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Apr 30, 2019 · 18m · top-founders

1375 NewRelic Competitor Hits $2m in ARR, 900 Customers, Growing 80% yoy

Nathan Latka · 8m spoken Matt Watson · 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, host Nathan Latka interviews Stackify founder Matt Watson to examine how the APM software company bootstrapped and scaled to over $2M in ARR with 80% year-over-year growth. Watson reveals the SaaS unit economics, content-driven inbound acquisition strategy, and capital discipline behind competing against enterprise industry giants.

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 55.8% of the talking time here. How this is scored →

Nathan as informed peer 4.6 Guest teaching 1.8 Guest disagreement 2.4 Nathan pushing back 4.2
05100:0010:000:01–2:32 · Nathan as informed peer 0/10 Book Promotion: How to Be a Capitalist Without Any Capital This is a solo host monologue promoting Nathan's book and summarizing the upcoming guest's metrics. As a promotional read/intro snippet, all dynamic scores are zeroed out.2:33–6:52 · Nathan as informed peer 7/10 Introducing Matt Watson and Stackify's Core Product Nathan drills into net negative churn and gross revenue churn calculations, correcting Matt's mathematical confusion regarding negative 20% churn vs. expansion. Matt admits the numbers are confusing for a developer CEO.6:52–11:11 · Nathan as informed peer 6/10 Product Activation, Onboarding, and Trial Conversion Nathan inquires about funnel conversion metrics and sales team KPIs, while Matt explains their purely inbound model and admits he doesn't track granular sales CAC numbers off the top of his head.11:12–14:45 · Nathan as informed peer 5/10 Bootstrapping, Seed Funding, and Enterprise Competitors Nathan presses Matt on why he raised outside capital after bootstrapping and pushes back when Matt tries to withhold total funding numbers by noting SEC filings are public.14:46–17:26 · Nathan as informed peer 5/10 Clarifying Funding Records and Capital Strategy Nathan confronts Matt with database records of a prior $5M round, which Matt firmly dismisses as inaccurate online reporting, before moving into the standard Famous Five questions.0:01–2:32 · Guest teaching 0/10 Book Promotion: How to Be a Capitalist Without Any Capital This is a solo host monologue promoting Nathan's book and summarizing the upcoming guest's metrics. As a promotional read/intro snippet, all dynamic scores are zeroed out.2:33–6:52 · Guest teaching 2/10 Introducing Matt Watson and Stackify's Core Product Nathan drills into net negative churn and gross revenue churn calculations, correcting Matt's mathematical confusion regarding negative 20% churn vs. expansion. Matt admits the numbers are confusing for a developer CEO.6:52–11:11 · Guest teaching 1/10 Product Activation, Onboarding, and Trial Conversion Nathan inquires about funnel conversion metrics and sales team KPIs, while Matt explains their purely inbound model and admits he doesn't track granular sales CAC numbers off the top of his head.11:12–14:45 · Guest teaching 2/10 Bootstrapping, Seed Funding, and Enterprise Competitors Nathan presses Matt on why he raised outside capital after bootstrapping and pushes back when Matt tries to withhold total funding numbers by noting SEC filings are public.14:46–17:26 · Guest teaching 4/10 Clarifying Funding Records and Capital Strategy Nathan confronts Matt with database records of a prior $5M round, which Matt firmly dismisses as inaccurate online reporting, before moving into the standard Famous Five questions.0:01–2:32 · Guest disagreement 0/10 Book Promotion: How to Be a Capitalist Without Any Capital This is a solo host monologue promoting Nathan's book and summarizing the upcoming guest's metrics. As a promotional read/intro snippet, all dynamic scores are zeroed out.2:33–6:52 · Guest disagreement 3/10 Introducing Matt Watson and Stackify's Core Product Nathan drills into net negative churn and gross revenue churn calculations, correcting Matt's mathematical confusion regarding negative 20% churn vs. expansion. Matt admits the numbers are confusing for a developer CEO.6:52–11:11 · Guest disagreement 2/10 Product Activation, Onboarding, and Trial Conversion Nathan inquires about funnel conversion metrics and sales team KPIs, while Matt explains their purely inbound model and admits he doesn't track granular sales CAC numbers off the top of his head.11:12–14:45 · Guest disagreement 4/10 Bootstrapping, Seed Funding, and Enterprise Competitors Nathan presses Matt on why he raised outside capital after bootstrapping and pushes back when Matt tries to withhold total funding numbers by noting SEC filings are public.14:46–17:26 · Guest disagreement 3/10 Clarifying Funding Records and Capital Strategy Nathan confronts Matt with database records of a prior $5M round, which Matt firmly dismisses as inaccurate online reporting, before moving into the standard Famous Five questions.0:01–2:32 · Nathan pushing back 0/10 Book Promotion: How to Be a Capitalist Without Any Capital This is a solo host monologue promoting Nathan's book and summarizing the upcoming guest's metrics. As a promotional read/intro snippet, all dynamic scores are zeroed out.2:33–6:52 · Nathan pushing back 6/10 Introducing Matt Watson and Stackify's Core Product Nathan drills into net negative churn and gross revenue churn calculations, correcting Matt's mathematical confusion regarding negative 20% churn vs. expansion. Matt admits the numbers are confusing for a developer CEO.6:52–11:11 · Nathan pushing back 4/10 Product Activation, Onboarding, and Trial Conversion Nathan inquires about funnel conversion metrics and sales team KPIs, while Matt explains their purely inbound model and admits he doesn't track granular sales CAC numbers off the top of his head.11:12–14:45 · Nathan pushing back 6/10 Bootstrapping, Seed Funding, and Enterprise Competitors Nathan presses Matt on why he raised outside capital after bootstrapping and pushes back when Matt tries to withhold total funding numbers by noting SEC filings are public.14:46–17:26 · Nathan pushing back 5/10 Clarifying Funding Records and Capital Strategy Nathan confronts Matt with database records of a prior $5M round, which Matt firmly dismisses as inaccurate online reporting, before moving into the standard Famous Five questions.

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

0:00 · Nathan 94.7% · guest 5.3%0:00 · Nathan 94.7% · guest 5.3%3:00 · Nathan 43.9% · guest 56.1%3:00 · Nathan 43.9% · guest 56.1%6:00 · Nathan 44.7% · guest 55.3%6:00 · Nathan 44.7% · guest 55.3%9:00 · Nathan 36.1% · guest 63.9%9:00 · Nathan 36.1% · guest 63.9%12:00 · Nathan 52.8% · guest 47.2%12:00 · Nathan 52.8% · guest 47.2%15:00 · Nathan 59.2% · guest 40.8%15:00 · Nathan 59.2% · guest 40.8%18:00 · Nathan 73.9% · guest 26.1%18:00 · Nathan 73.9% · guest 26.1%
Sharpest disagreement ▶ 11:47 Reluctance to disclose funding details

When asked how much capital was raised, Matt pushes back saying he would rather not disclose it, forcing Nathan to cite public regulatory filing requirements.

 Hardest push from Nathan ▶ 5:28 Challenging net revenue churn assumptions

Nathan refuses Matt's framing of having negative 20% churn alongside 20% expansion, explaining the mathematical impossibility unless gross churn is zero.

 Biggest teaching moment ▶ 17:05 Schooling on the relative value of coding vs. product management

Matt reframes Nathan's assumptions about developers wishing they knew sales, explaining that writing code is merely assembly line work compared to high-level product vision.

 Nathan holds their own ▶ 6:07 Structuring SaaS retention metrics for the guest

Nathan demonstrates mastery of SaaS metrics by synthesizing Matt's disjointed churn and retention explanations into a clean, standard cohort formula.
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 This is a solo host monologue promoting Nathan's book and summarizing the upcoming guest's metrics. As a promotional read/intro snippet, all dynamic scores are zeroed out.
Introducing Matt Watson and Stackify's Core Product 7236 Nathan drills into net negative churn and gross revenue churn calculations, correcting Matt's mathematical confusion regarding negative 20% churn vs. expansion. Matt admits the numbers are confusing for a developer CEO.
Product Activation, Onboarding, and Trial Conversion 6124 Nathan inquires about funnel conversion metrics and sales team KPIs, while Matt explains their purely inbound model and admits he doesn't track granular sales CAC numbers off the top of his head.
Bootstrapping, Seed Funding, and Enterprise Competitors 5246 Nathan presses Matt on why he raised outside capital after bootstrapping and pushes back when Matt tries to withhold total funding numbers by noting SEC filings are public.
Clarifying Funding Records and Capital Strategy 5435 Nathan confronts Matt with database records of a prior $5M round, which Matt firmly dismisses as inaccurate online reporting, before moving into the standard Famous Five questions.

Statements from this episode (12)

Assertion Not checkable as stated
Stackify has nearly 900 global subscription customers
“We're a SaaS company. We have almost 900 customers all over the world that just pay us a monthly subscription for using our tools.”
Matt Watson Apr 30, 2019 ▶ 3:46
Assertion Not checkable as stated
Stackify is growing approximately 80% year over year
“We've grown about 80% year over year.”
Matt Watson Apr 30, 2019 ▶ 4:21
Assertion Not checkable as stated
Stackify has 85% to 90% logo retention and net negative churn
“So an actual customer base, we probably retain 85 to 90% of the customers. And then the ones that stay all grow. And so the ones that stay spend more money than the ones that we lost.”
Matt Watson Apr 30, 2019 ▶ 5:59
Disclosure
Stackify avoids paid ads, keeping CAC to a few hundred dollars
“It's a few hundred dollars, but we don't do really paid advertising, so it's not a number that we really focus on.”
Matt Watson Apr 30, 2019 ▶ 8:17
Assertion Not checkable as stated
Stackify employs 20 people in Kansas City and 20 in the Philippines
“We have about 20 people in our office in the Kansas City, and then we have about 20 more in the Philippines.”
Matt Watson Apr 30, 2019 ▶ 8:29
Assertion Not checkable as stated
Stackify drives 800,000 monthly website visitors through content marketing
“We get about 800,000 people a month on our website from our content marketing and stuff that we do.”
Matt Watson Apr 30, 2019 ▶ 9:04
Disclosure
Stackify has enterprise customers paying over $100,000 per year
“You do have some customers that pay you more than a hundred grand per year. [802] Matt Watson: Yeah, we do.”
Matt Watson Apr 30, 2019 ▶ 13:19
Disclosure
About 70% of Stackify's revenue comes from international customers
“About 70% of our business is international.”
Matt Watson Apr 30, 2019 ▶ 13:30
Disclosure
Stackify acquired Honeywell as a customer entirely through organic inbound search
“Like we have somebody like Honeywell as a client, but we don't call on the CIO of Honeywell to try and sell them our software. They find us the same way anybody else does. They go to Google and search for different things, and they run across our product”
Matt Watson Apr 30, 2019 ▶ 13:35
Assertion Not checkable as stated
New Relic and AppDynamics focus almost exclusively on large enterprise accounts
“New Relic, AppDynamics companies like that. So they're all focused on the large enterprise accounts kind of exclusively, and most of our customers are SMB. They're more mid-market companies.”
Matt Watson Apr 30, 2019 ▶ 14:31
Disclosure
Matt Watson self-funded Stackify entirely before raising a $3M round
“I funded all of it until a year ago. We did a three million dollar round then.”
Matt Watson Apr 30, 2019 ▶ 15:24
Insight
Writing code is easy assembly work compared to product management
“You know, the most valuable part of it is the product product division, product management side of it. Writing the code is easy. That's like assembly work. Like, Manufacturing work, right? Almost. It's the knowing what to write and how it's supposed to work. T…”
Matt Watson Apr 30, 2019 ▶ 17:11
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