This is a guest post by Chad B. Harris. Chad is a healthcare entrepreneur and CEO of the No Insurance Club. He has also lived and worked in Asia in investment banking and trading for 6 years and speaks Chinese. You can find him blogging about branding, marketing and entrepreneurship at http://franchisewhale.com when he has free time or hanging out with his wife and four kids in Phoenix Arizona.
As I rode down the ramp from the airport terminal, I turned on my Blackberry to see what I missed. Just as I got to the bottom, an express train was waiting to take me downtown. Fifteen minutes later I pulled into the Amsterdam Central station and my first thought was, “How am I going to make it to Kiev by Friday night.” It was Thursday morning and I had a weeks’ worth of work to do before heading to Schiphol 60 hours later.
That was 1 new baby, 64 baseball games, 48 Fridays out with my wife ago and too many airports to count.
2006 is when it all changed for me. That was the year I realized, the freedom of calling my own shots had changed into a prison of air miles. I was licensing ideas around the world and missing my life around my own house. The answer was so laughable obvious I was surprised ‘I” did not think of it. “Why not find the best people in the world that are overworked and under paid. Put them in a position to automate processes and free up my time to be with my family. First, I needed to make my offering so compelling I would not need to travel to “sell” it. That will require more systems and web development.
Step One: Location, location, location
If you want to build big on a small budget you need to go abroad. Warning: Mumbai is New York with better curry. Don’t go abroad if you are going to work out of an expensive city. The worker bees that work in the Fortune 500 white collar sweat shops live in the slums and spend 15 hours a week taking trains to work just to make $150 per month as a two year college grad, Excel, phone skills guy. The trick is to dig for talent in the cheapest mine possible. Once you find the unpolished gem, move them to the suburbs as far as the broadband will go and give them a fat raise, an apartment, new PC and now you are ready to recruit. The setup is so good; they would die not working with you. You gave them a 100% raise, 15 hours a week of their life back and a free house and you still are under $600 per month all in with room for 6 more to work out of the same flat. Win/win.
Step Two: Hire head programmer close to your home
Just like finding the gem half way around the world, you need to find the same undiscovered talent close to home to make it all work. Look for talented programmers that make $100,000+ per year that are completely stuck in a horrific work environment. Now that we are still in recession, it is easy picking right now. Your head programmer works in a white collar sweat shop but they do not live in the slums. Their prison exists behind well groomed lawns in the suburbs, three car garage, dance classes and baseball for the kids, gym memberships, alimony and eating out. Their joy is found in “how many vacation days left” not in Monday mornings. The person you want needs a voice but they have no megaphone. Give them a voice!
To get started, you will pay them $1,500-$2,500 per month and you have them nights and weekends. You are selling them the idea that, “You will be able to build your own future on your terms and at the same time; we will pick up your mortgage payment.” What drives them to your offer an idiot boss or company that treats employees like another piece of paper they can easily get from a recruiter, not a valuable asset.
How many places do you know are like this within 50 miles of your home or office? That’s right, companies that existed before 1995 have not adapted to the new reality. The mass production broadcast media industrial complex is dead. Niche production, narrowcasting media is the new way based on consumers saying, “Build this” not producers saying “Buy this” It’s about people, not corporations. Entrepreneurs are in a golden era of creativity. We have gobs of talent still stuck in the old corporate structures. Give them what they want, “Freedom to create their own destiny, without jumping head first into the abyss.” That’s your job!
Step Three: Find a confident honest Indian manager
India is the great temptress.” I can crank code at .10 on the dollar and all I need to do is wire money once a month, I’m a genius!” Wrong! I remember trying several programmers on basic design and PHP projects and it was frustrating. I have come to the conclusion that God spreads talent around the world to keep us from killing each other. We need China’s factories, China needs European and American creativity and we all need India’s back office. We don’t kill each other because we can’t afford to! Indians as a whole are not creative. Sure you have some that are and go on to be fabulously wealthy but for the most part, they are terrified of making a mistake and it takes a very long time to build a confident team. Even at rates of $450-$550 per month for 2-3 year programmers, the confidence curve eats up a lot of patience equity. You need to start with a Manager that is an entrepreneur, non-programmer, part operations, and part sales person. A utility guy. They work, live and play at the same spot. He will recruit and manage the team but your Head programmer will test and run the team.
Step Four: Lather, rinse, repeat
Now that you have your global code factory, let’s light this rocket! You still don’t even have a corporate headquarters yet and don’t need one. A “Garage” start up is so 80’s, you have now started a global talent arbitrage machine that leverages the freedom out of three flats anywhere in the world the broadband can be pushed.
You have your Indian Manager now; recruit for programming languages and lifestyle changes under the direction of your head programmer. They simply repeat what interested them in the enterprise. Freedom, adventure and you are valued. Since you have 3 time zones to work in, your head programmer will quickly realize, he can work at night, lay things out for them, check the test server in the morning, give new instructions and off to his day job. When he comes back, he has hours of grunt work all done for him. As he sees his baby start to crawl he will steal away at lunch time, not to see his girlfriend but to push out some new code. His dreams of leaving the “Man” are becoming brighter each day. He can see, feel and savor the sweet taste of freedom.
Step Five: System, tracking and ROI
I assume you are reading this blog because you have an “Agile” mindset. This is why as a reader; I was attracted to this blog. As a guest writer, I need to insert this disclaimer: “Your results may vary”. I can only share with you my hits a misses. In addition to programming, we needed database miners and call center teams so we have ongoing skill sets we need even if the programming does not flow flawlessly. In other words, we build our teams around tasks and not around the enterprise. Imagine it like flexible pods you can click on like Lego’s as needed. We flex a lot. We can take our teams and put them on other projects with a click of a mouse. This is the right approach especially in the beginning because you will want to keep your teams busy even if the core of your business is changing more than Paris Hilton changes boyfriends. Don’t worry, i
t will smooth out as things develop and you listen to the market not your ego. Stay light and stay fast.
With that in mind I leave it up to the managers to track their teams. They use, Basecamp project management software, (I believe it is $25 a month for our entire company) and gives us unlimited users and enough storage to post what we need to collaborate on. They also use Gmail chat and Skype. That’s it. It is really simple. We built a nice test server for under $1,000 that has up to 4 terabytes of storage we can run the code around the track Our programmers are really busy with a base of ColdFusion, PHP and lots of java scripts, HTML for the web and API’s to the vendors to make our dashboard experience all seem very tight and integrated. Our dashboard is what functions as an internal CRM for us and is command and control for the web experience for the public and web experience for our partners. We create marketing content, deliver it over the web, clear payments, create contacts, track accounting and run reports all internally. Any outside software that already does what we want and saves us programming time, it qualifies for consideration only if they have API already. If not, we build it ourselves.
I assign a burn rate by project based on what Base camp shows as billable hours. Base camp has a time tracker in it. You will need to have people login and out on each project in order to have more accurate costing information. I know this is very rough but it will give you a good idea how many man hours for each project you are working on. We default Base camp as the browser homepage for programmers so they login before they gets started each day.
That’s it! Don’t forget each piece of the puzzle you put together creates more shareholder value. Building equity is the third leg we did not have time to discuss but will be increasingly more important once your enterprise starts to take flight as you need to raise money to multiply what is working. Get started, stay agile and I look forward to seeing you on the web.