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Sep 24, 2017 · 23m · top-founders

792: SaaS: $7m ARR Founder Used Ice Cream To Get Customers, How?

C. Lee Smith · 12m spoken Nathan Latka · 8m 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," host Nathan Latka interviews SalesFuel founder C. Lee Smith to examine how the company scaled to over $6 million in ARR as a completely bootstrapped B2B SaaS platform. Smith shares his strategies on sustainable growth, 98% customer retention, unconventional account-based marketing, and value-driven whole-team pricing.

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 4.8 Guest teaching 1.8 Guest disagreement 1.0 Nathan pushing back 2.8
05100:0010:0020:003:33–6:24 · Nathan as informed peer 5/10 SaaS Product Overview and Revenue Architecture Latka drills into revenue generation across product lines and clarifies team size breakdowns while Smith shares anecdotes about early internet adoption.6:24–9:04 · Nathan as informed peer 7/10 Pricing Philosophy and Customer Base Metrics Latka pushes past vague pricing explanations by demanding customer counts and executing rapid mental math to calculate average revenue per account.9:04–12:01 · Nathan as informed peer 4/10 Closing Enterprise Accounts with Artisan Ice Cream The conversation turns collaborative and lighthearted as Smith details sending artisan dry-iced ice cream to close a Utah prospect.12:01–14:31 · Nathan as informed peer 4/10 The Bootstrapping Journey and Revenue Growth Milestones Latka steps through historical revenue figures from 1989 through 2016 as Smith reflects on bootstrapping and why the first million is the hardest.14:32–19:34 · Nathan as informed peer 6/10 Sustaining High Retention and Grandfathered Pricing Strategy Latka questions whether a 98% retention rate is logo or net revenue retention, prompting Smith to defend his grandfathered pricing model.19:35–22:41 · Nathan as informed peer 3/10 Sponsor Announcement: TheTopInbox Acquisition and Features Latka delivers a sponsor ad for TheTopInbox before transitioning into standard Famous Five wrap-up questions.3:33–6:24 · Guest teaching 2/10 SaaS Product Overview and Revenue Architecture Latka drills into revenue generation across product lines and clarifies team size breakdowns while Smith shares anecdotes about early internet adoption.6:24–9:04 · Guest teaching 1/10 Pricing Philosophy and Customer Base Metrics Latka pushes past vague pricing explanations by demanding customer counts and executing rapid mental math to calculate average revenue per account.9:04–12:01 · Guest teaching 2/10 Closing Enterprise Accounts with Artisan Ice Cream The conversation turns collaborative and lighthearted as Smith details sending artisan dry-iced ice cream to close a Utah prospect.12:01–14:31 · Guest teaching 2/10 The Bootstrapping Journey and Revenue Growth Milestones Latka steps through historical revenue figures from 1989 through 2016 as Smith reflects on bootstrapping and why the first million is the hardest.14:32–19:34 · Guest teaching 3/10 Sustaining High Retention and Grandfathered Pricing Strategy Latka questions whether a 98% retention rate is logo or net revenue retention, prompting Smith to defend his grandfathered pricing model.19:35–22:41 · Guest teaching 1/10 Sponsor Announcement: TheTopInbox Acquisition and Features Latka delivers a sponsor ad for TheTopInbox before transitioning into standard Famous Five wrap-up questions.3:33–6:24 · Guest disagreement 1/10 SaaS Product Overview and Revenue Architecture Latka drills into revenue generation across product lines and clarifies team size breakdowns while Smith shares anecdotes about early internet adoption.6:24–9:04 · Guest disagreement 2/10 Pricing Philosophy and Customer Base Metrics Latka pushes past vague pricing explanations by demanding customer counts and executing rapid mental math to calculate average revenue per account.9:04–12:01 · Guest disagreement 0/10 Closing Enterprise Accounts with Artisan Ice Cream The conversation turns collaborative and lighthearted as Smith details sending artisan dry-iced ice cream to close a Utah prospect.12:01–14:31 · Guest disagreement 1/10 The Bootstrapping Journey and Revenue Growth Milestones Latka steps through historical revenue figures from 1989 through 2016 as Smith reflects on bootstrapping and why the first million is the hardest.14:32–19:34 · Guest disagreement 2/10 Sustaining High Retention and Grandfathered Pricing Strategy Latka questions whether a 98% retention rate is logo or net revenue retention, prompting Smith to defend his grandfathered pricing model.19:35–22:41 · Guest disagreement 0/10 Sponsor Announcement: TheTopInbox Acquisition and Features Latka delivers a sponsor ad for TheTopInbox before transitioning into standard Famous Five wrap-up questions.3:33–6:24 · Nathan pushing back 3/10 SaaS Product Overview and Revenue Architecture Latka drills into revenue generation across product lines and clarifies team size breakdowns while Smith shares anecdotes about early internet adoption.6:24–9:04 · Nathan pushing back 6/10 Pricing Philosophy and Customer Base Metrics Latka pushes past vague pricing explanations by demanding customer counts and executing rapid mental math to calculate average revenue per account.9:04–12:01 · Nathan pushing back 1/10 Closing Enterprise Accounts with Artisan Ice Cream The conversation turns collaborative and lighthearted as Smith details sending artisan dry-iced ice cream to close a Utah prospect.12:01–14:31 · Nathan pushing back 2/10 The Bootstrapping Journey and Revenue Growth Milestones Latka steps through historical revenue figures from 1989 through 2016 as Smith reflects on bootstrapping and why the first million is the hardest.14:32–19:34 · Nathan pushing back 5/10 Sustaining High Retention and Grandfathered Pricing Strategy Latka questions whether a 98% retention rate is logo or net revenue retention, prompting Smith to defend his grandfathered pricing model.19:35–22:41 · Nathan pushing back 0/10 Sponsor Announcement: TheTopInbox Acquisition and Features Latka delivers a sponsor ad for TheTopInbox before transitioning into standard Famous Five wrap-up questions.

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

0:00 · Nathan 89.1% · guest 10.9%0:00 · Nathan 89.1% · guest 10.9%3:00 · Nathan 24.9% · guest 75.1%3:00 · Nathan 24.9% · guest 75.1%6:00 · Nathan 35.2% · guest 64.8%6:00 · Nathan 35.2% · guest 64.8%9:00 · Nathan 14.1% · guest 85.9%9:00 · Nathan 14.1% · guest 85.9%12:00 · Nathan 23.6% · guest 76.4%12:00 · Nathan 23.6% · guest 76.4%15:00 · Nathan 32.6% · guest 67.4%15:00 · Nathan 32.6% · guest 67.4%18:00 · Nathan 57% · guest 43%18:00 · Nathan 57% · guest 43%21:00 · Nathan 46.1% · guest 53.9%21:00 · Nathan 46.1% · guest 53.9%
Sharpest disagreement ▶ 15:03 Defending 98 percent logo retention

Smith firmly pushes back against Latka's skepticism, insisting he is absolutely positive that retention is measured by client logos rather than revenue.

 Hardest push from Nathan ▶ 6:41 Refusing vague pricing generalities

Latka cuts off Smith's broad descriptions of small media stations to redirect him specifically into core enterprise contract pricing.

 Biggest teaching moment ▶ 7:51 Explaining non-seat tiered pricing

Smith explains why standard per-seat licensing fails in media and breaks down his team-tier and media-type pricing structure.

 Nathan holds their own ▶ 8:21 Instantaneous ARPU calculation

Latka demonstrates sharp domain mastery by computing monthly recurring revenue and average customer deal sizes in real time from Smith's high-level numbers.
the scores for every segment, with the reasoning behind each
ChapterTopicNathan as informed peerGuest teachingGuest disagreementNathan pushing backWhy
SaaS Product Overview and Revenue Architecture 5213 Latka drills into revenue generation across product lines and clarifies team size breakdowns while Smith shares anecdotes about early internet adoption.
Pricing Philosophy and Customer Base Metrics 7126 Latka pushes past vague pricing explanations by demanding customer counts and executing rapid mental math to calculate average revenue per account.
Closing Enterprise Accounts with Artisan Ice Cream 4201 The conversation turns collaborative and lighthearted as Smith details sending artisan dry-iced ice cream to close a Utah prospect.
The Bootstrapping Journey and Revenue Growth Milestones 4212 Latka steps through historical revenue figures from 1989 through 2016 as Smith reflects on bootstrapping and why the first million is the hardest.
Sustaining High Retention and Grandfathered Pricing Strategy 6325 Latka questions whether a 98% retention rate is logo or net revenue retention, prompting Smith to defend his grandfathered pricing model.
Sponsor Announcement: TheTopInbox Acquisition and Features 3100 Latka delivers a sponsor ad for TheTopInbox before transitioning into standard Famous Five wrap-up questions.

Statements from this episode (9)

Insight
Smith: Effective sales closers are rarely bad at customer discovery
“It's rare that you have somebody that's a good closer that, that, that really is not very good in the discovery process. That's really where you get all your leverage in the discovery process.”
C. Lee Smith Sep 24, 2017 ▶ 3:10
Disclosure
SalesFuel generated between $6M and $10M in 2016 revenue
“Let's say it's between six and 10.”
C. Lee Smith Sep 24, 2017 ▶ 5:11
Insight
Why SalesFuel avoids per-seat pricing for its SaaS product
“Our pricing model is a subscription base and it's based on the size of the sales team. And what we don't do is we don't do a per seat license because then we don't want people to cherry pick and say, okay, I want this sales person, but not that sales person. W…”
C. Lee Smith Sep 24, 2017 ▶ 6:51
Assertion Not checkable as stated
Smith: SalesFuel has 1,500 paying customers
“1500.”
C. Lee Smith Sep 24, 2017 ▶ 8:22
Disclosure
Smith sent artisan ice cream on dry ice to win a deal
“I actually sent a bunch of ice cream packed in dry ice just to get a return phone call or like that. So I got the return phone call, which was a thank you, which led into a sales discussion. And that's probably the weirdest thing I've done lately to get a sale…”
C. Lee Smith Sep 24, 2017 ▶ 10:03
Disclosure
SalesFuel reached $6M to $10M in revenue without outside capital
“Still bootstrapped a hundred percent.”
C. Lee Smith Sep 24, 2017 ▶ 12:28
Assertion Not checkable as stated
SalesFuel maintains an exceptional 98 percent annual client logo retention rate
“Our retention rate year over year is 98, is above 98%. That's, that is client retention.”
C. Lee Smith Sep 24, 2017 ▶ 14:38
Disclosure
SalesFuel still grandfathers 15-year-old clients at their original pricing
“Typically how we do is like, we have somebody who was a client of ours, 15 years ago, and we have several of them. They're still paying the same rate that they were paying 15 years ago.”
C. Lee Smith Sep 24, 2017 ▶ 15:37
Disclosure
Smith: SalesFuel spends over $250k yearly on research and content marketing
“Probably see for just those three things, I would say in excess of a quarter of a million dollars a year.”
C. Lee Smith Sep 24, 2017 ▶ 17:19
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