Interview with Joep Romijn, founder and Manager of the Dutch company Up2 Technology – a software developer based in the Netherlands and Bulgaria – for the Dutch Survey ("International Survey: Bulgaria-Netherlands") of Novinite.com (Sofia News Agency).

Your company “Up2 technology” falls in the category of small and medium-sized enterprises (correct me if I am wrong) in the field of software development, is that correct?

Indeed, with 34 people I think we are a relatively small software development boutique. But as we say in The Netherlands “small is beautiful”.

Up2 Technology is a pure breed software company. We are specialized in Microsoft .Net and Open Source technologies. We work for a wide range of companies in the creative and technology industry. We partner with those companies and assist and enable them with the technical expertise to deliver internet concepts and application solutions.

In practical terms we develop a wide range of solutions and implement all kinds of websites, online shops, portals, business and mobile applications.

What is the scope of your business activity in Bulgaria – i.e. the number of people you employ, the volume of work, the number of clients?

Well, before I can answer this question I have to explain you a bit about how we are organized. We are headquartered near Amsterdam.

With 6 very senior technical consultants we manage our projects. In our office in Bulgaria with 28 software engineers and testers we do almost all production activities. Initially our focus was not on the Bulgarian market, but it more and more becomes. I am happy to say that we can work for various Bulgarian governmental agencies. At this stage our revenue is about 20% Bulgarian and 80% foreign.

For the record, we are not an outsourcing company. We are just a company working from 2 locations, The Netherlands and Bulgaria.

Your business field is very knowledge-intensive. How happy are you with the quality of Bulgarian software developers that work for you?

Our work is indeed very knowledge-intensive and I think the next wave of technology will become even more intensive. You have not seen anything yet, when you see the new generation of applications we are working on.

After 13 years of personal experience in Bulgaria (Up2 is my second company experience in bulgaria), I can say we are very happy with the quality of Bulgarian software engineers. I have worked with engineers from different countries, and the Bulgarians absolutely stand their ground.

What you always have to take into account is the cultural difference. As you may know Dutch people are quite outspoken, while Bulgarians in my opinion are very modest and closed. Most of them do not dare to challenge the ideas of a manager or boss. But when you keep addressing this issue as a manager and get them to the level that they feel comfortable to speak out, than you really have the best people.

Do you have any impressions of Bulgarian universities and the quality of computer science graduates that they produce?

That is difficult to say for me. In general our experience is that universities do not deliver people that are ready to take on the work immediately. For us the university certificate means that people have been able to accomplish something and that they can learn and absorb knowledge. However, we have various people without any certificate, who prove to be very creative software engineers.

Do you think Bulgaria has a sufficient knowledge and number of skilled laborers to offer in that field?

Knowledge yes, but the number of people has proven to be an issue already. Bulgaria is a small country. So during recent years, when our economies boomed, it was sometimes difficult for us to hire good people. The supply was minimal and there were a lot of fortune seekers (job hoppers). But then size does not matter to us that much, so for us it was not a problem. Now the supply is relatively good again.

How satisfied are you with the conditions for setting up and running a business in Bulgaria – especially in your field?

In general I can say, dealing with the local bureaucracy in Bulgaria has been no problem at all for us. We are happily doing business here.

As a foreigner, to set-up a business in Bulgaria yourself is impossible because of the language. My experience is that you should always obtain advice about local procedures and taxes wherever you go.

When we founded the company here, we did so with a trustworthy lawyer and an accountant. They made it relatively easy for us, although I remember to have stamped and signed quite a load of papers. I can also recommend a good translator, so you always have an English copy of the papers in order to understand what is going on. And once your business is running stay close to your accountant. A good one will guide you through the local procedures easily.

How would you evaluate Bulgaria’s advantages and disadvantages in that respect? What do Dutch businessmen seek when they consider investing in Bulgaria?

I cannot speak for Dutch businessmen in general, but I think we all look for opportunities. Personally, I do not see many disadvantages in conditions for setting up and running a business in the software industry in Bulgaria.

What could be an issue is the level of English in general, but people are very willing to learn. I also see that the availability of people is at times limited and that the costs are increasing. I remember large software firms entered Bulgaria in 2000 – 2005 and it was more difficult to get good people, since these firms out-priced the market and they hired huge numbers of people. This situation has normalized again I think.

Does the working and business environment in Bulgaria live up to Dutch, i.e. Western, standards and expectations? For instance, have you ever had to pay a bribe in Bulgaria? Have your activities been hindered by the bureaucracy? What measures would you recommend to the Bulgarian government in order to improve the conditions for business?

Standards and expectations are definitely different, but changing constantly in the right direction. In the beginning I was surprised about the employer/employee relationship. Offices were quite crappy, and it was a mystery to me how companies were dealing with taxes. We always made it our company principle to not apply a lesser approach in terms of working conditions between our Dutch and Bulgarian office. We are residing in a new office building with good equipment and we pay all the taxes for our employees. That has been one of our ingredients to build a loyal team.

Regarding bribes, I never had to pay one to do business in our industry. I do not know if this is different in other industries, where you have to deal more with the government.

You have been doing business in Bulgaria for several years. Have you seen any substantial negative or positive changes or developments – for example – in the quality of the knowledge of the young work force in the field of software development, or in the economic/political situation in the country?

Apart from being amazed sometimes about some politics I have never felt it would take a wrong turn. I am impressed by the previous building boom here, the increase in housing prices compared to local salaries, but I guess Bulgaria did not differ from other countries in this respect.

Regarding the quality of young people, I feel that has not changed. But they do have higher expectations than the older generations. Before, they would job-hop for every increase in salary. The current crisis has normalized that again.

I have seen Bulgaria develop for the good and I do not doubt that it will continue.

How competitive is Bulgaria globally in the field of software design and programming – given its rather limited human resources? How can it become a more globally known destination for the outsourcing of software development services?

Bulgaria needs to compete with countries typical known for outsourcing IT such as India, Romania, Ukraine. It holds a rich history in computer science. The salary level is still acceptable to offer foreign customers cost effective solutions.

We think Bulgaria is an interesting location, since it is very near to Western Europe. Compared to India for example this is an absolute advantage. Software projects are sometimes so volatile, that you frequently need to interact with customers. This is a lot easier when you work in almost the same time zone.

As a destination I do not think Bulgaria can compete with countries such as India regarding the big outsourcing contracts, simply because the supply of people is limited. Instead I think Bulgaria should position itself as creative and innovative software engineers and focus on the medium sized foreign technology companies instead. It would be good when universities, companies and the government would join forces to make this happen.

Your company profile states that you have been able “to realize impressive reductions in development and maintenance costs” for your clients thanks to the establishing of your operations in Bulgaria. Could you elaborate on that a little – is the value of what your get for your investment in Bulgaria that favorable?

Yes, development in Bulgaria is still profitable. However, salaries continue to grow and the difference is getting less. We are anticipating that in not so many years the cost level itself will not be a reason for us anymore to be in Bulgaria. It should be the innovative power and the quality of our team that should keep it going. If that team is in Bulgaria, that does not matter so much anymore. The physical locations of our colleagues will less and less matter, with all technology already here and coming up. Actually for us it does not matter anymore already.

If you can sum it all up – why did you choose Bulgaria for your investment? Why didn’t you invest in some other place such as India, for example? Has the fact that Bulgaria is in the EU (or was about to join) influenced your investment decisions?

A long time ago we went to find software engineers abroad, since we were short in our own country and because we wanted to create some flexibility in doing cheaper research and innovation. Initially we went to Bulgaria instead of India, because of the more favorable time zone (one hour time difference and a 2,5 hours flight). We visited but eventually did not go to another Eastern-European country, because we found a match with a small team of engineers in Sofia and because of Bulgaria’s history in computer science. The fact that Bulgaria was not or is now a part of the EU has never influenced our decisions.

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