Swiss-Driven Software Development in Egypt

Modeso’s journey of creating a development center in Egypt, how it started and what we achieved within the first year.
egypt

By the end of 2017, market demand for mobile app development services will grow at least five times faster than internal IT organization’s capacity to deliver them, according to Gartner, Inc. This market forecast underpins the upcoming market opportunities and challenges at the same time.

The journey of Modeso Egypt started in 2015, as the founder team, consisting of Yehia Elazazy, Samuel Schmid, Alexander Maier and myself followed an enhanced market research and strategy to evaluate Egypt as a potential nearshore destination for mobile development.

At the time Yehia Elazazy and myself - Jonas Greminger, Partner & COO - were studying our master degree in ICT Strategic Management in Barcelona, whereas Samuel Schmid and Alexander Maier were both working as mobile engineers at Namics.

The curiosity around the consideration of the Egyptian market was many. The fact that we already had a reliable partner in Egypt with excellent connections in the mobile environment on board, we thought we are going to give it a try, but barely expected the outcome…

Business Viability

Having the team complete to evaluate the idea/vision of building-up a digital agency with its own development center, we pursued with the following approach:

Egypt’s Mobile Engineers

We started to evaluate mobile engineers regarding their technical skills. To do so, we created technology and rank-based (junior/senior) evaluation tasks and reviewed them in detail. Also, we investigated resource availability and price competitiveness in the mobile market. This undertaking got conducted through several interviews with well-known universities and digital agencies.

Market Demand in Switzerland

Second step was to analyse market demand for mobile solutions, particularly in Switzerland. To do so, we created an online survey with 40 Swiss digital agencies. In general, the survey showed that the mobile market was craving for:

  • Short notice availability of development manpower
  • Clients proximity in the field of consulting, conception & sales
  • Cost efficiency in project accomplishment

Business Plan

A Business Plan was developed in the context of the Master Thesis at Universitat Pompeu Fabra (UPF) by Yehia Elazazy.

Beside the business model itself and the financials we focused upon the risk of doing business in Egypt. We analysed and responded to risks such as:

  • Political Risk / Revolutions
  • Infrastructure protection
  • Property risk for foreign investment
  • Currency volatility
  • Internet connection downtime
  • Electricity downtime
  • Compliance risks in EGY
  • Project Confidentiality
  • Cultural differences

The outcome of the business plan resulted in proceeding with our idea to create a digital agency with a powerful source of software engineers.

Launch Development Center

After a comprehensive evaluation process both for market demand in Switzerland and resource supply in Egypt we decided to turn our idea into reality.

We were facing three main challenges during this phase. First of all, we had to recruit and hire engineers, followed by generating leads and contracting projects. Lastly, we had to set up our internal structure in order to make everything operate smoothly. In retrospect, we can state that the major challenge was to meet the balance between hiring employees and contracting projects.

In the part below I want to emphasis on the three key challenges we were facing and how we have been tackling them:

Recruitment of Mobile Engineers

It was challenging to convince potential candidates to leave stable jobs and join a start-up company, and since we pursue only the best qualified developers to satisfy our standards it was even tougher. What we are looking for in hiring an engineer at Modeso are features like: Excellent technical knowledge, willing to learn, fast learner, very good communication skills and an open mentality.

In this phase we highly benefited from our Egyptian partner Yehia Elazazy through his connections and reputation within Alexandria and Cairo. As soon as we employed our first team of engineers and started our first projects, Modeso gained increasingly in appeal as an employer.

Alexandria is the home of well-known Universities, such as Alexandria University, Arab Academy for science & technology (AAST), Pharos University and the Information Technology Institute (ITI). Through these institutions a great amount of mobile engineers are being educated every year.

What we learned from research conducted on employee behavior is that Egyptian employees are considered loyal. We are often struggling to contract them instantly, because they feel strongly committed to their former employer. But on the other hand it is honorable attitude which is in long-term definitely a great asset for the company and will pay off.

An effective recruiting process is essential, and requires a close eye. The recruitment process is pursued as followed:

1. Pre-selection process done by HR Egypt

  • Initial CV checkup
  • Phone interview with selected candidates

2. Evaluation task done by the candidates

  • 8 to 16 hours evaluation task for junior and senior position

3. Review & technical feedback of the evaluation task done by QA in Switzerland

4. Hiring decision done by HR Egypt and QA in Switzerland

Project Generation

Nothing happens without a project. No sales, no revenue, no profit, no development center, no Modeso. In the beginning, we definitely benefited from our existing network and buzz marketing. After accomplishing a couple of projects (Turkish Airline Euroleage, Mediconsult, RegioPoly etc.) we could start promoting our work on various mediums such as our own website and social media channels. We also frequently attend workshops and quickly develop Proof Of Concepts (POCs) for optimal understanding and visualization, both have been boosting our reputation and seal projects dramasticaly.

Operation’s Insights

We established our company’s structure and operations to keep a very close eye to our customers, in the utterly interactive processes (conception, design, project management). Likewise, due to our development center in Egypt we can work considerable cost-efficient and with high ratio of scouting qualified resources.

Client Center Switzerland

  • Agile teams in Winterthur and Märstetten
  • Aim to be close to the client where essential
  • Operations include: Marketing & Sales, Project Management, Quality Assurance, Consulting, Conception & Design, Recruiting, Knowledge Transfer
  • Quality Assurance takes a prominent role in the operational part of the business. We know that quality (testing) and sustainability (code reviews) is crucial for our clients. Conducted experience prove that automated testing and constant code reviews reduce the overall project cost by roughly 30%

Development Center Egypt

  • 15+ software engineers in our office in Alexandria
  • Provides our Client Center with mobile engineers for competitive prices
  • Operations include: HR, Development, Knowledge Transfer
  • Office extendable up to 70 employees

Knowledge Transfer & Education

We aim to engage knowledge transfer between Switzerland and Egypt. This is a crucial fact which differentiate Modeso in the Egyptian mobile market. We encourage our employees to constantly educate themselves in order to keep up with new frameworks and technologies. In order to do so, we organize various approaches, such as:

Tech Talks
Tech Talks are held once every month. These meetings host a platform where employees can exchange information across technologies (web, android, iOS).

Hack Days
Once a month our developers have the opportunity to choose a topic related to IT. The idea behind the Hack Days is to give them a chance to get in touch with technologies, hardwares and approaches which they won’t otherwise, such as the Internet of things (IOT).

IOT Hackday

Blog Posts
Our developers independently working on blog post to publicly promote their gained knowledge.

We realized that making our employees feel secure with us on both levels personal and professional through the norms and culture we adapt within our premises and having a convenient work environment. All theses factors are decisive when an employee comes to a point to decide whether to leave or stay in a company.

Communication & Tools

It has been shown that collaborating with an effective structure and the right tools is crucial in our business mainly since we are partially working remotely.

  • Slack: Communication
  • Github / Bitbucket: Code versioning
  • Jira: Project and task management
  • Harvest Forecast: Resource and project planning
  • Harvest Timesheet: Time tracking and invoicing
  • Zeplin: Mobile App visual design handover
  • Frontify: Web design specification and handover
  • Sketch: Design- and prototyping
  • Google Business App: Business collaboration
  • Bexio: Accounting

Conclusion

In the beginning of 2015 we decided to create our own development center in Egypt. Currently, we are counting 15+ employees exclusively in Egypt. Ever since, we are constantly extending our development center in order to meet our target market demands.

After doing nearshoring in Egypt for roughly a year we have been experiencing some manifest advantages. Firstly, through the high resource availability, we have supremely short notice time to kick off a project. In addition, we have utterly competitive implementation prices. Also, we have seen a distinguished working mentality. They are hardworking, willing to learn and loyal.

Gathering

Apart of all these benefits offered in the Egyptian market, it is crucial to have a reliable partner on-site for the daily operations and strategic business. Our partner Yehia Elazazy is a key person to allow a smooth flow of business in the Egyptian market. Without this asset It would have been a struggle.