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Dec 13, 2017 · 20m · top-founders

The "GiftCard Trick" to $6m in ARR

Pete Lamson · 12m spoken Nathan Latka · 6m spoken
0:00 / 0:00

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In this episode of The Top Entrepreneurs, Nathan Latka interviews JazzHR CEO Pete Lamson, exploring how the SaaS recruiting platform scaled to $600,000 in monthly recurring revenue through strategic HR partnerships, low-churn unit economics, and creative acquisition campaigns.

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 34.8% of the talking time here. How this is scored →

Nathan as informed peer 5.8 Guest teaching 1.8 Guest disagreement 1.4 Nathan pushing back 3.0
05100:0010:0020:001:13–4:15 · Nathan as informed peer 4/10 Introducing Pete Lamson and JazzHR's Recruiting Platform Nathan introduces Pete as the founder and CEO, which Pete politely clarifies immediately. The exchange remains cordial and informative as Pete details JazzHR's SMB recruiting focus and revenue-share partnerships.4:15–6:31 · Nathan as informed peer 5/10 Pricing Structure, Founding History, and Venture Capital Funding Nathan quickly drills into pricing tiers, capital raised ($20M total, $6.5M under Pete), and channel strategy. Pete answers directly with structured operational context.6:31–9:32 · Nathan as informed peer 8/10 Customer Lifetime Value, Logo Churn, and CAC Metrics Nathan breaks down SaaS mathematics, converting a nine-year average lifespan into sub-one-percent monthly logo churn and roughly $21k LTV. He pushes Pete on how LTV can grow without increasing ARPU, prompting Pete to clarify tier upgrades.9:36–13:10 · Nathan as informed peer 6/10 Sponsor Break: Nathan Latka on SignEasy Following a sponsor read, Nathan calculates CAC from the 13-month payback period. Pete explains an unconventional growth tactic using Amazon gift card incentives for demos and subsequent cohort maturation.13:10–17:00 · Nathan as informed peer 6/10 Target Market Sizing, Growth Trajectory, and Team Structure Nathan computes current MRR at $600k from 3,000 customers at $200 ARPU and presses for past revenue trajectory when Pete gives cagier percentage figures.1:13–4:15 · Guest teaching 3/10 Introducing Pete Lamson and JazzHR's Recruiting Platform Nathan introduces Pete as the founder and CEO, which Pete politely clarifies immediately. The exchange remains cordial and informative as Pete details JazzHR's SMB recruiting focus and revenue-share partnerships.4:15–6:31 · Guest teaching 1/10 Pricing Structure, Founding History, and Venture Capital Funding Nathan quickly drills into pricing tiers, capital raised ($20M total, $6.5M under Pete), and channel strategy. Pete answers directly with structured operational context.6:31–9:32 · Guest teaching 2/10 Customer Lifetime Value, Logo Churn, and CAC Metrics Nathan breaks down SaaS mathematics, converting a nine-year average lifespan into sub-one-percent monthly logo churn and roughly $21k LTV. He pushes Pete on how LTV can grow without increasing ARPU, prompting Pete to clarify tier upgrades.9:36–13:10 · Guest teaching 2/10 Sponsor Break: Nathan Latka on SignEasy Following a sponsor read, Nathan calculates CAC from the 13-month payback period. Pete explains an unconventional growth tactic using Amazon gift card incentives for demos and subsequent cohort maturation.13:10–17:00 · Guest teaching 1/10 Target Market Sizing, Growth Trajectory, and Team Structure Nathan computes current MRR at $600k from 3,000 customers at $200 ARPU and presses for past revenue trajectory when Pete gives cagier percentage figures.1:13–4:15 · Guest disagreement 1/10 Introducing Pete Lamson and JazzHR's Recruiting Platform Nathan introduces Pete as the founder and CEO, which Pete politely clarifies immediately. The exchange remains cordial and informative as Pete details JazzHR's SMB recruiting focus and revenue-share partnerships.4:15–6:31 · Guest disagreement 1/10 Pricing Structure, Founding History, and Venture Capital Funding Nathan quickly drills into pricing tiers, capital raised ($20M total, $6.5M under Pete), and channel strategy. Pete answers directly with structured operational context.6:31–9:32 · Guest disagreement 2/10 Customer Lifetime Value, Logo Churn, and CAC Metrics Nathan breaks down SaaS mathematics, converting a nine-year average lifespan into sub-one-percent monthly logo churn and roughly $21k LTV. He pushes Pete on how LTV can grow without increasing ARPU, prompting Pete to clarify tier upgrades.9:36–13:10 · Guest disagreement 1/10 Sponsor Break: Nathan Latka on SignEasy Following a sponsor read, Nathan calculates CAC from the 13-month payback period. Pete explains an unconventional growth tactic using Amazon gift card incentives for demos and subsequent cohort maturation.13:10–17:00 · Guest disagreement 2/10 Target Market Sizing, Growth Trajectory, and Team Structure Nathan computes current MRR at $600k from 3,000 customers at $200 ARPU and presses for past revenue trajectory when Pete gives cagier percentage figures.1:13–4:15 · Nathan pushing back 1/10 Introducing Pete Lamson and JazzHR's Recruiting Platform Nathan introduces Pete as the founder and CEO, which Pete politely clarifies immediately. The exchange remains cordial and informative as Pete details JazzHR's SMB recruiting focus and revenue-share partnerships.4:15–6:31 · Nathan pushing back 2/10 Pricing Structure, Founding History, and Venture Capital Funding Nathan quickly drills into pricing tiers, capital raised ($20M total, $6.5M under Pete), and channel strategy. Pete answers directly with structured operational context.6:31–9:32 · Nathan pushing back 6/10 Customer Lifetime Value, Logo Churn, and CAC Metrics Nathan breaks down SaaS mathematics, converting a nine-year average lifespan into sub-one-percent monthly logo churn and roughly $21k LTV. He pushes Pete on how LTV can grow without increasing ARPU, prompting Pete to clarify tier upgrades.9:36–13:10 · Nathan pushing back 2/10 Sponsor Break: Nathan Latka on SignEasy Following a sponsor read, Nathan calculates CAC from the 13-month payback period. Pete explains an unconventional growth tactic using Amazon gift card incentives for demos and subsequent cohort maturation.13:10–17:00 · Nathan pushing back 4/10 Target Market Sizing, Growth Trajectory, and Team Structure Nathan computes current MRR at $600k from 3,000 customers at $200 ARPU and presses for past revenue trajectory when Pete gives cagier percentage figures.

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

0:00 · Nathan 60.7% · guest 39.3%0:00 · Nathan 60.7% · guest 39.3%3:00 · Nathan 21.6% · guest 78.4%3:00 · Nathan 21.6% · guest 78.4%6:00 · Nathan 30.1% · guest 69.9%6:00 · Nathan 30.1% · guest 69.9%9:00 · Nathan 52% · guest 48%9:00 · Nathan 52% · guest 48%12:00 · Nathan 11.8% · guest 88.2%12:00 · Nathan 11.8% · guest 88.2%15:00 · Nathan 23.7% · guest 76.3%15:00 · Nathan 23.7% · guest 76.3%18:00 · Nathan 45.8% · guest 54.2%18:00 · Nathan 45.8% · guest 54.2%
Sharpest disagreement ▶ 8:02 Pete resists ARPU increase characterization

Pete firmly pushes back on the idea of increasing base pricing, emphasizing packaging moves over raw price hikes.

 Hardest push from Nathan ▶ 8:13 Nathan challenges LTV expansion without ARPU gain

Nathan directly interrogates the mathematical consistency of growing customer lifetime value if expansion revenue isn't driving ARPU up.

 Biggest teaching moment ▶ 12:04 Pete explains demo incentive cohort lag

Pete educates Nathan on why initial 3-month funnel metrics can mislead, showing how delayed conversion cohorts validated the gift card strategy.

 Nathan holds their own ▶ 7:06 Nathan reverse-engineers logo churn from lifetime

Nathan instantly translates Pete's 9-year retention figure into mathematical sub-1% monthly logo churn and projected dollar LTV.
the scores for every segment, with the reasoning behind each
ChapterTopicNathan as informed peerGuest teachingGuest disagreementNathan pushing backWhy
Introducing Pete Lamson and JazzHR's Recruiting Platform 4311 Nathan introduces Pete as the founder and CEO, which Pete politely clarifies immediately. The exchange remains cordial and informative as Pete details JazzHR's SMB recruiting focus and revenue-share partnerships.
Pricing Structure, Founding History, and Venture Capital Funding 5112 Nathan quickly drills into pricing tiers, capital raised ($20M total, $6.5M under Pete), and channel strategy. Pete answers directly with structured operational context.
Customer Lifetime Value, Logo Churn, and CAC Metrics 8226 Nathan breaks down SaaS mathematics, converting a nine-year average lifespan into sub-one-percent monthly logo churn and roughly $21k LTV. He pushes Pete on how LTV can grow without increasing ARPU, prompting Pete to clarify tier upgrades.
Sponsor Break: Nathan Latka on SignEasy 6212 Following a sponsor read, Nathan calculates CAC from the 13-month payback period. Pete explains an unconventional growth tactic using Amazon gift card incentives for demos and subsequent cohort maturation.
Target Market Sizing, Growth Trajectory, and Team Structure 6124 Nathan computes current MRR at $600k from 3,000 customers at $200 ARPU and presses for past revenue trajectory when Pete gives cagier percentage figures.

Statements from this episode (12)

Disclosure
Lamson: JazzHR targets small businesses with 25 to 50 employees
“Jazz HR was founded and exists today to help small businesses who have between 25 and 50 employees achieve more effective recruiting results”
Pete Lamson Dec 13, 2017 ▶ 1:59
Assertion Supported
Lamson: PrismHR manages 85,000 customers and will offer JazzHR integration
“It's a company by the name of Prism HR. They service The PEO industry, the professional employment organization industry, they have approximately 85,000 customers under management and later this fall their 85,000 SMBs will be able to purchase Jazz HR through t…”
Pete Lamson Dec 13, 2017 ▶ 3:36
Assertion Not checkable as stated
JazzHR's average customer pays approximately $200 per month
“So our average customer pays us about 200 dollars per month. Our products start as low as just 39 dollars a month go up to as high as a little over, about 349 per month. We average 200 or about 2400 per year.”
Pete Lamson Dec 13, 2017 ▶ 4:20
Assertion Partly supported
Lamson: JazzHR has raised $20M in total venture capital
“Twenty million.”
Pete Lamson Dec 13, 2017 ▶ 5:33
Assertion Not checkable as stated
Lamson says the average JazzHR customer stays for nine years
“So our, the average customer stays with us for about nine years right now.”
Pete Lamson Dec 13, 2017 ▶ 6:40
Assertion Not checkable as stated
Lamson: JazzHR's LTV to CAC ratio is about 3.5
“We aspire to be north of three. We have just gotten there. A couple of quarters ago. And so right now we're about three and a half.”
Pete Lamson Dec 13, 2017 ▶ 9:06
Assertion Not checkable as stated
Lamson: JazzHR's CAC payback period is just over 12 months
“Right now, we're just north of 12. It is coming down, but we're just north of 12.”
Pete Lamson Dec 13, 2017 ▶ 10:32
Assertion Not checkable as stated
$25 and $50 demo incentive gift cards yield identical results
“We have tested both 25 and 50 dollars. They both work the same.”
Pete Lamson Dec 13, 2017 ▶ 11:54
Assertion Not checkable as stated
90% of US mid-market companies lack dedicated recruiting software
“90% of that market has no recruiting solution in place other than word docs and spreadsheets and email inbox management.”
Pete Lamson Dec 13, 2017 ▶ 14:36
Prediction Didn’t hold up
Lamson predicts JazzHR will hit 25,000 paid customers by 2020
“We have a lofty goal of getting to 25,000 paid customers by the end of twenty-twenty. We're at 3000 now.”
Pete Lamson Dec 13, 2017 ▶ 15:15
Assertion Not checkable as stated
Lamson: JazzHR net new MRR grew over 600% in Q2 2017
“In Q two, it grew north of 600%. In Q three, we're growing at probably about 500%, maybe a little under that.”
Pete Lamson Dec 13, 2017 ▶ 16:15
Disclosure
Lamson says JazzHR would reject a $24M acquisition offer
“No.”
Pete Lamson Dec 13, 2017 ▶ 18:51
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