Outsourcing vs. Product Development in Ukraine? Why am I always angry with this topic?

My country is an outsourcing country by all meanings. We exported/exporting coal(war on that territory), we selling seeds, we selling tomatoes, we selling steel preparation components.

Same with coding sector - traditionally - our country “freelancing” for the last 20-15 years. We have a good STEM education, but rather than create products - we sell man-hours. CEO of Microsoft Ukraine naming outsourcing similar to slavery.

But we also have “poor gene”. It was also part of our history. A lot of people that were richer - 100 years ago was killed/repressed/moved out at Siberia/go to jail/run away. And it’s part of our folklore as well. we have a lot of sayings like - “Slower but steady”.

Want to provoke a discussion, so more notes later


Watching this thread. Same thing happening in Vietnam. In Vietnamese, it’s called “chảy máu chất xám”, literally translated to bleeding of intelligence. It’s a national calamity. And me being a born-and-raised Vietnamese but living and working and paying tax to the US doesn’t exactly add lots of credibility to the discussion.

My mom works for a textile company and all of the clothings are exported to EU and US regions.

However, the startup/tech scene is really booming in Vietnam. There’s a huge movement of people oversees starting businesses there because there’s so much potential in the region, with Vietnam being so centrally located in Southeast Asia and with population being young & increasingly more educated. I wonder, @arthur.tkachenko, how’s startup scene in Ukraine?


I hate that developed companies treat developing countries as a source for cheap labor. It is very much like slavery in my view.

The problem isn’t easy to solve. Developing countries will gladly “sell man-hours” because the revenue is desperately needed. Not being able to walk away from the negotiation table puts anyone from a developing country in a losing position which results in exploitation.

On top of that, it is hard to break the cycle because the type of work associated with these freelance gigs doesn’t really allow people to develop skills needed to start and grow a business. It’s a never-ending cycle of grunt work.

@arthur.tkachenko, I’d love to hear your thoughts on how to break the cycle and help countries like Ukraine develop healthy startup communities. I’ve got a few ideas to contribute but I’d like to think about the problem a bit more. My first thought is to start by encouraging more commissioned work rather than contract work. I’d like to write a piece the distinction and why I think that would help.


Totally agree with you!

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As this is a big topic - let’s split it into small chunks. Can you tell me - what exact is wrong from your point of view? @gln

Let me put it here as example. When I see ads like this - I understand it: “So Danish investor find someone with tech experience, make him(because it’s hard to woman obtain this position in Ukraine) an CTO(but can fire and also we not sure about equity) and using connections - getting projects at EU, giving them to our developers, paying salary, maybe low taxes(low low low low) keeping margin”

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another example. looks like people that selling that services start to realize that something is wrong and it’s hard to sell outsourcing. so they selling outstaffing

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Next Ad. Don’t worry - soon I’ll post more content to this topic. This is just a warm up

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The coding education system is broken in my country.

There is a very low chance to get hired, after completing just a university. It is maybe fine, but youngsters have very tough times.
So, topics below that I can elaborate at A4 list each.

  • IT Step Academy block story

  • Different outsourcing companies entertain people at our local colleges(story of how I chat with teachers from Pavlograd college)

  • After beginning of our war with Russia, it was a “movement” that IT people will help refugees to get a job in tech(part of the story of how my aunt was not able to land a low entry job with 2 degrees, skills of working as teacher for developers and readiness to work, but rejected by age(~40))

  • Recruiting process issues(companies are growing and evolving, but workflow are old and not manageable.)It can be manageable, but people don’t want to make changes and prefer comforting old reading CV stuff.

  • Nobody(ok, bad way to put it without numbers) wants to hire small developers and raise them. Because a lifetime of the developer at one company is 18 max. Usually, it’s lower. So it’s cheaper and easier for a company to re-hire(steal employee) quickly when a new rich client will be able to pay as much as that employee want.

  • Aging shit & Sexism

  • Story about one of the “Fathers” of software development companies owners was picked as main Principe at college.
    He started to change a default education process inside of that college to be profitable for all sides. He hired more experienced developers as teachers, fire old teachers that don’t know English or coding, fundraise money from companies and make a building repair so it starts to look inspiring, install new PC stands, create new opportunities for hiring entry-level students. He also cleans up a students line, lazy people get fired. nephew of my partner goes fired from it and switched into military education because he was lazy to learn to code.

** next part of this story. - Then he was voted to become the main principal in Kharkiv Tech Universite(Place where I was fired 2 times). First time I was bored and for the 2nd time, I have an argument with the teacher about databases explanation at Wikipedia.
So he was promoted to be Top 5-10 principals in tech Universities in Ukraine. Sure thing, he started doing the same thing there. Fire people, raise salaries, hire more young teachers. It was a year when this university moves with big steps forward. Then he got a huge strike back from an old system that finds a legal way to fire him.

  • Huge migration of employees between companies. Hire/Re-hire/counter-offers and jumping between jobs is a reality here. A small increase in salary will force an employee to leave an ongoing project… Only if your company is smart enough to bind you with a really complex contact, NDAs, etc - that will be preventing you from jumping - but it goes to a slavery side pretty quickly as well.

  • People get fired while attending previous jobs for meeting old colleagues(How suspicious, Huh, let’s fire him, he want to jump back to that company.) BUT he did it in his spare time. WTF.

  • Story of my friend/designer. She was scared to look for a new job at Linkedin because she has a small kid that she wants to feed and don’t want to be fired with a bad review…
    It actually keeps her in the same place for 4 years.

  • People got tired to work at this stressful environment and crazy tempo, and don’t have faith with their abilities. They have more feature outside and they migrate to a nice country, that treats their skills better. Rather than become a leader at their current companies and make more money.

  • small companies are really dying, they cannon sustain a time of 10 years(it’s ma story and other companies, that cannot evolve into a big company without adaptation to new realities of outsourcing market rules).

  • Story of how my friend has a lot of test assessments done. And nobody cares to look at them, everyone wants to spend his time on their own “custom”(copy-pasted from StackOverflow) test. So he has a nice GitHub account - nobody cares, because it will require to change their habits and old processes. He didn’t receive proper feedback from a recruiter, so he asked her publicly(she was an employee at first 10 big companies each has > 800 employees). He did it at Linkedin. She and her leader goes crazy and be upset with the fact that he made it publicly. That post received a lot of attention - 8k views. it’s a huge number for the local Linkedin community. People tried to silence him, advising that this post can make problems for him…

  • Huge story was when outsourcing made a BlackLists of developers. when this story was dropped to the public, it was like BlackListGate.

Fuh, it was long! sorry for poor writing

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I started a separated thread about it.

Briefly, I think we going into that direction, but it mostly going agains the main flow of the river, rather than. I have a one notepad with information about it, but i didn’t type it to this forum yet. will do it soon.

Crypto wave give us a new inspiration, because a lot of people start to feel that gold rush - which is a good thing.

I’m interested to hear more about it!

if you want to make some changes, you can help me with advice here for an example: Find an investor for me!

or you can break a cycle of one man. My best intern looking for a job. and by probability - he’ll become the next brick in the wall if I’ll not to find a way to trick the system. it’s my attempt

I wrote more about him at these posts.

Even our startupers know that demand for our talents is huge: https://www.producthunt.com/posts/youteam-2-0 I think they actually part of YC now.

The sad fact - project like this will more and more remove “faces of our developers”. Maybe soon we just don’t need to know their names? just set them an ID when they join and all will work fine?

I think wave that drown my own small company is slowly going down - because I start to see more “outsourc-ish” posts in my networks. Good it or bad - I don’t know

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OK, even Poland, which is part of EU making me feel it too. I don’t understand it. how much time we should spend, in order to understand it. it’s like using microscope for bend metal…

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This topic remind me about one story: [Explority Picks] Our Top 30 Outsourcing Software Development Companies in 2019

We have a big player in Ukraine. Company was located in few cities I think. They start to grow when collaborated with big MedTech firm and start to create a complex medical software for their products.
And you know, creating soft for something that related to lifes, people health is harder than just create websites. So quiality of talents was good.
Really good. Really really really good.

This story is differentiate with others, because this company was not small “cabin at lake”. it was big and stable body-shop.

At some point, their old contact was finishied(lets set it December). and from September they negotiating a new one. When December was gone, new contract was not signed and this company start to feel frist stress.

US company from September silently start to develop their own local office for UA developers. and when developers start to run away without salary - they just onboard them to work at new place with old projects.

ok, it was sad, and I agree it’s a business.

right now I’m attending a YCombinator startup school and I see a lot of small teams, most of their avg founders age is 26-42. and those teams are from Ukraine. So I think our future is bright, because with product you may have more protection. At least in places with real law

What I can say about article below?
“While Ukraine is still selling developers heads like chicken eggs(10 in one package), India know better what to do…”

Anna is role-model for a lot of “tech” people in Ukraine.

We have one fun phone call and she gave us a great advice.

I know a lot of recruiters in Ukraine. At least I think so :slight_smile: big part of my Linkedin network are HRs for some reasons.

And only top3 are real PROs for me.
So when someone reaching me with question - I redirecting them to pros only :wink:
Because they know how help.

So Anna is the first person, second is her brother and third place split between few people that always friendly and can help you even they know you wouldn’t apply.

I mean, this thread can looks like - i’m just personally mad on our “outsourcing situation”. But when you read article like this …

and people still trying to sell heads: https://www.producthunt.com/posts/make-it-in-ukraine

as we comparing a lot Ukraine with India - because of labour cost, number of tech engineers and number of accounts at Upwork-like-websites - important to understand that they also growing products…

Ok, new stuff arrived. Usually, i got similar request from people located in China, Japan - because Upwork decide to ban people from those countries and actually a lot of them don’t have any other sources to get tech gig. Now our local guys trying to trick the system… Again, sad thing. they are not a bad guys. I think it’s a system, that should evolve, so good and hard working people can just do their work and even don’t try to go into any “shadow`y paths”