Founder Interview
How Lately Got to $79K MRR With 358 Customers on $3.3M Raised (Interview with CEO Kate Bradley Chernis)
- Interview Date
- October 13, 2021
- Interviewee
- Kate Bradley ChernisFounder and CEO
Company Metrics at Interview Time
MRR (2021)
$79,000
Customers (2021)
358
Total Raised
$3,300,000
Team Size (2021)
7 full-time
Runway (2021)
18 months
Historical Snapshot
These numbers were reported by Kate Bradley Chernis during her interview with Nathan Latka recorded in October 2021 and are a historical snapshot, not current figures. See Lately’s current numbers.
Key Takeaways
- 01Lately had 358 paying customers at the time of the interview in October 2021
- 02MRR was $79,000 in October 2021, an annual run rate of about $948K, down from a $94,000 peak
- 03Total funding raised was $3.3M across multiple angel rounds
- 04The company had 7 full-time and 6 part-time team members
- 05Kate Bradley Chernis owned approximately 38% of the business
- 06Monthly total burn was approximately $50,000, giving 18 months of runway
- 07The company had 1 salesperson, paid intermittently, as it shifted to a self-service model
- 08The cap table had approximately 65 investors
Company Metrics at Time of Interview
| Metric | Value | Source |
|---|---|---|
| MRR (2021) | $79,000 | Founder interview, Oct 2021 |
| Revenue (ARR run rate) (2021) | $948K | Founder interview, Oct 2021 |
| Customers (2021) | 358 | Founder interview, Oct 2021 |
| Total Raised | $3,300,000 | Founder interview, Oct 2021 |
| Valuation (priced round) (2017) | $7,000,000 | Founder interview, Oct 2021 |
| Team Size (full-time) (2021) | 7 | Founder interview, Oct 2021 |
| Team Size (part-time) (2021) | 6 | Founder interview, Oct 2021 |
| Sales Reps (2021) | 1 | Founder interview, Oct 2021 |
| Monthly Total Burn (2021) | $50,000 | Founder interview, Oct 2021 |
| Runway (2021) | 18 months | Founder interview, Oct 2021 |
| Founder Equity (2021) | 38% | Founder interview, Oct 2021 |
| Cap Table Investors (2021) | 65 | Founder interview, Oct 2021 |
| Sales Conversion Rate (2021) | 98% | Founder interview, Oct 2021 |
Growth Breakdown
Revenue
Kate reported MRR of $79,000 at the time of the interview, down from a prior peak of $94,000. That puts Lately at roughly a $948K annual run rate. The decline was attributed partly to COVID impact and a deliberate pivot away from a social media management platform model.
Customers
Lately had 358 paying customers in October 2021, down from approximately 380 about ten months prior. Kate explained the reduction was tied to a strategic shift toward a self-service, AI-only product and away from a full social media publishing platform.
Team
The team consisted of 7 full-time and 6 part-time employees. Co-founders Jason and Brian made up the core of the engineering team alongside VP of Engineering Greg. The company had trimmed headcount to focus entirely on product rather than sales.
Funding and Runway
Kate had raised $3.3M in total across multiple angel rounds, with no institutional funding. Monthly total burn was approximately $50,000, providing 18 months of runway. She had a convertible note open at a $10M cap and said she would raise again in the spring, adding that "everything changes."
Growth Strategy
AI-First Product Pivot
Kate identified through cohort analysis that customers did not need Lately's social media publishing platform and only needed the AI content generation layer. The new product would focus exclusively on AI with gamification and a self-service model, eliminating the overhead of maintaining social media API integrations.
Cohort Analysis and ICP Segmentation
Kate spent time with adviser Mark Roberge studying cohorts broken down by ICP, payment behavior, and churn reasons. This analysis directly informed the decision to pivot to a self-service product and helped clarify that Lately is a category creator rather than a disruptor.
High Sales Conversion Rate
Kate credited a 98% sales conversion rate as a key strength, attributing it to the AI doing its job effectively. This metric gave her confidence in the product's value even as the company worked through a leaky retention bucket.
Strategic Partnerships and Integrations
Kate noted inbound interest from large platforms including Hootsuite and Salesforce, positioning Lately as an extension that multiplies the value of existing social media platforms rather than competing with them.
Angel Network and Scrappy Fundraising
Rather than pursuing venture capital, Kate built a cap table of approximately 65 angel investors through multiple small rounds ranging from $250,000 to $750,000. Key backers including Bob McCausland and Joanne Wilson provided both capital and board-level support.
Best Quotes
“So we have 358 customers.”
“MRR is at 79,000. We were up to 94 and we dropped.”
“I've raised 3,300,000 now.”
“I have eighteen months right now worth of runway.”
“I mean, my cap table is messy. There's probably 65 people in it.”
What Happened Next
This interview captured Lately at a transitional moment in October 2021, when Kate Bradley Chernis was pivoting from a full social media management platform to a self-service, AI-only product. The numbers here, including $79,000 in MRR, 358 customers and $3.3M raised, reflect the company as it stood at that point in time. Kate said she had a convertible note open at a $10M cap and expected to raise again "in the spring" on more traditional terms once the new product shipped, while adding that "everything changes." Visit the Lately company profile on GetLatka for current figures.
View Lately’s current profile and metricsFull Transcript
Chapters
- 0:00Introduction and What Lately Does
- 0:44AI Rooted in Neuroscience of Music
- 2:25Customer Count: 358
- 3:45Why Customer Count Dropped
- 4:53MRR at $79K, Down from $94K Peak
- 5:11Total Funding Raised: $3.3M
- 5:56Pivoting Away from Social Media Publishing
- 6:51Runway, Burn Rate, and Financial Position
- 8:15Founder Equity and Cap Table
- 10:14Team Structure and Co-Founders
- 12:11Sales Conversion and Churn Challenges
- 12:35Famous Five: Books, Habits and Advice
Introduction and What Lately Does
Nathan Latka
00:00Hello, everyone. My guest today is Kate Bradley Chernis. She's the founder and CEO of a company called lately, which uses AI to automatically transform a long form content like blogs into dozens of smart social posts. Kate, are you ready to take us to the top?
Kate Bradley Chernis
00:12>> I'm ready. Let's do it.
Nathan Latka
00:13Alright. Content is obviously a hot space, and splitting content up for easy consumption is even hotter. How are you guys playing in the space here?
Kate Bradley Chernis
00:20>> Yeah. We are really leaning heavily into the AI. I mean, what we've learned most, Nathan, is that people hate writing. Writing is really at the baseline of all the content we create, even video like this. Right? So you still have to promote this with writing eventually, and it seems to be the bane of most people's existence. Lucky me, I was a fiction writing major. So I'm good at writing. But really He says with a laugh. Yeah.
AI Rooted in Neuroscience of Music
Kate Bradley Chernis
00:44>> The other thing too, I think you know this about me, but I used to be a rock and roll DJ. And my last gig was broadcasting to 20,000,000 listeners a day. So what I learned about the neuroscience of music actually plays into the the the bedrock of our AI. Mhmm. So I can talk on that real quick. So so when you listen to a new song, Nathan, your brain must instantly access every other song you've heard
01:10>> in this moment, and it's looking for familiar touch points so it knows where to index that new song in the the memory of your brain. Right? And in that moment comes forth memory, nostalgia, emotion, all the things that feed trust, and trust is what makes you giving your money. Right? Now your voice, Nathan, is like a song. It has a frequency. It's a note. Right? And when you write text and I read it, I hear your
01:35>> voice in my head. So it's your job as the author to give me familiar touch points and trigger nostalgia nostalgia, memory, emotion, all these same things. Right? So the way lately's AI works is it first learns from me. I've written thousands of radio scripts and fiction writing major, and it learns from my best practices, which I've listed out for my whole team to replicate. And so the AI gives us what we need, and then we augment
02:02>> it with my writing rules. And then the AI continues to learn from itself. Right? The more we publish, the more it learns, and same for all of our customers. So we've we've created sort of like the multiple economies of scale through the AILO.
Nathan Latka
02:17So, Kate, this sounds sexy as hell. The question is, are customers paying for it?
Kate Bradley Chernis
02:21>> They are paying for it.
Nathan Latka
02:24How many?
Customer Count: 358
Kate Bradley Chernis
02:25>> So we have 358 customers.
Nathan Latka
02:27K. That's down a little bit since when we last spoke. So are you guys transitioning?
Kate Bradley Chernis
02:32>> It is down a little bit. Yeah. We're we're transitioning. We're learning. You know, we've we've got punched in the face from COVID a little bit as everybody did. As everyone did. Yeah. Importantly, we started looking at, you know, those you know, the cohorts cohorts. Right? So I've been studying those for years, and I wasn't really sure, like, what to make of what I was learning. But I spent the summer with Mark Roberge, Nathan. Google him.
Nathan Latka
02:57Is he an is he an investor?
Kate Bradley Chernis
02:59>> He's not an investor. He's an adviser. He led the first ever accelerator from stage two capital this summer. 700 companies were applying. We didn't apply. They just actually asked us to be a part of it, which is great. And it was amazing, by the way. And I wanna share this with everybody out there. So we were talking about economies of scale and and growth and moat, and I was really frustrated. And I said, you know, we're
03:26>> we've positioned ourselves as a disruptor. And he's like, yeah. Why are you doing that? You're not. You're a category creator. And I was like, well, because every investor I've ever said that to for seven years told me I was crazy. And he said, well, that's because they've never seen it before.
Nathan Latka
03:38But why they say you're crazy? I mean, you raised $200 in 2014 and another 2,500,000 in 2017, so you convinced some people.
Why Customer Count Dropped
Kate Bradley Chernis
03:45>> Well, it's not that I didn't convince them to invest in me, but I didn't convince them that we are a category creator, which is a it's a rare rare thing. Right? So everyone can take advantage or or believe in the better mousetrap, but the better mousetrap is what we don't wanna be. Right? So getting back to your question about why we have less customers. So we understood that our customers needed a social media management platform in
04:06>> order to publish the artificial intelligent content that we were creating, but we've since learned that they don't. They don't need our platform. They can need any platform. And that actually 75% of my headache, as far as resources go, is just dealing with Facebook and LinkedIn and all their bullshit. Right? And I didn't understand that lately could actually function and live without that. So it could be an extension of all the other social media platforms. Right? So
04:34>> we extend the value of what they already do by a hundredfold. Similarly, we extend
Nathan Latka
04:41the value of Hold on. Let's get let me give you, like, really specific for second.
04:44>> So three
04:44you were at, like, 380 customers about ten months ago. You're at three fifty eight now. They're still paying about $200 ARPU. So MRR is still about $70,000?
MRR at $79K, Down from $94K Peak
Kate Bradley Chernis
04:53>> MRR is at 79,000. We were up to 94 and we dropped.
Nathan Latka
04:58Oh, okay. Well, mean, that's not horrible. So let me ask you, I mean, you raised 2,500,000, I think at a $7,000,000 valuation back in 2017. How are the current investors who have been on the ride for now four years reacting reacting to sort of the not hyperscale growth?
Total Funding Raised: $3.3M
Kate Bradley Chernis
05:11>> Yeah. So act actually, I've raised 3,300,000 now.
Nathan Latka
05:16How long is that next round? Because I only had 2.5 in 2017.
Kate Bradley Chernis
05:19>> We did a couple of angel rounds, and I can email you the specifics. But so we've done some extensions, and then I've got a couple of notes open. Had a couple of notes in the last couple years. One's open now, actually. Okay. Okay. So no no institutional funding still.
Nathan Latka
05:37That last 2.5 was at a 7,000,000 priced round. Right?
Kate Bradley Chernis
05:40>> Yeah. So currently, the current note is at a 10,000,000 cap.
Nathan Latka
05:44Cap. Yeah. That's great. Okay. So you're still stretching upwards. So okay. So you're pivoting. You don't wanna deal with the Tuesday night updates Facebook thinks their API and outbreaks lately every week, and you have to always, like, playing catch up. So you're pivoting away from relying on the whales. What's the next product?
Pivoting Away from Social Media Publishing
Kate Bradley Chernis
05:56>> Yeah. So the next product actually falls in line with what what we already know. So when we studied those cohorts, I learned to study the patterns within them. And so I took them apart by we have multiple ICPs. I know it's weird, but we do. So I took them apart by ICP, by payments, reason for churn, all the things, and it was screaming at me to do to build a self-service product with gamification, and that only
06:25>> focuses on the AI and nothing else. So it's this weird position, Nathan, where it's like, I'm starting again, but not really because I already have the knowledge of the last seven years. Mhmm. Right? And this product answers all the questions that we know we can already answer. You know I'm saying? How do
Nathan Latka
06:44you get yourself financially ready for that pivot? Like, do you have enough cash cushion or you have three or four months where you can sort of test without any revenue growth?
Runway, Burn Rate, and Financial Position
Kate Bradley Chernis
06:51>> Oh, yeah. I have eighteen months right now worth of runway, and that's in part basically, my burn is about 48,000. So every 50 k gives me three months.
Nathan Latka
07:01Got it. Your total burn is 50 k or your net burn is 50 k?
Kate Bradley Chernis
07:03>> My my total burn is 50 k.
Nathan Latka
07:06So then you add back your revenue and you're actually profitable every month. Is that right?
Kate Bradley Chernis
07:10>> Almost. We're paying back loans, as you know. That's that's one thing we're doing. And we're paying back, you know, my staff. Right? So there's been a million times where I've had to ask people not to take a paycheck or
Nathan Latka
07:20But your total monthly expenses then are what? Like, a 100,000 and $110,000, and your net burn is $40,000 a month?
Kate Bradley Chernis
07:27>> Yep. Right around there. Yep.
Nathan Latka
07:28Okay. Got it. So you have plenty of runway. Eighteen months.
Kate Bradley Chernis
07:31>> So Plenty of runway. Yeah. But the trick, though, is not the runway. Like, I have the runway to live in cockroach mode, but for this ship to sail, I I need all the pieces to be moving. So I'll be raising again in the spring. I could do it now, but frankly
Nathan Latka
07:44How much are you raising on the 10 cap?
Kate Bradley Chernis
07:48>> It's a I was raising $250,000 and I got oversubscribed. So we're now at $5.35, 6 just under 700.
Nathan Latka
07:57Okay. $650,000, $750,000. So you'll close that $650,000 on a 10 cap and raise more traditional after this new product releases?
Kate Bradley Chernis
08:04>> That's the plan, but everything changes. Gonna go with how I feel. I mean, you know, I'm allergic to venture funding. They're allergic to me.
Nathan Latka
08:10Well, how much equity? I mean, I like that, by the way. Right? You how much equity do you still own in the business?
Founder Equity and Cap Table
Kate Bradley Chernis
08:15>> Low, actually. I need to be re optioned. So I'm around 38%, I believe.
Nathan Latka
08:19Why so low?
Kate Bradley Chernis
08:21>> Because when you're a female entrepreneur, you just have to beg, borrow, and steal. Right? So I've raised multiple rounds, but all between 250,000 and 750, all angel rounds. And I have a lot of I mean, my cap table is messy. There's probably 65 people in it.
Nathan Latka
08:38Okay. 65 people on cap table. Got it. Who's the next largest shareholder?
Kate Bradley Chernis
08:44>> It's Bob McCausland, who's on my board. He was a fan of mine when I was in radio. Yeah. He's just a really amazing angel from Austin, Texas, by the way.
Nathan Latka
08:52Oh, amazing. Yeah. So what does he own? Like, ten, twenty, thirty?
Kate Bradley Chernis
08:56>> I don't know. He was in he was in with I believe his full investment was 650,000 out Uh-huh. Out of all.
Nathan Latka
09:03Okay. Okay. Cool. Very cool. So you have you have allies behind you, which is good, and you also have time. What's your team like today? Fourteen
Kate Bradley Chernis
09:08>> Yeah. Well, and I have also, I have Joanne Wilson. Right? So she's on my board member and my she led my last round. We also have David Meerman Scott, who just came in. Google him if you guys don't know him. He wrote a little book called Fanocracy, and also is on the advisory board for HubSpot. Yep. The team is great. I trimmed just down. We're we're 100% focus product focus focus now and not sales, because we're
09:34>> moving to the self-service model. So buy sales. Hello, product.
Nathan Latka
09:39So how many team on now today?
Kate Bradley Chernis
09:40>> There's seven full time, six part time. And by part time, I mean, I get to work for me for free or
Nathan Latka
09:48So no salespeople, no quota carrying reps?
Kate Bradley Chernis
09:51>> I have one salesperson who we pay intermittently because
09:58>> we can't pay him often.
10:00Mhmm.
10:00>> And he's a nice guy, and his wife is Kate Snow from NBC. So
Nathan Latka
10:04Got it. So you have to sort of manage that relationship. Okay. Cool. So someone on the team, you're getting
Kate Bradley Chernis
10:08>> really This is what it's like.
Nathan Latka
10:10Yeah. You're raising capital. This is great. Who's doing the engineering? Are you outsourcing development?
Team Structure and Co-Founders
Kate Bradley Chernis
10:14>> No. It's my team. You know, interestingly, my my two cofounders, Jason and Brian, make up the majority of my engineering team. Also, Greg is our VP of engineering. And then we our AI lead came came from one of our investors. So those guys make up make up the team for the most part. But I wasn't paying my co founders because that's who you cut first. Right? And so that was a big
10:40>> challenge for us because I was feeding them, you know, freelance work for years.
Nathan Latka
10:44Well, how much equity do
10:46the two cofounders own together?
Kate Bradley Chernis
10:48>> So they're next to me. When we first started, it was, I'm 80 no. Sorry. Steve, 20. I do math backwards. Jason, 15. Brian, five. And then I'm the rest. So that's the ratios.
Nathan Latka
11:03So they owned 40. You've been diluted by about 50%. So today, they probably together own about 19% of the business.
Kate Bradley Chernis
11:10>> Yeah. Right around that.
Nathan Latka
11:12Yeah. Really interesting. And they're still active, which is good.
11:15>> So I mean,
11:15they have good upside. I mean, they have upside here too. Right? They'll take a pay cut to preserve equity value.
Kate Bradley Chernis
11:20>> Yeah. I mean, you know, we all this is the thing. We have to reassess every single day. Are we fucking crazy? That's what we wanna know. Are we crazy?
Nathan Latka
11:26Of course. Yes. The answer is yes. We all are.
Kate Bradley Chernis
11:28>> Everyone is the you're all the crazy right now, and you know it. Yeah. I mean, you know, like, when I've got, like, Hootsuite just tech literally texting me, what's happening? Like, let's close this deal with some giant company. Hurry up and integrate with us. And I'm like, okay. I guess that is I'm not crazy. And I've got Salesforce pulling me in to be one of five Why
Nathan Latka
11:48don't you exit the Hootsuite for $5,000,000? All cash out.
Kate Bradley Chernis
11:50>> I mean, I'm working on that shit, Nathan. You know, it's like it's weird because, like, we get all these accolades, right, where Mark Roberge comes out of the the the, you know, the brick walls and is like, holy shit. You're amazing. And you're like, well, yeah, but where's your investment? Right? There's that. You know? So it's this constant, and I I love Mark, and I I know where his investment is, so I'm not actually putting him
Sales Conversion and Churn Challenges
Kate Bradley Chernis
12:11>> to the to the grind. But then at the same time, you know, we have we have churn. Like, I've I still have that 98% sales conversion. I still have that shit. Right? Thank god. That's the AI doing its job, but I have a leaky bucket. I know this. You know? And so every day, I'm literally thinking, holy shit. Like, can can we do it? And everyone else is watching too. It's part of the entertainment.
Famous Five: Books, Habits and Advice
Nathan Latka
12:35If the answer is yes, you can do it. We're out of time. Let's wrap up with the famous five. Number one, favorite business book.
Kate Bradley Chernis
12:41>> Oh, fuck.
Nathan Latka
12:44Pitch anything. Was it I a year said it yeah.
Kate Bradley Chernis
12:48>> Like, I I I'm gonna say shit.
12:54>> The worst the best stuff.
Nathan Latka
12:56We'll skip that one.
Kate Bradley Chernis
12:57>> Number number two. The book is it was this it was I can't think of the name of it right now. Oh, I'm not gonna say any of those books. I'm gonna say One Train Later by Andy Summers, his autobiography. And the reason I love that book is it's a great it's just like it's like my story. It's an under event story, and he had to wait till he was quite old in the music industry for his
13:16>> team to come up. Right? And there was constant, constant chaos and and whatever, divorce, you name it, and they made it.
Nathan Latka
13:24Number two, CEO you're following or studying?
Kate Bradley Chernis
13:27>> It's always me.
Nathan Latka
13:28Number three, what's your favorite online tool for building a business?
Kate Bradley Chernis
13:31>> Lately.
Nathan Latka
13:32Number four, what's your favorite oh, sorry. How many hours of sleep do you get every night?
Kate Bradley Chernis
13:37>> I don't sleep between two and three hours. So I wake up at some point, and I don't know what happens there. I do
Nathan Latka
13:42How many hours? What do you get though on average each night?
Kate Bradley Chernis
13:45>> I try to make it actually eight or nine, but, like, that's you can see if I'm waking up at two, I'm having to catch up for those four hours, I sleep late.
Nathan Latka
13:51Alright. For meetings before eleven.
Kate Bradley Chernis
13:53>> Kill me now.
Nathan Latka
13:54Yeah. Situation, married, single kiddos?
Kate Bradley Chernis
13:57>> Married.
Nathan Latka
13:58Married. And any kids?
Kate Bradley Chernis
14:00>> It's on the list of things to do, but Obviously.
14:03But no rush.
14:03>> I mean, lately is first. Yeah. I mean, I'm pushing it, Nathan. I'm 47. So
Nathan Latka
14:07Alright. Fair. Fair. Fair. And what do you wish your 20 year old self knew?
Kate Bradley Chernis
14:13>> That eye cream is really worth the investment.
Nathan Latka
14:16That what? Oh, eye cream. Guys, there you have it. Kate from trylately.com. She still owns 40% of the business. They're scaling nicely. They have a little flat patch here during COVID, but they're now pivoting. They're serving three fifty eight customers. They do about $1,000,000 a year in revenue terms of run rate, raising $650,000 now at a 10,000,000 cap that's closing. Team of seven, very scrappy. Eighteen months of runway is booked to pivot, and a new a
14:37more traditional round in 2022. Kate, we are rooting for you. You. Thanks for taking us to the top.
Kate Bradley Chernis
14:42>> Love you.
Nathan Latka
14:44One 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 1PM
15:09Central. Additionally, remember these recorded Founder interviews go live. We release them here on YouTube every day at 2PM Central. To make sure you don't miss any of that, make sure you click the subscribe button below here on YouTube, the big red button and then click the little bell notification to make sure you get notifications when we do go live. I wouldn't want you to miss breaking news in the SaaS world, whether it's an acquisition, a big
15:32fundraise, a big sale, a big profitability statement or something else. I don't want you to miss it. Additionally, if you want to take this conversation deeper and further, we have by far the largest private Slack community for B2B SaaS founders. You want to get in there. We've probably talked about your tool if you're running a company or your firm if you're investing. You can go in there and quickly search and see what people are saying. Sign
15:53up 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 those people.
16:13We got to push them away. Click the thumbs up below to counter them and know that I appreciate your guys'support. Alright. I'll be in the comments. See you.