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Nov 27, 2016 · 21m · top-founders

EP 491: $13M in Funding, Grow.com Hits $300k MRR, Helping 600 Customers w/ Better Dashboards with Rob Nelson CEO

Rob Nelson · 9m 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

In this episode of The Top, host Nathan Latka interviews Rob Nelson, CEO of Grow.com, to explore how the company scaled to $350k in monthly recurring revenue and raised $13 million in venture funding. Nelson details Grow's unit economics, pricing evolution from low-cost tiers to a high-touch $600/month model, and lessons from scaling a 70-person team in Utah.

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 46.5% of the talking time here. How this is scored →

Nathan as informed peer 6.0 Guest teaching 2.8 Guest disagreement 1.3 Nathan pushing back 2.3
05100:0010:0020:001:07–4:04 · Nathan as informed peer 5/10 Guest Welcome and Overview of Grow.com Latka welcomes Nelson and explores Grow.com's founding origins following his previous bootstrapped software exit. Latka shares his own acquisition negotiation framework regarding founders' crazy numbers.4:04–8:04 · Nathan as informed peer 7/10 SaaS Pricing Model, Retention, and User Engagement Latka challenges Nelson's decision to offer unlimited user seats instead of expanding ARPU via seat tiers. Nelson passionately defends democratization of BI, and Latka drills into churn and retention metrics.8:04–11:42 · Nathan as informed peer 6/10 Team Expansion, Venture Funding, and Silicon Slopes Nelson discusses scaling the team to 70 and raising venture capital. Nelson corrects Latka's assumption about convertible notes, clarifying both early rounds were priced equity rounds.11:42–14:34 · Nathan as informed peer 8/10 Revenue Milestones and Customer Acquisition Economics Latka demonstrates sharp financial modeling by multiplying customer count and ARPU to estimate monthly run rates and calculating a six-month CAC payback period based on fully weighted acquisition costs.14:34–16:37 · Nathan as informed peer 7/10 Market Positioning, Pricing Evolution, and Onboarding Latka brings up competitor Dasharoo and examines why low-ARPU self-serve BI models struggle. Nelson details how complex onboarding requires higher price points to support hands-on customer support.16:38–20:08 · Nathan as informed peer 3/10 Acuity Scheduling Commercial Interlude Latka delivers an extended promotional spot for Acuity Scheduling before conducting the standard Famous Five lightning round with Nelson broadcasting from his garage.1:07–4:04 · Guest teaching 2/10 Guest Welcome and Overview of Grow.com Latka welcomes Nelson and explores Grow.com's founding origins following his previous bootstrapped software exit. Latka shares his own acquisition negotiation framework regarding founders' crazy numbers.4:04–8:04 · Guest teaching 3/10 SaaS Pricing Model, Retention, and User Engagement Latka challenges Nelson's decision to offer unlimited user seats instead of expanding ARPU via seat tiers. Nelson passionately defends democratization of BI, and Latka drills into churn and retention metrics.8:04–11:42 · Guest teaching 4/10 Team Expansion, Venture Funding, and Silicon Slopes Nelson discusses scaling the team to 70 and raising venture capital. Nelson corrects Latka's assumption about convertible notes, clarifying both early rounds were priced equity rounds.11:42–14:34 · Guest teaching 2/10 Revenue Milestones and Customer Acquisition Economics Latka demonstrates sharp financial modeling by multiplying customer count and ARPU to estimate monthly run rates and calculating a six-month CAC payback period based on fully weighted acquisition costs.14:34–16:37 · Guest teaching 5/10 Market Positioning, Pricing Evolution, and Onboarding Latka brings up competitor Dasharoo and examines why low-ARPU self-serve BI models struggle. Nelson details how complex onboarding requires higher price points to support hands-on customer support.16:38–20:08 · Guest teaching 1/10 Acuity Scheduling Commercial Interlude Latka delivers an extended promotional spot for Acuity Scheduling before conducting the standard Famous Five lightning round with Nelson broadcasting from his garage.1:07–4:04 · Guest disagreement 1/10 Guest Welcome and Overview of Grow.com Latka welcomes Nelson and explores Grow.com's founding origins following his previous bootstrapped software exit. Latka shares his own acquisition negotiation framework regarding founders' crazy numbers.4:04–8:04 · Guest disagreement 3/10 SaaS Pricing Model, Retention, and User Engagement Latka challenges Nelson's decision to offer unlimited user seats instead of expanding ARPU via seat tiers. Nelson passionately defends democratization of BI, and Latka drills into churn and retention metrics.8:04–11:42 · Guest disagreement 1/10 Team Expansion, Venture Funding, and Silicon Slopes Nelson discusses scaling the team to 70 and raising venture capital. Nelson corrects Latka's assumption about convertible notes, clarifying both early rounds were priced equity rounds.11:42–14:34 · Guest disagreement 1/10 Revenue Milestones and Customer Acquisition Economics Latka demonstrates sharp financial modeling by multiplying customer count and ARPU to estimate monthly run rates and calculating a six-month CAC payback period based on fully weighted acquisition costs.14:34–16:37 · Guest disagreement 1/10 Market Positioning, Pricing Evolution, and Onboarding Latka brings up competitor Dasharoo and examines why low-ARPU self-serve BI models struggle. Nelson details how complex onboarding requires higher price points to support hands-on customer support.16:38–20:08 · Guest disagreement 1/10 Acuity Scheduling Commercial Interlude Latka delivers an extended promotional spot for Acuity Scheduling before conducting the standard Famous Five lightning round with Nelson broadcasting from his garage.1:07–4:04 · Nathan pushing back 1/10 Guest Welcome and Overview of Grow.com Latka welcomes Nelson and explores Grow.com's founding origins following his previous bootstrapped software exit. Latka shares his own acquisition negotiation framework regarding founders' crazy numbers.4:04–8:04 · Nathan pushing back 4/10 SaaS Pricing Model, Retention, and User Engagement Latka challenges Nelson's decision to offer unlimited user seats instead of expanding ARPU via seat tiers. Nelson passionately defends democratization of BI, and Latka drills into churn and retention metrics.8:04–11:42 · Nathan pushing back 3/10 Team Expansion, Venture Funding, and Silicon Slopes Nelson discusses scaling the team to 70 and raising venture capital. Nelson corrects Latka's assumption about convertible notes, clarifying both early rounds were priced equity rounds.11:42–14:34 · Nathan pushing back 3/10 Revenue Milestones and Customer Acquisition Economics Latka demonstrates sharp financial modeling by multiplying customer count and ARPU to estimate monthly run rates and calculating a six-month CAC payback period based on fully weighted acquisition costs.14:34–16:37 · Nathan pushing back 2/10 Market Positioning, Pricing Evolution, and Onboarding Latka brings up competitor Dasharoo and examines why low-ARPU self-serve BI models struggle. Nelson details how complex onboarding requires higher price points to support hands-on customer support.16:38–20:08 · Nathan pushing back 1/10 Acuity Scheduling Commercial Interlude Latka delivers an extended promotional spot for Acuity Scheduling before conducting the standard Famous Five lightning round with Nelson broadcasting from his garage.

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

0:00 · Nathan 68.5% · guest 31.5%0:00 · Nathan 68.5% · guest 31.5%3:00 · Nathan 28.1% · guest 71.9%3:00 · Nathan 28.1% · guest 71.9%6:00 · Nathan 36% · guest 64%6:00 · Nathan 36% · guest 64%9:00 · Nathan 28.6% · guest 71.4%9:00 · Nathan 28.6% · guest 71.4%12:00 · Nathan 48.3% · guest 51.7%12:00 · Nathan 48.3% · guest 51.7%15:00 · Nathan 59.6% · guest 40.4%15:00 · Nathan 59.6% · guest 40.4%18:00 · Nathan 53.4% · guest 46.6%18:00 · Nathan 53.4% · guest 46.6%21:00 · Nathan 100% · guest 0%21:00 · Nathan 100% · guest 0%
Sharpest disagreement ▶ 4:32 Nelson rejects seat-based monetization model

Nelson vigorously attacks traditional seat pricing, stating that restricting business intelligence to a single user in a cubicle makes him want to throw up.

 Hardest push from Nathan ▶ 4:24 Latka challenges giving up seat expansion revenue

Latka challenges Nelson's unlimited seat model as a major concession that leaves standard SaaS expansion revenue on the table.

 Biggest teaching moment ▶ 10:16 Nelson corrects Latka on round structure

When Latka assumes the early fundraising was done on convertible debt notes, Nelson corrects him that both seed rounds were priced equity rounds.

 Nathan holds their own ▶ 14:05 Latka calculates payback velocity

Latka instantly derives the annual contract value from monthly ARPU and compares it against a 3500 dollar CAC to pinpoint a six-month payback timeline.
the scores for every segment, with the reasoning behind each
ChapterTopicNathan as informed peerGuest teachingGuest disagreementNathan pushing backWhy
Guest Welcome and Overview of Grow.com 5211 Latka welcomes Nelson and explores Grow.com's founding origins following his previous bootstrapped software exit. Latka shares his own acquisition negotiation framework regarding founders' crazy numbers.
SaaS Pricing Model, Retention, and User Engagement 7334 Latka challenges Nelson's decision to offer unlimited user seats instead of expanding ARPU via seat tiers. Nelson passionately defends democratization of BI, and Latka drills into churn and retention metrics.
Team Expansion, Venture Funding, and Silicon Slopes 6413 Nelson discusses scaling the team to 70 and raising venture capital. Nelson corrects Latka's assumption about convertible notes, clarifying both early rounds were priced equity rounds.
Revenue Milestones and Customer Acquisition Economics 8213 Latka demonstrates sharp financial modeling by multiplying customer count and ARPU to estimate monthly run rates and calculating a six-month CAC payback period based on fully weighted acquisition costs.
Market Positioning, Pricing Evolution, and Onboarding 7512 Latka brings up competitor Dasharoo and examines why low-ARPU self-serve BI models struggle. Nelson details how complex onboarding requires higher price points to support hands-on customer support.
Acuity Scheduling Commercial Interlude 3111 Latka delivers an extended promotional spot for Acuity Scheduling before conducting the standard Famous Five lightning round with Nelson broadcasting from his garage.

Statements from this episode (13)

Opinion
Nelson: Existing BI tools fail SMBs on cost or capability
“I tried several to try and solve the problem, and they were either insanely expensive, really complex to manage, or they were too simple and just didn't, like, give us what we needed. It was things like our latest tweets and, you know, Facebook likes. It wasn'…”
Rob Nelson Nov 27, 2016 ▶ 2:50
Assertion Not checkable as stated
Rob Nelson: Grow's ARPU is about $600 per month
“So our average you know, average, our ARPU is, is like, 600 dollars a month.”
Rob Nelson Nov 27, 2016 ▶ 5:16
Assertion Not checkable as stated
Nelson: 76% of Grow trial customers convert to paid annual plans
“Yes, 75%. That's pretty good. Yeah, we feel good about that. 70, you know, 76% in the last 90 days You know, renew from that trial period.”
Rob Nelson Nov 27, 2016 ▶ 6:19
Assertion Not checkable as stated
Rob Nelson: 50% of Grow customers log in daily, 92% monthly
“And half of our customers log in every day. And 90% of our customers, 92% of our customers log in you know, are logging in at least once a month.”
Rob Nelson Nov 27, 2016 ▶ 7:43
Assertion Not checkable as stated
Rob Nelson: Grow serves about 600 customers
“We've got about 600.”
Rob Nelson Nov 27, 2016 ▶ 7:59
Assertion Not checkable as stated
Grow.com expanded its team from 12 to about 70 people in 10 months
“We have about 70 right now, and in January we were at 12.”
Rob Nelson Nov 27, 2016 ▶ 9:43
Disclosure
Nelson: Grow.com's seed rounds were structured as priced equity
“Both seed rounds were priced equity rounds.”
Rob Nelson Nov 27, 2016 ▶ 10:25
Insight
Nelson: First-time founders should bootstrap to learn without rapid scaling pressure
“I'm a huge fan of bootstrapping on the first venture. I mean, you kind of you kind of go at your own pace. There's, there is no pressure to, you know, scale to a hundred million really quick. I mean you're learning and making mistakes and it's okay.”
Rob Nelson Nov 27, 2016 ▶ 10:46
Disclosure
Nelson: Grow.com did roughly $150k to $200k in 2015 revenue
“2015 was probably maybe I don't know, maybe yeah, a 150 grand, maybe 200 grand.”
Rob Nelson Nov 27, 2016 ▶ 12:16
Prediction Not publicly verifiable
Nelson: Grow.com will surpass $350k MRR by December 2016
“Oh, yeah, I mean, we'll, we'll surpass that.”
Rob Nelson Nov 27, 2016 ▶ 13:22
Disclosure
Nelson: Grow.com's fully weighted CAC is $3,500
“Fully weighted, we're at 3500.”
Rob Nelson Nov 27, 2016 ▶ 14:06
Insight
Nelson: Building a large self-serve SaaS at low ARPU is insanely hard
“When I launched, that's, you know, it was all self-serve. It was, you know, 29 bucks a month or 49 bucks a month, and it's just, it's insanely hard to build something large without, I mean, Dropbox has done it, but very few have.”
Rob Nelson Nov 27, 2016 ▶ 15:46
Insight
Nelson: High-touch onboarding is critical for complex BI products
“The other insight is the customers just need some help. You know BI is complex. Data is complex. And so to have a really good onboarding team that is fairly high touch in the beginning to help customers get immediate value and success out of the application is…”
Rob Nelson Nov 27, 2016 ▶ 16:03
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