How Clatter Reached $600K ARR with 10 Enterprise Customers and 1 Employee (Interview with CEO Josh Newman)

Introduction and Company Overview

Nathan Latka

00:00Hey, folks. My guest today is Josh Newman. He's an innovative product marketing technology leader and enthusiast. He's the founder today of clatter, a creative automation SaaS platform enabling large businesses to create branded PowerPoint presentations, microsites, and marketing collateral in minutes. The clatter suite is made up of productivity tools, including presentation maker, collateral maker, and a bunch of other products currently used by 5,000 users across 10 enterprise customers. Josh, you ready to take us to the top?

Josh Newman

00:24>> Yeah. Let's do it.

Net Dollar Retention and Revenue Mix

Nathan Latka

00:25Alright. 10 enterprise customers and 5,000 users to me screams net dollar retention of one fifty.

Josh Newman

00:31>> So net dollar retention's good. It's and it it's it's probably is around one fifty, but not for necessarily the reasons you would think. A lot of it's gonna be around that we'll add on professional services to it. So some of it is MRR, but it's a lot of it's around the professional services kinda arm of what we do.

Nathan Latka

00:52So break that down for me. You know, last last month, let's just use August first first, you know, last most most recent full month of data. What percent of your revenue was professional services versus recurring revenue?

Josh Newman

01:03>> So it's gonna be it's it's gonna be probably and it's it's grown over the the the life of of clatter, kind of the four years that we've been doing this. Right now, it's gonna be probably 72% is gonna be in the range of MRR, and the rest is gonna be additional services.

Customer Profile and Use Cases

Nathan Latka

01:22I love the split because when you put service on a customer, they tend to stick longer. So I guess tell me about tell me about one of these customers, if you can. What how how's the customer using you today and how many seats? Like, how how what teams are you going in? The dev team, the engineering team, you know, the marketing team, the sales team, who's using you?

Josh Newman

01:37>> So the our our day to day customers are gonna be the marketing team. The users of this, though, are gonna be split between the marketing team and the sales teams. And so think of it. These are this is these are big organizations. So one of them and when I say 10 enterprise customers, if we're being totally transparent, two of them are actually split where think about an enterprise. Think about a a a a Fortune 25 company.

02:01>> We have a few different customers within that same company, but these are groups that are totally independent. They don't even know each other. So it's the same logo, but I I'll split it up as different customers because they're totally unrelated to each other.

Nathan Latka

02:16Yeah. Yeah. I mean, this is all I mean, I'm seeing sort of a comp this it's almost like a it's like a content management system. Right? You have a branded slide deck. You want everyone to have access at all times so that they can create their own iterations of the master brand guide. Right?

02:29And you need

02:30to do that across many languages, countries, and brand styles and colors.

Josh Newman

02:33>> Uh-huh.

02:34>> Yeah. Would you agree that's Yeah. That's exactly right. And and that's for the presentation maker tool. And then, of course, collateral maker for brochures, microsite maker for landing pages and microsites, summary maker for data heavy kind of upload Excel, JSON, XML, and we'll build you a beautiful on brand looking table chart, whatever you need.

Nathan Latka

02:57Very cool. Okay. So what are these customers paying on average per month to use the technology?

Pricing and ARPU Breakdown

Josh Newman

03:01>> Got it. So from a from a monthly standpoint, the the average per month is gonna be somewhere around probably $5,000, and you're gonna have some customers who are gonna be lower where those might be folks who just use one of the one of the products. You might have some that are gonna be higher where they might use three or four of the different products. And then what what we'll do is if you've got one product that's

03:25>> gonna be around 2,500 a month, but if you're using three or four, it's gonna be around 6,000 a month because we discount kind of a from a bundling standpoint.

Nathan Latka

03:34And do you have PowerLaws in your customer base? What does your largest customer pay per month?

Largest Customer and Service Model

Josh Newman

03:37>> Our largest customer pays about $10,000 a month. And what what they're doing, though, is they're they're using us. So using the PowerPoint builder example, they're using us from a full service model. They'll email one of our project managers and just say, here are all the slides. They'll do it a few times a week. Here are a bunch of slides. Put them up for us. We've got other customers where it's self serve if you want it to

03:59>> be. This particular client, they're just they're busy. They've got ton of content. Some of the others, they'll manage it all themselves. We don't even know what they're doing on the system. Oh,

Nathan Latka

04:09what's going on there, YouTube? Good to see you guys. Now imagine this. You love watching these interviews with SaaS founders, but imagine if we took all of the valuation data out from over 2807 interviews I've done manually. Saves you a lot of time. Well, we've done this. We've built it into the beautiful interface inside of Founderpath. Check this out. I'll show you how you can access this in a second, but you log in, you connect your

04:32Stripe account, you see your valuation real time. You can see what it changed over the past eighty eight days and even set goals for valuation this year. Now the secret evaluation is there's many different ways to value a SaaS business. So the reason you're gonna see three or four different valuations inside of your Founderpath dashboard, this is all free by the way, is because depending on who's doing the buying of your SaaS company, you're gonna get

04:56a different valuation. A VC is gonna pay a different valuation. Private equity firm is different. If you're gonna do a minority sale, that's different. And if you sell the whole business, that's a different valuation. You can see all those when I hover over here. Right? So the teal is what a VC would pay. Yellow is what private equity And red is if you sold the whole thing outright. Now what's cool about this is this is not

05:18built off random data. Again, you guys hear these interviews on YouTube. All these datas are built from real time valuation data points founder share with us on the show. So traction 1,200,000 seed round 3.7 raise. They sold 22% of their business. Go in here and filter by the event. Maybe you only wanna see companies that have sold the whole business. Well, here are a bunch that have been acquired the valuation and the multiple. Maybe you're going

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06:32interview. That's very cool. Okay. When did this all get going? What year?

Founding Story and First Customer

Josh Newman

06:36>> So it started in 2019 and actually started with a a bespoke model where we super long story short, chief marketing officer of of one of the the largest divisions of this particular customer came to me and just said, Josh, we've got thousands of PowerPoint slides. We don't know how to organize them. The sales team is struggling. There's no consistent messaging, no consistent branding. Help us. With my very rudimentary PHP skills, and I'm not a developer, put

07:05>> together just a really rough proof of concept, sold it through. They said, we love this. We wanna build this. They gave us 250,000 to build out this solution. So I think it was kind of a professional services piece at the time.

Nathan Latka

07:19Wait. But hold We can't just glance over that. That's huge. I mean, some people go go sell 20% of their business, and that's their angel check. How'd you convince one of your first customers to write that kind of check up front?

Early Development Struggles and Team in Poland

Josh Newman

07:28>> Sure. So my my background is I've been I've been running an agency for since 2002. And so it had been a customer of ours for years, so we had built the trust, but they saw what this could do and treated it like a project. And so when when that kind of funding came in, it gave us the opportunity to build it. Our cost to build it was half that, so $125K. This launched within just

07:54>> a few months of it launching, they said, we love this thing. It took off. People were huge fans of it. So they said, wanna make some big improvements to this. At the same time, sold it through to another customer. So I was able to take that $125,000 plus another $125,000 and went to the group that built the bespoke model and said, can you build an enterprise version? They said yes. They weren't actually able to, so we

08:20>> ended up kind of hitting a little bit of a you know, of an oil slick.

Nathan Latka

08:24This was 2020?

Josh Newman

08:26>> This was in '20 end of twenty twenty, beginning of twenty twenty one is when we found out that that

Nathan Latka

08:33So how much how much money did you lose on that?

Josh Newman

08:35>> So we we actually didn't lose any money. We actually we just lost a lot of opportunity cost. There was no real money loss because what we had working was was good, but we had one very understanding customer who, even though we were six months late on delivering a product, they understood they weren't under a real time crunch, a little bit of luck there. But at the time, brought in a CTO. He was able to to kind

09:01>> of a from a fractional CTO standpoint, he was helping coach the team that we were using. It was a team in India. They just couldn't get it done. So we transitioned over to a team that this fractional CTO had used on a regular basis, kind of his team, and they're based in Poland. And they've really kind of come together. They've brought it up to enterprise standards. And really just as of about a month ago, we were

09:24>> able to be in a position where we could say, okay, now we've satisfied all the customer agreements. I can go and start to to sell this thing, you know, in the marketplace.

Nathan Latka

09:33Who is the who's the Indian firm you're using now today?

Josh Newman

09:37>> No. So that we're no longer using the firm in India. The the t it's a team in Poland. It's not it's just it's somebody that the fractional CTO, it's a group of a group of folks that that Do they have a website though? Not that I know of.

Nathan Latka

09:50I see. Okay. Okay. Got it. Okay. So you get that fixed though. Scale how many customers now today?

Josh Newman

09:55>> So today, we got that. That's where we have the 10 customers.

Nathan Latka

09:58Oh, amazing. Okay. So can I take ten ten customers times the 5,000 ARPU? You're doing about $50,000 a month in revenue?

Current Customer Count and ARR

Josh Newman

10:04>> Yeah. Exactly.

Nathan Latka

10:05Yep. That's amazing. Okay. So $600,000 in ARR. And where were you exactly a year ago? Do you remember?

Josh Newman

10:10>> So I I knew you're gonna ask that. So we were so from a

10:15>> from an ARR standpoint, we were at $370,000 a year ago, but total total revenue was $675,000 last year because we were doing more from a professional services standpoint. This year, it's changed a little bit. We're doing a little bit less, I think, from a professional service standpoint,

10:37>> but the the the MRR has gone up. So that's

Nathan Latka

10:40that's What do think total revenue this year will end up being?

Josh Newman

10:42>> We're looking somewhere probably around $850,000 when the year's when the year's done.

Nathan Latka

10:46But much higher percent is true recurring SaaS.

Josh Newman

10:50>> Yeah. Now it's at 71%, and a year ago, it was 55%.

Nathan Latka

10:55That's amazing. You know all the you must listen to you must listen to the show. You know all the answers.

Josh Newman

10:59>> Often.

Nathan Latka

10:59Often. That's amazing. Okay. Cool. So $30,000 up to $50,000, now more pure play SaaS. That being said, we love professional services. It does a lot of things for your customers. Now how do you deliver those professional service? How many folks are on your team today, and how many just do services?

Team Structure and Agency Relationship

Josh Newman

11:13>> Sure. So so to split it up, the our our team, I'm the only full time person on clatter. We've got Media Tavern, is my agency. They're the they're the folks who and and Media Tavern does a really nice job of kinda running itself. I I I do business development and some of the high kind of the the the customer service with some of our our higher end clients. But the the professional services, we'll just subcontract out

11:37>> to Media Tavern. So it's something that we're already doing. We're already designing PowerPoint slides, microsites, flyers, brochures.

Nathan Latka

11:44You're the only full time employee at the SaaS company, is doing almost $600,000 in ARR?

Josh Newman

11:48>> That's correct.

Nathan Latka

11:49Wow. Okay. So how are getting your engineering done today? Where's the engineer?

Josh Newman

11:52>> It's it's all that's that's the team in Poland. It's a subcontracted team.

Nathan Latka

11:56Oh, but but they don't have a website or anything?

Josh Newman

11:58>> No. No. It's just it's yeah. It's How'd you how'd

Nathan Latka

12:01you find them, though? How'd you find the person in Poland?

Josh Newman

12:03>> So my my fractional CTO, who's just a guy in in Westport, Connecticut where I live and where Clatter's based, just a a local guy that I've known for years, and he had some availability. He knew my struggles with the team in India. He said, I'll come in. I'll help you out. He brought his team in. So Which was their Polish team? Yes.

Nathan Latka

12:23Oh, interesting. Okay. So he's not he's not full time, but he's how you get all the development work done.

Josh Newman

12:29>> That's correct.

Nathan Latka

12:31I this is amazing. Okay. And so $50,000 a month. Oh, again, we're just talking the clatter, not Media Tavern. $50,000 a month revenue on clatter. I imagine you're very profitable.

Profitability and Capital Allocation

Josh Newman

12:40>> Yeah. It is it is profitable. At this this year, we'll do looking at my spreadsheet, we'll do about $274,000 in profit.

Nathan Latka

12:48And how do you put your capital allocation head on for a second? As a founder, how do you think about taking that profit? Do you take it out as a dividend and go buy real estate? Do put it a Media Tavern or do reinvest in the software company? What do you do?

Josh Newman

12:58>> So we'll I'll take a little bit of it out, but for the most part, I'll put it back into the I'll put it back into the company. Now that we've been like I said, we we're only about a month out from a place where I was thinking, alright. The product is is good enough where I can go to market. It's gonna be impressive. I finally have a demo that I can go and start to show to

13:18>> people. So we've actually we've put in reserves about 200 k where that can be used for a rainy day, can be used for some marketing that we're gonna do. So instead of needing to go and raise immediately or or needing to take some sort of debt, we we have a little bit of money to play with for the job.

Nathan Latka

13:37That's great. Okay. So bootstrap today, a lot of profits, one on the team. So how many here's a good question. How many people last month did you pay at least a dollar contract or, like, including your guy in Connecticut?

Josh Newman

13:50>> Okay. So

Contractor Headcount and Systems Discipline

Josh Newman

13:54>> including some of the folks at Media Tavern who would have done the professional services, it's probably eight or nine.

Nathan Latka

14:00Okay. Interesting. Interesting. I'm just I'm always hunting for who's gonna build the first, like, 10,000,000 or 50,000,000 ARR company with one full time employee. So you're you're on your way.

Josh Newman

14:09>> For a 100,000,000. I hear your I hear your teasers.

Nathan Latka

14:11Yeah. Yeah. You're you're you're you're on your way. I mean, it's it takes so much systems discipline to build around contractors because the way you get a a cheap contract, cheap labor to perform at a plus levels is you give them a great system to follow, building the system's a lot of work.

Josh Newman

14:27>> Oh, for sure.

Nathan Latka

14:28Yeah. But but you're sort of leaning into the development side systems. You're leaning on this guy in Connecticut. What about marketing and sales?

Josh Newman

14:34>> So that part we haven't I I haven't gone down that road yet. It's part of it that is my background a little bit because that's what Media Tavern does. So got a plan in place. Right now, it's just figuring out kind of where do we where do we wanna put the money, what's gonna be kind of our our next approach.

Nathan Latka

14:52Mhmm. Mhmm.

Josh Newman

14:52>> So that's

Nathan Latka

14:54okay. Before we wrap up with the famous five here, how are you getting you know, obviously, you can sell your agency customers on the SaaS product, but then you gotta find a new growth channel. Right? So how how are you getting new customers today?

Growth Channels and Go-to-Market Plans

Josh Newman

15:03>> Yeah. So so we what we're gonna do is I'm starting with from from really the floor up. So I'm gonna be starting with the just my my who do I know list. So going to folks that I know within my network, we're working actively on SEO. Pretty soon, I'm gonna do I'm gonna I'm gonna take the the Product Hunt approach, which I I know is you you've talked a little bit about that. So I think it's

15:29>> I think it's some of those. I'm gonna look at affiliate deals. I think a big one too, agency partners to be able to get literally other professional services firms. And if if this needs to be a white labeled product, if it's something they can just sell in, and we can figure out what percentage and, you know, how do we want to do that kind of, you know, over the first year or two of some sort of

15:50>> affiliate fees, I'm thinking that's gonna be the approach. And kind of my next move is to bring on kind of a a fractional CMO to to kind of listen to my ideas and and kinda help me pull it all together.

Famous Five Rapid Fire

Nathan Latka

16:01That's awesome. Well, we're certainly rooting for you. Hope you come back around a year and give us an update. But in the meantime, let's wrap up here with the theme that with the famous five. Number one, favorite business book.

Josh Newman

16:10>> Favorite business book. Gonna be the 10% entrepreneur by Patrick McGinnis.

Nathan Latka

16:13Oh, okay. 10% entrepreneur.

16:14Number two, is there a CEO you're following or studying?

Josh Newman

16:17>> Yeah. I love what Melanie Perkins at Canva is doing, and it's it's sort of loosely related to my world too.

Nathan Latka

16:22Number three, what's your favorite online tool for building clatter?

Josh Newman

16:26>> I'm gonna say Google Suite and Jira.

Nathan Latka

16:29Yep.

16:30Number four, how many hours of sleep do you get every night?

Josh Newman

16:31>> About seven.

Nathan Latka

16:33And situation, married, single, kids?

Josh Newman

16:35>> Married with three kids.

Nathan Latka

16:37Wow. Busy guy. How old are you?

Josh Newman

16:39>> I'm 46.

Nathan Latka

16:4046.

16:41Last question. Something you wish you knew when you were 20.

Advice and Closing Thoughts

Josh Newman

16:43>> Man, learn to code the right way. Don't be some sort of hack to build MVPs.

Nathan Latka

16:48So funny. All the engineers say learn to sell and all the sales and those people say learn to code. Right? It's just it's the nature of SaaS. Guys, clatter here, incredible story. Start off as an agency. They still run the agency. Right? The Media Tavern company. Now though clatter.io helps you launch, you know, your presentation templates and apply one brand style guide to thousands of presentations that you're building. They've got 10 enterprise customers today paying $5,000 a

17:10month on average, 50,000 a month in revenue up from $30,000 just a year ago. They've got about 72% of the revenue coming from pure SaaS, the other professional services, which is great. It's allowed them to stay profitable today and also bootstrapped. A lot of cash in the bank. Very profitable. Team of one. He's got nine contractors he pays on the side as they look to continue to scale. We'll see what happens next. Josh, thanks for taking

17:29us to the top.

Josh Newman

17:30>> Thanks, Nathan. I'll see you in New York in March at

Nathan Latka

17:32Let's SaaS go, man.

17:33See you there. Take care.

Josh Newman

17:35>> Awesome. Thanks, Nathan.

Nathan Latka

17:38One more thing before you go. We have a brand new show every Thursday at 1PM central. It's called Shark Tank for SaaS. We call it deal or bust. One founder comes on, three hungry buyers, they try and do a deal live and the founder shares back end dashboards, their expenses, their revenue, ARPU, CAC, LTV, you name it, they share it. And the buyers try and make a deal live. It is fun to watch every Thursday 1PM

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