How Revtrax CEO Jonathan Treiber grew Revtrax to $10.2M revenue and 100 customers in 2019.

hello everybody my guest today is jonathan schreiber he has championed greater measurement accountability for online and offline marketing as ceo of revtrex guiding his company from initial product development to capital investment and continuous innovation he leads a team of veterans and rising rockstars who today probably work with more than 350 brands in numerous industries jonathan you ready to take us to the top sure sounds good all right man tell us what rev tracks does and how do you guys make money so we uh we're an 11 year old startup and our vision uh uh over a decade ago was to solve a problem among big consumer brands retailers consumer package goods companies that we uh believed were overly discounting and uh and overly promotional and the the problem that we solve in the market is that a lot of these brands uh believe they're too promotional and they want to discount less but don't quite know how in order to leverage technology and a framework and systems to do that and so we built a software platform that ultimately helps our clients figure out the optimal discounts to give to each consumer through their digital marketing efforts um in an attempt to honestly not give a dollar more than they have to uh to a consumer uh to generate the sale and so that's the problem ultimately to enhance margin uh or reduce margin pressure that a lot of retailers and brands feel when they're just when they're discounting so universally so jonathan if jcpenney had your software maybe they wouldn't be bankrupt today then right it's possible yes you can own it you can you can say yes i mean it's possible yeah it's very possible how do you so how do you price for something like this so our pricing model for now 10 years has been um a volume-based sas so what that means is our clients typically commit to a 12-month contract where they're committing to a certain level of usage of our platform meaning a certain volume of offers that they want to create in a pool and optimize a certain number of offers distributed or offers actually cashed in offers distributed okay so the goal being a client might say hey revtrex i want to do over the course of my 12-month marketing calendar 50 unique offers uh x percent offs x dollar offs buy one get one all these different offers they want to set up in our system and um and leverage our system to help uh basically figure out which offer to give to which person and over the course of the year they might say hey i think i'm going to do a million offers distributed or 10 million offers distributed and what we'll do is we'll price the client in a tier where they'll commit to that level of usage and if they go over we'll bump them to the next tier and you know prorated and if they use less um they're sort of uh they're they're stuck with them jonathan you're a tough guy no refunds if you don't use your your what you fully paid for huh use it or lose it use it or lose it like a good offer use it or lose it all right so um give me i'm sure you have tons of different customer cohorts here but give me an average you're on average what's it what's a brand going to pay you per year for this so a brand on average will pay us about 100k a year okay and generally speaking if i pay you 100 today what am i committing to in terms of offer sent over the next 12 months probably somewhere in the neighborhood of 20 to 30 offers that we're gonna manage in our platform for you over the course of the year and probably a million offers distributed okay fair enough okay and then you said this was a you launched in 2007 did i get that right january 2008. oh 2000. by the way hell of a time to launch a company what were you thinking um i wasn't you know the uh the thought actually was uh it wasn't based on macroeconomics i come came out of my first job at a citigroup doing mergers and acquisitions um before the whole wall street industry sort of melted down so i felt like i got out at the right time uh and then really wanted to start a business focused on um you know a problem i i perceived in the market with my co-founders which uh you know has become more pervasive over the last decade with uh pricing and promotions being rampant so i think we just picked the problem worth solving that um actually was more acute in a recession than it was uh then it was not and so believe it or not i feel like the business we started and the problem we solved was actually more relevant in 2008 and 2009 uh you know versus in the boom years that uh you know preceded it yeah that's great so okay so you have you've had 10 years to essentially 11 years to grow the business what have you guys scaled to now in terms of total customers using you so we work with uh we work direct with brands so so not through agencies and that means that we today have a hundred corporate clients at a corporate entity as customers but underneath typical large company umbrellas um many of our clients like kimberly clark and unilever have you know dozens and dozens of brands and um and so when you look at it that way we work with a hundred corporate clients that ultimately have about 600 brands active using our platform and how did you i mean how did you get take me back to 08 right because the first 10 customers are always the trickiest right what what kind of mousetrap did you use to close the first 10 customers so uh yeah i would say that the first two customers were the trickiest you know selling even the first customer before we had a product um yeah the best uh the best story i could give you briefly is when we started the business in 08 myself and my tech co-founder made a gentleman's bet as to who could finish first could i finish selling our first client before he was done building the product or would he be done before i was done selling uh our first client and as the story goes we both finished pretty much in june of 2008 where uh where we were able to convince uh the all-new comp usa that had emerged from bankruptcy with a much smaller footprint you know much more nimble team um to buy uh our offer management platform who'd you sell into there we sold into their marketing and merchandising team and really from from you know their their big need was they had a much smaller digital footprint and um or digital footprint they had a lot smaller physical footprint fewer store locations after they emerged from bankruptcy you know they were a national chain went bankrupt had a much smaller footprint and they wanted to use digital marketing that they had going on to drive in-store sales with um targeted and um trackable offers and that was where we came in so we were a good fit for what they wanted to do to drive awareness among customers many of whom thought they were out of business um and what we found is in our first 10 customers what all sort of seemed to be a common theme was that they were small enough to be able to make a decision and be you know nimble enough to quantify that for me less than how many employees or revenue or what do you mean small enough so so the best exam the best way to quantify it is they had you know a 10 person or fewer marketing team and they had everybody kind of do everything it was all in um very scrappy nimble now on a revenue scale basis those companies still did anywhere from 200 to 500 million in sales a year so they are not small but what we found is that we could get in front of the right stakeholders who can make a decision versus of course over the years we've sold into bigger companies that tend to have much more silos and and you know very uh different decision makers that can make the sales process a lot harder now have you chosen to bootstrap this company or chosen to raise capital we bootstrapped the company um so we we initially did uh raised 1.6 million of angel capital from a bunch of industry angels who um you know bought into this vision and uh and then ultimately we took that capital invested it very prudently um and was able to scale the business so total total raise today then is just that 1.6 yep of equity capital and uh you know scaled the business to about 10 million of arr with um you know people and that's great i mean are you talking like like seriously positive or basically break even break even okay our focus has been to aggressively reinvest in the business for growth and a lot of our contracts you were joking about the use it or losing concept of our contract but one better than that is like most sas companies and i think you know this from your experiences um all almost all of our clients prepay their annual contracts up front yeah yeah you gotta i mean you told me earlier kind of average acv is 100 grand so it's 8 500 bucks a month across 100 customers puts you at what about 850 grand a month right now on revenue or about a 10 million run rate yep yeah that's great now where help us understand growth so if you're doing 850 a month today where were you about a year ago so we were about the same okay so we hit flat yeah we're flat we hit some uh some growing pains and hit the hit the ceiling um probably actually about closer to three years ago and have been dealing with some macro things um in our customer base that have you know created disruption for a whole set of vendors but you know we've been working through some transitioning in our customer base and working out some fine concentration issues but um but overall the...