How We Started A $150K/Month Website And Mobile Development Outsourcing Company

$150,000
revenue/mo
2
Founders
80
Employees
product
SteelKiwi
from Ódessa, Vinnitsa
started February 2011
$150,000
revenue/mo
2
Founders
80
Employees
85.8K
alexa rank
market size
$154B
avg revenue (monthly)
$116K
starting costs
$18.5K
gross margin
83%
time to build
12 months
growth channels
SEO
business model
Software
best tools
Trello, Slack, Twitter
time investment
Side project
pros & cons
37 Pros & Cons
tips
4 Tips
Discover what tools Viacheslav reccommends to grow your business!
Discover what books Viacheslav reccommends to grow your business!
Start A Mobile App Development Business

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

Headquartered in two Ukrainian cities (Odessa and Vinnitsa), Steelkiwi is a full-stack American outsourcing company, providing web and mobile app development services. Anton Baterikov and I co-founded the company in 2011.

We’ve decided to start as a Python/Django web development agency. But less than in one year, we’ve also established a mobile app department and since then have been developing native Android and iOS mobile applications. In 2021, we are celebrating the 10th anniversary and obviously are attempting to assess our success. And the very first thing that comes to my mind right now is how we have expanded our business: we’ve developed graphic design, quality assurance (QA), business analysis, project management, and marketing departments in addition to the initial two. And that’s over 80 employees working to help businesses grow digitally.

My main responsibility within Steelkiwi Inc. is non-technical team management. I run marketing, sales, project management, design, and business analysis teams. Together, we work on the improvement of the company’s internal processes and analyze the clients’ feedback. My partner Anton is in charge of all the technical aspects of our business.

how-we-started-a-150k-month-website-and-mobile-development-outsourcing-company

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

In 2011, Anton and I weren’t close friends but were well-acquainted and had many mutual contacts. In February 2011, we happened to meet among friends and our conversation took us to what we were doing for a living and how much we wanted changes. Back in 2011, I was involved in project management and Anton was a Python/Django developer, both common employees but with ambitions.

As we started sharing experiences, we came up with the thought that the software development market would soon be reorganized. For years, there wasn’t any good alternative to PHP development, and we thought it would be great if development companies started offering businesses an alternative to PHP. Python was already giving the power that businesses needed, and the language’s technologies and community kept growing.

Anton and I thought about using his development and my management skills to offer businesses high-quality products in a time-efficient manner. So, we’ve invested from our personal savings, and things heated up. What distinguished us from the rest of the market at that very moment was that we were delivering both technical experience and market expertise.

Today, we have built our expertise in different technologies and are now working with businesses from different industries, including consumer services, education, entertainment, food, and beverage, healthcare, media, real estate, recruitment, retail, sports, and travel and transportation.

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

Platforms like oDESK and Elance (now merged to Upwork) and Freelancer were where we connected enterprises and individuals to conduct business. The development projects Anton and I were working on were for small and medium-sized businesses. As far as I remember, the costs of the very first project were to be kept within the budget of $1,000.

Become a salesman yourself. It’s all about understanding your clients and understanding the best model.

Comparing those old days and us today, I see how wise it was at that time to start offering not just code writing but also the consultative approach. This idea remains the core of our business today. We do offer out-staffing and project-based engagement models. But in addition to these classic approaches, we offer the product development approach. This means we are also involved in business ideas and marketing.

Describe the process of launching the business.

For less than a year, we were following the same cooperation pattern: I was responsible for project management while Anton took over the technical part. But as the number of new and returning clients increased, we realized that Steelkiwi wasn’t just a part-time project we earned some extra money from. The group of two had to grow and develop. Our next step was launching our own website and renting an office.

how-we-started-a-150k-month-website-and-mobile-development-outsourcing-company

Here, I’d like to make things clear. From the very start of our business, we were planning to perform management roles in Steelkiwi. The very idea was to launch a credible startup, develop it into a profitable business, and hire employees responsible for implementing most of the processes, while Anton and I could take managing positions and monitor all the processes. And I am completely honest saying that we’ve achieved the desired result.

As for the lessons learned from the process of having the idea and making it work, I think I’ll say what I’ve heard countless times before: Don’t do business with your friends. It may sound obvious but few people follow the rule. When it all started, Anton and I were well-acquainted but we weren’t best friends.

At the start, we were very different, and we remain such now as well. The thing is that this difference in the way we saw how the business had to be run helped us build a successful company with clients from all over the world and an ever-growing number of new projects to work on.

My whole attitude towards having a startup with friends is best reflected in a quote by John D. Rockefeller: ‘A friendship founded on business is better than a business founded on friendship’.

At the present, Anton and I are both business partners and friends.

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

If you are an aspiring founder, there are three basic recommendations that I could give you. First, to enter any niche, you need at least a small pool of money at the startup. Anton and I had $1,000 each to kick off. As far as I can judge now, for two Ukrainian entrepreneurs out of 2011 this money was enough to become successful. And if you are already running a business, try not to inflate your expenses.

Second, every business has its primary and secondary services. At the very first stages of your business, you can grow by hiring people to cover primary services but you should deal with the secondary ones like accounting or sales by yourself. At the same time, one of the most important management skills is balancing between dealing with the secondary services and finding the right moment to delegate them to the hired personnel.

Third, when you see income increase, reinvest the maximum of your profits into your business instead of wasting your first big money. Plus, prioritizing your own savings and investment accounts (following the “pay yourself first" approach) is unacceptable at the early stages of your business.

Success in your business always involves time management. When you run your own business, it always seems as if you never have enough time.

To increase your business sales, become a salesman yourself. And the question isn’t whether or not you can afford to hire extra staff to sell your services. It’s all about understanding your clients and understanding the best model. Until you have a full understanding of your business, you will keep failing in hiring and teaching others.

how-we-started-a-150k-month-website-and-mobile-development-outsourcing-company

In business, there’s no place for numerous attempts. If the strategy was a failure at your first attempt, it’s going to remain such after the second or third pass too. My advice is to have many sales strategies and classify them into long-term and short-term. And mind making good investments in your long-term sales strategies. Though it seems that the long-term strategies' results are far beyond the horizon, time flies. And then before you know, you’ll be reaping the benefits and making adjustments.

And even though you know the product/services you offer well and you’ve learned the customer portrait from A to Z, the sales process is never easy or the same. The only rule that remains equal for every process in the human relationship.

There’s no doubt your services are of the highest quality but the human factor still plays its part. Remember one important thing: there are real people on both sides of the negotiating table, so you need to treat the other side accordingly. Keep in touch even after the project is completed and you aren’t collaborating anymore. This is the core of bringing existing customers back.

how-we-started-a-150k-month-website-and-mobile-development-outsourcing-company

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

I dare say we’re successful. No business wasn’t affected by the 2020 crisis dictated by the COVID-19. After the breakout and during the lockdown, we’ve reorganized our strategies and started investing more into lead generation. We had emergency case plans to retain employees and keep business afloat. And even though the crisis hasn't passed yet, this isn’t something that scares us. We’ve learned to adapt to the circumstances without losses.

Concerning our plans, we do have new strategies in the pocket, but we never plan to grow into a huge development company. What we are really into is giving the best services while remaining a medium-sized development company (100 employees, not more).

Managing under 100 employees is our choice. We are more than just a company. We’re a family. And (please, understand me right) it’s easier to make 100 people happy with what they do and what they have.

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

Success in your business always involves time management. When you run your own business, it always seems as if you never have enough time. But if your goal is becoming successful and achieving more in a short time, work on your time management skills improvement.

One of my main approaches in this regard is Inbox Zero. This is my usual approach to email management that helps me with keeping the inbox empty. Here’s another great thing you can do:

  • You prioritize the communication channels by the degree of urgency
  • You let your colleagues and clients know about and follow your priorities (so that they are aware of the response speed, can set their expectations, and use these channels accordingly)
  • You follow the rules you’ve established

What platform/tools do you use for your business?

At Steelkiwi, we consider lots of different tools for successful collaboration. Among them are instruments for group chats and one-to-one video calls with clients or team members: Slack, Hangouts, WhatsApp, Skype, all messengers.

Gmail is one of the tools we use from early morning for sending and receiving electronic letters. Confluence and Google Drive help our team create a customizable workspace with documents, files, tables, and presentations.

We manage tasks, organize work, and keep all projects on track through Jira Atlassian and Trello.

We always discuss projects’ designs via Invision, Sketch, Figma, Photoshop, Adobe After Effects, and Flinto.

At Steelkiwi, we turn to self-hosted GitLab for collaborative development.

Finally, Google Calendar and Calendly are our assistants for scheduling events and meetings.

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

Listening to interviews with people from industries far from the software development niche is one of the activities I regularly do. The greatest changes and shifts in my whole perspective happened after listening to people out of my world. Whether they are politicians or people of art, doctors or researchers - any of them helps you understand others better. Sometimes, you can get a better understanding of yourself after listening to them.

Surely, there are books I would strongly recommend others to read. Start with The Lean Startup by Eric Ries, proceed with No B.S. Ruthless Management of People and Profits by Dan Kennedy and Tribal Leadership by Dave Logan and John King.

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

Stop thinking that others will understand your ideas at their first attempt without having your background and scope. If you want your business partners, your employees, your clients to understand you, provide the full scope, the context, the idea behind your words.

Develop the skills of seeing others’ efforts and progress. And work on your skills of telling others that you notice and value their contribution. Your inability to notice, praise, or support can cost you a lot more than money. It can cost you a valuable team member.

Are you looking to hire for certain positions right now?

These are the top three vacancies we are trying to fill regularly:

  • Project Manager with experience in writing clear project requirements and with deep knowledge in programming or testing;
  • Team Lead Python/Django Developer to provide an estimate for projects, communicate with the foreign clients and development team, and build the project’s architecture;
  • Business Analyst/Requirements Engineer to support customers in making the right decision while creating coherent requirements and make research and analysis of obtained information.

For more, check this link.

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Where can we go to learn more?

-  
Viacheslav Ponomarov,   Founder of SteelKiwi

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