David Aloa.co

[00:00:00.000] – Speaker 1
You have found Authentic Business Adventures the business program that brings you the struggle stories and triumphant successes of business owners across the land. Audio episodes of the podcast can be downloaded at the podcast link found at drawincustomers.com. We’re locally underwritten by the Bank of Sun Prairie. My name is James Kademan, entrepreneur, author, speaker, and helpful coach to small business owners across the country. And today we’re welcoming/preparing to learn from David Pawlan, the founder of Aloa.co. David, how are you doing today?

[00:00:32.060] – Speaker 2
I’m doing well. Appreciate you having me.

[00:00:34.890] – Speaker 1
Yeah, I’m excited to have you on the show. How about for starters, you just tell the audience what is Aloa.co?

[00:00:41.100] – Speaker 2
Yeah, definitely. So we are software outsourcing infrastructure as a service. I think the easy way to explain it. So Google, Amazon, Facebook, they all will outsource their software development overseas. They don’t necessarily tell you that they do it, but they use companies like Accenture Deloitte to facilitate that process because they don’t want to necessarily prepare and build out that hiring infrastructure and processes behind the scenes to ensure predictability and success in that relationship. And so we’re following that model, building out that infrastructure to then service startup, small businesses, and just companies and helping facilitate their software experience. So we’ll match them to one of 12 firms in our network, highly vetted firms and then have tools, resources, and infrastructure to facilitate that relationship so they don’t have to make those first time mistakes in their software journey.

[00:01:38.580] – Speaker 1
Got you. All right. So I’ve interviewed quite a few people that have software of some kind. Some of them are an entire business model, and some they just built some proprietary back end stuff. And I think it’s safe to say that I don’t know of anyone that said it went smoothly. So it seems to me one of those things like, I know what I want, but I don’t necessarily know personally how to build it. So I got to find someone to and whether they hire someone or outsource it. It always seems to be just either disconnect or grossing expenses or whatever. So can you talk about that a little bit?

[00:02:15.250] – Speaker 2
Definitely. So that’s actually pretty much why we got into this space. So we actually started Aloa while we were in college and we were just building out apps doing student tech consulting, and we were looking to expand our development team. And so we worked with a team overseas and had a really good relationship. And so we said, Wow, that’s wonderful. Let’s keep doing this. And so we then did it once more after that and had a horrible experience, one of those horror stories. So then we said, Okay, let’s give it another shot. Did it again, had another horror story. And then we started talking to people and every single person we spoke to said, Software is horrible. Outsourcing is the worst. It’s a terrible industry. Don’t do it. You’re going to get screwed over. You’re going to lose money, etc. And to us, that was a really exciting prompt. And that was the light bulb going off. Software is one of the most remote industries in the world, yet for some reason, it consistently has one of the worst reputations, software outsourcing specifically. And so that’s really why we got obsessed with this space, really trying to figure out how to create a world where anyone can innovate freely, where anyone, startups, small businesses, larger series A B companies, whether you’re technical or not, everyone has the same opportunities and landscape to develop software and have a successful experience.

[00:03:39.760] – Speaker 2
So they can keep focusing on their business, let us take care of the rest behind the scenes to facilitate that relationship.

[00:03:47.630] – Speaker 1
All right, that’s cool. I can tell you from my experience, I have a flower ordering website. It’s just hanging out there. I was hanging out there because I hired a guy to do the developer development. I don’t know, he applied himself for maybe two months and then life happened, whatever, family, different day job, whatever. In his defense, I was a back burner side hustle thing. Totally. Motorcycle buddy, whatever. But it’s one of those, maybe should have actually gotten somebody committed to do this. Even though he said he was committed, it clearly wasn’t because I was a couple of years now. I guess I see people trying to pay their nephew or something to put their website together in their basement or trying to get by. I don’t even know if it’s necessarily cheaper. I feel like I’ve been burned so many times that how do you get around that whole… I guess what I’m trying to figure out is how to ask the question of I don’t even want to go down the software road because I’ve been burned so much, so often spent so much money. I’m like, Maybe it’s just not worth dabbling in.

[00:05:04.650] – Speaker 1
So we’re going down. So how do you get over that hurdle with clients?

[00:05:08.790] – Speaker 2
Yeah. So first of the story that you told, it sounds like the treadmill effect, which is a common problem that you’ll see in software where, imagine if your developers are running on a treadmill and the way you keep them motivated is dangling money in front of their face to keep paying them to do the job. Well, if you’re a side hustle, if you’re a background project, if you’re a low budget client, it’s hard to maintain that incentivisation throughout the entire process when you’re not able to keep dangling the incentive in front of their face to keep them running. So it’s a common problem that is seen a lot. And I think at a high level, one of the most fun parts, in my opinion, of my job and what I do and in working with entrepreneurs is I always first start just try to figure out how to guide a potential client or a lead in everything that they can do before they ever need to spend money on software. My first take is always trying to convince them to not spend any money with us, which I think catches people off guard to start off with.

[00:06:21.100] – Speaker 2
But it’s a fun conversation because at the end of the day, you need to really approach things strategically. And no code tools are really strong and really effective these days, especially as there’s been a lot more of investment and R&D pouring into it. And so there’s a lot of things that you can do with no code. And where people go wrong is they think that inherently they have to build something. When a lot of these individuals who have the smaller budgets or are more testing got an idea, it’s more about the MVP, the minimum viable product, that initial product that’s going to get off the ground that people can test and iterate, rather than throwing your life savings into building something that you don’t even have the proof of concept that people are actually going to use it.

[00:07:05.410] – Speaker 2
So step one is going to be first making sure that now is really the right time to invest in technology. But step two is then, okay, let’s say they say, Great. No, totally makes sense, but we’ve done our research, we need to build this out. Here’s the data. Wonderful. That’s really where our services will come in and the way that we’ve structured things. When you look at any type of working relationship, it can really be broken down into two buckets. It’s who you work with and how you work with them. The who you work with, that’s an easier one to solve. It’s finding individuals to work with. And there’s a lot of services out there that support that landscape. The issue, though, is that with software, a lot of people will only look for a developer. They’ll say, I need someone who knows how to code in Node js, and they’ll look for someone who knows how to code in Node. Js. The problem with that is, let’s take architecture, building houses is the analogy. If you need someone to build you a bridge and you go find an architect and go, Hello architect, you know how to build houses with brick and wood.

[00:08:16.470] – Speaker 2
I need you to build me a bridge, but also with brick and wood. You know how to work with brick and wood. Go do that. Well, sure, they can figure it out, but they’re used to building houses, not bridges. And so they’re probably going to make a lot of mistakes, even though they have vast experience in working with brick and wood. And so the same principle holds true. So the first thing we’ll do is someone from Aloa is really going to get to know that startup almost as a consultancy. Who are you? Why is now the time to invest in technology? What are you looking to build? Then we have vetted through thousands of firms and we’ve only accepted 12 to be within the network. So then we’re going to match you to the right firm. And the reason we’ll have you work with a firm and not a freelancer is that we found that firms tend to be more relationship focused. It’s less about the individual contract, it’s more about trying to build a long term relationships because they have the bandwidth, they have the ability to make those relationship investments. And throughout that relationship, we’re basically just going to be there to provide you the tools, the infrastructure, the resources to facilitate that.

[00:09:17.510] – Speaker 2
So project management tool built specifically for outsourcing software payment tools. You don’t have to deal with international exchange rates or anything like that. As well as auditing your project throughout behind the scenes based off of your own custom development strategies. So really giving the startup founder the transparency and insight to make educated decisions, to actually have a grasp of what’s going on while educating them along the way. That way, they, as an individual, can be making these proper decisions and they don’t have to feel like it’s in some type of black box and can have some educated opinions on what’s actually happening.

[00:09:58.970] – Speaker 1
Got it. Sounds interesting. I like it. Can you give us an example of some of the… What are some of the companies, or maybe not necessarily companies, but some of the software projects that people have come to you with? I don’t know if you’re familiar with any of that is, but if there’s something you can’t say, whatever, just don’t say it.

[00:10:16.710] – Speaker 2
Totally. So I think there’s a couple of cool ones that I can point to. One is this company called video bomb. They’re an augmented reality marketing tech startup. And they essentially, their proprietary tools are an augmented reality platform where they’ll work with brands. So Berkshire Hathaway is a brand that they work with. And let’s say you go and you’re walking around your neighborhood and you see a house for sale and you see the Berkshire sign, you can pull out their application and you can scan the sign and the sign will become an augmented reality tour of their home. So then you can have a home tour without actually having to go inside the house itself. So that’s a pretty cool product. Another one that’s also active and relevant is a new company called Bracketology. Tv. Think of it as like fantasy sports, but for reality TV. And so building out that whole application framework and all the tech on that side. So if you’re a fan of The Bachelor, The Bachelorette, Big Brother, you can essentially play fantasy sports or a March Madness type bracket tournament and play along with these shows. And so it’s essentially trying to build out that ESPN of reality TV.

[00:11:46.930] – Speaker 2
Those are two clients that come to mind that are working on some pretty cool and exciting stuff.

[00:11:52.730] – Speaker 1
Interesting. The last one, it always makes me laugh because I think 200 years from now, we’re going to talk to… I don’t know. Let’s just say time travel becomes a thing. And we talked to people even 200 years ago and we’re like, Hey, great, great, great, great, great grandma. Check this out. We got this internet thing. It’s super awesome. If you want to know anything at any time, this is what you can do. And she’ll be like, That’s awesome. What did you look up? You’re like, I built a bracket for the bachelor. It’s funny, but man, people are into that.

[00:12:25.760] – Speaker 2
People are totally into it. Yeah, absolutely.

[00:12:29.180] – Speaker 1
So it’s so interesting to me. The software just as a whole is so interesting because I look at something like QuickBooks and I’m like, so many people hate this, but they seem to dominate the market pretty well, even though they have some competition that’s coming up still after decades. So there must be either some challenge or name recognition or something where I’m wondering if people eventually, business owners or something like that, will come to someone like you and say, Hey, I need a new accounting platform or a new something where there’s an old school way that’s just been as the biggest name doesn’t mean that they’re necessarily the best.

[00:13:07.100] – Speaker 2
Yeah, totally. It’s funny that you mentioned that there’s… I feel like it’s a common pain point that I hear a lot of small businesses and companies talking about how much they hate the current invoicing providers and different tools like that. I think one reason why someone like QuickBooks is still really successful is just because of the breadth of resources that are available on this one platform. So you pay for your one license and you have all these different activities that are now open to you. And when you look at the invoicing facet of QuickBooks itself, the invoicing is really only a tiny sliver of their business model. And so they don’t necessarily focus on innovation on that because, well, it’s just a sliver. If you’re already using their tools, you’re likely going to use their invoicing as well because it’s the ease of use. But with us, so A lowA Pay is our payment platform. That’s actually why we built it was to solve our own pain points. We actually hated using QuickBooks. It was tough to get people to fill out the invoices. They were taking a while. It didn’t feel easy to use just having to email it out and fill out that information.

[00:14:26.790] – Speaker 2
And so we built out our own payment platform that’s meant as a B2B invoicing tool that combines the one click pay of Amazon one click checkout with more of an updated look and feel to make it a little bit easier. And that’s what we’ve transitioned to. And now all of our clients pay us through that. So one, they don’t have to deal with international exchange rates, foreign transaction fees, stuff like that. We handle that in our side. But on top of that, it provides that ease of use. And so to pay an invoice rather than having to read through a scary invoice, fill out all that information, all they do is do a one click pay, and they’re good to go. And it’s really, really advanced our accounts, our accounts, receivables. It’s decreased our collection times. It’s decreased the amount of fees we’re paying. And so that’s actually a little inside secret. We’ve got a waitlist of B2B companies that will soon be using our pay. Nice. That will be coming in a few months.

[00:15:36.420] – Speaker 1
All right. That’s super impressive. Yeah. One of the things that I want to ask you about was as far as quoting or paying for something like this. Let’s just take the bracket thing with the bachelor, whatever. I imagine that a software engineer would have a ballpark idea of hours, but software engineers make some healthy money. So if they’re off by a few hours, all of a sudden you’re talking thousands of dollars. Yeah. So how do you quote out something like that?

[00:16:04.350] – Speaker 2
Totally. So there’s really two ways that you can approach a software project. The first is going to be on a fixed cost basis. So think of more of a project based. The second is going to be more on a staffing model. So if you’re going to be project based, to start off that project, we’re going to outline the scope of work. We’re going to run through that with the development team that we paired you up with. And then they’re going to estimate the total number of hours. And then that’s going to be the fixed cost that you’re going to pay. So it ends up taking a developer four hours to do something that they initially estimated two hours to do it. Well, you’re only going to pay for the 2 hours because that was the initial estimation. However, let’s say you want to make a change to the scope of work, you want to add a certain feature, you want to change a certain color, any of those changes that you’re making are going to be additional requests. Those are going to be scope changes that you’re then going to have to pay for. It can then get a little more costly on the back end because once you start actually building and you start realizing all of the different things that you want modified, edited, etc.

[00:17:13.580] – Speaker 2
A lot of those can add up. When you make those changes after the fact, it can sometimes be more expensive than making those changes right at the very beginning. Sure. We’ll recommend the project based approach. If you have a very clear cut idea, this is what I need to build. I know it’s only this. There’s maybe going to be some changes here and there, but it’s not going to be a lot of confidence in the actual scope that you’re working through. The other model is then going to be more of a staffing engagement where it’s essentially, instead of hiring two engineers inhouse in the States, you’re going to have two engineers working for you 160 hours a month. They’re just going to be located in a different country and they’re just going to be contracted rather than hired. And and they essentially just work on a backlog of work for you. So maybe they say something’s going to take 200 hours, but then as they’re working on it, you want them to fix a bug that happened on something else and you want them to help you in a different department. Totally cool. They’re your resource.

[00:18:14.900] – Speaker 2
You can use their time as you please. So those tend to be the two models. And if someone isn’t really sure or someone wants to go the fixed cost route but doesn’t really have as good of a grasp of that idea, then what we’ll start off with is the discovery phase where we’ll first say, Okay, let’s take a week or two and let’s really break this down. Let’s work through what your actual user story is. Let’s work through what your requirements are and your acceptance criteria are. Let’s build you out designs and a prototype in your architecture diagram. Then once you have this, whether you want to work with us or not, this is going to be what you’re going to need for anyone to take those next steps into development. We’ll never sign into that long term. We’ll first say, Okay, test this out. We’ll do this discovery phase. Whether you work with us or not, you’re going to need this. And if you’re in the relationship, cool, then we can take that discovery phase and do a project based work or do a staffing. But if not, if you want to go elsewhere, totally cool.

[00:19:15.650] – Speaker 2
At the end of the day, our mission is to help people innovate. And so if we’re not the right fit, totally get it. But it’s at least going to give you the assets that you need to have a successful next step in any direction that you do choose to go.

[00:19:29.540] – Speaker 1
Got you. That makes sense. They can dip their toes a little bit. Comfortable feel they need. It seems like there’s a lot of similarities, oddly enough, with construction or commercial construction. We’re always wondered, how are you bidding on a building that’s $50 million or more? There’s so many variables that could either go wrong or go well. Gas going up or metal going up or somebody drops a box of screws, whatever. It seems like it’s going to be tough on some of the larger projects to make sure you’re profitable, but also fair, I guess, as far as that goes for both parties.

[00:20:10.670] – Speaker 2
Totally.

[00:20:11.300] – Speaker 1
Interesting.

[00:20:12.660] – Speaker 2
It’s really fascinating. I think that was a great example that you gave of, let’s say, the price of metal. If you’re building a building and you do the contract and then there’s some trade embargo and now the price of metal has skyrocketed, well, the cost of that development is going to go up. The same thing holds true for software as well. I think that’s something that it’s a little harder to tangibly grasp since it isn’t necessarily a tangible asset like metal is. But for example, if you’re launching a website and Google Chrome updates their services and releases a software update, well, we don’t necessarily know when Google Chrome is going to be launching a software update. But when they do, we definitely need to make sure that your site is now compatible with that and that might take extra hours. We had one instance where a client was working with Spotify and Spotify’s API, the application programming interface, the way that a company can communicate with another company’s assets and data. And in the middle of their development, Spotify changed their API policy where what this company was trying to do was no longer possible.

[00:21:29.550] – Speaker 2
It was no longer offered via the data. And so there’s nothing we can do about that. It’s entirely up to Spotify. But as a business, things come your way. And it’s about how do you pivot? How do you adapt to the environments that you’re dealt. That’s ultimately what they did is they adapt the model a bit and figured out a workaround solution. Got you.

[00:21:51.480] – Speaker 1
Right on. What have been some of the challenges that you have had with starting Elloa?

[00:21:58.900] – Speaker 2
Yeah. I think it’s been a lot of work, but that’s the fun part. As long as you’re passionate about what you’re doing and you feel ownership in what you’re doing, you actually believe in the mission. The work isn’t as much the tough part. I think for me, some of the bigger challenges, we started Elora while we were in college, and this is what I jumped into full time after graduating as well. So I think starting off, some of the initial challenges were more on the just emotional side of starting a business. I’m in a different position than most of my friends are, rather than being at a corporate position, the stresses and anxieties that I’m dealing with are different than the people around my age tend to be dealing with. And there isn’t necessarily a manual or a guidebook as to what the right steps are because especially with each industry, it’s going to be different. And so it’s a lot of learning on the fly and reaching out and trying to find mentors and people who can teach you who have been there before and done it before. And as you keep progressing and as you keep working, you start to realize that with each milestone you hit, as things continue to go better, more things will continue to arise that you need to keep working through.

[00:23:33.230] – Speaker 2
And it’s a never ending cycle. And it’s something that I think can be exhausting if you’re not doing it for the right reason. If you’re really only in it to get rich or to make money, then you’re going to burn out pretty quickly because it’s pretty intense. But as long as you’re passionate about it and you really believe in what you’re doing and you’re in love with the mission and the problem that you’re trying to solve, it’s just like a real life video game. You just keep working and trying and building stuff, and sometimes it doesn’t work, and then you just regroup and try again. The troubles and the stresses and the headaches have also been wonderful learnings and opportunities that feels like as an entrepreneur, you get to grow with each failure, which is a cool perspective and angle to bring with it.

[00:24:27.840] – Speaker 1
Yeah, it’s all education.

[00:24:30.020] – Speaker 2
Education.

[00:24:31.180] – Speaker 1
Is expensive, whether you pay for it to a school or just with mopping up mistakes or challenges that you get just in your business. It’s interesting you use the analogy of video game because I always look at the business saying, I’m like, this is just a game. Every game has got rules. So there’s rules of the game and all this stuff. I try to tell that to my employees as well with my call answering service. And it’s interesting because as we’ve grown, we’ve learned, we’re like, oh, I still fall into this trap. We’re like, oh, as soon as we do this, we’ll be home free. You’re never home free because there’s always going to be another problem around the corner that it may be a higher quality problem or something. You’re going to get educated. Totally. And it’s constant. And I have to remind myself that and be like, The problems are fun, or at least after you’ve mastered them, then they’re fun.

[00:25:29.100] – Speaker 2
Maybe it’s a time. They’re good problems to have.

[00:25:31.600] – Speaker 1
Yeah. But I keep thinking, man, after we get this, after we get a couple of new employees all up to speed, we’ll be golden. Yeah. It’s not how it works.

[00:25:41.760] – Speaker 2
Once you hit that milestone, then it just opens the door to all these other pains that you didn’t even realize you could have.

[00:25:49.900] – Speaker 1
Yeah, it’s interesting. I still fall into that trap.

[00:25:53.400] – Speaker 2
Yeah.

[00:25:53.750] – Speaker 1
Me too. But I guess that’s part of growing. So it’s a game, right? Totally. If we knew if it was easy, it would be like candy land. It wouldn’t be any fun.

[00:26:04.070] – Speaker 2
Yeah, everyone would do it. No, it totally is. In my head, I always compare it to I feel like I’m just playing roller coaster tycoon back as a kid on a PC. You try to build the roller coaster in a park, and then it goes out of business and you look back and you’re like, Okay, I did this and this wrong. I’m going to now try again. And you know what to do right this time. And it’s a never ending process. But one of my favorite lines of just startups is fail fast, fail frequently. Just keep going, just keep trying. And if something looks good, give it a shot and set yourself up to fail. Don’t try to protect your ego. Don’t try to protect your idea. Really put yourself out there and give everything a full effort and take feedback authentically. And if it fails in a few days, that’s wonderful. You just got some really beautiful learnings in three days and now you know how to approach it a little bit better. And you didn’t waste too much time and resources on the failure itself. And it’s a never ending process, but it’s a fun one.

[00:27:10.580] – Speaker 1
Yeah, true story there. True story there. Tell me, where did the name come from?

[00:27:16.270] – Speaker 2
Great question. It started. My co founder Christian, he’s a lot of the brains behind what we’re doing. He was in Hawaii with his cousin, and his cousin kept butchering the word Aloha. Christian said, as a joke, he said, You know what? I’m going to name my company right now Aloha. Just so one day when we make it big, everyone will know you don’t know how to pronounce words. And so it started off as a little joke. I think this was back in 2015 when Christian and us and some other co founders and other people joined in and leave in the team just building out apps as just student fun projects, passion projects. And then in 2018, we pivoted to the model that we have today after stumbling upon this pain point of outsourcing and realizing how many other people have the same issue.

[00:28:15.910] – Speaker 1
And.

[00:28:17.020] – Speaker 2
We started exploring changing the name. But with every conversation we had, everyone said, it’s a great story, you got to keep it. And so we kept the name and we’re riding with it. And now we’ve got a little Hawaii.

[00:28:28.880] – Speaker 1
Thing to it. That doesn’t hurt, right?

[00:28:31.690] – Speaker 2
It doesn’t hurt at all.

[00:28:33.700] – Speaker 1
So tell me about the partnerships or the group, I guess, that you have as far as founders and how that has worked from… Anytime you got more than one person in a group, you’re going to have people that different opinions and ways that they want things to be done. Just tell me how that has worked.

[00:28:52.830] – Speaker 2
Yeah. I feel super fortunate. So we are a five person founding team.

[00:28:58.590] – Speaker 1
Holy.

[00:28:59.500] – Speaker 2
Cow. Yeah. We’re all equal partners. And it actually works really well. And I think the main reason why it functions so well is that no one on our team really has an ego, and everyone’s really passionate about what we’re actually doing. And so when there aren’t any competing egos, no one comes off as they’re above any type of work. No one comes off as any type of ownership. If any of us give dissenting feedback, whatever it be, it’s always received properly in that we all know that we’re aligned with the right general purpose of what we’re doing, and we all have the same goal and ambition. Got you. So it’s a little unique, but it’s definitely a wonderful luxury to have a team that’s so aligned and passionate because it really increases our runway and our roadmap of what we’re doing given we can really divide and conquer and get a lot more done. Do you.

[00:30:06.010] – Speaker 1
Split everything up between the five people? So this person does, I don’t know, sales or HR, whatever you have to split up. I don’t know.

[00:30:15.050] – Speaker 2
How.

[00:30:16.000] – Speaker 1
Do you keep track of that so that it’s more or less even or fair? You know what I mean? With five people, that’s a lot to keep track of.

[00:30:24.740] – Speaker 2
For sure. I think a lot of it is pretty… It progresses organically. Christian’s our CEO, and he does your typical CEO stuff of running the business, making sure that everyone else on the team has what they need to do their job. But he’s also technical, so he also spends a lot of his time behind the scenes working on our own internal tools and platform. Reece is our CTO, and he’s your typical CTO, really always working on the product itself. Brian is our COO, and he’s more working on the general operations of the business. So whether that be accounts and infrastructure and processes and things like that. D away is our head of sales, and so he’s more streamlining and owning the whole sales process. And then my role started off sitting more on the sales side, so more of lead gen, bizdev and growth marketing has shifted a little bit into owning the marketing roadmap as well as just high level revenue operations. So how are we continuously growing as a team and hitting our targets. But this way I can focus on some of those not as fun conversations and a little bit more variable conversation so everyone can stay very focused on what their line of work really is.

[00:31:54.450] – Speaker 1
Sure. I guess, are there certain level of client… Level is probably the wrong word. There certain size of client or size of project that you guys focus on? Yeah.

[00:32:05.280] – Speaker 2
So we tend to focus on startups. We started the business as many entrepreneurs tend to start, right? We wanted to take over the world for day one. Yeah, right. Here we go. We learned you can’t do that. But it’s a process. So we talked with our mentors and we said, we’re going to help anyone build software. Our mentor said, niche down to brought in. We said, okay, we’re going to do solo entrepreneurs. He said, niche down. We’re like, okay, we’re going to do solo bootstrapped startups. We’re like, niche down. We’re like, okay, we’re going to do solo bootstrapped early stage startups. They said, you’re almost there. Niche down further. We said, Okay, we’re going to do solo bootstrapped early stage non technical founders. They said, Great. That is like as niche as you can get. And so that’s where we started. We said, Okay, if we can really solve this space for a non technical founder who’s spending their own money, who’s never been in the space before, who doesn’t have any support, we can grow out from there. And so that was our first target audience. And then from there, we have grown. And now, over the past four and a half years or so, we’ve worked with over 250 different startups across 40 plus industries, everywhere from those early stage bootstrap non technical founders all the way to series PC startups that are more hiring 5, 10 resources as staff supplementation.

[00:33:35.340] – Speaker 1
All right. So this is targeting that niche is pretty cool. But I also wonder when it’s that small of a business, they probably don’t have a ton of cash to throw your way. So they’re trying to throw ownership percentages or something like that your direction?

[00:33:54.210] – Speaker 2
Yeah, we definitely get that offer a lot. So our internal policy is that we don’t do work for equity, and we’re really going to do that for two reasons. The first is that if you really believe in your idea and what you’re building, equity is really going to ultimately be one of the most expensive ways to fund your company. And today, if you’re really going to make it, you could have gotten that development way cheaper. But the main reason why we don’t allow equity into the conversations is that we think it’s really important that you have a very authentic relationship with your development team, but also one that you still own all control of that relationship. And as a business owner, you need to have the ability to fire and to replace people if they’re not doing their job. And if you give away equity to someone who’s contracted, if someone’s being contracted, they’re inherently not as incentivized by the mission and more incentivized by the revenue that they’re going to receive. And so if that individual isn’t performing, if that group isn’t performing, you need to have the ability to fire them and move on and find someone who’s going to be a better fit for you.

[00:35:02.110] – Speaker 2
And if that team has equity, you’re married to them. It’s going to be tougher to split in that relationship. And through a lot of the customer discovery that we were doing, we heard a lot of those horror stories that centered around equity as well. And so we made it our own internal policy that we don’t take equity. You should have the ability to fire us if you don’t like how things are going. And as the business owner, you should always maintain that control over your business. Yeah, I.

[00:35:28.460] – Speaker 1
Get it. I get it. I think that’s smart move.

[00:35:30.820] – Speaker 2
Yeah, appreciate it. It may be.

[00:35:32.440] – Speaker 1
Tough when you see someone like, Oh, my gosh, this is the next big thing. But you never know, and it’s very tough to pay a mortgage on the next big thing.

[00:35:40.280] – Speaker 2
100 %. That is entirely correct.

[00:35:42.970] – Speaker 1
Yeah, it’s easy on the current big thing, but the next big thing, they don’t take that paper.

[00:35:48.630] – Speaker 2
As far.

[00:35:50.000] – Speaker 1
As the companies that you work with, what have been some of the challenges that you run into there?

[00:35:57.960] – Speaker 2
Do you have another four hours to check.

[00:36:02.180] – Speaker 1
No.

[00:36:03.700] – Speaker 2
It’s a small business, right? So we’re growing. We’re growing through those pain points, and we’re stepping into one of the most tumultuous industries out there. Anyone you talk to, you say the word software outsourcing and everyone’s triggered. It’s horrible. Don’t do it. A horror story almost consistently. And it has that reputation for a good reason. It’s typically really horrible. The outsourcing model that first started in the 80s and 90s used email and phone calls. And nowadays, especially before we got into this space, people are approaching those relationships in the exact same process. But instead of using email and phone call, they’re using Zoom and Slack. And so they’re trying to adapt a process to fit with modern technology rather than creating a new process around modern technology. And so we’re really focusing on the latter. But in order to innovate, you have to go through the pain points. So internally, we have a pain point table. Anytime there’s any pain point, we’re going to log that. And that really influences our development roadmap of what we’re really going to focus on as a business, where the actual pain points of what we’re doing. And because it’s such a new approach to the software outsourcing relationship and the way that we’re approaching it, there have been a lot of pain points and a lot of frustrations and headaches.

[00:37:31.620] – Speaker 2
Ultimately, they’re all things that we’ve learned from, whether it be some things are way too manual. And in the early days, I was up until two, three AM and up at five AM talking with people around the world. So have to be on at all hours of the day. And through those pain points, though, we pivot our internal product roadmap to building automation and things that help reduce that manual need. Up even to things that are more current. We’re four and a half years in and our process and infrastructure is way stronger and better, but we’re still identifying really valuable gaps. For example, if you as a client believe that things aren’t being done quickly enough and you don’t have the transparency, well, that tells us, Okay, well, our platform and our tools that show you the insights of the project are not giving you the right answers that you’re really looking for. And that has been a pain point, going back to the luxury. It’s with each step, with each point of growth, people find new things that aren’t to their liking. Once they hit that next level of luxury.

[00:38:46.280] – Speaker 1
You can.

[00:38:46.990] – Speaker 2
Okay, great. I now can talk to my devs consistently, but now that next pain point is, Okay, well, there’s miscommunication. Great. We handled the miscommunication. Now the next pain point is, Okay, well, I didn’t really know what they really did on Tuesday when they just said this or whatever it be. There’s always that next tier of luxury that you attain that allows you to worry about other things. And so the next thing that we’re now really working on internally is building out more data analytics. So we own our own platform, we own all the data, so we can really manipulate that data to show clients unique insights that you wouldn’t else otherwise be able to see. So for example, if someone is frustrated with response time, we can show them what the average response time actually is with the general regression. If someone is frustrated about tickets not being done properly, we can actually then show the data and say, Okay, well, 70 % of tickets are closed on time. 30 % of tickets are actually reopened. And 80 % of those tickets that are reopened, it’s actually because the development team wasn’t able to reproduce the issue that you were identifying.

[00:40:03.500] – Speaker 2
So let’s go and walk through the way that you’re outlining your issues and bugs that you’re finding. How can we help you better articulate that so developers can better understand what you’re going through so they can replicate it on their side and then solve the issue. The issues and the headaches and the stresses are multitude and they’re in every direction. But I think as a business owner and as someone who’s passionate about the problem you’re solving, each frustration and headache just opens up to a new possibility of innovation, a new way to further build out that moat. And I think it’s really about maintaining that perspective of the long term vision and the passion of the problem rather than letting each headache and frustration independently weigh you down. It’s a failure.

[00:40:59.060] – Speaker 1
Yeah, I like it. I like it. What is something that you wish you knew back when you first started this that you know now? Okay.

[00:41:11.930] – Speaker 2
I think if there’s one thing that I would say, and I feel like this is something that I’ll tell a lot of people, you need to network from day one and you need to be vulnerable. I think myself included, people have a lot of pride. And especially when you’re doing something that you’re not dedicating your life to, that, of course, a lot of pride comes with that territory. But 99.9 % of the time, you are not the first person to be doing this. And there’s other people who have done it in some capacity before you. And they’ve made mistakes and they know how to do it properly. So if you can really put yourself out there, if you can reach out to people in cold network and leverage that to any capacity you can, you can really learn about what not to do. So then you can go about it with a higher degree of potential success. Majority of the times when you reach out to people, they’re going to ignore you or not respond or send you a not kind reply.

[00:42:18.180] – Speaker 1
Oh, really?

[00:42:19.940] – Speaker 2
I’ve gotten it, definitely. I’ve gotten not always positive responses. Is this just a.

[00:42:28.150] – Speaker 1
Software world or in the business broadly?

[00:42:32.130] – Speaker 2
The business stratosphere. So I’ll go on LinkedIn. So for example, with marketing, I picked up the marketing hat off the wall. And this advice was given to me. And so now it’s something that I is a staple of that I think I do. And so I said, Great, I’m not really an expert in marketing. I don’t know too much about it, so I’m going to learn from others. And so before I even try to do anything with the marketing roadmap, I outreach tends hundred people on LinkedIn saying, Hey, my name is David. I’m a young entrepreneur trying to learn about marketing. Would love 15 minutes if you have just to chat and ask you some questions. And not always everyone responds positively.

[00:43:15.150] – Speaker 1
Really? But I would.

[00:43:16.750] – Speaker 2
Say the majority do. All right. Actually, I would say the majority don’t respond at all. And then a small sliver aren’t always a positive response. But then those who do respond, it’s either, Hey, I don’t have time, or, Sure, I’d be happy to chat. Every so often, though, you’re going to get a bite.

[00:43:35.020] – Speaker 1
And you.

[00:43:35.810] – Speaker 2
Approach that conversation very authentically and genuinely. It’s not a time to brag or pitch what you’re doing. It’s really a time to learn and let that individual speak about what they’re doing, give them that opportunity to mentor you. And through doing that, it’s really revolutionized a lot of my own personal efficiency. I don’t know marketing. I didn’t study marketing. But through having the tenacity to keep doing this outreach and keep talking with people, really made networking my main focus. And throughout that month, the first month, all I did was network with marketing people and was able to talk to eventually CMOs of billion dollar company and really just kept with each person, walk them through exactly what I was thinking of doing and let them iterate and critique and give me feedback on how I thought to be approaching things. And you basically take that conversation and you work on it and then you bring what you’ve updated to the next conversation. And a month in, rather than having to figure out the hard mistakes yourselves, you’ve got a really wonderful plan that was helped influence by these professionals that really helped you bypass a lot of the first time mistakes and make things way more efficient.

[00:44:57.320] – Speaker 1
Yeah. When I’m teaching my business planning classes, I’ll tell people, just find someone doing what you’re doing and take them up for coffee. And I always tell them if they say no or they don’t respond, that probably means they’re not making money and they don’t want to tell you. Yes.

[00:45:12.260] – Speaker 2
I don’t know when you’re.

[00:45:13.590] – Speaker 1
Talking to someone that’s got an actual job as CMO or something like that. And they’ve been there 15 years or something. Maybe they just don’t care. But I.

[00:45:23.870] – Speaker 2
Don’t find many.

[00:45:24.700] – Speaker 1
People that aren’t willing to at least chat. And usually they got nothing to hide. And what they’re going to tell you in 15 minutes isn’t a lifetime, but it’ll be a huge nugget for you when it’s just another day in passing for them. Totally.

[00:45:39.030] – Speaker 2
It’s interesting that.

[00:45:40.380] – Speaker 1
People would be either negative or I get the no response because don’t know for whatever reason that’s acceptable now. I don’t agree with that but whatever. Totally agree.

[00:45:50.120] – Speaker 2
At the end of the day, just respond, be pleasant. But I think maybe it’s because with LinkedIn, it’s becoming such a marketing channel that people think they’re getting sold to. Or that’s your initial outreach to then sell them something. Yeah. Let me learn about.

[00:46:08.380] – Speaker 1
Your business and try to sell you life insurance, right? Exactly.

[00:46:11.740] – Speaker 2
But if you can swallow your pride and admit that you really don’t know what you’re doing and that other people know more than you and take the time to learn and listen, it’s just wonderful learning that really expedite your journey. Yeah, that is cool.

[00:46:29.870] – Speaker 1
I want to ask you about funding. Have you guys gone through funding or were you self funded? We have not.

[00:46:35.380] – Speaker 2
So we’re bootstrapped. Okay. So we’ve just been putting in our own time and effort. It’s also the beauty of having a bigger founding team. Multiple individuals on the team are technical, so they cover the technical side of things. Some of us being non technical were then more on the sales and business side of things. Two of us jumped into this full time after graduation. We’re working on it while students then jumped into full time while some of the other team members were at corporate jobs and then jumped into this full time after. Once we were in a position where it made sense to finance their salaries internally inhouse. But yeah, we thankfully were bootstrapped, and now we’re really just using our revenues, driving that back into R&D to keep really innovating on the product and process to try to continue further making this space more accessible. Nice.

[00:47:33.110] – Speaker 1
That is super cool. That is super cool. So where do you think you’ll be in… Let’s call it… You’ve been around four and a half years or LOA? Yeah. It’s been around four and a half years? So let’s just say in another four years, where do you expect to be or where would you like to be?

[00:47:47.330] – Speaker 2
Well, we’ve got ambition. We’ve got ambition, that’s for sure.

[00:47:51.400] – Speaker 1
In.

[00:47:54.700] – Speaker 2
My opinion, something that really validates what we’re doing and the way we’re approaching things is that each of the independent tools and resources that we’re building out are each gaining traction as independent products. Nice. Which has been really, really nice. So our project management tool, we’ve gotten interest from different agencies, like development agencies or even different clients saying, Hey, I want to use this as my own project management tool for my clients. Payment platform, getting B2B company saying, Hey, I want to use this to do my own invoices. This analytics stuff as well as starting to… We’re MVPing it right now, but starting to get other bigger sized companies saying, If you could give me this type of analytics for my own tools that I’m using, I would totally pay for that. All right.

[00:48:46.560] – Speaker 1
Well, that’s cool.

[00:48:47.890] – Speaker 2
Yeah. So it’s been really exciting. It’s been a lot of fun. It keeps the days interesting for sure. So I think for another four and a half years, let’s say, hopefully we’re in a position where we’ve really scaled out some of these other products. And the innovations that these products are leading us to are really facilitating our process and our core business, helping tons more clients and helping people innovate and really decreasing the friction that we’re seeing. Yeah, I.

[00:49:19.470] – Speaker 1
Like it. I love it. It’s interesting. It sounds like you are having some of the similar feedback that I had when I am selling the call answering business. People always put up this brick wall where even though maybe in the back of their mind they’re like, I could probably use that. In the front of their mind, they’re like, Let me throw some curveballs at you to tell you why this won’t work. And I.

[00:49:45.530] – Speaker 2
Feel like is that fear?

[00:49:46.980] – Speaker 1
Is that misunderstanding? Or maybe they are literally just trying to break it as devil’s advocate, so that they know, well, if I can’t break it as devil’s advocate, then I become a client thing.

[00:49:57.910] – Speaker 2
It’s interesting because.

[00:49:59.510] – Speaker 1
I thought when I started my call answering thing, this is easy lay up. Small businesses all have this problem, so I’ll just run out there and money will just fall in buckets and we’ll just be helping businesses grow left and right. And instead I got, What.

[00:50:13.650] – Speaker 2
Happens if.

[00:50:14.700] – Speaker 1
Five million calls come in at the same time? What do you do then? These just off the wall curveballs. Is that the first thing that you thought of? Really? Yeah.

[00:50:23.500] – Speaker 2
Hey, if you’re at the point where you need someone to be answering five million calls at the same time, then.

[00:50:29.520] – Speaker 1
We should be having a different conversation.

[00:50:32.970] – Speaker 2
No, I totally feel you. And it’s something that we see all the time. In our early days, we were hungry and more in what we were phrasing of survival mode. And you take any business, you fight for any business that you can because it’s money at the door. But through that, I think now we’re in a point of a little bit more luxury where we can say no to clients if we really don’t think we’re the right fit. And a lot of these initial calls and questions and ways that you see people treat you before the conference, before they’re even a client, tends to be fairly indicative in our experience as to how that relationship is going to go.

[00:51:13.510] – Speaker 1
That’s fair. I’ll agree with that. Now that you say that, yeah, that’s interesting.

[00:51:19.770] – Speaker 2
Yeah. Some of our most difficult situations, looking back, it was pretty telling that they were going to be a difficult client. Before even did.

[00:51:32.630] – Speaker 1
Any work for them, they were difficult to deal with. Yeah. Interesting. Yeah, I can relate to that.

[00:51:38.590] – Speaker 2
The difficulty aspect, not in the sense that everyone has different working styles. There’s nothing wrong with having a different working style and preferences, but to the point of where the relationship then goes to, You did this, this, and this, and we’re going to sue you for this, and this isn’t going this way, and then we can We can go back in one email and say, Listen, it’s part of our process that we don’t have any of your admin credentials. You always have to invite us with specific permissions to make sure that we can’t do anything that goes against what you would want. So what you’re claiming just isn’t… It’s not even possible for us to do.

[00:52:18.900] – Speaker 2
And we found that a lot of those conversations and clients that you have those conversations with upfront, you get that gut feeling that, I don’t know how this is going to go, tends to lean in that direction. Sure.

[00:52:35.470] – Speaker 1
Interesting. I got one last question for you because I know we’re running out of time here. I look at the businesses that I’ve had, a lot of businesses that a lot of other people that I have, people, generally speaking, people understand it. I go to order a pizza. I know what’s in a pizza. But if I say, hey, build this software, I have a sliver of an idea of what actually goes into building that software. How do you translate the value, I guess, of the operations and what has to happen, even, I guess, beyond dollar amount, just in time or stuff like that, to people that probably aren’t that technical to start with. And not that they’re not smart people, just like that’s not their wheelhouse and that’s why they’re outsourcing. How do you have that conversation with people that just don’t even know what you’re talking about?

[00:53:29.740] – Speaker 1
Yeah, it’s a great question. And I think it makes me happy to think about the way that we started because we really started our business focusing on those type of… That type of client, individuals who don’t understand the technical space at all and really need that support. And so it’s pretty woven throughout our process, education and information. It’s pretty part of it. So for starters, each client is first going to talk to an Aloa strategist, someone from Aloa who’s going to get to know them. They’re US base, understand them, their business, explain everything. We love to explain in analogies. Using analogies always makes things way easier. And it’s actually the analogy of software development is like architecture, building houses, building a software product is like building a house. It’s a really good analogy for a lot of different facets of the whole process. Everything from blueprints to then electrical wiring and how you build a house, but you still need to work with a utility company to bring electricity to the house. And that’s not your architect who’s doing that. That’s the utility company who’s doing that. So it’s using a lot of analogies. Meet the individual where they’re at, so explain it to them in ways that they’re going to understand.

[00:54:48.540] – Speaker 2
Don’t try to force them to speak your language. And we have a lot of free resources and content that we’ve put together to try to help facilitate that process. But ultimately, our entire process is built around essentially providing those guardrails. So you’re naturally going to be doing what you should be doing, even if you don’t really know why or what you’re doing. The way that you’re going to be communicating and following, the way that you’re interacting on the management tool, the way that you’re approving different tasks, the way that you’re providing credentials, we’re going to have you doing things in a way where the natural way you would do it is going to be the way that you should be doing it. And at any point throughout that process, it’s all about just having that education. So if you have questions, ask questions, don’t make assumptions. Let us help you. Let us guide you. Let us be there as that support center to really equip you with the tools that you need to have better ownership of your project, to have better understanding of what you’re doing. Got it.

[00:55:54.300] – Speaker 1
That is cool. That is cool. I’m excited to see where you guys go. And just as you’re on because I think it’s safe to say software is not going away.

[00:56:03.320] – Speaker 2
I sure hope not. I wonder what the world would look like if we just eliminated software entirely. Yeah, right.

[00:56:11.020] – Speaker 1
The Internet is just a fad. Exactly. It’s funny. Well, David, I appreciate you being on the show.

[00:56:17.860] – Speaker 1
Definitely. Thanks, James, for having me. This was a blast.

[00:56:20.610] – Speaker 1
Yes, good times.

[00:56:21.860] – Speaker 1
This has been Authentic Business Adventures, the business program that brings you the struggle stories and triumphant successes of business owners across the land. We are underwritten locally by the Bank of Sun Prairie. If you’re listening to this on the web, if you could do us a huge favor, give us a big old thumbs up, smash that subscribe button, and of course, comment, ask some questions to David about all the software that you and your business need or have that little fancy idea to innovate with. David can probably help you. My name is James Kademan and Authentic Business Adventures has brought you by Calls on Call, offering call answering and receptionist services for service businesses across the country on the web at callsoncall.com. As well as Draw In Customers Business Coaching, offering business coaching services for entrepreneurs looking for growth on the web at drawincustomers.com. And of course, The Bold Business Book, a book for the entrepreneur in all of us available wherever fine books are sold. We’d like to thank you, our wonderful listeners as well as our guest, David Pawlan, the co-founder, I should say, of Aloa.co. David, what is the best way for people to reach out to you?

[00:57:26.280] – Speaker 1
Definitely.

[00:57:27.440] – Speaker 2
No, appreciate the ask. Anyone can shoot me an email, david@aloa.co,

[00:57:32.760] – Speaker 2
A-L-O-A.co. You can also reach out to us on our website, Aloa.co. Easy enough. Cool.

[00:57:40.510] – Speaker 1
I appreciate it, David. Definitely.

[00:57:42.860] – Speaker 2
Thank you, James. Yeah.

[00:57:44.310] – Speaker 2
Past episodes can be found morning, noon, and night at the podcast link found at, drawincustomers.com. Thanks for listening. We will see you next week. I want you to stay awesome. And if you do nothing else, enjoy your business.