How Collective Hub Reached 1,000 Customers With $299/Month Pricing and $10,000 Average Tax Savings (Interview with CEO Hooman Radfar)

Intro and Guest Background

Nathan Latka

00:00Guys, he had a nice success, learned a lot growing AddThis exiting to Oracle for a report over $200,000,000, then took a break in another company. Eventually said, you know what? This one man business is the new way to build a company in America profitable. 3,000,000, $4,000,000 in revenue is the way to go. He saw an opportunity, launch collective.com in 2020. They're now getting thousands of applicants every month. Very clear pricing at $300 a month or

00:18a slight discount, 15% if you pay upfront. He said, quote, they've got thousands of customers today called between 1,000 and 10,000. They've grown using outside capital, 7,000,000 seed raised back in 2020, sold around 15 to 20% of the company, then raised a 20 series a and a $25,000,000 call it note to write extension on the a. We'll see what happens next as they look to grow and scale, add new pricing plans, and continue serving these one man businesses.

00:41Hey, folks. My guest today is Hooman Radfar. He's a serial entrepreneur and the cofounder and CEO of collective, the first all in one financial platform designed for businesses of one. He previously started AddThis, which was acquired by Oracle, was a founding partner at Expa, and is an early investor in Uber, Sweetgreen, Convoy, and more. Hooman, you ready to take us to the top?

Hooman Radfar

00:59>> Let's go.

AddThis Acquisition by Oracle

Nathan Latka

01:00Alright. So real quick again, when was that Oracle acquired AddThis. Right?

Hooman Radfar

01:04>> Correct.

Nathan Latka

01:05What what year was that?

Hooman Radfar

01:08>> The acquisition, I believe, was done in 2015, and I wanna say it closed the beginning of two thousand sixteen.

Nathan Latka

01:14Okay. So did you go right into collective after that, or you take a break?

Hooman Radfar

01:18>> No, actually. So I was at Expa at the time and was very lucky. So I didn't have to join the rest of my team at Oracle.

Nathan Latka

01:26Mhmm. Oh, interesting. Now TechCrunch reported the headline was Oracle Buys Audience Tracking from AddThis for around $200,000,000. So you can really, I assume, do whatever you want. It's good money. It's not f u money. You don't have a private jet, but is that generally accurate?

Hooman Radfar

01:41>> I'm doing okay. I'm doing okay. I'm really I'm really grateful for it.

Advice for Founders Considering an Exit

Nathan Latka

01:44That's great. Okay. I guess looking back, there's a lot of founders on right now in a recession. They're all considering selling. Is it just based off what you went through at AddThis? Any advice you'd give them on running the process of exiting?

Hooman Radfar

01:55>> Yeah. I think, honestly, I mean, this is a longer discussion, but my, you know, TLDR advice is you never really wanna sell your company. You want your company to get bought. And, I know that's a tough thing to say, but in our case at AddThis, you know, Oracle had partnered with us across, I think, three different opportunities, and then they'd concluded as a result of those partnerships that it was more cost effective for them to, you

02:17>> know, buy us. And I think that drove a better outcome. When you drive a process to sell your company, typically, there's a banker involved, and it's almost like a more auction style process. And so when you just look at the math behind that, you don't often get the outcome you want. Now, of course, if you're stuck in that situation, it is what it is. And so I would give a different set of advice, but I guess

02:36>> my advice is don't sell if you if you can't, if you can wait. That that's my advice.

Nathan Latka

02:41And then I guess second question here. Some of these folks that are listening right now, maybe they are doing 5,000,000 revenue, but they've raised 2,000,000 from VCs. Right? And VCs all want a 10 x, which should mean they gotta sell for at least 20,000,000. But these founders are getting offers for 10,000,000, which they'd still like to take. There's obviously a balance you have to do there. You, I believe, went through the same thing. You guys raised

02:5973,200,000 at AddThis. If you did sell for around 200, you had to do some kind of management with the VCs because not everyone was getting a 10 x. How should founders thinking about that today, managing their VCs specifically think about it?

Hooman Radfar

03:11>> Yeah. I think ultimately, it's conversation, and most VCs now, in particular, are more founder friendly. They they of course, their first customer, they have to make sure that they're returning their fund and and their LPs are doing okay. But, you know, while VCs do wanna get, call it that proverbial 10 x, it's a portfolio. Right? So every company doesn't need to get that 10 x. So, if a founder, you know, is emphatic and convinced that the

03:38>> best strategy is to sell and ultimately the VC is getting a positive outcome, you typically can get that to happen. And, you know, more often than not, the VCs tend to be aligned.

Nathan Latka

03:48Yep. Alright. Let's get into let's go get back into collective here. So what is collective today? Describe your customer. Who's using you?

What Is Collective Hub and Who Is the Customer

Hooman Radfar

03:55>> So you'd mentioned we call them businesses of one. That's a term we coined because when we first started, we called everyone freelancers and maybe obviously some people don't self self identify as that. As an example, my parents, they were both psychiatrists. They were both business as one. I don't think they would consider themselves freelancers, realtors, and whatnot. So we we do wanna work with anyone who's really hanging up a shingle on their own, is solo, and

04:19>> and, you know, that's 36% of the workforce. So it's a fairly large, percentage of the population.

Nathan Latka

04:24Oh, what's going on there, YouTube? Good to see you guys. Now imagine this. You love watching these interviews with SaaS founders. But imagine if we took all of the valuation data out from over 2,807 interviews I've done manually. Saves you a lot of time. Well, we've done this. We've built it into the beautiful interface inside of Founderpath. Check this out. I'll show you how you can access this in a second. But you log in, you connect

04:48your Stripe account, you see your valuation real time, you can see what changed over the past eighty eight days and even set goals for valuation this year. Now the secret evaluation is there's many different ways to value a SaaS business. So the reason you're gonna see three or four different valuations inside of your Founderpath dashboard, this is all free by the way, is because depending on who's doing the buying of your SaaS company, you're gonna get

05:12a different valuation. A VC is gonna pay a different valuation. Private equity firm is different. If you're gonna do a minority sale, that's different. And if you sell the whole business, that's a different valuation. You can see all those when I hover over here. Right? So the teal is what a VC would pay. Yellow is what private equity and red is if you sold the whole thing outright. Now what's cool about this is this is not

05:34built off random data. Again, you guys hear these interviews on YouTube. All these datas are built from real time valuation data points founder share with us on the show. So traction, 1,200,000 seed round, 3.7 raise. They sold 22% of their business. Go in here and filter by the event. Maybe you only wanna see companies that have sold the whole business. Well, here are a bunch that have been acquired the valuation and the multiple. Maybe you're going

06:00out right now and you're raising your seed round. We'll go in here and look at all this recent seed deals that went down, what they raised, what valuation they raised at, and what percent that they sold. There's never been a larger dataset of SaaS valuations than what you can get now inside of Founderpath. And we're thrilled to bring it to you. Alright. We're gonna go back to the YouTube video here in a second, but if you

06:22wanna check this tool out, if you wanna jump in and sign up, you can check it out for free to get your valuation at this link. This link, founderpath.com/products/valuations. Or if you go to founderpath.com and hover over products, click on get your valuation here, and go ahead and sign up to give it a whirl. Again, all that valuation data live right inside the platform. I hope to see you there. Alright. Let's jump back into the interview.

06:49How far away from we when somebody takes a company public and there's only one full time employee, the true business of one?

Hooman Radfar

06:57>> You know, it's actually a really great question. I haven't thought about it, but I know that there are folks that have, you know, when Instagram sold, there was a lot of questions around the exit value per employee. Because I believe Instagram was, like, sub 40 or something like that, and they sold for a billion dollars. And so that's become, you know, a number to track, and it's interesting. I don't know. I guess with AI, that's there

07:20>> there's that possibility, to be honest. Right? So if

Nathan Latka

07:23you have that one don't realize how big you can get with a with an army of contractors. And you you have you see this data firsthand. You're sitting on it. So you can look in your database and go, wow. These guys I mean, you're not gonna name them, obviously. We can say, wow. These guys are doing 10,000,000. There's only two FTEs. That's amazing.

Hooman Radfar

07:38>> Yeah. So I will say I have, especially as an operator, been overwhelmed and impressed by the scrappiness of some of these folks. You know? I think, you know, one of my great passions is being a founder helping founders. And oftentimes, think there's a cognitive bias in the venture community to assume that venture backed founders are like the, you know, top 1%. Right? Honestly, I think these founders are more impressive in many ways. Like my mom, for

08:03>> example, she ran her business for thirty years. She was profitable the whole time, never raised a dollar. Right? Now granted the scale of it is smaller, but to your point, if you have contractors and you're, you know, just doing FTEs, you can go pretty far. And again, I I I don't wanna jump on the zeitgeist here, but there's a really compelling argument. Like, say, for example, you wanna build a content driven business. If you're using tools

08:22>> like ChatGPT and these other things, you can build a fairly large business with very, very few FTEs. So I I do think we're at the cusp of something interesting to say the least. So it's a great point.

Nathan Latka

08:33Alright. So very good. So just to be clear, like, can you can you name do you have any case days? Can you name a couple of your actual customers today so we can really get in their head?

Hooman Radfar

08:43>> I mean, we have some of the customers on the website that that we can share. I'll send you some over, but, you know

Nathan Latka

08:49Well, no. Here, I'll I'll I'll just want my audience to really get it. So Doug Byrne, who's the founder of WinSprint. David, who's a freelance designer at d h g on Twitter. David Stewart working on a next gen digital health thing. Another freelancer and marketer named Michael. These are the kinds of people that are using you.

Hooman Radfar

09:06>> Exactly. Exactly. But we have people who you know, I remember when Della Ann Barrow, she's like a podcaster on CNN, and she had just been starting. I mean, her business skyrocketed. So I think one of the things that we're seeing, which is new for me, is that, you know, the because the world has become democratized and you have tools like look at look at what we're doing right now. Like, folks can go set up a podcast.

09:27>> Folks can go set up, you know, TikTok and the just the self serve notion of some of these tools has led to this explosion of these businesses of one that can grow. And we are making, like, 2, $3,000,000 a year, and they go from zero, you know, maybe in a year. And I've seen it several times now. Again, you can look at a venture backed business and say, wow. This is like the pinnacle. But, I mean, if

09:50>> you're one person, you get all that gross profit yourself. I mean, that's pretty amazing.

Nathan Latka

09:55No. Hooman, it's a new American dream. It's a new American dream. $5,000,000 company with 2,000,000 in profits. That's better than a white picket fence. You know?

Hooman Radfar

10:03>> I know. I agree with that. I agree with that. And I'm just I'm really, really excited. I'm learning a ton from our community. So it's been pretty awesome.

Nathan Latka

10:11Talk to me more about how let me just, you know, not actually what Doug Binder from Windsburnt is paying you, but what is your revenue model? Is it a flat fee? Is it a percent of GMV? Is it something else? How do you monetize?

Revenue Model and Pricing

Hooman Radfar

10:22>> Yeah. Great question. So we don't do percentage of of of anything like that. It's a flat fee. We want it to be predictable. And we really look at it as, you know, from an ROI driven perspective. Ultimately, what we're doing is providing a solution. Right? By forming your company, providing payroll, doing the books, and doing the taxes, that's a solution. And the outcome is we drive tax savings. Now on average, we're saving $10,000. And for that,

10:47>> we pay a subscription fee, which you will predictably know. You pay that monthly annually. And if you pay it monthly, it's, like, $299 a month. So it's a pretty good deal. You get, you know, basically three times what you put into it plus it's tax deductible. So how great is that?

Nathan Latka

11:00What does that mean though? Like, when I go on your site and look at the pricing page and it's $300 a month, it says business formation. But so why would someone keep paying $300 a month after the business is formed?

Hooman Radfar

11:08>> Oh, great point. Great point. So no. Of we we don't just form the entity. So we'll form the entity. We actually will set up your books for you. We have payroll. So payroll comes with it. Bookkeeping comes. So we do your books every single month. We'll do quarterly tax estimates. We'll answer any questions you have, and we'll do your annual taxes. So it's a full service. Again, we deliver that outcome. To deliver those savings, that's all

11:32>> the work you have to do because you need to I mean, as as you probably know, a lot of the magic comes in how you set your payroll when you're trying to get savings in an s corp. So, yeah, there's quite a bit of, work that goes into it. It's full serve.

Nathan Latka

11:43So one then one there's really one plan. It's either paying $300 a month or you're paying $254 per month but paid annually upfront. Those are the only two pricing options.

Hooman Radfar

11:51>> Correct. For today. But we have some other options that I think our members have, helped inspire us to create that we're gonna work on. So, both in terms of higher end services that some members are demanding, but also, you know, we have, you know, I would say, like, 50 times more applicants than we do members and we're we're growing very quickly. And part of the reason is because we very much Wait. What do

Nathan Latka

12:14mean by that, Hooman? I I don't know what you mean by that. Applicants, members?

Hooman Radfar

12:17>> So it's a member service. Right? So you have to fill out an application. And so we just get tons of applications. Now one of the reasons that we don't work with people right now is because, look, as a small company, we have a focus point. Our focus small human.

Nathan Latka

12:30How many folks are full time today?

Hooman Radfar

12:32>> At our company?

Nathan Latka

12:33Yeah.

Team Size and Company Focus

Hooman Radfar

12:34>> Yeah. We're about a 175 employees.

Nathan Latka

12:36Okay. You're getting up there. I mean, that's that's, you know, that's a real you have HR problems. I mean, we're a 175 people is a real business.

Hooman Radfar

12:43>> Yeah. Yeah. Well, I I think I think we're still we're still pretty small, and we need to stay focused. And so we focused on the business of one where you can be helped by an s corp. So if your income is between, say, almost 100 k and 1,000,000, that's our sweet spot. But, you know, there's the majority of people are starting out or smaller, and we we can, you know, package our services for an offering there.

13:05>> So, yeah, I'm excited to add more plans, on the go forward because ultimately, our vision is to stop all business to one, but, you know, you gotta stay focused at the beginning. Right? That if you if you're not, then you're not really delivering for anybody.

Nathan Latka

13:16Interesting. So are you like, you would be filing 10 forties for these folks or or one of the other ones, corporate or self employed?

Hooman Radfar

13:22>> 10 forties. So yes. Correct.

Nathan Latka

13:24Okay. Interesting. This must be a massive market. Have you tried to map it? How many folks in The US are self employed that doing between a 100 k and a million?

Hooman Radfar

13:31>> On the 100 k to the million side, it's on the magnitude of, I'd say, 3.5 to 4,000,000. It's a little difficult because there's some overlap in the data. Right? Like, when you pull it, there's not, like, a one data source, but I'd say it's about that's about right.

Nathan Latka

13:45Interesting. Well, you're on trend because I think when the jobs report came out recently, another stat that came out is, like, there's a record number of new business applications being formed over the past quarter or half year or something like that. So certainly on trend here. I guess, walk me through so you get tons of applications per month. Where are you getting these applications from? What's sort of the growth strategy?

Hooman Radfar

14:06>> Yeah. So, you know, we're an interesting business because I guess you would call us b to b. Right? Because we are a business serving other businesses, but their business is one. So our, go to market motion is direct to consumer. So channels that you'd be familiar with. Right? So Facebook, Google, referral is a massive, channel for us. We opened up affiliate. So, like, we have opportunities now for people to make, you know, 400, 600, $1,000 per

14:33>> new customer that they sign up because

Nathan Latka

14:35Do you pay that 1,000 to an affiliate all upfront?

Hooman Radfar

14:38>> If they sign up a customer, yes. So there's different tiers. We're still working affiliate program. We just launched it. And so I think the initial tier is, like, you get 400, and then I think it goes up to 1,000 depending on how far you get along the affiliate program. But we're still working on it. But, you know, it's it's it's been great. So it looks like that direct to consumer motion because there's just so many folks.

14:57>> Right? And they ultimately are individual, but they are businesses. So we have to serve them in that way.

Nathan Latka

15:03And so can you share order of magnitude how many new applications not not what you're accepting, but new applications you're getting every month?

Application Volume and Growth Channels

Hooman Radfar

15:11>> Right now, let's see. Gosh. I mean, it's thousands right now. I have to go look. But it's yeah. It's definitely it's thousands per month. It's increasing like crazy because to your point that you'd mentioned earlier, as you know, we're, you we're going through some economic turbulence. Right? But when you look at 2008 where I was running my first company, what ended up happening is the freelancer population boomed. Because what do what do companies that have w

15:37>> twos do in periods of uncertainty? They shift to contract labor and that either increases the income of existing contractors, right, because they're already in business or creates opportunity for new contractors. That same phenomenon happened in COVID. We saw it firsthand. Right? We saw a boom and now it seems like it's happening again. So, you know, I I've been an investor for years. I have got 50 companies in my portfolio. If you're serving other businesses, they're cutting,

16:01>> you know, like SaaS and all of these other things. They're cutting all their forecasts and we're sitting here. We're growing like crazy actually. So we're hiring. I think there was this article in TechCrunch, in fact. We were mentioned in it. I didn't even realize when our employees reported to us that, like, we're one of the only fintechs that are that are hiring right now.

Nathan Latka

16:17Yeah. No. It makes a lot of sense. So thousands new per month. So that means fair to say between 1,000 and 10,000 new applications per month, something on that order?

Hooman Radfar

16:24>> Yeah. Yeah. Easily.

Nathan Latka

16:25Okay. And put this on a timeline for me. When did you launch the company? What year?

Hooman Radfar

16:28>> So we launched, officially collective at, it was September 2020.

Nathan Latka

16:34That also when you wrote the first line of code, or was there a bunch of MVP work before that?

Hooman Radfar

16:38>> Lot of MVP work before that. It's a great insight. So we we did we closed our seed round at the beginning of twenty twenty. Right right when right when the COVID started, in fact.

Nathan Latka

16:48How much was that for?

Funding History: Seed Round

Hooman Radfar

16:50>> The first seed round, I believe, was on the magnitude of 7,000,000, and we've raised 50,000,000 since.

Nathan Latka

16:54Do that? Hooman, tell me why you do that. Why people are gonna wait? He just sold a company for $200,000,000. Why would he why wouldn't he bet on himself in his next business? He has all the money in the world. Why not keep as much equity as possible?

Hooman Radfar

17:04>> I mean, look. It's expensive to to start a new business. So, you know, you always you always need outside capital for these types of businesses. We wanna build, you know, a brand that's enduring and iconic like a Square. And at the pace we wanna build it at, it just requires a lot of capital. I think if you wanna build a business that's sustained off of retained earnings or, you know, the cash flow, that's a different business.

17:26>> Right? Then you can, you know, do something more like self fund at least at at my level. But, I mean, even my partner from Expa Garrett who'd done Uber, I mean, we typically will raise outside capital. It's just a speed issue. Second, I would say is the more folks you get around the table, it's not you know, you get additional perspectives, but also it's, you know, building resiliency in the capital structure. Right? So General Catalyst, one

17:49>> of the best investors in world, top five VC, QED, one of the best fintech investors. So as we're growing, I not only gain their perspectives, but they both, you know, of course, have funds. So as there's periods of economic uncertainty, you have more resiliency in the business. Right? It's not just one person.

Nathan Latka

18:04Yep. Understood. And I guess most folks you're also an investor, but most folks in a pre seed round are selling, you know, 15 to 20% of the company. Were you pretty average there, pretty standard?

Hooman Radfar

18:13>> At that point, yeah, I think that was about right. Yeah. We we did we did we were we were along those lines.

Nathan Latka

18:18And then I cut you off. I apologize for that. You raised more since then. What was the second round you raised?

Hooman Radfar

18:23>> So our total that we've raised is around 50,000,000.

Nathan Latka

18:26Okay. Got it. Well, when was the second? So '20 did you raise more in 2020 or did you wait to do a series a in 2021? I'm just trying to get the timing of the rounds.

Series A and 2022 SAFE Extension

Hooman Radfar

18:33>> Yeah. So I can I can walk you through it? So seed round was in closed in 2020. And then in 2021, we had our series a. And then 2022, we saw kind of the economic climate going as it was, and we had, you know, partner that partners that we're really excited about. And so we just did a quick, you know, small, like, you know, note basically to to move forward. Right? I had been through the first

18:57>> one, and I think one of the mistakes that I made is, you know, a lot of founders when they they're used to only the growth period. Right? And I was in my twenties

Nathan Latka

19:05Hooman. Hooman. Real quick. Sorry. Before you tell the story, can you quantify so series a, how much was the a?

Hooman Radfar

19:09>> The a was for 20.

Nathan Latka

19:11Okay. And then what the extension was for another 20 or something like that?

Hooman Radfar

19:14>> Yeah. It was about 25.

Nathan Latka

19:16Okay. Sorry. Now now tell the story now that people have the the numerical context.

Hooman Radfar

19:20>> Yeah. I guess one of the things and I'll I'll speak to all of the entrepreneurs out there. When you've only managed through a period of increasing, multiples. Right? So what ends up happening is you have one thing to think about. People will think about growth. Right? And they'll say, oh, okay. If I wait six months, twelve months, n months, right, all things being equal, my business should be worth more money. That's actually not true in these

19:42>> types of economies because you may wait six months, but if the market is going down and the multiples are compressing and for those non essential multiples are, basically, a multiple is a proxy, a way you calculate valuation. So you take whatever the forward revenue is, let's say, for example, 10,000,000 and you multiply it by 10, you get a $100,000,000 valuation. That's an example of how you apply multiple. Those multiples were going down. And so I'm like,

20:03>> wait a minute. I may create more value in the business. I'm convinced I'm gonna do that, but the the value of that later on might be less. So all things being equal, you don't wanna on the side of speed and you wanna raise money at those periods of uncertainty quickly because that there's a lot of unknown later. It's very difficult to kinda like rock as like a first time like, I I have companies I would tell

20:23>> them that. I told them in March, April. I'm like, dude, this is this is going crazy, and they waited. And they had brutal rounds at the end of last

Nathan Latka

20:30I was gonna say, so was that 2022 round you did, call it 20, 25,000,000, was that debt from QED, or was that, like, a traditional convertible note that you're expecting to convert to equity?

Hooman Radfar

20:38>> Just a note. It's a YC safe that will convert. Interesting. Yeah. Yeah. So so we had a bunch of outside investors that we were very lucky again. Same philosophy. Can we bring more value? Can we bring more folks to the table that can help us? So, you know, we had a partner who who who was an operator led fund at Innovius. We had the founders of NerdWallet. They came in through, you know, Better Tomorrow Ventures. So

21:01>> that was a great one. It was just a lot of people we wanted around the table anyway, quickly coming in while things were still you know, it was shaky, but it wasn't quite, you know, where it was. And you could see

Nathan Latka

21:12Flat valuation from the series a or a little markup?

Hooman Radfar

21:15>> We were very happy with it.

Nathan Latka

21:17Okay. Fair enough. Alright. Let's talk about where you see this space going. Right? So you've got a big customer base now. You're gonna build new products for them. I guess, can you give us context there first before you talk about future products? How many customers how many of these one man businesses, one woman businesses are you serving today?

Customer Count and Growth Targets

Hooman Radfar

21:32>> Thousands.

Nathan Latka

21:33Okay. So fair to say between a 1,000 and 10,000 again? Yeah. Okay. Can you break 10,000 this year, you think?

Hooman Radfar

21:41>> There's a lot of ways we can grow faster. It's a lot of this is so so let me let me kind of throw it out there for you. Our problem is in demand. Our problem why we even say problem? Our opportunity is how do we navigate in this environment where raising money, the cost of raising money has changed. Because, you know, as a venture backed business, we don't operate profitably. Right? So I can grow way faster.

22:04>> I could grow three, four times faster if I lend in more members. The question is that profitability gonna work for us? And the answer is, well, probably not. So we have to work on that. So we we actually are limiting our growth purposefully, which is tough, in certain ways, but, just to focus on being a little bit more profitable, get a little more progress. So that's again another thing that changes. It used to be one variable

22:28>> that people are looking at. Hey. What's your top line growth? They looked at the other parts of the system, but with less scrutiny. Now they're looking for specific, though.

Nathan Latka

22:35So break down your rule. You're talking about rule of 40, profits versus growth. Right? So a lot of people might have said last year, hey. We're okay to grow a 100% and have profits be negative six negative 60% EBITDA to get your rule of 40. You might have a different combination of that in your pro form a rolling forward. Can you cut break that down for me? Like, what do you hope to grow by top line

22:51this year, and what are you happy with on a profitability perspective for the next twelve months?

Hooman Radfar

22:55>> So we don't like, rule of 40 for me, it's not something to look at at my stage right now as much. I look more unit economics. So I look at, you know, gross margin and I look at top line growth. Right? Because for us, when I look we're a subscription business, which is very attractive. We have incredible retention. I would say

Nathan Latka

23:14incredible, like, above above a 120%?

Hooman Radfar

23:17>> Well, we don't we don't have any upsell, so you can't you can't do that. Right?

Nathan Latka

23:20So Okay.

Hooman Radfar

23:21>> You you so but we we have very, very strong retention. So we're the top decile for a category. Let's put it that way.

Nathan Latka

23:26And Well, Hooman, I'm sorry. I have to push I have to push you back on that because I've had Zen Business on. I've had Rippling on, and and they've got one thirty, one forty, 150% NDR. You're telling me you don't even have the possibility to go above a 100 because you have no upsells. So how can you say you're top decile?

Unit Economics and Retention

Hooman Radfar

23:38>> We're top decile on the retention for our core products. So if they were to just look at their their core product and not the add ons, there's a retention rate there. I would say that in that zone, we I know we're top decile just based on the stats there, But, they have add ons. So you brought up Zen Business as an example. They've started to add add ons. They're a couple years ahead of us. We'll start

23:59>> doing that as well. So whether it's add ons or new plans or you wanna upsell plans, like, we just don't have that. We're not focused on it. We're focused on our core product right now because once we optimize that, then you can add on more things. So we have that potential. Obviously, to go above that 100%, I think you're absolutely right. We would not be in the top like, we're a public company, for example, you have

24:18>> to be it's usually like a buck 20 plus is considered top decile on a public sense.

Nathan Latka

24:21I would say $11.40, $1.50, one twenty. Well, I don't know you'd get a premium for that. But, yeah, somewhere in that range. I mean, there's a lot of private companies though that are at that one thirty, one forty, one fifty private SaaS companies. To your point, though, again, you're focused right now. You don't you haven't upsold anything yet. We'll see what happens there.

Hooman Radfar

24:36>> Yeah. Yeah. We'll we'll we'll let you know. We'll have to come back and, like, walk through our attachment. Our attachment. Well,

Nathan Latka

24:41listen. I had Ross on three times as he's growing his own business over the past five years, and it's crazy how much he changed his pricing. Know, there was selling one off things to file the the thing, and then they tried to

Hooman Radfar

24:51>> They started as free. Like, I think it's not Yeah.

Nathan Latka

24:54Yeah. It's all over the place. And then you've got Rippling that feels like they just wanna go build everything, and so they they get a little dilutive. I mean, I like that you're leading with the persona, the one man we believe in the one person business. We believe in profitability. Mean, this makes a lot of sense to me. So, hey. Listen. We're running short here on time. I I do wanna try and get a growth number

25:10out of you though. So, like, moving forward, how what do you hope to grow by top line this year? I mean, are you targeting 50% and you're happy with it or 200? No.

Hooman Radfar

25:18>> No. I think, on the magnitude of, like, two to three times is is what we think is pretty good.

Nathan Latka

25:25Okay.

Hooman Radfar

25:25>> You know? Because we have to balance again that growth and profitability. We're we're You think you can grow

Nathan Latka

25:29200% and stay profitable?

Profitability on a Per-Customer Basis

Hooman Radfar

25:31>> On the unit basis? Absolutely. Yeah. So, like, on a per customer basis is what we do. Yeah. No. We're we're very profitable on per customer basis. We've been profitable on per customer basis for two years, three years.

Nathan Latka

25:42Yeah. That's great. Well, listen, before we wrap up with a famous five, obviously, you have one price point. It's basically $300 a month unless people pay annually. You have a couple thousand customers. If it's a 3,000 customers times that ARPU, you're doing about a million bucks a month in revenue. Are you able to comment on that?

Hooman Radfar

25:58>> Benefit of being a private company, no comment. But I I hope I hope to be able to comment soon when we get we go public. But yeah.

Nathan Latka

26:04Alright. Fair enough. Let's wrap up here with the famous five. Number one, what's your favorite business book?

Hooman Radfar

26:08>> My favorite business book? It's probably a little bit boring. So it's a personal productivity book, if that counts. So getting things done.

Nathan Latka

26:16Okay. Number two, what's your, is there a CEO you're following or studying?

Hooman Radfar

26:20>> CEO I'm following or studying. I follow quite a few CEOs, but I like the I like the intel kind of family of CEOs like the Andy Groves and and the operators right now, just given the nature of our business is very complex. So I've been, like, reading a lot about how they work.

Nathan Latka

26:38Number three. What's favorite what's your favorite online tool for growing collective?

Famous Five Rapid Fire Questions

Hooman Radfar

26:43>> My favorite online tool for growing collective.

26:53>> Wow. That's a good one.

Nathan Latka

26:55You're just at your computer's running. What's something HubSpot. Okay.

Hooman Radfar

26:58>> I guess HubSpot. Yeah.

Nathan Latka

26:59Number four. How many hours of sleep do get every night?

Hooman Radfar

27:03>> I'm pretty I'm pretty good about my health. So I I try to keep it at a minimum 6.5, but I'm averaging 7.3.

Nathan Latka

27:08Alright. There we go. Number four sorry. Last set of questions here. What's your situation? Married, single, kiddos?

Hooman Radfar

27:14>> Married. Happily.

Nathan Latka

27:16Okay. Any kids?

Hooman Radfar

27:18>> I'm hoping to ship next year. We're working on it.

Nathan Latka

27:20Nice. Fair. And how old are you, Hooman?

Hooman Radfar

27:23>> I'm 42.

Nathan Latka

27:24Last question. Something you wish you knew when you were 20.

Hooman Radfar

27:28>> It's gonna be okay.

Nathan Latka

27:29Guys, he had a nice success, learned a lot growing AddThis, exiting to Oracle for a report over $200,000,000, then took a break in another company. Eventually said, you know what? This one man business is the new way to build a company in America profitable. 3,000,000, $4,000,000 in revenue is the way to go. He saw an opportunity. Launch collective.com in 2020. They're now getting thousands of applicants every month. Very clear pricing at $300 a month or

27:49a slight discount, 15% if you pay upfront. He said, quote, they've got thousands of customers today caught between 1,000 and 10,000. They've grown using outside capital, 7,000,000 seed raised back in 2020, sold around 15 to 20% of the company, then raised a 20 series a and a $25,000,000 call it note, right, extension on the a. We'll see what happens next as they look to grow and scale, add new pricing plans and continue serving these one man businesses. Hooman,

28:12thanks for taking us to the top.

Hooman Radfar

28:13>> Thank you so much. I had fun.

Nathan Latka

28:15One more thing before you go. We have a brand new show every Thursday at 1PM central. It's called Shark Tank for SaaS. We call it deal or bust. One founder comes on, three hungry buyers, they try and do a deal live and the founder shares back end dashboards, their expenses, their revenue, ARPU, CAC, LTV, you name it, they share it and the buyers try and make a deal live. It is fun to watch every Thursday one

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29:23saying. Sign up for that at nathanlatka.com/slack. In the meantime, I'm hanging out with you here on YouTube. I'll be in the comments for the next thirty minutes. Feel free to let me know what you thought about this episode. And if you enjoyed it, click the thumbs up. We get a lot of haters that are mad at how aggressive I am on these shows, but I do it so that we can all learn. We have to counter

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