5 reasons to stop Codegenio Software Engineers and move forward

There are many reasons why I decided to launch Codegenio back in October 2019, one of them is because I wanted to give an opportunity to my Cuban people, university colleagues, (Senior or Mid-Senior and graduate trainees) Software Engineers that still live there to succeed and move forward in there. By having a headquarter in Europe and the team in Cuba would be a perfect fit to create software and be working almost 24 hours a day.

I also wanted to let the world know that Cuba not only has Tobacco, Rum, Salsa and beautiful women, but also produces very skilled Software Engineers that today work or have worked at Amazon, Google, NVIDIA and many other big companies out there. Engineers graduated in the most prestigious universities among Latin America.

I have started the business back in Spain when I was living in there, then moved back to Latvia and the truth is, we have no business anymore because of COVID-19. This article will try to explain why I have decided to stop/temporarily close Codegenio and move forward.

Even we have decided to stop, our website will still be available at https://codegenio.com but I will probably shut it down in the near future. If you have a few minutes, please read below which were the causes that led me to take this decision and why we are not able to continue.

1- Software engineer salaries have fallen more than ever before

A year ago, Senior Software engineer salaries were estimated in Europe from a minimum of 50k up to 120K+ EUR, however, with the current crisis, we start to see more and more companies post jobs for Senior Software engineers starting at 30, 40k EUR and for Lead Software Engineers from 50 to 75k at max. Such low-level salaries become the new standard in this field. The reasons for this are not only because of Coronavirus, but also because more and more people choose to be a Software Engineer. Additionally, companies take advantage of the current situation where many talented and skilled engineers are out of business, lost their job or are desperately looking for a salary to pay their rent, mortgage or simply to eat.

2- COVID-19 a virus that succeeded sweeping small companies, weak, old people and unstable businesses

When the reality hit, consider it done. Most companies out there couldn’t withstand the fact that the economy crashed, they had to fire employees, most customers went either bankrupt or closed the contracts temporarily. It’s all a big chaos and we have all been there. Some of us like me tried our best to keep our company up and running, but at some point, we realized that the fight is lost and is time to take a new path and move forward.

3- I see any size software development organizations crashing every day

With more and more customers losing their business, software companies like mine that had a contract with these customers had to stop the cooperation and hence, the chase becomes really hard. I have received in the past month about 12 emails of Software Company owners trying to reach my company to establish some kind of partnership. Most of them trying to sell me the cheapest possible services in order to keep alive during COVID or simply because they have lost their main customer/s and they can’t keep up on business.

Stories are many, I have pictured myself trying to reach out customers in Germany, Sweden, Italy, France, etc., sending emails to big companies, but the truth is that very few companies trust outsourcing their products, and when they do, they prefer to pay 100 EUR per hour, rather than 25 or 30 which are the standard European rates.

4- Our biggest customers were from the tourism sector

As I said before when you get hit you get hit very hard. With just a few months on the market, our biggest customers were from the tourism sector, we were implementing cloud applications, improving our knowledge in microservices, stateless applications, vertical and horizontal scaling and many other features. Although we had a pretty good architecture, Engineering knowledge, working with cutting-edge technologies, Corona comes in and our biggest software provider kicks our contract due to an almost 100% income reduction on booking fees (Nobody was travelling or booking, instead, people were cancelling all active bookings day by day).

5- The market is saturated

We have to admit it, there are too many software companies out there. Indian companies are as cheap as 11$ per hour, I received 1, 2, 3, n proposals in such a small time that I started to wonder whether we had a chance out there for almost 3 times that price.

In Upwork, people would work for as low as 1 to 5 bucks an hour. In the other hand, you will get complete websites for free and only would get billed by maintenance costs. It’s not worth even the effort of registering on this platform as a company because the competition is too big and rates too cheap.

With the high amount of Software Developers/Engineers looking for a job right now, outsourcing companies have barely any chance to get a software project outsourced to them. Companies would better pay a very low salary for a Software Developer (Mid-Senior level), rather than a high 3 to 6 figures price for outsourcing the software to another company that they have no idea about their quality.

In another point, I would like to mention that the client chase is hard and you have to understand that you will be mistreated, you will get very ugly responses from people, no matter how good you treat them. So, either you go out and do the chase by yourself, or you hire someone to do it for you. I had this experience, the customer chase is infinite and I prefer to stay out of it, or rather partner another big company that does the customer chase for you.

Conclusions

Decisions like this are hard to make, especially when you know you could help so many bright people, really good Engineers that one way or another haven’t had the chance to be considered in real projects. My people are stuck in a wall of laws, regulations, embargo and much more that restricts them from getting a job in big companies without first going through very lengthy processes to get a work permit or visa. I want to improve that by giving them the chance to work remotely with Codegenio to improve their lives, at some point in time I will reopen and relaunch Codegenio, but for now I have to stop and move forward in my career.