The global market at work

Bangalore resident Rachna Asirvatham has a 56K modem, a bookcase full of software manuals ... and a bunch of American clients.

Topics: Globalization, India, Unemployment,

The global market at work

Rachna Asirvatham’s favorite TV show is “Friends.”

But her real idol is Oprah. Rachna admires the self-made billionaire not only for her stardom but also for her charity work. “Have you met her?” she asks me, as we drink Coke over a lunch of Chinese chicken noodles and chicken Manchurian.

Rachna and her colleague Jayanthi Ganesh and I are eating lunch in the dining area of a modest flat belonging to Rachna’s parents in Bangalore. Over the kitchen door hang formal group photographic portraits of both sides of the family.

“Have you met any other celebrities?” the two young women press me.

A visitor from the land of the stars, some 13.5 hours back across the international dateline, I have a sorry paucity of celebrity-studded encounters to share. No, I haven’t met Oprah. But I wonder what the TV talk-show host and her American audience would make of Rachna Asirvatham, an almost 25-year-old entrepreneur in Bangalore, who co-founded a small Web development company called Smart Webby when she was just 21.

What Rachna does is an example of the kind of work that is leaving the U.S. But the cheap labor that she sells is her own. The title on her business card reads “C.E.O.”

Rachna lives in Bangalore with her mother, an advertising copywriter, and her father, a retired Navy serviceman who now heads up the local subsidiary of a Japanese firm. For fun, she plays basketball with her church youth group. She strives to tithe fully 10 percent of her income to local orphanages.

She makes her money selling Web development services to clients, mostly in the United States and Europe, at a fraction of what her first-world competitors command for such projects.

The most basic package Smart Webby offers is a 10-page Web site for $225. On one recent project, Rachna and her colleagues built a site for a company in Bethesda, Md., including Flash-animated graphics and a newsletter subscription setup, for just $380, in less than a week.

An American firm bid $9,750 for that same project, according to the client.



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To put these fees in perspective, the lucrative starting salary for a “fresher” — aka recent college grad — working as a customer-service call-center worker in Bangalore is between 8,500 and 10,000 rupees a month. That’s between about $190 and $220 U.S. dollars. Many of Rachna and Jayanthi’s friends do those jobs. “They work late at night. We never get to see them. They have no social life,” says Jayanthi, adding that many take buses an hour and half each way to work.

Rachna and Jayanthi discovered that if you’re a college graduate with good English skills in Bangalore, you don’t have to stay up until dawn making collection calls to Des Moines to make a place for yourself in the global economy. If, like Rachna and her co-founder Anita Sudhakar, your parents can afford to lend you the money to buy a computer, you can just outsource yourself.

That’s because the multinationals like IBM, Yahoo and G.E. are not the only ones who are salivating over India’s burgeoning pool of educated, skilled workers. Those companies are erecting air-conditioned, cubicled temples to Western capitalism all over Bangalore’s third-world streets. But just as bargain hungry is the small-business man, armed with a Web connection and a credit card, who never understood why he had to shell out big bucks for a homepage in the first place.

Rachna sees the political furor in the United States over outsourcing to India this way: “It’s sad if people lose their jobs. But we’re just offering a good product for a price that’s much cheaper. It’s up to the customers.” As with most outsourcing firms here, the majority of Smart Webby’s clients are American.

Before I visit the offices of Smart Webby, Rachna warns me via e-mail not to ask the guard at the front gate for the company by name. He won’t know what I’m talking about.

The room where Rachna and Jayanthi Ganesh work is a converted balcony over the family garage. Rachna’s father turned it into an office for his daughter, adding walls, a ceiling and windows with screens for ventilation. Rachna’s bedroom is just on the other side of a gray stone wall.

Her co-founder, Anita Sudhakar, 26, now married and expecting her first child, works out of her apartment with her husband in Chennai (formerly Madras), about six hours away by train. The four of them make up the whole staff of this virtual company.

Jal Vayu Vihar, the complex where Rachna lives with her parents, houses some 500 retired members of the military and their families. It’s almost a self-contained village, with its own gardens, water tower and commissary. The development is surrounded by a tall barbed-wire fence, half-disguised by flowering vines. After the choke of Bangalore’s morning traffic, Jal Vayu Vihar is an oasis of calm.

Just blocks away, chaotic, dusty work on a major “flyover” — or overpass — is underway to divert some of that traffic out of the clogged streets. Before Bangalore became synonymous with the fast pace and easy money of all-night call centers, the so-called Silicon Valley of India was known as a pensioner’s paradise, a garden city. Now, longtime residents joke, “Thank God for the military,” since seemingly the only green space left in the wake of the population growth and traffic spurred by the influx of foreign multinationals are the lush lands still owned by the fighting forces.

Wearing a neat, short-sleeved Western business suit, a cross on a gold chain hanging around her neck, Rachna sits before her workstation and explains how projects from the other side of the world reach her here, across a modest 56K dial-up connection. (56K is an optimistic speed. When I visit, the connection is running slower, around 37.2 Kbps.) Their book collection includes a raft of familiar do-it-yourself technical titles — “Teach Yourself Access 97,” “Dynamic HTML,” “Using Dreamweaver” and “550,000 Premium Graphic Images.” An image of an oddly ethereal baby floats on Rachna’s monitor — an Anne Geddes screensaver.

Racha met her business partner because Anita’s father was in the Air Force. The two young women both ended up living in Jal Vayu Vihar and attended the same church and youth fellowship.

“There’s nothing like being your own boss,” is Rachna’s answer to why the two young women decided to go out on their own. That may sound all-American to Western ears. But in India, where salaried jobs have traditionally been low-paying, family-run businesses are also a common aspiration.

Rachna majored in communications in school and worked for just seven months for another Web firm before starting Smart Webby. She noted that her youth was an asset: Both she and Anita had very few financial obligations. When they founded Smart Webby, they both still lived with their parents. “No one was dependent on us. The start-up costs were very little,” she says.

But they also had no special connections or contacts overseas. Rachna had lived in Bombay and Delhi, but she’d never left the country. So, in the beginning, they worked 16 hours a day packing their site with free tutorials, downloads, and tips about Web development. The hope was to attract people interested in attempting to do their own Web development, and then to persuade them to buy Smart Webby’s “affordable” services. The partners decided to give it six months. They nabbed their first paying clients in three.

Since then, they’ve signed up more than 50 clients and completed some 150 sites. Their work includes a site promoting a consulting firm in Maryland and one for a South Indian restaurant in Toronto. One Richardson, Texas, Web development firm has been a consistent source of business, outsourcing mulitple projects to them.

Bob Adams, 58, in Bethesda, Md., is one client who has used their services several times but never met them. “They sent us their photograph a couple of years ago,” says Adams. “Mine is up on the Web, too. We’ve seen each other in that sense.”

His company, New Global Initiatives, works on international economic development projects, such as distributing U.S. grants to pro-democratic groups in Iraq. He’s not embarrassed to say “I outsource,” as he recently wrote in an e-mail to an Internet mailing list. Yes, he’s saved a lot of money using these inexpensive services in India, but where did the extra money go? “I use it to pay honorariums to people contributing original essays to our Commentary section at the site. So far, these are Americans. Result? Our budget goes almost entirely to Americans, just different Americans than it would have a few years ago.”

In a phone interview, Adams says that’s what frustrates him the most about the whole outsourcing debate: “Some of the arguments made by those opposed to outsourcing leave the impression that when I save money in this way, I’m putting it in my pocket. I have a budget. If there is a line item in my budget, and it gets lower, another one gets larger.”

Adams, who says he’s been responsible for the development of eight sites in seven years, adds: “I had gotten very frustrated by the high cost of Web sites. American design shops are so expensive, and it seemed to me that it didn’t have to be.”

In his e-mail, he wrote: “I do sympathize with those whose jobs have been lost or threatened here in the U.S. due to outsourcing, but I have a budget and a responsibility to spend it as effectively as possible. Like everyone else, I do my best.”

Rachna emphasizes that work is not just shifting to her firm from competitors in the United States, but new work is being created by their lower rates. She argues that many small businesses in the U.S. would never be able to afford pricy development services and might not get that Flash animation or e-mail newsletter done at all. “I think if people get what they want, at the price they want, it’s a win-win situation,” she says.

But it’s not just outsourcing that has caused prices for Web development to plummet in the past few years. Technology has, too. As new software tools have made these advanced skills more accessible, the likes of Rachna and her colleagues have been able to do professional-quality work with little more than some training from local technical institutes, weekend Macromedia classes, and a lot of manuals.

Rachna says the key to attracting work is persuading people to take a chance on them with a small inexpensive project — such as a $100 logo design. “They want to know who they’re dealing with, so they’re sure the other person exists,” she says. To protect themselves, Smart Webby charges 50 percent up front, and 50 percent at delivery.

Next to her desk, Rachna keeps a tourist souvenir plate featuring a photo of herself and Anita decked out in Malaysian sarongs. It’s framed by the words “Langkawi Islands Malaysia 2002,” commemorating the trip they took to celebrate the first year they’d been in business. They paid for it themselves. It was Rachna’s first trip abroad, and with little prompting she produces a photo album full of snapshots of the two young women on a happy spree of madcap recreation, a binge of wholesome frivolity. Here they are paddle-boating, kayaking, ice skating…

Rachna says her dream is to travel the world, including the United States, where she has family in Milwaukee, but “the tickets are so expensive.”

Smart Webby gives a 10th of its earnings to small local orphanages. They prefer to tithe to the smaller ones because they have lower administrative costs. The money goes directly to the kids.

American workers distraught at the jobs moving overseas will probably find little solace that Smart Webby is diverting some money to orphans in India, but they might find it worth pondering the motto that hangs over the desk where Rachna dials in: “You can’t change the past. But you can ruin a perfectly good present by worrying about the future.”

Editor’s note: This story has been corrected since its original publication.

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