Running a Rails Consultancy- looking back at 2022


“There are decades where nothing happens, and there are weeks where decades happen.” — Vladimir Lenin

2021- a year of Optimism

Last year, we missed posting our yearly review. Partially because 2021/start of 2022 was a busy time for us, led by digitalization of businesses post Covid.

The abnormal growth cycle also meant surplus revenue and profits that could be reinvested in other areas.

I always envisioned Saeloun to be an umbrella of activities, and grow laterally. It is difficult to rely just on our Services Business, to be economically independent or its side-effects.

The optimism of 2021, led to me expanding and investing in multiple areas (which I will discuss below), from the profit share attached to me personally.

Expectation

This optimism was high for me; and as a result I ended up over committing to several areas. I have generally been cautious overall, wherein, I kept my part of the profit share as company reserves for the first three years of the business. The surplus profits of 2021 also meant the company paid extra taxes on these reserves. So it made sense to me to invest these reserves given our growth trajectory.

Expectations Vs Inflation

While I started investing in other areas, not part of Saeloun, I miscalculated the effects inflation would have on us, and the growth rate.

Around mid March/April, the effects of this mistake slowly came to light. While last year has been particularly bad for SMBs, Saeloun was lucky enough to only see a slowdown.

Hiring

Another rather side effect of our 2021 growth, and the overall hiring market was, we saw a lot of lost opportunities of work due to all of our talent working on projects.

We have always faced a hiring problem, since our hiring cycles are different and are generally longer. And opportunity cost is still an issue.

To overcome this opportunity cost, we had decided to have a buffer of people in our team, for future opportunities.

Changing gears mid year - Facing Reality

As it became clearer that things weren’t picking up and we were falling behind commitments, to even our own employees, I started pausing other areas of investments and focusing back on our core business. Meanwhile, I had moved on from day to day activities to setup other projects.

Senior Team

As I had been involved in other areas of business, I tried out different modes of management - giving up more control to the senior team to run our finances and so forth.

Saeloun saw departure of a few senior team members, over disagreements about different things, but most importantly because of my overcommitment and spending in other areas, and not having a clear picture how things should proceed.

Our CPA Firm, got acquired during this period as well, and it added to our ongoing worries of getting back on track.

Back to being Founder run

The departure of our senior team meant, more involvement from my end and commitment to our core business.

I prefer doing all things at start of business, finances, project management, etc., to set guidelines to follow, and then handing over these responsibilities to others.

Saeloun was now back to being a “new” Company.

Attrition

When a major event like departure of senior team members happens, it often leads to attrition.

Fortunately the team did not see a major side-effect, but instead we witnessed additions.

Attrition is a big issue for a services company like us, and we try our best to retain our employees, giving favourable terms, profit sharing and so forth.

Attrition also hurts us more in current economy, as it directly affects the projects we have and revenue. We saw a slowdown in projects and clients too being cautious about new additions.

Bright side

This leads me to look at the bright side of this year - our team. Our team has stuck around with us during this period and trusted us.

Saeloun wouldn’t exist 4 years ago or today without our team members. They make Saeloun. It is and will be what it is in future, due to them.

Profit sharing structure changes

The departure of senior team members, opens up new possibilities for us. Particularly, I can in future provide more equity to my team. We will talk about and discuss more on this new structure in future posts.

Clients

We are also fortunate, and gracious for all our existing and new clients. Things have slowed down a lot last year, and we expect, they will continue to slow down further this year. Our clients trusting us and our team, has been a major reason of our growth in the past and will be in future.

Saeloun Products and Growth in Mexico

It’s unusual to see a Rails consultancy discussing this, but as I mentioned before, I really prefer diversifying for this particular reason of how growth and economy can be unpredictable.

On the upside of this year, we are now at a place where we have 3 completed independent products-

  • Miru- Our time tracking and Invoicing and Employee management platform, that we ourselves use to invoice our clients. It is open-source and free to use!
  • Gubixi- Co-Working space in Oaxaca, Mexico. If you are reading this and see yourself visiting Oaxaca, Mexico, feel free to drop by for a chat :)
  • Tlatoani- A bit unusual of the lot, but a Fashion label in collaboration with Pompii Garcia. Our collection was featured in Mexico Fashion Week and is currently going to go on sale in coming days, at the time of this writing.

We are working on some other in-house products which are not yet ready to be released.

Along with this, we also invested in various Tech Products and rolling funds on AngelList.

2023 - Now

After a tumultuous year, we are now at a place where we can reflect, and plan for the year ahead. Our investment commitments are done, and we are being extra cautious of the things we invest our time in.

Learnings

There are tons of learnings from this year to unpack for me personally, as well as a Company. Lets take a look-

Regular updates/Communication

Keep giving regular updates to your team. I was a bit on-off on this, while focusing on stability. I am trying to get back to giving frequent and timely updates to the team. The more the team is in loop, the more they would provide critical feedback and we, as a team, can course-correct.

Context

Previously I blogged about context and the importance of all communication. This is probably the biggest take away for me. While focusing on stability and work, it would have been a better way to handle things if there was more context to the team. We are actively working towards this.

Growth and relationship with Employees

While we shared our profits in the past, we also shared our hardest year yet with the team. It has brought us together to strive to be better than before. We have grown from a 1 person team to 60+ today. This growth depends a lot on the trust and relationship we have build over the years with the team.

Focus for the year ahead

Our focus is clear as we enter 2023. I will be working actively towards company stability, while making sure the team is not affected from the uncertain year ahead.

Summary

You will see me more involved on the blog here and the team in general. This post is a reflection of my mistakes, lessons learned and what should we focus on in future. I hope this to helps anyone going through similar situation, by comparing my experience and learnings to their own.

If you have any thoughts or suggestions, feel free to reach out to me @ vipul@saeloun.com

Join Our Newsletter