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Feb 19, 2019 · 21m · top-founders

1305 He Built AWS, Now Raised $9m at $30m Post for IoT Solution, $300k MRR

Robert Frederick · 11m spoken Nathan Latka · 7m spoken
0:00 / 0:00

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In this episode of The Top Entrepreneurs Podcast, host Nathan Latka interviews Circle founder Robert Frederick to explore how his AWS background helped build an enterprise IoT middleware platform generating over $300,000 in monthly recurring revenue. Frederick discusses Circle's hybrid hardware-software architecture, capital efficiency, unit economics, and real-world spatial tracking applications across healthcare, casino, and retail sectors.

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 40.4% of the talking time here. How this is scored →

Nathan as informed peer 5.3 Guest teaching 2.7 Guest disagreement 2.2 Nathan pushing back 4.5
05100:0010:0020:001:32–4:13 · Nathan as informed peer 4/10 Robert Frederick Background and Circle Business Model Nathan probes Frederick on the revenue composition of Circle, asking whether it is pure SaaS or includes hardware and services. He cites industry comps like Eero and Purple WiFi to understand hardware retention dynamics as Frederick explains the 70/30 split.4:14–8:03 · Nathan as informed peer 6/10 Patented Hardware Capabilities and AWS Architectural Parallels Nathan challenges Frederick's broad vertical focus and pushes back when Frederick compares Circle to AWS, noting AWS did not have a 30% hardware component. Frederick defends the comparison citing Kindle and Echo hardware before Nathan redirects him back to Circle's practical utility.8:04–10:52 · Nathan as informed peer 6/10 Passive Radio Surveillance and Real-World IoT Applications Frederick educates Nathan on passive radio surveillance and detecting signal leakage from earbuds and phones without user opt-in. Nathan demonstrates domain understanding by formulating the casino blackjack waitress engagement use case, earning praise from Frederick.10:52–14:14 · Nathan as informed peer 5/10 Enterprise Contract Values, Restructuring, and Fundraising History Nathan drills into pricing tiers, cap table history, and valuation mechanics ($9M raised on a $21M pre-money valuation). When Frederick deflects profitability timing questions, Nathan notes the target year and presses on customer metrics.14:15–17:26 · Nathan as informed peer 6/10 Customer Traction, Team Distribution, and Revenue Growth Nathan forces revenue transparency by combining Frederick's 15-customer count and $20k monthly floor to deduce $300k MRR, challenging Frederick when he claims he cannot disclose the number. Nathan also dismisses typical enterprise growth platitudes to pin down annual growth at 25-30%.17:28–19:59 · Nathan as informed peer 5/10 Sales Cycles, Customer Acquisition Strategy, and Payback Periods Nathan investigates customer acquisition dynamics and payback periods, translating Frederick's 3-4 month payback into an implied CAC range of $60k-$80k based on baseline ACV. The segment finishes with standard Famous Five rapid-fire questions.1:32–4:13 · Guest teaching 3/10 Robert Frederick Background and Circle Business Model Nathan probes Frederick on the revenue composition of Circle, asking whether it is pure SaaS or includes hardware and services. He cites industry comps like Eero and Purple WiFi to understand hardware retention dynamics as Frederick explains the 70/30 split.4:14–8:03 · Guest teaching 4/10 Patented Hardware Capabilities and AWS Architectural Parallels Nathan challenges Frederick's broad vertical focus and pushes back when Frederick compares Circle to AWS, noting AWS did not have a 30% hardware component. Frederick defends the comparison citing Kindle and Echo hardware before Nathan redirects him back to Circle's practical utility.8:04–10:52 · Guest teaching 4/10 Passive Radio Surveillance and Real-World IoT Applications Frederick educates Nathan on passive radio surveillance and detecting signal leakage from earbuds and phones without user opt-in. Nathan demonstrates domain understanding by formulating the casino blackjack waitress engagement use case, earning praise from Frederick.10:52–14:14 · Guest teaching 2/10 Enterprise Contract Values, Restructuring, and Fundraising History Nathan drills into pricing tiers, cap table history, and valuation mechanics ($9M raised on a $21M pre-money valuation). When Frederick deflects profitability timing questions, Nathan notes the target year and presses on customer metrics.14:15–17:26 · Guest teaching 1/10 Customer Traction, Team Distribution, and Revenue Growth Nathan forces revenue transparency by combining Frederick's 15-customer count and $20k monthly floor to deduce $300k MRR, challenging Frederick when he claims he cannot disclose the number. Nathan also dismisses typical enterprise growth platitudes to pin down annual growth at 25-30%.17:28–19:59 · Guest teaching 2/10 Sales Cycles, Customer Acquisition Strategy, and Payback Periods Nathan investigates customer acquisition dynamics and payback periods, translating Frederick's 3-4 month payback into an implied CAC range of $60k-$80k based on baseline ACV. The segment finishes with standard Famous Five rapid-fire questions.1:32–4:13 · Guest disagreement 1/10 Robert Frederick Background and Circle Business Model Nathan probes Frederick on the revenue composition of Circle, asking whether it is pure SaaS or includes hardware and services. He cites industry comps like Eero and Purple WiFi to understand hardware retention dynamics as Frederick explains the 70/30 split.4:14–8:03 · Guest disagreement 5/10 Patented Hardware Capabilities and AWS Architectural Parallels Nathan challenges Frederick's broad vertical focus and pushes back when Frederick compares Circle to AWS, noting AWS did not have a 30% hardware component. Frederick defends the comparison citing Kindle and Echo hardware before Nathan redirects him back to Circle's practical utility.8:04–10:52 · Guest disagreement 1/10 Passive Radio Surveillance and Real-World IoT Applications Frederick educates Nathan on passive radio surveillance and detecting signal leakage from earbuds and phones without user opt-in. Nathan demonstrates domain understanding by formulating the casino blackjack waitress engagement use case, earning praise from Frederick.10:52–14:14 · Guest disagreement 2/10 Enterprise Contract Values, Restructuring, and Fundraising History Nathan drills into pricing tiers, cap table history, and valuation mechanics ($9M raised on a $21M pre-money valuation). When Frederick deflects profitability timing questions, Nathan notes the target year and presses on customer metrics.14:15–17:26 · Guest disagreement 3/10 Customer Traction, Team Distribution, and Revenue Growth Nathan forces revenue transparency by combining Frederick's 15-customer count and $20k monthly floor to deduce $300k MRR, challenging Frederick when he claims he cannot disclose the number. Nathan also dismisses typical enterprise growth platitudes to pin down annual growth at 25-30%.17:28–19:59 · Guest disagreement 1/10 Sales Cycles, Customer Acquisition Strategy, and Payback Periods Nathan investigates customer acquisition dynamics and payback periods, translating Frederick's 3-4 month payback into an implied CAC range of $60k-$80k based on baseline ACV. The segment finishes with standard Famous Five rapid-fire questions.1:32–4:13 · Nathan pushing back 3/10 Robert Frederick Background and Circle Business Model Nathan probes Frederick on the revenue composition of Circle, asking whether it is pure SaaS or includes hardware and services. He cites industry comps like Eero and Purple WiFi to understand hardware retention dynamics as Frederick explains the 70/30 split.4:14–8:03 · Nathan pushing back 6/10 Patented Hardware Capabilities and AWS Architectural Parallels Nathan challenges Frederick's broad vertical focus and pushes back when Frederick compares Circle to AWS, noting AWS did not have a 30% hardware component. Frederick defends the comparison citing Kindle and Echo hardware before Nathan redirects him back to Circle's practical utility.8:04–10:52 · Nathan pushing back 2/10 Passive Radio Surveillance and Real-World IoT Applications Frederick educates Nathan on passive radio surveillance and detecting signal leakage from earbuds and phones without user opt-in. Nathan demonstrates domain understanding by formulating the casino blackjack waitress engagement use case, earning praise from Frederick.10:52–14:14 · Nathan pushing back 5/10 Enterprise Contract Values, Restructuring, and Fundraising History Nathan drills into pricing tiers, cap table history, and valuation mechanics ($9M raised on a $21M pre-money valuation). When Frederick deflects profitability timing questions, Nathan notes the target year and presses on customer metrics.14:15–17:26 · Nathan pushing back 7/10 Customer Traction, Team Distribution, and Revenue Growth Nathan forces revenue transparency by combining Frederick's 15-customer count and $20k monthly floor to deduce $300k MRR, challenging Frederick when he claims he cannot disclose the number. Nathan also dismisses typical enterprise growth platitudes to pin down annual growth at 25-30%.17:28–19:59 · Nathan pushing back 4/10 Sales Cycles, Customer Acquisition Strategy, and Payback Periods Nathan investigates customer acquisition dynamics and payback periods, translating Frederick's 3-4 month payback into an implied CAC range of $60k-$80k based on baseline ACV. The segment finishes with standard Famous Five rapid-fire questions.

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

0:00 · Nathan 73.4% · guest 26.6%0:00 · Nathan 73.4% · guest 26.6%3:00 · Nathan 26.1% · guest 73.9%3:00 · Nathan 26.1% · guest 73.9%6:00 · Nathan 28.4% · guest 71.6%6:00 · Nathan 28.4% · guest 71.6%9:00 · Nathan 31.9% · guest 68.1%9:00 · Nathan 31.9% · guest 68.1%12:00 · Nathan 36.3% · guest 63.7%12:00 · Nathan 36.3% · guest 63.7%15:00 · Nathan 28.7% · guest 71.3%15:00 · Nathan 28.7% · guest 71.3%18:00 · Nathan 57.7% · guest 42.3%18:00 · Nathan 57.7% · guest 42.3%21:00 · Nathan 77.2% · guest 22.8%21:00 · Nathan 77.2% · guest 22.8%
Sharpest disagreement ▶ 7:15 Guest defends AWS comparison citing Amazon hardware devices

When Nathan points out that AWS lacked a major hardware component, Frederick pushes back defensively, citing Kindle, Fire TV, and Echo to justify his architectural thesis.

 Hardest push from Nathan ▶ 14:48 Host corners guest on implied $300k MRR calculation

When Frederick says he is not allowed to confirm $300k monthly revenue, Nathan bluntly points out that Frederick already stated both 15 customers and a $20k minimum, demanding to know which number was wrong.

 Biggest teaching moment ▶ 8:22 Guest explains passive RF device fingerprinting without opt-in

Frederick explains how Circle's patented hardware passively captures radio waves leaking from earbuds, badges, or phones to fingerprint locations without requiring any app installation or user opt-in.

 Nathan holds their own ▶ 9:28 Host applies technical capabilities to casino dwell-time optimization

Nathan synthesizes the passive RF tracking concept into a practical casino hospitality workflow (sending drinks to players dwelling at blackjack tables), prompting Frederick to admit Nathan is more technical than expected.
the scores for every segment, with the reasoning behind each
ChapterTopicNathan as informed peerGuest teachingGuest disagreementNathan pushing backWhy
Robert Frederick Background and Circle Business Model 4313 Nathan probes Frederick on the revenue composition of Circle, asking whether it is pure SaaS or includes hardware and services. He cites industry comps like Eero and Purple WiFi to understand hardware retention dynamics as Frederick explains the 70/30 split.
Patented Hardware Capabilities and AWS Architectural Parallels 6456 Nathan challenges Frederick's broad vertical focus and pushes back when Frederick compares Circle to AWS, noting AWS did not have a 30% hardware component. Frederick defends the comparison citing Kindle and Echo hardware before Nathan redirects him back to Circle's practical utility.
Passive Radio Surveillance and Real-World IoT Applications 6412 Frederick educates Nathan on passive radio surveillance and detecting signal leakage from earbuds and phones without user opt-in. Nathan demonstrates domain understanding by formulating the casino blackjack waitress engagement use case, earning praise from Frederick.
Enterprise Contract Values, Restructuring, and Fundraising History 5225 Nathan drills into pricing tiers, cap table history, and valuation mechanics ($9M raised on a $21M pre-money valuation). When Frederick deflects profitability timing questions, Nathan notes the target year and presses on customer metrics.
Customer Traction, Team Distribution, and Revenue Growth 6137 Nathan forces revenue transparency by combining Frederick's 15-customer count and $20k monthly floor to deduce $300k MRR, challenging Frederick when he claims he cannot disclose the number. Nathan also dismisses typical enterprise growth platitudes to pin down annual growth at 25-30%.
Sales Cycles, Customer Acquisition Strategy, and Payback Periods 5214 Nathan investigates customer acquisition dynamics and payback periods, translating Frederick's 3-4 month payback into an implied CAC range of $60k-$80k based on baseline ACV. The segment finishes with standard Famous Five rapid-fire questions.

Statements from this episode (6)

Assertion Not checkable as stated
Frederick: Circle's revenue split is roughly 70% software and 30% hardware
“Oh, it's probably around 7030. When it comes to software to 30% harder if that makes sense.”
Robert Frederick Feb 19, 2019 ▶ 3:40
Assertion Supported
Frederick: Circle's patented hardware tracks indoor locations with shoulder-to-shoulder accuracy
“So we actually have patented hardware with multiple radios inside of it, and those radios, when you place the devices in in the right configuration around a room or a space, hallways, whatever, a stadium, A hotel, a casino, a hospital, you name it, a retail st…”
Robert Frederick Feb 19, 2019 ▶ 4:15
Disclosure
Circle's passive radio tracking acts as surveillance without user opt-in
“We do that without even having a need to opt-in. It's sort of like radio surveillance.”
Robert Frederick Feb 19, 2019 ▶ 8:22
Assertion Partly supported
Circle: Raised $9M at a $20M pre-money valuation
“Nine million at a 20 pre, so about thirty million dollars is the valuation of the company.”
Robert Frederick Feb 19, 2019 ▶ 12:50
Disclosure
Circle has 15 enterprise customers paying up to hundreds of thousands monthly
“15. 15. major, major customers. And like I said tens of thousands a month. Yep. upwards to hundreds of thousands.”
Robert Frederick Feb 19, 2019 ▶ 14:27
Disclosure
Frederick: Circle grows revenue 25% to 30% year-over-year
“We're basically around 25 to 30%. Year over year.”
Robert Frederick Feb 19, 2019 ▶ 16:15
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