Talon Cyber Security revenue, CEO Ofer Ben Noon, team size, customer count, churn, and more in 2022.

hey folks my guest today is offer ben noon he's a seasoned entrepreneur with vast cyber security experience and was the founder and ceo of argus a global leader in automotive cyber security which was acquired by continental in 2017. following that acquisition he served as a member of the senior management at the company and as ceo of argus leading it to protect over 60 million vehicles globally he served as captain in the idf cyber intelligence unit 8200 and was a team member of two israeli defense prize-winning projects alpha are you ready to take us to the top ready all right something special is happening over there in israel you know i have these founders on and they're all for exit idf you know we've got ari at corelogix tomorrow at yatpo what's happening over there well i think it's two things right one uh is the fact that um a lot of israelis now are are looking what can they do better for the world how they can contribute a little bit more and i think it's kind of the feeling of the ecosystem that there are opportunities that we can bring uh value and the other point is obviously the uh the background right so the fact that everything is always quite hectic uh the background coming from 8200 is is also very much uh helpful where we are solving significant problems on daily basis um so yeah the atmosphere here is quite good now so you're tackling security in the enterprise now with this new corporate browser that you've built specifically for distributed workforces how on earth can you get people or teams to convince their teams to switch from safari chrome or the browser they use onto your secure browser i think when teams already understanding that working from everywhere they would need to have additional security on on the end points especially the less managed uh endpoints potentially personal devices or uh if it's contractored and then in many cases they have devices from other companies i think it's clear for people and it's well understood that they will need to have some type of protection on this unmanaged endpoint and if you think about the alternatives right to install now a fully managed uh network filtering or is it to install a fully uh managed adr on this on this device then one of the alternatives that are the having the least amount of privacy invasion is actually a browser because in a sense your employee knows that you are only monitoring things which are corporate related but anything else is not and so walk me through pricing obviously every sas company is different but how do you price this thing very very similar to to adr so the pricing model is is pretty much identical what are you pricing is number of browser installation number of seats feature-based upselling so it's number of browser installations so it's in a sense uh per device per month okay per device per month and and so obviously um you know if you're signing up an smb with two customers that's different than an enterprise with 500 customers or licenses signing up what's your sweet spot what's the average customer paying you per month or per year to use this technology so our target uh customer would be organizations which are between 5 000 uh employees to to about 50 so this would be kind of our our suites for organizations which are big enough that have enough people working from all over the world enough contractors enough challenging use cases because one of the biggest uh advantages that we can bring is kind of a consolidation of the different uh devices different uh use cases so offer five to fifty thousand employees is your target audience but where are you at today what's the average team size on your platform using you guys today we have an organization still pretty much all rangers some with hundreds of thousands of employees some with uh tens of employees so in terms of the size of the customers but but if you take all the employ all the devices on your platform divided by all the brands using you you can back into an average what's that sweet spot like it's a thousand maybe a thousand employees a fair sweet spot something like that yeah okay okay and walk me through how you're keeping your top of funnel wide you mentioned people can get started with as little as just 10 devices or 10 employees what are they getting is it free or not so initially it's kind of we believe kind of in the model of uh try to pay so start feel the value of the product see that it brings you value uh in a sense i think that the best thing that any sus company give its customer is the conviction of bringing value rather than immediately charge your upfront so usually we start with a small pro with a process of a few weeks of demonstration or proof of value in which we can demonstrate the value to the customer and only then uh when when the volume start to increase then we will convert into a paying customer and now for before we go and get your backstory from argus into talon help me understand well i mean what if someone's listening right now and wants to start on you guys what should they expect to pay per device on average per month so usually it would be a single digi dollars per device per month okay so something like five to ten bucks per month per perm now if an employee has a cell phone a laptop and an ipad is that 10 20 30 bucks a month for that one employee because there's three devices in use case in in use cases like that then usually it would be per device so meaning yes three what usually happens is that on big organizations then obviously they they have bundles for for these type of days okay but it's generally fair to say just my audience understands you're charging sort of five to ten dollars per device not per employee because an employee could have three devices okay okay very cool let's get the back story here so what did you mean did you get the idea for this at argus did you see something there or at continental so if we go back kind of through the history of uh of argus in a sense we wanted to be to bring to the world something that brings a lot of value to solve a significant problem now if you look at the world of uh connected cars somewhere there in 2013 there were not many companies like general motors i think one was one of the only ones of the first ones that were really focused on on bringing connectivity and then all of the other communities kind of march forward so we had to understand there is a huge tectonic changes having uh employees or having sort of customers interested to connect their vehicles to the outside world in order to get again to gain a lot of insights uh and also abilities to have more safety and and we understood that when you are bringing such capabilities into a market that wasn't dominated uh with security issues uh before that then there would be a big vacuum a big a big issue that will come into the world and then at the point uh uh after uh three years after that acquisition i've started working with bobo my co-founder uh here at tallahassee to be the founder uh of lacun mobile security uh have you heard about lakunita i have not but you two got together in what what year was that when did you write the first line of code for tulan so that was middle of uh that was midday of 2020. and did you guys play nice did you just say oh do you know you're an equal partner i love your brother let's put it 50 50 or do you negotiate like hell why didn't i know each other from the 8200 intelligence unit days so that was i think already 15 years ago it was clear to us that we are equal partners that were going into this journey uh uh his brothers played super well uh it wasn't even something that i think we have discussed uh more than uh 20 seconds so that was one of the one of the first things that were completely clear that's amazing who did you so tell me tell me if you can name them that would be amazing who was your first customer and how did you land them at the time that that we started with uh with argus i think that um our first customers were some of the biggest car manufacturers uh in in the world i think actually at the time it was one of the biggest uh tier one uh manufacturers and and the logic and the reason why they came into the table car manufacturers you're talking ford these kinds of brands yes yes yes yes yes yes and and the logic is that all of them were coming into a relatively new world into coming coming to new environment and cyber security at the time wasn't a big thing for for for that area right because cars weren't connected now you added a stellar modem um and it was kind of the early stages but one of the things that for us at argus was was very clear is that the opportunity here to bring something into the world was was unique and by the way that's also what tuja and i were looking uh at mid-2020s so had i was the founder of mobile security it was the first cyber security for for smartphone and one of the things that uh both of us experienced is this tectonic chain so when i had started in 2011 with lacoon uh smartphones weren't connected to organizations uh at all and all organizations wanted to allow this access and then uh when we started working together uh june 2020 um first point is that we knew that we want to work together so that was this uh brotherhood that you've mentioned and second thing was uh can we bring something dramatic to the world and and i said so just to move this just to move this forward because again we've got about four or five minutes left here so your first customers come from the space you came from which is car manufacturers you know not ford but people maybe like ford or maybe ford too but you can't comment but those kinds of brands that was your first group of customers where yet today obviously you're only a year a year and a half in but how many customers today today we have about a dozen uh design partners uh getting uh probably by the end of uh this quarter to about uh 20 where the goal would be to bring as much as value as possible so over 12 design partners does that mean they're paying customers or are you guys pre-revenue today today the company is pre-commercialization okay so pre-revenue help me understand how you're learning right now this is a beautiful place to be in as a founder right as you're doing the design things you're saying what will work what won't when should we launch pricing how are you thinking about those challenges i think one of the most important thing is to understand which problems are we tackling for the customers and exactly what are the biggest pain points that we are solving because each customer by definition has uh different issues different challenges and what is kind of the common denominator that most of them are are having networking that were able to bring that value as soon as possible so i think that the most important thing the second most important thing would be to understand um and to identify exactly how is the fastest way uh to present this value because i think that one of them the main challenges with a lot of security companies is how to present the value that you are bringing to the customer and how many of the i guess how many devices are you managing across the 12 design partners right now like what's your actual install rate or install base usage rate base now it's uh hundreds and uh growing to thousands okay and so when i asked you earlier about pricing per device and you said sort of five to ten it sounds like that you're still experimenting you're not quite sure where pricing is going to end up but you're testing right now on these 12 design partners these are usually the feedbacks that we are getting but not only from the design partners so in the sense in many sessions and you are you are touching and feeling what are the expectations i see talk to me a little bit more about the funding history and this is unique because i believe again you exited to continental back in 2017 and i think it was a fairly large it was a fairly large deal right what did you exit for so the exit there was uh 430 million dollars okay and you were one of the founders there at that company correct so there's a meaning i imagine that was a very meaningful exit for you personally correct yeah so so why go raise capital you've chosen to raise cap on this new company why raise capital why not be a little greedy and you and ohad keep 100 do your thing use your own money to fund it the most important thing when you're starting a new company is to choose the partners that you want to work with along the way and at least my view is that every new investor is actually a new a new partner uh for the journey so understanding that with this partnership you are getting more and more um friends uh advisors supporters uh networks uh so choosing right i think is is critical and the opportunity to bring on board uh people like uh lightspeed uh teammate um zoro victor uh george kurtz mark under stone these are not people that uh you any entrepreneur should choose not to have rather than these are people that you want to attract in any way that you can so this is the main logic in in every funding that uh by the way also i had in my previous rounds yep yep well i mean listen investors would be writing you almost blank checks uh how much did you totally how much did you raise at august was that a good return for investors uh at argus we raised total of 30 million okay so that should have been a fantastic deal then for investors you know not a thousand x but certainly four five six 10x right over a short period of time so they're all going offer whatever you do next i'll write you a blank 10 million dollar check just let me and please let me in and you said zohar lightspeed teammate you know and adav we want to let you guys in specifically for strategic reasons how much did you choose to raise our state round was 26 million okay and most people in the state run are selling sort of 10 to 20 percent of the business i would argue since you're sort of a proven commodity you've done this before you had a bit more leverage were you able to skip that money and sell less than 10 of the business no more okay so 10 to 20 is sort of the range were you sort of in that range more than 20 oh wow okay why did you i would say that's pretty darn diluted first around then so these guys must be very strategic again my view here uh wasn't around uh how much do i dilute it's uh how much value am i getting and for me it was it was just uh i want each one of them to have a good interest in the company a good interest in in our success i want them as a partner so it's not about how much am i am i giving from the company but it's how much am i getting from these partnerships that's the logic and so how do they help you grow revenue right if you're raising 26 million and selling more than 20 to the business that you know you post money evaluation call maybe somewhere around 100 million bucks you've got to grow into that valuation you've done it before so obviously everyone believes you can do it again but how are they going to help you get your first paying customers first point that is the most important for it for anyone is is the product market fit right so uh these are people that have seen a lot have been operators uh a lot of them for significant portions of their career the second point is exposing us faster to their network of connections which is also super important uh the third point is in a sense supporting us the management uh in the challenges that we are having because uh in a sense a lot of the things even that we have done once not everything uh um are completely repetitive yeah this will be the most three points okay offer we're out of time let's wrap up here though with the famous five number one what's your favorite business book it's a tough one uh i think i'll go with the hardest thing about the heartbeat number two is there a ceo you're following or studying i'm trying to get a lot for many but number one for me would be zoro zizapel here in israel which companies you have though i was the founder of the rad group probably one of the founding fathers of all of the israeli high tech here oh very cool number three what's your favorite online tool for building talon that's easy the browser number four how many hours of sleep to get every night okay and situation married single kids i'm married with two kids four years old and two and a half wow busy guy how old are you i'm 35 35 last question something you wish you knew when you were 20 the importance of a team and and the fact that everything everything everything is about who do you surround yourself with and uh how to align this team to this uh joint uh uh vision and mission guys tell on sex i mentioned a new browser specifically to help you keep your team safe from threats online it's the first point in line of defense he's done it before sold his last company for 450 million bucks raising just 30 million a capital efficient founder we like to say now jumping into consect raised 26 million bucks from strategic partners sold more than 20 of the business but he loves the strategy these partners are going to bring to the table their pre-revenue today but looking at getting that going here the next 12 months we'll see what happens offer thanks for taking us to the top thank you very much one more thing before you go we have a brand new show every thursday at 1 pm 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 arpu cac ltv you name it they share it and the buyers try and make a deal live it is fun to watch every thursday 1pm central additionally remember these recorded founder interviews go live we release them here on youtube every day at 2 p.m central to make sure you don't miss any of that make sure you click the subscribe button below 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