Feb 3, 2018 · 19m · top-founders
924 How to Spin a Million Dollar SaaS Company Out of Media Agency
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gold bands on the timeline = statements, start to end. Hover to read, click to jump. CC turns on captions
Host Nathan Latka interviews entrepreneur Matt Britton on how he successfully incubated, funded, and spun out software platform Suzy from media agency CrowdTap. Britton shares tactical lessons on SaaS versus agency economics, cap table structuring, venture debt, and transitioning from influencer services to enterprise market intelligence.
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 33.1% of the talking time here. How this is scored →
Nathan as informed peer 6.4 Guest teaching 3.4 Guest disagreement 1.6 Nathan pushing back 3.6
speaking balance: gold is Nathan, purple is the guest (3 minute bins)
Sharpest disagreement ▶ 5:00 Pushback on influencer SaaS potential
Britton directly rejects the premise that influencer marketing companies can be viable pure-play programmatic SaaS solutions, citing zero 50M-plus acquisitions in the category.
Hardest push from Nathan ▶ 11:25 Latka confronts plateaued growth and debt financingLatka bluntly challenges Britton on whether revenue remained flat between 2014 and the present, forcing them to raise debt instead of an equity series round.
Biggest teaching moment ▶ 8:06 Dissecting reported ARR vs service revenueBritton educates Latka on why headline Inc 5000 numbers were misleading tech-enabled services rather than true programmatic SaaS ARR.
Nathan holds their own ▶ 7:02 Latka references Heyo and 2012 M&A waveLatka leverages his own direct entrepreneurial experience scaling and navigating M&A offers in the 2012 marketing tech ecosystem to question Britton's timing.
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 Guest Matt Britton and Corporate Background | 6 | 3 | 1 | 2 | Latka introduces Britton's background and presses specifically on cap table mechanics when spinning software companies out of agencies. Britton collaboratively explains how the cap table was mirrored and funded by Foundry Group. | |
| Managing CEO Succession and Leadership Transitions | 6 | 4 | 2 | 3 | Latka probes into the potentially awkward CEO succession dynamics and cites early 2011 ARR numbers from TechCrunch. Britton reframes the initial revenue spike, arguing why influencer marketing cannot function as pure programmatic SaaS. | |
| Pivoting CrowdTap to Real-Time Consumer Insights Platform Suzy | 7 | 3 | 2 | 4 | Latka brings in his personal founder experience with Heyo and peers like Buddy Media to ask why Britton didn't sell in 2012, then challenges a reported 16.5M ARR figure. Britton clarifies that much of the historical revenue was services rather than recurring SaaS. | |
| Contrasting SaaS Predictability with Agency Politics | 5 | 5 | 1 | 2 | Latka synthesizes the predictability of CrowdTap versus traditional agency and pure SaaS models. Britton elaborates extensively on the agency politics and lack of meritocracy compared to software product value. | |
| Venture Debt Strategy and Enterprise Business Restructuring | 8 | 2 | 2 | 6 | Latka delivers direct, sharp questions connecting the 2015 venture debt raise to flatlined revenue growth. Britton readily concedes the point, admiring Latka's directness and detailing the strategy behind spinning off Suzy. | |
| Suzy's Financial Growth, MRR Range, and Market Traction | 7 | 3 | 1 | 5 | Latka pins Britton down on MRR brackets between 200k and 1M, successfully negotiating a realistic range for Suzy's early traction. Britton transparently shares customer scale and explains corporate debt constraints on spinoffs. | |
| Enterprise Deal Sizes and Long-Term Agency-Tech Dynamics | 6 | 4 | 2 | 3 | Latka quickly deduces average contract values of 10k to 11k per month based on client numbers and MRR before transitioning into the Famous Five closing segment. |
Statements from this episode (20)
Britton: CrowdTap has raised about $15 million to date
“We've raised to date about fifteen million.”
Britton: CrowdTap's first venture round was about $6 million
“Our first round was, I believe, six million.”
Matt Britton: Influencer marketing will never become fully programmatic software
“Influencer marketing, in my opinion, is never going to become a fully programmatic software solution.”
Matt Britton: No influencer marketing startup has sold for $50M
“There hasn't been one influencer marketing company that sold for fifty million dollars”
Britton: Crowdtap is spinning off agency services and rebranding as Suzy
“So we're taking our creative and our kind of influencer business, and that's staying as crowd tap. And it's gonna be more of an agency model. And then we're rebranding our software platform, Susie as a business intelligence tool”
Britton: In Hindsight CrowdTap Probably Should Have Sold in 2012
“In hindsight, we probably should have, I think that, you know, when you have VC investors, they swing for home runs. They're not about singles or doubles.”
Britton Clarifies CrowdTap Did $16.5M in Total 2014 Revenue, Not ARR
“Well, 16.5 million in revenue.”
Britton: Suzy's revenue is entirely software ARR
“Now I could tell you the business we're doing right now on the Susie side is all ARR. It's all software revenue because it really is a software driven platform where crowd tap in the past was almost like a tech enabled service.”
Britton: The agency model is political, not a meritocracy
“The agency model is not a meritocracy. It's not the best work wins. It's really the people who can play the best politics wins where I think a software business, your product could really stand apart.”
Britton: CrowdTap Revenue Growth Tailed Off as Market Caught Up
“The growth of the company definitely tailed off because the market caught up with crowd tap and the influencer space.”
Britton: Eight-Figure Revenue Businesses Should Use Debt Over Mispriced Equity
“Sometimes you raise debt financing versus equity financing, not so much because you can't raise equity financing, but because you can't have the right valuation. And you, and with a business that has, you know, eight figure meaningful revenue, you're, you have…”
Britton: Suzy has about 75 enterprise customers licensing its platform
“About 75 enterprise customers who are licensing the product from us”
Britton: Suzy will probably not break $1M MRR by year-end
“By the end of this year, probably not, but we're well in our way.”
Britton: Agencies reliant on charismatic leaders face serious scalability limits
“I think it's a danger of an agency when you have a charismatic leaders, you can only be in so many places at once.”
Britton: Suzy Cannot Spin Out Until Shared Venture Debt Is Paid Down
“We have venture debt, so that sits on top of both companies. So you can't spin a business unit off until you pay the venture debt down a but yes, eventually that's the, it will be two separate operating companies because an agency model is completely different…”
Britton: Influencer Marketing Is Enduring but Functions as an Agency Model
“Cause I don't think the influencer marketing space is going away anytime soon. But I do think it's much more of an agency model.”
Britton: Brands Flee to Proven Influencers as Networks Cut Creator Rosters
“And I think that with brands is a flight to safety towards the more tried and true influencers. And you're seeing that with platforms like maker studios that are drastically decreasing the amount of people that are in their network.”