In this week’s episode of Growth Interviews, we invite you to join our podcast conversation with Nathan Latka, a serial entrepreneur with a top business podcast, an investor in B2B SaaS companies and a bestselling author. He is the founder of GetLatka.com, the host and executive producer of “The Top Entrepreneurs” podcast and the bestselling author of How to Be a Capitalist Without Any Capital. He is also the former CEO of the SaaS company Heyo.
Nathan is deeply skilled in Search Engine Optimization (SEO), digital strategy, sales, mobile applications and web design.
According to vox.com, he “is a bestselling author, a podcast host, and a sweet talker. And, depending on who you ask, he’s either a motivational hustler or a con artist.” On Nathan’s book webpage, he simply starts his description with 3 short sentences: “It’s 2019. I’m 29. I’m retired.” He then continues with a few more daring phrases: “At nineteen, I founded a software company with $119 in my bank account. Five years later, it was valued at $10.5 million. I don’t consider myself exceptionally brilliant. I just realized something few people know: you don’t need lots of money or an original idea to get really rich.” And he has his success to prove his words.
Welcome to Growth Interviews!
Welcome to Growth Interviews, the fun, stimulating and engaging series of conversations driven by digital business growth. Our mission is to provide valuable insights from the eCommerce arena, and each episode is a fascinating quest into the best-kept business secrets and money-making strategies of an insightful world-class expert.
In today’s episode, Nathan Latka has talked with us about the power to be able to copy something and improve it, so you can benefit from it so much more. We learned a little bit more about becoming a SaaS entrepreneur who can indeed have their cake and eat it too.
Here are the biggest takeaways:
- A popular SaaS business model in 2020 – 01:16
- The key for eCommerce direct to consumer – 02:11
- Copying what works vs the lack of innovation – 03:11
- Yesterday’s mistake could be tomorrow’s opportunity – 04:26
A popular SaaS business model in 2020
Nathan presents to us an interesting formula, a business model that so many SaaS companies are starting to follow:
SaaS + % of GMV (Gross Merchandise Volume)
This model applies to companies that are building SaaS tools for eCommerce brands.
“If you’re building a software tool and you’re trying to get a subscription fee but people are also putting payments through you, every time some put a dollar through you, there’s 1-3% up for grabs because basically Visa takes 2.5% and then there’s 0.5% that you could get as the tool is doing the flows.”
The key for eCommerce direct to consumer
Are direct to consumer companies going to completely eliminate the middleman? Nathan begs to differ.
The first thing on many people’s mind could be “Shopify”, considering that Shopify is the real Amazon contender. He also assures everyone that they don’t have to be concerned about Amazon taking advantage of their product if they have transferred to Shopify.
“Direct to consumer is powerful”, Nathan guarantees. He considers that the key for eCommerce direct to consumer is dominating your distribution channels.
“The trick is, in today’s day and age, you have to own your distribution channels. If I ask you guys right now ‘What’s more important to you? An amazing product or dominating your industry’s distribution channels? Which one would you say is more valuable?’ For me, personally, I would say I’d rather work with a lower quality product but dominate distribution versus have the best product and no distribution.”
Copying what works vs the lack of innovation
Nathan admits that he is “a massive fan of copying what works and then adding your own twist”. He gives the example of using specific tools to search on Amazon what is selling best, adding a personal twist and then selling at a scale in the long term.
But does this suggest a lack of innovation? Maybe not, is Nathan’s opinion. It’s all a matter of perspective. He further explains:
“There are a lot of broke inventors. There are a lot of really rich copiers that only copy and never invent. What I like doing is seeing what’s working, spotting a way to make it a little better, copy what worked, add a twist then go to market. […] Some of you are great executors and you don’t mind copying and adding a twist. Some of you prefer to invent in your basement by yourself and never sell a damn thing and that’s totally okay as well.”
Yesterday’s mistake could be tomorrow’s opportunity
Nathan admits that the biggest mistake in his career was raising VS (Venture Capital) funding. What actually happened?
While building an extremely profitable company, Heyo, a drag and drop Facebook application creator (during his student days!), he received a cold email that would offer him venture capital. Believing that would represent a huge opportunity at that time, he jumped at the chance. What happened next, however, was the late sale of his company, completely under the market price.
He began selling approximately 20% of the company, followed by flash selling the rest of it for 300.000 dollars in 2015. The end result was giving back 1.4 million dollars to investors and raising 2.5 million dollars. A huge waste, in his opinion. In 2012, numerous other drag and drop tools were sold, but Nathan refused to sell his company even for the generous offer of 6.5 million dollars.
What is most important are the lessons learned. Today, Nathan knows better than missing another opportunity, In fact, his greatest wish is to help SaaS CEOs to scale big companies and grow exponentially.
“I’m very excited for SaaS CEOs, especially ones that are looking at bootstrapping because you guys have so many options now to get capital to grow the company. You can raise typical equity, you can raise an RBF (Revenue Based Financing), you can raise traditional debt. So, anything I can do to help those kinds of founders scale big companies and grow, I’m all in. I want to see in the next 12 to 24 months a software CEO go from nothing to a hundred million bucks in revenue and still own 100% of the company.”
We could not encourage more this behavior and we are definitely rooting for Nathan to fulfill his wish in the upcoming time. And just as he mentions at the end of the interview, “Bet on yourself! Stay happy!”
Nathan Latka has introduced us to the world of venture capitalists and proper investing in opportunities. Check up on your competition and keep an eye on the market, spot the value in other products and services, copy them and make them even better. Learn from your mistakes and grow.
We hope you enjoyed our podcast interview with Nathan Latka!
For more valuable insights, make sure you come back to check out our next Growth Interviews as well.
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