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Rallying to $10M ARR | Jacob Eiting (Founder & CEO, RevenueCat)

Scott: Welcome to Subscription Heroes. I'm Scott Hurff, co-founder and Chief Product Officer of Churnkey. In this episode, Jacob Eiting, founder and CEO of RevenueCat, is incredibly generous with his knowledge bombs. We cover topics like the journey to $10 million in ARR, how he rallies his team during tough times, how COVID forged RevenueCat's company culture, and the most ridiculous thing he's ever done for his company. Here we go.

What the SVB Bank Collapse Meant for SaaS Startups

Scott: How are you doing after SVB and the two or three weeks since the collapse?

Jacob: We were supposed to record this podcast a week ago, and you gracefully gave me a rain check. I'm mentally in a much better state after a weekend off with my family. My co-founder and I are six years into a project, and to see an existential risk like that happen in such a weird way, you got hit from a flank you weren't even thinking about, it really put us into fight-or-flight mode for a few days. I'm grateful to be focused back on the core problems again.

Scott: What did you even do? How did you start to try and contain the problem?

Jacob: I got a text from my co-founder on Thursday morning of the bank run. He was like, "Hey, is this something we should worry about?" And I was lazy about it. I was like, really, a bank run? That's not going to happen. By the time it was clear that yes, it actually was going to happen, it was too late. I got the news about the receivership on Friday. We had payroll due on Monday, $227K, and I was like, we're not going to survive on this little FDIC allowance very long.

Honestly, the first day I was just shocked. My finance team went into full mode. We need a new bank; we need to get ready. And I was kind of in shock. Then I woke up Sunday and I was like, no. I'm not going to lie down. If this is what kills us, I'm going out screaming. So I started finding as much liquidity as I could.

We had our Brex line of credit. A big customer had closed a deal on Thursday for $190K, and I had a connection to their CFO. I asked if they could wire us that money first thing Monday morning, and they were amazing about it. On top of that, an investor wired us a quarter million dollars from his personal account with just an email note that said "IOU."

By Sunday night, by the time I got Janet Yellen's email saying everything was going to be okay, we had pulled together about three-quarters of a million dollars in liquidity. Enough to survive the week. I learned more than I ever wanted to know about financial engineering in a single weekend.

Scott: I saw you going after JD on Twitter during that...

Jacob: I accidentally tweeted at the wrong senator. But I now have an email relationship with one of my local representative's staffers, so I'm politically engaged. And I've committed to donating to anyone who can possibly help me. So I, at least, have something to point to when I need it. I never got a response from JD, for the record.

From Self-Serve to Enterprise Sales

Scott: Beyond the banking system, what's been on your mind business-wise lately?

Jacob: I've been using the term "shark closest to the boat" a lot. You're always just focused on what the most urgent problem is. We crossed into $10 million in ARR last year, which, when you're starting out, feels like the promised land. But it's just a different land. What worked at $1 million doesn't work at $5 million, doesn't work at $10 million.

My co-founder, Miguel and I are engineers. We built a really good developer tool, and our strongest product-market fit is with sole developer decision-makers starting from scratch. Where we're weaker is when an app is bigger and switching vendors is expensive, complex, and frankly, an enterprise sale. That's the classic "crossing the chasm" challenge, and that's where we are right now.

Scott: Let's take a quick break to tell you about Churnkey, the company making this podcast happen. Churnkey is the only platform that fixes every type of churn. We handle retention for customer-obsessed teams like Jasper, Fairdrop, AI Dungeon, and Castos. We lower cancellations by up to 42%, recover up to 89% of failed payments, and increase customer LTV by 28%; all through user-friendly cancel flows, modern failed payment recovery, and AI-driven feedback analysis. Head to churnkey.com to get started.

Lessons from Developer-Founded SaaS Companies That Have to Learn Sales

Scott: When did you realize you had to jump into the sales pond?

Jacob: I wanted to avoid it desperately. I'm the guy trying to skip sales calls. I didn't know what an SDR was when Jason Lemkin asked me about my SDR strategy during fundraising. But eventually the metrics do the math for you. Now the question is: how do we do it in a way that's true to our brand? Because I don't think there's a world where we're fully enterprise with no pricing on the website and a "contact us" button. But we have to build a real sold motion alongside our self-serve motion, and there's real tension between those two things.

Scott: Your DNA is so developer-centric. There's a clear dissonance with scaling up a high-touch sales process.

Jacob: It's kind of the same move Stripe has had to make. It hasn't been easy for them either. And as a founder, you have to be very careful about what you hold onto. There are aspects of our brand I won't lose, but I'm also realistic. If this is how our next $10M to $50M in revenue is going to be generated, I'm not going to shoot ourselves in the foot out of principle.

Scott: I saw you joking that when you were raising from Jason Lemkin, he asked about your SDR strategy and you literally didn't know what an SDR was.

Jacob: I had been annoyed by SDR emails my entire life but had no idea what the mechanism was. And I still don't fully know what "great" looks like on the sales side, which is a disservice to me as a leader. I know what great looks like for engineering, for product. On sales, I still feel like I'm learning.

I think founders feel like they have to have all the answers. But you really only need to know one thing really well: what your product does, and maybe two. That, plus how to work hard. Everything else is negotiable and learnable. What I've found counterintuitively is that talent density can actually increase as you scale, if you hire right. I used to assume my best team days were behind me. I've been proven wrong.

Why Scaling a SaaS Company Doesn't Have to Mean Losing Your Edge

Scott: There's often this "founder's lament"; the moping that things used to be better, we used to ship faster.

Jacob: The failure mode is only discounting the downsides of growth and not seeing the advantages. You go from one work stream to two or three. You can say "yes" to things you couldn't before. Our data strategy team, our developer ecosystem team, and our core infrastructure team. Those couldn't have existed at the five-person stage. You have to zoom out. We're running faster than we ever have before.

There's this tendency to look at big company practices and assume that's what made them successful. But you're looking at companies that have already been big for a while. You don't know what brought them there. As a founder, if you actively work against cultural drift and say "we are not going to let that happen," you can maintain speed and quality at scale through sheer force of will. It doesn't work all the time, but it works more than you'd expect.

Scott: The notion that nothing is too precious. That takes real discipline.

Jacob: In a startup, everyone has to not be precious about their work. When a colleague says, "I want to throw this out and rebuild it," the right reaction is: please, absolutely. If you're going to own it and do it better, I'm happy to never think about it again. And I think that's also why cultural problems tend to surface when growth slows. When there isn't an existential crisis around the corner, the minutiae rise to an inappropriate level of importance. Growth solves a lot of cultural problems, not by making them disappear, but by making it obvious they're not worth fighting over.

Scott: Do you think there's a risk of exiting while the company is still growing, just to avoid the problems that come when growth slows?

Jacob: That's a great question. Call me in five or ten years. I think RevenueCat is a forever business, almost a public utility for the App Store economy. I don't think there's a great set of acquirers for us; the amount of capital we've raised also limits our exit options outside of a public offering. My covenant with myself is to ask every five years: Am I still the best person for this seat? So far, the answer is yes, and there's still a lot of leverage I can bring. But naming that question honestly, especially with your co-founder, makes everything easier.

What is the Hardest Part of Scaling a SaaS Company?

Scott: What's been hardest to deal with perpetually over the company's lifespan?

Jacob: There's always regression: you hire the right person, set the right team up, think you've solved it, and then your sand castle gets knocked over again. That's just the cycle. I've learned to recognize the "neat and tidy" phases and use them to work on forward-looking strategy and vision, because I know I'm always one Slack message away from something changing.

The other thing: you're never done with people challenges. A CEO who tries to abstract themselves from the messy details of how people perform, join, and sometimes leave they're kidding themselves. It's incredibly taxing, but it's not something you can outsource.

Scott: You're speaking very calmly about very painful things.

Jacob: Peter from Segment said it well once: roller coasters are intense if you're not used to them. But if you lived on one, it wouldn't feel like much. I struggled for a while to accept that hard things, like letting someone go, navigating a sticky people situation, weren't going to be once-and-done events. They come every quarter or every year. You have to find a way to feel it and still be a clear-eyed leader at the same time.

What Founders Really Give Up to Build a Successful SaaS Company

Scott: Do you find yourself gravitating back toward your roots, the things you're naturally good at, when things get hard?

Jacob: Yeah, luckily, I'm not as good at the things I used to be really good at anymore, which prevents me from regressing too far. I joke that I'm the Rick Rubin of technical work now. I know what I like and what I don't, but don't ask me to play any instruments. That said, as an engineer, I still get frustrated when I see processes that could be a two-day build instead of nine spreadsheets. Maybe building small internal tools is how I'd keep that part of myself alive.

Scott: What's the most ridiculous thing you've done for RevenueCat over the years?

Jacob: When COVID happened, I had depleted most of my savings. I was paying myself very little. I decided to move back to Ohio during the pandemic to have family support for my daughter, and I had to borrow $20,000 from my parents to pay for the move. I was thirty-something years old, hat in hand. Then, about a month later, our Series A closed and I was able to pay them back immediately.

We also stayed in a hacker house before YC Demo Day, seven bunk beds in one room, no salary, and expensive hotels in Mountain View. I didn't get meningitis, which I consider a win. That was probably the lowest point, aesthetically speaking.

What RevenueCat's Subscription App Data Tells Us About Mobile Growth

Scott: Tell us about the State of Subscription Apps report you just released.

Jacob: We serve a niche market, mobile apps selling subscriptions through the app stores, and they have different physics than SaaS or D2C subscriptions. We were sitting on one of the only real data sets alongside Apple and Google, and we wanted to publish something useful.

The top takeaways: every app is different, so there's no universal "good" benchmark, and distributions matter more than averages. Verticals matter enormously; a consumer app looks nothing like a fitness app in terms of economics. And pricing is still probably your biggest lever. Before you invest in other things, make sure you're running data-driven pricing experiments if your volume supports it. The market is the only one that knows what price it will bear.

Scott: I remember at Tinder, we were manually testing different SKUs in different regions and it became a cone of confusion fast.

Jacob: That's exactly the vision for RevenueCat. Take the tools that companies like Tinder and Duolingo build internally, package them up, and give 80% of the result to thousands of developers. If developers can learn how to make more money, they build better apps. Everyone wins.

Best Books and Habits for SaaS Founders

Scott: What are you reading right now?

Jacob: This is going to sound cheesy, but I'm finally reading The Wealth of Nations by Adam Smith. A lot of the examples are dated, but as an engineer learning to run a company, having labels for things I'd already experienced firsthand, in labor markets, product markets, all of it, has been genuinely helpful. I'm also planning to read Marx's Capital next. I figured I'd just put both of them in my head and let them debate it out.

Scott: Last one: one high-octane tip to close.

Jacob: This is so annoying because it's such a cliche, but about a year ago, I started a consistent exercise routine and added cold showers. The cold showers thing, I know there's physiological evidence for it, but for me, the value is simpler. It's the hardest thing I do every day. It never stops sucking. And I have this little mantra: "hardest thing you'll do all day." If I can throw myself into that, I can handle the stressful email or the difficult conversation. Find a routine that works for you, lock it in, and use it as your anchor for the eight hours of chaos that follow.

Scott: Jacob, this was awesome. Thanks for reconnecting.

Jacob: Great to reconnect, Scott. Thanks for having me.

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