How Onboard.io Raised $1.25M Pre-Product and Landed Its First Customers Through Investors (Interview with Jeff Epstein)

Introduction and Guest Background

Nathan Latka

00:00Hello, everyone. My guest today is Jeff Epstein. He's an investor, mentor, advisor, and generally a huge fan of tech, sports, and business. Now along with

00:07all this, is now founder of onboard.io. That's onboard.io, a B2B SaaS to streamline onboarding for every customer. He previously founded, built, and sold Ambassador, a referral marketing program platform. Jeff, you're ready to take us to the top?

Jeff Epstein

00:20Yes. Absolutely.

Closing the Ambassador Story and the Exit

Nathan Latka

00:21Alright. Listen. We haven't chatted, I don't think, since the Ambassador days, but my gosh, I'll tell you what. There's so

00:26many SaaS founders I interview and they say

00:28our number one channel, it's affiliates, but it's always difficult to manage the affiliate model. So you played in that space at Ambassador. Close that story out for us. What happened?

Jeff Epstein

00:35Yeah. So it was a great ride.

00:40Late In 2017, we decided we were going to think about selling the business. And so, we ran through a process and we could talk for hours and hours about how that went. But ultimately, was a pretty successful outcome. It was bittersweet, of course, but the great news was everyone did fairly well. Obviously, the shareholders received

01:01sort of a really nice surprise from many folks, from stock obviously. And many of the team ended up moving up and joining the acquirer, which was West Corporation, in various capacities, but ultimately could move throughout the organization and of course move up inside of Ambassador as well. So it was a win win, but it was bittersweet and for me it was time to focus on something else after about a decade.

Capital Efficiency and Burnout at Ambassador

Nathan Latka

01:29What made it bittersweet? I'm going off memory here, I think when you came on, you were like, I don't know, like 3,000,000 or $4,000,000 in 2017, I want to say. Then you had more than doubled, I think, 2018 to like 8,000,000 or $9,000,000 and you were pretty capital efficient. I think you'd only raised like $5,000,000 or $6,000,000 Is that all right?

Jeff Epstein

01:45Yeah. We raised under $3,000,000 and so we were capital efficient. I think looking back, I think it was a little bit of burnout, to be honest. For me and just the team, mean, we pushed really hard and I think we outworked a lot of competitors. Sort of have a motto to do more with less, and I think it catches up with you. And I think as a team, I think we were really close knit and super

02:09proud of everyone and they did a great job. But I know personally for me,

02:14think I was kind of burnt out myself, just pushing so hard for so long. And so I think it made sense at the time instead of sort of raising more money and like even doubling down again was to sort of move on. And we found a good home and we thought it was a really great partner. And so that was sort of the way we went.

Nathan Latka

02:33Was my revenue number right there?

02:34It was about an 8 or $9,000,000, 2018?

Jeff Epstein

02:36I think when we sold, we were around 8.

Nathan Latka

02:36Okay.

02:40Okay. And last minute on this. Right? So do you remind me a lot of Andrew Gizdecki, who hits the same story with why he sold Bizness Apps, which was just crushing it. I mean, you really capital efficient, 15,000,000 ARR. He basically sold, he shared with me about for about one x. Right? But he said, Nathan, I don't wanna optimize for valuation. I just wanna move on. And now he's building MicroAcquire. Can you help me understand

03:01sort of... I mean, you sold, I think to... Mean, you sold a private equity firm. Right?

Jeff Epstein

03:05It was it was a it was a company that was run by a private equity firm. So West Corporation run by Intrado. I'm I'm sorry. West Corporation and the the company was Apollo Group. So, like, super huge backing, but it was... From my understanding, and they they they don't share a ton with me. Right? Like, we were a small piece of a big pie. But they were pretty autonomous in terms of choosing choosing the deal, and

03:28I think Apollo just sort of signed off on the high level logistics would be my understanding.

Nathan Latka

03:33Okay. Great. And can you share multiple in terms of revenue, in terms of what you sold for 1x, 3x more?

Jeff Epstein

03:39We can't share specifics, but it was definitely a multiple revenue instead of like an EBITDA multiple. So it

03:49was a solid range. It wasn't like 10x and it wasn't some EBITDA multiple. Was definitely a revenue multiple.

Nathan Latka

03:55Yeah. Well, look, mean, congratulations. From everything you're telling me, what I'm really asking is like, does the capital waterfall and the exit hit the early employees you gave 0.2% equity to? And it sounds like that was a definite yes.

Jeff Epstein

04:06It did. Absolutely.

Starting Onboard.io in 2020 After a Year Focused on Health

Nathan Latka

04:08So you created... This is good for a lot of people. So, okay. Let's move forward now to Onboard. When did you launch the business?

Jeff Epstein

04:13So we launched Onboard in 2020 actually. Was based on... Sorry, this is when we started. We didn't actually launch until just about a month or two ago. But the concept for Onboard was from our problems and challenges at Ambassador of launching big enterprise companies on our technology, a lot of people had to do a lot of things in sort of managing that process.

Nathan Latka

04:35What

04:36were you doing between... Because you

04:38exited Ambassador, and you think you said in 2018, right? 2017?

Jeff Epstein

04:412018. Yep.

Nathan Latka

04:42What'd you do for two years?

Jeff Epstein

04:44So for one year, basically all of 2019, my plan was to just sort of get healthy, sort of like decompress. And I know that's like a super fortunate position to be in, but that was essentially what I planned on doing. I did a little bit of consulting. Still talk to folks that were in the business and just help and mentorship and invest in some angel investing. But for the most part, I focused on myself. And then

05:09in 2020, as we sort of got into COVID, we started kicking around ideas of some of the old, know, sort of getting the band back together again. And so for most of early twenty twenty, until we eventually ended up sort of starting actually working on Onboard in about April, we were sort of thinking about ideas and what are some of the things that we really had pain points with at Ambassador and like how can we address

05:33those in a way that no one's doing today.

Nathan Latka

05:35Just touch on this quick because mental health and just health in general is a big thing. And a lot of us will ignore this. Mean, Get Ambassador that household, it sounds like it actually made you to some degree sick. You said get healthy for two years.

Jeff Epstein

05:45I mean, the work itself didn't make me sick. I mean, to me, was definitely, I made myself. I think I have a pretty strong willpower and willing to push through a lot of sort of like, hey, listen, it's not me, right? It's like all entrepreneurs, like they're willing to push themselves to lengths that maybe most people wouldn't. And that's not necessarily a good thing, but I think it's probably fairly accurate. And so, I mean, me, the

06:09course of ten years, I gained probably 40 pounds. I wasn't eating healthy, right? Like I was traveling a lot. I probably was sleeping like three or four hours a night for period of many years in a row. And I can do it. Like I sustained fairly well. But I think I'm getting older, it takes a toll. And so for me, I think all those things just added up. Wasn't like, I mean, think I was stressed out

06:34and things like that. So I think just focusing on being a little bit more mindful of my health and well-being, it was certainly sort of on trend. And I think that was good that it became a little bit more mainstream and okay to think about and talk about. But for me, was something that I was like, I'm fortunate enough I can invest in these things instead of having to invest in a business. I can invest in

06:55myself so that I can be better for longer essentially.

Co-Founder Decision and Team Structure

Nathan Latka

06:59Yep. You're pioneering this new concept at Onboard called Maps, which we're gonna talk about here in a second. But first you said get the old band back together. Now a lot of second time entrepreneurs will say most dilutive event was my co founder.

07:12My next thing, I'm going

07:13have enough money, I'm just going to pay someone a lot of money and I'm going to keep 100%. What did you do?

Jeff Epstein

07:18So it's funny, I actually thought about it in the opposite way. For me, it was actually quite lonely.

07:26For all intents and purposes, the first few years of Ambassador was all me, and at points I owned almost 100%. Over time, there were investors and the team received a bigger chunk of the equity, which I think was great. And for me, second time around, what I much more cared about was working with people that I like to spend time with and sharing some of the sort of burden of carrying it all on your back. And

07:51so, that was big difference for me was when you're the solo founder, essentially, there's just so much more that you're just carrying the weight of, and it has to be that way. Like you can't have it any other way, even if you hire someone to do the work, just equity splits and things like that, it's ultimately going to fall to you. I have a true co founder with Will. It's a lot more fun. We both started

08:14on day one and we both have a big chunk in the outcome and a big say in how we decide things.

Nathan Latka

08:22And is Zach involved too, is it mainly you and Matt?

Jeff Epstein

08:26It's myself, Will, Matt. Zach was a founder who's now an advisor, and he's obviously a really good friend and still helping us with the business, but he's not doing day to day right now with us. Yes.

Landing the First Customers

Nathan Latka

08:39Okay. So that's sort of how you get things going. True co founder this time around. We'll see how it works out. Tell me about the first customer. How'd you land them?

Jeff Epstein

08:48Yeah. So the good news is we did have a little bit of a network, so the first customers came investors as we were pitching, sort of telling them our product is being launched, our investors started sort of asking their portfolio companies. So the nice thing was we did have companies really as soon as we turned the product on, we had a handful of companies using it. We're still super early, so we're still definitely iterating on the

09:10feedback of those early customers and then the next few dozen that are using us and paying us now. But it's fun, it's moving way back to the beginning of the spectrum where it's really learning and understanding and really diving into the use cases and the little intricacies of the product.

Nathan Latka

09:10So you said a

09:27couple dozen, what, 36, 48 customers paying today?

Jeff Epstein

09:30Yeah. We have a couple of dozen, so even a little bit less than that.

Fundraising: $1.25M Pre-Product From Old Investors

Nathan Latka

09:34Okay, got it. We'll call it 30 or so. And the first comes from the network, which is great. I always love when folks use the raise process to land investors or investor portfolio companies as customers. It's obviously a smart way to do it. How much did you end up raising?

Jeff Epstein

09:46We only raised 1,250,000. So in this day and age, not a ton, but the beauty was it was old investors who literally gave us money pre product, pre team. It was myself and Will and Zach at the time were talking about what do we want to do. One of our investors was like, Hey, you're not going to do this without taking our money. Love working with them. Ludlow Ventures has done really well, and so they were

10:11like, You got to do this.

Nathan Latka

10:11Oh, and you just earned them

10:13maybe not a blockbuster return, but a pretty darn healthy return at Ambassador.

Jeff Epstein

10:17That definitely... Yeah. They did well.

Nathan Latka

10:19Yeah. Yeah. Mean, yeah. You I mean, you you wouldn't take... I mean, you have a million yourself. I mean, you could have funded it, but really having a partner is why you did it. And they also brought in customers, it sounds like.

Jeff Epstein

10:19Exactly. Yeah.

Nathan Latka

10:19Okay.

Jeff Epstein

10:29Some of them are... Yep. Run away.

What's Different This Time: A Problem He Lived and a Narrower Niche

Nathan Latka

10:31What do you... So you also, eight, nine, ten years ago, were getting your first 30 customers at Ambassador. You approached those 30 probably different than you're approaching the first 30 at Onboard. What's the biggest difference? Are you listening to all the ideas they give you or are you being more deliberate?

Jeff Epstein

10:46So really the biggest thing for me, there's really two specifics. One is it was a problem that we actually faced this time. So with Ambassador, it was much more of a concept and idea that I had that I thought would make sense, but it wasn't something that I actually lived in. Was never an affiliate marketer at a business. I had like an affiliate little side company that I had. So I had some ideas, but I didn't

11:10really feel the pain. With Onboard, we felt this pain very clearly. Me as running a team and trying to mitigate churn and understand how do we grow our top line, but also how do we grow our bottom line, how do we keep customers longer? And Will,

11:26he was also in charge with making customers happy, and keeping them, retaining them, and onboarding them as quickly as possible, and keeping our onboarding team efficient. So we didn't have to hire new employees every time we closed a new deal. So this was a pain that we felt really closely, right? Being a super scrappy and capital efficient team. So that's first and foremost. And then second was, we are focused on sort of trying to hit a

11:52niche as B2B and maybe software and maybe even more narrowly SaaS versus trying to solve all things for all people. And the first time Founder, I'm like, I just wanted to say yes to everything and then just start building that. And then you end up going in 50 different directions and you're like, Does it actually work for anyone specific? And so this time we're more intentional. It's hard though. I understand why I did it now because

12:14it's so hard to see someone walk away even though they're like, oh, this is perfect if you did this one thing, but the one thing isn't in the roadmap.

MRR and Pricing Strategy

Nathan Latka

12:21Yep. Yep. Now 30 customers, your pricing page is more mature than most startups. We'll talk about that in a second, but I imagine most of these folks are what, 200, $300 a month, something like that? Yeah. So have you passed $10,000 a month in MRR yet?

Jeff Epstein

12:35No, not yet. We're hoping to soon though.

Nathan Latka

12:37You've gotta be close. Yeah. Yeah, very cool. That's a special moment. Even though you've done it before, it's still a special moment. I wanna talk about your pricing page, right? Because you've done something here which I think is compelling. You've given yourself the opportunity to upsell against multiple pricing axes, right? You have the user based upsell and then you have a per seat price under that. You also can say, let's test upselling based off product upselling.

13:01They only get outboard if they're on sort the more advanced plans. And you also do things like, you know, the custom branding, right? Or the designated customer success manager on the top tiers. Why were these sort of your initial, shots at like how to set up the pricing page?

Jeff Epstein

13:17Yeah. So we were thinking about pricing from a couple different perspectives and the beauty of getting funding earlier in the process versus last time where it was coming out of my pocket was we want to optimize for information and feedback instead of optimizing for revenue. So it's an intentional decision on our side to price much lower than where we expect to be in the next year. And in fact, we've actually already raised our prices once. Same

13:43thing in Ambassador, we raised our prices every quarter for almost five years, and we didn't lose customers. We ended up moving upmarket, of course, but we found that if we can deliver on a product and deliver even more value, the prices is not the main determinant for the sale. In this case, though, we want the low price to be a determinant. So people try us and give us feedback, and we can get more people in the

14:07door and learn. So that's the intent there. But we do know as well that there are some people that are willing to pay a lot more for other things that we can provide, like

14:18more of an onboarding or a consultative type experience. So we wanted to leave those options open for some of the bigger companies that they don't care at all about the price, but they do care about basically maybe having their hand held a little bit more or for having more customization and things like that.

Differentiation from Pendo and User Onboarding Tools

Nathan Latka

14:35Yeah. I mean, is the customization and the sort of higher touch you can put on these folks, I mean, is that gonna be the mousetrap that allows you to really differentiate from like, you know, the Pendos of the world?

Jeff Epstein

14:46It it it can be, you know, I mean, I think, you know, the the biggest differentiation we see from a company like Pendo, and it's in... We're sort of walking into a a a muddy muddy waters here where Pendo does a lot of user guiding, and we we consider what they do actually user onboarding. So helping an individual user of a product or service get clicks through the appropriate points. We see ourselves as what we call

15:10company onboarding, which is really getting the technology implemented so that that user can in fact actually walk through efficiently. So it's really all the things that need to be done before the user even gets access. And so we see them as more complementary than competitive, even though the word onboarding is used in both cases, which is a little bit confusing.

Nathan Latka

15:28Is this sort of a throwback to Ambassador couldn't work but the marketer you're selling to can't do that without the tech team. So you're basically now helping people that have to do more in-depth things to onboard besides click a button here or there, you're helping them do that.

Jeff Epstein

15:44That's exactly right. Without the JavaScript, the marketer can't be successful, And in order for the JavaScript to work, we need to sign off from legal compliance, design, and all these folks, and then the marketer can get the walkthrough from Pendo. But before that, all these other things need to happen.

Team Breakdown and Engineering

Nathan Latka

15:59And that's where you want to play?

Jeff Epstein

15:59Yes.

Nathan Latka

15:59I see. Okay. We heard about your co founder. Splash out the rest of the team. How many folks full time?

Jeff Epstein

16:05We have five. Five.

Nathan Latka

16:06Okay. And does that include you three?

Jeff Epstein

16:08Yes. Yes.

Nathan Latka

16:08Okay.

16:10So how many of you guys are actually pushing code?

Jeff Epstein

16:12Three pushing code, myself and Will, nontechnical, but technical enough to be dangerous and certainly can speak to onboarding. So we're doing everything else, you know, sales, success, a little bit of product as well. And then we have the three, ex Ambassador, devs who are awesome and just jamming away.

Famous Five Rapid Fire

Nathan Latka

16:30Jeff, you're in a hot space, man. It's fun to see you execute here. Let's wrap up with the famous five. Number one, favorite business book.

Jeff Epstein

16:37Oh, I'm gonna go with The Hard Thing About Hard Things.

Nathan Latka

16:40Number two, is there a CEO you're following or studying?

Jeff Epstein

16:45Man, I mean, it's super cliche, but Elon Musk is obviously one that I'm always interested in following.

Nathan Latka

16:51Number three, what's your favorite online tool for building Onboard. Besides your tool?

Jeff Epstein

16:56I'm big fans of HubSpot. They've really come a long way.

Nathan Latka

16:59Number four, how many hours of sleep are you getting every night?

Jeff Epstein

17:02So my goal is about eight, so I'm probably at about seven, which is a lot more than before.

Nathan Latka

17:07And what's your situation, Jeff? Married, single kiddos?

Jeff Epstein

17:10Married, two dogs, no kids.

Nathan Latka

17:12No kids, and how old are you?

Jeff Epstein

17:14I'm turning 40 in a couple of weeks.

Nathan Latka

17:15A big four, oh, take us back twenty years. What's something you wish you knew when you were 20?

Jeff Epstein

17:20Man, that everything was gonna work out, I think, okay.

Nathan Latka

17:24Guys, learned a bunch at Ambassador, grew it to about a $9,000,000 run rate, very capital efficient, sold it back in 2018, took two years off to get healthy, now coming back at it, building a tool for himself plus his first 30 customers, onboard.io, Inventing Maps, really helping people do the more in-depth things to get your tool working for them like JavaScript, embeds and things of that nature. That then others can come on and actually help, get

17:46more users onboarded with clicks and things of that nature. We'll see what happens. They're about to pass $10,000 a month in revenue. Again, capital efficient 1,400,000 raised as Jeff looks to scale. Jeff, thanks for taking us to the top.

Jeff Epstein

17:46Thanks, Nathan. Appreciate it.

Nathan Latka

17:58One 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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