Founder Interview
How Inflectra Reached $13M ARR and 5,500 Customers While Staying Bootstrapped (Interview with Founder and CEO Adam Sandman)
- Interview Date
- October 31, 2023
- Interviewee
- Adam SandmanFounder and CEO
Company Metrics at Interview Time
Annual Revenue (2023)
$13M
Customers (2023)
5,500
EBITDA Margin (2023)
5%
Team Size (2023)
55
Year Founded
2006
Historical Snapshot
These numbers were reported by Adam Sandman during his interview recorded in October 2023 and represent a historical snapshot, not current figures. See Inflectra’s current numbers.
Key Takeaways
- 01Inflectra reported $13M in ARR in 2023, up from $10M the prior year
- 02The company serves 5,500 customers across defense, aerospace, biotech, manufacturing, and supply chain sectors
- 03EBITDA margin is approximately 5% in 2023, generating roughly $500K in cash flow
- 04Adam Sandman owns 100% of the business, having never taken outside investment
- 05The company employs 55 people full time, including approximately 20 engineers
- 06Sales cycles have extended by 30 to 60 days beyond the typical 60 to 90 day baseline due to procurement and compliance delays
- 07Inflectra sells three product flavors: SpiraTest, SpiraTeam, and SpiraPlan, targeting QA, engineering, and PMO personas respectively
- 08The sales team of approximately 15 is organized by industry and region rather than by product line
- 09No individual sales commissions or quotas are used; the entire team is on salary with a company-wide quota
- 10Customers in the large defense and aerospace segment pay several hundred thousand dollars per year across buying points
Company Metrics at Time of Interview
| Metric | Value | Source |
|---|---|---|
| Annual Revenue (2023) | $13M | Founder interview, October 2023 |
| Annual Revenue (2022) | $10M | Founder interview, October 2023 |
| Monthly Revenue (2023) | $1M | Founder interview, October 2023 |
| Customers (2023) | 5,500 | Founder interview, October 2023 |
| EBITDA Margin (2023) | 5% | Founder interview, October 2023 |
| Cash Flow (2023) | $500K | Founder interview, October 2023 |
| Team Size (2023) | 55 | Founder interview, October 2023 |
| Engineers (2023) | 20 | Founder interview, October 2023 |
| Product Count (2023) | 3 | Founder interview, October 2023 |
| Year Founded | 2006 | Founder interview, October 2023 |
| Founder Equity (2023) | 100% | Founder interview, October 2023 |
| Typical Sales Cycle (2023) | 60 to 90 days | Founder interview, October 2023 |
| Extended Sales Cycle (recent) (2023) | 90 to 150 days | Founder interview, October 2023 |
| Small Customer Contract Threshold (credit card) (2023) | $10,000 | Founder interview, October 2023 |
| Large Defense Customer Annual Spend (2023) | Several hundred thousand dollars | Founder interview, October 2023 |
| Mid-tier Customer Annual Spend (2023) | $50,000 to $70,000 | Founder interview, October 2023 |
| Base Customer Annual Spend (2023) | $12,000 to $15,000 | Founder interview, October 2023 |
| Profitability Range (historical) (2006 to 2023) | 0% to 10% | Founder interview, October 2023 |
Growth Breakdown
Revenue
Inflectra grew from $10M ARR in 2022 to $13M ARR in 2023, representing roughly 30% growth. Monthly revenue reached $1M at the time of the interview, up from approximately $830K a year prior. Growth came in below the 35% target the team had set, largely due to extended procurement and compliance cycles at enterprise customers.
Customers
The company serves 5,500 customers as of October 2023, a roughly 10% increase over the prior period. Growth came from a combination of expansion into adjacent buying points within existing accounts, referrals from consultants who move between organizations, and new logo acquisition focused on a more tightly defined ideal customer profile.
Team
Inflectra employs approximately 55 people full time, with around 20 engineers split across its two core platforms and a team of roughly 15 in sales organized by industry and region. The company does not use individual sales commissions; all staff are on salary with a shared company quota.
Profitability and Funding
The business is fully bootstrapped and profitable, with an EBITDA margin of approximately 5% in 2023, translating to roughly $500K in cash flow. Adam Sandman owns 100% of the equity. The company has received acquisition interest at indicative multiples of 6x to 8x revenue but has not accepted a firm offer.
Growth Strategy
Account-Based Marketing and Ideal Customer Profile Definition
Over the eighteen months prior to the interview, Inflectra invested heavily in defining its ideal customer profile, focusing on regulated industries that are simultaneously pursuing digital transformation. This included life sciences companies seeking FDA approval and manufacturers building software-defined products. Resources were concentrated on these accounts rather than broad prospecting.
Expansion Within Existing Accounts
The company sells three product flavors targeting distinct personas: SpiraTest for QA teams, SpiraTeam for agile engineering teams, and SpiraPlan for PMO and program management. A customer who starts with SpiraTest at $15,000 per year can expand to $75,000 or more as additional personas and products are added, without requiring a separate sales motion.
Industry and Region Based Account Management
Inflectra reorganized its sales team from a product-specialist model to an account management model organized by industry and region. Each account manager owns the full relationship across all product lines, reducing handoffs and improving cross-sell effectiveness. Pre-sales engineers support them on technical depth.
Referrals and Consulting Partner Channel
A significant portion of new business comes from consultants who move between organizations and bring Inflectra into new accounts. The company also works with partners to broaden deal flow, particularly for reaching new enterprise accounts in regulated sectors.
Pricing Ratchet on Legacy Accounts
Older customers on legacy pricing are being moved to current pricing through natural renewal cycles. This contributes to revenue growth without requiring new customer acquisition and improves the overall revenue quality of the existing base.
Best Quotes
“An engineer would say quality is fitness for purpose. But for us, what it means is keeping the world running.”
“A lot of it has expanding into adjacent buying points in the same customer as well as referrals and partnerships.”
“We spent a lot of work this year on messaging and message development, and our website is still in the midst of that transition if you go to it.”
“We find that customers after the first year will stay with us for five to six years, but if the first one or two years are rocky, they'll leave.”
“We don't carry individual quotas. We have a company quota, and everyone's paid salary. We don't do any commissions. That's one unique feature.”
“The client says, Yes, we want to buy the tool. We've, the CTO, the CIO, the VP of engineering, whoever the stakeholders has said, Yes. All the bureaucracy now takes another sixty days longer than it did a year ago.”
“We've had many offers, and we've talked to companies. We're not in the market yet, maybe.”
“Strategic alignment and cultural alignment is number one. And then the other stuff, yes. We can negotiate on equity or cash.”
“Don't worry about what other people think of you. Do what you enjoy, do what you love, and don't let people tell you can't do it.”
“Right now, instantly. I love instantly. We just started using that to cold emails and prospecting, and it combines the best of Apollo and ZoomInfo and a bunch of tools.”
What Happened Next
This interview captures Inflectra at a specific moment in October 2023, when the company reported $13M in ARR, 5,500 customers, and a 5% EBITDA margin while remaining fully bootstrapped under Adam Sandman's sole ownership. The figures here reflect what was stated during the recording and should not be taken as current performance data. Visit the Inflectra company profile on getLatka for the most recent metrics and any updates since this interview aired.
View Inflectra’s current profile and metricsFull Transcript
Chapters
- 0:00Introduction and Company Overview
- 0:47What Inflectra Does and Who It Serves
- 1:59Customer Base and Verticals Update Since 2022
- 3:22Growth Strategy Over the Past 18 Months
- 5:39Revenue Growth and Extended Sales Cycles
- 7:40Ideal Customer Profile and LTV Focus
- 12:44Three Product Flavors and Upsell Motion
- 15:58Sales Team Structure and No-Commission Model
- 19:06Bootstrapped Ownership and Acquisition Interest
Introduction and Company Overview
Nathan Latka
00:00InFlexure was launched in 2007. They serve customers like large defense contractors, supply chain companies, mix of on prem and cloud solutions. They'll do a million dollars per month in revenue, up from 830,000 a month just a year ago. So nice growth serving 5,500 customers. Many customers pay have several 100,000 per year, which is great. Nice expansion there. And he's done this all bootstrapped was incredible by Adam. He owns a 100% of the business company will profit
00:24call it 5% this year as he looks to continue to scale. We'll see what happens next. Hey folks, my guest today is Adam Sandman who founded Inflectra in 2006. He's been a programmer since the age of 10. Today, serves as the company's CEO. He's responsible for product strategy, technology, innovation and business development. He lives in Washington DC with his family. Adam, you ready to take us to the top?
Adam Sandman
00:46>> Yep. I'm ready.
What Inflectra Does and Who It Serves
Nathan Latka
00:47Alright. So Inflectra helps customers deliver quality software. What does that mean?
Adam Sandman
00:53>> Oh, an engineer would say quality is fitness for purpose. But for us, what it means is keeping the world running. I mean, that's what our team does every day. That's what our passion is. We work with companies that are in the biospace, utilities, energy companies, literally every sector of the economy that you rely on to get to work every day, to have power in your house, to clean water. We work with those kind of companies to
01:13>> make sure all of the IT systems they have work as they should and going forward in the future anticipate risks that might come so that, you know, as the world evolves and changes, they're ready to address those risks. So that's what we're that's what we're here for.
Nathan Latka
01:27And we spoke back in May 2022. You told me your biggest customers are large defense contractors and supply chain companies, a mix of on prem and cloud. Is that still the case?
Adam Sandman
01:36>> Yep. That is definitely still the case. A lot of bio companies, I think, have added into the mix, but definitely a lot of aerospace. When I see a defense, a lot of aerospace companies, but also maritime and but large platform companies are making big hardware as well as companies working in the supply chain manufacturing space, automotive aerospace, but also general manufacturing as well, IoT and those sort of sectors.
Customer Base and Verticals Update Since 2022
Nathan Latka
01:59Let's sort of fast forward the past twelve to eighteen months. I want to talk about sort of how you thought about product. Obviously, we're in a very different economic climate today than we were in May 2022. Curious how you've changed or pivoted, I guess. But first, have you decided to sort of expand with the current customers you had back a year and a half ago? You had about 5,000 of you told me, or have you focused
02:18on expanding into new accounts?
Adam Sandman
02:20>> That's a great question. And we've done a bit of both, but a lot of it has expanding into adjacent buying points in the same customer as well as referrals and partnerships. So finding working with partners at Broadus Deals and finding more deals with them, and then obviously looking at larger customers and finding adjacent buying points or following referrals where, you know, oftentimes people are consultants. They move from organization to organization, and they bring us in into
02:44>> those organizations. And that's been a large part of the, you know, direct sort of sales as well as partnership sales. And then, of course, we're still looking for new buying points that fit our ideal target client. One thing I think we've done a better job of in the last eighteen months has been defining our ideal client. We we spent a lot of work this year on messaging and message development, and our website is still in the
03:03>> midst of that transition if you go to it. So it's you'll see it's in evolving state. But really trying to hone down what is our ideal customer, what is our USP at a much more at a much more deep level. Not just the technology that sells, you know, quality software, but what is our client trying to do? Which clients do we find resonate the most? And then putting our resources into those clients rather than chasing everyone
Growth Strategy Over the Past 18 Months
Adam Sandman
03:22>> under the sun. Mhmm. So I think when it comes to the new sales, really hoeing down obviously, we'll be opportunistic if someone comes to us, but not spending resources and not prospecting and not, you know, focusing outside of that core as much as we might have done, you know, eighteen months ago.
Nathan Latka
03:35So I'm curious how much you've grown over the past eighteen months, and then I wanna drive deeper into how you decided what ICP to go after because you had a huge bucket of customers to choose from. Right? So what has growth looked like the past twelve to eighteen months?
Adam Sandman
03:45>> It's been about a year of a period of a period about 25%. So we would hope to be actually higher about, I think, 35%, I may have said. So it's been a little bit lower than we'd we'd hoped. But what we the reason for that number one reason has been
Nathan Latka
03:59Well, just to be clear, Adam. Sorry. Just to give everyone a number. So you said I think you were about $10,000,000 run rate last time we spoke. Would put you at about twelve, thirteen today. Is that right?
Adam Sandman
04:06>> That's right. That's right. That's right. So we were hoping for a little bit higher, but I think what we found is that the sales cycles this last this year, particularly, a little bit less than last year, have extended. Typically, our sales cycle is sixty to ninety days. A lot of deals are taking thirty to sixty days longer than that. And mostly it's not in the buyers. It's the procurement. It's the legal and the compliance. A lot
04:29>> of those stages are taking just incredible amounts of time.
04:33>> The client says, Yes, we want to buy the tool. We've, you the CTO, the CIO, the VP of engineering, whoever the stakeholders has said, Yes. All the bureaucracy now takes another sixty days longer than it did a year ago. A lot of it's budget. A lot of it's also compliance, security, cyber, GDPR and privacy. A lot of things just seem to be taking longer, and it's hard to move those wheels of bureaucracy. Also, as I you
04:56>> know, we're dealing with these large regulated industries where it's much harder to exert pressure on them because they have a cadence for buying software and validating it and doing all the, like, the compliance stuff that you can't really accelerate.
Nathan Latka
05:06So what does that mean for today? Still serving up 5,000 customers or slightly more?
Adam Sandman
05:10>> More yeah. More than that. I think it's about 10% more than that.
Nathan Latka
05:13Okay.
Adam Sandman
05:14>> Because, obviously, we've got we've added a lot of existing, you know, deals and cross selling into our other customers.
Nathan Latka
05:20Oh, 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 Founder Path. Check this out.
Revenue Growth and Extended Sales Cycles
Nathan Latka
05:39>> I'll show you how
05:40you can access this in a second, but you log in, you connect your 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 Founder Path dashboard, this is all free by the way,
06:03is because depending on who's doing the buying of your SaaS company, you're gonna get 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
06:25you sold the whole thing outright. Now what's cool about this is this is not built 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
06:50are a bunch that have been acquired the valuation and the multiple. Maybe you're going 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 Founder Path. And we're thrilled to bring it to you.
07:15All right, we're gonna go back to the YouTube video here in a second, but if 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
Ideal Customer Profile and LTV Focus
Nathan Latka
07:40right inside the platform. I hope to see you there. Alright. Let's jump back into the interview. Yep. So caught Futtman be 5,500 today. Now, again, there's a lot of people right now sitting on a customer base of a 2,000, but they want less customers that pay more. What process did you go through to figure out what customers you wanna serve? A lot of people would say, just download from Stripe. I sort from which customers have paid
08:00me the most to the least, and then I go find more that pay me the most.
Adam Sandman
08:03>> So we what we've done, did we've done a two factors two factors. One is we have some older clients that were on older pricing that we've been ratcheting up, and that by natural attrition, we'll we'll do that. The second thing is we found that we wanted clients that would have a longer LTV with us, Customers that are going to be with us for five to ten years because of the onboarding time takes time, the training. It's
08:22>> a wealthy complex suite, and that we find that customers after the first year will stay with us for five to six years, but if the first one or two years are rocky, they'll leave. So we want to find customers that really align with the with the com with the product, and not just the the product they might buy, but the product suites they can upgrade. And what we found is if we look at the sectors and
08:40>> the types of customer, it's customers that have a degree of compliance needs, but yet also need to be agile. So we we looked at the world in two lenses, which is the agile DevOps fast paced technology companies. We look at these industries that are very traditional with lots of compliance needs. And we find the cases where the clients are trying to make a move for a digitized future, but they have these regulations. These are our most
09:01>> qualified clients. So think of a life science company that's got a a relatively new medical device that they wanted to deliver in a very agile way and take the market by storm, but they've got to get FDA approval in three years, five years, whatever it is. So they they have to have a well defined software system like ours. They can't just wing it together using spreadsheets or, you know, other tools. So that's a great example of
09:21>> a client that we we would now proactively target. And then similarly, clients in the manufacturing space that, again, they want to digitize their future. They want to be able to deliver software defined vehicles, software defined manufacturing. So they want to be agile and differentiate, but they also need to follow all the process they already have. Whereas a client that's never gonna change, we don't want them as much. Or a client that's just, you know, is IT
09:43>> company that's just gonna release software, change tools every year. They're they're they're not gonna be a long term customer with us, or they're certainly not gonna expand and grow and be the reference that we would need. Want clients that only want to be a customer, but evangelize to other customers for
Nathan Latka
09:56us. And so when you look at your concentration at the top of your book today, like, obviously, I don't name who they are, the logos, but your top customers say, do you have anyone paying the $500,000 per year? What's the top cost what's the top group of customers paying?
Adam Sandman
10:07>> Yeah. So the largest defense type companies are probably paying I have to get the numbers. Somewhere in the I guess, if you look at across all their buying points, a couple $100,000 a year, that will be and then mostly the large defense companies or aerospace companies. And then from there, you're gonna go down into the large biotech, large IT companies, manufacturing that are paying 50,000, $6,070,000 a year. And there's a large there is a there is
10:30>> a large tail of the people paying 12 to 15,000, 15,000 a year, which obviously forms the base of the pyramid.
Nathan Latka
10:37So you're not a sales guy, but if you wanna go target the folks paying $1,012,000 per year and get them up to $5,060,000 dollars per year, what does that look like? Are you putting another product in front of them? Are you asking them to buy more seats in the same in the same business unit? Or how does that look?
Adam Sandman
10:49>> It's both. It's first of all identifying additional personas in this that use that in their organization that would use additional features. And that's why we actually have three flavors of our product. So we don't just even though it's really one product, we sell it in three distinct flavors, which target different personas.
Nathan Latka
11:03What are the three? One, two, three.
Adam Sandman
11:05>> Oh, sorry. SparoTest, SparoTeam, and SparoTplan. One product. One's for QA audience. One is for a, like, an agile engineering team. One is gonna be for a PMO, program management, risk management team. You sell to the QA team first. You can then expand it to the dev team, to the wider the team that's using the tool, and then you can go up the ladder to the PMO, this managing team of teams, that and way you're expanding from
11:28>> 15,000 a year to, you know, 75,000 a year. Mhmm. Then we have a second product, which is an automation suite, more specialized. We don't go into that to try and sell to customers as standalone because the cost of sales is much higher. The type of POC's, all of the the things you have to do to sell is much more complicated. But we've when you've got a qualified client on our primary platform, we can cross sell that
11:47>> very effectively.
Nathan Latka
11:48How do do that, Adam? Do you have a sales rep that is dedicated to the customer that is responsible for upselling product two and product three, or is there an a different sales team per product line?
Adam Sandman
11:57>> We do we we used to do it per product. We changed it to per industry. So when you sign up for us because of the discontinuity. So what happened is you bought product one. I I get to know you, know your problems, hand you off to product to person two, hand you off to customer success. So we've gone to an account management model by industry and by region. So if you're in North America and in aerospace,
12:15>> you'll get one person. If you're in North America, in health care, you get someone else. If in Europe, you get someone else.
Nathan Latka
12:19Across all of those. So then your sales team has to be well educated in all three product lines. They can't be a specialist That's in right.
Adam Sandman
12:25>> Now, obviously, we do have pre sales engineers who can, you know, augment their knowledge. But, yes, they have to know all the products, and they have to know at least two or three industries. We're not big enough to have one person in the industry. As we get bigger, you would expect to be of an industry, know, knowledge as well. So we're taking so our salespeople have to be technically smart, know sales, and also understand the industries
Three Product Flavors and Upsell Motion
Adam Sandman
12:44>> they serve, which is quite a big ask. Mhmm.
Nathan Latka
12:46Interesting. Do you when you recruit sales reps, do you recruit them from the specific industry that you want them to then sell to, or do you just go find the best salesperson you can that knows how to hit quota?
Adam Sandman
12:57>> We've most of the latter, and then we find the industries that they will fit best with. And and that seems to work best. Some of com
Nathan Latka
13:04Okay. Just to clear, you find great sales reps
Adam Sandman
13:06>> and teach them more about the industry. We're not hiring a finance person. Yeah. We're not hiring a bio person. We have somebody who knows these kind of products is really good, good at communication, good at closing, good at following through, and then they'll learn the industry stuff.
Nathan Latka
13:18I see. How many folks are full time today?
Adam Sandman
13:21>> Right now, about fifty, fifty five, I think.
Nathan Latka
13:24How many carry a quota?
Adam Sandman
13:26>> We don't don't carry individual quotas. We have a t we have a company quota, and we everyone's paid salary. We don't do any commissions. That's one unique feature.
Nathan Latka
13:33So how many are on the sales team?
Adam Sandman
13:36>> Of the 55, including if you exclude customer success and you exclude partnerships, I think it's about 15.
Nathan Latka
13:44Okay. One five. And how many are actually writing writing pushing code every month? Engineers?
Adam Sandman
13:48>> Oh oh, sorry. Code. Team size across both the two platforms. That's five plus five fifteen to about 20.
Nathan Latka
13:5720. Interesting. Yeah. So did I hear you I hear you're doing the math. Did you sort of put five engineer do engineers work on all three products or do you put five engineers on product one, five on two, three?
Adam Sandman
14:06>> Five is on product one and there is another fifth 10 to fifth 10 on the other core product. And there's another five that do like add ons extensions and, you know, the
Nathan Latka
14:14But you let them specialize in that same product. They don't switch between products once and once.
Adam Sandman
14:19>> Yes. That's correct. That's correct. 100%.
Nathan Latka
14:20Very interesting. Okay. Why no quotas?
Adam Sandman
14:24>> Team colla we found that team collaboration is the key. We we did try it years ago, and what we found is that my deal or your deal, we're not gonna work together. And because the the products are complicated and the industries often intersperse, and we have multinational companies, we if you got a sales team in the EMEA who's working with a sales team in North America sorry, salesperson in North America, we want them to collaborate. We
14:43>> don't wanna fight together who's gonna get the target, and that was the main reason.
Nathan Latka
14:47Very interesting. You last year, you were bootstrapped. Are you still bootstrapped today?
Adam Sandman
14:51>> We are. We've had many offers, and we've we've talked to companies. We're not in the market yet, maybe
Nathan Latka
14:56What's what's what's the most interesting offer you got? Don't name the company, but what was the price? Like, would they say, wanna buy you for a $100,000,000 or what?
Adam Sandman
15:02>> There's ones that wanna do probably less than that now because the evaluations are down a bit. Ones that want to merge one is interesting. One that wants us to be part of a manufacturing, very, very industry vertical approach. Other ones want us to go, you know, very horizontal across all industries.
Nathan Latka
15:18What was the highest offer you got, though, Adam, that you rejected?
Adam Sandman
15:21>> We honestly, we haven't got to a firm firm offer. So that they're they're all talking, you know, six x, eight x, I would say, but we hadn't got
Nathan Latka
15:27into So 60,000,000, 80,000,000, Yeah, yeah, something like Right, exactly. So who someone's listening right now, they really love you. They really wanna partner with you or buy or whatever. What is the right partner for you? What are you looking for?
Adam Sandman
15:39>> For a partner, it will be a a firm that that has a service offering, a consulting firm that wants to expand their business, that wants to be able to extend their range of services, and is willing to not just sell a product, but also build an offering at their company around that service.
Nathan Latka
15:53I see. And you would consider something between an 80,000,000 and a $100,000,000 all cash offer today?
Sales Team Structure and No-Commission Model
Adam Sandman
15:58>> Oh, sorry. When you say partnership, I think you meant to partner with the company to acquire us. Strategic alignment and cultural alignment is number one. And then the other stuff, yes. We can negotiate on equity or cash. I have to say the number one thing is cultural alignment. Yep. All the people here would wanna work it has to be someone that we all wanna work for or at least hand over the company to.
Nathan Latka
16:16I don't
Adam Sandman
16:17>> wanna How much
Nathan Latka
16:18equity does the team own today? What's the ESOP pool you've set up?
Adam Sandman
16:20>> 10%, 15 No.
16:21>> Actually, none. It's there's no I'm a solo owner.
Nathan Latka
16:24That's awesome. Okay. So you own a 100%. Do they have like Phantom shares or anything?
Adam Sandman
16:27>> We'll we will do that when we if we if once we start yeah. The plan is once we get near an offer, an actual offer, we would do that. Exactly. That's exactly right. We do a Phantom stock plan.
Nathan Latka
16:35Adam, this is very sensitive, but you are very rich on paper. Right? Do you already have some exit where you're able to go buy the house you want, build a family vacation when you want? Like, how do you diversify your net worth out of your SaaS company? A little bit.
Adam Sandman
16:46>> Yeah. Great. I mean, I will be I have first of I have rental I have real estate rental real estate, which is great because it's a nice cash generating asset that's low lower growth, but very, again, very safe and gives you that diversification.
Nathan Latka
16:57How many beds how many beds do you have in your in your real estate portfolio?
Adam Sandman
17:01>> Three three single family houses.
Nathan Latka
17:03Okay. Great.
Adam Sandman
17:05>> Plus my own house. We live in a house that we love. The kids have gone are in college, almost finished, so that's all paid for. So there's not a ton I need. It's more it's more the fun of the chase.
Nathan Latka
17:14There you go.
17:15>> He he keeps his expenses low and makes some money off his real estate, which is great. That's nice nice nice position to be in.
17:19Now are you guys do you operate right at breakeven, is the company 10% profitable today? 20% profitable?
Adam Sandman
17:24>> Depending on the year, zero to 10. Some year to 10%. Some to some years, we close to breakeven.
Nathan Latka
17:29What do think this year will be?
Adam Sandman
17:32>> I would say around five percent just because we Okay. The rate rate's a bit lower than we'd hoped.
Nathan Latka
17:36I mean, still 5% profit on 13,000,000 AR. I mean, that's $500,000 of profit this year.
Adam Sandman
17:40>> That's pretty good. Right. Right. Right. And that that's good. You know, we we want to reinvest it. We don't want sit on cash. That makes sense.
Nathan Latka
17:44Yep. Yep. Yep. Very cool. If you do, you just go buy another investment home. Right?
Adam Sandman
17:49>> Yeah. I don't know. Yeah. My my wife's nice. She she wants to go to California, so who knows?
Nathan Latka
17:52Get out
Adam Sandman
17:53>> there to rent out and then move there up because it's gonna fall California. Who knows?
Nathan Latka
17:56That's awesome, Adam. Alright. Let's wrap up here with the famous five. Number one, a book you're reading right now.
Adam Sandman
18:01>> Oh, I just finished reading it's called The Glass Hotel. I forget the name of the author. It's a New York author. She also it's really, really good it's a really good book. I I really enjoyed reading it. I'm also reading another book by David Mitchell called oh god. It's about Utopia Avenue. It's about a rock a fictitious rock band from the nineteen sixties, which is just a great read. He's a great writer. He did Cloud Atlas,
18:23>> did Bone Clocks. I love all of his stuff.
18:25>> Amazing.
Nathan Latka
18:26Number two is there a CEO you're following or studying?
Adam Sandman
18:30>> Oh, jeez. I always like Richard Branson Yep. Just because he's but think I said that last time.
Nathan Latka
18:35That's okay. You can say it again. Number three, what's your favorite online tool for building the business?
Adam Sandman
18:40>> Right now, instantly. I love instantly. We just started using that to cold emails and prospecting, and it combines the best of Apollo and ZoomInfo and a bunch of tools, so I love instantly.
Nathan Latka
18:49Guys, if you wanna hear the Instantly story, search Latka instantly on your podcast app or on YouTube. We had them on the show. They went from 0 to $2,400,000 run rate very quickly, starting off as an agency model moving into SaaS. Really cool story there. Glad you glad you liked that, Adam. Number number four, how many hours of sleep do get every night?
Adam Sandman
19:04>> Eight.
Nathan Latka
19:05Okay. Good. And six
Bootstrapped Ownership and Acquisition Interest
Adam Sandman
19:06>> When I was jet lagged. Except when I jet lagged. Came back from Dubai, I was wake sleeping and waking two in the morning. Sorry.
Nathan Latka
19:10Do you have customers in Dubai?
Adam Sandman
19:12>> Yes. We do. We just closed our first one a week after the conference, actually.
Nathan Latka
19:15Wait. What was that like? I mean, is it same sales process as in The UK or The US?
Adam Sandman
19:20>> Small customer well, small companies in Dubai, like anywhere, they'll buy with a credit card easy. Large companies, you gotta have an office there, a presence there. You gotta do a lot more of in person.
Nathan Latka
19:28What's the what's the inflection point? Anything below 10,000 contract value, credit card?
Adam Sandman
19:32>> Yeah. Sounds about right. And also, is it is it a government enterprise or is it like a private small like, a lot a lot of firms, are Indian companies that have set up shop there or or or of other companies. Those private companies, easy to sell to you. 10,000, 15,000. Government entity that's building out a large part of the infrastructure, that's a whole different beast.
Nathan Latka
19:48Interesting. Okay. So married, two kiddos, they're off college. I believe you had a birthday, so you're 48 now?
Adam Sandman
19:54>> December 4. So coming up. Not yet. Almost.
Nathan Latka
19:57Okay. So still 47?
Adam Sandman
19:58>> Mhmm.
Nathan Latka
19:59Alright. Very good. So 47 years old. Last question. Something you wish you knew when you were 20.
Adam Sandman
20:05>> Raising kids is a bit of pain, but we love them.
20:11>> Don't don't worry about what other people think of you. Do what you do what you enjoy, do what you love, and don't let people tell you can't do it. That's why, yeah, that's what I would say.
Nathan Latka
20:19I love that guys. And Flexure was launched in 2007. They serve customers like large defense contractors, supply chain companies, mix of on prem and cloud solutions. They'll do a million dollars per month in revenue, up from 830,000 a month just a year ago. So nice growth serving 5,500 customers, many customers pay have several 100,000 per year, which is great, nice expansion there. He's done this all bootstrapped, which is incredible by Adam. He owns a 100% of
20:43the business. Company will profit, call it 5% this year as he looks to continue to scale. We'll see what happens next. Adam, thanks for taking us to the top.
Adam Sandman
20:50>> Thanks so much, Nathan. Have a good one.
Nathan Latka
20:52One 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
21:17Central. Additionally, 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
21:39fundraise, a 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
22:01for that at nathanlakka.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. 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
22:21to 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.
22:27>> See you.