How To Build an Offshore Tech Team & Transition Challenges

Colin and Brent discuss all things tech. How to build an offshore team and limits of tech debt.

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All right. Hello and welcome back. This is Colin Keeley here,and I'm Brent Sanders. And we are two guys buying and building wonderfulinternet companies indeed. And, we've had a lot of tech stuff happen in thislast week, or last two weeks. Have, as you can probably hear, I've caughtwhatever virus that's been going around, at least Northern United States, whichis like this two week cold, which I feel fine.

I still sound pretty bad. Over that two week period, we,wrapped up like the most of our quarterly goals for for Scout, which is the bigones, moving to Stripe for subscriptions and then moving to Stripe for paymentfor our customers. And we just shipped that yesterday, which involved a lot of,going through old code that hasn't been touched in, like years that we probablyshould be more careful, with deploying, but we, we dug into it and I think wehave a great deal of confidence despite not having any tests or anything,manual testing, but, Yeah, we got it out and and done and I'm excited to, tosee the change in, in, how customer behavior goes, signups go.

I think it's gonna be a, a huge improvement from Braintree,which was just awful. Like, I don't know if you did any like liveexperimentation with Braintree, but like the amount of declines that they have,it's like crazy. And I don't know if it's a fraud thing, but I was going on,our customer accounts like that are very reputable.

They process tens of thousands per. , regularly and just addinga new card, it's like declined in a, it's a good card. I know. It's, it'slegit. And I go into brain, I mean, I don't have access to see everything, butyou do it on Stripe and it like, it works and it's, I don't know, it's just adifferent level.

Yeah. So just to put it in perspective, if you onboard andyou're like, you have to sign up. You have to sign up for us, and you have tosign for Braintree, and the previous owner had a, blast out from Intercom, justan automated email basically. Apologizing for Braintree and saying, that'sright, whatever issue you're running into, cuz you're 100% gonna run into this.

It's an issue on their side and this is how you fix it. Andlike this is the workaround. And so that is the signup flow for Scout, or atleast it has been, for the last five years or whatever. So it felt really goodto turn that off because it's been sent out like, I don't know, a thousandtimes or something.

Yeah. To every single person that's signed it up for. . Yeah.So despite that, I mean the, the fun part about this was we got to touch everysingle part of the platform. So there's, mobile apps for the pet parents,mobile apps for the dog walkers, the app, the web app for the business, the webapp for the pet parents.

Like everything now has the same code and same Stripe updates.And then we got into the, they actually have separate billing microservicesthat this is where, code hadn't been touched in in quite a while, but, we, it'sfun when you, it's like the most rewarding part of software engineering issometimes like you're given no documentation.

we do diligence, we make sure things work and that they'reinsanely put together, but, then you get to, actually change it and, manifestsome for sort of confidence around it. , happens. It, it takes longer than thanwe expected, and at the same time we're supporting, live users, which is kindof the challenge.

I think that's been one of the challenges in that project.Where, versus any acquisition? I mean, it's just our third, but that one's beenlike since day one, support's been like, there's always activity, there'squestions, requests, changes. It's super active, which is a testament. thecustomer base, but also the, the interest there is in that product.

Yeah. I mean, that's the thing with like business managementsoftware for X is like, this literally runs their business and they touch it,know, a hundred times a day. Yeah. So yeah, customer support's been wild. Ithink that is also the potential of like, we're charging these people like $30a month to run their whole business.

Yeah. And, contact us every day. So there's a lot of, spacethere to do other things. This is an interesting one. I mean, you always thinkit's just like, all right, we bought something, add sales and marketing off tothe races, and there's always a big tech lift. This one I guess was also, webought it from a very technical founder.

Is that a little different, I guess, from your perspective atall? Yeah, I, I think, the transition from this founder, I mean, so there wastwo things here that were interesting. One, it made me appreciate. How muchwork that he put into this. And I actually even asked him like, exactly howlong did it take?

Cause there's so many code bases, there's so much code in thosecode bases. They work, right? Like there, there's very, like the quality of thecode's very good. It's just not tested. So certain best practices aren't, and,and you won't find many startups that have like great test coverage. Althoughwe've acquired companies that have great test coverage sometimes.

So just kind of luck of the. But yeah, he wrote everythinghimself. I mean, I think he hired some help here and there, but like, it'sbeen, I was blown away and thinking about like, other ventures that we startedfrom the beginning of like, I always limited, like, I'm not gonna do this untilwe get certain amount of business growth.

And I think he just built all this stuff and it was there and,and so it was, I think the transition was, was good, but the way that he. ,structured the code was, was beneficial. And I think that was one of the thingsin diligence that we saw is like, he broke apart the billing service. He brokeapart the payments, or, some of these things were broken into smaller pieces.

So yes, we got them in sort of, not shambles, but in like, thisis just how it is and there's no tests and there's no, we can't run it locallyand, good luck trying to get it kind of tested and working. It's always, know,you can always look into production and be like, okay, what's going on there?

And how do we kinda mirror that? But, the, the challenge is,you have to be technically yourself. And I think there's also a benefit thatI'm lucky to be the age I am, because a lot of these things were built, andI've mentioned this before, a lot of these things were built during like, myprofessional years.

So it's like I'm aware of, the, the issues and the, theversions of things. And so I think it's been. It's one thing we've been able tonavigate quite well. We've bought very technical businesses. I mean, they'reall software companies, but some are a little bit more boxed up and tidy thanothers.

And that's kind of the fun part of this is like digging intothe, the puzzle and getting it put back together. So I don't know, I don't seeit as been like a major challenge for us. I think that's one thing we've beenkind of lucky with is. The other thing is I've, I've tried to always keep anopen line of communication.

The seller or the, the tech founder. So with Scout, like we get90 days, we negotiated what I even said to him. Like, Hey, let's, let's keep aconsulting agreement open. So if I have questions, and man, he's shared a filewith me that like would've meant the difference between rewriting this wholeservice or, using what he already had.

And thankfully he's like, oh yeah, I meant to give you this.And it's like, yeah, that's the key we were missing. So that was good to haveand, and I think keeping a. Relationship open is vital. And part of that isincentivization through deal design, right? Like a Yeah, I think seller note isa, a big part of this.

It's like, hey, we're all on the same team and we don't doearnouts typically. So, but I can see that being, keeping that person around.Cause you never know what, it's just a password or a file or something that youneed to unlock, past. . So I'd like the spectrum of tech debt, right?

There's always some form of tech debt. I, what's the extreme ofit? Like what would be too much that you wouldn't take on

That's a good question because it's like, I feel like we takeon a lot. I think it, it, it's a matter of like, we even have situations wherelike, we're afraid. , not afraid, but like, we wouldn't want to touch certainservers like a database server because it's like the only one running, at thetime of acquisition.

There's, there's situations like that. I think that's the, thescenario where it's like, do we feel comfortable like restarting something anddo we think it would not come back up? That's usually the line I would tow.It's like, okay, this isn't stable. to restart it or like, can't come back online.

That being said, I mean, we're, we're in a situation where,we've acquired something and then there are ways to, like, for example, like adatabase, you can put things sort of in front of it. You can add a replica,like we've learned these techniques to take like either outdated or fragile orbrittle systems and, add redundancy to them, add backups to them, add thesethings that give us.

There's mitigating factors that make it feasible, but like ahard and fast? No, I'd say it probably would just be something that's likestill suffering from like a known security issue. Right? Like, what was the,the most recent Java related one? I forget the name of it, but you know, aseveryone was patching Java, so making sure those things aren't there, but you know,that's the basics of our.

Yeah, because I, I'm always looking at Constellation and Ilistened to an interview of another one this week and like, they'll pick upthese companies for just super cheap and it seems like as long as they're,throwing off cash and they're like putzing along, they'll take on basically theworst of the worst.

As long as they're confident they can keep it running andthey'll just shut down all innovation and running for cash flow. But I'm notthat technical. I don't know what the extreme of that is. And when you justlike, ah, this is impossible. Yeah, well, I think that that's one thing to say,Hey, if you're just gonna run it for cash flow, like with all of ouracquisitions, we're, we're taking a pretty heavy hand.

Like we're coming in and taking a, we're taking out Braintreeand swapping that. That's a pretty big, if you think about what, in the domainsof what Scout does, billing is a pretty huge domain. So to rework that with adifferent payment service and it all, the response is, everything works differentlythan, than Rachel, I mean, roughly.

You're sending something to be approved or not approved, butyou know, it, it's a pretty big change. Same thing that we've done withautomatic and, and with Blink Cell. Like we've, we've gotten very involved in,in that. So it's like, yes, could you pour concrete over it and say, Hey, we'renever gonna change it, but we're just gonna cash flow this.

And then if it's really successful down the line, maybe we'llrewrite it. But, I don't think we look at things. Like, we always want to beable to work with it. Cause I think we see, it's a slow growth, like a slowprocess to do all this. But like, I think we always see, hey, there's gonna besome improvement.

But, I could see like gov tech software where it's like, or. Thereare certain domains where you just don't want to touch it, keep it running, andthat actually there's a, a lot of like advancements in that world ofcontainerization and things that you can do to costs. Like that's a reallyinteresting thing.

I don't know if you saw this recent update from the 37 Signalsfolks or David Hander Hansen was, a very like triggering figure in, in theTwitterverse, but they've been moving all of their infrastructure off the.Right. Yeah. And so this idea of like doing all this containerization and doingit on your own infrastructure, I think that's really interesting.

I think that's where we're gonna end up spending a lot moretime is like, yes, things are on clouds right now. Moving them onto our owninfrastructure on our own data center. The cost at scale are the, the costsavings are huge. I mean, they're, they're massive. I mean, think about. , oneof the biggest things we pay for with automatic, which, we have a good way ofgetting around it, which is run it, we a allow you to run backups on your owninfrastructure is traffic and you don't really have to pay for traffic as much.

as with cloud hosted resources, it's very expensive to passdata around in someone else's infrastructure. So all those things I think are,are directions that you can go with not having to touch the code and you justkind of containerize this old code. You can optimize it in other ways to makeit more attractive, more appealing to get that, squeeze that growth out of it.

Yeah, I think he was, he was saying they're gonna save over amillion dollars a year by moving off the cloud and it's like basically the mostimpactful thing they could do. I mean, they're not gonna cut 10 people orwhatever. And this is kind of an easy thing, so he's all about it. He's beenposting about it nonstop for like six months.

That's like all he talks about now. I, I wouldn't be so likeboastful. I mean, he's, that's his, his thing. Like I would be super nervousaround telling everybody about that because it's like, the redundancy, I guessyou're, you're, he's a super confident guy and I'm sure he's, he's a smart dudeand knows what he's doing.

But yeah, I mean, we, we have AWS outages that, would beavoided. I mean, it, I don't think it's, I, I think it will be shifting back inthat direction and I'm excited about that because that's, kind of the world Icame from, co-location, all that stuff of, having a server and, and having ateam down at the data center.

And that seems like a, a, a good advancement. I'd like to seethat more companies do that. I guess, sorry. No other questions. shout out toJeremy Jackson, one of our listeners, for sending over some questions in their,almost all technic. So this is the, the Grilling Brent episode. Love it. Thisother question was along the lines of, nearshore onshore, how are you thinkingabout scaling up the tech?

Yeah, sure. I think it, it depends on resources in my mind.Like, I think there's always, as I've gotten glimpses in some firms, like they,they are all offshore or all, below a certain dollar amount. So it's like youcould be onshore, you could be nearshore, you're just gonna get paid a certainpoint, below some tier.

The way that I'm thinking about it right now, So we, I think Imentioned this in prior episode, we, I've, I've hired an apprentice, so payinga little bit more for full-time help that can really allow me to leverage mytime a little bit better and leverage them and investing in that person toscale up.

I mean, I think that's one thing that I'm seeing, like a lot ofvalue of it. And that's kinda always been happening as we've talked about inpast episodes. But then there's like, what do you do when you have, a ton ofwork or you wanna do a. of an entire application. I think that there, there aresome advantages for like, hey, you're just going to need three to four peopleto do something, or two to three people to do something, and it's not going torequire a lot of, back and forth.

So the, there are, that those are, in my mind, those are likethe great spots for offshore talent is give them something that can be, sort ofmodular, right? Give them the entire pieces. And that's where we've seensuccess. Where it's like, hey, we want to. from this version to that versionand it's, it's pretty straightforward and it doesn't require a lot of back andforth and it has test coverage, so it's like you just need someone smart to doit, and it doesn't need to be like a lot of meeting around it and it can bedone asynchronously.

I, I think the stuff that kills me is the, Hey, we have to havea conversation almost every other day about a tricky issue or a product featurethat's like, partially baked or is going through iteration that it's just toohard. It's too hard on, on me to show up at like, eight, nine in the morningand then be like, Hey, you get one or two hours or three hours at most toaccomplish this in order to unblock the next day, and otherwise you losemultiple days.

I just think from a, like a product management perspective, it,it makes my life miserable. Yeah. And so that's, that's where I'm seeing a lotmore. , I mean those, the time zone changes or the time zone's difference isjust tough. I wanna start hiring some folks in like South America. If you everwanna visit them, it's like a five hour flight instead of like, 20 hours to goacross the world.

And around our time zone. But so I've seen people had successthere. A funny one recently is I've been looking for a good webflow developeras I've, like, reached the limits of my ability to do some stuff on there. It'snot all no code. It eventually turns the code and then becomes a problem. But Ifound a really good one in.

But it's Ukraine, right? So it's like he runs into issues andhe kind of disappears for like two days at a time. So it does really good work.It's kind of cool like to support folks over there. But like, he hadn't gone tohis office in I think a year until somewhat recently because apparently if youwalk the streets, I think he's inky, aver, like one of the big cities.

They would just take like able-bodied men of like army age andlike draft him into the army. Yeah. So he wouldn't leave his home. Cuz hecouldn't risk it. He didn't wanna leave like his. So, but yeah, he's, yeah,doing great work over there. Just, in the midst of a war. Yeah, man. That's atrip.

It's not great. I mean, we have a, a family that moved here,local, actually it's a relative, good friend of mine's, cousin, she has familyin Ukraine who's been distant, but they moved here. They were able to, the, thewife and the son were able to move. , the father was able to move and I thinkhe's still working out his visa issues, but he was able to leave because of amedical issue or something.

So they're very happy to be here. Like literally, I think theday after they left their apartment building got bombed and they're like,there's no g. it was in the middle of, this was like two months ago, I think itwas middle of January and it's like no windows, and the building was fine. Itwas like next door got attacked with a missile, but there's no glass.

Imagine like living through 10 below. And there's no, you haveno windows. It's like, fuck. So very grateful for our, temporary safety and,yeah. Anyways, he's a super cool guy and, his son is, is, has become friendswith my son. He's working up his English. So yeah. Shout up to Sacha . Yeah,it's a trip.

Anything else you wanted to cover? I don't really have a bunchelse. Yeah, no, that's about it. I mean, I think we've, I've been super headsdown. I think I'm really excited. This has been a really busy last three monthsof like hands-on, low leverage work on both Automatic and scout and it's,we're, we're finally starting to get some good talent in and get people inplace.

And, I'm excited to kind of pick my head up a little bit moreand, and start working on some more strategic things. . Yeah, I mean, just likerevenue-wise and business-wise, things have gone about as well as possible. Imean, we haven't talked for a few weeks on this podcast, but like things have beenup, everything's going well, like a lot of stuff we've been working on.

Finished some fundraising, got some money in the door. I'vebeen doing taxes, which has been just horrible. Bookkeeping, taxes and likeclosing a round of. , it's just like I'm in paperwork, hell I had to walk so Idon't have a printer, right? So I had to go to a coffee shop and print stuffand then I had to go to Notary at Chase cuz Chase is never use, I guess youcould use.

So I had to do that and then I had to scan, cuz you need a wetsignature of course for the s sec C for some reason. But yeah, then, insulatingyou from all that mess, but getting through it. Thank. . Yeah. Thank you. I, I,I just like let it pile up on my desk until it's as late as humanly possible.So you don't want me doing that stuff.

You'd rather have it. I could push code a lot faster. Yeah. Ihate it. But yeah, it's been, it's been good. I actually, we, we could talkabout, some updates. I don't wanna get in, in too far of detail, but like, we,I think one really validating thing or, or cool thing that felt like Moneyballa little bit, like, you start losing.

We, we've been working on this stuff for automatic, like theonboarding flow and we released some features that it was all a theory and wewere kind of like working for months on this theory of like, it's gonna beeasier. It's gonna be easier, we've gotta fix the funnel, fix the funnel. Andsure enough, we released the features and the funnels fixed.

It was like super validating and rewarding to see the numberslike start to just go way up based on that. I. I don't wanna talk intospecifics, but it, it was like all based on, and it's funny, this happened alot in venture deals were like, we talked about, okay, we need to work on this,work on that, and you saw some changes, but this was like a very drastic changeand it felt like an outsized win because of all the work that went into it.

So I, that's a kind of the first time that's ever reallyhappened where it's like been a resound. Success from like a feature. Usuallyit's like, yeah, there's a feature, but there's also sales and marketingpushing on it, which we're doing, but it definitely feels like a markedimprovement and that that feels awesome.

Yeah. Jake Curve is always like a theoretical thing whereyou're like, investing, investing, investing. There's a natural drop and then,in theory it's gonna rock it up at some point and, but that's exactly what thechart looks like. It's like, yeah. Down, down, down. Shoot up. Yeah. Just thatone like inflection point.

Yeah. So that's been super cool to see. I know. Competitorslisten, so we won't give any like, future product advice or product thoughtsthere. . Yeah, this one felt good. I got one other thing we should talk about.I forgot to mention this, and we didn't talk about this, we didn't really prepfor this, but I don't know if you saw the, I think it was the CEO of ChartMogul talking about Baremetrics posting their, their, having their books open.

Did you see this tweet? No. It, it was super inter, I'll shareit with you, but to paraphrase it, he basically, it was kind of a savage thing.So I'm, I'm in my, like, the Twitter t. But he basically was saying, one of thebenefits from working in Open or, opening your books up to everybody like Joshdid and from Bare Metrics is like, you get some notoriety and maybe you'll getsome, some new people to sign up.

But he, he was saying one of the biggest disadvantages is yourcompetitors see exactly what's going on. And they, they were basically lookingat their numbers being like, okay, what we're doing is working, we're seeing, Iwon't get into the, the exact trends, but they were taking a ton ofintelligence from.

and knowing that they were able to double down on what wasworking and they could tell what wasn't working for them was working for, forChart Mogul. So it was very interesting and it kind of was like, little bit.I'm wondering like, why would you even say that cuz like, what's the upside inkind of shitting on that?

But, if you look at like Chart Mogul started after them. Theirfirst sale was later and Bear Metrics, and they just saw this, this number,it's probably related to. , they had that big price increase. Were they, didthey double their prices? Yeah, they double their prices and it looked greatinitially, and then it's basically declined since then.

I haven't checked, I think it's probably still declining as it,that seemed like it's gonna be hard to overcome. But yeah, that whole space iskind of crazy. I mean, bear Metrics sold for like three or 4 million inProfitWell. A competitor ended up selling for like 300 million or something. Itwas like a, a hundred x difference.

Wow. Yeah. And then Stripe is, is kind of eating in that space,which is scary to play. But anyways, it was an interesting tweet where this guywas like, maybe you shouldn't be sharing, these de like that level of detailcuz your competitors are basically feasting on that data. I think it's so dumb,so profit.

Well, just to correct myself, sold for 200 million. But just, Imean, building in public, in saying your revenue, especially once you getbeyond like 10, 20,000 a. And like, it's clearly a success. You're justinviting like a million competitors because there's so many people out therethat are good at building and just have no idea what to build.

And as, as soon as you say like, Hey, build this, it's working.You just like, there's a lot of sharks kind of hiding in the water. And so Iget building in public until it starts to work and then you should shut up.Just don't talk about it anymore and just like do your thing and continue togrow. Yeah.

Yeah. He was saying, I'll, I'll share the two you with you. Ibookmarked it. But it was like being able to see the numbers allowed us to seethe results of certain pricing changes and their experiments and avoidessentially mistakes. And there's just like kind of a, a ruthless, I guessthey're showing their mri, I guess now they are showing historical, this isback in 2020, so it's not terribly, wild.

But they're showing their MRI just like vastly exceeded. Imean, they were up. Looks like nearly 400,000 in 2020. Yeah, it's aninteresting space cuz profit well is free. Barometric is, I think nicer, butsuper expensive. So I'm not really sure why anyone would use barometric really.Profit well makes money when they, they have like retained their differentfeatures.

So if like people are churning cuz their customer like creditcard expired, they'll like bring some back and take a percentage. I thinkthat's a better business model. . That's great. I mean, I would pay for thatall day. And we, as we do, I think yeah. we use it and it's, it's well worth ittrying to chase people down.

It's like, Hey, we'll split this with you happily. Yeah. It'samazing how often those cards expire and I think they get like, something likeonly 20% come back and maybe with profit, well, it's like 80%. So it's like a,it's a pretty big difference. Cool. Yeah. But yeah, no, that's, that's prettymuch all I got.

It's Friday. I think we we're gonna start moving this to, moreof a weekday, middle of the week to, to improve our, we've been kind of, sparseon our updates. So, here's to some more, regular releases of, of new episodes.Yeah. Friday recordings just dangerous. It's easy to punt and then you'repunting for like a whole week instead of like, oh, we'll just do it tomorrow.

So yeah, stay tuned for more consistent episodes going forward.Sounds good. Well, thanks for listening. All right. See you.

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