StarZero All shows Try the podcast clipper →

Jan 14, 2017 · 17m · top-founders

EP 539: eTailInsights Bootstrapped, $1.4m ARR Ecommerce Data with CEO Darren Pierce

Nathan Latka · 7m spoken Darren Pierce · 7m 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 Darren Pierce, founder and CEO of eTailInsights, exploring how the company bootstrapped to $1.4 million in annual recurring revenue providing specialized ecommerce intelligence. Pierce breaks down his SaaS unit economics, proprietary data crawlers, outbound acquisition strategy, and roadmap for global expansion.

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 50.9% of the talking time here. How this is scored →

Nathan as informed peer 5.2 Guest teaching 2.8 Guest disagreement 1.4 Nathan pushing back 2.6
05100:0010:004:09–6:46 · Nathan as informed peer 7/10 SaaS Financial Metrics, Pricing, and Churn Analysis When Darren gives a broad revenue range of 1 to 5 million, Nathan quickly crunches the math using customer count and annual price to estimate monthly recurring revenue and a trailing twelve-month revenue of 1.35 million. Darren explains their adjusted churn calculation, which Nathan notes and verifies.6:47–9:07 · Nathan as informed peer 7/10 Customer Acquisition Economics and Global Expansion Plans Nathan converts Darren's 65 percent CAC figure into a concrete 5800 dollar acquisition cost and immediately derives a 20 to 25 thousand dollar customer lifetime value from the 82 percent renewal rate. Darren confirms Nathan's exact calculations before unveiling their global expansion plans.9:07–11:25 · Nathan as informed peer 6/10 Market Competition and Long-Term Valuation Goals Darren anticipates Nathan's signature question regarding dream exit valuations and names 100 million dollars. Nathan uses the moment to discuss negotiation psychology and how predictability costs leverage in mergers and acquisitions.11:25–14:32 · Nathan as informed peer 4/10 Bootstrapping Capital, Team Structure, and Proprietary Crawlers Nathan assumes research employees earn 120 to 180 thousand dollar salaries, but Darren corrects him by explaining their compensation is much lower. Darren also clarifies that they built their own proprietary crawlers rather than relying on commercial data enrichment APIs.14:33–16:07 · Nathan as informed peer 2/10 The Famous Five Questions with Darren Pierce Nathan runs through his Famous Five rapid-fire questions covering books, tools, and personal habits. Darren accidentally states his age as 29 before immediately correcting to 39, prompting light banter.4:09–6:46 · Guest teaching 3/10 SaaS Financial Metrics, Pricing, and Churn Analysis When Darren gives a broad revenue range of 1 to 5 million, Nathan quickly crunches the math using customer count and annual price to estimate monthly recurring revenue and a trailing twelve-month revenue of 1.35 million. Darren explains their adjusted churn calculation, which Nathan notes and verifies.6:47–9:07 · Guest teaching 2/10 Customer Acquisition Economics and Global Expansion Plans Nathan converts Darren's 65 percent CAC figure into a concrete 5800 dollar acquisition cost and immediately derives a 20 to 25 thousand dollar customer lifetime value from the 82 percent renewal rate. Darren confirms Nathan's exact calculations before unveiling their global expansion plans.9:07–11:25 · Guest teaching 3/10 Market Competition and Long-Term Valuation Goals Darren anticipates Nathan's signature question regarding dream exit valuations and names 100 million dollars. Nathan uses the moment to discuss negotiation psychology and how predictability costs leverage in mergers and acquisitions.11:25–14:32 · Guest teaching 5/10 Bootstrapping Capital, Team Structure, and Proprietary Crawlers Nathan assumes research employees earn 120 to 180 thousand dollar salaries, but Darren corrects him by explaining their compensation is much lower. Darren also clarifies that they built their own proprietary crawlers rather than relying on commercial data enrichment APIs.14:33–16:07 · Guest teaching 1/10 The Famous Five Questions with Darren Pierce Nathan runs through his Famous Five rapid-fire questions covering books, tools, and personal habits. Darren accidentally states his age as 29 before immediately correcting to 39, prompting light banter.4:09–6:46 · Guest disagreement 1/10 SaaS Financial Metrics, Pricing, and Churn Analysis When Darren gives a broad revenue range of 1 to 5 million, Nathan quickly crunches the math using customer count and annual price to estimate monthly recurring revenue and a trailing twelve-month revenue of 1.35 million. Darren explains their adjusted churn calculation, which Nathan notes and verifies.6:47–9:07 · Guest disagreement 1/10 Customer Acquisition Economics and Global Expansion Plans Nathan converts Darren's 65 percent CAC figure into a concrete 5800 dollar acquisition cost and immediately derives a 20 to 25 thousand dollar customer lifetime value from the 82 percent renewal rate. Darren confirms Nathan's exact calculations before unveiling their global expansion plans.9:07–11:25 · Guest disagreement 2/10 Market Competition and Long-Term Valuation Goals Darren anticipates Nathan's signature question regarding dream exit valuations and names 100 million dollars. Nathan uses the moment to discuss negotiation psychology and how predictability costs leverage in mergers and acquisitions.11:25–14:32 · Guest disagreement 2/10 Bootstrapping Capital, Team Structure, and Proprietary Crawlers Nathan assumes research employees earn 120 to 180 thousand dollar salaries, but Darren corrects him by explaining their compensation is much lower. Darren also clarifies that they built their own proprietary crawlers rather than relying on commercial data enrichment APIs.14:33–16:07 · Guest disagreement 1/10 The Famous Five Questions with Darren Pierce Nathan runs through his Famous Five rapid-fire questions covering books, tools, and personal habits. Darren accidentally states his age as 29 before immediately correcting to 39, prompting light banter.4:09–6:46 · Nathan pushing back 4/10 SaaS Financial Metrics, Pricing, and Churn Analysis When Darren gives a broad revenue range of 1 to 5 million, Nathan quickly crunches the math using customer count and annual price to estimate monthly recurring revenue and a trailing twelve-month revenue of 1.35 million. Darren explains their adjusted churn calculation, which Nathan notes and verifies.6:47–9:07 · Nathan pushing back 2/10 Customer Acquisition Economics and Global Expansion Plans Nathan converts Darren's 65 percent CAC figure into a concrete 5800 dollar acquisition cost and immediately derives a 20 to 25 thousand dollar customer lifetime value from the 82 percent renewal rate. Darren confirms Nathan's exact calculations before unveiling their global expansion plans.9:07–11:25 · Nathan pushing back 3/10 Market Competition and Long-Term Valuation Goals Darren anticipates Nathan's signature question regarding dream exit valuations and names 100 million dollars. Nathan uses the moment to discuss negotiation psychology and how predictability costs leverage in mergers and acquisitions.11:25–14:32 · Nathan pushing back 3/10 Bootstrapping Capital, Team Structure, and Proprietary Crawlers Nathan assumes research employees earn 120 to 180 thousand dollar salaries, but Darren corrects him by explaining their compensation is much lower. Darren also clarifies that they built their own proprietary crawlers rather than relying on commercial data enrichment APIs.14:33–16:07 · Nathan pushing back 1/10 The Famous Five Questions with Darren Pierce Nathan runs through his Famous Five rapid-fire questions covering books, tools, and personal habits. Darren accidentally states his age as 29 before immediately correcting to 39, prompting light banter.

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

0:00 · Nathan 87.3% · guest 12.7%0:00 · Nathan 87.3% · guest 12.7%3:00 · Nathan 29% · guest 71%3:00 · Nathan 29% · guest 71%6:00 · Nathan 26.2% · guest 73.8%6:00 · Nathan 26.2% · guest 73.8%9:00 · Nathan 36.5% · guest 63.5%9:00 · Nathan 36.5% · guest 63.5%12:00 · Nathan 62.5% · guest 37.5%12:00 · Nathan 62.5% · guest 37.5%15:00 · Nathan 66.6% · guest 33.4%15:00 · Nathan 66.6% · guest 33.4%
Sharpest disagreement ▶ 12:18 Direct pushback on compensation assumptions

Darren directly refutes Nathan's assumption that research staff earn six-figure salaries, pointing out that even the founders do not take that level of compensation.

 Hardest push from Nathan ▶ 5:37 Pressing past vague revenue ranges

Refusing to accept Darren's broad revenue range of one to five million, Nathan takes the customer count and contract value to force an estimate of 1.35 million ARR.

 Biggest teaching moment ▶ 6:19 Explaining adjusted versus gross churn

Darren educates Nathan on why their gross 28 percent churn is adjusted down to 18 percent by excluding customers that go out of business or pivot away from retail.

 Nathan holds their own ▶ 7:32 Instantaneous CAC and LTV derivation

Nathan instantly converts Darren's acquisition percentage and renewal rate into an exact 5800 dollar CAC and 25000 dollar customer lifetime value.
the scores for every segment, with the reasoning behind each
ChapterTopicNathan as informed peerGuest teachingGuest disagreementNathan pushing backWhy
SaaS Financial Metrics, Pricing, and Churn Analysis 7314 When Darren gives a broad revenue range of 1 to 5 million, Nathan quickly crunches the math using customer count and annual price to estimate monthly recurring revenue and a trailing twelve-month revenue of 1.35 million. Darren explains their adjusted churn calculation, which Nathan notes and verifies.
Customer Acquisition Economics and Global Expansion Plans 7212 Nathan converts Darren's 65 percent CAC figure into a concrete 5800 dollar acquisition cost and immediately derives a 20 to 25 thousand dollar customer lifetime value from the 82 percent renewal rate. Darren confirms Nathan's exact calculations before unveiling their global expansion plans.
Market Competition and Long-Term Valuation Goals 6323 Darren anticipates Nathan's signature question regarding dream exit valuations and names 100 million dollars. Nathan uses the moment to discuss negotiation psychology and how predictability costs leverage in mergers and acquisitions.
Bootstrapping Capital, Team Structure, and Proprietary Crawlers 4523 Nathan assumes research employees earn 120 to 180 thousand dollar salaries, but Darren corrects him by explaining their compensation is much lower. Darren also clarifies that they built their own proprietary crawlers rather than relying on commercial data enrichment APIs.
The Famous Five Questions with Darren Pierce 2111 Nathan runs through his Famous Five rapid-fire questions covering books, tools, and personal habits. Darren accidentally states his age as 29 before immediately correcting to 39, prompting light banter.

Statements from this episode (11)

Assertion Not checkable as stated
Pierce: eTailInsights has ~150 customers averaging $9,000 per year
“We have about a 150 customers. And our average is skewed down a little bit because we have a, what we call a small business addition that's for real You know, true startups that maybe have no sales team or one salesperson. So even, you know, skewed down our av…”
Darren Pierce Jan 14, 2017 ▶ 4:14
Assertion Not checkable as stated
Pierce: eTailInsights generates between $1M and $5M in annual revenue
“I'll give you a range where we do between one and five million annually.”
Darren Pierce Jan 14, 2017 ▶ 4:58
Assertion Not checkable as stated
Pierce: eTailInsights typically grows 20% to 30% per year
“We tend to grow roughly 20 to 30% per year.”
Darren Pierce Jan 14, 2017 ▶ 5:20
Assertion Not checkable as stated
Pierce: eTailInsights sees 28% unadjusted churn, 18% adjusted churn
“So we renew at 82%. So the adjusted churn rate there is 18. And the reason we adjust is that about 10% of our customer base tends to either go out of business or shift focus. So if you take that out we say our churn rate's 18%. If you add that in, it's 28%.”
Darren Pierce Jan 14, 2017 ▶ 6:21
Assertion Not checkable as stated
Pierce: Outbound CAC is roughly 65% of first-year ACV
“That model comes in at about 65% cost and that's adjusted... Cost to revenue, cost annual contract value. And that does adjust for their share of overhead too.”
Darren Pierce Jan 14, 2017 ▶ 7:02
Disclosure
Pierce says eTailInsights will pay up to $400 per inbound click
“We are not good at generate a lot of inbound sales but we will pay, you know, we will pay on up to 400 dollars per click for the right customer.”
Darren Pierce Jan 14, 2017 ▶ 7:21
Disclosure
Pierce: eTailInsights plans to begin indexing all retail websites globally next year
“We today index and we publish the United States market, the 10,000 largest retailers in the U S. But for six years in kind of our backend, we, we've been tracking hundreds of thousands of retailers globally. And next year, we're going to flip the back end to t…”
Darren Pierce Jan 14, 2017 ▶ 8:10
Prediction Not checkable as stated
Pierce: eTailInsights expects TAM to grow from 3,000 to 20,000 companies next year
“So our total available market today is about, you know, 3000 companies, 3000 potential customers, and we have 150 of those. But we expect that to grow to about 20,000 next year.”
Darren Pierce Jan 14, 2017 ▶ 8:55
Disclosure
Pierce's dream exit valuation for eTailInsights is $100 million
“My dream number would be one hundred million.”
Darren Pierce Jan 14, 2017 ▶ 10:15
Disclosure
Pierce: eTailInsights bootstrapped with roughly $100k in founder capital
“Yeah, we have not raised any capital. We are bootstrapped. Me and two of my partners put money in early. It was about 100,000 collectively.”
Darren Pierce Jan 14, 2017 ▶ 11:29
Disclosure
Pierce: eTailInsights built proprietary crawlers to source its own data
“Believe it or not, we don't, we source it all ourself. We've built our own tech. My partner is a, you know, he's an engineer by trade, so he's built everything from scratch. We have our own crawlers. Everything's our own, but we do license some information.”
Darren Pierce Jan 14, 2017 ▶ 12:51
Made with StarZero

Turn any episode into a week of clips.

This entire site, over 2,600 episodes transcribed, diarized, checked and made playable, runs on the StarZero media pipeline. Drop in your own episode and the podcast clipper finds the moments worth sharing, cuts them, captions them, and reframes them for every feed.

Try the podcast clipper Learn more