How This Self-Taught Developer Started A $125K/Month Software Agency

Alex Nordlinger

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Published: November 30th, 2022

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Alex Nordlinger

Founder, Materialize

$125K

revenue/mo

Founders

Employees

Materialize

materializelabs.com

from Los Angeles, CA, USA

started March 2018

$125,000

revenue/mo

Founders

Employees

Discover what tools recommends to grow your business!

platform

Figma

accounting tool-icon

Quickbooks

productivity tool-icon

Slack

Jira

ClickUp

Notion

Todoist

analytics

Google Forms

design

Figma

freelance

Upwork

other

Github

Zoom

Hubstaff

Discover what books Alex recommends to grow your business!

The 4-Hour Workweek: Escape 9-5, Live Anywhere, and Join ... Timothy Ferriss

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Hello! Who are you and what business did you start?

Hello everyone! I’m Alex Nordlinger, founder of Materialize, a software development studio that builds bespoke mobile and web applications. We’re a software development team-as-a-service that provides deeply technical product design, development strategy, and expertise.

We focus primarily on working with customers requiring web and mobile app development services by bringing a unique set of skills to build products efficiently and cost-effectively.

As an engineer, I have experience working with stakeholders and managing teams to build products using a well-honed process that emphasizes reliability and maintainability. We work with customers in all industries, from startups to Fortune 500. We specialize in working collaboratively with our clients to learn the specific needs of their companies and serve as an extension of their companies to reach their goals.

I began my career as a self-taught software engineer. I quickly rose through the ranks from a jr. developer to managing engineering departments at companies large and small.

As an engineer, I always had people coming to me to help them with their projects and worked on them as my side projects. One day I realized that I could take on more side projects if I started hiring team members that I could manage, and thus Materialize was born. Materialize has grown to a team of 18 people, and our revenue is $125k per month.

When I first started, I set my rates low and only provided web and mobile app engineering services. I was able to win business by charging less than the competition.

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

I’ve always been passionate about computers and have been fascinated with them since I was a young kid. At 10 years old, my parents bought me a book on building websites with plain HTML and everything took off from there. I spent, and continue to spend, hours and hours teaching myself new programming concepts and capabilities until I eventually found myself working for companies that needed my skill set.

I started out by hiring other engineers as freelancers to help build products for clients that approached me. The experiment went well, and I decided to take a leap of faith by concentrating full-time on building up a company and focusing purely on working with my clients. The “aha” moment came when I realized that people would pay me to provide my expertise and that I loved building a business just as much as I love software development.

At the time I went full-time on Materialize, I had about $20k in my newly formed business account and small cushion of personal funds that I told myself I would use to support myself while I got the business up and running. I’ve been incredibly financially conservative and thankfully I never had to once dip in my savings to support myself, as the business has continued to grow and pay for itself. Materialize is fully bootstrapped by me, with no outside investment, and we’re set to do about $1.7m in revenue for 2022.

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

When I first started Materialize, I set my rates low and only provided web and mobile app engineering services. I was able to win business by charging less than the competition and gave my clients confidence that they would have their product built by an expert in the field based on my past experiences and knowledge of software engineering. I charged a flat rate across the board and started figuring out what platforms and services would help build a business and managing projects.

I leaned heavily on blog reading, podcast listening, outreach, and Googling. Just like I had taught myself to program using mostly freely available resources, I taught myself how to manage multiple projects, hire staff, manage teams, track time, invoice, manage finances, etc. It’s been incredibly fulfilling and rewarding and I have found that building a business is just as fun as building products. Now, instead of only being able to build one product at a time, I get to build multiple products with customers of all different backgrounds and learn all about new industries as we go.

I quickly found that the process by which I was building products for customers needed improvement. I started leveraging more and more platforms and services to help me do my job better and set standard operating procedures for how I do things. I had read and learned enough from other business owners through blogs and podcasts that I knew that setting a foundation of processes would be key to building a scalable and successful business. I made sure to document everything I did and to keep a detailed record of everything.

I can’t stress enough how important it is to establish processes if you plan to build a scalable business. My intentions have always been to build a business that could operate without me, and the lens I look through is from someone who might want to purchase Materialize. Can the business operate without me, or is it entirely dependent on me?

Photo of the first office space where I launched the business

The first scoping exercise for a project I ever did. We’ve improved our process drastically since then

One of our first job listings

Describe the process of launching the business.

Like most app developers, I was always working on a side project for a customer simply as a side gig to supplement my income. I was making about $180k a year plus benefits and managing a team of other developers at my full-time gig which was difficult to leave if I didn’t have something that I could turn into something that made just as much income or more.

I had a friend approach me with a project that she needed help with at her company and I decided to say yes to it and hire an engineer to do the work for me. I reached out to a recruiter friend of mine, who put me in touch with someone that recommended a staffing agency that could provide a contractor with the skills I needed. The engineer ended up working out well, my friend was happy, and the idea that this could work had been validated. I decided to pick a business name, register an LLC in CA, and start looking for more work. I eventually picked up a contract through Upwork (for a client with whom I still work) and went full-time work on my new business.

I had begun trying to find qualified freelancers and engineers using Upwork and decided I would take a stab at creating my profile to try and win business. As it turns out. Upwork has been one of my main sources of customers for me and even though it’s hard to scale a business purely from Upwork customers, I have been able to use it as a way to build a network of referrals and a strong reputation.

I have experienced a lot of setbacks and surprises from learning how to manage projects properly and hire the right people. There’s just simply nothing that can replace experience, and I have had to go through some learning experiences to learn how best to hire people and what clients are best to work with. At this point, I have a lot of confidence in the way that I operate and how I find qualified engineers and support staff. In the beginning, I did not have this luxury, and I constantly worried about how I could hire the right people that I could trust. This just simply took time for me to implement and I don’t think there was any other way I could have done it better.

I learned that reaching out to other business owners and allowing others to help you establish processes is key to growing a business. There are a lot of ups and downs when operating as an entrepreneur, and I’ve had to weather the storm of negative self-talk to persevere through trials and tribulations. Perseverance has been key and being incredibly financially conservative has given me the confidence to grow.

The first version of the website! Built by yours truly

I leaned heavily on blog reading, podcast listening, outreach, and Googling. Just like I had taught myself to program using mostly freely available resources, I taught myself how to manage multiple projects, hire staff, manage teams, track time, invoice, manage finances, etc.

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

I continue to improve and standardize our offerings. In the beginning, I never said no to anything and would take on any type of work that someone asked for. I considered maybe that Materialize could be an agency that provided all sorts of auxiliary services, including marketing and SEO, but I quickly learned that it is best to concentrate on what I do best: building mobile and web apps.

When I first started Materialize, I was surprised at the ease with which I was able to build products for more than one customer at a time, and I thought that if anybody knew what I was doing, they could easily figure out my methods and replicate it across the board. But what I learned over the last few years is that I have such a depth of knowledge and experience with managing teams, working with stakeholders, and building digital products according to a very well-defined and honed process, that not just anybody can do it. I can do it so well because I have been doing it for so long and have learned from my mistakes over the years.

To build our customer base, I have hired lots of help to get my branding where I want it to be. We’ve redesigned our website numerous times, honed our language, built a large contacts list, and always capture reviews as soon as we deliver on projects successfully. I have gotten our systems and processes thoroughly documented and standardized which has allowed me to grow and scale without needing to do much training.

My advice to a new founder is to always write down everything and record as much as you do. Use a screen recording service, write documentation, and constantly refine how you do things to make things streamlined and easy to train new employees. This is key to being able to scale rapidly and allowing yourself to move into the CEO role quickly. If you start to see success, double down on what is working, and don’t be afraid to invest in your business and yourself early on.

A strong source of business for us has been Upwork, but it’s not a reliable and scalable resource. We have branched out to improve our authority by attending conferences and are currently looking into other marketing channels, such as content creation, newsletters, and advertising. A key piece to running successfully is to never rest on your laurels and continue to try new things. A big client can leave at any time, so you always want to stay ahead of the curve and continue to build your business opportunities.

We do not get any business through ad spending, website traffic, or drip campaigns, so it’s entirely reliant on our authority, referral network, Upwork, and partnerships.

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

We keep detailed logs and track all of our leads, proposals, and conversion rate. We typically do not send a proposal unless a lead is warm, and our conversion rate for proposals that we send out is 33% for 2022. I have found that unless you’ve been specifically requested to provide a proposal, the win rate is going to be less than 5%. We do not get any business through ad spending, website traffic, or drip campaigns, so it’s entirely reliant on our authority, referral network, Upwork, and partnerships.

I have been incredibly conservative while running Materialize and held onto cash in the event of any type of downturn and slow sales. Because of this, I was hesitant to hire operational help, like project managers and assistants, and I continued to do everything myself, working 16-hour days, 6 days a week.

Now, I have a staff that helps me immensely and my working hours have been cut dramatically, and most importantly, I can concentrate on sales and growth. If I were to go back in time, I would have hired help as soon as I had success so that I could continue to grow at a more rapid pace. It’s important not to try to do everything yourself and to invest in yourself and your business if you see that something is working!

We have virtual assistants, an operations manager, and project managers who help to keep the business running smoothly and projects completed successfully. The majority of our staff are engineering resources that have been built up over the years across reliable channels of finding strong engineering talent. Most of the engineers are contractors, some of whom have been working for Materialize since the beginning.

This year I have expanded our marketing efforts by hiring a Fractional CMO who is helping with general marketing tasks, including advertising, sponsorships, content creation, and capturing reviews across multiple channels. I have not seen any returns on investment just yet but it is a long process that can take a long time to realize any returns.

A boilerplate project calculation spreadsheet I use to estimate projects and profit

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

It’s important to invest in what you’ve had success with and to double down on it. It’s good to be conservative and to save cash, but you want to be careful not to hamper growth by being too conservative. A question I routinely ask myself is this: is what you’re currently doing what a CEO of a $50mm business would do? If the answer is no, then I adjust my approach to what a highly successful CEO would be doing with his/her time and business processes.

Finding the right employees and hiring well can be a make or break for your business. It’s a long and arduous process to interview and hire, but finding the right people that I can trust has helped me to sleep well at night and removed a ton of stress. Finding those channels to hire well in and trusting your resources is an important first step to running a successful business.

Reading, researching, and learning from others have also been key to my ability to run a successful business. I learn well by teaching myself, and I have fun doing it. Learning how to track time, invoice, balance books, hire, fire, market, write proposals, do sales, manage teams, manage schedules, and set up LLCs has been both fulfilling and essential.

What platform/tools do you use for your business?

Slack – Communication with team members and sometimes clients
Github – Code hosting and version control
Jira – Project management
ClickUp – Operational task management
Zoom – Virtual meetings
Grain.co – Meeting recording and transcripts
Google Workspace – Email, docs, spreadsheets, etc.
Notion – Documentation, Standard Operating Procedures, and client dashboards
LinkedIn – Prospecting
Figma – UI/UX design
Hubstaff – Time tracking and invoicing
Quickbooks – Managing and tracking finances, invoicing, bookkeeping
Upwork – Hiring freelancers and finding new work
Todoist – Personal daily task list

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

Tim Ferriss, The 4-Hour Workweek - this book was the catalyst that showed me I can start and run my own business.

HackerNews - Always staying up on the latest trends.

Smart Agency Masterclass podcast - Interviews with service-based business owners.

Daily Stoic - Reading this first thing in the morning to align my intentions for the day.

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

If you have a good idea and you want to work for yourself, don’t be afraid to take a chance and go for it. I knew that I wanted to start my own software development company for a long time but I didn’t muster the courage for many years.

There’s so much to learn along the way while building a business and so many freely available resources to help you. Other business owners love to discuss the life of entrepreneurship and there’s a massive amount of resources available to get you started. Be cautious but take risks, I promise the results will be worth it.