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Nov 13, 2017 · 21m · top-founders

842: SaaS: Ukraine SEO Tool 3x MRR yoy from $20k July 2016 to $70k July 2017

Artem Borodatyuk · 9m spoken Nathan Latka · 9m 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, Nathan Latka interviews Artem Borodatyuk, founder of Netpeak and Serpstat, exploring how the SEO platform spun out of a $15 million agency to achieve $70,000 in monthly recurring revenue with high gross margins and outstanding unit economics.

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 48.4% of the talking time here. How this is scored →

Nathan as informed peer 4.7 Guest teaching 2.8 Guest disagreement 2.0 Nathan pushing back 3.5
05100:0010:0020:000:58–4:40 · Nathan as informed peer 5/10 Promotional Announcement for GetLatka Database Nathan interrupts Artem's claim of being the largest agency to challenge employee count as just a metric of cash burn rather than success. Artem defends the metric by explaining that revenue rankings are not publicly available in Eastern Europe.4:41–7:28 · Nathan as informed peer 4/10 The Creation and Spinout of Serpstat Artem walks through the origin story of Serpstat as an internal tool within Netpeak and its eventual spinout and seed funding. Nathan asks clarifying timeline questions in a collaborative manner.7:31–12:32 · Nathan as informed peer 5/10 MRR, Freemium Scale, and Regional Payment Realities Nathan presses Artem on standard SaaS math, insisting revenue and MRR are identical. Artem educates Nathan on regional Eastern European banking constraints where auto-recurring charges are uncommon and users must manually renew monthly.12:32–15:50 · Nathan as informed peer 7/10 Acquisition Metrics, Team Structure, and International Expansion When Artem admits he cannot calculate fully weighted CAC, Nathan breaks down a live formula using marketing headcount and ad spend to guide him. Artem supplies the unit economics and explains their analytics-driven ad spend reduction.15:50–18:16 · Nathan as informed peer 5/10 SaaS Infrastructure, Gross Margins, and 3x Year-over-Year Growth Artem details technical infrastructure, proxy costs, and database size. Nathan quickly calculates gross margins around 85-90% and confirms 3x year-over-year MRR expansion.18:16–21:01 · Nathan as informed peer 2/10 Sponsor Spotlight: Acuity Scheduling The segment includes a sponsor pitch for Acuity Scheduling followed by standard Famous Five questions and Nathan's final outro summary.0:58–4:40 · Guest teaching 3/10 Promotional Announcement for GetLatka Database Nathan interrupts Artem's claim of being the largest agency to challenge employee count as just a metric of cash burn rather than success. Artem defends the metric by explaining that revenue rankings are not publicly available in Eastern Europe.4:41–7:28 · Guest teaching 2/10 The Creation and Spinout of Serpstat Artem walks through the origin story of Serpstat as an internal tool within Netpeak and its eventual spinout and seed funding. Nathan asks clarifying timeline questions in a collaborative manner.7:31–12:32 · Guest teaching 7/10 MRR, Freemium Scale, and Regional Payment Realities Nathan presses Artem on standard SaaS math, insisting revenue and MRR are identical. Artem educates Nathan on regional Eastern European banking constraints where auto-recurring charges are uncommon and users must manually renew monthly.12:32–15:50 · Guest teaching 2/10 Acquisition Metrics, Team Structure, and International Expansion When Artem admits he cannot calculate fully weighted CAC, Nathan breaks down a live formula using marketing headcount and ad spend to guide him. Artem supplies the unit economics and explains their analytics-driven ad spend reduction.15:50–18:16 · Guest teaching 2/10 SaaS Infrastructure, Gross Margins, and 3x Year-over-Year Growth Artem details technical infrastructure, proxy costs, and database size. Nathan quickly calculates gross margins around 85-90% and confirms 3x year-over-year MRR expansion.18:16–21:01 · Guest teaching 1/10 Sponsor Spotlight: Acuity Scheduling The segment includes a sponsor pitch for Acuity Scheduling followed by standard Famous Five questions and Nathan's final outro summary.0:58–4:40 · Guest disagreement 3/10 Promotional Announcement for GetLatka Database Nathan interrupts Artem's claim of being the largest agency to challenge employee count as just a metric of cash burn rather than success. Artem defends the metric by explaining that revenue rankings are not publicly available in Eastern Europe.4:41–7:28 · Guest disagreement 1/10 The Creation and Spinout of Serpstat Artem walks through the origin story of Serpstat as an internal tool within Netpeak and its eventual spinout and seed funding. Nathan asks clarifying timeline questions in a collaborative manner.7:31–12:32 · Guest disagreement 5/10 MRR, Freemium Scale, and Regional Payment Realities Nathan presses Artem on standard SaaS math, insisting revenue and MRR are identical. Artem educates Nathan on regional Eastern European banking constraints where auto-recurring charges are uncommon and users must manually renew monthly.12:32–15:50 · Guest disagreement 2/10 Acquisition Metrics, Team Structure, and International Expansion When Artem admits he cannot calculate fully weighted CAC, Nathan breaks down a live formula using marketing headcount and ad spend to guide him. Artem supplies the unit economics and explains their analytics-driven ad spend reduction.15:50–18:16 · Guest disagreement 1/10 SaaS Infrastructure, Gross Margins, and 3x Year-over-Year Growth Artem details technical infrastructure, proxy costs, and database size. Nathan quickly calculates gross margins around 85-90% and confirms 3x year-over-year MRR expansion.18:16–21:01 · Guest disagreement 0/10 Sponsor Spotlight: Acuity Scheduling The segment includes a sponsor pitch for Acuity Scheduling followed by standard Famous Five questions and Nathan's final outro summary.0:58–4:40 · Nathan pushing back 5/10 Promotional Announcement for GetLatka Database Nathan interrupts Artem's claim of being the largest agency to challenge employee count as just a metric of cash burn rather than success. Artem defends the metric by explaining that revenue rankings are not publicly available in Eastern Europe.4:41–7:28 · Nathan pushing back 2/10 The Creation and Spinout of Serpstat Artem walks through the origin story of Serpstat as an internal tool within Netpeak and its eventual spinout and seed funding. Nathan asks clarifying timeline questions in a collaborative manner.7:31–12:32 · Nathan pushing back 7/10 MRR, Freemium Scale, and Regional Payment Realities Nathan presses Artem on standard SaaS math, insisting revenue and MRR are identical. Artem educates Nathan on regional Eastern European banking constraints where auto-recurring charges are uncommon and users must manually renew monthly.12:32–15:50 · Nathan pushing back 4/10 Acquisition Metrics, Team Structure, and International Expansion When Artem admits he cannot calculate fully weighted CAC, Nathan breaks down a live formula using marketing headcount and ad spend to guide him. Artem supplies the unit economics and explains their analytics-driven ad spend reduction.15:50–18:16 · Nathan pushing back 2/10 SaaS Infrastructure, Gross Margins, and 3x Year-over-Year Growth Artem details technical infrastructure, proxy costs, and database size. Nathan quickly calculates gross margins around 85-90% and confirms 3x year-over-year MRR expansion.18:16–21:01 · Nathan pushing back 1/10 Sponsor Spotlight: Acuity Scheduling The segment includes a sponsor pitch for Acuity Scheduling followed by standard Famous Five questions and Nathan's final outro summary.

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

0:00 · Nathan 83.8% · guest 16.2%0:00 · Nathan 83.8% · guest 16.2%3:00 · Nathan 23.9% · guest 76.1%3:00 · Nathan 23.9% · guest 76.1%6:00 · Nathan 33% · guest 67%6:00 · Nathan 33% · guest 67%9:00 · Nathan 36% · guest 64%9:00 · Nathan 36% · guest 64%12:00 · Nathan 43.4% · guest 56.6%12:00 · Nathan 43.4% · guest 56.6%15:00 · Nathan 35.5% · guest 64.5%15:00 · Nathan 35.5% · guest 64.5%18:00 · Nathan 68.2% · guest 31.8%18:00 · Nathan 68.2% · guest 31.8%21:00 · Nathan 98.6% · guest 1.4%21:00 · Nathan 98.6% · guest 1.4%
Sharpest disagreement ▶ 10:21 Refusing standard MRR definition

Artem pushes back against Nathan's division formula, firmly clarifying that revenue and recurring revenue cannot be conflated in his regional market.

 Hardest push from Nathan ▶ 10:30 Host demands explanation on revenue definition

Nathan bluntly challenges Artem's assertion, insisting that monthly revenue and monthly recurring revenue are the exact same concept.

 Biggest teaching moment ▶ 10:53 Explaining Ukrainian payment mechanics

Artem educates Nathan on why recurring auto-billing doesn't work standardly in Ukraine and Russia, explaining that users manually repurchase each cycle.

 Nathan holds their own ▶ 12:50 Deriving fully weighted CAC live

When Artem says he cannot compute customer acquisition costs, Nathan steps in with financial modeling to calculate their true acquisition cost on the spot.
the scores for every segment, with the reasoning behind each
ChapterTopicNathan as informed peerGuest teachingGuest disagreementNathan pushing backWhy
Promotional Announcement for GetLatka Database 5335 Nathan interrupts Artem's claim of being the largest agency to challenge employee count as just a metric of cash burn rather than success. Artem defends the metric by explaining that revenue rankings are not publicly available in Eastern Europe.
The Creation and Spinout of Serpstat 4212 Artem walks through the origin story of Serpstat as an internal tool within Netpeak and its eventual spinout and seed funding. Nathan asks clarifying timeline questions in a collaborative manner.
MRR, Freemium Scale, and Regional Payment Realities 5757 Nathan presses Artem on standard SaaS math, insisting revenue and MRR are identical. Artem educates Nathan on regional Eastern European banking constraints where auto-recurring charges are uncommon and users must manually renew monthly.
Acquisition Metrics, Team Structure, and International Expansion 7224 When Artem admits he cannot calculate fully weighted CAC, Nathan breaks down a live formula using marketing headcount and ad spend to guide him. Artem supplies the unit economics and explains their analytics-driven ad spend reduction.
SaaS Infrastructure, Gross Margins, and 3x Year-over-Year Growth 5212 Artem details technical infrastructure, proxy costs, and database size. Nathan quickly calculates gross margins around 85-90% and confirms 3x year-over-year MRR expansion.
Sponsor Spotlight: Acuity Scheduling 2101 The segment includes a sponsor pitch for Acuity Scheduling followed by standard Famous Five questions and Nathan's final outro summary.

Statements from this episode (13)

Assertion Not checkable as stated
Netpeak is Eastern Europe's largest SEO agency with 400+ employees
“And that big agency now is the largest SEO agency in Eastern Europe with more than 400 employees.”
Artem Borodatyuk Nov 13, 2017 ▶ 2:29
Assertion Not checkable as stated
Netpeak SEO agency generated $10M to $15M in 2016 revenue
“We between 10 and fifteen million, yeah.”
Artem Borodatyuk Nov 13, 2017 ▶ 4:38
Assertion Not checkable as stated
Serpstat began inside Netpeak agency with a $5,000 monthly burn rate
“We had money in net peak for sub start growth at the beginning, but we had no dedicated team. So it's, it was a 5000 dollar burn rate for this company. It's very easy. I mean, yeah, per month.”
Artem Borodatyuk Nov 13, 2017 ▶ 6:20
Assertion Supported
Serpstat raised $250,000 for 15% equity from Digital Future in 2016
“So in 2016, we received from local VC fund, Digital Future, 250,000 dollars for 15% stake of Serpstat.”
Artem Borodatyuk Nov 13, 2017 ▶ 6:59
Assertion Not checkable as stated
Serpstat approaches $1M ARR and profitability leveraging a Ukraine-based team
“Now we are near one million in our recruiting revenue, and we are profitable because we is, we are located in Ukraine, in Odessa, so we are very easy can hire best developers and-”
Artem Borodatyuk Nov 13, 2017 ▶ 7:15
Assertion Not checkable as stated
Serpstat reached $70,000 in monthly recurring revenue in late 2017
“We was 70 thousand K MRR last month.”
Artem Borodatyuk Nov 13, 2017 ▶ 7:58
Assertion Not checkable as stated
Serpstat employs 52 people, including 20 in its marketing department
“We have 20 52 employees in Serpstat, and almost 20 employees in our marketing department.”
Artem Borodatyuk Nov 13, 2017 ▶ 8:43
Assertion Not checkable as stated
Serpstat serves up to 2,000 paid customers and 120,000 free users
“I cannot share your exact number, but it's between 1000 to 2000 customers, paid customers. And we have 100 20 K users on premium model.”
Artem Borodatyuk Nov 13, 2017 ▶ 9:35
Assertion Not checkable as stated
Serpstat reports a month-over-month user churn rate of 1% to 3%
“Month over month, we lose near one, three percent of our users.”
Artem Borodatyuk Nov 13, 2017 ▶ 12:00
Assertion Not checkable as stated
Serpstat converts free users to paid for a $20 acquisition cost
“If you want such formula, we will pay a near two dollars per one registration. We need 10, 10 registration to have one customer. So we pay 20 dollars.”
Artem Borodatyuk Nov 13, 2017 ▶ 13:13
Assertion Not checkable as stated
Serpstat estimates its average customer lifetime value at $500
“We have LTV in our admin system and we got near 500 dollars. It's our lifetime value.”
Artem Borodatyuk Nov 13, 2017 ▶ 13:50
Assertion Not checkable as stated
Serpstat cut Google ad spend by 80% using proprietary web analytics
“We spent near 10,000 dollars per month to Google AdWords, and then we created very interesting system for web analytics and we cut 80% of our spends. So we spent right now only 2000 dollars per month and save this almost everything that we got from the Google …”
Artem Borodatyuk Nov 13, 2017 ▶ 14:18
Disclosure
Founder Artem Borodatyuk plans US relocation and Canadian sales hires
“We have plan to expand globally, and we will hire salespersons in Canada in our plan, and I will switch my place where I live, and we'll go to U.S.”
Artem Borodatyuk Nov 13, 2017 ▶ 15:37
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