TechLahore

Bad employees are those heavy boxes weighing you down, and you are the ASS.

The software industry in Pakistan is still nascent. We started off with grandiose visions, poor execution and bureaucratic nonsense but, to be fair, we’re since covered considerable ground. You may recall that it was Benazir Bhutto, when she was PM, who loudly proclaimed that we would quickly – and magically – build a double digit billion dollar industry. No surprise that coming from a politician, those dreams were not backed by anything meaningful. And so what usually happens to empty slogans ended up happening to this one too… the jackass beauracrats probably stole the funds allocated for initial “research” and that was that.

But today things are different. The multi-billion dollar software industry that has developed in Pakistan since, growing at 50% YoY, is a testament to the entrepreneurs and private industry. Not the Government. And that is not to say the Government hasn’t done anything at all – the 18 year tax holiday is a good thing! But the biggest thing the Government can do is just get the hell out of the way. No Government can really take on the charter for building an industry. This is a function best performed by private enterprise, to whom success and failure are the difference between getting a pay cheque/getting rich on the one hand and failing/having a hard time paying the monthly bills on the other. You need that sort of Darwinian motivation sometimes.

Now that we’ve taken the first few steps and have built the industry, essentially with services businesses, we need to keep moving. The next step has to be a transition to the product model. I’ll pull this out of my hat, but I would say that one of the goals for Pakistan’s software industry should be to earn more than 50% of aggregate revenue from product sales within the next 5 years. With many countries jumping into the services fray and everyone trying to beat the other’s per-hour prices, there is very little money to be made in pure services plays. There are companies that have gotten lucky, or have long established relationships which yield decent margin. But for new comers, getting into services is like getting a root canal with no anesthesia.

So, if we want to make the move to products what are some of the impediments along the way? What do we need to do to make sure we – as entrepreneurs, engineers, business leaders – are well poised to make this mental and physical shift. Well, there are obviously several factors. But I just want to tackle one important one today. And that’s human capital.

The lifeblood of any young technology startup is not money, infrastructure or even an idea. It is people. Human Capital. Where there are good, motivated, hard working, smart people you pretty much have all the ingredients for success. If you don’t have and can’t get the right kind of DNA in your organization, you might as well shutter the darn thing up and head home. You’re sunk anyway. That’s how important people are to a technology startup. They are, simple put, EVERYTHING.

So the first challenge in building compelling product focused companies is to get the right people together. People that are opinionated, dedicated, brimming with ideas and most importantly, ready to embrace risk. What you do NOT want is a bunch of whiny, scared, 100%-motivated-by-salary job hoppers who think stability, constant back-patting and financial incentives not associated in any way with corporate and personal performance are their God-given rights.

Unfortunately, for those of you who have managed employees in a local software company or are entrepreneurs yourself, I am sure specific faces and names went through your head as you read that last sentence. There are too many of these safe-haven seeking, tool-focused, salary driven careerists around. If an entrepreneur is Luke Skywalker, they collectively represent the dark powers of Emperor Palpatine. They are the anti-matter that will collide with whatever you create and destroy it in a spectacular display of FAIL. They are bad news. Pure and simple.

And yet, as dangerous as these “I’m-leaving-this-job-because-I’m-always-job-shopping-and-found-another-one-where-I-get-five-thousand-rupees-more” types are, they seem to be comin’ out the woodwork. Because our universities and colleges are not producing enough graduates, entrepreneurs are being forced to hire these bombs of negativity. And inevitably, as bombs are given to do, they explode. Leaving behind a big ol’ mess of crap and unpleasantness behind them.

And then you realise… I really shouldn’t have hired this ass! You start interviewing again and find that most of the people coming your way are Negativity Bomb 2.0. What do you do?

I don’t have a definitive answer to this, unfortunately. Slapping people silly and otherwise assaulting them is illegal. So don’t do that. Short of those more satisfying resolutions, there are perhaps a couple of other things to consider. Especially for entrepreneurs who have the luxury of starting from scratch. For example:

1) Keep the team SMALL. If you keep it small, you can hope to fill positions with very, very rare genuinely good talent. If your model requires a lot of employees, you WILL end up with nefarious asses on your team. And then good luck to ya!

2) As a corollary to #1, make sure your idea/product is one that can be built and supported with a small team. And most importantly, one that has a low-friction sales model. You don’t want to get into something that requires armies of Account Executives peddling your wares.

3) Identify the core group of team members that are really A-players and make sure they succeed if the company succeeds. Whether you set-up some kind of subsidiary ownership, or profit sharing or whatever… just make sure that if you collectively hit it out of the park, that they are in on the action too.

4) If you absolutely must get some work done and can’t find an A-player, instead of settling for a B or C player, think about contracting the work out. That way, you can get the work done without polluting your organization. Because once you go down the slippery slope of inducting selfish non-team players into your organization, the virus will only spread. The next guy you hire will be a C or D player and then cleansing the illness will become super expensive.

5) Don’t set expectations you can’t keep and don’t become party to the industry’s poor-as-hell HR policies when it comes to incentives and general HR management. Part of working in a startup is having a heightened appreciation of the fact that there are consequences for your actions. For example: If your product sucks, then it won’t sell. And if you can’t convince anyone to pay money for your code, then you won’t have money to pay salaries. Drop the pretense. Everyone in the organization needs to understand that when something doesn’t work, the team bears a collective responsibility. It’s not just the management, or sales, or engineering. It’s all of you. So if you expect a raise that the company can’t afford (assuming the company is reasonably well managed), then too bad. Tough it out and instead of looking for another 5K/month somewhere else, how about working twice as hard improving the product so it WILL sell?

You have to ram this concept in to your employees heads… and when I say “you”, I am really talking to all software and technology business owners in Pakistan. Because if you don’t, we’re all screwed. It’s fine and well to irrationally incent someone  when work comes your way, but then recognize what you’re getting yourself into. If you don’t first lay the guy off realizing that your strategy is basically unsustainable, he’ll eventually leave anyway. Probably at the worst possible time for your project and company. And that’s no surprise. After all, you lured away a person who was willing to bail from a previous position for a few extra thousand. He was probably interviewing elsewhere every single day while he worked for you. The moment he found a better deal, the job hopper bailed on you. What do you expect?

And think about what your larger contribution here was… you added to industry turn over and instability for a short term activity you could have sub contracted.  You reinforced the wrong sort of behaviour that will come and bite you in the backside. Guaranteed.

Truth be told, Pakistani software companies share blame for the negative behaviour we see these Lethargians exhibit. If you’re going to get two raises a year when the going is good with no regard for your personal performance, sure you’re going to develop ludicrous and unsustainable expectations! If you’re naturally prone to focusing on the short-term benefits of a slightly higher salary, Pavlovian programming such as this will only ruin you further.

I think it’s time the industry as a whole acknowledged that we’re tolerating lots of C and D players because not nearly enough A players are being produced. And once we acknowledge this, we really need to arrive at some sort of collective agreement that we can’t keep playing the “incent, use and lose” game any longer. It’s ruining the pool of human resources we all have to make do with. Until we do this, it’s each man for himself and victory can only belong to the dark forces of Palpatine.

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