Re: Worldtrade Course- Part 2

Ooops..that first email got away....to continue..

This is what I would do:

Do nothing else except get a customer in Egypt who wants your product. Then,
you must ask that customer every single question you have asked me. The
customer's desires and answers are the only ones that count.

You can be assured nobody can anticipate what a customer wants. If you get
exclusives, make labels, etc before you have a customer, you will have to go
back and makes changes, instead of doing it right the first time. Going back
and making changes is a burden on those the second time around. You surely
can get it right the first time around if you first have a customer advising
you.

John

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Trade Question

John,
I am working with a German company that desires growing contracts for St.
John's Wort with Idaho farmers. We've been faxing back and forth, and have
a meeting set up in Montana next week.
Any idea what a typical brokerage fee might be on this kind of deal. I know
ag brokering can be low margin/high volume. Any thoughts/ % ranges would be
appreciated.
Also, they appear legit, but anything I should be careful of?

Malcolm L. Dell
Woodnet Development Council, Inc.
"Dedicated to Small-Scale, Sustainable, Value-Added Forest Resource
Enterprises"
PO Box 709
Orofino, ID 83544
(208) 476-4263; FAX: (208) 476-4860
woodnet@woodnet.org www.woodnet.org

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Folks,

You recall our discussion regarding the nascent small business importing
prescriptions from Mexico...big business is delivered from competition again!

"In Tuesday's NEW YORK TIMES, President Clinton will propose revamping the
nation's Medicare program to offer prescription drug coverage to all
beneficiaries... "

Once medicare covers it, the large pharmaceuticals will be spared the effort
of competiting.

John Spiers

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Barbados?

folks,

here is an intersting story, which can be found in entirety at
http://www.inc.com/international/recommended_readings/01980361

***
When the Lehman guy wouldn't go to India, "that's when I snapped," Doug
Mellinger is saying.

He's telling this to his father, in his father's backyard--the
backyard of Mellinger's green-lawned suburban boyhood. It's early summer
1994, and the 29-year-old founder of PRT Group Inc. is in full rant.

Lehman Brothers, the New York City-based investment-banking
firm, is a customer. Mellinger's custom-software-engineering company was
doing a project for Lehman in India, where PRT had at long last, and only by
surmounting epidemic red tape, set up a subsidiary. ("Took us two damn years
just to get incorporated," Mellinger says.)
And just when the project hit one of those critical stages when
the client and programming team have to collaborate face-to-face, "the
client wouldn't go." Too long a trip, Mellinger explains. Or too many cows in
the hotel lobby. Or maybe it
was just the damn shots.

Mellinger senior nods; he knows. He's been to India. He's had
the shots.

What happened in the yard on this particular day was that Mellinger's rant
about programmers led to a question, which led to an idea, which led to the
decision that will forever define Mellinger and his company. What he needed,
he remembers saying
to his father, was a better country than he could find. And
that's when he decided that since the country he needed didn't exist, what
he would do is invent it.

He would invent a place programmers would want to come to, a
place they'd want to stay. Build it, he thought, and the links would be
forged. The customers would come because the place had what they needed, was
where they wanted to work, and
was home to the people they wanted to work with. It could be
done, Mellinger thought. It was possible.

Today, some three years later, Mellinger's "country" exists. It
is everything he envisioned and more. On an island in the Caribbean, four
hours by air from New York City, Mellinger has imported the workers, the
customers, the capital, the infrastructure. He's established a partnership
with the island itself that suggests how a tiny developing nation can
leapfrog right over the industrial stage of economic evolution into a
global, technology-based, knowledge-driven future.
To answer that question--to answer it definitively--one need only visit the
country that Mellinger invented. Welcome to Barbados. Welcome to the
21st-century high-tech nation.

"IF YOU BUILD IT, THEY WILL COME."
The programmers have arrived. Pamela Alleyne from Malaysia.
Leslie Farquhar from Manitoba. Jawahar Desai from Bombay. In the past two
years, more than 300 software engineers have immigrated to Barbados from all
over the world.
"Soon we will be 400," says Srinivasan Viswanathan ("Vishy," he
insists), the president of PRT's island subsidiary,
PRT/Barbados.

On first encounter, the place to which they've come is your
standard-issue coral-and-limestone island--this one located at the
southeastern extreme of the Caribbean, just wide of the
hurricane track that has other West Indians boarding up their
windows through late summer and fall. Beyond that, though, you
and I wouldn't recognize the Barbados where PRT's new
employees land. Nor would the locals. Nor would the tourists who
room on the west-shore beaches (Pavarotti's favorites) for
$600-plus a night. Because unlike the rest of us, PRT's crew
gets The Life. Which is as good a place as any to start
describing why, at an economic moment when their skills could
get them jobs anyplace on earth, PRT's programmers come
here.

"We always knew we'd have to provide the basics for them," says
Mellinger of The Life. "Housing, transportation. But we
had no idea where it was going to take us. It just grew."

Where it took them was toward the creation of an information-age
company town. A place to live? Arranged for. Furnished?
Natch. Medical care, insurance, legal concerns, banking affairs?
All taken care of.
"I don't want them to have to think about anything but having fun and writing
killer code," Mellinger likes to say now. And
indeed, the setup looks comprehensively, well, "maternal," as
Alleyne puts it. Even before the newcomers leave home, travel
arrangements are handled for them, and careful advice is given
about what they shouldn't forget to bring (a pressure cooker,
spices, family photos). Later, on the island, employees' bills
are paid. They get free transportation. Their savings pile up in
the bank. (Although programmers' salaries are less than what
they could make in a market like New York City, the "savings
rate" for Barbados-based engineers equals what they could expect
to net anywhere in the world, thanks to all the perks and
benefits of the turnkey life.)

"In the mornings we play tennis," says a man from Bangalore.
"Then we create software."

The tennis part, of course, is abetted by the paradise part--an
aspect of PRT's invented location that attracts employees,
customers, and investors alike. It is--have we mentioned
this?--a tropical island. When you're not working, you can play
tennis all winter if you want. By night, in the raucous,
melodic, open-air music halls, with the stars overhead and the heat and
the drifted smoke from jerk-chicken grills outside, you can have
a beer, laugh, and dance.

But Mellinger knew that even if those features brought engineers
to the island, they wouldn't keep them there. These are
knowledge workers. "What's best is that here," says Moilly, "you
really get to focus on your work."

The Work. As Mellinger and Vishy understood, the most powerful
thing programmers can be offered is a place to work with
the best people, on the best projects. A chance to write better
code. It's easy to forget that while industry conditions have
made engineers a cherished commodity, often a commodity is what
they're treated like. Custom programmers go project to
project, normally working at customer sites where they're
surrounded by nonprogrammers who assume what all buyers of
custom software have been taught to assume by experience: that
the programming being done will (1) be late, (2) be over
budget, and (3) not work. Not work, that is, as reliably as even
the cheapest of consumer products. "Not a happy vibe," says a
PRT engineer who's done stints both in the United States and in
Germany. Adds Gururaj Managuli, another engineer with
U.S. experience, "In U.S. organizations there is fear."

Compare that environment with the work life PRT provides.

In Barbados, the engineers get their own state-of-the-art
computer platforms and a workspace designed to the specs of the
international banking industry (required by J.P. Morgan and
Chase, PRT's early Barbados clients). "I was awestruck by the
infrastructure," says programmer analyst Ramkumar Subrahmanian.

The PRT/Barbados development-center approach enables engineers
to work with colleagues beside them, instead of among
customer-site nonprogrammers (in other words, you and me, our
most common contribution to an on-site programmer's
daily experience being, "When're you gonna be done?"). And it
enables engineers to work directly with managers who can
teach and challenge them. Vishy came to PRT from Citicorp in
India, where he built one of the best development centers in
the world. Richard Koppel, PRT's year-2000-bug strategist, was
formerly the CIO of McKinsey & Co. and is famed for
having set up the technology behind the 1984 Los Angeles
Olympics.

Most appealing of all from an engineer's perspective is the
nature of the projects the development center attracts these days.
"It's the more value-added work, stuff that's higher up on the
food chain," says Craig Goldman, who, as the Chase Manhattan
CIO, was a Barbados "founding customer." Those projects come in
part because of the talent level of the programmers PRT
has attracted--"These are very rare skill sets," says
Goldman--and in part because creating new, business-expanding
applications can be difficult back at the customer's home base
on the customer's in-use computer systems. At a development
center with conditions like those in Barbados, customers can try
the ambitious stuff--from an engineer's perspective, says
Arun Kumar, "the good stuff."

The enterprise has succeeded so well at attracting--and
keeping--engineers that Barbados is now a community to which not
many even get invited. Would-be PRT programmers undergo
interviews, background checks, and three rounds of tests--for
cognitive ability, technical skill, and attitude. ("What we care
about most is how badly they want to learn," says Mellinger.)
Remarkably, in a brain-drained industry, PRT is choosy. The
measure of the island's success is that it's a place where
nobody talks about not having enough people.

"If you build it, they will come" had been Mellinger's logic
from the start. Attract the programmers, and customers will
follow. Get the customers, and before long the capital will
flow. But in one respect Mellinger's logic was flawed.

So appealing was even the prospect of his proposed solution to
his industry's labor curse that all he had to do was suggest it
and customers became investors even before the solution was
built--before the first programmer arrived in Barbados. In fact,
the customers didn't just finance the solution, they helped
build it. To their specs. To meet their needs. J.P. Morgan, Chase,
and others paid for future work, invested equity, and
contributed millions of dollars' worth of donated design help,
construction-management expertise, and purchasing clout. The
value of the contributions totaled some $12 million in all,
Mellinger estimates. Said one software-industry veteran during a
tour of the Barbados tech facilities last July: "Software
consultants don't do this. Banks do this."

Over-the-top infrastructure notwithstanding, at first the
customers came not for matchless quality but for bodies--for the
programmers they couldn't get enough of anywhere else, the
people who could get a project completed. "Quality?" asks one
financial-services-firm customer. "Screw quality. All that
mattered was that they could do it."

It wasn't long, though, before customers began to get more than
they bargained for--more than "the bodies." The sheer
presence of reliable programmers who finished what they started
was enough to make better-than-usual products the likely
outcome of a project. Add the physical assets of PRT's
facilities, and the ease with which customers and engineers could
collaborate there "eyeball-to-eyeball," as Craig Goldman says,
and the chances of unexpectedly good results rise even more.
In a custom-software industry that Mellinger reminds us is "a
catastrophe of failed promises" (all those awful products on
blown schedules at surprise prices), Barbados began to look
different.

Finally, customers began to come for "the jazz." Far more
attractive even than the beaches was the relationship that began to
form between customers and programmers. Because PRT/Barbados
boasted an unusually skilled workforce in a setting that
made unusually good collaboration the norm, customers got their
problems solved. Because customers' expectations were
exceeded and the collaboration was personally enjoyable, they
began bringing their "higher-on-the-food-chain" work. And
since getting that more-stimulating work from more personally
engaged and appreciative customers made the engineers feel
more professionally fulfilled, they grew more eager still to
stay on the island and take pleasure from the collaboration. In
short: Barbados's benefits to programmers and customers alike
became interdependent and mutually reinforcing. The whole
arrangement turned out better than Mellinger had expected. He
knew that if programmers were there, customers would want
to come. He hadn't realized that if customers wanted to come,
programmers would want to be there. Now everybody involved
got to do the business that's most rewarding, and the unhappily
adversarial tide of the software-design process had been
reversed. "You know what?" says an executive from J.P. Morgan.
"This work stuff can be fun."

So Mellinger's thesis has been proved--and then some. Aiming to
create a place programmers would come to, he also ended
up getting customers to actually build it. Whereas PRT Group's
growth before it opened the island facility had been stellar
enough, landing it on the 1995 Inc. 500 after the company had
reached $14 million in sales in six years, now its Barbados
operation alone has gone from nothing to $19 million, in just
two years' time. But the island is more important to the
company than even those numbers suggest. It was the showpiece of
the road show that preceded PRT's November initial
public offering. It's what hooks PRT's customers even if the
work will be done elsewhere. It's what differentiates PRT.

**
the times are a - changin'
John Spiers

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