Omer (00:11.840)
Welcome to another episode of the SaaS Podcast.
I'm your host, Omer Khan and this is the show where I interview proven founders and industry experts who share their stories, strategies and insights to help you build, launch and grow your SaaS business.
Today's interview is with a guy called Nathan Latke.
Nathan is just 24 years old.
He took an idea that he came up with in his dorm room and has successfully turned that idea into an eight figure business that's still growing 10% month over month.
He's a really interesting character and I'm sure you're going to really enjoy this episode.
So here we go.
Okay.
I'm delighted to welcome my guest for today who is Nathan Latke.
The founder and CEO of heyo.
HEO helps businesses easily create Facebook contests, sweepstakes and mobile optimized landing pages to help you get more fans, leads and sales.
HEO achieved over six figures in revenue in its first year and Nathan and his team are now currently on a mission to get to 500,000 paying customers by 2017.
So with that, let's bring on Nathan.
Nathan, welcome to the show.
Nathan Latka (01:22.600)
Omer, thanks for having me.
I'm so thrilled to be here.
Omer (01:26.120)
Now, I've told our audience just a little bit about you, but tell us in your own words a little bit more about you personally and then give us an overview of your product and business.
Nathan Latka (01:34.360)
Sure.
You know, you know, I'll never, I'll never forget the day I was.
You know, I was born in 89, so it makes me 24 currently.
And just about three years ago, I just gone through a breakup as I went into college and I.
The one good thing that I got from that breakup was a pair of red Christmas boxers that she had bought me.
And I was wearing those boxers one day after I returned from architecture studies here at Virginia Tech.
So I went back to my dorm room and I was really scared, Omar, because what I had heard in class that day in Architecture studio, and this was 09, is that these architect folks that were graduating weren't able to find jobs.
So I got worried.
You know, no one was hiring architects, Nobody was building in 09 because of the financial crisis.
So I went home and said, gosh darn it, I need to figure out a way to make my own money and not rely on anybody else.
And that's when I started just calling cold calling people on Facebook, selling them Facebook fan page apps.
And the reason I decided on selling Facebook apps was because I was very affluent with how Facebook works.
As a college student.
User and I looked at the dot com boom and said, well, hey, drag and drop website builders did well in response to the dot com boom.
I bet people that build fan pages will do well in response to the social boom.
And that's how things got started.
Omer (02:58.820)
Awesome.
So before we get into talking a little bit more about you and and Heyo, can you just give people a little bit more of an explanation of what Heyo does?
Nathan Latka (03:10.900)
Sure.
You actually, I'm going to hire you to pitch our product.
I mean, hit the nail on the head, right?
Heyo helps small business owners capture email leads and drive sales via Facebook.
That's our sole focus and we want to be best in the world at that.
So like you mentioned, we're currently serving thousands of paying customers.
We've launched over a quarter of a million campaigns, and we've helped small business owners capture millions of leads, new email leads every single year to help them grow their businesses.
Omer (03:42.480)
Okay, so before we dive into some of those details, we like to kick things off with a success quote just to better understand what drives and motivates our guests.
What is your favorite success quote?
Nathan Latka (03:52.700)
Mine comes from Ben Horowitz from his book, and the quote is, if you're going to eat shit, don't nibble.
Right.
So take big risks and be okay.
If you feel yourself going downhill, just accelerate downhill, crash and burn fast, and then start going up the other side.
Omer (04:12.860)
I think that is going to be the most memorable quote that I've ever heard.
Nathan Latka (04:17.160)
People can tweet to me.
I'll respond, if you're going to eat shit, don't nibble.
Omer (04:23.240)
Okay, now before we talk about.
More about.
Hey, I really want to talk more about you.
You know, when I did my research for this interview, I realized what an interesting character you are and you have a great story to tell.
And I, you know, as I said to you earlier, I really felt like we could easily have done two shows, one just about you and one about Heyo.
But since that's not the plan that we have, I do want to spend a little bit of time talking about you today.
Nathan Latka (04:46.950)
Great.
Omer (04:47.670)
Firstly, can you talk a little bit about eggs, showers, and what to wear?
Nathan Latka (04:54.470)
Yeah.
Omer (04:55.190)
Just about your morning routine.
Nathan Latka (04:56.950)
Yeah.
So let me talk about why I decided to dedicate Mindshare towards building a morning routine.
You know, what I learned quickly was that we all have a finite amount.
Think of it almost like pens in our pocket.
Right.
You can only fit so many pens in your jean pocket each day.
Each of those pens represent a decision that you in a given Day you run out eventually.
Most people run out before lunch and they come back tired and weak in the afternoon.
What I want to do is optimize my decision making powers for the biggest decisions I make during the day.
Which means I needed to make all unnecessary decisions or small decisions.
Habit, in other words, I needed to fire those synapses frequently in my brain.
So they became habits.
So I didn't think about them each day.
And so some of those habits were things like the first thing I do when I wake up and I wake up at 5:30 each morning is I'll pump up.
I'll do 30 push ups to activate my mind quickly so I don't even think about getting back in bed.
I'll go grab my frying pan, put it on the heater in the front.
I have four heaters on the top of my stove.
I put it on the upper right corner, turn the knob to four and put a little bit of dab of oil on it.
Because I cook scrambled eggs and I leave that dab of oil on there heating while I then go jump in the shower.
One of my weaknesses is that I always took really long showers.
So I knew I had to curb that and I had to curb that with an existential fluor threat.
Well Omar, that existential threat was my house burning down because the fryer was on, right?
So now I take three minute showers, I get out, I quickly go to the oven, put on the eggs and I kick off my day.
And that is streamlined.
I don't even think about it every day.
It's a successful foundation to launch my day from.
And it's all, I do it with limited kind of mind power.
Omer (06:46.680)
And what about the clothes that you wear each day?
Now you have a routine for that as well, don't you?
Nathan Latka (06:50.680)
I do.
I do it almost like, almost like an assembly line I wear.
I'm actually wearing it right now.
It's a medium sized American Apparel charcoal gray T shirt with the same pair of jeans, the same style I should say.
And I wash them each Sunday and then I lay them out, seven pairs at the foot of my bed.
And each day I just go through, pick up Monday's pair, pick up Tuesdays, Wednesday, Thursdays, Friday, Saturday, Sunday, and again that way I don't have to spend hours contemplating about what I'm gonna wear each day.
It's just, boom, it's already decided.
Now go and make big decisions.
Omer (07:23.140)
Now I believe you hired someone to take over some of those tasks for you, is that right?
Nathan Latka (07:28.580)
I did.
I hired someone actually.
To take over all those tasks.
Omer (07:31.700)
So the other from taking the showers,
Nathan Latka (07:34.020)
apart from, well, you know, who knows?
One day we'll see.
But what I do is that person lays out like Monday, Tuesday, Wednesday, Thursday, Friday, Saturday, Sunday, each Sunday.
So, for example, I eat about one chicken breast.
I eat three eggs.
I cut it down from five recently because I learned it was bad for your cholesterol.
You're supposed to eat three eggs a week.
I was eating five a day.
So 35 a week.
10 times as much cholesterol intake that I should have had.
But anyways, I do three eggs each morning, and then I do about a chicken breast for dinner, along with a thing of rice.
And then during lunch, I do kachi cereal mixed with flaxseed mixed with Greek yogurt, mixed with blueberries for a little bit of sweetness.
And so what I do is I have the person come in each Sunday and portion out all of those meals.
So it's literally just an assembly line as I go through my week that lets me.
That rigidity in my schedule allows me the freedom to think and get into flow state at all other times of my day when I'm reading or doing other things.
It's hugely critical, and it's totally worth it.
You know, it costs about 10 bucks an hour to streamline that stuff.
Omer (08:46.150)
Now, you know, I can.
I can see the value in doing that in terms of saving time and just being able to free up your.
Your mental horsepower for.
For more important things.
But don't you miss the variety of.
Of eating different things on different days and how does that work out for you?
Nathan Latka (09:10.830)
No, I don't miss it at all.
And I hate you for reminding me that I'm potentially missing out.
You have to convince yourself you're not missing out.
Right.
So, like, what I do is when I travel, obviously I sometimes break that schedule and I do get additional variety.
But when I'm.
When I get mine, when I'm in a week where I'm here in Blacksburg and I'm trying to optimize my mind for thinking about, hey, oh, I intentionally eliminate all of their decisions.
And the freedoms that I have are freer.
The freedoms that I have chosen to have, which is my mind share during specific times of the day, are freer because I'm not thinking about all these other micro decisions.
Omer (09:46.320)
So do I.
Was I correct in understanding that you actually worked out a business arrangement with this person that you hired that you would help them grow their business?
Nathan Latka (09:55.200)
Yeah, I mean, a lot of things that I like to do I then tell everyone I'm doing it right, like, just like how I'm doing it right now.
And so this lady is in Blacksburg.
She's creating a competitor, TaskRabbit.
And I said I want her to be invested in the company if I'm going to be using it and recommending it.
So we did work out a business arrangement to do that.
Omer (10:15.630)
That's a great way to do that.
Kill two birds with one stone.
Nathan Latka (10:18.270)
Totally.
You have to invest in things you use.
That's true for any entrepreneur that's solving.
You have to solve problems that you have
Omer (10:25.790)
now.
The other thing I learned about you was that reading seems to be a huge passion for you.
Just you always seem to be looking for ways to save time.
And often you gave the example so I can read more.
So what drives that interest in reading?
Where does that come from?
Nathan Latka (10:40.730)
It's a true belief that reading is like compound interest for the brain.
Just like money and people.
There's calculators online to see this.
You put it save a dollar today and it turns into 10 bucks in four or five years.
So because I'm so young, I'm 24.
Every additional word that I put into my brain actually has tangible and measurable compound interest in terms of intellect over the next 20 to 30 to 50 to 60 to 80 years, however long I live.
So getting all those in my mind now is a major advantage.
And so I do optimize and try and get about 50 to 60% of each day in a good book.
Currently I'm reading Hillary Clinton's bio, I'm reading Business Adventures by Bill Gates, and I'm reading a book by an author called Jordan Ellenberg.
It's a teal cover called how to Not Be Wrong, which it's about the power of mathematical thinking to argue any points you have, so you're never wrong.
Omer (11:31.370)
How many books do you read in a typical month?
Nathan Latka (11:34.410)
I read about three books a week.
One bio and two strategy books.
So depending on how long the month is, you can just multiply out by the number of weeks.
Wow.
Omer (11:44.330)
Okay, so one more question before we move on to.
Heyo.
Can you tell our audience a little bit about this idea that I heard about you wanting to capture photos every hour and then being able to do this 24 seconds of reflection each day?
Nathan Latka (12:00.100)
Yeah, I'm actually trying something new even today.
I just, I got one of these basis watches from a friend which, like, calculates calories and steps and heart rate.
My heart rate is actually fairly low right now for being girl with these tough questions.
56 is pretty dang good, but it's interesting.
When you go back and look at your heart rate plotted over time over a given day, you can actually estimate and see when your meetings were, when stressful moments were based off your heart rate.
Then you can work to eliminate those moments from your day so that you live a healthier life.
So it's actually fascinating.
The reason I wanted to do these pictures is so that I could take a picture every minute, and at the end of each day, I could sit down and then 30 seconds.
Those pictures serve as stimulus to remind myself what my full day looked like in the span of 30 seconds for a more thorough analysis.
And it's something I haven't enacted yet, but I'm actively experimenting with how to build that into my life as a habit.
Omer (12:58.500)
I think we could keep talking about this for a long time, but I think we should talk about Heyo a little bit as well.
Nathan Latka (13:04.340)
Yeah.
All these things you'll notice as you start asking me questions about hey.
They're reflected in Hey.
I mean, it's extremely analytical, it's purposeful, it's intentional, all those things.
Omer (13:13.540)
So let's take a journey back together to the early days and explore how you got started.
So earlier you.
You told me a little bit about where the idea for Heyo came from.
Was that the first idea that you had when you started thinking about building a business?
Nathan Latka (13:28.240)
No, I tried all kinds of stuff.
I had a company called the Social Tea, which it was like I was selling T shirts with, like, social quotes on them.
Like, you know, tweet me or tap this with a picture of the Facebook friend icon, things like that.
That didn't do so well because it's no fun sitting on inventory, especially when you're in cramped quarters at a dorm room.
So that didn't work.
I then tried the Social Consultant, which I sold $900 a month plans to businesses, and I would send out tweets and Facebook posts for them each morning, which I hated because I knew I would never have a day of free time because every morning I had to start it by doing a bunch of work for other people that I didn't really care that much about.
And then once I pivoted away from that, I did something called the Social banner.
And I was selling custom Facebook fan page profile pictures that I framed and kind of had a template for that I sold for 30 bucks apiece that did well.
But I wanted my profit margins to be higher, so I started pivoting to things that I could Charge more for.
And that's when I started selling Facebook fan page tabs for 700 bucks a piece under the name fanpage Factory.
Omer (14:33.820)
So even though you explored a lot of ideas, it seems like social was a consistent theme that ran across all those ideas for you.
Nathan Latka (14:42.770)
It was.
It was a hot thing at the time.
It still is, and I still believe in it as a, you know, a core piece to the.
You know, if you look at the communication parthenon or what the pillars are going to be over the next several decades, social is going to be one, if not several, of those pillars.
So I knew I was setting myself up to be lucky.
Omer (15:00.770)
So how did you go.
How did you get started with this?
And tell me a little bit about what you exactly were you offering?
So were you.
Were you going to manually go and build fan pages for these people?
Nathan Latka (15:11.790)
That's correct.
What I would do is I was searching the word executive in Facebook, and my thinking was anyone that called themselves an executive had a big ego.
If I could call them and convince them that they weren't a true executive, weaken their ego, and then fulfill their ego by saying, you could become a true executive if you had this new executive fan page tab, that.
That would drive sales.
That's what I did.
I would build the tab for them once they said they wanted it.
I'd say, okay, go here and pay me $700 via PayPal.
And then I said, hold tight.
I'll get you the product in the next six months.
I need that time to make sure I give you something of quality.
And my thinking was I wouldn't actually deliver that product until I got X amount of sales because I didn't know how to code.
And so I sold about 100 of them at 700 bucks a piece.
So 70 grand in sales.
And I thought, you know, it's worth learning how to code for 70 grand.
My other plan was to refund everybody.
And So I watched YouTube videos to teach myself something called FBML, which was Facebook markup language, and taught myself that, started delivering the product, and that was the start of everything, really.
Omer (16:24.330)
So you ended up.
You started out selling this solution that you didn't actually have.
Nathan Latka (16:31.220)
Correct.
Omer (16:31.860)
And how long did it take you to get to 100 paying customers?
Nathan Latka (16:35.380)
About five, six months.
Omer (16:38.820)
Wow.
Nathan Latka (16:39.340)
Okay.
Omer (16:40.180)
And so one of the first people who signed up to become a customer, I believe, was Carrie Wilkerson.
Nathan Latka (16:46.980)
Yep.
Kerry Wilkerson.
She's the barefoot executive, which is the only reason I met her is because executive was in her title.
Omer (16:53.700)
And then.
So how did that phone call go?
Nathan Latka (16:56.020)
Yeah.
So it was something like.
Hi, this is Kerry.
Yes, this is Kerry.
Hey, Kerry.
You call yourself the barefoot executive.
I just want to ask you real quick, are you a true executive?
Yes, I'm an executive.
Who is this?
Oh, my name is Nathan.
I'm the founder of a company.
We create executive fan page tabs for the top executives in the country.
You know, the reason I'm reaching out to you is because you call yourself an executive, but I noticed you don't have an executive tab.
Why is that?
Well, Nathan, I don't know.
An executive tab is.
Oh, Carrie, can I tell you what the tab is?
Sure.
Okay, well, what the executive tab is, is you can install it.
You can feature your brand, your colors, maybe a video, and you can ask your folks to enter their email, your fans to enter their email so you can build your list.
Is building your list something that you'd like to do?
Well, yeah, Nathan.
In fact, I've got a book launch coming up here in a few months, and if my list is bigger, that means I'll get more traffic to the book I'm interested in.
Okay.
So this went on omer for about 40 minutes, and eventually she said, yep, and she paid 600 bucks via PayPal or 700 bucks via PayPal.
And that was the start.
Omer (18:00.310)
It's got to take a lot of balls to start calling up all of these people and making a pitch like that.
Nathan Latka (18:05.350)
I've got nothing to lose.
You know, I've got nothing to lose.
You know, if you tried to do this, you might be thinking, oh, my gosh.
You know, my former, you know, my former colleagues at Microsoft, if they ever hear that I'm randomly calling people online trying to sell, you know, fan pages, if they hear about this, like, what are they going to think about me?
Like, I had.
I just.
I had no baggage.
I had nothing to lose.
Omer (18:27.200)
That's great.
Can you tell me about a call that maybe didn't go that well?
Nathan Latka (18:31.200)
Yeah, let me tell you about.
About how I think about calling.
It's like a knock knock joke.
Okay?
When you call, you have to say knock knock, right?
In some form or fashion, if the other person doesn't say, who's there, you have no chance to get them to laugh.
So you have to say, knock knock.
You have to give them to say who's there?
And then you have to say something corny and hope it's good, right?
And hope that the laughter continues.
Where you think can go into the pitch.
So what I mean, when I say follow, like this knock knock joke format is you have to just ask a big question to elicit a response.
Like my version of knock knock was, are you an executive?
And if they said, who's there?
Or yes, I'm an executive, I then had quote unquote, their permission to go forward.
Right.
Because they were then driving the discussion versus me telling them it was pull versus push.
So there are several people where I'd go knock knock and they'd go, you know, f off, basically.
Right.
So those people, some people just are not in the mood and that's fine.
And you just have to go, okay, I need nine more of those calls to get to the one that purchases.
And that's how you look at it.
Omer (19:40.130)
So that's how you thought in terms of if I need to get 9 or 10 no's in order to get a yes?
Nathan Latka (19:46.240)
Well, I wish they were as nice as someone just saying no, but they weren't.
But yeah, that's how I looked at it.
Had to get to nine nos before I got to the one yes.
Omer (19:55.360)
Okay, so you've got these hundred paying customers.
What did you do next?
You've got to build this stuff now, right?
Nathan Latka (20:01.520)
Yeah, exactly.
So I said, oh crap.
I'm spending my Christmas break figuring out how to code.
I just watched this gentleman from China who'd uploaded videos to YouTube about, and it was about him teaching how to code fbml and he would publish templates and I could copy and paste and things like that.
So I had Dreamweaver on one side of my screen and this gentleman on the other.
And I just taught myself to code FBML that way.
And I had code them.
I'd install the tabs on a demo fan page, email the link to Kerry Wilkerson and say, is this how you would like it?
She'd say yes, or give me edits.
When it was ready to be installed on their live page, I'd then copy the code over and install it.
Omer (20:42.690)
On average, how long did it take you to build each page?
Nathan Latka (20:45.170)
Approximately 3 hours and 45 minutes.
Omer (20:48.770)
So you spent somewhere around 350 hours building all of these pages, Correct?
Nathan Latka (20:55.090)
Correct.
Omer (20:55.970)
Wow.
Nathan Latka (20:56.690)
About 20 days.
Omer (20:59.250)
Okay, so how did this take you onto Heyo?
Nathan Latka (21:05.010)
Well, so what I learned was I don't want to spend 20 days to make 70 grand manually.
What I should do is I should be selling the software to allow people to come in and do this themselves.
And so I didn't know anything about all these fancy terms like software as a service.
I didn't even know that's what was happening, I just knew that it was more efficient.
And so we started selling.
Actually, when I was delivering the product to Kerry Wilkerson and folks, I eventually built this tool internally for me to build fan pages faster.
And one day when I was on Skype with a customer, they saw me, they said, hey, I want it red.
And I changed it from green to red.
And they saw me do that using the drag and drop tool I had, and they said, well, wait a second, Nathan, next month when I launch a new contest or a new executive tab, I don't want to pay you 700 bucks.
Can you just give me access to that thing that you just used to make that change really fast?
And that's when I said, oh, I need to just sell access to the software.
So we started selling it under the name le jour for 30 bucks a month.
And that was the start to what is currently.
Heyo.
Omer (22:15.880)
How did you go about building the software?
Nathan Latka (22:18.760)
Yeah, so I needed to find technical co founders.
So I didn't want to lose leverage by just randomly finding people I knew and saying, you want to be a co founder?
So I founded the E Club at Virginia Tech as a cover to kind of find two technical people who started coming to the club who I could bring on as co founders or one, whoever it was.
And I found two folks that have their own kind of computer repair company that were technical.
And they called and asked me for advice if they should open up a brick and mortar location.
And I said, you're crazy.
Join me instead.
And after a little bit of a convincing over a day or two, they joined me.
So I had known them literally for a few days before they joined me in the company.
And they were the ones that helped me build the initial.
The initial product.
Omer (23:04.720)
And so initially this was something that they built just for you to use in terms of optimizing the way you were building out these pages.
Nathan Latka (23:12.480)
Correct.
I said, guys, I'm getting too many $700 orders.
I need a tool I can use to help me crank these out faster.
Here's what I need.
Ready?
Go.
Omer (23:22.400)
So looking back at those early days, what do you think was one of the biggest mistakes that you made?
Nathan Latka (23:27.750)
Not spending more time getting to know co founders.
They're no longer with the company today.
And it was a, it was a big mistake.
You know, I was in a weird spot because we already had 70k in revenue.
So I just needed developers, any developers I should have looked for, like, cultural fit, people that, you know, you know, you know, would get along with me.
People I would want to play board games with and go on runs with and play ping pong with.
And, you know, we would just come from very different lifestyles.
And they didn't like Risk as much as I like Risk, so that wasn't a good fit either.
Omer (23:59.410)
So you just answered my next question.
I was wondering what happened to those two guys.
Nathan Latka (24:03.810)
Yeah.
Yep.
Yes.
They're no longer with the company.
In fact, ironically, when I talk about Risk, they're now doing government jobs, which is about the safest thing you can be doing.
But, yeah, it was a mistake and certainly learned from it, and it kind of is what it is.
Omer (24:17.890)
Okay, so you had your first hundred customers, which really involved you building out these fan pages for them manually.
And then you had this tool which helped you be more productive.
And eventually this tool became the product that you started selling to customers.
How long did it take you to get the next hundred customers?
Nathan Latka (24:39.030)
Probably about three to four months.
It was fairly fast because what we did is we put Powered by Heyo or Powered by Le jour on those 100 tabs that I installed.
And so their fans would then say, I want to be like Carrie.
They how did she create this tab?
They'd click Powered by Hey.
And that would drive new customers.
So product marketing, right?
Omer (25:00.850)
Right.
A little bit like what the Hotmail guys did years ago, where when you got the email, it would just say, sign up for your free Hotmail account at the bottom.
Nathan Latka (25:07.450)
And yeah, that thing just took off.
They're sent from iPhone, which is a classic example.
Right.
All free marketing.
Omer (25:16.290)
Okay, so what did you do next?
Now?
Now you've got.
You've got more customers.
What.
What type of growing pains did you have with the product?
Because, you know, you'd never designed this as a product to go and sell to customers.
It was a tool for your own internal use.
So there must have been some.
Some kind of warts that start to come out of the product when you start using it commercially.
Nathan Latka (25:39.940)
Yeah.
I mean, and there still are today, right?
I mean, we are growing fast, and we still have legacy code that is just old and outdated that you're constantly trying to refresh, but also balance with the fact that there's new things you want to build.
And everyone goes through this.
And it just takes a pragmatic approach to understanding what's necessary and what's not and being hardline about what to put your time into.
So, yeah, there was a ton of growing pains, not to mention Facebook releases, massive changes every Tuesday night that would constantly break the software.
So we were Constantly dealing with some port tickets every Wednesday morning while the dev team tried to fix anything that broke.
So, yeah, it was definitely a challenge, but we also rode a lot of our growth on the back of Facebook as well.
Omer (26:25.920)
And when did you decide to bring in investors?
Nathan Latka (26:29.760)
We did it.
They begged and we said, okay.
So what it was is I started building this mentor list and I would send out monthly updates in hopes of continuing to gain the mind share of these really smart people.
My thinking was if I could get them to think about hey oh more and talk about hey oh more and help us grow faster.
And eventually, when they were seeing us grow 30% month over month in terms of revenue, I got a reply that said, hey, Nathan, you know, I'd love to support you guys.
And I said, well, what does that mean?
How do you want to support us?
And they said, I want to give you money.
And I said, great, buy the product.
He said, no, no, like I want to, I want to put money into the company.
I said, well, how would that work?
Now?
I played ignorant a bit, right, because I want him to articulate to me because if he spends time convincing me, he's more bought in.
So it was to my advantage to be a bit ignorant, but still be educated enough via Google searches to know what questions I should be asking.
So I said, well, you know, he said, I want to put money in.
I said, well, how would you do that?
And he said, well, I can invest.
I said, well, what's investing?
And he said, well, I can put money in your company.
It's kind of like the stock market, but it's not public.
And I said, well, I'm focused on product right now.
I'm not interested.
And he said, well, let me put an offer on the table.
So I'll never forget he had this 8 1/2 by 11 piece of paper.
And we were in our office above a bar in downtown Blacksburg, which we had negotiated for free in exchange for doing, quote unquote upgrades to the space, which entailed 80 cent per square foot Astroturf floors that we, we laid down.
So this, this investor came up and it was a folding table that was crooked in the middle because we'd been using, you know, put so much of our computer weight in the middle, put this piece of paper down and it said like, you know, 500K, you know, 8 and a half or 6% interest convertible note cap.
And, you know, I said, well, what does all this stuff mean?
He articulated it to me and we weren't interested.
And over time the terms got better and we eventually raised $550,000 from some of the top investors in the country, including Paul singh and Dave McClure from 500 Startups Techstars with David Cohen, Pat Condon, the founder of Rackspace, among others.
Omer (28:45.300)
Now you had another big investor as well who gave you a lot more, didn't they?
Nathan Latka (28:50.020)
We did.
Our focus at HEY was helping entrepreneurs and small business owners capture email leads and drive sales sales via Facebook.
And we recently stumbled upon one of those products that people wish they thought of their whole lives, right, that turns into a game changing kind of idea or product.
And we've discovered this and I put it in front of a mentor who turns out to also be a Forbes billionaire.
He saw the idea last October on a Thursday afternoon and that Monday said he wanted to put in $5 million via email and we didn't need that much.
So we said, hey, we'll take 2 million.
We worked out the terms of the agreement over several months and he invested that money.
And so we are now being extremely aggressive about building the number one tool for entrepreneurs and small businesses to use to capture email leads and drive real revenue, real sales via Facebook.
And you know, Omar, I think it's going to surprise people what this Forbes investor saw.
He has seen the product that we believe will ultimately compete aggressively and potentially take down Amazon when it comes to selling, especially on social.
Omer (30:00.640)
Where do you think you would be now if you hadn't taken that investment money?
Nathan Latka (30:05.440)
I'd own way more of the company and we'd have $2 million less cash.
That money is still sitting.
I mean it's still in the bank, right?
That money is way more about capturing that smart person's mind share than it is about the money.
Omer (30:22.460)
So what advice would you give to somebody who's, who's in a similar stage where maybe they either need some investment money in or they may be talking to potential investors.
What would be the advice you would give them based on your own experience?
Nathan Latka (30:37.660)
Like don't talk to investors.
Like build a mentor.
Like tell them if you're talking to them, send them an email tomorrow morning that says, hey, the business continues to do well.
August closeout looks good.
We actually don't need cash.
But is it okay if I put you on our mentor Update?
It's a 600 word update we send each month to mentors and ask for feedback and advice.
Is it okay if we put you on that since we're really not looking for capital right now?
So send that email.
And what happened is as you Start growing and sending those emails out, people will start saying, I want to invest.
So get leverage on yourself side.
And if you don't have leverage, if you do really need the cash, you have to fake it and figure out how to create leverage, otherwise you're going to get cooked.
Omer (31:19.560)
Where did you get that idea of having a mentor list and sending out a monthly update like that?
Nathan Latka (31:24.200)
I just was selfish and wanted people thinking about us more and I thought that was the quick, easiest way to get them thinking about us more without me begging like a child for them to be thinking about us more.
Omer (31:33.000)
I think that's a great idea.
You should trademark that.
Nathan Latka (31:35.560)
It's like a passive, it's a passive way to get them involved without saying, I need you involved.
Omer (31:40.040)
Yeah, it's really smart.
So, Nathan, we started this conversation going back to where the idea of Reheo came from.
And then we've taken this journey together on how that turned into that idea turned into a successful product.
Looking at the business today, can you share any numbers with us in terms of customers or revenue or anything to help us better understand where you currently are with your business?
Nathan Latka (32:03.520)
Yeah, so we've got several thousand customers we're currently serving that's growing over 10% month over month, which is frankly remarkable.
And our focus continues, you know, continues to be on small business.
You know, I really could care less about big business.
My focus is on helping the entrepreneurs, the small business owners, the restaurant owners that are getting ignored by all these companies that are being greedy, that are serving enterprise customers, you know, jacking up rates to 3, 4, 5 grand a month and just turning a blind eye to the small business and the entrepreneur.
So we will be the hero for that market.
We like to call ourselves maybe the Robin Hood of social marketing software and that we take from the rich, charge them crazy prices to then give high, high value products at lower prices to small business owners and entrepreneurs.
And we won't stop until we've got at least 500,000 small business owners driving email captures and driving sales using us by 2017.
That's our goal at all, just 30 bucks a month.
Omer (33:10.620)
Now a lot of entrepreneurs would pick a, you know, business customers or enterprise customers to go after because they could charge more for their product.
And you're actually doing the opposite, right?
You're actually talking about driving down that cost as, as low as possible for your business customers.
You're kind of like not Robinhood or the, you know, like the Jeff Bezos, right, who's kind of over at Amazon and just constantly looking to drive prices down.
What is the reasoning behind that?
Nathan Latka (33:40.950)
Yeah, well, I hate what Jeff at Amazon has done when it comes to totally squeezing authors just out of profit margins.
You know, those authors actually are small business owners.
So like that's the first piece of business we are excited to be, you know, taking away from Amazon is we want to serve the author and the speaker that is sick of giving up like 70, 80% of their revenue and waiting 60 to 80 days to actually get money.
And a lot of them are switching to heyo, which is fantastic.
But to answer your question, the reason we're going downstream is because it's really, really freaking hard.
The people that are doing it, you could say kind of halfway, maybe the best is constant contact.
They've got 500,000 small business customers.
They're adding about 60,000 customers a month, but they're also losing 50,000, which means they've got a crap product.
So our focus is on how can we create the most valuable product for small business owners.
And if we get the product exactly right, we can scale and serve millions and millions and millions of small business owners while all these other folks get distracted by these high margin enterprise customers who tend to honestly be flaky and extremely hard to manage.
You probably know this from your Microsoft product days.
Big enterprise customers, it's a big contract.
They can control product decisions, which stinks because they don't know what the heck they're talking about.
Omer (35:02.870)
Yeah, it's a completely different set of dynamics working with enterprise customers.
Nathan Latka (35:07.110)
Yep.
And it's funny because what we've got is we've got massive brands begging us to use us and it's like we just say go away.
I mean we just care about the small business owner.
Omer (35:16.860)
Yeah, that's a great place to be in.
So what's the one thing in your business that you're most excited about right now?
Nathan Latka (35:23.340)
I am most excited about the piece of grid paper that I had sketched this idea out on 8.5 by 11, showed to this Forbes billionaire and he said I want to put 5 million in this because it is an idea that we believe will service millions and millions and millions of small business owners over the next one to five years.
It will destroy entire verticals of what Amazon is doing, which is exciting because it's going to be more beneficial to the small business owner.
And it's also ballsy and a big idea and you know, we're committed to that and we can't wait to win.
Omer (36:05.350)
I love it.
Okay, Nathan, now it's time for our Lightning round.
I'm going to ask you a series of questions and I just like you to answer them as quickly as you can.
Are you ready?
Nathan Latka (36:13.380)
I'm ready.
Omer (36:14.180)
Okay, let's do it.
So what's the best piece of business advice that you ever received?
Nathan Latka (36:19.060)
Hesitation is the enemy of hustle.
Omer (36:22.100)
What would you recommend to our.
What book would you recommend to our audience and why?
Nathan Latka (36:28.260)
Business adventures.
It's.
It's Bill Gates favorite book.
And that's because it tell looks at history and tells you lessons from all kinds of different industries, ranging ranging from the failure of Ford Etzel model to the stock market to information rights.
And it's just a great kind of case study.
All inclusive education.
Omer (36:49.240)
What's one attribute or characteristic in your mind of a successful entrepreneur?
Nathan Latka (36:55.960)
Someone that knows what problems they have and they're only focused on solving their problems.
Omer (37:01.640)
What is your favorite personal productivity tool or habit?
Nathan Latka (37:07.010)
Oh, geez Louise.
I would say Boomerang because it allows me to quickly manage email.
I can schedule email, just go out in the future.
I can say, send this email back to me if I don't get a reply in three to four days.
So I use it often.
Omer (37:24.770)
If you had to start over tomorrow, what type of business would you build?
Nathan Latka (37:29.250)
One that serves small business owners.
Omer (37:33.440)
Okay, what's an interesting or fun fact about you that most people don't know?
Nathan Latka (37:41.520)
Cougars.
Really love my haircut.
Omer (37:47.760)
All right.
And then what is one of your most important passions outside of your work?
Nathan Latka (37:54.800)
I would say so.
I'd say definitely reading.
Many people would consider that work one day.
Let me give a different answer.
That's, that's, that's the easy answer.
Playing board games, it allows you to.
It allows you to practice strategy at a micro level in a really tight cohort and, you know, over the span of a few hours while you're playing the board game.
Omer (38:16.440)
So did I read or hear somewhere that you play Monopoly online?
Nathan Latka (38:20.440)
I do.
Omer (38:22.440)
Do you, do you still do that?
Nathan Latka (38:23.960)
I do.
Omer (38:25.000)
I'll have to find you one time.
And do you play play online with you?
Yeah, I play a little bit.
Nathan Latka (38:29.960)
What site do you play on?
Omer (38:31.880)
I don't.
I usually just play on my, my iPad or.
Nathan Latka (38:37.080)
Go on, go on.
Pogo Online.
My username is Bonecrusher347.
I'm just kidding.
I made that up.
But I use Pogo.
I use Pogo Online.
So I play that.
And again, the reason I do that is to like.
And you look at all successful people like Warren Buffett, he plays bridge every night.
And that's because those People, I think they still want to feel like what it's like to lose, say that's something inconsequential, like a bridge game that gives them the motivation to keep crushing it and winning when he goes back and is thinking about banking the next day.
So you create artificial losses to keep your drive high.
Omer (39:18.580)
All right, thank you, Nathan.
Those were great answers.
Unfortunately, it's time for us to wrap up on this episode.
So I want to thank you for joining me today and talking about Heyo and I really appreciate you sharing your experiences and insights with our audience.
And also thank you for letting us get to know you a little better.
Personally, I've really enjoyed this chat and I really think you really have a very interesting story and I just can't wait to see what you're going to do in the coming years.
Nathan Latka (39:46.720)
Yeah, you know, I hope your audience gets a lot out of this.
Watch out for, hey, we're doing big things.
And if you've got an idea or you also like my hair, you can text me any of your questions or feedback.
My number is 703-431-2709.
And Omar, you can put that number in your show notes as well.
703-431-2709.
Omer (40:11.890)
Wow.
So do you get a lot of texts?
Nathan Latka (40:13.890)
I do and it's fantastic.
I have awesome conversations.
Thousands of text message conversations.
Omer (40:19.810)
Well, just.
Just look out for the time you get a phone call asking if you're an executive.
Nathan Latka (40:25.810)
Exactly.
I'll probably hire that person because I'll say you remind me a lot of myself.
Omer (40:31.730)
So if folks want to find out more about HEYO or they want to get.
Well, we talked about getting in touch with you.
I assume they can go to heyo.com h e-h e y o dot com.
Nathan Latka (40:40.280)
Yep.
If they go to heyo.com and I'd encourage them in the upper right to sign up for a free trial.
The reason is that idea that I told your audience that I put in front of a Forbes billionaire where his eyes lit up.
The people that go to heyo.com and put in their information in the upper right, they'll be the first to see this idea.
So even if you're not interested in the product, you should still do that so you can kind of see the inner workings of how HEYO works in my brain.
Omer (41:05.010)
Awesome.
Thanks again, Nathan, and I wish you continued success.
Nathan Latka (41:08.610)
You bet.
Thanks so much.
Thanks for having me.
Omer (41:10.770)
Cheers.
