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Every ambitious EMEA, APAC, and LATAM startup that’s positioned to disrupt an industry and become the next big thing knows that entering the American market needs to be on their roadmap.
American startups received 5x more venture capital funding in 2023 alone, which means that your best shot at a successful IPO or a lucrative exit lies across the Atlantic.
Welcome to Selling America - the podcast where we sit with business owners and executives worldwide to uncover their journeys into the US market.
Join Sergey Olexa, Co-Founder at Leadium, as he dives into their strategies, challenges and successes in navigating one of the most dynamic business landscapes.
Whether you’re on the cusp of launching your US expansion or planning it for the distant future, this podcast will give you actionable, timeless insights from those who have already made it happen.
Share the show and leave us a review - it truly helps the podcast grow!
[00:00:00] Welcome everyone to a new episode of Selling America, the podcast we sit down with business owners and executives from across the globe to uncover their unique journeys into the U. S. market. I'm your host, Sergey Aleksa. today we have, two special guests. We have, Yaroslav Lazar, CEO and founder of Railsware.
[00:00:18] And, Sergey Korolev, Managing Director of Railsware. thank you for joining us today, guys. Thank you for the invitation. Pleasure is all ours. Every time I book my Calendly meeting or send a Calendly link to someone, it reminds me of you. I remember back in, maybe 2016 or 17 when I first met you and you guys told me that, Hey, we actually helped Calendly team build their software.
[00:00:47] I was like, This is impressive. the Ukrainian company helped the global tech company in the S built their core functionality. So we'll probably touch base on that a little bit today and, how you got [00:01:00] into that partnership with Calendly. But if we can start with just a quick introduction of your roles.
[00:01:07] And how the CEO and the managing director kind of work together. What are the roles within the company? And then maybe give us a little bit of a story behind Railsware. Sure. Railsware was created back in 2006 and early 2007.
[00:01:24] that was, I got there by mistake. and I was hoping that, we could just build a company. there was a bunch of founders. but what happened was the vice verse every next year. And you found there would be eliminated by stress and staying that, I was hoping that, it's going to be a very quick and nice journey, but it seems, very stressy and, I'm gone.
[00:01:48] So eventually, this was the time when, we started hiring new people and, looking into, someone who can fill in the shoes of this new company that was actually, growing and building some [00:02:00] serious software. this was around the time.
[00:02:02] When Sergei joined, I don't think Sergei ever saw the local founder on the company, right? Yeah, I've seen him, of course. He did? Okay. Yeah, yeah, yeah. Worked for some time. Oh, yeah, you're right, you're right. It was an incident for me, to join the company as well. I was planning to do so, so It was a lucky one, I guess.
[00:02:26] A lucky accident you had. Two accidents. Two accidents. And here we are, what kind of accident was, did you, I assume you didn't manage as you didn't join as a managing director right away, right? Knowing how, how, how precise you are in hiring people. I can't imagine you hire someone as a managing director from the street do never worked within, within the company.
[00:02:50] There were no managing directors. It was just a funny quad who wants to build some software. So [00:03:00] not, not that many processes. Just building software, having fun. And later we decided to build a company actually that can build software to build products. How big was the team when you joined Sergei? It was about 50 people working.
[00:03:17] 50 people with day 10. Yeah, I guess it was less probably that moment, but yeah, but then part of the company actually separated, right? so those who were, part of those 50, they separated into a separate company, what was the name? I think it was, I was 75 when, when we were back then. And then part of that year got separated to Adility.
[00:03:40] the company went on a wave of Groupon. It's funny that you mentioned your, I just love this story of the founders because, we've, we faced that too, as a young company, you know, we had four founders and somehow the four of us thought, not all four of us, but the two of us thought that all founders are equal, they should [00:04:00] all have the same stakes, no matter what they do, no matter what their impact is.
[00:04:05] some were working over weekends and spending hours, sleepless nights, and kind of trying to push the company forward. And others were just involved in their tiny little worlds. And they still believe that they are, you know, equal partners and everything. So I kind of understand the story behind multiple founders and eliminating them.
[00:04:24] Yeah, it's a little bit of a psychological session now. you guys obviously in the very crowded space, you know, software development, there are a lot of companies, not only in Ukraine, not only in, India, but really just growing across the world.
[00:04:39] among our clients, we have a few and they all sell the exact same way. We are experts, we are the best, we know exactly what we do, we are more cost effective. So how do you break through this noise and how do you position yourself? What's your unique selling point? our unique selling point is that [00:05:00] a lot of companies are in development of software and we're in delivery of software.
[00:05:04] We actually build it. there's a lot of, selling points that we have, but your portfolio has bits for yourself and, happy clients for themselves. And the fact that we typically start working with the company and then we never finish, just because the, our unique approaches and principle that we have, there is.
[00:05:25] Now and before, right? So if we talk about now, then it's pretty hard, to break through, this noise that you have from different companies from different websites. so many software development companies, like I'm talking about product companies, but I'm talking about those who are providing services.
[00:05:45] they learn how to build good marketing, how to build good websites. We were one of those who pioneered that, back then the one, our, our website, the way, how we position ourselves, the way, how we communicated [00:06:00] with the, customer, through the messages that we delivered on the website and how we position it.
[00:06:06] it was an inspiration for many companies. I mean, many companies in the Eastern Europe, not only in Ukraine, but in Belarus, in Poland. Estonia as well. so we won, we were the one of like, Ethelon, that the others tried to repeat. And of course, when they repeated it, it became much harder to, to be distinguished because before that you have like a kind of old school service oriented website, and then you have a service company website, which looks like a product, you know, it was the user journey of ordering your.
[00:06:44] How would you like to build software? Like which platform, like the, the budgets you have and so on. So all this user experience you start to experience as the user, before starting working with us. So you were able [00:07:00] to. I don't know, kind of understand what, what experience your users will have with your product.
[00:07:06] Gotcha. obviously these days having a client portfolio and the products you've built and the name in the industry, it's kind of easier to sell, right? But then back in the day when you guys started no clients or, you know, a few clients, really not a, not a big brand name in the space, what was your sales strategy back then?
[00:07:27] Was it just networking and trying to gain some customers, you know, just calling your phone book and, whoever picks up the phone, or you'd started building your sales processes at the very beginning? We definitely did. And then there was pre third day era. So the way we landed some of, we, we had a kind of a big serious climb back then it was a Boston, company with, a decent investment, a seed round, guys who just acted at, a previous business, that they sold for like a hundred plus million.
[00:07:58] And, we landed them [00:08:00] back in 2000. So basically it was the very beginning of the company. the way we did that is through Google ads, back then, we were advertising ourselves as a Ruby and Rails, shop and, you know, we found each other and then we were working on that company and that, that made us much more serious.
[00:08:16] There was many more, requests and projects that we did in But this project was like huge and serious and we were doing. Billions transaction with it and so on. And that then became the core team of Rails for it. From then we, built it out. but it was back then when we could, you know, easily do it, we're going to realize it was completely unpopular.
[00:08:38] it was a very new thing and nichey kind of spot. And from back then you were just building up our portfolio upward. But then 2013, we landed Calendly and Calendly became pretty popular. and then we had, other curious clients with decent investment. right now, if you summarize all the investments in our appliance, it counts to a [00:09:00] billion dollars, which is, you know, nicer number to have than a million of dollars.
[00:09:05] It doesn't mean that much for us. we didn't get that much of those billion dollars. On top of this state, really, people don't care about what you did. they do care, but then they're like, Hey, we have this problem, then can you help us? And then we, what we really built is the knowledge base
[00:09:22] Very often what I see, in service companies and some people get away with that. They want to sleep through their service journey and somehow become big and great. and some companies do get through that really. but we are not that lucky we cannot sleep through anything and, it hits like pounding us in the face, if it doesn't work.
[00:09:41] So we had to work through everything. building products is just one part of it, right? But we had to build. Sales, marketing, operation, legal, accounting, office management, procurement, people team, HR recruiting, and we gained an immersive amount of knowledge, and practice and [00:10:00] understanding.
[00:10:00] basically that, helps us to also speak to people because we have so much stuff. I guess the most important thing here, which first I've mentioned is the niche. And this is the usual tactic that you will hear about building product, building service. So you pick the niche, sometimes it's a lucky strike, sometimes you just, felt that it can be a nice idea.
[00:10:25] And you will learn those histories about, Facebook and other popular companies. They started with the niche product for the niche audience and growing from there. How did you guys come up with, the Ruby on Rails? Was it on purpose? we have to find our niche.
[00:10:41] We have to position us in a very specific way. No one was good at Ruby on Rails that day because it just appeared like you were not able to have five years of experience of Ruby on Rails because it didn't exist.
[00:10:54] Yeah. And then we basically walked some other crowdfunders. Like there [00:11:00] was one guy who was pretty good at it. And then there was another guy who said, I think this is great. let's do this niche. As I told you, I was just, co founded the team. I was told that I just need to put in 2, 000.
[00:11:10] I will have a corporate company. So, that's how I started. But on top of what Sergey said, niche is the first thing. Be serious of what you do and actually build your knowledge. sometimes you're lending the project and you're like, Oh, wow, I want to do more.
[00:11:24] I want to do, but you still don't know how to chew up and digest this project that you have just focus back on it and then learn how to build software for real. Because, you know, there's a lot of companies that say they build software, but they just lend people and, and Exhaust fires in terms of software.
[00:11:46] It makes our approach, be conscious of what you're doing, build your knowledge, and you'll be positioned for both for service world. Gotcha. who's responsible for new revenue at Railsware? Are you [00:12:00] guys still both of you involved in the sales process where you have like VP of sales? Who's like driving that, that sales arm for you.
[00:12:08] Are we talking about products or service company because we have two wings of the company, right? Yes. And, and, and we'll get into that in a second. Let's start with the services line. and then we'll get into the products you have. so we have, team members that joined the team, grow through engineering roles and, kind of elite engineers.
[00:12:31] And then they grow out and became, like directors, we have an internal term, it's called liaison, but it's a very confusing term. Yeah, associate director.
[00:12:41] Yeah, probably. I've seen a few titles on LinkedIn like that. Titles were never the case for us. so we do not manage company through the title. we rather manage through responsibilities, like metrics of responsibilities. And so that that's the most important part here.
[00:12:59] [00:13:00] Yeah. So basically those engineers though, that became associate directors, they became our account managers, they are a part of the recruiting team who recruits the people they're a part of the sales team. And then, so they're managed the whole thing, right? They managed to fail cycle, which is recruiting and, The actual sales of a client.
[00:13:18] And then they account manager, both, both of them, right? So they oversee people and they oversee product creation. They oversee client. and they are engineer if they build, product before, they're not, salesy people. so they learned that process gone through, right? And then there was always a strategy for us.
[00:13:36] I spent a lot of time in sales, and a lot of time in sales. We are both engineers with Yaroslav and right now other engineers manage sales process as well. So we have folks right now who are pure sales guys. so they've joined and they help a lot, but the core of the process is still, show the expertise during the first call.
[00:13:59] so you get on the [00:14:00] call and instead of just telling you how great Railsware is, you ask about the problems that client has. And we start from there and about an hour, we talk about his or her problems, plans. so we ask a nice, nice there, you know, precise question, which shows that we understand the details of the topic and not just the broad ones.
[00:14:25] So we suggest right away, some solution on the flight. We had the key story when we rejected. almost half a million of dollars, just because we've seen that it's not possible to build a product with this client. So building products is the driving force.
[00:14:41] And the problem with the Eastern European, I would say service companies is that, there are two forces which are not related to product development itself. it's a sales process and. Salesforce actually, and HR force. HR has the KPIs [00:15:00] to hire as many engineers as they can. That's why they have gaps in the recruitment process from just to hire as more as possible, not just filter unneeded candidates.
[00:15:10] And then you have Salesforce, which has KPIs to sell as many engineers as they can. And those two forces run all those bigger companies, smaller companies, service oriented. And there is no force of building products. And this is the biggest problem, actually, in our industry. So all of your salespeople, even though you don't call them salespeople, they all have, tech backgrounds.
[00:15:35] They all come from the, engineering positions, right? They're closer. So if we talk about closer, so the ones who close the deal, they're engineers. They have tech background. If we talk about, prequalification, so we'll have a regular self development representative.
[00:15:51] Gotcha. let's talk about that process a little bit. What are your channels for new leads? Obviously you do some marketing, you do some [00:16:00] content. I've noticed some LinkedIn activity recently. So you're doing a lot of, yeah. Like I've noticed the rails were more in my feed, which I was like, okay, something's happening here, Are you sending out emails? Are you making cold calls? Are you, reaching out to people on LinkedIn? walk me through kind of those systems that you have in place.
[00:16:22] We have never had outbound. So never, never done outbound. No, we had, have never had outbound, but we started to experiment with it for last year, not very proactively, I mean, so we did a few experiments, but, There is no client, like real client, which has built with us some product.
[00:16:46] there is no one who has been outreached by us. So they came to us by the inbound marketing and, referrals. Gotcha. And how do you, how do those clients typically [00:17:00] find you? Are those still Google ads that, that you guys perform or what are the drivers on inbound leads, conferences? Yeah, the thing is that as we don't have such a huge amount of clients and they stay with us for a very long period of time.
[00:17:18] we don't have to, keep on rolling them through the sales cycle and then some of them came through Booklet, but that doesn't make any sense anymore because it was like 11 years ago, for example, for Calendly, right? So, it's very different now.
[00:17:32] a lot of them came through a referral, from, from other client we did a unanimous, super long term, great service for, throughout, 360 degrees. so that definitely pays out for us in two cents, right? That the client are working with a very long term, and we can deliver really high quality product with them.
[00:17:55] And then we also have referrals and inbound leads that come to us. [00:18:00] We can give them those clients as we work for 10 years. What better can you have, if you plan to work for 10 years, still working without any kind of great game plans. But Inbound was the biggest channel for a long time. I mean, if we will take a look.
[00:18:20] And, Google ads were in the beginning as an experiment for a long time. We didn't have any other channel, but inbound. so our website was rated in Google by niche keywords, like on real development or something like that. so we were always there. yeah, and right now we do a lot of stuff, so add LinkedIn and video and, well, referrals is always there, of course, but this is not the channel that you can control, right?
[00:18:55] I mean, you can control it by doing a good job, but then doing a [00:19:00] good job, it takes time and then it takes time for someone to refer to you. You mentioned that you guys tried outbound, but it didn't necessarily yield any, any tangible results.
[00:19:10] What do you think the challenges for that, for that channel with, for your company, why it wasn't successful? Oh, we didn't, yeah, we didn't put a lot of efforts into it. We didn't put some efforts into it, but then our, we didn't have a bench And then because the higher those 0. 7 percent of people from the market, we don't have enough people waiting, so we cannot just do.
[00:19:37] Big fails, death, because we cannot start that many projects. So unless we grow like 10 times and then we will have some volatility involved, we don't. That makes sense. so it sounds like scaling business is not your priority because hiring quality engineer, our model, let it be clear here, [00:20:00] our model is quite unique.
[00:20:01] If you would think about McDonald's and some Kraft burger place, which, all the city loves to visit, but not every day. Sorry, it's just 4. 99 in Google reviewed, right? Yeah. Yeah. So that's something like this. you have some really great chef and you cannot, scale this chef, 10 times or 20 times.
[00:20:25] He does this fantastic job. in our case, it looks similar. we didn't want to be small. So there wasn't goal. If we would be able to grow that, that's totally fine. But quality was always the priority for us, like number one. And we were not growing until we felt that, okay, we don't have foundation to scale up a bit.
[00:20:46] And so we scaled up a bit. We never hired people from the street to put them on the project. So when client comes to us, we. know who are the engineers, what are their skills, [00:21:00] who matches best for this type of product.
[00:21:02] so we know which product manager is the best to feed this product. So we combine the team, which has the skill metrics, which will support the needs of the product that we need to build. So that's very important. it's different model and unfortunately, or fortunately, it's not that scalable.
[00:21:20] You will not be able with those percentages that you've just heard from your slot, 0. 7%, from the recruitment. and that, that's a thing like we have a lot of applicants from engineers, product managers, QAs, like really hundreds of them, but then just, if you pass the interview process. And I'm ready to become a roles for team members.
[00:21:43] Yeah. Was it the strategy of right away? Like, Hey, we didn't want to grow too big, too fast, too unqualified sometimes. Like we don't want to be McDonald's of the world. We want to be a two star, you know, Michelin restaurant rather than, you know, scaling to billions [00:22:00] of dollars. Was it your initial plan or you kind of shaped it up as you started kind of onboarding new employees and clients
[00:22:08] Figuring out your model. Right. Yeah. We still plan to become a billion dollar business, multi billion dollar business, but through product, not through service, because through service, it will be just impossible to achieve with our, with our model. And that's, that was my, that was kind of my next question of like, it sounds like the fact that you're now launching your, your own products, that's your scalability point, right?
[00:22:33] That's where you feel like you can, you can get to that billion dollar company. So when did you get that, kind of line of business set up? I know you started building those internally. And then what was the point where like, well, we might as well start selling it to, potential customers. So basically it was always the point.
[00:22:55] but if you go back, to the service company, we are all for becoming [00:23:00] a billion dollar service company too. We just cannot hire enough high quality people. And this is just not something that we want to, Neither Sergey nor me nor anyone else in the team, because you know, those awesome team members that we have don't want to work with someone who's rude or incompetent or.
[00:23:20] Or, really just says, you know, with the job, I'm not interested. How can we write the code? I'm just going to write it, whatever. And then it's not like those people are bad in some way. We're not talking about it. We're saying that we can work with them. It's not. The best work of your life, because eventually for a lot of people, you have a certain thing that you're trying to achieve, right?
[00:23:42] You're, you're a part of the company, you're building the company by doing your activity, but then they have their small cycle within what is it that they're trying to deliver. And then when they do great things, they feel like they're living their best life, not, you know, they can cash out and buy [00:24:00] something great and sign off 30 years of doing complete disaster.
[00:24:06] So it's not we're, we're absolutely all for that, but we didn't find a edge where we could buy, where we could get so many engineers. I'm pretty much sure that we could, scale up the sale. When we will figure out, a place, where really, really great Austin people can join us in a much more massive quantity, we'll just kill the whole thing.
[00:24:26] And this is what we're doing. We're, we're always killing most parts of the, not, not just, perfect parts. I just want to also to adhere that the both me and your stuff were product managers, like really hands on product manager for a long time, running the company, but also being product managers for the products we were building for our client.
[00:24:45] And when you work and these role, you just. Don't want really to work with engineers or QA's. We didn't have to do it, but we have 4. 1 time or designers who do not deliver, who just, you know, play tennis, speak [00:25:00] about, some planet thing. Motorcycles. Yeah, that's great. I mean, like, it's nice. And I think to have, two to my tennis table in the office, but still the value must be there.
[00:25:13] So you should deliver a product then, which client is happy about the users are happy about. So how many products do you guys have right now in your portfolio? Not the client products, but the products that your team built and they are Railsware products. There's three, groups of products and, because it is a bit hard to say for some of them, you could call those three product groups, and then there's product lines, that are kind of delivering different things.
[00:25:44] So we have, mail drop, coupler, and tightness. And Titan apps is the most bizarre to go because, it has apps on Glacier and Marketplace. It has apps on Monday and it has Tundra on Earth. So, you know, how do you count them? [00:26:00] And then how do you combine them together? It's very hard, but this is the same thing, right?
[00:26:04] And then each one of them has three brand. Meltrop, Coupler and Titan apps. And how do you change your company structure as you expanded into the product lines or did you need to change the company structure at all? Like, are they all separate entities for you or they all work within under, the Railsware umbrella?
[00:26:25] They're separate entities, but entities are. I mean, a vessel that is trying to do something, so you could say that we have two companies. One is a service company and one is a product company. Gotcha. But do you guys share your marketing resources across all the companies or they build their own kind of marketing arm, sales arm, operations arm, HR arm, or?
[00:26:49] So the reason the service, I mean, there is a service part, I mean, the whole company works with the service. like right now, not right now, but for some time, it's a micro [00:27:00] service model when you have a service and then the services request, there are some, you know, some needs to use them. So if we talk about operations and finances, they're shared.
[00:27:14] If we talk about engineering, product management, marketing, those are dedicated for their, they have their own team. but it's not like. They grow on their own, there are guilds like marketing guild, product management guild, product designers guild, QA guild, engineering guild. So those guilds, they cherish the craft inside those guilds, share practices, kind of exchange the experience they received recently in their product.
[00:27:49] There is an analytic guild. So many guild, they call break with each other. And then we manage the resources that we have deciding that, okay, we need to [00:28:00] extend, more marketing team. So we have budget for that. So let's extend the marketing team and mail drop, but let's also add some engineering team in coupler.
[00:28:10] so we are on the higher level, manage the resources, but each team has their in different spheres, again, in product management, in design, in marketing. And so they're responsible for managing their teams and so on. And now that you have experience in selling services and products, what are the main differences?
[00:28:33] If any, have you built different processes for the products versus the services or they're practically the same? in terms of sales and then, so basically the, our consultancy, part much less people compared to product, the product team is two times bigger, just because you have so many roles and then consultancy typically have just your role, which is, well, actually three, which is engineers, product managers, and then basically [00:29:00] the, the product leadership, make out managers that are helping the product to succeed further, right?
[00:29:06] the products are a completely different thing. There's, there's about nine GIL involved in that. Programs, engineers, designers, QA, data support, marketing, marketing design, security, HR, operations, legal, accounting.
[00:29:26] So there's many more roles. That I'm involved in there and then some of those are in the shared services, but generally most of them are within every product they're focusing, but the question was about difference in sales, right? So maybe you can talk, what are the differences between selling the services and selling the products?
[00:29:46] And, have you noticed the difference in channels for your sales? Like, would you say inbound leads are still the main kind of driver for the product line or you started doing some other channels there as well? Yeah, but it's very different, right? So [00:30:00] the inbound for product is completely different than the inbound for service.
[00:30:03] And the way that you convert from inbound of products to inbound of services, the way we create, the inbound content is very different than for products. So you have an attention span of like a, second. to see if it will work or not. And then you have a free meal or free trial model where you sign up and just check it out.
[00:30:21] We have a demo site. you typically, we don't do sales driven, in terms of our products that, people try it out. They're just self conversions. And then if you would do sales, when you do sales with a bigger account or people who need to port it very different. It's like a demo driven thing.
[00:30:39] We're done with the product. And then sales cycle for services is very different. you have to understand the problem of the people and then explain them how we can help them and, explain our portfolio before that. It is very different. If our product would have a lot of service part to it, then it would be similar, but they don't.
[00:30:58] Yeah. Speaking about, we [00:31:00] started with Coupler trying to sell, just the cold outreach, like pure outbound. It didn't work well at that moment. we will give it a try at a different angle because the positioning of the product has been changed a bit. but what worked for us is that when sales works with, prequalified lead, so the person who tried the product, but then lost interest or something like this, you know, so it was not able to handle the, onboarding wizard,
[00:31:34] So then sales, reaches and kind of proposes some interview or like some, expert consultations or whatever we think it makes sense to propose, but sales work with someone who already showed the interest. So not just to every person, of course there is some qualification parameters, right?
[00:31:54] But still, when the person showed the interest, then you can. work much more efficiently [00:32:00] with the content. No, that makes perfect sense. And then I know you mentioned that the U. S. market was always a primary market for you. Is it both for services and for products? Products are pretty diverse.
[00:32:15] I would say, U. S. is still a major market. it most likely will be the top one market just because if you compare, you know, The California realm probably over, overplaced, And then yes, it's a big country, right? and then from a service perspective, for sure, it was Silicon Valley, Boston was the mecca for tourists as well.
[00:32:37] We just got more done. How did you define that the U S market is the market you have to kind of expand into? I know a lot of, a lot of things happen with rails where. And like, as an accident, you both joined the company, as you said, but was the U. S. market defined by accident as well? Like, well, we just happened to see some traction with the, you know, companies in the U.
[00:32:59] S. [00:33:00] Or you specifically decided to kind of grow into that all, we obviously huge market, but also very competitive. So let's talk about pricing. Our prices were always much higher. Well, like how much, like sometimes it's twice higher than the regular, you know, Rates on the market, of Eastern Europe.
[00:33:19] And that's a lot. It's already cuts off, major, like majority of European countries. I'm not talking about even other. So we took them all. They just simply cannot afford you right at the price range. They can't afford, but they don't understand the value, especially if we talk about, let's say Germany. So we didn't have any client from Germany.
[00:33:37] we had a guy from Switzerland who worked in Germany and they didn't pay us money. so that wasn't the pleasure, like fantastic experience, great client. Well, they paid part of it, but not all. so rates are crucial and, our rates usually were comparable to a yearly salary of really good software engineer right [00:34:00] there in the United States.
[00:34:01] so like comparable, comparable numbers. All right. So that's not the best selling point to expand in the U. S. market. No, it's not the best, but yeah, for sure. I mean, but this is a point which cuts off all the other regions. So you don't have any other choice. I mean, realistically, we had three, three major areas.
[00:34:25] It's like UK, U. S. and, the Netherlands as well. So they were ready to pay premium price, for getting, product experience. Did you find any trends why those three countries were, was it because they've tried so many, cheaper options and they didn't see the results and they're like, well, maybe we need to spend more money with more qualified partners rather than keep trying somewhere, at a lower end from a pricing perspective.
[00:34:54] Why would those countries be willing to spend more money, and how would they know that you're more [00:35:00] qualified? So in general, if it's a cheeky game, about the quality thing, right? It, very often you forget who delivers when you work with the service, with the proper service provider, right?
[00:35:11] And then you hope that you have three people in there and you can get three people for the half of the price and everything will be fine. And it's very hard to say for a business owner depends on how deep he is into day to day or into code that everything is fine, right? Because If you're writing code and have two teams, or maybe you're a Blazor team, it's not that obvious for quite some period of time, and you need to actually understand what's happening, right?
[00:35:38] It's like, if you start eating junk food, every day from now on, will your organism die tomorrow? No. it'll start developing longterm severe consequences and maybe even then you'll say that, just because you're getting older, very similar thing happened in this case. so basically this selling point is more about, it's not [00:36:00] about the price.
[00:36:00] Specifically, the prices generally competitor, because it's similar to hiring full time engineers, It's a boutique experience, when you are an entrepreneur in the United States, even back then, let's say you are a non tech entrepreneur, what would you need?
[00:36:14] You need to find a tech co founder, but how can you trust a person to be a tech co founder if you don't understand the technology? So you start to look around for someone who has expertise, and instead of you hiring some engineers without knowledge, how to hire them, you search for companies who are able to build products.
[00:36:36] for many years in Silicon Valley, there was a clear pattern so that, you can outsource, some not important part of the product or your operation. But everything that is core, it must be in house, right? And this is what they did. But for younger entrepreneurs who didn't have opportunity to build the core [00:37:00] team, they were looking around and that was the perfect example.
[00:37:03] like perfect, perfect case for us. Calendly actually started like that. The young interpreter with non tech experience, searching for a company with product expertise, not only just engineers, but with product expertise. And then there are actually many more. So Calendly is just, the popular one, of course.
[00:37:23] quick question about Calendly. I'm just curious. Obviously you started working with them, very early on in their development cycle. With him. There is no then. There was, yes, there was one person, a non tech founder who reached out to you, right? listening to his idea, did you guys feel like it could be a big thing?
[00:37:43] Or back then you were like, ah, you know, it's an interesting and we need a client. So let's onboard him. or you always knew like, Hey, this could be something big. Like Calendly it is. Well, we're always listening to our client ideas and we get [00:38:00] excited and fired up with them. And then we always hope and help for it to become the big thing.
[00:38:05] If we don't like the idea, we just don't work on it. so that, that's the thing. Yeah, typically we never say, well, and those projects were very small, beginning with budgets are very small. So it's not like, Oh, you know, let's take it and then burn the budget. We never burn people's budget. This is why Kellen began to buy a lot of software somewhere in the corner because we used his budget.
[00:38:30] in a crazy efficient way, like ridiculous efficient way, at the time. Right. And then if, if, someone else would be building, most likely they would just build a bunch of stuff. That is not a product. And there's a lot of bunch of stuff on the internet. You can, you can try to use it. And, you know, that's why it doesn't grow because it's not, you know, haptic.
[00:38:50] And then this is how we build the consistency. And we, we did think, right. And then I was very excited about the idea because There was an idea that we wanted to build something [00:39:00] back. There was this company, a long, long time ago. I forgot their name. They were bought by BlackBerry. And then this kind of old calendly thing was, was there and they just killed the product because it was an aqua hire.
[00:39:13] So they hired the people to kill the bird and then went on. And I was like, well, there would be a ferry between the building and like that. And then I was the bird manager on the project. So I was driving it into the direction that I feel it would be successful. you know how it happened. And we did think and hope that it will be a successful product.
[00:39:29] We didn't know the scale. it didn't scale with like, with a typical, Silicon Valley approach, like where they, you know, 2 million of seed, and then 10 million of A, and 25 million of B rounded, so it scaled dramatically faster and, with much less capital required.
[00:39:47] And you were asking us earlier, how did we start being serious about product? definitely, you know, as you build kind of a more explosive, so we build a lot of software, which had like this very steady, super small [00:40:00] growth, but this was a crazy explosive growth. We were like, Oh, wow, you can do, you can do it as well.
[00:40:06] But we were also being Ukrainian and Eastern European. We were undervaluing ourselves, right? we were staying well. Those guys in Silicon Valley didn't know how to build software. And we were just, you know, people from Ukraine, we know how to develop it, but we didn't know how to do the whole thing.
[00:40:22] And then in that case, we did a lot of the thing where, we did marketing and development. And then we saw that our undermining of ourselves and our constant urge to learn and learn the V Way, how to do that. We overshot it by a lot, and then we already are a world class company that can build world class software and we actually know what we're doing.
[00:40:46] So that helped us to remove our kind of imposter syndrome or just not being sure about our own knowledge and yeah, just move forward. Guys, if you ever reached out to Railsware and they [00:41:00] said no to you, there's most likely because they didn't believe in your product and they don't think you're going to grow too big.
[00:41:06] it's interesting how you mentioned that this Eastern European kind of syndrome of underestimating kind of sometimes blocks companies from expansion. and I've heard this story so many times where a lot of talented people wouldn't go into the U. S. market just because they don't feel like they're good enough, they have enough expertise, or like, hey, these are the big guys in the Silicon Valley, and we have nothing to do with them, right?
[00:41:29] Like we're just sitting here, you know, in the middle of Ukraine, in Kiev, or in even smaller cities. Like thinking that we can conquer the U S market. This is one of the reasons why I decided to start this podcast is to really show other companies that, Hey, as competitive the U S market is, but it's also possible to work within that space and kind of be one of the best companies, in their segment.
[00:41:52] when you guys started in the United States, did you feel that you needed to hire someone locally to [00:42:00] sell or represent you or, you know, Yaroslav, I know you are in the United States, but I don't think you've moved to the United States immediately. I don't know if you moved there completely, you know, even at this point, but like, what was your, what was your thinking on like, Hey, we need someone there locally to be, our U.
[00:42:18] S. voice. So we started visiting U. S. As early as 2007, basically from the beginning of the company. And then we traveled a lot and we learned, we met a lot of, great people. before that, we were also reaching out, you know, sending them contact email or LinkedIn. And they said, well, we don't know their story.
[00:42:35] There's nothing that we can, you know, talk about. But we build our way into a lot of the communities by just doing great things. like 3D, for example, built a typical tracker, Mac app. Which helped us with other things and other connections, from engine yard and back then helped us to build connection.
[00:42:54] Digital apps would like to be a really trendy company in Philippine Valley for quite a long [00:43:00] time. And they enjoyed our paid forward culture approach where we, you know, did something for the ecosystem and they, become friends with us. And they should give us a card to the office and, you know, come anytime.
[00:43:13] They, as long as you want. Don't bother too many people off work, but you can ask around wherever you are. And then I personally spent four months there, in and out basically two weeks, three, four weeks, a month at a time. And we learn a lot of very basic things that this company had to offer.
[00:43:30] they were really great in their approaches and a lot of the things that we learned from them, or a lot of the things we just validated that we learned ourselves. Because you're like, Oh, you can do this, you can do that. What do you see? And then we talked to them and they're like, Oh, we tried all the thing.
[00:43:44] This doesn't work. And that's really much better. And then we did that and it worked for us. So it was, they really helped us a lot to bloom for a couple, but then we were networking all the time. We were coming there with Xavier. we were with our clients always. We were trying to extend that through the clients.
[00:43:59] And then we were [00:44:00] visiting from the 4k event and just meeting people, Silicon Valley, it was. meeting anyone. Right. And I'm talking to them. So I just want to add here for the context, Pivotal Labs, was the long consulting company. so they have built local service company.
[00:44:15] So it's not outsourcing, right? That was the actual ideal service company would like to work with, with the product mindset, helping other companies, to boost their development. So in the middle of San Francisco and New York, yeah.
[00:44:30] So, and then there is another company football, right. That was to mention, which were always a North star for us. the guys. actually contributed a lot to the Rubdown rails ecosystem and to Alex ecosystem. But rub rails, I guess is the major input there. we loved a lot what they did.
[00:44:49] and we've contacted them, well, like talked to them and Chad is their CEO and co-founder, really great guy. So there was no issue for him to respond to our emails, [00:45:00] with like, honestly with the details. sharing the information that he had managed to get during his career. I guess speaking about this imposter syndrome, right, and the fear of your Eastern European company.
[00:45:16] or entrepreneurs to outreach, someone in the United States, don't be afraid. There are a lot of nice guys. If you're honest with them, if you do some nice thing towards them, I don't know, some complimentary, work or contribution to what they do, like they do open source and you just contribute a bit to their open source project.
[00:45:38] So you already have a topic to discuss with them and then start kind of building relationships from there. So we got zero deals from digital ad from ThoughtBot, only knowledge, that they'd write it. and ThoughtBot we met on a conference by sitting in the audience on their talk and asking them some really deep questions and then after that, going to the speaker [00:46:00] and saying, let's connect, you know, and then being very annoying, like constantly coming back to them and then talking to like, I mean, You just can't come to a person and say, Hey, let's, let's talk like really like to learn, you know, and they say, yes, sir.
[00:46:13] You know, here's my home address. Come live with me for a year. It doesn't happen. You have to, you have to be persistent. So speaking about the local person, it's important again to say that some of the contracts that we have signed, it wasn't possible to sign without the local visit. So we didn't have local present, but we had local with, so there was a communication back and forth, through emails, Skype calls and so on.
[00:46:40] But then in order to sign the agreement, because sometimes you just need to imagine yourself sitting on the other side of the ocean and signing an agreement with people you have never met, in the country you have never been. And so you sign a contract, so you [00:47:00] give them your idea, you give them your money.
[00:47:02] So how trusting your company, it's maybe your, last chance, become a super successful, famous person, which you would like to be. And, you give your fate into the hands of someone you've never met. it's a weird thing, of course. And then, but you build a bit of trust during the cold, right?
[00:47:22] And then you meet personally when. We arrived, kind of, and one more thing here. So one thing we learned from Pivotal Labs actually was this, ideation process, which we've took as the foundation and then, build many other things on top and called Bridges, framework. this framework is shared on our website, you can visit them, like, which there, there are materials, so everyone who, so what I wanted to say here is this discovery was always the selling point for us.
[00:47:52] So you need to have something unique and something catchy so you can show during a [00:48:00] limited amount of time. So this discovery session were the selling point for us. We even had cases that we say, okay, let's prepare the bigger contract for many hundreds of thousands of dollars. But then we signed the smaller one just for 10, 000.
[00:48:17] We're with you. We run this discovery session and if you are satisfied, we signed this big deal. So you kind of, you put. Almost zero risk, at the desk and kind of, you already experience work with these guys. I mean, these guys ask, and then it's of course, much easier for you to make a decision, and to spend much more money with you.
[00:48:43] It was a magical session for sure. And then, but you tend to have just one thing, right? They say, Oh, those guys are so happy with my contract. You're like, okay, well, yeah, I don't know why they're happy. Maybe they have a better price. Maybe. Maybe you paid them to say they're happy, maybe whatever, right? You have a kickback.[00:49:00]
[00:49:00] There might be a lot of reasons why people will say that you're great. but if you have many reasons to believe that it's a success, then you can, you can get connected to it, right? And then inception, or bridge session, was Very important for us. And then people typically travel to us for that.
[00:49:15] And then we were like, well, you know, if you can just cancel, you didn't have to proceed on the new contract. They just do the British session with us. And then if you feel that we're, we're the wrong fit then, but the British session is such a lovely bros list that it is impossible to. To not work with that after that.
[00:49:31] By the way, before the war it was, you just remind, remind me that, in many cases we insisted in, insisted that client visit us, not even us visit client. So there were, our treats as well, but in, in cases like to, for example, came, came to us and, many other guys involved. So they were able to see Ukraine, right, to
[00:49:54] There's a modern city. So meet people, talk to them. [00:50:00] Again, trust is super important here. And then you have to go to a bar. I know because they live in Los Angeles.
[00:50:05] They were involved. And I mean, I remember we took one client to, Docker pub, Friday evening. looking back at your story, I know we approaching an hour here, so I want to be respectful of your time.
[00:50:21] But, what are the. Is there anything you would have done differently now, knowing the story and the expansion, any things that you would have changed? Yes, a lot of things. All right. So we, before that we built a lot of product. and then we never pushed them to market as quickly as we did.
[00:50:42] And most likely those were billion dollar per, for sure. We built a CI before CI was cool. We had a time tracking tool before, like a lot of the time tracking tools were cool. We were just, we had the syndrome of imposter syndrome and it would like, we've built, we've built, also, Twitter analytics, [00:51:00] which, analyzed content of the tweets and, you know, many other things that later on such tools appeared and also became billion dollar businesses,
[00:51:07] But we have never pushed a bit more, to make them products. while you can say that the market is more competitive right now, and it's harder,
[00:51:18] We learned from that. We learned from those mistakes. So instead of saying, Why didn't we do that back then? We're saying, wow, we have such a cool idea, back then. And now we still have them. So let's just do it. Let's just advocate them. It seems like we were hitting cool ideas, not their cool ideas.
[00:51:33] It means that our new cool ideas will be also cool. So this is exactly what we're doing. we're productizing, Mike's war right now. That's why people ask, why didn't you build three products at the same time? It's hard. You know, we have three cool products and then they all grow. And it's very interesting to look at that.
[00:51:48] Why do you have three kids? So you need to kill two and focus on one? Yes. Focus on one. Like, what do you mean, man? Well, maybe killing is a little bit of an overkill, but okay, just sell it Now [00:52:00] I'm talking about sales, right? Selling is another option.
[00:52:04] But one could argue and say, Hey, why, you know, you start with one and you focus on the one and you put your energy in there and you grow there. Like why expending like that? Like, do you have enough resources? Do you have the capacity to spend enough time with those three? Yeah, it's similar. Sometimes you make a kit without a true intention and then they, you know, come to life.
[00:52:27] The same happens with products. Created this thing with some of the products, for example. And then we're, we're still very romantic with Sergey. And I was sitting in Starbuck from Poland and they were just coding the hell out of one of our perfect equipment. And then it was beautiful. I mean, it was great.
[00:52:43] It was such a great prototype. And I cannot, you know, compare it to any thing that I did for money, like, Oh, just make money and then you'll be happy. You won't. And any collection of Rolex. And not replay the beautiful creation of Orgnar [00:53:00] writing, in the Starbuck table. we're just very romantic from that regard.
[00:53:04] and we value creativity a lot. Compared to just, scaling the business and making money and stuff like that. There's nothing on the other side of the money. at that time, I know too many billionaires. And, you cannot tell that they are, super happy people because they're billionaires.
[00:53:20] and there's like this creativity process has an amazing index of all potential happiness compared to just giving the business or say, well, wow, we have such a lousy huge business. This is so great being fat and mercy has similar content from that regard. And I think this is like, almost like a perfect, ending point of this episode of how romantic this is all still for you guys, right?
[00:53:50] You're still in love with the company you're a part of, you're still building amazing things. And this is probably part of the success, right? Like, Hey, we really just enjoy doing what we do and we [00:54:00] do it, you know, because we love it. Not because we really want to make a shit ton of money, even though it's always part of, the mindset a little bit, right?
[00:54:08] So that's the backhand of the business. I think here that the best thing is, to thank all the guys and girls who work with us, we love our team and all those people. They're really fantastic. of every person you talk to, they're brilliant. They have so many talents, not only what they do, but what they do in their leisure times, their hobbies, there are musicians
[00:54:33] Beautiful people. Very interesting. Like multidimensional. Go. We love our team. We love our products. Everything will be great. Awesome. And then what's the quick message you can probably, or a tip of advice to those other non American companies that are, growing their products and, trying to conquer the U S market, maybe afraid a little bit to get into that.
[00:54:57] any piece of advice that you can give them? [00:55:00] Who dares, shares. Who dares, shares. There is a nice word. I think what helped us to overcome fear in a lot of cases that we were afraid, but we were still doing it. And then based on the previous success and the previous project that we did, which seemed impossible, we tried the next even bigger thing that seems even more impossible.
[00:55:24] And then after 15 impossible things we were like, well Are they impossible if we need 15 of them? And then that helps us build momentum. So definitely push yourself. everyone has a much bigger limit than to to to expand yourself and push yourself and then go with stress without stress. Doesn't work always for everyone. It can go crazy a bit. But then, you know, I was stressed 10 years back, much more than I'm stressed right now. And right now we have a thousand times more stuff. So just don't, don't believe the stress.
[00:55:58] Not true. Serhii, [00:56:00] anything? No, as I've said, who dares, shares. And so give it a try, give it a try. don't quit. Yeah. Give it another try and it will work out. Or in the end, it's going to be fun. And one more thing, actually. When you hear the success story of everyone, don't believe it.
[00:56:20] It's all the myth. so this story in reality was completely different, completely different, so many, tiny details that actually influence the result are missed and, don't think that those who make billions, they're super smart. They know this world. They're exactly the same people
[00:56:40] With same fears. Exactly with the same mistakes. so many of them work. Some of them work hard, some of them not hard. there is a lot of luck in business, by the way. I mean, like you appear in the right place. And there were a lot of luck in our business, although we're not billion dollar company yet, but still.
[00:56:59] A lot of [00:57:00] smaller things happen here and there, which hard to, tell about during one hour session. So maybe we'll have more session talking about, but approaches. Approaches always are a kill. So basically we learned a ton of approaches and then we were very religious to those approaches and those approaches always helped us.
[00:57:20] And then if you have, you know, like an Aikido or Jiu Jitsu, you, wow. Amen. the opponent is on the mat saying, what happened? You know, this we have so many of them on, and we're going to probably do all the LinkedIn, both of those. Perfect. Well, to all of our listeners, thank you for tuning in to Selling America.
[00:57:41] If you enjoyed the episode, please don't forget to subscribe, follow us, leave us a review. Follow Sergei's and Yaroslav's LinkedIn profiles as well. Follow Railsware's LinkedIn profile too. guys promised that there are more stuff coming our way there. looks like the PR is just, scaling up, [00:58:00] so we should expect more content posting by the team.
[00:58:03] You know, obviously, test out their products. And, stay tuned for new episodes of Selling America.