As the new CTO at Olive Technology (I started in October of 2014), I have been debating what to post about on this blog. I’m not a big fan of “marketing” blog posts (you know, the kind that shamelessly plug our products, services, etc.). But I’m also predominantly interested in the technical side of the world, which isn’t of the greatest interest to many of our clients.
Fortunately, I’ve noticed a pattern in client interactions that I think is relevant to you and interesting to me. A win-win.
We talk to a lot of potential client. That’s not blog worthy. Naturally, we don’t win every contract from every potential client we talk with. That’s not blog worthy either.
What is blog worthy is why we lose certain contracts and why that might matter to you. Namely, we occasionally lose a contract over price.
I’ll write in generalities. We recently lost a contract to a competitor because they were significantly less expensive than we are. We’re on average about 1/4 the price of a purely US based firm, so that caught my attention.
I dug into the details of the vendor (a company based out of a different part of India), and what I found was their prices were so low they were actually charging less than what it costs us to employ a mid-experience developer.
What does that mean? It means, and this is just economics, the only way they are able to charge those prices is because they are hiring absolute beginning of career developers. Ouch.
At Olive Technology, we’ve taken a different route. We pride ourselves on offering great value. We’re often less expensive than purely US based firms, but that’s not actually our goal. Our goal is to gather the best people we can from the right international context to help our clients meet their goals.
As a result, we transitioned from a purely India based company to a hybrid US-India company. Our CEO, Chairman, and sales team are based out of the US. As the CTO, I’m also based out of the US. Why? Because we’re the people you need to access the most frequently.
We also do UX/UI design work out of the US. Why? Is it because Indians are bad at design? Not at all. Rather, it’s because Indian designers live in a different design culture than we do. Our marketing campaigns and graphic design work looks as foreign to them as theirs does to us. So we right-source our solutions for you so that you get the maximum value. It doesn’t lead to the cheapest price, but it does get our clients the result they’re actually looking for.
Whenever you consider price as a determining metric, stop. Reevaluate your choice. Figure out how to evaluate value.
Here are some of the questions you might want to ask: How long has the firm been in business? Are they ISO 9001 and 27001 certified (in other words, what independent auditing process validates a firm’s internal quality and security practices)? How many developers do they have (size matters here, but that’s for another post)? What kind of support will you get in the US? How strong is the company with communication? What kind of project management comes with the bid (we include a project manager, and account executive, and oversight from me, the CTO). Is there a dedicated Quality Assurance Analysis team, or are developers evaluating their own work?
It bothers me to lose the contract I was referring to above because I really believe we were offering a great value: US based UI/UX and graphic design, India based senior engineering, project management… a turnkey solution for a tightly scheduled project. We offered end-to-end partnership from ideation to hosting and maintenance. What bothers me more is I think in the end the client we lost will be faced with a perilous experience fraught with disappointment and they’ll likely blame it on having trusted an “Indian outsource company.”
The reality is they just chose the wrong partner. Geo-location has nothing to do with it.
I’ll give one last example. I have a close friend who’s really struggling with an internal development project his company is involved in. They hired a US based contractor that significantly underbid the job (a nice guy who’s basically working out of his garage). As a result, they’re behind schedule and they’re shedding features to try to make it work. Geo-location has nothing to do with their frustration. They chose a US firm. They just chose the wrong partner. Experience matters. We wouldn’t have bid as low as this firm did because we know from 18+ years of delivering software projects across 10 countries that underbidding never ends up being a good value for our customers.
So, I guess I end my first blog post at Olive Technology with two hopes: (1) you don’t take this to be a shameless plug for our company, it’s not; and (2) you would consider looking at the big picture. What is the value of the technology firm you are seeking to partner with. What do they bring to the table? Ask, “am I comparing apples to apples” and are those apples of the same quality?