
Why I Haven’t Hired a Single Developer in Canada - uladzislau
http://www.techvibes.com/blog/why-i-havent-hired-a-single-developer-in-canada-2013-04-10
======
pifflesnort
This is a silly false dichotomy. We've built our own business, profitably,
from the start, by paying prevailing wages to top-tier talent who are located
where we are.

It benefits our community and our country, but it also means that we're
getting the best possible talent, locally, without the overhead of managing
and communicating with remote non-native speakers.

The author simply wanted higher margins, and achieved them by externalizing
costs onto their community. That's not to say that such a thing can't be
successful; look at WalMart.

However, it's fallacious to state that they couldn't have built their business
otherwise.

Lastly, it was this line that really got my goat:

> _At the time of launch, I wasn’t even making that much, so I could I justify
> paying someone more than I was making myself as a business owner? It was a
> hard pill to swallow._

You, the business owner, have all the upside. That's how you justify it.

~~~
nateabele
> _This is a silly false dichotomy._

Um, who's really creating the silly false dichotomy here? I'm based on the
east coast (US), I run a (very) small development shop, and I work with
contractors all over the world, including some locally. I prefer to work with
contractors rather than hire employees for the same reasons the author prefers
to hire remotely instead of locally: employees have much higher maintenance
costs.

However, I hire based on experience in relevant Open Source communities, not
on hourly rates. I have never, _ever_ negotiated with _anyone_ over their
rate. I ask them how much they want to make, and that's how much I pay them
_as their base_. I _love_ paying my contractors higher rates and bonuses.

> _However, it's fallacious to state that they couldn't have built their
> business otherwise._

This is complete guesswork _at best_. You have no idea what this person's
situation is. Further, one could probably infer from this comment that you've
never had kids or a mortgage.

> _You, the business owner, have all the upside. That's how you justify it._

This is exactly as it should be! As a business owner, I also have all the
risk. Whether or not a client decides to pay me (on time or at all), I'm bound
by the terms I agreed to with my contractors to make sure their cheques show
up, no matter what. This risk/reward balance exists in _every_
employer/employee relationship. I fail to see how it's a problem.

------
blindhippo
This is adorable.

Telling phrases:

1) "But I didn’t want to be constantly worrying about financing, loans or
diluting my shares by raising funding to stay afloat. "

That's nice, if you can't have 100% of everything it's not worth it. Tell that
to every other small business owner. jackass.

2) "Finding the right talent in Canada wasn’t difficult. That’s right, it was
easy to find. Talent was plentiful. There were extremely intelligent and
capable developers. But the price tag that came along with their talents made
me wonder how I would even stay in business."

Huh, so you don't want to take in seed money, but you can't afford talent
(that you were able to source without much work).

3) "Our first projects involved building on new technologies: mobile and
Facebook apps. At the time, there were only a handful of us in Canada that
could do this kind of work."

You built "mobile" and facebook apps and thought you were special and unique?
Bullshit.

I worked for a guy like this - it was the worst 5 months of my career. I asked
for $55k, he talked me down to $49k suggesting my experience was weak. Was out
performing every other developer in the shop (including the CTO) within a
month. Asked for a raise and got laughed at. Left that company shortly
thereafter and landed a "low paying" job at a local startup - this move ended
up giving me a $10,000 raise + stock options. Meanwhile the asshat I worked
for before has had his company collapse as he tried off shoring to bargin bin
shops in India and Mexico. I would be sympathetic if the guy wasn't such a
sales oriented jerkoff.

~~~
seivan
Me to. I've work for people like them. Abused, weekends, night, all nighters.
I was young and stupid. I thought they were doing me a favour. Gah. I want
those nights back.

~~~
blindhippo
It was this experience that revealed to me that I should never be working for
the guy in marketing. The marketing guy should be working for me.

~~~
seivan
I learned never hire non-software engineers. Marketing, and etc it's child
work compared to what talented hackers can do.

~~~
blindhippo
Yes and no.

While I disparage the whole "marketing" side of things, I don't necessarily
discount it. A good marketer or sales person can add immense value to a
business and can source and provide connections that prove to be make or
break. Just the same as that rare engineer who is capable of solving that one
critical technical puzzle that makes the business work.

I just happen to think that the popular model of some business graduate having
an "idea" and finding developers to build it for him is lame - that shouldn't
be the norm. Developers are the builders, they just need help coming up with
the business framework to make a living around what they build.

------
OlivierLi
I'm a Canadian software engineering student and I find this article insulting.
The author blames recent graduates for wanting to be paid a decent wage. I
guess he's missing the point that he only gets to be in the position he is in
because other people before him thought it was a good idea to invest in Canada
and make its quality of living rise above third world levels.

Also I'm not trying to be insulting but since when is Facebook marketing
equivalent to building "cutting edge platforms".

~~~
guiomie
"The author blames recent graduates for wanting to be paid a decent wage" ...
75k is not an entry-level/recent grad salary.

~~~
rdouble
_75k is not an entry-level/recent grad salary._

Four years ago my intern went to Amazon after graduation for $86k and his
degree was from SFSU, which is not a CS powerhouse. I believe entry level
salaries have gotten higher since then...

~~~
davidandgoliath
$75k in Toronto & $75k in SF are very different things. One could live in
Toronto in a 2br apartment for $500-750 a month.

~~~
sibsibsib
I think your rental prices are a little off. Have you looked for a place in TO
recently?

------
j-m-o
This paragraph in particular irks me:

"When I first put up a few job postings for a senior developer position, the
salary expectations for almost every applicant was $75,000 and up. Some of
which were fresh grads with no significant experience."

Competent senior developers are few and far between, and command market rates
well above $75k, depending on location. Compared to many cities in the US,
there's an argument to be made that Canadian software developers are generally
underpaid.

------
mbesto
_By hiring globally, I was able to stretch a dollar much further, expand
organically, and not have to worry about financing or issuing options (in lieu
of fair market salaries like what most startups do). I was able to hire
engineers abroad, pay them above their market rates, keep them happy, maintain
high margins and maintain ownership. It was a win-win strategy._

This strategy has been talked about for, ummm, 20 years now? Yet, it's still
not reproducible and scalable in _every_ situation. Does it work? Yes. Does it
fail? Yes. Does it work better than the latter model he mentions? It can. Does
it reduce your risk? No. Can it reduce your risk? Yes.

Both models the author notes can be successful and you normally you'll get
what you pay for.

~~~
suyash
This strategy has been talked about for, ummm, 20 years now? - Nailed it :)

------
raganwald
I liked everything in the article except for the "Canada" part. It's not like
he hired exclusively in NYC, SF, Chicago, or Boston. He really means "The
Third World, where salaries are low and expenses are lower."

He doesn't elaborate, but I suspect that when he says "Europe," he isn't
talking about London, Paris, or Berlin.

~~~
CanSpice
Yep, when he talks about Europe he could easily mean Hungary, where salaries
are about half what they are in Germany or England. Europe is a big place, and
just saying "Europe" is like saying "United States". Hell, he could have hired
a developer in Regina for less than a developer in Vancouver.

~~~
gamechangr
I agree, United States and Europe has a greater variance than Canada for
employee income.

------
anoncow
Third world citizen here. Here is the simplified rosy image of outsourcing
that I have in my dollar starved brain.

Outsourcing helps spread the monies. Without outsourcing, many cs guys in
argentina would never work for a tech company. Without outsourcing many
wouldn't get a cs degree in the first place. With outsourcing third worlders
get better salaries. This creates local competition and an eventual increase
in the baseline salaries for cs guys in that third world country. North
american companies then move on to a different third world country say india.
Salaries there rise too. Then they move on to vietnam, bangla desh and so on.
Eventually baseline salaries everywhere becomes the same and outsourcing stops
making sense.

Benefits whom?: third world country and the company

Negatively affects: north american cs grads. They will have to wait till
everyone in the world is getting the same salary.

So according to my calculations, let outsourcing be for the next 500 or so
years and the world will appreciate your sacrifice. Till then think of
starting companies because the company and third worlders will benefit.

Believing this helps me sleep at night.

~~~
MetaCosm
Thanks for injecting the viewpoint of someone who isn't defending their
birthplace as a virtue.

------
seivan
I know his kind all to well. Ship bullshit apps to bullshit marketing cunts.
Get third world youngsters to do slave labour for slave fee's.

"A Facebook Preferred Marketing Developer. " "Global Managing Director of
Majestic Media, Canada's first Facebook Marketing & Technology agency. His
extensive experience on the Facebook platform includes building out social
strategy, campaign ideation, app architecture and social design"

I really want to punch this asshole in the face.

~~~
davidandgoliath
Define 'slave fee's', he sounds as though he's running a comfortable shop
where everyone works within the confines of their local timezone (9-5). I
don't see any comments generated by his contractors, and based on what he's
saying about their talent I imagine they have jobs-a-plenty available.

~~~
MetaCosm
"Slave fee's" is money paid to people who didn't win the birth lotto of being
born in the right country.

There is an ugly sort of nationalism and entitlement under a lot of the
comments. The concept of being entitled to a job because of where you are born
is insane.

------
cpressey
Good to know that "by definition" it's "not outsourcing". Failing to fall into
that particular narrow categorization makes all the difference to the
economies involved.

(Yes, this is sarcasm.)

~~~
suyash
It is 100% offshoring, people from his local community do not get jobs, it
does not help Canada and in a way insulting for Canadians. I'm surprised to
see this article making 1st page :(

~~~
aquadrop
Why doesn't it help Canada? Startup is still in Canada, profit goes to the
country. And he creates some jobs for Canadians as well. Maybe it would be
better if all staff was local, but Canada wins either way. And it's just one
of the ways for business: some hire locally, some hire remotely, some do both.
It's just business playing by the rules of the country.

~~~
vy8vWJlco
Canada would win a lot more, and be more self-sufficient in the global
economy, if employers acted in their long-term interest instead of shorting
their shares in the Canadian economy.

~~~
aquadrop
Yes, but if OP tried to use local employes there was higher risk of failing or
not even starting the company. In that situation Canadian economy would get
zero. So I don't know what is better.

------
drewying
For every outsourcing success story it seems there are two horror stories. I
know at my prior employer we hired a development team in India for a year and
it was a complete disaster. Not only was the work shoddy and buggy, we ended
up paying more than what we would have had we just hired a good local
developer. They ended up charging us 300k for the year. We were supposed to
get a 25 developer team for that 300k but the work they turned out could have
been easily done by two decent experienced State-side engineer and done a lot
better too. I had to spend 6 months rewriting large chunks of their code, it
was just terrible.

From my experience it seems really hard to get good talent overseas. And if
you do find good talent, they usually want almost as much a good local talent.

~~~
memracom
In our company we had a team of Moscow developers. It did not work out because
the person who was supposed to manage them was not doing that. We took the
work in house. But this is not an outsourcing sob story. To do the work, we
had added developers to our Vancouver team, and hired a second developer in
Seattle. At the same time we added people in Virginia and added a second
developer in Portsmouth England. This is one team of developers in 4 cities.
At the same time we added a separate team in Spain, and yet another separate
team of 40 people in Thailand.

It works, because we have good managers who pay attention to making it work.
Good managers who are not looking for shortcuts and who encourage all
developers in the company to be self-driven professionals who provide value to
the business.

This is how to make remote teams work. Sofware craftsmanship etc.

------
AshFurrow
Let me save you the trouble of reading the article:

> herp derp derp outsourcing.

------
yanghan
This guy's an outsourcing company.. of course he's going to look for cheaper
talent in other continents. He also has little understanding or appreciation
of quality of code and scalability, because he really doesn't have to worry
about it. He's building Facebook apps that probably aren't vey complicated.

The salary of software developers in Canada is also substantially lower than
the US. A $70k developer salary in Canada is approximate to a $90-100k salary
in New York, Silicon Valley.

Not sure what the purpose of that article was, since a lot of us are building
tech companies, not outsourcing agencies.. I guess this is why I don't read
techvibes.

~~~
MetaCosm
Your implication is that the quality of code from foreign developers is worse?
Or that their code scales worse? That seems at best presumptuous and at worst
racist.

~~~
yanghan
No. read what I wrote -- "cheaper talent" is worse.

------
darkchasma
The first developer you hire shares in your risk, but with a fraction of the
potential gain, and you're worried that you can't pay him what he's worth?

Exploitation of depressed markets is a viable option, but it's not the right
option.

~~~
MetaCosm
"Exploitation" is an silly loaded word. I am not certain the developers he
hired feel "exploited". I am not sure their families or children feel
"exploited".

~~~
darkchasma
So in order to exploit something, the target must feel exploited? That's news
to me.

------
sbov
Not all businesses are created equal.

The OP couldn't find a way to build a profitable business (edit: profitable
enough for them) with developers commanding a Canadian salary, but was able to
with developers commanding a lower one.

In comparison, I work for a small company that's been profitable from pretty
much day one and they pay the prevailing rate for developers in San Francisco,
which is roughly double the Canadian salary the OP is bemoaning.

I'm sure there are some businesses that would fail even at the rate the OP is
paying. Think of all the opportunities that would open up if we could pay
developers $1/hour.

------
memracom
This company does outsourcing and the reason that it works for them is a) they
are doing it on a small enough scale to keep control of the situation and not
let problems fester, and b) they are doing it themselves, not subcontracting
to a foreign company with an incentive to cut corners.

Not much new here. And I don`t think their early hiring strategy was all that
smart. Canada is full of experienced developers and when a new technology
comes along, there are hige numbers of people with enough experience to master
it in a month, who would even be willing to work for a bit less in order to
get up to speed on the new technology. They are unlikely to be senior
developers who have invested themselves in ONLY taking high paying jobs where
they can put their expertise to work on day one. But none of this is specific
to Canada.

And, in fact, I don't really believe that this company's success has much to
do with lower wages. The fact that they made remote development teams work
demonstrates that they pay attention to details and that is what breeds
success.

------
enoch_r
What's remarkable to me is how many here find this insulting. We exist on the
upper crust of the first world and are actually _insulted_ because someone
claims that Argentinians aren't actually backwards incompetents. We take
offense because we "deserve" our jobs more than (much poorer) Argentinians,
and we "deserve" to be paid several times their going wage.

~~~
MetaCosm
Don't you realize, I put in the time to be born in the right country, unlike
lazy foreigners... if they wanted a job, why didn't they ensure they were born
in Canada? I will tell you why, laziness.

------
gexla
Some points to add here...

1\. The ROI is all that matters. Perhaps he should try hiring one of these
more costly developers, it may pay off.

2\. There is a global market for good developers, which means a good developer
in X developing nation can charge as much as a good developer in N. America.
However, you can get a crap developer far cheaper in developing nations! ;)

3\. That same global market is why the recent grad can ask for 75K. If he were
applying for MdD's, then he wouldn't be asking that.

------
umsm
I believe there are MANY pros and cons to hiring outside of your country. The
problem is that this article doesn't touch any of them other than mention some
of the pros experienced by one.

Discussing the LONG TERM effects are always the most constructive.

The company I work for does this to a degree, but their emphasis is always
hiring locally.

------
diadara
I am cs Student from a non english speaking country doing offshore development
for a start up , which opened a "Industry Exposure Programe " and getting paid
peanuts .This article makes me want to quit my job,but the I can do with the
credits. For Cheap founders ,one more model to get cheap talent.

------
dusing
He should have just wrote an article about outsourcing your startup in order
to "double" staff, extend runway, and get profitable faster. Instead it was a
rather insulting look at Canadian developers wanting a respectable wage.

------
seivan
It's funny how this asshole used IBM as an example. Who basically does EXACTLY
the same thing. Abuse immigrants on HB1 to push down salaries.

My God, the irony, I can... taste it.

------
xal
_facepalm_

------
seivan
Hah, he's a product manager. No wonder.

------
yoster
I don't live in Canada, I live in the states, and I have to say, I find this
insulting.

