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Jul 16, 2016 · 25m · top-founders

EP 357: He Quit His Job, Lost His Life Savings, Then Hit it Big With SaaS Business

Hank Leber · 13m spoken Nathan Latka · 9m 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 Vitamin founder Hank Leber, exploring how Leber overcame the total loss of his life savings in a failed startup to build a marketing automation SaaS company generating over $1 million in annual run rate.

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 43.8% of the talking time here. How this is scored →

Nathan as informed peer 5.0 Guest teaching 2.4 Guest disagreement 1.0 Nathan pushing back 2.2
05100:0010:0020:000:28–3:53 · Nathan as informed peer 4/10 Weekly Listener Giveaway and Subscription Details Nathan introduces the show and guest Hank Leber, probing into Vitamin's pricing structure and verifying its business model as pure SaaS.3:54–9:51 · Nathan as informed peer 4/10 Transitioning from Corporate Advertising to Startups Hank details leaving corporate advertising, draining his personal savings on his failed startup Gonna Be, and selling his car for runway while Nathan clarifies personal versus business expenditures.9:52–14:46 · Nathan as informed peer 7/10 Post-Failure Consulting and Teaming Up to Build Vitamin Nathan demonstrates high SaaS fluency by breaking down MRR run rates, customer average contract values, and comparing Vitamin's gross churn to other SaaS founders he has interviewed.14:47–17:40 · Nathan as informed peer 6/10 Customer Acquisition, Sales Pipeline, and Seed Funding The conversation covers customer acquisition economics, inside sales margins based on ACV, and Y Combinator SAFE notes.17:41–22:41 · Nathan as informed peer 4/10 Sponsor Message: HostGator Website Hosting Offer Following mid-roll sponsor reads, Nathan asks about headcount benchmarks and growth figures before concluding with the Famous Five quickfire questions.0:28–3:53 · Guest teaching 2/10 Weekly Listener Giveaway and Subscription Details Nathan introduces the show and guest Hank Leber, probing into Vitamin's pricing structure and verifying its business model as pure SaaS.3:54–9:51 · Guest teaching 3/10 Transitioning from Corporate Advertising to Startups Hank details leaving corporate advertising, draining his personal savings on his failed startup Gonna Be, and selling his car for runway while Nathan clarifies personal versus business expenditures.9:52–14:46 · Guest teaching 3/10 Post-Failure Consulting and Teaming Up to Build Vitamin Nathan demonstrates high SaaS fluency by breaking down MRR run rates, customer average contract values, and comparing Vitamin's gross churn to other SaaS founders he has interviewed.14:47–17:40 · Guest teaching 2/10 Customer Acquisition, Sales Pipeline, and Seed Funding The conversation covers customer acquisition economics, inside sales margins based on ACV, and Y Combinator SAFE notes.17:41–22:41 · Guest teaching 2/10 Sponsor Message: HostGator Website Hosting Offer Following mid-roll sponsor reads, Nathan asks about headcount benchmarks and growth figures before concluding with the Famous Five quickfire questions.0:28–3:53 · Guest disagreement 1/10 Weekly Listener Giveaway and Subscription Details Nathan introduces the show and guest Hank Leber, probing into Vitamin's pricing structure and verifying its business model as pure SaaS.3:54–9:51 · Guest disagreement 1/10 Transitioning from Corporate Advertising to Startups Hank details leaving corporate advertising, draining his personal savings on his failed startup Gonna Be, and selling his car for runway while Nathan clarifies personal versus business expenditures.9:52–14:46 · Guest disagreement 1/10 Post-Failure Consulting and Teaming Up to Build Vitamin Nathan demonstrates high SaaS fluency by breaking down MRR run rates, customer average contract values, and comparing Vitamin's gross churn to other SaaS founders he has interviewed.14:47–17:40 · Guest disagreement 1/10 Customer Acquisition, Sales Pipeline, and Seed Funding The conversation covers customer acquisition economics, inside sales margins based on ACV, and Y Combinator SAFE notes.17:41–22:41 · Guest disagreement 1/10 Sponsor Message: HostGator Website Hosting Offer Following mid-roll sponsor reads, Nathan asks about headcount benchmarks and growth figures before concluding with the Famous Five quickfire questions.0:28–3:53 · Nathan pushing back 2/10 Weekly Listener Giveaway and Subscription Details Nathan introduces the show and guest Hank Leber, probing into Vitamin's pricing structure and verifying its business model as pure SaaS.3:54–9:51 · Nathan pushing back 3/10 Transitioning from Corporate Advertising to Startups Hank details leaving corporate advertising, draining his personal savings on his failed startup Gonna Be, and selling his car for runway while Nathan clarifies personal versus business expenditures.9:52–14:46 · Nathan pushing back 3/10 Post-Failure Consulting and Teaming Up to Build Vitamin Nathan demonstrates high SaaS fluency by breaking down MRR run rates, customer average contract values, and comparing Vitamin's gross churn to other SaaS founders he has interviewed.14:47–17:40 · Nathan pushing back 2/10 Customer Acquisition, Sales Pipeline, and Seed Funding The conversation covers customer acquisition economics, inside sales margins based on ACV, and Y Combinator SAFE notes.17:41–22:41 · Nathan pushing back 1/10 Sponsor Message: HostGator Website Hosting Offer Following mid-roll sponsor reads, Nathan asks about headcount benchmarks and growth figures before concluding with the Famous Five quickfire questions.

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

0:00 · Nathan 73.2% · guest 26.8%0:00 · Nathan 73.2% · guest 26.8%3:00 · Nathan 29% · guest 71%3:00 · Nathan 29% · guest 71%6:00 · Nathan 9.6% · guest 90.4%6:00 · Nathan 9.6% · guest 90.4%9:00 · Nathan 23.4% · guest 76.6%9:00 · Nathan 23.4% · guest 76.6%12:00 · Nathan 46.6% · guest 53.4%12:00 · Nathan 46.6% · guest 53.4%15:00 · Nathan 60.1% · guest 39.9%15:00 · Nathan 60.1% · guest 39.9%18:00 · Nathan 42.2% · guest 57.8%18:00 · Nathan 42.2% · guest 57.8%21:00 · Nathan 49.5% · guest 50.5%21:00 · Nathan 49.5% · guest 50.5%24:00 · Nathan 100% · guest 0%24:00 · Nathan 100% · guest 0%
Sharpest disagreement ▶ 18:30 Hank corrects Nathan on company location

Hank immediately interrupts Nathan's premise about operating in San Francisco to clarify that they are based in Los Angeles.

 Hardest push from Nathan ▶ 8:21 Nathan presses on personal vs corporate burn

Nathan interrupts to specifically pin down whether Hank was paying himself a founder salary or directly exhausting personal life savings.

 Biggest teaching moment ▶ 13:47 Hank explains monthly to annual churn compounding

Hank educates listeners and Nathan on the reality of monthly churn, noting that 4% monthly translates to losing nearly 50% of the customer base annually.

 Nathan holds their own ▶ 13:02 Nathan cites SaaS industry benchmarks and past case studies

Nathan displays in-depth industry command by citing specific metrics and churn pitfalls from past interview subjects like KJ Singh from Dil Mil.
the scores for every segment, with the reasoning behind each
ChapterTopicNathan as informed peerGuest teachingGuest disagreementNathan pushing backWhy
Weekly Listener Giveaway and Subscription Details 4212 Nathan introduces the show and guest Hank Leber, probing into Vitamin's pricing structure and verifying its business model as pure SaaS.
Transitioning from Corporate Advertising to Startups 4313 Hank details leaving corporate advertising, draining his personal savings on his failed startup Gonna Be, and selling his car for runway while Nathan clarifies personal versus business expenditures.
Post-Failure Consulting and Teaming Up to Build Vitamin 7313 Nathan demonstrates high SaaS fluency by breaking down MRR run rates, customer average contract values, and comparing Vitamin's gross churn to other SaaS founders he has interviewed.
Customer Acquisition, Sales Pipeline, and Seed Funding 6212 The conversation covers customer acquisition economics, inside sales margins based on ACV, and Y Combinator SAFE notes.
Sponsor Message: HostGator Website Hosting Offer 4211 Following mid-roll sponsor reads, Nathan asks about headcount benchmarks and growth figures before concluding with the Famous Five quickfire questions.

Statements from this episode (17)

Disclosure
Leber: Vitamin's basic software package starts at $1,000 per month
“It is a thousand dollar a month service at the most basic package, and then it goes up from there if you want deeper features or more traffic.”
Hank Leber Jul 16, 2016 ▶ 2:49
Disclosure
Leber: Vitamin launched with manual 'Wizard of Oz' operations
“As most SaaS companies, we, we've had some Wizard of Oz to get started where you got a man behind the curtain that's turning the wheels a little bit to get started.”
Hank Leber Jul 16, 2016 ▶ 3:29
Opinion
Leber: Social media platforms fail at sharing future plans and data
“Social media doesn't do a very good job sharing future data.”
Hank Leber Jul 16, 2016 ▶ 7:26
Disclosure
Leber exhausted his life savings keeping GonnaBe alive for two years
“We raised to 250 K and that lasted us about a year and a half, two years, because I also exhausted my life savings.”
Hank Leber Jul 16, 2016 ▶ 7:53
Assertion Partly supported
Leber: GonnaBe's former iOS developer became Snapchat employee number 17
“My iOS developer, who's a brilliant guy, got snapped away from me by Snapchat. This was two and a half years ago, so that would make him employee number 17 at Snapchat. And now he's the lead of the iOS team over there.”
Hank Leber Jul 16, 2016 ▶ 9:19
Disclosure
Leber: Rebuilt lost startup savings by consulting for ad agencies
“I took a year and consulted back in the agency world, don't call me a whore, but I did kind of whore myself out there, and I was able to make back a lot of the money that I lost.”
Hank Leber Jul 16, 2016 ▶ 9:57
Assertion Not checkable as stated
Leber: Vitamin generated $460K revenue in its first calendar year
“460,000 dollars.”
Hank Leber Jul 16, 2016 ▶ 11:14
Assertion Not checkable as stated
Leber: Vitamin reached $102K monthly revenue in April 2016
“102 K.”
Hank Leber Jul 16, 2016 ▶ 11:34
Assertion Not checkable as stated
Leber: Vitamin crossed $1M ARR just 15 months after starting
“We did that in March.”
Hank Leber Jul 16, 2016 ▶ 11:40
Assertion Not checkable as stated
Leber: Vitamin's Monthly Gross Churn Is Around 4%
“Gross churn about four percent monthly right now.”
Hank Leber Jul 16, 2016 ▶ 12:44
Assertion Not checkable as stated
Leber: Vitamin suffered 21% monthly gross churn before product-market fit
“And once upon a time it was 21% monthly gross churn.”
Hank Leber Jul 16, 2016 ▶ 12:50
Insight
Latka: High-churn SaaS businesses are just selling one-time subscriptions
“Any SaaS business that has a monthly churn higher than, you know, call it four or five percent. You might just sell a one-time subscription.”
Nathan Latka Jul 16, 2016 ▶ 13:38
Disclosure
Leber: Vitamin spends zero on outbound marketing, using its own software
“We use our own technology on ourselves so we don't have to Spend on marketing, so to speak. I mean, it's all our own software. So we do not spend on outbound marketing at all.”
Hank Leber Jul 16, 2016 ▶ 15:10
Disclosure
Vitamin raised $650k on a SAFE note from LA investors
“We raised 650,000 last year on a safe note from local Los Angeles investors, mostly.”
Hank Leber Jul 16, 2016 ▶ 16:14
Assertion Not checkable as stated
Leber: Vitamin maintains headcount costs around $10,000 monthly per employee
“But it's right around 10 K per head, which is if you read all the smartest of the smart, I think Fred Wilson is the one who's made it popular that that's the benchmark to keep 10 K per head. And you're running an efficient business.”
Hank Leber Jul 16, 2016 ▶ 18:35
Assertion Not checkable as stated
Leber: Vitamin grows revenue 18% and users 20-25% month over month
“Yeah, revenue is around 18% month over month, and then our user base itself is more like 20, 25% month over month.”
Hank Leber Jul 16, 2016 ▶ 18:53
Disclosure
Leber: Pulled six all-nighters in six weeks while fundraising for Vitamin
“And in fact, when we were raising money, I would, I did six all nighters in six weeks. So it averaged one per week, literally stay up all night work. The sun comes up, you go through your whole day and you go to bed at 11 o'clock the next night.”
Hank Leber Jul 16, 2016 ▶ 20:56
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