This Law Student Quit to Build Referral Program Business Doing $2MM+ Per Year


In Episode #300, Nathan interviews Jeff Epstein. Jeff’s the founder of Ambassador, a SaaS company that helps businesses track and optimise referrals to make their affiliates really work for them. Jeff manages a team of 43 people and made over $3.5 million in revenue in 2015. Listen in as he and Nathan break down Ambassador’s numbers and talk referrals, reaching negative churn, and not sweating the small stuff.

Famous 5

  • Favorite Book? – The Hard Thing About Hard Things
  • What CEO do you follow? — Gary Vaynerchuk
  • What is your favorite online tool? — Slack
  • Do you get 8 hours of sleep?— Definitely no
  • If you could let your 20 year old self know one thing, what would it be? —That it would be okay. I was really worried about things that didn’t matter.

Time Stamped Show Notes:

  • 01:20 – Nathan’s introduction
  • 01:45 – Welcoming Jeff to the show
  • 02:05 – Raised just under $2.5 million in 2015 to grow their team
  • 02:36 – Ambassador helps companies track and manage referrals
  • 03:10 – Currently serving over 300 customers
  • 03:21 – Per-user revenue averages $1500 per month
  • 03:50 – Company started in 2009 and launched in 2010
  • 04:10 – Jeff started an affiliate marketing company in college. He built his own software to support an affiliate idea he had – then realised the software was a better idea
  • 04:50 – Revenue in the first year was almost nothing
  • 07:00 – Funded real estate investments with the revenue from selling his first business
  • 07:28 – Revenue in 2015 was $3.5 million
  • 08:11 – Ambassador is a SaaS business
  • 08:40 – Churn decreased as Ambassador moved up-market
  • 09:16 – “We now require onboarding for every customer”
  • 09:55 – Around 10% annual customer churn
  • 10:40 – Measure both gross churn and net churn
  • 12:15 – Net dollar churn is currently negative
  • 13:00 – “Customer acquisition cost isn’t our biggest concern at the moment”
  • 13:55 – “On our own referral programme we pay $525 per customers”
  • 14:30 – Advertising in paid channels was around $25-50k in February 2016
  • 15:33 – On average customers are paying $15-30k per year, and acquisitions cost $2-7k
  • 16:15 – Most of the team are based in Detroit; some are in Colorado and some are remote
  • 17:05 – Connect with Jeff on Twitter
  • 19:20 – Famous Five

3 Key Points:

  1. Everything will be okay. Don’t get worked up over small things.
  2. High-value customers are often more committed. They’ve invested more in you and so churn is likely to be lower.
  3. Don’t worry if revenues are low when you start out. All businesses start somewhere.

Resources Mentioned:

  • Host Gator – The site Nathan uses to buy his domain names and hosting for cheapest price possible.
  • Freshbooks – The site Nathan uses to manage his invoices and accounts.
  • Leadpages – The drag and drop tool Nathan uses to quickly create his webinar landing pages which convert at 35%+
  • Audible – Nathan uses Audible when he’s driving from Austin to San Antonio (1.5 hour drive) to listen to audio books.
  • Show Notes provided by Mallard Creatives

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