Budget Your Business

Advancing Your Tech-Stack from No-Code to Custom Code with John McGann

• Scott Geller • Season 1 • Episode 36

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E#36: In this episode, Scott Geller talks with John McGann about how small businesses can smartly scale their internal software—from early no-code tools to fully custom systems. They break down the warning signs that it's time to upgrade, what it really costs, how to prepare, and why investing in the right tech at the right time can unlock growth rather than stall it. Whether you're buried in spreadsheets or starting to outgrow your off-the-shelf tools, this one’s for you.


Book Recommendation: Influence: The Psychology of Persuasion by Robert Cialdini

Find out more about John McGann: 

www.linkedin.com/in/johnomcgann 

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John McGann:

You know, start documenting your unique processes, anything that differentiates your business. Generic software can handle common workflows pretty well, but your competitive advantage often lies in those uncommon ones. So you know figuring out what those are is important and then identify you know so essentially your workflow fingerprint. You know a specific sequence of steps, decision points, data transformations unique to your business. These are prime candidates for custom development.

Scott Geller:

Hello and welcome to Budget your Business, the podcast for small business owners who want to learn how to financially plan for every aspect of their business. I'm your host, scott Keller, and today I'm joined by John McGann of CloudSource. Hello, john, hey.

John McGann:

John.

Scott Geller:

Good, good. So today we have John on here to talk about upgrading a business's internal software from that MVP or kind of initial version, and how they can take it to the next level. Thanks for joining today, john.

John McGann:

Absolutely Glad to be here.

Scott Geller:

So, John, for the folks who are meeting you for the first time, could you share a little bit about who you are kind of what you do?

John McGann:

Yeah, so I'm John McGann, founder of CloudSource. What we do is we help startups and small businesses that have kind of outkicked their coverage with their software solutions and need to get to the next level. We help them get to that next level and we come in and build out a custom solution for them that makes them truly unique.

Scott Geller:

Okay, very interesting. Yeah, I think that's going to be really helpful today digging into that. So to get us kicked off here, john, I'm not a software guy. I've worked with software companies but maybe you could help me understand, or help our listeners understand. You touched on that next level. What are the levels of software for a company?

John McGann:

Yeah, that's a great question. So what I typically see is a few different stages. Initially what we like to call the hamster wheel stage, and that's when you're doing everything. You are a small team, you're handling everything, you're kind of in the background making things work A lot of spreadsheets, but it works because you are small and lean and you don't have a high customer base. But as you scale you move in to a more stable, maybe off-the-shelf air table, maybe industry-specific off-the the shelf software. And then, once you get into this stage, you're good for you know, you're good for some time. You can get in with the workflow automation, you know, using Zapier or paying for your customizations. But you know, at a certain point there you start hitting those limitations as well, a pulse kind of snowball, and which drives you into the custom development stage. And that's when you've gotten big enough to where you know what you need and it makes sense to own your own solution and your software becomes a competitive advantage versus an operational necessity.

Scott Geller:

Okay, I've heard of no code. Where does that fall into that range you just mentioned?

John McGann:

Yeah. So that range is, you know that's essentially. You know the early stages. So using like the no code or even low code to kind of prove out your model, you know you may have, depending on where you are with your business. If you're just starting out, you know you don't want to put too much money into proving out a concept. Or you know a business idea or your market, you know, to see if it's going to be viable. You can use these no-code solutions, which are super valuable, in order to figure all of that stuff out before getting into the custom phase, when it's going to cost you a bit more but you're able to pay for it at that point with money that you've earned through the business. So you're just taking it to the next level.

Scott Geller:

And what are some of the warning signs? Let's say I'm in that no code or low code stage of my business. I'm sure there's going to be some warning signs of this is where this level is just not working. What are some of those warning signs that you see?

John McGann:

Yeah, it comes in different buckets so you'll see it across the people. So, for instance, your team spending more time fighting with your tools than actually doing any work, or you know they're having to manually move or retype data, you know. Or they're even leaving out of frustration due to some of the tools they're having to use. You know those are some signs. Processes, so a simple task of taking multiple tools to handle, taking longer to handle. You also have your data. So, because you're using various tools, your data becomes siloed and as you grow, different departments may not be able to access certain things. You may have high paid resources that are spending a lot of time manually entering data, being overpaid to do simple tasks, manually entering data, being overpaid to do simple tasks, and your decisions become outdated because the decisions you're making is on old data, because reports are taking you longer to cobble together Growth that's another area. So onboarding customers or employees that process taking longer and longer that's a sign there.

John McGann:

Or you're having to turn down business. Your systems can't handle the complexity, or you're just turning it down out of fear that they can't Budget. That's another area. So you're paying for multiple tools or customizations and as you start to scale that starts to balloon up, and this is all ongoing, since you don't actually own your solution, right, so it's. So we're actually working with a company now that's paying ten thousand dollars just to look into what a customization would cost them to do, and so you know, that's the calculus that they're running in their head, you know, and they're getting bigger and bigger, and you know, seeing that it's time to jump ship Tech.

John McGann:

Obviously, tech is going to be another area. You know performance issues, temporary solutions are now your permanent workflow, you know, and you start to your kind of user experience starts becoming clunky for your users, which then you start having your customers. You may start hearing complaints about your system. Most of the time, though, customers are just going to bail. They're not going to say a word. So you're actually lucky to have those vocal early adopters that actually stick it out and give you that feedback.

Scott Geller:

Okay, yeah, you hit some really important ones there. I mean, as far as I'm concerned, not willing to take on new clients, losing existing clients. Those are some Some pretty big warning signs.

John McGann:

Yeah, some are more egregious than others.

Scott Geller:

And I see these signs, I know I need to do something. How do I get started, like, where do I go from there?

John McGann:

Well, so the first really the best and first step, I would say is starting with workflow automation. So that means mapping out your current processes, looking for those repetitive tasks that require human intervention and highlighting those processes that make you special as well, because those are going to be important to bake into your product. A critical mistake I see companies make is going custom too early and too quickly. There's no-code, low-code tools out there that can really help you understand what you actually need before investing and maybe going down the wrong path too far.

Scott Geller:

Yeah, interesting Now in your experience. Then how do I know if it's too early or not? And I like what you're saying is sometimes those somewhat generic is a good way to get started. If I'm starting right off, do I always go no code, or obviously I don't always go custom, but what should I be thinking about as far as how I get going?

John McGann:

Well, like I said, you know, start documenting your unique processes, anything that differentiates your business. Generic software can handle common workflows pretty well, but your competitive advantage often lies in those uncommon ones. So you know figuring out what those are is important. And then identify you know so essentially, your workflow fingerprint. You know specific sequence of steps, decision points, data transformations unique to your business. These are prime candidates for custom development. You know development that you're going to want to look at. So start with the existing tools before building from scratch, and that way you've got a blueprint for what unique processes you'll need and it will actually cost you less because you'll have a better idea going in. And then most modern software has APIs and customization options that can bridge that gap for you. So if you have a somewhat solid solution coming in with a good idea of what you need, you're in a lot better shape and you can still stick with those out-of-the-shelf solutions for things like payment processing, basic CRM features.

Scott Geller:

It doesn't need to be everything just your core processing, gotcha, yeah, I like that. And you don't have to rewrite the entire wheel. Right, you should be thinking about your core, but there's so many CRM processors, there's so many payment processing options out there that you can leverage what's already been built. Right, gotcha, okay. So how far in advance should I be thinking about this?

John McGann:

Yeah, great question. It's good to be thinking about this stuff early, you know, have it in the back of your mind, you know from an early point. But you really should start getting serious about it. Between you know, typically between about $2 million and $5 million annual recurring revenue somewhere in there, right after you know, right after that two mark you should start based on you know what you're doing. There You'll likely start seeing some cracks At the $5 million. You know you're pushing it. That's really kind of your ceiling. You know you're pushing it. That's really kind of your ceiling. And the key is being aware of your technical debt before it becomes painful, you know, and a real problem. So tracking software costs and complexity early, that stuff helps, you know. Documenting your processes while they're still simple helps a lot and it also makes the future automation much, much easier.

Scott Geller:

Gotcha All right. Well, let's go down that future automation conversation, John, and maybe you could walk me through. What does a process look like to go from this no-coder generic to something more custom? You talked about how to kind of get ready for it, but I really want to understand the process to actually go through it.

John McGann:

Yeah. So once you've got so, once you're there, you want to find a partner, you know, somebody that can kind of come in and and help work with you to build out what you need and make sure that this you know. Talk to a couple different options there. When you get into these relationships, you know it's. You know, if you get into a typical company, it's finding a girlfriend. It's like, you know, finding a wife. They're hard to get out of and you want to make sure that it's somebody you want to work with.

John McGann:

And then you know, make sure you have buy-in with your stakeholders as well. Get them involved. That's important, you know getting their buy-in early, getting their feedback early. That will also help with their adoption as well. And then you want to going through this process. You don't want to take everything and say I want to build this all out as a whole, break it up. You want to break, you know, chunk it out into small modules and stuff, because things change so fast. You know technology changes, business needs change, customer needs change and so you don't want to get locked in too much too early. Give yourself some flexibility.

Scott Geller:

Okay, and breaking it up? Should I be thinking about breaking it up as far, like how should I be thinking about breaking it up as far, like how should I be thinking about breaking it up, like how do I break it?

John McGann:

Yeah. So you know you want to look at those key areas that are going to A first and foremost, you want to automate out all of the things that you can looking for, those things that are taking time away, and you know those are things that you can easily put into to automate out because you want your employees focused on high value tasks versus grunt work. There's some things you can also look at too, like on the response times, error rates, customer satisfaction, customer facing metrics like that to look at as well.

Scott Geller:

Okay, and how long should I be expecting to spend? How much time should I? Months, weeks, years, hopefully not, but how long should I be thinking of giving myself enough time to go through this process? Do you mean the process when you actually getting into that custom part? And and you know, I've agreed to have somebody come in and help me with this and I know it's probably. It depends, but maybe you could give us some, some ranges to think about.

John McGann:

Yeah, so. So yeah, obviously depends on the size of the company how long they waited before making the switch over, but you know it's not going to be a you know a quick and you know a quick thing. So you're most likely looking at, I would say, at least six months to a year of work, based on the size of your company, and then expect some. Typically you'll want to have some kind of support following that, after you know you've got, which are different than the monthly fees that you would be paying off the shelf. You know where you don't own the code or your solution and you're having to continue to pay for updates, changes. You know this is more from improvement side of your software and you know making it scale and say you know serving your customers and staying on track with technology.

Scott Geller:

You made a comment that I'd like to go back to. John, you mentioned it depends on how long you waited to start this process. Why does that matter?

John McGann:

Yeah, no, that's a good question. It matters because when you, it becomes much more expensive and disruptive the longer you put it off. So the later you start, the more you're building around existing constraints versus optimizing based on what you know, what you've learned with those early tools that we were talking about before. But you know, I've seen companies successfully modernize their internal software in various stages. You know across the board, so you know it's always doable. It's just a matter of you know how much money and pain you know you're looking at and that can come in. You know a direct out of cost expense it could come, you know, and missed opportunities at the time when you're making that switch over. You know just knowing that upfront helps the process as well.

Scott Geller:

Is it ever too late?

John McGann:

I don't think so I think it's it's rarely ever too late. And you know, like I said, I've seen companies come, you know come in all different stages and come in pretty, pretty late, pretty big, and you know it's it works out for them. You know it's just more painful Ultimately, you know if you kick the can on it long enough, you know what you're in for.

Scott Geller:

Yeah, yeah, I agree. Could you give us any guidelines? We try to help businesses plan for these massive changes in their business. You gave us a little bit of around the duration. Yeah, what about the cost? Like how much should they be thinking about the cost of going through specifically on the on for the to get a custom software?

John McGann:

Yeah, that's a great question. So it ranges but it can be, as you know, as low as if you're doing it modularly and you're doing you're kind of breaking things out. You could be looking coming in 20, 30 K or you know, for an initial, you know rollout of what you're looking at. It could be, you know, it could be 50 or 60, based on, you know, based on the size of your company. But then you know you, like I said, you want to kind of take those small chunks, build those out and get a you know, get a better feel for what you need. As you go and just do it, be smart, build slow.

Scott Geller:

And do you have any do's and don'ts when trying to find a partner to come in and build this custom software out for them?

John McGann:

Do's and don'ts. I would say do's, make sure you're invested or have somebody that you know, somebody dedicated to it. You know, for us we handle everything you know, from the project management you know down to the delivery and testing, but it's we still, you know, always ask for a, some resource that we can have as a dedicated point of contact. You know, and this helps because they can help, you know, wrangle the stakeholders and bring people in and and kind of be the, you know, the decision maker on that side, which is super important, because you don't want your dev team making your business decisions for you. So, yeah, that's definitely one.

Scott Geller:

And before you go to the next one, does that have to be like a chief technology officer or chief information officer? Does it have to be somebody that's an expert in technology?

John McGann:

It's a really good question. No, not at all. Okay, somebody that just knows you want somebody because you know. It actually kind of hinders things a bit when that happens, because when somebody is coming in like that, they have an idea of how they want it implemented, versus giving what the needs are or the problem and so, which allows for the development team to kind of come up with the best technical solution to implement. So, no, definitely that is not needed. In fact, most companies that we work with we work with a lot of non-technical founders without CTOs, so they look at us as essentially being that for them, and so just having somebody on their inside there that is close to you know, close to what the needs are and the stakeholders, and has a good pulse on what the application needs to do.

Scott Geller:

Thanks, sorry for interrupting. You. Feel free to go back to the do's and don'ts now.

John McGann:

Yeah, no, no, no, absolutely. Stakeholders, you know, like we were talking about before, is a good one. They're making sure to get their buy-in on that. Let's see, on the don't side, like we were just saying, you know you don't want to come in overly rigid on what it is you want. You want to have a clear idea and you've got things proved out on the process side, but in terms of how it's implemented, don't be as rigid there. Let the technical folks do what they do best and come up with the ideal solution for that. Okay.

Scott Geller:

And is there anything? I haven't asked to be prepared for this process?

John McGann:

To be prepared, I would just say, with the dedicated resource and making sure that you're somewhat committed to the success of the product and have some buy-in.

Scott Geller:

I think that's important as well from our guests. The first one are three budgeting or planning takeaways. The idea is our listeners can take these and as soon as they get off the podcast, they can put them into place. I know this is not your first company that you've worked with or even started, so it could be around that, or it could be something you've already mentioned or in something with getting that custom software place, but love to get your three takeaways uh, you said three takeaways from.

John McGann:

I'm sorry, I think it's a takeaways yeah, so just three takeaways three budgeting or planning takeaways.

Scott Geller:

It could be about running crowdsource or it could be about building out custom software got it.

John McGann:

So I would say one say one. You know, don't spend. You know, don't spend a lot too early. You know you have an idea or if you've got a business that you're starting, try to. You know, try to figure out the. You know, try to do things manually and kind of as much as you can to get a feel for what you would actually need to be automated, instead of going down the rabbit hole of trying to do all of that out the gates. Yeah, that's definitely one. You know, waiting and then waiting until you have that to actually invest into that custom solution.

John McGann:

See, another one I would say is in terms of, you know, starting this company. You know we, we invested in a marketing team. I think kind of early, too early, I would say. A good recommendation there is to make sure really you as a founder need to kind of figure out your messaging and what works and talking with customers and really learning the market and the people and what the needs are before engaging in anything like that, and have somebody else try to figure that out for you. So I would say that as well. And then let's see a third budgeting and two are fine too.

Scott Geller:

If you don't know, if you can't come across the third one, the both of those are pretty good. I like both of those. Do you roll out all three? What's that? Yeah, yeah, well, yeah, if you have three, great. If only have two, then that's perfect too. Let me think here.

John McGann:

Budgeting Hmm.

Scott Geller:

And I think we're you know with those two. I like those, don't spend too much money early. I really like that and I think that should really resonate, considering it's coming from somebody that you know that that that sells those services.

John McGann:

Right.

Scott Geller:

And and yeah, you know, know, know your marketing spend and and kind of think about when it makes sense and how much to spend. I yeah, I like both of those, john.

John McGann:

Okay, all right, we're well with that yeah.

Scott Geller:

So other question is do you have any? We always ask our guests if they have a favorite podcast or book recommendation.

John McGann:

Well, you know Budget, my Business is definitely top on the podcast list. But on the books, you know the book side is just. You know there's too many to really pick from. I will say you know I read recently it should be called D&E's Influence, you know for any. You know any of the small businesses out there trying to grow. It's a great book to really understand. You know any of the small businesses out there trying to trying to grow. It's a great book to really understand. You know human psychology and what makes humans tick. Good Help with your conversions.

Scott Geller:

All right, thank you Like that one. This has been great, john. Where can people find out more about you online?

John McGann:

Yeah, they can check us out at cloudsourcecom or find me on LinkedIn and reach out.

Scott Geller:

Okay, well, thank you. Thanks for joining us today, john.

John McGann:

Absolutely. Thank you, scott, appreciate it.

Scott Geller:

All right, folks, that's it for today. If you liked the show or found something useful, I just ask that you please share it with someone else. Send it to someone else, Say, hey, take a listen to this episode and I'd just like to grow the audience and help more small business owners. I'm Scott Keller and I hope you join me.