Wingmantracker Revenue & Valuation (2020)

hello everyone my guest today is ben latz he's a personal finance nerd turned software developer he left his first job out of college after six months to launch wingman his current company it's a trade tracker for options traders two years later he's running it part-time and leads product as a co-founder at the thai a fintech data business all right ben you ready to take us to the top yeah let's do it so where are you spending more of your time wingman or the tie definitely the ties so that's my full-time focus but um you know spending an hour two day on wingman um treating it more as a side project now that it's pretty developed which came first wingman or the tie um so my involvement was first with wingman my my good friend for a decade now was actually starting the tie at roughly the same time i ended up joining him about six months or so after i started wingman so the company started around the same time but i joined the thai several months later so which of these so let's let's sort of break down each quickly so what does wingman do yeah so uh as i said in the intro wingman helps options traders track their trades and so the best way i can sort of give an analogy is if you could imagine a cfo at a startup if they had to manually track every single expense in the company in a spreadsheet you know versus just having something like quickbooks right that's the level of difference where these options traders who are individuals they're given no data from their brokerage firms about their trading and their performance and analysis besides a single p l number year to date so it's like if a cfo is operating an entire business with a single profit number so what wingman does is it imports your trades directly from your brokerage so that way it handles all the organization all the analysis all the tracking your cost basis your p l and every trade so you don't have to spend any time doing it in a spreadsheet why doesn't like i feel like when i log into my ameritrade account i can see some of this sort of breakdown but it's sort of confusing because they're not software people and they're a big bureaucratic thing i mean shouldn't most of them be doing this internally you would think so and it's actually a lot easier for stock so people who just trade stock there are plenty of trackers out there that do this just fine the problem with options trading is it's very complicated you have multiple expiration dates positions have multiple contracts within a single position that position can move from month to month and so it takes of you know pretty deep level of experience with options to actually understand how people want to track this and embed all of that domain expertise into a software that does it for you so that's why there's just nothing really out there that goes this niche i would say i want to spend most time on your main focus which is the tie but i want to wrap up wingman tracker though first so you launched it what 2017 um i had the idea in 2017 i ended up um partnering with a friend from school who helped me build it and you know wouldn't exist without him we ended up launching in end of may 2018. um so yeah it's been quite the journey did you guys just split equity 50 50 yeah yeah we did that to start and then adjusted later on um quite recently just for the shift in in balance of work so you basically gave some more to him because you're now working on the tie um i actually took a little bit more because i had been doing most of the work for the past year or so just he has a full-time job is doing extremely well in his career um so he's sort of the you know he's been a great partner helping me build it launch it run it um and now he's more of sort of an advisor role where we talk very frequently about it but i've been doing all the development and all the design customer support that sort of thing got it and how many customers does one man have today right now there's 180 paying customers um and about 80 people on their free trial okay god i mean so can i take 180 times your minimum price point 49 i mean it's doing like eight nine ten grand a month something like that uh not quite so there are people who are grandfathered in um from day one we charge a price so the introductory price was 25 a month and just out of respect to people who sort of latched on early you know i'm happy to carry them forward but um yeah right now it's just a 49 tier or 490 for the year and um yeah so it's currently at about 6000 mrr okay so i mean how do you you're building something that has some initial traction you clearly like it how do you know that the right thing to do is spend less time on it and go focus on this new thing called the tie yeah i mean this has been a constant you know thing in my head for the past year and a half plus because on the one hand it's really nice to have two things at the same time from a diversification and interest standpoint and you know that sort of thing but it also can lead to burnout and be really frustrating as to figure out like what should i spend my time on you know i'm doing the same exact skills and activities in terms of web development with both because i'm building the product for both um but it became quite clear early on and this is sort of why i joined the tie in the first place the nature of the opportunity in the market for the tie is just much larger so i can take the same skills and effort and um put that into the tie for just a much more leveraged effect of what i could put into wingman so what is the tie yeah the tie where we focus uh primarily on two types of data for the cryptocurrency space um so the first is we're an official twitter partner so we leverage their firehose and calculate real-time investor sentiment on you know hundreds of cryptocurrencies and we feed that uh we sell apis to hedge funds and other market participants um our partner that we spun off of has been doing that for 10 years who'd you spent off um it's a chicago-based company called social market analytics they're one of the leading providers of that social sentiment data for the equity space um and walk me through how that worked though how that connection your partner worked there or something um yeah there's some connections in terms of just uh existing business relationships in previous companies um yeah it's kind of a long story but there is a close connection that spans you know 10 years i see i see so for someone that is listening right now that is not super familiar with all of this stuff i mean is there a way that can you explain this to like me like make it like dumb it down uh which part exactly the the tie right so like if i had if you asked me to explain it back to you right now what i would tell you is um there's this new cryptocurrency called the nathan coin uh all of a sudden this morning your tool realized that a thousand people were tweeting things and they had smiley emojis in the tweet so your nlp is saying hey this is there's bullish sentiment on this thing it's gonna keep spiking and so you you quickly sell that data to hedge funds to maybe have a live pipeline to you and they go buy some of the token for for hedging or to get some of the upside is that sort of how it works sure that's that's close enough i mean obviously there's a lot of technology that goes into it but that's the general idea the other half of the tie really quickly is something we've developed over the past year and a half which is um we're going out and live scraping from 1200 plus direct sources and the whole idea is that if you look at a traditional space like equities or stocks um all their information about what moves the market like corporate actions you know ceo get firing you know an sec filing all of those are very standardized but there is nothing that can actually understand the live market moving events in crypto so what we did was over 1200 sources we developed topic models to really isolate what's happening what coin is it about what event is it is it a partnership is it a hack is there a scam going on and we're delivering that you know sub five minutes from around the world to our participants with a very similar goal of just getting information faster than everyone else um because that stuff can really move the market like for example if a coin gets listed on coinbase you know it's probably going to go up 20 or 30 percent um what's the team look like today how many people um so it's a co-founder uh josh and i with a couple advisors we're based in the us he's in california i'm in austin and then we have a great team of developers that we work with um in packs and which is about four other full-time developers so we're really just um you know all developers and uh josh really carries the team on sales a lot of sas founders have heard that it's smart to build these sort of outsourced development teams a lot of talented people over there but they're just scared they don't know how to start right so like let's just start with like the obvious question i mean when you say four really smart people full time in pakistan well i mean total expenses on that is what like 4 5 10 30 50 grand a month um well we have a certain arrangement with the development firm and this is a development firm we've had a long-standing relationship with so that's sort of the caveat i would say um so we have sort of an in-kind arrangement where they're providing sort you know discounted rates as in exchange for some equity in the company um so that allows us to keep our cash burning control and we're profitable at this point but um when people ask me about outsourcing development you know i'm definitely hesitant to say like just go go find someone this is a company they're based in chicago um they have offices around the world we feel really comfortable the development company is called ssi and they and you brought that connection or josh did so they're actually the same development firm that social market analytics uses so it's still a long-running relationship that we feel great about um these are not just people that we found for the sake of the tie yeah this is strategic systems international in chicago they clearly know that i'm just looking them up on linkedin yeah they're they're super smart guys it's like 300 employees they know what they're doing yeah exactly i wouldn't just go find someone you know random overseas now now so what happened here because so when i look at the tie on crunchbase you are not listed as a co-founder and you did not mention eric frank or josh frank which maybe they're related but are they still involved with the company oh sorry joseph getz what about joseph and josh frank yeah so joe is the ceo of social market analytics so he and eric are sort of our co-founding advisors josh and i are really the day-to-day operations co-founders oh i see okay got it so when you said earlier your team sizes two you were referencing you and josh frank eric frank and josh gitz are kind of more like they have equity but they're more like advisors not operational yep there you go i i see i see okay talk to me about the tool sounds compelling and interesting how are you pricing like a lot of people will price against number of api calls some do a seat based model how are you pricing yeah so for our um sentiment api that's just a flat fee um you know no hard api limits per se and what like a flat fee per month yeah flat fee per month um and our sig dev product which is our sort of real-time event sourcing that is a flat fee and then per month per seat okay flat fee okay then per month so you it's sort of like an entry price you get three seats by default and then you know each additional seat is a certain cost if you if you look at your total revenue last month what percent was your uh api tool versus your sig dev product um so our you know the tie is really interesting because we've gone through such a transition of just product market fit and seeing what sticks and so at this point we started generating like notable revenue earlier this year and it's really a conglomeration of so many you know there's there's some random consulting projects in there some random you know this or that but really our signa product is where it's starting to really take hold crypto sig dev the corporate app yeah there's just so many market parts it's like basically anyone in the market who needs access to information in a timely manner is a customer so it could be publications you know currently it's driving about 50 of breaking news in crypto comes from our tool so we're providing those events to publications themselves so then they can write about it so it's kind of the news before the news yeah yeah um you know law firms hedge funds um really anyone who needs that timely information so about so about how much is sig dev doing per month right now um yeah so i feel totally comfortable disclosing as much as i want about wingman the tie we're definitely a little bit more reserved at this point um just because it's you know so scattered and you know still getting our feet but um the tie is doing extremely well uh sorry well i guess maybe a better question might be when you said earlier this year the whole company altogether started it started making notable revenue i mean what was what would notable be what would you consider notable yeah i mean we are well above our cash burn per month um as i said like i'm happy to talk about wingman in terms of revenue and structure and all that but the tie is not something we're we're really disclosing at this point well and it's really because you it sounds like a minority stake there's a lot of people with equity in this so you feel like you don't you'd have to get like their approval first right yeah i mean wingman is definitely like i it's it's it's my thing the tie is sort of this company that i'm uh i'm leading product minority co-founder in you know spending most of my energy but you know happy to share as much about wingman when do you say minority does that mean less than 20 equity that you own in the tie yeah yeah and we just have we have really strategic partners and so that's the cap table has been divvied up among them which allows us to access all this technology without significant development cost no that look i i think it makes a lot of sense i mean i'm reading your signup product you say it parses over a thousand sources real time including exchange announcements court cases chinese publications token issuer blogs regulatory filings and more i mean this is not an easy sort of data scraping thing to build so i could totally see why you would give ssi a meaningful chunk of the company to save cash flow on dev costs yeah no this is serious stuff and uh if we had to build it all you know from scratch at full cost i don't think it would be possible what do we think about cost builders from scratch at full cost i couldn't even tell you i mean hundreds of thousands of dollars to build all this technology at least probably a few million i mean because sma's technology they've been building over the past 10 years we just took that technology and brought it into crypto using our domain expertise um and you know similarly we have a partner for the sig dev product to provide the base infrastructure we just took that to crypto so we're really just injecting our knowledge into existing technology and sort of building on that so let me ask you a question i mean if this is like super valuable right which sounds like it is you actually list i think some of your pakistan team on the website saeed shabeer janae muhammad amir they're listed here with their linkedin profiles if i'm coinbase or i'm someone that's like you're trying like let's say you're trying to sell one of your current enterprise accounts on the tie to move them from like a five grand a month plan to like a 50 grand a month plan i'm gonna say you know what screw it i'm just going to go recruit syed and shabir off their website and bring them on i like coinbase i'll just bring i'll bring them on full time to coinbase how do you think about that i mean that wouldn't really work um sort of the relationships we have in place in the exclusivity deals that we have in a sense don't even allow any other company to access either the sentiment technology or the sig dev technology unless they come through us so we have exclusive access to both of those um with respect to crypto why can't okay so what you're saying is ssi sort of built this tool internally and you guys essentially license it with the crypto angle for the tie this is i know it sounds super complicated we have another partner called roi that helps us with the sig dev technology so ssi is really their role is helping us ingest the data from both sma and roi and help us build the front end products and the apis that are sort of wrappers around those what is sma sma is social market analytics and what is roi uh robotic online intelligence okay and how did you meet them again it's a you know uh existing relationship from previous business got it something like like from your like from wingman or from josh from from josh's side of things yeah i see i see yeah i know it's super i know it's super complicated but uh well so if this is so exciting why isn't why isn't he doing this full time josh oh he is this is his this is his only thing that he's working on sorry eric eric frank oh he's the ceo of uh you know a couple billion dollar company so okay god which which company um he uh his company is called lightbox that's a whole other story but uh yeah he has his hands more than full got it okay interesting that and that's that's sort of real estate platform potentially also a data play yeah it's a sort of private equity real estate data play yeah interesting so he could probably bring some strategic buyers into your world like hedge funds that have real estate exposure but also now want crypto exposure yeah right and what is interesting is roi's technology for um parsing headlines and aggregating information actually came from the real estate industry we took that into crypto so there's a bunch of moving pieces that all sort of came together dude i freaking love this though i love all these moving pieces i just think it's the challenge for someone like you is i mean you look like you're maybe younger than me even it's like you're young are you single yeah yeah i'm 24. 24 you probably keep your expenses really freaking low right now in your life is the time where you want to take the biggest risks and you've made the decision to partner with some really smart people for a much a lot much smaller stake of the company versus continuing to build a wingman that's an interesting sort of choice yeah no i mean and wingman is actually really at the core of my story because as you mentioned i left my job in a company in the options trading industry in order to launch wingman to avoid any sort of potential conflict of interest so that's really sort of my bootstrapping story where you know my partner push and i for wingman built it from scratch that's how i learned web development in the first place i studied finance but i wanted to build wingman so i learned how to do web development really latched on to it and wingman's only grown from word of mouth um and so yeah i keep my expenses super low um i saved you know 60 of my salary when i was working full time so that let me leave my job comfortably um you know live out the rest of my lease you know that sort of thing so um it's a it's it's pretty amazing to see that it's actually come here i mean the original goal with wingman was you know pewch and i were like how can we just meet our living expenses right that was like the ultimate goal because even though we didn't see wingman being our you know road to riches i've been starting small business since middle you know since middle school and i i know that each time you do something it just gives you more exposure to things and it's just a piece of the puzzle so if all we could do is get to you know 2 500 bucks a month each or whatever um that sort of unlocks us where we feel the freedom to really sort of escape the job world so speaking of freedom i mean wingman does six grand a month if ameritrade comes and offers you 100 grand to sell the company today all cash up front do you sell well no that would be that would be too low i mean if if you're already because it's all profit right i don't have any expenses so um you know i'm happy to just keep operating it building great product i do the customer support but i've mostly automated everything so um the only thing i have to do is you know maybe 20 minutes a day customer support so what would ameritrade or something like that have to offer where you and push actually take it seriously um i mean i i don't have an exact number but it would have to be you know a pretty decent multiple on annual revenue since right now you know we haven't done anything what's decent though like 3x 5x 10x um i i don't i don't know i mean not in i i i don't see really a point in giving an exact number but for some context you know from word of mouth it's growing about ten percent month over month so yeah i get it i get i get it i get all that my my point is i was like you have another big opportunity right now it's only if you're building it for cash flow then the analysis you're doing is you guys are each making three grand a month right now on cash flow right so it's that versus if someone wrote you a massive check today and you just instead of having to wait three years to get three grand a month you just got 100 grand today what you could do with that in terms of compound interest over time that's the math you're doing totally so yeah you're a finance guy i don't believe that you haven't thought about this right like what's the number today i've definitely thought about it you know if today right now if i was able to take all the risk off the table you know looking at something like 500 000 which i know is a high multiple to me that would be like a reasonable number where i say okay and the reason why i'm okay not just getting it off my hands is because i enjoy running it it does not take a lot of effort at all there's no expenses and it's growing well so um i don't really see a reason to sort of sell it short yeah so 500k would be 250 grand to both you and push you actually a little less to push because you take a little more equity so about 300 to you 200 to him after taxes it's like 160 170 and you're saying okay at that point it makes sense to take 160 cash after tax today versus waiting and getting 3k per month you know for the next whatever 20 years yeah and and even then like that amount of money would be great but it's really not life-changing so at this point what i'm focused on is how can i enable myself to do you know free up the most of my time and focus on what i want to focus on and you know oftentimes with an acquisition what would come is a lot of more you know a lot more responsibility potentially with that not always i mean if there's an earn out yeah but not always yeah well yeah if there was right so um that would be a consideration as well where at this point it lets me do whatever i want to do it's a really great backup plan you know it covers my living expenses so um you know it's just nice to have in the back your pocket i hear you all right let's wrap up the famous five number one favorite business book i don't have any favorite book but i will do a special shout out to the tropical mba podcast number two is there a ceo you're following or studying um i follow quite a few my twitter following list is probably the best place but definitely focused around sort of the micro sas bootstrap and community and there's some obvious main hitters there pick one um i really like nathan barry um and there's there's plenty others why do you like tropical mba do you have a connection is that chris i forget is it chris trucker no that's uh dan andrews and ian ian showing um the thing i really like about tropical mba is they focus on lifestyle business and really more of a holistic picture right so they're focused on people who are mostly digital nomad but i don't necessarily relate to that they're just focused on how can you design a business around the life that you want to have and the unique takes that they have are pretty refreshing um so it's given me a lot of thought over the past two years of um different aspects of just how to see your path and what you want to focus on number three what's your favorite online tool for building your company that's a good one so um i think zapier is really cool i'm just sort of a nerd for automation i like automating things if i'm not doing it by scratch um one especially one tool i'd love to shout out is hatchbox created by chris oliver that handles basically all my devops so in a click of a button it's really easy to just manage and deploy uh my wingman code so it's a really great tool can you spell it hatchwhat hatchbox dot io i was going to say hatchbox is something else 3d filaments hatchbox.io got it vps hosting providers did it okay very cool uh number four how many hours i'll sleep to get every night uh eight and what's your situation well it sounds like 24 single yeah single no kids running around not yet all right and and um last question take us back four years what's something you wishing you when you were 20 yeah i mean that is not too long ago but the thing that i definitely remember feeling when i was a senior in college is just not thinking that it was even possible for a very long time to pay your own bills doing your own thing i thought you had to get a job and even though there are a lot of perks to that there is a path to making your living expenses very quickly um outside of school if you have some good you know skills that you can find a way to monetize guys wingmantracker.com trade tracking for options traders benes hustled his ways 24 today's hustled its way to six thousand dollars a month in revenue covers expenses it's a great sort of thing to have in his back pocket as he doubles down on a minority stake in a much larger company larger potential lease called the tie which is really a crypto sort of analytics tool breaking news from you know trusted sources tied to some very very smart people that have done this in other industries we'll see what happens we'll see which one gets bigger faster but ben in the meantime thanks for taking us to the top yeah thanks so much