I Started A $1M/Year Software Development Agency After Moving From Venezuela To Miami
Hello! Who are you and what business did you start?
My name is Angel Lacret, I’m the CEO and Founder of Cobuild Lab. We are a company that partners with industry experts to create Custom Software Solutions, Artificial Intelligence, and IoT.
Cobuild Lab started 5 years ago from previous clients that I had. Then I moved to Miami from Venezuela and formalized the business.
I started here on my own, but with a team back in Venezuela. Now I have a co-founder, 5 full-time employees in Miami, and close to 50 remote full-time workers all over the world.
What's your backstory and how did you come up with the idea?
I’m a Software Engineer doing software development for over 15 years now. I started my first 4 years in corporate and discovered the startup world.
I created several products for large clients, including startups and large government organizations.
8 years ago I created my first software company. I started with 6 developers and in 2017 my partners and I split the company to pursue different paths. I stayed with some customers including several Miami-based clients, and that was the start of Cobuild Lab.
For many years I watched startups fail that have a really good product but poor technical knowledge or execution. I want to change that, I set myself to create and partner with entrepreneurs to help them achieve that goal.
With the years I realize that to be a successful startup founder you not only need a good technical product, but also many skills that we couldn’t provide.
Little by little over the years we started pursuing partnerships with companies that compensate for our lack of experience as entrepreneurs, like navigate.capital or 8base.com both form now the way that we interact with entrepreneurs.
Since COVID hit, we pivot our idea of focusing on entrepreneurs, now half of our clients are small businesses and we are growing in that direction.
Take us through the process of designing, prototyping, and manufacturing your first product.
Our product development cycle has evolved dozen times, at the moment we preach for a ZERO WASTE SUSTAINABLE SOFTWARE development process that consists of 3 stages over 3 months:
- PLAN: Meet with stakeholders to establish priorities and goals
- COBUILD: Weekly iterations with the whole development group to build features.
- VALIDATE: Constant delivery of done products to be used by end customers.
Before this, we spent 2-4 weeks prototyping the UI/UX for the product.
During these 3 months, we do bi-weekly delivery meetings with our customers to gather early feedback.
Describe the process of launching the business.
I started the business using a couple of credit cards that I had. I started just with $20K at that moment as I was working at a friend’s office in Downtown Miami: 4Geeks Academy, I couldn't have started without them.
After a year of working with some regular clients, I moved to an office on my own once I started working with someone who is not my co-founder.
I started my plan by assisting the Idea Center program in MDC, where they provide education to small businesses to scale. I created my first business plan and social media strategy.
I started from that moment with a heavy digital marketing campaign, PPC, that worked for a couple of years acquiring clients. This combined with our first partner 8base.com keeps us alive and brings customers.
COVID pandemic hit us hard, all sources of leads were reduced and we lost more than half of our customers. We changed the strategy then to a more B2B strategy, led by a direct sales strategy and email marketing tactic.
At the moment these 2 initiatives plus our partners supply 75% of our pipeline, rest of the leads are cooking via SEO, which has been increasing since the end of the last year.
Since launch, what has worked to attract and retain customers?
Customer service and satisfaction is the key to retention.
Unhappy customers are the road to being broke. Leveraging the fact that we were a small operation competing with companies that were 10x bigger than we represented a competitive advantage. You see, once a company gets big, tends to pay less attention to small customers, and is forced to automate many of the components of a personal customer relationship to be able to sustain growth.
This is leveraged by smaller companies such as us. One common thing that we started doing to take advantage of that situation, and that we still do, is that every customer that’s actively operating with us has a direct relationship with either me or my co-founder, we take them to launch, and try to help them grow their business.
Before growing makes sure that your message is clear and understood by your customers. Name, brand, value proposition, services, etc.
When I started this journey, my biggest challenge was to communicate my value proposition, “what we do” to customers and peers. My mind has always been the one of an engineer, and we tend to communicate what we do by describing the process. It took me 2 years and at least 6 or 7 iterations to understand that a value proposition, and “what you do” need to be described in terms of results, and not the process, and need to be expressed on terms that your audience understand.
Growth starts with Product Market Fit, followed by a heavy investment of time and money in lead generation and sales.
In the beginning, we struggle to find customers at scale, we were always generating new business but at a very slow pace. It took us 2 years, lots of iteration, and a pandemic to land our Market and start growing.
PPC ads perform poorly for B2B customers.
The B2B world and consumers have different habits to decide providers and partners. First of all, they think about you about actually that, a partner. So not only pricing is important, trust and cultural preferences are also important. Also, B2B purchases tend to require more research and learning from the person in charge. Over 4 years, we had tried multiple strategies for PPC direct sales with close to no luck. The reason for this is simple, no company is gonna purchase your services from a Google, Linkedin, or Facebook Ad, they need to research, compare, try multiple avenues before they make a decision.
Professional services is a trust relationship, no clients will buy without trust.
Specifically in the case of Software Development, as you do Construction, you don’t buy a tangible product immediately, you buy a contract and a promise that something good is gonna be built. In this space, customers are very careful about who they buy, especially if they had a bad experience before. To overcome this, we work very hard in our presence online, in our portfolio, testimonials, and our references. Every sales presentation, every sales pitch contains these elements to establish during the conversation that we can deliver something good. In addition to this, 50% of the time we make a sale, it comes after a down sale process where we lower our prices to let the client in and establish a trusting relationship
In our first years, our main lead generation channels were referrals, second SEO, and third Email Marketing.
At the moment of writing this article, we rely on 50% of our revenue coming from our Email marketing strategy. It was a shock for me at the beginning who successful email marketing is. If you have been a CEO for several years, you can relate with me in the number of emails offering services that we receive, and how most of them, maybe 99% go to the trash, unsubscribe button, or “Mark as SPAM” actions.
Regardless of this, I decided to try this as a lead generation strategy, at the time the effectiveness of our PPC campaigns declined significantly and I’m happy that I did, as now is our main source of leads. Email marketing is very simple in theory, but very complicated to implement effectively. You find a source of contacts, such as a Linkedin Sales navigator or Apollo, and you prepare a couple of email templates to send to every contact, and you wait for responses to talk to you. There are many variations on how that works, some being more effective than others, but one common thing here is that leads are just one stop in the selling process, it takes talent, a process, and a strategy to transform that lead into a paying customer.
Linkedin is full of people, trying to sell, like yourself.
One really important thing that we learned testing different lead generation strategies and PPC channels is that, despite the enormous growth of Linkedin as a digital space to network with executives and decision-makers, many people make the mistake to consider this as an easy avenue to reach them for business. The reality is that, if you have tried a strategy to acquire leads via LinkedIn, you by now have realized that also millions of people in there. Linkedin is crowded with paid advertising, paid content, lead generation bots, posting bots, and fake accounts, leaving little space to connect with real people outside of your current network. In addition to that, is still not common that executives to hang out a lot or spend lots of time on Linkedin searching for content or providers.
How are you doing today and what does the future look like?
For 2021 we double our company size, both for revenue and staff, so we double down in efforts for Sales. Our main goal for the rest of the year is to dominate our sales funnel and lead generation, meaning, having a predictable sales strategy.
Our current revenue target for the year is $1.2MM which is 4x from last year, and 8x from the year before that. For 2022 we are targeting a 2x growth.
Professional services deliver a great margin as it is mainly a valued service. Make sure to select a good customer segment, where your expertise can provide tangible, sizable value. As a friend put it in simple terms, is the same effort to sell a $10 watch as a $1000 watch.
At the moment we are extending our client base to customers in Canada, Mexico, Chile, the U.K, Australia, and Spain.
Through starting the business, have you learned anything particularly helpful or advantageous?
Everything that I know and dominate from a business management perspective I’ve learned over these last 5 years. By experimenting, listening to experts, reading books, networking, etc.
At the beginning of this journey I started with an expensive product for a client that didn’t receive any immediate value, my dream was to deliver cheap services to low budget clients, this was achieved, but didn’t make a good business model to grow and scale
Good decisions:
- Hire a trustworthy partner that complimented my skills and make him a partner
- Keep tweaking my marketing message until it fits a large customer base
- Partner with companies with more experience than me
- Learn corporate relationships
- Seek help
What platform/tools do you use for your business?
- Trello for executive task management
- Wave for accounting
- Odoo for HR and Bills
- Github for Project Management
- Slack and Whatsapp for IM
What have been the most influential books, podcasts, or other resources?
The Art of Unselling is by far the best book on selling that I’ve read.
Advice for other entrepreneurs who want to get started or are just starting out?
- Product Market Fit first
- Take care of your customers
- Improve your message until is perfect
- Sales, Sale, Sale
Are you looking to hire for certain positions right now?
Where can we go to learn more?
- 4,818 founder case studies
- Access to our founder directory
- Live events, courses and recordings
- 8,628 business ideas
- $1M in software savings
- 4,818 founder case studies
- Access to our founder directory
- Live events, courses and recordings
- 8,628 business ideas
- $1M in software savings
- 4,818 founder case studies
- Access to our founder directory
- Live events, courses and recordings
- 8,628 business ideas
- $1M in software savings
- 4,818 founder case studies
- Access to our founder directory
- Live events, courses and recordings
- 8,628 business ideas
- $1M in software savings
- 4,818 founder case studies
- Access to our founder directory
- Live events, courses and recordings
- 8,628 business ideas
- $1M in software savings
- 4,818 founder case studies
- Access to our founder directory
- Live events, courses and recordings
- 8,628 business ideas
- $1M in software savings
- 4,818 founder case studies
- Access to our founder directory
- Live events, courses and recordings
- 8,628 business ideas
- $1M in software savings
- 4,818 founder case studies
- Access to our founder directory
- Live events, courses and recordings
- 8,628 business ideas
- $1M in software savings
