A maverick is an un-branded range cow or steer. It is also the name used for sports teams at Minnesota State University — Mankato. That’s where the Cringely Startup Tour stopped recently to visit Maverick Software Consulting and find out where’s the beef. This Maverick (the consulting company) has come up with an amazing business model for software consulting services — one that employs American programmers yet meets or beats the cost of using programmers in India or China. But it is much more than just a price-competitive service: Maverick Software Consulting also gives prospective technical employers a newer and better way to directly recruit good programmers.
Maverick was founded by Martin Hebig and Chuck Sherwood, both former Mankato students. As computer science students in the 1990s, both men worked part time for a partnership between IBM and the University. Mankato provided office space on campus and hired students to work for IBM testing the then-new OS/400 operating system. The students gained real work experience while IBM got its testing done for less money.
It was a good program that ran for several years, but then the faculty sponsor retired and with him went those IBM jobs.
“I always thought it was a great idea, ” Hebig recalled during our visit. “I wanted to figure out a way to get something like that rolling again. I had been seeing more and more companies sending work offshore when the idea came to me: why couldn’t we set up an office close to the University, hire students, train them and have the students do the same work that was being sent offshore? We could price the work about the same or a little cheaper, students would be in the same time zone and the company could hire the students when they graduate.
“I contacted one of my clients I had worked with as an independent consultant and they liked the idea. We worked out the details and opened our first office at Minnesota State University – Mankato. Four years later Maverick has a total of four offices (the other are the University of Minnesota, University of Wisconsin – Madison, and Iowa State University) and 74 student employees.”
This isn’t rocket science. The students are testing software, recording bugs, and doing middleware development mainly for a single client — Thomson Reuters. Reuters, in turn, has gone on to hire as full time employees more than 90 percent of the Maverick student consultants as they graduate.
Each consultant works approximately 20 hours per week during the academic year and 40 hours per week in the summer making $10-13 per hour. That amounts to an average 3000-hour tryout over two years for the would-be Reuters programmers. No wonder the company hires so many of them, because with that much exposure Reuters truly knows what it is getting.
Maverick isn’t hugely profitable but it is profitable… and has been since its first week of operation. Required capital has been minimal. Turnover is minimal, too, because these are often the best-paying student jobs on campus.
It’s a model Maverick hopes it can bootstrap across the nation, eventually having an office at every school with 150 or more CS majors, generating with a single manager nearly $1 million in annual revenue per office.
That‘s several hundred potential offices and a lot of pizza.
So how do you protect this great lifestyle business? With yet another refreshing business idea — honesty.
“We understand that any company could try and do what we are doing, ” Hebig continued. “Because of this we have transparent finances with our clients. They know everything about our business (cost for office space, cost for T1 lines, cost for students and the margins that we make, etc.) We show them that we aren’t making a ton of money doing this and that it would be difficult to do it much cheaper. Plus, we bring our experience, training and automated process that makes us very efficient at what we do. ”
While Maverick looks only marginally profitable on paper, the business has no debt, is completely bootstrapped, is keeping dozens — eventually hundreds — of jobs in America. And if they can scale the business the way they think they can there’s nothing that says the founders won’t soon be paying themselves a bootload of money while remaining mavericks — unbranded.
What a great idea. Good luck to them.
I got my first *real* job through a similar experience. The tech school that I was attending at the time had an internship agreement with a Fortune 500 company that was based nearby.
Back in 1996, I got free tuition, $250/semester for books, $10/hr and the chance to do real-world IT work in a big company. The company got an enthusiastic and dedicated resource (36 hours/week max) that was currently getting classroom instruction on all of this newfangled network and web technology.
Best of luck to Maverick!
I guess anything to keep jobs onshore is good, but it seems like they are still displacing american workers in the job market, this time just with cheaper american students. What happens when Reuters goes through a downturn and lays them off? Congratulations! Now your competing for jobs with students from your own university and you are more expensive then they are.
Efficiency is worth seeking otherwise we’re doomed. As for Reuters, having talked with the lady who runs their operation with Maverick, she’s never had a layoff — just continual expansion.
Bob
“Efficiency” is just an arbitrary dogma. You have to design for a stable society or else you really are doomed!
Hopefully when they are competing for those jobs they’ll know the difference between “then” and “than”.
LOL good catch – I wondered what it was about that sentence that bothered me but after several heavy shots of Appleton’s VX rum I didn’t catch it.
how is this any different than a co-op university based program, which have been in existence for decades? hasn’t this business simply outsourced the work that was done by the co-op people in the university?
There are a few major important differences. For one, students can start out during any college year, even their 1st year if they interview well enough. They will simply be placed in a position that suits their skill. Second, this doesn’t require the student to be physically located in the main office (like most co-ops have to). A separate office is set up close to the college, so it’s more like an on-campus job with flexible schedule, where the students work come between their classes, in the evenings and/or weekends if they choose to. Also, because it is set up in an office environment, students can work as project teams and bounce ideas off each other as they are all of the same or similar skill level, unlike co-ops who may feel like the only inexperienced ones in a team. And finally, unlike co-ops or internships, these jobs are much longer, for example upto 2 years, if the student starts out during their junior year, and after they graduate, they simply continue to do the same or similar kind of work as full time employers, leading to a much better transition, to both the student and the hiring company. There are a lot of other smaller details that make this program much better than a co-op, believe me, but I don’t want to get into all that details here.
– coming from a student who graduated from the program and is currently working in Thomson Reuters. 🙂
then you never went to a coop school. none of your arguments are true, at least at the coop school i went to. i worked hundreds of miles away from school, started at the end of my first year and lasted at the same place for 4 coop terms (@ 6 months each), worked with other coops in the same organization and group, worked on the same projects as full time employees and was paid the same as them, and at least 50% of the coops were hired by their original companies.
One of my coop projects was working with the Air Force on this new fangled thing called the ARPAnet. Another was working with a new operating system called Unix, which had just become available outside of Bell Labs.
“Also, because it is set up in an office environment, students can work as project teams and bounce ideas off each other as they are all of the same or similar skill level, unlike co-ops who may feel like the only inexperienced ones in a team.”
Wouldn’t working in a team with more experienced members (full time company employees rather than other students) teach them more?
Ok, if what you’re saying is true, then great! That’s not how the co-op program works where I work and where I went to school, at least not that I know of. As I mentioned there are other details this program offers that’s different from a co-op. if not, I’m sure they would just call it a co-op! Do remember that I’m not saying the Maverick program is better than a co-op, or vice versa. I’m just saying that it’s a different way of providing jobs to school students, that otherwise didn’t exist. It sure didn’t exist in the 4 universities mentioned in the article. Also, I know, this program has helped our company scale back the use of offshore tremendously, benefiting the company as well as the students, so in turn, the American economy, however minor the benefit may be. I’m sure you’d be happy about that!
Just one minor correction about myself, when I mentioned that the students work in group projects, I didn’t mean they work just with themselves, they obviously have mentors, project leads and an on site experience office manager as well to ask questions. But, when we bounce ideas off each other to come up with a solution first, instead of asking questions right away, I think we learn more. Again, not saying co-ops learn less or Mavericks are better, I’m just correcting myself!
I’m sure we’re all impressed by your background (I know I am) but what, exactly, is your point? That co-op programs are good and this is bad? That this is just a co-op program under another name?
GREAT idea!
P.S. Go Mavs hockey!
err.. wait your turn… Football starts out this week;-)
This is especially nice considering the other aspects of MSU-Mankato engineering and technology often fly under the radar, except in sad circumstances. (https://www.mnsu.edu/news/read/?paper=topstories&id=1116419516).
Finally, given the state’s economic issues, and the fact most schools without large endowments or research grants have to figure out creative ways to generate income for students so they can pay the increasing load of non-subsidized tuition, having this as win-win-win (students win, employers win, and the colleges win) scenario is a great thing.
[…] Maverick Software Consulting provides software consulting from mankato, Minnesota at prices that meet or beat Chinese and Indian software companies. How do they do it? Robert Cringley explains: […]
Sounds a lot like an internship to me.
Thomson Reuters is sending my job and basically reconstituting my entire development team to Hyderabad later this year.
Confirmed. I worked for 3 years at Thomson Reuters (Thomson West at the time). A year after I left the company, I heard the majority of my development team had been outsourced.
Until you find a way for the executives running the Fortune 500 companies to personally benefit, I don’t see this project expanding very far. And in fact, I can imagine more than a few outsourcing companies putting their lobbyist to work to shut it down.
“Until you find a way for the executives running the Fortune 500 companies to personally benefit”
Exactly! Our so-called democracy has turned into a “dictatorship of the executives,” which is as bad as the fake “dictatorship of the proletariat” of the USSR.
When jobs are more and more scarce, why do we still have a 40-hour work week? Why, years after machines were supposed to replace all the grunt jobs, is the low-paid “service sector” the main source of jobs?
The laws of supply and demand are still alive and well. The USSR is not.
There must have been something unique about IBM Rochester (home of the 400) that allowed it to keep doing these deals. I worked at a similar job at Winona State University testing the 400 and it’s associated pc clients when I was in university. Lots of alumni from that program ended up working for IBM, myself included for a decade. Yet everytime I described it to folks at other IBM locations trying to get similar programs going, it was like I had just sprouted a third arm.
The “400” group in IBM is one of the few that is still well managed and can still think and act outside the box. It is great that team gave so many students such a good experience for so many years.
Without the intervening consulting organization, we recruit talent from the local university and do the very same thing. We have kept only 10% of our Student Engineers (not interns) because they can get better salaries in more mainstream locations. We benefit from their work, they benefit from the experience.
“Without the intervening consulting organization” What! Are you saying we don’t need a third party with “business expertise” to take a share of the profits. Sounds downright unamerican to me.
Interesting that a good idea can just kind of lie there for a long time before someone picks up on a way to generalize it. Traditional internships are good but not quite optimum.
I like the idea of the intermediate company: interviewing students and arranging suitable matches is something a medium sized company may not have time for. Also the intermediate company can
bang the drum for doing this for many businesses, not just one.
As I recall, something between internship and consulting is how more than a few people got their start in IT including Gates and Allen.
Those “transparent finances” are likely one of the principal reasons why this model will appeal to clients. Consulting firms (I work for a very large, well-known one) really don’t want to be very forthcoming with “actual” costs and where the overhead goes. It surely doesn’t go into the pockets of practitioners, despite what some clients think.
The money for the marble vanities, corporate jets and Baccarat crystal has to come from somewhere.
There’s nothing that interesting here. The University of Waterloo has had a co-op education program for decades in Engineering and Science, and the concept is essentially the same.
You’re just taking advantage of youth and a lack of experience to pay less than the standard market rate (however you want to define that.) In return employers get employees who are probably more enthusiastic about doing the job for a rate that is, frankly, probably not sustainable for anybody who actually needs to pay rent/mortgage, eat food and get laid by a non-drunk frat girl.
I’m not saying there’s anything wrong with the business model, I’m just saying it’s not that new or interesting and I don’t think I’d base a venture capital investment on a company whose only real competitive advantage is continuing to pay less than market rate for services.
Less than market rate?
What is the ‘market rate’ for a college student?
How about what McDonalds would pay?
It provides college students with real world experience in a field that they are interested in, and provides the company with a reliable source of qualified employees.
“It provides college students with real world experience in a field that they are interested in, and provides the company with a reliable source of qualified employees.”
so does a sweatshop.
Nice one-liner there, Chuck. You like…blew my mind and stuff. I especially liked how you took a line from the story that was describing one thing, but then said that the same description could be applied to something negative. How do you come up with this stuff?
Although I wonder how efficient your sweat shops would be if they paid well over the expected income for their employees’ demographic, capped the work week at 20 hours per week when school was in session, and allowed them to make their own schedules. Also, I doubt sweatshops allow you to use their facilities to complete non-work-related work like school projects, but I guess I wouldn’t know.
Perhaps you can elnighten us since you clearly possess a unique authority on both internship opportunities for American IT students and forced labor practices in developing countries?
“so does a sweatshop.”
Clever.
You sound like a pretty funny guy.
Fortunately, while most kids around here are slapping sandwich meat on a piece of bread in local mall somewhere for $7.50 an hour, I just got done working on a piece software that tests an application for one of the largest news corporations in the world (all while sitting at a desk 3 minutes away from my 12:30 IT course). I also make SUBSTANTIALLY more than said sandwich artist.
These are just a few of the perks…I’d be happy to run over MANY more tonight after class (while I’m NOT working a grave yard shift to make rent).
Also it’s usually cold in the office. Most of the students only get sweaty during hack break.
Darcy,
Being at the Career fare and talking to employers thats what I realized:
Having just a degree in technical field is not enough to be competitive and successfulll in your career.
It understandable but frustrating that most of the companies would like to hire students with minimum of 2 years of experience.
If everyone will have such a requerement, then how could young motivated students get that experience????????
I thinks companies like Maverick Software Consulting is a great opportunity for students to improve and apply their skills in real world IT work.
Getting exposed to new tools, programming languages and obtainig Valuable skills in Maverick will open doors to new opportunities.
P.S.Regarind paying less, I am going to disagree with you: Maverick provides a good paying job on campus. Plus students have a very flexable schedule which makes easy for them combine work and school.
It keeps jobs here and gives students an idea how things will be in the real world. I’m a former employee who because of this experience ended up with multiple job offers while still in school mainly because of what I learned here. Most people who are still in school rarely get to make salary demands but I was able to because this company helped me increase my own value as an engineer. Does it really matter if the concept is similar to others that have been done before? Most inventions and Ideas are based off of other ideas so if the new product is an improvement than yeah it is new. MSC saw that jobs were being shipped overseas and found a way to bring them back while benefitting students. One of the first tasks given to students when the company began was to rewrite some of the very code that had been shipped to Asia to be written. The quality of work was subpar way and students were given a unique look at how not to do things. That is something few professors can teach.
As far Your comments about paying students less than the standard rate and
“I don’t think I’d base a venture capital investment on a company whose only real competitive advantage is continuing to pay less than market rate for services”
shows that you completely missed the point of the article and what the company model is. The profit margins are next to nothing and no one ever claimed that the company has ever done anything with profits in mind. It’s not like they are out selling stock or trying to retire early off of student labor. You really should read what is being said in the article before making comments about things you clearly don’t understand or are biased against for whatever reason
interesting. good idea
As a current Maverick Software Consulting employee at University of Wisconsin, I can say there is no better job than this on campus. MSC is the only company within walking distance of campus that gives students pursuing a computer science or computer engineering degree a chance to gain real experience before graduation while earning one of the highest wages available on or near campus.
Sure, there are other internships and co-ops that pay slightly more around the Madison area, but all of them require some sort of transportation to get to and from their campus. Another advantage of MSC is that they make it easy for students to schedule their shifts in between classes and are very flexible if any conflicts do come up. This is possible because of the proximity of the MSC offices to the universities.
Yes, MSC is very similar to a co-op or internship, but they offer a lot of small perks that students are looking for that some co-ops or internships simply can’t offer: walking distance to campus, flexible, well paying, real world experience, able to work part-time during school and work full-time while school is not in session.
I would definitely choose Maverick Software Consulting over a co-op or internship near University of Wisconsin campus just because of what they can offer. Yes, I do get paid slightly less than I would at some co-ops or internships, but the small benefits, like flexibility and walking distance to campus, make MSC much more appealing.
I’m assuming most of the people posting derogatory comments have no experience with Maverick outside of this article because as a current employee and someone with plenty of opportunity to go onto a more monetarily rewarding position, I can honestly say that Maverick has provided the best vocational experience I’ve ever had. Every level of management has been extremely concerned with my career development, sometimes even more so than the company’s well-being (e.g. My manager worked very hard to get me an internship at another company despite the fact that it deprived them of the money they made from my work). Yes, we make less than some other CS internships; however, this is an extremely flexible part-time job and synchronizes with both a school schedule and your individual interests for CS very well. When I got this job, I had no experience in my major and was working at a movie theatre for less than ten dollars an hour with no accommodations for my class schedule; now I’m being pursued by industry leading companies, have a comfortable living and am able to manage my time on my own terms. Comparing Maverick to a sweatshop would be like comparing someone ignorant enough to make that comment to an educated person, and yes, I was young and inexperienced when I came into this job, but I am more than thankful for having been taken on by Maverick even after a year and another internship at a higher wage. If you’re going to whine about something that doesn’t concern you and is appreciated by those it does, then so be it, but for those of you looking for relevant opinions about MSC–talk to any employee.
Most of the points I would make as a Maverick employee have been made by others here, and I see no need to reiterate them. However, I will respond directly to the assertion that our compensation prevents us from paying a mortgage (never mind that a mortgage is generally not included in the average college student’s monthly expenses), eating, etc.
This internship is actually what has allowed my wife (who is a full-time LPN and also in school completing her RN) and me to comfortably pay our mortgage and support our two-year-old son, while still allowing me the flexibility to participate in a graphics research group and enter my senior year at the top of my class. To compare my experience to that of a sweatshop worker is not only ridiculous, but disrespectful to those who actually have to work in those conditions.
😉 🙂 🙂 🙂 🙂
This all sounds well and good and I see some benefits to Maverick over co-op, but I see 2 problems with this.
1) How can students make the time to work here while studying? When I was going through earning my Comp Sci degree, I barely had enough time to complete my class projects, let alone work part time. Especially during the last 2 years of the degree. The same with my classmates. How do you guys find the time to work at Maverick?
2) Since most of the students working at Maverick aren’t doing co-op, I assume they are studying from Sept-April, and working at Maverick May-August. Seems to me that Maverick would only be at full capacity during the summer break. How can Maverick handle the workload when it’s only running at capacity for about 1/3 of the year?
It’s not easy, I grant you, but it is doable.
First, a majority of our hours are required to be between 7 and 5 to facilitate communication with our full-time contacts. With a little careful planning, you can leave your evenings and weekends completely free. Plus, it helps that we’re all taking/have taken the same classes, mostly. Right now I am in 4 300-level CS courses, and I have at least one Maverick in 3 of the 4, not to mention Mavericks in the office who have taken these classes before and can give advice/help on the homework.
As to your second point, Maverick doesn’t direct the projects we work on, so “capacity” isn’t really the right term, at least not in that context. The office managers don’t get a pool of projects for their office and then divvy out the work, we’re actually assigned to specific leads at Thomson Reuters who are responsible for utilizing us as they need. With this direct interaction with Thomson Reuters leads, they have the ability to assign us to a regular project, plus whatever needs a little extra help at the moment. This makes the overall process much more flexible, as the managers don’t need to be trained on all the projects to then train us, for one.
That’s interesting, I didn’t realize that Maverick employees were in direct contact with leads from Thomson Reuters. It almost sounds like a “remote co-op” kind of situation.
But I don’t see how this could replace outsourcing (as much as I’d love it to). With outsourcing you get someone who is working on your project full time at low cost. With Maverick you get low cost, but definitely not full time. Sounds like this would work only for companies that have special projects that were relatively light work, and a long deadline. I don’t see how that could work in industries like video games, for example, where there are huge piles of work to be done in small periods of time.
Its always nice to hear about success stories coming out of the Midwest! Just goes to show you don’t have to be headquartered in Silicon Valley to make something of yourself.
De dуnde eres? їEs un secreto? 🙂
Ilias
I keep meaning to ask: what’s the story behind that “prairie geek” picture up at the top? It looks like Kevin McHale (https://www.imdb.com/name/nm2389665/).
nice post! I really like the style of your blog.
CS Degree Program Administrator:
“Let’s make American programming into a $20K job for programmers who will be forced into retirement by 25.”
One year later:
“How come nobody but third world student visas are signing up for our classes?”
Contrary to the claim that this promotes “efficiency”, this sort of idea is even far more destructive to quality software than outsourcing was. That is because the wage paid to a programmer is a tiny portion of the cost spent on a system, and a high quality system is worth vastly more than a poorly constructed one to the company that relies upon it. Yet anybody who works in IT could tell you that the former is a rarity, and the latter is the norm, despite 40 years of “magic bullets” in methodology and tools.
Why? Because management doesn’t understand the technical, which is not only abstract, but also deeply resistant to quantitative analysis, so they end up using the hammer they know: cost. The irony is that they would save far more if they looked for a small number of the priciest programmers they could find, subject to the caveat that the persons hired must better than 90% of his peers. Of course this is a problem when you don’t know what “good” is, which is probably why I’ve never encountered such an approach.
So why is this worse than outsourcing? Because outsourcing of software design has been in full swing long enough to see that more often than not it ends up being a disastrous, career ending failure for the MBA that comes up with the bright idea of replacing his deep pool of technical staff with some chair warming, color by numbers body shop whose only incentive is how to maintain the technical status quo with the least qualified people possible. It is possible to do outsourcing right, but this requires more foresight and wisdom than is typically found in the plodding leviathans that drive these fads.
The hook of outsourcing for the MBA type is the tantalizing idea of getting 2 or even 3 programmers for the price of 1, which, as any programmer worth his salt could tell you, violates Brooks’ nearly 40 year old law that more people == more problems.
But this problem solves itself: The outsourcing project fails and the company now finds itself having to hire contractors (sometimes former employees who’ve moved beyond the W2 treadmill) at much higher rates to rip and replace the entire project, which in turn creates a steady stream of demand for skilled programmers in America’s cities. I’d argue that outsourcing has been great for the American programmer by forcing out the mediocre, and liberating the skilled from the W2/cubeland and transforming them into decently paid freelancers.
But this is far worse because it undercuts wages here. Everybody expects to pay less in India or China, but if they’re smart they’ll know that some work will need to be done here and that that work will cost more. But if you introduce a critical mass of low wage workers into a given metro area the whole thing falls apart: Unfortunately, heavy experimentation with outsourcing often goes along with a heavy influx of H1B and L1 visa labor, and that means hiring people with significantly lower cost of living arrangements. Look at today’s rates in NYC and you’ll see why I moved to FL, the rates are 50% higher… In FL. You’d have to live in Bergenline NJ or Astoria Queens to live on what the going rate is, which is why no good programmers I know of live there.
So what does a $10/hr intern make when they are hired by Reuters? $15? $20? How will they make the transition to $50, $60, or $70/hr when there’s no mid level rate to get them there?
Now you can think I’m a prima donna for expecting these rates, but why would you expect someone skilled in one of the most complex and abstract of knowledge industries should work for admin level wages that any docker clad blogger could do? Would you hire the cheapest lawyer you could find for a divorce, or the cheapest doctor you could find for an operation? Please think about what you mean when you say “efficiency”.
Podcasts missing from Itunes since 9/4, available elsewhere?
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Quick Update on Maverick Software Consulting…
Maverick Software Consulting Wins 2011 Tekne Award
MINNEAPOLIS (November 4, 2011) – The Minnesota High Tech Association (MHTA) honored Maverick Software Consulting with the 2011 Innovative Collaboration of the Year Tekne Award during a ceremony at the Minneapolis Convention Center Nov. 3. The Tekne Awards recognize Minnesota companies and individuals who have shown superior technology innovation and leadership.
Minneapolis-based Maverick Software Consulting was recognized for developing a first-of-its-kind academia-meets-corporate America partnership, bringing together top computer-science students from campuses across Minnesota with major corporations seeking local software development and software testing. In partnership with Minnesota State Colleges and Universities (MnSCU), Advance IT Minnesota, Thomson Reuters and Digital River, Maverick provides corporate partners with top student talent as a successful, proven option for cost-effective software development and testing services and an experienced workforce after graduation. It also provides students real-world experience working in the field with cutting-edge technology – and typically a job offer prior to graduation.
“We’re honored to be counted among the ‘who’s who’ in the Minnesota technology community, and thank our academic and corporate partners, and the outstanding work of our student employees, for making the Maverick program so successful in creating technology jobs and hands-on learning opportunities for students across the Midwest,” said Hebig. “Receiving the Tekne Award is a testament to how well the program is working for everyone involved, from corporations to universities and students to the entire community.”
Maverick continues to seek corporate partners to join the award-winning program and benefit from cost-effective software development and testing work, as well as an experienced workforce after graduation. With the support of additional corporate partners, Maverick is positioned to expand to other college campuses with renowned computer science programs across the Midwest, including Winona State University and the University of Minnesota – Duluth. To learn more or to schedule a tour, contact Maverick founder and president Martin Hebig at mhebig@mavericksoftware.com.
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[…]I, Cringely » Blog Archive Little Geeks on the Prairie – I, Cringely – Cringely on technology[…]…
Absolutely AMAZING!! Im just disappointed we didnt get to meet up again.but I know we will!!
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