Custom software developers Zoolatech – based in Kyiv, Ukraine – provide custom-built mobile and web development solutions for a variety of clients, working in a range of industries and specializations, with engineering talent based all over the globe. We caught up with CEO and co-founder Roman Kaplun ahead of last week’s dot.LA Summit to talk about the company’s explosive pandemic-era growth, how COVID helped sell clients on the fundamentals of remote work, and why L.A. can’t seem to train engineers quickly enough.
Zoolatech CEO and co-founder Roman Kaplun
dot.LA: I don’t just want to repeat the “Office Hours” podcast you did with Spencer [Rascoff], but I do think people are going to be fascinated by this idea of working with a team that is still partly in Ukraine. It’s a bit like having a remote workforce, which is the thing a lot of people are going through right now, but on the hardest, most complicated mode.
KAPLUN: When managers complain about working with remote teams, I think they either selected the wrong partner, wrong people, or they have not established the right process. We live in a global world, and so you almost have to work with teams that are not congregated in one place anymore. And so in order to do this successfully, you just basically need to set it up and hire the right people.
We are a technology company, but we provide technology as a service to other technology companies. And we are in business primarily because there is a shortage of technology and engineering talent in the U.S. Technology companies are almost forced to go and hire people offshore.
dot.LA: A lot of companies are already doing this on their own in-house. “Well, we have our team here and then we’ve got a team in Manila or Poland or whatever.” What are some of the advantages to coming to a company like yours, where there’s architecture already set up for that, as opposed to just me as an American founder going overseas to round up my own team?
KAPLUN: We can do it a lot faster. We are professionals, we understand the market, we understand the culture. And by understanding the culture of our client and culture of the people we hire, that makes it a lot easier for us to basically to do everything a lot faster. So unless you are a Microsoft or Amazon or some other large company that wants to invest in each market, and basically built your own recruitment team, HR team, your own marketing team, basically invest into infrastructure over hiring and running these kind of teams, then the next best option is to use a company like ours, that understands the market and has all that infrastructure in place.
dot.LA: What is it like to manage a company where some of your colleagues are working basically around the clock?
KAPLUN: It is all about, like I said, hiring the right people, setting up the right management team.
dot.LA: That’s got to be a challenge too, to constantly be focused on bringing in the right people. You’ve grown so quickly, to 450 staffers in just over four and a half years. I’d love to hear a little bit about that.
This is a word of mouth kind of business, in terms of our clients and employees. Zoola is Hebrew slang for a place that, once you find it, you don’t want to leave. So we like to say that this concept applies to our both employees and our clients. We treat all our clients very well, so they want to stay with us, but even more importantly, we also treat our employees in the same way. So we have a very mature HR practices in place and we help our employees to grow their careers. We take care of them in terms of benefits and perks that companies would do. So we invest into that. And then word of mouth creates a positive reputation for us in the markets in which we work.
dot.LA: That’s a lot of growth in a few years, especially considering it’s not a product that just blew up in the marketplace. It’s consulting, you’re finding new clients, you’re growing that organically. To what do you credit the fast growth of this concept?
We signed 40 clients in about five years. A lot of it is just having a professional network of people I’ve worked with before. COVID has also opened up the concept of remote work. Our industry has existed for a long time; companies have always outsourced work offshore. But before COVID, the most challenging question that I had to answer was: “How does it work in a remote environment?” Everyone said, we like to have our teams co-located, everybody in the same office and so on. So I had to sell this idea of having a team remodeled, that it was okay to have some workers remote. COVID helped with that. I don’t have to sell people on the basic concept that this works.
Also during COVID, a lot of money was invested into the economy. A lot of companies received funding allowing them to tackle new projects, so the demand for engineering talent in the U.S. went up. Due to limit availability of engineers stateside, companies had to go offshore. So we were in the right place, at the right time, with the right clients and the right proposition. A lot of our clients were growing, so that resulted in our growth.
dot.LA: You mentioned that before, that part of the success of Zoola and what you’ve been doing is this lack of available engineering talent in the U.S. Economics 101 would teach us, if there’s a huge demand, supply should be going up. Why do you think it’s not and, why aren’t more Americans becoming engineers to take these readily available engineering?
KAPLUN: It’s a great question. So let me give you a conceptual example that I think is true. So in Eastern Europe, let’s say Ukraine, the average salary outside of technology is about $600-$700 a month. In high tech, it’s about $6,000-$7,000 a month. It’s 10 times the difference. So if you’re a college student or a high school student, your career path as an electrical engineer or an architect or a biotech engineer is about maybe $1,000 a month tops. But you go into software engineering, you make $1,000 as an intern.
So now let’s look at the U.S. In the United States, you can go to college and major in pretty much anything. You can become an architect, an electrical engineer, whatever, and you’re going to make a decent living. If you’re a software engineer, you’re probably going to make a better living, but it’s not 10 times more than the other options.
So in Ukraine, the path to success is fairly clear. Go into technology and you can be successful. So you have a larger graduating class, and a lot of people going into that field. I think this is a big difference. So there’s basically a limited supply of engineers here, it creates more demand for it, and so people have to go offshore.
dot.LA: We think of tech companies as specialized in some ways. It’s a fintech company or we’re doing Web3. And for Zoolatech, regardless of what the client needs, you’re there to build the tools. I’m interested in that decision not to specialize and how you make that work in a practical way.
KAPLUN: We specialized in custom software development. So if Salesforce, like in a hypothetical scenario, if Salesforce is not a good enough solution for you – maybe it’s too complex and maybe it’s too big, you want something very specific – we can build your own custom software.
A lot of technology companies, they choose to build their own software solutions as opposed to purchasing them. There are also many tools on the market that you can purchase, but some of them are very big and very complex and require a level of integration and customization that is beyond to what you actually need. So we specialize in custom software development, we just don’t specialize in specific tools.
dot.LA: Is there a case study you could walk us through as an example?
So for one major North American retailer, we made their Android app. 80% of their customers are on the iOS on iPhones because they are slightly upscale, so they’re willing to spend more money on retail. Most of the people are on iPhones, but they can’t ignore Android entirely. It’s about 20% of the market for them, so they have to have it, but it’s not a top priority. And so Android is not a top priority for them, but it’s very important. So it was a great opportunity for them to give this to us and basically say okay, you guys manage the Android entirely, just follow the iOS.
For a San Francisco fintech company, we brought together their Mortgages platform. They were getting into new business. They started as a student loan refinancing company, and we played a large part in building that software, and when they expanded it into mortgage financing, we built that platform out for them completely. The lesson learned from that is that was, the closer we work with the companies, and the more trust we build with their technology leadership, the more responsibility they give us and then the better independent results that we can provide for them.
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