How Trex CEO Benjamin Cohen grew to $56.8M revenue and 225 customers in 2023.

this is the top where i interview entrepreneurs who are number one are number two in their industry in terms of revenue or customer base you'll learn how much revenue they're making what their marketing funnel looks like and how many customers they have i'm now at twenty thousand dollars per top five and six million he is hell bent on global domination we just broke our 100 000 units and i'm your host nathan latka when i do webinar interviews or i give big speeches to thousands of people all over the world i usually will talk about data and sometimes show my dashboards like my sas dashboard as i'm going my sas company the top inbox or my website dashboard which shows how i take impressions to convert them into email leads and convert them into customers for nathanwacka.com the funny thing is guys i build these dashboards with myself no developer and it's basically free and i use one tool to do it you can see the tool at nathallaca.com forward slash analytics i'll tell you more later in the show all right guys i talked about this earlier but i schedule like so many meetings it would blow your mind i mean all my podcast interviews right hundreds of entrepreneurs i talk to monthly i schedule and you know what i do it so efficiently i get them all to agree to my calendar so all the calls are back to back to back that means i'm not switching in between tasks all day long i get them to batch so i can be very efficient it's so critical and i use a tool called acuity scheduling to do this at nathanwatka.com forward slash schedule it eliminates back and forth between me and people i'm trying to meet with it makes it very simple and most importantly they help me keep my no show rate very low because they send out reminders helps you look very professional so go to nathan micah.com forward slash schedule to sign up and you get a great deal you know you guys know this i hit people hard i make great deals and gavin the ceo has given us a great deal if you sign up like normal people okay on their website you only get a 14 day free trial to use my link made from micah.com forward slash schedule to get 45 days free okay it's the best it's free go to nathanwacka.comforce schedule right now to sign up and i'll see you there nathan lacka here this episode 650 coming up tomorrow morning you'll learn from garth of a company called people indexes which it indexes 3.5 billion people and helps get you contact data that really works like email addresses good morning everybody my guest this morning is benjamin cohen he's the ceo and his leading t-rex with a strong vision for the future of enterprise financial technology and its impact on marketing and making markets more transparent and efficient he has built the t-rex team in the trx software platform by combining the most sustainable elements of finance with modern software as a service technology benjamin are you ready to take us to the top i'm ready nathan all right tell us what that means elements of finance with modern sas technology what's t-rex do so t-rex is a fintech company that makes complex capital markets more liquid by making them more transparent and efficient energy go ahead um i i was going to say that that that means that you sort of take everything that uh happened during the financial crisis what happened there was lack of transparency and a lack of efficiency especially in markets that were not as well covered and that lack of transparency meant that there was a lack of price discovery and assets just didn't trade and so capital was constrained and thus you had no liquidity so getting to that ultimate liquidity is the key for these smaller more esoteric markets and i'm seeing kind of in the screenshot and the research did on the site you've got like th this image where it says trunch a 113 trunch b 213 trunk c and then residual etc with maps and things spotted i mean are you basically taking these things that were these very bad things that were all wrapped up together that lipstick on them and made them look very pretty in the form of a triple a rating and breaking them down so they're easier to track down exactly so we're providing institutional investors or the ultimate holders of these capital who are holding all of our money in pension funds insurance companies etc and we are providing them with a familiar framework where they can slice and dice everything uh in as many ways as possible so they can get complete transparency into the risk we're not de-risking things we're just making that risk more transparent got it and what's your model how do you make money so we have an enterprise sas model where we have subscribers and those subscribers can be anywhere in the ecosystem of the deal can be from the originator of an asset if you look at our beachhead market which is renewable energy fintech for renewable energy you can take somebody who is who's putting in place a loan for you to put solar on your house and you then have a 20-year contract to pay that back so we have the originator of those assets the intermediaries the lending banks and the investment banks who are packaging these up and then ultimately the institutional investors and they can all interact across our platform together and what are they just on average we don't have to break down individual customer cohorts what are they paying you per month would you say they're paying anywhere from two to twenty thousand dollars a month uh and that depends on the functionality that they need okay got it and then take us back to kind of the history here so what did you launch this then i launched this company almost exactly five years ago five years ago two days from now uh when i met with uh venture capitalists out in san francisco saw that there's a big need in the renewable energy market specifically in connecting it to capital markets because completely fragmented exactly 2012. was this a case where you know we have a lot of vcs on the show some very successful ones like elon musk's first investor and many of them will tell me the way they do deals is they actually they target a space typically they go research the hell out of the space and then and then try and get in with the leader if they can if not get in with second place was this a scenario where this vc brought you in because they were interested in this kind of solution and then you went and built it because of you know them convincing you uh it was close to that though i i actually had the solution in mind i met with this vc uh and it fit their investment which is perfectly it was ecosystem integrity fund they're our series a lead investor participated in our series b as well uh have been tremendous at incubating the company from basically pretty early stage through to to this point in our success and so obviously you're you're not bootstrapped how much total have you raised to date we've raised about five million dollars today okay we're sorry not five i've understood that that was in our series a uh that we're at 15 million 15 one five and uh i i'd be shocked if all those were or notes in debt i'm assuming you've had a priced equity round at this point we've had two price equity rounds in a beam nice very good and uh tell us more about the team how many team members we have 21 people on the team uh we're based in new york where i am at the moment and we have almost half our team in tel aviv israel where we have most of our software engineers it's an incredible market for software engineering on par with new york city and the bay and uh and the talent there is just incredibly deep and and very loyal and economically what makes it so comparable and competitive the cost of living there is lower um but the the market for software developers is also incredibly hot and we we have a good niche there in that we're fintech which is interesting it's also challenging which developers like and we're doing it for our first market which is renewable so we're also doing some good for the world even though we're entirely focused on risk in return and providing that analysis are you from television are users i'm not i was constantly born in new york my parents just moved from south africa and i grew up in north carolina oh very cool all right and what is the uh that's really interesting what is the uh how many customers are you serving uh today q127 we have over 225 users uh and including those that have renewed from the institutional investor and and uh originator of asset side and when you say you know these terms get all mixed up all the time when you say 225 users are those you know paying customers yes those are paying customers uh or paying via uh by transactions so we we want to get as many institutional investors as we can because that provides the liquidity aggregated on the platform that makes it attractive for the originators to come in and say look we want to sell this portfolio of assets we have nobody to sell it to or it's impossible to sell it using old microsoft excel models and so part of it is a freemium upsell service on the institutional investor side where they can use this during the transaction process but then they won't uh they won't be able to thereafter unless they they pay for a subscription so just to be clear the investors are coming in kind of looking for different deals that originators have put together which include basically different loan portfolios right now specifically in the renewable energy sector that's correct interesting so for for could a common man think of this like when they go to the bank and get a mortgage and it's bb t basically bb t puts all those things together and tries to sell them to fannie and freddie same kind of model except for renewable energy that's exactly right and that that market and mortgages has worked incredibly well which has ultimately brought that common man's mortgage price down because bb t is is accessing uh a much lower cost of capital but because aig has pretty low return thresholds and um and so uh the same thing is happening here in solar instead of having bb t or your local credit union give you uh a relatively high rate for um for your loan to put solar panels on your roof those ultimately get packaged up and what would be relatively hot by the way uh i mean you can actually track uh how these rates have come down over time from eight percent to six percent and now now some of these loans for some of our customers when they are ultimately securitized uh are sold for three and a half percent for the the top tier tranches describe to everybody what securities means uh yes that's exactly what you just described nathan where you package maybe 10 000 of these loans together and you put them into a security and so that security is secured by the cash flow so you're going to pay back your loan over 20 years and that is basically the collateral that's the value that the investor is investing they want that return yeah i know many of you guys we've chatted about this one-on-one and there's a lot of you obviously that listen to every episode but a good way to think about this if just to make an analogy is almost like a rubber band ball each rubber band is is kind of one mortgage for one new house the bank that makes the rubber band ball makes it look pretty and tries to you know sell it somewhere else and when that that is what securitization is benjamin is that right yeah that's a really good analogy interesting okay so is the math going back to your business is the math is simple i mean can i take 225 customers paying a minimum of two grand per month and assume you're doing well north of 450 grand in mrr uh that's reasonable we don't disclose these numbers now um but i but we yeah in our first six months of revenue uh which was last year last year it took us a couple years to build the platform to get across renewable energy project finance and all capital markets and do it better than anybody else out there so 2016 was was meant to be our first year of revenue in our first six months of revenue generation we were into seven figures of arr that's great i mean that's very very successful um how many so you put in a significant amount of time pre-revenue i mean imagine you put a lot of money into this thing before you saw your first dollar revenue how much did you invest before that first sale came through i invested two years my time before getting paid a dollar um and basically two years before we raised our series a capital and then um another year and a half of fully building out the infrastructure with a with a full team before launching and and really we're hiring our first sales person who we hired from bloomberg well benjamin but seriously so where'd you get that money from how did you fund all that initial development going back to my history which uh put me in a good place to launch this company in the first place i spent the first five years of my career at macquarie bank in energy capital markets and it was a tremendous training i lived through the financial crisis which is fascinating to be in the front row four and and also saw how finance was changing in some ways that were good and more conservative in some ways they were just not learning from the past and realized that fintech was really going to be the pipe work that maybe is not the sexiest part of finance but it's going to grease the wheels of capitalism and make finance more robust and so that's what i wanted to create renewable energy presented a great blank slate of a market and uh so i took everything and basically invested uh my life savings into this and then raised money how much did you put it and people love understanding risk and how much you really put your your money on the line i mean we're talking more than a million bucks of your own capital you put in before you saw dollar revenue or what no we did a pretty good job of bootstrapping for the first couple years but uh not not that much of my own capital but it was well into the six figures got it good and then uh take us through some of the cost economics advantages you have specifically with the software engineering tel aviv team on average i mean what do you what do you pay kind of a junior engineer coming out of tel aviv is it in the you know 80 90 range um we don't disclose as numbers because they're sensitive and this is all all public but benjamin don't not don't tell me what your people make i'm saying for other people looking to get lower cost of development i still expect i see so i think you can expect basically 50 of what people would make in either new york or the bay area markets and obviously you lose some efficiencies by having people in different time zones and really just not co-located but the other the big advantage that i've found in working with our tremendous team in tel aviv is the depth of knowledge that they have everybody there basically has a bachelor's in computer science probably a master's in computer science and in time in the army many of them in computer science oriented roles and so they have unbelievably deep and disciplined training and then they're incredibly loyal to the product to their team and to the company on the whole and so we have no attrition which for a very hot startup market is also incredibly valuable uh and and just tremendous for the company and our development do they all have equity do you use that as an incentive or no are they absolutely everybody in the company every employee in the company has equity so that we're all uh aligned in our incentives that's good sole founder or you have co-founders sole founder uh which i i would do differently if they were an option to have co-founders to to share the load oh come on you love the control it's good you can get your vision going faster i i would happily delegate everything when i can find better people to do it than i can awesome talk to me about some of the economics around uh customer behaviors and stickiness anyone has anyone started paying you and left uh no we have not had anybody pay us and leave we have only thus far and remembering that it is we had a couple customers in 2015 paying customers that have since renewed and one of them at more than four times the rate that they came in at so part of our strategy is land and expand you know if we have to discount for the first year we expect these we expect to be incredibly sticky because you're not going to go back to an exile model that operates four thousand times slower than t-rex and that's just sort of based on vba code at best yeah what um every sas business has different triggers that allows them to drive expansion revenue sometimes it's seat based sometimes it's usage based sometimes additional product features what leverage are you using to drive a forex arpu expansion year over year uh the first and the last so we can sell additional seats and with that particular customer selling more modules and selling access to a marketplace and so this gets to our vertical expansion uh we can expand horizontally into different markets and thus sell different modules but we can also expand vertically where we actually you can share models very easily across the tx platform that has facilitated transactions and we're now introducing uh later in 2017 automated marketplace functionality where these transactions can actually be facilitated across the platform so a couple years ago we set up our own broker dealer so we could earn success fees around that and are you in terms of bringing on new customers you mentioned you got someone from bloomberg uh you know when you look at kind of a fully weighted cat so paid marketing expenses plus kind of inside sales folks what are you looking at typically um it is entirely dependent on the on the customer we will have very small solar customers where we effectively have no cac because they will just sign up online on our site and use credit card uh and then you have very large customers that uh you know major investment banks uh a jp morgan citibank for example that could take a year to convert and so you know the the online cac there can approach high uh tens of thousands yeah what uh are you doing any literally like paid marketing expenses per month sponsoring any financial newsletters anything like that we are very involved in the conference circuit uh especially with these larger these larger customers it's very high touch and and public but where they can literally see you and so i was at a conference last week i'll be doing another one next week and then out in vegas at the at the major structured finance conference where i'll moderate a panel and we'll have a booth in a few weeks time with with a handful of our team so what i mean are these like 20 30 40 50 000 per conference sponsorship kind of things you're doing now we can do it uh at 10 000 or under we we just need to be there because we don't have huge competition and so if if we needed to have a bigger presence to sort of um outdo the the guy next door then it would cost us a lot more but because we're competing with in-house excel models uh we just need to get on people's radar yep you mentioned uh you went up through series b when was that round when did you close it we closed that november 15th it closed exactly on time in spite of the election yeah you're thinking two things get it done before so it's all safe and done or wait till after i risk when i was recently in new york meeting dozens and dozens of you that listened to the show i showed many of you guys my sas analytics dashboard i also showed you my website and a conversion dashboard from impression for a child a paying customer along with many other dashboards i use in my business like my social media command center and a few others now all of these are built with one tool i just dragged and dropped them together you can see how i did that at nathan lika dot com forward slash analytics that's nathanwaka.com forward slash analytics now these dashboards guys are critical to my business you know i refresh them on my mobile phone right when i wake up in the morning i roll over and boom refresh i'll refresh them right before i want to take up on a flight because i'm just addicted to data and numbers they drive my business so i think they probably drive your business too you can see my dashboards how i use them at nathanlica.com forward slash analytics now if you go to the regular website that's the tool called folio you only get 14 days free you go through my link you get 90 days free so i got a great deal for you guys it does expire so you got to go there now guys i get asked all the time nathan you post all these interviews hundreds of them per month how do you do them efficiently and guys the answer is simple people always agree to my calendar back-to-back meetings i batch my interviews to stay very efficient and the way that i do it is i use a tool called acuity scheduling at nathan latkin.com forward slash schedule and the reason i use them is very simple they keep my no-show rate very low because they send out reminders about when the interview or the meeting is coming up and also they make it very easy to schedule time right i don't have to go back and forth with the email 10 000 times with people i'm trying to meet with okay nathan lecter.com forward slash schedule helps me so much and by the way look i like have so many meetings i'm the best in meetings okay i do them back to back very very efficient you guys know me many people say i'm the most efficient they've ever seen okay so i use the tool it's so efficient and by the way i got gavin i said gavin he's the ceo i said i want a great deal for my people he said nathan well most people get a 14-day trial isn't that great i said no he's giving us a 45-day free trial at nathan lacta dot com forward slash schedule that's not going to stay up forever so go get it now nathan laska dot com forward slash schedule all right benjamin let's wrap up here with the famous five number one what's your favorite business book it's an unconventional book for business book it is robert sildini's influence which i first read in college and i've attempted to read as much of it as i can every year since then and it is a psychological insight into people's motivations and how people work and i found it incredibly useful in every interaction with my team with customers with investors and the market more broadly number two is there a ceo you're following or studying uh the the one that i look at is uh elon musk more than anybody just his his long-term vision and what he's actually been able to build out of that is tremendous not to mention the fact that i'm a james bond fan and he seems very much like drax from moonraker number three what's your favorite online tool like wealthfront uh the one that i have that i use far and away the most often and get by far the most value out of is linkedin we use it for for everything from successful recruiting mandates where we're not paying recruiters tens of thousands of dollars that we would otherwise uh to just looking up people's resumes number four how many hours of sleep you get every night i get somewhere between six and seven and a half and it's usually on the lower end during the week because uh my answer to your next question is that i'm married with a three-year-old you've listened to a few episodes huh i haven't did did you enjoy them yeah yeah it's great i love your style good i appreciate that okay so so married a little one three months old unbelievable three three years old three three years okay got it three years old yeah she's very active as i say if you're three months old and you're getting six point you know six point seven hours of sleep that's actually pretty good and how how what are you benjamin i'm 33. all right last question take us back 13 years what do you wish your 20 year old self knew uh i wish that i knew that not everything was of the utmost consequence for my entire life as in just because something was going to change or something didn't work out didn't mean that that dictated how everything was going to be for the rest of my life and so it is great to make mistakes it is great to fail so long as there are good learnings that i can incorporate in my life thereafter there you guys have it from benjamin at t-rex those mistakes will not drown you for life you'll learn from them and move on he's got a team of uh 21 between new york and a 10 person software engineering team in tel aviv launched his company in 2012 to bring more transparency into the securitized kind of model specifically right now in the renewable energy space over 15 million dollars raised past seven figures in ar in their first six months of kind of turning revenue on now somewhere around 225 paying customers paying between 2 grand and 20 grand per month so somewhere around 450 grand a month the occurring revenue zero churn in fact a net negative revenue return with expansion churn tax ranging from no touch online up to 50 grand in a high touch kind of conference driven model benjamin you're sitting on a rocket ship thank you man for taking us to the top thank you very much for having me on nathan if you enjoyed benjamin today go back and listen to pablo yesterday pablo's company ola gus raised 1.4 million dollars helping clients automate support with artificial intelligence it would mean the world's me if you guys got any value from this episode if you would go leave a review on itunes right now and then subscribe you know i hustle like have to get these episodes out every freaking day for you guys and trust me i love it i would do it with no listeners but boy oh boy makes my day and makes my team's day when we see great reviews and get your feedback so thanks so much okay top tribe i love giving away free money i feel like oh we're giving away cars and i have something special for you today how many of you have heard our super sharp guests talk about success they've had with facebook and google ads well all of you listening right now yes if you're listening you get a hundred dollars in free adwords here's how you get it okay again thanks for listening get the free hundred dollars from google right when you sign up with my website host provider hostgator go sign up now to get your free money hostgator.com forward slash nathan again that's hostgator.com forward slash nathan so guys i'm so glad to be back in austin i just got back from a major tour of southeast asia went to sydney bangkok bali and japan and you know i always get sick when i travel and this particular trip my gosh 15 different airports 20 different hotels i mean imagine flushing in airport vegetables i was worried about germs and getting all the nutrition i need i mean finding a restaurant in japan difficult because nothing's in english so it's hard enough to figure out the train system but my point is i had a guy named drew canole on the show who said nathan if you're concerned about that take these little green packets with you you just mix them once per day with water they'll keep you super healthy you get all your nutrients and they'll keep you from getting sick so i took them and guys they worked unbelievably well i got no sickness just mixed with water once per day they didn't make my water bottles all sticky that's like nice a lot of these mixtures that make them sticky it was very clean and smooth took them once per day never got six they've got 11 superfoods and they're perfect if you're not traveling but you're just on the go from your office to work so you can check them out at nathan like dot com forward slash juice that's nathan latke dot com forward slash juice [Music]