Is Passion Enough To Land Your First Investor with Ran Aroussi of Tradologics

If you want to start doing anything in the trading space, you need to come up with the idea and bring on the talent. And everything else is just a subscription away on the platform. So really build an ecosystem for the next generation of traders. Welcome to SaaS Origin Stories. Tune in to hear authentic conversations with founders as they share stories from the earlier days of their SaaS startups.

We'll cover painful challenges, early wins, and actionable takeaways. You'll hear firsthand the do's and don'ts of building and growing a SaaS, as well as inspirational stories to fuel you on your own SaaS journey. Here is your host, Phil Alves. Today I have Ron Naruzzi from TradeLogix. Welcome to the show, Ron. Thank you for having me. Great to be here.

So the first question I would like to ask you is, what problem does your SaaS product solve?

It's a myriad of problems that we're solving. So I would say that we remove all the technical or most of the technical barriers out of people's way when they look into generate a trading strategy that trades automatically on stock market exchanges or crypto, or forks, whatever it may be. So that's what we're aiming to do.

Who is your customer?

Who is buying your product?

So our main target customer right now is, we call them the prosumers. It's kind of an in-between market of the relatively smaller professional traders, fund managers, investment advisors, and kind of the top of the tier of retail traders, people who trade for a living using their own money. That's kind of our in-between with hopefully expanding into more pros, more retail, as kind of a middle out expansion. That's awesome.

It's kind of like an API, the product per se, right?

So the prosumer is going to buy, but he's still going to have a developer that's going to come and put the final pieces together to make their trades.

Is that correct?

Yes. So if I'll kind of give you a quick overview of exactly what it is that we're doing. So what we decided to do, we decided to create a cloud infrastructure and software for trading, for automated trading operations. So the problem that we're solving, I think the best way to do it is using an analogy, like imagine building a food blog with no WordPress, Wix, any of that.

So aside from knowing how to cook, you'll also need to know how to design code, set up the server, get the domains, setting everything up. Whereas with the existing tools, like the ones that I mentioned, like Webflow, Wix, et cetera, you just focus on generating the content and they abstract all the tech stuff out of the way.

So that's kind of the same, I guess, the same idea that we would like to bring into trading, because you can have a very simple trading idea.

Like, I want to buy Tesla whenever Elon Musk tweets about it or whatever it is. So it's a very simple idea, but now you had to listen to incoming feeds and monitor transactions and connect to your brokers and write their API. And there's a lot of data science databases. There's a lot of stuff that goes on after you had your billion dollar idea.

So we're trying to move that out of the way.

So yeah, you still need to code, but you're coding about 2 to 5% of what you used to have to code pre-traded logics. That's awesome, that's a great product.

And what's your background?

Tell me a little bit about yourself and how you arrived at that idea.

So yeah, I'm pushing 50 soon. I'm going to be, wow.

Yeah, I was born in 1974. So I've been playing around with computers in the early 80s when I was just a kid. I've always loved it. So when I grew up, I had my one foot in the internet marketing advertising space and the other one in software development. And for a long while, I was working at the ed tech space, kind of building exchanges for online media and all that.

About 10 years ago, I kind of switched my focus to financial markets because I like the idea of theoretically not having a boss and scaling just by changing a figure in my software. Instead of investing $1,000, I'm now going to invest a million, whatever it is. I liked it as a concept.

But yeah, so I would say that if I look at the past 10 years, heavily involved in software development for a gazillion years now and in the financial industry for about 10 years now. So that's kind of where I'm at. I have no temperament at all for doing any sort of manual trading. So I just cannot look at charts all day and see a trade goes against me or anything.

So I need everything to be automated. I'm a computer guy. That's what I love to do. That's what I'm most into. So that's kind of my background. And that's actually funny, if I digress a little bit.

When I first started doing that, I wanted to have software that I understand exactly how we work, so I developed my own tools and released them kind of as open source libraries and kind of took on fire. One of my libraries right now has about 600 installs every month. It's called the Y Finance Data Library. It's a Python library for downloading financial information from Yahoo.

And that kind of also got me exposed to other people in this industry that are facing the same difficulties. You work a lot and there's a lot of effort that goes into trying to come up with a strategy. And let's face it, most of your ideas would fail.

Otherwise, if it was so easy, then everybody would be a billionaire.

But you need to work two or three months with the testing and market hypothesis and research and all that stuff just to realize, oh, you know what?

That idea is not really worthwhile. So at least I wanted to create a software that will allow you to vet ideas quickly, you know, just for the sake of saving time.

Before we go to building, how much money did you raise so far?

Is that public information?

Yeah, I think it's out there. We raised about two and a half million dollars in total. Nice. And walk me through the process of designing and building kind of like the first version of your product. Yeah. So the first version was API only, no UI, command line interface. You had to set up an account and everything would just happen on the command line on the terminal.

So it was the initial early adopters were very technical people, extremely technical people that are comfortable with this back screen on the monitor.

And who built that first version?

Did you build that by yourself still or do you have a team helping you?

So the first version was a small team of myself and two developers were still with me to this day. And that was the first version that we've released. At the first web version, let's call it the first version that actually had a user interface. We were already a small team of about eight or 10 people from Israel, London, Ukraine, Paris. So it was kind of all over the place.

We're a fully remote company. After that, the Russian-Ukrainian war started. So it kind of shuffled the cards a bit.

But yeah, the core team is still there and keep on working and adding more capabilities and improving the speed of the platform and robustness, et cetera. That's cool. So you start building a development team in the Ukraine and then the whole thing happens.

So how long did it take them to get the first version of your product done and to get the first users got the end?

I would say to get to the first command line interface only version was probably about six to eight months. But to get the fully working version, the version one of the product, which is never your full vision, it's just testing the water version, it took about a year and a half. And right now, we're almost three years.

And with the delays that the war caused, we are going to be releasing in the upcoming weeks, finally, the final version. We've been kind of doing a very, very long soft launch, working with customers and doing hand-holding type of onboarding and testing and releasing one small feature after another. Just because it is a financial application, you are trading, you're connecting to your brokers, you're making financial decisions.

It needs to work 100% of the time exactly as you expect it to work. And we don't want to. We had two challenges. One is obviously the technical stuff. We need to make sure that it works as well as brokerage application or banking application needs to work in terms of reliability.

But on the other hand, we needed to work and here we have a great UX designer from Ghana in Africa that works with us in order to make sure that the platform is as self-explanatory as possible.

And that's kind of where we put a lot of the effort into making videos and rewriting the docs and kind of generating a boatload of content and really specific type of onboarding in order to be able to facilitate a larger user flow. That makes sense. You don't want to make mistakes like make the wrong trade, buy the wrong stock or anyone to have a very good user interface.

So how was the process?

How did you find the first beta users and walk into the process?

Because I imagine you kept bringing users to your soft beta.

How did that work?

Again, I was extremely fortunate in that regard. I've created the website, I've kind of tweeted about it, wrote it on my blog, which I haven't updated since then.

Okay, this is my idea, this is what I want to do, this is what we started working on and here's the link to a waitlist if you're interested. And people started registering, just signing up for the waitlist and filling out a survey post registration and giving us some information that we can learn about their needs and what it is that they want.

And we got to a few thousands of people in a matter of a few weeks and ever since then, it kind of grows more, obviously, slowly because we never did any sort of advertising or anything like that. The only type of advertising that we did was buying the word trade-allogics on Google AdWords for when you specifically search our name. So it's kind of a brand protection. So it's not really advertising.

But yes, right now we have close to 20,000 people on the waitlist. I guess that many of them are people that use my open source libraries, was kind of a way to get to those people in that niche and the category.

So again, I was very fortunate in the sense that it didn't work too hard on getting that initial interest. That's very amazing. So basically, it's kind of like the pay offer of your work that you did before when you're building open source products, when you're building your LinkedIn and your Twitter and your blog.

So you already kind of have an audience and you put something in front of them that they want and that got you like 20,000 people in the waitlist. That's amazing. That's impressive. And also that tells people... Hopefully we'll convert 10% of them at some point. That also shows how valuable it is to build in public and to build an audience, to do something.

I mean, as a developer myself too, sometimes we code just for fun. And I think that's probably most of the time what you were doing at your open source. Exactly. But you can see the results of doing that in public.

And then, so how do you decide then who is going to be the customers that's going to be part of... Plus we rely so much on open source technologies these days, it would seem unfair not to contribute. To the ecosystem.

Yeah, for sure. And also you become a much better developer when you know people are going to see your code. Yeah.

And so, and how did you figure out, did you decide who you do bring as a beta tester?

Did you have any, based on the questions, how you decide who would come in and test the software?

Yeah. So it was based on the survey that they've filled. We had a cap that we don't want more than sort of 500-ish beta testers on the platform. And that's what we got. They've rotated. We had version that didn't work so well and kind of people got frustrated saying, you know what, let me know when you have the final version out.

We had other people that are using the platform on an ongoing basis. And we learned a lot from there, how they're using the platform and where are the contact points that they reach out to us for help. So we're going, okay, we need some more user experience improvements in that area or more docs or whatever. So that's kind of the way that we've done it.

We wanted, obviously the first batch was really adventurous people and highly technical.

Again, there was no UI or anything like that, but now it's a completely different ballgame.

And yeah, so people that are using the platform now are kind of mostly using it without any of our help, which means that we're getting very close to being able to release it to the public. I like that strategy. So you have different batches.

Bring a batch in, make sure people like it, don't hate it, bring the second batch and keep adding batches, and then if the person from the first batch is staying, that's a good sign. And you are trying to figure out, so it looks like the metrics that you're looking at...

Or if they come back at a later batch and say, okay, it wasn't ready for me or was too technical or I didn't get it or it wasn't working, but they still believe in the product to come back in batch five or six, that's also a good sign.

And what else are you looking at?

You told me you're looking at questions they're asking you, but do you have any other metric like, for example, on my own SaaS, I'm building a SaaS, I'm in the same stage, I'm in the beta stage, and I'm looking at how many weeks in the row they're actually coming back to the software. And if someone is coming eight, nine, 10 weeks back to the software, it's great.

And when people drop, I'm like, what can we do to keep adding value for these people?

So what metrics, for example, you were looking at to make sure that you're going the right direction?

So obviously we started with the initial question here, like what's your trading volume, what's your trading style, which brokers are you working with, what language are you programming in?

So we started with those basic questions to even know who is the potential beta tester for us. Once they were in, the metrics that we are looking at is how many times they go into the platform is not really as important because there's a lot of stuff that you can do without actually doing anything.

So if you have a running trading strategy, so strategy runs, you are not coming back to the platform, but you are using the service.

You know what I'm saying?

So it really, the way that we've looked at it is how many actions are you making with the platform, either passively using an existing running strategy or with you actually going into executing API call log into the platform and all that stuff.

And we wanted to really learn how many active, what's your trading activity, like how many orders are you submitting?

Are you mostly back testing research or live trading?

Are you more into crypto, more into equities?

So what we kind of learned where we need to put our emphasis, because when we're adding a new brokerage connection, should we add another equities broker or another crypto broker, another forex broker?

Where's more demand?

So right now, I'm happy to say that with the markets that we are, for example, the market that we're currently supporting, which is equities, crypto and forex, we've kind of reached sort of an equilibrium where we don't get any more requests than, hey, please add that broker or that exchange.

So yeah, obviously we will get once we expand to non-U.S. markets and futures. So a new host of brokers will need to be added. But for the markets that we currently supported, we've kind of stopped getting requests for new connections, which is good.

And is your beta customers paying you any money?

Some of them, yeah.

About, I would say about 20, 25% of them are paying us.

I mean, the very early adopters are not paying. They were literally guinea pigs. But as we kind of moved along into something that say, okay, this is still not the full vision of a product, but it's a usable product, it gives you enough value that you should be paying for it.

So yeah, some of them are paying. That's cool.

I think that's, again, go back to the stages that you should run into your beta, right?

As you start to getting money, it's like it's one final validation that you can do. And I think, again, it makes a lot of sense. It was very important.

Even, by the way, even the ones that are not paying, most of them and most of the beta, they didn't know that they're not going to pay until they completed the signup. Because there was a credit card, there was a signup, they had to choose the plan, they had to do all of that stuff, which testing the willingness.

But then, for the foreseeable future is going to be free for you as an early adopter. We wanted to make sure that they actually put in their payment information. That's awesome.

So what's kind of like the first oh shit moment that came to mind from your journey building your SaaS?

Putin. That was an ongoing oh shit moment. The oh shit moment was really understanding that the first time that we've rushed into creating a release to conference that we attended, which is almost a year ago now. And we weren't able to because everything started with Russia and everything, we weren't able to get the version that we wanted to that conference.

So we had to, at that point, with everything that was going on, to just say, you know what?

We know exactly, now we know what we need to do. We know what's working, what's not. And we literally rewrote everything from scratch based on what we've learned. I knew that this moment was going to happen at some point, so there's always your MVP. It's always a disposable code base because it's not built for scale or it's not built for what customers actually need.

But once you kind of figure this out, now it's time to really go and do it better. Version two of products is often better than version one. That's it's a Skype. But that's still a very hard decision to make to like, okay, we're going to start over.

How was coming to that decision?

Well, you know, we started with a very small idea.

Well, not a small idea, but with a very small implementation of the idea. And just adding more of our vision onto it, we started hitting kind of the limitations of what this code base can do for us in terms of speed, in terms of architecture, in terms of versatility. So we decided to kind of go back to the drawing board, knowing what we know.

We have the scars to show for it and just go and redo it and do it right this time. And I'm happy to say that we're done. And right now, most of our focus is with the onboarding and the UX kind of stuff. That's a lot of testing about the UX. We don't have the bandwidth to let 20,000 people in and be there for 24-7 customer support.

So we need to make sure that the product is as self-expendatory as possible with a lot of resources in terms of small stuff like a tiny 30-second, one-minute video that explains pretty much everything that goes on in the app that you can trigger with a mouse click anywhere inside the application.

Oh, what's that?

Boom, a quick video that shows you how to use that. So that's a lot of where our efforts are focused right now. It makes sense. Making user-friendly is pretty hard. People don't realize how much work goes into building something. Hope people want to click that button and they don't click it and they're like, oh, my gosh, let's revise this. So let's get a little bit more nerdy.

Tell me about the tech knowledge behind building this. You are a Python developer yourself.

What was the structure when you guys decided to build the second version to scale?

What are the decisions that you made about the architecture?

Well, in terms of a Python developer, most of my training stuff is in Python because it's kind of the go-to language for training applications. But I've been programming for 35, 36 years. So I've been through most programming languages by now. And our platform indeed kind of works the same way. So we tried to use the best tool for the job that we're trying to do.

So we have, I'll give you an example, we have several different components of the platform. Just look at three, four of them. So we have a data streaming engine that gets data from the exchanges and delivers it and process it, cleans it in real time, both puts it into the database and distributed to customers. So here in that example, we needed speed.

We don't need an HFT firm type of speed, but we do need the speed. So this module is written in the compiled languages and it runs as machine code on its own infrastructure. Other stuff where we don't need as much, we don't need the speed as much, like, for example, the locally running backtest. You wouldn't really mind if it takes plus minus 20 seconds more to complete your backtesting for your training strategy.

So for the sake of code readability and portability, we're using Python there as the main core engine of the backtester. The web application mostly is written in JavaScript and Node.

So yeah, it's a mix and match of different technologies that can really fit the job that we're trying to do. That makes total sense. Instead of like trying to go with one technology. Exactly. The DevOps was the most challenging thing here because we're running VMs for every customer. And so that was kind of, obviously, we're using heavily Kubernetes and Docker images for different programming languages runtime.

And yeah, we have data centers across. Right now it's about 12 different data centers.

Yeah, it's a lot of fun. It's a geek. It's a dream come true.

Yeah, it is. That's awesome. Thanks for sharing. I know most of our listeners are going to be like, OK, go back to the business part. But I like to learn. Tell me a little bit about a very smart decision that you made in the early days of running your company.

Oh, wow. A very smart decision to actually go and execute on the idea. I don't know. I don't have like the best decision that I've made was to hire the team that works for me from day one. Because the way that it started, I need to get something up and running quickly.

So I've hooked up with an HR type of placement firm in the Ukraine and got me two developers that I started working with. I would say probably that one of the best decisions that I made was make sure that these guys become an integral part of the company and no longer as a second tier or second level, whatever you want to call it, freelancers.

So I've kind of had to work out a deal with the contractor to let them go and work directly for the company. And that was probably a great decision. Yeah. I think that makes total sense.

And also, you being technical yourself, being willing to go and hire developers so early on, it's a good decision. Sometimes technical founders, they spend too much time.

No, I can do it. I can do everything and don't bring extra.

Oh, I can do it. It's just a matter of how fast can I do it and how well I can do it. Anyone can do anything. You just need to factor in time and energy and alternatives. So it is definitely a smart decision. But it is a harder decision to make when you're technical because you always have the mentality, I'm just going to do this.

And how about like a very bad decision that you made, a mistake?

A very bad decision that I've made. You're kind of catching me off guard here with both the good decision and the bad decision. I would say that I probably should have released earlier, quicker, and with a lot less features and started to get more attraction to be more round ready type of thing. But I don't know if it's a bad decision, but I can see the point.

I can see the merits in doing that rather than taking my time in making sure that the product is perfect before actually releasing it. So I'm taking a lot of time to really make sure that everything is perfect, which in a business sense may not be the smartest choice. Sometimes you just need to ship it. I don't know, time will tell. It's definitely a hard balance.

Because especially I think to that advice, people say go fast. The problem is that's kind of like a 10 years old device and software today is too good. But the software today is too easy. And especially in the financial space, what if you have a big mistake, but it's still a balance because you don't want to build forever. You want to take the product to markets.

But finding that sweet spot is so hard. And I think most founders do too late. Because it's so hard to find that sweet spot. I agree. I think that we're also on the too late scale, but I'm betting on it being worth it. Because here's the thing.

What we're trying to build with TraderLogix, yeah, we could have released soon with only that set of features, but it just wouldn't make sense if you don't get the whole package. Always go back to an example where, go back 15 years and ask the public to imagine what the dream phone might be. Nobody asked for an iPhone.

Nobody asked for an iPhone until they actually saw it because it got you, okay, here's a package. Here's a browser. Here's a media player. Here's email with a great screen for that time. And here you go. And then when you saw it, it was, oh, I definitely want that. But if they would have just released a phone with a music player, that wouldn't work.

If they just released a cooler, more Apple-y version of a Blackberry, I don't know if it would have worked. It needed to be perfect for what was possible at the time. So that's kind of what we're trying to do.

It won't make sense if we'll only come out with a backtest version of the product or only with market data and kind of build on that because there's a solution right now that does backtesting. There's a solution right now that does market data. There's a solution, but there's no ecosystem that kind of brings you everything and have it work together and seamlessly with the different components.

So we need, on that regard, we need to make sure that we deliver the full package or at least 90% of it. It makes total sense.

So if you could go back in time and meet yourself from three years ago, what would you tell yourself?

What would I tell myself?

I would probably tell myself to not try to move to a different country, hire a fully remote team in a shaky area in the midst of COVID all at the same time, kind of take my time with different hits and blows.

And I would definitely, as much as I love them, if I would have started over again, I would probably, knowing what I know, knowing that there's going to be a war, I would probably not more hire people from Ukraine. And that's not because they're not great. I love them to death.

It's just, you know, would I have known what I know now that there's going to be like a massive war there, I would probably go with an easier route and just, you know, chose elsewhere. That's a very honest answer. Thank you. And it's true, definitely will make you go faster. So thank you very much for sharing the story of your company. I have two final questions.

First one is, how is the company doing today?

Like whatever you can share about size and how does the future look like?

Like your vision for the future. Okay. So in terms of how the company is doing today, as I mentioned, we went back from about 15 people that we were at some point back to around five, and we're not going to do any further expansion in the personnel until the product is out there.

So right now we have the developers, we have the UX, we have the business development guy, and that's kind of where we're keeping it as small as lean as much as possible. So we kind of went back into a bootstrap mindset until we were able to release the product, even though, you know, the company was funded and everything.

We kind of went back to that mode of operation in order to stretch the burn rate, the run rate as much as possible. In terms of our vision, so yeah, I would say that the vision was and still is to create a platform that will really make it simple on a technical level. Coming up with a good trading idea, that's on you.

But on a technical level, it really would make it simple, almost barrierless transition into that world from a technical standpoint.

So if you have an idea for a strategy or if you have a good, you know, hypothesis for something, I want you to be able to use traderlogics to do your research, to do your testing, to do your live trading, your risk analysis, your marketing, if you're a fund and kind of get people to your fund from using a real live, you know, the tear sheet report that is always live and always updating.

So that's kind of the vision. We've working on a marketplace that will allow you to integrate not only software tools, but services, so like an auditing service for your fund as a subscription from the application and, you know, stuff like that.

Really to get to a point where if you want to start doing anything in the trading space, you need to come up with the idea and bring on the talent and everything else is just a subscription away on the platform. So really build an ecosystem for the next generation of traders. That's an amazing vision.

And what book do you recommend for every founder?

For every founder?

Actually, it's the shortest book that I've had. It's called The Great CEO Within. It's the shortest book that I've read in this space. Karen Berber wrote it. The Great CEO Within, it's by Matt Mochrie.

So yeah, I would really recommend it. It's very short. It's even free as a Google Doc. Lots of insights there.

If people want to follow you, where they can follow and look in here more about you?

It's tradelogic.com, tradelogics on Twitter or Arusi can find me on Twitter as well. Awesome. Thank you very much for taking the time for coming to the show and congrats on your company. Thank you very much. SaaS Origin Stories is brought to you by Dev Squad. To find out more about how we help entrepreneurs launch new products and help larger businesses plug in a ready to go development team, visit devsquad.com.

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