Thursday, February 26, 2009

How Chad Fowler Found Good Programmers in India

In his essay GreatHackers, Paul Graham annoyed the industry with the assertion that Java programmers aren’t as smart as Python programmers. He made a lot of stupid Java programmers mad (did I say that?), causing a lot of them to write counterarguments on their websites. The violent reaction indicates that he touched a nerve. I was in the audience when his essay was first presented, in the form of a speech. For me, it sparked a flashback.

When I was in India weeding through hundreds of candidates for only tens of jobs, the interview team was exhausting itself and running out of time because of a poor interview-to-hire hit rate. Heads hurting and eyes red, we held a late-night meeting to discuss a strategic change in the way we would go through the candidates. We had to either optimize the people (or both). With what little was left of my voice after twelve straight hours of trying to drag answers out of dumbstruck programmers, I argued for adding Smalltalk to the list of keywords our headhunters were using to search their résumé database. But, nobody knows Smalltalk in India, cried the human resources director. That was my point. Nobody knew it, and programming in Smalltalk was a fundamentally different experience than programming in Java. The varying experience would give candidates a different level of expectations, and the dynamic nature of the Smalltalk environment would reshape the way a Java programmer would approach a problem. My hope was that these factors would encourage a level of technical maturity that I hadn’t been seeing from the candidates I’d met so far.

The addition of Smalltalk to the requirements list yielded a candidate pool that was tiny in contrast to our previous list. These people were diamonds in the rough. They really understood object-oriented programming. They were aware that Java isn’t the idealistic panacea it’s sometimes made out to be. Many of them loved to program! Where have you been for the past two weeks? we thought. Unfortunately, our ability to attract these developers for the salaries we were able to pay was limited. They were calling the shots, and most of them chose to stay where they were or to keep looking for a new job. Though we failed to recruit many of them, we learned a valuable recruiting lesson: we were more likely to extend offers to candidates with diverse
(and even unorthodox) experience than to those whose experiences were homogeneous. My explanation is that either the good people seek out diversity, because they love to learn new things, or being forced into alien experiences and environments created more mature, well-rounded software developers. I suspect it’s a little of both, but regardless of why it works, we learned that it works. I still use this technique when looking for developers.
- From Chapter 4 of Chad Fowler's book 'My Job Went to India: 52 Ways to Save Your Job'

Thanks to Pragmmatic Programmer for permission to use an excerpt from the book.

Friday, February 13, 2009 2009 - Striking the Right Notes

I attended, the two day event for startups in Bangalore in Jan'2009. Bangaloreinc has a couple of neat posts in their weekly roundup for 23-30'Jan.

Overall it was an useful and occasionally inspiring experience. For me the most heartening thing was how there are still people who care about ethics in the startup community, people who still think that the ends don't justify the means. At least they made all the right noises ... well, I shouldn't be really so cynical; watching some trends and hearing some of these folks does make one a bit more hopeful about the future of startups in India.This is important for me, having wasted my time in two startups that were out to game the system; I learnt at the conference that there is a term for this - 'lifestyle businesses' - startups that exist solely to enrich the founder(s). Another great thing was the remarkable absence of corporate drones at the event - there is something about about open source and startup events that makes them adopt a low profile despite their prominent sponsor banners.

A number of presenters struck the right note by honestly sharing their real experiences:
  • Allwyn of asked about the number of the huge number of Web 2.0 businesses that took money and produced nothing.
  • Ashsish gupta from Helion ventures gave a great talk that emphasised the need for founders to be intellectually honest
  • Atul Chitnis pointed out changed conditions, the economic downturn, the unworkable VC model, etc. Atul is the organiser of India's largest open source event and he seems to have begun his career by making DOS software.
  • Ashwin Mahesh with his tongue in cheek explanation of the IIM Bangalore incubation process easily made it one of the most entertaining presentations. It's so nice to see people from academia not take themselves very seriously. Oddly enough one of the organisers kept pointing out some government programs to help entrepreneurs - oxymoron and all that.
  • One of the most interesting facts that came out was the number of successful startup founders without an engineering or computer science degree. Suresh Sambandan said he had never been to college. Shalin Jain of ten miles has a B.Sc in Maths or Statistics. Looks like startups are relatively free of the tyranny of degree and pedigree that plague larger companies.
  • Bob Young gave a great talk - Ashish Gupta admitted it was a tough act to follow. Bob explained the history of Redhat and how he got started working from his wife's closet. I asked Bob what the big idea behind Lulu was. Bob explained that at Redhat he always had the nagging feeling that the contributors to the various pieces of open source software that Redhat was shipping were not being compensated properly. With Lulu he said they hoped to have a fairer compensation system for contributors.
  • The amount of soul searching that was evident in the panel discussions, the frank admission of mistakes, etc was remarkable. You don't get to hear this kind of honesty in vendor dominated software events or in internal meetings at larger companies.

Sunday, February 01, 2009

The Indian Software Exports Scam

The 12th Feb issue MoneyLIFE magazine has published a letter from an unnamed head of an Indian IT company. The letter does a great job of explaining why the whole software export business is a scam. About seven or eight years back, I was arguing with a friend that this whole 'Software Technology Park' (STPI) idea was not a good way to encourage software companies. A software company that's part of a government anointed STPI gets various concessions.

(Note: The letter is not online yet. I will update the post with a link later.) Done.

The letter:
This is with regard to your cover story “The Truth about Satyam” (MoneyLIFE, 15 January 2009), and other reports on Satyam’s most recent adventures, which are not really new. Actually, the truth behind Satyam was well spelt out at the end of your report – what Satyam did was not way out of line – inferring that most other companies in India would be guilty of similar creative accounting and governance methods. But, with IT companies in India, there seems to be some justification trotted out by a variety of fellow-travellers, who bring in national prestige and credibility as an excuse for daylight robbery of the national exchequer and the public.

So, what’s at the root of this? How is it that companies that get the benefit of tax exemption worth thousands of crores of rupees now appear to be getting more money in thousands of crores from the government for, of all things, reviving the possibility of even more tax evasion? Never mind the diversion of profits that may also occur again. The answer is simple: a scheme called Software Technology Parks (STPI). This is a ‘scheme’ that has outlived its usefulness as far as real IT industries are concerned. But it seems to be around only to permit such scams. It is a fact that the STPI scheme, used by Satyam and misused by so many others, is at the root of the large number of IT companies in India, declaring huge tax-free profits and then going under or simply vanishing. By modest estimates, over 96% of the companies registered under STPI came in, took their tax exemptions on imports, took some more tax exemptions on export profits, and then disappeared. A simple analysis of the top-20 lists with NASSCOM over the last decade will provide evidence for this. A slightly more complex examination of the way the STPI scheme is actually performing will give an even better indication that things are going terribly awry.

From being a facilitator and an incubator for IT companies, the STPI scheme has become yet another den of inspectors and officials who, in league with other government bodies, are there simply to permit all sorts of duty-free imports and tax-free exports. Since real IT exports don’t really need this exemption any more, it is only the scamsters who increasingly benefit. Simply put, buying computer hardware is now cheaper if done directly, without using import duty exemptions. The real game here, as always, is in over-invoicing; and non-existent imports followed by equally non-existent exports.

The second important parameter which needs to be brought out is the way headcount is multiplied, for assorted benefits especially towards showing and booking higher expenses on payroll, allied expenses and more – the more employees you show, the higher these can be. And, in the corresponding billing as well as dummy profits, more fictitious employees mean higher billing and, therefore, higher paper profits. A simple double-check would involve finding out how many employees such IT companies have registered with the EPFO (Employees’ Provident Fund Organisation); but that’s often not easy to do because the EPFO’s own records are in tatters too. Just one number should suffice. Satyam claims to have 53,000 employees; but, at their second largest centre in Pune, they have just about 4,500 employees. Where are the rest? It simply doesn’t add up.

Satyam is not a one-off or stand-alone scam. There are many like them and one would have presumed that those in charge at NASSCOM would have taken action against such members of their association well in advance. The fact that they haven’t, makes one suspect that all is not well with NASSCOM too. And, therefore, it is all the more amazing that elements from NASSCOM have been put in charge of Satyam’s revival. To fix such problems, one has to go deep into the roots and pull out the rot. That will happen only when tax exemption of expenses as well as revenues for the IT sector is done away with. Otherwise, like the fertiliser sector, the tax-exempt IT companies will simply be like addicted sucklings not being weaned off the mammary of the State.

The writer heads an IT company and does not want his name to be disclosed. – Letter by email