Chile wants to be a Start-Up Nation

Chile wants to be the Latin American  Silicon Valley. In Chile this month I visited ground zero of this dream: Start-Up Chile (SUP).  Of my planned visits on this trip I was most eager to see this place given the buzz SUP accumulated, including by Vivek Wadwa, whom I enjoy reading (see WashingtonPost article 8/2011 here).

The SUP basics are: submit plan, get 40K USD seed money, no strings attached, to come to Chile for 6 months and start a business. That's it, essentially.

I am photographed in main room of SUP.
Scattered out of the frame were ~20 entrepreneurs
working on their computers. 

Yes, with my students we picked holes in a few aspects of this deal…but anyone can pick holes in any scheme.  The brilliance of the SUP initiative is that it achieves key national objectives: it puts Chile on the map as the aspirant to be a future entrepreneurial Valle del Silicio,  in the new incarnation of the American garage. 

see

http://nextmontreal.com/start-up-chile-is-a-great-experience-but-be-careful-too/

http://www.bbc.co.uk/news/business-15887000

The giraffe view of the Dutch professor

Last week I was in The Netherlands, in the beautiful city of Delft, as a guest of the Delft University of Technology, the leading tech university in the Netherlands. 

My visit – and my host --  got me thinking about improving the position of business professor in the United States.

The reason for my visit was this event: My colleague Dr. Rini van Solingen was promoted to (full) professor in Global Software Engineering.  Here’s where it gets odd to an American academic: you see, it’s a full professorship, but on a part-time basis. One day per week for research and education plus four days in industry. That’s 1+4.   

These professors have a “heart for research” (Rini’s words)  but are also working  in practice; in Rini’s case in a large Dutch I.T. consultancy. Rini referred to this as “the giraffe view:” Head in the clouds (for one day per week) but with all feet on the ground (for the other 4 days). Such a position nicely bridges  business with academia.   Mind you,  these professors still need to pass all the official qualifications such as a Ph.D., significant h-index, publication track record, etc.

Rini supervises two full-time Ph.D. students that are partly financed by an industrial company with a large interest in their research findings and publications. Furthermore, he teaches one MSc elective class; an applied one, of course: Global Software Engineering, thus bridging industrial experience with teaching the future global software engineering workforce.

Why is this a good model for American business schools? In the USA we have institutionalized a hard separation between research and practice. This Dutch model would encourage ambitious business people to get a doctorate.  Today, in American business schools we relegate people from industry to low influence adjunct professors, or if they become full time professors, we carefully obfuscate their tainted industry dealings as being un-scholarly.  It’s hypocritical, especially in a business school -- of all places…

CleanTech is often InfoTech

This week I was at Cleantech 2011 (here in Washington DC).  I was quite surprised and interested in one slicing of the top 100 dynamic, exciting, innovative Cleantech companies. Of the 5 most admired Cleantech companies, 4 of them are basically IT companies.  

The companies are:  Takadu (uses data from power firms),  Hara (software for energy and sustainability management),  Silver Spring (smart grid), Opower (smart grid).  

Why are these the most admired? I brought this up with an attendee who argued that these firms  are lower risk, known technologies, with faster monetization of investment. 

Brazilian-spiced agile

Is there a Brazilian agile software development?   A unique kind of software development that is done in Brazil?  I've visited many countries where techies have boasted that they do something special; that they have some special national spice. 

The backdrop to this vignette is agile. Agile is the popular approach to software development. It  has become the aspirational standard around the world.

I traveled to Brazil this month. I speculated on a Brazilian-spiced agile after visiting three IT /software firms, all of them based on agile,  and seeing nearly identical team rooms in each. The companies are ThoughtWorks   and the media firm RBS  in Porto Alegre, and Ci &T in Campinas.   Here is a photo from Ci&T.   

Is this the Brazagile way?    Dr. Sabrina Marczak  a Prof at PUCRS thinks so. Brazilian firms are looking for competitive advantage when competing globally. This co-located work environment, the   antithesis of the far-flung American style, seems to be something they are coalescing around.

Infosys Connect 2011 in Las Vegas

In 1999 when I began to visit and speak at outsourcing conferences, I first encountered the Indian managers, who rose from coders, engineers-- still so raw, still so foreign outside of India. These were the men at the sales booths.  Infosys was already a big firm, though: already at 100 million USD.

Some years later, in 2005 I was a guest at Infosys, Bengaluru, the huge glittering campus. The company had just become a rockstar, propelled in part by Tom Friedman’s World is Flat. Consequently, it became the poster child for offshoring.  Infosys had just crossed the 1 billion USD threshold. It had grown x10 in 6 years.

This month I attended the Infosys annual internal conference, Connect 2011, in Las Vegas. Now I sensed a confident global firm.  Yes, still dominated by Indians (and the firm’s clique of founding fathers), but many non-Indians are represented at all ranks.  The Indian-born managers are now clearly part of the global elite, jetting in from London and Switzerland to play golf in Las Vegas.  The company’s managers are cosmopolitan and confident.

Call Center Avenue of Manila

24-hour food for call center workers

I paid a short visit in May to the Call Center Avenue of Manila. About 100 call centers are located along a short strip of tall office buildings along the fancy Emerald Avenue in Pasig City in metro Manila.  But work hours are different here. Most employees come to work about 6 PM. With all these young workers working 24/7, the avenue has a wonderful concentration of fast restaurants open 24 hours a day. There are even two Starbucks (after all, one needs caffeine for those night shifts).  Every Friday night at midnight, when the call centers are full, the busy avenue is closed to traffic and there’s a banchetto – a lavish street feast and party.

I was the guest of SPi,  an impressive firm, now the largest contact center provider in the Philippines with 14000 employees (most at call desks) in 23 sites of which 11000 are in the Philippines.

Việt Nam High Tech and Offshoring

I recently returned from my first tour of Việt Nam.  Vietnam competes on low wages, hard work, and natural resources – but not yet on innovation. Nevertheless some early signs of its future competitiveness can be found in Saigon Hi-Tech Park SHTP, a huge parcel of land northeast of the city. It is home to Intel, a small Vietnamese incubator, and various other firms.

One firm that just moved into their new digs in SHTP is FPT. FPT is close to my heart, so to speak, because it is the largest Vietnamese IT Services provider (in other words, it is an offshore provider). FPT is the largest Vietnamese tech conglomerate, with many connections in high places—a must for this place.  FPT Software, which is the offshoring provider, has $50 million in revenues, 3500 employees,  and tries to be the Infosys of Vietnam.  I particularly liked that it recognized the weak universities in Vietnam-- a national failure—and in 2006 stepped in to create FPT University. Tuition is cheap by any standard: $1000 for a degree. I was told that “all our graduates want to work in outsourcing.”  Indeed.

Microsourcing in Vietnam and Philippines

The  microsourcing entrepreneurial pattern is remarkably consistent in four of the last five visits here in Vietnam and Philippines. Here it is:

Step 1: You work in a low paying job. Most  knowledge economy jobs, including those requiring degrees, pay little, require long commutes, and are ridiculously tiny in salary when one measures them from the shores of America.

Step 2: You happen to hear about microsourcing marketplaces (see list below).  You begin to moonlight (= work at night). You quickly make more in a few days doing work for Americans, Canadians, or Australians,  than your regular monthly salary.

Step 3: You quit your day job

Step 4: You scale.  You grow. You capitalize on your instinctive understanding of the market and farm out work to other local microsourcing workers  (full time and part-time). You are now charging  high rates for your personal work and you are taking good margins on work you manage for others.

Step 5: You are amazed at how far you’ve come in such a short time  (18 to 30 months). Suddenly, you have money to get the latest gadgets, you may have enough to buy a car, you are financially much more comfortable, and you are supporting your extended family.

Step 6? Too early to tell what’s next. This microsourcing entrepreneurial economy is too young to see the next common step.  

List of microsourcing marketplaces:  eLance, Freelancer, Getafreelancer, Guru, oDesk, Vworker. Some others: 99design, Amazon Mechnical Turk,  Clickworker, Cloudcrowd, Crowdspring, Innocentive, Innovation Exchange, Liveops, Maven research, Samasource, Topcoder, Utest

…Oh, one of the four is a Filipino firm that insisted I mention it explicitly! Mondex, with a virtual workforce spread around the Philippines, now with 59 full time and part time workers. 

Clarification. Philippines has a large firm in the BPO space called Microsourcing.  We see microsourcing as a special kind of outsourcing: sourcing to individuals and very small firms.  The Filipino firm name is just a name... kind of like Microsoft.

Billionaire Microsourcers in Vietnam

Saigon

It sounds easy to be a billionaire IT provider in Vietnam, with the dong worth about 20,000 per USD,  a billion dong is just 50,000 USD.  But in Vietnam, where the annual wage is 1000 USD and a fresher programmer makes just 150 USD per month, a billion dong is a nice take for a small firm. 

So in Hanoi and Saigon I met two tech entrepreneurs practicing microsourcing that are near or exceeding a billion dong.

 

The two have lots in common: they quit their old day jobs making pennies (one was a professor…  horrors!).  Using online marketplaces (eLance, vWorker, freelancer, etc.) to get their foreign clients,  they each created a virtual company of programmers, all working out of their homes. Both entrepreneurs have permanent and part-time employees (it is common to moonlight in Vietnam).  With no offices, very little overhead, they are bidding on jobs in the US and elsewhere and asking 10-15 USD per hour. This is a fortune in Vietnam, but not much for an American client.  Both have made more money in the last few years than they ever have. Both want to scale – they want to grow their business more.

But here is the challenge: how to scale this kind of virtual business?  Elements that both of these firms lack are regular company functions. For example, both need a salesperson that is not the technologist in chief. Both need to formalize internal processes including methodologies.  Both need to look at other virtual organizations, especially Open Source,  for how to scale.

By the way, Vietnam is booming. There seem to be more cranes in Saigon/HCMC  than in most US cities.

I gave a TEDx talk this week about the Internet and Time Zones

I gave a TEDx talk this week (TEDx is the franchise of the big TED).  The  talk is about the Internet and Time Zones (click thru to watch it).

We’ve been conditioned by Moore’s Law to expect rapid changes in anything related to technology. But there’s no Moore’s Law for time zones. We are not making much progress. Global knowledge workers still need to timeshift when collaborating because I think we have two fundamental flaws as humans:

First, we still need proximity and interaction. When collaborating across time zones on tasks that are fuzzy, we still need synchronization. This synchronization needs to be interactive— in real-time. We need to sync for being creative, for resolving disagreement, and for clarifying differences.

Second, we’re still very much stuck with the cycle of sunshine and night time. As biological organisms we cannot beat our 24 hour Circadian rhythm. We need our sleep. It’s impossible to break out of this 24 hour rhythm. Yes, you can use a drug called Modafinil to stay awake for 48 hours, but I don’t recommend this for the everyday, ordinary, global knowledge worker that is struggling to overcome the time zone difference.

MBAs who became Leaders of Nations

The charismatic flash leader of the Egyptian uprising has an MBA. Wael Ghonim, is a young Google Egypt executive.  Perhaps he may become the leader of the largest nation in the Arab world.  If so, he will become one of the few leaders in the world who have earned an MBA (or equivalent).  

Ghonim brought me back to my interest in MBAs who later became world leaders. I first gave this attention when the first person with an advanced degree in business and management  was elected back in 1996 to be the leader of a nation.  As a business professor who teaches MBAs I paid attention.  

Since the first one in 1996, I am aware of only one other world leader with an MBA. I would have expected more by now given that there are several million MBAs in the world.  So, that’s a total of two so far. That’s it.

I predict that you cannot guess who was the first. It was Benjamin Netanyahu of Israel, with an M.Sc. in Management Studies from Sloan (1976) at MIT. He qualifies as the first. At the time there were few MBAs. Netanyahu’s degree was, in essence an MBA degree plus a thesis. 

In 2000 along came George W. Bush (Harvard MBA, 1975).  

Yes, there have been other prominent politicians in the last decade with MBAs. See this FT article.

But no more leaders of nations that I am aware of.

I present a few facts about the pair and then a bit about their early business careers right after their business degrees. Both men come from politically-connected families and once their business careers stalled,  other opportunities came along and they never had to come back to business.

• George W. Bush, MBA ’75, elected President in 2000, served 8 years. His business career in the late 1970s and early 1980s was in oil and then later as General Manager of the Texas Rangers baseball team.  His career as an oil entrepreneur was … undistinguished.
• Benjamin Netanyahu, M.Sc. in Management ’76, elected Prime Minister in 1996, served 3 years; elected again in 2009  and is currently Prime Minister for two years and counting. His business career was quite short. He briefly worked at the prestigious Boston Consulting Group in the US.  In the late 1970s he worked for about a year in an Israeli furniture chain.

The real benchmark is how well did these MBA leaders do when in charge of a nation?   Did they learn something from their “B school” days? Were they good leaders?, good managers?,  good administrators? Did they manage teams well? Did they manage money well?

Well…

Let’s just hope that if Ghonim ascends to the top, he will do well.