Elkhan Shabanov was born in the Soviet Union, and started out in the tech world. He eventually left tech to try some other types of businesses, but eventually returned. He has done a few early stage startups in the past, in particular in the 3d printing space before it was cool. Six years ago, he joined his current venture. Outside of tech, he enjoys traveling, and is in a competition with his daughter to see how many countries he can visit. When he reads, he prefers to go back to the books he has read and enjoyed before, and being in Texas, he is a big fan of grilling out on his big green egg.As I mentioned, six years ago Elkhan joined a company that wanted to be more than a software development shop. He and the founder of the company wanted to build a company that did more than throw bodies at a problem - but actually because a long term partner to their clients.This is the creation story of Digicode.SponsorsSpeakeasyQA WolfSnapTradeLinkshttps://www.mydigicode.com/https://www.linkedin.com/in/elkhanshabanov/Our Sponsors:* Check out Vanta and use my code CODESTORY for a great deal: https://www.vanta.comSupport this podcast at — https://redcircle.com/code-story/donationsAdvertising Inquiries: https://redcircle.com/brandsPrivacy & Opt-Out: https://redcircle.com/privacy
Just like with any product, after launch, start looking at it and trying to identify ways to make it more valuable. You can call it by different names, but the bottom line is the more valuable is your product, the more people are ready to pay for it, and the longer they will be using it, especially considering that we live now in an age of subscription and a license-based product.
If we use that analogy to our service, increasing value and stickiness is probably the most obvious strategy. My name is Elkan Shabanov. I am CEO of Americas at DigiCode.
This is CodeStory. A podcast bringing you interviews with tech visionaries. Who share what it takes to change an industry. Who built the teams that have their back. Keeping scalability top of mind. All that infrastructure was a pain. Yes, we've been fighting it as we grow. Total waste of time. The stories you don't read in the headlines. It's not an easy thing to achieve.
Took it off the shelf and dusted it off and tried to begin. To ride the ups and downs of the startup life. You need to really want it. It's not just about technology. All this and more on Codestory. I'm your host, Noah Labhart. And today, Hal Elkin-Shevinoff is leading the charge of building innovative solutions with excellence and world-class talent. This episode is sponsored by Speakeasy.
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He eventually left tech to try some other types of businesses, but eventually returned. He has done a few early stage startups in the past, in particular in the 3D printing space before it was cool. Six years ago, he joined his current venture, but outside of tech, he enjoys traveling and is in a competition with his daughter to see how many countries he can visit.
When he reads, he prefers to go back to the books he has read and enjoyed before. And being in Texas, he's a big fan of grilling out on his big green egg. As I mentioned, six years ago, Elkin joined a company that wanted to be more than a software development shop.
He and the founder of the company wanted to build a company that did more than throw bodies at a problem, but actually become a long-term partner to their clients. This is the creation story of DigiCode.
what we do is we have 400 plus developers coming together to help other companies to achieve their business and technology goals we just celebrated last week 16th anniversary of digicode reason was primarily dissatisfaction with the quality of service provided by software vendors and that
unhappy with what I was getting from any outsourced projects by outsourcing work to somebody outside of my organization. An idea was to be better, provide more than just bodies to cover hours that is very often happening in our industry. So we wanted to founder AXIP, wanted in the beginning and then we joined our efforts a few years later.
He wanted to provide a service that more value to the client. And that's how DigiCode was born and operated since. We try to make relationships with the client be more than just a provider of very limited type of services. We give you Java developers and that's it. That's what we do. Now we are trying to go way beyond that. And I can explain in more detail if you like.
Let's dive into what you would consider, you know, the MVP when you joined the company, right? The first version of Digicode, you know, where was the company at? What you offered? How are you approaching what you offered and how you were offering it? And tell me a little bit about those early stories when you joined.
It was fairly straightforward, basically. We would work with clients who had a need in developing certain types of software. Usually, such needs were based on the fact that they could not find anything commercial off the shelf. They were in some unique space and they needed something done, but they did not have either talent or time or something to do it on their own.
Initially, we started with offering them to do that work. And that was something that you can compare to MVP of other startups. We will help you to do it. And you will have to tell us. in which direction you want to take it, sometimes in the very, very early days, what technology you want to use, etc., etc. But then, gradually, slowly, we moved from that simple to much more complex.
So if we will see our service as a product, it evolved over time into something much, much bigger than just what I described earlier.
Let's dive into that. So, you know, OK, so that's the first version. Right. And and I'm I'm curious about that evolution that probably fits into what might be considered a roadmap. Right. Or how you're going about evolving that business or addressing what's important. So tell me a little bit about that.
Just like with any product, you, after launch, start looking at it and trying to identify ways to make it more valuable. You can call it by different names, but the bottom line is the more valuable is your product, the more people are ready to pay for it, and the longer they will be using it, especially considering that we live now in an age of subscription and not a license-based product.
So if we use that analogy to our service, increasing value and stickiness is probably the most obvious strategy that anyone doing what they are doing is adopting. And sometimes I see companies taking different paths.
Trying to use different strategies, which I don't find very effective, like lowering the price, promising more than they can achieve, or lowering the price in the beginning with the hopes of making more money on later change requests and such.
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But for us, it was obvious that we should increase the value that we add to our clients through expertise, using our experience, and becoming partners and advisors for our clients rather than just a software vendor. By doing that and by trying to get that seat at the table when they are making decisions, discussing their own strategy, we can help them to choose a better path.
And if we are successful, they recognize that and that's how we achieve that added value. It is much better to have a discussion with the client about business than about technology. This is, to me, first sign of successful relationships with my client. The moment we start talking about their business goals and their technology goals.
You know, you said you're saying we multiple times. I'm curious about how you go about building your team. Right. And what do you look for in those people to indicate that they're the winning horses to join you?
I like to refer to us as we. I know there are different ways how people interact. talk about services and products of their company and sometimes you are trying to get i don't know buy a cell phone that salesperson at the counter will say i have my guy who can look at your phone and give you my price so not referring to himself as a company We work as a collective from the very, very top.
The company has partners who are in charge of different areas of operation of the company. At the same time, we always void that very tall hierarchical pyramid. Each one of the partners very often involved in very small things. We know people that we work with. We don't have three or four layers of management between us and people, between employees of the company.
And I think this is creating a culture that is more open. We get to hear more about what issues problems our employees are facing. We get to know them better. They know that we are not sitting in some ivory tower. Every one of us is reachable. They disagree with us. Sometimes I even feel frustration because especially in situations when I know the best answer and I know that it's the best answer.
I still feel that I need to explain reasons why certain things need to be done in a certain way because I believe when people know why, they will do their job much better than when I tell them what to do. And I think that similar mentality, similar culture can be seen across our entire company.
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Developers can use the company's official client SDKs to build investing experiences in minutes without the limitations of traditional aggregators. Get started for free today by visiting snaptrade.com slash codestory. Let's talk about scalability. You know, given the product, right, is the people and the services and the partnership, right? How did you approach scalability?
And have there been interesting areas where you've had to fight it as you've grown?
At some point, you start reaching physical limitations because there are only 24 hours in a day. If you need to talk or maintain communication with that many clients, you start reaching a point where you're physically unable to do so effectively. For us, this little secret or key to scalability was an internal institution that we call delivery managers.
Even though it's delivery manager, that's the name we gave it to this role, but it entails much more than just a delivery. This role for us is a key element in every relationship day to day.
because delivery manager at digicode is part project manager part program manager very often product manager but also in very many cases a people manager and of course responsible for delivery so we chose this type of a role because
We felt that there should be somebody with a lot of responsibility, but at the same time with authority who can be that lens that focuses all the information, all the communication that comes from the client on one hand and can do something about it and communicate back to the client.
For us, I think authority was one of those revelations that you can have a project manager that just counts hours, making sure that your projected burn rate in Gantt chart or somewhere is exactly like it should be. And that's it. That's the responsibility.
Or if you have a product manager just by nature of its role, interested in features implemented in the product that they are working on, backlog, etc., etc. People managers are usually focused on other things, making sure that their team is well-structured, happy, doing what they should be doing, but Mixing all those things, at first it was very challenging. Now we do it in a very natural way.
Apparently it was that little secret that helps us to scale. Now we train new delivery managers. We add people to the team. They work with one of the experienced, successful delivery manager shadows, that person, until they are ready to go and do it on their own.
Okay, as you step out on the balcony and you look across all that you've built with DigiCode, what are you most proud of?
If you would ask me that question, 2020? answer would have been different. But with the reality of life in 2024, I think I would be most proud of resilience. We have a lot of people in Ukraine. And first, we went through COVID like everybody else. It was difficult, of course, because for the first time, we started implementing remote work into the company.
The policy before that was we were always working from offices. We have several offices across several continents. But COVID was the first time where we actually had to do some dramatic changes in the way we operate. And in a way, COVID was also an exercise that helped us to be ready what came next.
Because when in February 22, Russia invaded Ukraine, we already had all those methods of operation in place. And that helped us to continue operation without interruption. We actually never had any complaints from any one of our clients across the globe that they felt that somehow projects slowed down or came to complete stop. We continued operations.
In fall of 2023, Russia started targeting the Ukraine infrastructure, affecting power, internet. We already were ready with some solutions. And again, there were no issues with delivery of our service. And that's why that resilience and ability to go through serious challenges is something that I'm really proud of.
Let's flip the script a little bit. Tell me about a mistake you made and how you and your team responded to it.
Any company can, any founders or any leaders in any company would probably agree with me. The most important thing, it's not product, it's not technology. The most important thing is ability to sell your product. The CEO could be the one who is selling the product. They may have a team who is selling the product.
At some point, we realized that the growth, organic growth that we had prior to that through referrals and personal network of partners in the company wasn't enough to support those goals that we set for ourselves. We've been growing 30-35% year over year. very steadily. But as you grow and get bigger, those 30-35% mean much more business than the year before and the year before that.
So we decided that we need to start building a sales team. And I think that was a big mistake because we started building a sales team before we built a marketing team. We had people who were supposed to work with the bottom of the funnel before we had somebody to fill up the top of the funnel. The way we spread that effort, we didn't succeed with hiring. sales team.
We had several people trying to sell our services and we had to go and start properly from the beginning, starting with the marketing strategy, building a marketing team, doing the most important thing ever for any company, brand awareness. There is nothing more important than that. Now we are slowly going back to that place where we will be ready to start building a large and effective sales team.
This will be interesting. Tell me what the future looks like for DigiCode and what you offer and for your team.
Our goal is 30-35% growth year over year. Many years ago, we've been celebrating company day. Every year in September, we were gathering in one of our locations, bringing all the employees and their families for a long weekend to celebrate company birthday.
i remember one of the first goals of maxim the founder he said i want to provide 100 families with a decent income which in other words you know we i wanted to reach 100 employees and when we reached that goal we we celebrated a lot it was a big celebration now we are over 400
We would like to be a company growing from the small company size to be a medium size on one hand, but this is just the numbers. But on the other hand, we would like to provide more clients of different sizes with our knowledge and expertise. I know it sounds a little bit boring and bland, but before I go to the team, let me elaborate here a little bit.
What we often get to see when starting a new project is that many technology decisions in companies are usually based on the convenience. What I mean by that is I can have a solid business model, I can have a great vision, but when it comes to technology, if I am not an expert in technology, I will go by the
of least resistance and that least resistance can be nephew or neighbor or somebody who is saying that he knows something about technology and companies start doing something building something that many years later haunts them because they are so locked in and some hard for me to call it software very often because those are
Very strange, rigid creatures that have been built by people who are not very good with technology and those things are affecting company. Business model, bottom line, and ability to change something in the way they operate. Very often for that type of situation, we can offer our joint experience, which is probably several hundreds of years of experience.
Each one of us had seen many dozens and dozens of different systems and projects with the customers. We know how systems are built properly and what to do, and most importantly, what not to do. And bringing that value to our clients is a huge deal.
For the employees of Digicode, one of the requests that we hear most often from people is not salary increase, is not, I don't know, more benefits or flexible schedule or something. People are always asking for interesting projects because they... The type of people who work for Digicode, they like to be challenged.
They like to do something that is really keeping them engaged and interested for the entire duration of their workday. During the hiring process, one of the most common questions or the most common question is what type of the project I'm going to be working on.
Because when we hire people, they understand that we are a software development and consulting company and we are not hiring them to do a particular project. They can work on one project and the next project. day on another. So that's what I think they want to hear from us, that we will give them interesting projects, interesting challenges to work on.
Let's switch to you, Alkin. Who influences the way that you work? A person or many persons or something you look up to and why?
I'm not old, but I always had what's called old. I don't know if there are many people who are influencing me today. It wasn't like that always. When I was young, I was inspired by other people Now it is more focused on how to get things done. It's less time for inspiration, more time for looking for solutions for the problem that we have day-to-day or strategically.
Maybe it's not the answer that you would like to hear, but I cannot have right now any favorite person letting anyone outside of my company to influence me too much. And that especially comes true when we live in an age of podcasts.
And sometimes some public figures that I considered worthy of admiration, when you listen to them too much, and podcast is one of those formats where people get to talk a lot, right? Much more than a TV interview or something like that.
You slowly start to understand that people that maybe yesterday you were considering worth of influencing you, being important in somewhat to the way, affecting to the way you think and stuff. The moment you start knowing them better, a lot of disappointment happening
I would not name names, but I've been following several public figures, especially it started during COVID because we were all a little bit bored, not traveling, nothing much to do. For now, I can tell you it's very hard to find a person who will be absolutely perfect. Expecting somebody to be absolutely perfect is by itself a wrong type of expectation. So I decided not to play that game.
Elkin, last question. So you're getting on a plane and you're sitting next to a young entrepreneur who's built the next big thing. They're jazzed about it. They can't wait to show it off to the world and can't wait to show it off to you right there on the plane. What advice do you give that person?
Having gone down this road a bit, you mentioned earlier from a startup fashion, but also in DigiCode. There is so much.
Well, one of the first things I would tell a new entrepreneur is Be ready that every time you think everything is going well, that it can turn on you at any point of time, any second. You have to anticipate that things that you couldn't even predict that may happen will happen, because that's how life is.
I would tell them to be very careful with equity and not to invite way too many people very early to be to have equity in the company because it is extremely valuable thing down the road. While doing business with close friends and family, this one is obvious, but people still do that, work with professionals.
Because professional that you are paying for his professional job for the long term of your company is so much better than your friend to whom you are not paying and who is doing this job because he is your friend and not necessarily 100% sharing your vision. relationships based on favors or friendship are not good for a business for a long term.
From where I'm an expert, I will tell them if you are a business founder and your business idea based on technology, stop looking for the technology co-founder because more times than not, this will take a very long time and then you become
a hostage of the knowledge experience of that technical co-founder because everybody has their limits i've seen this way too many times when technical co-founders are let's say have a very limited knowledge in the technical field and they drive company into the comfort zone of theirs
where they can do something and that is not necessarily even close to where a company should be or what a company should or can do, breaking up those relationships is very expensive later because technical co-founder usually has a second unless the company is founded by technology. This is a different story.
But business founder and technical co-founder is the second size of the equity chunk in the company. Buried so many startups for that particular reason. Better to pay someone to do this job than spend your efforts on trying to find a co-founder for technology.
I appreciate that advice. Well, Elkin, thank you for being on the show today. And thank you for telling the creation story, your creation story at DigiCode.
Thank you.
It was a pleasure. And this concludes another chapter of Code Story. Code Story is hosted and produced by Noah Laphart. Be sure to subscribe on Apple Podcasts, Spotify, or the podcasting app of your choice. And when you get a chance, leave us a review. Both things help us out tremendously. And thanks again for listening.