CodeIT

How An IT Agency Started With Just $3,000 Has Grown To 200 Employees

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Yuriy Rybkin

Founder, CodeIT

Founders

200

Employees

CodeIT

codeit.us

from Vinnytsia, Вінницька область, Україна

started August 2007

Founders

200

Employees

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Discover what books Yuriy recommends to grow your business!

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Hello, my name is Yuriy, and I am the co-founder of the software development company CodeIT. We started our journey 15 years ago by completing small bug-fixing tasks on Elance marketplace. Nowadays, CodeIT has grown into an international software development company with delivery centers in Ukraine and Bulgaria.

The company focuses on full-cycle software development without pegging to specific business domains. Thus, we have broad expertise in e-learning, healthcare, CRM, telecommunications, and other fields. Our clients are primarily startups and IT businesses.

What's your backstory, and how did you come up with the idea?

Starting from childhood, I was passionate about everything related to computers. I took my first steps in programming at the age of 7. On the other hand, I was always dreaming of launching my own business. I’ve picked my major intuitively, combining these two passions, so I have earned a degree in information systems analysis.

I earned my second university degree in Lyon, France. I got my first order during my internship in a small company in this country. The client wanted to make minor updates to its SugarCRM setup, and I agreed to help them with this task for roughly 100 euros. I've involved a friend to complete the task. He helped me deliver these modifications on time. My friend has found a skilled software engineer in Ukraine who has completed this task.

I returned to Ukraine in the summer of 2007 with the company name in mind and a solid understanding of launching a new company. My friend and I have become partners and launched our new business. We didn't have much experience in the digital product development niche, but we were passionate about creating a successful business. First, we have set the company's core values that helped us build a large team that involves more than 200 experts.

The tried-and-tested company development plan involves the following rules:

build trusted and long-lasting relationships with clients
deliver products of outstanding quality
constantly seek innovations
keep evolving despite any challenges
help clients solve their business problems

Adherence to these rules has been helping us for 15 years so far. We pay close attention to the businesses' struggles and offer comprehensive digital transformation plans and solutions to overcome their challenges.

Take us through the process of designing, prototyping, and manufacturing your first product.

From the beginning, we were interested in developing software products from scratch or building significant parts of them. However, it was challenging to assure potential customers that we could handle such complex tasks. Hence, we decided to eat an elephant in bites by doing small jobs and fixing various bugs. We demonstrated our trustworthiness, tech skills, and sincere desire to improve our clients' businesses.

They started to trust us, so we started getting more complex projects from them. I clearly remember when my partner and I covered several roles by doing QA, BA, and PM work on a couple of projects by ourselves. Our clients have made excellent deals by selling these IT businesses afterward.

The fundamental idea lies in the fact that business needs are more prevalent than fancy technology you might use. Therefore, we are doing our best to identify and clarify business requirements with our clients. It helps understand what type of digital solution a business needs to achieve the desired goal.

To recap, the most important tips following the principle “better safe than sorry” are to do a deep analysis of the business and product before starting to develop it. And secondly, all your team members engaged in the project must understand the business goals of the product they are creating.

Micromanagement brings no benefits and negatively affects overall performance. Don’t be afraid to delegate tedious tasks to others.

Describe the process of launching the business.

We had no boosts, big clients, or investors. We were building our business step by step from having nothing. Our initial investment was around $3,000 to buy our first dev server (HP Proliant) and rent a small room in an average office building.

Selling services to customers is just one side of the coin. You have to "sell" yourself to your future team too. When launching our business, we were focused on building complicated and enterprise-grade solutions. Such tasks usually require the corresponding level of the team, would be able to solve them. Unfortunately, it was quite hard to hire top-notch experts when we had a company consisting of two people, including myself, and you didn't have a big name on the market.

Being honest is the only secret tip. Show your absolute trust in your idea and let potential team members know that you won't give up in case of unforeseen problems. Also, don't hesitate to show your immense trust in what you are doing and use your charisma. It can help convince skilled software engineers to choose to join your startup instead of a big tech company.

Combining these three factors helped us acquire our first in-house software engineer. He was working full-time on complicated tasks, so we didn't need to find and hire specialists upon demand to tackle small software development tasks. These days, our first software engineer has become the company's CTO and keeps working in our team.

Since launch, what has worked to attract and retain customers?

During our 15-year working experience, we have tried many strategies to attract customers. Indeed, some of them worked well, and others didn't. However, the most successful way to acquire new customers is through references.

Make your client satisfied with the result, and they will recommend you to other business owners for free. We follow the tried-and-tested strategy to get new clients and receive new orders. You ought to deliver products or services of outstanding quality if you strive to succeed.

Note it won't bring simultaneous results. It is a long-term strategy that will pay off in the form of new customers who find your business for free. For instance, we have tracked the 6-level referral client who has reached our company and requested us to help build a digital solution. Moreover, all the prior-level referral clients were our clients. It's a real-world example of how references can attract new clients without investments. The main point is that top-tier products and services can sell themselves.

Also, we've discovered that turning clients into loyal customers is much more effective than attracting new ones constantly. 53% of our clients return with new projects. Indeed, it's required to deliver excellent solutions. However, it's also essential to build interpersonal relationships with clients. Let's review CodeIT's case, which showcases the importance of trusted relationships for consistent business development.

One of our clients couldn't continue paying our invoices because of unexpected obstacles. However, we didn't stop cooperation. Instead, we believed in the client's idea and invested our company's resources into the product we were building. Consequently, the client found an investor and paid for our services with a short delay.

How are you doing today, and what does the future look like?

Ukraine is experiencing the darkest days in its history now. The military invasion has changed everything and made us postpone or change all our company's development plans. The main company's office is located in Kharkiv, one of the closest to the frontline cities. During the first days of the war, the company had only two days of downtime because our team members and their families needed to relocate to safer places to continue working remotely. The company supported all the team members, so the overall performance didn't fall.

Thanks to the client-oriented approach and trusted relationships, roughly 95% of our clients continued working with us as usual. These days, we keep following our primary customer acquisition strategy. Since all products we build are unique, we only plan to offer custom and well-tailored solutions. Besides, our company widely uses roadshows to attract new customers.

Even though we live in the digital era, face-to-face communication is vital in building trusted relationships with potential partners. The company's CEO and customer acquisition managers make real trips to the customers' offices and schedule product discussion sessions to define clients' real needs and offer the best solutions. Sometimes, we even involve technical specialists at roadshows to provide the right solutions. It's a very effective strategy that helps acquire new customers.

These days, we have opened two new offices. One is located in Vinnytsia, a city in Ukraine, and another in Bulgaria. Our short-term goal is to keep the growth rate of our business. Therefore, we keep acquiring new experts, despite all the challenges. Unfortunately, building long-term business development goals is hard while the enemy keeps shelling our cities every day.

Through starting the business, have you learned anything particularly helpful or advantageous?

If you're a beginner in entrepreneurship, you first need to remember that you shouldn't be afraid to make mistakes. If you take failures as lessons, you will find the right path to success. Indeed, we have made many misleading decisions when running the business. However, the worst was being afraid to share information about our company, how we run our business, and what we strive to achieve.

We decided to avoid publicity because we feared that internal information would make us vulnerable when it gets shared with others, including our counterparts. We thought that the way we work is unique, and our counterparts would also start using our secrets if they became public.

That misconception led us to lose potential clients and more complicated talent sourcing. However, we've discovered that our secrets cannot be stolen because they are an essential part of us. Hence, we decided to start sharing helpful information with all our team members and other companies. It helped us increase brand awareness significantly, positively affecting customer acquisition and talent sourcing.

A lot of entrepreneurs, including me, try to get involved in all the processes and monitor them meticulously. Micromanagement brings no benefits and negatively affects overall performance. Don’t be afraid to delegate tedious tasks to others. Ideally, you need to find experts who can tackle certain tasks better than you and let them do their job. Management tasks should be delegated as well if you experience a lack of time or expertise. The faster you do this, the faster your business starts growing.

The top-three don’ts that will help you develop helpful habits to run a business effectively are:

Don’t get stuck. If you are required to complete a set of bothersome tasks constantly, you may stop noticing new growth opportunities.
Switch activities. You need to keep focused on one task only to succeed. But if you switch your attention to different tasks during the day, the creative process becomes easier. You let your brain rest by doing different activities and pushing the process forward.
Don’t leave tasks unfinished. If you've already started working on a certain task, it's vital to complete it, even if you doubt it will bring any profit. Even a poor or negative result is better than nothing.

What platform/tools do you use for your business?

Unfortunately, the assortment of tools for businesses many years ago wasn't rich. We struggled to find solutions that 100% met our business needs. Hence, we came up with the only solution — to develop well-tailored tools ourselves. Custom-made solutions helped us automate business processes effectively.

Our team has developed the following digital platforms from scratch:

Human resources (HR) tool
Office-management tool
Resource planning tool for our production team

The main benefit of this approach is that custom solutions help solve 100% of our business problems. Also, we can easily upgrade CodeIT's internal software solutions because we don't rely on any vendors. However, the main drawback is that the market is growing at a high pace. Consequently, many out-of-the-box solutions with more rich functionality have appeared on the market, so it may be unreasonable to keep maintaining and upgrading our solutions.

What have been the most influential books, podcasts, or other resources?

People from our team are the primary source of inspiration for me. The team implies many individuals with various backgrounds and standpoints. They help come up with innovative ideas and strategies to achieve business goals.

As a business owner, I strive to build an outstanding collaborative environment for all team members. The Joy, Inc. is the mind-changing book that helped me form a strategy for effective team management.

Following the main concepts stated by the book's author, I do my best to establish a working environment where all team members are excited about the projects they work on. For instance, when a back-end software engineer is interested in developing products in the financial niche, we assign the developer to fintech projects. It's a win-win strategy that keeps team members happy and eliminates the need to monitor their work.

Advice for other entrepreneurs who want to get started or are just starting out?

Indeed, if you decide to become an entrepreneur, you should never give up. You will face a lot of unforeseen obstacles. The only way to overcome them is to keep pursuing your dream, despite any challenges. However, there are a few tips that I'd like to share with you. They help me run the business effectively and cope with all the challenges.

Tip 1: Make important decisions quickly. If you postpone making a decision that may affect your business, you will never succeed. The only reliable way is to decide quickly and cope with the consequences. Indeed, you can make right or wrong decisions. Any of them is better than lagging. Postponed choices can lead to lost profits or increased spending.

Tip 2: Test everything by yourself. Even though I recommended delegating tasks, you shouldn't hire people and ask them to achieve specific goals. For starters, you need to develop a new strategy, pick the right tools, and try if they help achieve the required result. If yes, you can hire people and give them all the necessary tools and instructions. Otherwise, you will hardly succeed in delegating tasks to others.

Tip 3: Hire managers with hands-on experience. Hiring inexperienced managers is one of the worst mistakes business owners can make. A person who makes valuable decisions and manages a team of others needs practical expertise in achieving the required results. They need to know how to use all the tools and be capable of guiding other team members.

Are you looking to hire for certain positions right now?

Since our business development strategy is continuous growth, we have ten open positions in our company now. We are looking for specialists in different niches. You can check the list of openings here.