In this episode of the Startups Savants podcast, Alex Iceman holds forth on the direct tie between leadership and scalability. Alex is the founder and CEO of Genium, which provides and sources software engineering services, in addition to acting as a consultant. Alex is a Russian émigré who cut his teeth on developing video games. He has been a hockey referee and official for close to two decades and is completely at home in the ice hockey habitat. Tune in to hear how he circumvented the pitfalls of his startup odyssey.
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To what purpose was Genium founded?
“[The purpose was to] build a platform that solves the problem of global tech hiring. Genium is a premium consultancy company, we help companies to build software teams … all around the world … and they help US companies to grow and build the product pipeline faster, all around software, whether it’s mobile apps, React, front end, back end anything related to software that needs a higher security and higher quality of software development.”
What were the events that led up to the founding of Genium?
“We started Genium about seven years ago when my first consultancy company, here in San Francisco, was doing really well, but my clients started to ask for more affordable rates because engineering rates were going up … and clients were having a hard time paying the rates. That’s when they started asking me, ‘Hey Alex, is there anything else that we can do to lower the rates or find an alternative?’”
And I started looking elsewhere. I did quite a few trial projects. I did a project in China. I did projects in Mexico, Philippines, Eastern Europe, and I tested all those locations and Argentina was last on my list, and I sent out two projects to Argentina, and they came out a success, a total success, a total match for the values I have, which is effective communication, responsibility, accountability, forgiveness. It was a really good match for what I was looking for in engineers and people, and the way you work and I started expanding there. I started hiring more and more engineers and administrative staff in Argentina, and then we grew into a greater Latin America [presence] since then. In the sense I’ve listened to my clients, and I’ve listened to what they wanted and adapted to their needs, and that’s how Genium came about.”
You mentioned that you see Genium as a consultancy – what’s the difference between a consultancy and an agency?
“Consultancy to me … we position ourselves as a partner, so it’s not a ‘vendor and vendor’ relationship, but partnership collaboration where the interaction is much tighter … and when we build teams, they work directly for the companies and they’re very integrated into clients teams. We also specifically do client interviews, which I do prior to taking a client. I see if it’s a good partner for us, so they don’t treat us as a vendor, ‘Take this and just run with it.’ But they treat us as a partner. We’re in it together, and you’re going to get full support from us, and we expect the same from you. To me, that’s the definition of consultancy versus an agency, where agency comes in, they take on a project, they do it more independently, and they just hand off the results.”
What similarities do you see between a consultancy and an agency?
“To me, I think both agencies and consulting companies, they have a lot in common, and it really depends on target demographics, because look, we offer agency type of services within the company as well if you’re looking at visual designs or marketing or some other aspects. There is an agency aspect inside of a consultancy company, so it’s hard to differentiate if you do one or the other, it really is geared towards the type of clients you serve and their needs. Sometimes you do consultancy. Sometimes you present yourself as an agency to a specific problem or approach that as an agency to a specific problem.”
Healthy businesses will grow over time – what hindrances may arrest this growth?
“Most of the businesses that don’t scale, they don’t have a process, and they don’t know how to create that process that could be scalable. And I think that’s where people get stuck. They work for their own businesses, and that’s where I’ve learned to step out of working for your business and managing and leading that business to scale because I was becoming a manager snowflake, where I would manage everything, and everything would tie it to me, and I tried to eliminate that. I tried to build processes and assign people to manage those processes, so I don’t have to be involved in decision-making and et cetera, et cetera. I’m mostly involved in strategic initiatives or high-ticket items, and that’s where you process, you scale the process, and that’s how you scale.”
How do you make the shift from handling every task to forming a team and delegating?
“I had to work with coaches to get that mindset … I asked a friend of mine and certain business partners and even hockey supervisors, and some of them were able to share their wisdom on how you do certain things, how you approach certain things, and one of my business mentors, Dave Meltzer, he suggested that initiative that you should take yourself out of that equation and start delegating more. What I found later, most important thing to do in your business is to get your first three to five first hires into your company, and that’s vital for your company. Those are the people you’re going to be delegated to manage everything, and you should spend an enormous amount of time vetting those people, getting them on board, training them and that’s what’s going to define the future of your company.
They will continue hiring more like-minded people by the same process you hired them because you established that relationship process and they will basically continue hiring the same type of people that they are themselves as a group, and that will determine how your company is going to operate, what’s the values and just the whole ecosystem. Once I’ve got the first three hires, and I started delegating properly to those people because I’ve trusted them, I’ve trained them. I’m a fan of processes, I fly airplanes and checklists are vital for saving lives, and they’re there for a reason. I started applying that mentality into business and creating simple checklists that would go through the key points of a process to get to a high quality or safety or whatever it is, and that’s how I started scaling up and delegating more.”
You moved away from sourcing talent in the US to sourcing talent overseas – why is that?
“I needed scalability of the consultancy company that I had, Iceman Softworks, which was the first company. We had 15 engineers here in San Francisco working on mobile projects and the competition for the engineering force here was just enormous, and I just couldn’t compete with the salaries, just let alone right now, TikTok offers almost $300,000 for an engineer, for a mobile engineer a year.”
How do you screen engineers?
“First of all, we never post job offerings online saying, ‘Hey, apply to this job.’ We always reach out, and we always reach out to people who we already think will be a good fit. We have an amazing HR team and People’s Ops team. They do great lead generation basically. We have a database of people that are really skilled in their field, and sometimes they’re not available for a job, but guess what, people do change their job every three to four years or sometimes five, and when the time comes, I want to be there for them, and I want them to think of us and come and work for us, so we have that database. We’re also reaching out a lot and then once we have a handful of candidates, we run them through three to four interviews, and we have obviously the initial screening, and then we have a cultural fit interview, which is important for me, is more important than anything else. If there is not a cultural fit, I’m not even going to test the technical skills, and that’s what makes our company unique.
We have very good people working together, and I have a saying that we have one life and it’s better to work with nice people, and we spend so much time working, therefore sometimes we take an extra week or two to hire the right person that would be a good team player, so we don’t get troubles later down the road. The psychological profiling and then after that, we have a technical assessment where we assign a technical architect from a specific area. They would do the technical interview that typically hour and a half, two hours with some coding exercise and such.
Then the very last one is also an architectural interview, and sometimes that happens with our clients as well, and in conjunction sometimes we do that on our own. I am a big fan of the right architecture. I’ve seen a lot of bad code that doesn’t scale well, that has security problems, and I’ve made a promise to myself to hire people, engineers that know how to build software the right way. They know the right architecture, the foundations and that’s where we would test that at the very last meeting, and if everything checks out, the hiring committee makes the call and they get a person on board.”
Your staff retention rate is about 90% – how do you achieve that?
“First, competitive salaries … but then you find the person who’s passionate about a specific thing. A good example would be, you can get an amazing engineer who would work for a large corporation, and he would be just one gear in that big machine, and he used to have all bells and whistles around how he works, a bunch of quality engineers that will test what he’s doing, there’s a certain process, and he thrives in that environment. If I take that amazing engineer with a lot of experience and put him in a startup, he’s going to most likely miserably fail, now he has to do way more things, much quicker, sometimes changing processes and he will not be able to navigate and adapt quickly.
For us, it’s vital to find the right match and find the right talent to feed the team dynamics, so when we do interviews with our clients, the People’s Ops team, my team does interviews with clients to understand what type of people work together on their side. What’s their psychological profile, how [do] they like to work, how [do] they like to communicate, what are the processes? What are the meeting schedules? What are the tools? We get all that information and then find somebody who is comfortable working within this environment while matching the skill sets.
I also have a management style that I’ve adopted a while ago, which I called a reverse pyramid. I’m at the very bottom of this reverse pyramid, and my job is not to tell from top down, but my job is to support people from the bottom up. and my first question to my direct employees is what can I do to make you more successful? What can I do to make your life easier? And I’m here to work for you to serve you and remove barriers for you to thrive and I encourage them to do the same up the pyramid, and they feel, and they feed off of that. They feel that responsibility and trust and just being a human and a good supportive manager, not even a manager, it’s a different word. I don’t manage them, being a good supporter, I’d say, and that goes throughout the whole company. I think that’s what keeps the retention rates high. We also, just to brag a little bit about that, we had three people last month return to the company, the ones that left a year ago. They came back.”
You mentioned a story about being 18 and seeing a friend running a successful business. It seems that was the inspiration for your move to Silicon Valley – what were your thoughts at that time and how did you go about starting your first company before you turned 25?
“When I started working as a hockey official, and I started when I was 16, so at the age of 18, I’ve already worked for three years and I had some experience, and as an official, you don’t really go to an office. You have assignments, you travel there, you work a hockey game, you do something that you really like, and then you work on your own schedule around the games, it’s not a typical job. At the age of 18, I saw my friend and his dad working on … building a successful company, and to me, success was a different measure at that time. They had a store where they would sell RC toys … but specific, professional helicopters, airplanes, and specific radio-controlled stuff for niche audiences.
They were successful at it, and they had fun now, and I saw all that. They were very passionate, they had fun, they worked on their own schedule, they drove a nice car, and I thought to myself, “Wow, I really would enjoy that lifestyle, especially being a hockey referee. I didn’t want to go and work for somebody else. I just wanted to continue that vibe.” And I made a promise to myself, and he was, I think he was 26 or 27 at that time, my friend, he was a little over 25, and I said, ‘I want to beat him, and I want to open my company when I’m 25, not older.’ And I did open my first company when I was 25, so I did open my first LLC at age of 25.”
What do you think that being a referee for so many years has taught you about business?
“First of all, I love hockey, and I’ve been doing that for many years, and it’s part of my life. It’s part of my routine, and that’s who I am. I like routines, and I like to be strict about the schedule and preparation and I think a lot of it helped me to be a successful entrepreneur is routine and work ethics and that’s what you get as an athlete or as a professional referee. You have to work on your own, you have to push yourself almost every day to work out or learn rules and do certain things. What I find, I started to find a lot of similarities with professional hockey and running a business is every hockey game for me is almost an intense situation with either clients or business, et cetera. You manage high emotions on one side and the other for both teams and you have adults, they have a common goal, and they try to play for a buck, and there’s high emotions, and you manage those emotions.”
You’re also an investor and an advisor at Blue Startups – how do you balance all of this with running a company?
“I’ve analyzed myself how I’ve gotten to that point, and I’m able to still do everything at such a high level, and I have to sit down and think through, ‘what are the success factors for me?’ I find a few key things that I do consistently to keep up with everything. First, I have to be a student of my calendar. I constantly look at my calendar and see how I can improve things and how I can make it more efficient, and then I look at ways how to make it more efficient. First of all, geography, my house is very close to my office, it’s close to the airport I fly airplanes off of, it’s literally 15 minutes to my office, 15 minutes to the airport. It’s about 25 to 30 minutes to the closest NHL arena where I do a lot of work.
I have a sound recording studio where I compose right at my house so I would, and more importantly, it’s always on. It’s always on, no matter what time of the day it is, sometimes if I have an inspiration and I have an extra half an hour, I just step in, sit down and start composing, it’s always on. That’s one of the things that I have to do, everything has to be on. Same thing with my gym. My gym is at my house, and it’s a specific gym for hockey training, so I have certain tools and stick handling and treadmills and a couple of bikes and sliding board specifically geared towards hockey. I also try to exercise every day, stretching is important, so I adjust the geography.
Then I have my priorities, so obviously business takes a lot of my time, and it’s a priority for my clients, it’s a priority, my employees are priority. Then hockey, you cannot move hockey games, right? You cannot call and say, ‘Hey, move hockey games.’ Obviously, once I get my schedule for hockey, that’s when scheduling for everything else happens for business meetings, for my travels. I typically travel outside of the United States in the season break, so once the season stops somewhere in June through August, I would do all my international travels. I would go to Argentina for a month, go to Europe to do some business meetings there and come back, because the preparation and training starts and mostly once the season starts, it’s all the same routine. You get ready, you prepare, you go to a game, you do a game, come back, you do meetings, and it’s all really a student of my calendar and geography optimization, and everything has to be on.
For work, I have the workstation set up. My phone is a really good tool for me, I’ve set up my phone that I can do almost every task that I need to do on my phone and that helps a lot because I’m mobile and I can, even during the workout on the ice, I can pull out my phone and reply to certain emails and make certain decisions, sometimes even make a call right being on the ice. That’s part of the job, that’s part of who I am, and sometimes clients and vendors understand that, and I can just do a call without a video and say, ‘Hey, I don’t have a video. I’m right on the ice right now. How can I be a service? How can I help?’ I think those things really resonate and work ethics. Work ethics, you optimize things all around, and I use Pareto rule, which is the 80/20 rule — 20% of efforts give you 80% of results — and I always find those 20% that would give me 80% of the outcome. That’s how I manage my calendar and my activities.”
How did you become a startup advisor?
“I’ve gotten into that a while ago by a referral. A friend of mine, he was involved with Blue Startups, and they were looking, at the time, for a tech mentor who understands technology, software, mobile apps, websites, back ends, et cetera, and has the business side of it, who can understand both technical and business aspects of the challenge. They’ve invited me in and said, ‘Would you be open to be a mentor at Blue Startups?’ And we met up and became a mentor. They run this program every year, and they select a handful of startups that go through that program, and every year we meet up with them, and I provide my knowledge, wisdom, and on multiple things, first, a lot of the questions come from scalability. If my architecture and software architecture is right, will it scale? Will it work? Can you look at it or can you suggest the certain tools or servers technologies? How should we build this? And I would advise them on that.
The other important aspect is team building. How do I build my engineering team? … Where do I start? Who do I hire? Do I hire a CTO or hire an engineer? Where do I hire them? What is the budget? How do I do all that? And a lot of the startups have the same question, and they would come to me, and I would analyze where they are, what they have, what the goals are, and then suggest them based on my experience, how to make it happen. I’ve gone through over probably 80 startups in my career, and I see what works and what doesn’t work in specific marketing conditions in specific industry so I’m able to advise them on the right structure.
And then also, recently more and more people are asking about business, about sales as well, how do we set up sales? … A lot of the entrepreneurs, [they’re a] one man shop, they do a lot of things themselves, and sometimes I just help to prioritize where you should put your eggs in which basket to grow faster. Those are the areas that I help out a lot and specifically at Blue Startups, but I’m happy to, a lot of startups just reach out in Silicon Valley through networking, and they would ask those questions and for advice.”
Blue Startups is an accelerator – they’re in Silicon Valley, correct?
“They’re in Hawaii actually, so they’re based off of Hawaii and … they combine Asian market startups and Silicon Valley startups right in that region and investment line as well for those startups. They do come to San Francisco once a year, they have a working session for, I believe two weeks and that’s where we all meet up and get through all that stuff. Some typically go to San Francisco, drive up, and that’s where we would meet up with them.”
If I’m a new founder, how would you advise me on making the decision to join an accelerator and also to vet them and ensure that they’re a good fit for the company that I’m running?
“That’s a great question. I think first, you have to realize who you are, what you’re building and what your goal is, and then look at the profile of companies that specifically applying for that accelerator. If you’re looking at Y Combinator, you have to get in, you have to pitch your ideas … They take a specific profile of companies, so if you want to get in there, you have to be a specific profile that they would like … A lot of people just don’t know where to start, and that’s a good starting point.
Many different Combinators, I think you should really focus on the one that complements something that you’re missing, if you’re missing technical co-foundership, there are certain … accelerator programs that help you with this, if it’s sales, marketing, there’s also that part. Some people really struggle with structure. I am a self-starter, so I can work anywhere, anytime and I don’t really need a motivation to work and produce results. Some people need a structure, they need to go to an office, they need to have a group of people around them, and sometimes certain programs offer that. You go into a specific building, and you collaborate, you brainstorm, and be part of the group that keeps you accountable.
It really depends on the needs, the goals, the exit strategy, the growth speed, the financials that you have. If you don’t have anything, just go in somewhere where they can give you some money and advice on how to grow or build a prototype or again, complement your weak points, and right now there’s all different Combinators and programs you can get. Blue Startups, for example, they specifically focus on half of it on local Hawaiian startups and half of it east meets west, so people from companies from Asia or from California as well come in, but they also have this local presence for supporting Hawaiian startup ecosystem. Which have grown and since the pandemic, a lot of engineers have moved to Hawaii and started working remotely off of Hawaii.”
A client became insolvent leaving a debt of $300,000 unpaid – how did you weather that storm?
“Those are one of the darkest moments, and when I reflect on it, it was a really tough challenge for me … It was devastating because I had to pay salaries for three months, I had to finance that, and I also had to pay all the taxes, the insurances, the office, all the expenses.
I sat down and started thinking through my priorities and the first priority for me, it was to take care of my people … I paid everything to everybody on my team, and that was number one priority. I cut down my salary, and then I took three loans to cover the payrolls … I took a lot of loans, and I just paid off one loan seven years later last year … I was able to keep the guys on the team for quite some time. I gave them two months runway extra time to find another job. We kept half of the team, and half of the team had to find another job.
If your client stops paying you should really consider [stopping] working right away, and that’s something that, or at least minimize the cost … dial down on the expenses you are occurring, because you have to think that you probably were not going to get that money for a long period of time.
You can figure things out. You can negotiate in the best interest of the people because once you take care of people, they take care of you and they take care of the product and the clients … I supported them for a couple of months, and they’ve all found jobs. I felt much better, but then I had to pay those almost $300,000 worth of loans over the span of five years.
Guess what, I started working more in sales. I started selling more, started reaching out, doing more networking, connections, just getting more business, and eventually I paid it off … made a promise to myself that we always take money first in advance and then just continue working every month … It’s the money first and then work next, and that’s my motto that protects my people and people that have families, and it’s there to protect them and the community that I feel responsible for.”
What is your number one piece of advice for early-stage entrepreneurs?
“Ask for help and learn how to ask for help. I didn’t ask for enough help. Didn’t reach out to enough people just to ask advice or help, whatever it is … I started asking for more help later on, and that helped to accelerate the business and not just business, every aspect of my life.
For small companies, the number one rule for business is stay in business. As simple as it sounds, stay in business and then everything will come naturally.”
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