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Jan 16, 2017 · 22m · top-founders

EP 541: VerticalIQ Hits $175k MRR, Helping 140 Banks Prep for Company Meetings with President Bobby Martin

Bobby Martin · 9m spoken Nathan Latka · 9m spoken
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In this episode of 'The Top,' host Nathan Latka interviews entrepreneur and author Bobby Martin, who details how he bootstrapped sales intelligence platform Vertical IQ to $175,000 in monthly recurring revenue serving 140 commercial banks. Martin also shares lessons from his $26 million exit of First Research and insights from publishing his book, 'The Hockey Stick Principles.'

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 47.7% of the talking time here. How this is scored →

Nathan as informed peer 5.0 Guest teaching 2.8 Guest disagreement 0.7 Nathan pushing back 2.7
05100:0010:0020:000:28–3:59 · Nathan as informed peer 4/10 Contest Announcement and Upcoming Episode Teasers Nathan introduces Bobby and investigates his background with First Research, asking about launch dates, business models, and market timing around the 2007 bubble. Bobby answers directly and collaboratively.4:01–8:29 · Nathan as informed peer 5/10 Publishing 'The Hockey Stick Principles' and Book Distribution Nathan probes Bobby on publishing economics, trying to extract the book advance figure, which Bobby declines under confidentiality. Bobby shares surprising findings that traditional publisher distribution vastly outperformed digital marketing.8:30–12:05 · Nathan as informed peer 6/10 Vertical IQ Overview and Novel Enterprise Pricing Strategy Bobby explains Vertical IQ's enterprise pricing structure where they charge per division rather than policing seats, which Nathan quickly grasps and re-articulates.12:06–15:49 · Nathan as informed peer 7/10 Financial Performance, Retention Rates, and Sales Acquisition Nathan calculates ARR from customer count and ACV, then presses Bobby on customer acquisition cost and lifetime value. Bobby calls CAC a loaded question and admits he has not calculated the exact dollar figure per customer.15:50–18:51 · Nathan as informed peer 5/10 Operational Scaling, Revenue History, and Bootstrap Financing Nathan drills down into historical revenue milestones and capital invested, clarifying that the business was bootstrapped with founder capital under $1M.18:52–20:25 · Nathan as informed peer 3/10 The Famous Five Rapid-Fire Questions with Bobby Martin Nathan runs through the standard Famous Five rapid-fire questions, and Bobby provides concise, candid answers.0:28–3:59 · Guest teaching 2/10 Contest Announcement and Upcoming Episode Teasers Nathan introduces Bobby and investigates his background with First Research, asking about launch dates, business models, and market timing around the 2007 bubble. Bobby answers directly and collaboratively.4:01–8:29 · Guest teaching 5/10 Publishing 'The Hockey Stick Principles' and Book Distribution Nathan probes Bobby on publishing economics, trying to extract the book advance figure, which Bobby declines under confidentiality. Bobby shares surprising findings that traditional publisher distribution vastly outperformed digital marketing.8:30–12:05 · Guest teaching 4/10 Vertical IQ Overview and Novel Enterprise Pricing Strategy Bobby explains Vertical IQ's enterprise pricing structure where they charge per division rather than policing seats, which Nathan quickly grasps and re-articulates.12:06–15:49 · Guest teaching 3/10 Financial Performance, Retention Rates, and Sales Acquisition Nathan calculates ARR from customer count and ACV, then presses Bobby on customer acquisition cost and lifetime value. Bobby calls CAC a loaded question and admits he has not calculated the exact dollar figure per customer.15:50–18:51 · Guest teaching 2/10 Operational Scaling, Revenue History, and Bootstrap Financing Nathan drills down into historical revenue milestones and capital invested, clarifying that the business was bootstrapped with founder capital under $1M.18:52–20:25 · Guest teaching 1/10 The Famous Five Rapid-Fire Questions with Bobby Martin Nathan runs through the standard Famous Five rapid-fire questions, and Bobby provides concise, candid answers.0:28–3:59 · Guest disagreement 0/10 Contest Announcement and Upcoming Episode Teasers Nathan introduces Bobby and investigates his background with First Research, asking about launch dates, business models, and market timing around the 2007 bubble. Bobby answers directly and collaboratively.4:01–8:29 · Guest disagreement 2/10 Publishing 'The Hockey Stick Principles' and Book Distribution Nathan probes Bobby on publishing economics, trying to extract the book advance figure, which Bobby declines under confidentiality. Bobby shares surprising findings that traditional publisher distribution vastly outperformed digital marketing.8:30–12:05 · Guest disagreement 0/10 Vertical IQ Overview and Novel Enterprise Pricing Strategy Bobby explains Vertical IQ's enterprise pricing structure where they charge per division rather than policing seats, which Nathan quickly grasps and re-articulates.12:06–15:49 · Guest disagreement 2/10 Financial Performance, Retention Rates, and Sales Acquisition Nathan calculates ARR from customer count and ACV, then presses Bobby on customer acquisition cost and lifetime value. Bobby calls CAC a loaded question and admits he has not calculated the exact dollar figure per customer.15:50–18:51 · Guest disagreement 0/10 Operational Scaling, Revenue History, and Bootstrap Financing Nathan drills down into historical revenue milestones and capital invested, clarifying that the business was bootstrapped with founder capital under $1M.18:52–20:25 · Guest disagreement 0/10 The Famous Five Rapid-Fire Questions with Bobby Martin Nathan runs through the standard Famous Five rapid-fire questions, and Bobby provides concise, candid answers.0:28–3:59 · Nathan pushing back 1/10 Contest Announcement and Upcoming Episode Teasers Nathan introduces Bobby and investigates his background with First Research, asking about launch dates, business models, and market timing around the 2007 bubble. Bobby answers directly and collaboratively.4:01–8:29 · Nathan pushing back 4/10 Publishing 'The Hockey Stick Principles' and Book Distribution Nathan probes Bobby on publishing economics, trying to extract the book advance figure, which Bobby declines under confidentiality. Bobby shares surprising findings that traditional publisher distribution vastly outperformed digital marketing.8:30–12:05 · Nathan pushing back 2/10 Vertical IQ Overview and Novel Enterprise Pricing Strategy Bobby explains Vertical IQ's enterprise pricing structure where they charge per division rather than policing seats, which Nathan quickly grasps and re-articulates.12:06–15:49 · Nathan pushing back 5/10 Financial Performance, Retention Rates, and Sales Acquisition Nathan calculates ARR from customer count and ACV, then presses Bobby on customer acquisition cost and lifetime value. Bobby calls CAC a loaded question and admits he has not calculated the exact dollar figure per customer.15:50–18:51 · Nathan pushing back 3/10 Operational Scaling, Revenue History, and Bootstrap Financing Nathan drills down into historical revenue milestones and capital invested, clarifying that the business was bootstrapped with founder capital under $1M.18:52–20:25 · Nathan pushing back 1/10 The Famous Five Rapid-Fire Questions with Bobby Martin Nathan runs through the standard Famous Five rapid-fire questions, and Bobby provides concise, candid answers.

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

0:00 · Nathan 95.5% · guest 4.5%0:00 · Nathan 95.5% · guest 4.5%3:00 · Nathan 34.8% · guest 65.2%3:00 · Nathan 34.8% · guest 65.2%6:00 · Nathan 18.1% · guest 81.9%6:00 · Nathan 18.1% · guest 81.9%9:00 · Nathan 23.7% · guest 76.3%9:00 · Nathan 23.7% · guest 76.3%12:00 · Nathan 36.4% · guest 63.6%12:00 · Nathan 36.4% · guest 63.6%15:00 · Nathan 31.8% · guest 68.2%15:00 · Nathan 31.8% · guest 68.2%18:00 · Nathan 81.6% · guest 18.4%18:00 · Nathan 81.6% · guest 18.4%21:00 · Nathan 91.6% · guest 8.4%21:00 · Nathan 91.6% · guest 8.4%
Sharpest disagreement ▶ 6:16 Refusal to disclose book advance

Bobby explicitly pushes back against Nathan's direct financial inquiry by citing a confidentiality agreement.

 Hardest push from Nathan ▶ 14:28 Pressing on fully weighted CAC against high LTV

Nathan refuses to accept Bobby's vague response regarding acquisition costs, doing the mental math on a $60k+ LTV and demanding exact spend figures.

 Biggest teaching moment ▶ 7:27 Traditional publishing distribution vs modern online marketing

Bobby reframes the common startup assumption about digital channels, explaining how brick-and-mortar placement and traditional publisher channels drove most book sales.

 Nathan holds their own ▶ 12:06 Instant ARR calculation from customer and ACV data

Nathan demonstrates domain fluency by multiplying 140 banks by $15k ACV to immediately deduce the company's $2.1M ARR run rate.
the scores for every segment, with the reasoning behind each
ChapterTopicNathan as informed peerGuest teachingGuest disagreementNathan pushing backWhy
Contest Announcement and Upcoming Episode Teasers 4201 Nathan introduces Bobby and investigates his background with First Research, asking about launch dates, business models, and market timing around the 2007 bubble. Bobby answers directly and collaboratively.
Publishing 'The Hockey Stick Principles' and Book Distribution 5524 Nathan probes Bobby on publishing economics, trying to extract the book advance figure, which Bobby declines under confidentiality. Bobby shares surprising findings that traditional publisher distribution vastly outperformed digital marketing.
Vertical IQ Overview and Novel Enterprise Pricing Strategy 6402 Bobby explains Vertical IQ's enterprise pricing structure where they charge per division rather than policing seats, which Nathan quickly grasps and re-articulates.
Financial Performance, Retention Rates, and Sales Acquisition 7325 Nathan calculates ARR from customer count and ACV, then presses Bobby on customer acquisition cost and lifetime value. Bobby calls CAC a loaded question and admits he has not calculated the exact dollar figure per customer.
Operational Scaling, Revenue History, and Bootstrap Financing 5203 Nathan drills down into historical revenue milestones and capital invested, clarifying that the business was bootstrapped with founder capital under $1M.
The Famous Five Rapid-Fire Questions with Bobby Martin 3101 Nathan runs through the standard Famous Five rapid-fire questions, and Bobby provides concise, candid answers.

Statements from this episode (10)

Insight
Traditional publishing outperformed online marketing for Martin's book
“I thought that a lot of our sales would come from online, like from people just seeing me in the media and that kind of thing, which we've gotten a fair amount of that. But quite frankly, that's been a little bit disappointing. You know, the traditional bloggi…”
Bobby Martin Jan 16, 2017 ▶ 7:30
Assertion Not checkable as stated
Vertical IQ serves over 140 banks and 30,000 total users
“We have almost a 150 banks, a 140 some odd banks. We have 30,000 plus users of vertical IQ within those banks.”
Bobby Martin Jan 16, 2017 ▶ 10:41
Disclosure
Vertical IQ prices by division headcount with unlimited seats
“We don't charge per seat. We charge according to the number of bankers, for example, in particular divisions who will benefit from our service using it as a pre-call preparation, the number of calling officers. But then we let the bank have unlimited seats. So…”
Bobby Martin Jan 16, 2017 ▶ 10:59
Assertion Not checkable as stated
Vertical IQ's ACV averages $15,000 to $20,000 per bank
“The average contracts between 15 and 20,000 a year, but it, those are quite, quite a range, you know, it starts at 5000 a year and it goes all the way up to a quarter million a year, but on average it's in around that area.”
Bobby Martin Jan 16, 2017 ▶ 12:07
Assertion Not checkable as stated
Vertical IQ maintains a 98% annual customer renewal rate
“We don't lose many customers. It's a really sticky product, and so I'm pretty proud of our 98% renewal rate.”
Bobby Martin Jan 16, 2017 ▶ 12:42
Assertion Not checkable as stated
Vertical IQ consistently hits 10% to 20% operating margins
“10 to 20% operating margins is what we aim for. And we normally reach that, you know, some years we just started in 2011.”
Bobby Martin Jan 16, 2017 ▶ 14:07
Disclosure
Vertical IQ pays its salespeople a 15% commission on sales
“Our salespeople earn a 15% commission, you know, on their sales, and they also get a small piece for the renewals.”
Bobby Martin Jan 16, 2017 ▶ 15:22
Disclosure
Vertical IQ operates with 15 employees and three sales reps
“We only have three salespeople. Okay. We have 15 employees.”
Bobby Martin Jan 16, 2017 ▶ 16:14
Disclosure
Vertical IQ generated $1.4 million in total revenue in 2015
“15 was 1.4 million. Yes. 1.4 million.”
Bobby Martin Jan 16, 2017 ▶ 16:59
Disclosure
Vertical IQ founders personally invested hundreds of thousands to bootstrap
“We put in hundreds of thousands of dollars. I'll say that.”
Bobby Martin Jan 16, 2017 ▶ 17:33
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