“Most entrepreneurs are worried about not having enough money to start or build their businesses. But the other side of the same coin is even worse. It’s not about the money, but about the fact that you end up losing focus. You end up hiring too many people and you do much more development than you should. The lesson here is that you shouldn’t lose focus with your product.”
I had the pleasure of interviewing Sergey Sundukovskiy, co-founder, chief technology, and chief product officer of Raken, a web and mobile application for the construction industry. Sergey is a serial entrepreneur who co-founded multiple successful startups focused on small business marketing and eCommerce. The last startup he co-founded was acquired by Capital One in 2014. Sergey specializes in implementation of subscription-based high volume SaaS platforms, with a strong emphasis on early stage product development, product marketing, and customer acquisition. Specific areas of expertise include user testing, A/B testing, marketing, big data, video management, eCommerce, RTB platforms and cloud computing.
Thank you so much for doing this with us! What is your “backstory”?
I immigrated to the US at the age of 18, arguably a fully-grown adult. I already had an electrical engineering degree from one of the technical schools in the Ukraine. Shortly after my initial adaptation period, and after picking up enough English to converse on a basic level, I started working for a small engineering firm in San Francisco as a hydraulics engineer while attending a community college. After several years I quickly realized that computer science is much more to my liking than electrical and mechanical engineering. Three years later, I graduated from the University of California San Diego with a bachelor’s degree in computer science. While still in college I was not exactly sure what area of software engineering I wanted to apply myself to, hence I worked three separate part-time jobs trying to figure it out. After graduation, I accepted a position at a mid-size engineering shop as a software engineer. After that, I rose through the ranks being vice president of this and chief technology officer of that. Along the way, I got a master’s degree in information technology and a doctorate degree business. From that point on I almost exclusively worked for startups that I either co-founded or joined at the later stage. My last startup, prior to Raken, was sold to Capital One.
Can you share the funniest or most interesting story that happened to you since you started Raken?
The funniest stories in my life seem all to be connected to my family. Prior to immigrating to the United States, I studied radar engineering. This was a vestige of an old Soviet strategy to answer America’s development of stealth technologies with better radars. In the broadest sense of the term, I was an electrical engineer. Back then when explaining what I do to my mom she asked if I can fix a water heater. I said, “No, unless it becomes airborn.” Something similar happened when I joined Raken. When I told my kids what I do and that Raken helps construction companies build things, they asked me if I am finally going to be able to build a tree house now. The answer, in that case, was again, “No.” They immediately lost interest until I told them that I am going to be working next to GoPro.
So how exactly does Raken help people?
On a daily basis, general contractors and subcontractors use Raken’s mobile and web apps to document daily activities on the construction site. By taking pictures, videos, and spoken or written notes, superintendents and foremen complete a daily report that gets collated and sent to project stakeholders that monitor and document variances from the original plan. Raken’s daily report contains all of the important daily information pertinent to everyone on the jobsite such as weather conditions, manpower hours, images, notes, and survey answers. During the project closure stage, Raken aggregates information representing the entire duration of the project. This information protects construction companies from litigation years down the line by providing stakeholders detailed daily reports that they can reference in case of a lawsuit.
What makes your business stand out? Can you share a story?
This is a typical question we hear from investors and potential customers. The investors usually want to know how Raken is different from its competitors. Even though “differentiation” is not the only competitive strategy (“price” and “niche” are quite often forgotten), they really want to hear that we are different, cheaper, and more specialized. In fact, Raken is all three — we are different, cheaper and more specialized than our competition, but I would not consider that to be the biggest “moat” around our business. What differentiates Raken the most is our focus on customer success. To borrow a phrase from our Rackspace friends, “…we are fanatically dedicated to our customers.” We see our success as a company inextricably linked to our customers’ success. Many companies say similar things, but not many companies truly practice it. I quite often see startups drawing a line between the clients they are prepared to upset and those that they don’t want to upset. Let’s call it an “upset line”. Clients below the upset line are perceived to be unprofitable and it’s therefore OK to upset them. Of course, nobody says that directly, but you see it in the level of attention and the desire to resolve problems collaboratively. At Raken, we have no such line. Regardless of the client size we will do our utmost best to help them resolve any possible issues. Customer delight is the goal of any customer interaction by our Customer Success team.
How have you used your success to bring goodness to the world?
I certainly like to think so. Prior to starting my first startup, I finished my doctorate in business. I thought to myself that now I am completely prepared to start a company. Little did I know that nothing really prepares you for the trials and tribulations of a startup. I made every possible mistake every first-time startup founder does, regardless my bona fides and prior experience. In fact, I made so many mistakes, I felt exceptionally stupid. After a number of years in the tech startup industry, I decided to give back to the community through mentoring and advising other startup entrepreneurs. I contributed to a dozen incubators and accelerators in New York, Texas, and California, including private mentoring. I’m also an Anchor Mentor for Google Launchpad Accelerator. I feel if I can help even one entrepreneur, I would have accomplished my pro bono mission of helping founders avoid the same mistakes I made in the past. However, there is still a question in my mind if these mistakes are really avoidable, or if one has to make them and grow through them no matter what.
What are your “5 things I wish someone told me before I Started my Business” and why? (Please share a story or example for each)
1. A Ph.D. in business in not really going to help you. Doing a postgraduate business degree will teach you how to run a big company, but there is nothing in your MBA or Ph.D. about how to get a startup off the ground and run a small business. Even with my doctorate in business, I have made every possible mistake every first-time startup founder does.
2. Your initial product needs to be minimalistic. You don’t need the most complex product with as many features as possible to actually start a business. That’s not how startups or products are built.
3. You can’t copy success. If one company is successful doing something, it doesn’t mean your company will be successful doing the same thing. For example, Google has 20 percent flex time for their employees. That means employees spend 80 percent of their time on their actual job at Google, and 20 percent on any other projects they would like to. This might be something that makes Google really successful, but for a smaller startup this is not something that will necessarily work.
4. Raising too much money is worse than not raising any. Most entrepreneurs are worried about not having enough money to start or build their businesses. But the other side of the same coin is even worse. It’s not about the money, but about the fact that you end up losing focus. You end up hiring too many people and you do much more development than you should. The lesson here is that you shouldn’t lose focus with your product.
5. You need to be mentally and physically fit. Working 80 hours a week and having a lack of sleep will soon enough catch up with your health. You have to take care of yourself so that when you’re at work, you are fully focused and have enough energy and creativity to do your best. You can’t do that unless you take care of yourself mentally, physically, emotionally and spiritually.
Some of the biggest names in Business, VC funding, Sports, and Entertainment read this column. Is there a person in the world, or in the US whom you would love to have a private breakfast or lunch with, and why? He or she might see this. :-)
I very much admire Mark Suster, a fellow UCSD graduate. I really like his practical, pragmatic and experience-based approach to running companies. I am an avid reader of his blog “Both Sides of the Table.” In my mind, it is a must-read for any tech entrepreneur. Also, an honorable mention goes to Shai Aggasi. Without excessive adulation, his contribution to Green Tech is very difficult to overestimate. Shai was a founder of a company called “Better Place”, prominently featured in “Start-up Nation: The Story of Israel’s Economic Miracle.” Even though Better Place has failed as a company, I feel that lots of Shai’s ideas are finding their way into Tesla.