The Exchanges

Q That churn is for the low, low-end customers. Right? As I've told you, after three months, they are churning, and that's why we are not, we are, we've actually got from 18% churn two years ago to where we are now.

A Yeah, but Valentin, sorry, the reason revenue churn was invented was to make up for discrepancies in ARPU. So the exact thing you just said where you said, hey, Nathan, our churn is high in our low paying customers and low in our high paying customers. The way you erase that discrepancy in your core analysis is you look at overall, on a macro level, you look at revenue churn. Because if you lose one customer who's paying you nothing, your revenue churn is going to be very, very low. But if you lose one customer that makes up, you know, that pays you 50 grand a year, right, or makes up a big chunk of your revenue, revenue churn is going to be really high. So when you say six percent revenue churn, you say that's just in your small cohorts. What's the revenue churn across your entire customer base?

AI assessment note: “the reason revenue churn was invented was to make up for discrepancies in ARPU.”

Q So you don't want people to see what you care about so that they don't have control over you?

A 100%. One, this is why you create diversions. This is why I'm going to throw a five million dollar acquisition out for success magazine when frankly, it's like the worst performing magazine, two million uniques when Forbes gets thirty million. Look, they're selling CDs. They're selling CDs in their magazines. When was the last time anybody listened to a CD? I mean, they're the worst performing. I would never want them, especially for that price. But when I did that, dissenters of your target then come to you. So people that have been, felt like they've been shafted by success, see that story and come and get behind you, and you're gonna see me do something very interesting in media in the next maybe six months, and you're gonna go, oh, that's why Nathan did that. So you have to create diversions, in my opinion.

AI assessment note: “100%. One, this is why you create diversions.”

Q is that the founders want to go hard, make changes, and not have to worry about doing all the, you know, these interest calculations, and worrying about, oh, do I need to take this VC deal now because it's going to cost me more later, like, It really, in the end, if you're successful, everybody's going to win. Everybody's going to get rich. And if you're not, then who cares?

A Yeah. Yeah. Yeah. I mean, I'll push back a little there and say there's a lot actually of people that get really wealthy, but not like a billionaire. And actually that's the majority of people. And one of the key things that people never talk about with convertible notes is angels can call, like that is, it's debt. Like those people, if the economy shifts and they want their money back, they can shut the business down basically by calling that money. Now, That rarely happens, but I'm, I'm concerned. I think in the next maybe year or two years, if the economy does take a dip or interest, you know, Yellen increases interest rates and people freak out and want money back, I'd be curious to see what happens in these situations.

AI assessment note: “I'll push back a little there and say... convertible notes is angels can call”

Q all your All the software needs that you need and, uh, be able to sell, sell that thing as a, perhaps even as a percentage of their, of their revenue, right? So in that way, you, what you're saying kind of does make sense that you're owning a part of the dental office, but not in the traditional sense that you actually literally own the brick and mortar dental office.

A You look at McDonald's, McDonald's is really a real estate company with a very efficient McDonald's that sits on top of it. You know, um, a lot of these companies, you know, Sears, Macy's that were founded way back in the day are now Trading off the book value of their real estate holdings underneath. And so I just wonder, I'm searching, what's the modern day analog to those kinds of companies? And I think it's going to be somebody like you and Aditi. Maybe you don't go buy the practices, but to your point, if you're helping drive all their revenue because of this great software you've built, you know, service as a software, you're pretty darn close to being an owner.

AI assessment note: “to your point, if you're helping drive all their revenue... you're pretty darn close”

Q I tell them that, hey, if you get this kind of dividends, are you okay with that? They say, yeah, I'll be pretty happy with a 300 dollars per year dividend because it's passive income, right? So, um, So, so that, that was the more like, yeah. So, so it's, it's, it's, it's different from how, and like you said, the value is based on what the market decides, right?

A Yeah. But you can control that because you're a good sales guy. That's my point. You are basically a great sales guy. I mean, you're selling me, you're trying to, I mean, you talk for five minutes and you sell me on an idea. You're a great salesman. Your background picture here on zoom is you in front of a massive audience. You understand soft power. All you, you're very good at sales, right? So I don't, it doesn't, it doesn't surprise me that you can convince Your best friends who have money to give you money at a 600,000 dollar valuation. That's not what I'm hitting on here. What I'm trying to understand is how did you actually grow the actual value of this business where the dividends can be consistent? They can be guaranteed and you do grow revenue higher than five grand a month in revenue. I mean, we're talking like peanuts here. This is nothing.

AI assessment note: “Yeah. But you can control that because you're a good sales guy.”

Q you got a, you got a shitty book, and you hit New York Times bestseller, ok, great, but what's the content? I mean, is that really what you want to be known for, is I put out a shitty book? I, I, I, I, it just, um, for, for me, it's not what we specialize in, we're looking for actual content, valuable, meaningful content that we put into the books.

A What I'm most concerned about, though, is using the example you just gave, that should hurt them, right? Their speaking fees should go down, right? If more people are reading, you know, reading their shitty book, less people should book them, like, it just, it exposes that you're more bad, right? The problem is that it's just not working like that, because they're able to put in their bios everywhere, on their keynote pages, blah, blah, blah, New York Times, Washington, Best Seller, and that one sentence adds So much value. It, 10 X covers up any negatives from the shitty content you put out. So like people are going to keep gaming the system until that changes in my opinion.

AI assessment note: “that one sentence adds So much value. It, 10 X covers up any negatives”

Q to go after this year, we will allow you to come and participate in this in-person event. Otherwise, you can participate in this, like, huge Virtual event, right? So, and we have seen a lot of people do that with pretty high success that keeps your in-person conference smaller, more targeted, and high value because it's very expensive, and you can still open it up to a wider audience virtually.

A Well, Posh, what if we did, like, I don't want to see, I don't want to limit, like, if, if, if people knew as we were promoting SaaS Open, which just finished last week, if they, if everyone knew there was a virtual version, a lot of them would have just said, screw it, I'll pay for the virtual ticket, I don't want to fly away to New York, right? And we had, Hundreds flying from Europe. So I don't want to lose that traffic. I mean, have you ever had someone like, let's say the next event that we were running was Jennifer and Martin. It's March, it's March, it's today. Let's say it was, it was April 15th, right? And we've got a 110 speakers. What if two weeks before the live event, we did a virtual three hour session where each speaker who is coming flying in live shared like one slide from their presentation at over five minutes. And we just got through like 60 speakers in the virtual event two weeks before to promote the in-person one. Have you seen something like that work well?

AI assessment note: “if everyone knew there was a virtual version, a lot of them would have just said, screw it”

Q project that I brought on that I thought was going to knock the ball out of the park. So I invested my own money into it. And unfortunately it just didn't work out. So that's sort of, when you're an intellectual capitalist, like a venture capitalist, sometimes things really work out well and you can celebrate. Other times, unfortunately, they don't work out. So there's risk and reward there, right?

A Yeah, I understand there's risk and reward. Again, I'm beating this point of the ground, but like what I'm trying to say is if you're going to put together an incentive-based plan, you have to clearly isolate the variables so you know when you get rewarded, like a salesperson commission structure, right? That's a great example. It's, it's very clear. The system works. There's data on past salespeople on their ramp up time and their quotas and what percentage should hit and what should miss and blah, blah, blah. That same data for like funnel, like launches and creating funnels and email sequences doesn't necessarily exist. So I guess that's, that's why I'm struggling with my head around, around that. I mean, it sounds like it's, it's very, it's a very risky model to bet everything on. And that's why you're going to group coaching.

AI assessment note: “Yeah, I understand there's risk and reward.”

Q part of it is that, like, Michael from Social Media Examiner could have been a friend of yours and an ally in your battle against, like, the founder of Success Magazine or something else, because you know him. The Success Magazine peoples of the world, you don't know that well. They're feeling like, why is Nathan attacking friends? Why is Nathan being rude to friends instead of working with friends?

A Look, I, I was never, I have nothing personal against Michael Stelzner. But I didn't like how Social Media Examiner operated when many people emailed him and said, you should put Nathan on stage, and their reply was, Nathan hasn't written a book. And I know many people he's put on stage that have paid a quarter of a million dollars to buy a best-selling book, and their information is shit. And I go to the conference, and I'm going, are you kidding me? This is unbelievable. So I lost respect for Michael, because I think so, and by the way, I have to now link him to this, because I've mentioned him so times, so he's going to have to listen to this. But I think he put people on stage because of a system he set up that is wrong, and it's, it's hurting his audience. I mean, in my opinion, it's hurting his audience. He posted the other day on Facebook, our email list is getting less opens. I'm going, I wonder why, Michael? It's because you're selling tickets the whole time. You must not be selling tickets like you used to be. People can like me or not like me. The point is I believed in that, that, that soapbox Andrew is standing on in that quote battle was that list size is not important. What's important is how much do you know about the people on your list? So while he puts at the top of every social media examiner, you know, email, you see this now at 4423 thousand subscribers, r…

AI assessment note: “I lost respect for Michael, because I think... he put people on stage because of a system”

Q Well, for sure. It makes sense for you, no, Nathan?

A A hundred percent. A hundred percent. No, I agree with you. I'm playing dumb a little bit here because we want to learn. I want to capture all the good stuff. Take, take us back to that first. Yeah. The other one, the other thing I want to touch on, and again, the reason I'm hitting on all these, I like to sort of create frameworks for, for my audience. And, and one of the frameworks I like to have them think about is there's, there's really only about 34 ways to grow your software company, right? There's cheap stuff, there's expensive stuff, there's fast stuff, and there's stuff that takes more time. You over here used influencer marketing. You used affiliates. Um, you know, we have product hunt here. You used product hunt early on. You did three launches. Ironically, you're one in 20, 23, which was what this was four months after you launched. Take us through this launch.

AI assessment note: “A hundred percent. A hundred percent. No, I agree with you.”

Q Uh, it's bad for the consumer because they don't really have a choice now, right?

A Yes, they do. There's a cheaper option. Amazon crushes the competitor, brings in a cheaper option and you rock and roll like they do with diapers. Well, listen, hey, look, we'll have to see what happens. You, you proved me wrong. This interview, I will look very, very silly two years from now. If you have a million speakers to market, you will, I will, I will post this everywhere on all my socials. I was completely wrong. They killed it. Look at what they've done before we wrap up. So let's just talk again about software real quick. Let's say you've got a million devices out there. What is the software subscription look like? Are you charging developers to use it? And if so, what's the monthly price point?

AI assessment note: “Yes, they do. There's a cheaper option. Amazon crushes the competitor”

Q Yeah, you could do that, I guess, but do you see my point?

A I just think you undercut, I think you undercut yourself, because I remember when I, when you came on the first show, I'm like, this is a great tool, which we haven't talked about, by the way, you should talk about what the tool actually does. Great tool, um, visual content is in right now, so like, he, this is hitting on like the perfect time, perfect market, but like, you, you've, you've, you've taken the thing, and you've, you've gone like, doing an absolute deal, you've gone like, downstream, right? If you're going that direction, you have to go like, Hootsuite model. High, millions of paying customers at a really low price point versus enterprise, which is I thought the track you were on last time.

AI assessment note: “I just think you undercut, I think you undercut yourself”

Q in that case, we're providing, you know, To like a millionaire to help them pay their mortgage on their mansion. And so, you know, does that make sense? And why don't we see that as essentially a 30,000 dollar a year basic income for a homeowner that has an expensive enough home? So I say eliminate a lot of those tax expenditures and use that money instead for basic income.

A Tax expenditures. TANF welfare programs in general. There are people listening to this, trying to follow the numbers, and this is part of the issue in a world where our attention spans are shorter and shorter, and we come up with opinions and be convinced of things in sound bites. One of the, one of the, in my opinion, one of the reasons this sort of thing has not passed is because no one has packaged it in less than a sentence that makes crystal clear sense to everybody that is simpler. I think it has to be simpler than anything historically. Why even you, I mean, you, you study this for a living, uh, and it just, you know, we just, we've been talking about this for 45 minutes and we could go talk for another four hours on all the different things to subtract or add. Why hasn't someone just come out and said welfare state gone. We're doing 1500 every to every citizen. Doesn't matter. We're not going to try and decide who gets in, who doesn't. There's no bureaucracy. We drastically eliminate property in the United States. We're okay with less employment because we've created a baseline of capitalism and consumerism at 1500 dollars per month. I mean, why hasn't someone just come out and said that exclusively market the heck out of it and get it passed?

AI assessment note: “There are people listening to this, trying to follow the numbers, and this is part of the issue”

Q Exactly. And so, so I understand from, from, I understand the post response. I understand that. How do I slow that down? Will I, will I move forward here? Some of those conversations are probably the most important from a geopolitical, uh, landscape.

A So China has used government power to centralize this, and then they're building amazing social mapping features, two hundred million cameras across the country. They're building the muscle to process this data faster than a You know, what might rival Google or Amazon as private entities. There's another faction of people that would argue exactly what you're selling, which is a decentralized nature of this utility works perfectly with blockchain technology and decentralized applications. Jack Dorsey has talked about making Twitter and turning into a Dapp. The problem and the question I keep wondering, I like that path a lot because it basically mean every bit that you and I, every piece of data you and I as consumers commit to the AI machine We earn a little bit more of the value of the system, the network effect. But what capital provides the, like, what is the capital provides incentive for anyone to build the machine to process the data we're inputting if you went the DAP route?

AI assessment note: “China has used government power to centralize this, and then they're building amazing social mapping”

Q entrepreneur magazine said, Here's a big failure that Nathan had in public. He can't acquire it. In the video that you did about it, you said, I don't fail. I don't fail. Like, that is a very Donald Trump-like thing to do, that if you say you don't fail, and everyone fails, but if you say you don't fail, people start to believe it, right? And you become this, this.

A You know this more than me, because you've, you've done this entrepreneurial thing much longer than I have, and you have more success than I have. This failure thing is like a sexy thing to write articles on because it gets clicked so much and it's a sexy thing to talk about, but failure is a perception. Like you, I only think I, people only think they fail if their mom thinks they failed, right? And they, and the mom calls the son and goes, son, like, I heard you didn't get the job offer. Like, are you okay? Right? The way that makes you feel when she says, are you okay? Makes you feel like you failed when you build up emotional barriers all around you so that you don't feel much of anything. You can, you honestly can fail. That's why I don't fail.

AI assessment note: “when you build up emotional barriers all around you... That's why I don't fail.”

Q My board was pretty surprised when they saw that article come out. Are you sure you would have been? Transparency is all good, but really, come on.

A Yeah, look, people value that. I mean, I saw some of the, the, Keynotes you gave early on where you had kind of a math equation with a clock and a division sign, and you said, any, any MIT guys out there want to decode the heck out of this? I mean, people, people like that transparency, I think. So, um, how are you, I mean, so a hundred leads per month, and obviously for listeners, you know, this is not going to necessarily work for you. You have to understand, like, is your, are you selling something similar to Yesware? Are you completely different? Is your price point the same? There's all kind of variables. But yes, uh, Matthew, in your business at Yesware, a hundred leads Per month for 25 reps is 2500 qualified leads per month. How are you, I mean, are you guys doing paid acquisition at this point? How are you getting those leads?

AI assessment note: “people like that transparency, I think. So, um, how are you”

Q see. So can people figure out a way to later? So let's say you are creating the platform. I'm creating the platform. Can we find later a way to maybe join our tokens, uh, and creates one platform, or will it just be the usual competition when it takes it all? And at some point, The one platform is a really big one, and the other one is completely irrelevant.

A Yeah, this is where I get stuck on crypto, because what I tell, what I hear are very good intentioned people like you telling me this will decentralize everything. It will take the power away from the people who control everything for no reason other than they control and have a lot of money, right? It gives power back to the people. But what I'm trying to figure out is when the crypto marketplace is more mature, There's going to have to be competition somehow. Otherwise you just print unlimited tokens, which it doesn't work. So like, I'm trying to figure out who wins and who loses. And my, if you're, if you're, if your answer is Nathan, if there's two competing token issues or issuances, the goal would be to get those two people that are responsible for them to figure out if they can agree and come together.

AI assessment note: “this is where I get stuck on crypto, because what I tell, what I hear”

Q So what do you, you actually were listening to Mixergy back when you were building your company, kind of like I said in the intro, many people do. What did you get out of listening to Mixergy all those years?

A Well, look, I, I, I've never, the only reason I put my phone number out online, Andrew, is because I know my first, what I felt my first big break was, was you doing that to me. Right. And I got a phone call with you. Then I started listening to every episode. Okay. And I start, and I even subscribed to Mr. G premium. Then you had me on and I taught a course and the episode that when you had me on did very well in. I mean, I think it was ranked up in the top 10 or top a hundred or something. So like, and I'll be honest with you. I don't have time to watch every episode, but you can look at the episodes and pick out and like learn from pieces. But Andrew, I just, I have to go back to like that question. I was asked you though for a second, because That, I think, is one of my number one skill sets. I do it on webinars. If I know someone's a big supporter of me, and I'm with them, the last thing I want to do is promote myself when I could tee up a question where I know it's going to be a positive response.

AI assessment note: “I have to go back to like that question... That, I think, is one of my number one skill sets.”

Q What are the lawsuits that are coming at you now?

A Hold on. You're getting me off my, my point. Give me 1:02. My point is these kinds of things are not things that I necessarily want or invited. But Andrew, one of the things I've seen with every successful entrepreneur, they have to know how to generate their own momentum, even when they have nothing. And if you don't have the balls to create your own momentum, you're going to lose. And so I already had like some momentum and to take the little momentum or some momentum and make it more momentum. You do what I'm doing. You use your creative smarts, your marketing, your resources, and you keep growing. And that's exactly what's happening. I mean, people would be surprised if they, you know, see my 20 16 tax returns. I mean, something interesting is happening. I frankly don't know why it's working so well, so I can't even take credit for it, but it's working. Going back to to what you just said, what was the question?

AI assessment note: “Going back to to what you just said, what was the question?”