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SaaS Interviews with CEOs, Startups, Founders

749: He's Making $9.6m Off Those Horrible Airport WiFi Connections

SaaS Interviews with CEOs, Startups, Founders

Nathan Latka

Ceo, Entrepreneurs, Founders, Software, Business, Entrepreneurship, Saas, Startups

4.6 β€’ 683 Ratings

πŸ—“οΈ 12 August 2017

⏱️ 26 minutes

🧾️ Download transcript

Summary

Gavin Wheeldon. With over 15 years of experience working in technology led or enabled businesses, Gavin has a deep understanding of the impact of technology on the bottom line of an organization. He sold his last business, Applied Language Solutions, a global language technology and service business, and has used some of the earnings to set up a new company, Purple WiFi.

Famous Five:

  • Favorite Book? – Who Moved My Cheese
  • What CEO do you follow? – Jack Welch
  • Favorite online tool? β€” InsightSquared
  • How many hours of sleep do you get?β€” 7
  • If you could let your 20-year old self, know one thing, what would it be? – β€œI’d rather read more of finance”

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Time Stamped Show Notes:

  • 01:24 – Nathan introduces Gavin to the show
  • 02:29 – Gavin travels a lot and is frequently reliant on public WiFiβ€”that’s where the idea for Purple WiFi came from
  • 03:02 – Gavin sold his last company for over $60M
    • 03:20 – His last company was in the translation and interpretation industry
    • 03:23 – They used machine learning to translate languages with incredible accuracy
    • 03:43 – Theirs is also a human editing in between so the translation is perfect
    • 03:59 – Gavin was 36 when he sold it
    • 04:02 – It was completely bootstrapped
  • 04:44 – There’s no particular single owner of the space
    • 04:54 – Fon does domestic hotspot and other traditional utility wifi
  • 05:38 – Purple Wifi is the next generation of wifi
  • 06:03 - Purple WiFi is SaaS business, charging annually depending on the number of wifi points
    • 06:14 – For a single venue, the price is $13 a month
    • 06:22 – Purple WiFi also caters to stadiums and airports
    • 06:45 – An airport can average a hundred access points
  • 07:10 - Purple WiFi currently has 17K installations
    • 07:15 – It ranges from restaurants up to a whole city
    • 07:53 – They now have around 80K access points
  • 08:03 – Average MRR is close to a million
  • 08:25 – Purple WiFi offers discount for bigger venues
  • 09:00 – Sales cycle varies every hour
  • 09:19 – A physical venue owner is usually clueless about what is happening in the venue
  • 09:50 - Purple WiFi is channel-based and sells through partners
    • 09:55 – Some of the partners are Telstra and Singtel and other national carriers
  • 10:23 – Team size is over 100
    • 10:30 – 45 are focused on sales and partnerships
  • 10:46 – Telcos are usually built with partners
    • 11:09 – They can build their own access points but it takes years and a huge investment
  • 11:40 – Purple WiFi partners with half of the service providers in the USA
  • 12:37 – Purple WiFi partners with Cisco and Ruckus for the access points
  • 13:06 - Purple WiFi does post visit reviews which prompt the user to review the coffee shop or hotel
    • 13:19 – There was around 500 increase in TripAdvisor reviews
    • 13:21 – 600-700% increase in CRM generation
    • 13:28 – The value of Purple Wifi can be seen from day 1
  • 13:43 - Purple WiFi was launched in 2013
  • 13:48 – First year revenue was $200K
  • 13:59 – 2014 revenue was around $600K
  • 14:13 - Purple WiFi consistently grows over 100% year over year
  • 14:34 – 2017 target revenue
  • 14:48 – Gross margin is 80%
    • 14:59 – One of the challenges is the location and the huge number of data
  • 15:35 - Purple WiFi is processing around 500K data from all of their access points in a day
  • 15:50 – Purple WiFi has net negative churn and gross customer churn is 12% yearly
  • 17:00 – LTV is around 10 years
    • 17:10 – Most enterprise customers are signing 3-5 years with an upfront payment
  • 17:33 - Purple WiFi has raised $13M
    • 17:51 – The costs usually go to engineering and sales
    • 18:07 - Purple WiFi spends on event sponsorship too
    • 18:24 – They track the events prior to sponsorship
    • 18:50 – Payback period is around 12 months
    • 19:25 – Average CAC
  • 19:39 - Purple WiFi is headquartered in Manchester, UK and US office is in Austin, Texas
  • 20:26 - Purple WiFi is tremendously valuable for conferences
  • 23:04 – The Famous Five

Β 

3 Key Points:

  1. Public wifi solutions are becoming more and more of a necessity especially for establishments and events.
  2. Having your own wifi solution allows you to gather data more than you could otherwise.
  3. Study your business before starting your business.

Β 

Resources Mentioned:

  • The Top Inbox – The site Nathan uses to schedule emails to be sent later, set reminders in inbox, track opens, and follow-up with email sequences
  • GetLatka - Database of all B2B SaaS companies who have been on my show including their revenue, CAC, churn, ARPU and more
  • Klipfolio – Track your business performance across all departments for FREE
  • Hotjar – Nathan uses Hotjar to track what you’re doing on this site. He gets a video of each user visit like where they clicked and scrolled to make the site a better experience
  • Acuity Scheduling – Nathan uses Acuity to schedule his podcast interviews and appointments
  • Host Gator– The site Nathan uses to buy his domain names and hosting for the cheapest price possible
  • 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

Transcript

Click on a timestamp to play from that location

0:00.0

2014, 2015 to launch purple Wi-Fi.

0:03.7

Okay, purple Wi-Fi.

0:05.3

And again, doing super well there.

0:08.0

They've passed 17,000 venues have installed at least and at one access point with over 80,000 access points.

0:15.0

You know, average access point is 11, 12, 13 bucks per month.

0:17.8

So they're doing between 800 grand and a million bucks in MRR.

0:20.4

Growing, you know, this year they'll grow. We call it 100, 140% year over year.

0:25.0

Gross churn monthly is about 1%, but they have net negative revenue churn.

0:29.4

Payback period. He's always aiming for less than 12 months, but some of his, you know,

0:32.7

good fit customers, lifetime value. He's projecting it well over $100,000 with this team of 100 in Manchester, UK,

0:39.2

fighting hard to make your public Wi-Fi connections easier.

0:43.4

This is the top, where I interview entrepreneurs who are number one or number two in their industry

0:49.7

in terms of revenue or customer base. You'll learn how much revenue they're making,

0:54.9

what their marketing funnel looks like,

0:56.5

and how many customers they have.

0:59.4

I'm now at $20,000 per talk.

1:01.7

Five and six million.

1:02.6

He is hell-bent on global domination.

1:04.5

We just broke our $100,000 unit sole market.

1:07.3

And I'm your host, Nathan Latka.

1:10.4

This is episode 749. Coming up tomorrow morning,

1:13.3

you're going to learn from Makita, Mikado, and he's going to talk us through how to 3X your

...

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