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Feb 25, 2018 · 18m · top-founders

946 He Changed Ideas 7 Times at Y Combinator, Now 500,000 Employees More Engaged Because of Him

Taro Fukuyama · 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 Fond.co co-founder and CEO Taro Fukuyama to discuss how his employee engagement SaaS platform scaled to 500,000 active seats following seven early pivots in Y Combinator. Fukuyama breaks down Fond's pricing model, 1% net revenue churn, multi-product expansion strategy, and key unit economics powering their enterprise growth.

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 45.9% of the talking time here. How this is scored →

Nathan as informed peer 5.6 Guest teaching 2.8 Guest disagreement 2.4 Nathan pushing back 3.6
05100:0010:000:49–4:26 · Nathan as informed peer 5/10 Introducing Taro Fukuyama and Fond.co Nathan introduces Taro and questions him about Fond's business model and pricing. Taro collaboratively explains their dual offering of employee discounts and recognition programs.4:26–6:32 · Nathan as informed peer 6/10 Scaling Metrics and Navigating Revenue Inquiries Nathan calculates Fond's potential revenue run rate and repeatedly pushes Taro to confirm a $2M+ MRR estimate. Taro holds a strict boundary with multiple no-comments and asks to avoid revenue due to an ongoing fundraise.6:32–10:16 · Nathan as informed peer 6/10 Funding Background and Competitor Landscape Nathan pushes back against Taro's generic PR answer regarding competition and forces him to name actual competitors. They then transition into a constructive breakdown of YC pivots and pre-sales.10:19–14:21 · Nathan as informed peer 6/10 Sponsor Break: Acuity Scheduling Following the sponsor ad, Nathan investigates SaaS churn dynamics and retention metrics. Taro explains why Fond prioritizes revenue churn over logo churn and pursues multi-product expansion.14:21–17:47 · Nathan as informed peer 5/10 Customer Acquisition Costs, Payback Periods, and Marketing Budget Nathan asks about CAC payback targets and event marketing expenses before concluding with the standard Famous Five rapid-fire questions.0:49–4:26 · Guest teaching 2/10 Introducing Taro Fukuyama and Fond.co Nathan introduces Taro and questions him about Fond's business model and pricing. Taro collaboratively explains their dual offering of employee discounts and recognition programs.4:26–6:32 · Guest teaching 2/10 Scaling Metrics and Navigating Revenue Inquiries Nathan calculates Fond's potential revenue run rate and repeatedly pushes Taro to confirm a $2M+ MRR estimate. Taro holds a strict boundary with multiple no-comments and asks to avoid revenue due to an ongoing fundraise.6:32–10:16 · Guest teaching 4/10 Funding Background and Competitor Landscape Nathan pushes back against Taro's generic PR answer regarding competition and forces him to name actual competitors. They then transition into a constructive breakdown of YC pivots and pre-sales.10:19–14:21 · Guest teaching 4/10 Sponsor Break: Acuity Scheduling Following the sponsor ad, Nathan investigates SaaS churn dynamics and retention metrics. Taro explains why Fond prioritizes revenue churn over logo churn and pursues multi-product expansion.14:21–17:47 · Guest teaching 2/10 Customer Acquisition Costs, Payback Periods, and Marketing Budget Nathan asks about CAC payback targets and event marketing expenses before concluding with the standard Famous Five rapid-fire questions.0:49–4:26 · Guest disagreement 1/10 Introducing Taro Fukuyama and Fond.co Nathan introduces Taro and questions him about Fond's business model and pricing. Taro collaboratively explains their dual offering of employee discounts and recognition programs.4:26–6:32 · Guest disagreement 5/10 Scaling Metrics and Navigating Revenue Inquiries Nathan calculates Fond's potential revenue run rate and repeatedly pushes Taro to confirm a $2M+ MRR estimate. Taro holds a strict boundary with multiple no-comments and asks to avoid revenue due to an ongoing fundraise.6:32–10:16 · Guest disagreement 4/10 Funding Background and Competitor Landscape Nathan pushes back against Taro's generic PR answer regarding competition and forces him to name actual competitors. They then transition into a constructive breakdown of YC pivots and pre-sales.10:19–14:21 · Guest disagreement 1/10 Sponsor Break: Acuity Scheduling Following the sponsor ad, Nathan investigates SaaS churn dynamics and retention metrics. Taro explains why Fond prioritizes revenue churn over logo churn and pursues multi-product expansion.14:21–17:47 · Guest disagreement 1/10 Customer Acquisition Costs, Payback Periods, and Marketing Budget Nathan asks about CAC payback targets and event marketing expenses before concluding with the standard Famous Five rapid-fire questions.0:49–4:26 · Nathan pushing back 1/10 Introducing Taro Fukuyama and Fond.co Nathan introduces Taro and questions him about Fond's business model and pricing. Taro collaboratively explains their dual offering of employee discounts and recognition programs.4:26–6:32 · Nathan pushing back 7/10 Scaling Metrics and Navigating Revenue Inquiries Nathan calculates Fond's potential revenue run rate and repeatedly pushes Taro to confirm a $2M+ MRR estimate. Taro holds a strict boundary with multiple no-comments and asks to avoid revenue due to an ongoing fundraise.6:32–10:16 · Nathan pushing back 6/10 Funding Background and Competitor Landscape Nathan pushes back against Taro's generic PR answer regarding competition and forces him to name actual competitors. They then transition into a constructive breakdown of YC pivots and pre-sales.10:19–14:21 · Nathan pushing back 2/10 Sponsor Break: Acuity Scheduling Following the sponsor ad, Nathan investigates SaaS churn dynamics and retention metrics. Taro explains why Fond prioritizes revenue churn over logo churn and pursues multi-product expansion.14:21–17:47 · Nathan pushing back 2/10 Customer Acquisition Costs, Payback Periods, and Marketing Budget Nathan asks about CAC payback targets and event marketing expenses before concluding with the standard Famous Five rapid-fire questions.

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

0:00 · Nathan 54.6% · guest 45.4%0:00 · Nathan 54.6% · guest 45.4%3:00 · Nathan 34.6% · guest 65.4%3:00 · Nathan 34.6% · guest 65.4%6:00 · Nathan 44.7% · guest 55.3%6:00 · Nathan 44.7% · guest 55.3%9:00 · Nathan 60.1% · guest 39.9%9:00 · Nathan 60.1% · guest 39.9%12:00 · Nathan 40.7% · guest 59.3%12:00 · Nathan 40.7% · guest 59.3%15:00 · Nathan 29.4% · guest 70.6%15:00 · Nathan 29.4% · guest 70.6%18:00 · Nathan 95% · guest 5%18:00 · Nathan 95% · guest 5%
Sharpest disagreement ▶ 5:40 Taro establishes firm boundary on revenue disclosures

Taro repeatedly gives 'no comment' to revenue estimates, asks Nathan to avoid the topic entirely due to fundraising sensitivity, and questions whether the interview is currently being recorded.

 Hardest push from Nathan ▶ 5:25 Nathan repeatedly attempts to pin down revenue figures

Nathan refuses to drop the revenue line of questioning, rephrasing his run-rate calculations multiple times even after Taro expresses discomfort.

 Biggest teaching moment ▶ 9:35 Taro explains the Minimum Sellable Product framework

Taro educates Nathan on why getting an upfront customer check for an unbuilt PDF is far more validating than polite feedback or a standard MVP.

 Nathan holds their own ▶ 5:08 Nathan reverse-engineers Fond's monthly revenue

Nathan demonstrates SaaS expertise by swiftly calculating Fond's monthly revenue ($2.5M MRR) using disclosed customer counts, seat averages, and unit pricing.
the scores for every segment, with the reasoning behind each
ChapterTopicNathan as informed peerGuest teachingGuest disagreementNathan pushing backWhy
Introducing Taro Fukuyama and Fond.co 5211 Nathan introduces Taro and questions him about Fond's business model and pricing. Taro collaboratively explains their dual offering of employee discounts and recognition programs.
Scaling Metrics and Navigating Revenue Inquiries 6257 Nathan calculates Fond's potential revenue run rate and repeatedly pushes Taro to confirm a $2M+ MRR estimate. Taro holds a strict boundary with multiple no-comments and asks to avoid revenue due to an ongoing fundraise.
Funding Background and Competitor Landscape 6446 Nathan pushes back against Taro's generic PR answer regarding competition and forces him to name actual competitors. They then transition into a constructive breakdown of YC pivots and pre-sales.
Sponsor Break: Acuity Scheduling 6412 Following the sponsor ad, Nathan investigates SaaS churn dynamics and retention metrics. Taro explains why Fond prioritizes revenue churn over logo churn and pursues multi-product expansion.
Customer Acquisition Costs, Payback Periods, and Marketing Budget 5212 Nathan asks about CAC payback targets and event marketing expenses before concluding with the standard Famous Five rapid-fire questions.

Statements from this episode (17)

Disclosure
Fond charges companies roughly $5 per employee monthly
“How we make money is we charge a fee from company based on the company size. So we typically charge around five dollar per employee per month.”
Taro Fukuyama Feb 25, 2018 ▶ 2:01
Assertion Not checkable as stated
Salesforce is one of Fond's largest customers
“Salesforce is one of our largest customers.”
Taro Fukuyama Feb 25, 2018 ▶ 2:23
Insight
Fukuyama: Millennials require instant workplace recognition like social media feedback
“Recently, especially a lot of millennial are so used to post on Snapchat, Instagram, and once you do it, five seconds later, they get likes or comments. So that type of instant recognition is getting so important, but that's what they require in the workforce …”
Taro Fukuyama Feb 25, 2018 ▶ 3:46
Assertion Not checkable as stated
Fond serves over 1,000 companies on its platform
“Roughly over a thousand company right now.”
Taro Fukuyama Feb 25, 2018 ▶ 4:30
Assertion Not checkable as stated
Fond's average customer size is approximately 500 employees
“Yeah, most like 500 employees as a company is the average that we see.”
Taro Fukuyama Feb 25, 2018 ▶ 4:47
Disclosure
Fond is currently fundraising and keeping revenue numbers private
“Yeah, we're a little sensitive right now for the funding, so if you could keep the, if you could not touch about the revenue, that'd be helpful.”
Taro Fukuyama Feb 25, 2018 ▶ 5:55
Disclosure
Fukuyama: Fond has raised around $24 million so far
“We have raised around twenty four million so far.”
Taro Fukuyama Feb 25, 2018 ▶ 6:38
Assertion Not checkable as stated
Fukuyama: 90% of lost prospects do nothing instead of choosing competitors
“Mainly, 90% of companies who don't end up working with us typically don't end up doing anything. So, biggest competitor, it's not direct competitors.”
Taro Fukuyama Feb 25, 2018 ▶ 7:09
Assertion Partly supported
Incumbents like Achievers and Globoforce generate hundreds of millions in revenue
“But for, especially for the recognition side, the large players are companies like Achievers, Global Force Aussie Tunners. Those are like hundreds of millions of revenue companies. Usually, those are the companies.”
Taro Fukuyama Feb 25, 2018 ▶ 7:26
Assertion Not checkable as stated
Fukuyama: Fond pivoted seven times in its first month at YC
“We actually changed seven times in the first month of the batch which was three month batch of programs.”
Taro Fukuyama Feb 25, 2018 ▶ 8:14
Insight
Fukuyama: Founders should build a 'minimum sellable product' over an MVP
“So I think this is a concept called like MS MSP instead of MVP. It's like a minimum desirable desirable, sorry, minimum sellable product that if there is a person that's going to be willing to pay, then most likely you can find a second one. And if you can get…”
Taro Fukuyama Feb 25, 2018 ▶ 9:56
Assertion Not checkable as stated
Fukuyama: Fond secured its first sale with only an idea PDF
“We had only PDF of the idea.”
Taro Fukuyama Feb 25, 2018 ▶ 11:37
Insight
Focusing on logo churn over revenue churn misleads enterprise SaaS companies
“Focusing on logo churn could kill us to, you know, focus on the wrong thing, so we tend to focus on the revenue side.”
Taro Fukuyama Feb 25, 2018 ▶ 12:58
Assertion Not checkable as stated
Fukuyama: Fond targets monthly revenue churn of around 1%
“Right now on the monthly basis, we try to stay around one percent on the monthly revenue side, and as long as we can keep the range, then I think we're pretty on a good path.”
Taro Fukuyama Feb 25, 2018 ▶ 13:19
Disclosure
Fukuyama: Fond expands via multi-product lineups rather than going upmarket
“Our strategy is less for going to the market, more so to expand to the more product lineups so that, that's why we added second and third product recently.”
Taro Fukuyama Feb 25, 2018 ▶ 14:13
Disclosure
Fukuyama: Fond targets a 12 to 24 month CAC payback period
“We're just trying to stay within like 12 to 24 months range.”
Taro Fukuyama Feb 25, 2018 ▶ 14:28
Disclosure
Fukuyama: Fond spent over $1 million on marketing in the past year
“It's about the line. I think a little more than that, but we're trying to get aggressive on the marketing expansion side just to make sure that we are you know, the leader of the market.”
Taro Fukuyama Feb 25, 2018 ▶ 16:05
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