Sep 24, 2016 · 22m · top-founders

EP 427: $1m+ Agency to Launch SaaS Product SegMetrics.com with CEO Keith Perhac

Keith Perhack · 10m spoken Nathan Latka · 9m spoken
0:00 / 0:00

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Nathan Latka interviews Keith Perhack, founder of DelphiNet and SegMetrics, exploring how he bootstrapped a dedicated marketing attribution SaaS product using the cash flow and team of his one-million-dollar consulting agency. The conversation delves into early SaaS metrics, seasonal churn mitigation, affiliate acquisition strategies, and disciplined valuation considerations.

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 48.5% of the talking time here. How this is scored →

Nathan as informed peer 4.9 Guest teaching 1.6 Guest disagreement 1.1 Nathan pushing back 3.0
05100:0010:0020:000:28–5:05 · Nathan as informed peer 4/10 Weekly Winner and Send Later Announcement Latka opens with his customary promotional intro before quizzing Perhack on the origin of SegMetrics. Perhack explains the agency origin and validates the typical entrepreneur hesitation around sharing low early-stage revenue numbers.5:05–8:12 · Nathan as informed peer 5/10 SegMetrics Revenue, Pricing, and Customer Count Latka pushes Perhack to state exact MRR figures and calculates the customer count from average price point when Perhack hesitates. The dynamic remains friendly as they compare SaaS economics with agency margins.8:14–11:48 · Nathan as informed peer 6/10 Managing Churn, Seasonality, and Product Lock-in Latka pushes Perhack on monthly churn when Perhack reveals it sits at 9% rather than the presumed 2%. Perhack explains seasonality in the info-product niche, and Latka draws parallels to his own product paywall experiences.11:48–13:52 · Nathan as informed peer 6/10 Organic Customer Acquisition and Affiliate Commission Structures The conversation covers organic acquisition channels and affiliate structures. Latka demonstrates SaaS industry knowledge by breaking down why LeadPages acquired Drip and why acquirers prioritize top-line revenue over expenses.13:52–16:06 · Nathan as informed peer 7/10 Fundraising Ambitions and SaaS Valuation Analysis Latka schools Perhack on SaaS valuation formulas, showing that raising $250k–$500k against a $60k run-rate business would dilute away almost the entire company. Perhack readily concedes the point.16:06–18:55 · Nathan as informed peer 2/10 Distributed Team Structure and Contact Information Perhack briefly describes his remote team across Japan and Portland, followed by standard mid-roll sponsor reads from Latka for Toptal and HostGator.18:56–20:53 · Nathan as informed peer 4/10 The Famous Five Lightning Round Latka runs through the rapid-fire Famous Five questions, and Perhack provides straightforward answers about his favorite tools and advice before Latka delivers the outro analysis.0:28–5:05 · Guest teaching 2/10 Weekly Winner and Send Later Announcement Latka opens with his customary promotional intro before quizzing Perhack on the origin of SegMetrics. Perhack explains the agency origin and validates the typical entrepreneur hesitation around sharing low early-stage revenue numbers.5:05–8:12 · Guest teaching 1/10 SegMetrics Revenue, Pricing, and Customer Count Latka pushes Perhack to state exact MRR figures and calculates the customer count from average price point when Perhack hesitates. The dynamic remains friendly as they compare SaaS economics with agency margins.8:14–11:48 · Guest teaching 3/10 Managing Churn, Seasonality, and Product Lock-in Latka pushes Perhack on monthly churn when Perhack reveals it sits at 9% rather than the presumed 2%. Perhack explains seasonality in the info-product niche, and Latka draws parallels to his own product paywall experiences.11:48–13:52 · Guest teaching 2/10 Organic Customer Acquisition and Affiliate Commission Structures The conversation covers organic acquisition channels and affiliate structures. Latka demonstrates SaaS industry knowledge by breaking down why LeadPages acquired Drip and why acquirers prioritize top-line revenue over expenses.13:52–16:06 · Guest teaching 1/10 Fundraising Ambitions and SaaS Valuation Analysis Latka schools Perhack on SaaS valuation formulas, showing that raising $250k–$500k against a $60k run-rate business would dilute away almost the entire company. Perhack readily concedes the point.16:06–18:55 · Guest teaching 1/10 Distributed Team Structure and Contact Information Perhack briefly describes his remote team across Japan and Portland, followed by standard mid-roll sponsor reads from Latka for Toptal and HostGator.18:56–20:53 · Guest teaching 1/10 The Famous Five Lightning Round Latka runs through the rapid-fire Famous Five questions, and Perhack provides straightforward answers about his favorite tools and advice before Latka delivers the outro analysis.0:28–5:05 · Guest disagreement 1/10 Weekly Winner and Send Later Announcement Latka opens with his customary promotional intro before quizzing Perhack on the origin of SegMetrics. Perhack explains the agency origin and validates the typical entrepreneur hesitation around sharing low early-stage revenue numbers.5:05–8:12 · Guest disagreement 2/10 SegMetrics Revenue, Pricing, and Customer Count Latka pushes Perhack to state exact MRR figures and calculates the customer count from average price point when Perhack hesitates. The dynamic remains friendly as they compare SaaS economics with agency margins.8:14–11:48 · Guest disagreement 2/10 Managing Churn, Seasonality, and Product Lock-in Latka pushes Perhack on monthly churn when Perhack reveals it sits at 9% rather than the presumed 2%. Perhack explains seasonality in the info-product niche, and Latka draws parallels to his own product paywall experiences.11:48–13:52 · Guest disagreement 1/10 Organic Customer Acquisition and Affiliate Commission Structures The conversation covers organic acquisition channels and affiliate structures. Latka demonstrates SaaS industry knowledge by breaking down why LeadPages acquired Drip and why acquirers prioritize top-line revenue over expenses.13:52–16:06 · Guest disagreement 2/10 Fundraising Ambitions and SaaS Valuation Analysis Latka schools Perhack on SaaS valuation formulas, showing that raising $250k–$500k against a $60k run-rate business would dilute away almost the entire company. Perhack readily concedes the point.16:06–18:55 · Guest disagreement 0/10 Distributed Team Structure and Contact Information Perhack briefly describes his remote team across Japan and Portland, followed by standard mid-roll sponsor reads from Latka for Toptal and HostGator.18:56–20:53 · Guest disagreement 0/10 The Famous Five Lightning Round Latka runs through the rapid-fire Famous Five questions, and Perhack provides straightforward answers about his favorite tools and advice before Latka delivers the outro analysis.0:28–5:05 · Nathan pushing back 2/10 Weekly Winner and Send Later Announcement Latka opens with his customary promotional intro before quizzing Perhack on the origin of SegMetrics. Perhack explains the agency origin and validates the typical entrepreneur hesitation around sharing low early-stage revenue numbers.5:05–8:12 · Nathan pushing back 4/10 SegMetrics Revenue, Pricing, and Customer Count Latka pushes Perhack to state exact MRR figures and calculates the customer count from average price point when Perhack hesitates. The dynamic remains friendly as they compare SaaS economics with agency margins.8:14–11:48 · Nathan pushing back 5/10 Managing Churn, Seasonality, and Product Lock-in Latka pushes Perhack on monthly churn when Perhack reveals it sits at 9% rather than the presumed 2%. Perhack explains seasonality in the info-product niche, and Latka draws parallels to his own product paywall experiences.11:48–13:52 · Nathan pushing back 3/10 Organic Customer Acquisition and Affiliate Commission Structures The conversation covers organic acquisition channels and affiliate structures. Latka demonstrates SaaS industry knowledge by breaking down why LeadPages acquired Drip and why acquirers prioritize top-line revenue over expenses.13:52–16:06 · Nathan pushing back 6/10 Fundraising Ambitions and SaaS Valuation Analysis Latka schools Perhack on SaaS valuation formulas, showing that raising $250k–$500k against a $60k run-rate business would dilute away almost the entire company. Perhack readily concedes the point.16:06–18:55 · Nathan pushing back 0/10 Distributed Team Structure and Contact Information Perhack briefly describes his remote team across Japan and Portland, followed by standard mid-roll sponsor reads from Latka for Toptal and HostGator.18:56–20:53 · Nathan pushing back 1/10 The Famous Five Lightning Round Latka runs through the rapid-fire Famous Five questions, and Perhack provides straightforward answers about his favorite tools and advice before Latka delivers the outro analysis.

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

0:00 · Nathan 74.8% · guest 25.2%0:00 · Nathan 74.8% · guest 25.2%3:00 · Nathan 28.4% · guest 71.6%3:00 · Nathan 28.4% · guest 71.6%6:00 · Nathan 29.5% · guest 70.5%6:00 · Nathan 29.5% · guest 70.5%9:00 · Nathan 26.3% · guest 73.7%9:00 · Nathan 26.3% · guest 73.7%12:00 · Nathan 26.6% · guest 73.4%12:00 · Nathan 26.6% · guest 73.4%15:00 · Nathan 70.4% · guest 29.6%15:00 · Nathan 70.4% · guest 29.6%18:00 · Nathan 56.6% · guest 43.4%18:00 · Nathan 56.6% · guest 43.4%21:00 · Nathan 99.2% · guest 0.8%21:00 · Nathan 99.2% · guest 0.8%
Sharpest disagreement ▶ 9:05 Perhack counters on SaaS churn vs seasonality

Perhack pushes back on Latka's suggestion that summer churn is disastrous by explaining how info-product launch seasonality directly impacts client retention cycles.

Hardest push from Nathan ▶ 5:05 Latka presses Keith to know his monthly recurring revenue

Latka bluntly chides Perhack for not knowing his exact MRR off the top of his head, forcing him to look it up immediately on the call.

Biggest teaching moment ▶ 9:34 Perhack clarifies true product lock-in via CRM lead tracking

When Latka presses for how SegMetrics creates product lock-in, Perhack details how their proprietary tracking matches UTM campaign parameters directly to specific CRM email contacts.

Nathan holds their own ▶ 15:18 Latka calculates SaaS multiple and disproves funding target

Latka explains standard ARR multiple calculations to Keith, demonstrating that his targeted $250k–$500k angel round would exceed the full theoretical valuation of the software.

the scores for every segment, with the reasoning behind each
ChapterTopicNathan as informed peerGuest teachingGuest disagreementNathan pushing backWhy
Weekly Winner and Send Later Announcement 4212 Latka opens with his customary promotional intro before quizzing Perhack on the origin of SegMetrics. Perhack explains the agency origin and validates the typical entrepreneur hesitation around sharing low early-stage revenue numbers.
SegMetrics Revenue, Pricing, and Customer Count 5124 Latka pushes Perhack to state exact MRR figures and calculates the customer count from average price point when Perhack hesitates. The dynamic remains friendly as they compare SaaS economics with agency margins.
Managing Churn, Seasonality, and Product Lock-in 6325 Latka pushes Perhack on monthly churn when Perhack reveals it sits at 9% rather than the presumed 2%. Perhack explains seasonality in the info-product niche, and Latka draws parallels to his own product paywall experiences.
Organic Customer Acquisition and Affiliate Commission Structures 6213 The conversation covers organic acquisition channels and affiliate structures. Latka demonstrates SaaS industry knowledge by breaking down why LeadPages acquired Drip and why acquirers prioritize top-line revenue over expenses.
Fundraising Ambitions and SaaS Valuation Analysis 7126 Latka schools Perhack on SaaS valuation formulas, showing that raising $250k–$500k against a $60k run-rate business would dilute away almost the entire company. Perhack readily concedes the point.
Distributed Team Structure and Contact Information 2100 Perhack briefly describes his remote team across Japan and Portland, followed by standard mid-roll sponsor reads from Latka for Toptal and HostGator.
The Famous Five Lightning Round 4101 Latka runs through the rapid-fire Famous Five questions, and Perhack provides straightforward answers about his favorite tools and advice before Latka delivers the outro analysis.

Statements from this episode (14)

Prediction Didn’t hold up
Latka: I will take Send Later public by age 30
“I will build send later and do a big business, and I will take it public by the time I turn 30.”
Nathan Latka Sep 24, 2016 ▶ 1:17
Assertion Not checkable as stated
Perhac: SegMetrics generated $20K to $30K revenue in year one
“So segmetrics was actually pretty low. I think we were doing around 20, 30 K. MR the first year. Sorry, annual first year.”
Keith Perhack Sep 24, 2016 ▶ 3:11
Assertion Not checkable as stated
Perhac: DelphiNet built and iterated SegMetrics three times in four weeks
“So we took our internal team, no contractors, no nothing. Everyone It works at DelphiNet. We said, this is the problem we're going to solve. We're jumping in this whole hog. We built the entire thing, did three iterations in four weeks.”
Keith Perhack Sep 24, 2016 ▶ 4:20
Assertion Not checkable as stated
Perhac: SegMetrics generated around $5K MRR in August 2016
“I think it was around five K.”
Keith Perhack Sep 24, 2016 ▶ 5:16
Insight
Perhac: Functional SaaS companies never lose 30% of customers in one month
“You're at no point, unless your SaaS app explodes in a fiery fireball, you're never going to have 30% of your client, of your customers leave in one month.”
Keith Perhack Sep 24, 2016 ▶ 6:05
Assertion Not checkable as stated
Perhac: SegMetrics average customer pays around $97 to $100 per month
“Average customer is paying us around 10, a hundred bucks. I think it's like 97 or something around there.”
Keith Perhack Sep 24, 2016 ▶ 6:18
Disclosure
Perhac: SegMetrics is fully bootstrapped via consulting cash flow
“This is all bootstrapped based on my, mine and my co-founder's bank account and the consulting businesses that we both do.”
Keith Perhack Sep 24, 2016 ▶ 6:48
Assertion Not checkable as stated
Perhac: Consulting agency generates about $1 million in annual revenue
“The consulting business is about a million dollars.”
Keith Perhack Sep 24, 2016 ▶ 7:10
Assertion Not checkable as stated
Perhac: SegMetrics shows a 9% monthly customer churn rate
“So our customer churn is, and of course, as soon as I start looking at it, it's a, it says nine percent, but we had a couple people drop a couple days ago, but normally it's not that high.”
Keith Perhack Sep 24, 2016 ▶ 8:43
Disclosure
Latka: Acquired free software tool Send Later and implemented a paywall
“I'm the reason I'm thinking about this exact same thing on a business that I just bought, which was a free tool called send later. And I just put a paywall up and I'm doing the same thing.”
Nathan Latka Sep 24, 2016 ▶ 10:56
Prediction Not checkable as stated
Perhac: SegMetrics will eventually need 30% affiliate commissions
“I think eventually we're going to need to get up to 30%.”
Keith Perhack Sep 24, 2016 ▶ 13:00
Assertion Supported
Drip doubled affiliate commissions to 30% after acquisition by Leadpages
“They had 15% commission until Clay purchased them, and then they upped that to 30.”
Keith Perhack Sep 24, 2016 ▶ 13:08
Insight
Latka: Healthy SaaS companies trade at 3x to 5x ARR multiples
“When I'm valuing companies, what I do is I typically take, especially SAS monthly recurring revenue, assuming churn is below three percent monthly. That's a, that's kind of good economics. I'll take the five grand multiplied times 12. So you annualize it and t…”
Nathan Latka Sep 24, 2016 ▶ 15:21
Insight
Latka: Many major SaaS businesses originate from service agencies
“Many times, SaaS businesses that go and become very big, their infancy is from an agency, which is the cash cow. The agency gets to see into clients' problems, and they realize every client has the same problem.”
Nathan Latka Sep 24, 2016 ▶ 21:03
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