CTOcast # 4: Jacob Fine (Farata Systems, SuranceBay)

    Introducing the fourth issue of the podcast on technology, processes, infrastructure, and people in IT companies. CTOcast's guest today is Jacob Fine, co-founder of Farata Systems and SuranceBay.

    Listen to the podcast

    About our interlocutor:

    Yakov Fayn was born in Kiev, since 1992 lives and works in the USA. In 2006, together with partners, he founded the company Farata Systems, which develops web applications for large companies, and also collaborates with outsourcing companies in Belarus, Russia and Ukraine. He is the managing partner and co-founder of SuranceBay, a company developing software products to automate the work of insurance agents.

    Java Champion (2005), hosted by the Princeton Java Users Group. He is the author of books and numerous publications on software development issues, including Enterprise Web Development (co-author, 2014) and Java Programming 24-Hour Trainer (2011). Lead a podcast americhka.us.






    Text version of the podcast (1st part)


    About outsourcing and startups



    Alexander Astapenko: Recently, in the americhka.us podcast, you and your Farata Systems partners discussed the future of outsourcing, where the market is moving, what you should do, and came to the conclusion that it is more profitable and interesting to work with Belarus from the perspective of the perspective. This was your position. Your interlocutors, as I recall, had a slightly different one. Let's try to look at the issue of choosing an outsourcing partner from a slightly different angle. It is a manager of a financial company, say, on the East Coast (approx. Ed. - East Coast of the USA), who is looking for artists for a specific project, on the one hand, and on the other, a Mountain View startup who needs to quickly expand and hire a team . What strategy would you follow in both cases when choosing an outsourcing partner?

    Jacob Fine:I would like to say right away that if I were a project manager in a financial company here on the East Coast, then I simply would not have the freedom of choice. I would be forced to work with the company that we were forced upon as an outsourcing partner. Most likely, it would be an Indian company. Well, not a 100 percent chance, but probably 75 percent.

    Financial companies on the East Coast are placed in a very tight framework. There is a certain long process by which certain companies from other countries become outsourcing partners, the so-called vendors. There are vendor lists in large companies and preferred vendor list. And financial managers are forced to work with people only from there. I know this firsthand, but on a concrete example. One of the major financial companies chose a person from us, here in New York. He worked, a strong, competent guy, but then he had to leave. That is, not to leave us, but simply to another project. They tried to replace him, interviewed 65 people from India, but could not find a replacement until the head of the financial company told the manager: "You stop this business, choose someone else, because otherwise you will lose your job." Therefore, the decision is not made correctly, and outsourcing, as a rule, costs much more to these large companies than it seems. The hourly rate seems attractive, but in fact, work is often not effective. But once again I say that these people, managers, are not able to change something and are forced to pull it just as it is.

    If I were a startup on West Coast (approx. Ed. - West Coast of the USA) ... I don’t know why I should be on West Coast, because I am a startup on East Coast - we made a food startup SuranceBay. I would count my money, of course, and try to find a team that could do the most useful work for a certain amount of money, which is usually small. That is, we, in fact, are working. SuranceBay managed to put together a very good team, but we choose people, as you know, to collect cherries. Separately, one by one, and try to make sure that we do not have people who have ballast. And we have an excellent team, and, as you have already correctly said, they are mainly Belarus, Ukraine, a very small percentage of Russia. If you are a startup, then you must very carefully consider the money and spend a lot of time finding people.

    What am I doing? How are we so literate? Well, firstly, I publish a lot, record podcasts, go to conferences, do trainings. I was with trainings in Moscow, Minsk, and Ukraine. That is, we want to please programmers, because we have a small company. Let's say why you should go to our company if, for example, you want to get into some large company, work for a large company? Thanks to this PR, which I do, people believe us and come to us, work for many years and do not leave. The second part that we do, because we still cannot recruit all the people we want, is working with partners. I will not give a name, but it is one of the largest outsourcing companies located in Eastern Europe. We take a lot of people from there, and they also have been working with us for years. That is, people

    About Farata Systems and SuranceBay



    Alexander Astapenko: Farata Systems appeared in 2006, that is, eight years have passed. How did it all begin and what did you come from the point of view of the team, customers?

    Jacob Fine:Firstly, for many years I worked here in America as an independent consultant and never intended to go to any partnerships or to any companies. I was a good programmer and they often suggested to me: “Well, I have an idea! Let's do some startup. ” And I always tried to imagine that we already did it. Suppose you, Alexander, are suggesting that I make a game or program. You have an idea, and I'm a good programmer. I immediately imagine that we made this game. Technically, this can be done. And then what will we do with it? How will we sell it? What do we know about this business? Are we able to sell? Can I knock on the door and say: "Buy, buy, buy." And, as a rule, I understood that it was useless. That is, I always asked myself the question:

    I then held seminars “Weekend With Experts”, where I invited famous people in the industry for the weekend and they held trainings on various topics. Two of my current partners flew into this training, Victor (ed. - Victor Rasputnis) and Anatoly (ed. - Anatoly Tartakovsky). They were in JavaScript at the time, and I was mostly in Java. Both they and I did not see anything interesting in terms of GUI development. At the same time, Adobe acquired Macromedia, where the Flex framework was developed. We thought it was good potential, but nobody knew about Flex then, and we decided to write an article about Adobe Flex for the Java Developer's Journal. They also wrote on blogs. And Adobe noticed us, because they really wanted their product that they bought, this Flex, to be known. And then it turned out that some people try it and even publish in quite well-known publications for programmers. They contacted us, paid us a trip to, I don’t remember, in San Francisco, probably all the same. They invited not only us, but, in my opinion, 50 people from different places of the world. Adobe introduced the product and we returned, continuing to write articles. And then I already suggested to the guys: "Let's write a book." We were all working programmers, all consultants, that is, everyone earned good money. But they agreed. And they began to write a book and it became clear that few people in this market in terms of consulting, and I suggested creating a company. They agreed, and we made the company in 2006. That's how it happened. That is, if it were not for such a special situation, we probably would never have made this company. We did it, but continued to work for customers, that is, everyone made money himself. Then they began to hire people, conduct various trainings, we were invited. And so the consulting company is developing.

    Alexander Astapenko: What is Farata Systems now?

    Jacob Fine:Two parallel lines appeared. Farata Systems already existed as a consulting company. By the way, Farata Systems differs from many consulting companies in that we never had a sales specialist. We never knocked on anyone or said: “Take us to the project.” We just wrote technical articles, books, went to conferences, and spoke. That is, purely because of PR, then they called us and said that we needed people for such and such work and whether we could do it. At first we did it ourselves, then, of course, we started hiring people. A couple of years ago, one of our customers said that they needed an e-commerce specialist, a javist, but we didn’t do anything about e-commerce at that time. And there was a special e-commerce, with special software. We took a strong javist, gave him a project where he showed himself well, figured out. Then it was still needed, yet. And so we developed this practice - a consultant who does e-commerce. At certain points, we worked 25 people only on this. This is how Farata develops.

    But the important thing for me is that five years ago, quite by accident, a person came to us from an insurance company, or rather from the insurance industry, and said that he had ideas on how to make a product. As I said at the beginning, we all take ideas very carefully. How to sell? Technically there is no problem, we will do anything, but how to sell? And here again there was a special situation: he knew how to sell, but did not know how to do it. And he still had one investor, a person who was ready to pay, to invest in this development. Then we decided to take a chance, because the risk was not very large, because someone was going to invest money anyway. And that's why we made the second SuranceBay company.

    A year later, however, this investor said: “Well guys, where is the money? I’m investing and investing, but how back? ”We say to him:“ How? We just figured it out! This is a very powerful, great product to make. ” He says: “No! I have been investing in you for a year, I want to see something real. ” And the question was what to do next. How to develop? Or quit everything, or you need to look for some other investors. And we found such a compromise: Farata earned some money on consulting, and we became investors in the second company. That is, we began to give part of this money for development at SuranceBay. Thus, we have stood, withstood and are performing very well now. 200,000 insurance agents today use our system, we are developing by tearing a large chunk of the market from the monopolists.

    Alexander Astapenko:And which company, Farata Systems or SuranceBay, takes longer? And who is the technical leader at Farata Systems and at SuranceBay?

    Jacob Fine: SuranceBay is easy. Anatoly, who is a very strong programmer, he is the technical leader at SuranceBay.

    As for Farata, we mainly consultants work for the client. The consultants are strong, we do not have juniors, so in many cases the clients themselves give them a manager. Sometimes we do management. If it’s just a consultant working for a client, then he doesn’t need management; the client gives management. If we were asked to make an entire team, then one of us, partners, is leading these projects. As a rule, this also doesn’t take much time, because the guys are strong and we rely on their good engineering training. In addition, we do trainings, of course. If you ask what my time is spent, then, of course, training takes more. Trainings, writing of some articles, here books come out. And I do not do much management.

    Alexander Astapenko:It is logical to assume that people who come from Farata Systems are developing SuranceBay. And there is? Or are there people who are accepted from the outside for the project?

    Jacob Fine: From the side, too, of course. 20-25 people work on the product, not counting customer support. Most are taken from the side, some people come from Farata.

    We try not to lose good people. And if, for example, a person worked as a consultant for someone on a Pharaoh project and the project was over, then we keep it and transfer it to the SuranceBay project. That is, we do not earn anything on an employee, we pay a salary from our pocket, but we keep it so that it is busy, because if another consulting project suddenly appears, so that we do not lose this person. Therefore, it works well and successfully. Indeed, we at SuranceBay hire specific individuals, in particular, through large outsourcing companies that we have been working with for many years.

    Pavel Pavlov: Was the SuranceBay project the most difficult in terms of technology? Or is it that the projects that Farata Systems have to deal with are more complicated in technical implementation?

    Jacob Fine: In fact, SuranceBay is a complex project, and there are complex projects in financial companies.

    If we take financial companies, then projects are complex when there is real work with the market, with the securities market. You see, if they tell you to write the program “Hello, world!”, You will answer that everyone can do this with his left foot. Yes true. And then I’ll tell you: “And I want this program to work on the server, and that it would respond“ Hello ”to 10,000 users per second.” And the program is getting extremely complicated. Therefore, when we work for financial companies, when what is called real-time trading is going on, then speed is the most important thing, as we say “Speed ​​is the King”. And because of this, products are often very complicated. How to make the system architecture to ensure a huge number of transactions per second? And how to make sure that not a single transaction is lost? As you know, people lose a lot of money if there are mistakes. That is, in this regard, financial projects are complex. And every programmer who wants to make a serious career on the East Coast should try to get on a financial project, in a financial company. This, of course, should not be an HR project in a financial company, but something serious. I think this gives a leap in the career of a programmer who wants to get this leap, and not sleep in a furrow.

    SuranceBay is also a complex system. We automate insurance business agencies located between the agent who comes to you to sell insurance and large insurance companies that do not want to deal directly with the agent. That is, between them there are agencies that we then automate.

    When we decided to do SuranceBay five years ago, we were told about the upcoming conference in three months for insurance agents, where the main industry players gathered and where it would be nice to show something. And then we have neither a dream nor a spirit about the insurance industry. Three months later, however, we were at the conference and already showed the product. He was, you know, like a minefield. That is, we knew how to go through it so that nothing would explode. Well, imagine, two or three months, the development just went.

    Today, a lot of smart ideas are invested in the product. We managed to take 45% of the market from other companies. I have already said that 200,000 agents use our product. We shot a sea of ​​paper work, made pattern recognition, forms are driven into databases, electronic signatures are collected. We made smart various questionnaires, and also tons of them there, which a person must fill out before buying insurance. That is, depending on the answer to the previous questions, the following may not be asked. We found a sea of ​​services that pull up data about agents, about people, that is, half of the questions can not be asked, because the information is known. Some need to pay. For each question, a dollar or two is paid, but then we get the form filling out.

    The text version of the podcast will continue in the coming days.

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