Founder's Story
What Most Founders Get Wrong About Scaling—Railsware’s Founders Get Right | Ep. 205 with Yaroslav Lazor and Sergiy Korolov
Thu, 24 Apr 2025
Yaroslav Lazor and Sergiy Korolov take us on their fascinating journey from passionate software engineers to innovative entrepreneurs at Railsware. They share how their love for building software evolved from personal passion into a thriving business, influencing multiple industries and countless lives. Railsware’s approach of treating every internal process as a product is central to their ability to innovate, scale, and continuously improve.Key Discussion Points:Origins & Inspiration:How their genuine passion for software as a transformative force inspired the founding of Railsware.Viewing software development as an exciting sport—endlessly challenging and infinitely rewarding.Product Mindset & Business Evolution:The philosophy of approaching every company function (legal, finance, recruitment) as a "product" to enhance efficiency and user experience.Balancing in-house product development with collaborative ventures to constantly engage with fresh ideas and challenges.Building & Scaling Successful Companies:Why early-stage entrepreneurs must juggle multiple roles, from visionary to executor.The critical importance of team-building, sharp decision-making, and scaling thoughtfully as the business grows.Traits of Successful Entrepreneurs:Embracing a "founder mode craziness," coupled with conscious decision-making, intuition, and deep domain knowledge.How luck, timing, persistence ("don't quit"), and managing your own psychology are underestimated yet critical factors in entrepreneurial success.The Impact of AI:AI’s role as a productivity booster rather than a complete replacement for creative roles such as writing, design, and software development.How AI fosters clearer articulation of ideas, better prototyping, and expanded creative possibilities.Key Takeaways:Passion and continuous learning fuel entrepreneurial longevity.Treating business processes as products helps create clarity and efficiency.Understanding timing, persistence, and adaptability is critical for sustained success.Leveraging AI effectively enhances human potential rather than replacing it.Our Sponsors:* Check out Avocado Green Mattress: https://www.avocadogreenmattress.com* Check out Indeed: https://indeed.com/FOUNDERSSTORY* Check out Northwest Registered Agent and use my code FOUNDERS for a great deal: https://northwestregisteredagent.com* Check out Notion: https://notion.com/founders* Check out Plus500: https://plus500.com* Check out Rosetta Stone and use my code TODAY for a great deal: https://www.rosettastone.comAdvertising Inquiries: https://redcircle.com/brandsPrivacy & Opt-Out: https://redcircle.com/privacy
Chapter 1: Who are the founders of Railsware and what inspired them to start the company?
But first, what was the spark that made you even say, I want to start Railsware and this is the industry I want to be in?
Hi, everyone. So the spark really is the love for software. Ability to see and feel that software is something that can change the world drastically.
Chapter 2: How do Yaroslav and Sergiy view software development as a multidimensional sport?
passion for building software it's it's an amazing ride always you learn like crazy you grow and it's just you know it's like there are those people who are who are certain sports junkies right they really enjoy doing a particular sport whether it's snowboarding or rowing or anything like that right this is this is a sport for me personally I'm pretty much sure for Sergey it is the same
And this is a sport where you can get like infinitely better because there's so many dimensions. So you can like expand into this multidimensional world, the multiverse and learn and understand. And you see those, you know, miraculous stories and it's, Sport itself is a, it's something that lifts your spirit and gives you ability to see, wow, I made those incredible results.
And software businesses are even more multidimensional from that perspective, right? Because you can, you can change people's lives. You can, you know, pure cancer or whatever. whatever it is. You can change anything in the world with the proper amount of software. We see what those big tech companies are doing with the world. And you can do some amazing things.
At the beginning, it was more a sport of writing code and being in code. And now it's more of a sport of this multidimensional change and influence, helping people grow helping amazing individuals grow into professionals, grow into influential people, into influential leaders, changing things. It's just great. It's great, right?
So I mentioned the metaphor of sport, and I think we started as swimmers or runners, but then we went to triathlon and, I don't know, exathlon, whatever it is. So at some point you understand that you love to swim, but then you want to do something else as well. And with software companies, like in our case, I believe it works the same way.
You start with writing code, but then you want to influence decision, what exactly you want to deliver, then you want to influence the design, and then you want to influence the business model, and so on and so on. And in the end, you start to build a company which handles all those aspects.
But then, of course, you do something that maybe you don't want to do, something like finances or legal or something like that, operations. But when you change the perspective and you treat... those disciplines as a product as well, then it helps a lot. It's, by the way, a very good concept we've coined in the company. It's like doing everything as a product, as a software product.
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Chapter 3: What is the philosophy behind treating every internal process as a product?
Kind of whatever you take, like if it's a legal, if it's a finances, if it's a recruitment, whatever you treat it as a product, because there are users on both sides and they have some needs and you want to cover those needs with the software or processes or any other things.
So do you think it takes a different skill set or mindset for an entrepreneur that builds, let's say, a single product or a single service versus somebody like yourselves where you're building services for other people? And which I love doing companies like this because I get very bored of doing just one thing and being able to help many different people do different things.
I feel like it's like a refresh every time. But do you think it's different when you are a service provider helping other people be successful and building stuff for them versus you're an entrepreneur who's just hyper focused on building one thing?
So in our case, we're both, right? So we run three of our own products and we run now joint venture products. So we run a lot of products. We run about six to seven products, depending on how you look at it, of our own products. And then we also help other companies and do still help other companies build their own products. And it's definitely more...
growing and engaging right because when you do your thing and you have five people in the team you're like well you know maybe there's this in the world or that in the world maybe if I would raise money you would get this. Maybe if I would hire in San Francisco, you would get that. And from our side, we burn candle not from both sides. We burn candle from all sides.
We have clients in San Francisco. We have clients who have hundreds of millions of revenue. We have clients who have hundreds of thousands or zero revenue. So we have all those experiences. We're living them in the same time. It's kind of a multiverse. And we know everything that's happening in those companies because we help them. And we know the founders, we know their stories.
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Chapter 4: How does Railsware balance building their own products and serving clients?
And a story for one founder is a lot because they basically talk to them and they tell you their whole life. and how they made decisions and how they didn't make decisions. It's a huge amount of knowledge packed in this simple medium of just working with a person. And you learn just much better than those what-if scenarios. You just see them from all perspectives.
So that definitely helps us to grow and to understand everything, all the aspects.
And I just want to say here quickly why many products appeared or popped up in Rails 4. All the products that we have, they originally started from not products, but just a piece of software that resolves our own problem. So Mailtrap, Titan Apps, and Coupler, we've built it for ourselves first. Then we kind of start to use it. We find out that it's interesting and it solves actually the problem.
Then we shared it to the community. Community loved it and started to use it. So we started to get more users. And then, of course, it kind of pushes you to think maybe it makes sense to invest into that product. Firstly, it's time and then it's money and then kind of, you know, it has own pace. So all three products have been started this way.
Well, joint venture, Yaroslav mentioned, that's already a conscious decision because if we talk about own products, then we cover both sides. It's a biz dev and marketing, right? But also engineering and product development ourselves. And with joint venture, we find experts in their domains and we join our efforts.
So the best of the knowledge subject matter expert and the best of our qualities in building software.
So do you find a correlation between if I have a problem, I solve it for myself and then it's successful. So then I open it up to others versus somebody that comes to you and says, here's a problem I think we need to solve. Let's build it for other people before it's being tested internally.
So it's definitely never not... You open up this Pandora box to a very huge world, right? So I have a friend, he's been doing festivals and he was hosting hundreds of thousands of people on those festivals.
So if he talks to me about tickets, ticketing systems, ticketing problems, and how to work with ticketing information and information of demographics, who buy those tickets to be able to market better, rather than when someone out of college just thinks, you know what, I just bought a ticket on Ticketmaster and it was a bad experience. I want to make it great. Very different worlds. Yeah.
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Chapter 5: What differences exist between solving internal problems versus building products for clients?
Some of those people are crazy because they were building products for three, four years and they made $200. And then eventually somehow they build it into a billion dollar business, which doesn't like, you know, people like hockey sticks, but it's not a hockey stick. It's a perpendicular. It's just some of that, you know, some of that needs this founder mode craziness in it.
I would say founder mode craziness is very important spices that you put on top of everything. Understanding and going deep. But at the same time, I saw people who are very successful, they work out of their intuition. Their organization methods are not great. Their organization within their company are not great.
The way they hired people and they created the structure, they don't even know how it works. It just works. And I don't even tell them anything because I don't want to break it. it's, it's a very huge area that, you know, you can, you can cover, but, but there are some principles for sure.
So I'm, I'm curious then, because you've been able to work with, and thank you for, for sharing that, by the way, I really liked the ticketing example. Because those are two very extremes. And it is very fascinating to see in the end who does become the most successful.
But I guess at the same time, if you already have a successful business and you can add in a component and make it even better, that's success in its own right, even if it doesn't make itself a billion dollars. I'm curious on on the traits of successful entrepreneurs.
So when you think of yourselves or if you think, you know, you've worked with other people who have also found success and you've been integral in that in that success. If you could tell me two or three traits that you feel that either you all share or people have to have in order to find success.
So I would say that there are different stages that require different skill sets. So if it's an early stage, you need to be able to wear different hats and be a visionary person.
and a doer at the same time so you need to project the perspective somewhere in the future but also do just small tasks big tasks all the day long that's that's the beginning right but then when you grow your company you need to be able to switch from this mindset into the mindset of the
team builder first of all because the great entrepreneur in the end must build a team because it's impossible to implement all the plans by yourself and you can lose the momentum if you will start not start when you will proceed to move forward with your principles of building the early stage company So you need to switch your mind into the scaling mode, right?
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Chapter 6: What traits define successful entrepreneurs according to Railsware’s founders?
Did the right thing, yeah, but sometimes... But people usually prefer not to talk about this this way. They rather say that everything has been planned this way from the very beginning, from the childhood, kind of envisioned... Yeah, yeah.
But at the same time, Adamson Horowitz has this great article that helped me throughout the years. It's called The Most Difficult CEO Skill, Managing Your Own Psychology. One of his points is don't quit. It's pretty simple. If you quit... Even if luck is there to present itself to you and you're not there, then if something falls from the tree, you have to be under the tree.
So don't quit is a really great idea. A lot of, in our cases... we kind of rely more on trend rather than particular use case right now. So we know we have those games or situations that happen every time and every time it feels like it's the end of the world.
And when we went through 10 ends of the world, we were like, you know, maybe we don't call it the end of the world because the world is not ending. Maybe we call it just, you know, something hard that we went through. Like, I mean, our country went through war and we survived that as a company. And the don't quit is a really important thing. Another thing is what Anderson Carter was saying.
It's technique to calm your nerves. So at some point, emotionally, you can burn out. but it's a choice. And it's a choice in front of you. You burn out by burning yourself out. So, you know, lower the gas, don't burn yourself out. It's actually very egoistic to burn yourself out because you're like, you're taking things the wrong way. You're being too connected to what's really happening.
And you're like, you know, it's, It feels so rough. Look, well, don't feel that roughness. Sometimes that doesn't make sense to do it this particular way. So just go, you know, calm down your nerves by making some friends and getting things out from your head into the paper. In the head, they're always more painful, but... Focus on the road, not on the wall.
The words of Anderson Horowitz, not mine, but they really helped me throughout the time to kind of remember them. But one thing is to read them. The second thing is to actually rely on your past successes. Oh, I was in a situation like this. Oh, it felt really hard. I did solve it. I didn't know how I will solve it, but I found a way. So maybe, you know, maybe I rely on myself this time.
And because I did handle things like that, that really helps a lot. It helped me a lot in a lot of the cases when, you know, when you feel nervous and you just go through it. So, you know, don't quit. And those techniques are really, really cool.
Yeah, I like that. Don't quit. I'd say, you know, many of the people that we've interviewed, if you ask them, luck was a major part of it. And timing might have been the most important. And, you know, if they quit at year one, then they wouldn't have anything. If they quit at year 10, quit at year 15, it just was a matter of time for them.
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Chapter 7: How important is conscious understanding and decision-making in growing a startup?
Right now, the same person can create thumbnails faster because AI helps, and then he just finishes with smaller touches here and there. But still, it's not a replacement for graphical designer. It's a booster for graphical designer. He can do more work than he was able to do before. With software engineers, it very depends on the type of task that you work.
If you prototype, AI right now gives a lot of possibilities to prototype quickly. So you can make some clickable, almost applications to present the idea before you were able to do so with, I don't know, some software.
napkin and you know some pencil but then you were able to do it with some instruments like figma kind of create some clickable prototypes right before it was envisioned but right now you are able to make like almost you know almost ready to use with some corner cases not covered yet, but still you're able to show it, present it and kind of even get some feedback.
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Chapter 8: What role does intuition, luck, and timing play in entrepreneurial success?
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