Building and Expanding Tech Teams with Echo

[00:00:00] What's going on everybody? Ryan Leary from WRKdefined. Before we kick off today's episode,

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[00:01:09] We have Max on from Echo. We're going to be learning all kinds of things about him and his company. Max, how you doing today?

[00:01:17] Very good. Thanks for having me. Absolutely happy to have you. So let's just jump right in.

[00:01:24] Tell us a little bit about Echo. Let's start the learning process.

[00:01:28] Yeah, well I think I should start a little bit talking about my background. How you know my path led me to working at Echo and being charged

[00:01:39] on all of the operations and business processes there. So my name is Max, born and raised in Ukraine and in late 2014 I moved to

[00:01:48] China where I spent, I'm not afraid to say amazing six years working in international trade representing Chinese factories all over the world.

[00:01:57] Oh wow, that's cool. Also that time I had a couple of personal e-commerce projects and that's probably where I acquired some solid sales

[00:02:08] communication and business skills which I later decided to apply in the tech space. So I believe that that period of my life has

[00:02:17] tremendously impacted the course of the path that eventually led me to work in the tech industry. And fast forward I will just

[00:02:26] transition how I started working in the tech space. So in 2014 I moved to China then fast forward to 2020 COVID broke out and I moved back

[00:02:37] to Ukraine. And that actually was not the main reason why I left China but we could talk about it a little bit later. So it just happened

[00:02:57] that I was a business partner and co-owner of Echo Global and now I am in charge of basically all of the operations here.

[00:03:07] So tell us a little bit about Echo, what are we looking at? What is Echo and what's the problem that you are solving?

[00:03:14] Yeah sure. So basically we help Western tech companies to build or expand their tech teams but the way we do it is by hiring

[00:03:24] software engineers within our company where they work full time exclusively for our clients and we are not involved in the product

[00:03:32] development directly, however we take all of the legal burden that comes with hiring off of our client's shoulders.

[00:03:40] And by that I mean that we cover all social benefits, tax, HR support, organized team building events, corporate parties you name it.

[00:03:51] So basically we make sure that the employees are you know they feel comfortable working remotely and feel themselves as an integral

[00:04:01] part of our clients company not like just you know another freelancer who can disappear on you at any point of your

[00:04:09] collaboration. So that's why I don't like when we are being confused with just a recruitment company because we are not.

[00:04:17] We are not. The recruitment is an indispensable part of our process but it's not the biggest value that we provide.

[00:04:25] Right you know it's interesting because we've seen a lot of movement in global payroll where you know and even global recruiting

[00:04:33] in this sense of we need to hire 100 engineers they're going to be in 40 different countries how do we get them paid etc.

[00:04:42] And your model what I love about it is it's different from that it's basically saying no we're going to hire them they're going to be a part of our company

[00:04:50] they're going to be working for you. And so you know although all but we'll make sure that they're taking care of we'll make sure that their

[00:04:58] benefits are right we'll make sure that everything's taken care of and when that project's over we'll redeploy them on another project or whatever.

[00:05:08] And does it do you go because there was a model with RPO years ago where they would put people on site and have they would have email addresses

[00:05:18] so people the outside world wouldn't even know that they weren't quote unquote employees because they didn't act like employees.

[00:05:27] I mean you know they excuse me they acted like employees. So what do you do with stuff like that like are they are they because they're in the project

[00:05:37] people need to hire them they need to scale up quickly are they are they to the point of actually you know having email addresses and just working with them

[00:05:50] you know nine to five or whatever this schedule. Yeah. Yeah so first of all you said that we work with the software developers I mean we provide software developers

[00:06:02] so our company to our customers until they finish working there and we put them on the other project that actually is not how it works in our case

[00:06:11] because we our main goal is to find customers to work with us long term. So most of our customers work with us for five six seven years.

[00:06:21] We have a lot of you know success stories where small startups started working with us on a very tight budget and then eventually they got acquired

[00:06:30] a few years later by a bigger company and overall all of our employees got really good sales bonuses and stuff like that.

[00:06:37] So that's that's how we try to position ourselves that we are a long term partner. If somebody comes to us and says look we have this feature that we want to implement it's going to take three months.

[00:06:48] We sorry we will suggest you to go either to Upwork or hire somebody directly. We still would be happy to help you to help you out with finding somebody but as a company not going to be a good fit.

[00:07:01] You know then when you look at the LinkedIn profile of ACO's employees and at the same time let's say I want to take a break real quick just to let you know about a new show

[00:07:15] we've just added to the network up next at work hosted by Jean and Kate A'Keele of the Devin Group. Fantastic show if you're looking for something that pushes the norm pushes the boundaries has some really spirited conversations.

[00:07:32] Google up next at work Jean and Kate A'Keele from the Devin Group.

[00:07:39] Our customers employees so we give a choice to do those guys to either put ACO Global or put the customers company on their profile. We don't really care.

[00:07:50] They do have both corporal emails at ACO Global dot tech and also their customers mean our customers their company but on the day to day basis they communicate more with our customers.

[00:08:06] You know we do have HR on the staff at ACO Global but his job is basically to make sure that they are happy. He has one to one sessions with them once in a while and sometimes let's say if somebody wants to move from one city to another city

[00:08:21] or just have some you know like random problems day to day problems that we would be happy to help them solve which is I also believe is our benefit because even if you hire somebody directly who is in the other part of the world

[00:08:40] you would not be able to help them locally you know even if you really wanted to. That's what helps us to maintain and keep those new hires and employees for as long as possible.

[00:08:52] So Max talk about the actual customer here that we're referencing so what makes a good customer for ACO? What's the type of company? What type of projects or what type of work will they be doing? What type of product are they pushing into the market?

[00:09:14] Yeah so our ideal customer is small mid-size company we try not to work with a huge companies although we do have our customer who's been with us for a long time it's an American company that is Fortune 500 but it just happened we just got lucky to work with them

[00:09:33] but the reason why we try not to work with huge companies because they have a lot of levels of approval a lot of bureaucracy and stuff like that's really difficult to work with because we are a small company we are not a big company

[00:09:44] and I think that's also one of our benefits because we don't have a lot of billable stuff you know that we have to pay if you have a huge company they would have inflated billable staff that they have to pay salaries

[00:09:58] and so that is your cause that's what you as a customer also will pay for you know another thing that we work remotely I'm a big proponent of remote work we do have office in here in Lviv but most of our employees work everywhere basically in almost any country in Europe or in the world so

[00:10:18] and sorry Sir Ryan what was your question? Oh the ideal customer okay so not a big company it could be an established startup not somebody who's just looking for the investments they have this amazing start up idea and they come to us I say sorry it's not really it doesn't fit our business model

[00:10:38] but if you already have somebody who is tech savvy and who understands what he's talking about when we are talking you know about technologies and product development so we can help you to build your team from scratch if you are a software engineer or the

[00:10:56] best case scenario if you already have a tech team and you just want to expand that is the ideal customer for us right so so customers can be from anywhere in the world and your talent can be from anywhere in the world customer can be from anywhere in the world as long as they have money

[00:11:13] you know but as experience shows right now we have customers only from the US and from the UK we used to have quite a few customers from Europe but if somebody comes tomorrow to us from Singapore or from you know Middle East no problem of course be happy to work

[00:11:32] and your developers the talent itself is it that's from everywhere in the world or

[00:11:38] no no they are not so because we have our recruitment department and they feel strong in Eastern Europe countries so we have a good network and good database of software engineers so let's say if you come to us and say I need here are the technical requirements

[00:11:58] we would probably have already a huge list of people that you could reach out they already know about us maybe they are working on some projects but they know about us and they can recommend somebody so the time the timeline would be much shorter than we would like you know start all over from scratch

[00:12:15] but also we do it's important to mention that we do and not only passively because there is a passive and active recruitment so we also do head hunting we reach out on LinkedIn you know we check other companies because that is also a very very important part

[00:12:33] we never have people on the bench so sometimes customers come to us and say hey I need this kind of developer for tomorrow you know for yesterday unfortunately it's not how it works and I explained that that could be actually beneficial for you as a customer because we would find somebody who really fits your requirements

[00:12:53] not if we have only three or ten developers that would be your right to choose from you know yeah but we have a base of two hundred thousand software engineers from all over Eastern Europe and that's why I think the success of the higher is much better here in this case

[00:13:12] well walk us through a scenario here so people that are gonna listen to show are they're looking for a use case that fits their company need right so you're we'll just assume they're they're in your ideal customer profile there they're in your ICP

[00:13:34] they're looking for somebody they're looking for an augmented team maybe for the next three to five years to get them to a certain point

[00:13:45] what walk us through how that works from start to finish so you they've agreed in principle to work with you what does that look like from onboarding how do they interact with the developers that you have and how hands on is your leadership with that relationship or is it just company to developer

[00:14:07] yeah sure so first of all after we have a discovery call and you know they they like what you could provide them and we agree on all the technical requirements that's I think another good thing for our potential customers that they don't have to pay anything upfront until they get somebody hired

[00:14:27] so we basically do everything for free for them we do we start the recruitment process we send them validated profiles and by validated profiles I mean not like random CVs that we found on internet it's like you know we do our due diligence we interview people we check their background

[00:14:46] to do skills testing we do skills testing yes usually if we have somebody hired within our company who has you know expertise who could do that we use our own employees for that if not we use a third party company to do the technical validation as well

[00:15:06] and also later we can I can tell you the story about why it is why it is so important to check the background like to get referrals from the previous places of work because we you know we always learn from our own mistakes and we had a huge huge incident I would say

[00:15:30] and it caused it was caused because us not checking the scum artist the con artist that we hired yeah but I would get to that so let me first answer

[00:15:43] oh yeah you should have led with that story

[00:15:46] well that's happened to everybody that's happened to everyone so it's very real

[00:15:52] for sure so yeah I just wanted to answer the Ryan's question we agreed we agreed on the technical requirements then we started recruitment campaign then we send the validated profiles so if the customer sees the profile and think that might be a good fit

[00:16:12] we arrange the interview if not no problem we would repeat the process until you know he finds so we never put any pressure like look we've send you to profiles and you don't like them why not this is a good

[00:16:24] we never try to oversell you know because that will backfire on us later on yeah what's that what's that time frame from that conversation to staffing to staffing

[00:16:35] yeah so usually we say that within within seven to ten days we would send the first profile after after a great on everything

[00:16:45] basically depending on how fast they interview and that type of stuff you can stand this up in two three weeks

[00:16:52] yeah this is actually very very important point that you mentioned William if they communicate well because often they come to us we agree on everything we do our work we deploy our resources and then we send them the profile and reply like four days later five days later

[00:17:12] and then again and again the whole process takes two three months of our work and eventually they just disappear or go to us and that's a big disadvantage disadvantage for us that we are not signing any agreement before we do that

[00:17:26] but we do that for the reason to put our customer on ease that we you know there is no strings attached let's just try it you know

[00:17:36] what could what could go wrong but also hey that's a barrier there's a low barrier to entry here we want to put talent in front of you if you choose to work with that talent yeah we know it's all going to be on a long term basis great I think

[00:17:49] I think it's an active good will it's a gesture that it's it's refreshing to hear do you do you get you get considered as staffing do people think of you as staffing or is that a bad word or like you know what's what's your bit what's your take on staffing

[00:18:10] you see my partner Lou he is an SEO he's very good at SEO optimizing so we need to talk to him for a different and I'm just kidding

[00:18:24] so so by the way off topic I just scrolled through your YouTube videos and I saw a few comments like hey guys I checked your yeah you need some SEO optimization

[00:18:36] so yeah it's true it's true so yeah so about staffing and how do we position ourselves we try to avoid to call us just a recruitment company you know right many people they perceive us as just a recruitment by recruitment we could do just pure recruitment

[00:18:53] service as well for 15% of the annual salary of the software engineer and he works directly for you we are not involved you know with you after he gets hired but people call us different in different ways staff augmentation company dedicated teams offshore teams what's

[00:19:12] what's our but basically they always mean the same thing just people have different understanding of that right yeah I you know I want to say that sometimes it's really difficult to answer when you have a discovery call and and the potential customer ask you so guys how how you are different from other companies

[00:19:34] you know right why should I work with you not with hundreds of other companies available in the market and that is that question that was on the back of my mind for a very long time and bugged me a lot you know and I was thinking how do because I always try to sell without selling you know

[00:19:56] I hate like old school you know you are looking for software engineers who would perform for two pennies a month this is your lucky day that's not how it works you know so and and let's admit there is no company on the market that would say yeah we have a never service and okay developers so please come work with us everybody says

[00:20:20] we have the best service the best developers everything about us is the best so how do you cope with that how do you really stand out we have developers if you want to pay an average price yeah I mean nice developers at all levels you want we got shitty yeah let me ask you a quick question here max so this could just be my 1990s

[00:20:46] way of thinking I do think American companies have as they've gotten more global especially small business and you know SMB's and you know with the ability to go global and do certain things are you getting a lot of pushback on having an offshore

[00:21:07] development team for an American based company then not pushback from the from their customers are just from Americans at large but from the owners of the companies that you're talking to so from the buyer are they resistant to this or are they accepting of it and if they're accepting which obviously they are because you're in business what are they most accepting of yeah

[00:21:32] do you mean do you mean Ryan the customers of our clients who find out that they have offshore team or no no no your customers directly

[00:21:42] oh no not really because I think that there is not the best option you know you could I cannot say that working with us would be the best option for you and you should do that I always give you a choice and I explain you every option that you have and what is

[00:22:00] best for for example you come to me and say we have to implement you know not a very sophisticated feature and it's probably gonna take as I mentioned before you know not a long time three six month I explain it look it's better if you hire a freelancer on Upwork it's an amazing platform have nothing against Upwork or but if you really want somebody who would be invested in your project who would feel like he is an integral part of your team then it's better if you hire through us then there is another option you can hire directly

[00:22:30] but as I mentioned before that would be more difficult for you to manage and to keep them and to feel like he is a part of your team you know so regarding pushbacks I cannot give you a certain answer because different people have different opinions and I never tried to convince them if I see that they are very resistant I would rather you know say okay look this is what we could offer please think about it and yes yes no that's your choice that's it

[00:22:59] that's the best way in my opinion that's the best way to do it don't force people into something especially you're looking for long term relationships yeah so have you been has this happened so far in terms of conversion they've really just follow

[00:23:16] the rules that worked with somebody for four years they just really really love them and now they would like for them to join their team 100% has it already happened do you have a mechanism in place in case that happens

[00:23:32] I love your question William because that is a pain in the neck actually for us we had a bad experience when our French customer back in the day we hired like the account size was 24 people that we hired him and they were that was a good business for us you know

[00:23:49] right because we are not a big company 24 people for us within one account that's a that's a that's a good deal and as you said eventually they started pushing the idea of buy out of the whole team and it didn't we sold out that we let them to buy the whole team but it was not on a very good conditions for us as a business

[00:24:12] but it's a very long story right so we always try to avoid that although in our agreement with the customer there is a stipulation that says there is an option and you can buy out somebody for not less than $10,000 but that's also another problem that we encountered quite recently actually we are still dealing with that

[00:24:36] so $10,000 it means if you want to buy out I don't know somebody who has a lower salary like a QA engineer or low entry but if if we are talking about devops that you want to get a percentage of their salary

[00:24:53] yeah one of our customers came to us and said look we really like this guy and we want to buy him out and promote him to CTO because he's a beast at what he does and then they offered us 10K and this is you know that is around his salary

[00:25:13] you become the farm system this is happened in the US too as you probably well know is someone they basically use staffing firms to find people and then once they find the people that they like they work with them for a while then they're like okay now

[00:25:30] now though either which is even worse here I'm just assuming is they'll just go around the company and cut the company out entirely even if there is a buyout they'll just be like okay quit and then we'll rehire you and we'll rehire you at this salary and you don't have to worry about staffing firm anymore

[00:25:50] exactly that's a I don't know of anybody that's in staffing that hasn't had some version of that happen to them and it never feels good it never feels good but I think a flat fee at least in what y'all do I think a flat fee is probably not

[00:26:08] like if you think of the placement fee if you were placing these people you know from as you said headhunter or executive search you get a percentage of their salary that's what the bid is a placement fee can be the same thing just thought of retroactive they've worked with you for three years

[00:26:27] you know everything about them that you need to know you've worked with them for three years you want to hire them great it's a placement fee

[00:26:34] yeah that's a good point that's a good point I'm sure that we will consider it because that's exactly what we are working on right now we are still in the middle of the negotiation you know

[00:26:42] Max if you hadn't been through that yet I'd be actually worried about the business because you're some shitty people

[00:26:50] yeah yeah yeah well that's the thing is at one point that company's gonna say we really like Ralph we really want Ralph to be our CTO or we don't want Ralph to be on the team we want to fly around the world and do a bunch of stuff with us

[00:27:06] and the relationship that you formed is not necessarily the relationship they want to form with Ralph

[00:27:11] like that's okay but like having a mechanism in place I think talking about it from the jump from the first call and just go listen Norm you're accustomed to paying a placement fee at upfront

[00:27:26] not okay yeah we're not gonna do that but what we are going to do is we'll put some candidates in front of you you're gonna like one you're gonna work with them for a bunch of long time

[00:27:35] and if at any point you feel like you want to take your relationship to the next level with that person not a problem there's a placement fee it's the same fee that you were going to pay

[00:27:45] it's made in a different place

[00:27:47] yeah and that money doesn't earn up so you're not you're not buying that employee over the course of three years and I think the so unsolicited advice now is where we get into we're gonna rebuild your business here Max

[00:28:02] yeah

[00:28:03] but it's also

[00:28:04] because it's such a curious problem

[00:28:06] it is and this is also putting you on the side of the candidate as well

[00:28:13] yeah right so your developer you're now an agent for their success into their next career move so you're not

[00:28:22] you're not incentivized to hold them back for your own good

[00:28:26] right

[00:28:26] that's right

[00:28:27] your team is incentivized to say Williams an amazing developer these guys really have grown to like him let's go get you on to your next thing

[00:28:36] we're gonna get compensated for because we're a business right and so that 20 30% has to happen

[00:28:43] that's business and both parties understand that but you're building that relationship with that developer so that when his job not if but when the job ends

[00:28:53] where he where you just sold him into

[00:28:56] you have a place to collect it to feed he's gonna come back to you and say hey I really enjoyed that engagement who else do you have I can work with

[00:29:04] and now you're gonna double triple quadruple dip on that same person just keep no different than a staffing agent redeploying them

[00:29:11] yeah but the final question for me is is without naming names and things like that just a great customer success story

[00:29:20] something where you're like you know what and you know again now without names but just the idea that they approach you to be skeptical

[00:29:28] and all of a sudden magic happened

[00:29:31] sure I just want to start with as I said before that there it's a it's not a red ocean here it's a bloody ocean with sharks that you have to find your way around

[00:29:42] you know you cannot just say that you have a good service and customer success stories is that thing that you really need to have

[00:29:49] you know when somebody asked you how are you special and fortunately we do have you know a few customers success stories that we are proud to share

[00:29:57] and so there is a British company touch stay I can name because they they are public it's it's not a big deal we talk about that on

[00:30:08] publicly on our social networks anyway so they came to us seven years ago where they were a small startup and probably today we would be more cautious

[00:30:20] starting with a small start up as I mentioned before no investments very tight on budget but you are likely to start working with them

[00:30:27] they were very tight on budget we negotiated a lot the monthly rates of the developers but we held them to build that

[00:30:35] software engineers team that are still working for them today the same team for seven years and not they they are just working

[00:30:46] the company two months ago they they got acquired by another company called a trinity and they made a very good deal

[00:30:54] I'm not sure about the figures and you know it's not it's not my business but I know everyone all parties are happy

[00:31:00] and moreover the whole team that we hire they also got very good sales bonuses so I think that's that's a great story everybody's happy

[00:31:09] and we are really proud that we help to bring them from you know from having zero customers or maybe they had just like

[00:31:17] MVP product and a few customers too because they are their product is in being real estate and traveling industry

[00:31:25] they basically have digital guidebook for gas who ran BNB's you know so when you check in you have those like Wi-Fi passwords

[00:31:34] on the you know physical piece of paper they just digitalize it's a very simple product but they really have a very good

[00:31:45] and strategic idea behind this because now it turned into kind of like a landing page builder for BNB owners who can put

[00:31:54] all of these phone information stuff like that right and it blew up they have thousands of customers tens of thousands of

[00:32:01] properties all over the world you know so that's that there you have it

[00:32:07] can't beat that Max this is awesome thank you so much for coming on sharing a little bit about the story and

[00:32:15] if you still want to do yeah like subscribe love us everywhere we'll see you next time