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Aug 16, 2017 · 26m · top-founders

753: With His Tool, Mobile Browsing on Spotty Wifi Doesn't Suck

Shlomi Gian · 14m 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 podcast, host Nathan Latka interviews PacketZoom CEO Shlomi Gian to discuss how the mobile networking startup optimizes app performance in spotty wireless environments. Gian breaks down PacketZoom's business model, customer economics, global channel partner strategy, and rapid growth toward a one-million-dollar annual run rate.

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 39.7% of the talking time here. How this is scored →

Nathan as informed peer 5.5 Guest teaching 2.7 Guest disagreement 1.3 Nathan pushing back 3.3
05100:0010:0020:001:57–5:26 · Nathan as informed peer 6/10 PacketZoom Technology, Mobile Optimization, and Pricing Structure Nathan frames PacketZoom's value proposition using an Eventbrite spotty Wi-Fi example and drills into the pricing mechanics. Shlomi details how their SDK pricing operates on daily active users and offsets customer CDN bills.5:27–9:32 · Nathan as informed peer 6/10 Founding Origins, Seed Capital, and Executive Hiring Nathan investigates the circumstances of Shlomi joining as outside CEO, identifying venture investor pressure for commercial traction. Shlomi explains the timeline and technical complexity behind building the mobile networking stack.9:32–13:06 · Nathan as informed peer 6/10 User Metrics, Traction Goals, and Reseller Partnerships When Shlomi talks about international resellers, Nathan cuts through generalities to demand specific partner revenue share percentages. Shlomi explains the sliding scale depending on whether the partner handles operations or just sales.13:07–16:41 · Nathan as informed peer 7/10 Revenue Targets, Team Expansion, and Marketing Budget Nathan computes MRR brackets in real time based on earlier customer counts and price points to test if PacketZoom has crossed the $1M ARR threshold. Shlomi shares team distribution and modest marketing expenditure.16:41–21:50 · Nathan as informed peer 8/10 Gross Margins, Zero Churn, and Infrastructure Economics Nathan strongly challenges Shlomi's reported zero percent churn, arguing it implies underpricing and creates dangerous assumptions for LTV calculations. Shlomi defends their pricing and explains why their unoptimized cloud infrastructure currently suppresses gross margins.21:52–23:51 · Nathan as informed peer 0/10 Database Access and Top Inbox Promotional Spotlight Solo host promotional segment and advertisement for GetLatka database and The Top Inbox acquisition.1:57–5:26 · Guest teaching 4/10 PacketZoom Technology, Mobile Optimization, and Pricing Structure Nathan frames PacketZoom's value proposition using an Eventbrite spotty Wi-Fi example and drills into the pricing mechanics. Shlomi details how their SDK pricing operates on daily active users and offsets customer CDN bills.5:27–9:32 · Guest teaching 3/10 Founding Origins, Seed Capital, and Executive Hiring Nathan investigates the circumstances of Shlomi joining as outside CEO, identifying venture investor pressure for commercial traction. Shlomi explains the timeline and technical complexity behind building the mobile networking stack.9:32–13:06 · Guest teaching 3/10 User Metrics, Traction Goals, and Reseller Partnerships When Shlomi talks about international resellers, Nathan cuts through generalities to demand specific partner revenue share percentages. Shlomi explains the sliding scale depending on whether the partner handles operations or just sales.13:07–16:41 · Guest teaching 2/10 Revenue Targets, Team Expansion, and Marketing Budget Nathan computes MRR brackets in real time based on earlier customer counts and price points to test if PacketZoom has crossed the $1M ARR threshold. Shlomi shares team distribution and modest marketing expenditure.16:41–21:50 · Guest teaching 4/10 Gross Margins, Zero Churn, and Infrastructure Economics Nathan strongly challenges Shlomi's reported zero percent churn, arguing it implies underpricing and creates dangerous assumptions for LTV calculations. Shlomi defends their pricing and explains why their unoptimized cloud infrastructure currently suppresses gross margins.21:52–23:51 · Guest teaching 0/10 Database Access and Top Inbox Promotional Spotlight Solo host promotional segment and advertisement for GetLatka database and The Top Inbox acquisition.1:57–5:26 · Guest disagreement 1/10 PacketZoom Technology, Mobile Optimization, and Pricing Structure Nathan frames PacketZoom's value proposition using an Eventbrite spotty Wi-Fi example and drills into the pricing mechanics. Shlomi details how their SDK pricing operates on daily active users and offsets customer CDN bills.5:27–9:32 · Guest disagreement 1/10 Founding Origins, Seed Capital, and Executive Hiring Nathan investigates the circumstances of Shlomi joining as outside CEO, identifying venture investor pressure for commercial traction. Shlomi explains the timeline and technical complexity behind building the mobile networking stack.9:32–13:06 · Guest disagreement 2/10 User Metrics, Traction Goals, and Reseller Partnerships When Shlomi talks about international resellers, Nathan cuts through generalities to demand specific partner revenue share percentages. Shlomi explains the sliding scale depending on whether the partner handles operations or just sales.13:07–16:41 · Guest disagreement 1/10 Revenue Targets, Team Expansion, and Marketing Budget Nathan computes MRR brackets in real time based on earlier customer counts and price points to test if PacketZoom has crossed the $1M ARR threshold. Shlomi shares team distribution and modest marketing expenditure.16:41–21:50 · Guest disagreement 3/10 Gross Margins, Zero Churn, and Infrastructure Economics Nathan strongly challenges Shlomi's reported zero percent churn, arguing it implies underpricing and creates dangerous assumptions for LTV calculations. Shlomi defends their pricing and explains why their unoptimized cloud infrastructure currently suppresses gross margins.21:52–23:51 · Guest disagreement 0/10 Database Access and Top Inbox Promotional Spotlight Solo host promotional segment and advertisement for GetLatka database and The Top Inbox acquisition.1:57–5:26 · Nathan pushing back 2/10 PacketZoom Technology, Mobile Optimization, and Pricing Structure Nathan frames PacketZoom's value proposition using an Eventbrite spotty Wi-Fi example and drills into the pricing mechanics. Shlomi details how their SDK pricing operates on daily active users and offsets customer CDN bills.5:27–9:32 · Nathan pushing back 3/10 Founding Origins, Seed Capital, and Executive Hiring Nathan investigates the circumstances of Shlomi joining as outside CEO, identifying venture investor pressure for commercial traction. Shlomi explains the timeline and technical complexity behind building the mobile networking stack.9:32–13:06 · Nathan pushing back 5/10 User Metrics, Traction Goals, and Reseller Partnerships When Shlomi talks about international resellers, Nathan cuts through generalities to demand specific partner revenue share percentages. Shlomi explains the sliding scale depending on whether the partner handles operations or just sales.13:07–16:41 · Nathan pushing back 3/10 Revenue Targets, Team Expansion, and Marketing Budget Nathan computes MRR brackets in real time based on earlier customer counts and price points to test if PacketZoom has crossed the $1M ARR threshold. Shlomi shares team distribution and modest marketing expenditure.16:41–21:50 · Nathan pushing back 7/10 Gross Margins, Zero Churn, and Infrastructure Economics Nathan strongly challenges Shlomi's reported zero percent churn, arguing it implies underpricing and creates dangerous assumptions for LTV calculations. Shlomi defends their pricing and explains why their unoptimized cloud infrastructure currently suppresses gross margins.21:52–23:51 · Nathan pushing back 0/10 Database Access and Top Inbox Promotional Spotlight Solo host promotional segment and advertisement for GetLatka database and The Top Inbox acquisition.

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

0:00 · Nathan 66% · guest 34%0:00 · Nathan 66% · guest 34%3:00 · Nathan 31.4% · guest 68.6%3:00 · Nathan 31.4% · guest 68.6%6:00 · Nathan 14.7% · guest 85.3%6:00 · Nathan 14.7% · guest 85.3%9:00 · Nathan 27.5% · guest 72.5%9:00 · Nathan 27.5% · guest 72.5%12:00 · Nathan 34.6% · guest 65.4%12:00 · Nathan 34.6% · guest 65.4%15:00 · Nathan 28% · guest 72%15:00 · Nathan 28% · guest 72%18:00 · Nathan 24% · guest 76%18:00 · Nathan 24% · guest 76%21:00 · Nathan 75.9% · guest 24.1%21:00 · Nathan 75.9% · guest 24.1%24:00 · Nathan 57.8% · guest 42.2%24:00 · Nathan 57.8% · guest 42.2%
Sharpest disagreement ▶ 17:05 Defending low pricing against Nathan's increase suggestions

Shlomi rejects Nathan's insistence that they should double prices, explaining that price-sensitive small apps would churn and that making a profit on every deal is sufficient.

 Hardest push from Nathan ▶ 16:53 Challenging the reality of zero percent churn

Nathan refuses to accept zero churn as just customer happiness, repeatedly pressing that it signals severe underpricing.

 Biggest teaching moment ▶ 4:40 Explaining how PacketZoom reduces legacy CDN bills

Shlomi breaks down how sitting in front of traditional CDNs like Akamai and CloudFront allows PacketZoom to drastically cut customer CDN costs without requiring them to cancel existing contracts.

 Nathan holds their own ▶ 13:55 Real-time ARR mathematical deduction

Nathan synthesizes the 68 customer count with the $400 to $4,000 monthly tiers to pinpoint PacketZoom's approximate MRR range against their $1M ARR target.
the scores for every segment, with the reasoning behind each
ChapterTopicNathan as informed peerGuest teachingGuest disagreementNathan pushing backWhy
PacketZoom Technology, Mobile Optimization, and Pricing Structure 6412 Nathan frames PacketZoom's value proposition using an Eventbrite spotty Wi-Fi example and drills into the pricing mechanics. Shlomi details how their SDK pricing operates on daily active users and offsets customer CDN bills.
Founding Origins, Seed Capital, and Executive Hiring 6313 Nathan investigates the circumstances of Shlomi joining as outside CEO, identifying venture investor pressure for commercial traction. Shlomi explains the timeline and technical complexity behind building the mobile networking stack.
User Metrics, Traction Goals, and Reseller Partnerships 6325 When Shlomi talks about international resellers, Nathan cuts through generalities to demand specific partner revenue share percentages. Shlomi explains the sliding scale depending on whether the partner handles operations or just sales.
Revenue Targets, Team Expansion, and Marketing Budget 7213 Nathan computes MRR brackets in real time based on earlier customer counts and price points to test if PacketZoom has crossed the $1M ARR threshold. Shlomi shares team distribution and modest marketing expenditure.
Gross Margins, Zero Churn, and Infrastructure Economics 8437 Nathan strongly challenges Shlomi's reported zero percent churn, arguing it implies underpricing and creates dangerous assumptions for LTV calculations. Shlomi defends their pricing and explains why their unoptimized cloud infrastructure currently suppresses gross margins.
Database Access and Top Inbox Promotional Spotlight 0000 Solo host promotional segment and advertisement for GetLatka database and The Top Inbox acquisition.

Statements from this episode (15)

Disclosure
Gian: PacketZoom charges between $400 and $4,000 per app
“400 to 4000 per application. That's what we're not in the 4000. Of course, you have to be a very popular game or retail application. The 400 is more reasonable if you have tens of thousands of daily active users”
Shlomi Gian Aug 16, 2017 ▶ 4:40
Assertion Not checkable as stated
Gian: PacketZoom drastically reduces customers' traditional CDN bills
“Many of our customers are using traditional web CDNs like Akamai, Amazon, CloudFront, et cetera. Once they start using PackageZoom, this bill almost goes away, and they can replace it with a better service and all that. Technically, They don't have to change. …”
Shlomi Gian Aug 16, 2017 ▶ 5:03
Disclosure
Gian: Baseline Ventures and First Round Capital are PacketZoom's main investors
“So our main investors are baseline and first one capital.”
Shlomi Gian Aug 16, 2017 ▶ 5:29
Assertion Supported
Gian: PacketZoom won Sephora, Glu Mobile, and Upwork as enterprise customers
“We started with enterprise selling. We were able to attract Customers like Sephora and Glue Mobile and Upwork”
Shlomi Gian Aug 16, 2017 ▶ 8:04
Assertion Not checkable as stated
Gian: PacketZoom serves about 68 customers
“We have about 68 customers.”
Shlomi Gian Aug 16, 2017 ▶ 9:35
Prediction Not checkable as stated
Gian expects 60% of PacketZoom revenue from partnerships
“This business is, ah, ah, relying heavily on partnerships, so I expect that a company like Packageo, ah, like Cotendo back in the days, like other startups I work with in this space, 60% of the revenue is going to come through partnerships.”
Shlomi Gian Aug 16, 2017 ▶ 11:09
Disclosure
Gian: ChinaCache sells PacketZoom exclusively in China
“We have one large partnership with China Cash. It's a large CDN public company selling us exclusively in China.”
Shlomi Gian Aug 16, 2017 ▶ 11:27
Assertion Not checkable as stated
Gian: PacketZoom is nearing $88,000 MRR and $1M ARR
“We're very close. And so that, that is well, it's the end of the quarter. We're already counting the days for the end of the quarter.”
Shlomi Gian Aug 16, 2017 ▶ 13:45
Assertion Not checkable as stated
Gian: PacketZoom operates with just three sales reps
“We're pretty much three sales guys, and, you know, the most senior guy has been with us for seven months.”
Shlomi Gian Aug 16, 2017 ▶ 15:16
Assertion Not checkable as stated
Gian: PacketZoom employs 20 people
“The company's 20.”
Shlomi Gian Aug 16, 2017 ▶ 15:24
Assertion Not checkable as stated
Gian: PacketZoom spends under $10K monthly on marketing
“Less than 10,000 dollars.”
Shlomi Gian Aug 16, 2017 ▶ 15:59
Assertion Not checkable as stated
Gian: PacketZoom has zero customer churn
“No, no churn. Zero.”
Shlomi Gian Aug 16, 2017 ▶ 16:48
Insight
Gian: Mobile SDK infrastructure creates very high switching costs
“Once, once you're in, especially in the form of an SDK, switching costs are very high.”
Shlomi Gian Aug 16, 2017 ▶ 19:22
Prediction Not checkable as stated
Gian expects PacketZoom's gross margins to hit 95% via AWS reselling
“We're, you know, we're anything between I would say, 60 to 80. But it will be very different next quarter as we're becoming We're already an AWS partner, we're gonna become an AWS reseller, we're gonna get this price down, and we're, we have some great ideas a…”
Shlomi Gian Aug 16, 2017 ▶ 21:18
Opinion
Gian uses MixRank to track competitors' mobile SDK installations
“I like a company called MixRank. They have pretty good data that helps me understand what's happening out there. Who's using who? What kind of SDKs are being installed in apps? What kind of SDKs are being removed from apps? That's a pretty fantastic data that …”
Shlomi Gian Aug 16, 2017 ▶ 24:25
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