The whole interview by Donald Landwidth you can listen directly here. If you don’t have enough time, you can read only interesting info for you from the text below.
Nataliya, you have 2 Master Degrees. Not many people have that. How did you get them?
My first Master Degree was an entrance to US, I came to the Univesity of Kanzas and did my Masters in accounting and information systems and then worked for Ernst and Young for several years, but always had in mind that I would like to start a business and business school was always on my horizon. I got applied to Stanford and got accepted and got my MBA and it was near 80 percent of my stay here, in Bay Area.
It was a wonderful experience to be in the mix of people from all over the world, from different backgrounds and age categories, the wonderful professors and speakers who were invited to our classes. I was previlaged enough to have Uoren Buffett as a speaker.
The network of Stanford Alumni is wonderful, they are really helpful.
I studied in Moscow, the Wall just came down and I was one from several students who had a chance to come here. As I was growing in Soviet Union, it was easier to imagine that I’d became an austronaft and go to Mars then I go to United States. I still remember the day when I came to the emigrational officer and presented my papers he asked: “You’re going.. where? Kanzas? … to study… what? accounting?” That point I thought maybe I’m doing that wasn’t quite right. But in fact my experience in Kanzas was wonderful: relaxed lifestyle, people are very friendly.
If there would be outsourcing on Mars, you are going to be there :)
Nataliya, I’ve known you for almost 5 years, from Inflection company, thank you for the great service, great team work, it’s been really a pleasure to work with you and your team. How did you start doing your own business?
The concept of an outsourcing company was an easy idea because India by that time have been already on the market for about 10 years, it was already established indusry growing rapidly and keeping my connections in Ukraine and knowing that great technical talents and being here in Sillicon Valey where was a shortage of that talents (they are expensive and hard to find), sit became very easy for me to make the connection and to start a business.
Are you a programmer? Did you study programming and computer science?
No, I’m mostly a business person, finance, accounting, business development are my specialities. I’ve been in this industry for qiute a while, I communicate with great technical people.
What made you think IT? Maybe you should start a hedge fund or consulting…
I was at the “soup” of the Sillicon Valley and being exposed to different entrepreneurs and ideas, speakers who were coming to the school, friends and network of my friends, they all were in IT industry. To come up with idea to use great technical talents from Ukraine was an easy way to start a company.
Did you start your company after studying in University of Kanzas?
No, I worked for Ernst and Young, I was in a international tech consulting group, I’ve gone to New-York and then to London, doing quantitave calculations for multi-national companies. And from London I applied to several business schools and Stanford was my top choice. I was lucky after got accepted anf moved to California.
So, you went to Stanford and decided to start your own business and your first one was Lohika. What area of IT do you decided to go?
Yes, Lohika from Ukrainian means “logic”. It was a venture funded business which we started in 2001, it was a very tough year, but a concept was good, we had a good business plan and were fortune enought to raise funding. Again, the idea was to use the talents from Ukraine to deliver development and testing services to US companies. We had US strong technical people, a sort of front-end, they were dealing with customers and a back-end development work was done in Ukraine.
I remember those times when it was really hard to sell. Right now you don’t have to sell the concept of outsourcing. Entreprenuers who starting a business, say: “We’re going outsource”.
Now it’s much easier to bring developer to a customer, they stay here for a month-two-three. Skype is a great tool to be connected.
Is Lohika still in business?
I exit the company after 2 years being there, the company is still around and going strong.
Why did you leave and start Svitla?
Certain friction on the management team and secondly i wanted to see if I could try to start a product company. We’re trying to create a solution to protect CDs and DVDs from pirate copying. Unfortunately, that company didn’t go very far. And third company, Svitla, was already bootstrapped and I came back to service model. What’s different? No venture funding, only organic growth. People, who are interact with a customer, are highly qualified team leads and developers, they understand the requirements, go on daily meetings and lead the engagement with the customer.
Are there 2-3 key tips you can give to the entrepreuners what it takes to start a company?
I think the major tip is preserverence. It’s so difficult to start a company, things always go wrong, it always takes more time, more money that you predicted. Obviously, you have to listen to your customers, go back to your assumptions that you don’t bitting against the wall. It’s hard, but it gets easier.
What it is the main difference between venture funded and bootstrapped company? If you had to do another company, which way did you go?
For the services business I’d go bootstrapped way, like Svitla, because you don’t need much capital to start a company. As soon as you get a customer, you get a cash flow and can finance your operations and go to the next level. For a product company you have to go for venture funding because it allows to grow faster. It’s also a choice for entrepreneur how fast you want to grow, which model you want to choose, which one fits your personality, your lifestyle.
What should the company think of when it is going to outsource?
Obviously, what is your core business and what is not. Startups usually build their core business in-house. When they have a need to scale up, and do it fast, they start thinking about outsourcing. Our developers become the part of in-house team, they participate in daily meetings and this is the way of expanding startup’s core team.
Sometimes startups would like to have the whole development cycle: from graphic design to system administration.
What is the difference between hiring people in-house and remote outsourcing team in that case?
When you hire people in US, you hire employees. When you sign the contract with an outsourcing company, the outsourcing company itself is dealing with its employees and you don’t have to think about it.
There are so many countries that propose an outsourcing services for the clients: India, China, Argentina etc. What country should man think of when he make a decision to outsource?
What differentiate Ukraine in the map of all outsourcing companies is the great technical talents, I’m really proud when I’m talking about that. I heard many times from many customers that we have strong technical people who can think out of the box, come up with ideas and suggest things.
Time lap is not a problem: you have a 24 hours working day.
Absolutely. We wake up, doing daily meeting with offshore team, then the guys go to sleep, we check what was done during the day, think about strategy and plans for the next day, send them off and go to sleep. Offshore team wakes up and here is the cycle.
How do you work for Inflection?
We started from 1 developer, who came to US and had iteraction with the team in US, understood the requirements and got back to Ukraine to establish the team there. In a year we had 20 developers and we’ve been working for 6 years with Inflection, in fact, it’s my favourite customer. They treat our team as an internal part of their team.
How Svitla compares to Odesk, Elance or other similar companies?
Such websites are usually for renting a developer when you need 1 developer to get job done. In Svitla case you deal with a company, with whole number of services from UI, graphic design till deploying a ready project.
I know that technical resumes are almost always a crap. They are full of achronisms and never tell the level of developer. How do you deal with that?
We’ve found a really convenient format of resumes. Our HR department fills out a table where you can find not only the list of technologies, but the level from beginner to expert. Such a format helps our customers to understand the skills clearly.
What are trends of software development?
Ruby on Rails allows our startup customers to develop prototypes quickly, also PHP with Zend Framework is a scallable tool.
We ask the right questions at the beginning of the project to know which technology will fit the best.
Why do you think your developers are so tremendous talented?
Such a heavy emphasise on math, physics from soviet school, we learned a lot from such disciplines.
I don’t think that there is some secret in the water or in the air, it’s just a hard work.
Thank you for being here and sharing your experience.
May 08, 2012