollar product.10:58–15:12 · Guest disagreement 1/10 Sponsor Message: Acuity Scheduling for Interview Batching Following a mid-roll sponsor read, Nathan extracts Jonathan's monthly marketing spend, trial volume, and calculates estimated lifetime revenue of 5 to 7 million dollars, asking what multiple would be needed to sell.15:14–17:30 · Guest disagreement 0/10 Famous Five Questions and Episode Conclusion Nathan runs through the standard Famous Five rapid-fire questions and concludes with a concise recap of Tumult's cash-flow business model.1:09–6:46 · Nathan pushing back 6/10 Tumult Hype Product Overview and Pricing Strategy Nathan presses aggressively on the awkward dynamic of Jonathan's co-founder leaving for Apple while retaining over 30% equity. Jonathan calmly explains the mechanics of their vesting schedule and reframes the business as a cash-generating model rather than an equity-growth vehicle.6:47–10:55 · Nathan pushing back 5/10 Team Operations, Profit Sharing, and Operating Costs Nathan drills into Jonathan's cost structure, personal rent in San Francisco, and customer acquisition costs. When Jonathan mentions a 10-dollar CAC, Nathan pushes back on why that would be considered unsuccessful on a 50-dollar product.10:58–15:12 · Nathan pushing back 3/10 Sponsor Message: Acuity Scheduling for Interview Batching Following a mid-roll sponsor read, Nathan extracts Jonathan's monthly marketing spend, trial volume, and calculates estimated lifetime revenue of 5 to 7 million dollars, asking what multiple would be needed to sell.15:14–17:30 · Nathan pushing back 1/10 Famous Five Questions and Episode Conclusion Nathan runs through the standard Famous Five rapid-fire questions and concludes with a concise recap of Tumult's cash-flow business model.

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

0:00 · Nathan 45.4% · guest 54.6%0:00 · Nathan 45.4% · guest 54.6%3:00 · Nathan 34.4% · guest 65.6%3:00 · Nathan 34.4% · guest 65.6%6:00 · Nathan 40.6% · guest 59.4%6:00 · Nathan 40.6% · guest 59.4%9:00 · Nathan 59% · guest 41%9:00 · Nathan 59% · guest 41%12:00 · Nathan 42.4% · guest 57.6%12:00 · Nathan 42.4% · guest 57.6%15:00 · Nathan 55.2% · guest 44.8%15:00 · Nathan 55.2% · guest 44.8%
Sharpest disagreement ▶ 10:06 Guest rejects simplistic CAC margin calculation

Jonathan pushes back against Nathan's assumption that a 10-dollar acquisition cost is automatically great on a 50-dollar product, pointing out ongoing development and support overheads.

 Hardest push from Nathan ▶ 5:45 Host refuses to accept passive co-founder equity dynamic

Nathan challenges Jonathan directly, arguing that watching a departed co-founder profit off incremental value should make him want to shut the company down and restart.

 Biggest teaching moment ▶ 6:06 Guest educates host on cash-flow vs equity dynamics

Jonathan clarifies that traditional Silicon Valley equity concerns matter far less when a business prioritizes cash flow and profit distributions over an eventual exit.

 Nathan holds their own ▶ 14:18 Host calculates lifetime revenue from unit economics

Nathan demonstrates strong financial intuition by instantly reverse-engineering Jonathan's 5 to 7 million dollar cumulative revenue from license prices and volume estimates.
the scores for every segment, with the reasoning behind each
ChapterTopicNathan as informed peerGuest teachingGuest disagreementNathan pushing backWhy
Tumult Hype Product Overview and Pricing Strategy 5426 Nathan presses aggressively on the awkward dynamic of Jonathan's co-founder leaving for Apple while retaining over 30% equity. Jonathan calmly explains the mechanics of their vesting schedule and reframes the business as a cash-generating model rather than an equity-growth vehicle.
Team Operations, Profit Sharing, and Operating Costs 5425 Nathan drills into Jonathan's cost structure, personal rent in San Francisco, and customer acquisition costs. When Jonathan mentions a 10-dollar CAC, Nathan pushes back on why that would be considered unsuccessful on a 50-dollar product.
Sponsor Message: Acuity Scheduling for Interview Batching 5313 Following a mid-roll sponsor read, Nathan extracts Jonathan's monthly marketing spend, trial volume, and calculates estimated lifetime revenue of 5 to 7 million dollars, asking what multiple would be needed to sell.
Famous Five Questions and Episode Conclusion 2101 Nathan runs through the standard Famous Five rapid-fire questions and concludes with a concise recap of Tumult's cash-flow business model.

Statements from this episode (8)

Disclosure
Deutsch: Tumult sells Hype for a $50 fee plus $50 pro upgrade
“We pretty much sell the software for a one-time license with the one exception being that we have a standard version and professional version, so we do a bit of Price differentiation that way. So you can buy the standard version for 50 dollars, and if you want…”
Jonathan Deutsch Mar 19, 2018 ▶ 2:05
Assertion Supported
Tumult co-founder left after four years to return to Apple
“After four years it was a good run, and he decided that he really enjoyed being at Apple again, so he went back.”
Jonathan Deutsch Mar 19, 2018 ▶ 4:02
Disclosure
Departed Tumult co-founder retained equity because the company is cash-flowing
“Due to the mechanics of how this is a little bit more of kind of a cash business we actually didn't go through with the deal, so he still owns a percentage of the company.”
Jonathan Deutsch Mar 19, 2018 ▶ 5:21
Insight
Deutsch: Profit sharing reduces equity's importance in cash-flow businesses
“We're more of a cash generating business and we'll do things like profit sharing. And so what is considered equity actually has a little bit less kind of importance and value in the company nowadays.”
Jonathan Deutsch Mar 19, 2018 ▶ 6:07
Disclosure
Deutsch: Tumult operates with only two full-time employees
“So right now there's pretty much myself and one other full-time employee.”
Jonathan Deutsch Mar 19, 2018 ▶ 6:47
Disclosure
Deutsch: Tumult pays between $1 and $10 to acquire a new customer
“So typically I would say it can range on where I go, which is kind of the fascinating thing where sometimes it can be around a dollar or two dollars to gain a customer. And other things that have been perhaps less successful, it can be around 10 dollars.”
Jonathan Deutsch Mar 19, 2018 ▶ 9:43
Disclosure
Deutsch: Tumult spends about $5,000 monthly on marketing
“In the, like, five grand range.”
Jonathan Deutsch Mar 19, 2018 ▶ 12:19
Disclosure
Jonathan Deutsch would consider selling Tumult for 3x lifetime sales
“Two times? Probably not. Maybe three times.”
Jonathan Deutsch Mar 19, 2018 ▶ 14:16
Made with StarZero

Turn any episode into a week of clips.

This entire site, over 2,600 episodes transcribed, diarized, checked and made playable, runs on the StarZero media pipeline. Drop in your own episode and the podcast clipper finds the moments worth sharing, cuts them, captions them, and reframes them for every feed.

Try the podcast clipper Learn more