StarZero All shows Try the podcast clipper →

Oct 7, 2016 · 19m · top-founders

EP 440: $700k MRR, 100,000 Pay $7/mo For Gay Dating App Hornet, Will Beat Grindr?

Nathan Latka · 9m spoken Sean Howell · 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" podcast, host Nathan Latka interviews Sean Howell, co-founder of Hornet, exploring how the gay social network scaled to fifteen million users, reached cash-flow breakeven with zero paid acquisition, and built a multi-million dollar business through freemium subscriptions and high-value direct advertising.

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 4.8 Guest teaching 2.2 Guest disagreement 2.2 Nathan pushing back 4.0
05100:0010:001:35–4:40 · Nathan as informed peer 5/10 Sean Howell on Hornet's Freemium Structure and Monetization Nathan drills into Hornet's monetization metrics and freemium conversion rates. Howell corrects Nathan's assumption that paying users are 5% of total registered accounts rather than monthly active users, which Nathan quickly adapts into his financial calculation.4:40–7:31 · Nathan as informed peer 5/10 Direct Brand Partnerships and Targeted Audience Demographics When Howell declines to share 2015 revenue figures citing an active fundraising round, Latka pushes back firmly, explaining why disclosure helps with investors and pressing for at least a rough range.7:31–9:52 · Nathan as informed peer 6/10 International Expansion, Retention Dynamics, and Churn Rates Nathan attempts to pin down customer churn, steering Howell past vague user-growth narratives. Latka demonstrates SaaS fluency by converting Howell's 5.5-month average customer lifespan figure into an approximate 20% monthly churn rate.9:53–13:54 · Nathan as informed peer 6/10 Organic Virality, Distributed Team Structure, and Valuation Comparables Nathan inquires about viral mechanics, playfully challenging Howell's denial of tracking user location data for attribution. They also discuss valuation multiples across dating apps such as Match and Grindr.13:56–18:03 · Nathan as informed peer 2/10 Mid-Roll Sponsorships: Toptal Developers and HostGator Services This segment contains host sponsor reads for Toptal and HostGator followed by a standard, amicable Famous Five rapid-fire closing questioning round with little conflict.1:35–4:40 · Guest teaching 4/10 Sean Howell on Hornet's Freemium Structure and Monetization Nathan drills into Hornet's monetization metrics and freemium conversion rates. Howell corrects Nathan's assumption that paying users are 5% of total registered accounts rather than monthly active users, which Nathan quickly adapts into his financial calculation.4:40–7:31 · Guest teaching 2/10 Direct Brand Partnerships and Targeted Audience Demographics When Howell declines to share 2015 revenue figures citing an active fundraising round, Latka pushes back firmly, explaining why disclosure helps with investors and pressing for at least a rough range.7:31–9:52 · Guest teaching 2/10 International Expansion, Retention Dynamics, and Churn Rates Nathan attempts to pin down customer churn, steering Howell past vague user-growth narratives. Latka demonstrates SaaS fluency by converting Howell's 5.5-month average customer lifespan figure into an approximate 20% monthly churn rate.9:53–13:54 · Guest teaching 2/10 Organic Virality, Distributed Team Structure, and Valuation Comparables Nathan inquires about viral mechanics, playfully challenging Howell's denial of tracking user location data for attribution. They also discuss valuation multiples across dating apps such as Match and Grindr.13:56–18:03 · Guest teaching 1/10 Mid-Roll Sponsorships: Toptal Developers and HostGator Services This segment contains host sponsor reads for Toptal and HostGator followed by a standard, amicable Famous Five rapid-fire closing questioning round with little conflict.1:35–4:40 · Guest disagreement 2/10 Sean Howell on Hornet's Freemium Structure and Monetization Nathan drills into Hornet's monetization metrics and freemium conversion rates. Howell corrects Nathan's assumption that paying users are 5% of total registered accounts rather than monthly active users, which Nathan quickly adapts into his financial calculation.4:40–7:31 · Guest disagreement 3/10 Direct Brand Partnerships and Targeted Audience Demographics When Howell declines to share 2015 revenue figures citing an active fundraising round, Latka pushes back firmly, explaining why disclosure helps with investors and pressing for at least a rough range.7:31–9:52 · Guest disagreement 2/10 International Expansion, Retention Dynamics, and Churn Rates Nathan attempts to pin down customer churn, steering Howell past vague user-growth narratives. Latka demonstrates SaaS fluency by converting Howell's 5.5-month average customer lifespan figure into an approximate 20% monthly churn rate.9:53–13:54 · Guest disagreement 3/10 Organic Virality, Distributed Team Structure, and Valuation Comparables Nathan inquires about viral mechanics, playfully challenging Howell's denial of tracking user location data for attribution. They also discuss valuation multiples across dating apps such as Match and Grindr.13:56–18:03 · Guest disagreement 1/10 Mid-Roll Sponsorships: Toptal Developers and HostGator Services This segment contains host sponsor reads for Toptal and HostGator followed by a standard, amicable Famous Five rapid-fire closing questioning round with little conflict.1:35–4:40 · Nathan pushing back 4/10 Sean Howell on Hornet's Freemium Structure and Monetization Nathan drills into Hornet's monetization metrics and freemium conversion rates. Howell corrects Nathan's assumption that paying users are 5% of total registered accounts rather than monthly active users, which Nathan quickly adapts into his financial calculation.4:40–7:31 · Nathan pushing back 6/10 Direct Brand Partnerships and Targeted Audience Demographics When Howell declines to share 2015 revenue figures citing an active fundraising round, Latka pushes back firmly, explaining why disclosure helps with investors and pressing for at least a rough range.7:31–9:52 · Nathan pushing back 5/10 International Expansion, Retention Dynamics, and Churn Rates Nathan attempts to pin down customer churn, steering Howell past vague user-growth narratives. Latka demonstrates SaaS fluency by converting Howell's 5.5-month average customer lifespan figure into an approximate 20% monthly churn rate.9:53–13:54 · Nathan pushing back 4/10 Organic Virality, Distributed Team Structure, and Valuation Comparables Nathan inquires about viral mechanics, playfully challenging Howell's denial of tracking user location data for attribution. They also discuss valuation multiples across dating apps such as Match and Grindr.13:56–18:03 · Nathan pushing back 1/10 Mid-Roll Sponsorships: Toptal Developers and HostGator Services This segment contains host sponsor reads for Toptal and HostGator followed by a standard, amicable Famous Five rapid-fire closing questioning round with little conflict.

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

0:00 · Nathan 78.5% · guest 21.5%0:00 · Nathan 78.5% · guest 21.5%3:00 · Nathan 41.8% · guest 58.2%3:00 · Nathan 41.8% · guest 58.2%6:00 · Nathan 29% · guest 71%6:00 · Nathan 29% · guest 71%9:00 · Nathan 26.2% · guest 73.8%9:00 · Nathan 26.2% · guest 73.8%12:00 · Nathan 66.4% · guest 33.6%12:00 · Nathan 66.4% · guest 33.6%15:00 · Nathan 74.5% · guest 25.5%15:00 · Nathan 74.5% · guest 25.5%18:00 · Nathan 99.1% · guest 0.9%18:00 · Nathan 99.1% · guest 0.9%
Sharpest disagreement ▶ 4:43 Deflecting revenue questions due to fundraising

Howell attempts to stonewall Nathan's financial questions by citing fundraising confidentiality, forcing Nathan to negotiate down to a generalized multi-million range.

 Hardest push from Nathan ▶ 4:53 Pushing back on fundraising confidentiality excuse

Latka refuses to let Howell completely dodge the revenue question, citing high-profile VC listeners and demanding a revenue range.

 Biggest teaching moment ▶ 4:00 Correcting total versus active user conversion base

Howell halts Nathan from miscalculating paying users based on total registered users rather than monthly active users.

 Nathan holds their own ▶ 9:40 Instantaneous churn math deduction

Nathan demonstrates SaaS expertise by translating Howell's average 5.5-month retention figure into a 20% monthly churn metric without hesitation.
the scores for every segment, with the reasoning behind each
ChapterTopicNathan as informed peerGuest teachingGuest disagreementNathan pushing backWhy
Sean Howell on Hornet's Freemium Structure and Monetization 5424 Nathan drills into Hornet's monetization metrics and freemium conversion rates. Howell corrects Nathan's assumption that paying users are 5% of total registered accounts rather than monthly active users, which Nathan quickly adapts into his financial calculation.
Direct Brand Partnerships and Targeted Audience Demographics 5236 When Howell declines to share 2015 revenue figures citing an active fundraising round, Latka pushes back firmly, explaining why disclosure helps with investors and pressing for at least a rough range.
International Expansion, Retention Dynamics, and Churn Rates 6225 Nathan attempts to pin down customer churn, steering Howell past vague user-growth narratives. Latka demonstrates SaaS fluency by converting Howell's 5.5-month average customer lifespan figure into an approximate 20% monthly churn rate.
Organic Virality, Distributed Team Structure, and Valuation Comparables 6234 Nathan inquires about viral mechanics, playfully challenging Howell's denial of tracking user location data for attribution. They also discuss valuation multiples across dating apps such as Match and Grindr.
Mid-Roll Sponsorships: Toptal Developers and HostGator Services 2111 This segment contains host sponsor reads for Toptal and HostGator followed by a standard, amicable Famous Five rapid-fire closing questioning round with little conflict.

Statements from this episode (11)

Assertion Not checkable as stated
Sean Howell: Subscriptions represent roughly 60% of Hornet's revenue
“It's about a 60% subscription. And the rest is divide between programmatic advertising and direct sales.”
Sean Howell Oct 7, 2016 ▶ 2:36
Prediction Not checkable as stated
Sean Howell: Direct ad deals will soon eclipse programmatic revenue at Hornet
“And oddly, despite loving technology and loving auctions we're seeing such a huge growth in direct deals that I'm sure someday that's going to eclipse programmatic very soon.”
Sean Howell Oct 7, 2016 ▶ 2:45
Assertion Not checkable as stated
Sean Howell: 5% of Hornet monthly active users pay for subscriptions
“So we've got five percent of our monthly active users that are paying our subscription.”
Sean Howell Oct 7, 2016 ▶ 4:05
Disclosure
Howell: Uber Signed a Recent Direct Advertising Deal with Hornet
“There's probably 5000, but Uber is a recent direct deal.”
Sean Howell Oct 7, 2016 ▶ 6:17
Assertion Not checkable as stated
Hornet Displaced Competitors in France, Brazil, Russia, Turkey, Thailand, and Italy
“We're trying to deplete, displace competitors and key markets, and we've done that in France, Brazil, Russia, Turkey, Thailand, Italy, and trying to do that the rest of the world.”
Sean Howell Oct 7, 2016 ▶ 7:47
Assertion Not checkable as stated
Hornet: 50% of Paying Subscriptions Are Annual Plans
“50% of our subscriptions are actually annual.”
Sean Howell Oct 7, 2016 ▶ 8:34
Assertion Not checkable as stated
Hornet Monthly Recurring Subscriptions Average 5.5 Months Duration
“On the monthly renewal, those average out to five and a half months.”
Sean Howell Oct 7, 2016 ▶ 9:01
Assertion Not checkable as stated
Hornet raised $1.5M and reached breakeven in year three
“So we raised just about one and a half million very early in the company's history. And then we broke even through subscriptions in year three and we haven't fundraised since then.”
Sean Howell Oct 7, 2016 ▶ 10:00
Assertion Not checkable as stated
Hornet spent zero dollars on customer acquisition since 2011
“We haven't spent anything on acquisitions since October, 2011.”
Sean Howell Oct 7, 2016 ▶ 10:25
Insight
Howell: Early product localization is a growth driver founders overlook
“I would actually say one of the things that has really helped us grow is we localized really early, and that's been great for our users, and one thing I see a lot of startup founders missing.”
Sean Howell Oct 7, 2016 ▶ 12:00
Assertion Partly supported
Howell: Grindr sold for 7x revenue while Match trades at 36x
“Well, if you're a match, it's like 36. But Grindr, I think, sold for seven.”
Sean Howell Oct 7, 2016 ▶ 13:23
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