How Redtrack CEO Vlad Zhovtenko grew Redtrack to $2.3M revenue and 500 customers in 2024.

hey folks my guest today is Vlad jovtenko he's the founder and CEO of red brick red track dot IO he combines his passion for digital marketing and creating things since 2000 and now as a Founder he's always looking for to learn from people who are ahead of him on both path and fundraise but also likes to have a nice life besides Stardust glad you ready to take us to the top yep we'll try it just to be clear so is red track bootstrap today are you phrased no we're raced and we already saw you three times already yep okay all right well don't tell us how much we'll chat about that a little bit but first tell us what is the company what are people paying you for people paying us to get comfortable uh daytime when they do digital marketing basically they see everything in their campaigns in green and they know things are going good if something goes bad we have automation that can stop the campaigns let them know and they will look and dress the issues while they paying us money because the whole digital marketing is shifting from third-party cookies to first party data and that's how rhetorical praise it helps digital marketers measure their campaign performance across all channels consistently and based on first party data so that's what people are paying us for I love this okay and so so what are people paying you per month on average uh we uh for the last two years that's basically since last time we talked we increased our average learning per customer from uh 400 to close to 200 per month and that's what people are paying us now of course we have Legacy customers we have new customers so that's averages are what they are well just be clear sorry you said you increased from 400 to 200 that would be a decrease sorry for 40 to 200. okay that's what I thought yeah last last time you came on last time I came on back in 2019 you told me you were doing about forty dollars per user per month now you're at 200. what drove that expansion are two things uh we basically we're cutting load your subscriptions adding High test subscriptions and to but not just cutting we actually were expanding the product for those two years uh making sure that when we charge more we actually deliver the value to those people who pay more and Vlad what is your largest cut don't name the customer what's your largest customer paying you today annually annually around 60k without it yep okay because so why do they why do they pay you so much are you upselling seats or features or something else uh we upselling seats and we have selling volume volume of what a volume of data are tracked for a particular customer is in billions of clicks per month volume of data measured by number of clicks per month yep in this particular case okay so for someone paying you sixty thousand dollars a year how many clicks per month are they managing through your system well uh slightly more than a billion a billion in clicks per month yep wow that field a billion is a big number it feels like that ACV should be like 120 Grand or a million a year or something uh that's our Legacy customer we have actually uh very uh friendly uh system towards a big data hello and most other customers we have don't have nearly as much volume as this one customer does I see okay and now how many customers are you working with today total 500 okay 500 customers and so I mean can we take 500 customers at 200 bucks a month you guys are doing about 100 Grand a month in Revenue uh well that's where averages so yeah we're doing currently uh 75k per month oh you're very close you're very close to the million dollar run rate exactly yeah and so I mean I'll be honest if not the one Ukraine would be there last three months for a bit rough for us a lot of customers we had from Europe uh actually they and actually from Europe they were on a bit of uh not decline but let's say uh steady grows so we were growing couple of plus months just one and two percent per month which stopped us short of reaching 1 million Aurora which was my goal for June oh what's going on there YouTube good to see you guys now imagine this you love watching these interviews with SAS Founders but imagine if we took all of the valuation data out from over 2807 interviews I've done manually saves you a lot of time well we've done this we've built the into the beautiful interface inside of founder path check this out I'll show you how you 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 88 days and even set goals for evaluation this year now the secret valuation is there's many different ways to value a SAS business so the reason you're going to see three or four different evaluations inside of your founder path dashboard this is all free by the way is because depending on who's doing the buying of your SAS company you're going to get a different valuation a VC is going to pay a different valuation private Equity Firm is different if you're going to 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 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 not 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 1.2 million seed round 3.7 raise they sold 22 percent of their business go in here and filter by the event maybe you only want to 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 going out right now and you're raising your seed round well 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 data set of SAS valuation than what you can get now inside of founder path 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 if you want to check this tool out if you want to jump in and sign up you can check it out for free to get your valuation at this link this link founderpath.com forward slash products forward slash evaluations 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 all right let's jump back into the interview I didn't know that so you're currently based in Ukraine no uh we have part of the team in Ukraine part of the team in Lithuania part of the team now across Georgia and Tokyo wow okay interesting okay so you're obviously moving pieces around as we deal with obviously the war going on as well right yep yeah and how has that impacted you uh I would say uh the big impact more was on team production uh and uh capacity to move because I know when we have uh developers actually having to run to bomb shelters three times a day but impacts the production in terms of wow and meaning that uh a part of our company was not working uh proper full times a part of our company was even being full-time you know people have other things to think about when there's a lot going on so it was an impact it was mostly a mental impact to the uh production rates but I'm uh grateful to the whole team that uh they managed to find strengths to actually also think about the company not to only about things that are more important than business now this makes sense and I'm glad you know everyone's okay and you're managing through and still growing uh you didn't grow as fast as you wanted but you're still growing which is great uh now how many folks are on the team full time today uh we have 35 people uh sorry uh two people will join next week so we have 35 now we have 33 people full time and actually we expanded ourselves into new roles we have three people in our Brazilian office to address most of this customer success our U.S Infinity customers which for everyone listening right now who is who are based in Europe looking to expand to Brazil how did you find those first three employees in Brazil amazing we're extremely happy yeah but how for anyone listening right now who's based in Europe and wants to expand to Brazil how what can they learn from you how can you how did you find your first three well we a used LinkedIn just to find people who worked in companies that looked like our right profile so basically doing the uh recording uh ourselves uh but uh surprisingly the path to us was opened by our first pursuing high when we had the local ad which reached out to us hey guys I want to join the team I said well and it was about cavity time so we already said to work remotely why not so we uh confirmed her suggestion we hired her and we found to have to be an amazing uh team member so I said hey can we find more uh sorry if I hire more people around yes of course so we started to look around we had one more person then one more and we actually plan to hire more people in Brazil uh by the end of the year that first employee did you pay her to bring on new people did you pay her attention uh green ask new people she just advised well shared a bit where to look for people people that's it all the Harry was done and what did she say she gave you company names to go pick people out of or application basically gave us location like uh don't hire in Rio or in other big cities because the pay grades and we actually checked is probably uh two times compared to smaller cities and again since everybody walks remotely that's fine with us what's a smaller city in Brazil that's better to hire from I don't know what the smallest one well what's where did you hire your people what city we are from the north from the north of Brazil we have three cities and actually I don't know not a single name of the city that's a shame I'm just I just know but our team is at inventoff the north we have live calls but uh I heard the names of the Cities several times but they never are stuck in my memory and the compensation you can pay the folks in north of Brazil is about half what you'd pay a developer If you hired them in Rio uh yep wow interesting uh very cool and so um you mentioned back in 20 I believe in 2020 raised a 550 000 seed round is that correct yep exactly and what when and have you raised since then or no uh we raised another round and we actually did uh big closure just a couple of months ago uh we raised a late round let's call it at 750 basically this would be the money to help extend our Runway until series a but we plan to raise in U.S next year because please know what is better than me you don't trace series a until you got at least to 1.5 million and we're very close to that one million but we still need probably at least uh eight to ten months to get as close to 2 Millions as possible so 73 000 raised at what valuation uh we raised at uh post money would be uh 9 million and did that feel fair to you did that why did that feel good uh that feels fair to us given the industry in the situation where in the support we get from this is existing and the new ones and how fast they were moving was the deal yeah it's about 11x multiple on your current Revenue uh congrats on getting that funding in the door gives you more Runway you mentioned last time that you were on that you were burning about thirty thousand dollars a month so you weren't profitable are you still burning Capital today uh we're still building Capital today and actually we I realized that if we want to hire developers aggressively we will not be able to build product as fast as we need because the market is evolving and like as we get bigger customers we go in up Market we get more complex demands and so we were not managing to get where we need with the small team we had in terms of development so we actually tripled our development team in size over the last six months and so our burn rate actually increased despite everything is growing so are you burning like a hundred thousand a month now or what's your birth uh like uh 60 per month right now okay that's that's net Burn Right yep so your bank is going down 60 000 per month yes yes so that's why we uh got the runway yeah you have plenty of obviously plenty of Runway let's rep up here talking more about product right because this is a very interesting product it's a very interesting Trend which is again people moving away from cookies and more to first party data you are working one of your four key customers you sell to are SAS companies you help SAS companies understand why their leads turned into subscriptions explain how you do that well uh we do that by allowing uh the companies to see a of the channels that drive in traffic the channels that give them leads and actual which is more important to see the customer Journey because for sales companies uh but it's not like one touch point conversion uh but typically especially for uh SARS like right track or even hours logic tickets they get multiple touch points across different channels Facebook uh display ads Partners referrals before somebody commits to even a trial and then to subscription so retro clouds are SAS customers are just talking about them to see all those typical pulses uh that a visitor would make before convert into a trial and then later on since we combine um on-site data with offline conversions coming from CRM HubSpot for example we can keep building about customer journey into multiple conversion stages from trial to demo to initial sign up to recurrent sales uh so that uh the marketers can see the best channels are the driving the best impacts all there very cool channels this makes tons of fun guys if you want to check it out it's red track.io highly recommend it Vlad we're out of time let's wrap up with the famous five number one what's your favorite book uh my current favorite book and probably still the favorite book for the last year it's even here it's uh extreme ownership extreme ownership is a good one number two is there a CEO you're following or studying um I used to study a couple of them uh no I'm more or I can't tell them still just uh looking for many people in the niche so when I have a problem or a question I reached out to the VCS or to the community we have I asked that question and I get advice whom to talk to who would give me the best solution so that's why I say will be uh advice that sticks most of my memory would be my talk with competencio uh six months ago when he helped me reshape our approach to pricing but just look into our numbers and send me uh one phrase that your customer pricing is not a journey from all over to higher your customer should be in buckets and then it was like wow you're so right and we shaped our pricing completely guys there you have it pricing should not be a journey it should be buckets that's a good takeaway there Vlad number three what's your favorite online tool for building red track um uh my first online tool would be actually a Google drive because I have the docs are slides everything number four how many hours of sleep do you get every night um from six to seven okay and what's your situation married single kids uh uh two kids in a partnership okay good and how old are you uh oh hold on uh this year will be 43. 43. last question something you wish you knew when you were 20. uh I wish I would not quit my first uh own business guys don't wait redtrac.io helping SAS companies understand where their leads come from he's grown from just thirty thousand dollars a month back in 2019 and now almost eighty thousand dollars a month in Revenue about to break that million dollar run right they just closed a six a 750 000 seed plus round at a nine million post money valuation as they look to scale their team's base between Lithuania Ukraine and now also Brazil they just opened an office in Northern Brazil because developer salaries are 50 there scaling nicely with their team of 33 we'll see what happens next Vlad thanks for taking us to the top thank you one more thing before you go we have a brand new show every Thursday at 1pm Central it's called Shark Tank for SAS 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 our poo CAC LTV you name it they share it and the buyers try and make a deal live it is fun to watch every Thursday 1 p.m Central 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 SAS World whether it's an acquisition a big fundraise a big sale a big profitability statement or something else I don't want you to miss it additionally if you want to take this conversation deeper and further we have by far the largest private slack Community for B2B SAS 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 that at nathanlacka.com forward slash slack in the meantime I'm hanging out with you here on YouTube I'll be in the comments for the next 30 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 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hello everyone my guest today is vlad joftengo he started with digital marketing way back in 2000 from website building to lead generation to sas ad tech he still has a passion for digital advertising with redtrack.io he's trying to address one of the core problems that he was facing often accurate real-time and actual measurement and analytics solution for performance focused digital marketing vlad you ready to take us to the top yeah i'm ready so let's go good so first off what's your business model do you do you get paid on a sas model or is it some other model yeah we run pure sauce and i think that's the way to go for most of the technology companies especially with customers who might see different volumes months or months they can change their plans freely to pay just for what they need okay so that's the best way and so give me a sense on average what are companies paying per month to use your technology yeah you'll be surprised the companies are paying average 100 bucks for months for using the right track and basically depends on the volume we build the product that is very uh high load friendly and scalable so i guess our biggest cost is support so you upsell on volume volume measured by what ad spend number of creatives no we don't want to jump into customers budget so we sell on volume and some extra features regarding automation yeah but sorry vlad volume measured by what yeah we measure data basically the clicks impressions conversions so we don't care what our customers budget so we have customers with six figures but in very low subscriptions because the clicks are expensive okay so you upsell based off volume volume of clicks impressions and conversions yep what what where did you launch the company in uh sorry can you repeat my last one what year did you launch the company in uh last year so we launched the company early 2018. okay and i would say the uh product not some viable concept she was ready by september and only uh almost a year after september we reached the point where we started to release all the features regarding automation which was the real purpose of the tracker so how much money did you spend building the mvp before you had your first dollar of revenue well we had our first deal of revenue the first month this will be a big surprise but we got our first hundred customers uh in ten months uh we built this uh with a four main team two developers me and one person in marketing so we didn't spend much okay but you have in order to get a sale selling software either your pre-selling idea or you built the tech really fast in under a month and got it live my question is again you either bootstrapped or you put in your own money what did you spend to build the mvp uh we uh built on top of the other technology solution they were catering the similar market uh performance advertising but they couldn't address the need of uh media buyers especially small ones that we work with so basically we took the technology repurposed to our needs and that was very fast so which allows us to close the first sale and then we keep repurposing the technology okay so you feel like you feel like you spent less than ten thousand dollars on the mvp yep okay very cool now to date have you bootstrapped the company or did you decide to raise uh we are raising uh second rounds right now and we're in the talks with several we see funds how much have you raised to date though uh we have raised half a million half a million and how much are you hoping to raise right now uh next half a million and afterwards we'll see how much we'll need to raise to get to scale so raising 500 now are you gonna do that on a note or a priced equity round do you think i think we'll do it on the price equity so what valuation are you hoping to get uh right now based on the all the talks we have our volition is uh 2.5 million okay do you think that's fair well uh i think it's fair and we talked with different people who did to put them down in volume up relations the numbers match so i think it's fair and how many customers are you serving today we sell more than thousand customers a thousand yep okay i mean so can i take a thousand customers times a hundred dollars a month you're doing about a hundred thousand dollars a month right now on revenue uh it would be very good we started as a freemium so i guess uh well the right which says uh users with customers being less than that customers being about 500 we still keeping customers who signed up when we had lower subscriptions and to get first people on board we uh give quite heavy discounts so right now so right now about how much are you doing per month [Music] uh well uh i don't want to disclose this number sorry uh because that will influence some of the negotiations we have well you said 500 vlad you said 500 customers and you said 100 rpoo and rpu stands for average revenue if you let me finish our poo stands for average revenue per user right so if you take rpoo times customer account that means you're doing fifty thousand dollars a month do you need to correct one of those numbers is arpu actually lower uh yeah i would pick lower because the errors really per customer would be around given the small number of subscriptions and discounts uh will be roughly at uh 60 dollars so yeah okay got it and where were you so that would put you at more like thirty thousand dollars a month right now where were you a year ago do you remember a year ago we were at just a thousand dollars a month yep so healthy growth a year ago we had our first uh 20 customers and a year ago we ran into the first three bucks so return rate was awful how bad what was the percentage well it was like 20 months till october 20 turn per month yes what's it now i know it's about 10 per month basically because of our lower tier subscriptions which we are letting go by september okay but ignore lower tier subscription instead of measuring logo churn measure revenue churn what's revenue churn over the past month uh roman percent okay so about six still sixty percent annually that's pretty high i do know uh because we right now in the niche there is affiliate performance marketing which is very uh very aggressive people come and go and to this is why we're actually raising the money and we're moving to working with digital advertising agencies they are more predictable more stable we have those guys within our customer base uh and i don't see any one of them actually go since uh october last year we just keep adding them up so it's a point of uh building out the product to the point with all those automations coming that we can work with uh agencies not affiliate marketers well i feel like markets are good customers but they come and go and how aggressive being to get a new 100 a month customer in terms of your fully weighted cac uh well uh i would say currently we spent let me do the mess i'm not ready for this question uh so we spend roughly uh 150 to get this customer okay so about a two-month payback period yep and where are you spending the 150 we're spending uh mostly uh so we have three channels to spend and we don't spend much we spent on uh some sponsorships and affiliate marketers so that sorry are influencers that would be 30 of the budget then under 30 would be on paid advertising and uh the last 30 would be on content generation and that would include people who actually work in payroll and generate the content so last month how much add up all those categories how much did you spend 6k okay so about 2k on each of them yep and are you burning i imagine you're burning capital today to drive growth correct yeah we burn capital uh and we're burning capital roughly at 30k per month okay so that's i mean do you feel good about that or does it keep you up at night well uh i feel good because the burn rate is increasing steadily so and we want to actually reach close to maybe 10 to 15k by the end of the year and the burn rate will be keep at this rate more because we plan to grow aggressively both in terms of team and marketing space what's your team today team today is 14 people one for 14 folks very good um and so where tell me how you got your first 10 customers what growth channel did you use um well i would say it would be uh reaching to people directly asking them to go travel product and then yeah but how did you target them how did you find them what titles did you go after how to get your their email and that's very tricky because there is no such thing as titles in affiliate marketing they are more media buyers there are specific communities where those people hang around name one or two of them sorry name a couple of mono communities okay uh let's take that money forum affiliate fix i'm affiliate uh a number of linkedin groups like media buyers and sellers cpa marketers all such groups okay interesting so you go in there that's how you get your first 10 customers very cool all right let's uh let's wrap up here with the famous five number one what's your favorite business book i would say my favorite business book would be good to greet is there a ceo you're following or studying um i would say i'm studying cup oh well i'm not exactly following but i like what different people do i would say uh i'm rather inspired of what joker willing does i also follow uh what my past ceo uh kell brown from world depth does i admire this man a lot and i have other people they're not very familiar about it i think they do great stuff number three what's your favorite online tool for building your company uh google docs number all we'll see what number four how many hours you sleep to get every night seven and situation married single kids i'm married to kids and how old are you 40 40. yep last question what do you wish your 20 year old self knew uh not to quit my first own business guys don't quit too early red track dot io during 30 000 a month right now helping again media buyers and sellers with digital advertising and their date managing their data they've raised 500 000 burning 30 grand a month right now to drive growth team of 14 people churns too high right now 60 gross revenue churn annually they obviously are trying to fix that spending 150 to get a new 100 a month customer so three month payback period there again healthy economics they look to scale hope and raise another 500 grand right now on a 2.5 million dollar pre-money evaluation vlad thank you for taking us to the top thank you have a good day bye