Agiloft's Founder Refused to Give a Revenue Number. Twice.

Colin Earl came on the Latka show twice, four years apart, and refused to give a revenue figure both times. What makes Agiloft’s record worth reading is that the database recorded one anyway — twice — and both numbers are arithmetic somebody else did out loud.

In 2017 he explained exactly why he would not answer, and the reasoning is better than the answer would have been.

You can estimate that each employee fully loaded is going to cost you between a hundred and two hundred thousand dollars. If we stated we’re profitable and we have 52 employees, you’d be able to put a pretty good range on our revenue. If we’re profitable and we have 220 employees, that also puts a pretty clear number on what our revenue is. And we just don’t disclose that.

Colin Earl, CEO and founder, Agiloft

He had just told Latka the team was “more than 50 and less than 250” — a range wide enough to be useless, which was the point.

The two numbers nobody confirmed

Latka did the multiplication out loud anyway, which is the show’s whole method. In 2017: 50 to 250 employees at $100–150k fully loaded gets you “somewhere between five and twenty-five million annual revenue.” Earl allowed only that it was “a fair way beyond five million — we’re into eight digits,” and then widened the band himself to “really between 10 and 50.”

The GetLatka profile recorded $20,000,004 for November 2017. That trailing four is the signature of a synthesised midpoint, and no one on the tape ever says twenty million.

Four years later the same thing happened with a bigger number. In September 2021 Latka reasoned: “More than a thousand customers today at around a $2,000 ARPU puts you at 3 million a month, and annualised it’s about 36 million.” The profile recorded $36,000,000. Fifteen hundred customers times two thousand dollars times twelve months, to the dollar — and Earl had declined to give either the customer count or the ARPU. Asked the average customer spend, he said: “We don’t disclose that information.” Asked how many customers: “I won’t answer that directly.”

What he did answer

Earl gave up growth rates freely, which is a different kind of transparency and arguably a more useful one.

• 2017 — “We’ve been increasing revenue at thirty to forty percent per year for the past seven years,” and separately, “we’re growing at over 40 percent per year.”
• 2021 — “Growth over the past year in terms of new sales has been more than 50 percent, and the prior year was about 40 percent.”
• Net dollar retention — above 100 percent, “for a number of years now.”
• Logo retention (2017) — about 94 percent, with revenue retention over 100 because existing customers buy enough seats to cover the losses.

He also named the constraint that kept the company from spending faster, and it is not the one most founders cite.

We have a problem: we can’t hire people fast enough to address existing customer demand. It is simply a nightmare hiring smart, qualified people in the Valley. We don’t need programmers, we just need people who have attention to detail and natural intelligence — and even there it’s really tough to find the calibre of individual that we need.

Colin Earl, CEO and founder, Agiloft

So Agiloft deliberately underspent on acquisition. The SaaS norm is a willingness to pay twelve months of revenue for a customer; Earl paid six — about $6,000 against a $1,000-a-month average — which meant profitability in the first year. “We’re deliberately spending less on marketing and sales than we could, because if we were to spend significantly more we wouldn’t be able to meet demand.” Against a customer lifetime value of half a million to a million dollars, over a lifetime typically in excess of ten years, that is an extraordinary restraint. Latka’s reaction: “If you can put six grand in an ATM and spit out half a million, you use an ATM all day long.”

The strategic move that actually mattered

Agiloft launched in 1991, took about a decade to pass a million dollars in revenue, and reached ten million around 2015. Earl gave two separate explanations for the shape of that curve, and the second one is the real answer.

The first is capital structure. Bootstrapping meant funding product development out of consulting revenue: “If you bootstrap an organisation you have to develop some working capital, and we developed that by providing consultancy services. We then used that money to fund development of our first product, and then used the money from that product to fund development of the Agiloft suite. So it takes a while.” He added, unprompted: “If I had to do it again, maybe I’d raise capital at the beginning.”

The second is market selection, and it is the one that changed the slope.

Agiloft had built a general-purpose no-code platform and pointed it at the wrong application first. The company did not change what it was. It changed which market it competed in, and that is the move the growth rate records.

The market it chose is expensive to be bad at. “Negotiating and agreeing upon one of these contracts can cost well in excess of a hundred thousand dollars in attorney fees,” Earl said. The customers reflect that: Roche, where contracts are “living documents which imply an obligation on the part of the customer to buy a certain quantity of drugs, reagents each month”; Chevron, for Sarbanes-Oxley auditability; the US Air Force, running it inside their own firewall on a secure network; Cal Poly, provisioning services to hundreds of thousands of students.

Thirty years, then $45 million

In 2020 Earl took money for the first time: $45 million from FTV Capital. By then Agiloft had already reached number one in the Gartner Magic Quadrant’s critical capabilities report — “without having a penny of funding, purely through bootstrapping.”

What he says about that round is unusually direct on a topic founders normally fudge. He took secondary, and he explains the amount by its purpose rather than its size.

The goal wasn’t that I become wealthy. If I simply wanted a ton of money then I’d have sold the company. The goal was that I get enough money that the company can afford to expand rapidly and aggressively without my worrying about it.

Colin Earl, CEO and founder, Agiloft

The generalised advice underneath it is the sharpest thing in either interview: “If you want to grow a company rapidly, you have to be willing to go into the red, because growth is expensive. It is almost impossible to double revenue year over year without going into the red from a GAAP perspective — and that’s, at least for me, a very uncomfortable thing to do. So to do that you need to pull in investment capital. But if you want to be comfortable doing it, you also need to pull in enough secondary so that your retirement is taken care of.”

Millions went to employees as well. Earl had set up an option pool of about ten percent from the beginning — “one of the core tenets of Agiloft is to align the self-interest of the company, the employees and the customers” — and more than doubled it as the company grew. He is still the largest shareholder, and volunteered that this is not the same as owning half.

On valuation he gave a band and nothing more: more than 10x ARR, less than 20x. On the target he was willing to be pinned: a $50 million run rate within 12 to 24 months, which he called “a stretch goal — I think it’s reasonable.” Agiloft’s profile records $52.1 million for November 2023.

Latka asked whether he would sell if Larry Ellison wrote the cheque. Earl’s answer sorts buyers into two kinds.

A check from an organisation that I admire, that treats its employees well, that’s going to grow the business, expand to new frontiers and can do a better job of growing the organisation than I can — I’ll take a serious look at that. A check from an organisation, and there’s a lot of them out there, which are essentially strip-mining businesses, buying it for no more than the customer base, replacing the employees with low-cost alternatives, just keeping it running for a few years as the money flows in — that I probably wouldn’t consider.

Colin Earl, CEO and founder, Agiloft

Asked what he wished he had known at twenty, the man who spent thirty years refusing to tell anyone his revenue said: “If you simply accept what people are telling you as being the gospel truth, you’re never going to be more than a wage worker.”

Sources — Colin Earl interviewed by Nathan Latka twice: episode 954, recorded 15 November 2017, and again 1 September 2021. Revenue, headcount and funding figures from the Agiloft profile on GetLatka, with dates as recorded.