Top Challenges Tech Startups Face

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Top Challenges Tech Startups Face

Top Challenges Tech Startups Face With Edwin Frondozo

Sean: From LJ, what are the challenges you faced when starting up your tech company?

Edwin: You know, a lot of the challenges, like any entrepreneur, is the ability to do many things. So it all depends if you’re coming with a large team. But most entrepreneurs, most tech founders, they’re doing many things. They’re not only building out their stack or their tech stack, their MVP, but they’re also needed to – we built our business on paying customers. We bootstrapped it, right? The biggest challenge I found was finding that balance of finding new customers, delivering a product, a superior product. The challenge that I’m seeing is finding that rhythm, right, and that balance. But if you want to grow in scale, you got to exit yourself from these different positions.

Edwin: And this is something Sean talks about a lot in terms of and I know we talked about, you know, firing, getting and how to grow. But ultimately it’s finding that rhythm carving out the time to build out the system. So when you hire someone, they’re not just there waiting for you to tell them what to do, that there’s a system and a process for them to follow. Otherwise, they’re just sitting there twiddling their thumbs. So I would say the biggest challenge now that I said that out loud is doing the work when it happens. When I say doing the work is to write out the process right away, like, OK, I close a deal. This is what I have to do next. I got to send an onboarding email. So here’s the template, and then I got to do this. I got a log into this system, so they’re there. Or what if it’s all integrated already, but write down that process right away.

Edwin: I’ve seen entrepreneurs not have a process after running their business for 10 years, and they’re wondering why it’s difficult to hire people because you know, “the people come and go. And when I don’t know why, I can’t keep people” and I say, Well, do you have a specific job role or do you have the process for them? What are they doing when you hire them? You can’t just hire them and let them sit there. They get very quickly unmotivated. If you’re not empowering these people, then they don’t feel worthy or not motivated to work, they’re already leaving. That is my biggest challenge – is probably on the scale, understanding processes and systems. It’s easy to – especially today, Sean, there are so many tools out there. Like I said, like Bubble, you could resell a tech stack and just label it and you could sell right away. But the problem is scaling the sales, scaling the customer support, and scaling the billing and doing all those types of stuff.

Sean: Yeah, I resonate 100 percent. I mean, one of the main reasons why, like you said, a lot of entrepreneurs don’t invest in those systems and processes is – the most common reason that I hear. And they tell me ‘Sean, you talk about processes and process documents and stuff, but I’m trying to survive here. You know, I’m trying to make ends meet. I’m trying to make sure that I get more revenue than expenses.”

Sean: And that is true 100 percent. But that is also something that you’re going to want to do as you scale. Otherwise, you’re building the company in a linear way. And the problem is when you lose someone’s key while you’re building it in a linear way, you’re in line suddenly goes flat or goes down because you lose a key person. But if you have your processed documents to back you up when you hire, it’s automatic. You hire, they get onboarded, they learn stuff, they read the process document.

Sean: And the beauty about it is that your process document is alive, in the sense that when someone doesn’t understand something in the document, they’ll go to you and say, ‘Hey, what’s this? What does this mean?’ And then you realize, Oh, this document is not that good at all, because these people, they’re asking me questions about it when they shouldn’t be, because I wrote the process documents, or someone like the team leader or manager wrote that process document. It’s supposed to automatically onboard people, but now they’re asking me questions about things they don’t understand in the document. So you’re going to have to evolve these documents.

Sean: In SEO-hacker. What we do is every three months, we make sure that documents are revisited and we have a new hire every three months anyway. So it’s revisited well and we improve it and we rewrite it. And so we’re able to evolve and make it alive and there’s really no excuse that you don’t have a process document, so 100 percent agree there.

Sean: Edwin gave a good perspective there on some of the challenges. But I remember when I was starting Qeryz and I was the co-founder. I don’t code, so I didn’t code Qeryz. It’s a software as a service company. And what we do is micro surveys, which you can run on any page on your website track. There’s a lot of integrations that we have inside.

Sean: So that was a challenge for me because I didn’t know how to code and I also came in as the main investor. So I invested millions with Qeryz, when it was starting out.

Sean: So Yann has a follow up, things to say. I’m doing pitches to investors for a bunch of SAS issues that are the multiplication of the same offers. So when early on you’re doing a lot of investor pitches? That’s something I didn’t do. I bootstrapped Qeryz first and I did think about investors and people coming in to make sure that we have this good pool of funds. But the truth is, if your runaway is not enough for you to take off. There’s not much revenue coming in. This is also not a really good sign for investors. But when your revenue is growing and it’s just that you invested a lot of capital in it, then a lot of investors would be attracted to your SAS startup.

Sean: So I didn’t go pitching for investors. I built it first from MVP all the way to presentable, all the way to recurring revenue already before some investors started approaching me about Qeryz. So, yeah, that’s one major challenge when you’re starting a tech company and you’re not a technical founder. I wasn’t a technical founder. I didn’t know 100 percent what they were doing and my technical founder is not a business guy.

Sean: He isn’t the best guy when it comes to knowing what’s next. What’s the next feature we should be getting? What’s the next feature? We should be launching Diaz? He has no idea about how to do these things, and I’m supposed to be the one always giving the roadmap to him and his team. So that was a challenge for me. And doing that alongside SEO Hacker was double the challenge, because SEO Hacker is the bigger brother of a company, is the one providing for queries, and it’s the one funding the entire SAS project for Qeryz.

Sean: So I had to focus one on SEO. Hacker just made a lot of sense. But the roadmap for Qeryz, everything, it was a challenge for me, always being the one to give that. And if I don’t, then it doesn’t move. So that’s a big challenge for me. All right.

Sean: So I hope that answers the question. We go to the next question, how can a business keep up with the changing technology trends? Alright.

Edwin: That’s an interesting question, actually. What came to mind Pam is, as a business operator, there’s always going to be a new shiny business operations solution, and I’m going to reiterate what I said earlier. You really have to know your core as a business and a business operations and what works? Right? I’m in the telecommunications business, and there are companies that have been around for 20, 30 years that don’t use, you know, technologies like Slack or Voice Over IP or do that.

Edwin: And you can imagine people who work there. They’re like ‘Man. We’re such an old business,’ but these founders are these operators they’re not so much worried about. If it’s going to help them, don’t get me wrong. If you could get in there and show them that you can implement something quicker, they probably can. But change is difficult, as a business operator, change management, people don’t realize if you’re a new entrepreneur, you don’t realize how much when you’re ingrained in a process and a system that’s already in place and working, you know there is a saying if it ain’t broke, don’t fix it. It is true to business like I’ve been in business for a while now, and you will see some enterprise companies that are still on old Unix business systems, because that are running their whole operations, their billing operations, they are backed in. So to forklift that and replace that could be a multiple hundred million dollar business, and you won’t even know if it’s going to save you money or increase your efficiency.

Edwin: So when it comes to technology trends, you’ve got to really understand again your business, where is your business going and what technology will enable you to get there? Right? So COVID, for example, I’m in the telecommunications business. COVID forced business operators, entrepreneurs, managers, and everyone to work from home. Technology like phones. You know, if you had a business that was still around doing phone call centers or really operating a business where people need to call in, whether it’s a doctor’s office or veterinarian. These are a lot of businesses that were affected by and that we helped a lot.

Edwin: Call centers. They had to move home. And if they’re on a traditional phone system that didn’t have this capability. Now they’re like, Oh, I need to do something about this and I need to do this now. So there is a huge, huge pain that this operator that never really felt the pandemic in their life, or a global problem realized, Oh, maybe now, now I understand what they were talking about cloud businesses, right? But when you’re a business operator, “if it ain’t broke in and don’t fix,” you’ve got to be a little forward facing in terms of where do I foresee my business going? How do I see those trends?

Edwin: But you know as a sales or a marketer, you could try to paint that picture all day, but if your prospective customer or your target audience isn’t feeling that pain or just worried about making the next sales – that’s why people who go into business. It’s nice to be on the sales and marketing side, because that pain every entrepreneur needs, right? But then again, there’s a billion like SEO agencies. There’s a lot of them, right?

Sean: Yeah, for sure.

Edwin: So that’s sort of my answer on the aspects of the changing technology, as a business leader, as a business operator, I’m not sure Pam if that actually answered your question though.

Sean: Yeah, that’s a very good perspective. So I’m going to take it from a different angle because you already gave a fantastic one. So for me, one of the things that -since a lot of people tuning in, I know you’re just trying to start a business or you’re there, you’re trying to scale up. It could be daunting because we have a lot of new technology, new tools out there, new software, new this, new that, new ways of doing things. And maybe you’re scared about things being disrupted over and over again while you’re building a business.

Sean: I’d say the change that a business has to go through should come from the founder, or the executive team, and it should come even before the pain is felt. So with what Edwin mentioned about the, you know, some businesses, business owners having to change, having to adapt. Usually when you do that, you’ve felt the pain and it’s too late. You’re one of the laggards who are trying to grasp on straws on how to improve everything in your business. And you wouldn’t want to be in that position because you’re just trounced by a lot of your competitors during that time already.

Sean: And I’ve seen a lot of companies who have come to SEO-Hacker during the pandemic actually this year, and I am so happy that a lot of them are actually one of the first movers, like no one in their industry is doing SEO. Imagine abrasives, right? I mean, who would have thought that abrasives is a big business here in the Philippines, but it is a big business and this company that has approached me, they’re going to be the first ones who’s going to do SEO, and it’s going to be fantastic because like the competition is not doing it, they’re still focused on their traditional methods. They don’t believe so much in digital marketing.

Sean: So with this company taking the risk and rolling the dice with us, we could see that they could easily rank first page for a lot of their keywords. And when that happens and we know Google and millennials, we’re looking in Google, we’re no longer asking friends for referrals. We’re no longer using Yellow Pages anymore. So we’re so excited about the leads and sales that they’re going to be getting.

Sean: So with those changes, it comes from the entrepreneur, from the founder or the executive team when you are so focused on growth, when you want to keep on improving. That’s one of the great things about Toyota right? The Kanban method or continuous improvement. They are always looking for something to improve.

Sean: While the phrase “if it’s not broke, don’t fix it,” is very, I say I love it because we don’t like people going ahead and breaking stuff. But there’s also a balance where in this day and age, sometimes you just gotta, you know, you just got to experiment. You just gotta roll the dice in an educated way, of course. And you’re not just going to go ahead and break the process without any Plan B, you know, it’s a tough thing. It’s a tough job being an entrepreneur. Super. I get it. We get it.

Sean: And Edwin and I, we’ve been there, but you have to want to keep on improving things, because time, technology, it’s not going to wait for you. You just got to try. I’ve also burned a couple of, well, more than what I would like to burn in terms of money, cash, just trying out new stuff. But if I don’t do that, then I’m not going to learn. I consider that my tuition fee and I could cascade everything I’ve learned to people within my team, which is great and helps us to improve everything. So, yeah, I hope that answers the question.

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