We’re thrilled to announce that we extend our tech talks from conversations with our clients to tech entrepreneurs and C-level executives from all over the world.
The founder of Redwerk – Konstantin Klyagin adores visiting new places, meeting new people, and engaging in a diverse spectrum of experiences. He likes to shoot interviews with IT professionals and tech agency owners, like himself, to learn how companies in different countries deliver projects, attract customers, hire and retain talent.
Are you eager to learn more about work specifics of the software development agencies in Mexico and Ukraine? What does it take to start and run a company being a sole founder? Discover this and much more in the interview!
In this interview, Maria De Buen, CEO of BluePixel and Co-Founder of Stadibox, together with Konstantin Klyagin, Founder of Redwerk, discussed their path to building outstanding companies, as well as the challenges they faced during COVID-19. They also touched upon the gender bias in tech and how sole founders pave their road to success in the industry.
Let’s get into this!
– I’m in Mexico City together with Maria De Buen, CEO of BluePixel – a product design company founded 6 years ago.
– Well, yeah, we started six years ago. We were founded as a UX/UI agency. Now, we also have a pretty big development department, so we are both like the UX/UI designers and developers.
– What made you found BluePixel?
– It was very organic, I would say. I studied industrial design at college, and I started freelancing doing all kinds of stuff from interior design to logos. Some people asked me to do websites, but I didn’t know how to do that. I looked into it and then, little by little, I started to go into UX/UI design and decided that was what I wanted to do. When I was getting more clients that I could deal with, I started hiring people. So, that’s how BluePixel was born.
– How long did you freelance before you found BluePixel?
– Not much, actually. It was about a year.
– That’s fast growth! What do you do now as a founder?
– Well, the past year has been a big challenge because we grew a lot. First of all, we started the development department of the agency. We already had a lot of clients who asked for development, but we didn’t have any people to do it, and we just passed it on to other agencies. This year we started doing that, and we have a lot of work already. There has been a series of hirings. With the outbreak of COVID-19, the technology requirements grew all around the world. My main role as a director is managing and hiring talent, and just looking to keep the quality and start creating scalable processes, you know?
– Is it difficult to be a female founder in Mexico?
– I would say no, because my personal experience with it hasn’t been challenging in that sense. What I have noticed is that I almost always have these sales meetings myself, and the people who help me in commercials are also women. However, there have been times when I asked, for example, my husband, who is also a partner, to have a meeting together, and I started noticing that people were actually talking to him. But it’s not something I notice every day.
– Has it never happened to you that you were not taken seriously because you’re a female entrepreneur?
– I think not. Sometimes I haven’t been taken seriously because of my age. Now I’m 30, so it’s not a problem anymore. But I started at 25, so people were like: “Are you sure we can trust you?”.
– I started my business when I was 23.
– Yes, I think it’s more of a challenge with age. But, generally speaking, gender hasn’t been so much of a problem.
– What is the gender balance in your company?
– It’s 60% men, 40% women. But most women perform the managerial roles, and most of the guys are more operative. For example, my CTO is an incredibly smart and talented guy, but other than him, most of the roles in management and direction play women.
– How difficult was it to transition from a design company to a software development agency?
– It has been challenging. A lot of learning curve, for example, in measuring times. I think that the most of the challenge has been in measuring, because as a designer, I can more or less tell you how much a particular process is going to take. And for me to calculate a development process, that’s a bit of a difficult part. Even in price, right? You say it’s going to be four months and cost this much, and then if it’s six months, then you’re losing a lot of money and time. But we’ve worked a lot on it and we’ve gotten so much better at it just by establishing processes, and measuring analytics. But from the tech side, the way we structured everything from the beginning was pretty great.
– What type of software development do you do?
– We try to make most of it completely from scratch with our own code. The tech stocks that we use are React/Node.js.
– Is it mostly web development or also mobile?
– No, it’s also mobile development. There’s been a lot of asking for e-commerce this year, so we also do some Shopify and WordPress, but mostly custom development.
– How COVID-19 affected your business? I think it affected me in a positive way.
– I actually have a fun story here because I have two businesses. BluePixel – that was a super boom, and Stadibox – kind of Airbnb but for renting suites and seats which was going amazingly at the beginning of the year. It looked like it was going to be our best year. Everything was going great in January, and then with COVID-19, BluePixel went up, and Stadibox – down.
– How old is Stadibox?
– Well, right now I think it’s four years. We had been upgrading for three and it was going pretty well. We had already made a name for ourselves in Mexico, and we were in seven different stadiums also entering the US.
– Can you describe this business in more detail?
– There are a lot of people who own private suites in different stadiums or who own them for a certain period of time, say ten years. There’s a small bar, fridge, and TV. You can invite your friends, and there are usually 9 to 12 seats, but they are crazy expensive. The main difference between Mexico and the USA is that most US suites are owned by the club or by the stadium, and most of the people who rent them are from big companies.
– Does it make sense to buy tickets if you can rent a suite?
– Well, does it make sense to fly in a commercial flight if you can have a jet? I mean, it depends on money. But there are people in Mexico who bought the suites 50 years ago and now they don’t even use them, and the kids or grandchildren don’t use them anymore. They just rent it out so that people can go and enjoy an amazing game. It’s not really that expensive to rent it out. The price depends on the suite and you can bring your own food, drinks, and everything inside the suite. So, it’s a pretty good deal.
– Do you know if they have this in Europe?
– I’m not that familiar with how they manage it in Europe, but I know they do have suites. I think it’s similar to the USA, and the companies are the ones that usually use or rent them out. It’s something that can be scaled to other countries as well.
– How would you explain such an improvement in your main business in 2020?
– Things have radically changed for all companies. There were a lot of people who were resisting technology change. And when COVID-19 hit, everyone realized that they had either to evolve or die. Even the people who didn’t like to have online meetings and video calls, and always had personal meetings, now are seeing that technology has the ability to do different stuff. I think that’s why a lot of people and companies have been looking for us even though there’s not a lot of money now and the economy is super slow. They want to invest money that they do have in tech because in such a way they will be able to survive or grow.
– With BluePixel you made it to the top of Clutch. How did you do that?
– Well, it’s funny because we’ve never had a marketing strategy when we were growing. It has always been from word-of-mouth. Then I suddenly noticed that there was a Clutch profile on another website, and I saw that BluePixel was just waiting there for us to claim the profile. So, we did that and then started asking the clients to publish some reviews, and we’ve been nominated afterwards.
– Clutch is very expensive. Have you ever used the paid listings?
– I haven’t paid for Clutch yet. We have had so much work organically and so many leads that we haven’t been able to launch a marketing strategy. We don’t want it to get out of control, you know?
– Where do you get your leads from?
– Most of them are from word-of-mouth (60-70%).
– It’s a good channel, but it’s quite difficult to scale.
– Actually, it scales, because every good client that you work with recommends your services to 2-3 prospective customers.
– I started the company 15 years ago.
At first, we were Java and e-government in terms of tech stack and industry. Over the years, also through word-of-mouth, we grew and covered more industries and technology stacks. With time, some technologies became more popular, some went down, so we’ve been keeping up with the trends. I started with a team of three, and currently my team consists of 70 people.
We’ve done all kinds of projects. Mostly we are software development, but we have been adding new services to our offerings, and now we also have UI/ UX design, and SEO. It’s all a part of the integral service, so you don’t have to hire multiple companies or multiple freelancers to aggregate it all. Last year we finally started the project with blockchain.
We are trying to do some really complex stuff. Among our recent projects is a solution for e-government again, but this time for the USA, not for the Netherlands. It’s a solution that facilitates communication between citizens and state authorities in the states. Also out of e-government projects, we’ve worked with the vendor of the European Parliament to record votes in the voting room.
– That’s pretty interesting. What would you say has been your biggest challenge over the years?
– Well, people are the biggest challenge, because my background is software development. I started coding when I was eight. Then I discovered that the most difficult part in software development and programming is not computers; it’s people. My goal is to create a comfortable environment for the employees and also be a very comfortable company to work with for the customers. I think that comfort, stress free and no-nonsense is the way to go.
– I completely agree. It’s a big challenge, but I think that’s how it should be. Are all your workers in Ukraine?
– Yes, all of them are in Ukraine. I have two offices: in the capital, Kyiv, and in Zaporizhzhya (500 kilometers south from Kyiv). When I was living in Germany, I started the company with a small team in Zaporizhzhya. Then I opened an office in Kyiv because I wanted to be there more often for work. I quit my full time job in Germany, concentrated efforts on my company, and moved back to Ukraine.
– So, Maria, how do the prices work?
– That was another interesting challenge. Before, the price varied by the project type. So, we could say this project costs this much, taking into account more or less the price of man-hours plus fixed costs, and then our margin. But if we’re looking for example for a 40% margin and then we’ve miscalculated the project by 30%, then there goes our margin rate. We even lost money on some projects, which wasn’t nice.
What we have been doing lately is that we do calculate and we are very meticulous with these calculations because we try to be as accurate as possible. We calculate the low end and the high end, and we report hours on a weekly basis. If we at some point see that we are not getting to a part of the project where we have to have 50% of the project by these hours, then we always have a conversation with a client.
If it’s our responsibility, we of course have to take care of it. If it’s because we have gone over the adjustment phases, the clients have been pretty understanding with that. Usually if it takes more hours, it’s because the project demands so, and it’s in the client’s interests to get those hours in so that we can make the best project possible. That has been our pricing strategy.
– In my company, at first, we were also doing fixed code projects that led us nowhere because of scope creep and changes from the customers. For example, they change the scope, but at the same time want to have everything delivered on time and on budget. What we switched to is time and materials.
At first we estimate the project’s optimistic and realistic range, and also the budget range. It’s up to our project managers to keep the customer up to date with all the changes and the progress on the project. If the customer requests a change or an additional feature, they will tell them immediately that they will adjust the budget and the timing accordingly.
– So, speaking of prices, what’s the hourly rate?
– It really depends on the profile. But I could say our hourly price ranges between $30 to about $80.
– Well, it’s pretty much the same in Ukraine. We charge $45-60.
– I think it’s good pricing for clients in Mexico. It’s a mid-ground – not cheap, but not expensive either. We do have attractive prices for the US clients because if we compare ourselves to other companies inside the USA, then our wages are better. If they go, for example, to India, they have a problem with time zones and all of that stuff. So, that’s why I think we are also gaining some customers from the USA.
– What do you consider a good profit margin?
– It should be at least 50% in tech. There are some projects where we go up to 70%, and there are some projects where we haven’t even lost money. I think our average right now is about 40%. So, one of our challenges this year is to raise it up a little bit.
– In Ukraine we say that 40 is a very good margin. I have 40 and it’s considered to be excellent. You have to be lucky to have 50 and 70. It’s really pure luck, and from my experience, it doesn’t scale.
– I’ve had some financial advisors that I’ve been working with lately, and they have been working in tech for around 15 years. I asked them what would be a good margin and stuff, and those were just the numbers that they have worked on before.
– It’s been changing over time as well. There were bigger margins earlier, but the market is getting more crowded now, and the whole world is competing for the US market. It cannot push the margins up.
– Speaking of customers, where are most of your customers located?
– Most of them are here in Mexico (65-70%), around 20% are in the U.S. and Canada, and the rest are in Latin America. Mexico is a pretty big market.
– What do they typically order?
– Since we started as a UX/UI company only, most people that come to us are looking for a custom application with a very good user experience. So, it can be a start-up that’s looking to launch a new app or a big company that wants to launch something either internally or for their clients. We had a lot of e-commerce last year, but still, most of our work is custom.
– Do you do personas and user acceptance testing?
– It depends on each project and each client. We try to first understand the user really well, by doing interviews and different workshops where we invite the users and try to get to those very cool differentials for their app.
We also involve the users in the prototyping process from information architecture to wireframing. So, we do user testing, and after we finish the design, we work in multidisciplinary sales with developers. We have different cells in BluePixel, and each one is composed of three developers and three designers who work together and are always involved in the whole process.
– Maria, how big is BluePixel now?
– Now we are 29 people, and we’re in the process of hiring two more.
– What’s the role distribution of those people?
– Our team consists of designers (40%), developers (40%), the rest are project managers, administration, and it’s only me and another girl in the commercial.
– How do you interview and hire project managers?
From my experience, it’s very important to have knowledgeable project managers. We tried to teach them or hire someone of entry level, but they just don’t stand the challenge with the customers, since communication at the end of the day is the most important part.
– I think we’ve been very lucky with our project managers. We have 3 and all of them are super smart. We always look for very smart people. During the hiring process everyone has to take a kind of IQ test on our hiring platform, regardless of the role on the team. It’s like an intelligence capability test, and it tells you if applicants are very good or not that good. We always interview just those who are in the very intelligent spectrum.
The other thing that we always try to go for is their attention to detail. Moreover, we do look at how analytical they are, their experience, as well as personal skills, people’s skills, and communication skills. Based on that, we have done some pretty good hires.
– What’s the platform you are using for hiring?
– We use indeed.com, and we really like it. They told me that “indeed” gets your profile into a lot of platforms or something like that, and it has worked very well.
– Well, we use the Ukrainian human resources management system called CleverStaff.
It imports resumes from emails, and lets you organize your interviewing process. But unfortunately we haven’t been doing any IQ tests. I think this could be a really good filter, because we’ve been struggling with soft skills.
– I have been personally involved in the hiring process, and I think that’s very important.
You can have a very smart and talented person, but if they don’t fit the culture, it will never work. In the past, we have made that mistake of hiring someone just based on talent and intelligence, but not on culture.
– How do you check the compatibility with your culture?
– It’s a very personal process. I ask questions like why they do what they do, how they see themselves in a while, and then we take into account their answers, and their personality.
– There is a joke like:
-What are your future plans?
– I meant long term plans.
– What, like dinner?
– So, speaking of hiring talent. Mexico City is such a big place. Is it easy to find talent here?
– I think it is, actually there are two parts of it. Everything has been great with internal hiring. We have an alliance with a school called Kodemia, where I also teach some classes. When we hire, we ask them for some talent, and we look in indeed.com, and also social media. When we are doing the hiring process, we always find very good people.
However, it has been challenging to find freelancers. There are some pretty good developers, but I haven’t found the ones that are good, and also responsible and communicative. From my experience, that balance of staff is kind of difficult to find in freelancing.
– Do you have developers in-house or freelancers?
– We have them all in-house. We do have an alliance with two other companies, and their quality is the same as ours. So, when we need some technologies that we don’t manage or when we have a lot of projects instead of hiring – we work with them. We don’t do freelance anymore because it hasn’t been a good experience, but I think you learn from that.
– Once hired, is it easy to retain talent in the company?
– It has been. I think we are very humane in the way that we treat people. As you said, we are always looking to give them comfort. However, it’s a challenge because usually comfort also means giving them benefits that equal a financial spend.
We try to balance that, and see what’s good for the company at this stage, and what’s good for them. I think we treat them well and try to be very understanding when they need something. They also appreciate the home office, of course. We do “semestral retirement” when we all go to the lake house or something like that, and they really appreciate it. So, we have been amazing with the retention of talent up till now.
– What is the longest an employee has stayed with you, Maria?
– The first ones that we hired are still with us. Some employees have left in the first 1-3 months because we’ve noticed that they’re not a match. We try to cut them off in the beginning because it’s not good for anyone. Only two people have left because they have been offered a scholarship elsewhere to do their master’s degree. Right up till now, no one has left without a reason.
– Do you have all of them working for you for six years?
– First, we started slowly, so I do have some of the hires that are from the beginning. I’d say we have hired most of the people in the last two years.
– There’s an average span of employment in any place. It’s mostly an attribute of a country or a city. For example, in Japan, people work for the same company for generations. In New York, they change jobs every year.
– In Mexico, people try to change companies maybe every two years, which is more or less like in the USA. I think when they’re comfortable with something – they don’t have any reason to move, other than if they receive a very good offer.
– Well, the same as in Ukraine – two years. But I have employees that have been with me for 5-10 years.
– Did you found your company yourself?
– Yes, just myself. Of course I used the help of one guy who wanted to do it with me when I was in Germany. He was managing the first team but then he left for the USA, and I worked on the rest.
– Do you like being a sole founder?