How Code42 Grew Its Insider Threat Product Past $50M ARR, Then Sold CrashPlan for $250M (Interview with CEO Joe Payne)

Introduction and Financial Overview

Nathan Latka

00:00Guys, last year, code42 with their combined products hit a $120,000,000 of revenue. They sold off a 50,000,000 or sorry, a $70,000,000 revenue stream for $250,000,000 to a private equity group. Joe's now in a very good defensible position with a bunch of cash on the balance sheet and the product left behind, which is a product they're very excited about at code42, doing still $50,000,000 of revenue that was a year ago, targeting 20% year over year growth. We'll

00:20put them if they hit it at 60,000,000 in ARR this year. We'll see what happens there. They've got 800 customers on that product, several paying more than 1,000,000 per year, which is great. 220 folks on the team, 30 quota carrying reps as they continue again to build products here to make sure that internal employees don't accidentally or or intentionally take files from your company into their next gig. Hey, folks. My guest today is Joe Payne.

00:41He's the president and CEO of code42, a leading data security company that focused on reducing the risk of data leakage from insider threats. With more than twenty years of experience as CEO, he's a proven track record leading high growth technology companies over a long period. Previously, he served as CEO of Eloqua, eSecurity, eGrail, and as president of iDefense. Joe, you ready to take us to the top?

Joe Payne Background and Code42 Mission

Joe Payne

01:01>> Let's go.

Nathan Latka

01:02Alright. So code42, I guess help us understand how you're helping big I I assume SaaS companies or companies in general prevent insider threats. Is it social engineering? Is it team training? Is it code exclusively? What is it?

Joe Payne

01:15>> Yeah. It's really interesting, Nathan. A lot of security is focused on the external threats. It's on the bad guys on the outside. And that's it's easy in the sense that you can when somebody tried to breach your network, they are a bad person. And you can hit them with a hammer, and you can isolate their network traffic or their machine or something like that. And security people are really attuned to those kind of threats. And they're

01:38>> growing and they're a big deal and we need to pay attention to them. However,

How Insider Threats Drive Data Loss

Joe Payne

01:43>> if you look at what actually happens in terms of data loss in an organization, most data loss actually comes not from external actors, but from insiders, from employees, from contractors. Sometimes malicious, sometimes accidental, sometimes sort of in the middle. And so what we see is that about 60% of employees admit that they took data from their last company to help them in their current job. And that's the 60% that admit. And our data pretty much shows

Building the Insider Product from Scratch

Joe Payne

02:13>> that it's almost 100% of people, especially when they leave a job, take a bunch of data with them. So we founded this company inside another company. We founded this product called Insider. We built it from scratch starting about five years ago to really tackle that problem and give visibility for security people into, hey, who's moving stuff to Dropbox? Who's putting stuff on a thumb drive? Who's opening up a window in Gmail and emailing themselves some source

02:42>> code or customer lists or things like that? And so we built this product to give great visibility. And also, we're people that like building great cultures. So part of what we've come at this is with a strategy to help course correct employees and contractors to not do things they shouldn't do. Maybe not go against their, not be their worst self and take a bunch of things they shouldn't. And so we provide, part of what we do

03:11>> is also provide a lot of education and positive reinforcement for people to do the right thing. So that's a key part of our strategy also.

Pricing Model and Product Features

Nathan Latka

03:20Understood. And what do you charge for this technology on average per month or per year?

Joe Payne

03:26>> Well, we sell to organizations from as few as 200 people. Our largest customer has over 120,000 employees. So what we charge really depends on your size. But think about it as maybe

03:42>> a $100 a year, a $120 a year per employee. That's just a good rule of thumb. But obviously, it depends on the sophistication of the product that they buy, many features they buy, etcetera. I mean, our product, as an example, connects to things like salesforce.com. That's an option you can have. So you can see who's exfiltrating data using Salesforce. Our product connects to your OneDrive, your G drive account to see who's publicly sharing documents that they

04:09>> shouldn't share there because that's where all our data sits. Product makes tons of sense.

Nathan Latka

04:14We hear about this all the time. I guess just to hone in there a bit though, a company with 120,000 employees using you, if you build them the full rate of a $100 per seat, you're doing the same math I am. Right? We'd love for you to be making 12,000,000 a year on that contract. Maybe you are. What would you say the average though customer paying you is paying per seat? Is it more like maybe 20

04:33per seat, 50?

Joe Payne

04:34>> Oh, no. No. The average is closer to $80 a seat. So, you know, there's there's companies that are paying us more than that, obviously, but and there's companies that buy a 120,000 seats. They they get the price they get a better price as you would expect. So, it's it's all of a map. But we have a number of multimillion dollar a year customers for sure. And, you know, this is a multimillion dollar problem. It's, our research

04:58>> shows that the average breach costs an organization $16,000,000. So a big company is gonna pay a lot of money if they have a breach from an insider. So we're we're a small drop in the bucket compared to that.

Nathan Latka

05:12Oh, what'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 2,807 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

05:35your Stripe 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

05:59get a 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

06:21not built off random data. Again, you guys hear these interviews on YouTube. All these datas are built from real time valuation data points founders 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

06:47going out right now and you're raising your seed round. We'll go in here and look at all this recent seed deals that went down, what they raised, what valuation they raised at and what percent that they sold. There's never been a larger dataset of SaaS valuations than what you can get now inside of Founderpath. And we're thrilled to bring it to you. All right, We're gonna go back to the YouTube video here in a second, but

07:09if you wanna check this tool out, if you wanna jump in and sign up, you can check it out for free to get your valuation at this link. This link, founderpath.com/products/valuations. Or if you go to founderpath.com and hover over products, click on get your valuation here, and go ahead and sign up to give it a whirl. Again, all that valuation data live right inside the platform. I hope to see you there. Alright. Let's jump back into

Sweet Spot: Mid-Market Buyers

Nathan Latka

07:35the interview. That that makes sense. And what would you say you know, you have teams as small as 200 and as big as a 120,000. What would you say your sweet spot is? A thousand person team? What would what an average be there?

Joe Payne

07:45>> Well, you know, Nathan, the thing I love about SaaS software is it's democratized software for everybody. So the same awesome product that I'm giving people, you know, at a 120,000, I'm giving to a 200 person company. So I'm giving them that same power and capability. So I'm not gonna define a sweet spot per se. I will say the people that are buying fastest today from us are mid market companies. So think of that as companies between

08:13>> sort of 1,000 to 5,000 employees, because honestly, they're making fast decisions today, and it's much easier for them to make decisions. Today, in this economy, big companies are taking forever to make a decision on new technology purchases. So again, if you talk about who's buying today, I would say the sweet spot is in that 1,000 to five five thousand.

Nathan Latka

08:33Sweet spot or medium. I understand there's obviously edges on both sides, but a thousand person company wanting to side up with with Joe Payne's code42, you know, paying $80 a seat. We can sort of think about, okay, these average contract values are called 80 to 120 k on average, something like that.

Joe Payne

08:49>> Yeah. That's right.

Nathan Latka

08:50Give me more of the backstory here because you said something interesting. You said you started this inside of a company called inside. Did you lead the spin out or help me understand how you got this intellectual property outside of a parent co?

Origins: Joining Code42 and Pivoting from CrashPlan

Joe Payne

09:00>> So so I joined a company called CrashPlan, in 2015. Or it was called code42, but the product was called Crash Plan. It was an endpoint backup product, and the board hired me to figure out what we were gonna do with that product long term. And that's an endpoint backup product. So basically, think backing up all your data from your laptop into the cloud. And the idea was that, look, that long term is going to go

09:24>> away because most people keep their data in the cloud. Today, you keep your data in OneDrive, you keep your data in G Drive, etcetera. And so we set out to figure out how we could use all the skills we had to build a company that added a lot of value in the market.

Nathan Latka

09:37And what year was that?

Joe Payne

09:38>> That was 2015. And so we really spent a lot of time doing research. And one of the things we discovered is that the DLP market, the data loss prevention market, was ripe for disruption because everyone that we talked to hated their DLP. And that product didn't work and they had spent a lot of money on it, but they weren't actually using it and they weren't solving the problem. And so we built a product, we launched it

10:02>> in 2017 and we've been growing it pretty aggressively since then. We grew it enough, we're over 50,000,000 in ARR last year on that one product, on the new product.

Nathan Latka

10:13You said 50,000,000, right?

Joe Payne

10:15>> 50, yeah. So that was enough for us to feel comfortable to, we actually then sold the crash plan product. So we incubated this idea inside a company with what I would call an entirely new founding team, a founding technical team, etcetera. We built this new product, we grew that new product, and then last summer we sold CrashPlan to a private equity firm. And basically, we don't do that anymore. We only do this new thing. So we're

10:44>> completely focused on insider threat and and data protection now.

Nathan Latka

10:49Okay. Got it. Got it. Got it. Got it. Okay. So code42 no longer has CrashPlan. A private equity group bought that. I think it was Mill Point Capital. Right? Did a carve out there. Took that on. Okay. And why get rid of that if it was just like printing money? Mean, it sounds like it was a really great business.

Why Code42 Sold CrashPlan for $250M

Joe Payne

11:04>> It was a good business, but it was a declining business. And the people that you sold to in that business were IT people, and you were selling to old organizations that hadn't moved to the cloud yet. So you could see where that business was going to go long term. And also we were selling now to security people. So our focus is on a completely different buyer solving a completely different problem. And one thing I would tell

11:29>> any entrepreneur is you've got to be focused. If you want to disrupt an industry, if you want to win in a space, you can't have lots of different products doing lots of different things. You can do that when you become bigger and you're CrowdStrike or you're GE or you're some large company, you can have lots of different products in your bag. But if you wanna disrupt the market and win in that market, you better be very

11:54>> focused on it. So that's why we did that. It made a lot of sense for us and we sold it for $250,000,000 so we That's cash. On the balance sheet.

Nathan Latka

12:01Yeah. That's great. Okay. So that's all on the balance sheet now. So I guess what was left behind though at code42? Mean, was there like no revenue after the 50,000,000 was sold off or what was left?

Joe Payne

12:11>> Sorry, Nathan. You got the I messed you up on the numbers. The 50,000,000 was the insider product. It's the product that we kept. That product is at 50,000,000. The old, crash plan product was another 70,000,000 or so of ARR. So we were 120,000,000, we got down to 50,000,000. So that's what's

12:32>> belief once we got to 50,000,000 is we should focus entirely on this new product and we should sell the crash.

Nathan Latka

12:38I see. I see. Okay. This makes loads of sense now. Got it. Okay. And and so where do you think the code42 product will end this year in terms of revenue? I mean, we get up to 55, 60, you think? Have three more months left in the year.

Joe Payne

12:50>> We'll see. We got some really big deals in the pipeline. And so we'll definitely grow this year. And I don't want to jinx it, so I'm

Nathan Latka

12:59not going to give you any actual numbers.

Joe Payne

13:00>> You'll have to come back next year for that story. But it's been a pretty exciting process. I think the thing that's most exciting for us is the number of security companies that use code42 today.

Nathan Latka

13:11How many folks use you today?

800 Customers and Security Company Logos

Joe Payne

13:13>> Well, we have over 800 customers today on paying customers, that's the only kind we have.

Nathan Latka

13:20I think there are some people some people get creative there and say, well, they're free customers, you know?

Joe Payne

13:24>> Yeah. Yeah. No. No. We we you know, it's interesting because we our product requires a lot of you have to install our product. There's a sensor that sits on the endpoint. There's no sort of PLG model where the average person could just download it themselves. Also because we're looking at what insiders are doing, there's also no natural growth for an insider to say, Hey, I wanna put an agent on my machine to see how I'm exfiltrating

13:48>> my own data. In fact, most insiders don't want that on the machine at all because they want the opportunity when they leave, if they need to, to take things with them. So I mentioned security companies. Security companies, there's probably 30 security companies using code42 today. They're the big names in this space. It's people like CrowdStrike and Okta and Ping and Rapid7 and Splunk and Cisco. So we have really, really good customers and they're the smartest people

14:17>> in security and they're using us to solve this problem. So I think it's a real validation for us as the folks you wanna talk to just to solve what is a really difficult problem.

Nathan Latka

14:28Joe, you say you're doing $50,000,000 of revenue today at code42, and you mentioned you have many million folks paying you more than a million dollars per year. Can you share how many? Are we talking like two or three or more like ten, twelve, 15?

Joe Payne

14:38>> Nathan, so I've run a public company and what's great about a public company is that it's public and you can share stock. But what stinks about it is you have to share all your actual data with people. What's fabulous about being in a private company is I don't have to answer questions like that for you because I've got a lot of

Nathan Latka

14:53You just told me what you sold for. You told me your revenue. You told me a bunch of data. I'm transparent.

Joe Payne

14:58>> I'm pretty transparent, but but now you're now you're diving into tell me how many actual multimillion dollar customers you have. And I've actually got some pretty good competitors in our in our space who are targeting my customers, actively targeting my customers. So I have to be a little bit more careful about that because I don't wanna help them come after us. That's what happens when you're the leader in the space. When you're the leader in space,

15:17>> you should expect everyone you put a case study up, everyone's gonna knock on their door and say, we can do it for half the price. And we've got one of those competitors in our space.

Nathan Latka

15:25Who is that competitor?

Joe Payne

15:27>> Now, Nathan, why should I give them any press? I'm never gonna do that. You're gonna have to find them yourself. But just

Nathan Latka

15:32Guys, Joe is trained. He is press trained. I'm gonna keep pushing. This is good stuff. Walk me through how you plan to grow code42, right? So what's the team look like today? And are you doing an outbound sales motion, inbound? What's it look like?

Joe Payne

15:43>> Great question. So we have a outbound

Sales Team Structure and Go-To-Market Motion

Joe Payne

15:49>> Obviously, everybody's doing We all do inbound. You have to do inbound, right? If you're crazy, if you're not to. We're aggressively looking at intent in the market. So we use tools like 6sense to look for who's interested in buying it in this space. We have a new business sales team that's entirely dedicated to new business. And we have a customer success team that's entirely dedicated to make our customers successful and to grow their accounts. So

16:16>> a lot of SaaS companies follow this model today. It's something that I helped pioneer when I was running Eloqua to to set to separate those two functions and have what we, at the time, coined as hunters in the forest, which is your new, you know, new business people, but then also hunters in the zoo, which are people that are hunting for business in your install base.

Nathan Latka

16:38Joe, what's the full team size today at the company?

Joe Payne

16:41>> Company is about 220 people.

Nathan Latka

16:43Okay. And how many would you say, just based off memory, a quota carrying sales reps?

Joe Payne

16:50>> I would say there's probably

16:53>> 30 of those, 25, 30 of those.

Nathan Latka

16:56Do you feel good about how you have their plan structure in this new macroeconomic environment in terms of their quota, the OT to quota ratios, things like that moving into next year? Have you had to make some adjustments?

Security Budget Cuts in 2023

Joe Payne

17:06>> I think we're all looking at quotas given the macroeconomic environment. And the macro has been interesting for security especially because security in the last few years has sort of had a blank check. If you needed a product, you just ask for it and you got it. And I've been involved in two deals this year where procurement overruled security on the deal. And I have never seen that. I've never seen a procurement person tell a security leader

17:38>> that they can't have a product that they want, that we're going go with a cheaper product. So that's a sea change. And I think the data is showing right now, security budgets are growing about 5% in 2023. And historically, over the last ten years, budgets grow 30 to 35. So this has been a really tough year in security. So for me and my team, way we're looking at it, we'll relook at quotas next year going into

18:02>> 2024. We'll look at territories. We'll make sure there's enough business there for our teams to do well.

Capital Efficiency and M and A Strategy

Nathan Latka

18:10$250,000,000 on the balance sheet from the sale last year. I assume you saw most of that in the bank. Are you looking to be opportunistic in a downturn with M and A?

Joe Payne

18:17>> Always. Are you buying?

Nathan Latka

18:19I mean, what are you interested in?

Joe Payne

18:20>> We haven't bought anything. And again, this is all about focus. So we you know, it's a very high bar for us. You know, it's a very high bar. You're gonna look for somebody that augments something that you already do, but, it's worth buying because it's not as opposed to building. And so far, in all the analysis we've done, every time we look at something that we really get excited about it, we end up saying, well, we

18:43>> could build most of what they have, or we don't want to take on their customers or their challenges. So we're being very judicious about that. The other thing that hasn't happened yet in security, it's interesting that the budgets are down to 5% growth, but we haven't seen valuations. The valuation expectations for a lot of companies are still pretty high because people raise money during difficult times, I mean, during good times. And so they still have money

19:08>> on the balance sheet. And until people start running out of money, valuation expectations are gonna still be high. So things are, that's a long way of saying things are not cheap yet.

Nathan Latka

19:18Yeah, I guess going back really quick to your guys'capital structure story, obviously a nice big moment last year with the sale, but I think your first round was like 20, wasn't it back in 2012 with Accel for $50,000,000? But you said the company launched 2015. So what was going on there?

Joe Payne

19:34>> Well, the company's been around since 2001. So a crash plan has been around for a long time. The previous founders raised money from Accel in 2012 and that was the only round that they did. And then I joined in 2015 and then raised money in a B round in 2015.

19:54>> But I think that round was 85,000,000. And we use that money, we're pretty cash flow. I run what I call the East Coast offense as opposed to the West Coast offense, which is you pretty much spend what you have to grow your business as opposed to

20:13>> overspending early. So we try to run it. So we've been pretty capital efficient, throughout the process and we'll continue to try to be that way.

Nathan Latka

20:22Does that mean this year closing out 2023, you guys will be what plus or minus 5% EBITDA margin, somewhere in that range?

Joe Payne

20:28>> Now, I'm still the same person that was trained ten minutes ago, Nathan, so I'm not gonna tell you all that stuff. Our

20:37>> EBITDA is still being affected by the separation of our two businesses. So we just sold that business last year, so we're still working through some of that stuff.

20:48>> We'll be a consumer of capital this year, but again, we're careful of how we use our money and how we use our resources.

Nathan Latka

20:56I've never sold a company for a $250,000,000. What would eat cash twelve months after that, you know, at the company that just got rid of that company and sold it? Wouldn't the new company be the one sort of taking the cash out there? Help me understand that.

Joe Payne

21:10>> Well, I I think it's really all about this the our our the size of our business today. So our business today is probably a little bit bigger because we have people,

21:21>> because we were a $120,000,000 company and now we're a $50,000,000 company, so we're a little bit bigger than probably most people our size.

Nathan Latka

21:27Some people didn't go with the deal. I would have thought the buyer would have taken a bunch of the people.

Joe Payne

21:30>> Some did, but a very small percentage of the people.

Nathan Latka

21:33Oh, I see. I see.

Joe Payne

21:38>> Again, it depends really on how we end up the year. The great thing about the SaaS business, almost all of us charge in advance upfront. So it's a very cash efficient business and that we get a lot of cash. If we close a deal on November 30, we'll get a year's worth of cash from that customer,

21:57>> And then we'll just deliver them service for a year. So it's October still, so we have a couple months left and we've got a few good things in the pipeline. So a lot of how our year will be determined is going to happen over the next couple months.

Nathan Latka

22:11Yeah. Joe, a lot going on at code42, but when you were setting your goals a year ago, what were you hoping to grow by year over year percentage wise?

Growth Goals and Rule of 40

Joe Payne

22:19>> Yeah, I think our sort of original goals were like most SaaS companies our size, sort of 20% to 25 growth. And we'll see how we do on that.

Nathan Latka

22:33Yeah, I mean, the rule of 40 is obviously very interesting, right? If growth is lower, then you got to just get 20% EBITDA margin basically to get there, right? So I mean, when you talk, I don't know if JMI is still on the cap table, when you think about how to position the company for the next couple of years, do you want to get back to the rule of 40 at some point? And if so, what

22:49is the split between growth and cash flow you think?

Joe Payne

22:52>> I think all of us want to have the rule of 40. I was talking to some Vista folks a few months ago and they go, we like the rule of 50. And I was like, well, doesn't like So the rule

23:02>> I think, yeah, we all aspire to get to 40% growth plus EBITDA. And honestly, I think

23:11>> growth is out of style right now, but I think long term growth always trumps for a SaaS business because the way the economic model works is if you're growing at a high rate, great things can happen. So I would always on the side of trying to be high on that growth. And then you want to monetize, you want to be profitable at the right time. And different companies have done it different ways. Salesforce proved that you

23:43>> can get to a billion dollars and just have a ton of leverage in the model. And I don't think the market is going to stand for that for most people today. But I do think that I still believe, and I know it's unpopular this month, but the growth trumps profitability right now, especially if you're early in a market and not at scale. I mean, we're not a $100,000,000 company today. And so there's still a big grab

24:12>> and you're going to keep these customers three, five, seven years. And so you want to make sure that you're the market leader come the time that the market's got a couple of $100,000,000 players in it.

Nathan Latka

24:25You mentioned you talked to Vista recently. Are you in talks to sell the rest of the company to them?

Joe Payne

24:29>> No, no, no. I just I meet with people all the time. That was a casual breakfast. There was nothing going on. Think for your listeners and your watchers of the podcast, you should always be talking to everybody in your market space, particularly strategics who think about how they're building their businesses and what holes you might fill and what innovation you have. And I think sometimes entrepreneurs are worried that if they talk to a big company, if

24:57>> they talk to Splunk or Cisco or Oracle or somebody like that, that they're going to steal their ideas. And in my experience, those companies have trouble executing on their own, like building their own products.

25:13>> They don't have the capability to listen to small companies like us steal our ideas and go execute them better than we do. And so I'm always telling people, get in there and make sure they know what you're doing and how they're doing it. So I do that strategics and people that are in our space because you never know those partnerships are going to come. But I also like to meet with the private equity people because they

25:34>> have great insights. Vista is probably the largest software company in the world today. So they're a great company. To hear how they're thinking about business and to hear how they're thinking about how to manage their companies is super interesting.

Nathan Latka

25:48Yep, Joe, wanna wrap up here. So just rapid fire stuff really quick to build out the revenue growth story. I don't know, were you around when the company hit their first million of revenue or you joined after?

Joe Payne

25:57>> Well, I was around when we heard for the product that we sell today, I was absolutely around because the only product we have today is Insider, and we hit our first million in revenue about four years ago.

Nathan Latka

26:08Okay. Got I guess, just to keep the story the same, when you have the combined companies, though, do you remember the first, like, maybe 25,000,000 a year? Just some some end point in terms of before 50,000,000 of revenue?

Joe Payne

26:19>> Yeah. Yeah. I mean, I was I was here when CrashPlan was a $50,000,000 company, but I wasn't here when I was a fifth when I was a $25,000,000 company. I don't if that answered your question.

Famous Five Rapid Fire

Nathan Latka

26:29That's helpful. That's helpful. Okay. Let's wrap up here with the famous five. Number one, book you're reading today.

Joe Payne

26:35>> I I just finished, Infinite, whatever on Sam Bankman Fried. So, that was good. But I also just about right before that, I just finished Covenant of Water. So I would recommend that book highly to people in the tech industry, even though it has nothing to do with tech, it's all about India. And there's so many folks of Indian descent in the tech industry, I found it to be a great read.

Nathan Latka

27:01Joe, number two, is there a CEO you're following or studying today?

Joe Payne

27:07>> I'm following Jamie Dimon more closely than I normally do because of the larger economic issues. And so he's been vocal recently, he's not a tech exec that someone that I would emulate on the product. But there's actually, I'm in a CEO group with about 40 tech CEOs and they're all fantastic. And I'm not gonna call any one of them out because they would all be like, why didn't you mention me? But I I listen to group.

Nathan Latka

27:33Is it an EO group?

Joe Payne

27:35>> What's that?

Nathan Latka

27:36Like an EO group? What's the name of that group?

Joe Payne

27:38>> It's called the enterprise software CEO council.

Nathan Latka

27:42Oh, cool. Okay. Very cool. Number three, what's your favorite online tool for building code42?

Joe Payne

27:48>> I think we use 6sense better than most do, and it's been super helpful for us to build our business. Number four My favorite online tool is Eloqua.

Nathan Latka

27:59Eloqua, yeah. Yeah. I just was drinking Irish whiskeys with Mark Organ in Dublin at SaaStock a couple of days ago. I think you may be joined after him, but

Joe Payne

28:09>> alright.

Nathan Latka

28:10Number four story, Nathan.

28:11That's a very deep story. Yes. Number four we actually have that story. I recorded that with Mark, I think. Gosh. It must have been four three, four years ago. But anyway, back to the point. Number four, Joe, how many hours of sleep do get every night?

Joe Payne

28:22>> Seven.

Nathan Latka

28:22Okay. And situation, married, single kids?

Joe Payne

28:26>> Married, four kids.

28:28>> Wow. Been married. I've been with the same woman for forty years.

Nathan Latka

28:33Wow. That's impressive. And how old are you, Joe?

Joe Payne

28:36>> I'm 58.

Nathan Latka

28:37Last question. Something you wish you knew when you were 20 years old.

Joe Payne

28:41>> How important culture is to the CEO job.

Nathan Latka

28:46That's awesome. Guys, last year code42 with their combined products at $120,000,000 of revenue. They sold off a 50,000,000 or sorry, $70,000,000 revenue stream for $250,000,000 to a private equity group. Joe's now in a very good defensible position with a bunch of cash on the balance sheet and the product left behind, which is a product they're very excited about at code42, doing still $50,000,000 of revenue that was a year ago, targeting 20% year over year growth. We'll

29:07put them if they hit it at 60,000,000 in ARR this year. We'll see what happens there. We've got 800 customers on that product, several paying more than 1,000,000 per year, which is great. Two twenty folks on the team, 30 quota carrying reps as they continue again to build products here to make sure that internal employees don't accidentally or intentionally take files from your company into their next gig. Joe, appreciate your time. Thanks for taking us to

29:27top.

Joe Payne

29:28>> Thanks, Nathan. Appreciate being here.

Nathan Latka

29:30One 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, 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 Central.

29:56Additionally, remember these recorded founder interviews go live. We release them here on YouTube every day at 2PM Central. To make sure you don't miss any of that, make sure you click the subscribe button below here on YouTube, the big red button and then click the little bell notification to make sure you get notifications when we do go live. I wouldn't want you to miss breaking news in the SaaS world, whether it's an acquisition, a big fundraise,

30:18a big sale, a big profitability statement or something else. I don't want you to miss it. Additionally, if you wanna take this conversation deeper and further, we have by far the largest private Slack community for B2B SaaS founders. You want to get in there. We've probably talked about your tool if you're running a company or your firm if you're investing. You can go in there and quickly search and see what people are saying. Sign up for

30:40that at nathanlatka.com/slack. In the meantime, I'm hanging out with you here on YouTube. I'll be in the comments for the next thirty minutes. Feel free to let me know what you thought about this episode and if you enjoyed it, click the thumbs up. We get a lot of haters that are mad at how aggressive I am on these shows, but I do it so that we can all learn. We have to counter those people. We got

30:59to push them away. Click the thumbs up below to counter them and know that I appreciate your guys'support. All right. I'll be in the comments. See you.