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Jan 11, 2017 · 22m · top-founders

EP 536: HGData $24M Raised, $10M 2016 Revenue Helping B2B Companies Get Accurate Data with Mark Godley

Mark Godley · 12m spoken Nathan Latka · 7m 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 Episode 536 of The Top, host Nathan Latka interviews Mark Godley, Chief Revenue Officer of HG Data, to discuss how the B2B technographics company reached $10 million in ARR, raised $24 million in capital, and navigated OEM channel dynamics while expanding down-market.

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 38.7% of the talking time here. How this is scored →

Nathan as informed peer 4.2 Guest teaching 3.5 Guest disagreement 2.0 Nathan pushing back 2.8
05100:0010:0020:000:28–4:19 · Nathan as informed peer 3/10 Weekly Contest Winner Announcement and Entry Details Nathan introduces the show and Mark Godley before establishing the basic company background of HG Data. Mark humorously plays along with Silicon Valley title tropes and explains his role as CRO.4:19–6:53 · Nathan as informed peer 4/10 Customer Segmentation Breakdown and Revenue Growth Milestones Mark demonstrates familiarity with Nathan's interview format, preemptively rattling off customer counts, ASPs, and historical ARR growth figures. Nathan commends Mark for anticipating all his standard metric questions.6:54–10:44 · Nathan as informed peer 5/10 Managing OEM Channel Conflict and Down-Market Product Strategy Nathan queries whether introducing lower-cost UIs down-market will cannibalize enterprise deals or cause partner channel conflict. Mark explains the strategic difference between OEM back-end integrations and mid-market front-end applications.10:44–14:41 · Nathan as informed peer 5/10 Enterprise Expansion Dynamics, Funding, and Churn Metrics Nathan pushes on MRR and churn metrics, but Mark educates him on why ARR and contract expansions are the only metrics that matter for enterprise data licensing. Mark notes that gross churn is negligible, having only lost one six-figure client in four years.14:42–16:48 · Nathan as informed peer 6/10 Sales Compensation Structure, CAC Dynamics, and Santa Barbara HQ When asked for CAC, Mark admits he does not track the exact figure and claims even the CEO would need the CFO for that. Nathan pushes back, noting that Mark clearly knows CAC is too high given his planned transition to inside sales reps.16:50–21:21 · Nathan as informed peer 2/10 Sponsor Segment: The Top Inbox Feature Pitch The episode transitions through host sponsorship plugs into the rapid-fire Famous Five segment where Mark shares non-business reading habits and life philosophies.0:28–4:19 · Guest teaching 2/10 Weekly Contest Winner Announcement and Entry Details Nathan introduces the show and Mark Godley before establishing the basic company background of HG Data. Mark humorously plays along with Silicon Valley title tropes and explains his role as CRO.4:19–6:53 · Guest teaching 4/10 Customer Segmentation Breakdown and Revenue Growth Milestones Mark demonstrates familiarity with Nathan's interview format, preemptively rattling off customer counts, ASPs, and historical ARR growth figures. Nathan commends Mark for anticipating all his standard metric questions.6:54–10:44 · Guest teaching 5/10 Managing OEM Channel Conflict and Down-Market Product Strategy Nathan queries whether introducing lower-cost UIs down-market will cannibalize enterprise deals or cause partner channel conflict. Mark explains the strategic difference between OEM back-end integrations and mid-market front-end applications.10:44–14:41 · Guest teaching 5/10 Enterprise Expansion Dynamics, Funding, and Churn Metrics Nathan pushes on MRR and churn metrics, but Mark educates him on why ARR and contract expansions are the only metrics that matter for enterprise data licensing. Mark notes that gross churn is negligible, having only lost one six-figure client in four years.14:42–16:48 · Guest teaching 3/10 Sales Compensation Structure, CAC Dynamics, and Santa Barbara HQ When asked for CAC, Mark admits he does not track the exact figure and claims even the CEO would need the CFO for that. Nathan pushes back, noting that Mark clearly knows CAC is too high given his planned transition to inside sales reps.16:50–21:21 · Guest teaching 2/10 Sponsor Segment: The Top Inbox Feature Pitch The episode transitions through host sponsorship plugs into the rapid-fire Famous Five segment where Mark shares non-business reading habits and life philosophies.0:28–4:19 · Guest disagreement 1/10 Weekly Contest Winner Announcement and Entry Details Nathan introduces the show and Mark Godley before establishing the basic company background of HG Data. Mark humorously plays along with Silicon Valley title tropes and explains his role as CRO.4:19–6:53 · Guest disagreement 2/10 Customer Segmentation Breakdown and Revenue Growth Milestones Mark demonstrates familiarity with Nathan's interview format, preemptively rattling off customer counts, ASPs, and historical ARR growth figures. Nathan commends Mark for anticipating all his standard metric questions.6:54–10:44 · Guest disagreement 2/10 Managing OEM Channel Conflict and Down-Market Product Strategy Nathan queries whether introducing lower-cost UIs down-market will cannibalize enterprise deals or cause partner channel conflict. Mark explains the strategic difference between OEM back-end integrations and mid-market front-end applications.10:44–14:41 · Guest disagreement 2/10 Enterprise Expansion Dynamics, Funding, and Churn Metrics Nathan pushes on MRR and churn metrics, but Mark educates him on why ARR and contract expansions are the only metrics that matter for enterprise data licensing. Mark notes that gross churn is negligible, having only lost one six-figure client in four years.14:42–16:48 · Guest disagreement 4/10 Sales Compensation Structure, CAC Dynamics, and Santa Barbara HQ When asked for CAC, Mark admits he does not track the exact figure and claims even the CEO would need the CFO for that. Nathan pushes back, noting that Mark clearly knows CAC is too high given his planned transition to inside sales reps.16:50–21:21 · Guest disagreement 1/10 Sponsor Segment: The Top Inbox Feature Pitch The episode transitions through host sponsorship plugs into the rapid-fire Famous Five segment where Mark shares non-business reading habits and life philosophies.0:28–4:19 · Nathan pushing back 1/10 Weekly Contest Winner Announcement and Entry Details Nathan introduces the show and Mark Godley before establishing the basic company background of HG Data. Mark humorously plays along with Silicon Valley title tropes and explains his role as CRO.4:19–6:53 · Nathan pushing back 2/10 Customer Segmentation Breakdown and Revenue Growth Milestones Mark demonstrates familiarity with Nathan's interview format, preemptively rattling off customer counts, ASPs, and historical ARR growth figures. Nathan commends Mark for anticipating all his standard metric questions.6:54–10:44 · Nathan pushing back 3/10 Managing OEM Channel Conflict and Down-Market Product Strategy Nathan queries whether introducing lower-cost UIs down-market will cannibalize enterprise deals or cause partner channel conflict. Mark explains the strategic difference between OEM back-end integrations and mid-market front-end applications.10:44–14:41 · Nathan pushing back 4/10 Enterprise Expansion Dynamics, Funding, and Churn Metrics Nathan pushes on MRR and churn metrics, but Mark educates him on why ARR and contract expansions are the only metrics that matter for enterprise data licensing. Mark notes that gross churn is negligible, having only lost one six-figure client in four years.14:42–16:48 · Nathan pushing back 6/10 Sales Compensation Structure, CAC Dynamics, and Santa Barbara HQ When asked for CAC, Mark admits he does not track the exact figure and claims even the CEO would need the CFO for that. Nathan pushes back, noting that Mark clearly knows CAC is too high given his planned transition to inside sales reps.16:50–21:21 · Nathan pushing back 1/10 Sponsor Segment: The Top Inbox Feature Pitch The episode transitions through host sponsorship plugs into the rapid-fire Famous Five segment where Mark shares non-business reading habits and life philosophies.

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

0:00 · Nathan 80.1% · guest 19.9%0:00 · Nathan 80.1% · guest 19.9%3:00 · Nathan 14.3% · guest 85.7%3:00 · Nathan 14.3% · guest 85.7%6:00 · Nathan 25% · guest 75%6:00 · Nathan 25% · guest 75%9:00 · Nathan 10.3% · guest 89.7%9:00 · Nathan 10.3% · guest 89.7%12:00 · Nathan 18.4% · guest 81.6%12:00 · Nathan 18.4% · guest 81.6%15:00 · Nathan 51.4% · guest 48.6%15:00 · Nathan 51.4% · guest 48.6%18:00 · Nathan 44% · guest 56%18:00 · Nathan 44% · guest 56%21:00 · Nathan 100% · guest 0%21:00 · Nathan 100% · guest 0%
Sharpest disagreement ▶ 15:43 Mark rejects CAC probing by claiming neither he nor the CEO would know

Mark pushes back against Nathan's insistence on getting a CAC range by claiming that even the company founder and CEO would not know the metric without the CFO present.

 Hardest push from Nathan ▶ 15:56 Nathan presses Mark on admitting CAC is currently too high

Nathan refuses to let Mark dodge the CAC question, pointing out that Mark instantly stated CAC needed to come down, proving he knows the metric is problematic.

 Biggest teaching moment ▶ 10:58 Mark breaks down how enterprise data pilots expand into million-dollar accounts

Mark explains the enterprise SaaS expansion curve, illustrating how initial $50k-$100k regional pilots predictably grow into $1M+ global multi-year contracts.

 Nathan holds their own ▶ 15:56 Nathan corners Mark using Mark's own sales rep economics

Nathan uses Mark's admissions about high rep base salaries to demonstrate that enterprise sales economics cannot support the company's new low-priced mid-market tier.
the scores for every segment, with the reasoning behind each
ChapterTopicNathan as informed peerGuest teachingGuest disagreementNathan pushing backWhy
Weekly Contest Winner Announcement and Entry Details 3211 Nathan introduces the show and Mark Godley before establishing the basic company background of HG Data. Mark humorously plays along with Silicon Valley title tropes and explains his role as CRO.
Customer Segmentation Breakdown and Revenue Growth Milestones 4422 Mark demonstrates familiarity with Nathan's interview format, preemptively rattling off customer counts, ASPs, and historical ARR growth figures. Nathan commends Mark for anticipating all his standard metric questions.
Managing OEM Channel Conflict and Down-Market Product Strategy 5523 Nathan queries whether introducing lower-cost UIs down-market will cannibalize enterprise deals or cause partner channel conflict. Mark explains the strategic difference between OEM back-end integrations and mid-market front-end applications.
Enterprise Expansion Dynamics, Funding, and Churn Metrics 5524 Nathan pushes on MRR and churn metrics, but Mark educates him on why ARR and contract expansions are the only metrics that matter for enterprise data licensing. Mark notes that gross churn is negligible, having only lost one six-figure client in four years.
Sales Compensation Structure, CAC Dynamics, and Santa Barbara HQ 6346 When asked for CAC, Mark admits he does not track the exact figure and claims even the CEO would need the CFO for that. Nathan pushes back, noting that Mark clearly knows CAC is too high given his planned transition to inside sales reps.
Sponsor Segment: The Top Inbox Feature Pitch 2211 The episode transitions through host sponsorship plugs into the rapid-fire Famous Five segment where Mark shares non-business reading habits and life philosophies.

Statements from this episode (10)

Disclosure
Godley: HG Data has 15-20 enterprise clients paying mid-six figures
“We have about 15 to 20 enterprise clients. By enterprise clients, I mean folks that are spending mid six figures with us. Again, the likes of the IBMs, the HPEs of the world.”
Mark Godley Jan 11, 2017 ▶ 4:56
Disclosure
Godley: HG Data has 50 OEM partners spending $80K-$100K annually
“OEM partners who use our data set as part of their product. And those folks are names like the data.coms of the world, the discover orgs of the world, the Dun & Bradstreet's of the world. The predictive vendors like lattice engines and lead spaces and these ki…”
Mark Godley Jan 11, 2017 ▶ 5:13
Disclosure
Godley: HG Data has 100-125 mid-market clients at a $25k ASP
“We probably have a hundred to 125 of those with an average ASP of about 25 grand.”
Mark Godley Jan 11, 2017 ▶ 6:01
Disclosure
Godley: HG Data hits $10M-$12M 2016 revenue, doubling four straight years
“That all adds up to, we'll finish the year somewhere between 10 and twelve million dollars which is, we've doubled the business each of the last four years. So if you roll that back, You know, it was one and a half million, then three, then six, and now 10 to …”
Mark Godley Jan 11, 2017 ▶ 6:13
Assertion Not checkable as stated
Godley: HG Data generates 50% of its revenue from partner channels
“50% of our revenue is direct clients. The other 50% is partners.”
Mark Godley Jan 11, 2017 ▶ 8:34
Assertion Not checkable as stated
Godley: HG Data enterprise accounts expand from $250K to over $1M
“Our renewals on our enterprise accounts go from two 50 to 500 to seven 50 to we have accounts over a million dollars that they're spending with us in year three and four.”
Mark Godley Jan 11, 2017 ▶ 11:47
Prediction Not checkable as stated
Godley: HG Data expects to reach cash flow positive by 2018
“We are losing money by design. We expect to be cashflow positive if things go as planned by 2018, and we have enough cash to get there with a lot in the bank.”
Mark Godley Jan 11, 2017 ▶ 13:31
Assertion Not checkable as stated
Godley: HG Data lost only one six-figure account in four years
“We've had one six figure churn in the last four years.”
Mark Godley Jan 11, 2017 ▶ 14:27
Disclosure
Godley: HG Data pays top enterprise sales reps $200K to $250K
“Most of our sales team, which right now is about ten-ish people of our 80 total employees, you know you know, we're paying these people North of one 50? Definitely North of one 50. North of two 50? For the ones that are performing, yes. Probably not for the ot…”
Mark Godley Jan 11, 2017 ▶ 14:44
Assertion Supported
Latka: DiscoverOrg recently crossed $70M in annual recurring revenue
“They just passed seventy million bucks in ARR at Discover.org.”
Nathan Latka Jan 11, 2017 ▶ 19:27
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