Entrepreneurs

From Construction To Tech: How To Start A Tech Company Without A Tech Background

At the core, entrepreneurship is about problem solving.

Entrepreneurs are people who encounter a problem, and instead of getting frustrated or waiting for someone else to provide a solution, they go out and create that solution for themselves.

This is exactly Tom Sagi’s story. 

While working in his family’s construction business, Sagi realized there was no single app that could do everything he needed to manage his hourly workers’ time and pay. Sagi had no experience building a tech company from the ground up, but was determined to be the one to fill that gap. He took the leap into entrepreneurship and launched a people management platform called Hourly in 2018.

Sagi offers an insightful story on how trusting your drive, determination, and instincts can lead to massive success in the entrepreneurial world, regardless of your prior experience.

Searching for a solution, Sagi created his own and started his journey into tech entrepreneurship

In 2008, Sagi joined his family’s Silicon Valley high-end construction business. The company employed more than 30 hourly workers, many of whom would be working on different projects.

From an administrative standpoint, it was a nightmare. Every week, Sagi would spend up to two entire workdays sorting through physical time sheets, manually processing payroll, allocating payroll dollars to the appropriate projects, and trying to organize all the data in an excel spreadsheet. It was time consuming, frustrating, and tedious, and Sagi was determined to find a better and more efficient solution.

But after searching for months, Sagi found that there was no better and more efficient solution. While certain platforms helped to manage parts of the process, there was nothing on the market that combined payroll, time tracking and workers’ comp payments for companies that employed hourly workers.

It was an “aha” moment. Sagi knew that if he was struggling with inefficient payroll and time tracking, other business owners were struggling too. So he decided to do something about it, and the idea for Hourly was born, an all-in-one tool to manage time and attendance, payroll, and workers’ comp insurance in one click.

Sagi set out to solve the biggest issue in his construction business and, in the process, started a long journey of building a technology company from scratch.

Raising $ 7.2 million

One of the biggest barriers to entry for many would-be entrepreneurs is funding. They believe that in order to get a business off the ground, they need investors to back their idea, and if they can’t generate investor interest, they can’t build a business.

Sagi took the opposite approach. He knew that because he didn’t have prior experience building a successful technology company, he’d need to have a fully functional product and an existing customer base.

Because his background was in business, and not in engineering or technology, he knew he would need a co-founder to lead product development. He partnered with Shay Litvak, who at the time was a director of engineering at Shutterfly. Shay, who joined early on as co-founder and CTO, brought over 20 years of experience in tech and leading large engineering teams to the table. Together, they got to work creating the Hourly platform.

At first, Sagi invested his own capital into the business and tapped friends and family as their first investors. Instead of hiring strictly in Silicon Valley, one of the most expensive labor markets in the world, they built a distributed team in the US and Latin America to hire top engineering talent. They built out the entire platform and once they had a working product, they started pitching Hourly to investors.

At that point, Hourly already had hundreds of customers so when they talked to angel investors and VCs, they were willing to listen. They had proven product market fit. Ultimately, Hourly raised $ 7.2 million in funding from a pool of 22 Silicon Valley angel investors and top VCs such as S Capital, Inovia and J-Angels

As an entrepreneur, you don’t necessarily need to land investors from the get-go. If you find ways to build an initial version of your product that can attract customers, investors will start to believe you’re a good bet.

What Sagi wishes he knew from day one

Even the most successful entrepreneurial journeys have at least one or two bumps in the road ,and for Sagi that bump was marketing.

As they were building the Hourly platform, Sagi put marketing on hold. In his mind, you couldn’t market a product until all the kinks had been worked out and the product was perfect.

But once Hourly was ready to go, Sagi realized that he had made a misstep. Marketing takes time. During that development time he could have started building Hourly’s brand and audience, and lay the foundation for bringing Hourly to market. Instead, when he was ready to launch the platform, he was starting his customer acquisition and branding efforts from scratch. 

Don’t wait until you have a fully loaded product to start marketing. Instead, start developing your brand and audience from the beginning. When you’re ready to launch, you’ll have an understanding of who your customers are and how to reach them. Your time is precious and every day is a race to prove your business can work. 

How to thrive as an entrepreneur

Sagi has spent the last few years building a successful company from the ground up and learning plenty of lessons along the way. When asked to offer his advice to emerging tech entrepreneurs, these were the strategies he had to share:

Trust your idea. Sagi didn’t have any experience as a tech entrepreneur or startup founder. However, he knew that he had an idea that would solve a major problem for business owners that employ hourly workers, and he put his full trust into that idea. If you have an idea that solves a pain point you know well, trust that idea and follow through on it, even in the face of inevitable challenges.

Find the right investors. If you do decide to go after funding, don’t just take money from the first investor willing to write a check. Instead, look for investors that truly understand your vision and can help you bring that vision to life. 

Embrace the challenges. When it comes to starting a business, challenges and hardship are par for the course. Accept that while they may slow you down, they won’t go away unless you dig in deep to tackle them. Plus, they might teach you new ways to overcome issues in the future and open up new doors.

The entrepreneurial journey is a learning experience

Sagi started Hourly with no investors and no experience launching a tech company, but he knew that with his drive, vision, and commitment to solving a real problem in his industry, he would figure out the rest along the way.

Sagi explained, “If something is holding you back from starting a business, whether that’s a lack of experience, a lack of resources, or both, make the choice to move forward and start your entrepreneurial journey. All you have to do is take the first step. You’ll figure it out along the way.”

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Forbes – Entrepreneurs

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