How Retargeting CEO Rares Banescu grew Retargeting to $3.9M revenue and 850 customers in 2024.

hello everyone my guest today is raj banesco he's an entrepreneur with more than 10 years experience in e-commerce and a good understanding regarding the market especially in ce he founded retargeting five years ago and quickly became market leader in romania bulgaria hungary and greece the website's retargeting dot biz where are you ready to take us to the top yes hi nathan thanks for inviting me you bet so just right off the bat um are you is your business model a sas based model or are you taking like a cut on gmv okay so tell me more about it what's the company do you describe one of your customers uh so basically we're trying to we're doing we're automating uh all the marketing channels available for e-commerce from emails newsletters pop-ups push notifications sms and uh since 2018 google facebook and instagram and we're currently working on uh becoming the first company worldwide who will be able to deliver youtube dynamic ads this feature is not available yet it doesn't exist anywhere and we're trying to build it and hopefully it will be released on in q1 2020. let's come to that back to that in a second but first you help me understand on average what are companies paying you per month to use the technology uh the average uh ticket right now it's 297 euros 297 okay and what do they get what are you pricing against is it number of skews tracked number of volume what do you upsell against we're uh we're uh we're charging based on the traffic of the website so for small customers up to 15 000 sessions we charge like 53 euros then we go to 260s 520 and now 400 000 to sessions per month it's like 1 500 euros anything else besides website website traffic you price against no okay website traffic that's good and when did you write the first line of code for the platform uh i'm not a software developer or when did when did the team write the first line okay okay okay uh i think it began uh five years ago okay so five and a half years ago the mvp was released then we went uh we went through some updates and some changes and uh we are using now the fifth version of the software okay do you remember how much well first off when was your first dollar revenue do you remember i can check and tell you if i won but i think i'm pretty sure it was 2014 november 2014. okay and so how much did you spend on the mvp before your first dollar of revenue um well it's difficult because i had my revenue before the mvp so basically i'm a sales guy and i had contracts signed i had like 20 contracts signed and already cashed for some money by like a few thousand euros anyhow the mvp costed around uh 50 or 60 000 euros how did you convince people to pre-pay you 30 40 50 grand or whatever was three four five grand up front before you had the product uh can you repeat i couldn't understand you said you had contracts signed before the mvp how did you convince people to pay you before you had the mvp built i must admit i'm a good salesman no okay i get that but i want to i want to decode that right so specifically what did you do uh the idea is the following what i gave the customers i gave them the possibility i presented the software i told them that it's working products progress and it's being built right now uh and i gave them a post the possibility to to let's say to start using it after the software was released like three six months after but with half of the behalf of we have using by paying half of the fee if they signed a contract with me in that day so basically it was a it was a time pressure and a pricing uh advantage for those customers that's great now how many customers are you now working with today uh around 850 paying customers 850 that's great so 850 paying customers launched in 2014. have you guys bootstrapped the company or raised it's bootstrap so far we are planning to raise some money probably at the end of this year why do you want why do you want to raise because we need to accelerate uh we are increasing customer base we're increasing revenue and we opened offices in uh greece in hungary in bulgaria and we plan to open some in italy and spain and we need to increase the we need to increase the the the the speed when that will end up everything so we're accelerating how much do you hope to raise uh an average 2.5 okay and what valuation do you hope to raise on obviously i have to negotiate it but 16 to 20 million okay so pre-money that's great now you mentioned revenues what's your revenues look like today uh 130 000 mr okay about 130 so that that would mean the average uh the average before we go past that 130 today where were you a year ago do you remember uh a year ago this time i was doing uh 35 35 000 per month now you're doing about 130 000 that's 850 customers and that would mean they pay on average about 150 a month okay oh how much 150. uh i think it's higher than that well 150 times 850 customers is 130 thousand dollars a month okay and this in this case the averages yeah you might you i assume you're probably moving up market so new customers today probably pay more than 150 a month uh actually we just had an update in pricing we are charging with performance we have performance based pricing so far so we are charging 3.5 out of extra generated revenues and the customer would pay the budget google and facebook and now we're switching from that to fixed p actually we switched it last month why why is this important in update we because in for us it will help us scale faster because of fixed fee it's easy to plan it's easy to budget it's easy to estimate how we're going to spend uh we have for example i'm using some such businesses in order to help us with retargeting and uh in terms of performance pricing or in terms of variable costs i had some nasty surprises uh in the past so i don't want my customers my customers to face this yeah are you profitable today or burning cash uh we are from the beginning of the year this year so far where we made like 20k in profit or something like that so we're break even because we're bootstrapped and we're spending our money so we have to be a little bit on top yeah so it's like three thousand bucks a month something like that on average you're taking to the bottom line something like that that's good we'll call it one point five percent ebook to margin okay on your 130 top line that's good all right what's your team size today how many people uh 26 or 27. how many engineers uh seven and how many are quota carrying how many are have quota like sale like sales person quota you pay commissions okay okay uh five eight plus 12 oh wow you have a lot of sales people yes i have one for every country where we're present one for spanish market one for italian three or four for romanian two for greek market who makes the most i bet you it's the spaniard who makes the most money romania really because that's you right yes [Laughter] actually this is our third month in italy and spain and we went to i'm like i will tell you exactly we have like four hundred to lay for made in spain meaning that one thousand eight hundred euros okay what quota are the sales people on uh like what's their target how much do you want them to close and new revenue per month uh around the 20 paying customer per 20 paying customers per month okay so 20 customers per each quota carrying rep you have 12 of them so what is that about 240 new customers per month that's the goal yes but we're not that there yet romanian romanian uh the romanian colleagues uh achieve the targets bulgaria greece uh there's they're they're increasing but they are not there yet and italy and spain they just began so we don't have available uh let's say good numbers this feels like the olympics or the world cup it's like you know the country is competing against each other i love that uh listen you can be really good at sales but if they don't stick it doesn't matter which churn today uh hi 4.8 monthly monthly and is that on a local basis pricing that's a logo basis or revenue basis uh rephrase in other words is that the amount of revenue that you lose each month about four point seven percent or the number of customers that we i lose i say vermont four point eight so in january we have we had six and then we decreased to five and now four point eight this is the pricing change uh is part of the strategy of our strategy in order to reduce chart yeah that's good now do you have any expansion revenue each month or no if i have any expansion revenue would be customers you signed up a year ago that you're upgrading uh we're actually we're very permissive in in subscription you don't uh you don't you don't commit for one year you can cancel the subscription anytime you want and we're updating also this because do you have a method right now to get someone that pays a hundred bucks a month in year one to upgrade them to 200 bucks a month in year two no they the only strategy they need to increase their traffic because they're paying based on their sessions so we need to increase their traffic in order to get more revenue for them and so we consider your guide we have a new product in uh in uh in progress on on the pipeline right now that will increase the revenue per customer because we have we it has more features to their accounts when you look at your sales team and your fully weighted cac...