Adam Torres and Matt Strippelhoff discuss software development.
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Show Notes:
What does it mean to bundle development and ongoing tech support for software projects? In this episode, Adam Torres interviews Matt Strippelhoff, Founder & CEO at Red Hawk Technologies, explore Red Hawk Technologies and its competitive edge in the software development industry.
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About Matt Strippelhoff
During his career, Matt Strippelhoff has curated an extensive portfolio in traditional and interactive media. Leading the development of web applications, mobile applications, e-commerce websites and specialized interactive marketing programs, he shapes Red Hawk’s technological landscape.
In 2022, The Circuit awarded Matt the Visionary Leader Award for his groundbreaking approach to software development. Recognized for reimagining the process, Matt’s bold leadership catalyzes growth and success. His visionary business model bundles software development and technical support services for a fixed monthly fee, offering financial predictability and operational stability for their mid-market clientele.
About Red Hawk Technologies
Since 2008, award-winning Red Hawk Technologies has used technology in novel ways to help clients improve efficiency, lower costs and increase profits. We offer bundled service to develop, enhance and maintain custom software products and web applications, generating significant returns for our mid-market clients while realizing long-term, value-based relationships. A proactive technology partner based in Wilder, Kentucky, Red Hawk Technologies also offers mobile application development and systems integration, along with code evaluation. Software product support is a valuable service to their clients, as are tech innovation workshops.
Full Unedited Transcript
Hey, I’d like to welcome you to another episode of mission matters. My name is Adam Torres. And if you’d like to apply to be a guest in the show, just head on over to mission matters. com and click on be our guest to apply. All right. So today’s guest is Matt Striplehoff and he’s founder and CEO over at red Hawk technologies.
Matt, welcome to the show. Thank you. I’m glad to be here. All right, Matt. So we got a lot to talk about today. So I want to talk about, of course, Redhawk Technologies and specifically how you’re working on and aiming and how you’re accomplishing this disruption of software development and the services industry and really your model and what makes it unique in the marketplace.
So we’re going to get into that and a whole bunch more. But to get this going, we’ll start this episode the way that we like to start them with our Mission Matters Minute. All right, Matt. So Matt, at Mission Matters, our aim and our goal is to amplify stories for entrepreneurs, executives, and experts to tell stories that we feel need to be heard.
That’s our mission. Matt, what mission matters to you? Our mission is to provide Solutions in a way for customers to buy software development services in the mid market, so they can afford to invest in game changing technology, compete with the big boys. It’s not really been truly possible without a great deal of financial and technical risk.
I think we solve for that now. It’s it’s just improving that model and expanding. It’s awesome, Matt. Well, great to have you on. And I guess just to dive right in here, software, software development, like, where’d you start in that industry? Like, where’d that all begin for you? Well, you know, it’s interesting.
I’ll try to keep this part brief is, is I started out going to school and achieved a bachelor of fine arts degree with a communication emphasis of communication design. I mean, that screams software, right? Yeah, nothing really to do with software. Of course, went back into the, into the, you know, graduated in the early nineties.
And so the internet was just coming out, you know, things were, it was just, it was a fantastic time to start down this journey, but fast forward, you know, communication design is about graphics and content and making things easy to understand. You can go down a lot of different fields and specialize wayfinding, for example.
For me, it just sort of evolved from doing traditional Advertising and graphic design services to producing websites and defining how to sort of wayfinding through websites. And so I was doing user interface design, user experience design. It wasn’t called that before back then, just design, like the front end design and development.
So. I found myself early in my career, late nineties, working for a software development company in greater Cincinnati and, and solve for a lot of challenges. You know, how do we take this big idea that’s this entrepreneur or, or innovative business thinker has and, And turn it into functional software on the web for what age were you about that time?
Like, roughly, just roughly, roughly mid twenties. Wow. What was that’s, that’s amazing. Just to think about that. Like I want to, I want to stay at those younger days, just a little bit longer, just to see what it was like, because I feel like. For some of the people that watch this, they can’t even imagine. And that’s not that long ago, by the way.
I’m not saying age or anything like that. I mean, this is not that long ago, but to think about like the beginning days of design, like, and especially being in your early twenties or mid twenties, whatever, to see that, like, what was that like being in that environment? Cause it was the wild west. It was absolutely the Wild West and it was actually a lot of fun.
You know, I produced my first website for a small advertising agency in Cincinnati using Netscape Navigator, which is a browser that doesn’t exist anymore because it had developer tools in it. And I could do things that at the time seemed like magic. And we’re talking about just. Having graphics change based on where the mouse was on the screen.
This is magic. Like, wow. Okay. How do you do that? So yeah, it was a lot of fun. Yeah. And so now fast forwarding a bit, and I also like setting the stage with that because it also, because you’ve seen the evolution of this thing. That whether we call it digital, online software, just that whole ecosystem, you’ve seen the evolution, right?
Absolutely. Absolutely. In the early years, you really needed to have sophisticated developers with some great chops just to do simple websites, e commerce sites, things that we take for granted today as engineers and designers. There are so many tools out there that let you produce things very quickly.
We see advertisements online all the time for Squarespace and Wix. And yeah, there was no drag and drop for, you know, drag and drop. And now you’ve got AI tools that promise to develop a website in a matter of minutes. Yeah, you know, so it’s changed dramatically. Yeah, so fast forwarding a bit through your career.
So now of course that was the early days. Then you move into like, when, when does the software part become a big piece of your career? Like when does that happen? It was in 1999 when I started working for a small boutique software development consultancy in Cincinnati and really enjoyed that. The business model at that company was to provide software engineering services for web-based applications to startup, to the startup community.
And there’s a fair amount of funding available. Yeah. Now that’s, you know, around the 2000, 2001 timeframe you had the dot bomb is what we’ve affectionately called it, where the economy kind of took a major dip in. That’s that correct. 2002, man, 2002 was not fun for me. . Yeah. So all the funding kind of dried up and so that, that business started to struggle at that point.
And then. I migrated kind of back to this realm where I had a foot in the technology space and one foot in the average traditional advertising and marketing space. And so I, I worked at that convergence between marketing and technology. For a number of years, but never quite let go of driving custom software engineering projects.
At the time, there weren’t a lot of companies, vendors available that the mid market clientele might turn to. They oftentimes turn to their advertising agency, asking them, can you develop a custom report? Can you develop the sophisticated e commerce solution? We need something that’s not quite ERP, but close to it.
And so I don’t think the agencies were the companies to do the work, but they said they could. And that makes sense though, because that would have been the established relationship. That would have been who’s closest. So if you were a client or you had a business, then that’s who you’re going to ask, because you don’t know, and you’re not big enough to go out there and you don’t want to start knocking on doors to the big boys.
Cause you’re like, we don’t have a budget for that. We already know. So that would be obvious, right? Or am I off on that? I’m just trying to paint the picture. I think you’re right on. That’s exactly what was happening. And depending on the agency you talk to, they may or may not overpromise. They might be able to deliver, but a typical agency model at the time was to lean on vendors for different types of things like media buying and placement.
They might source some work to illustrators. They would source work out to recording studios or audio tracks and commercials, video videographers, and they would always mark that up. So the way they approached it at the time is. Well, let’s just find some talented developers, guys like me, I actually created a lot of business with agencies as a, as a vendor and we take on the responsibility of developing that solution.
I would have my own team of engineers to help out with that. I want to take a, just kind of a slight sidestep here. We’ll go further and I will get into, of course, the, the, the meat of this, which is going to be talking about your current model, but I’m just curious, does your, does that, that design and that advertising side of things in that experience?
Cause I feel like that’s slightly unique to many that are, that are in the software space. Do you think that drives and or helps fuel what you do today? From a consulting standpoint, it certainly helps me quite a bit. I understand the need to really drill into the why. Yeah. When you’re thinking about advertising, to get that message right, to understand what the key differentiators are, you have to have those types of conversations and really drill in with that customer.
That is a different conversation. That’s a great point. It really is, as opposed to, and I think I see this a lot with, with some of our competitors, they’re not always asking why they’re more interested in. What do you want to produce? Yeah, let’s get as much detail around that as we can. So we can provide a reasonable proposal.
And we start like the, like, kind of more like the what and the how. The what and the how, I will tell you that without a doubt, we’ve probably almost seems counterintuitive unless you’re in that advertising and or space because it’s like, well, I don’t want to put up a roadblock. The last thing I want to do is ask why, and then have them think, well, why am I doing it?
That’s the, that’s the the falseness of it. That’s like the myth, if you will, to asking the why, but for the advertising side, you can’t have anything without the why, because you don’t know what the story is going to be. That’s an excellent point. Absolutely. And for us, we’ve probably talked more people out of bad ideas than delivered good ones.
And I say that in a way I’m proud of that primarily for us. It’s if, if the customer can’t articulate what the anticipated return on investment is, and we continue down that path of that conversation, it doesn’t matter what the price is. All they’re going to see is pure cost. And honestly, we don’t really want to see a bad investment being made because then they’re not going to reinvest to properly support, maintain it.
Eventually that whatever that effort was that we all got involved in is, is destined to end. So we really want to understand. And the other part of it is if we understand the intended ROI. We can provide expert guidance and consulting to say, have you thought about here’s another approach. This might create some more efficiency or if we architect the solution in a certain way, you can leverage the data maybe in a more powerful way in the future.
Yeah, and I think that nuance that you mentioned about support, maintain and maintain. I think that’s a great transition here. Because most companies in your end that are just into the software development side of it aren’t necessarily as concerned with that. So I think that’s a great transition.
Let’s get into Redhawk technologies and kind of start peeling that back and what makes it a differentiate, what differentiates it in the market. So what makes it different? What makes it different is that we are the only software consultancy in the United States and abroad. As far as I can tell at this point, this is a unique business model.
We developed back in 2019. We’ve been in business since 2008, by the way. So it’s been a journey, but this inflection point came in in 2019 and we tested the market. It’s gone extremely well. Basically, what we figured out. In hindsight, which is 2020 is that is particularly true for the mid market when they invest in a custom software application.
It might be a customer portal or a field service application on your mobile phone or tablet. They’re approaching it as if it’s a project. And the industry responds as if it’s a project. It’s not a project. What you’re really doing is you’re developing another asset for the business that has to be properly maintained and supported.
And for whatever reason, if we think about it and we talk about it, everybody kind of has this aha moment. Nothing ages faster than software. The ecosystem that surrounds the software. We’re talking about the operating system on the desktop computers, the operating system on our mobile phones, the rules of the people who own the marketplace like Apple and Google, if you’re not proactively supporting and maintaining that code base, it’s going to turn into a liability overnight.
And so because the marketplace would traditionally respond the way that customers want to buy, right? This is the project mindset. Mid market wants to buy like it’s a project. Vendors are going to respond like it’s a project and they end up with some type of a, an engagement. They build something.
Generally speaking, the vendor will offer a support level agreement of some kind. I call that a break fix relationship. Reason being is that the mid market customer does not have the resources or operating routines, standard operating procedures in house to maintain that code base. And so they’re only waiting for one of three events to occur before they choose to reinvest.
Two are bad breaks. There was a security breach that was connected to the source code. All bad, all bad. The only good one is if they’re seeing a really good return on their investment and now they have some new ideas, they want to add some features. So even if the vendors is, what did you call that? A break, fix relationship.
I call it a break, fix relationship because is that a, is that a standard software? Is there, is that all you? Cause I’m going to use it and I just need to know if I need to give you the credit on that one. Give me the credit. Give me the credit on it. I’m in, I’m going to be saying it like it’s so like, I’m like, oh, that’s a break, fix relationship.
Like that’s yeah, of course. Yeah. There is a, Yeah, it absolutely is. Because the customer at that point by the way, I love it. Yeah. They’re waiting until an event and now the relationships until the issue is resolved because we’re all human beings. Yeah. There’s a lot of emotion and anxiety that comes into the conversation when something’s broken.
The vendor is not aware of why it broke because they weren’t. Required to maintain it. And so there’s this mystery around this problem. And as long as there’s all this anxiety and the problem persists, now there’s anxiety and that relationship breaks. And I got the conceptual level of this, but what is this bundling of development and the tech support and the backend and the ongoing, like, what does that look like?
Like, what does that type of relationship look like? Because traditionally, let’s say that’s different types of contracts, different time. We don’t have to go into the legalese side of it, but just high level, like what does that look like? Yeah. So it looks like a managed service contract with, with MSP.
So client, anybody on the call that, that is working with a third party to provide end user desktop support, cybersecurity services. They can replace equipment, hardware, they’re paying for that on a monthly fee schedule for sure. And that’s like, so what basically what we’ve done is we’ll bundle the development of that custom business application with those proactive services, and we provide service through a fractional team of experts, which is another beautiful part of how this works.
We’ll have someone with 25 years of experience involved in the build. For let’s call it data warehouse and a power bi project, for example. Yeah, but as that once that has been delivered, then we have other levels of developers and resources available to provide other services to properly support maintain that.
Yeah, because not everything needs a 25 year experience. Like, some of it’s going to be just like you mentioned, like, it’s. going to be the back end of maintaining or something else. So it’s like, so I’m a big fan of the fractional model. I’m not exactly familiar with it for software in this case, but I’ve seen it for like fractional CFOs or like other executive positions.
So it seems to me like it works very similarly. Am I off on that? No, it does. It works very similar to that. The other additional pieces that come into play for us because of this has been our focus now for quite some time. Is that we introduce additional routines and services to support that code base that the client’s not doing on their own, that the vendor who has that break, fix contract with is not doing either because they deliver the source code.
It’s now in the client’s ecosystem. We’re doing things like generating a software bill of materials. We’re scanning it for common vulnerabilities and exposures proactively. The results of that scan automatically populate a backlog of work. This is a way for us to take high, well, what I should say is this, using routines and solutions like that as part of our delivery model.
Allows us to focus limited resources on high value work. Yeah. And it seems to me like the just also lets you in terms of the planning side of things for resource planning for the for a business to kind of have. Some idea of what it’s going to look like to project costs on things like this, versus with the break fix, which we all know is a common term that we’ve been all using for decades, the break fix model.
Whereas when that, you know, that monkey wrench comes into play and you don’t know what happens and everything’s broken, you may not have budgeted for it. You may not even know what it’s going to cost. You may not know, like. How antiquated is it? Like, have you done any maintenance? Like, was it like a set and forget, and you didn’t even know something needed maintenance and now you got a real problem, right?
We take on a lot of projects like that, where the vendor is no longer in the picture or the key person who developed it as an employee is no longer present. You know, this goes back to 2019. I think this might’ve been the first account that we set up under this new business model. I got a phone call and it was a referral.
The gentleman on the other side of the call was VP of the sales and revenue, basically a chief revenue officer. Yeah. They had an individual within their organization develop a customer portal that made the ordering and reordering and fulfillment process extremely efficient. Turned out to be a really powerful solution.
They were moving just under a million dollars a year of revenue through this customer portal. That individual that was responsible for creating it did it on his own with company permission because he was an employee at the time left the organization. So by the time I get this phone call, the individual who was responsible for that code had been out of the organization for almost four months.
Yeah. And they said the conversation went something like this, Hey, we were having some issues. Browsers change. It’s not working properly. You were referred to us. What can you do to help us? And the first question I asked him is where is the source code? It’s out there. Where’s there? Well, we can give you FTP access to the website.
I said it could be compiled code on your customer portal, but let’s take a look. But before I hang up the phone, what is your process for decommissioning hardware when somebody leaves your organization? So generally it’s about, it’s supposed to get turned around in about 90 days. They wipe the computer, they reissue it to somebody else.
And I said, I’m going to hang up the phone. I want you to call the department, figure out where that gentleman’s laptop is and set it aside. If it hasn’t been wiped. Yeah. The good news is that computer had not been touched yet because that’s where the source code was the uncompiled source code and without having access to that source code and putting it in a proper development environment, which we very quickly did, and we solved a lot of problems for them, they could have lost significant investment.
But they just don’t know what they don’t know. Yeah, of course. Yeah. When you, when you say that it’s not like, you know, they didn’t, they weren’t thinking about that. And then, you know, four months later, they’re not thinking about what is, and they would have had no idea. No idea. Oh man. That’s I’m sweating a little bit over here, Matt, on that one.
I got a ton of them like that. Let me just say, so I think this is a great, like, Speaking of mistakes. So that’s a mistake. Like what are some that’s a very isolated incident. What are some other like mistakes you see that maybe non technical founders are making when it comes to building softwares? But that that’s a good one.
But is there other ones that just come up time and time again? I think the most common mistake is not taking the time to determine how they’re going to measure their return on their investment and then defining what those routines are going to look like. Yeah, that is very, very common. They have a general idea of what the expected outcome is, but they may have not taken the time to measure what the cost is, for example, I think this is pretty common, a lot of the custom software solutions that we’re asked to are designed to streamline or automate workflows.
So you take routine activity away from the knowledge workers. So they don’t, they’re just not typing in, filling out spreadsheets constantly. This is a fairly common type of, of, of, of an initiative. Well, if you don’t take the time to understand what the cost of that manual activity is, and then have some way to measure the benefit automating that routine, you might not have the business case to get, Additional funding from stakeholders.
So oftentimes in that scenario, I guess I would, I would describe it as you have a champion who wants to automate something they’re given permission to go shop. That’s usually how it works. We’ll go find out what that’ll cost. Yeah. Okay. Well, if it’s just cost, then you’re not thinking about what the benefit is to the business.
We need to help you make a business case for it. So I think the most common mistake that I see is, is that people aren’t taking the time to make the business case to understand what that ROI is going to be and how to measure it before they start shopping for vendors to provide them quotes because, and then if they don’t do that and they still get support in funding to make the investment, they’re making that decision purely on cost.
They might not be working with the right vendor. Yeah, I can see that happening. Like I can see that happening time and time again. And the the interesting thing though, and what I hope, and one of the reasons I was excited to have you on this show is because now I feel like people understand that there’s different models out there, like the model that you’re proposing.
And of course, when they’re doing their shopping around, they’re looking at vendors, they’re doing different things. There’s other ways to look at this thing and there’s other ways to plan it out. So this is good. Yeah, well, Matt, but I just think that there are different models. There’s really only three that I see out there in the marketplace.
Currently, you can go to a staff consultancy, a staff augmentation software consultancy. They’ll put butts in seats and it’s up to you to get value out of that team. Good luck. If you don’t know how to manage software engineering teams, the other model is working with a boutique software development consultancy.
That’s going to provide time and materials engagement and develop something in an agile manner. Microsoft Mechanics www. microsoft. com But then you generally end up with that break, fix relationship at the other end. And then our model, which is the third one that I think is selfishly, I think it’s the best one.
It’s, it’s what’s led to 147 percent growth by the way, in the last three years, yeah, we’ll double again in size next year just based on what’s in the pipeline. So we’re on our way to being a 20 million a year top line revenue company in the next three years. Just because this model is so unique. Yeah.
Because we develop, support and maintain what we’re developing, but we can also bundle the development cost and finance that by folding that into the fee schedule over the longer term investment. So, ultimately, really what we’re delivering is financial and operational stability to the mid market clients we serve so they can compete with the big boys.
They can make those high risk investments and innovative technologies. Because they, the predictable from a financial standpoint provides financial stability. The fact that we’re providing DevOps to properly support and maintain what’s delivered on a, through a fractional team of experts and doing all this for a fixed monthly fee, that’s where they’re getting their operational stability.
You can’t go anywhere else and get financial and operational stability from a software engineering firm. I don’t believe. Yeah, it’s great, Matt. I love what you build and I love to see this continued success. So you mentioned the growth over the next couple of years. I just asked him, you know, what’s next, what’s next for the company.
Yeah, twofold. The growth is certainly a big part of the strategy. Some of this is going to be through inorganic growth. So we will be acquiring more companies. We bought one in October of last year. That’s gone extremely well. The other strategy is to start building a moat around our business. Other leaders that are listening to, to this live stream will appreciate this.
Once you’ve created something truly unique, that’s starting to have an impact in the marketplace, you need to start thinking about how do I build a moat around my business? How do I protect this? Conceptually, what we talked about is easy for people to wrap their heads around. What I can tell you is over the past four years, the amount of investment that we put into, into the standard operating procedures, the way that we measure time, the way that we provide the service, there’s a lot of sophistication in the way that we operate to get this business model, right?
So we’ve got some runway before these fast followers start to catch up to us. Part of what’s next. Includes customer portal of our own with an AI solution, and we’re already making progress on this. So if you can imagine being a customer of Redhawk and we’re supporting three or four different software assets for you.
Yeah. What if you could log into the customer portal and ask Hawkeye, whatever you want it, what’s in the pipeline, how much time and investments been put toward new enhancements versus issue resolution. Who’s working on this initiative for the next three months? Who worked on it in the last six months?
We’re a hundred percent transparent in the way that we operate with our clients. So we’re training our AI model to be able to answer questions like that. So. That’s what’s next. I’m willing to share a little bit of the highlights on that with you now on this call, because we’re so far ahead of the competition.
We’ll probably be on to what’s next next by the time they start figuring out how to produce some of the solutions that we’re delivering to our clients today. Man, I love stories like this. I’m in man, I’m in, I can’t wait to see this continued growth and to see what happens next. So further the conversation.
I know we, we hit a certain amount of things. But I know the audience and the business leaders watching this that are, have need, will want to follow up. How do people connect? How do they connect with your team? The two easiest ways, just go to redhawk tech. com. That’s the website. Lots of ways to contact us through the website, or you can find my profile and reach out to me on LinkedIn.
Fantastic. And for everybody watching, just so you know, we’ll put the links to the website in the show notes, so you can just click on it and head right on over. And speaking of the audience, if this is your first time with mission matters and you haven’t done it yet, don’t forget, hit that subscribe or follow button.
This is a daily show each and every day. We’re bringing you new leaders, new content, and hopefully new inspiration to help you along the way in your journey as well. So again, hit that subscribe or follow button and Matt, thanks again for coming. My pleasure.