How We Started A $360K/Year Software House [From Italy]

Federico Schianchi
Founder, Dreamonkey
$30K
revenue/mo
5
Founders
2
Employees
Dreamonkey
from Scandiano, Province of Reggio Emilia, Italy
started January 2018
$30,000
revenue/mo
5
Founders
2
Employees
1.54M
alexa rank
56
followers
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How We Started A $360K/Year Software House [From Italy]

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

Hello, I am Federico Schianchi and I started Dreamonkey in 2016 with four partners.

We kick-started Dreamonkey to support our first project, Check Your Life, a kind of project management tool. After a year of development and difficulties in finding actual investors, we decided to drop that web service and we started to rethink ourselves as an actual company, selling our expertise to clients.

Today we develop high-quality web apps and we work on industrial IoT (Internet of Things), dealing with the process directly from machine level communication up to Cloud data storage. We also take part in open-source software development for web developers. Currently, some of us are part of the Quasar Core Team and take part in the decisional process to improve this incredible framework for web coders.

We are a B2B working reality, mostly dedicated to enterprise-level customers. We specialized in this kind of customer because we deal with high-level budget projects due to our extra care dedicated to UI and technical analysis process. We often design software for internal use or machine software which is developed under NDA most of the time.

Our non-stop improvement and our strategic choices allowed us to grow from the first year $90K of revenue to today $300K of revenue, with the constant growth of 50% per year.

how-we-started-a-360k-year-software-house-from-italy

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

I was a system engineer, I loved my job, but since I was a child I wanted to become an entrepreneur.

I have always been hyper-organized but I never found a tool that responded to my needs, so I decided to gather together some old and valuable friends to start working on a personal project, which is the aforementioned Check Your Life.

This was way before Dreamonkey was to be a thing it was 2013, and we were hungry for success and ready to test our skills with such a challenge. Some of us, like me, had some working experience already, while others brought a more academic approach as they were freshly out of university or still going through their studies.

Despite our goodwill, Check Your Life was a project studded with problems of many sorts, starting from our short-life experience in the startup's world, to our knowledge which had to be improved. Unfortunately, the project never overcame the beta version for many reasons, but the friends were there to stay and so we became associates.

That was our "aha" moment, we began to realize that, even though Check Your Life had failed, we could still sell our self-made experience put to test directly, facing all the issues that always emerge when someone tries to kick-start a project involving software.

Don't trust too many explosive success stories: be patient as in reality results never arrive quickly, they require time, sometimes even years

Dreamonkey, born to economically support our project, became our second bet and first source of income. We still consider ourselves at the beginning of our journey but it has given us a lot of satisfaction already.

We were different, especially if compared to companies like us in our Italian environment, and as years went by we became more aware of this. Great attention to detail, strong work ethic, and company identity.

We have always struggled to communicate freshly and simply to make our field, which is web development, accessible to people who know little about our work. We also want to offer cutting-edge solutions that improve companies and make them step closer to the future of web services and technologies.

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

Every time a new project starts we list as many questions as we can think of and we try to answer them along with the client; this helps us gather as much information as possible to jump into the analysis phase.

Perfection is an objective to aim for but it is not something by hand in the short run, so something finished is better than something perfect.

Requirements are collected in a list that describes many aspects of the project: features needed by users, the structure of the app pages, technology constraints, must-haves,s and so on. The more accurate the list is, the best the project workflow becomes.

Then we start designing the UI, making sure we respect a good UX while the customer provides us feedback to get a first validation check. This phase is followed by our designer but it is not faced solo as we value technical support from developers to check the feasibility of every frontend design solution as soon as possible.

If a project doesn't require UI, e.g. a backend piece of software, at least two technicals figure out the best structure and logic that describe how inputs and outputs should be handled from development or DevOps point of view.

Coding and configuration start only when the analysis and design have been completed and validated by the client. This is the moment that sets the passage from a visual and logical concept to an actual functioning software.

how-we-started-a-360k-year-software-house-from-italy

Describe the process of launching the business.

In the early period, we were counting on personal savings and a big part was played by the families that supported us in various ways: giving some money to kick-start the company and hosting us at home while growing the business. At the end of the first year, with some sacrifice and strong will, we were able to maintain the business just with our work. It was not an easy task as we started without an existing client base and that was created with our effort and luck.

Luck is always part of the game, sometimes you just need to recognize when you are given an opportunity. We did our best to succeed and we happened to be hired by some big companies that allowed us to strengthen our portfolio.

Surely luck helped us get found by these clients without being recommended by some insiders (which we almost had none), but we were able to work with big dealers of this kind due to our decision to focus on high-quality software, refusing to take part in the quantity market of CMS and low-budget development.

We specialized and we found our niche in a panorama in which companies like ours were few, while all around it was overflowed by Wordpress designers and best-practices unaware developers.

Now we are thinking about the next steps: we will try to raise passive income with some internal small projects and finance operations, which will give us the boost to evolve our company into a bigger reality.

how-we-started-a-360k-year-software-house-from-italy

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

When we started, we had just our logo and a small website, and we spent much energy trying to build a client base. We did a lot of meetings and we tried our best to communicate our skills and to make our technological stack interesting for potential clients.

We were starting from scratch and we got many small projects in the hope to put our hands on more challenging software. As we went on, word of mouth and references were crucial to getting new clients because we were not a big company and we offered software skills out of the basic scope of the classic web agencies that could count on more accessible pricing.

In that period we faced quite some hard times and getting enough work suited to a company like ours was no easy task, especially considering the long list of competitors offering low-average quality products and the Italian widespread cultural habit to bargain on price.

In 2018, we started rethinking the website and we spent many months improving its design and inspiring a stronger sense of trustability and professionalism.

A copywriting and marketing professional was involved in that first workflow: we took care of many aspects of communication. It has been a big investment in terms of time and energy but we realized that we put together something that stood out among competitors.

That approach set the very core of our brand identity and we are still working on it.

During the last years, we have hired other freelancers who follow us regularly to help us shape the content and explore new ways to improve SEO and social marketing.

First of all, we made sure that our website followed all the main SEO best practices suggested directly by Google on its long list. This is something that many people ignore but being ok from a technical point of view is very important. Google pays attention to how code is written: bad performances can hurt a website's SEO.

After that, we worked to develop a personal vision, mainly. We try to stick to quality content which means writing articles that can help people. We avoid click-baiting and, as much as possible, all those kinds of low-effort expedients that anyone can replicate to generate traffic but that is not aligned to the image that we have of ourselves as a company. We want to engage with a different kind of client and we want to be an example to others.

We try to be clear and exhaustive, but not verbose, and we like to intertwine our articles with hyperlinks, to let users discover more interesting insights if they wish to. It is chisel work but it works for us. We also try to be constant, publishing every month, but sometimes other priorities get in the way.

We have also tried ads but they never worked as we wished, probably because we work in a niche and targeting is a long and costly try-and-error path that generates fewer results than the classic word of mouth, which works fine, especially when you deal with high-budget projects and big companies.

In general, we don’t trust digital advertising too much, especially after having read Tim Hwang’s book, Subprime Attention Crisis. It works for big companies with big budgets but realities like ours could get choked by the costs required to be competitive. The impression is that of a gamble game with difficult rules and low satisfaction. I think that if we had the time, we would do more on this front, but when you have limited resources you must make a choice and we got results without paying big sums to Google.

We prefer to work on content which is also good for people and we never actually paid too much attention to our competitors. To a certain level it helps, but once you begin to grow experience it is not that useful. Why try to be someone else? Shape content that fits your identity and your objectives.

Sometimes we borrow ideas for articles but mainly about topics, then we filter them through our lens and experience. So far we have content that works better than others but it is always difficult to tell exactly 100% why. Too many variables are involved.

Our approach is: to tell something about an aspect of the work we do, tell it in a meaningful way, and based on actual issues and experiences we faced. Repeat until we cover the most important topics and then delve deeper with secondary ones or write about them again but from a different perspective.

One thing works for sure: the more you write, the more keywords you will cover and you will increase the probability that someone reaches your website.

Of course, there is much more to say about content creation and SEO, but unfortunately, it would take too much time. We recently published our yearly company results where you can find some SEO data insight.

The brand identity has become more consistent, we created more blog content and we even began to translate it into English. This helped us shape as a company able to move on an international scenario with our heads held high.

Another step that contributed to building our reputation was to start working on a valuable open source project, that is the Quasar framework. We began as a sponsor then we were invited inside the Core Team and today we are one of the players that are helping this technology become better and more known in the tech panorama. Here again, word of mouth has played a big role.

In the long run, all these little actions and decisions enabled us to be hired from abroad, like in the USA and Canada. We have built a reputation upon quality, responsibility, and transparency: we would not take any project just because we get paid but if we do, be sure that we know how to handle it.

Nowadays we can consider ourselves as an actual high-quality developer company, but we want to get even better.

how-we-started-a-360k-year-software-house-from-italy

how-we-started-a-360k-year-software-house-from-italy

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

We sell our time, so we can keep costs low. Our main costs are people, so we can balance them by integrating both employees and external cooperators according to our project agenda and priorities. It also means that potentially we can have a really good gross margin and manage it with flexibility and without hardware suppliers' dependencies.

We are strong in hand-to-hand customer reach but we are continuously working on our brand reputation too, to strengthen passive attraction when potential clients find us online. We have got a website visitors conversion to the client (monetization) of about 3% and conversion from website quotation request to the client of about 75%. These numbers witness that we are working well both in personal and online communication.

People find us via Google, because they read one of our articles or because they hit one of our SEO keywords, but we keep active our Facebook and Linkedin account too. Quasar channels are another crucial gateway to get people to know that we exist and to get in touch with us.

So far, some of the best and most lucrative projects we got involved in have come from web requests. Working with our territorial realities is still somehow more difficult, maybe because other cultural dynamics get in the way when you are selling software to Italians. Who knows.

The selling-time model has a problem though: time has a limit.

This is why we are trying to integrate passive incomes coming from small personal projects. Having these incomes will mean more time to improve our company and do even more personal projects.

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

We learned a lot, starting from being patient with colleagues' behaviors and characters (I'm talking about me, but not exclusively! aha) to the importance of MVPs and the simplicity they must have.

We learned to treat clients respectfully without letting them put us in trouble. This means being aware of many things, like knowing when you must say no to a request and when it is safe to allow debatable but not-so-important ones for sake of diplomacy. Also, the strategic importance of a price discount, the importance of getting paid what you deserve and not being exploited.

Dunning-Kruger effect is real: we learned how to spot incompetent braggarts quickly. This helps a lot when you do not want to waste time on people with no budget or that are trying to drag you down into absurd projects.

We learned teamwork: make everyone shine, trust others (if they demonstrate to be trustworthy) and focus on what you are good at. Discuss what you do not agree with but do not make a war out of every discussion. Try to put yourself in your team member's shoes.

Do not compete with others: be aware of what they can do that you cannot and let them help you.

Perfection is an objective to aim for but it is not something by hand in the short run, so something finished is better than something perfect. This implies that you can recognize what is core in a project and what can be done later. If you miss this part you are going to mess up everything that comes afterward. Good buildings have good foundations.

Currently, we are learning to balance our agenda, trying to split work evenly to avoid overcharging any member of the team while others are managing a lighter workload.

Last but not the least, we learned that there is 1 percent of luck that makes the difference between failure and victory. Competence, foresight, and a mental-healthy workspace make for 99% while luck is just 1% but indeed it can turn the scale!

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What platform/tools do you use for your business?

We have some general management tools, which are used by everyone, and some specific tools for development, design, and Cloud computing.

At the core of the company, we have Google Workspace (but we are evaluating Office365 too) and we have a shared file system to manage all our documentation and working files. When it gets to project management we use Monday, mainly to manage our time, however recently we have been evaluating ClickUp to replace it.

Our developers use mainly VSCode for coding and PHPStorm for more specific tasks.

Github is another platform that plays an important role in our business: we use it to share code and it is important to bring on our open-source software philosophy.

UI design and hand-off are dealt with Sketch and Zeplin while graphic design related to branding needs is managed with Adobe Creative Cloud.

The company's social communication takes place on Facebook, Linkedin, and Google Business.

Occasionally we also use Twitter to reach developers who are more active on that platform.

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

Everyone on our team has their favorite books, podcasts, and channels. As well as other media like music, movies, and video games. We are very curious people: all of this material covers a lot of topics and it probably goes beyond the strict frame of our specific jobs.

I think there is nothing to mention in particular, we are here nowadays because of a sum of these heterogeneous cultural experiences we collected in years, along with actual working experience and the university studies attended by some of us.

Critical thinking played an important role though: we have always tried to understand every chunk of information deeply, without stopping at the surface of things. We try our best to think out of the box in any context.

We always remember a challenging project, some years ago, for which we adopted very smart solutions commonly found in real-time strategy video games to design some tools to navigate an industrial warehouse and its piled stocks. It was awesome and it fitted the needs. When clients let us, we are this kind of guy.

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

My advice, along with the team, is:

  • Don't trust too many explosive success stories: be patient as in reality results never arrive quickly, they require time, sometimes even years;
  • Troubles will be a lot, but they should not stop you from building your company;
  • Troubles are more than satisfaction, but when satisfaction comes, it surpasses troubles;
  • Be respectful of others' jobs but do not let yourself be subdued by other people around you;
  • Keep an eye on your competitors to be aware of what they do and how they do it, but do not get obsessed with them and their results: focus on your business needs that might not be the same;
  • Try to be the best at something you love.

Are you looking to hire for certain positions right now?

Probably in February we will be searching for someone to hire: a backend or full-stack developer with knowledge of DevOps (AWS if possible). It can be a fully remote working hiring as it is a kind of cooperation we are dealing with already.

Where can we go to learn more?

You can check our website. We have many articles in our blog so you can get a better idea of what our work philosophy and competence are. We are also trying to spread our newsletter.

You can also visit our Facebook page or our Linkedin page to learn more.

-  
Federico Schianchi, Founder of Dreamonkey
Pat Walls,  Founder of Starter Story
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