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Sep 8, 2017 · 18m · top-founders

776: TextingBase Shares Margins, Cap Table, Valuation, More

Eric Beans · 8m 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

Nathan Latka interviews TextingBase founder Eric Beans on scaling a personalized SMS marketing SaaS platform to $25,000 in monthly recurring revenue with 78% gross margins. Beans discusses bootstrapping development, negotiating telecommunication volume pricing, acquiring customers efficiently, and leveraging strategic angel investors.

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 47.7% of the talking time here. How this is scored →

Nathan as informed peer 5.2 Guest teaching 1.4 Guest disagreement 1.0 Nathan pushing back 3.2
05100:0010:002:56–5:14 · Nathan as informed peer 5/10 TextingBase Platform Overview, Pricing, and Monthly Revenue Nathan asks foundational SaaS metrics questions regarding pricing tiers, customer count, and calculates monthly revenue. Eric readily confirms the figures and shares his cap table and investor background in an agreeable manner.5:14–9:14 · Nathan as informed peer 8/10 Cost Structure, Gross Margins, and Twilio Volume Pricing Nathan actively challenges Eric's definition of gross margin when Eric cites a 566% markup rather than a standard 0-100% margin figure. Nathan systematically reconstructs the above-the-line cost structure including Twilio fees, servers, and payment processing to deduce the true 78% margin.9:14–11:24 · Nathan as informed peer 4/10 Founding Origins, Team Composition, and Early Go-To-Market Eric explains the founding timeline, team structure, and initial cold outbound strategy targeting mortgage brokers. Nathan pushes for specific third-party data providers, though Eric cannot recall the exact vendor.11:25–14:10 · Nathan as informed peer 6/10 Acquisition Costs, Retention Metrics, and Cap Table Breakdown Nathan walks through annual compounding churn math to clarify Eric's monthly churn rate. Nathan then probes into paid acquisition spend and restructures the exact percentage allocation of the cap table.14:10–17:43 · Nathan as informed peer 3/10 Sponsor Segment: TheTopInbox.com Acquisition and Playbook Nathan delivers a mid-roll acquisition promo for TheTopInbox before transitioning into the Famous Five rapid-fire format. When Eric playfully dodges the tool question by naming his own product, Nathan pushes him to name an actual third-party operational tool.2:56–5:14 · Guest teaching 1/10 TextingBase Platform Overview, Pricing, and Monthly Revenue Nathan asks foundational SaaS metrics questions regarding pricing tiers, customer count, and calculates monthly revenue. Eric readily confirms the figures and shares his cap table and investor background in an agreeable manner.5:14–9:14 · Guest teaching 1/10 Cost Structure, Gross Margins, and Twilio Volume Pricing Nathan actively challenges Eric's definition of gross margin when Eric cites a 566% markup rather than a standard 0-100% margin figure. Nathan systematically reconstructs the above-the-line cost structure including Twilio fees, servers, and payment processing to deduce the true 78% margin.9:14–11:24 · Guest teaching 2/10 Founding Origins, Team Composition, and Early Go-To-Market Eric explains the founding timeline, team structure, and initial cold outbound strategy targeting mortgage brokers. Nathan pushes for specific third-party data providers, though Eric cannot recall the exact vendor.11:25–14:10 · Guest teaching 2/10 Acquisition Costs, Retention Metrics, and Cap Table Breakdown Nathan walks through annual compounding churn math to clarify Eric's monthly churn rate. Nathan then probes into paid acquisition spend and restructures the exact percentage allocation of the cap table.14:10–17:43 · Guest teaching 1/10 Sponsor Segment: TheTopInbox.com Acquisition and Playbook Nathan delivers a mid-roll acquisition promo for TheTopInbox before transitioning into the Famous Five rapid-fire format. When Eric playfully dodges the tool question by naming his own product, Nathan pushes him to name an actual third-party operational tool.2:56–5:14 · Guest disagreement 0/10 TextingBase Platform Overview, Pricing, and Monthly Revenue Nathan asks foundational SaaS metrics questions regarding pricing tiers, customer count, and calculates monthly revenue. Eric readily confirms the figures and shares his cap table and investor background in an agreeable manner.5:14–9:14 · Guest disagreement 2/10 Cost Structure, Gross Margins, and Twilio Volume Pricing Nathan actively challenges Eric's definition of gross margin when Eric cites a 566% markup rather than a standard 0-100% margin figure. Nathan systematically reconstructs the above-the-line cost structure including Twilio fees, servers, and payment processing to deduce the true 78% margin.9:14–11:24 · Guest disagreement 1/10 Founding Origins, Team Composition, and Early Go-To-Market Eric explains the founding timeline, team structure, and initial cold outbound strategy targeting mortgage brokers. Nathan pushes for specific third-party data providers, though Eric cannot recall the exact vendor.11:25–14:10 · Guest disagreement 1/10 Acquisition Costs, Retention Metrics, and Cap Table Breakdown Nathan walks through annual compounding churn math to clarify Eric's monthly churn rate. Nathan then probes into paid acquisition spend and restructures the exact percentage allocation of the cap table.14:10–17:43 · Guest disagreement 1/10 Sponsor Segment: TheTopInbox.com Acquisition and Playbook Nathan delivers a mid-roll acquisition promo for TheTopInbox before transitioning into the Famous Five rapid-fire format. When Eric playfully dodges the tool question by naming his own product, Nathan pushes him to name an actual third-party operational tool.2:56–5:14 · Nathan pushing back 1/10 TextingBase Platform Overview, Pricing, and Monthly Revenue Nathan asks foundational SaaS metrics questions regarding pricing tiers, customer count, and calculates monthly revenue. Eric readily confirms the figures and shares his cap table and investor background in an agreeable manner.5:14–9:14 · Nathan pushing back 7/10 Cost Structure, Gross Margins, and Twilio Volume Pricing Nathan actively challenges Eric's definition of gross margin when Eric cites a 566% markup rather than a standard 0-100% margin figure. Nathan systematically reconstructs the above-the-line cost structure including Twilio fees, servers, and payment processing to deduce the true 78% margin.9:14–11:24 · Nathan pushing back 3/10 Founding Origins, Team Composition, and Early Go-To-Market Eric explains the founding timeline, team structure, and initial cold outbound strategy targeting mortgage brokers. Nathan pushes for specific third-party data providers, though Eric cannot recall the exact vendor.11:25–14:10 · Nathan pushing back 3/10 Acquisition Costs, Retention Metrics, and Cap Table Breakdown Nathan walks through annual compounding churn math to clarify Eric's monthly churn rate. Nathan then probes into paid acquisition spend and restructures the exact percentage allocation of the cap table.14:10–17:43 · Nathan pushing back 2/10 Sponsor Segment: TheTopInbox.com Acquisition and Playbook Nathan delivers a mid-roll acquisition promo for TheTopInbox before transitioning into the Famous Five rapid-fire format. When Eric playfully dodges the tool question by naming his own product, Nathan pushes him to name an actual third-party operational tool.

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

0:00 · Nathan 82.8% · guest 17.2%0:00 · Nathan 82.8% · guest 17.2%3:00 · Nathan 24.7% · guest 75.3%3:00 · Nathan 24.7% · guest 75.3%6:00 · Nathan 45% · guest 55%6:00 · Nathan 45% · guest 55%9:00 · Nathan 28.4% · guest 71.6%9:00 · Nathan 28.4% · guest 71.6%12:00 · Nathan 48.7% · guest 51.3%12:00 · Nathan 48.7% · guest 51.3%15:00 · Nathan 43.4% · guest 56.6%15:00 · Nathan 43.4% · guest 56.6%18:00 · Nathan 100% · guest 0%18:00 · Nathan 100% · guest 0%
Sharpest disagreement ▶ 16:26 Guest refuses to name external software tool

Eric deflects Nathan's standard question about favorite operational tools by insisting on naming his own product before Nathan forces him to name an external tool.

 Hardest push from Nathan ▶ 5:46 Nathan rejects non-standard gross margin definition

Nathan immediately halts the conversation when Eric claims a 566% gross margin, reminding him that margin cannot exceed 100% and demanding a proper breakdown.

 Biggest teaching moment ▶ 8:06 Eric details Twilio wholesale volume pricing tiers

Eric educates Nathan on how TextingBase achieved a 0.06 cent per message rate by committing to volume contracts rather than standard rack rates.

 Nathan holds their own ▶ 7:26 Nathan derives complete gross margin from cost components

Nathan calculates total monthly costs across Twilio fees, hosting servers, and credit card processing, prompting Eric to admit Nathan did the financial modeling better than he could.
the scores for every segment, with the reasoning behind each
ChapterTopicNathan as informed peerGuest teachingGuest disagreementNathan pushing backWhy
TextingBase Platform Overview, Pricing, and Monthly Revenue 5101 Nathan asks foundational SaaS metrics questions regarding pricing tiers, customer count, and calculates monthly revenue. Eric readily confirms the figures and shares his cap table and investor background in an agreeable manner.
Cost Structure, Gross Margins, and Twilio Volume Pricing 8127 Nathan actively challenges Eric's definition of gross margin when Eric cites a 566% markup rather than a standard 0-100% margin figure. Nathan systematically reconstructs the above-the-line cost structure including Twilio fees, servers, and payment processing to deduce the true 78% margin.
Founding Origins, Team Composition, and Early Go-To-Market 4213 Eric explains the founding timeline, team structure, and initial cold outbound strategy targeting mortgage brokers. Nathan pushes for specific third-party data providers, though Eric cannot recall the exact vendor.
Acquisition Costs, Retention Metrics, and Cap Table Breakdown 6213 Nathan walks through annual compounding churn math to clarify Eric's monthly churn rate. Nathan then probes into paid acquisition spend and restructures the exact percentage allocation of the cap table.
Sponsor Segment: TheTopInbox.com Acquisition and Playbook 3112 Nathan delivers a mid-roll acquisition promo for TheTopInbox before transitioning into the Famous Five rapid-fire format. When Eric playfully dodges the tool question by naming his own product, Nathan pushes him to name an actual third-party operational tool.

Statements from this episode (14)

Assertion Not checkable as stated
Beans: TextingBase mean customer spend is $50 per month
“Our mean is 50. Yeah. Most people go with the min plan and build up from there when they need it.”
Eric Beans Sep 8, 2017 ▶ 3:47
Assertion Not checkable as stated
Beans: TextingBase is approaching 500 customers
“We're approaching 500.”
Eric Beans Sep 8, 2017 ▶ 3:55
Assertion Not checkable as stated
Beans: TextingBase generates $20K to $25K in MRR
“It's in that area. That's a very solid Virginia tech math.”
Eric Beans Sep 8, 2017 ▶ 4:12
Disclosure
Eric Beans: TextingBase has raised $262,000 in outside capital
“262,000 dollars.”
Eric Beans Sep 8, 2017 ▶ 4:33
Disclosure
Beans: Former AOL COO Kimberly Partoll invested in TextingBase
“You know, we have the former COO of AOL is, is one of our investors.”
Eric Beans Sep 8, 2017 ▶ 4:51
Assertion Not checkable as stated
TextingBase marks up $0.006 wholesale SMS costs to $0.04 per text
“If our cost per message is about a .6 of a penny and we're charging four cents a penny you know, that's kind of a text. Four cents a text.”
Eric Beans Sep 8, 2017 ▶ 6:02
Assertion Not checkable as stated
Beans: TextingBase server costs run about $900 monthly during infrastructure migration
“Our server costs run between 380 dollars, and now they're going to be more because we're actually running two concurrent server infrastructures while we do some additional porting over, so our server costs right now are running about 900 dollars a month.”
Eric Beans Sep 8, 2017 ▶ 6:52
Assertion Not checkable as stated
Beans: TextingBase committed to $12,000 annually with Twilio for volume pricing
“That's our minimum. That's just our 12,000 dollars a year is what we've committed to Twilio.”
Eric Beans Sep 8, 2017 ▶ 8:58
Assertion Not checkable as stated
Beans: TextingBase took 3.5 years to build due to client work
“It took about three and a half years. And part of that's because my team, we had to take on additional projects just to be able to fund them and pay their salary.”
Eric Beans Sep 8, 2017 ▶ 9:36
Disclosure
Beans: TextingBase operates with a five-person team
“We have a, an engineer up in Maryland who does back-end work in programming. We have a programmer down in Orlando user interface professional in Orlando an attorney that I'm married to and myself.”
Eric Beans Sep 8, 2017 ▶ 9:46
Assertion Not checkable as stated
Beans: TextingBase reduced CAC from $28.47 to $18 via proprietary data
“It's gone from about 28 dollars and 47 cents down to 18 dollars in that range. And mostly because we started compiling our own data, you know, it was a real push of mine to get our own data so we didn't have to, you know, pay a penny of an email.”
Eric Beans Sep 8, 2017 ▶ 11:25
Assertion Not checkable as stated
Beans: TextingBase monthly customer churn is approximately 2.87%
“Our current turn is about 2.87%, but you know.”
Eric Beans Sep 8, 2017 ▶ 11:47
Assertion Not checkable as stated
Beans: TextingBase monthly churn was roughly 8% a year ago
“Rewind a year and it was much higher. I think it was closer to eight, eight percent for a month a year ago.”
Eric Beans Sep 8, 2017 ▶ 11:54
Disclosure
Beans targets 50.1% control while allocating 20.5% of equity for fundraising
“You know, I've kind of set my minimum at 50.1. I know it's fairly useless because you have voting shares and you can keep control that way. So, so I'm aware, but that's sort of my target. I have about 20.5% of the company available for a capital raise right no…”
Eric Beans Sep 8, 2017 ▶ 13:34
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