These Two Friends Met In College And Started A Custom Software Development Company [$1.2M/Year]

Alexander Yagovdik, Andrey Pankov
Founder, Twelvedevs
$100K
revenue/mo
2
Founders
50
Employees
Twelvedevs
from Hrodna, Belarus
started October 2012
$100,000
revenue/mo
2
Founders
50
Employees
400
followers
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These Two Friends Met In College And Started A Custom Software Development Company [$1.2M/Year]

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

Hey there! My name is Andrey and I’m the co-founder of Twelvedevs and want to share our story. Together with my friend Alexander, we created an IT consulting and custom software development company. Since 2012, we have provided a wide range of software development services for SMBs and enterprises. Our core services include software engineering, digital consulting, blockchain implementation, as well as UX/UI design, quality assurance, and legacy software modernization.

For 9 years, we have completed over 70 projects of different complexities within a variety of industries, including FinTech, logistics, telecommunication, healthcare, e-commerce, media & entertainment, and others.

Our key focus areas are Fintech and logistics, primarily for the US market. We have also completed more than 40 projects in other industries, including telecommunication, healthcare, e-commerce, media & entertainment, and others.

Now we are one of the leading custom software development companies with over $100k revenue per month, fifty employees, and a soon-to-be-open branch office in the U.S.

twelvedevs

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

The love of programming started as early as we were at the university. We were studying computer science and after university got a job as programmers in a software development outsourcing company, where we first met each other.

We worked, gained experience, and studied the IT industry, and, at some point, just working for someone was not enough for us. We were additionally engaged in freelancing and more often thought, what if we start our own company?

We have always been inspired by the success stories of small teams starting out with a close circle of friends, like Apple or our countrymen who made selfie startup Masquerade. Working with projects, we adhered to the Agile Manifesto and its practices for creating products, and this philosophy works best for small development teams.

When discussing the possibility of starting our own business, we agreed we want a small team, but comprising high-level specialists. We liked the number 12: the 12 months in a year, the 12 apostles. This is how the idea with 12 top developers was born.

At some point, we realized we couldn't validate the idea of such a small team. It was a good starting point, but the company's growth is impossible without expanding teams, and we started to build teams around these 12 experts to save the magic of numbers.

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

At Twelvedevs, we distinguish 5 main stages in the development of any product. We didn't invent these stages, they are part of the Agile development philosophy we adhere to:

1) Discovery

We explore the features of a project and analyze the requirements. We research clients' challenges and offer the best way to meet them. Business analysts and architects conduct analysis and prepare a product specification (user stories, BPMN, wireframes) for client approval. After that, we conduct a crude estimate of the time and cost to develop an MVP.

2) Design

Designers prepare several design concepts and offer to choose a style for the future product. Then we create a style guide with logos, colors, fonts, and other elements, and build the final interface for each screen based on the previously created layouts.

3) Development and Testing

All members of the project team work together, in parallel carrying out development and testing. Engineers deploy a test environment and conduct a set of tests to ensure the product is performing as required.

4) Deployment

DevOps engineers prepare the cloud hosting environment and deploy an application. Then, using the practice of CI/CD, the deployment process is automated.

5) Support

Following the launch of the MVP, at the client's option, the team continues to monitor and improve the product - scale and add new features

twelvedevs

Describe the process of launching the business.

After deciding to start the business and before its direct launch, we spent almost a month in a rented apartment and got off the computers just to make coffee. We had to describe all our thoughts collected for almost a year to consider the risks, define the budgets, plan the work, and ways to attract clients. We also needed to solve many legal issues related to the opening of a new international business.

The biggest lesson we learned is how important it is to find people who look in the same direction as you and are not afraid of difficulties.

In 2012, we didn't yet know how to do such work correctly and which tools we should use to organize information. We were good developers, but not entrepreneurs. As we had no money to hire third-party experts, we had to work on our own and consult with experienced friends. As a result, we had about 300 docs and all kinds of notes on Google Drive with no systematization and it was chaos.

Despite this, we decided it was time to start and officially launched our business in October 2012 after registering as a legal entity. Our starting costs were only $3,000 from the 2 co-founders. We didn't have an office at the time because we could not afford it. We spent all the money on business registration, a rented apartment that serves as an office, a purchase of computers, and needed software.

We received our first order almost immediately, as we had already worked with a client from the USA as freelancers. We proved ourselves as good coders and were immediately offered our first contract as a company, which we were very happy about.

The biggest lesson we learned is how important it is to find people who look in the same direction as you and are not afraid of difficulties. The first 2 people who joined our team changed their positions in well-grown companies for our idea and dream, which was of great importance for us at that difficult time. By the way, these people are still with us today.

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

At the start of the business, we laid the fundamentals that we still rely on. One of them is building solid long-term partnerships with our clients. This approach has made recommendations from previous clients as an integral part of obtaining new orders.

Since launching, we have tested many channels to attract clients and increase sales and selected those sources that are profitable and fit our marketing strategy. At the moment, most of our clients come from our business partners and on the recommendations of past clients. A valuable source of leads for us is Clutch, where we collect reviews and showcase our expertise.

We almost don't use digital advertising because of its high cost in the niche of IT service providers. For example, Google Ads' average bids for our target keywords are between $40 and $80 per click, which is too high for us. That is why we run ads on Facebook and Google to increase brand awareness only.

twelvedevs

We now put a lot of effort into SEO and preparing useful content for potential clients to meet their challenges. We build an inbound marketing strategy that allows increasing website conversion rates and getting more qualified leads, thus reducing the cost of qualifying them.

We don't cooperate with any third-party marketing agencies and prefer to develop our own department and raise in-house professionals who share our values and philosophy. We consider such an approach to be more financially rewarding in the future.

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

2021 was a good year for us, as we could strengthen our market position well, partner with large subcontractors, and started relationships with an enterprise client. Such achievements took the company to a whole new level and prepared the foundation for its further development.

We have recently organized our own marketing department within the company with the purpose of promoting us in the US market and building lead acquisition processes. In 2022, we started with a new stage in our company life and launched a full-scale rebranding. We have completely redesigned the website to reflect our vision and new corporate identity. We also improved our business processes to prepare our company for the upcoming challenges, further development, and growth.

Be critical and spend enough time on the hiring process. A good team allows you to grow steadily and gives you an opportunity to plan your work months ahead.

We strive to constantly move forward and develop, and we deeply care about the people we work with and our working environment. This year we are going to pay even more attention to our corporate culture, prioritizing individual professional growth and career development. We aim to make each of the team feel pleased and genuinely motivated by a full understanding that their work counts. We also focus on work-life balance, believing each of us should feel fulfilled and content in both areas of our lives.

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

I’m sure 2020 and 2021 were hard times for a lot of companies because of the pandemic hitting the entire world. Previously, we had a brief experience of our employees working remotely, and it so happened that we had to completely switch to a remote format and learn to work under the circumstances. We discovered many advantages of such work and became more flexible and mobile.

We realized how important it is to build transparent and trusted partnerships with our clients to assure we choose the best solutions to achieve their goals, thus turning them into regular clients and recommending us to their business partners.

We also understood how important it is to plan - to prepare a detailed development plan for the months ahead. It is necessary to have the idea and clearly stated goals and how to achieve them.

What platform/tools do you use for your business?

We used JavaScript and the Next.js framework to build our website thanks to their high performance and SEO focus. For CRM we use HubSpot, Office 365 for internal communication, Jira and Asana for task management, Confluence & Google Drive for document management, and LinkedIn for hiring.

Our internal teams use many other specific tools and services to work smoothly and optimize business processes

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

Together with Alexander, we attend meetups and business conferences to hear real people telling their stories and experience. Valuable sources of information are all kinds of research and analysis of the business domains we are interested in. From representatives of such research, it stands to mention Gartner and IBM. We also get a lot of useful marketing content from the HubSpot blog.

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

I would share some advice for the entrepreneurs who want to start their own business:

  1. Build a plan of business launch in advance. It is very important to prepare a detailed development plan for at least a year, 5 years, and 10 years if possible. It is necessary to define intermediate and global goals and make a strategy of how to achieve them.

  2. Prepare a cash cushion. It is very important to have a reserve of money for the first time. Such reserves will help you insure against the risks associated with starting a business and reduce the chance of failure and bankruptcy. Remember, you may not get any revenue in 6 months, or even a year, since you start your business.

  3. Build a strong team. In any business, the right people are the key to success. Be critical and spend enough time on the hiring process. A good team allows you to grow steadily and gives you an opportunity to plan your work months ahead.

Where can we go to learn more?

If you have questions, drop a comment below!

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Alexander Yagovdik, Andrey Pankov, Founder of Twelvedevs
Pat Walls,  Founder of Starter Story
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