StarZero All shows Try the podcast clipper →

Jun 19, 2019 · 17m · top-founders

1425 He Pivoted From IBM Reseller to SaaS in 1998, Now $5m in ARR

Mickey Patton · 7m spoken Nathan Latka · 6m spoken
0:00 / 0:00

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

In this episode of The Top Entrepreneurs Podcast, Nathan Latka interviews Mickey Patton, CEO of Clear C-Two, discussing how he bootstrapped a former IBM reseller into a $5 million ARR manufacturing CRM supporting over 80,000 active seats with sub-10% churn.

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 48.2% of the talking time here. How this is scored →

Nathan as informed peer 3.5 Guest teaching 2.5 Guest disagreement 1.0 Nathan pushing back 2.2
05100:0010:000:00–2:10 · Nathan as informed peer 0/10 Book Promotion: How to Be a Capitalist Without Any Capital Solo intro and book advertisement with past archive clips; no live guest interaction occurs.2:10–4:19 · Nathan as informed peer 4/10 Introducing Mickey Patton and Clear C-Two's Product Offering Latka introduces Mickey and frames the early CRM era, while Mickey explains their IBM partnership history and seat pricing tiers.4:19–8:23 · Nathan as informed peer 5/10 Company Origins, Founder Buyout, and Texas Operations Latka tries multiplying 400 logos by $60, prompting Mickey to clarify that $60 is per seat and enterprise accounts have thousands of users. Latka then probes sales compensation structure.8:24–13:27 · Nathan as informed peer 6/10 Retaining Enterprise Clients and Maintaining Sub-10% Churn Latka presses for specific churn and CAC figures, making an instant payback assumption that Mickey corrects by detailing lead conversion rates.13:28–15:29 · Nathan as informed peer 5/10 Financial Performance, Revenue Expansion, and Scaling Goals Latka navigates around Mickey's broad answers to pin down specific revenue benchmarks, getting Mickey to confirm crossing $5M ARR with 60% growth.15:29–17:16 · Nathan as informed peer 1/10 The Famous Five Rapid-Fire Questions with Mickey Patton Standard friendly Famous Five rapid-fire closing questions and recap.0:00–2:10 · Guest teaching 0/10 Book Promotion: How to Be a Capitalist Without Any Capital Solo intro and book advertisement with past archive clips; no live guest interaction occurs.2:10–4:19 · Guest teaching 2/10 Introducing Mickey Patton and Clear C-Two's Product Offering Latka introduces Mickey and frames the early CRM era, while Mickey explains their IBM partnership history and seat pricing tiers.4:19–8:23 · Guest teaching 5/10 Company Origins, Founder Buyout, and Texas Operations Latka tries multiplying 400 logos by $60, prompting Mickey to clarify that $60 is per seat and enterprise accounts have thousands of users. Latka then probes sales compensation structure.8:24–13:27 · Guest teaching 6/10 Retaining Enterprise Clients and Maintaining Sub-10% Churn Latka presses for specific churn and CAC figures, making an instant payback assumption that Mickey corrects by detailing lead conversion rates.13:28–15:29 · Guest teaching 2/10 Financial Performance, Revenue Expansion, and Scaling Goals Latka navigates around Mickey's broad answers to pin down specific revenue benchmarks, getting Mickey to confirm crossing $5M ARR with 60% growth.15:29–17:16 · Guest teaching 0/10 The Famous Five Rapid-Fire Questions with Mickey Patton Standard friendly Famous Five rapid-fire closing questions and recap.0:00–2:10 · Guest disagreement 0/10 Book Promotion: How to Be a Capitalist Without Any Capital Solo intro and book advertisement with past archive clips; no live guest interaction occurs.2:10–4:19 · Guest disagreement 0/10 Introducing Mickey Patton and Clear C-Two's Product Offering Latka introduces Mickey and frames the early CRM era, while Mickey explains their IBM partnership history and seat pricing tiers.4:19–8:23 · Guest disagreement 2/10 Company Origins, Founder Buyout, and Texas Operations Latka tries multiplying 400 logos by $60, prompting Mickey to clarify that $60 is per seat and enterprise accounts have thousands of users. Latka then probes sales compensation structure.8:24–13:27 · Guest disagreement 3/10 Retaining Enterprise Clients and Maintaining Sub-10% Churn Latka presses for specific churn and CAC figures, making an instant payback assumption that Mickey corrects by detailing lead conversion rates.13:28–15:29 · Guest disagreement 1/10 Financial Performance, Revenue Expansion, and Scaling Goals Latka navigates around Mickey's broad answers to pin down specific revenue benchmarks, getting Mickey to confirm crossing $5M ARR with 60% growth.15:29–17:16 · Guest disagreement 0/10 The Famous Five Rapid-Fire Questions with Mickey Patton Standard friendly Famous Five rapid-fire closing questions and recap.0:00–2:10 · Nathan pushing back 0/10 Book Promotion: How to Be a Capitalist Without Any Capital Solo intro and book advertisement with past archive clips; no live guest interaction occurs.2:10–4:19 · Nathan pushing back 1/10 Introducing Mickey Patton and Clear C-Two's Product Offering Latka introduces Mickey and frames the early CRM era, while Mickey explains their IBM partnership history and seat pricing tiers.4:19–8:23 · Nathan pushing back 3/10 Company Origins, Founder Buyout, and Texas Operations Latka tries multiplying 400 logos by $60, prompting Mickey to clarify that $60 is per seat and enterprise accounts have thousands of users. Latka then probes sales compensation structure.8:24–13:27 · Nathan pushing back 5/10 Retaining Enterprise Clients and Maintaining Sub-10% Churn Latka presses for specific churn and CAC figures, making an instant payback assumption that Mickey corrects by detailing lead conversion rates.13:28–15:29 · Nathan pushing back 4/10 Financial Performance, Revenue Expansion, and Scaling Goals Latka navigates around Mickey's broad answers to pin down specific revenue benchmarks, getting Mickey to confirm crossing $5M ARR with 60% growth.15:29–17:16 · Nathan pushing back 0/10 The Famous Five Rapid-Fire Questions with Mickey Patton Standard friendly Famous Five rapid-fire closing questions and recap.

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

0:00 · Nathan 84.8% · guest 15.2%0:00 · Nathan 84.8% · guest 15.2%3:00 · Nathan 24.6% · guest 75.4%3:00 · Nathan 24.6% · guest 75.4%6:00 · Nathan 48.7% · guest 51.3%6:00 · Nathan 48.7% · guest 51.3%9:00 · Nathan 24.1% · guest 75.9%9:00 · Nathan 24.1% · guest 75.9%12:00 · Nathan 44.5% · guest 55.5%12:00 · Nathan 44.5% · guest 55.5%15:00 · Nathan 67.1% · guest 32.9%15:00 · Nathan 67.1% · guest 32.9%
Sharpest disagreement ▶ 12:38 Pushing back on instant payback calculation

Mickey firmly interrupts Latka's assumption of instant payback to correct the math between lead acquisition cost and closed customer CAC.

 Hardest push from Nathan ▶ 15:02 Pressing past vague revenue answers

Latka refuses to leave revenue vague, explicitly pushing Mickey to confirm whether ARR is north of three and five million dollars.

 Biggest teaching moment ▶ 6:10 Correcting logo vs seat pricing confusion

Mickey educates Latka on enterprise deal sizing, explaining that the $60 figure was per seat across thousands of users rather than per customer logo.

 Nathan holds their own ▶ 13:12 Synthesizing CAC and monthly contract value

Latka immediately recalibrates the unit economics, demonstrating his SaaS modeling expertise by mapping a $10k CAC against a $6k/month contract.
the scores for every segment, with the reasoning behind each
ChapterTopicNathan as informed peerGuest teachingGuest disagreementNathan pushing backWhy
Book Promotion: How to Be a Capitalist Without Any Capital 0000 Solo intro and book advertisement with past archive clips; no live guest interaction occurs.
Introducing Mickey Patton and Clear C-Two's Product Offering 4201 Latka introduces Mickey and frames the early CRM era, while Mickey explains their IBM partnership history and seat pricing tiers.
Company Origins, Founder Buyout, and Texas Operations 5523 Latka tries multiplying 400 logos by $60, prompting Mickey to clarify that $60 is per seat and enterprise accounts have thousands of users. Latka then probes sales compensation structure.
Retaining Enterprise Clients and Maintaining Sub-10% Churn 6635 Latka presses for specific churn and CAC figures, making an instant payback assumption that Mickey corrects by detailing lead conversion rates.
Financial Performance, Revenue Expansion, and Scaling Goals 5214 Latka navigates around Mickey's broad answers to pin down specific revenue benchmarks, getting Mickey to confirm crossing $5M ARR with 60% growth.
The Famous Five Rapid-Fire Questions with Mickey Patton 1000 Standard friendly Famous Five rapid-fire closing questions and recap.

Statements from this episode (10)

Assertion Not checkable as stated
Patton: Clear C-Two was IBM's go-to CRM from 1998 to 2008
“We were the go to CRM from IBM from about 1998 through 2008 so forth.”
Mickey Patton Jun 19, 2019 ▶ 3:19
Disclosure
Clear C-Two is entirely employee-owned with zero outside investors
“I bought everybody else and we're an employee owned company. No, no investors, no nothing.”
Mickey Patton Jun 19, 2019 ▶ 4:59
Assertion Not checkable as stated
Patton: Clear C-Two has around 450 corporate customers
“We have an install base around 450 or so customers. Companies”
Mickey Patton Jun 19, 2019 ▶ 5:52
Disclosure
Clear C-Two includes professional services in subscriptions at no extra charge
“Our business model is that we provide the services as part of that subscription. So you sign up with us and you have a report that you want, or you have a change in some of the business processes that you have. We do that as part of the subscription, but we do…”
Mickey Patton Jun 19, 2019 ▶ 8:44
Assertion Not checkable as stated
Patton: Clear C-Two experiences less than 10% annual logo churn
“It's less than 10%.”
Mickey Patton Jun 19, 2019 ▶ 9:19
Assertion Not checkable as stated
Patton: Clear C-Two averages 100 to 150 seats per signup
“Right now it's hundred, right? ... A hundred to a 150.”
Mickey Patton Jun 19, 2019 ▶ 12:12
Assertion Not checkable as stated
Clear C-Two has a 10% close rate and a $10,000 CAC
“It's certainly over a thousand dollars. So per new customer, and that's a per prospect probably is more and more accurate. So you get 10% of that. So that number is probably more in the 10,000 range, right? To acquire a prospect, which you got probably a 10% c…”
Mickey Patton Jun 19, 2019 ▶ 12:49
Assertion Not checkable as stated
Clear C-Two grew revenue by roughly 60% year-over-year
“Based upon a year ago, about 60%.”
Mickey Patton Jun 19, 2019 ▶ 14:45
Assertion Not checkable as stated
Patton: Clear C-Two revenue growth driven primarily by seat expansion
“Yep. Expanding the seats on logos we already have.”
Mickey Patton Jun 19, 2019 ▶ 14:59
Assertion Not checkable as stated
Clear C-Two has surpassed $5 million in annual recurring revenue
“Yeah, we're past five million.”
Mickey Patton Jun 19, 2019 ▶ 15:11
Made with StarZero

Turn any episode into a week of clips.

This entire site, over 2,600 episodes transcribed, diarized, checked and made playable, runs on the StarZero media pipeline. Drop in your own episode and the podcast clipper finds the moments worth sharing, cuts them, captions them, and reframes them for every feed.

Try the podcast clipper Learn more