StarZero All shows Try the podcast clipper →

Oct 13, 2016 · 19m · top-founders

EP 447: $0 to $13M Agency Revenue in 10 Years with RaizLabs CEO Greg Raiz

Greg Reyes · 10m spoken Nathan Latka · 6m 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 Raizlabs founder and CEO Greg Raiz, who shares how he bootstrapped a mobile and web innovation agency from scratch to over $13 million in annual revenue. Raiz outlines his strategic approach to financial discipline, scaling an 80-person team, engineering successful apps like Runkeeper, and incubating proprietary software tools.

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 39.8% of the talking time here. How this is scored →

Nathan as informed peer 2.6 Guest teaching 1.6 Guest disagreement 1.2 Nathan pushing back 2.0
05100:0010:001:41–5:25 · Nathan as informed peer 2/10 Introducing Greg Raiz and Raizlabs Agency Model Nathan introduces Greg and asks baseline questions regarding Raizlabs' founding, team size, and historical revenues. Greg answers transparently without any friction.5:25–8:52 · Nathan as informed peer 4/10 Operating Margins, Executive Compensation, and Wealth Retention Nathan presses Greg on executive compensation, personal monthly burn, and headcount math relative to top-line revenue. Greg clarifies how scaling expenses across the year maintain profitability rather than breakeven.8:53–11:21 · Nathan as informed peer 3/10 Operational Tool Stack and Perkins School Case Study Nathan asks about tool stack costs and teases Greg about client envy when building high-value software. Greg explains their micro-navigation case study with the Perkins School for the Blind.11:21–15:14 · Nathan as informed peer 4/10 Runkeeper Development and Transitioning Apps In-House Nathan demonstrates knowledge of Runkeeper founder Jason Jacobs and the common playbook of agencies launching SaaS spin-offs. Greg reframes clients bringing products in-house as a planned sign of success.15:14–18:00 · Nathan as informed peer 0/10 Sponsor Spotlight on Hiring Developers Through Toptal The segment begins with a solo promotional sponsor read for Toptal followed by standard, amicable Famous Five rapid-fire questions.1:41–5:25 · Guest teaching 1/10 Introducing Greg Raiz and Raizlabs Agency Model Nathan introduces Greg and asks baseline questions regarding Raizlabs' founding, team size, and historical revenues. Greg answers transparently without any friction.5:25–8:52 · Guest teaching 3/10 Operating Margins, Executive Compensation, and Wealth Retention Nathan presses Greg on executive compensation, personal monthly burn, and headcount math relative to top-line revenue. Greg clarifies how scaling expenses across the year maintain profitability rather than breakeven.8:53–11:21 · Guest teaching 2/10 Operational Tool Stack and Perkins School Case Study Nathan asks about tool stack costs and teases Greg about client envy when building high-value software. Greg explains their micro-navigation case study with the Perkins School for the Blind.11:21–15:14 · Guest teaching 2/10 Runkeeper Development and Transitioning Apps In-House Nathan demonstrates knowledge of Runkeeper founder Jason Jacobs and the common playbook of agencies launching SaaS spin-offs. Greg reframes clients bringing products in-house as a planned sign of success.15:14–18:00 · Guest teaching 0/10 Sponsor Spotlight on Hiring Developers Through Toptal The segment begins with a solo promotional sponsor read for Toptal followed by standard, amicable Famous Five rapid-fire questions.1:41–5:25 · Guest disagreement 1/10 Introducing Greg Raiz and Raizlabs Agency Model Nathan introduces Greg and asks baseline questions regarding Raizlabs' founding, team size, and historical revenues. Greg answers transparently without any friction.5:25–8:52 · Guest disagreement 2/10 Operating Margins, Executive Compensation, and Wealth Retention Nathan presses Greg on executive compensation, personal monthly burn, and headcount math relative to top-line revenue. Greg clarifies how scaling expenses across the year maintain profitability rather than breakeven.8:53–11:21 · Guest disagreement 1/10 Operational Tool Stack and Perkins School Case Study Nathan asks about tool stack costs and teases Greg about client envy when building high-value software. Greg explains their micro-navigation case study with the Perkins School for the Blind.11:21–15:14 · Guest disagreement 2/10 Runkeeper Development and Transitioning Apps In-House Nathan demonstrates knowledge of Runkeeper founder Jason Jacobs and the common playbook of agencies launching SaaS spin-offs. Greg reframes clients bringing products in-house as a planned sign of success.15:14–18:00 · Guest disagreement 0/10 Sponsor Spotlight on Hiring Developers Through Toptal The segment begins with a solo promotional sponsor read for Toptal followed by standard, amicable Famous Five rapid-fire questions.1:41–5:25 · Nathan pushing back 1/10 Introducing Greg Raiz and Raizlabs Agency Model Nathan introduces Greg and asks baseline questions regarding Raizlabs' founding, team size, and historical revenues. Greg answers transparently without any friction.5:25–8:52 · Nathan pushing back 4/10 Operating Margins, Executive Compensation, and Wealth Retention Nathan presses Greg on executive compensation, personal monthly burn, and headcount math relative to top-line revenue. Greg clarifies how scaling expenses across the year maintain profitability rather than breakeven.8:53–11:21 · Nathan pushing back 2/10 Operational Tool Stack and Perkins School Case Study Nathan asks about tool stack costs and teases Greg about client envy when building high-value software. Greg explains their micro-navigation case study with the Perkins School for the Blind.11:21–15:14 · Nathan pushing back 3/10 Runkeeper Development and Transitioning Apps In-House Nathan demonstrates knowledge of Runkeeper founder Jason Jacobs and the common playbook of agencies launching SaaS spin-offs. Greg reframes clients bringing products in-house as a planned sign of success.15:14–18:00 · Nathan pushing back 0/10 Sponsor Spotlight on Hiring Developers Through Toptal The segment begins with a solo promotional sponsor read for Toptal followed by standard, amicable Famous Five rapid-fire questions.

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

0:00 · Nathan 81.7% · guest 18.3%0:00 · Nathan 81.7% · guest 18.3%3:00 · Nathan 17.7% · guest 82.3%3:00 · Nathan 17.7% · guest 82.3%6:00 · Nathan 21.6% · guest 78.4%6:00 · Nathan 21.6% · guest 78.4%9:00 · Nathan 13.5% · guest 86.5%9:00 · Nathan 13.5% · guest 86.5%12:00 · Nathan 22.4% · guest 77.6%12:00 · Nathan 22.4% · guest 77.6%15:00 · Nathan 65.2% · guest 34.8%15:00 · Nathan 65.2% · guest 34.8%18:00 · Nathan 94.5% · guest 5.5%18:00 · Nathan 94.5% · guest 5.5%
Sharpest disagreement ▶ 12:31 Reframing client in-housing as intended graduation

Greg rejects Nathan's framing that losing agency-of-record status to in-house teams is a dilemma, arguing they actively design apps to graduate.

 Hardest push from Nathan ▶ 8:22 Challenging agency breakeven math based on monthly burn

Nathan directly challenges Greg by calculating that an 800k-900k monthly headcount burn on 13M projected revenue implies zero profit.

 Biggest teaching moment ▶ 8:30 Clarifying intra-year expense ramp versus annual margins

Greg educates Nathan on accounting for intra-year headcount growth, showing costs started much lower earlier in the year to ensure healthy margins.

 Nathan holds their own ▶ 13:49 Explaining agency-to-product incubation patterns

Nathan articulates his domain insight on how high-performing agencies leverage cross-client pattern recognition to build standalone software products.
the scores for every segment, with the reasoning behind each
ChapterTopicNathan as informed peerGuest teachingGuest disagreementNathan pushing backWhy
Introducing Greg Raiz and Raizlabs Agency Model 2111 Nathan introduces Greg and asks baseline questions regarding Raizlabs' founding, team size, and historical revenues. Greg answers transparently without any friction.
Operating Margins, Executive Compensation, and Wealth Retention 4324 Nathan presses Greg on executive compensation, personal monthly burn, and headcount math relative to top-line revenue. Greg clarifies how scaling expenses across the year maintain profitability rather than breakeven.
Operational Tool Stack and Perkins School Case Study 3212 Nathan asks about tool stack costs and teases Greg about client envy when building high-value software. Greg explains their micro-navigation case study with the Perkins School for the Blind.
Runkeeper Development and Transitioning Apps In-House 4223 Nathan demonstrates knowledge of Runkeeper founder Jason Jacobs and the common playbook of agencies launching SaaS spin-offs. Greg reframes clients bringing products in-house as a planned sign of success.
Sponsor Spotlight on Hiring Developers Through Toptal 0000 The segment begins with a solo promotional sponsor read for Toptal followed by standard, amicable Famous Five rapid-fire questions.

Statements from this episode (13)

Disclosure
Raizlabs projects range from hundreds of thousands to nearly $1 million
“So our project definitely range in size, but they tend to be anywhere from a couple 100,000 dollars. We have some projects close to a million dollars in size.”
Greg Reyes Oct 13, 2016 ▶ 2:45
Disclosure
Raizlabs bootstrapped for a decade without raising venture capital
“We've never taken funding”
Greg Reyes Oct 13, 2016 ▶ 4:35
Assertion Supported
Raizlabs generated just under $9 million in revenue in 2015
“I think we were just shy of nine million.”
Greg Reyes Oct 13, 2016 ▶ 4:56
Prediction Partly held up
Raizlabs projected $13 million to $14 million in 2016 revenue
“We're on track to 13, 14 this year.”
Greg Reyes Oct 13, 2016 ▶ 4:59
Assertion Supported
Raizlabs reached 80 employees across its Boston and Oakland offices
“We're about 80 folks. We have offices in Boston and Oakland, California.”
Greg Reyes Oct 13, 2016 ▶ 5:12
Assertion Not checkable as stated
Raizlabs has been profitable every year since its inception
“But the company has been profitable every year since, since I started it when I was taking zero salary through, through to today.”
Greg Reyes Oct 13, 2016 ▶ 5:51
Disclosure
Greg Raiz started Raizlabs with $15,000 to $20,000 in personal savings
“I had about 15, 20 K from when I left Microsoft, so it wasn't a ton.”
Greg Reyes Oct 13, 2016 ▶ 7:39
Assertion Not checkable as stated
Raizlabs' monthly headcount expenses range from $800,000 to $900,000
“They're just under a million dollars. So around 800 to 900,000 dollars.”
Greg Reyes Oct 13, 2016 ▶ 8:23
Assertion Not checkable as stated
Raizlabs built an app generating $250 million annually for one client
“I mean, we had one client where we were definitely generating about quarter, quarter billion dollars a year in revenue for them.”
Greg Reyes Oct 13, 2016 ▶ 9:44
Assertion Supported
Raizlabs helped design and launch Runkeeper, reaching up to 40M users
“So we work with them on the design development of that product, helped launch it. Grew to 20 to forty million users, and they raised a bunch of money, they took the project in-house”
Greg Reyes Oct 13, 2016 ▶ 12:18
Insight
Clients will inevitably take successful agency-built products in-house
“Well, we expect them to take it in house. Like if we're successful, then they will take it in house”
Greg Reyes Oct 13, 2016 ▶ 12:38
Assertion Not checkable as stated
Raizlabs charged just $15,000 to build the original Runkeeper app
“So I think we charged like 15 K early on and we've certainly sophisticated and matured.”
Greg Reyes Oct 13, 2016 ▶ 13:37
Assertion Not checkable as stated
None of Raizlabs' internal product spin-offs have crossed $1M in revenue
“Not, not currently. You know, we, we're really concentrating on our services business, but we're, we love product incubation and exploration, but we haven't kind of anchored on a home run with any of those yet.”
Greg Reyes Oct 13, 2016 ▶ 14:52
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