The following interview is a conversation we had with Stoyan Zulyamsky, Co-Founder & Managing Partner of Costimize, on our podcast Category Visionaries. You can view the full episode here: $5 Million Raised to Revolutionize Cloud Finance Management.
Stoyan Zulyamski
Hi, Brett. Thanks for having me today. And hi to your audience. Pleasure being here.
Brett
So were joking there in the pre interview that you have a very difficult last name to say. I was going to try to say it, but I didn’t want to start the interview off the wrong foot and insult you would say your name wrong. So how do you pronounce your last name? And hopefully, how do you pronounce your first name? I hope I got that right. But just to recap, what is the first and last name or how do you pronounce it?
Stoyan Zulyamski
Yeah, no worries. So my name is Stojan Zulamski. I’m coming from Bulgaria, so it’s a typical name for here.
Brett
Take us back inside the mind of Stojan. At age 15, what were you thinking in terms of your career, life, what you wanted to do in life?
Stoyan Zulyamski
Yeah, actually, I remember even when I was seven year old, I wanted to build my own, let’s say, computer to work with. Because at that point in Bulgaria, it was difficult to get one. And then when I got to 15, I was working with my father in Greece at construction sites. And at that point I realized I really don’t want to do this. And I was good at studies. So when I came back to just continue my education, I realized that I need to go for technical education and doing something which is in that direction. I knew pretty young what I want to do, and so I just followed that path. Nowadays I continue to earn every day. So when I was 15, I just decided go and work from the large enterprises, what these guys are doing and good at.
Brett
Right?
Stoyan Zulyamski
So this is why I started working when I was 19 for the biggest bank in Bulgaria. And that gave me a lot of insight about how to construct my career going forward. So of course, I didn’t know that we ended up having a company, but that was the start.
Brett
Tell us about the tech scene in Bulgaria. What’s that like today?
Stoyan Zulyamski
I think Bulgaria had a journey, right? I’ll bring you back to 2000, let’s say, because I believe that at that point, Bulgaria was seen like a call center for a lot of companies as a call center location. But now it has upgraded its status to even R and D country for a lot of companies. And a lot of companies now have thousands of developers here developing their products and improving them. So large names are here. It’s a pretty convenient place for them to be here because of the tax system in Bulgaria and also because there are a lot of educated people in Bulgaria. So I think it’s a nice combination for the large tech companies, not only for, I think even the startup ecosystem is now growing a lot. And people are realizing, like Israel, right?
Stoyan Zulyamski
At some point, Israel became a good location for startup development, but now Bulgaria is also a very good one in Europe, and a lot of capital was poured here during the boom time of 2019 and 2023. I would say now it’s more difficult to get capital, but probably we’ll talk about this later.
Brett
I’d love to switch gears now and dive a little bit deeper into the company. So how we’d like to begin this portion of the interview is really focusing on the problem. What problem does customize solve?
Stoyan Zulyamski
So that brings me to the question. And we are trying to save money in the cloud ecosystems for companies that are having their operations there or planning to migrate to the cloud. This is because cloud is consisted of a very complex automated environment, having billions of, I would say, transactions and interactions between the systems and the users. And if you multiply this by three and you’re having even more complex environments, and then on top of the clouds, you have your applications, and now, of course, you have your AI models. It’s getting very difficult for people to monitor their spendings. And we decided that we just want to have a system and even a systematic approach, right?
Stoyan Zulyamski
How to save money for the people in the cloud, but also not only saving money, but organizing their operation playbook, how to do it correctly, sustainable and continuous way. And we started very simply, but now the whole offering that we have is getting into the large enterprise segment. And this is simply because of my background understanding corporate environments. So we are pushing hard from a niche cloud, which was Google Cloud. Now we’re trying to go to the other clouds and provide that deep technical expertise to the other platforms so people can actually leverage wherever their systems are.
Brett
How did you uncover this problem? And what was it about this problem that made you say, yep, that’s it, I’m going to go build a product and build a company around that and dedicate the next 510 15 years of my life to solving this problem?
Stoyan Zulyamski
Yeah, that’s an excellent question. I was working for, after my time in the bank, where I spent nine years, I started working for m and a fund in the states. That fund was buying companies each week between 550 and 500 million in terms of evaluation. And were migrating these companies into the different cloud providers. And at that time, there was a company which the fund bought about telecommunications, which was a very prominent player in the market, and it’s an excellent company. And they were migrating to AWS, but then decided to migrate to Google Cloud.
Stoyan Zulyamski
And I really got excited at that point because Google Cloud just started getting into the game and I was sure that they will do the cloud in a different manner simply because they were catching the wave later than the others and they had the advantage of just learning from their internal developments. And then, of course, what the world was given at that point. So coming back to the point, I was starting to figure out that actually after the migrations, companies are spending a lot of money, but all the efforts were manual. I was thinking to myself, all right, how that thing can actually get exponential if it was a company, right? How you can package services or you can create a product or platform even, and offer this to the audience, to the customers, so they can actually leverage your knowledge worldwide.
Stoyan Zulyamski
And I was thinking how that can be hyper automated with different agents which are doing different tasks for saving money, but that can be seen into a platform, so the user can actually say, okay, I understand what customize does and how it saves money for me, 24 by seven. Of course, all of these operations needs to be monitored by the person. But at that point, before I had the product vision, I just realized the problem, because I was working for a bank, and when I was working for the bank, were managing like 40 million in IT operations. And I constantly had to take care of not overspending. And I had the habit of just having that control in spreadsheets at that time because that was back in the days.
Stoyan Zulyamski
And when I started working for the fund, I realized that something else needs to be done, because simply, cloud doesn’t tolerate spreadsheets. It tolerates something which can keep up.
Brett
With the pace when it comes to the market category. Is the category cloud cost management? Or how do you think about the actual market category that you’re in.
Stoyan Zulyamski
At the beginning, when I started was cloud financial management. I think the fancy term right now would be fin ops, right? Coming again from financial operations. That is even a very serious organization out there, which is a nonprofit organization, the phenops.org. Shout out to them, they’re doing excellent job in the sphere. So I think phenops is the right term and that’s the category right now. And when I’m speaking to researchers or analysts from investment counterparties, they’re asking for the Phenops segment. So I think you’re right, it’s finopsy.
Brett
When it comes to marketing, how would you describe your philosophy?
Stoyan Zulyamski
Well, I made a lot of mistakes there because that was my first company in terms of product offering. So of course my engineering background was thinking that having a great product will solve the marketing problem, which is totally wrong. Of course, in some cases it works perfectly. But for our case, we needed to do more marketing. We started to develop channels coming to talking to the communities, talking to the customers who are looking for a product, making a lot of materials, and educating actually companies. I think I spent most of my time educating customers why this is important and that can better done via excellent marketing in terms of developing the stories and telling them why it’s important before you go to the cloud, while you’re migrating, and after your migration phase, I think that’s something that is very important.
Stoyan Zulyamski
So for me, marketing is high touch approach. You need to do it from many angles.
Brett
What’s the biggest marketing fail or just mistake that you think you’ve made if you had to choose one?
Stoyan Zulyamski
I think the biggest mistake that I made was telling customers directly what the product would do for them. And were conveying this message in this way as well. Not that it’s such wrong message, but I think first, for every entrepreneur it’s very important to understand the problem of the audience. I had that problem, so I had the insight, but I think framing it better is very important. So telling them that organizing their processes leading to efficiency would be a better statement than just saying that one product will give you 30% savings. I think this is a little bit fishy and I don’t do it anymore.
Brett
What about your positioning? How have you seen your positioning really evolve over the last, let’s say, twelve months? Have there been any big changes in terms of positioning?
Stoyan Zulyamski
Yes, like I said, we are positioning ourselves right now as the operating system. Why? I’m saying this because an operating system has, let’s say, a kernel, and you need to sustain it with the latest development so the system can work and then you have more exterior operations. So the way I’m positioning ourselves right now and customize is that Google or AWS or Azure, they need a digital worker or an operating system that’s accompanying them in solving the problem of cost. Like I said before, what were doing is, hey, we are offering a product which is going to save you money. So we’ve moved away from this approach and now we are talking to customers that now getting into the explanation phase of AI from here. Of course, these are the first steps.
Stoyan Zulyamski
And because all of the workloads we get into the cloud now, you’re going to have a system which is keeping up with the pace of the developments. So it’s a little bit different positioning.
Brett
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Stoyan Zulyamski
So before I answer your question, we’ve also changed the way we offer ourselves because I see that the cloud economics, which is an economic on its own, it proliferates on the marketplaces of the cloud providers. So before were offering ourselves outside, but because customers are having commitments to these cloud providers, it’s easier for you to grow when you’re on the marketplace. So we are betting a lot. We’ve just got on the marketplace resource for Google, and I’m betting that we’re going to see probably ten x growth this year. We’ve had, I don’t know, five or six serious partnerships with managed service providers and then a new big managed service provider is coming this year. I cannot share the name right now, but it’s part of a, let’s say very prominent player and in terms of individual customers, I would say thousands.
Stoyan Zulyamski
But we’ve started working, you know, we’ve launched the general availability last year, March. So I think that probably now we are going to grow ten x this year simply because not that customized or the other phenomenal solutions are rocket science is just because the situation in the world is getting into a stage where everybody will need to save if it was a 2022, everybody was talking about evaluation. Now it’s about profitability. So people will start working on how to optimize their cloud operation. So I see very strong demand and I hopefully have the supply for it.
Brett
On the topic of the cloud, there was a famous post that came out last year and I just read the update and it was basecamp announcing that they were leaving the cloud. You think we’re going to really see more companies do that or to back up? Did you read that post?
Stoyan Zulyamski
Yeah, and I actually repatriation, let’s say, procedure that some companies are launching. My opinion on this is the point. Some of the players out there swipe banks, for instance. They have certain operations that they want to keep their data center. And it makes sense if you have made, let’s say, 20 million investment for core banking solution, and it just doesn’t make sense to migrate right now. Probably not only for financial reasoning also because people are not ready. So that’s one reason for people not going to the cloud. Just one reason for people going back to the data center also makes sense for some of them, because if they have certain operations which are, let’s say, very static, and they can manage them better on servers and they can have good deals with the data center providers, I’m not against it.
Stoyan Zulyamski
I just think it’s a step in the wrong direction for me, because like I said before, the cloud hyperscalers are moving at such speed and now adding AI, I think it’s more a tactical and strategical advantage for companies. And I would urge people to strongly think about this because, for instance, companies like SAP, at some point we will directly move to the cloud and demand people to be on the cloud. And you need really to think about whether you’re making the right decision. If you are a corporation, for instance, and you have certain licenses and providers which are going to direct you to be on the cloud in five years anyways, for other companies which are doing their own software and they can live in the data center. Yeah, why not? I don’t have any problem with that.
Brett
Who’s the primary person that you target when it comes to messaging on the site? I see you have operational benefits, financial benefits, technical benefits. So it sounds like there’s three different groups. There’s which one’s like the top priority, and who do you typically need to really spend a lot of time convincing to use the platform?
Stoyan Zulyamski
Excellent question. I was not aware at the beginning of my journey with costumes, but now I know. So, first of all, the CTO and the vice president of engineering. These are two titles which are often top view because these people are analyzing how costumes will be plugged into their ecosystem and help them. That’s from the technical side and also because typically these guys have cloud budgets to fit in within. And I speak to the financial people for several reasons. For instance, finance and procurement are two very important teams because procurement talks to the cloud provider and they’re walking the commitment with the clouds and finance. They’re willing to understand, for instance, what’s the productivity for from the cloud, how they can save money.
Stoyan Zulyamski
Can they do certain computations or formulas based on the cloud which are showing them the efficiency the actually it team is getting from there. So these are the three guys I’m oftentimes speaking to. There is another Persona, which is the MSP provider. That’s a fairly complex approach there because you need to speak to the guys who are managing the, because they typically have a lot of cloud clients, to the guys who are managing that group of clients, the guys who are organizing billing, to the guys who are organizing offering. And that was worn the hard way. By the way, I didn’t know about this at the beginning, but these are different Personas there. So quite a lot. And I can tell you more, people are getting interested into the topic of phenops.
Brett
As I mentioned there in the intro, you’ve raised 5 million to date. Tell us a little bit about your investors.
Stoyan Zulyamski
And that’s a very good story. And I like the question. So when I was working back in the days in the bank, I had people that I was delivering services which were approved vendors for the bank. And when I started working in the states and for the fund and then thinking about how to organize customize, I didn’t want venture capital because I was studying at that point macroeconomics and I knew that there is a cycle coming of boom and bust. And I was thinking, dawn, if you get money right now from the venture capital and the things are getting, let’s say, into the direction of bad direction, let’s say in 2023 and 2024, do you really want to get money from the VC’s?
Stoyan Zulyamski
So I spoke to a friend in Bulgaria, which I knew back in the days from the bank, and I said to him, hey, look, you have a services company from your profitable with. I have a very nice idea for a product and I will dedicate myself to this. So why don’t we invest our own money and create the product? So practically the company is called Nevexis. And Nevexis invested our own money, practically my partners money and my own into the customized. And thats how we funded it and that’s how we are funding it to you nowadays. And I believe this is putting a lot of pressure on us because you need to balance two apples in the air, because from one side the services are now getting into a time of people. They just want better services at lower cost.
Stoyan Zulyamski
And from another angle, you need to make customized profitable. So it’s putting a lot of pressure on us. And I think that we are doing a good job without venture capital. I think if you ask me what we going to do in the next years, probably at some point we will not be able to sustain this with our own efforts and I will need strategic capital when we scale.
Brett
Im guessing when you do thats going to be coming from a place of strength though, right? The company will be profitable, it’ll be growing, and you’ll be going to those early conversations and having much different conversations with the venture investors. Im guessing than you would if it was. Hey, we have an idea. Do you want to fund it?
Stoyan Zulyamski
Yeah, I think even now probably its going to be tougher for me right now to just go and pitch an idea simply because there is an AI hype and people are still thinking that it’s going to be like this forever. So I think right now it’s going to be more difficult. But also, like I said, we are really determined and relentless in trying to optimize the clouds for customers. And if I go to the venture capital guys and I tell them that I now have a good track records of results, I think that it’s going to be a better pitch at some point.
Brett
Yeah, have to imagine that will definitely be the case. Now lets imagine, Stuyne, that I come to you and I say, hey, I want to start a company thats not going to be a competitor, but its going to be in a similar space and maybe sell to a similar Persona. What would be the number one piece of advice that you’d give me as I embark on that journey?
Stoyan Zulyamski
I actually would give two directions. One is the way we started, then I truly believe this is a correct way. You need to start from something that the customer really needs. And for this you have either you need to test ideas or you need to have an insight. And when you get that niche thing working, then you need to scale. Because I think the problem that all of us, the founders will have now and in the years is that the software get commoditized because the cost for developing something is just getting easier. And my advice to them will be get a thing that works done and then just keep pushing. And even if some of these features or products that you create don’t work, don’t get desperate, just keep working. Because that’s the way it’s supposed to be, right?
Stoyan Zulyamski
It’s supposed to be a painful thing. It’s not easy. And I was thinking, I knew that it’s not going to be easy at the beginning, and that’s my advice. And now I have my second advice to them. I think we are heading into the era of exponential organizations. And this is an idea from Peter Diamandis. And I really think that people need to learn this idea because he’s trying to tell the people that there is another way of creating companies beside, you know, the normal hierarchy, let’s say top down structure. And for people who work, capital, or they’re not supported by venture capital teams, or they just, their ideas are not there yet, this is a good way. Just read his book. I think it’s going to be a great advice for everybody else. And just adding another flavor.
Stoyan Zulyamski
Bear in mind that the hyper automation era which we are getting into, we require from every software to act as a digital agent worker, which executes different tasks and can be leveraged as part of other larger ecosystem. So don’t close your product, be ready to interconnect it with other systems. I think this is very important in terms of finops. For me, what is interesting right now is how can AI help fin ops? How you can leverage machine learning and algorithms to actually help you in the daily operations of saving money. That’s something I’m really interested in right now, and I’ll advise people to do something in the phenops space to start from there.
Brett
Final question for you, let’s zoom out three to five years into the future. What’s the big picture vision that you’re building here?
Stoyan Zulyamski
For me, I believe I want to have customized central place where it has connectivity to a lot of systems out there, and it can help you improve, whether it’s your AI model, whether it’s your current system in use, which can be monolithic or it can be, let’s say, microservice based, help you organize it in a better way, help it be more efficient and save you money. Because I’m coming from the understanding that you need to be profitable, and by saving you money in the right way, you can be more profitable and also open your mind about these things. So in five years, I believe that the system will grow to such a stage where we will be able to help organization hyper automate their spendings and savings and efficiencies.
Brett
Amazing. I love the vision. I’ve loved this conversation and I’ve learned a lot. I know the audience is going to as well. Before we wrap up here, if the audience is listening in and wants to follow along with your journey, where should they go?
Stoyan Zulyamski
I’m really open. You can find me on LinkedIn. All my mails phone numbers are there. You can just drop me a message via LinkedIn or drop me a mail or directly call me. I’m open for all conversation and I really love talking to people who have ideas and are looking for an advice or even I can learn something from them because I think this is a value sharing.
Brett
I love it. So thank you so much for taking the time again. This has been so much fun.
Stoyan Zulyamski
Likewise, thank you for having me.
Brett
No problem. Have a good rest of your Friday. Thanks for doing this line on Friday night.
Stoyan Zulyamski
Thank you so much.
Stoyan Zulyamski
Thank you so much.
Brett
No problem. Keep in touch. This episode of Category Visionaries is brought to you by Front Lines Media, Silicon Valley’s leading podcast production studio. If you’re a B2B founder looking for help launching and growing your own podcast, visit Frontlines.io podcast and for the latest episode, search for category visionaries on your podcast platform of choice. Thanks for listening, and we’ll catch you on the next episode.