Clutch revenue, CEO Matthew Hager, team size, customer count, churn, and more in 2022.

just got done editing this interview you guys are gonna love it before i do that though i want you to know that i'm going to be in the comments for the next 30 minutes or so answering your questions if there's additional questions you want me to ask the ceo next time i interview them leave them below or if you're just loving the data points i get ceos to share click the thumbs up button below that's your way of telling me you're loving this stuff and i'll get you more of it additionally again i'll be in the comments answering any questions you have all right for 30 minutes enjoy the interview hello everyone my guest today is matthew hager he is the founder of a company called clutch began writing code at the age of eight and at 20 he started a company called poetic one of houston's leading technology agencies now a ceo of clutch he's working towards his lifelong passion of making building software faster and easier than ever before when he's offline get this he spends time with his wife of 11 years four kids 17 chickens matthew what are you on 17 chickens and two dogs amazing matthew you ready to take us to the top i am let's do this have you taught the chickens to write code that's the question uh we haven't attempted that yet but i don't know they're they're they're not the smartest uh creatures i'm not gonna be able to do it all right so you set the context here for us is is this an agency that helps people launch an mvp like a code mp quick or are you actually building a sas platform yourself so we're building a sat platform uh but it started in the agency and so i think this is a great case of uh building a solution for a definite need okay so we spent tell us how yeah tell us how you use this in the like tell me how you built the agency and when you realize this thing you want to spin out as a sas product yeah definitely so i started the agency when i was 19 um and grew to about between 40 and 50 people depending on you know what where our demand is and i just found us creating the same things over and over and over again uh so we started hunting for a better way to allow what designers create which currently today is pixels uh how can we make that translate into final products easier we've actually you know you've had a vlad from webflow on your on your podcast yeah so uh we use webflow uh in the past and it worked great but we found that if you want to build apps things beyond web sites that it became limiting so our goal was basically to build squarespace or webflow or a wix or one of those products but that could actually build enterprise level applications and when you say apps you're talking iphone apps it could be iphone apps could be web applications um things that are beyond a simple website maybe with a login or a database that you can search that kind of thing okay good so that'll we're gonna get into that here in a second give me a sense of the agency so you launched it when you were 19 what year was that being 20 2007 2007. okay and you grew up to 40 or 50 people and what year do you stop the agency to focus on the sas um 2019 end of 2019. okay so just last year now was the agency was the agency declining when you shut it off last year or was 2019 your best year at the agency it was uh every year at the agency was actually the best year so in the 2019 um we did over 5 million in revenue um and you know it was great i actually my partners actually were really wanted to keep it going so they were able to buy me out and so kind of everybody won which is great this is fascinating okay so if you listen to enough episodes you know that one of the things i see all the time the most successful sas founders almost always come out of an agency but the struggle from shutting down or getting out of the agency to launching the sas product is where most of these die great smart people get stuck in an agency because it's pumping off cash they never have the they never have the risk they have the appetite to launch the sas company so be very valuable to the extent you can to share how you actually business-wise made this work so there were three of you that had the agency in 2019 you knew you wanted to spin out and start building a sas company is that accurate that's correct so what'd the conversation sound like hey fellas we're doing five million buy me out i mean how did it work well so i was draining a lot of our profit into the product and uh so right off the bat i was i had the most equity the partner with the second most equity really wanted to keep doing the agency model and he's like this thing is an atm machine it grows every year like why focus and do something risky and i think i was burnt out i was bored i've been doing it for 12 years and so there was sort of alignment he'll take it he'll keep running the uh the machine and then i would split off and go uh buy you know for the amount that we've invested i would buy the product out and we go our separate ways it did take well over a year so my advice is you need to find somebody first off so let me back this up i had to hire a ceo who could take over for me okay so you were the ceo at the agency i was the ceo uh and while we had um people doing most of the things we didn't have somebody who could basically fill my shoes yep so first thing is you spent all this time making yourself indispensable then if you want to do this you need to make yourself dispensable you have to do the opposite so i'd do that for a year and then convince my partner that we should go our separate ways which i did and then the next thing we had to do is you need to figure out how to make the agency actually worth something because if if your partners obviously know that you want out there's no vested interest in paying you what you might think it's worth so the next thing i had to do was shop it around and find other people who are highly interested and get other offers on the table once i was able to get a few offers on the table that was able to set a price because agencies are extremely hard to sell um what were you able to get i mean most agencies i've seen sell it's you know you're lucky to get 1x ebitda i mean is that kind of the offers you were seeing um i actually was able to get right around one times revenue wow that's impressive so you basically had like a four or five million dollar offer that you were used to set the valuation of the company yes but it included it included um the amount that we had invested into the product and so after selling then i had to come back with some of that and buy the product back out i see i see and how much had you sunk in money had you sunk into building the product at that point uh in total about 600 000 okay okay interesting now this was your baby i mean right you founded the agency when you were you know back in 2007 right so i mean did you own more than 50 of the agency just yourself i did interesting okay so and this should be clear there were three parties negotiating here or two parties you and a partner well just me and the partner that owned the second um the second most amount because between the two of us we had the the majority vote okay so like how much like 70 80 between the two of you uh between the two of us we had over we had about yeah 80 okay fair enough got it so the third partner over that was do they just go along with the other partner that's still running the agency um no the he got bought out as well so he got drug along through it um which is he with you know on this ass product no he's not but we're still great friends he was the original partner that's been on since the beginning interesting okay so so if you owned more than 50 personally yourself the second person owned somewhere between kind of 20 and 40ish percent you had to set the value of the agency so you went and tried to basically sell it get offers you got an offer for somewhere around 5 million which is impressive 1x the top line which means that your partner would have had to come up with something north of 2.5 million dollars to essentially buy you out how did that work um well without disclosing who the partner is in this um they're a massive he's a presidency of a really massive company already so they basically leveraged that company bought the agency and then integrated it into the into the bigger entity i see okay so you essentially got something north of 2.5 million in cash of which you had to take 600 000 of it to go buy back the code that you want to spin out as a sas company that's correct i see okay so through all of this you essentially net call it you know 1.8 ish million right you now have your sas company you have the code the early product you put 600 grand into it where did you find the people did you take engineers from the agency no so um i think this is another great thing for people to hear um uh whenever i got started on the mission i decided that at this company i was only going to find other people who are already on this...