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Mar 12, 2018 · 19m · top-founders

961 How He Sells Commercial Real Estate Data to PE Firms for $5m+ in ARR

Michael Mandel · 10m spoken Nathan Latka · 5m 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, host Nathan Latka interviews CompStak co-founder and CEO Michael Mandel to explore how the commercial real estate data platform scaled to over $5 million in ARR. Mandel discusses CompStak's crowdsourced data exchange, enterprise monetization, capital strategy, and the unit economics driving their market expansion.

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 35.6% of the talking time here. How this is scored →

Nathan as informed peer 5.0 Guest teaching 1.4 Guest disagreement 0.9 Nathan pushing back 2.6
05100:0010:000:49–3:35 · Nathan as informed peer 4/10 CompStak Overview and Monetization Model Nathan asks straightforward questions about CompStak's data crowdsourcing model, pricing tiers, and average annual contract value.3:35–5:45 · Nathan as informed peer 5/10 Origins, Launch, and Closing Early Enterprise Customers Nathan inquires about IP protection while working at a brokerage firm and how Michael landed early enterprise clients.5:46–9:03 · Nathan as informed peer 6/10 Finding a Technical Co-Founder and Equity Division Nathan explores equity division with the technical co-founder and drills into the terms of their venture debt financing.9:03–11:10 · Nathan as informed peer 7/10 Scaling Enterprise Customer Base and ARR Metrics Nathan multiplies customer count by ACV to derive a $5M run rate, directly challenging Michael when he hesitates to disclose exact revenue.11:12–13:42 · Nathan as informed peer 3/10 Sponsor Break: Nathan Latka on The Top Inbox Following a sponsor message, Nathan briefly inquires about team composition and headcount breakdown across departments.13:42–16:40 · Nathan as informed peer 7/10 Customer Acquisition Cost and Net Churn Economics Nathan drills into customer acquisition costs, direct paid marketing spend versus event travel, and clarifies annual net versus gross churn metrics.16:40–18:41 · Nathan as informed peer 3/10 The Famous Five Rapid-Fire Questions Standard rapid-fire closing questions covering favorite books, sleep habits, and advice to a younger self.0:49–3:35 · Guest teaching 1/10 CompStak Overview and Monetization Model Nathan asks straightforward questions about CompStak's data crowdsourcing model, pricing tiers, and average annual contract value.3:35–5:45 · Guest teaching 1/10 Origins, Launch, and Closing Early Enterprise Customers Nathan inquires about IP protection while working at a brokerage firm and how Michael landed early enterprise clients.5:46–9:03 · Guest teaching 2/10 Finding a Technical Co-Founder and Equity Division Nathan explores equity division with the technical co-founder and drills into the terms of their venture debt financing.9:03–11:10 · Guest teaching 2/10 Scaling Enterprise Customer Base and ARR Metrics Nathan multiplies customer count by ACV to derive a $5M run rate, directly challenging Michael when he hesitates to disclose exact revenue.11:12–13:42 · Guest teaching 1/10 Sponsor Break: Nathan Latka on The Top Inbox Following a sponsor message, Nathan briefly inquires about team composition and headcount breakdown across departments.13:42–16:40 · Guest teaching 2/10 Customer Acquisition Cost and Net Churn Economics Nathan drills into customer acquisition costs, direct paid marketing spend versus event travel, and clarifies annual net versus gross churn metrics.16:40–18:41 · Guest teaching 1/10 The Famous Five Rapid-Fire Questions Standard rapid-fire closing questions covering favorite books, sleep habits, and advice to a younger self.0:49–3:35 · Guest disagreement 0/10 CompStak Overview and Monetization Model Nathan asks straightforward questions about CompStak's data crowdsourcing model, pricing tiers, and average annual contract value.3:35–5:45 · Guest disagreement 0/10 Origins, Launch, and Closing Early Enterprise Customers Nathan inquires about IP protection while working at a brokerage firm and how Michael landed early enterprise clients.5:46–9:03 · Guest disagreement 1/10 Finding a Technical Co-Founder and Equity Division Nathan explores equity division with the technical co-founder and drills into the terms of their venture debt financing.9:03–11:10 · Guest disagreement 4/10 Scaling Enterprise Customer Base and ARR Metrics Nathan multiplies customer count by ACV to derive a $5M run rate, directly challenging Michael when he hesitates to disclose exact revenue.11:12–13:42 · Guest disagreement 0/10 Sponsor Break: Nathan Latka on The Top Inbox Following a sponsor message, Nathan briefly inquires about team composition and headcount breakdown across departments.13:42–16:40 · Guest disagreement 1/10 Customer Acquisition Cost and Net Churn Economics Nathan drills into customer acquisition costs, direct paid marketing spend versus event travel, and clarifies annual net versus gross churn metrics.16:40–18:41 · Guest disagreement 0/10 The Famous Five Rapid-Fire Questions Standard rapid-fire closing questions covering favorite books, sleep habits, and advice to a younger self.0:49–3:35 · Nathan pushing back 1/10 CompStak Overview and Monetization Model Nathan asks straightforward questions about CompStak's data crowdsourcing model, pricing tiers, and average annual contract value.3:35–5:45 · Nathan pushing back 2/10 Origins, Launch, and Closing Early Enterprise Customers Nathan inquires about IP protection while working at a brokerage firm and how Michael landed early enterprise clients.5:46–9:03 · Nathan pushing back 2/10 Finding a Technical Co-Founder and Equity Division Nathan explores equity division with the technical co-founder and drills into the terms of their venture debt financing.9:03–11:10 · Nathan pushing back 7/10 Scaling Enterprise Customer Base and ARR Metrics Nathan multiplies customer count by ACV to derive a $5M run rate, directly challenging Michael when he hesitates to disclose exact revenue.11:12–13:42 · Nathan pushing back 1/10 Sponsor Break: Nathan Latka on The Top Inbox Following a sponsor message, Nathan briefly inquires about team composition and headcount breakdown across departments.13:42–16:40 · Nathan pushing back 4/10 Customer Acquisition Cost and Net Churn Economics Nathan drills into customer acquisition costs, direct paid marketing spend versus event travel, and clarifies annual net versus gross churn metrics.16:40–18:41 · Nathan pushing back 1/10 The Famous Five Rapid-Fire Questions Standard rapid-fire closing questions covering favorite books, sleep habits, and advice to a younger self.

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

0:00 · Nathan 46% · guest 54%0:00 · Nathan 46% · guest 54%3:00 · Nathan 16.4% · guest 83.6%3:00 · Nathan 16.4% · guest 83.6%6:00 · Nathan 15.2% · guest 84.8%6:00 · Nathan 15.2% · guest 84.8%9:00 · Nathan 53.1% · guest 46.9%9:00 · Nathan 53.1% · guest 46.9%12:00 · Nathan 37% · guest 63%12:00 · Nathan 37% · guest 63%15:00 · Nathan 38.8% · guest 61.2%15:00 · Nathan 38.8% · guest 61.2%18:00 · Nathan 50.6% · guest 49.4%18:00 · Nathan 50.6% · guest 49.4%
Sharpest disagreement ▶ 9:43 Michael resists revenue disclosure

Michael tries to evade giving an ARR figure by stating they do not disclose revenue, pushing back against Nathan's derived calculation.

 Hardest push from Nathan ▶ 9:45 Nathan challenges Michael on his own numbers

Nathan immediately interrupts Michael's deflection, holding him accountable by stating he simply multiplied Michael's own provided metrics.

 Biggest teaching moment ▶ 7:59 Michael details venture debt economics

Michael educates Nathan on why venture debt at a 4.5% prime-tied rate without personal guarantees is extremely cheap, non-dilutive capital.

 Nathan holds their own ▶ 9:32 Nathan calculates exact ARR run rate

Nathan demonstrates financial mastery by calculating the $5M ARR and $416k monthly run rate on the fly using customer count and ACV.
the scores for every segment, with the reasoning behind each
ChapterTopicNathan as informed peerGuest teachingGuest disagreementNathan pushing backWhy
CompStak Overview and Monetization Model 4101 Nathan asks straightforward questions about CompStak's data crowdsourcing model, pricing tiers, and average annual contract value.
Origins, Launch, and Closing Early Enterprise Customers 5102 Nathan inquires about IP protection while working at a brokerage firm and how Michael landed early enterprise clients.
Finding a Technical Co-Founder and Equity Division 6212 Nathan explores equity division with the technical co-founder and drills into the terms of their venture debt financing.
Scaling Enterprise Customer Base and ARR Metrics 7247 Nathan multiplies customer count by ACV to derive a $5M run rate, directly challenging Michael when he hesitates to disclose exact revenue.
Sponsor Break: Nathan Latka on The Top Inbox 3101 Following a sponsor message, Nathan briefly inquires about team composition and headcount breakdown across departments.
Customer Acquisition Cost and Net Churn Economics 7214 Nathan drills into customer acquisition costs, direct paid marketing spend versus event travel, and clarifies annual net versus gross churn metrics.
The Famous Five Rapid-Fire Questions 3101 Standard rapid-fire closing questions covering favorite books, sleep habits, and advice to a younger self.

Statements from this episode (14)

Assertion Not checkable as stated
CompStak operates in over 70 commercial real estate markets globally
“We're live in over 70 markets across the US and UK over 900 sub markets in over 8000 cities.”
Michael Mandel Mar 12, 2018 ▶ 2:00
Assertion Not checkable as stated
Mandel: CompStak's customers include Wells Fargo, JP Morgan, and Blackstone
“So our customers are some of the world's largest banks, private equity funds, hedge funds, institutional owners. So people like Wells Fargo and JP Morgan and Morgan Stanley we've got, you know, institutional owners like Blackstone, Brookfield, Bornado, Tishma…”
Michael Mandel Mar 12, 2018 ▶ 2:23
Assertion Not checkable as stated
Mandel: CompStak's average annual contract size is around $50,000
“Around 50,000 dollars.”
Michael Mandel Mar 12, 2018 ▶ 2:57
Assertion Not checkable as stated
CompStak closed 2012 with $60,000 in revenue from two customers
“I think we probably closed out 20 12 at 60,000 dollars in annual revenue. We, but we actually, that was from basically two customers.”
Michael Mandel Mar 12, 2018 ▶ 4:52
Disclosure
Mandel: CompStak founders split equity 50/50 down the middle
“We did split it down the middle.”
Michael Mandel Mar 12, 2018 ▶ 6:47
Assertion Not checkable as stated
Co-founder worked full-time for a year while Mandel remained a broker
“Actually my co-founder worked on Comstack for nearly a year, basically full time while I was still working as a broker.”
Michael Mandel Mar 12, 2018 ▶ 6:57
Disclosure
Mandel: CompStak has raised around $20M in total funding
“Around twenty million.”
Michael Mandel Mar 12, 2018 ▶ 7:46
Disclosure
Mandel: CompStak raised $3M in venture debt and paid off half
“We did about three million in venture debt. And why make the decision to do some in venture debt? We've now paid off about half of that.”
Michael Mandel Mar 12, 2018 ▶ 7:55
Disclosure
CompStak secured a venture debt interest rate of approximately 4.5%
“We're tied at prime. I think we're probably at about four and a half percent right now.”
Michael Mandel Mar 12, 2018 ▶ 8:58
Assertion Not checkable as stated
Mandel: CompStak has nearly 100 enterprise customers
“We're a little shy of a hundred customers now.”
Michael Mandel Mar 12, 2018 ▶ 9:09
Assertion Not checkable as stated
Mandel: CompStak roughly doubled revenue over the past year
“We roughly doubled our revenues over the last year.”
Michael Mandel Mar 12, 2018 ▶ 10:41
Disclosure
CompStak spends under $1,000 monthly on direct paid advertising
“It's more along the lines of a grand or less. You spend very little on that.”
Michael Mandel Mar 12, 2018 ▶ 14:53
Disclosure
Mandel: CompStak's customer acquisition cost is roughly $15,000 to $20,000
“Our customer acquisition cost is probably more around, you know, 15 to 20,000 dollars.”
Michael Mandel Mar 12, 2018 ▶ 15:11
Disclosure
CompStak maintains negative 6% to 8% net ARR churn
“We have, you know, negative six percent or eight percent net, net ARR churn. So we expand our customers at a much higher rate than our customers churn.”
Michael Mandel Mar 12, 2018 ▶ 16:02
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