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How A Mysterious Tech Billionaire Created Two Fortunes -- And a Global Software Sweatshop (forbes.com)
An anonymous reader writes: Forbes magazine has an in-depth piece on Joe Liemandt. As you may be aware, Liemandt was the founder of Trilogy, a startup which has been credited to help put Austin on the tech map. He is also founder of ESW Capital, a private equity firm that is scooping up software startups left and right. Forbes called him "one of the most mysterious and innovative figures in technology."
But the story explores the approach Liemandt and his team took to acquire enterprise software companies, install new leadership, lay off staff and hire significantly cheaper tech labor abroad. And the numbers are compelling -- $15 an hour C++ programmers. Those are Amazon warehouse wages -- and those $15 programming gigs don't come with much for benefits. Plus, they require you to install software to your computer that tracks surfing, keystrokes and even takes screen grabs and photos via your computer's camera -- and this is typically on a gig worker's personal computer, not an employers' machine. The story opens with this: From an office suite on the 26th floor of the iconic Frost Bank Tower in Austin, Texas, a little-known recruiting firm called Crossover is searching the globe for software engineers. Crossover is looking for anyone who can commit to a 40- or 50-hour workweek, but it has no interest in full-time employees. It wants contract workers who are willing to toil from their homes or even in local cafes. "The best people in the world aren't in your Zip code," says Andy Tryba, chief executive of Crossover, in a promotional YouTube video. Which, Tryba emphasizes, also means you don't have to pay them like they are your neighbors. "The world is going to a cloud wage."
Tryba's video has 61,717 views, but he is no random YouTube proselytizer. He worked in sales at Intel for 14 years before serving in the White House as an advisor to President Obama's Council on Jobs and Competitiveness. Since 2014, Tryba has been the right-hand man of Joe Liemandt, one of the most mysterious and innovative figures in technology. In the 1990s Liemandt was the golden boy of enterprise software, a 30 Under 30 wunderkind before there was a Forbes 30 Under 30 list. Like Bill Gates before him, he dropped out of college, in his case Stanford, to start a company, Trilogy, and build his fortune. In 1996, at the age of 27, he made the cover of Forbes, and a few months later he appeared as the youngest self-made member of The Forbes 400, with a $500 million net worth.
But the story explores the approach Liemandt and his team took to acquire enterprise software companies, install new leadership, lay off staff and hire significantly cheaper tech labor abroad. And the numbers are compelling -- $15 an hour C++ programmers. Those are Amazon warehouse wages -- and those $15 programming gigs don't come with much for benefits. Plus, they require you to install software to your computer that tracks surfing, keystrokes and even takes screen grabs and photos via your computer's camera -- and this is typically on a gig worker's personal computer, not an employers' machine. The story opens with this: From an office suite on the 26th floor of the iconic Frost Bank Tower in Austin, Texas, a little-known recruiting firm called Crossover is searching the globe for software engineers. Crossover is looking for anyone who can commit to a 40- or 50-hour workweek, but it has no interest in full-time employees. It wants contract workers who are willing to toil from their homes or even in local cafes. "The best people in the world aren't in your Zip code," says Andy Tryba, chief executive of Crossover, in a promotional YouTube video. Which, Tryba emphasizes, also means you don't have to pay them like they are your neighbors. "The world is going to a cloud wage."
Tryba's video has 61,717 views, but he is no random YouTube proselytizer. He worked in sales at Intel for 14 years before serving in the White House as an advisor to President Obama's Council on Jobs and Competitiveness. Since 2014, Tryba has been the right-hand man of Joe Liemandt, one of the most mysterious and innovative figures in technology. In the 1990s Liemandt was the golden boy of enterprise software, a 30 Under 30 wunderkind before there was a Forbes 30 Under 30 list. Like Bill Gates before him, he dropped out of college, in his case Stanford, to start a company, Trilogy, and build his fortune. In 1996, at the age of 27, he made the cover of Forbes, and a few months later he appeared as the youngest self-made member of The Forbes 400, with a $500 million net worth.
After 25 years in the software industry, I saw that this was becoming the norm. Outsourcing and cost cutting. And people wonder why software has gone to shit these days? The best people walk away from the industry as soon as they can.
This has been my experience as well. You can try to hire people in Eastern Europe or South America, but if you want working software, you're going to need to pay the same order of magnitude as in America.
"First they came for the slanderers and i said nothing."
I'd love to see some try and propose a tariff on all tech outsourcing efforts.
Want to hire cheap coders in some trash pit somewhere? 25% tariff.
Want to outsource your US teams to some shared services center in Timbuktu? 40%.
It won't happen, but it's good to watch certain types squirm.
I'm looking forward to the epiphany when Western managers and "entrepreneurs" discover that foreigners can do their work far better too.
I am sure that there are many other solipsists out there.
All it would take is for people to stop voting for anyone who accepts money from corporate PACs and to vote in their primary election. Hell, if the population of /. would just show up to their primaries with that mindset it would probably be enough. If you think voter turnout's bad in a mid term you ain't seen nothing like a mid term's primary. If you want political power for the working class, that's where it is.
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Your claim is exactly what the article refutes.
The article doesn't refute anything. It doesn't present data, or even anecdote, to show how well these programmers in foreign companies are working. The article did manage to find some ex-programmers for the company in far off places, who basically complained how crappy the job was.
"First they came for the slanderers and i said nothing."
These guys are fucking scum. Nothing but parasites that drain value from productive people under the guise of "job creators". The 21st century's robber barons and sweat shop owners, except their products are far inferior to that of their late predecessors.
The digital and legal shackles they put on their employees and the slave-like hours they demand "employees" work mean that we're not far off from people being paid in scrip and being forced to buy their goods in the company store, which will probably be Amazon.
Captcha: salaried
This model works best for crappy near-end-of-life "enterprise" software, where all the original developers are long gone, and you're in maintenance mode.
These private-equity types buy up loads of failing enterprise software companies and offshore everything. They fund the purchase by loading up the victim companies with the debt used to purchase them.
It works best with _sticky_ software -- systems which are very, very hard for customers to get rid of. Bend over your customers, fuck them hard on recurring license revenue, do a little "labour cost arbitrage".
The spivs who are doing this are making BANK. The insiders are getting something like 40% return on capital, even accounting for losing bets. Investors are bashing down doors to invest in these equity funds.
I saw this with another notorious (and VERY large) San Francisco-based private equity outfit, who've pulls a similar caper, although not quite as draconian -- they have just opened an enormous development centre in Bucharest instead of pimping out contract developers online. Eventually, they'll wise up after chasing the cheapest competent developers in the world, and implement a digital treadmill, as these amoral worms have.
If you're running or working for an enterprise software company, here's a hard home truth: if you embrace mediocrity or fail outright, this is your fate: you'll be bought out by these vultures, cut up for scrap, and everything you've worked for will be worth ought, while these fat cats walk away laughing.
It's a really common business model for the vulture-capital funds which do this.
When they go shopping for failing enterprise software companies to buy out, one of the key criteria, is "stickiness" of the software, and how hard they can screw their customers on recurring license revenue before they jump ship and use something modern. For some markets, e.g. core banking software, a failed core banking migration project might be disastrous, which is why so much broken old software remains in service.
Vulture-capitalist private equity funds LOVE this sort of thing, and they are making absolutely OBSCENE amounts of money off the misery and toil of others.
I've been there. I see getting raped by vulture-capitalists as a punishment for failure. Not much you can do about it as an individual software developer, but it does go to show how bad managers can really destroy a lot of value, if allowed to.
I mean, what is $15/hour C++ going to look like? The mind boggles.
"There is more worth loving than we have strength to love." - Brian Jay Stanley
Did somebody hurt your Feelz? Bad bad man! FEELZ!
You pretend to pay us, we pretend to work. I can guarantee you he's not getting any good C++ for that $15/hr.
It works best with _sticky_ software -- systems which are very, very hard for customers to get rid of. Bend over your customers, fuck them hard on recurring license revenue, do a little "labour cost arbitrage".
In other words, this is the end-game for Salesforce, after they have all your data? SAAS ftw.
"First they came for the slanderers and i said nothing."
Have you used any software lately? There's no sense of quality or pride in work.
macOS had a bug where you could log in as root without a password.
Microsoft keeps breaking MSVC in horrible ways and their response is to tell you to wait a couple of years for the next major update. Windows gets bugs like preventing you from changing keyboard/layout input method settings, and they won't fix it until the next six-monthly update, by which time they'll have broken more stuff. The bug where files were deleted if you had custom library paths had been reported by "insiders" yet they still rolled out the update without fixing it. Oh and the way they've sacked their QA department and try to sell being an unpaid beta tester as being an "insider" is disgusting. You're just doing unpaid testing at the risk of your own data/productivity, you're not an "insider" in any meaningful sense.
Meanwhile, Red Hat has forgotten what "stability" means. RHEL7 has broken not just binary compatibility but also source compatibility for kernel extensions on a point release (the APIs for IPv6 stuff changed in an incompatible way), and they subsequently completely changed how Infiniband and RDMA work on a point release, breaking compatibility with everything that uses it. Their graphical installer now needs 2GB of RAM to run properly, even though you can actually run an installed system in 512MB. The default installation contains a whole pile of WiFi firmware packages and daemons that are only useful if your network configuration changes dynamically (like a notebook used on public WiFi) which you'd never need on a server. They've completely lost touch with their customers.
Games are all developed with a "ship buggy, patch later" mentality. There have been games released in a state where it's impossible to finish the first level. You know what was good about cartridge-based consoles with no connectivity? They needed some QA because it was expensive to pay for a run of mask ROMs that you had to dump in landfill.
Software is almost uniformly shit these days. Apparently no-one thinks it's worth making good software any more.
Sure, any kid from Cairo can "teach himself to code" by watching Youtube videos. But that doesn't mean they'll produce anything of quality that's actually maintainable. I've seen the quality that comes out of India, and it's atrocious.
Oh, yes. I reviewed some Java code from Indian "quality outsourcing" a few years back for security. This was so bad it was absolutely incredible. A lot of layers, basically all they did was rename all parameters and exceptions and pass them downwards (upwards). They had parameter names longer than 80 chars, differing in 3 chars, for example and these were not the same renamed parameters, but different ones. But the best thing I found was this: While scrolling over the code, I saw a nested loop (immediate red flag in glue code). And get this: It was a hand-coded bubble sort (probably the worst performer possible that is still n^2) used to remove duplicates (Java has hash-tables for that) from the result of a database query (you can tell the DB to remove the duplicates before it returns the result) that could possible include the whole customer base of a few million entries. I don't think it is possible to do this any worse so that it still technically works. I don't think I ever have seen technically working code that shows such a massive non-understanding of the technologies used. Needless to say the project was scrapped a while later, because they could not get it to work fast enough even with the medium-sized test data set.
My take is that the only economically sensible way to produce business-critical code (and a lot is that) is to get the absolute best coders you can, pay them wathever they ask and you will still come out massively ahead on the code TCO compared to the utter trash that usually gets deployed.
Most ACs are not even worth the keystrokes to insult them. Be generically insulted by this and ignored otherwise.