Dec 10, 2018 · 20m · top-founders
1234 How He Bootstrapped to $160m in ARR in HR Space
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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 iCIMS founder and CEO Colin Day to examine how the talent acquisition software leader bootstrapped past $160 million in ARR while maintaining profitability and market leadership.
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 37.3% of the talking time here. How this is scored →
Nathan as informed peer 5.2 Guest teaching 2.2 Guest disagreement 1.2 Nathan pushing back 2.6
speaking balance: gold is Nathan, purple is the guest (3 minute bins)
Sharpest disagreement ▶ 15:42 Colin firmly withholding proprietary CAC and retention metrics
Colin pushes back on Nathan's direct probe for internal customer acquisition cost and net retention, maintaining confidentiality boundaries.
Hardest push from Nathan ▶ 15:31 Nathan correcting the premise from M&A costs to organic CACNathan interrupts Colin's pivot toward M&A purchase economics to clarify that he specifically wants internal customer acquisition spend.
Biggest teaching moment ▶ 10:27 Colin breaking down the three rationale drivers of an IPOColin educates Nathan with an industry insider framework detailing capital need, CEO vanity, and brand legitimacy as the sole drivers of taking a company public.
Nathan holds their own ▶ 12:47 Nathan projecting forward ARR run-rates in real timeNathan demonstrates sharp financial command by instantly applying 25% target growth to derive Colin's projected 2018 ARR target, drawing praise from the guest.
the scores for every segment, with the reasoning behind each
| Chapter | Topic | Nathan as informed peer | Guest teaching | Guest disagreement | Nathan pushing back | Why |
|---|---|---|---|---|---|---|
| Introducing Colin Day and iCIMS Talent Acquisition Platform | 5 | 2 | 1 | 2 | Nathan drills into ARR numbers and asks how leadership stays motivated after cashing out secondary liquidity. Colin explains their competitive landscape against Taleo and Workday. | |
| Moving Upmarket and Scaling Deal Sizes | 6 | 2 | 1 | 2 | Nathan calculates monthly ARPU on the fly from ARR and customer count to evaluate unit economics. Colin details their shift upmarket to enterprise clients with a hybrid pricing structure. | |
| Capital Markets, TextRecruit Acquisition, and IPO Considerations | 6 | 3 | 1 | 3 | Nathan brings up specific PE buyout dynamics including Vista Equity's $14B fund and potential valuation multiples. Colin lays out his three-factor framework for assessing an IPO versus staying private. | |
| Revenue Targets and Google for Jobs Advertising Opportunity | 6 | 3 | 2 | 4 | Nathan presses on internal CAC and net revenue retention after calculating Colin's 2018 forward run rate. Colin politely declines exact proprietary metrics while sharing their target 24-month payback benchmark. | |
| The Famous Five Questions with Colin Day | 3 | 1 | 1 | 2 | Nathan moves through the Famous Five routine, tossing in a quick query about Microsoft's GitHub valuation. Colin offers lighthearted reflections on his habits, family life, and trusting his gut. |
Statements from this episode (16)
iCIMS operates strictly as a pure SaaS talent acquisition platform
“We are a pure SaaS provider and we focus just on the talent acquisition industry, so really end-to-end recruiting from your advertising needs, marketing to passive candidates obviously the applicant tracking the recruiting process straight through to onboardin…”
iCIMS targets mid-market and enterprise tiers, handing off to Workday and Oracle
“Typically we deal with the upper end of the market. So we call it majors and enterprise majors is typically call it about a hundred employees to 2500 employees. In those cases, we're usually handing off to an ADP an ultimate software, a Ceridian at the high en…”
iCIMS exited 2017 with over $160M in annual recurring revenue
“We exited 20 17 over a hundred sixty million ARR. So the annual recurring run rate was over a hundred sixty million at the exit of 2017.”
iCIMS reached $160M ARR without putting primary capital on its balance sheet
“We have an investor. The investor was all secondary. It was all liquidity. So their money did not go into the business. So we'd like to think of it as a entirely bootstrapped company.”
iCIMS serves 3,500 customers, closing in on Oracle Taleo's 5,000-plus
“We're about 3500 customers. I would guess that they're probably north of 5000 customers, but we are growing rapidly.”
iCIMS has secured enterprise customers like Microsoft, Amazon, and Intuit
“We've been signing some very large companies, you know, the Microsofts, the Amazons, the Intuits, et cetera.”
iCIMS doubled its average monthly customer spend to $5,000 in two years
“Yeah, we have probably gone from two years ago that the average company paying us 2000 a month to, I would guess, and again, I'm spitballing a little bit here, but I would say in that sort of 5000 a month, four to 5000 a month now.”
Colin Day: iCIMS has the metrics to IPO but doesn't need to
“We constantly look at IPO. I think we have all of the metrics, the scale, the growth, the profitability to take a look at that. But the reality is believe it or not, to sort of hit our goals, we're not sure we need to go down that route right now.”
Colin Day: Companies IPO for capital, CEO vanity, or brand exposure
“The best I can come up with is that there's three reasons to IPO, which is you know, need for capital, and you think it's better in the public market than the private market. We don't have that dynamic right now. And then I've been told that the second one is …”
iCIMS is focused on scaling from $200M to $500M in ARR
“We're dead set on trying to figure out, you know, how to move from a kind of two hundred million dollar business to a five hundred million dollar business.”
iCIMS is targeting over $200M in annual recurring revenue exiting 2018
“Ah, you're in the ballpark. We're looking to certainly go over too.”
Talent software is a $7.5B market, but recruitment advertising is $15B
“So our market, if you kind of add up all the software, it's about a 7.5 billion dollar market, but tangential to is a fifteen billion dollar recruitment advertising market.”
iCIMS is partnering with Google for Jobs to expand into recruitment advertising
“We're working with them heavily. We're building products sort of around them. And I think it's a chance for us to go sort of further up the funnel. So rather than thinking about broadening out downstream into HR, et cetera, we're much more excited about actual…”
Colin Day views a two-year CAC payback period as healthy SaaS economics
“I think a two-year payback is, is typically pretty good, and that's a comfortable economic we're looking for.”