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Dec 30, 2016 · 19m · top-founders

EP 524: Podium Hits $1m MRR in 12 Months, $4m Raised with 6500 SMB Customers sub 1% Churn with CEO Eric Rea

Nathan Latka · 9m spoken Eric Rea · 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 Podium co-founder and CEO Eric Rea to explore how the Utah-based SaaS company scaled to 11 million dollars in ARR and one million dollars in MRR with sub-one-percent churn. Eric shares key operational metrics, venture fundraising strategies, and lessons on selling software to local small businesses.

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 55.6% of the talking time here. How this is scored →

Nathan as informed peer 6.0 Guest teaching 1.6 Guest disagreement 0.8 Nathan pushing back 1.6
05100:0010:001:43–4:00 · Nathan as informed peer 5/10 Introducing Eric Rea, Podium's Model, and Founding Story Nathan introduces Eric Rea and establishes the core business model of Podium. The exchange is smooth and collaborative as Eric details their $299–$400 monthly price point per location and founding story.4:02–7:25 · Nathan as informed peer 7/10 Rapid Team Scaling and Venture Capital Strategy Nathan breaks down headcount costs and performs on-the-fly valuation math based on Podium's $3.5M raise for 20% equity, accurately deducing a $15M–$20M pre-money valuation.7:26–10:56 · Nathan as informed peer 7/10 Unit Economics, Exceptional Retention, and Customer Lifetime Value Nathan analyzes unit economics including gross churn, negative net churn, and LTV. Eric provides a slight correction to Nathan's MRR math by factoring in partner discounts and commission structures.10:56–13:09 · Nathan as informed peer 6/10 Scaling to Eleven Million ARR and Capturing SMBs Eric shares Podium's rapid climb to $11M ARR and explains the unique challenges of selling software to offline SMBs compared to traditional B2B SaaS companies.13:10–18:17 · Nathan as informed peer 5/10 Mid-Roll Promotions: The Top Inbox and HostGator Web Services Following mid-roll sponsor reads, Nathan runs through the Famous Five questions and gently corrects Eric about the podcast's launch timeline.1:43–4:00 · Guest teaching 1/10 Introducing Eric Rea, Podium's Model, and Founding Story Nathan introduces Eric Rea and establishes the core business model of Podium. The exchange is smooth and collaborative as Eric details their $299–$400 monthly price point per location and founding story.4:02–7:25 · Guest teaching 1/10 Rapid Team Scaling and Venture Capital Strategy Nathan breaks down headcount costs and performs on-the-fly valuation math based on Podium's $3.5M raise for 20% equity, accurately deducing a $15M–$20M pre-money valuation.7:26–10:56 · Guest teaching 3/10 Unit Economics, Exceptional Retention, and Customer Lifetime Value Nathan analyzes unit economics including gross churn, negative net churn, and LTV. Eric provides a slight correction to Nathan's MRR math by factoring in partner discounts and commission structures.10:56–13:09 · Guest teaching 2/10 Scaling to Eleven Million ARR and Capturing SMBs Eric shares Podium's rapid climb to $11M ARR and explains the unique challenges of selling software to offline SMBs compared to traditional B2B SaaS companies.13:10–18:17 · Guest teaching 1/10 Mid-Roll Promotions: The Top Inbox and HostGator Web Services Following mid-roll sponsor reads, Nathan runs through the Famous Five questions and gently corrects Eric about the podcast's launch timeline.1:43–4:00 · Guest disagreement 0/10 Introducing Eric Rea, Podium's Model, and Founding Story Nathan introduces Eric Rea and establishes the core business model of Podium. The exchange is smooth and collaborative as Eric details their $299–$400 monthly price point per location and founding story.4:02–7:25 · Guest disagreement 1/10 Rapid Team Scaling and Venture Capital Strategy Nathan breaks down headcount costs and performs on-the-fly valuation math based on Podium's $3.5M raise for 20% equity, accurately deducing a $15M–$20M pre-money valuation.7:26–10:56 · Guest disagreement 1/10 Unit Economics, Exceptional Retention, and Customer Lifetime Value Nathan analyzes unit economics including gross churn, negative net churn, and LTV. Eric provides a slight correction to Nathan's MRR math by factoring in partner discounts and commission structures.10:56–13:09 · Guest disagreement 1/10 Scaling to Eleven Million ARR and Capturing SMBs Eric shares Podium's rapid climb to $11M ARR and explains the unique challenges of selling software to offline SMBs compared to traditional B2B SaaS companies.13:10–18:17 · Guest disagreement 1/10 Mid-Roll Promotions: The Top Inbox and HostGator Web Services Following mid-roll sponsor reads, Nathan runs through the Famous Five questions and gently corrects Eric about the podcast's launch timeline.1:43–4:00 · Nathan pushing back 1/10 Introducing Eric Rea, Podium's Model, and Founding Story Nathan introduces Eric Rea and establishes the core business model of Podium. The exchange is smooth and collaborative as Eric details their $299–$400 monthly price point per location and founding story.4:02–7:25 · Nathan pushing back 2/10 Rapid Team Scaling and Venture Capital Strategy Nathan breaks down headcount costs and performs on-the-fly valuation math based on Podium's $3.5M raise for 20% equity, accurately deducing a $15M–$20M pre-money valuation.7:26–10:56 · Nathan pushing back 2/10 Unit Economics, Exceptional Retention, and Customer Lifetime Value Nathan analyzes unit economics including gross churn, negative net churn, and LTV. Eric provides a slight correction to Nathan's MRR math by factoring in partner discounts and commission structures.10:56–13:09 · Nathan pushing back 1/10 Scaling to Eleven Million ARR and Capturing SMBs Eric shares Podium's rapid climb to $11M ARR and explains the unique challenges of selling software to offline SMBs compared to traditional B2B SaaS companies.13:10–18:17 · Nathan pushing back 2/10 Mid-Roll Promotions: The Top Inbox and HostGator Web Services Following mid-roll sponsor reads, Nathan runs through the Famous Five questions and gently corrects Eric about the podcast's launch timeline.

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

0:00 · Nathan 81.9% · guest 18.1%0:00 · Nathan 81.9% · guest 18.1%3:00 · Nathan 35.8% · guest 64.2%3:00 · Nathan 35.8% · guest 64.2%6:00 · Nathan 40.1% · guest 59.9%6:00 · Nathan 40.1% · guest 59.9%9:00 · Nathan 47.4% · guest 52.6%9:00 · Nathan 47.4% · guest 52.6%12:00 · Nathan 66.2% · guest 33.8%12:00 · Nathan 66.2% · guest 33.8%15:00 · Nathan 41.9% · guest 58.1%15:00 · Nathan 41.9% · guest 58.1%18:00 · Nathan 98.6% · guest 1.4%18:00 · Nathan 98.6% · guest 1.4%
Sharpest disagreement ▶ 12:17 Eric rejects simple SaaS assumptions for SMBs

Eric firmly explains that unlike tech-savvy B2B SaaS buyers, non-tech business owners require significant education on online reviews.

 Hardest push from Nathan ▶ 16:05 Nathan corrects Eric on show timeline

Nathan pushes back on Eric's claim of listening for three years, pointing out the podcast had only been active for eighteen months.

 Biggest teaching moment ▶ 8:05 Eric educates on partner impact on MRR

Eric corrects Nathan's straightforward ARPU multiplication calculation ($1.6M) by explaining partner discounts bring current MRR closer to $1M.

 Nathan holds their own ▶ 7:14 Nathan calculates exact pre-money valuation

Nathan calculates the exact pre-money valuation range of $15M–$20M based on equity sold and capital raised, prompting Eric to praise his math skills.
the scores for every segment, with the reasoning behind each
ChapterTopicNathan as informed peerGuest teachingGuest disagreementNathan pushing backWhy
Introducing Eric Rea, Podium's Model, and Founding Story 5101 Nathan introduces Eric Rea and establishes the core business model of Podium. The exchange is smooth and collaborative as Eric details their $299–$400 monthly price point per location and founding story.
Rapid Team Scaling and Venture Capital Strategy 7112 Nathan breaks down headcount costs and performs on-the-fly valuation math based on Podium's $3.5M raise for 20% equity, accurately deducing a $15M–$20M pre-money valuation.
Unit Economics, Exceptional Retention, and Customer Lifetime Value 7312 Nathan analyzes unit economics including gross churn, negative net churn, and LTV. Eric provides a slight correction to Nathan's MRR math by factoring in partner discounts and commission structures.
Scaling to Eleven Million ARR and Capturing SMBs 6211 Eric shares Podium's rapid climb to $11M ARR and explains the unique challenges of selling software to offline SMBs compared to traditional B2B SaaS companies.
Mid-Roll Promotions: The Top Inbox and HostGator Web Services 5112 Following mid-roll sponsor reads, Nathan runs through the Famous Five questions and gently corrects Eric about the podcast's launch timeline.

Statements from this episode (15)

Assertion Supported
Eric Rea: Podium Charges $299 per Month per Location
“So we charge it. 299 dollars a month. And that's per location.”
Eric Rea Dec 30, 2016 ▶ 2:31
Assertion Not checkable as stated
Eric Rea: Podium Customers Pay an Average of $400 Monthly
“So average customers paying us about 400 dollars a month.”
Eric Rea Dec 30, 2016 ▶ 2:57
Assertion Not checkable as stated
Podium expanded from 15 to 110 employees over 12 months
“End of 20 15. We had 15 employees. And then today we have a 110.”
Eric Rea Dec 30, 2016 ▶ 4:18
Assertion Partly supported
Podium raised $500k seed in 2014 and $3.5M in December 2015
“We raised 500 grand in 2014. So that was our kind of seed round. And then we raised three and a half in December of 2015.”
Eric Rea Dec 30, 2016 ▶ 5:51
Disclosure
Podium gave up about 20% equity for its $4M in funding
“We have given up About. 20% of the business.”
Eric Rea Dec 30, 2016 ▶ 6:35
Assertion Not checkable as stated
Rea: Podium's gross monthly customer churn hovers around 1%
“We usually focus on a net churn, but our gross hovers around about one percent monthly, which in our space is extremely good.”
Eric Rea Dec 30, 2016 ▶ 8:46
Assertion Supported
Rea: Small businesses go out of business at about 1% monthly
“Small businesses go out of business at about one percent monthly.”
Eric Rea Dec 30, 2016 ▶ 9:01
Assertion Not checkable as stated
Rea: Podium maintains a net negative churn of about 2% monthly
“And then we really focus on our net churn, which is about negative two percent monthly.”
Eric Rea Dec 30, 2016 ▶ 9:09
Assertion Not checkable as stated
Rea: Podium spends about $1,200 on average to acquire a customer
“We spend about 1200 dollars to acquire a customer. That's our cap.”
Eric Rea Dec 30, 2016 ▶ 9:59
Assertion Not checkable as stated
Rea: Podium's average customer lifetime value is about $10,000
“So our LTV, our average LTV is about 10 grand. So if you take, it's about three, three year lifetime.”
Eric Rea Dec 30, 2016 ▶ 10:15
Assertion Not checkable as stated
Rea: Podium grew from zero to $1.8M ARR in 2015
“We went from zero at the beginning of 2015 to, well, close to zero to 1.8 million in ARR. By the end of 2015.”
Eric Rea Dec 30, 2016 ▶ 11:05
Assertion Not checkable as stated
Rea: Podium hit $11 million ARR in December 2016
“We just hit eleven million in ARR this month.”
Eric Rea Dec 30, 2016 ▶ 11:31
Prediction Not checkable as stated
Rea targets reaching mid-$30M ARR for Podium in 2017
“2017, we'd like to do twenty five million dollars in new annual recurring revenue, which would take us to about somewhere in the mid thirties if our churn holds.”
Eric Rea Dec 30, 2016 ▶ 11:41
Disclosure
Rea: Podium runs its whole business on Domo BI software
“Okay, so it's a local company. It's called Domo BI company, and I didn't even know if they had a real product, but we just started using about six months ago, and I, like, our whole business is basically run on Domo.”
Eric Rea Dec 30, 2016 ▶ 16:30
Disclosure
Rea: Domo CEO Josh James is an investor in Podium
“We Josh James, their CEO is an investor, so we actually get it.”
Eric Rea Dec 30, 2016 ▶ 16:44
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