Everything You Always Wanted to Know About Russia

1. EverythingYou Always Wantedto KnowAbout Russia But Were Afraid to Ask

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

3. 1. Some Key Factsabout Russia Geographical Summary

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5. Real Russia Area: 17,075,400 km2 Brazil, Russia, India, China: countries of growing economics. Population: 145,000,000

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 CyrillicLatinАа U (but)Бб BВв VГг GДд DЕе YE (year) Жж ZH Зз ZИи IЙй Y (way)Кк KЛл LМм MНн NОо OПп P CyrillicLatinРр RСс SТт TУу U (cool) Фф FХх HЦц TS (zurück) Чч CHШш SH (push)Щщ SH (ship) Ъъno soundЫы E (we)Ььno sound Ээ E (letter)Юю YU (you) Яя YA (yard) Собака (“sabaka”) Кошка (“koshka”) Поезд (“poyezd”)

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.) • Verb’s form depends on the gender of the corresponding noun or person • Punctuation rules are strict and complicated

9. Р How much weearn and pay in Russia Currency: Ruble Abbreviation: RUR Symbol: (informal), р.or руб. $1 ≈ 32 р. 1€≈43 р. Average Wages in IT* Team leader: 3,500 € Senior developer: 2,800 € Developer: 1,800 € *data for Moscow, monthly(!) 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%

10. We don’t We work How hard we workin 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

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

12. We have Much Money Now …and we use it or lose it. 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 Just do right things and they’ll share their profit with you.

13. We still have GoodEngineers and Researches …and we use it or lose it. The main branches are: • Software Development • Security and Cryptography • Aviation and Space • Weapons • Medicine • Specific Technical Branches Just do right things and they’ll 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 Businesswith Russians Understanding Strategies of Your Russian Partners-to-be

16. The MainCustomers The BestEngineers Russian IT-related Companies RussianEngineering Companies Help them bringtheir solutions to the worldwidemarket Give them new buzzwords and products Reasonable Approach to the Russian Market You

17. Strategy 1: Help the Big Guys to spend money E. g. implementation of some technology or product. 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.

18. Strategy 2: Help the Smart Guys move to the West E. g. developing a product for the worldwide market. 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.

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: It’s not just product making. You need it fast!Or even yesterday.

21. Economy of Outsourcing to Russia How an outsourcer bids you: Price = Wages + Taxes + Profit = Wages • 3.5 300–500 € for a developer’s work daily If it is Less: If it is much more: • 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 • They can’t calculate • They are too big • They are really greedy

22. How to Negotiate with Russian Outsourcer • Must have an English website • Must react rapidly • Make presale estimations for free THEM: • 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 YOU:

23. 5. Culture-specific Aspects Dos and Donts

24. 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.

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 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.

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