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Sep 15, 2017 · 26m · top-founders

783: SaaS: Here's How RFP Scout 3x YoY to $1.2m+ in MRR

Nathan Latka · 12m spoken Alex Yakubovich · 11m spoken
0:00 / 0:00

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In this episode of The Top, host Nathan Latka interviews Alex Yakubovich, co-founder and CEO of Scout RFP, examining how the enterprise procurement SaaS platform scaled past $1.2 million in monthly recurring revenue with $27 million in venture funding and strong 17% net negative revenue churn.

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 51.5% of the talking time here. How this is scored →

Nathan as informed peer 6.0 Guest teaching 1.8 Guest disagreement 1.4 Nathan pushing back 3.3
05100:0010:0020:002:51–5:56 · Nathan as informed peer 6/10 Scout RFP Product Overview and Enterprise Use Cases Latka pushes past product feature explanations to get directly into SaaS pricing metrics. He rapidly converts the annual seat pricing into monthly figures to establish contract economics.5:57–8:17 · Nathan as informed peer 5/10 Venture Capital Strategy and Capital Allocation Latka explores why a previously bootstrapped founder opted to raise venture capital and drills down into team headcount distribution between engineering and go-to-market.8:17–10:26 · Nathan as informed peer 5/10 Prior Exit to LivingSocial and Scout RFP Origin Latka probes the financial psychology following Yakubovich's prior eight-figure exit to LivingSocial and how that safety net alters entrepreneurial risk tolerance.10:26–15:06 · Nathan as informed peer 6/10 Customer Accounts, User Licensing, and Platform Scale Latka refuses vague user figures, pressing the guest to isolate paid company logos and active paid seats from free participants across the RFP ecosystem.15:06–17:15 · Nathan as informed peer 7/10 Net Negative Revenue Churn and Team Allocation When Yakubovich hesitates on exact logo churn, Latka tells him not to make it up and steers the conversation into net revenue expansion math, calculating exact contract trajectory.17:16–21:12 · Nathan as informed peer 7/10 Enterprise Unit Economics, CAC Payback, and Paid Ads Latka challenges generic CAC-to-LTV claims by demanding the payback window and ensuring marketing acquisition costs include fully loaded operational expenses.21:12–23:51 · Nathan as informed peer 8/10 SaaS Gross Margins and Triple-Digit Annual Growth Latka synthesizes previously shared customer and seat numbers to calculate an implied $1.2M+ MRR run rate, checking whether the company's 3x goal applies to MRR or ARR.23:52–26:10 · Nathan as informed peer 4/10 The Famous Five Questions with Alex Yakubovich Standard Famous Five lightning round with personal details and light banter about sleep schedules with a newborn.2:51–5:56 · Guest teaching 2/10 Scout RFP Product Overview and Enterprise Use Cases Latka pushes past product feature explanations to get directly into SaaS pricing metrics. He rapidly converts the annual seat pricing into monthly figures to establish contract economics.5:57–8:17 · Guest teaching 2/10 Venture Capital Strategy and Capital Allocation Latka explores why a previously bootstrapped founder opted to raise venture capital and drills down into team headcount distribution between engineering and go-to-market.8:17–10:26 · Guest teaching 2/10 Prior Exit to LivingSocial and Scout RFP Origin Latka probes the financial psychology following Yakubovich's prior eight-figure exit to LivingSocial and how that safety net alters entrepreneurial risk tolerance.10:26–15:06 · Guest teaching 3/10 Customer Accounts, User Licensing, and Platform Scale Latka refuses vague user figures, pressing the guest to isolate paid company logos and active paid seats from free participants across the RFP ecosystem.15:06–17:15 · Guest teaching 1/10 Net Negative Revenue Churn and Team Allocation When Yakubovich hesitates on exact logo churn, Latka tells him not to make it up and steers the conversation into net revenue expansion math, calculating exact contract trajectory.17:16–21:12 · Guest teaching 2/10 Enterprise Unit Economics, CAC Payback, and Paid Ads Latka challenges generic CAC-to-LTV claims by demanding the payback window and ensuring marketing acquisition costs include fully loaded operational expenses.21:12–23:51 · Guest teaching 1/10 SaaS Gross Margins and Triple-Digit Annual Growth Latka synthesizes previously shared customer and seat numbers to calculate an implied $1.2M+ MRR run rate, checking whether the company's 3x goal applies to MRR or ARR.23:52–26:10 · Guest teaching 1/10 The Famous Five Questions with Alex Yakubovich Standard Famous Five lightning round with personal details and light banter about sleep schedules with a newborn.2:51–5:56 · Guest disagreement 1/10 Scout RFP Product Overview and Enterprise Use Cases Latka pushes past product feature explanations to get directly into SaaS pricing metrics. He rapidly converts the annual seat pricing into monthly figures to establish contract economics.5:57–8:17 · Guest disagreement 1/10 Venture Capital Strategy and Capital Allocation Latka explores why a previously bootstrapped founder opted to raise venture capital and drills down into team headcount distribution between engineering and go-to-market.8:17–10:26 · Guest disagreement 1/10 Prior Exit to LivingSocial and Scout RFP Origin Latka probes the financial psychology following Yakubovich's prior eight-figure exit to LivingSocial and how that safety net alters entrepreneurial risk tolerance.10:26–15:06 · Guest disagreement 2/10 Customer Accounts, User Licensing, and Platform Scale Latka refuses vague user figures, pressing the guest to isolate paid company logos and active paid seats from free participants across the RFP ecosystem.15:06–17:15 · Guest disagreement 2/10 Net Negative Revenue Churn and Team Allocation When Yakubovich hesitates on exact logo churn, Latka tells him not to make it up and steers the conversation into net revenue expansion math, calculating exact contract trajectory.17:16–21:12 · Guest disagreement 1/10 Enterprise Unit Economics, CAC Payback, and Paid Ads Latka challenges generic CAC-to-LTV claims by demanding the payback window and ensuring marketing acquisition costs include fully loaded operational expenses.21:12–23:51 · Guest disagreement 2/10 SaaS Gross Margins and Triple-Digit Annual Growth Latka synthesizes previously shared customer and seat numbers to calculate an implied $1.2M+ MRR run rate, checking whether the company's 3x goal applies to MRR or ARR.23:52–26:10 · Guest disagreement 1/10 The Famous Five Questions with Alex Yakubovich Standard Famous Five lightning round with personal details and light banter about sleep schedules with a newborn.2:51–5:56 · Nathan pushing back 3/10 Scout RFP Product Overview and Enterprise Use Cases Latka pushes past product feature explanations to get directly into SaaS pricing metrics. He rapidly converts the annual seat pricing into monthly figures to establish contract economics.5:57–8:17 · Nathan pushing back 2/10 Venture Capital Strategy and Capital Allocation Latka explores why a previously bootstrapped founder opted to raise venture capital and drills down into team headcount distribution between engineering and go-to-market.8:17–10:26 · Nathan pushing back 2/10 Prior Exit to LivingSocial and Scout RFP Origin Latka probes the financial psychology following Yakubovich's prior eight-figure exit to LivingSocial and how that safety net alters entrepreneurial risk tolerance.10:26–15:06 · Nathan pushing back 4/10 Customer Accounts, User Licensing, and Platform Scale Latka refuses vague user figures, pressing the guest to isolate paid company logos and active paid seats from free participants across the RFP ecosystem.15:06–17:15 · Nathan pushing back 5/10 Net Negative Revenue Churn and Team Allocation When Yakubovich hesitates on exact logo churn, Latka tells him not to make it up and steers the conversation into net revenue expansion math, calculating exact contract trajectory.17:16–21:12 · Nathan pushing back 4/10 Enterprise Unit Economics, CAC Payback, and Paid Ads Latka challenges generic CAC-to-LTV claims by demanding the payback window and ensuring marketing acquisition costs include fully loaded operational expenses.21:12–23:51 · Nathan pushing back 5/10 SaaS Gross Margins and Triple-Digit Annual Growth Latka synthesizes previously shared customer and seat numbers to calculate an implied $1.2M+ MRR run rate, checking whether the company's 3x goal applies to MRR or ARR.23:52–26:10 · Nathan pushing back 1/10 The Famous Five Questions with Alex Yakubovich Standard Famous Five lightning round with personal details and light banter about sleep schedules with a newborn.

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

0:00 · Nathan 97.6% · guest 2.4%0:00 · Nathan 97.6% · guest 2.4%3:00 · Nathan 23.9% · guest 76.1%3:00 · Nathan 23.9% · guest 76.1%6:00 · Nathan 36.3% · guest 63.7%6:00 · Nathan 36.3% · guest 63.7%9:00 · Nathan 24.2% · guest 75.8%9:00 · Nathan 24.2% · guest 75.8%12:00 · Nathan 22.9% · guest 77.1%12:00 · Nathan 22.9% · guest 77.1%15:00 · Nathan 53.9% · guest 46.1%15:00 · Nathan 53.9% · guest 46.1%18:00 · Nathan 45.1% · guest 54.9%18:00 · Nathan 45.1% · guest 54.9%21:00 · Nathan 84.3% · guest 15.7%21:00 · Nathan 84.3% · guest 15.7%24:00 · Nathan 81.6% · guest 18.4%24:00 · Nathan 81.6% · guest 18.4%
Sharpest disagreement ▶ 22:04 Pushing back on MRR extrapolation

Yakubovich steps in to clarify that the company's 3x annual target does not translate directly to $3M in MRR, pushing back on Latka's rapid extrapolation.

 Hardest push from Nathan ▶ 15:29 Calling out uncertain churn estimates

Latka interrupts Yakubovich's hesitation around gross churn by firmly advising him not to guess if he doesn't know the exact logo churn figure offhand.

 Biggest teaching moment ▶ 11:38 Explaining the difference between RFP participants and paid seats

Yakubovich explains the architecture of the platform where tens of thousands of free suppliers interact while paid seats remain concentrated among internal enterprise buyers.

 Nathan holds their own ▶ 21:52 Live SaaS revenue triangulation

Latka demonstrates deep financial SaaS fluency by instantly multiplying 3,000 seats by $417 per month to deduce Scout RFP's $1.2M+ monthly revenue benchmark.
the scores for every segment, with the reasoning behind each
ChapterTopicNathan as informed peerGuest teachingGuest disagreementNathan pushing backWhy
Scout RFP Product Overview and Enterprise Use Cases 6213 Latka pushes past product feature explanations to get directly into SaaS pricing metrics. He rapidly converts the annual seat pricing into monthly figures to establish contract economics.
Venture Capital Strategy and Capital Allocation 5212 Latka explores why a previously bootstrapped founder opted to raise venture capital and drills down into team headcount distribution between engineering and go-to-market.
Prior Exit to LivingSocial and Scout RFP Origin 5212 Latka probes the financial psychology following Yakubovich's prior eight-figure exit to LivingSocial and how that safety net alters entrepreneurial risk tolerance.
Customer Accounts, User Licensing, and Platform Scale 6324 Latka refuses vague user figures, pressing the guest to isolate paid company logos and active paid seats from free participants across the RFP ecosystem.
Net Negative Revenue Churn and Team Allocation 7125 When Yakubovich hesitates on exact logo churn, Latka tells him not to make it up and steers the conversation into net revenue expansion math, calculating exact contract trajectory.
Enterprise Unit Economics, CAC Payback, and Paid Ads 7214 Latka challenges generic CAC-to-LTV claims by demanding the payback window and ensuring marketing acquisition costs include fully loaded operational expenses.
SaaS Gross Margins and Triple-Digit Annual Growth 8125 Latka synthesizes previously shared customer and seat numbers to calculate an implied $1.2M+ MRR run rate, checking whether the company's 3x goal applies to MRR or ARR.
The Famous Five Questions with Alex Yakubovich 4111 Standard Famous Five lightning round with personal details and light banter about sleep schedules with a newborn.

Statements from this episode (18)

Disclosure
Scout RFP charges per user only for internal buyers running bids
“We only charge for the buyers, the individuals within the organization that are actually running the bids and it's a per subscriber basis, so per user per month”
Alex Yakubovich Sep 15, 2017 ▶ 4:42
Disclosure
Scout RFP averages $5,000 per year per user seat
“Our, I would say our average users are paying somewhere around 5000 dollars per year.”
Alex Yakubovich Sep 15, 2017 ▶ 5:34
Disclosure
Scout RFP sells exclusively on annual contracts
“All annual.”
Alex Yakubovich Sep 15, 2017 ▶ 5:52
Assertion Partly supported
Scout RFP has raised nearly $28 million in venture funding
“27, five to eight.”
Alex Yakubovich Sep 15, 2017 ▶ 6:07
Assertion Supported
Yakubovich's previous startup was mostly bootstrapped with $500,000 in funding
“So our, as you may have seen our last company did we did mostly bootstrapping. We only raised half a million dollars.”
Alex Yakubovich Sep 15, 2017 ▶ 6:27
Assertion Not checkable as stated
Scout RFP splits headcount evenly between product and go-to-market teams
“Now we're about 50, 50 between product, not just engineers, but like all of our product group and then our go to market side. So sales marketing, et cetera.”
Alex Yakubovich Sep 15, 2017 ▶ 7:57
Assertion Supported
Yakubovich's first bootstrapped startup sold to LivingSocial for tens of millions
“It was in the tens of millions.”
Alex Yakubovich Sep 15, 2017 ▶ 8:29
Disclosure
Former LivingSocial CEO Tim O'Shaughnessy is an angel investor in Scout RFP
“And Tim O'Shaughnessy, who's the CEO there at the time he, he's an investor in Scab as well.”
Alex Yakubovich Sep 15, 2017 ▶ 10:17
Assertion Not checkable as stated
Scout RFP has just under 100 paying enterprise customers
“In terms of, like, companies using the platform, we're, like, well over a hundred, and then it's, like, 90, like, high nineties in the paying customers.”
Alex Yakubovich Sep 15, 2017 ▶ 10:48
Assertion Not checkable as stated
Scout RFP uses industry networking groups to drive peer customer acquisition
“Being part of it has definitely helped us to get customers, just because a lot of our customers go to it, and then they talk to one another as a part of the thing.”
Alex Yakubovich Sep 15, 2017 ▶ 13:57
Assertion Not checkable as stated
Scout RFP maintains an elite 17% net negative revenue churn
“We have a 17% net negative churn.”
Alex Yakubovich Sep 15, 2017 ▶ 16:00
Assertion Not checkable as stated
Scout RFP customer lifetime value sits in the six figures
“Yeah, I don't want to make up the number right away, but it's in the six figures per customer.”
Alex Yakubovich Sep 15, 2017 ▶ 17:40
Assertion Not checkable as stated
Scout RFP averages approximately 10 user seats per enterprise customer
“No, it's like closer to 10 seats per customer.”
Alex Yakubovich Sep 15, 2017 ▶ 18:34
Assertion Not checkable as stated
Scout RFP maintains an LTV to CAC ratio of 3:1
“I couldn't tell you like our off the shelf hack thing, but like our, it's right around three for our, Cacto LTV ratio.”
Alex Yakubovich Sep 15, 2017 ▶ 18:57
Disclosure
Scout RFP targets a customer acquisition payback period of 15 months
“We try to keep it right around 1515 months.”
Alex Yakubovich Sep 15, 2017 ▶ 19:25
Assertion Not checkable as stated
Scout RFP spends roughly $40,000 per month on paid acquisition
“I mean, just like maybe ballpark, 40 grand a month.”
Alex Yakubovich Sep 15, 2017 ▶ 20:34
Disclosure
Scout RFP tripled revenue in 2016 and targets 3x growth in 2017
“We're, I, I'll just say that, like, we tripled last year. We're looking to triple again this year, so.”
Alex Yakubovich Sep 15, 2017 ▶ 21:41
Assertion Not checkable as stated
Scout RFP exceeds $1.2 million in monthly recurring revenue
“We are.”
Alex Yakubovich Sep 15, 2017 ▶ 22:17
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