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Nov 16, 2018 · 17m · top-founders

1210 How this Niche CRM player passed $7m in ARR after CEO Stroke

Jeff Gordy · 9m spoken Nathan Latka · 5m spoken
0:00 / 0:00

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In this episode of The Top Entrepreneurs Podcast, host Nathan Latka interviews Jeff Gordy, co-founder and CEO of NeonCRM, who shares how he overcame personal adversity to bootstrap a specialized nonprofit CRM past $7 million in ARR. Gordy discusses the company's capital-efficient growth, international engineering office in Chengdu, expansion pricing model, and world-class SaaS retention metrics.

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 35.2% of the talking time here. How this is scored →

Nathan as informed peer 5.6 Guest teaching 2.4 Guest disagreement 0.8 Nathan pushing back 2.4
05100:0010:001:21–4:33 · Nathan as informed peer 4/10 Introducing Jeff Gordy and NeonCRM Nathan inquires bluntly about Jeff's personal background, probing whether he served jail time or faked an epileptic seizure. Jeff answers candidly and cooperatively, detailing his journey from troubled youth to getting his business degree.4:33–9:06 · Nathan as informed peer 7/10 The Genesis and Bootstrapped Scale of NeonCRM Jeff explains how NeonCRM was bootstrapped and details the nuances of long sales cycles selling to non-profit boards. Nathan demonstrates strong grasp of SaaS growth economics by extrapolating MRR and revenue targets on the fly.9:06–11:06 · Nathan as informed peer 5/10 Global Team Structure and Scaling Engineering in Chengdu Jeff shares how opening an engineering office in Chengdu allowed them to hire six senior developers for the cost of two US junior developer salaries. Nathan listens and summarizes the operational efficiency of the model.11:10–14:38 · Nathan as informed peer 8/10 SaaS Metrics, Expansion Pricing, and Marketing Strategy Nathan drives the conversation through unit economics, identifying 5% expansion revenue from gross vs net churn figures and computing a 6-month payback and $30k+ LTV. Jeff admits to only recently learning about negative churn concepts.14:38–16:20 · Nathan as informed peer 4/10 The Famous Five Rapid-Fire Questions During the Famous Five, Nathan pushes back when Jeff gives a movie quote instead of a business book recommendation, prompting Jeff to name an actual title.1:21–4:33 · Guest teaching 2/10 Introducing Jeff Gordy and NeonCRM Nathan inquires bluntly about Jeff's personal background, probing whether he served jail time or faked an epileptic seizure. Jeff answers candidly and cooperatively, detailing his journey from troubled youth to getting his business degree.4:33–9:06 · Guest teaching 4/10 The Genesis and Bootstrapped Scale of NeonCRM Jeff explains how NeonCRM was bootstrapped and details the nuances of long sales cycles selling to non-profit boards. Nathan demonstrates strong grasp of SaaS growth economics by extrapolating MRR and revenue targets on the fly.9:06–11:06 · Guest teaching 3/10 Global Team Structure and Scaling Engineering in Chengdu Jeff shares how opening an engineering office in Chengdu allowed them to hire six senior developers for the cost of two US junior developer salaries. Nathan listens and summarizes the operational efficiency of the model.11:10–14:38 · Guest teaching 2/10 SaaS Metrics, Expansion Pricing, and Marketing Strategy Nathan drives the conversation through unit economics, identifying 5% expansion revenue from gross vs net churn figures and computing a 6-month payback and $30k+ LTV. Jeff admits to only recently learning about negative churn concepts.14:38–16:20 · Guest teaching 1/10 The Famous Five Rapid-Fire Questions During the Famous Five, Nathan pushes back when Jeff gives a movie quote instead of a business book recommendation, prompting Jeff to name an actual title.1:21–4:33 · Guest disagreement 1/10 Introducing Jeff Gordy and NeonCRM Nathan inquires bluntly about Jeff's personal background, probing whether he served jail time or faked an epileptic seizure. Jeff answers candidly and cooperatively, detailing his journey from troubled youth to getting his business degree.4:33–9:06 · Guest disagreement 1/10 The Genesis and Bootstrapped Scale of NeonCRM Jeff explains how NeonCRM was bootstrapped and details the nuances of long sales cycles selling to non-profit boards. Nathan demonstrates strong grasp of SaaS growth economics by extrapolating MRR and revenue targets on the fly.9:06–11:06 · Guest disagreement 0/10 Global Team Structure and Scaling Engineering in Chengdu Jeff shares how opening an engineering office in Chengdu allowed them to hire six senior developers for the cost of two US junior developer salaries. Nathan listens and summarizes the operational efficiency of the model.11:10–14:38 · Guest disagreement 1/10 SaaS Metrics, Expansion Pricing, and Marketing Strategy Nathan drives the conversation through unit economics, identifying 5% expansion revenue from gross vs net churn figures and computing a 6-month payback and $30k+ LTV. Jeff admits to only recently learning about negative churn concepts.14:38–16:20 · Guest disagreement 1/10 The Famous Five Rapid-Fire Questions During the Famous Five, Nathan pushes back when Jeff gives a movie quote instead of a business book recommendation, prompting Jeff to name an actual title.1:21–4:33 · Nathan pushing back 3/10 Introducing Jeff Gordy and NeonCRM Nathan inquires bluntly about Jeff's personal background, probing whether he served jail time or faked an epileptic seizure. Jeff answers candidly and cooperatively, detailing his journey from troubled youth to getting his business degree.4:33–9:06 · Nathan pushing back 2/10 The Genesis and Bootstrapped Scale of NeonCRM Jeff explains how NeonCRM was bootstrapped and details the nuances of long sales cycles selling to non-profit boards. Nathan demonstrates strong grasp of SaaS growth economics by extrapolating MRR and revenue targets on the fly.9:06–11:06 · Nathan pushing back 1/10 Global Team Structure and Scaling Engineering in Chengdu Jeff shares how opening an engineering office in Chengdu allowed them to hire six senior developers for the cost of two US junior developer salaries. Nathan listens and summarizes the operational efficiency of the model.11:10–14:38 · Nathan pushing back 3/10 SaaS Metrics, Expansion Pricing, and Marketing Strategy Nathan drives the conversation through unit economics, identifying 5% expansion revenue from gross vs net churn figures and computing a 6-month payback and $30k+ LTV. Jeff admits to only recently learning about negative churn concepts.14:38–16:20 · Nathan pushing back 3/10 The Famous Five Rapid-Fire Questions During the Famous Five, Nathan pushes back when Jeff gives a movie quote instead of a business book recommendation, prompting Jeff to name an actual title.

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

0:00 · Nathan 61.4% · guest 38.6%0:00 · Nathan 61.4% · guest 38.6%3:00 · Nathan 15.3% · guest 84.7%3:00 · Nathan 15.3% · guest 84.7%6:00 · Nathan 31.8% · guest 68.2%6:00 · Nathan 31.8% · guest 68.2%9:00 · Nathan 26.5% · guest 73.5%9:00 · Nathan 26.5% · guest 73.5%12:00 · Nathan 26.1% · guest 73.9%12:00 · Nathan 26.1% · guest 73.9%15:00 · Nathan 59.7% · guest 40.3%15:00 · Nathan 59.7% · guest 40.3%
Sharpest disagreement ▶ 3:15 Jeff clarifies his seizure was real

When Nathan abruptly asks whether his medical seizure was 'actual or a fake', Jeff firmly clarifies that it was a sudden, real condition that forced him to change his life path.

 Hardest push from Nathan ▶ 14:44 Nathan refuses movie quote as a book answer

When Jeff cites 'Field of Dreams' as his favorite business book, Nathan pushes back to ensure he names a legitimate book he has read.

 Biggest teaching moment ▶ 6:18 Jeff breaks down non-profit purchasing dynamics

Jeff educates the host on why selling to non-profits is distinct from B2B SaaS, highlighting multi-stakeholder board approvals and incumbent multi-year contracts.

 Nathan holds their own ▶ 13:54 Nathan computes LTV and payback period on the fly

Nathan rapidly calculates the lifetime value exceeding $30,000 and validates a healthy six-month payback period based on the raw inputs provided.
the scores for every segment, with the reasoning behind each
ChapterTopicNathan as informed peerGuest teachingGuest disagreementNathan pushing backWhy
Introducing Jeff Gordy and NeonCRM 4213 Nathan inquires bluntly about Jeff's personal background, probing whether he served jail time or faked an epileptic seizure. Jeff answers candidly and cooperatively, detailing his journey from troubled youth to getting his business degree.
The Genesis and Bootstrapped Scale of NeonCRM 7412 Jeff explains how NeonCRM was bootstrapped and details the nuances of long sales cycles selling to non-profit boards. Nathan demonstrates strong grasp of SaaS growth economics by extrapolating MRR and revenue targets on the fly.
Global Team Structure and Scaling Engineering in Chengdu 5301 Jeff shares how opening an engineering office in Chengdu allowed them to hire six senior developers for the cost of two US junior developer salaries. Nathan listens and summarizes the operational efficiency of the model.
SaaS Metrics, Expansion Pricing, and Marketing Strategy 8213 Nathan drives the conversation through unit economics, identifying 5% expansion revenue from gross vs net churn figures and computing a 6-month payback and $30k+ LTV. Jeff admits to only recently learning about negative churn concepts.
The Famous Five Rapid-Fire Questions 4113 During the Famous Five, Nathan pushes back when Jeff gives a movie quote instead of a business book recommendation, prompting Jeff to name an actual title.

Statements from this episode (12)

Assertion Not checkable as stated
Gordy: NeonCRM average customer pays slightly under $200 per month
“So the average customer is paying us about a little under 200 dollars.”
Jeff Gordy Nov 16, 2018 ▶ 4:41
Prediction Not checkable as stated
NeonCRM projected $8 million in 2018 revenue, up from $6 million
“Last year we closed up around six million. This year we should close up around eight million.”
Jeff Gordy Nov 16, 2018 ▶ 5:53
Assertion Not checkable as stated
Gordy: NeonCRM has around 3,000 paying nonprofit customers
“About 3000 nonprofits.”
Jeff Gordy Nov 16, 2018 ▶ 6:02
Assertion Supported
Gordy: Blackbaud locks nonprofit customers into one- to four-year contracts
“Then they might be under a one, two, three, four year contract due to some of our competitors like BlackBaud that have really held people in for long-term contracts and really kind of got their nails in.”
Jeff Gordy Nov 16, 2018 ▶ 7:15
Disclosure
Gordy: Bootstrapping allowed NeonCRM to undercut competitor pricing with more features
“We were, we basically came into the market being able to offer more than our competitors were able to offer, but at a lower price because we were bootstrapped and didn't have any capital, didn't have any debt to pay.”
Jeff Gordy Nov 16, 2018 ▶ 7:53
Assertion Not publicly verifiable
Gordy: NeonCRM approaches 100 staff across Chicago and Chengdu offices
“Right now we are about to breach the 100 staff number mark. We've got about 56 people here in our Chicago office. And we've got about 45 in our Chengdu office.”
Jeff Gordy Nov 16, 2018 ▶ 9:11
Assertion Not checkable as stated
Gordy: NeonCRM traded two US developer salaries for six senior Chengdu engineers
“So what we ended up doing is taking those two salaries and opening an office in Chengdu, China. And we were able to legally open an office and hire six developers with over 10 years of experience with those two salaries.”
Jeff Gordy Nov 16, 2018 ▶ 10:48
Assertion Not checkable as stated
Gordy: NeonCRM has around 1% annual net revenue churn
“So right now we're actually right above, like, a little bit of churn, around one point something percent.”
Jeff Gordy Nov 16, 2018 ▶ 11:19
Assertion Not checkable as stated
Gordy: NeonCRM experiences roughly 6% annual gross revenue churn
“I believe yeah, that's around six percent.”
Jeff Gordy Nov 16, 2018 ▶ 11:36
Assertion Not checkable as stated
Gordy: NeonCRM customer acquisition cost is around $1,100
“So right now our customer acquisition cost is around about 1100 dollars.”
Jeff Gordy Nov 16, 2018 ▶ 12:34
Disclosure
Jeff Gordy hired a CMO with a higher salary than his own
“I just hired a CMO this year that I actually offered a salary that was higher than myself to bring him on board as an entrepreneur would do who knows his money.”
Jeff Gordy Nov 16, 2018 ▶ 13:03
Assertion Not checkable as stated
Gordy: NeonCRM lifetime value exceeds 13 years for larger customers
“Right, and actually the fun part to add on to that is the lifetime value is over 13 years for some of our higher, for our larger customers.”
Jeff Gordy Nov 16, 2018 ▶ 13:55
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