How a team of techies created their company, season 2 (life in crisis)

Our first article received a great response on Habré, 62 thousand views, +94 votes, 340 times added to favorites. This is very cool, and we are happy to tell you what happened over the past year.

This season you will find out :

• how to earn 7 million in outsourcing in the first year;
• how to lose your first lam and not go crazy;
• how to become saviors for your clients, to remove from them the pain and hell of the ever-troubled IT;
• how to survive in a crisis;
• and super bonus for those who want to start a business: our business model with preference and dancers. Mathematically justified calculation of the cost of normal hours at outsourcing.

For those who have not mastered our first article and want to understand what we are here. A year and a half ago, five pipe IT specialists gathered with a large baggage of work in IT companies of various sizes and floated to an independent voyage to custom develop mobile applications and web solutions, to firmly carry the light of correct methodologies and engineering practices. Successfully passed the first quests of the organization of the company and the search for customers from scratch, raised karma, went into the plus.
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How to make money

Many more experienced colleagues twisted their fingers at their heads, saying that the business model with experienced and expensive developers would never pay off. That it will be impossible to compete with regional outsourcing companies, and even Moscow studios that hire developers of primary and secondary level. And, in part, this is true. We negotiated with the top Russian outsourcing companies under a subcontract, indeed, with our work hours, we flew stupidly through the filter of their business model. The factor of speed and quality is always difficult to explain.

However, our experience shows that our business model has a right to exist. There are a number of companies on the market that have fed on cheap solutions that need a working product, a stable team you can rely on.

The race for cost has led many companies to IT hell. We clearly felt this, almost everyone has the same picture. There was a team, maybe not even one, they paid money, they didn’t do it at all or they didn’t do it at all, the deadlines are constantly breaking, for a couple of years everything is barely moving, regular problems with stability of work are regularly falling, the speed of introducing new opportunities into business has plummeted

“I know what the problem is! - you say. “They hire freelancers or gostnos”. But no, we had a case when we picked up a mobile application from a company from the TOP-3 mobile developers of Russia. Month cleaned kreshy and childish mistakes. And the quality of the code was “student” level.

Here the main challenge is to explain to the client what he pays such money for. What problems you can remove from it. Sometimes a simple thing helps. I tell the client: “That we are all balabol, let's actually show what we can do. Give a painful piece of the project, we will solve it according to our model, and we will understand if the price / quality ratio suits us. ”If a client doubts and he is interested in us, we can offer to do something small with paying after the fact for the result on time.

The most important thing is to accomplish the task, which can be very difficult with projects that are overgrown with bugs, “strange solutions” and completely missing documentation. The first thing that comes to mind is to throw the existing code in the trash and rewrite it. In the short term, it is simply impossible, and we spent a lot of effort to learn how to work with such solutions, to seamlessly make the transition to a qualitatively new level. So, gradually, we straighten the project in the right direction. Of course, in the end, this model is longer and more expensive. However, almost everyone chooses such an approach, because it allows the customer to develop their business, albeit at a slower pace.



The second direction we cheerfully called “Dev-Special Forces” . Companies of any caliber, from an online store to top Internet companies in Russia, have a situation when their own resources are not enough to close a project on time. Or a temporary expansion of the state for a project is required. There are a lot of cases: the startup urgently needs to finish the system before the next event, the management set tight deadlines, one of the developers left, the front of work suddenly surfaced a couple of months before the delivery, there is a non-core direction under which I don’t want to take to the staff, etc.

Getting a good developer out of the market in a short time is almost impossible; as a result, PMs and executives are forced to close with overtime, reduce the amount of work, or put up with the failure of the project.

There are nuances in this model. First, the name is when it's too late. Under deadline it is useless to add resources, it will only worsen the situation. Secondly, some businesses are not at all ready to work quickly. Agreement negotiation may be delayed for weeks, payment for another week, there may be several more stages of formalities before at least some work begins. Third, it is almost impossible to keep resources at the ready. A client comes, he urgently needs to close the question, and all your people are busy for a couple of months in advance. And, of course, no one has canceled the trust factor: letting someone into your garden, and even in such a situation - this is not an easy decision, and, frankly, non-standard.

Here, speed is important, as you can quickly include the developer in the project, while creating minimal delays in the work of the current team. And then it is then that the experience of the developers and the well-established processes of quickly entering the project play into the hands of the project. We know who and what should be asked, there are well-developed questionnaires and cases, there is a streamlined mechanization of project initialization. The main focus is not to interfere, but to help. In such stress situations, much is manifested, and if you really manage to pull the project out of the pit, the customer will not forget this.

And we are just interested in the age , there is an opportunity to go to a qualitatively different level. In this approach, our favorite methodologies Scrum, Kanban, Lean Startup work perfectly. On the whole, we live according to Kaizen philosophy . We are not interested in doing the same, we want to do each time better than the previous one.

A few more points we tried

In the previous article, in the comments, we were advised to look for design studios and offer them cooperation. We did not reach the leading companies, it turned out to establish a dialogue with a couple of companies. But somehow it did not go, I can not say why. I think it was necessary to develop this topic more closely, while we at that moment had a decent job. In general, we are always open to cooperation. We also have customer requests for related areas: marketing / promotion, UI, UX, SEO, security. I'm sure you can find common interests and make great projects.

Tried to call through the placement of resumes on the hunting sites, does not work.

We tried to get into a “deep” enterprise (by the way, also a tip from the previous article). It is not clear yet, I can’t even tell, NDA is solid)

Practical guide "How to drive your business into hell"

We do this:

• It is necessary to work with everyone who is willing to pay you. It makes no difference that the client is strange, that he says some crazy thoughts, you do not have a common language with him, or his project sucks. It's his business, let him do what he wants. Your task is to code what he asks and get paid.
• Do not trust the first negative experience with a new client, but rather the second too. This is it so by chance. Everything will definitely get better, you are smart, you’ll come up with something for sure.
• If a friend brought you to a client, you do not need to ask unnecessary questions, this person is definitely checked and you will have no problems with him.
• Try to believe the verbal agreements: the customer has said the format of cooperation will be. There are a lot of points in your framework agreement, why complicate things.
• Always obediently fulfill all the wishes of your customers. They certainly know that you do it for free, that it is additional work. And we will be very grateful to you for the absence of unnecessary formalities in your cooperation. The budgets of your company are mortal.
• Clients will never use you, manipulate you. If you are asked to do much cheaper and barbaric conditions, and then promise a bunch of interesting projects and a blissful paradise, agree, there is nothing here to check with your strategy and think about the risks.

In varying degrees, we ran into all these rakes. In some cases, it was a waste of time at the pre-sale stage, in some there were direct financial losses.

One case was seriously knocked down by us, when the customer took the work by phone, said that he would pay for everything, and then disappeared. Rather, at first I fed breakfast for a couple of months, then, apparently, I realized that I could not pay it off, and I stopped responding on all communication channels. The customer was smart, he had the sense not to confirm the fact of work either by mail or skype, even the result of the work was not put into production. The brilliant idea to record a telephone conversation came after he stopped even answering the phone. This is how we lost a decent amount and gained invaluable experience of not working with such “wonderful” people.

What to do in a crisis

I think we are not original here. At the last parties, every third company says that it is necessary to go to foreign exchange earnings. In Russia, business gradually collapses budgets or closes altogether. Although this is more a consequence of the panic of the end of that year, now everything has been cut short and calmed down.

We had our first experience of working with foreign customers before the crisis. In the summer of 2014, I decided to register a profile of our company for the former elance, without any definite intentions to get into competition with the Indians, just to try what it is and how it works. Proposals began to arrive, mostly cheap trash. And here comes something from Jordan, and here I understand that the client has hooked on a project from our portfolio, and he needs almost the same thing. We have an excellent expertise on the product, there is a proven solution for mobile platforms, everything is super. We agreed on the British Law contract for a long time, then the TK, and then we learned the first feature of working with the Arabs - if something does not suit them, they will tell you to hell in the open, that's not accepted from them. Most likely, the guys just ripped off our expertise for free and merged. By the way, they tried to tear off the expertise in Russia. Grief start-ups came, tried to find out in great detail what and how we were doing, on what technologies, with a smart look everything was recorded, it was funny to watch) But this is not about now.

Then we went to a Dubai company that badly needs good developers. The Arab direction began to develop. It turned out that our employee went to the state to them, eventually went to Dubai and took up order management in the local market for our resources.
From the peculiarities of the customized development market in Dubai, I can single out that there is very little middle segment of projects. Either these are budget sites, or large state ones. or corporate projects. However, given the current rate, projects of $ 3,000 - $ 10,000 look quite attractive. You can get into projects up to $ 50,000 with a competitive price, everything else is closed by large IT vendors.

As a result, with the Dubai company, we went further customer-contractor relations. We help them optimize their processes in the development and support of projects, recruit employees to the Moscow office, and work together on projects. They, in turn, supply us with orders from their partners. I think this is an excellent case - from outsourcing to a mutually beneficial partnership.

We also plan to enter the American market, there are acquaintances who are ready to help us with customers at first. There is a problem here, of course, experienced colleagues highly recommend keeping on staff not just people with fluent english, but locals, with an American mentality. We do not have such yet. Moreover, we have strong PMs not quite fluent, and who fluent is not quite strong PM) Apparently, we will take to the state, it may be local for a percentage of orders.

So, if you are confident in your abilities, foreign markets can be opened . There, more demanding are the quality of work, the choice of contractors, more competition. However, really good hands, talented developers are needed everywhere. I hope in a year there will be something to share in this direction.

In fact, the Russian market is quite alive . At the moment, there are very promising leads for long-term and interesting projects. Oddly enough, even startups are turning. For the first time, we began to invite us into closed tenders for large contracts. So there is a movement in Russia.

Calculation of normal hours for custom development

The promised bonus is how to calculate the cost of a normal hour depending on salaries, taxes, risks, contributions to funds and much more. How to correctly calculate the planned income of the company, taking into account idle resources, sick leave, vacations, rent, cleaners ...

On the Internet, this is not laid out, although approximate descriptions can be digged. I don’t pretend to know how, probably many people think so, I’m just sharing with you. I hope this will help someone to start a business or to understand why contractors are ripping so much from them.

Many companies derive their rates from mid-market or, oh, woe!, Customized to the capabilities of the client. Some people think that it is enough to sum up the payroll, and here you have the rates. As a result, the company goes into the minus, although there are orders and everything seems to be quite good.

The calculation is relevant for companies with their own staff of developers . In the case of a subcontract or deal with freelancers, everything is much easier to consider. All parameters are sewn into formulas, you can safely play with the business model, evaluate the final budgets and rate. All figures are given only as an example, put your own.

If you have questions, ready to answer in the comments. I often go to events on mobile & web, I’m happy to personally meet you. You can knock on the FB.

Download calculation here

Positioning

The most important thing is to find your niche, your client. To be honest, we are still looking for the right model. Initially, our task was to clearly position our value, relying on our technical skills and practices on Continuous Integration, TDD, BDD, Dependency injection, design patterns, regression tests, our Agile-framework based on Scrum, Kanban, XP.

Now we are focusing not on technology and methodologies, but on business results. For us, the case works fine when there is a sufficiently large and complex product, several teams have already screwed up, and we have the challenge to untie the hands of the business and give new opportunities for growth. Here all our practices and experience play on us.

I stopped even trying to participate in tenders for all sorts of applications for restaurants, corporate sites, standard online stores, promo. Work on the flow of template solutions is not our profile. Yes, this is the main stream of orders from the market. Well, it is not for us, there is no room for those skills that we can do really well.

And finally

It's a pleasure to work with the right people, this is a different return and motivation. It is especially pleasant to move from a dry customer relationship to a kind of partnership. When you are in the same boat, go to the same goal, understanding and complementing each other. Here you can do something really interesting and effective.

I wish you also find your business partners!

I hope this article will be useful. A year later, update the status on Habré, Like and repost you in karma)