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Jul 23, 2016 · 29m · top-founders

Ep 364: $300,000 Per Year Worth $15 Million?

Jonathan Gillen · 14m spoken Nathan Latka · 11m spoken
0:00 / 0:00

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Host Nathan Latka interviews Jonathan Gillen, founder of peer-to-peer storage marketplace Roost, to examine the startup's unit economics, grassroots customer acquisition, and justification for a $15 million valuation on a $300,000 revenue run rate. Gillen shares his venture-backed growth strategy, operational metrics, and past startup lessons that drive his ambition for a $50 million exit.

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 45.4% of the talking time here. How this is scored →

Nathan as informed peer 6.0 Guest teaching 2.7 Guest disagreement 3.0 Nathan pushing back 4.3
05100:0010:0020:001:08–3:36 · Nathan as informed peer 5/10 Introducing Jonathan Gillen and Explaining Roost Marketplace Latka checks Roost's live site in real-time to verify listing fees and clarify whether the 15% marketplace take rate is paid by the host or renter. Gillen explains the mechanics of peer-to-peer storage and parking spaces without friction.3:37–6:56 · Nathan as informed peer 5/10 Grassroots Hustle and Early Customer Acquisition Strategy Latka drills down into early traction, conversion rates, and the distinction between unique hosts and total space inventory. Gillen details his boots-on-the-ground hustle camping outside a closing storage facility.6:56–10:54 · Nathan as informed peer 6/10 Team Expansion, Office Costs, and Zipcar Partnership Latka inspects Roost's $9k/month Soma office lease, cap table, and $3.5M round at a $12M pre-money valuation. Gillen shares an innovative zero-cost expansion tactic partnering with Zipcar to secure parking spaces in Washington DC.10:54–16:58 · Nathan as informed peer 8/10 Debating Valuation Multiples and Long-Term Exit Strategy Latka aggressively challenges the company's $15M post-money valuation against only $25k MRR ($300k run rate), arguing Gillen is crazy not to take a $2M cash buyout. Gillen pushes back firmly, stating he is aiming for a $150M exit and rejects building a small business.16:58–19:53 · Nathan as informed peer 6/10 Past Ventures, Droperty Tax Buyout, and Founder Maturation Gillen reflects on selling Droperty Tax for a couple hundred grand at age 23 and spending it all on lifestyle items like a sailboat. Latka presses him on whether scaling from $300k to $5M in a single year is realistic.19:54–25:31 · Nathan as informed peer 6/10 Mid-Roll Announcements: Live Austin Event and HostGator Promotion Following mid-roll ads, Latka examines space unit economics, low churn rates, $50 CAC channels, remaining cash runway, and Gillen's modest $64k salary. Gillen defends his low compensation as a badge of pride.1:08–3:36 · Guest teaching 2/10 Introducing Jonathan Gillen and Explaining Roost Marketplace Latka checks Roost's live site in real-time to verify listing fees and clarify whether the 15% marketplace take rate is paid by the host or renter. Gillen explains the mechanics of peer-to-peer storage and parking spaces without friction.3:37–6:56 · Guest teaching 2/10 Grassroots Hustle and Early Customer Acquisition Strategy Latka drills down into early traction, conversion rates, and the distinction between unique hosts and total space inventory. Gillen details his boots-on-the-ground hustle camping outside a closing storage facility.6:56–10:54 · Guest teaching 3/10 Team Expansion, Office Costs, and Zipcar Partnership Latka inspects Roost's $9k/month Soma office lease, cap table, and $3.5M round at a $12M pre-money valuation. Gillen shares an innovative zero-cost expansion tactic partnering with Zipcar to secure parking spaces in Washington DC.10:54–16:58 · Guest teaching 4/10 Debating Valuation Multiples and Long-Term Exit Strategy Latka aggressively challenges the company's $15M post-money valuation against only $25k MRR ($300k run rate), arguing Gillen is crazy not to take a $2M cash buyout. Gillen pushes back firmly, stating he is aiming for a $150M exit and rejects building a small business.16:58–19:53 · Guest teaching 3/10 Past Ventures, Droperty Tax Buyout, and Founder Maturation Gillen reflects on selling Droperty Tax for a couple hundred grand at age 23 and spending it all on lifestyle items like a sailboat. Latka presses him on whether scaling from $300k to $5M in a single year is realistic.19:54–25:31 · Guest teaching 2/10 Mid-Roll Announcements: Live Austin Event and HostGator Promotion Following mid-roll ads, Latka examines space unit economics, low churn rates, $50 CAC channels, remaining cash runway, and Gillen's modest $64k salary. Gillen defends his low compensation as a badge of pride.1:08–3:36 · Guest disagreement 1/10 Introducing Jonathan Gillen and Explaining Roost Marketplace Latka checks Roost's live site in real-time to verify listing fees and clarify whether the 15% marketplace take rate is paid by the host or renter. Gillen explains the mechanics of peer-to-peer storage and parking spaces without friction.3:37–6:56 · Guest disagreement 2/10 Grassroots Hustle and Early Customer Acquisition Strategy Latka drills down into early traction, conversion rates, and the distinction between unique hosts and total space inventory. Gillen details his boots-on-the-ground hustle camping outside a closing storage facility.6:56–10:54 · Guest disagreement 2/10 Team Expansion, Office Costs, and Zipcar Partnership Latka inspects Roost's $9k/month Soma office lease, cap table, and $3.5M round at a $12M pre-money valuation. Gillen shares an innovative zero-cost expansion tactic partnering with Zipcar to secure parking spaces in Washington DC.10:54–16:58 · Guest disagreement 6/10 Debating Valuation Multiples and Long-Term Exit Strategy Latka aggressively challenges the company's $15M post-money valuation against only $25k MRR ($300k run rate), arguing Gillen is crazy not to take a $2M cash buyout. Gillen pushes back firmly, stating he is aiming for a $150M exit and rejects building a small business.16:58–19:53 · Guest disagreement 5/10 Past Ventures, Droperty Tax Buyout, and Founder Maturation Gillen reflects on selling Droperty Tax for a couple hundred grand at age 23 and spending it all on lifestyle items like a sailboat. Latka presses him on whether scaling from $300k to $5M in a single year is realistic.19:54–25:31 · Guest disagreement 2/10 Mid-Roll Announcements: Live Austin Event and HostGator Promotion Following mid-roll ads, Latka examines space unit economics, low churn rates, $50 CAC channels, remaining cash runway, and Gillen's modest $64k salary. Gillen defends his low compensation as a badge of pride.1:08–3:36 · Nathan pushing back 2/10 Introducing Jonathan Gillen and Explaining Roost Marketplace Latka checks Roost's live site in real-time to verify listing fees and clarify whether the 15% marketplace take rate is paid by the host or renter. Gillen explains the mechanics of peer-to-peer storage and parking spaces without friction.3:37–6:56 · Nathan pushing back 3/10 Grassroots Hustle and Early Customer Acquisition Strategy Latka drills down into early traction, conversion rates, and the distinction between unique hosts and total space inventory. Gillen details his boots-on-the-ground hustle camping outside a closing storage facility.6:56–10:54 · Nathan pushing back 3/10 Team Expansion, Office Costs, and Zipcar Partnership Latka inspects Roost's $9k/month Soma office lease, cap table, and $3.5M round at a $12M pre-money valuation. Gillen shares an innovative zero-cost expansion tactic partnering with Zipcar to secure parking spaces in Washington DC.10:54–16:58 · Nathan pushing back 8/10 Debating Valuation Multiples and Long-Term Exit Strategy Latka aggressively challenges the company's $15M post-money valuation against only $25k MRR ($300k run rate), arguing Gillen is crazy not to take a $2M cash buyout. Gillen pushes back firmly, stating he is aiming for a $150M exit and rejects building a small business.16:58–19:53 · Nathan pushing back 6/10 Past Ventures, Droperty Tax Buyout, and Founder Maturation Gillen reflects on selling Droperty Tax for a couple hundred grand at age 23 and spending it all on lifestyle items like a sailboat. Latka presses him on whether scaling from $300k to $5M in a single year is realistic.19:54–25:31 · Nathan pushing back 4/10 Mid-Roll Announcements: Live Austin Event and HostGator Promotion Following mid-roll ads, Latka examines space unit economics, low churn rates, $50 CAC channels, remaining cash runway, and Gillen's modest $64k salary. Gillen defends his low compensation as a badge of pride.

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

0:00 · Nathan 62.8% · guest 37.2%0:00 · Nathan 62.8% · guest 37.2%3:00 · Nathan 22.2% · guest 77.8%3:00 · Nathan 22.2% · guest 77.8%6:00 · Nathan 32.4% · guest 67.6%6:00 · Nathan 32.4% · guest 67.6%9:00 · Nathan 39.1% · guest 60.9%9:00 · Nathan 39.1% · guest 60.9%12:00 · Nathan 53% · guest 47%12:00 · Nathan 53% · guest 47%15:00 · Nathan 32.3% · guest 67.7%15:00 · Nathan 32.3% · guest 67.7%18:00 · Nathan 62.6% · guest 37.4%18:00 · Nathan 62.6% · guest 37.4%21:00 · Nathan 38.7% · guest 61.3%21:00 · Nathan 38.7% · guest 61.3%24:00 · Nathan 30% · guest 70%24:00 · Nathan 30% · guest 70%27:00 · Nathan 87.3% · guest 12.7%27:00 · Nathan 87.3% · guest 12.7%
Sharpest disagreement ▶ 13:36 Gillen refuses buyout and demands 10x exit

Gillen flatly dismisses Latka's suggestion of taking a $2M buyout and claims he would rather aggressively swing for a $150M valuation and fail than take small money.

 Hardest push from Nathan ▶ 12:03 Latka channels Kevin O'Leary on valuation

Latka confronts Gillen directly, stating investors would have to be out of their minds to pay a $15M valuation on a company generating just $25k per month.

 Biggest teaching moment ▶ 9:41 Educating host on Zipcar supply-side arbitrage

Gillen educates Latka on Roost's supply expansion model, showing how partnering with Zipcar converts private driveways into fully pre-booked monetization instantly.

 Nathan holds their own ▶ 16:10 Latka details the liquidation preference trap

Latka demonstrates deep VC finance expertise by breaking down how young founders taking inflated early valuations get trapped under liquidation preferences and walk away with nothing.
the scores for every segment, with the reasoning behind each
ChapterTopicNathan as informed peerGuest teachingGuest disagreementNathan pushing backWhy
Introducing Jonathan Gillen and Explaining Roost Marketplace 5212 Latka checks Roost's live site in real-time to verify listing fees and clarify whether the 15% marketplace take rate is paid by the host or renter. Gillen explains the mechanics of peer-to-peer storage and parking spaces without friction.
Grassroots Hustle and Early Customer Acquisition Strategy 5223 Latka drills down into early traction, conversion rates, and the distinction between unique hosts and total space inventory. Gillen details his boots-on-the-ground hustle camping outside a closing storage facility.
Team Expansion, Office Costs, and Zipcar Partnership 6323 Latka inspects Roost's $9k/month Soma office lease, cap table, and $3.5M round at a $12M pre-money valuation. Gillen shares an innovative zero-cost expansion tactic partnering with Zipcar to secure parking spaces in Washington DC.
Debating Valuation Multiples and Long-Term Exit Strategy 8468 Latka aggressively challenges the company's $15M post-money valuation against only $25k MRR ($300k run rate), arguing Gillen is crazy not to take a $2M cash buyout. Gillen pushes back firmly, stating he is aiming for a $150M exit and rejects building a small business.
Past Ventures, Droperty Tax Buyout, and Founder Maturation 6356 Gillen reflects on selling Droperty Tax for a couple hundred grand at age 23 and spending it all on lifestyle items like a sailboat. Latka presses him on whether scaling from $300k to $5M in a single year is realistic.
Mid-Roll Announcements: Live Austin Event and HostGator Promotion 6224 Following mid-roll ads, Latka examines space unit economics, low churn rates, $50 CAC channels, remaining cash runway, and Gillen's modest $64k salary. Gillen defends his low compensation as a badge of pride.

Statements from this episode (16)

Disclosure
Roost takes a 15% transaction fee on peer-to-peer storage bookings
“So the transaction happens, and we take 15% and it comes from both parties.”
Jonathan Gillen Jul 23, 2016 ▶ 1:53
Opinion
Facility demolitions are sparking an urban storage crisis
“It's getting, getting torn torn down, and that's what's happening in a lot of cities, actually. It's causing a storage crisis, and that's presenting a really big opportunity for roost because there is a, Severe lack of alternatives.”
Jonathan Gillen Jul 23, 2016 ▶ 5:29
Assertion Not checkable as stated
Roost has acquired 600 buyers and 2,000 listed storage spaces
“We've had like 500, 600 buyers total. And sellers, we've got probably about 2000 spaces now.”
Jonathan Gillen Jul 23, 2016 ▶ 5:51
Disclosure
Roost hosts average three to four storage spaces per seller
“Actually, some of them are average, like three to four spaces per host, and that's something you know, per seller, and that's something that we're actually actively pursuing a strategy around.”
Jonathan Gillen Jul 23, 2016 ▶ 6:08
Disclosure
Roost has raised $4.9 million in total funding to date
“We've raised 4.9 million to date.”
Jonathan Gillen Jul 23, 2016 ▶ 8:30
Disclosure
Roost raised its Series Seed at a $12M pre-money valuation
“12 pre.”
Jonathan Gillen Jul 23, 2016 ▶ 9:09
Assertion Not checkable as stated
Roost generated approximately $80,000 in total revenue in 2015
“2015 was something around 80 grand.”
Jonathan Gillen Jul 23, 2016 ▶ 10:59
Assertion Not checkable as stated
Roost has processed roughly $1.7M in cumulative transaction volume
“Like 1.7 million.”
Jonathan Gillen Jul 23, 2016 ▶ 11:08
Assertion Not checkable as stated
Roost generates $25,000 per month in recurring revenue
“20, we're doing about 25 grand a month.”
Jonathan Gillen Jul 23, 2016 ▶ 11:29
Prediction Didn’t hold up
Gillen is targeting a $150M valuation or a 10x exit multiple
“I'm going for 10 times.”
Jonathan Gillen Jul 23, 2016 ▶ 13:59
Disclosure
Gillen previously sold his Droperty Tax stake for a couple hundred thousand
“Ended up by getting bought out by my partners for you know, nothing, nothing crazy, a couple hundred grand. And at that time, that was, you know, I was 23, and that was the most amount of money I've ever seen in my life.”
Jonathan Gillen Jul 23, 2016 ▶ 17:28
Prediction Not checkable as stated
Gillen predicts Roost could achieve a $50M exit within a year
“Not, not, not keen on it, and I know what I can do, and I know what Roost is capable of, and I see a you know, there could be a fifty million dollar Exit in like a year or something like that.”
Jonathan Gillen Jul 23, 2016 ▶ 18:28
Disclosure
Roost takes a 30% to 35% cut on bulk partnership deals
“We actually have some things now that we're doing where we're taking a lot more than the 15%. I didn't want to go into it too much, but with some partnership deals that we have, we do sort of bulk offers and end up making like 30, 35%.”
Jonathan Gillen Jul 23, 2016 ▶ 21:56
Disclosure
Roost pays approximately $50 to acquire each new space listing
“But if you want to factor everything in, I'd say it costs about 50 bucks to get a space.”
Jonathan Gillen Jul 23, 2016 ▶ 23:55
Disclosure
Roost has approximately two years of cash runway remaining
“We've got you know, two years of runway.”
Jonathan Gillen Jul 23, 2016 ▶ 24:28
Disclosure
Roost founder Jonathan Gillen pays himself a $64,000 annual salary
“I've been getting paid like 64 K.”
Jonathan Gillen Jul 23, 2016 ▶ 24:43
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