Search Interviews:

Jeremy Weisz 16:44 

While the share DevStats with Sujan, maybe he’d be a good customer for DevStats. We were chatting, Phil, before we hit record, and you said something very interesting, which is, there’s a lot of money to be made in boring businesses. So what did you mean by that?

Phil Alves 17:03 

Yes, I see on my own company, there’s like, a lot of boring niche that because like what we see in the media, while we say what’s cool, now everything is about AI. And everyone thinks that if they’re going to start a company, they have to start AI company, like just a couple years ago, everyone wants to start the Uber of whatever, right, it was, like, let’s start the Uber of this Uber of this Uber of that, and that was the cool thing.

Jeremy Weisz 17:25 

You see these trends, which is interesting, they probably like, hey, by this idea, we want to do the Uber of fill in the blank, right, and now you’re getting we want to do the AI of fill in the blank.

Phil Alves 17:36 

Fill in the blank. And the real money to be made, especially for Bootstrap and if you are not raising hundreds of millions of dollars, it’s a boring in business, like we have customers building software, for carwashes, for accountants for financial advisors, for inventory management, like those more boring industry, car fleet management. So it’s pretty boring, but that’s really where the money is, and is where the investments a lot lower. And that’s where I see a lot of SaaS successful.

Jeremy Weisz 18:13 

Talk about inventory management for a second, there was a company that you worked with that went from start to exit.

Phil Alves 18:25 

Yeah, so that was a very cool example. So the guy came to us was his third or second business, he already had a couple exits, and smaller exits. But he now wants to do the software in a space that he knew very well, because he was in retail before. And then he knew how complex was to manage inventory in retail. And he was like, there were certain tools that I wish I had when I was running my previous business. So we helped him build those tools. He knew the conferences to go that he knew what people were going back to our like our stock in the beginning, he understood the market. And then so he was able to grow his SaaS to a pretty good size, and then he exited that company. And it was a great exit for him.

Jeremy Weisz 19:10 

Any lessons to be learned our mistakes that you’ve seen with either when you exited. Or when you’ve seen some of your clients exit with lessons learned.

Phil Alves 19:23 

Guess the lessons learned after the exit if the customer is after the exit, they’re good or they’re away, they’re happy. Thank you, mate. Help me get rich.

Jeremy Weisz 19:34 

I mean, I mean during the exit, like through the exit process of they’re in discussions and I don’t know from your experience, what were some of the challenges n that process or lessons? Yeah,

Phil Alves 19:51 

To be honest, I’m not expert in exit M&A. I’m not part of the process. Usually the only part we do meet with their people, they’re gonna come and they’re going to look at their codebase, they’re going to make sure it’s all good. And every time that one of our customers went to an exit, and they have an audit of the code that we wrote, they were like, this is very good. This is test-driven. This is a scalable, so like the technology side, I could say, build things that are easy to maintain, and that they can actually be okay in audit, but I don’t know much about like, the whole process of like, getting many offers decide on the LOI, I’m not expert in the area, but I could talk about the lessons that I see people write before. And when they start to scale. And it’s kind of like related to what we were talking about the boring business, like, I see companies going too quick after the next hype, like, oh, the next technology, the next hype, I have to do this, I have to do that. And then they put millions of dollars into chasing a hype, where that money could be spent on growing their business that they already have, I actually have seen more companies go out of business, lost a lot of revenue lost 50% of revenue because of chasing hype than I started, companies got a business because they didn’t develop fast enough, we’re all too afraid of falling behind. And there we go the other way around. I mean, I saw when we work with our VC fund companies, multiple CEOs get fire, because their vision was like, oh, you have to chase, chase, chase their hype, and then they don’t chase growth. So, that’s kind of like the lesson, I think we have to really be careful with the shiny object syndrome, you are more likely to fail because of that, then because you fail to develop and to adapt, because he got outdated, but we’re so afraid of being outdated.

Jeremy Weisz 21:53 

What have you seen as far as people striking a balance between the innovation, like people don’t want to be left behind? Right? So like, innovate, but then you kind of lose focus sometimes on what’s growing currently. And I know Google essays really let people work on a certain percentage of time on separate things. What, in your experience, have you seen as a good balance between okay, we should probably look to see about this new stuff and the innovation that’s going on, but they focused on what is working now.

Phil Alves 22:38 

That’s very challenge to strike the balance. And that’s why we see founders get replaced with CEOs. Let’s look at Apple, for example, when Steve Jobs was there, there was a lot of innovation that the founders kept getting better. He died. And then you have Tim Cook. There’s zero innovation since them apple, but it grew so much. And they made so much money, because there’s just different skills is the person that capitalize and the person that innovate. And I think you have to see which stage am I? Am I on the stage to capitalize or am I on the stage to innovate, and maybe if your innovation is already going, you have to stop kind of like going in circles, okay, I’m gonna innovate again, I’m gonna innovate again. And you have to realize I’m in a space where I have to really double down on this thing that I already figured out on this market that I’m already good at. But that’s the reason why founders get fired because founders find pleasure, and, like, keep innovating, like and keep taking big risks. And you have to keep developing, and myself, I think, if anyone on company has to keep growing, there’s gonna probably be going to be a size, that I’m not going to be the right leader for. Because the bigger the company, the less risk you should take. That’s just the reality.

Jeremy Weisz 23:57 

Can we talked about a startup, Phil, went from zero, a figure exit. Let’s talk about VC. Right. You’ve helped people go from idea to Series A, and what you did with that, I think there was one in in the dental space.

Phil Alves 24:14 

Yeah. So they first raise like a seed round with family and friends. And they decide they would focus on what they knew they knew that space well, they knew what the dentist wants. And they would outsource development. And I think here I would like to talk about like a myth that you need a technical founder. That’s not true at all. I have seen a lot of companies make a lot of money and without a technical co-founder, because what matters, it’s your knowledge of the market your knowledge of the industry, can you sell. So this specific company, the founders, they were not technical, but they were very good salespeople. They’re very good marketing people. So they left development for us, and they went into sold their product. And they sold the hell out of the product. A lot, we kept moving quick, who kept developing and kept working very closely with them. And at some point, it made sense for them to raise Series A, they raise a bunch of money. And then with VC fund like, especially after you raise series A most likely they’re going to tell you hey, that’s okay that you start with an outsourced development partner, but you should bring your in-house team now. And that’s what happened. And have done that same journey multiple times with multiple customers that, again, went from idea all the way to Series A. And even customers, sometimes they found the first version and then the raise series a others were able to raise even a seed round. Unfortunately, the investors today still a lot of them have that mentality, you don’t have a technical founder, you’re not going to make it. So I’m not going to give you money. But that’s not true of what I see in the market, I don’t think is required to be technical, to launch a very successful product. Actually, technology nowadays is not a big risk anymore in building b2b SaaS products, the risks are others used to be like 20 years ago, when people were building Google, that was a huge risk of technology. But technology is not a risk anymore. And that can totally be outsourced for a competent development partner.

Jeremy Weisz 24:27 

What are some mistakes people make when they’re creating a SaaS business?

Phil Alves 26:34 

Too many. I think mistakes are part of the process. But maybe there’s too much too many features on version one. That’s one and then another hour, the features are great. Their vision is big, but they don’t realize that they have to build a tool before they build a platform. That’s a big mistake. Another mistake I see is overcomplicating and overengineering, I see that a lot. Now we’re going to be huge. Here’s the reality, only half percent of every SaaS business is going to hit $10 million in revenue, and so on until you get there, you should not worry about scalability. But people like spend all this time and money thinking about how they’re going to scale and over-engineer, everything from the actual software, to their operations, to the customer retention departments over engineering is definitely the number one mistake I see people doing, making.

Jeremy Weisz 27:34 

What are their most common things that the clients you work with or start to work with push back on, right? Because you’ve experienced you’ve worked with, you’ve developed your own, you’ve hundreds of customers, but it doesn’t matter what you say sometimes, they may be like, Phil, we need to make this scalable. Like what are the most common things they’ll push back on even though you’re telling them from my experience, I would not go down this road. What are some of those preconceived notions? What are people pushing back on you even though you’re telling them?

Phil Alves 28:10 

Yeah, we’ve got a lot of pushback, we need to build a bigger product to go to market. That’s the number one pushback that we get. And you’re like, no, we don’t, we have to configure someone that is going to add a value right now. And we take that to market, sometimes we’ll get pushback on like our very simplistic approach to developing products and the technologies that we use, because they hear in the news that technology X or Y is the best. And it’s our approach to not be beta testers of anybody. So we work with modern wow, established frameworks. And like, oh, we hear this thing that just came out yesterday is the best thing on earth. And realize, oh, so many technologists come and go, we stay where we believe is the best place that’s going to be reliable for you. And to be honest, we are in a place where we’ll really try to understand if the customers from the beginning if we can be in the same page so we can work together. And our customers appreciate the pushback, and they appreciate us helping them and being like real partners not yes, yes, yes, man. Because, like, I feel like there’s a lot less value. If we just do what they tell us to do. We’re like coming as a consulting firm. I like to say we are not glorified staffing agents. If you go online to find developers, most companies are glorified staffing agents. We are actual consulting firm, and you’re going to consult and you’re going to push back, and you’re gonna tell what we think. And we might even tell you, we’re not a good fit for you. If we really believe that the direction that you’re going, it’s not going to put your product in a better position.

Jeremy Weisz 30:02 

You’ll consult with them, but you also supplied your in-house developers to work on it too. Yes, for sure. Yeah. What would you say? Well-established frameworks, what are some of the frameworks that that you like?

Phil Alves 30:17 

We’ll have to develop in Laravel and the back end, and Vue js on the front end?

Jeremy Weisz 30:25 

Phil, I would love to hear your favorite software’s.

Phil Alves 30:30 

My favorite software. Okay. I love Notion. I love PHP Storm. It’s a thing that developers use. I love DevStats, my own product I use all the time. So it’s a very good product. Let me see what other products I use. Every day.

Jeremy Weisz 30:54 

What else do you use, yeah, internally with the team?

Phil Alves 30:58 

Slack’s a very good product, really like Slack. So the CRM that we use here is HubSpot. Think it’s a very good one. very simplistic. Yeah. But those are some of my favorite products.

Jeremy Weisz 31:14 

I love it. I have one last question, Phil. And before I ask it, I want to just point people to check out DevSquad,, to learn more about what you’re working on, throughout your journey from starting selling a SaaS company starting, you know, DevSquad, and also DevStats, what’s been a proud moment that sticks out for you?

Phil Alves 31:41 

A moment. I’m very proud of the DevSquad, it’s been growing since the beginning. And it’s able to bring jobs back to Brazil, where I’m originally from, we have a team here in Utah, or there’s about 10 of us where I am right now. But the majority of our team is in Brazil, and we really send millions of dollars back to Brazil every year in jobs and giving them opportunities for people that would be harder for them to have. We have a lot of people that started a career at DevSquad. And so it’s something that I really like and I find a lot of pleasure on seeing how can change a lot of people’s life and give the people their first jobs and their first opportunity. So this was something that I’m very proud of, of like being able to build a company and a company that stable. Of course, we never know what the future but as hard as the market is right now and with all the layoffs that happened in tech, DevSquad has not done a layoff. So it’s super cool to be able to run a company that’s stable, that’s profitable. And that’s helping so many people here in United States but also in the country where I’m originally from.

Jeremy Weisz 33:04 

Phil, I want to be the first one to thank you. Everyone can check out and to learn more, and we’ll see everyone next time. Thanks Phil. Thanks, everyone.

Phil Alves 33:13 

Thank you.