UruIT is a nearshore outsourcing company with 10 years in the industry, but how do they reinvent themselves to stay relevant? What is UruIT all about? With Marcelo Lopez, Co-Founder of UruIT, we are going to address these questions and many more.
Fabian: Hey everybody! Fabian from Kaizen Softworks here. Welcome to The Kaizen Podcast, thanks for coming. The Kaizen Podcast is produced every two weeks for your enjoyment. Show notes and links are found at podcast.kzsoftworks.com. Come back often and feel free to add podcast to your favorite RSS feed, iTunes, Stitcher, and Spotify. You can also follow me on Twitter, @kzfabi. Now, let's get into the show.
Fabian: You're listening to episode number four. Today we are talking about why big names like the Chicago Bulls, Boston Celtics, Charlotte Hornets, and the Cleveland Cavaliers are using UruIT's product name, Hurrah, a sales leaderboard. UruIT is nearshore sourcing company with 10 years in the industry but how do they reinvent themselves to stay relevant. What is UruIT all about? To answer these questions and many more, I'm here today with Marcelo Lopez. He's the co-founder of UruIT and a long time friend in this industry, so welcome to the show, Marcelo.
Marcelo: Thank you, Fabi.
Fabian: Alright. So would you like you to introduce yourself to the audience, give us a little bit about you, your background, what did you study, what is your current job in general terms?
Marcelo: Oh, sure. Yes. So I am 38 years old and I have computer science degree in terms of background. Twelve years ago we also went to Columbia University in New York with the help of the Innovation Agency in Uruguay. So at that time we went through some management training. It was kind of new for us. So we started the company without any management training at all and mostly technical know-how. Nowadays, I spend most of my time with UruIT, which is a core business, but I am also a member of the board at a couple of startups and another two spin-off companies that we have. So it's been a busy time for the past 10 years but so far so good.
Fabian: Okay, cool. And you said you are a member of the board of many startups. Are they only from Uruguay or also from other countries?
Marcelo: No, from Uruguay. So we co-created one company with another two colleagues or companies in Uruguay. We call it ConexioGroup. And that company's focused on building portals with Adobe content management platform, working for agencies in the states so that is one example. And then we are now starting ... and then we have our own spinoff companies that like the product that you mentioned. But also we are now trying to try this: How to help startups in Uruguay and we are going through our first initiatives there. I will tell you more in a few months how it goes.
Fabian: Excellent. All right so I want to start with something that is kind of a game I call Guess the Year. Something to break the ice, all right?
Fabian: So you have to guess the year. So I'm asking in which year was outsourcing formally identified as a business strategy. You have to guess.
Marcelo: Outsourcing itself? I don't know. In the early 90s?
Fabian: Early '90s? A little earlier.
Marcelo: Really? Oh, wow.
Fabian: But almost there.
Marcelo: Almost there?
Fabian: It was '89.
Marcelo: Oh, okay.
Fabian: So according to a research by the North Carolina State University, outsourcing was not formally identified as a business strategy until 1989. By that time, most of the organizations outsourced those functions for which they don't have no competency internally at all. I will leave in the show notes a link to the post where they describe all this and a brief history of outsourcing.
Fabian: Yes, interesting.
Marcelo: I want to learn about that too.
Fabian: So let's move into the topic of today. But for that, I want to give an introduction to outsourcing and the industry so which do you think are the reasons that make companies today to outsource their work?
Marcelo: Okay, sure. So I think there are many factors that can get a company to try outsourcing or to do outsourcing. I have seen that in most of the cases is very cost oriented. So companies that are willing to reduce costs of ... in our case like building a piece of software or eventually also, the ones that ... we also found the ones that are willing to focus in the core business at some point, in a core product, and they might have other apps that they want to build or to try. And I have seen also that some companies that are looking for outsourcing to deal with that. And the other reason obviously is the lack of resources and the lack of talent-
Fabian: The skills.
Marcelo: The skills sometimes. They might look for some partner that has some specific skills and they are willing to leverage those skills when they don't have it in house. Or when they don't have the opportunity to bring those skills in house because I don't know we have clients that are competing for talent with Facebook, with big names and it is really hard for them to get talent in their specific locations. So it's a combination sometimes of everything. And we have this outsourcing trend that is gaining population over time. And in particular I have seen Latin America grow in that sense compared to other locations.
Fabian: In the last years, right?
Marcelo: Yeah, in the last few years actually. Last year we were at this conference in Google actually that was about outsourcing and we see the ... they reported this trend about India going down a little bit and Latin America gaining more traction. So I think there is a huge opportunity in particular for Latin America to get more market share on that.
Marcelo: And companies in the US still need to learn more about what we could offer in Latin America. So I think this type of communication and this type of things that you are doing right now to promote it. I think we need more of that actually.
Fabian: We'll go back to the India going down in the ITO business, but I want to ask a few questions before that. Going back to why companies outsource and all that, are we talking about that any size of company can outsource or is it better for startups or just corporations, small, mid-size?
Marcelo: Good question. No, I think it applies to everyone. I mean everyone has different needs maybe and also different motivations to do outsourcing. But in our case for instance, we had been working a lot with the startups in the past few years. But also established companies and even Fortune 100 companies have outsourced some work to us in the past. So I think everyone can benefit of outsourcing.
Marcelo: The goals and the pains that they might have that will ... why they are doing outsourcing might be a little bit different and also the type of services that they will require in each stage will change a little bit. But I think in our case, we can offer something to any of those. So I think anyone can benefit from outsourcing.
Fabian: Excellent. Do you think there's any negative impact on a company that outsources part or all of their software?
Marcelo: Negative? Sometimes they are afraid that they are losing the control or the IP in some cases. And this is why we see a trend also that whenever they have the possibility to bring some talent in house they prefer to do that and work with a combination of nearshore or offshore resources along with the in-house ones. But anyway with today's tools that are available I think that is not a huge risk right now. They can access the code at anytime and they can access the application's environments are in the cloud. So I think they are gaining control but I had identified that as a risk that we need to mitigate in our pre-sale calls, for instance. Rather than that I think it's a ... I mean they can ... if they do the right research and they find the right partner, I think that they can overcome such fears. It's a matter of building this partnership with them and at the end they will benefit more of the partnership that the actual risks or problems that they might face.
Fabian: Another part of the puzzle might be building a good agreement that protects the IP of the company?
Marcelo: For sure, yes. I mean that is a very important piece of the negotiation. And in most of the cases, if the client is a mature company probably you will end up dealing with legal, with procurement, with security and we have gone in the past ... for instance, we have gone through several security audits for instance. And that needs to be reflected in the right paperwork. So yes, NDAs, MSA and in particular signing or reflecting those contracts with our people and our employees and our contractors is also part of the game there along with working with the right insurance policies and everything. So for companies like us that are ... we have been dealing with these type of international business in the past, I think we were able to develop this type of assets and know how. And at the end, it will for sure reduce the risk for the clients. But yes, it is part also of the due diligence that they need to do. But I think it's part of the game for sure.
Fabian: You said something about choosing the right partner, I think. So what should a company looking to outsource evaluate from the software outsourcing partner?
Marcelo: Good one. Yeah, I mean we treat every new client as a partnership. And we encourage them to make as much questions as they can. And we try to minimize the risks to make sure they are as we call it the right fit for us. And also that we are the right fit for them. And I think this is part of a research that every company needs to do. And there are many things that they typically look when they get to know us. In particular in terms of understanding the engagement process, and you know there are different, as I say, different companies in different stages with different needs. And not every company and or every partner or every vendor will fit with those. And in particular to understand what are the interests of the vendor and to try align that with the strategy of the client. I think that is an engagement. I think that is very important for us. And to make sure how the teams will collaborate and what they expect from their relationship. And we like to be very up front and to tell them what they will find in us and if we are not the right partner we will let them know. So I think that is very important. And we have found also that it's better when they can meet the counterpart. You can meet in person for instance. You need a trip or when they come down here and visit us. We encourage them to have these close relationships with the vendor so we have found that it's a small investment compared to what you get from that. So I think that getting to know the other vendor of course you have all the text that you need to do in terms of the technology. They typically challenge us with some coding challenges, interviews and everything. But at the end I think it's how you can structure this partnership and to be beneficial for both parties. And typically that requires more discussions about that type of goals, I think.
Fabian: So I found in UruIT's blog a post that is a really good one, I think, that compares offshore with nearshore and onshore. Would you briefly tell the audience what's the difference between these three?
Marcelo: Oh, yes. So offshore in particular as you say what is motivating a company to do some outsourcing. When they decide to do outsourcing they have different options. They could go with a local partner, even a next door partner or a partner that is located in the same region. In particular, we call it on shoring to the practice of outsourcing to a nearby vendor that might be ... in our case our market is the states so any company outsourcing to a local US development company is what we call the onshore in practice. Obviously, that has some advantages that they've identified that they outsource to someone that is located inside the same borders and the same culture. Eventually, they might be ending up working remotely from other states, but they engage with them as a local vendor. And then when they decide to go beyond borders they have two options. They could go offshore and in this case when we talk about outsourcing from the states it's typically about outsourcing to India or outsourcing to Asia or nowadays Europe is very hot. And the other option is we call it nearshore when they go to a nearby country. In our case it's Latin America mainly. The advantages of doing that is basically compared to the offshore is a timezone for sure and also the communication and everything. You can improve that by being closer and the travel distance and everything is much easier. And I think this is one of the things that is why Latin America is getting traction in the nearshore in the outsourcing to the nearshore market. Compared to the onshore outsourcing I think nearshore is quite similar. Obviously, it's a different country that you outsource to but the cultures are quite similar compared to the states. And we have found that we can deliver almost the same quality in terms of software and coding and best practices. We are pretty aligned and we use the same tools. We get access to a very high level of education here in Latin America. We have great universities. So we even had a client once in Kansas City that was outsourcing part of the work to a local vendor. And actually that was a big development shop that at the end was doing the work from Las Vegas. And they were working side by side with us in the project. And we were working from our offices in Montevideo and in Medellin. And the client was saying, "Hey, I get the same quality and I'm paying three or four times more to this local vendor and they are working remote anyway."
Fabian: There is no difference.
Marcelo: So why? Yeah, it doesn't make any difference. Obviously, they ended up going ... letting them go and going with us for the entire development. So this is what I am trying to tell the clients that we are ... you would be outsourcing to a company that is going to be working like from another state if you will because we work from the same timezone, EST or CST in our case, depending on the branch. So the communication and the culture and when they are able to travel down and meet face to face with the development team you create this connection with the team. So we are in the situation of being able to deliver the same quality of the onshore at a fraction of the price or the cost. So it makes total sense for companies to try it.
Fabian: You earlier said that as part of the partner selection for a company looking to outsource, meeting in person was important. But you recently just said that meeting with the team in person is also important. So besides working remotely how many times do you think these relationships should meet in person or going to the states or coming to Uruguay? Is that because you try to build trust or why is that?
Marcelo: Yeah, that is a big component on that. As I say, we recommend that the partners to consider us as partners rather than vendors. And to also ... yeah, we try to build this partnership. And to do that they treat us as an extension of the teams. And we recommend that face to face meetings to happen because you end up knowing the persons behind the video conference. Nowadays we do a lot of video conference all the day. But anyway, meeting, going out for beers and enjoying the-
Fabian: Yeah, do other stuff than coding, right?
Marcelo: Yeah, exactly. So whenever we travel or they come down here we spend a week or so doing more than work. And I think that is very important. And at the end you understand the goals, the personal goals and who is behind that. In terms of how many times, typically it's one time per year at least. If the team is big enough they might be coming down a couple of times every year. We have seen that happen a lot with our Colombian branch because it's quite nearby. We get the clients to share with us the goals for the year. They align us on the goals for each product so I think that is very important to have those strategic discussions with the team so they feel engaged and they feel as part of something and not just coders or people taking notes from somewhere else. So we do recommend that and we've even read a lot about it.
Fabian: Good. I will leave the link to the blog post of UruIT on the shop notes, too. Today we were talking about India losing some part of the business and I want to say that India has been for years the outsourcing destination paradise probably. But several if not most of the companies that outsource the work to that destination from the United States. I think that they learned the hard way. Because in recent years, you can see that the high volume of article everywhere. I've been reading about how outsourcing destinations are shifting to China and other small countries of Asia. Or even to South America. Even in 2017, I found an article from 2017 that the CEO of TCS said that, "We had a tough year."
Fabian: So what do you think are the reason of these changes? I think we said a couple. You've said a couple today like time zone alignment, the similar culture. Are there any other advantages of outsourcing to South America versus India or other Asian countries?
Marcelo: Yes. I think India obviously has some great talent available, and you see that many CEO's of big companies in The States are from India. So definitely they have a great talent there. They have great availability. But I think that at the very beginning it was more like a cost-saving thing that they started to do outsourcing to India, and nowadays that is not the only reason as I said, to outsource. I can tell because I started working in TCS, which is one of the largest Indian vendors. And I learned there a lot about quality, about process, and actually during this scholarship that we did at Columbia University, we went to India, and we were able to be in TCS and other companies there.
Marcelo: And we realized how important the culture is and they had this compromise with a job and the work. You had to understand. At the end, I think they have some great talent, but at the same time they have been growing quite fast, and maybe the quality has been compromised a little bit. And we have found many clients that are not willing to pay that. And they prefer to go with a more expensive option, but where quality is very important. Yes, we took many project that were originally built in India 15, 10 years ago. And nowadays we are refactoring, and we were rebuilding everything almost. And when we ask the clients, they say, "Okay, yes it was a very cost effective approach." But for most of the business it doesn't make sense to outsourcing when you have such time zone problem. And also they reported to us that it is much easier to engage and to communicate with Latin America because the culture is quite similar as I said. And so when they consider that I think at the end they prefer to pay a little bit more and not compare only all the rates. And for those companies that are also doing a lot of agile development, it just doesn't make sense. Even though if the vendor's in Asia or India work in night shift, because they need to do that to overlap. They find that at the end, it doesn't make sense to have people working at night. And it doesn't make sense to ... Last week I had a conversation with a potential client. And he was saying, "Yeah, I want to get out from my outsourcing to India, because my share is wake up at night or midnight trying to fix things and discuss with the Indian team." And so at the end it won't work. Maybe for some type of service when you can outsource some requirements or some maintenance it is great because you basically next day you get the result. But for this truly agile engagement model as we typically do with The States companies, I think it doesn't make sense for them.
Fabian: Right. Okay. Now let's move into your UruIT. Can you give us a brief introduction to the company?
Marcelo: Okay, yeah. So UruIT started 10 years ago, and with my business partner, we used to be developers. And in particular with Microsoft technologies and working in TCS. So we met there. And we learned a lot about how to do this. We had TCS to ramp up the teams in Uruguay. And at that time that was 15 years ago, it was the first branch they had in Latin America to serve the US market. So we learned a lot. We were used to working with US companies, and we spent time working on site in The States, in Motor Oil, American Express. So this is how we got into these nearshore model. And we learned how to work remote for clients. At that time it was kind of not a new thing, but not everyone was doing that as today. And the communication channels and everything was different 15 years ago.
Fabian: And how many founders are you?
Marcelo: We are two, two founders.
Fabian: Two founders.
Marcelo: And then we had the spin off companies with other share holders. We started in thinking about how we could build the same concept, but at different scale. So we wanted something that was more like a boutique shop and focusing more on the quality and everything. And this is how we started. And we were lucky that at that point we were also connected with Microsoft services in Chile. And this is how we started exporting services to Microsoft and then to Microsoft clients. But we had this goal of work with The States and focus on the US market. And this is how we started attending some conferences and doing some online marketing to showcase what we could do. And six months later we were getting some clients visiting us here in barbecue. We started a barbecue of my co founder.
Marcelo: So it was kind of a great start for us. I think that that focus on the quality, we tried to stick to that even today. And we had the opportunity to grow faster for sure. But we decided to stay smaller and not compromising the quality that much.
Fabian: How many people are you?
Marcelo: Right now at UruIT core business we are probably around 80 or so.
Marcelo: Yeah. Including software engineers mostly, but some UX/UI folks and many product management roles, marketers, product owners. And then within the other groups, the other companies that we have in the group, we are probably 130 or so in total.
Marcelo: Yeah, it's been good.
Fabian: What kind of services do you offer at UruIT?
Marcelo: Well it depends right now we do mostly custom software development for companies in The States, what is including in that service depends on the stage of the company. So we have companies that are requiring what we call the end to end solution, and in that case we do the development but also the UX/UI part and we also do the product management part. And in other cases when the companies mature enough, they probably have some in house talent, and so we do co-development with them. And we basically offer them engineers to work from our officers working side by side with them. So in terms of services, that is what we do. Mostly web applications. In the past couple of years we have been getting into mobile, too, machine learning, some block chain. The technology status changes depending on the client.
Fabian: Now, the following is one of the opening questions I made when we started recording this podcast. How UruIT, an outsourcing company with 10 years in the industry has been able to reinvent itself to stay relevant and keep in business?
Marcelo: That's a good one. I think that is part of the ... As a co-founder, you need to stay relevant, and you need to stay in movement. So we are always looking for opportunities to expand either the capabilities, the offices, the technologies, the services, and every year we basically decide where to invest. And to do that, we rely on the quality of the people we have obviously. We are very open about listening to their goals. So last year for instance we decided to go with mobile in particular with Xamarin, because someone was interested in learning about that. It did happen the same when we got into CRM or nowadays when we got into machine learning. So we try to align those interests from our people with what we see at the market and obviously having this presence in The States and to get into conferences to see what is going is very important. And to be honest I think a very important thing that we have been lucky kind of was the type of clients that we were getting all the time, or we get all the time, they are pushing us to innovate and to stay ahead of the technology and to stay updated. We are very lucky that I think whenever there is a new technology, we get someone interested on us either learning about it or trusting on us because we already know it. I think that we were able to combine that, our interests, our goals, the market, and also the clients pushing for that are very important. So we were able to do some blockchain work when that was still not so well known or we are now going through some machine learning stuff and we have clients supporting us on some new technology. So it's really tricky or really hard to stay up to date with all the changes that are happening, so you need to be very picky. And I think that is part of what we do is to try to invest the time and money into things that might work in the near future and the next few years at least. Obviously in some cases it didn't work out, so it's really hard. But we plan every year where we investing our time and money. And we prefer to review it every quarter rather than every year. Because opportunities will arise almost every day here.
Fabian: It changes all the time.
Marcelo: A lot. Quite a lot. Yeah.
Fabian: Does it take you too much time to invest in those decisions? You said you take a look into the goals of your people, try to align that with your business objectives. Do you see it all together and decide what to do?
Marcelo: Yeah it's just a natural process I think. A lot of input comes from our marketing activities. And as I said, we like to sponsor conferences and attend conferences there. And we listen to some hot technology that everyone is using there. And we try to offer that internally or do some proof of concept. And typically because I think that the engineers are always willing to learn something new. So I think it is pretty easy to align on that. But at the at the same time what we don't like is to lose focus. So it's really hard for instance to be the best in every single content framework, let's say, or every single cross-platform and development platform. So we prefer to stay focused on just a couple that we-
Fabian: You can be the best at.
Marcelo: Yeah. And be the best, exactly. Right now they come to us because we are pretty solid with React or in the past Angular. So we prefer to be very, very good at something rather than not specialists on a lot of technologies at the same time.
Fabian: So you started the team in Uruguay, and you also mentioned that you have an office in Medellin. Do you have other offices, and also why going to Medellin?
Marcelo: Okay. Yeah, we are incorporating The States, too, so we have a mutual office there, an entity, and also we work a space that we use when we travel to LA and New York. But our offices are in Montevideo, Uruguay. And the first branch we opened two years ago was Medellin in Colombia. Then we have smaller groups working from other locations but not in our offices.
Marcelo: Why we went to Medellin, it was kind of an interesting story. Because it was kind of a partnership with a client, so we had this client that was very important for us and was outsourcing to Uruguay. And at some point, they realized that they were spending a lot of time traveling to Uruguay. And they were considering going with a vendor in a closer location. And we offered them the option, we had this in our mind and we also realized that we needed to expand beyond borders at some point. So we offered them to set up a branch and start with them as our first client.
Marcelo: And they say, "Okay, let's do it." And-
Fabian: Kind of like it was good to push you to make a decision.
Marcelo: It was. Yeah for sure. And in two months, we opened the branch. We were relocated our COO here from Uruguay with his family to Colombia, Medellin. And it was kind of the client pushing us. Like, "Okay, if you say that you can do it, can you do it in three months?" And so we ended up in Medellin also because we did some analysis obviously that we were doing previously to this opportunity. And we considered to Mexico, Costa Rica, or Colombia.
Fabian: Yeah, Medellin is one of the fastest growing cities in IT, right?
Marcelo: It is. Yeah. Yes, obviously it's the technology center in Colombia right now. It's getting a lot of support from the government. We actually got a lot of support from what they call RutaN which is an accelerator for companies. So we felt in love with that and we decided that we were able to replicate our culture there. Yeah, it's been a great path so far. We have right now getting into 20 or so people and finding great talent there, and obviously getting more clients that are interested in Colombia. Because it's closer, because it's easier to get to. And the timezone wise also is central time, it will align better with the West Coast clients. So we are very happy about it. The initial concerns about the image of the city and the country and the state, I think we are very happy that we went with Medellin. Because clients right now come to us and say, "I want your Medellin office for my team." So we are very happy about it. But, yeah, it was kind of this partnerships with the clients, and when you have this trust, it's something that you can do.
Fabian: To give a picture of financial terms, on financial terms speaking of how it would be the relationship if United States company decides to work with UruIT. Do they have any tax assumptions? Do they have to pay something additional in the United States? Do you invoice from Uruguay or do you invoice from your mutual company in the United States or from Colombia?
Marcelo: Yes, we invoice from almost everywhere depending on the client. Some clients, in terms of taxes they don't pay anything more because they are outsourcing to Uruguay or Colombia. Actually, we had this discussion with a client a couple of months ago that they were saying, "Oh, I need to pay 30% more," and we were able to with our IT chamber, we were able to demonstrate that it was not the case. And that was mainly in some particular cases where they were outsourcing not only services but buying licenses and some tricky scenarios there. But when they outsource, so for development they don't need to pay any extra taxes which is good. However, sometimes they do have some legal requirements that they need to engage with a US cooperation. Depending on the procurement side of their business, we might need to invoice from The States. And for us it's easier if the development is being done from Colombia to invoice from Colombia directly. And obviously, we have different taxes in our countries depending on where we invoice from.
Marcelo: But for them I think it's very transparent that they will just engage with us as with another vendor probably.
Fabian: Good. So in 2017 UruIT was named Nearshore Company of the Year by Nearshore Americas. During Dave Nexus event in the context of the Illuminate Awards, which is kind of like the Oscars of Latin outsourcing. You have many other awards, so what are these awards recognizing from UruIT in your view?
Marcelo: That was kind of a good celebration for the 10 anniversary to get that award and we've spent a great time there in California. We have been doing this for 10 years, so right now we have kind of a brand in Latin America. And obviously I think they do it because we get so many testimonials and happy clients speaking about our services. And at the end, I think that is what they consider when they award us. And we like them to ... most of our clients support us with case studies and with interviews and referrals and everything. And I think that reflects what we deliver. So at the end, it's what they consider and it's a great honor to get those type of awards. And yes, we got many in the past few years across different verticals and different technology that we do.
Fabian: Good. So what industries are the strength of your company?
Marcelo: We work a lot with software as a service companies. We have been doing that since the very beginning. And we have learned a lot about that. So I couldn't say it's about a particular industry like ... We do have some clients coming from the commercial real estate for instance, but we have clients in almost every industry, construction, market research, talent management, you name it. But at the end, where we are very strong I think is building those types of software as a service. And typically, those are more like B to B solutions. So what I mean is that our clients will have a product that they sell to other clients. It might be corporations or global companies. And we have learned a lot about how to build a software as a service, multi-tenant applications, the need to scale and be able to manage that workload. So we have been specializing on that from companies that are starting with an MBP to companies that are supporting large software as a services or deploying to global clients with literally thousands of users across the globe. So I could say that is our core expertise. And in particular, yeah, in the front and side of it. So how to build these picture-perfect applications that will render on every device is what ... Typically, that is the most needed thing from our services.
Fabian: Now, talking about strengths, what are the technologies is your IT best at?
Marcelo: Well, front end for sure. Front-end frameworks. Nowadays we do a lot of free ad work. But we were one of the first companies doing angular at that time. And combined with backend systems that we do mostly donate. 50% donate, 50% no to yes, so we are going with this full java script stack. Then we have other smaller groups or teams working with, as I said Xamarin, machine learning, and so I would say front end is probably on of our core skills these days.
Fabian: You say you are getting into machine learning, is it also any additional thing from artificial intelligence, big data, bots, are you getting to those fours?
Marcelo: We did a lot of, you can call it yeah, data projects, from the early days we were cutting that big data, call it different data sources, and big data set, so we have been traditionally doing a lot of that type of work. Most of the applications we do they handle millions and millions of records and we went through different data bases, cloud base, on-prem In these days obviously, data is everywhere, so most of the solutions require some expertise on that. We do have only right now two data engineers as we call it. And a couple of fours that are going through this machine learning project, so it is not huge, but I anticipate that we will grow for sure. Right now the machine learning type of work we are doing is related to video, so we don't have any chat bots right now in the project. But eventually, we will be able to tackle those type of things.
Fabian: Talking about machine learning, I just remembered that not long ago, probably a couple weeks, I read in your blog, and yes I'm a big fan of your blog, I read quite often, that you probably, a blog post, about machine learning. They were using, a very technical blog post, about how they through the texts of the description of the stories on TFS, I think it was, and they give an estimate of the starting points base on the test. Right?
Marcelo: Funny one. Yes that was done by one of our tech leads. That is, he went through this PhD in machine learning, and basically, as I said, he was looking to improve those skills and we were supporting with time and project. It was one of the reason was, by the way we just went with one that is an entire guide to machine learning that I encourage you to go through it. To understand the basic concept behind it, some applications, what is a smart system, what type of business applications you could be on top of this type of technology. So I encourage to...we like to write and do these proof of concepts and then write about it to share with the community. That is the last piece of... and it was amazing, I mean, it was able to predict in most of the cases that, the size of the story. So you can apply to almost any, I remember the previous one was about predicting the performance in the World Soccer Cup and using some video game data set that were from FIFA. Yes, you can apply to almost everything right now and we were teaching clients in the past few months, every client we have, we were teaching about how they could improve their applications or their business using a little bit of predictive machine learning technique. I think there is a lot of room for growing in that sense. Every company will end up using it and every vendor should be doing some kind or some type of machine learning work if they want to stay relevant for the client.
Fabian: Alright. So let's move into the last section of today's podcast. Which is about your program HURA. Can you teach us that program?
Marcelo: Yes. So HURA is basically a sales leaderboard too, that will help save teams or outbound teams, the typical call center doing sales to automate the measures they take from CRM and to promote this competitive environment, like a gamification type of thing, with leaderboard, contests, celebrating with big events as we call it. That is basically what it is, so you will be rendering that into the TV along with call center rooms and you will be basically creating this environment in the office space.
Fabian: Before starting to record this program, you were telling me that the history of HURA was kinda exciting. Can you tell us the history of it?
Marcelo: Yes. Sure. I can try to summarize it because it would be an entire podcast for that. It was our first successful product. We were, as a service company you always dream of having a product, you don't rely on shops growing the stuff and you have these IP that you can sell one, one time after time. So we tried a couple of mobile labs, games at that time, to be honest, we didn't put the right focus and at the end, we ended up losing money basically. But with HURA we decided to do it in a different way, one of our co-founders in the spin-off company that was doing it at that time, CRN Implementations, found these problems about the use of adoption of CRN Systems.
Marcelo: Learning about gamification we decided that we could build something to tackle that problem and this is how we approach this. We say, let's do it the right way this time. Let's try with an MBP you know, try to get some traction and then look for investors. Basically what we recommend to every client, we decided to do it, and we started with another program, not the HURA one, it was a gamification platform for dynamic CRM, Microsoft CRM in that moment, and created this spinoff company, and we build a dedicated team and created the MBP in a couple of months. And we took a plane and took it to this Microsoft conference to showcase it and you know, the market feeling about it. And, wow, it was incredible. We were there with a booth and showcasing, some proof of concept. We were getting tons of people going through the booth and saying, "wow I want this, I want this." And we came back from the states and I remember we say, "Oh, we might have something here." We decided to put more effort and money into this and continue the development, improve it. We got the support from the local innovation agency here, to kinda scale it a little bit faster. This is how we started with the product and we decided to have dedicated marketing, dedicated sales people, dedicated developers. It's very hard for a service company to do that, because at the end you will be basically you will be compromising people that could be working for a client. We took that very serious and we had a great experience. At some point we were focused on growing this Microsoft CR-Ram base, and actually we were in discussion with Microsoft at some point. They were interested in acquiring a similar product, but they decided to go with another competitor and offer it for free. So everything, all of our strategy change from one day to the next one. We were able to recover. We piloted the product a little bit into this HURA and sales automation too. It has been good so far. We have been shopping it right now, and looking for a new round of investments, but we do count on our customer base with quite a few being named as you mentioned. I think we have like 30 sports teams because they use it mainly for selling tickets for the stadiums. They have our tool in the sales room. Motivating the people to call and close more this and sale more tickets. So we found that niche. And obviously we have another 30 or so clients in other industries, but it's great to work with big sports name. It's very exciting for everyone in the company.
Fabian: So you came back from the Microsoft conference, that you said, "We might have something interesting here." You were right because you just mentioned it, you have like 30 sports teams. Just to name a few, the Chicago Bulls, Boston Celtics. But the question is, how did you get to them or did they get to you? How did they find you? What did they find most attractive, you think, about the platform?
Marcelo: Well, it was a combination of marketing and sales activity. So we did hire a person in the states to start with sales activities there. Nowadays, we also have someone working from Uruguay doing sales, and then it was a lot about additional marketing. We invested a lot in creating content to attract potential leads and this is how we ended up. I remember in the very beginning, partnering with Microsoft and other CRM vendors, nowadays we decided to open it to sales force and others CRM systems out there. So, it was a combination of partnerships, direct sales, and additional marketing. And we all the time have this focus of providing them with use and experience that is very appealing for them. They don't recognize if we, they don't care if we are in Uruguay, as long as it's quality of the service.
Fabian: Which is really exciting, right? How a company in Uruguay is selling to big names in the United States.
Marcelo: It's really exciting and I think it's something we need to try to replicate. It's not impossible and you can do it. Obviously, you need to consider, as I say, we did hire some Americans to do the sales, and we have support teams. We require a lot of work and to provide these user journey in client experience, you need to compete with other vendors that are in the market and are getting millions of dollars in investment. At the same time our clients are use to engage with self service product and you need to provide a similar experience. So we put a lot of effort into that. The good part about us, is that we know how to build software, so we have been using that to create this experience. It's an advantage that we have. But the marketing and sales, I think is a tricky thing for Uruguayan companies, because you need to overcome that difficulty that we are so far away in, geographically at least.
Fabian: In which year did you start this product?
Marcelo: We started about 4 years ago, but then we started with another product that we had to pilot into this. This was a feature of the original product actually and we identified that it could be a selling product and it ended up being our core product. So right now we are very excited about how to do this, scale this sales process, now that we have so many names in the portfolio. At the same time raise some more money to do it faster, because you know competitors are growing, and we need to face that competition.
Fabian: And besides those big names in the NBA, do you also have teams in other sports leagues?
Marcelo: Oh yes, we have in NFL, even some soccer teams in the U.K. So yeah, hockey. So we have in almost every sport and then we have others. There other clients in other industries, from contact centers, staffing companies, so it's...the product itself can apply to almost every industry.
Fabian: You say you are looking for investment. Do you only look for investment from Uraguay investors or...
Marcelo: No, actually we need more money than what you can get right now in Uraguay. It's been a challenge, yes, we have to pitch other of investors in the past year but, as I say that our company will start raising millions. We are right now, starting to look at some accelerators in the States and also start pitching some, starting with some friends and connections that we have from our services businesses, to see what we could do in the states in terms of raising money. It's going to be an entire journey and my business partner will be focused on that, while I help with the sales process.
Fabian: If someone from our audience, listeners, are interested in your IT's services or the program HURA, how could they get in touch with you?
Marcelo: Well, they can reach out to our website uruit.com, so uruit.com. And in the case of the HURRAH! product, it's CRMgamified.com.
Fabian: Good. I will leave the links and probably your phone numbers of the company and show notes too. Any final talking about outsourcing? Any final recommendations would you like to make thinking about outsourcing?
Marcelo: I would say they need to try Latin America outsourcing. We need to invest more in marketing our countries and what we could offer because I think it's still a lot of kinda untapped market for outsourcing in most of the U.S. companies. So I will encourage them yes, find a good partner and a good location and give it a try.
Fabian: Thanks everyone for listening to The Kaizen podcast. This podcast has been brought to you by Kaizen Softworks. Check us out at kzsoftworks.com.