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Apr 20, 2016 · 21m · top-founders

This Mom of 3 Does Clever Thing Each Morning, Has Made $76 Million with Jana Francis of Steals.com EP 244

Jana Francis · 10m spoken Nathan Latka · 8m 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 Jana Francis, founder of Steals.com, exploring how she bootstrapped a niche daily-deals platform to $76 million in cumulative gross sales. Francis details her inventory fulfillment models, unit economics, organic email marketing strategies, and her plans for a $2 million equity round to accelerate growth.

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 45.7% of the talking time here. How this is scored →

Nathan as informed peer 5.8 Guest teaching 4.6 Guest disagreement 1.2 Nathan pushing back 3.6
05100:0010:0020:000:59–4:42 · Nathan as informed peer 5/10 Introducing Guest Jana Francis of Steals.com Nathan probes how the business model works and whether Steals.com carries inventory. Jana details how their flash daily deal e-commerce logistics operate across four niche websites.4:42–9:35 · Nathan as informed peer 7/10 Deconstructing Unit Economics and Net Margins Nathan drills into the unit economics of an $11.99 shoe, working through COGS, fulfillment, and packaging to derive a 17% net margin. Jana breaks down freight and variance in product weights.9:35–14:01 · Nathan as informed peer 7/10 Macro Financials, Scalability, and Capital Raise Needs Nathan catches an inconsistency between her 17% unit margin and overall business profitability, prompting Jana to admit the company broke even and she took pay cuts. Jana details her capital raise plans and email list size.14:01–16:14 · Nathan as informed peer 6/10 Equity Valuation Pitch and Scaling Potential Nathan asks for Jana's valuation pitch for potential listeners and investors. Jana lays out a 1x revenue valuation ($8M pre-money for a $2M equity raise) and highlights capacity to scale to $24M in their current facility.16:14–20:26 · Nathan as informed peer 4/10 Contact Information and iTunes Giveaway Plug The segment covers social handles, an ad read, and the standard Famous Five rapid-fire questions in an amicable closing tone.0:59–4:42 · Guest teaching 5/10 Introducing Guest Jana Francis of Steals.com Nathan probes how the business model works and whether Steals.com carries inventory. Jana details how their flash daily deal e-commerce logistics operate across four niche websites.4:42–9:35 · Guest teaching 6/10 Deconstructing Unit Economics and Net Margins Nathan drills into the unit economics of an $11.99 shoe, working through COGS, fulfillment, and packaging to derive a 17% net margin. Jana breaks down freight and variance in product weights.9:35–14:01 · Guest teaching 5/10 Macro Financials, Scalability, and Capital Raise Needs Nathan catches an inconsistency between her 17% unit margin and overall business profitability, prompting Jana to admit the company broke even and she took pay cuts. Jana details her capital raise plans and email list size.14:01–16:14 · Guest teaching 4/10 Equity Valuation Pitch and Scaling Potential Nathan asks for Jana's valuation pitch for potential listeners and investors. Jana lays out a 1x revenue valuation ($8M pre-money for a $2M equity raise) and highlights capacity to scale to $24M in their current facility.16:14–20:26 · Guest teaching 3/10 Contact Information and iTunes Giveaway Plug The segment covers social handles, an ad read, and the standard Famous Five rapid-fire questions in an amicable closing tone.0:59–4:42 · Guest disagreement 1/10 Introducing Guest Jana Francis of Steals.com Nathan probes how the business model works and whether Steals.com carries inventory. Jana details how their flash daily deal e-commerce logistics operate across four niche websites.4:42–9:35 · Guest disagreement 1/10 Deconstructing Unit Economics and Net Margins Nathan drills into the unit economics of an $11.99 shoe, working through COGS, fulfillment, and packaging to derive a 17% net margin. Jana breaks down freight and variance in product weights.9:35–14:01 · Guest disagreement 2/10 Macro Financials, Scalability, and Capital Raise Needs Nathan catches an inconsistency between her 17% unit margin and overall business profitability, prompting Jana to admit the company broke even and she took pay cuts. Jana details her capital raise plans and email list size.14:01–16:14 · Guest disagreement 1/10 Equity Valuation Pitch and Scaling Potential Nathan asks for Jana's valuation pitch for potential listeners and investors. Jana lays out a 1x revenue valuation ($8M pre-money for a $2M equity raise) and highlights capacity to scale to $24M in their current facility.16:14–20:26 · Guest disagreement 1/10 Contact Information and iTunes Giveaway Plug The segment covers social handles, an ad read, and the standard Famous Five rapid-fire questions in an amicable closing tone.0:59–4:42 · Nathan pushing back 3/10 Introducing Guest Jana Francis of Steals.com Nathan probes how the business model works and whether Steals.com carries inventory. Jana details how their flash daily deal e-commerce logistics operate across four niche websites.4:42–9:35 · Nathan pushing back 5/10 Deconstructing Unit Economics and Net Margins Nathan drills into the unit economics of an $11.99 shoe, working through COGS, fulfillment, and packaging to derive a 17% net margin. Jana breaks down freight and variance in product weights.9:35–14:01 · Nathan pushing back 6/10 Macro Financials, Scalability, and Capital Raise Needs Nathan catches an inconsistency between her 17% unit margin and overall business profitability, prompting Jana to admit the company broke even and she took pay cuts. Jana details her capital raise plans and email list size.14:01–16:14 · Nathan pushing back 3/10 Equity Valuation Pitch and Scaling Potential Nathan asks for Jana's valuation pitch for potential listeners and investors. Jana lays out a 1x revenue valuation ($8M pre-money for a $2M equity raise) and highlights capacity to scale to $24M in their current facility.16:14–20:26 · Nathan pushing back 1/10 Contact Information and iTunes Giveaway Plug The segment covers social handles, an ad read, and the standard Famous Five rapid-fire questions in an amicable closing tone.

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

0:00 · Nathan 64.6% · guest 35.4%0:00 · Nathan 64.6% · guest 35.4%3:00 · Nathan 23.3% · guest 76.7%3:00 · Nathan 23.3% · guest 76.7%6:00 · Nathan 34.3% · guest 65.7%6:00 · Nathan 34.3% · guest 65.7%9:00 · Nathan 32.1% · guest 67.9%9:00 · Nathan 32.1% · guest 67.9%12:00 · Nathan 26.7% · guest 73.3%12:00 · Nathan 26.7% · guest 73.3%15:00 · Nathan 66.2% · guest 33.8%15:00 · Nathan 66.2% · guest 33.8%18:00 · Nathan 61.7% · guest 38.3%18:00 · Nathan 61.7% · guest 38.3%21:00 · Nathan 100% · guest 0%21:00 · Nathan 100% · guest 0%
Sharpest disagreement ▶ 11:15 Jana refuses profit assumption

Jana pushes back against Nathan's assumption that an $8M top line yielded $1.5M in net profit, revealing unmodeled company costs led to zero profit.

 Hardest push from Nathan ▶ 11:01 Nathan questions bottom-line cash flow

Nathan applies unit economics to total revenue to press Jana on where the expected $1.5M in bottom-line cash went.

 Biggest teaching moment ▶ 5:18 Jana explains hidden freight and logistics costs

Jana educates Nathan on the complex friction costs in e-commerce, such as freight carrier contracts, custom box sizing, and SKU weight variations.

 Nathan holds their own ▶ 7:20 Nathan calculates 17% net margin on the fly

Nathan deduces the exact margin structure from product purchase price ($6.25) to net profit ($2.00) on a $12 sale.
the scores for every segment, with the reasoning behind each
ChapterTopicNathan as informed peerGuest teachingGuest disagreementNathan pushing backWhy
Introducing Guest Jana Francis of Steals.com 5513 Nathan probes how the business model works and whether Steals.com carries inventory. Jana details how their flash daily deal e-commerce logistics operate across four niche websites.
Deconstructing Unit Economics and Net Margins 7615 Nathan drills into the unit economics of an $11.99 shoe, working through COGS, fulfillment, and packaging to derive a 17% net margin. Jana breaks down freight and variance in product weights.
Macro Financials, Scalability, and Capital Raise Needs 7526 Nathan catches an inconsistency between her 17% unit margin and overall business profitability, prompting Jana to admit the company broke even and she took pay cuts. Jana details her capital raise plans and email list size.
Equity Valuation Pitch and Scaling Potential 6413 Nathan asks for Jana's valuation pitch for potential listeners and investors. Jana lays out a 1x revenue valuation ($8M pre-money for a $2M equity raise) and highlights capacity to scale to $24M in their current facility.
Contact Information and iTunes Giveaway Plug 4311 The segment covers social handles, an ad read, and the standard Famous Five rapid-fire questions in an amicable closing tone.

Statements from this episode (10)

Disclosure
Francis: Steals.com shifted from 100% upfront inventory to a hybrid model
“We do a bit of a mixture right now where sometime, you know, I would say about half the time and in our eight years, it's been a hundred percent. We take on the inventory, but since August of last year, we've been testing a little bit of a different strategy”
Jana Francis Apr 20, 2016 ▶ 3:21
Assertion Not checkable as stated
Francis: Steals.com averages $2 net profit per order after friction costs
“On average, we will make two dollars. Once you take out all the friction costs, it's two dollars. Which, by the way, in e-commerce is, yeah, it's relatively impressive for e-commerce because, you know, most e-coms at scale are splitting pennies, right?”
Jana Francis Apr 20, 2016 ▶ 7:30
Assertion Not checkable as stated
Francis: ScrapbookSteals margins are higher due to local Utah suppliers
“We have a much better margin on our scrapbook steel site that just sells paper, right? Exactly. And so that, that's a, we get a lot better margin on that site, mainly because partially our friction costs aren't as high, are because most of the scrapbooking bra…”
Jana Francis Apr 20, 2016 ▶ 8:54
Assertion Not checkable as stated
Francis: Steals.com generated $76M in cumulative revenue since 2008
“We've done almost, almost seventy six million in revenues, top line revenues since we started.”
Jana Francis Apr 20, 2016 ▶ 10:08
Prediction Not checkable as stated
Francis forecasts Steals.com will generate $8M in 2016 revenue
“Right now, my forecast shows us flat year to year, so we'll do another eight million this year. If I get an influx of capital from a really smart investor that believes in my business as much as I do.”
Jana Francis Apr 20, 2016 ▶ 10:22
Assertion Not checkable as stated
Francis admits Steals.com made no profit in 2015
“So last year I did not make money at all.”
Jana Francis Apr 20, 2016 ▶ 11:40
Assertion Not checkable as stated
Francis: Steals.com has spent under 4% of revenue on marketing
“I've spent less than four percent on of top lane revenue on marketing ever, and that is including my email channel, which you can't be in e-commerce without sending daily emails.”
Jana Francis Apr 20, 2016 ▶ 12:42
Assertion Not checkable as stated
Francis: Email channel generates 55% of Steals.com revenue
“Yeah, it's 50, it's 55% of our revenues. Is our email channel. And we send, we're sending, though, thirteen million a month in total.”
Jana Francis Apr 20, 2016 ▶ 13:18
Disclosure
Francis targets a 1x revenue valuation for Steals.com equity round
“I'm valuing the company right now at about one times revenue, which I think is extremely reasonable.”
Jana Francis Apr 20, 2016 ▶ 14:29
Assertion Not checkable as stated
Francis: Steals.com can reach $24M revenue without new infrastructure investment
“I mean, you know, we're doing eight million in revenue right now, but I'm in a building that I could, I do not need to spend one more dime to sell three times the amount. Yeah, so I could get to, in this building alone, I could get to about twenty-four million…”
Jana Francis Apr 20, 2016 ▶ 15:27
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