How Artudata CEO Tal Zohar grew to $360K revenue and 7 customers in 2018.

hello everybody my guest today is tal zohar he's the founder and ceo of a company's working on today called r2data he successfully uh he successfully exited many companies one of them being 100 million dollar plus exit one unicorn ipo on the nyse on the tech space he's also established the ai division uh at a ft sc 250 fintech enterprise valued at 300 million by barclays and was member of management and led digital transformation at the london stock exchange tower are you ready to take us to the top all right so you're in a hot hot space you know a lot about fintech it sounds like what's r2day to do and how do you make money what's your revenue model hey we're a sas company uh when we help our company grow we grow with them and basically uh for marketing we are charging a usage fee and for the sales optimization tool we're charging a few cents per lead okay and so so i was gonna say what are you pricing around is it is it is it number is basically people can pay an x amount per month at x number of leads it all around leads or is it contacts or other valuables so we have two products one is for the sales cycle basically we help mainly fintected companies finding predicting who would be their high value clients among from tens of thousands of leads that they get every month and for those uh we're charging a few cents per lead and for the marketing side we're charging uh basically a percentage of the budget spent through our platform so only if our clients choose to use our technology and they pay and in those cases we are allowing companies to run super targeted campaigns in edwards so think about moving from fishing with a net when you buy some fish but you also buy water and the water costs as much as the fish does unfortunately to moving into fishing with a hook next to the right fish at the right time with the right bait in the right way with the right message this is account based marketing right sorry it's account based marketing essentially correct yeah all powered all of these are powered by several layers of quite sophisticated and patent-protected ai so so i want to understand just just so i can kind of dive in here i mean this sounds like this is not an smb kind of approach give me a general sense of what people are paying you like per year to get access to this technology you've built it's actually an sme approach so one of the things we're doing and our vision is that we're democratizing ai for customer acquisition we're bringing tools that google and facebook and amazon's are using today in their b2c areas and we're bringing them to the rest of the market um and we're allowing to do that that what allows us to do that is the combination of the fact that we are in our technology a lot and allow us to reach a high accuracy from just 4 000 records comparing to millions of records in the regular ai environment and the second thing is that our pricing is is very compelling especially so sorry what is that just because we're short on time what is the actual what do people pay on average per month for this would you say uh about three to four thousand dollars okay got it so you're kind of okay i'd say maybe that's like mid-market-ish pushing enterprise at some point do you have an inside sales team built out to scale it or no sorry sorry do you have are you employing an inside sales team strategy to grow grow your number of customers or no yes okay so we have a quite a we have a few sales people break so break the dynamic down for me people are always wondering how to build their sales teams how many total people are on your team today and how many sales people so we have the nine people on our team four are developers and uh four are front-ending which is a split between one who's a marketing person and three are doing sales and what year did you launch the company in last year 2017 summer time but we only started the actual activity in january this year and since then we've grown uh 12 weeks and only in the last two months we have doubled our size of the goal i hope you've grown really fast it should be infinite growth going from zero to wherever you're at now right oh no in general we also yeah yeah that's true that's true but also if you just look at the last few months we have again just in september and october we have doubled the size of the company well congratulations congratulations on that let's break that down i understand kind of how you're doing that so so how many customers have you scaled to today uh 10 to 12. okay 10 to 12. great so i mean can i take the 10 times that 4 000 you're doing about 40 grand a month right now [Music] uh some of them are still in poc so they're paying slightly less okay um but we're around 25 30. fair enough and again this is up from zero a year ago correct zero year ago yeah zero in december yep okay teach us the lessons here how'd you get your first 10 customers um we first i come i have the advantage of coming with a some network of people who trust me over the years and second i brought some sales people with their own network of the companies that the the founders and the owners trust us and then uh that allowed us they probably to bring the two three first clients and since then we're going quite regularly to conferences events uh and we are partnering with other companies who are servicing uh different products but to the same audience and we're doing kind a kind of joint venture with them that works well when you're looking to hire these first few sales people how did you know what rolodex to hire for so you need to the way i see it i need to imagine those people standing in front of an executive and are they able uh do they have the caliber do they have their their the the attitude that will allow them to convince an executive who is super busy and managing a lot of people to give a chance to a new product which is in the eyes of many companies is kind of visionary because from their perspective we're for seeing the future and they don't many people don't believe in it you know that in our tech industry everybody's talking about ai and how cool it is but if you go especially in europe to the mid-market companies it sounds like uh fiction for them the fact that we can predict the future and then and therefore uh we need to gain their trust beforehand and we initially we did some very low cost pocs now our pocs are already priced well but in the beginning when we had to gain trust we said okay we'll do it slightly cheaper but on the other hand once it works you agree to have a proof of cons a kind of a case study with us so we built one pager about what we did and how it go how it went and how how well it grew so and are you bootstrapping this or have you raised capital we have raised precedent money okay how much have you raised to date about half a million okay half a million so my next question is i mean you have quite a history in terms of exits and especially in the fintech space you know they say once you make somebody rich it's hard to motivate them why aren't you on a yacht sailing in in the ocean somewhere enjoying life why jump back in the game so quick so um first although i don't have much hair i think i still feel quite quite young and the second thing is that in most of those startups i was employee number three or four uh so i i'm not a poor person but i'm not uh you don't have you don't have you don't have private jet money yet right no exactly all right very good now you've got a team in nine where's everyone bases everyone in london so we're half in london half in india r d is in india and the front end is in london great and is it too early to talk about some other economics like you know churn and you know cac and things like that your cohort's too small right i don't think it's never i i think it's never too early to talk about fundamentals of the company uh although in some cases you need to wait to see how they grow so far we have uh we don't have churn yeah all our clients are still there and the important thing about we have kind of anti-churn what i mean is that all the clients who completed the poc and are working with us for more than three months at least doubled if not tripled uh the scale of working with us specifically the amount of money they're paying you yeah so our biggest client today started with uh less than a thousand pounds revenue a month and now we're making 9 000 from them and it's not because we're nice people it's because they like the product and because they're making money more more money than they thought that's great and we have we have five clients like this so almost all our clients who completed the poc have grown more than double and all of them hundred percent of them may increase their activity all over the past uh six months correct yes okay that's great uh we're at a time here but last few questions i want to sneak in cac what are you willing to spend to get a new three thousand dollar a month customer can you please repeat that sure there was something yeah cac fully weighted what are you willing to spend to get a new three thousand dollar a month customer uh probably uh three to five thousand oh really just one month of of of kind of the value of the customer i thought it'd be way more um i'm willing to spend more and but so far it's not required what i mean what about the commission to your sales people i assume that's more than just one month of the revenue hey well i'm excluding uh i'm excluding commissioners that's what i mean fully weighted fully weighted cac uh fully web because the commission for the sales people is coming from the you know future flow of revenues so that's a directly tied account when i say fully weighted that's exactly why i say it's like fully weighted you know you include you know include salaries onboarding like marketing and then any direct paid spend facebook ads conferences not development necessarily that's usually people don't put that in their cac metrics but um it also might just be too early like you've only you've done this 10 times so um you might maybe i guess that i would probably be willing to uh dedicate to it probably 30 percent yeah thirty percent our first year another uh seventy about about fifty percent of that goes to development yeah and then in the beginning obviously you guys are just starting out you're still obviously investing aggressively i assume you're burning cash today right you're not profitable yet correct yeah that's great very good tal let's wrap up with the famous five number one what's your favorite business book uh i thought that's actually my my favorite business book is not a business book it's uh about uh um it's the einstein uh book about how he takes uh physical models and implement them on on people number kind of like taking science and i don't remember the name i think it's uh we'll look it up no problem number two is there a ceo you're following or studying right now er there are a few there's another one the ceo of google google i think and and the ceo of microsoft i think that the microsoft one is much more interesting because he took a company which weren't trending very well and he took basically the same product and repacked it both in terms of making taking into the cloud and and changing the business model behind it to bring the company back to growth together with very very aggressive m a strategy like buying linkedin so and also a company that unlike you know the younger companies their their work workforce have been there long before him and uh and i think that's that's uh very good there's a number that's microsoft satya nadella quick answers here if you can tell just throw out a time billing tool that you use billing tools that we use uh we use revolut in the uk and we use the uh good old-fashioned wire transfers we do b2b we don't we don't need to collect uh money from thousands of people number four how many hours of sleep to get every night no dude not enough how many probably around the five okay and what's your situation married single kids sorry married single kids married not the kids how old are you uh i'm 40. just turned 40 a month ago actually congrats last question what do you wish your 20 year old self knew um be less concerned about the next year and be more concerned about the next five years guys there you have it have a little bit of a long-term approach he's had some success being employed number three for at some companies that have had some success now he's doing it on his own r2 data launched in 2017 customers paying about four grand a month they've got between kind of seven and ten pocs out there many of them call it seven eight nine have converted a paid account so about 30 grand a month right now in revenue that's up from obviously nothing a year ago because they just launched using conferences and other tactics to drive uh obviously those initial sales nine people right now on the team between london and india raised about 500 grand to get the thing going obviously not profitable because they're investing in growth willing to spend up to three months of lifetime value on acquiring the customer so call it maybe 10 12 grand for a three or four month payback period tal thanks for taking us to the top thank you it was a pleasure thank you