1. Everything You Always Wanted to Know About Russia But Were Afraid to Ask

2. Agenda 1.Some Key Facts about Russia 2.Where are the Money? 3.Business with Russians 4.Outsourcing to Russia 5.Culture-related Aspects

3. 1. Some Key Facts about Russia Geographical Summary

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5. Real Russia Area: 17,075,400 km 2 Population: 145,000,000 Brazil, Russia, India, China: countries of growing economics.

6. 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).

7. Russian Cyrillic Alphabet CyrillicLatin А 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 CyrillicLatin Р 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)

8. 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.) Verbs form depends on the gender of the corresponding noun or person Punctuation rules are strict and complicated

9. 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

10. 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 dont

11. 2. Where are the Money Why its a good idea to do Business with Russians

12. 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 theyll share their profit with you.

13. 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 theyll share their profit with you.

14. 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.

15. Doing Business with Russians Understanding Strategies of Your Russian Partners-to-be

16. Reasonable Approach to the Russian Market You The Main Customers Russian IT-related Companies Russian Engineering Companies The Best Engineers Help them bring their solutions to the worldwide market Give them new buzzwords and products

17. 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. Dont 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. Dont 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.

18. 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. Clients company branch out of Russia. E. g. developing a product for the worldwide market.

19. 2. Outsourcing to Russia What, When, How

20. What and When Outsource to Russia? Extremely complicated task: No one wants to do it. Problem solution needed: Its not just product making. You need it fast! Or even yesterday.

21. Economy of Outsourcing to Russia Price = Wages + Taxes + Profit = Wages 3.5 How an outsourcer bids you: 300–500 for a developers work daily If it is much more: They cant calculate They are too big They are really greedy If it is Less: They cant calculate Their skills are poor They will re-outsource your task It is not a legal company They dont understand your task

22. 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:

23. 5. Culture-specific Aspects Dos and Donts

24. Dont Be Confused by the Following Behavior We might: Try to prove your task doesnt 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.

25. 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

26. You dont 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.

27. You are always welcome with your questions misha@philosoft.biz Mikhail Ostrogorskij