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Everything
You Always Wanted
to Know
About Russia
But Were Afraid to Ask
Agenda
1. Some Key Facts about Russia
2. Where are the Money?
3. Business with Russians
4. Outsourcing to Russia
5. Culture-related Aspects
1. Some Key Facts
about Russia
Geographical Summary
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Nikolay Dekhtyarenko
Partisans
Legendary Russia
Real Russia
Area: 17,075,400 km2
Population: 145,000,000
Brazil, Russia, India, China:
countries of growing economics.
History (simplified)
• Up to 1547: Feudal dominions.
• 1547–1721: Feudal Kingdom (old school).
• 1721–1917: Russian Empire (European).
• 1917–1922: Red Russia.
• 1922–1991: Soviet Russia = USSR.
• 1991–today: Russia (as we see it today).
Russian Cyrillic Alphabet
Cyrillic LatinА а U (but)
Б б B
В в V
Г г G
Д д D
Е е YE (year)
Ж ж ZH
З з Z
И и I
Й й Y (way)
К к K
Л л L
М м M
Н н N
О о O
П п P
Cyrillic LatinР р R
С с S
Т т T
У у U (cool)
Ф ф F
Х х H
Ц ц TS (zurück)
Ч ч CH
Ш ш SH (push)
Щ щ SH (ship)
Ъ ъ no sound
Ы ы E (we)
Ь ь no sound
Э э E (letter)
Ю ю YU (you)
Я я YA (yard)
Поезд (“poyezd”)
Собака (“sabaka”)
Кошка (“koshka”)
Russian Language
Good news:
• No articles
• No auxiliary verbs (like be and are in English)
• Word sequence in a sentence is not fixed
Bad news:
• Grammar features three genders
• Plural of nouns is often irregular
• 12 forms for a noun (2 numbers, 6 cases)
• 1000…0 forms for a verb (gender, tense, person, number, mood, etc.)
• Verb’s form depends on the gender of the corresponding noun or person
• Punctuation rules are strict and complicated
Currency: Ruble
Abbreviation: RUR
Symbol: (informal), р. or руб.
$1 ≈ 32 р.
1 € ≈ 43 р.
How much we
earn and pay in Russia
Some Common Costs
Ticket to a subway: 0.65 €
Average bill in a decent restaurant: 30 €
Two bedroom flat in Moscow: 700 € monthly
My laptop: 850 €
Core Taxes
Individual income tax: 13%
Corporate wages tax: 34.2%
Corporate VAT: 18%
Corporate profit tax: 25%
Average Wages in IT*
Team leader: 3,500 €
Senior developer: 2,800 €
Developer: 1,800 €
*data for Moscow, monthly(!)
Р
How hard we work
in Russia
• Working week: 5 days (Mon–Fri)
• Working day: 8–10 hours
• Vacations: 20 business days per year
• Holidays:– Dec 31– Jan 11
– Feb 23
– Mar 8
– May 1, 2, and 8, 9
– Jun 12
– Nov 4
We
work
We
don’t
2. Where are the Money
Why it’s a good idea to do Business with Russians
We have Much Money Now
The Main Customers are:
• Gas, Oil, and Minerals Companies
• The Russian Government
• Retail as B2B customer
• Retail as Channel of Sales
• Banking and Insurance
• Telecom
…and we use it or lose it.
Just do right things and they’ll share their profit with you.
We still have Good
Engineers and Researches
The main branches are:
• Software Development
• Security and Cryptography
• Aviation and Space
• Weapons
• Medicine
• Specific Technical Branches
…and we use it or lose it.
Just do right things and they’ll share their profit with you.
Get Ready
for the Russian Business
In Russia you can quickly make
a lot of money but you have
to render very strange activities
in order to achieve that.
Doing Business
with Russians
Understanding Strategies of Your Russian Partners-to-be
Reasonable Approach
to the Russian Market
You
The MainCustomers
Russian
IT-related Companies
Russian
Engineering Companies
The BestEngineers
Help them bringtheir solutions
to the worldwidemarket
Give them new buzzwords and products
Strategy 1: Help the Big Guys
to spend money
1. Fast: Informal agreement: subject and budget.Be ready to send your datasheets and prices ASAP.
2. Slow: Wait for OK from the customer.Don’t worry. Feel free to call your Russian friends.
3. Fast: Do entire work in a draft mode.Start work promptly but insist on signing a contract.
4. Slow: Set up a formal contract with customer.Don’t do anything before they sign a contract with the customer.
5. Normal: Finalize or even remake the draft.Be ready for numerous changes and corrections.
E. g. implementation of some technology or product.
Strategy 2: Help the Smart Guys
move to the West
1. Making a prototype that looks like a real product.
2. Checking if anybody out of Russia wants to pay for it.
3. Setting up contracts with foreign customers or partners.
4. Producing a final version of the product (from the start).
5. Starting product sales via Internet or foreign partners.
6. Client’s company branch out of Russia.
E. g. developing a product for the worldwide market.
2. Outsourcing to Russia
What, When, How
What and When Outsource
to Russia?
Extremely complicated task:No one wants to do it.
Problem solution needed:It’s not just product making.
You need it fast!
Or even yesterday.
Economy of Outsourcing
to Russia
Price = Wages + Taxes + Profit = Wages • 3.5
How an outsourcer bids you:
300–500 € for a developer’s work daily
If it is much more:
• They can’t calculate
• They are too big
• They are really greedy
If it is Less:
• They can’t calculate
• Their skills are poor
• They will re-outsource your task
• It is not a legal company
• They don’t understand your task
How to Negotiate
with Russian Outsourcer
• Must have an English website
• Must react rapidly
• Make presale estimations for free
• Let them know the entire budget
• Give them time to consider your task
• Write and reconcile detailed requirements
• Request a fixed price
• Always sign written contracts
• Reconcile the payment method
THEM:
YOU:
5. Culture-specific
Aspects
Dos and Donts
Don’t Be Confused by the
Following Behavior
We might:
• Try to prove your task doesn’t make sense
• Delay (up to forever) calling or writing back
• Come up on the deadline point with an
announcement of ‘not having enough time’
• Come up on the deadline point with a ‘much
better idea how to implement all that’
• … and so on.
But there is a bright side
We will survive with:
• Deadline shifted to the day after tomorrow
• Requirements modified on the fly
• Exotic technology needed to be grasped in a wink
You don’t want to try these…
• Run a project in absence of a specific manager in charge.
• Report the other party to their boss without any war declaration.
• Make general answers to specific questions.
