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EPISODE 7: What Is Foundational Software? (w/ Dev Firm Founder Mike Stone) 🎙

EPISODE 7: What Is Foundational Software? (w/ Dev Firm Founder Mike Stone) 🎙
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This week Louis is joined by Mike Stone, the founder of Boston-based software consultancy The Gnar Company. What is software development? What’s the process of developing new products and how much of a role does design play? When should you develop something in-house and when does it make sense to hire outside help? Mike answers these questions and more, plus gives his best advice for what to ask before hiring a company to develop your next app or feature.

“A lot of invisible work goes into building a product. Coding and design and work behind the scenes.”

-Mike Stone

🎙 Highlights Include

  • An explanation of “foundational software” & why it matters
  • What to know before hiring a software dev firm 
  • Emerging trends in software development 
  • How The Gnar has changed in response to the pandemic — and why it’s called “The Gnar”! 

This Week’s Guest

Mike Stone

Mike Stone

Founder @ The Gnar Company

Mike Stone is founder of The Gnar Company, a Boston-based software development group that consults with both startups and enterprise companies, including institutions like The John Hopkins School of Medicine and the Commonwealth of Massachusetts. 


The Startup Stack’s Host
This image has an empty alt attribute; its file name is louis-1024x1002.png

Louis Beryl

CEO, Co-Founder of Rocketplace

Rocketplace is a curated marketplace of high quality professional service providers. A 3x founder, investor, and board member, Louis began his tech career as a partner at Andreessen Horowitz. When he’s not working or podcasting, Louis enjoys cooking for his family. His pizza, he’d like you to know, is incredible. 


Full Episode Transcript

Mike Stone: Why did the developer quit smoking?

Louis Beryl: I don’t know.

Mike Stone: Because they imposed a new Syntex.

Louis Beryl: There you go. Badum ching!  Hi, welcome to “The Startup Stack” I’m your host, Louis Beryl, and this week we’re talking to Mike Stone. Mike’s a developer, business owner joining us from Boston, where, like many of us are sheltering in place. He’s going to be talking about a software development company, The Gnar. What was it like starting the company, the pros and cons of his newly remote team, and the one thing he wished every potential client asked before hiring an outside dev team? Let’s jump right into it.

Louis Beryl: Ok, so I’d love to just start off with hearing about The Gnar company. So you guys are a software development firm in Boston, have been in business for five years, have about 20 people. And, you know, I’d love to hear the story about how you started Gnar. How you all met up, got together with your co-founders and decided to start the company.

Mike Stone: As you mentioned, we are a software consultancy. We build web and mobile applications as well as design, mostly UI/UX design for web and mobile. And we started about five years ago in late 2015. At that time, my co-founder Nick Maloney and I were working together at another Boston based product company called New Health. That company, like startups do, was going through some tough times. Nick had previously been a consultant before joining New Health, so he had some connections to people that had experience there. We got connected, started a business previously and he was interested in starting a business so we got connected over nights and weekends just started taking on projects. Very kind of lightweight sort of projects that we would take on. But then once the round of layoffs happened at New Health, we found ourselves in a perfect new job. We basically had some projects, we had some contacts and clients, and we transitioned over from working at New Health to working full time at The Gnar company. And that’s how we got started. It was just the two of us to start and we slowly grew. The nice thing about the layoffs and kind of the opportunity through the chaos was that there was this group of really strong engineers and New Health also had a really fantastic engineering culture. So we had not only really strong engineers, but people we knew and worked, culture. The best practices were all there. And so we were able to bring on a bunch of people that we already knew they would be great and develop a strong culture. And we were able to bring them on to some of the projects that we were working on.

Louis Beryl: The Gnar company. It’s a very unique name. How did you come up with it?

Mike Stone: We get that all the time and we’re deliberate about wanting something that is going to be unique and different, something to stick out, because when you’re a new company, it’s a crowded marketplace. There’s tons of consultancies. And if someone’s going down the list, we wanted something that would stick out a little bit.

Louis Beryl: Yeah, I mean, I totally know. I mean, I’ve named three companies at this point. And when people ask me about founding companies, it’s funny, but I always joke that, like, the hardest part about starting a company is coming up with a new name.

Mike Stone: It is really hard. And, you know, as you know, coming up with the domain name is really hard to spend…

Louis Beryl: I don’t even get me started on my trials and tribulations and domain names, but…

Mike Stone: I bet. And so, yeah, we went through the standard like rigamarole of every name that we liked was taken, the domain name was taken. But we were in a tough point initially when we first took on those clients, when it was nights and weekends, we didn’t have a name and we were using our personal networks to try to find clients. Then we got to a point where they had to pay us and they needed to know who to make the check out to. And so that really made finding a name a priority. So we kind of in a fit of frustration one evening when it was that day, we had to have a name so they could pay us sorry, one of the founders who ended up leaving, but he was a snowboarder and he was like in this fit of frustration, we just need like a gnar name. And everyone kind of stopped and looked at each other like maybe maybe that’ll work and, you know, ended up settling on The Gnar company. And the reason behind it is that we help solve your gnarly problems. And that was what we ended up going with.

Louis Beryl: Gnar is a fire breathing Boston based software consultancy. And I’m like fire breathing, right? I’m like, you have a tiger, some sort of tiger dragon, which I’m wondering if there’s like a name for the tiger dragon on your homepage.

Mike Stone: Yeah, we have. I think it’s four different gnar beasts. They don’t have creative names. It’s like Fire Tiger, Laser Eagle. There’s another one that’s like a warthog with like tire or tank tread legs. It’s weird. Our designer is just a phenomenal designer, but he really wanted to embody the weirdness or like boldness of the brand.

Louis Beryl: So what happens when a snowboarder, a software engineer and a former professional lacrosse player get together equals gnar beasts? Yeah, yeah, yeah.

Louis Beryl: You were a professional lacrosse player before starting there. And I want to hear about what you learned in lacrosse and being a professional athlete and on those teams that still influences how you’ve built Gnar and built Gnar today.

Mike Stone: Like sports being on teams for so long is just really helpful for then growing a team. And it kind of sounds sappy, but I really believe it. And that’s something that is my responsibility at Gnar and that I love building a team and being part of a team that functions really well because I was on so many different teams, I got to see teams that worked well and teams that didn’t work well. Teams that succeeded in teams that failed. That was huge. I think it also equipped me with a team mindset where I want to help the people around me. There’s like this common goal that we’re working towards and all of that kind of stereotypical stuff. But the transition from, like college to pro was also pretty eye-opening, too, because that game changes a lot, not like the physical game, but like you are now part of a business and it’s very much more cut throat. And can you get the job done or not? There are certainly lessons that I learned, like not only that life is that way, but that I learned to push myself and organize myself and get myself prepared to be in that type of environment. I think that’s been helpful with the business as well.

Louis Beryl: Teamwork makes the dream work. I love it! I want to ask you one more question about running Gnar. You know, today you have 20 people and you have a number of clients. I’d love for you to tell me like today, you’ve clearly had a lot of success and you’ve figured a lot of stuff out. But what are some of the big challenges that you face today? You know, it could be anything about finding new clients or closing them. You know, I’d love to hear about what’s on your mind about running the running of the business. That’s a good question.

Mike Stone: And the thing that’s on my mind the most now is that we have a really flat structure in the company. Like everyone’s the same title. Everyone does the same thing. We don’t have management layers or anything like that. And so we’re stretching that model a bit now. And it’s working. But we’re getting to the point where you have to kind of think what the next step is going to be there or if we even want to go to that next step, because right now we have good quality control and it’s manageable at this size. But a big thing is for us, as we grow and grow, how can we keep tabs on everything that’s going on and make sure everybody on the team is well supported on their projects? So that’s the biggest thing for me that I focus on.

Louis Beryl: I wanted to jump into the world of software development. As you were describing the software consultancy, you were saying we do web dev, we do mobile dev, we do UI and UX design is kind of kind of a lot there. Well, you must meet clients sometimes and maybe they don’t have a good understanding of really even the differences. They’re just like, hey, we need this built. And I was wondering if you could describe for us really the differences in some of the things that you do. And I would love to also understand, are there certain things that you do more of than others and you kind of just do a little bit or is it more evenly spread out across those different areas?

Mike Stone: We get approached all the time by people that are not technical, that have a product idea or work at a company that needs a mobile app for something. They will ask us, you know, what’s it going to cost to build this? The types of questions that we get asked all the time and we pride ourselves in being able to kind of walk through that process with non-technical folks as well as technical folks. And there’s two branches to the type of work that we do. One is building the product side. And that’s when someone comes to you saying, we want to build this application, can you help? And oftentimes, I mean, the answer for us is almost always yes. But what will often start out with is what we call it design discovery engagement. And that’s because it’s so hard and this is a thing that I think is frustrating to people but it is so hard to tell somebody how much a product is going to cost. And it’s something that everyone just wants to answer, like, okay, I get it but just how much is it going to cost? It’s a bit like saying, you know, how much is a house going to cost? And so what we often do as a way of a budget friendly way to get to that number, get to an estimate and also make some progress and get the client to understand what this is going to look like. Is this design discovery and so that’s when our head of growth in our designer will work with the client to understand what their vision is, what they want to build, and start to iterate on some wire frames and get towards the deliverable at the end of this process. Is final design comps for their initial vision, along with an estimate for what it would take our team to build that out. So that’s one of the branches that we work in. Oftentimes people, especially non-technical people, don’t value the design part of that as much as the development. They think that they’ll have an engineer just do it. But there’s a big difference between what an engineer does and what a designer does. Engineers get tasked with figuring out how someone thinks something’s going to look on the page. It’s often not as good as what a designer would actually do.

Louis Beryl: Other times maybe there is a designer on the team, but then maybe there’s a difference between how your engineers like to work with the designers on your team and you’ve got a set of designs coming over from a different organization. And that must also be a challenge.

Mike Stone: Totally. And that’s kind of the other branch of the type of work that we do that I mentioned, which is more where the client is coming to you and they already have a team, but they may need more velocity. They need to move faster. Maybe we’re working in an area of expertise that they don’t have in-house, but they have a designer, for instance. More embedding ourselves in their process where we kind of differentiate as we’re very client focused so we have opinions and best practices and ways that we like to work engagements, but we very much want to learn from clients and learn how they’re doing things and then blend what we do and what they do. You know, hopefully leave them in a better place at the end of the engagement, but also be able to learn how other people, other companies are working and take those learnings with us to other clients. So there is, I would say, about 50/50 where sometimes we’re building stuff from scratch and sometimes we’re working as teammates with existing teams.

Louis Beryl: In my experience, both running companies, I’m a mentor to a number of companies and investors in a number of companies. You know, probably the number one request that I get on the startup side when people are building companies is really around engineering talent. You know, there are a lot of firms out there like yourself that can help, but there is a reluctance to bring in outside help that isn’t kind of on your full time staff. And I’m wondering, what advice would you give to other startup CEOs about how to evaluate a firm like a software consultancy like yourself? What should they be looking for?

Mike Stone: I think a lot of times it’s looking at their portfolio and the types of products they’ve built, getting referrals from clients and also like looking on LinkedIn to see who works there and what is the level of experience of the people on staff that you might be paired up with? There’s a lot of consultancies that might be kind of sales heavy. There’s other consultancies that are engineering heavy. There’s other ones that are design heavy. So doing some snooping to find out who you’re talking to and if that suits your needs in terms of hiring talent internally versus externally, we get that a lot, too. It can be a little bit tricky because especially as a company starting out, I think it’s really important that the foundation is laid well and that the application is built to be extended and kind of built to last. And oftentimes we’ll see companies that why would I go with you and and pay your rate versus hiring somebody internally who can get the job done. And I think a lot of the times it comes down to building that foundation. We actually use this term foundational software when we’re talking with potential clients, because that’s really what it is. It’s something that you can build the company around and they’ll be able to come on and on board and understand the patterns that are being used and have a lot to reference. But there is a like expertise, time to market and cost savings that can come from using consultancies where you’re you’re saving the expense of hiring and the risk of hiring somebody full time with benefits, as well as the time that it takes to review resumes, get them through the hiring process and all of that. If you do your diligence and find the right consultancy for your needs, you can kind of hit the ground running and build something that is going to last a long time that you can then hire behind. We always know that we’re a short term solution, so we’ll go away. But we’ve had many projects where we actually review the resumes and help in the hiring process and then on board have those engineers work with us and onboard them and we go away and they stay with the project. And that’s actually been a really successful software and process.

Louis Beryl: Well, so it’s interesting we’re doing all this talking about hiring and recruiting and internal versus external talent. So tough question for you. Have you ever had a client that was working with you try to hire some of the team members at Gnar to their company or maybe a team member at Gnar to go to one of the clients? What do you think about that?

Mike Stone: Yeah, that’s a good question. So we’ve had a similar situation, but it wasn’t exactly that. We had an engineer who was going to leave, nor his client that he’d been working with for a long time, approached me and said, would you be okay with me approaching the engineer to see if they wanted to come on full-time? And then they ended up doing that. That felt okay. It’s kind of like a big no no of like when we work with clients, we’re not going to poach their talent and they’re not going to poach our talent. And you can burn some bridges that way. There are some companies that like that as their model. It’s like a contract to hire and that’s what they do for a company like us that’s not the case. It has happened in that roundabout way for us. But I think it’s pretty known with the clients that we have and it’s in like the MSA and stuff that that’s not the relationship.

Louis Beryl: Yeah, yeah, totally. I wanted to transition into trends you’re seeing in both the technical aspects of software development but also there’s a lot of other stuff going on in the world right now with that huge move to remote work and COVID. How is the business different today than it was a few years ago? What are you seeing?

Mike Stone: First of all, we’re remote now. We weren’t remote before. We still have an office in downtown Boston and that’s something where we’re kind of within these trends we’re kind of thinking, how long is this going to last? Are we just going to be a remote company now? There’s been a bit of an adjustment to being remote, even if it is temporary. We’re big believers in constantly kind of evaluating ourselves in our process and making adjustments. We have parts of our process, like our morning stand ups that have gone through many iterations of how we execute on those to be helpful to the team. So we’ve made some tweaks to our process. Because of this, we used to not have daily stand-ups. Reason being is that everybody’s for the most part, there’s a lot of different teams going on and there can be a bit of a distraction if you have stand up with your client and then you come to Gnar and you have stand up with Gnar and, you know, to keep the day moving forward and delivering more value to clients, we we do them twice a week traditionally. But we found that moving remote. We started to do them every day. Just so there’s at least one touch point with the team every day you’re not seeing each other around the office. We also always have video on for our meetings and just having that touch point in our stand ups are a little bit different to another thing, another kind of trend that’s changed. But it’s not so much like what you do yesterday, what you have going on today and what are your blockers? It’s what challenges do you have right now? How could someone on the team help you with your challenges? And what are you excited about? Those questions and how we hold our stand ups who have gone through many changes?

Louis Beryl: You know, one of the reasons we started Rocketplace was that we believed that there were really great service firms, consultancies just like Gnar all over the country. They could collaborate remotely regardless if they were in different cities. You know, you talked a lot about, you know, some of your initial clients you guys were going to networking events and, you know, you hired a big dev person to kind of source new business. I’m wondering, have you noticed changes to how you bring in new business? Has that become more remote in any ways with everything that’s going on?

Mike Stone: Most of our work now actually comes from referrals or inbound leads. So there’s certainly a lot of meetings, you know, reviews and stuff like that. That will happen on Hangouts or more through emails than meetings sometimes. But we certainly had a bit of a grim period when COVID first started coming on really strong in March, when a lot of companies were really tight with their budgets and didn’t want to spend according to the plans that they had set out at the beginning of the year. But then we’ve kind of seen more recently a bit of a resurgence and there’s many more like cold leads coming in through our website. And um, I guess the nice part about being a software consultancy is you really only need your computer. So our transition to remote, both with meetings and just our daily work has been really nice and it’s made us seriously consider if we want to be a remote company going forward.

Louis Beryl: What about on the technical side? We talked a little bit about web dev and mobile dev. Is mobile dev a larger percentage of your business than it ever was, even within mobile. I’m wondering what’s the balance between iOS and Android or is it really like we need to do both all the time?

Mike Stone: Yeah, that’s an area that has changed a bit since when we started. So there’s like mobile dev, then there’s front-end development and back-end development, It used to be that the front-end development side was like the Wild West. There was React and Angular and Backbone and Ember, and every week there was some new front-end framework that was coming out that everybody was really excited about.

Mike Stone: And I imagine that’s really challenging for you as a consultancy, because you meet a new client and they’re like we’re, you know, we’re building an Ember. And do you or do you not have competencies in those areas? What do you think about that? And constantly staying up to speed.

Mike Stone: The first time we used React, we were like, this is great. And we kind of made a decision that we are going to focus on React for our front-end development. You know, luckily the market kind of trended that way, too. So we’re in a good spot now where we’re getting a lot of React requests before we state that that’s one of our core competencies. And there still is like a good amount of Angular work and stuff like that. What we try to do is have a hub and spoke type model where we have a lot of looks like partner organizations that we can send work back and forth if it doesn’t meet our competencies. So if we have an Angular request for an application, we have a company we can go to. We’re still able to serve the client and say this isn’t the best fit for us. But let me introduce you to this other company that specializes in the type of work that you need. And so there’s a lot of kind of friendly competition in the space too, where you’re all competing for the same work but people have different focuses because you can’t. You kind of can’t do it all, especially at a small size.

Louis Beryl: And do you have any predictions on what the future of software dev looks like over the next five years?

Mike Stone: Yeah, it’s so so hard because, you know, it changes really quick with software. I think React is great. I would be surprised if that goes anywhere. You had mentioned Native as well, which has been an interesting story over the past number of years, too, because traditionally you have an iOS team and you have an Android team and you have a web team. So there’s not a lot of mixing between them in terms of skill set because it’s all different languages that people are working in and different tools in that sort of thing. More recently, with React Native, you can kind of combine all of those teams into one and you’re able to kind of write once deployed anywhere. It’s not quite that easy, but you’re able to write the same or similar React code that you would in the web and your JavaScript front-end engineers are able to not only work on your web application but they can work on your mobile application and that one team can do both Android and iOS. That’s pretty huge. I think it’s really helpful for startups, too, that can’t afford to have mobile engineers. All engineers are really expensive. And so it’s tough to have to hire three people just to get your product to market, but you can really take advantage there. So I wouldn’t be surprised to see more like React Native and React. There’s all sorts of other technologies that are competing to do similar things. But I think it is really a huge advantage to React Native that it uses React which already has a ton of market share. So I wouldn’t be surprised to see even more of that. There’s other technologies like graphical for API development and stuff like that that I think will gain some more traction.

Louis Beryl: I imagine that every relationship you start with, a new client is different. And I’m wondering if you had, through your experience, any advice that you would give to new clients. As you know, they start a relationship with software consultancies or the Gnar company. Like what is the question that you wish they ask before they start working with you so that you really kick off the relationship in the best way?

Mike Stone: I guess depending on the client, there can be a good amount of client education and just general software development practices. It’s not really one question that I would say they should ask, but where I guess if it were to be one question, maybe like what is this process going to look like, especially people that haven’t done it before. They kind of come into it with, you know, build me this thing and there’s a lot that goes into the building of that thing. It’s all this kind of invisible work that needs to get done and all of this is like coding and design and work behind the scenes. So we do a lot of education or working through the process with the clients initially. We try to always do it during the sales process of this is how this is going to go.

Louis Beryl: Kind of understanding the process of what it looks like of working and iterating with software consultancy, I think is really smart. And I think a lot of potential clients really could be better educated in that as they get started with you. Kind of thing that client comes to you is like, I just need this built, can you just build this? And I think it’s really smart that you spend time walking them through that process. But it does make me think of a follow up cause I’ve built a lot of products with my teams. And you spent a lot of time, you think about it, you design it, you build it, you release it. And now we learn a ton from our users, certain things aren’t working from a UX/UI perspective. We have bugs, maybe actually it’s working really well and we have challenges with maintaining and scaling the system or there’s other things that arise in terms of enhanced security. What do you think about that process of post delivering work and building it out over time? How do you work with your clients to do that yet?

Mike Stone: That actually starts really early on with us when we’re in the sales process and we’ll go through that. I mentioned earlier the design and discovery engagement where we really learn what it is they’re trying to build and then we basically take that product and whittle it down with the client of what of this do you really need? What’s the need to have versus nice to have so that we can increase that time to market? Cause while we’re sitting there building before it’s been released, we don’t know how customers are going to receive that product. And so we work with them to try to phase this out, let’s MVP this to start and get only exactly what needs to be in this first version so that we can get it out and learn. Maybe that’s good learning for some of these clients that haven’t done the process before of technology or like your products are always evolving. You’re never done with your product. So we will build that initial piece and we have a lot of stuff that’s cued up to do after that. But what can we do to get that product into people’s hands as soon as possible and then start working on the other things and continually be adding new features and extending existing features? So it really starts early on. And then the biggest task, especially once we get close to launch, is prioritization. And that can be really tough for everybody, for, you know, for engineers and particularly for the stakeholders that, well, everything is the highest priority. Getting them to really say, like, which one of these do you want first can be a really tough thing, but we try to get an early jump on that as much as we can.

Louis Beryl: I mean, do you find that some clients are like clients forever? I’m wondering, like, what’s your longest standing client?

Mike Stone: We do a lot of work with the state of Massachusetts and those projects are really long. We’ve had some of those that have gone on for multiple years. Most of our projects are closer to like a six month timeframe. We have a lot of clients that will come back. So we have long standing clients but it’s not a full duration of work. You know it’s a year later they’ll come back to us and want us to help out with something else.

Louis Beryl: Ok, I wanted to maybe end with you giving some advice to maybe the younger version of you and Nick 5, 6 years ago or out there today. A couple of really talented software engineers are thinking about starting their own software consultancy. What advice would you give for them?

Mike Stone: The biggest area where I was naive was probably around cash flow and just how important that is. And we’re a bootstrapped company, so we didn’t raise money and we didn’t have this big bank account that we could draw from. And so we had to be really conservative and make sure we were managing our cash flow really well and we never got too big in trouble. We had one up whoopsies and a couple of close calls, but making sure that we manage the cash flow well was really important. If I could turn back the tables, I would like to bring that knowledge that I have now with me.

Louis Beryl: Tell us more about the big whoopsies. I want to hear about that.

Mike Stone: It wasn’t a huge deal, but within the first year we had one where we had to loan back the company some money in order to make payroll which was pretty nerve racking. It was really tough because we had so much money in, like accounts receivable that clients owed us. But we weren’t maybe getting paid on time or the terms were too far out. Our payroll was draining our bank account. So it’s like we should have all this money, but we still have to pay our engineers on the cadence that we have. So we ended up having to loan it back. It ended up as no big deal because we just got refunded when the cash came in. But it was a big, like, eye opening experience of like, oh, this can happen and we should make sure we do whatever we can so it doesn’t.

Louis Beryl: Yeah, accounts receivable and cash flow is a big pain point for a lot of our clients at rock a place and helping and solve that problem and making sure that people get paid on time and that they can rely on getting paid is is one of the big challenges that we’re hoping to solve with our platform. Mike, this has been great. I really enjoyed this. It was really cool learning more about Gnar. Hearing your thoughts about software development and where that’s going. It’s a really exciting company and I’m excited to see what happens for you guys in the future. So thank you so much for joining us today.

Mike Stone: Yeah, thank you so much for having me. It was great to get connected and great to be on Rocketplace too. I love the direction you guys are going. So thank you so much for having me on and giving me this opportunity to talk to you.

Louis Beryl: That was awesome. I learned so much from Mike and I really can’t thank you enough for coming on to show. For more on Mike in our conversation today, visit www.rocketplace.com/podcast. Make sure to tune in next week. The easiest way to know a new episode drought is to subscribe to “The Startup Stack” in Apple Podcasts, Spotify or wherever you listen to them. So you should do that. Thanks for joining.

Announcer: The Startup Stack. Written and edited by Hannah Levy, produced by Leah Jackson. 

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