Building A $500K/Year Software Development Business With A $500 Investment [Ukraine]
Hello! Who are you and what business did you start?
Hi, my name is Boris and I am the founder and CEO of the software development company TRIARE based in Ukraine. We help businesses and startups to transform their ideas into accomplished digital solutions.
Currently, we are explicitly focused on building products for delivery and logistic firms. We have a turnover of $500,000 per year, which is a 15% increase compared with the last year, and this is just the beginning.
I want to share how personal and collective responsibility paired with patience and consistency can help you build a profitable, respected business. It’s not easy, but it shouldn’t be painful. Here’s my story.
What's your backstory and how did you come up with the idea?
About 10 years ago, I was introduced to the IT world by a friend of mine. Around that time I registered on Linkedin and Facebook for the first time (VK.com was a prevalent alternative in Eastern Europe at that time). My primary responsibility was finding clients for the company. I enjoyed this process a lot and got to know many interesting people and businesses at that time.
I tried to work as a project manager at some point: my new role was a remote position at a German startup with a team of developers from Asia. That was a bit challenging due to the time and cultural differences, and I shot an idea to our CEO about building a team around me and having them all at the local office here in Ukraine. It was brave, and it worked! (A quick tip to the readers from a younger me: don’t be ashamed of asking questions and posing assumptions; it is natural for leaders).
We had worked together this way for about two years. The team grew to (only) 5 people. And then, I received a call from the CEO on a late Friday evening in November informing me about closing the business; they could not reach financial goals and had to dismiss the team on the following Monday.
If a client needed any solution, we answered that we could do it and quickly searched for the necessary specialists. It was inefficient, stressful, but we also learned a lot in the process.
That was a tough weekend full of uncertainty. I was at a crossroads: quitting everything I just learned and built or trying my way with the same people. I decided to keep the team: it wasn’t easy but we survived. After half a year, I invited Anton, a current partner of TRIARE, to join the team as a project manager. It was the time when our common path began. After seven years, we are moving forward together, supporting and building a team of professionals within the area of software solutions for business.
Take us through the process of designing, prototyping, and manufacturing your first product.
I’ve put $500 of my savings into the “office”, a simple room we rented out. We started as a team with different skills and technologies, mainly providing software development for our clients’ needs. It was a bright example of the early company: if any client needed any solution, we answered that we could do it and quickly searched for the necessary specialists. It was inefficient, stressful, but we also learned a lot in the process.
But active growth and, later, sustainability requires a change of mindset. We began to look for a focus and turned into a team that provides a full-cycle service: from business analysis to the product launch. It didn’t happen overnight, though. We experimented a lot. For instance, we developed a separate service called Discovery, launched free mentorship calls, and advised startups. We even participated in the EUvsVirus Online Hackathon. Surprisingly, it gave dozens of valuable contacts and even a couple of contracts.
During this process, we fulfill various areas like discovering the product, building visuals, analyzing features, creating the software, testing it, and then presenting it to the customer. Generally, it takes between 2 and 6 months depending on the project scale and difficulty. The platforms we use can be found below on the list of tools.
Because this business changed considerably over these years, it also created pressure for the companies to seek constant improvement and growth. We’ve started initiatives like professional development, English classes, and other educational programs for our employees – all of these had to be deployed rapidly along with our main activities. I can tell that we are a software development company and an educational company for our staff.
Describe the process of launching the business.
Sorry to disappoint you, the reader; I have no recipe. For us, it happened organically over several years of working and growing as a team. Since it wasn’t an actual launch but rather a transition, the key events happened over several months: renting the first “office”, getting new contracts, hiring more teammates. We didn’t even have a company name, but we’ve continued to work as a like-minded group focused on delivering quality work to our customers.
Why did customers stick to working with us? I assume it was due to our responsibility, reliability, and value of lasting relationships. These were the fundamental values that kept us together and made the clients return to us. These three R’s became the current name: Three R or TRIARE.
The same goes for our company’s website: it wasn’t exemplary at all. I mean, we’ve been building stunning web apps and highly efficient web platforms for our clients, but it took us years before we could create the current sleek pages of TRIARE.net. Still, it is a work in progress, and we will redesign the whole thing again for the third time. As Reid Hoffman, LinkedIn’s founder famously said: “If you are not embarrassed by the first version of your product, you’ve launched too late.”
Since launch, what has worked to attract and retain customers?
For many years, the main source of our customer base was word of mouth. Indeed, it is the most effective and reliable source of customer acquisition. It also saves time because one doesn’t need to prove their reliability – a close acquaintance has already recommended your company. However, it drains over time, especially if the company grows rapidly.
To ensure a constant flow of leads, we started using various marketing tools, from email campaigns to paid ads on Facebook and Google to original content on our blog. Let’s start with content; we can separate email marketing and blog posts highlighting TRIARE expertise. We achieved some excellent results in open/reading rates (up to 40%) for the first one. Then the open rates slowly decreased to (15-20%) with a 1-4% click-through rate.
There were 0 leads from a dozen or two campaigns our marketer had sent. Zero! I was disappointed but patient. We have invested heavily in copywriting with an outcome of almost 50 unique articles on our website. This, too, seemed not to be paying off.
However, a year and a half passed, and we got the first lead from email marketing! Oddly for us, this person has been opening each letter, every time, and only later decided to ask us for our service. As for blog content, people started coming to the website organically. By 2022, we received 22,000 unique visitors and a few dozens of leads out of 807 in total.
A crucial part of this marketing segment is SEO and distribution. If your articles are hard to find, there will be fewer chances of appearing on the first two Google pages. The marketing funnel remains narrow if you do not share this content on social media (Linkedin in our case, mostly team’s pages and relevant groups) and via link building. You ought to have a wide funnel to capture relevant leads.
Everything changes and never stays the same except for several things in the Universe. Thus, I need to constantly adapt and update my thinking to improve my decision-making and intention of my actions.
One more way to enlarge the funnel is Google Ads and Facebook Ads. We also tried Linkedin Ads, and I do not recommend this option since we didn’t see any traction whatsoever. While ads seem to be a no brainer, there are several issues we’ve stumbled upon:
- Focus: if the ad is not well-targeted, you will receive many non-qualifying leads (for our taxi delivery app service, people applied for a job).
- Cost: the IT market is very competitive; so are the ads in this segment; before we chose our niche sectors, we were shotgunning: it was costly and ineffective.
- Frequency: when we finally fine-tuned this channel, it backfired: we started generating more leads than we could process; yet, I still believe this process must be ongoing to support your IT service business.
There is no silver bullet in terms of an ideal marketing tool: one has to rely on a combination of tools to get needed results. And we were able to make it work and find customers through these outreach channels. Finally, one more channel helps with brand awareness and brand recognition: conferences and trade missions. Although we didn’t have enough leads from these activities, they proved to help us in the long run.
How are you doing today and what does the future look like?
We had quite a ride! There were exciting highs that inspired us to grow the team and accept more difficult technical challenges. There were bumps, too: incorrect estimates that cost us profits (we even lost money in one case), customers taking a break due to COVID uncertainty, and people leaving the company, making us respond quickly with new hires.
In the past, we were trying to grow chaotically, taking on every possibility and each lead. In 2021, we started applying OKRs and introduced our goals to the whole team. Everyone is involved in reaching the results more than ever.
In terms of specialization, we focused on transportation logistics and delivery, edtech, and HoReCa (mobile apps for Hotels, Restaurants, Cafes). Geographically, we target the UK, Germany, Norway, Sweden, Netherlands, the US, and Canada. Notably, this works well for us operating in Ukraine. I am not sure about web studios in these countries: consider your margins and expert potential. I know that many western companies deliberately outsource and outstaff in Eastern Europe: it has the best cost/result ratio.
The future looks the way you want it to look. We do not know where we will be, but we know what we want and what we need to work on today. That defines our daily agenda and activities.
Through starting the business, have you learned anything particularly helpful or advantageous?
Every step forward has resulted from a brave decision that we had to make, and we relentlessly chase this grand vision. The bigger the goal, the less distracting the obstacles are. Comparing our business in the beginning, a few years ago, and even last year, I can tell that we are so different today!
The quality standards improved, optimal approaches became a part of the reliable system and continuous operations; we also created separate departments: for sales, marketing, iOS, and Android mobile development.
Everything changes and never stays the same except for several things in the Universe. Thus, I need to constantly adapt and update my thinking to improve my decision-making and intention of my actions. And since it is an endless process, I wish you all to embrace this challenge with a wide smile on your face and an open heart. There will be wild ups and devastating downs, but eventually, everything will be OK.
What platform/tools do you use for your business?
Many tools help us in the workflow. We start with marketing to find potential clients whom we can help:
- ActiveCampaign CRM is at the core.
- We also rely on Ahrefs to navigate with SEO for our blog.
All the communication happens via corporate Gmail accounts; Skype, Zoom and Google Meet for video-calling, Calendly for scheduling these calls, and Slack for team communication.
For design, we utilize Sketch, Figma, and Miro. For project management, we picked these options: Redmine, Jira, and Trello.
What have been the most influential books, podcasts, or other resources?
- Sales: Sell or be Sold.
- Personal Productivity: The 10X Rule.
- Business relationships: Give and Take, Crucial Conversations.
- Leadership: No Limits, Good Leaders Ask Great Questions.
- Company processes: Traction, Good to Great.
A fun fact: nothing from each of these books works. Unless you apply it.
Advice for other entrepreneurs who want to get started or are just starting out?
There are so many possibilities to become successful right now! Companies raise millions; startups gain incredible traction; tons of products are being sold. You know, when covid-19 struck, we felt lost; we didn’t know what to expect, so were our clients. Contracts were delayed or canceled. It could end right there. However, each storm creates both fears and opportunities.
There is a Chinese proverb: “When the winds of change blow, some people build walls; others build windmills.” We went with building, creating more jobs for employees in our city, and placating our partners (we launched a newsletter campaign sharing these thoughts with them). Ironically, some people found the use of this proverb offensive (remember, coronavirus came from China?).
Anyways, “what you focus on grows.” So I wish the readers to do what they like and enjoy; this includes helping others and fulfilling more customer needs. And don’t let success turn your head. There is so much noise that you have to be intentionally ignorant of; don’t get distracted from your focus.
Are you looking to hire for certain positions right now?
We constantly hire and add people to the team. There are multiple positions opened on our website. Here are the current ones: Middle Node.js developer and Middle/Senior Angular developer (both at office or remote; full-time).
The requirements include:
- Implementation of new features.
- Clean code.
- Conscious approach.
- Analyze technical requirements and provide an estimate for the project.
- Communication with the customer.
Where can we go to learn more?
If you have any questions or comments, drop a comment below!
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Download the report and join our email newsletter packed with business ideas and money-making opportunities, backed by real-life case studies.
Download the report and join our email newsletter packed with business ideas and money-making opportunities, backed by real-life case studies.
Download the report and join our email newsletter packed with business ideas and money-making opportunities, backed by real-life case studies.
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