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Apr 21, 2019 · 17m · top-founders

1366 ACT! and SalesLogix Founders New Company Hits $1m in ARR

Pat Sullivan · 10m spoken Nathan Latka · 5m spoken
0:00 / 0:00

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Host Nathan Latka interviews veteran software entrepreneur Pat Sullivan about his storied history founding ACT! and SalesLogix, as well as the unit economics, pricing strategy, and scaling milestones behind his collaboration platform, Ryver, as it nears $1 million in ARR.

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 33.6% of the talking time here. How this is scored →

Nathan as informed peer 5.3 Guest teaching 3.3 Guest disagreement 2.3 Nathan pushing back 3.8
05100:0010:000:31–4:15 · Nathan as informed peer 4/10 Pat Sullivan's Entrepreneurial History with ACT! and SalesLogix Nathan begins by assuming Pat was the CTO of ACT and SalesLogix, which Pat immediately corrects by clarifying he was the CEO and co-founder. The rest of the segment is an informative walkthrough of Pat's career trajectory, founding River, and its flat-rate pricing tiers.4:16–8:32 · Nathan as informed peer 6/10 Venture Capital Strategy and External Validation for Repeat Founders Nathan asks why a wealthy repeat founder would raise VC rather than self-fund, which Pat explains through the need for external market validation. Nathan then pushes back on River's pace, noting that raising $13M over five years to reach a $1M run rate is relatively slow growth against competitor Slack.8:32–13:42 · Nathan as informed peer 7/10 Accelerating SaaS Growth, Low Churn, and Enterprise Expansion Nathan drills deep into SaaS unit economics, probing net revenue retention, logo churn, and customer acquisition cost. When Pat provides a $17 cost-per-lead figure rather than CAC, Nathan presses him on the free-to-paid conversion math until Pat deflects with self-deprecating humor.13:43–17:00 · Nathan as informed peer 4/10 Founder Persistence, Overcoming Doubts, and Knowing When to Persevere The conversation shifts to founder persistence, cutting losses, and the rapid-fire Famous Five. The tone is reflective and collaborative as Pat reflects on learning finance later in his career.0:31–4:15 · Guest teaching 5/10 Pat Sullivan's Entrepreneurial History with ACT! and SalesLogix Nathan begins by assuming Pat was the CTO of ACT and SalesLogix, which Pat immediately corrects by clarifying he was the CEO and co-founder. The rest of the segment is an informative walkthrough of Pat's career trajectory, founding River, and its flat-rate pricing tiers.4:16–8:32 · Guest teaching 4/10 Venture Capital Strategy and External Validation for Repeat Founders Nathan asks why a wealthy repeat founder would raise VC rather than self-fund, which Pat explains through the need for external market validation. Nathan then pushes back on River's pace, noting that raising $13M over five years to reach a $1M run rate is relatively slow growth against competitor Slack.8:32–13:42 · Guest teaching 2/10 Accelerating SaaS Growth, Low Churn, and Enterprise Expansion Nathan drills deep into SaaS unit economics, probing net revenue retention, logo churn, and customer acquisition cost. When Pat provides a $17 cost-per-lead figure rather than CAC, Nathan presses him on the free-to-paid conversion math until Pat deflects with self-deprecating humor.13:43–17:00 · Guest teaching 2/10 Founder Persistence, Overcoming Doubts, and Knowing When to Persevere The conversation shifts to founder persistence, cutting losses, and the rapid-fire Famous Five. The tone is reflective and collaborative as Pat reflects on learning finance later in his career.0:31–4:15 · Guest disagreement 2/10 Pat Sullivan's Entrepreneurial History with ACT! and SalesLogix Nathan begins by assuming Pat was the CTO of ACT and SalesLogix, which Pat immediately corrects by clarifying he was the CEO and co-founder. The rest of the segment is an informative walkthrough of Pat's career trajectory, founding River, and its flat-rate pricing tiers.4:16–8:32 · Guest disagreement 3/10 Venture Capital Strategy and External Validation for Repeat Founders Nathan asks why a wealthy repeat founder would raise VC rather than self-fund, which Pat explains through the need for external market validation. Nathan then pushes back on River's pace, noting that raising $13M over five years to reach a $1M run rate is relatively slow growth against competitor Slack.8:32–13:42 · Guest disagreement 3/10 Accelerating SaaS Growth, Low Churn, and Enterprise Expansion Nathan drills deep into SaaS unit economics, probing net revenue retention, logo churn, and customer acquisition cost. When Pat provides a $17 cost-per-lead figure rather than CAC, Nathan presses him on the free-to-paid conversion math until Pat deflects with self-deprecating humor.13:43–17:00 · Guest disagreement 1/10 Founder Persistence, Overcoming Doubts, and Knowing When to Persevere The conversation shifts to founder persistence, cutting losses, and the rapid-fire Famous Five. The tone is reflective and collaborative as Pat reflects on learning finance later in his career.0:31–4:15 · Nathan pushing back 2/10 Pat Sullivan's Entrepreneurial History with ACT! and SalesLogix Nathan begins by assuming Pat was the CTO of ACT and SalesLogix, which Pat immediately corrects by clarifying he was the CEO and co-founder. The rest of the segment is an informative walkthrough of Pat's career trajectory, founding River, and its flat-rate pricing tiers.4:16–8:32 · Nathan pushing back 6/10 Venture Capital Strategy and External Validation for Repeat Founders Nathan asks why a wealthy repeat founder would raise VC rather than self-fund, which Pat explains through the need for external market validation. Nathan then pushes back on River's pace, noting that raising $13M over five years to reach a $1M run rate is relatively slow growth against competitor Slack.8:32–13:42 · Nathan pushing back 6/10 Accelerating SaaS Growth, Low Churn, and Enterprise Expansion Nathan drills deep into SaaS unit economics, probing net revenue retention, logo churn, and customer acquisition cost. When Pat provides a $17 cost-per-lead figure rather than CAC, Nathan presses him on the free-to-paid conversion math until Pat deflects with self-deprecating humor.13:43–17:00 · Nathan pushing back 1/10 Founder Persistence, Overcoming Doubts, and Knowing When to Persevere The conversation shifts to founder persistence, cutting losses, and the rapid-fire Famous Five. The tone is reflective and collaborative as Pat reflects on learning finance later in his career.

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

0:00 · Nathan 38% · guest 62%0:00 · Nathan 38% · guest 62%3:00 · Nathan 24.7% · guest 75.3%3:00 · Nathan 24.7% · guest 75.3%6:00 · Nathan 36.3% · guest 63.7%6:00 · Nathan 36.3% · guest 63.7%9:00 · Nathan 40.5% · guest 59.5%9:00 · Nathan 40.5% · guest 59.5%12:00 · Nathan 26.1% · guest 73.9%12:00 · Nathan 26.1% · guest 73.9%15:00 · Nathan 36.5% · guest 63.5%15:00 · Nathan 36.5% · guest 63.5%
Sharpest disagreement ▶ 12:58 Pat draws the line on disclosing marketing spend

When Nathan asks for exact monthly paid ad spend figures, Pat directly declines to reveal the number before pivoting to how cheap digital marketing is compared to legacy print ads.

 Hardest push from Nathan ▶ 6:38 Nathan challenges $13M raised versus $1M ARR

Nathan directly challenges Pat by stating that taking five years and $13 million in VC funding to reach a $1M run rate is not great growth.

 Biggest teaching moment ▶ 4:48 Pat explains why wealthy founders must raise VC

Pat educates Nathan on investor psychology, explaining that experienced entrepreneurs make the mistake of self-funding because they think they are smart, missing essential market validation.

 Nathan holds their own ▶ 10:38 Nathan breaks down lead conversion math

Nathan demonstrates strong SaaS fluency by analyzing River's 1M users against 1,000 paying customers and questioning why Pat measures cost per lead rather than customer CAC.
the scores for every segment, with the reasoning behind each
ChapterTopicNathan as informed peerGuest teachingGuest disagreementNathan pushing backWhy
Pat Sullivan's Entrepreneurial History with ACT! and SalesLogix 4522 Nathan begins by assuming Pat was the CTO of ACT and SalesLogix, which Pat immediately corrects by clarifying he was the CEO and co-founder. The rest of the segment is an informative walkthrough of Pat's career trajectory, founding River, and its flat-rate pricing tiers.
Venture Capital Strategy and External Validation for Repeat Founders 6436 Nathan asks why a wealthy repeat founder would raise VC rather than self-fund, which Pat explains through the need for external market validation. Nathan then pushes back on River's pace, noting that raising $13M over five years to reach a $1M run rate is relatively slow growth against competitor Slack.
Accelerating SaaS Growth, Low Churn, and Enterprise Expansion 7236 Nathan drills deep into SaaS unit economics, probing net revenue retention, logo churn, and customer acquisition cost. When Pat provides a $17 cost-per-lead figure rather than CAC, Nathan presses him on the free-to-paid conversion math until Pat deflects with self-deprecating humor.
Founder Persistence, Overcoming Doubts, and Knowing When to Persevere 4211 The conversation shifts to founder persistence, cutting losses, and the rapid-fire Famous Five. The tone is reflective and collaborative as Pat reflects on learning finance later in his career.

Statements from this episode (15)

Assertion Supported
Sullivan: ACT! Sold to Symantec in 1993 and Bought Back in 1999
“We sold it to Symantec in 1993 and then after I started SalesLogix and we went public, we actually bought it back from Symantec in 1999.”
Pat Sullivan Apr 21, 2019 ▶ 1:03
Insight
Sullivan: New market categories never have just a single winner
“Well, you know, in any space, particularly a new space, there's never just one winner. And there's always a way if you really work at it to differentiate and find a place where they're not as strong as they seem.”
Pat Sullivan Apr 21, 2019 ▶ 2:46
Disclosure
Sullivan: Ryver's average revenue per customer exceeds $70 per month
“Well the average revenue per customer Is just over 70 dollars. So, and most of the users are, tend to be the 99.”
Pat Sullivan Apr 21, 2019 ▶ 3:42
Disclosure
Sullivan: Ryver Has Raised $13M Over Six Years
“We've raised actually thirteen million dollars. And that, that has been over a space of the last six years.”
Pat Sullivan Apr 21, 2019 ▶ 4:22
Insight
Sullivan: Repeat founders make a mistake by self-funding their new startups
“I learned long ago that entrepreneurs the second time that they start a company after selling they make the mistake of funding their own company because now that they've sold a company, they're really smart. And there's a validation that you have to go through…”
Pat Sullivan Apr 21, 2019 ▶ 4:48
Assertion Not checkable as stated
Sullivan: Ryver has reached nearly one million users
“We have nearly a million users growing very, very fast.”
Pat Sullivan Apr 21, 2019 ▶ 5:43
Assertion Not checkable as stated
Sullivan: Ryver has between 1,000 and 2,000 paying customers
“Oh, I'd say between a 1002 thousand at this point.”
Pat Sullivan Apr 21, 2019 ▶ 6:06
Opinion
Sullivan: Ryver has been the most difficult startup of his career
“By far the majority of companies struggle and river of all my startups have, has been the most difficult.”
Pat Sullivan Apr 21, 2019 ▶ 7:09
Assertion Not checkable as stated
Sullivan: Ryver's monthly customer logo churn is under 1%
“It's slightly less than one percent of our customers.”
Pat Sullivan Apr 21, 2019 ▶ 8:55
Assertion Not checkable as stated
Sullivan: Ryver grew almost 50% month-over-month last month
“Last month we grew almost 50%.”
Pat Sullivan Apr 21, 2019 ▶ 9:34
Insight
Sullivan: SaaS companies begin needing enterprise features at 500 users
“The companies who need single sign-on and the enterprise features really begins around 500 users.”
Pat Sullivan Apr 21, 2019 ▶ 10:06
Assertion Not checkable as stated
Sullivan: Ryver pays $17 per lead
“It cost us 17 dollars a lead.”
Pat Sullivan Apr 21, 2019 ▶ 10:25
Prediction Not checkable as stated
Sullivan: Ryver will break even or be profitable in 5-6 months
“I would like to think that in the next five to six months, we will be breakeven, even profitable.”
Pat Sullivan Apr 21, 2019 ▶ 11:58
Assertion Not checkable as stated
Sullivan: Ryver's entire marketing budget is under $30k-$40k
“Running a single ad for sales logics was 30, 40,000 dollars. My entire budget is, is less than that.”
Pat Sullivan Apr 21, 2019 ▶ 13:14
Assertion Contradicted
Pat Sullivan: ACT! ultimately sold more than 30 million copies
“There were times during Act which, you know, ultimately sold thirty million plus copies that we thought we were gonna fail.”
Pat Sullivan Apr 21, 2019 ▶ 14:02
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