James Mackey 0:00
Welcome to Scale by Design. My name is James Mackey, your host, and today we're joined by Yurii Filipchuk . Welcome to the show. How are you doing?
Yurii Filipchuk 0:21
Thank you for inviting me over. I'm fine. From lovely Ukraine. I should be now sitting on Venice Beach in LA, but I am in the western part of the Ukrainian Carpathian Mountains.
James Mackey 0:39
And the view you have is really great. I mean, some people should be watching this via video. Could you show us so everybody could see?
Yurii Filipchuk 0:46
Yeah, it's really beautiful. And sorry for the village noises and farm sounds around me. But this is the way of work-meditation for me when you hear the cows.
James Mackey 1:00
That sounds nice. By the office is the occasional ambulance or something. Before we jump into everything, we have a really amazing list of topics. And I'm so pumped to dive into that. Let's let everybody know a little bit about you, your background, and what you're doing now. We'd love to hear that before we jump into it.
Yurii Filipchuk 1:23
Sure. Thank you. So my background is in finance and investments. Although I'm from the medical dynasty and medical family, from Ukraine, I really disappointed everyone when I decided to go into finance. But that ended up me running the company.
So before that, we invested in early-stage startups locally, here in Ukraine, with my partners.
But everything changed in May 2020 when two friends of mine (I hope you guys are gonna be listening to this showed up and said): The pandemic is here. And there's gonna stay for a while. Why don't we gamify video chats?
And that was the original idea. I really loved it. And since then, we are working on a company called Party. Space. By the way, the first version of the name was friend the scope, which we just didn't care about at the moment.
But now we are participating in the Metaverse platform for virtual events for remote teams and online communities. Since May 2020, we have hosted more than 100 larger events we worked with and we work with very large companies like Zapier, Slack, Scania, and Epidemic Sound. We just landed our first two Fortune 500 clients, and we are pioneers here in the metaverse for businesses.
James Mackey 3:16
I love that, you have some big-name clients bank. Congratulations!
When did you found the company? In 2020?
Yurii Filipchuk 3:24
Exactly. I don't even want to show you the first prototype of what we got. But with that prototype, we closed our first big deal with the leading music streaming service, which is really strict. And they're NDAs. And they never allowed us to name them.
But they wanted the 5000 people virtual event, to celebrate the year of pandemics. And they wanted that to be in 3D and browser-based.
So my team and I gathered hired some top-tier Ukrainian engineers and delivered the solution. And the result was really cool. Like, could you imagine the virtual corporate party with every session lens of more than two hours? So people are turning enough cameras and jumping up zoom calls as fast as possible. But during the party space events, they stayed with us for a while. And that was like the very beginning of our journey.
James Mackey 4:39
That's really cool. So it sounds like for your first big customer, they actually gave you the opportunity to build out the solution. You didn't even have it completely before you sold it.
How did you do that?
I just imagined myself doing that for my company and I just feel it's really difficult. I feel like if a large client came to us, they'd be like, What are your capabilities? And we would say, this is what we're at, but we can deliver on beyond that. They'd be like, “yeah, you say that, but we don't know you. So we're gonna go with a more established player.
How did you overcome that hurdle?
Yurii Filipchuk 5:18
So first of all, you know, like hustle culture, is the way to go. And at that point, all you could do is fake it until you make it. So we just listened to what they wanted. We said, okay, so we can do it this way. And it's gonna be a good user experience. If we fail, you still can have your event in the zoom, and you would basically lose nothing. And the client agreed.
And we received our payment only after that worked for them. So that was like a huge risk for both of us and for them. Because we had no chance for that not to work for us.
James Mackey 6:07
Did you have a strong relationship with somebody at that company that preceded this? Or who did you reach out to? Did they reach out to you?
Yurii Filipchuk 6:18
It was just a cold moonshot on Linked, I reached out to the Global Head of People experience from that company. And she then introduced me to the technical guy from her team.
And that guy, he had a consultant background. So we found some points of contact. And that probably helped us to build a dialogue and secure the deal.
James Mackey 6:51
Cool. That's really impressive.
Yurii Filipchuk 6:56
And after that, actually that guy and his friends, they helped us a lot to get our first traction. Because they really loved the solution and how that worked out for the client.
James Mackey 7:10
Nice. So is your business. Is it like a recurring revenue model in which people are paying on an ongoing basis? Or is it per event? What does that look like?
Yurii Filipchuk 7:20
So we started on a payment basis, and we were charging clients. The contract value was based on the maximum number of users we were going to see at the event.
But now, we started selling our first subscriptions. And we now sell. In fact, we sell virtual real estate, because clients are paying for the maximum number of concurrent users in this specific virtual venue. They go for a virtual office that can fit 50 people, okay, then they pay five grand for that, and they can use it unlimitedly.
James Mackey 8:07
Okay, that's really cool. I was thinking maybe it would be a thing where it's like, an annual subscription, where you can host up to x amount of events, or something like that.
Yurii Filipchuk 8:17
We call those bundles. And that way of activation, contracting, is something we use to work with the crypto communities. They don't need just another tool. They need people who would help them achieve their goals. And they said, Okay, we need regular community events in matters. So please supply us for 12 months, and that's going to be the contract requirements.
James Mackey 8:52
For sure. Well, that's really cool. So what are you focused on right now? What are the biggest challenges to scale or the biggest kind of opportunities ahead of you? Where is your headspace at the moment?
Yurii Filipchuk 9:07
So my biggest challenge right now is to secure the proper seed round with good investors. People are crying out loud that the market is dead. I'm speaking to funds and I see that's not true. I want to have the cherry from Top of funds on my cap table right now.
Because we're going to be scaling a lot next year in product lead. And currently, what we are doing is preparing the team, the product, and the marketing to deliver the Halloween and Christmas parties. Is the hottest period of the year for event planners.
So we are now developing the self-service solution for horror quiz nights, which is going to be our beachhead offering, basically, mentors or quizzes for a remote team, maybe with a celebrity host, if I can secure that.
James Mackey 9:55
That'd be really cool.
Yurii Filipchuk 9:55
Yeah, it's definitely going to be cool and promote teams, they deserve a better thing to hang out on rather than zoom. So why don't we deliver something fun for them?
James Mackey 10:39
For sure. Getting back to the fundraising part, are you currently pitching? Are you getting ready to start getting in front of VCs? Like, where are you in the process?
Yurii Filipchuk 10:50
No. So today, I talked to two of our existing investors and asked them for intros. I also talked to the fund that reached out to us. So yes, it was a pitch day for me. I'm actively pitching and building a book and looking for the lead investor to start with.
I also received commitments from my existing investors to fund us if we need it, but I really want to find somebody on the open market.
James Mackey 11:24
For sure. So this would actually be really helpful for people tuning in. What are some of the lessons learned in fundraising since you did the initial seed?
You also had a previous seed round, too. So you're adding on to that, but can you share with us just some of the lessons learned in terms of how you go about presenting and really capturing the interest of investors?
Yurii Filipchuk 11:51
I always think of fundraising as much as dating. If you want to score a goal, you get to hit up the partner and the funnel, and you're going to invest a lot and keep them engaged.
So it's always good not to show all your best deals and all the strong points you have.
Because investors are always in a position where it's much more convenient for them not to invest, than invest. So you actually have to build this fear of missing out, otherwise, they won't close the deal.
As an investor, in my previous experience, we were usually saying, ”Okay, we're going to invest and then waiting for a month to see what the team was doing without our money.
And now, I don't want to be in the same position. I will want investors to play those games for me, so I'm trying to play my games on them.
So just imagine what would they want to see from their side, and in this way, also, like, division, if you cannot sell your vision, selling your product, your business and your team won't help. Your vision might be rolling, you might be pivoting in a week or so. But you're still going to be able to sell this vision. And if that happens, then you move further, page all the details, and build the whole picture of your company.
James Mackey 13:42
When you're doing an initial pitch in how much detail do you really get into?
Yurii Filipchuk 13:49
It really depends. So most of all, it's really important to understand whether the investor is believing in the virtual events and Metaverse and the awareness of the situation. It might be just an educational call where you say “Okay, this market is interesting because we see this is happening”, those clients are entering the market. Those are the predictions.
If they are quite familiar with what's going on, then you skip that step and they can scrub through some numbers or so.
And for me like always it's really important to remember that the product market fit is something that is hard to measure. And probably, like in a year or so it's gonna be much easier to say “Okay, so we've reached our product market fit that month with that client that year.
But while you are in the moment, it's so hard to comprehend. And we are always doing like, sessions where we just stop, we try to assess what's going on. We try to see all the patterns and say, “Okay, so we're probably much closer to product market fit, or it might even happen. What if it happened, then what are we doing wrong? So when you just share, like those thoughts with the investor and they understand the way you think, then you're going to be able to close the deal. This is what I can tell you.
James Mackey 15:33
So, I said, on the previous episode of Scale by Design, we had Scott Leese, he's a revenue advisor in tech, he's worked with a tonne of startups and growth stage companies primarily round series, a seed round to Series B, somewhere within that growth stage.
And so one of the things that he talks about is really identifying a clear, ideal customer profile. As part of that, like Product Market Fit motion. I see there's obviously a correlation there.
But his real focus is like getting really tight on who you're going after. I'm curious, like, what for Metaverse, like virtual events? Which companies seem to be most interested, right now?
Yurii Filipchuk 16:18
So speaking of the market cycle, let's get to the beginning. So the metaverse hype starts from the mark, saying, okay, Facebook is now a Meta. Okay, that was just the beginning. And after that, all the expectations were focused on the B2C side. So people started arguing about whether the future of social media platforms is metaverse or not. After that, major players announced their visions.
So Facebook said, Okay, we're going to focus on VR. Snapchat said, no metaverse is going to happen in AR, a lot of platforms said is going to happen in browsers and markets began just comprehending what's behind the matters. And the initial hype for B2C investors and crypto people decreased.
And then businesses woke up. And the first thing they did was to call their consultants, and analysts from Gartner, they went on G2 and looked at what are metaverse for business, and use cases. And now we are at this stage of the market where businesses are trying to figure out what kind of goal and what kind of methods they should use to reach that goal.
So everybody is experimenting. And we are just here to make them experiment on our platform.
James Mackey 18:03
For sure. Looking at some of the logos you have, these are bigger organizations. What's interesting to me is that, from your perspective as founder and CEO, I would almost want my first events to be with smaller companies. So you can test it out on like the series A companies that are smaller before you go straight to like Zapier or like Grammarly. I feel that's a lot of pressure when you're first getting your product out to market.
Yurii Filipchuk 18:34
Last year, we spent time running smaller events. We failed a lot of events to be honest. And we even failed the United Nations accelerator event for developing countries.
But now when we have a bulletproof solution, and it's stable, we just go to the best because they have the budget, they have the power of decision. And like 80% of our cases are internal corporate events, where remote teams are trying to reconnect to have some fun, to do stuff together to present new products internally, etc.
And that part of the market where you're selling to HRs and people experience is clear but is really hard. Like you probably know that. The majority of HR is not their passion profession, and those people are not very actively engaged in different communities, schools.
That's why it's pretty hard to reach them and suggest that they should participate over zoom.
And by the way, Zoom is still our biggest competitor. Like 2022. But when people are considering running internal events, it's much easier and less risky for them to go with them than to try out matters.
James Mackey 20:32
Yes, for sure. I mean, it's more of a known quantity at this point, right? So they're like, Okay, I'm gonna take the time to learn about this new thing? Or am I just gonna use Zoom? Right?
That's,like the hurdle, right? But, I think over time, more and more people are going to obviously give it a shot. And as you like, prove out the model and the business.
Yurii Filipchuk 20:53
So, HubSpot managed to educate people that CRMs are not only for big businesses, I think we also need to be able to educate HR that the company's event shouldn't be only in Zoom.
James Mackey 21:11
For sure. I agree. And so is the tech industry you focus on right now, because I feel like tech would be a little bit more open to.
Yurii Filipchuk 21:20
Oh, yeah, more or less tech companies are more open. But if we measure the visitors in satisfaction, people from non-tech businesses, they are just getting, you know, like batshit crazy about what just happened. Law firms.
Maybe if we work more with the non-tech businesses, it's going to be easier for us, because it's hard to impress tech people with a metric.
James Mackey 22:01
That's a good point. Tech people have really high standards, probably when it comes to this stuff. Like if you work for law firms maybe they're easier to please. I can see that for sure.
Yurii Filipchuk 22:18
And, by the way, we saw statistics that Gen Z are not excited about Metaverse at all. Because they already live in their metaverse. They play fortnight, they chat in discord. They watch streams on Twitch. And this is the sort of Metaverse for them already.
That's why I will say the majority of people whom we expect to see in the metaverse are Millennials and Boomers. And it's going to be really interesting to see how this whole thing could turn out to be.
James Mackey 23:03
For sure, it's very interesting!
And so one of the things you mentioned was G2, I'm curious, how much lead traffic that's driving? Or maybe you don't want to get into all that, which is fine, too.
But, how many different providers are there right now in G2 for your industry? Are there a lot of competitors, I know, you said Zoom is like a competitor. But on G2 it sounds like you maybe place in their category, but do they place in your category?
Yurii Filipchuk 23:34
So we are placed in three categories. The virtual workplace, virtual events, and VR collaboration.
So G2 is actually working on creating a metaverse category and we're going to be there for sure. Speaking of leads, speaking of buyer's intent, we are receiving around 250 accounts per month to work with based on G2 and slip feeder information. So my pre-sales department is working a lot to reach out to all of those people.
James Mackey 24:31
So, and again, like whatever you feel comfortable sharing, right? Just let me know if I'm asking too many detailed questions that you don't want out there.
What I love about G2 for my business is that it basically allows us to leverage their SEO to show up in Google searches. So we're number one, basically, tech companies borrow recruiters from us, that's our business, right? So like for a fancy way of saying that as a recruitment process outsourcing.
So for that business, for that category, we placed number one. For the category of staffing agencies, we placed number two. And for recruiting agencies we placed number three, and we're on track for next month, we're probably gonna be at the top of each one of those categories. What we are actually doing is SaaStr and San Jose next month, so we can mark that out that we're talking about three categories.
But the biggest value add that G2 had is, again, just people searching on Google, and then looking for the best, you know, agency or whatever, right?
And then we come up on G2 and it gives us a lot of visibility. So it's definitely been a good driver for us. I mean, I think for us, we have several channels that we're pursuing.
I just wanted to kind of dive into G2, and see how much traffic you're getting there? Are you close to the category leader in any of these spaces? Or how competitive are these categories?
Yurii Filipchuk 26:03
Yes, so we received a number of wages. So we have been leaders since the spring when we just started being on G2. We also have been rated better than Facebook and Horizon.
So it really makes me personally beat Mark there.
And the virtual events category is really crowded with a lot of companies there. But when we go to a virtual workplace, and we collaborate, the competition there is not really fierce. Well, we used to collect the buyer's intent data. This is really important because we just need to talk to as many people who are exploring what matters for business as possible. And this is a great way to identify those.
James Mackey 27:03
We’re actually not paying for buyer's data right now. We are just paying for G2, but it's the base package. And Nick, our VP of Marketing here, sitting in on this call, I think he met with G2 a couple of times to learn more about the high intent data, we just haven't made the investment yet. So you think it's definitely worth it?
Yurii Filipchuk 27:24
We think it's definitely worth it in our case because for us, it's really important to identify those early adopters. Maybe in high-traffic zones like yours, it won't be that important. But we want to know when people from big companies are searching for metaverse business solutions.
James Mackey 27:51
What does that workflow look like? So is it like capturing high intent data? Start email outreach, like?
Yurii Filipchuk 28:01
So G2 is letting us know the company name and the potential office where those people are from, then my researchers are digging through the data to identify potential buyers there.
We collect a lot of data on roles. And that may vary a lot. And I'm sure that we just called, to reach out to those people to figure out who that was.
And before that, we were just doing the cold, outbound. It just didn't work well. Now with this buyer-intended data, the quote or pre-sales manager is being fulfilled each month. And it's still very important for us to figure out what kind of roles are most responsive and most interesting to pursue. Because we are playing around with all the targeting. And our goal is to move to the ABM approach for which we just need a little bit more data points.
James Mackey 29:19
Yeah, we're kind of in the process of refining our strategy when it comes to client outreach. We're really tightening that up. And like we're going through our current customer profile out right now. And we're trying to identify, like, we wrote out probably 20,30 criteria, some of which we're not even sure if we can actually collect but we're just really being thorough on just what the profile is. And then we're looking at, like, what's the ideal customer profile because basically, we're trying to move up our average deal size right now.
And so our goal is to, you know, in addition to our current customer profile, which is like a startup to growth stage, we're looking to push more into a late growth stage like actually some of the logos that you were talking about earlier, right? So that's gonna land us a deal size between one to 2 million annual recurring revenue a year. And that's really the focus.
So our thought process behind that is like, we want to push up the market gradually, like my initial thought was like, let's go straight enterprise.
But our sales adviser was like, look, let's say you landed a $10 million deal like are you going to be able to deliver on that one to be able to have a high enough win rate to make it worth it, because you don't know those customers, as well as you know, growth stage.
So if you push up too late in the growth stage, you're going to know a lot more about them, because they're a little bit more similar to the earlier growth stage. So it's like a more natural progression, right? So we're going through our current customer profile, we're tweaking to like the next ICP, which, like we've landed a couple of deals in that deal size.
We're looking at that data and then trying to figure out, okay, some trends between, what our typical customer looks like and what our bigger customers look like, and trying to draw some correlation.
So for instance, if it's like a headcount like our typical customer has between 50 to 200. But the seven-figure deal that we closed is like a 500-person company. So we can see, okay, that's like a 150% increase in headcount, is there a correlation between headcount growth and deal size?
And so we're trying to use some correlate correlation data, basically, to try to figure out like, Okay, if we want to go from a million deal size to like, 1.5, is there a trend where if we increase the headcount of the company, that's going to have a relevant correlation to the deal size, or maybe it's not headcount, maybe it's revenue, maybe it's funding?
We're trying to find a couple of data points that correlate, where we can say, Okay, if we increase this, it's going to increase deal size.
And it's a really interesting motion because we're getting much more data-driven, and how we approach moving upmarket than we have historically. And it's also just a massive lift like me and Nick are just getting on a call, like, an hour and a half a day. And just through data and thinking about all of these like little data points, because there are some things that seem obvious, right, like revenue employee count, like just easy stuff. But what we're trying to figure out is like, maybe there's a data point that's not as obvious, but actually has a better correlation.
Yurii Filipchuk 32:25
Just a quick note, have you tried tracking the number of open remote positions?
James Mackey 32:34
Yeah, we do. Like that's something that we're looking at. It's like open roles? Yes, definitely, that's going to be part of it. The only kind of downfall to that sometimes is that sometimes companies come to us prior to posting jobs. So they'll get budget approval for 100 Plus positions, they won't be posted yet. And they'll say, Hey, we need a solution, because we only have XYZ number of like internal recruiters. And starting next quarter, we're gonna have all this open headcount.
So when it's like a retroactive thing, where they realize they bit off more than they can chew, and they already have a tonne of openings, then we can, we can definitely leverage that.
So we will like it, but we're doing two numbers, right? We're doing an active number of job postings. And we're also doing, like hiring plans, which is a proactive motion.
The issue with hiring plans is that it's not like a data field that you can. You can't just like, Okay, what's over the next 12 months? How many roles is a company going to hire, you can't filter that, and like zoom info or an Apollo or something like that, right? You can filter active roles. But ideally, it's like we're going after those companies. And we're also getting engaged with companies before they post the jobs, right? Because ideally, we want to get in there before everybody else. Right.
Yurii Filipchuk 33:48
Your experience with the way people start who change their positions in like, last month, or three months, what, how is it helping in your case with figuring out the right buyers?
James Mackey 34:08
The right buyer? So on the client side? I mean, a large part of our revenue is referrals and word to mouth. So when a customer like a buyer, right, let's say, a VP of whatever, moves from one company to another company, they'll pull us with them.
So our revenue team is actually very small. It's Nick, our VP of marketing, basically, recently Nick started to help actually sell and I've been the one selling and closing. So we actually have not built out a sales team yet.
There are some more sophisticated motions that we're not going through currently as we should have. One of our strategies should be “ let's look at the buyers, decision makers that we've worked with over the past several years. Where are they now? In targeting outreach to them. Now it's more like, they're just reaching out to us. And they'll refer people to us. And it's more of this behind the scenes, word-to-mouth type of thing, which is, you know, driving a fair amount of revenue for us.
But right now, we're really focused on, building out repeatable processes, simplifying, getting the right dashboards into Salesforce, getting the right automation into SalesLoft and Salesforce, and we're trying to put together all the process documents surrounding outbound. And then once we have all of that, then we're gonna hire our first salesperson. But our revenue adviser has also said, he wants us to hire ideally, three salespeople at once.
Because it's like, if you only have one, you don't really have a baseline for how good they are. So you're like base one will be great. One will be alright. And one probably won't be good.
And so he's like, you know, ideally, wait till you have the budget to hire all three at once. So, right now, it's like a heavy lift. Like we're bootstraps, so we grow based on profitability.
So right now, we're just focused on getting all of the process and strategy in place.
Then we can plug in the salespeople, and we can be confident that their performance is reflective of their performance, not a broken process, or tech because I don't want to hire a salesperson, and then not know if it's us, or them. That's producing a result, so we're trying to do process tech first, revenue advisors, simplify everything standardize it, write out all the process docs, and then plug in, ideally, three sealed salespeople, which I need, like, probably around 300,000 in the budget, probably more like 350, 360K.
Yurii Filipchuk 36:49
And have you hired any pre-sales people yet?
James Mackey 36:52
No, literally until Nick came in, in January, we were 100% inbound, people would book discovery calls with me directly, and I managed the full sales process. So until we hit 3 million ARR we were 100% inbound, and I was doing everything.
And then when we hit 3 million, we hired Nick. And then Nick started opening up some outbound channels like email, and he accelerated our G2, we have like, 175 G2 reviews now. So we put in some incentive programs to accelerate reviews, and we're experimenting with other stuff. But yeah, we, that's kind of where we're at at the moment.
Yurii Filipchuk 37:34
That's a solid direction, and you're definitely heading in the right direction.
James Mackey 37:40
I just want to start scaling faster, right? Like, who doesn't? But like, that's why we're trying to move upmarket a little bit. So we can get, I mean, we're always gonna be working with seed round series, A series B, that's a core part of our business. But we want to serve basically ICPs, right? We want the earlier stage companies, and we want the later stage companies and we kind of have a solution for both of them. That makes sense.
Yurii Filipchuk 38:06
Actually, I just wanted to ask you, what do you think about virtual job fairs? As a thing, I don't know whether that happens on traditional platforms and if that was any success or helped to hire better people. What do you think about this part of the market?
James Mackey 38:30
That's interesting. So I'll just tell you what I do know because there's a lot that I actually don't know about this. For example, we service the tech industry, so primarily product, SaaS companies, and some services companies, like custom software development, right? One big life sciences company.
So there are a few, outside of tech, but primarily tech. And the way that we're currently sourcing talent, probably 80 to 90% of the hires we help our clients make, are through outbound sourcing on LinkedIn, and that spans across engineering, Product Revenue. GNA, the entire org.
So we're not leveraging in-person job fairs. We don't do campus recruiting. We don't do the kind of unskilled labor recruiting right entry-level, like the most junior role will do is an SDR role. And occasionally, it'll be someone with that experience. But typically, it's like six months to two years of experience. And it's usually we're targeting people with experience in the tech industry.
So I have not thought about a way to leverage virtual events for hiring beyond. Actually, I think an angle for that might be like proactively engaging with candidate pools.
For instance, for a company like SecureVision, an agency, or an in-house large tech company, maybe they want to host a quarterly virtual event, where they're proactively giving value to the engineering or product team communities, to build the relationships so that when they need to hire, they have a bunch of essentially warm leads of people that have engaged with their company.
So I think that would probably, I mean I'm kind of just riffing out loud right now just thinking through it. But I think that would probably be the biggest opportunity. Is like this concept of proactive candidate pools, which ensures that when the recruiters are ready to reach out, there's already a warm relationship in place.
Yurii Filipchuk 40:26
So basically brand conferences rather than virtual job fairs.
James Mackey 40:32
Yeah. It's like, what do engineers care about? What are the biggest challenges? Do they have the opportunities? What is the stuff that interests them?
Same for salespeople, right? Like, what do they care about? And then throwing virtual events for that, branded with the company. And if you know, the company knows, like, over the next five years, we're gonna be hiring like 500 engineers, then they're motivated to increase response rates top of the funnel when they do their outreach.
Yurii Filipchuk 41:00
Yeah, definitely. I remember the first event we made for a tech conference. And we hosted the after-party for that, in a virtual lounge. And I remember when visitors figured out a bug, which allowed them to do some visual effects on the other people, and they had a lot of fun there. And the organizer said, “Okay, so the platform wasn't working properly, people found the bug, what should we do?” And we said just ask them, whether they loved it or not.
And we received tons of positive feedback because people just enjoyed it.
In your case, hiring people and outsourcing that's hard work. And it's not nice to have but is a must for companies. And I really envy you because Metaverse is now still in the nice to have zone.
James Mackey 42:19
Well, I think it's like if I think the angle there right is like can you attach to must have industries right? That's one thing we're thinking about a lot right now. And kind of a contracting market is like, we want to segment and we want to look at our existing customer base. Look at if there are any correlations between the customers that have not churned due to the market, what industries they're in, and what industries their customers are in taking it a step further, which is harder to figure out sometimes.
And then trying to figure out like, alright, for instance, cybersecurity products, like core cybersecurity products, people are going to invest in, like in any market. So if we can, you know, part of our ICP, we want to develop our like, you know, cybersecurity companies, certain finance FinTech companies, and we're gonna more robust than that, but we want to figure out which industries are a little bit more insulated from market contractions, as like attaching ourselves to must-have solutions.
Because our industry, it's a little bit of a different problem, like yours is emerging, right? Which is an incredible upside, but it's also riskier. Ours is an established industry. But hiring is cyclical.
So we'll have customers that are very happy with us, but like, they just don't need to hire right now. Right? So it's like, they'll come back. So then it's like, Alright, how can we decrease churn, which our churn rates are pretty good for a services company. But, still, it's obviously higher than SaaS companies. Right? So it's like, it's like, how can we be more sticky?
And so one of the strategies there is like, well, flexibility on demand that helps people scale us up or down, right? So that allows us to continue an engagement even if they have to hire less. But then again, it's like being more targeted at the industries that we go after for new customers. That's kind of how we're trying to tackle that a little bit.
Yurii Filipchuk 44:17
So that was a great insight into the cyclical nature of the business and how this works for you. And then all the investors will say, Okay, and what's behind your business, and how defensible.
A friend of mine was running a company. He's the machine learning engineer, and he was helping to build the hard skills test and so a solution for developers which would allow hiring better people and tech teams, and that was working well. And I remember him saying, okay, so we figure out that improving, the hiring rate is fine. But it's for sure nice to have. But what could be a big new thing? And a cyclical market during the crisis is the ability to share somebody between like two or three companies, because the top specialists, they can do, they can work on multiple projects, they can be helpful there, and companies would need such people. And these people should be compensated in the proper way. So if I remember him trying to solve this problem.
James Mackey 45:47
Yeah, that's important. And it's also like, there's an overarching trend there, right?
Like, there's the market contraction aspect, where people are gonna be more like, maybe they only need a shared resource or fractional resource, right? Where it's like, they're basically sharing a human with one or two other companies. Right. So like, that person's working on several projects at once. So there's definitely that cyclical nature to that.
But I think it's just a trend, and what we're seeing in terms of employment is people prefer flexibility. And they think it's like becoming more of a preference to work on a couple of projects at once they want to diversify income streams, they want to, you know, kind of pick the hours they work, the projects they're working on, you know, if they're, you know, if they're working an area where they there's a talent shortage, there's just more and more of a preference to, to that type of work.
And I think also employers are becoming a little bit more flexible, like, this person doesn't have to be a W two. Right, we're more open to contractors taking on strategic stuff. So I think just overarching as a trend, and talent acquisition, and people functions, we're seeing a lot more flexibility. So it's, I think it's like what your friend is going after makes sense for, like, more than one reason, right? Like, I think it's just the overall trend of where we're kind of heading with employment, too.
Yurii Filipchuk 47:08
And this seems like a win-win situation to both employers and employees. And that's why you want to work in a tech company because you just want to level up the game to make it evolve. fractionalize workers why not? So it's yeah.
James Mackey 47:33
It's interesting. It's definitely an interesting time to like to, like from hiring and a people perspective, there's just a lot of shift shifting happening right now. Okay, you have a hard stop coming up here. 1030. Yeah, yeah.
Yurii Filipchuk 47:53
Yeah, hard stop. So that was really nice to talk about. Thank you. I really love your approach. And I wish you all the best with making the hiring. easier, and more fun. And good luck with finding three salespeople.
James Mackey 48:16
We're not there yet. I still gotta get the budget for that.
Yurii Filipchuk 48:20
Very smart. Very smart move, man. I love it.
James Mackey 48:24
Yeah, it makes sense. I didn't think of it and can't take credit for it. But I, I guess, can take credit for finding the right advisor. But yeah, man, this has been a tonne of fun. Thank you for coming to the show. I actually want to talk to you about Ukraine and how people can support Ukraine in the best ways to do so. So maybe after the show, you could just send us a few links to organizations where people can help. And then we'll drop that in the podcast notes. So people tuning in know exactly where to go to support Ukraine.
Yurii Filipchuk 48:51
Yeah, sure, I will do that. And, please, the best way to support Ukraine right now is to remind everybody, your friends and colleagues that the war is not over. And people are tired of that across the globe. But it's not over. And without Western support. Ukraine will fail. That's why please keep helping. Please spread the word. And we'll share some links on how you can help Ukraine. Thank you so much.
James Mackey 49:26
Thank you, Yuri. We'll talk to you soon.
Yurii Filipchuk 49:29