How Cheq CEO Guy Tytunovich grew Cheq to $168M revenue and 100 customers in 2024.

hello everyone my guest today is guy tetunovich he is the founder and ceo of czech which he founded in 2016 with fellow graduates of the 8200 cyber intelligence unit in the israeli army guy you ready to take us to the top i am indeed all right i want to put money in one thing i realize is you never bet against ex-israeli army folks do you guys you just there's some there's something about the program that just pumps out really smart software ceos well first of all thank you very much i would concur only not in my case i am an exception to the rule but yeah i think i think one of the things that that's so great that's made us kind of the startup nation in israel is is the fact that to a certain sense we're a post-traumatic nation um you know when we're young teenagers 18 years of age we have to go to the army and the nerds among among us go to the defense intelligence and they have to start learning stuff is that what you did and yeah i did i did i learned my journey in head can get seven years old my dad brought home a fax machine and i thought oh my god what are there small people inside the the and then shortly after 11 years after i got drafted to the defense intelligence and spent nearly a decade working on different cyber security fronts later on also natural natural language processing and yeah okay so now you're working on check so why do people have to you know validate numbers that facebook power editor is giving them in terms of their cost per click and their impression data and all that jazz that is incred an incredible question the answer is i and and it might surprise uh i think some of the viewers listeners but at the end of the day i think companies like google or facebook are extremely reliable and i don't think we need to vet their numbers what i do think however is and i think google and facebook concur is that um there is a cyber security issue revolving around ad fraud and it's a very specific and very um expertise based uh issue and like in many many different aspects other than advertising or other than ad fraud the likes of facebook and google sometimes need help and their advertisers sometimes need help in in really preventing those bad instances from happening wait so can you give me an example of like a really bad fraud case that check you know you know found across one of your customers sure so i can't go into too many specifics including names and so on and so forth but what i can tell you is that um in a lot of the cases what i used to do for the government really is similar to what i do now or to what my company does now um i'll i'll give you a small example we just one of our clients is a very big um what we call an ssp a supply side platform they monetize traffic for publishers um about a year ago we discovered a very targeted and sophisticated fraud case that was targeting specifically them at first we saw it on one side and once we were finished we saw it on around 100 sides then we needed to prove that these sides are interconnected and the aim of these sides were to generate fake clicks for that ssp interesting were all of these media i'm gonna make this up it's like uh latkamagazine.com uh you know uh latkacontentmarketing.com blah blah blah there's maybe they're it's not as obvious but they're all kind of like in the same network were they all together those companies purposely doing this or was there some bad actor targeting those media sites than to get to the supply side platform in that case it was the side owners so the sign owner the site owners banded together specifically to defraud that ssp interesting is this this is a writ so this is a real problem i mean there's these are like big schemes to do this are we talking like millions of impressions yeah we're talking about billions of impressions in that case and we saved about two million dollars per month of activity um of of revenue of wasted revenue of fraudulent revenue and at the end of the day in these cases what's also important to note is that you you you said for instance blahblah.com it's exactly that but in some cases you know it's never i would never accuse the likes of you know turner warner media et cetera of doing bad things they are um not behind those kind of things yet these sites suffer too in that case uh in that example that i just gave it's a bit of a different one because it was a bunch of small sites purposely designed and built to defraud that client of ours but in a lot of cases the big publishers also suffer from fraud we call it nuclear windfall basically obviously it's not directed by the big publishers but unfortunately they're also targeted interesting okay let's get into your business model here for a second so these folks pay you to make sure that they're getting what they think they're getting you're preventing essentially ad fraud give me a general target and you have so many different cohorts that you serve just based off your website and your pricing we don't have to go down all of them but give me like a sweet spot on average what's the company going to pay you to use your technology oh it really depends it really varies and the volumes of traffic that they would buy i'd say that a tier one um massive massive massive international advertiser think brands like the png's of the world and the unilevers of the world uh the ones that spending billions of dollars uh yearly on on digital advertising they would pay in the realm of of up to around one and a half million dollars a year okay um the large platforms that that aggregate a lot of traffic would pay slightly more than that um now is that yours are you giving me like your top two percent of your customers or is that a fair average is about a million a year no it's it's more i wish it was the average so so but it said it stopped 30 i think the average generally speaking is at around 20 000 a month okay so quarter mil a year yeah yeah okay cool and the reason i ask that is because it will affect the rest of my questions related to how you built your internal sales motions things like that so this is clearly an enterprise sales motion yeah of course so break your team down for me how many folks on the team right now and how many of them are engineers so we have around 100 um the vast majority of which are our engineers mostly in uh based in tel aviv um majority i mean like 70 or 80 of them i if i'm not mistaken around 70. yeah cool are you an engineer by train i am not a very good one but i am by training all right so 70 folks are engineers and then again let's jump over to the sales side so i imagine you probably have folks with quota how many quota carrying reps do you have uh everyone else pretty much oh uh except for maybe gna except for gna about 15 quota quota attaining the personnel so so how did look one of the things that is critical scaling a sas company especially if an inside sales team where your acvs are at your level is making sure you get your like new sales person profitability and pro formas right the onboarding time the quota targets the profitability per sales rep how did you when you hired your first sales person where did you like put a stake in the ground and how have you had to edit that stake over your first 14 hires you're jumping into conclusions that i actually put my stake under the stake in the garage i was absolutely clueless um i learned the hard way i i think maybe the best way but the hard way by failing by making mistakes and in this case as well i think at the end of the day there came a time where i understood and i think every entrepreneur especially if it's a ceo who's also the founder needs to understand is that he needs to get help from people who are whose expertise is business operations people like you um people who have done it before even multiple times so what i did is i hired the ceo of uh of a company that was sold for nearly a billion dollars to be my ceo and he really instilled all the business operations quote entertainment uh new acv methodology and so on and so on and he put this state on the ground only after i failed miserably in doing it properly um that being said i i feel that our current process is fairly robust so what do you put if there's you know i'm going to your indeed page applying for a job to work a check for your sales role you hire me on day one you're gonna say nathan just so you know like first year we expect you to hit quota of x what is it typically for if for a junior salesman that would be around half a million dollars of uh annual added acv edit edit they are over what period of time my first year annual yeah over the first year so okay and then when i get to full production what do you put me at like a million new bookings a year year two is it a million yeah okay yeah does it cap out there or do you keep accelerating it it caps out in terms of the quota and yet it it increases in terms of uh the bonus structure so the bonus structure does improve uh with tenure or seniority okay so the reason i'm asking this is every ceo i've spoken with i don't know if you're in this range or not but every ceo i've spoken with doing between like 50 150 million in arr they optimize for some amount of salesperson kind of profitability...