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Oct 29, 2016 · 21m · top-founders

EP 462: $8.8M 2015 Sales of iPhone Repair Parts with CEO Chris Koerner

Nathan Latka · 10m spoken Chris Koerner · 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

Host Nathan Latka interviews LCD Cycle CEO Chris Koerner to examine how he bootstrapped a B2B smartphone parts and screen-recycling company to $8.8 million in revenue while maintaining profitability and majority ownership.

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 56% of the talking time here. How this is scored →

Nathan as informed peer 4.6 Guest teaching 2.6 Guest disagreement 1.4 Nathan pushing back 3.0
05100:0010:0020:002:28–6:18 · Nathan as informed peer 4/10 College Startup Beginnings and First Business Exit Latka guides the conversation through Koerner's first exit and his transition into the LCD wholesale business. The tone is collaborative, with Latka normalising modest early exits before digging into lead generation tactics.6:18–11:23 · Nathan as informed peer 7/10 Profit Margins, Bootstrap Financing, and Equity Structure Latka drills into Koerner's financials, immediately catching an inconsistency between Koerner's claimed 32% gross margin and unit unit economics of buying at $23 and selling at $32. Koerner clarifies that he targets a 40% markup rather than true margin.11:23–13:43 · Nathan as informed peer 5/10 Market Volatility, Customer Retention, and Acquisition Costs Koerner explains how market shortages spiked screen prices and distorted revenue numbers, teaching Latka about wholesale parts commodity fluctuations. Latka pushes for precise definitions around what Koerner means by an 80% reorder rate.13:43–17:23 · Nathan as informed peer 5/10 Rejecting VC Term Sheets and Business Valuation Koerner explains turning down a $1M VC term sheet due to slow closing times. Latka walks through standard valuation multiples on net income to calculate the company's enterprise value.17:24–18:55 · Nathan as informed peer 2/10 The Famous Five Rapid-Fire Questions Koerner answers the Famous Five rapid-fire questions smoothly, mentioning he listened to dozens of episodes prior to the interview. The exchange is lighthearted and cordial.2:28–6:18 · Guest teaching 2/10 College Startup Beginnings and First Business Exit Latka guides the conversation through Koerner's first exit and his transition into the LCD wholesale business. The tone is collaborative, with Latka normalising modest early exits before digging into lead generation tactics.6:18–11:23 · Guest teaching 3/10 Profit Margins, Bootstrap Financing, and Equity Structure Latka drills into Koerner's financials, immediately catching an inconsistency between Koerner's claimed 32% gross margin and unit unit economics of buying at $23 and selling at $32. Koerner clarifies that he targets a 40% markup rather than true margin.11:23–13:43 · Guest teaching 5/10 Market Volatility, Customer Retention, and Acquisition Costs Koerner explains how market shortages spiked screen prices and distorted revenue numbers, teaching Latka about wholesale parts commodity fluctuations. Latka pushes for precise definitions around what Koerner means by an 80% reorder rate.13:43–17:23 · Guest teaching 2/10 Rejecting VC Term Sheets and Business Valuation Koerner explains turning down a $1M VC term sheet due to slow closing times. Latka walks through standard valuation multiples on net income to calculate the company's enterprise value.17:24–18:55 · Guest teaching 1/10 The Famous Five Rapid-Fire Questions Koerner answers the Famous Five rapid-fire questions smoothly, mentioning he listened to dozens of episodes prior to the interview. The exchange is lighthearted and cordial.2:28–6:18 · Guest disagreement 1/10 College Startup Beginnings and First Business Exit Latka guides the conversation through Koerner's first exit and his transition into the LCD wholesale business. The tone is collaborative, with Latka normalising modest early exits before digging into lead generation tactics.6:18–11:23 · Guest disagreement 2/10 Profit Margins, Bootstrap Financing, and Equity Structure Latka drills into Koerner's financials, immediately catching an inconsistency between Koerner's claimed 32% gross margin and unit unit economics of buying at $23 and selling at $32. Koerner clarifies that he targets a 40% markup rather than true margin.11:23–13:43 · Guest disagreement 2/10 Market Volatility, Customer Retention, and Acquisition Costs Koerner explains how market shortages spiked screen prices and distorted revenue numbers, teaching Latka about wholesale parts commodity fluctuations. Latka pushes for precise definitions around what Koerner means by an 80% reorder rate.13:43–17:23 · Guest disagreement 1/10 Rejecting VC Term Sheets and Business Valuation Koerner explains turning down a $1M VC term sheet due to slow closing times. Latka walks through standard valuation multiples on net income to calculate the company's enterprise value.17:24–18:55 · Guest disagreement 1/10 The Famous Five Rapid-Fire Questions Koerner answers the Famous Five rapid-fire questions smoothly, mentioning he listened to dozens of episodes prior to the interview. The exchange is lighthearted and cordial.2:28–6:18 · Nathan pushing back 2/10 College Startup Beginnings and First Business Exit Latka guides the conversation through Koerner's first exit and his transition into the LCD wholesale business. The tone is collaborative, with Latka normalising modest early exits before digging into lead generation tactics.6:18–11:23 · Nathan pushing back 6/10 Profit Margins, Bootstrap Financing, and Equity Structure Latka drills into Koerner's financials, immediately catching an inconsistency between Koerner's claimed 32% gross margin and unit unit economics of buying at $23 and selling at $32. Koerner clarifies that he targets a 40% markup rather than true margin.11:23–13:43 · Nathan pushing back 4/10 Market Volatility, Customer Retention, and Acquisition Costs Koerner explains how market shortages spiked screen prices and distorted revenue numbers, teaching Latka about wholesale parts commodity fluctuations. Latka pushes for precise definitions around what Koerner means by an 80% reorder rate.13:43–17:23 · Nathan pushing back 2/10 Rejecting VC Term Sheets and Business Valuation Koerner explains turning down a $1M VC term sheet due to slow closing times. Latka walks through standard valuation multiples on net income to calculate the company's enterprise value.17:24–18:55 · Nathan pushing back 1/10 The Famous Five Rapid-Fire Questions Koerner answers the Famous Five rapid-fire questions smoothly, mentioning he listened to dozens of episodes prior to the interview. The exchange is lighthearted and cordial.

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

0:00 · Nathan 82.8% · guest 17.2%0:00 · Nathan 82.8% · guest 17.2%3:00 · Nathan 28.9% · guest 71.1%3:00 · Nathan 28.9% · guest 71.1%6:00 · Nathan 31.7% · guest 68.3%6:00 · Nathan 31.7% · guest 68.3%9:00 · Nathan 40.6% · guest 59.4%9:00 · Nathan 40.6% · guest 59.4%12:00 · Nathan 36.2% · guest 63.8%12:00 · Nathan 36.2% · guest 63.8%15:00 · Nathan 90.2% · guest 9.8%15:00 · Nathan 90.2% · guest 9.8%18:00 · Nathan 77.3% · guest 22.7%18:00 · Nathan 77.3% · guest 22.7%21:00 · Nathan 100% · guest 0%21:00 · Nathan 100% · guest 0%
Sharpest disagreement ▶ 12:40 Reorder rate definition clarification

Koerner pushes back against Latka's assumption of monthly recurring cadence, clarifying that his 80% reorder metric strictly measures repeat purchasing across a six-month window.

 Hardest push from Nathan ▶ 9:26 Latka presses on margin discrepancies

Latka refuses to let the unit economics slide, challenging Koerner on how a $23 cost on a $32 sale aligns with a claimed 32% gross margin.

 Biggest teaching moment ▶ 11:38 Commodity price fluctuations in smartphone screens

Koerner educates Latka on why top-line revenue dropped while volume increased, explaining that component shortages artificially inflated screen prices from $25 to $65.

 Nathan holds their own ▶ 9:30 Latka dissects gross margin math

Latka demonstrates operational accounting fluency by calculating the exact COGS breakdown on the fly when the guest mixes up markups and gross margins.
the scores for every segment, with the reasoning behind each
ChapterTopicNathan as informed peerGuest teachingGuest disagreementNathan pushing backWhy
College Startup Beginnings and First Business Exit 4212 Latka guides the conversation through Koerner's first exit and his transition into the LCD wholesale business. The tone is collaborative, with Latka normalising modest early exits before digging into lead generation tactics.
Profit Margins, Bootstrap Financing, and Equity Structure 7326 Latka drills into Koerner's financials, immediately catching an inconsistency between Koerner's claimed 32% gross margin and unit unit economics of buying at $23 and selling at $32. Koerner clarifies that he targets a 40% markup rather than true margin.
Market Volatility, Customer Retention, and Acquisition Costs 5524 Koerner explains how market shortages spiked screen prices and distorted revenue numbers, teaching Latka about wholesale parts commodity fluctuations. Latka pushes for precise definitions around what Koerner means by an 80% reorder rate.
Rejecting VC Term Sheets and Business Valuation 5212 Koerner explains turning down a $1M VC term sheet due to slow closing times. Latka walks through standard valuation multiples on net income to calculate the company's enterprise value.
The Famous Five Rapid-Fire Questions 2111 Koerner answers the Famous Five rapid-fire questions smoothly, mentioning he listened to dozens of episodes prior to the interview. The exchange is lighthearted and cordial.

Statements from this episode (12)

Disclosure
First Repair Startup Sold for $30K and 33% Equity
“They basically took my stores, my branding, my name, my URL, and then they added theirs to the pot, and they abandoned their name and brand, and they took on mine, and then they gave me, like, 30 grand, and we basically split up the equity, 33, 33, 33.”
Chris Koerner Oct 29, 2016 ▶ 3:11
Assertion Contradicted
US Market Has About 13,000 Smartphone Repair Shops
“There's about 13,000 repair shops, and we supply them parts.”
Chris Koerner Oct 29, 2016 ▶ 4:46
Assertion Not checkable as stated
LCD Cycle Generated $2.1M in Revenue in 2013
“First we opened on January second, so 2013 was a full year. We did 2.1 million that year.”
Chris Koerner Oct 29, 2016 ▶ 5:03
Assertion Not checkable as stated
LCD Cycle Grew Revenue to $4.8M in 2014, $8.8M in 2015
“So we did 2.1, and then 2014, that was 2013, 20 14, we did 4.8, and then last year in 2015, we did 8.8.”
Chris Koerner Oct 29, 2016 ▶ 5:15
Assertion Not checkable as stated
LCD Cycle Posted 32% Gross Margins, $800K Profit on $8.8M Revenue
“So our gross margin is about 32 and net is about eight percent. So we did about, 800 grand on 8.8 million.”
Chris Koerner Oct 29, 2016 ▶ 6:44
Disclosure
Koerner Launched LCD Cycle by Wiring Entire $30K Savings to China
“So we started I took that 30 grand from, you know, the merger sale or whatever. And I literally, like four days later, I wired all of it to China on just a hope and a prayer that I would get some parts back.”
Chris Koerner Oct 29, 2016 ▶ 7:12
Assertion Not checkable as stated
LCD Cycle Surpassed One Million Total Parts Shipped
“So, it's been almost four years, and we have, we just eclipsed our millionth part.”
Chris Koerner Oct 29, 2016 ▶ 8:22
Assertion Not checkable as stated
Screens Account for 70% to 80% of LCD Cycle Sales
“Mostly, yeah, we do, you know, we've got a few hundred SKUs, but I mean, 8070, 80% of what we sell are screens.”
Chris Koerner Oct 29, 2016 ▶ 8:46
Prediction Not checkable as stated
LCD Cycle Expects Around $6.5 Million in 2016 Revenue
“We're actually looking to do about six and a half this year.”
Chris Koerner Oct 29, 2016 ▶ 11:31
Assertion Not checkable as stated
2015 Supply Shortage Spiked iPhone Screen Prices From $25 to $65
“The reason for our high top line number last year was because there was such an incredible shortage in the market. That the average price of screens went from like, 25 to 65 dollars, and so our top line just went through the roof, whereas the number of actual …”
Chris Koerner Oct 29, 2016 ▶ 11:44
Assertion Not checkable as stated
Over 80% of LCD Cycle Customers Order at Least Twice
“That just means it's a customer that's not just ordering once, right? A customer that's ordering at least twice is over 80%.”
Chris Koerner Oct 29, 2016 ▶ 13:02
Disclosure
Koerner Turned Down $1M VC Term Sheet Due to Slow Process
“I raised a million bucks last year from a VC firm in Birmingham. And They took so long to actually, you know, come to the table with the term sheet that by the time they did, I really didn't need the money anymore. We kind of worked through our cash flow issue…”
Chris Koerner Oct 29, 2016 ▶ 13:47
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