What US Software Companies Should Understand About the Rest of the World(medium.com)
medium.com
What US Software Companies Should Understand About the Rest of the World
https://medium.com/@did_78238/what-us-software-companies-should-understand-about-the-rest-of-the-world-783e8dbca758#.b2b3slmak
15 comments
I think you're missing the point here. He's coming at it from a sales perspective. I.e. if you're trying to sell into Romania then there's no point bragging about being bootstrapped because that is a normal way of life for them. You also should recognise that they can produce the same products at a fraction of the cost, and so you may just be too expensive.
On the R&D thing, of course there are issues with going international with development, but if you find the right people, you'll find that many are extremely competent and easy to communicate with.
On the R&D thing, of course there are issues with going international with development, but if you find the right people, you'll find that many are extremely competent and easy to communicate with.
Articles like this completely ignore brain drain. "Extremely competent" becomes more of a rarity when high-quality developers in Eastern Europe move to Germany or the US.
The reality is that nearly all of the time it's not "the same product." When it is, it's great for whoever made it, but when it's not, you're making the very serious decision to release a worse product to cut your costs. Sometimes it's worth it, sometimes it's not.
The reality is that nearly all of the time it's not "the same product." When it is, it's great for whoever made it, but when it's not, you're making the very serious decision to release a worse product to cut your costs. Sometimes it's worth it, sometimes it's not.
Brain drain from Eastern Europe to the US are still few and far between because every year the H1B program for IT workforces are still predominately occupied by Chinese and Indian workers.[1]
Also, keep in mind that in some of the fast growing developing countries and regions, reverse brain drain is happening [2]. With booming economic development in those places and the rising of Donald Trump alike politicians, reverse brain drains is only going to become more common.
[1] https://www.uscis.gov/sites/default/files/USCIS/Resources/Re... Section 3.2 Table 4A
[2] https://en.wikipedia.org/wiki/Reverse_brain_drain
Also, keep in mind that in some of the fast growing developing countries and regions, reverse brain drain is happening [2]. With booming economic development in those places and the rising of Donald Trump alike politicians, reverse brain drains is only going to become more common.
[1] https://www.uscis.gov/sites/default/files/USCIS/Resources/Re... Section 3.2 Table 4A
[2] https://en.wikipedia.org/wiki/Reverse_brain_drain
If you want to move out of Eastern Europe, there's little reason and lots of hurdles when you want to move to the US. On the other hand, moving to UK or Germany is extremely easy, so that's what most people do.
Or Canada.
This is true - I've been told that Twitter has actively recruited university students in Romania. However, some people would simply prefer not to move to the US because of personal reasons.
The cheaper clones may also be a lot worse in practice, but hey, it seems to be working for China ...
The cheaper clones may also be a lot worse in practice, but hey, it seems to be working for China ...
> This is true - I've been told that Twitter has actively recruited university students in Romania.
This may be because Romanians seem to have a disproportionate interest in natural language processing.
This may be because Romanians seem to have a disproportionate interest in natural language processing.
The country that can't produce baby formula or pet food without plastic and or poison in it you mean.
> A good developer in Eastern Europe now costs $1000-$1500 a month
I haven't found this to be true, at least when trying to build an international "work from home team".
I've found most estimates for the cost of skilled labor in other countries to be low. Example: For software developers in South America, a good rule of thumb is you need to pay at least half of what you would pay in the US.
I have some people who do marketing for me in the Philippines. They need to be getting about a third of what a US person would be getting.
In both scenarios, you will be able to find people for a lot less, but you will have issues with quality and reliability. This is because even though the job market might suck in their country. You are still dealing with people who are trying to live a comfortable life. In order to get first world productivity, there is a base level of first world comfort that the employer needs to provide (food, air conditioning, health insurance, internet, computer equipment, car, social status, etc...)
Another factor to consider is that as you approach the upper echelons of play, pay rates start to converge at an international level - regardless of where the person actually lives (not a full convergence).
I haven't found this to be true, at least when trying to build an international "work from home team".
I've found most estimates for the cost of skilled labor in other countries to be low. Example: For software developers in South America, a good rule of thumb is you need to pay at least half of what you would pay in the US.
I have some people who do marketing for me in the Philippines. They need to be getting about a third of what a US person would be getting.
In both scenarios, you will be able to find people for a lot less, but you will have issues with quality and reliability. This is because even though the job market might suck in their country. You are still dealing with people who are trying to live a comfortable life. In order to get first world productivity, there is a base level of first world comfort that the employer needs to provide (food, air conditioning, health insurance, internet, computer equipment, car, social status, etc...)
Another factor to consider is that as you approach the upper echelons of play, pay rates start to converge at an international level - regardless of where the person actually lives (not a full convergence).
>I've found most estimates for the cost of skilled labor in other countries to be low
One thing people forget is that major goods cost the same all over the world. Cars in India cost almost as much as cars in the US, decent models cost more. Electronics in Brazil cost more than what they do in the US. So you just can't pay people such low wages.
One thing people forget is that major goods cost the same all over the world. Cars in India cost almost as much as cars in the US, decent models cost more. Electronics in Brazil cost more than what they do in the US. So you just can't pay people such low wages.
We recently had to equip someone in Argentina with a Macbook Pro. It cost literally double what it would cost here and it didn't matter if he bought it there or we bought it here and shipped it to him. (we opted for the latter and they hit us with import fees)
> I have some people who do marketing for me in the Philippines. They need to be getting about a third of what a US person would be getting.
US people, or SF people? There's a huge difference.
US people, or SF people? There's a huge difference.
3. You are paying your developers how much?
Ironically this was how I felt sometimes talking to various EU-based companies I was considering working with last year. Especially given the popularity of the "you're a contractor your first year, then maybe you become an employee" model.
I was looking at a situation where:
1. The base pay was already less than my prior salary had been, and
2. Because of the "start as contractor" model I'd get to pay at least an additional 15% in tax for the privilege of working for them, and
3. Because contractors are responsible for their own insurance, I'd get to pay for that out of my own pocket too, and
4. Since even the base pre-tax, pre-overhead rate was about 20% less than my prior salary, it'd kill me when time came to negotiate for my next job -- it'd be the same as being set back multiple years' worth of seniority/experience, since salary negotiation always starts with what you made at your last job.
I ran the math on one offer and it came out close to an effective 40% cut plus a likely significant reduction in whatever I'd make at future jobs. And that's just flat-out unacceptable.
Ironically this was how I felt sometimes talking to various EU-based companies I was considering working with last year. Especially given the popularity of the "you're a contractor your first year, then maybe you become an employee" model.
I was looking at a situation where:
1. The base pay was already less than my prior salary had been, and
2. Because of the "start as contractor" model I'd get to pay at least an additional 15% in tax for the privilege of working for them, and
3. Because contractors are responsible for their own insurance, I'd get to pay for that out of my own pocket too, and
4. Since even the base pre-tax, pre-overhead rate was about 20% less than my prior salary, it'd kill me when time came to negotiate for my next job -- it'd be the same as being set back multiple years' worth of seniority/experience, since salary negotiation always starts with what you made at your last job.
I ran the math on one offer and it came out close to an effective 40% cut plus a likely significant reduction in whatever I'd make at future jobs. And that's just flat-out unacceptable.
See, and no tripled salary at 20% tax rate would ever pull me to a country where I pay 3000$ per month for a toilet with bed, every toddler has the right to bear arms, clowns like Trump are even seriously considered for presidency, and my kids don't get free health insurance, daycare and later on great education until college level.
And nope, I don't feel unfairly treated by leaving 50% of my paycheck on the desk in exchange for a society with an overall super low crime rate because everyone here has a minimum amount of money here and the same right to the same chances of starting out in life.
Guess it's simply a different lifestyle. :)
And nope, I don't feel unfairly treated by leaving 50% of my paycheck on the desk in exchange for a society with an overall super low crime rate because everyone here has a minimum amount of money here and the same right to the same chances of starting out in life.
Guess it's simply a different lifestyle. :)
There's two things wrong with your argument.
1) Minneapolis, Minnesota
2) Immigrants to Europe
You don't have to be some slick banker type moving to London to want your salary to keep pace with the cost of living. Lack of options in a small european country means less chances to negotiate what's only fair.
America’s population is growing about .8% per year (. 5% from births minus deaths and .3% from net migration). Thus 2% of overall growth produces about 1.2% of per capita growth. That may not sound impressive. But in a single generation of, say, 25 years, that rate of growth leads to a gain of 34.4% in real GDP per capita. (Compounding’s effects produce the excess over the percentage that would result by simply multiplying 25 x 1.2%.) In turn, that 34.4% gain will produce a staggering $19,000 increase in real GDP per capita for the next generation. Were that to be distributed equally, the gain would be $76,000 annually for a family of four.
Ask yourself if the GDP of Sweden is growing and if you're likely to see that as a raise.
Are you going to be able to negotiate a 3000$/yr raise for yourself? 12,000$/yr for your family of 4? (distributed according to the current breakdown of wealth held in the US for the pay range of a computer programmer)
Because that money is going to go SOMEWHERE. And if you can't negotiate for it, it will go to the top. And you will go down. Its that simple.
1) Minneapolis, Minnesota
2) Immigrants to Europe
You don't have to be some slick banker type moving to London to want your salary to keep pace with the cost of living. Lack of options in a small european country means less chances to negotiate what's only fair.
America’s population is growing about .8% per year (. 5% from births minus deaths and .3% from net migration). Thus 2% of overall growth produces about 1.2% of per capita growth. That may not sound impressive. But in a single generation of, say, 25 years, that rate of growth leads to a gain of 34.4% in real GDP per capita. (Compounding’s effects produce the excess over the percentage that would result by simply multiplying 25 x 1.2%.) In turn, that 34.4% gain will produce a staggering $19,000 increase in real GDP per capita for the next generation. Were that to be distributed equally, the gain would be $76,000 annually for a family of four.
Ask yourself if the GDP of Sweden is growing and if you're likely to see that as a raise.
Are you going to be able to negotiate a 3000$/yr raise for yourself? 12,000$/yr for your family of 4? (distributed according to the current breakdown of wealth held in the US for the pay range of a computer programmer)
Because that money is going to go SOMEWHERE. And if you can't negotiate for it, it will go to the top. And you will go down. Its that simple.
GDP growth in Western Europe moderately outpaced the US between 1973 and 2003.
https://en.wikipedia.org/wiki/List_of_regions_by_past_GDP_%2...
I readily concede that such numbers are not very concrete, but economic growth in the EU is quite similar to economic growth in the US.
https://en.wikipedia.org/wiki/List_of_regions_by_past_GDP_%2...
I readily concede that such numbers are not very concrete, but economic growth in the EU is quite similar to economic growth in the US.
The U.S.'s GDP might be growing, but only very few are benefitting. For the vast majority, their wages haven't increased in 30 years while costs of housing, health care, and higher eduation have skyrocketed.
Its worse in Europe and no one is talking about because "hurr de hurr socialism" while wages are stagnating.
> Its worse in Europe
I'm pretty sure that's not true. I've read many times that the U.S. is at or near the top (i.e., the worst) in inequality, and that economic mobility also is higher in Euripe. A quick search found the following:
* See the map at the top which shows current inequality (it would take too long to read through the table and figure out historical change):
https://en.wikipedia.org/wiki/List_of_countries_by_income_eq...
* "Income inequality is high in the US, but the support of social welfare programmes is low. In Europe, income inequality is low and the welfare states are generous."
http://voxeu.org/article/perceptions-inequality-europe-and-u...
* "Towards the end of the 2000s the income distribution in Europe was more unequal than in the average OECD country, albeit notably less so than in the United States"
http://www.oecd-ilibrary.org/economics/income-inequality-in-...
I'm pretty sure that's not true. I've read many times that the U.S. is at or near the top (i.e., the worst) in inequality, and that economic mobility also is higher in Euripe. A quick search found the following:
* See the map at the top which shows current inequality (it would take too long to read through the table and figure out historical change):
https://en.wikipedia.org/wiki/List_of_countries_by_income_eq...
* "Income inequality is high in the US, but the support of social welfare programmes is low. In Europe, income inequality is low and the welfare states are generous."
http://voxeu.org/article/perceptions-inequality-europe-and-u...
* "Towards the end of the 2000s the income distribution in Europe was more unequal than in the average OECD country, albeit notably less so than in the United States"
http://www.oecd-ilibrary.org/economics/income-inequality-in-...
I understand and agree with the egalitarian spirit of your post, but...
1) Housing in the vast majority of the US is inexpensive. Paying $3000 for a tiny room is something that pretty much only happens in SF proper and Manhattan.
2) Crime, quality of public schools, etc. are all completely dependent on where you live. As economically unfair as it is, software developer salaries in most of the country are high enough to place you firmly into the middle/upper-middle class, which means that you can afford to live where it's safe and schools are good.
It's morally questionable but American software developers are paid enough that they can for the most part ignore the systemic economic issues that plague the US.
1) Housing in the vast majority of the US is inexpensive. Paying $3000 for a tiny room is something that pretty much only happens in SF proper and Manhattan.
2) Crime, quality of public schools, etc. are all completely dependent on where you live. As economically unfair as it is, software developer salaries in most of the country are high enough to place you firmly into the middle/upper-middle class, which means that you can afford to live where it's safe and schools are good.
It's morally questionable but American software developers are paid enough that they can for the most part ignore the systemic economic issues that plague the US.
> American software developers are paid enough that they can for the most part ignore the systemic economic issues that plague the US.
We could use a heaping reminder of this every time an argument about social issues comes up on HN.
We could use a heaping reminder of this every time an argument about social issues comes up on HN.
>1) Housing in the vast majority of the US is inexpensive. Paying $3000 for a tiny room is something that pretty much only happens in SF proper and Manhattan.
HN is such a weird place. I can't believe the number of posts, comments, and job posts where you have to dig deep, deep down to figure out where the heck it's talking about.
And the answer ends up being "Well obviously San Francisco, California." It's the default here.
HN is such a weird place. I can't believe the number of posts, comments, and job posts where you have to dig deep, deep down to figure out where the heck it's talking about.
And the answer ends up being "Well obviously San Francisco, California." It's the default here.
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I'm going to take a wild guess and say your country probably has self-proclaimed white nationalist representatives in your Parliment (or similar governmental apparatus), an almost entirely homogenous demographic (barring recent refugees), no free speech, and state accessible cameras recording on every corner.
It's almost like different places have different tradeoffs, and acting like a smarmy elitist in response to GP's statement about the economics of a situation is a non sequitur.
It's almost like different places have different tradeoffs, and acting like a smarmy elitist in response to GP's statement about the economics of a situation is a non sequitur.
Trump is very likely to be the republican presidential candidate, and that comes with at least a couple percent chance of winning. Representative Scalise, the house whip, is a white supremacist. I wouldn't throw stones about avowed white supremacists in government...
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"Every toddler has a right to bear arms"
No toddler has a right to bear arms in the United States. I hope you were being facetious, otherwise you're grossly misinformed.
No toddler has a right to bear arms in the United States. I hope you were being facetious, otherwise you're grossly misinformed.
It's not quite a right to bear arms, but I learned to shoot about the same time I learned to read (which happened before I started kindergarten.) GP was probably being facetious but it's not a joke that has no basis in reality.
Tripled salary? I suppose if you're awful. I think you have no idea what US devs make compared to their european counterparts if they're worth their salt.
Why are you sharing your salary with new companies? a flexible jump number makes more sense.
Here is what my fellow Eastern Europeans do not know (and I'm from there so I'm qualified):
> A good developer in Eastern Europe now costs $1000-$1500
> a month. I kid you not.
In Eastern Europe definition of a good developer is "hamburger flipper which knows a little of HTML". I kid you not. Also work ethics are horrendous.
In short it ends up much cheaper to hire somebody in mid-west than from Eastern Europe (even though I tried very very hard).
The really good developer in Eastern Europe is $6000/month - less than US mid-west but you have to adjust for time change, logistic, trust, etc. So you end up at same.
> A good developer in Eastern Europe now costs $1000-$1500
> a month. I kid you not.
In Eastern Europe definition of a good developer is "hamburger flipper which knows a little of HTML". I kid you not. Also work ethics are horrendous.
In short it ends up much cheaper to hire somebody in mid-west than from Eastern Europe (even though I tried very very hard).
The really good developer in Eastern Europe is $6000/month - less than US mid-west but you have to adjust for time change, logistic, trust, etc. So you end up at same.
This fits my experience too.
The saying "pay peanuts, get monkeys" applies everywhere. I am not sure where I heard it but I recall even great developers in India, born and bred, are on six figure US income. Just because you can pay someone $1,000 a month doesn't mean they are actually doing the same work as somone on $10,000 a month.
And if they are really a great developer I would go so far as to say that they are being played and taken advantage of.
The saying "pay peanuts, get monkeys" applies everywhere. I am not sure where I heard it but I recall even great developers in India, born and bred, are on six figure US income. Just because you can pay someone $1,000 a month doesn't mean they are actually doing the same work as somone on $10,000 a month.
And if they are really a great developer I would go so far as to say that they are being played and taken advantage of.
Developers are pretty mobile so you should expect that wages will converge on a global basis.
The UK (outside of London) seems to be quite cheap.
The UK (outside of London) seems to be quite cheap.
It can be pretty cheap to hire a developer in London too, since the expectations for wages here are still a lot lower than in the Bay area, even though the houses prices are astronomical. There seems to still be an expectation that programming/development is a simple, somewhat near entry level job with entry level wages here.
How do people live on average wages and live in London?
Either:
1. They commute from cheaper accomodation outside of London. It's why the train services into stations like Fenchurch Street, Liverpool Street, Waterloo and Euston are so packed. Because it's cheaper to say, live in Southend and commute for an hour than to afford a place in the city centre.
2. They live with their parents, friends, other relatives or spouse, any of which either have better paying jobs or still own property from when it was cheaper to buy.
3. They share really cramped, sometimes illegal accomodation while sending a percentage of the money to their family abroad.
4. Their parents/family are rich and they're living on a trustfund of some kind.
None of those are reasonable ways to live in London on average wages, but they are likely the reasons that your average developer/programmer job here is offering around 30-50,000 pounds a year, often nearer the low end.
1. They commute from cheaper accomodation outside of London. It's why the train services into stations like Fenchurch Street, Liverpool Street, Waterloo and Euston are so packed. Because it's cheaper to say, live in Southend and commute for an hour than to afford a place in the city centre.
2. They live with their parents, friends, other relatives or spouse, any of which either have better paying jobs or still own property from when it was cheaper to buy.
3. They share really cramped, sometimes illegal accomodation while sending a percentage of the money to their family abroad.
4. Their parents/family are rich and they're living on a trustfund of some kind.
None of those are reasonable ways to live in London on average wages, but they are likely the reasons that your average developer/programmer job here is offering around 30-50,000 pounds a year, often nearer the low end.
Exactly - wages for software developers are pretty much the same all over the world. Of course, Bay Area is kinda crazy these days but that is just a temporary flux (I hope).
Bay area salaries are just disappearing into housing and transport costs. I don’t see salaries coming down, but a continued fleeing of development out of the area.
Looking from Norway (admittedly with a high average/median wage across all jobs, even if top-end compensation isn't all that high) advertised salaries from positions in the UK often appear surreal. Granted there's a difference in cost of living, but I often wonder what kind of people end up in these jobs in the UK. Especially government position seems to lag far behind in terms of compensation. I'm hoping my picture is slightly skewed by a sampling bias (eg: most positions sadly don't list a comp. range).
In sum, I agree with what you said, although maybe not what you meant: Developers in the UK appear cheap. Too cheap.
In sum, I agree with what you said, although maybe not what you meant: Developers in the UK appear cheap. Too cheap.
Yes I meant developers are cheap - the cost of living not so much.
> It really helps to have R&D office in Europe, India or Philippines, you definitely should consider this if you want to keep your dev costs down.
I'm sorry but my anecdotal experience totally disagrees with this.
The problem really isn't developer quality -- which I believe is quite high in a lot of places, my problem is that it's so hard to work across time zones and countries. Your costs are cheaper but your productivity sucks.
I'm sorry but my anecdotal experience totally disagrees with this.
The problem really isn't developer quality -- which I believe is quite high in a lot of places, my problem is that it's so hard to work across time zones and countries. Your costs are cheaper but your productivity sucks.
Have you considered South America? That should fix the timezone differences.
It's also physically closer so the occasional meeting won't be so painful to organize.
It's also physically closer so the occasional meeting won't be so painful to organize.
Move the whole team to Romania, no need work across timezones.
Quick before anyone else thinks of this! Realistically information technology has the potential to be a force multiplier and good developers seem to be in sufficiently short supply that there is room for the Romanians and the Americans.
Well, how come the teams that are already fully in Romania not out-competing Silicon Valley?
Same answer as for India and all the other cheaper locations; it's easy to get simple development done thanks to all the (chiefly American!) tools for drag and drop development, testing etc available nowadays, but having a team of people with the vision to come up with something new (and therefore difficult; you're not just doing a cheap shitty version of something which somebody else already invented), functional (bug free - yes, the code compiles and passes the tests you knocked together but does it actually work in the real world), scalable and competitive with the systems it attempts to disrupt isn't quite the same thing, is it.
On the positive side, I do get a lot of phone calls from Microsoft in India offering to fix my computer problems if only I'd let them use remote desktop to connect to it.
On the positive side, I do get a lot of phone calls from Microsoft in India offering to fix my computer problems if only I'd let them use remote desktop to connect to it.
That's true. Also the good engineers make it to the US where they make 10x what they would at home. Isn't that what anyone would do??
> Well, how come the teams that are already fully in Romania not out-competing Silicon Valley?
Recent-History is littered with American companies acquiring European tech companies that out-compete Silicon Valley for : Skype and MySQL come to mind.
Recent-History is littered with American companies acquiring European tech companies that out-compete Silicon Valley for : Skype and MySQL come to mind.
Skype and MySQL were Swedish. Not a place known for cheap labour.
> Skype and MySQL were Swedish
I never suggested that Skype or MySQL were Romanian - only European.
Correction: Skype is definitely not Swedish. Skype's founders are pan-European - 1 Swede, 1 Dane and 3 Estonians. The company itself was widely considered to be Estonian[1]. I frequently I confuse Estonia and Romania and I was thinking Skype was Romanian.
1. https://www.microsoft.com/en-us/stories/skype/skype-chapter-...
I never suggested that Skype or MySQL were Romanian - only European.
Correction: Skype is definitely not Swedish. Skype's founders are pan-European - 1 Swede, 1 Dane and 3 Estonians. The company itself was widely considered to be Estonian[1]. I frequently I confuse Estonia and Romania and I was thinking Skype was Romanian.
1. https://www.microsoft.com/en-us/stories/skype/skype-chapter-...
> You are paying your developers how much?
How come nobody asks how much you are paying your executives? Can't we find cheaper executives in other countries?
How come nobody asks how much you are paying your executives? Can't we find cheaper executives in other countries?
Yeah, I cringed when I read that. Just what we need another excuse to keep from sharing profits with the builders of your product.
The argument about ad spending and dumb money makes sense and I can relate to it. SV startups have the freedom to build products which are inherently unprofitable (unprofitable by design).
There are many incestuous networks of companies and investors within which startups dogfeed on each other's products in an attempt to generate profit for themselves.
Unfortunately, money can't keep moving in a closed loop. Just like the economy of a country; if money exits the network faster than new money enters it, the network's finances will dry and shrivel up.
The incestuous pattern of dogfeeding which is common in tech centers like SV tends to rely on a few 'alpha dogs' to actually extract money from outside the network. These alpha dogs are the tech giants; Google, Microsoft, Oracle, IBM, Facebook... - To avoid a bubble, these tech giants have to be able to make enough OUTSIDE profit to feed not only themselves but all startups and investors which indirectly depend on them for profit.
With this dynamic, you would hope that the alpha dogs of the industry are highly profitable; but it's simply not the case. It's very rare to find a large tech company with a Stock Price/Earnings ratio below 30 - It seems that even the alpha dogs are struggling to feed themselves so it's hard to imagine that they would leave behind enough scraps for the others who depend on them.
Interestingly enough, the giants like Google and Facebook tend to rely heavily on customers from INSIDE their network for profit (I believe a decent share of their revenue would come from advertising other tech companies) - Which means that even the alpha dogs are dogfeeding.
There are many incestuous networks of companies and investors within which startups dogfeed on each other's products in an attempt to generate profit for themselves.
Unfortunately, money can't keep moving in a closed loop. Just like the economy of a country; if money exits the network faster than new money enters it, the network's finances will dry and shrivel up.
The incestuous pattern of dogfeeding which is common in tech centers like SV tends to rely on a few 'alpha dogs' to actually extract money from outside the network. These alpha dogs are the tech giants; Google, Microsoft, Oracle, IBM, Facebook... - To avoid a bubble, these tech giants have to be able to make enough OUTSIDE profit to feed not only themselves but all startups and investors which indirectly depend on them for profit.
With this dynamic, you would hope that the alpha dogs of the industry are highly profitable; but it's simply not the case. It's very rare to find a large tech company with a Stock Price/Earnings ratio below 30 - It seems that even the alpha dogs are struggling to feed themselves so it's hard to imagine that they would leave behind enough scraps for the others who depend on them.
Interestingly enough, the giants like Google and Facebook tend to rely heavily on customers from INSIDE their network for profit (I believe a decent share of their revenue would come from advertising other tech companies) - Which means that even the alpha dogs are dogfeeding.
"it will function in all Russia, including Crimea,"
Sorry Dmitry, Crimea is not Russia, no matter what this crazy president of ours thinks of it.
Sorry Dmitry, Crimea is not Russia, no matter what this crazy president of ours thinks of it.
You realize of course that the Russian naval base in Sevastopol is older than than the United States, right ?
Not to pass judgement on the current Russian claim to Crimea, but it's a very short-sighted view to pretend that Crimea won't ever be Russian.
Not to pass judgement on the current Russian claim to Crimea, but it's a very short-sighted view to pretend that Crimea won't ever be Russian.
The Russia that exists today is not the same Russia that existed when the naval base was built. It's a different country with the same name.
Well, it's a different government. I'm not sure it's a different country.
Yes, I have been in Sevastopol.
However, using blunt military force is not a way to present a territorial claim since 1945, among civilized countries. Especially after signing an agreement guaranteeing territorial integrity in exchange for nuclear weapons (Ukraine had produced and deployed most of Soviet ICBMs while it was a part of the USSR).
Whatever legitimacy Russia might have had over Sevastopol and Crimea, now lost forever. I, Russian citizen, can't go in Crimea anymore, because it amounts to visiting the occupied territory.
Some cite Israel of doing the same. Well, Israel gained Golan Heights / West Bank in response to all-out full destruction war against her (and is still being pressed quite hard by international community for it). Ukraine didn't attack Russia in any way.
However, using blunt military force is not a way to present a territorial claim since 1945, among civilized countries. Especially after signing an agreement guaranteeing territorial integrity in exchange for nuclear weapons (Ukraine had produced and deployed most of Soviet ICBMs while it was a part of the USSR).
Whatever legitimacy Russia might have had over Sevastopol and Crimea, now lost forever. I, Russian citizen, can't go in Crimea anymore, because it amounts to visiting the occupied territory.
Some cite Israel of doing the same. Well, Israel gained Golan Heights / West Bank in response to all-out full destruction war against her (and is still being pressed quite hard by international community for it). Ukraine didn't attack Russia in any way.
That's not the point. The point is many US companies can't sell products there whether it's "really" Russia or not.
Has any map provider, like Google Maps, changed Crimea to be part of Russia?
Google Maps is now displaying it as "disputed territory", like West Bank or Hans Island.
Depends on Country, actually. Google Maps displays it as "disputed" in most of the world, as "Ukraine" in the Ukraine, and as "Russia" in Russia.
The question is: what does Google displays in Crimea ?
National Geographic, if you want to count them as a "map provider."
Many thanks, Dmitry, for brilliant and acute article. Same problems apply for me: Russian developer doing logistics software in Finland.
Here is my simple theory. There are two types of deals: friendly and unfriendly. Friendly deals happen between friends - people help each other, they have trust and comfort in negotiations, they enjoy making a deal and respect mutual interests. Unfriendly deals normally do not happen. They only happen when there are no friendly alternatives around. During unfriendly negotiations, seller is squeezed for all possible discounts, all terms are treated sceptically, fear and negativity are in the air, and with first chance deal will be off. Product has to be inevitably necessary for deal to happen in unfriendly environment.
It is natural that foreign companies and persons are treated friendly less often than local alternatives. But when product is good, and seller is right, then deals happen anyway. And deals help to make friends, and vice versa =)
Here is my simple theory. There are two types of deals: friendly and unfriendly. Friendly deals happen between friends - people help each other, they have trust and comfort in negotiations, they enjoy making a deal and respect mutual interests. Unfriendly deals normally do not happen. They only happen when there are no friendly alternatives around. During unfriendly negotiations, seller is squeezed for all possible discounts, all terms are treated sceptically, fear and negativity are in the air, and with first chance deal will be off. Product has to be inevitably necessary for deal to happen in unfriendly environment.
It is natural that foreign companies and persons are treated friendly less often than local alternatives. But when product is good, and seller is right, then deals happen anyway. And deals help to make friends, and vice versa =)
> During unfriendly negotiations, seller is squeezed for all possible discounts, all terms are treated sceptically, fear and negativity are in the air, and with first chance deal will be off.
This reminds me of the adage, "A fair deal is when both parties are equally displeased with the outcome."
This reminds me of the adage, "A fair deal is when both parties are equally displeased with the outcome."
A great deal is when both parties feel like they've ripped the other off.
That often means that at least one side greatly underestimated the real value of the deal.
Not necessarily. It only implies that the two sides have largely different values. What is worth but perception, yada yada
I apply this to dating, both think themselves less attractive then they are and that the other are way out of their league. Doesn't seem unethical this way.
And also "if you can't figure out who the sucker is in the room, it's you."
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This is a ridiculously inefficient way of doing business. Ideally most transactions should be off the shelf as otherwise transaction costs beat any 'savings' from dealing with friends.
The only 'upside' is it gives people in the middle of an organization a way to make money on the side.
PS: Enterprise discounts on enterprise prices are generally a cost increase. That said, bulk discounts can be standardized as there are savings for selling in bulk.
The only 'upside' is it gives people in the middle of an organization a way to make money on the side.
PS: Enterprise discounts on enterprise prices are generally a cost increase. That said, bulk discounts can be standardized as there are savings for selling in bulk.
> Ideally most transactions should be off the shelf
What about SaaS, when most value comes from second 'S'? =)
What about SaaS, when most value comes from second 'S'? =)
Depends, Dropbox works fine as does AWS etc. It's all pay as you go with minimal up front prices which can be great. They also have clear prices and direct competitors.
However, integrating some highly customized software from a 3rd party is generally a terrable idea. See any school using blackboard. Remember you pay for the work and are on the hook if the company drops the product, raises prices, changes the TOS etc.
At least with public API's your likely to find a replacement or have a good starting point to roll your own.
However, integrating some highly customized software from a 3rd party is generally a terrable idea. See any school using blackboard. Remember you pay for the work and are on the hook if the company drops the product, raises prices, changes the TOS etc.
At least with public API's your likely to find a replacement or have a good starting point to roll your own.
Yet almost all business depends on personal relationships
I think OP is living in a bubble. Sure we aren't #1 in Japan, but what is the size of business in Japan compared to the US? And Putin doesn't want to buy our software.. and you call our society fucked? seriously you're run by a dictator. I could go on and on but I think OP is too invested in his own little world and wants the rest of us to know he exists.
> Putin doesn't want to buy our software.. and you call our society fucked?
You completely misunderstood OP's argument, IMHO.
A dispute between Obama and Putin over a peninsula where your company has maybe 1.5 users suddenly results in you being locked out of a market with millions of potential users. And the conclusion is that when selling abroad, you need to be aware that vagaries of international politics can drastically affect your business, and that an American software company will be seen - by policymakers in both countries - as a tool of American foreign policy.
You completely misunderstood OP's argument, IMHO.
A dispute between Obama and Putin over a peninsula where your company has maybe 1.5 users suddenly results in you being locked out of a market with millions of potential users. And the conclusion is that when selling abroad, you need to be aware that vagaries of international politics can drastically affect your business, and that an American software company will be seen - by policymakers in both countries - as a tool of American foreign policy.
> A dispute between Obama and Putin over a peninsula where your company has maybe 1.5 users suddenly results in you being locked out of a market with millions of potential users.
Doesn't this cut both ways? If US based companies are locked out of the Russian market, don't Russian based companies run the risk of being locked out of the larger and more influential US market? If forced to choose, I know which of the two I'd pick.
Doesn't this cut both ways? If US based companies are locked out of the Russian market, don't Russian based companies run the risk of being locked out of the larger and more influential US market? If forced to choose, I know which of the two I'd pick.
> don't Russian based companies run the risk of being locked out of the larger and more influential US market?
Of course, and in fact it has happened a few times, e.g. see [1]. But Russian based companies tend to be aware of the possibility and plan accordingly. OP's audience is Silicon Valley startups trying to enter foreign markets for the first time, and for them the idea might be rather unfamiliar.
[1] http://insidehpc.com/2014/01/us-lifts-trade-ban-russian-supe...
Of course, and in fact it has happened a few times, e.g. see [1]. But Russian based companies tend to be aware of the possibility and plan accordingly. OP's audience is Silicon Valley startups trying to enter foreign markets for the first time, and for them the idea might be rather unfamiliar.
[1] http://insidehpc.com/2014/01/us-lifts-trade-ban-russian-supe...
> OP's audience is Silicon Valley startups trying to enter foreign markets for the first time, and for them the idea might be rather unfamiliar.
Why do you assume that to be the case? Just because US companies don't need to rely on foreign markets doesn't mean they're somehow unaware of basic geopolitics.
Why do you assume that to be the case? Just because US companies don't need to rely on foreign markets doesn't mean they're somehow unaware of basic geopolitics.
Japan has the 3rd highest GDP with a population that is roughly 40% to that of the US.
With that said, business in Japan is quite difficult if you're not Japanese, though that's starting to change in recent years. Some say their startup ecosystem is 10 years behind that of the US.
With that said, business in Japan is quite difficult if you're not Japanese, though that's starting to change in recent years. Some say their startup ecosystem is 10 years behind that of the US.
it isn't 10 years behind. the whole idea of startups is kinda at odds with japanese culture, this is not necessarily a bad thing.
> this is not necessarily a bad thing
Can you elaborate on how it's a good, or neutral, thing? Startups may be imperfect creatures, but I perceive them to have a net-positive influence on the economy (and, to be clear, I don't work for one). How is their absence from the Japanese economy a good thing?
Can you elaborate on how it's a good, or neutral, thing? Startups may be imperfect creatures, but I perceive them to have a net-positive influence on the economy (and, to be clear, I don't work for one). How is their absence from the Japanese economy a good thing?
You're not wrong, and I agree that there is more cultural opposition to startups.
The 10 year comment was from a discussion I had with a Japanese investor/entrepreneur while in Tokyo last fall. He built his other businesses in the US, and related the current state of Japan's startup scene (funding, opportunities, etc) as being similar to that of the US about 10 years ago.
The 10 year comment was from a discussion I had with a Japanese investor/entrepreneur while in Tokyo last fall. He built his other businesses in the US, and related the current state of Japan's startup scene (funding, opportunities, etc) as being similar to that of the US about 10 years ago.
> what is the size of business in Japan compared to the US?
It's about a third the size of the US economy.
It's about a third the size of the US economy.
Most of Europe doesn't see Putin as a dictator - that's just some hysterical nonsense the US mainstream media likes to peddle.. Americans gotta have an enemy figure to fixate on!
Define "most of Europe".
Eastern or Western?
Eastern or Western?
Yeah, I'm from Europe and definitely see him as a dictator who has stolen the country elections and is about as corrupt as Berlusconi or or our Spanish counterparts.
I'm not saying he's an angel, he's as corrupt as the next politician, maybe even worse than the average. But no other bent politicians seem to get as much bad press as Putin, given the fact that he's no more guilty of crimes than say, Hilary Clinton.
I've never understood why Putin is singled out by the media for such vicious treatment when, as you yourself pointed out, there is absolutely no shortage of political corruption stories they could run with.
Still, it's a lot easier for the American public to swallow that a man half a world away, from a traditional enemy figure, could be evil and corrupt, rather than examine the fact that some of their own representatives might be the same. No no, that would throw into question their belief that American is the worlds shining bastion of freedom and democracy, a notion that they've been spoon-fed since childhood.
I've never understood why Putin is singled out by the media for such vicious treatment when, as you yourself pointed out, there is absolutely no shortage of political corruption stories they could run with.
Still, it's a lot easier for the American public to swallow that a man half a world away, from a traditional enemy figure, could be evil and corrupt, rather than examine the fact that some of their own representatives might be the same. No no, that would throw into question their belief that American is the worlds shining bastion of freedom and democracy, a notion that they've been spoon-fed since childhood.
How many journalists has Clinton had murdered?
How many political opponents has Clinton had murdered?
How many political opponents has Clinton had murdered?
How many world leaders has Clinton had murdered? At least one
"Heck, even Canada now has a law that makes using Dropbox illegal if you are working with personal data (at least until Dropbox starts storing that data in Canada, or that’s what I was told). It’s called PEPIDA."
It's actually called PIPEDA, not PEPIDA.
Also, where is the source? I have done a good share of readings in this topic as part of my research in a Canadian university (< 4 months ago) and could not find the "illegal"-ness of such actions.
Currently, the act essentially outlines consent and putting the knowledge and power to update/remove private information with the users, and does not outline what services or actions are illegal.
It is important for people care about privacy, but it is not cool to post un-sourced opinions as facts, as people often mis-cite them as fact and propagate false info.
Here is the act, and a summary of responsibilities: https://www.priv.gc.ca/resource/fs-fi/02_05_d_16_e.asp
It's actually called PIPEDA, not PEPIDA.
Also, where is the source? I have done a good share of readings in this topic as part of my research in a Canadian university (< 4 months ago) and could not find the "illegal"-ness of such actions.
Currently, the act essentially outlines consent and putting the knowledge and power to update/remove private information with the users, and does not outline what services or actions are illegal.
It is important for people care about privacy, but it is not cool to post un-sourced opinions as facts, as people often mis-cite them as fact and propagate false info.
Here is the act, and a summary of responsibilities: https://www.priv.gc.ca/resource/fs-fi/02_05_d_16_e.asp
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I am not a fan of this trend where other lowly paid software developers want to bring down the salaries of highly paid software developers.
To be honest, I can't imagine highly skilled software developers on the wages that the OP considers in his article.
Why are some people obsessed with highly skilled people making a lowly income?
To be honest, I can't imagine highly skilled software developers on the wages that the OP considers in his article.
Why are some people obsessed with highly skilled people making a lowly income?
"only better and free" - lol. Good luck with that. Amateurish at best.
I guess these might be surprising insights to someone but I'm not sure whom.
And hot on the heels of an earlier post decrying Medium authors as largely self-serving knowitalls that are eager to tell you how everything you know is wrong. [1]
[1] https://news.ycombinator.com/item?id=11478159
[1] https://news.ycombinator.com/item?id=11478159
Too bad it's been deleted; that sounds like it would have been more interesting to read than a guy asking me to be shocked that people make less money in Eastern Europe than in the United States.
Thank god for archives: https://archive.is/5WGiY
Based on the comments in here, It seems that this article may have struck a nerve for readers from a certain country?
I am not from America but I agree with many people here, especially in regards with the OP advocating dirt cheap pay for software developers.
I know of no other industry where the professionals constantly self-flagellate with regards to pay.
I know of no other industry where the professionals constantly self-flagellate with regards to pay.
Perhaps the one who should be surprised ....
... is /you/!
... is /you/!
Or perhaps nothing in this article is surprising to anyone who has even in a passing interest in the world around them.
Do you agree that the Tech industry is in a bubble?
Yes. I'd like to think that there's some solid work that is less vulnerable going on outside of the latest start-up providing a service that no one outside of the Bay Area would ever use, but who knows if that's even true.
Is there anyone who doesn't think it is in one?
I think it's telling in your example that the friend laughs because their grandma did it, not that the friend themselves did it. Beyond that, by your own admission all the money in tech makes bootstrapping harder, not easier, because it drives up costs. So your example makes even less sense, unless you intend to point out the ignorance of laughing at someone bragging about it.
You're also not the first to recognize that labor is more expensive in the US. Many companies acted on this information in the early 2000's, and it did not exactly result in a complete exodus of software development jobs. Culture, language, and even timezone differences can be a problem. Paying someone in Eastern Europe 30k/year instead of a US developer 100k/year to develop a product does not necessarily result in 70k/year worth of savings.
Interestingly I feel like some of what you say here goes against your recommendations in your internationalization article: the implication is that we should all hire Eastern European developers, but your internationalization article talks about the perils of thinking that all you need to do is slap a new language on your product and think that it's OK for another country.
If you're developing a product to be sold in a given country, and you hire developers from that country, you can empower your developers to act with more discretion.