StarZero All shows Try the podcast clipper →

Jan 6, 2017 · 16m · top-founders

EP 531: $5m Note Cap Pre-Revenue? How? With ZeroApp CEO Alex Babin

Nathan Latka · 7m spoken Alex Babin · 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 episode 531 of The Top, host Nathan Latka interviews ZeroApp CEO Alex Babin to uncover how the AI email client secured a $5 million valuation cap while pre-revenue. Babin breaks down ZeroApp's on-device privacy architecture, user traction, enterprise monetization plans, and founder philosophy.

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 51.7% of the talking time here. How this is scored →

Nathan as informed peer 4.8 Guest teaching 3.0 Guest disagreement 1.8 Nathan pushing back 3.8
05100:0010:001:43–7:07 · Nathan as informed peer 5/10 Guest Welcome and Alex Babin's Background Nathan introduces Alex and demonstrates industry awareness by listing competitors like Superhuman and Polymail. Alex educates Nathan on why cloud-based AI fails enterprise compliance in law and healthcare, explaining ZeroApp's on-device processing architecture.7:09–10:00 · Nathan as informed peer 5/10 User Engagement, Retention Metrics, and Enterprise Pricing Nathan drills into user activity metrics and pricing clarity, pressing Alex on whether his quoted seat price is $2.99 or $300. Alex explains their enterprise positioning and how their initial card-swipe MVP created a weekly inbox cleanup pattern.10:01–13:04 · Nathan as informed peer 6/10 Securing a $5 Million Note Cap While Pre-Revenue Nathan presses Alex on how a pre-revenue startup commanded a $5 million convertible note cap with only six pilot customers on a waiting list. Alex defends the valuation by highlighting that active free users converted into angel investors.13:04–15:21 · Nathan as informed peer 3/10 The Famous Five Rapid-Fire Questions Alex catches Nathan off guard by admitting he always skips the ends of Nathan's podcast episodes because he thought they were ads. Nathan pushes back forcefully when Alex claims to only sleep three hours per night.1:43–7:07 · Guest teaching 4/10 Guest Welcome and Alex Babin's Background Nathan introduces Alex and demonstrates industry awareness by listing competitors like Superhuman and Polymail. Alex educates Nathan on why cloud-based AI fails enterprise compliance in law and healthcare, explaining ZeroApp's on-device processing architecture.7:09–10:00 · Guest teaching 3/10 User Engagement, Retention Metrics, and Enterprise Pricing Nathan drills into user activity metrics and pricing clarity, pressing Alex on whether his quoted seat price is $2.99 or $300. Alex explains their enterprise positioning and how their initial card-swipe MVP created a weekly inbox cleanup pattern.10:01–13:04 · Guest teaching 2/10 Securing a $5 Million Note Cap While Pre-Revenue Nathan presses Alex on how a pre-revenue startup commanded a $5 million convertible note cap with only six pilot customers on a waiting list. Alex defends the valuation by highlighting that active free users converted into angel investors.13:04–15:21 · Guest teaching 3/10 The Famous Five Rapid-Fire Questions Alex catches Nathan off guard by admitting he always skips the ends of Nathan's podcast episodes because he thought they were ads. Nathan pushes back forcefully when Alex claims to only sleep three hours per night.1:43–7:07 · Guest disagreement 1/10 Guest Welcome and Alex Babin's Background Nathan introduces Alex and demonstrates industry awareness by listing competitors like Superhuman and Polymail. Alex educates Nathan on why cloud-based AI fails enterprise compliance in law and healthcare, explaining ZeroApp's on-device processing architecture.7:09–10:00 · Guest disagreement 1/10 User Engagement, Retention Metrics, and Enterprise Pricing Nathan drills into user activity metrics and pricing clarity, pressing Alex on whether his quoted seat price is $2.99 or $300. Alex explains their enterprise positioning and how their initial card-swipe MVP created a weekly inbox cleanup pattern.10:01–13:04 · Guest disagreement 2/10 Securing a $5 Million Note Cap While Pre-Revenue Nathan presses Alex on how a pre-revenue startup commanded a $5 million convertible note cap with only six pilot customers on a waiting list. Alex defends the valuation by highlighting that active free users converted into angel investors.13:04–15:21 · Guest disagreement 3/10 The Famous Five Rapid-Fire Questions Alex catches Nathan off guard by admitting he always skips the ends of Nathan's podcast episodes because he thought they were ads. Nathan pushes back forcefully when Alex claims to only sleep three hours per night.1:43–7:07 · Nathan pushing back 2/10 Guest Welcome and Alex Babin's Background Nathan introduces Alex and demonstrates industry awareness by listing competitors like Superhuman and Polymail. Alex educates Nathan on why cloud-based AI fails enterprise compliance in law and healthcare, explaining ZeroApp's on-device processing architecture.7:09–10:00 · Nathan pushing back 3/10 User Engagement, Retention Metrics, and Enterprise Pricing Nathan drills into user activity metrics and pricing clarity, pressing Alex on whether his quoted seat price is $2.99 or $300. Alex explains their enterprise positioning and how their initial card-swipe MVP created a weekly inbox cleanup pattern.10:01–13:04 · Nathan pushing back 5/10 Securing a $5 Million Note Cap While Pre-Revenue Nathan presses Alex on how a pre-revenue startup commanded a $5 million convertible note cap with only six pilot customers on a waiting list. Alex defends the valuation by highlighting that active free users converted into angel investors.13:04–15:21 · Nathan pushing back 5/10 The Famous Five Rapid-Fire Questions Alex catches Nathan off guard by admitting he always skips the ends of Nathan's podcast episodes because he thought they were ads. Nathan pushes back forcefully when Alex claims to only sleep three hours per night.

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

0:00 · Nathan 88.9% · guest 11.1%0:00 · Nathan 88.9% · guest 11.1%3:00 · Nathan 20.6% · guest 79.4%3:00 · Nathan 20.6% · guest 79.4%6:00 · Nathan 22.6% · guest 77.4%6:00 · Nathan 22.6% · guest 77.4%9:00 · Nathan 42.5% · guest 57.5%9:00 · Nathan 42.5% · guest 57.5%12:00 · Nathan 73.4% · guest 26.6%12:00 · Nathan 73.4% · guest 26.6%15:00 · Nathan 76.9% · guest 23.1%15:00 · Nathan 76.9% · guest 23.1%
Sharpest disagreement ▶ 13:14 Alex reveals he skips the outro of Nathan's show

After Nathan assumes Alex knows the Famous Five routine from binge-listening, Alex bluntly admits he turns episodes off right at the end because he assumes it is just advertisements.

 Hardest push from Nathan ▶ 14:23 Nathan rejects Alex's three-hour sleep claim

Nathan repeatedly refuses to believe Alex's claim that he functions on only three hours of sleep, interrogating him on his age and family life until Alex clarifies his polyphasic nap routine.

 Biggest teaching moment ▶ 5:35 Explaining on-device AI for corporate privacy

Alex educates Nathan on why competing cloud-based productivity apps cannot penetrate regulated industries like law and finance due to strict internal data privacy policies.

 Nathan holds their own ▶ 11:05 Nathan summarizes the 5x valuation step-up math

Nathan cuts through the narrative to summarize the financial mechanics, highlighting that Alex 5x'd his cap from $1M to $5M entirely off pre-selling to an enterprise waiting list.
the scores for every segment, with the reasoning behind each
ChapterTopicNathan as informed peerGuest teachingGuest disagreementNathan pushing backWhy
Guest Welcome and Alex Babin's Background 5412 Nathan introduces Alex and demonstrates industry awareness by listing competitors like Superhuman and Polymail. Alex educates Nathan on why cloud-based AI fails enterprise compliance in law and healthcare, explaining ZeroApp's on-device processing architecture.
User Engagement, Retention Metrics, and Enterprise Pricing 5313 Nathan drills into user activity metrics and pricing clarity, pressing Alex on whether his quoted seat price is $2.99 or $300. Alex explains their enterprise positioning and how their initial card-swipe MVP created a weekly inbox cleanup pattern.
Securing a $5 Million Note Cap While Pre-Revenue 6225 Nathan presses Alex on how a pre-revenue startup commanded a $5 million convertible note cap with only six pilot customers on a waiting list. Alex defends the valuation by highlighting that active free users converted into angel investors.
The Famous Five Rapid-Fire Questions 3335 Alex catches Nathan off guard by admitting he always skips the ends of Nathan's podcast episodes because he thought they were ads. Nathan pushes back forcefully when Alex claims to only sleep three hours per night.

Statements from this episode (8)

Disclosure
ZeroApp closed a $700k seed round from tech angels
“We have a seed round closed in May, 700 K, mostly from angels. We have a great, great investors from Google, ex-Googlers, ex-Amazon, Skype, I mean, all of the communication companies, so we have angels from this company.”
Alex Babin Jan 6, 2017 ▶ 4:00
Insight
Babin: Email winners will offer convenience over the best product
“I guess not the best one, but the one who will penetrate the market with the most convenient way for the user, for the customer, because what we experienced is that when we started targeting customers specifically corporate customers, we saw that they just don…”
Alex Babin Jan 6, 2017 ▶ 5:19
Opinion
ZeroApp claims to be the only email client running AI on-device
“In our case, we're probably the only company that develops an artificial intelligence on device. It's a device centric. So it runs on the device itself, not in the cloud.”
Alex Babin Jan 6, 2017 ▶ 6:45
Assertion Not checkable as stated
ZeroApp reports 30k downloads, 10k MAUs, and 2k DAUs
“We have about 30,000 downloads with 10,000 monthly active and 2000 daily active.”
Alex Babin Jan 6, 2017 ▶ 7:17
Disclosure
ZeroApp charges enterprise users $299 per seat per month
“Right now we have two 99 per month per user.”
Alex Babin Jan 6, 2017 ▶ 9:46
Disclosure
ZeroApp opens seed round with $200K already committed
“We actually opened a seed round last month, already 200 K committed.”
Alex Babin Jan 6, 2017 ▶ 10:10
Disclosure
ZeroApp raises pre-revenue seed on a $5M capped convertible note
“It's convertible note capped.”
Alex Babin Jan 6, 2017 ▶ 10:23
Assertion Not publicly verifiable
ZeroApp closed prior $700K round at a $1M cap in May
“It was one million.”
Alex Babin Jan 6, 2017 ▶ 11:20
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