SaaS Interviews with CEOs, Startups, Founders
1384 CyberSecurity SaaS CarbonBlack Passes $200m ARR Charging $30/Device/per
09 May 2019
Chapter 1: What is the new book by Nathan about?
My new book is out on Audible, How to Be a Capitalist Without Any Capital. You can grab it right now. Here's what a user, Thomas Lornaviticus, said. Latke is the real deal. Five stars. Hey, Nathan, I just listened to your podcast with JLD. You killed it. I saw your book earlier last week and thought, meh, I'll wait when Kindle costs $199 or whatever, as I have over 150 books to catch up with.
But then I sensed that this book may have something I need right now. I bought it for full price, but didn't really start reading it. Then talking with JLD, you mentioned that the strategies may not work if you wait. And that's so true. I read it. I'm feeling pumped to devour it even more. Thank you for sharing it all and kicking ass.
Guys, all of you that listen to the podcast, you were the reason I wrote the book. SaaS CEOs, founders, entrepreneurs, go grab it today at capitalistbook.com. Especially if you like audio, go grab the audible version right now. Again, capitalistbook.com. power of persistence. Carbon Black launched over a decade ago.
He joined the team about 10 years ago when they were only doing about a hundred grand in ARR. And these were like, you know, selling like TCV, like SLA agreements. You know, they were putting people, servers, on-prem solutions. This was like back in the golden years. Slowly switched from TCV to ACV to ARR.
They scaled revenue to about, call it 180 million bucks in ARR, 191 million bucks raised before, saying, you know what? Going public is the right thing to do. We're in this security space. It gives us credibility. It'll allow big logos to maybe have more trust in us. They're doing that now, growing exponentially well. Charge about $30 per device per year is the right way to think about it.
This is the Top Entrepreneurs Podcast, where founders share how they started their companies and got filthy rich or crash and burn. Each episode features revenue numbers, customer counts, and other insider information that creates business news headlines.
We went from a couple of hundred thousand dollars to 2.7 million. I had no money when I started the company.
It was $160 million, which is the size of many IPOs.
We're a bit strapped. We have like 22,000 customers. With over 5 million downloads in a very short amount of time, major outlets like Inc. are calling us the fastest growing business show on iTunes. I'm your host, Nathan Latka, and here's today's episode. Hello, everyone. My guest today is Patrick Morley. He leads Carbon Black.
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Chapter 2: How did Carbon Black evolve from its early days?
And so I've helped build and scale the company over the last 10 plus years. And I'm really proud of what we built as a company. And we do have a co-founder here with me as well.
That's great. Okay. So other folks founded the company. You joined as CEO 10 years ago.
That's right. I was brought in by the venture, by the investors around the table.
By the way, very typical, happens all the time. So how much had the company raised before they brought you in?
The distant history, I think the company had raised about $24 million before I came on board.
And did you come on board with a round that was contingent upon you leading as CEO? Yes. Okay. And how much was that round and who led it?
I should know that, Nathan, but I do not remember that.
So you weren't like an EIR in the firm that led it?
No, no, I was not. So Accomplice, Jeff Fagnett at Accomplice was kind of what I would consider to be the founding investor. And then Maria Serino at 406 and Ted Schlein at Sequoia were all... I came in with them.
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Chapter 3: What is Carbon Black's current revenue model?
And our focus is on organic growth right now, but we have acquired in the past. And if we so choose in the future, access to public markets is a good thing.
How do you resist the urge? You know, there's a lot of folks that go public and it becomes very difficult to resist the urge to financially engineer growth, right? You know, arbitrage plays where you acquire at a ratio that, you know, when you get that revenue on your books, that the public markets are going to value it at a higher, you know, multiple than what you acquired it for.
And then you kind of grow value that way. How do you resist the urge to like do that every day? Because there's tons of arbitrage out there. And the counter to that is, when do you give into that urge? Because it makes so much strategic sense, you have to do it.
Yeah, look, I've seen exactly what you've described. I've seen it in past lives. And I don't want to be too off the cuff and just say, oh, we don't even think that way. We don't yet. We haven't. And I think some of it's because we're still early as an IPO company. And frankly, we're trying to build for the long term.
May, right? May 2018 was IPO date?
Yeah, May of 2018.
Okay.
So we're still early. And look, we're building something for the long term. If you keep the team focused on saying we're going to build a product long term, then you have a product strategy and you go against that product strategy as opposed to building something for revenue. Yep.
$1.57 billion market cap today. Are you overvalued or undervalued?
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