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27 Comments

I started a software development agency a year ago. AMA

  1. 3

    Hey and thanks!

    I did the switch about 10 years ago from a 9 to 5 job to be a FullStack developer (I go from the idea to deploy to production), I have good clients and a good income, I'm from Mexico, and 95% of my clients are located on the USA or Canada.

    I've been looking to grow, to this day I've been a single showman, I plan, I design, I do the backend, I do the frontend, servers, CI/CD, and I want to start to delegate so in the future be only the manager and get a small agency running.

    One of my biggest challenges until now to make the transition is to find proper developers, designers to do the job, so I'm curious what is your interview process and what profile do you looking for to create your team?

    My biggest fear is to get Jrs and spend more time training them than make work for clients.

    Chers!

    1. 2

      Hi, Enrique! Thank you for your story.

      It is great that you do everything from design to deployment. It will help you understand how this business work. So, it would be easier for you to delegate and clearly describe tasks.

      Personally, the team is 50% of agency success; the other 50% are your customers. I chose tactics with juniors because I didn't have enough money and clients to pay for superpowerful developers and designers.

      Therefore, I actively mentored juniors. After a few months, they started delivering great quality. I gave them all of my time and efforts before pushing to real clients.

      For a tech guy like you, it would be easier to interview people. I have the next interview process:

      • I post a job on the Djinni —Ukrainian job board. They have a lot of qualified interns and juniors
      • Send a form with basic questions to potential candidates
      • Test task. It is a real app candidate should finish in two days or so
      • If all is OK, we move to the technical interview
      • The best one gets the offer

      My typical profile is a student from a tech university with great analytical vision and a fast learner. He knows React.js and design basics.

      P.S. If you want to start with juniors, you should be ready to assist a lot and be right there along the way.

  2. 2

    Hi Ilya! Your story inspired me. Also, my friends and I ran my agency some time ago but without Upwork. Not so profitable as yours :) I'm interested in how you are handling Upwork's client's pipeline. Are you responding to the jobs from the personal account, or you're using a company account? I heard it's hard to act on Upwork as a company. Also, are you using the Upwork app with screen screenshotting?

    1. 1

      Hi! Thanks for your questions.

      When we started, we responded from a personal account only. So at the start, it just works better than when you respond as a company. But after one year, we were actively using both.

      With each of our customers, we discuss that we don't use time trackers and screenshotting apps. The main reasons are privacy and because it isn't comfortable for developers.

      From my experience, developers work better without them. So you need to build trust and automation around them and always be in touch.

      1. 1

        Thank you for the answers. Very clear. I think maybe in several years, I'll go back to the agency business.
        Good luck to you!

  3. 2

    How does running an agency (managing, recruiting, sales) compare to dev freelancing in terms of (1) working hours and (2) how much you earn per hour?

    1. 2

      Hello, Panos. Great question!

      When you start an agency, be ready to work 12+ hours, even on the weekends. Freelancing is a little bit easier to start, and you can chill on the weekends.

      In terms of managing, I have 9 projects and 7 people. It isn't hard because, for each project, we have some set of rules, so right now, it takes around 4-6 hours of my time. When you are freelancing, you need to manage yourself, and you can get two projects, and it would be enough.

      Recruiting is key for an agency. If you can hire great people and grow them, you will get the best workers you won't hire anywhere. When we make recruiting campaign, we usually dedicate around two weeks to complete the hire, sometimes it takes one week and sometimes even a month. For freelancing, you don't need to hire, so you don't spend time on this.

      The sales process for freelance and agencies is very similar. First, you need to have a strong profile and landing page. Next, you discuss the project by text, make a few calls(introduction, technical interview, or project details depending on client), discuss priorities, make an offer, and sign the contract.

      When you freelance expert, you can put the price between $30-$100 per hour. In our agency, we have $35-$40 per hour rates.

  4. 2

    Congrats! At $15k MRR it sounds like you're doing great. I love the approach of small commits, daily updates, etc... a truly agile approach that your customers seem to appreciate.

    Questions:

    • How do you go about sourcing clients? In the past I've thought about starting a development agency, but always struggled when it came to finding new clients.
    • When you say "MRR", are most of your clients on retainer/billed monthly/regularly? Or are your projects fixed-cost?

    Thank you for taking the time, and best of luck!

    1. 2

      Hey, Matt. Thank you for your questions!

      • Yeah. I understand. For me, as a tech guy, it also was very hard. I learned a lot. I took a bunch of courses about customer acquisitions for agencies and read a few books about selling. But it seems it didn't work for me. After that, I met my old friend(sales guy), who helped me create a sales pipeline. The major source of leads and customers comes from Upwork. Besides that, we are growing affiliate network + brand awareness.

      • Yes. All of our current clients are billed weekly by Upwork, so there are always regular monthly payments. Mostly hourly rate.

      1. 1

        Hey @sweatC what type of sales pipeline do you guys have ? And thanks for doing AMA. Regards.

        1. 1

          Hi, Khalid! Right now, 90% of our customers we get from Upwork. We have a Top Rated Plus badge and a 100% Job Success Score. So, therefore, we get around 7 leads each day from it. And it works great for us.

          If one of the projects ends, we could find another one in just one day.

          And 10% of customers come from affiliates.

          1. 1

            Hey sweat, thats great. Just curious how do you manage hiring more people for diverse projects. Do you do the talking witht he clients ? How does it scale ? As for the ourly, does your team have upwork account as well ?

            1. 1
              1. We don't hire a lot of people. Instead, we have older developers who help me to onboard newbies.
              2. Yes, we talk with our clients.
              3. Yes, we have a team account as well on Upwork.
  5. 1

    How did you get your first customers in Upwork? Any tips?

    1. 1

      Hi. It was really challenging. We spent around 2 months experimenting with profile bio, sent more than 100 customized bids, made more than 10 calls with potential clients, and finally got our first customer.

      I still think that it was one of the hardest parts, but also the funniest one.

      My key advice here write only customizable bids, don't spam. You need to show potential clients that you are interested in his project and understand the problem, and will solve it.

      1. 2

        Thanks, it makes total sense. Your comment reminded me of an epic story: A guy posted a job in Upwork, he needed someone to prove P= NP (An almost impossible problem to solve in CS, nobody has succeeded), he worded it a little bit different so people didnt realize he was trolling but the problem was the same. In 2 days he received 20+ bids all offering to solve the problem in 72h for 200 USD or less. I was trying to find the link but I couldnt find it, it was hilarious.

        1. 1

          Yeah. You got what I mean.

  6. 1

    Hi there,

    I started a small development agency recently. I now have three developers and I am planning to add two more. ( All of them are freshers but I filter perfectly from the rest like top 1% )

    Previously I tried to launch indie products but none got traction and that's why I picked the agency for making money. I have plenty of time now other than applying jobs and managing people.

    Now I am planning to create product like before. Now that I got the income stream from my agency, I have decided that it's time to take this road.

    My question is what you're thought on my approach. ? Do you feel like back on indie hacking after certain time ?

    Best, Simon

    1. 1

      Hi, Simon. Nice question.

      I did indie hacking before I started the agency and now continuously programming and building new products.

      Agency gives me some money to live and create, and I think it is the best option to start if you have previous experience in development.

      I like your approach because I personally invest part of the money in some indie projects. I will announce an awesome one soon.

    2. 1

      Also one more things... Seems like you guys are doing frontend stuff. Can you send any backend development to my way? Much appreciated.

      1. 2

        Yes, we do only front end. Our clients do backend in-house, but if they need it, I will notify you.

        Stay tuned.

  7. 1

    Thanks for this Ama.
    I'm curious about what kind of projects do you usually work on ? Type (web app, saas? websites, mobile app) ? And what industry ?

    1. 1

      Hi! Thank you for a good question.

      Mostly web apps, a lot of SaaS, and websites. We had experience in a few mobile apps(React Native).

      Industries: VC, game, crypto, robotics, wealth, documentation, blogs, moving, chatbots, AI, and data science.

    1. 1

      Subscribe to me on Twitter, so you will be notified about my next post.

  8. 1

    Happy to answer any questions you have!

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