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Oct 8, 2019 · 16m · top-founders

1536 Manufacturing Sales Platform Hits $5m ARR With New $250k ACV Plans

Mark Murphy · 8m spoken Nathan Latka · 5m spoken
0:00 / 0:00

gold bands on the timeline = statements, start to end. Hover to read, click to jump. CC turns on captions

Nathan Latka interviews Atlatl Software CEO Mark Murphy on rebuilding and scaling an enterprise visual CPQ platform for industrial manufacturing to $5 million in ARR. Murphy breaks down the company's Unity 3D technology, OEM-to-dealer monetization model, upfront fee structure ensuring day-one CAC payback, and strategic legacy customer migration.

How this conversation actually went

Every chapter scored 0–10 on four independent dynamics. Hover any point for the reasoning behind the score. Nathan holds 38.2% of the talking time here. How this is scored →

Nathan as informed peer 5.3 Guest teaching 1.3 Guest disagreement 1.0 Nathan pushing back 1.8
05100:0010:000:58–3:08 · Nathan as informed peer 5/10 Visual Sales Enablement via 3D and AR Technology Nathan frames the product in familiar terms as Salesforce for manufacturing, while Mark elaborates on using the Unity gaming engine for visual AR enablement in heavy machinery sales.3:08–5:35 · Nathan as informed peer 6/10 Enterprise Deal Sizes and Implementation Fee Structure Nathan quickly runs the unit economics on the $250k ACV, 1:1 setup fee ratio, and $90k CAC, establishing that upfront services completely cover customer acquisition costs.5:36–7:44 · Nathan as informed peer 5/10 Founding Origins, Executive Restructuring, and Early Capital Nathan probes the restructuring circumstances, pressing on whether the family office brought Mark in due to dissatisfaction with the founder's growth rate.7:44–11:14 · Nathan as informed peer 7/10 Customer Base Breakdown and Sunsetting Legacy Contracts Nathan immediately catches a math discrepancy when 250 customers at $250k ACV does not match $5M ARR, leading Mark to clarify that the bulk of the base consists of legacy low-dollar contracts.11:14–14:21 · Nathan as informed peer 6/10 Retention Dynamics and Net Revenue Expansion Outlook Nathan guides the discussion into logo versus revenue churn and asks whether the company has considered non-dilutive venture debt for upcoming expansion.14:21–15:22 · Nathan as informed peer 3/10 The Famous Five Rapid-Fire Q&A Nathan runs through the standard Famous Five rapid-fire questions in a quick, collaborative closing routine.0:58–3:08 · Guest teaching 2/10 Visual Sales Enablement via 3D and AR Technology Nathan frames the product in familiar terms as Salesforce for manufacturing, while Mark elaborates on using the Unity gaming engine for visual AR enablement in heavy machinery sales.3:08–5:35 · Guest teaching 1/10 Enterprise Deal Sizes and Implementation Fee Structure Nathan quickly runs the unit economics on the $250k ACV, 1:1 setup fee ratio, and $90k CAC, establishing that upfront services completely cover customer acquisition costs.5:36–7:44 · Guest teaching 1/10 Founding Origins, Executive Restructuring, and Early Capital Nathan probes the restructuring circumstances, pressing on whether the family office brought Mark in due to dissatisfaction with the founder's growth rate.7:44–11:14 · Guest teaching 3/10 Customer Base Breakdown and Sunsetting Legacy Contracts Nathan immediately catches a math discrepancy when 250 customers at $250k ACV does not match $5M ARR, leading Mark to clarify that the bulk of the base consists of legacy low-dollar contracts.11:14–14:21 · Guest teaching 1/10 Retention Dynamics and Net Revenue Expansion Outlook Nathan guides the discussion into logo versus revenue churn and asks whether the company has considered non-dilutive venture debt for upcoming expansion.14:21–15:22 · Guest teaching 0/10 The Famous Five Rapid-Fire Q&A Nathan runs through the standard Famous Five rapid-fire questions in a quick, collaborative closing routine.0:58–3:08 · Guest disagreement 1/10 Visual Sales Enablement via 3D and AR Technology Nathan frames the product in familiar terms as Salesforce for manufacturing, while Mark elaborates on using the Unity gaming engine for visual AR enablement in heavy machinery sales.3:08–5:35 · Guest disagreement 1/10 Enterprise Deal Sizes and Implementation Fee Structure Nathan quickly runs the unit economics on the $250k ACV, 1:1 setup fee ratio, and $90k CAC, establishing that upfront services completely cover customer acquisition costs.5:36–7:44 · Guest disagreement 1/10 Founding Origins, Executive Restructuring, and Early Capital Nathan probes the restructuring circumstances, pressing on whether the family office brought Mark in due to dissatisfaction with the founder's growth rate.7:44–11:14 · Guest disagreement 2/10 Customer Base Breakdown and Sunsetting Legacy Contracts Nathan immediately catches a math discrepancy when 250 customers at $250k ACV does not match $5M ARR, leading Mark to clarify that the bulk of the base consists of legacy low-dollar contracts.11:14–14:21 · Guest disagreement 1/10 Retention Dynamics and Net Revenue Expansion Outlook Nathan guides the discussion into logo versus revenue churn and asks whether the company has considered non-dilutive venture debt for upcoming expansion.14:21–15:22 · Guest disagreement 0/10 The Famous Five Rapid-Fire Q&A Nathan runs through the standard Famous Five rapid-fire questions in a quick, collaborative closing routine.0:58–3:08 · Nathan pushing back 1/10 Visual Sales Enablement via 3D and AR Technology Nathan frames the product in familiar terms as Salesforce for manufacturing, while Mark elaborates on using the Unity gaming engine for visual AR enablement in heavy machinery sales.3:08–5:35 · Nathan pushing back 1/10 Enterprise Deal Sizes and Implementation Fee Structure Nathan quickly runs the unit economics on the $250k ACV, 1:1 setup fee ratio, and $90k CAC, establishing that upfront services completely cover customer acquisition costs.5:36–7:44 · Nathan pushing back 2/10 Founding Origins, Executive Restructuring, and Early Capital Nathan probes the restructuring circumstances, pressing on whether the family office brought Mark in due to dissatisfaction with the founder's growth rate.7:44–11:14 · Nathan pushing back 5/10 Customer Base Breakdown and Sunsetting Legacy Contracts Nathan immediately catches a math discrepancy when 250 customers at $250k ACV does not match $5M ARR, leading Mark to clarify that the bulk of the base consists of legacy low-dollar contracts.11:14–14:21 · Nathan pushing back 2/10 Retention Dynamics and Net Revenue Expansion Outlook Nathan guides the discussion into logo versus revenue churn and asks whether the company has considered non-dilutive venture debt for upcoming expansion.14:21–15:22 · Nathan pushing back 0/10 The Famous Five Rapid-Fire Q&A Nathan runs through the standard Famous Five rapid-fire questions in a quick, collaborative closing routine.

speaking balance: gold is Nathan, purple is the guest (3 minute bins)

0:00 · Nathan 52.6% · guest 47.4%0:00 · Nathan 52.6% · guest 47.4%3:00 · Nathan 25.6% · guest 74.4%3:00 · Nathan 25.6% · guest 74.4%6:00 · Nathan 42.7% · guest 57.3%6:00 · Nathan 42.7% · guest 57.3%9:00 · Nathan 32.3% · guest 67.7%9:00 · Nathan 32.3% · guest 67.7%12:00 · Nathan 22.6% · guest 77.4%12:00 · Nathan 22.6% · guest 77.4%15:00 · Nathan 83.1% · guest 16.9%15:00 · Nathan 83.1% · guest 16.9%
Sharpest disagreement ▶ 9:30 Pushing back on arbitrary contract price hikes

Mark rejects Nathan's hypothetical suggestion of arbitrarily 10xing legacy customer prices overnight, citing contractual restrictions and the need for value-based migration.

 Hardest push from Nathan ▶ 8:07 Calling out ARR versus monthly revenue mismatch

Nathan refuses to accept unclear revenue numbers, pointing out that 250 enterprise contracts at stated ACVs would mean $5M per month rather than $5M ARR.

 Biggest teaching moment ▶ 1:20 Explaining visual sales enablement via gaming engines

Mark educates Nathan on how heavy manufacturing sales are transformed from catalogs to real-time interactive 3D and AR using the Unity gaming engine.

 Nathan holds their own ▶ 8:41 Deducing actual legacy customer ARPU on the fly

Nathan instantly calculates the blended monthly yield of $1k-$2k per customer to expose that most accounts are low-paying legacy grandfathered users.
the scores for every segment, with the reasoning behind each
ChapterTopicNathan as informed peerGuest teachingGuest disagreementNathan pushing backWhy
Visual Sales Enablement via 3D and AR Technology 5211 Nathan frames the product in familiar terms as Salesforce for manufacturing, while Mark elaborates on using the Unity gaming engine for visual AR enablement in heavy machinery sales.
Enterprise Deal Sizes and Implementation Fee Structure 6111 Nathan quickly runs the unit economics on the $250k ACV, 1:1 setup fee ratio, and $90k CAC, establishing that upfront services completely cover customer acquisition costs.
Founding Origins, Executive Restructuring, and Early Capital 5112 Nathan probes the restructuring circumstances, pressing on whether the family office brought Mark in due to dissatisfaction with the founder's growth rate.
Customer Base Breakdown and Sunsetting Legacy Contracts 7325 Nathan immediately catches a math discrepancy when 250 customers at $250k ACV does not match $5M ARR, leading Mark to clarify that the bulk of the base consists of legacy low-dollar contracts.
Retention Dynamics and Net Revenue Expansion Outlook 6112 Nathan guides the discussion into logo versus revenue churn and asks whether the company has considered non-dilutive venture debt for upcoming expansion.
The Famous Five Rapid-Fire Q&A 3000 Nathan runs through the standard Famous Five rapid-fire questions in a quick, collaborative closing routine.

Statements from this episode (14)

Disclosure
Murphy: Atlatl Software uses Unity gaming engine for visual sales enablement
“So we're essentially a sales automation sales enablement platform, but you know, what we're doing differently is we're using the unity gaming platform.”
Mark Murphy Oct 8, 2019 ▶ 1:20
Disclosure
Murphy: OEMs pay Atlatl for internal sales and dealer network licenses
“The manufacturer, the OEM is the person paying us, and you know, they'll, they'll pay for their salespeople, that it's our tools in the hand of their salespeople, so they'll, they'll pay for the license, or push it down to their, Dealers and their distribution…”
Mark Murphy Oct 8, 2019 ▶ 2:28
Disclosure
Murphy: Atlatl SaaS Deals Range From $250K to Seven Figures
“And then it's a typical SAS model running anywhere from about 250 K to 500 K to the larger, you know, seven figure ARR deals.”
Mark Murphy Oct 8, 2019 ▶ 3:24
Disclosure
Murphy: Atlatl Implementation Fees Match or Double First-Year ACV
“So, it's about a one-to-one carry. We try to keep it about that. You know, for customers that have a lot of models, it may tip the scales to about two to one.”
Mark Murphy Oct 8, 2019 ▶ 3:56
Disclosure
Murphy: Atlatl relies entirely on inside sales and inbound calls
“So right now, we're really just inside sales, and taking inbound calls for our technology.”
Mark Murphy Oct 8, 2019 ▶ 4:49
Assertion Not checkable as stated
Murphy: Atlatl CAC ranges from $90K to $100K per enterprise account
“It's ranging from about the 90 to a hundred K.”
Mark Murphy Oct 8, 2019 ▶ 5:08
Assertion Supported
Murphy: Atlatl Software has raised about $12M from a family office
“Non-institutional investor. So about twelve million.”
Mark Murphy Oct 8, 2019 ▶ 7:35
Disclosure
Murphy: Atlatl Software has 250 customers and 1,500 to 1,600 licenses
“So we have 250 customers sitting around 15 to 1600 licenses.”
Mark Murphy Oct 8, 2019 ▶ 7:54
Prediction Not checkable as stated
Mark Murphy predicts Atlatl Software will reach $5M ARR in 2019
“No, we're at about five, we're gonna close in at about, we should close 19 at about five million in revenue ARR.”
Mark Murphy Oct 8, 2019 ▶ 8:18
Disclosure
Murphy: Atlatl is purposefully churning unfit early legacy customers
“You know, we're experiencing what we call some good churn right now is to try to kind of sunset some of those early customers that really weren't a fit.”
Mark Murphy Oct 8, 2019 ▶ 9:15
Assertion Not checkable as stated
Murphy: Atlatl faces contractual limits on increasing legacy customer pricing
“Contractually and legally I've looked into that and, you know, there's some restrictions on how those contracts were structured before I got here.”
Mark Murphy Oct 8, 2019 ▶ 9:51
Assertion Not checkable as stated
Murphy: Atlatl had roughly $1.7M ARR one year ago
“We were at about 1.7.”
Mark Murphy Oct 8, 2019 ▶ 10:37
Assertion Not checkable as stated
Murphy: Atlatl Software maintains monthly logo churn at about 2%
“You know, we've contained it to about two percent.”
Mark Murphy Oct 8, 2019 ▶ 11:57
Disclosure
Murphy Eyes New Atlatl Funding Round in Q1 or Q2 2020
“We're experiencing, we're gonna experience a really great fourth quarter. And you know, I think that's gonna be my indicator for how much gas we can put on this thing for growth. So, you know, I'd like to see a new round in first or second quarter really based…”
Mark Murphy Oct 8, 2019 ▶ 13:27
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