Costa Rica’s cultural and time zone affinity with the United States has been attracting IT services companies to the country for years now, creating a growing rate of competition among vendors as they chase quality talent. One of those companies is Gorilla Logic, an app development firm headquartered in Boulder, Colorado, that settled in Costa Rica around three years ago.
The company’s Co-founder and CEO, Stu Stern, told Nearshore Americas that while the Costa Rica operation developed slowly for the first two years, they have experienced meteoric growth over the last 12 months, with the company’s headcount growing more than 500%.
We sat down with Stern to find out exactly how the company has been able to grow so fast amid the competitive IT ecosystem of Costa Rica.
Nearshore Americas: What are the biggest pressures that Gorilla Logic is facing right now in the nearshore market?
Stu Stern: Well, honestly, there are not a lot of big challenges. It has been a very smooth process since we entered Costa Rica just over three years ago, and the first two were just getting the nearshore business off the ground. That was a slow process of figuring out the right marketing and positioning for the services that we are offering, and getting our recruiting capability dialed in for Costa Rica.
The main challenge has been keeping up with the demand, which we have been consistently overcoming. We have been pleasantly surprised and delighted to discover what an abundance of high-quality programming talent exists in the San Jose area, which is really the reason for our rapid growth rate. Our customers were also impressed by the quality of the talent and the advantages of nearshoring. These are generally companies that have been sourcing offshore, primarily to India or countries in Eastern Europe, such as Ukraine.
There are certainly smart people with computer science degrees in every country in the world. However, we have seen in Costa Rica that it’s not only about being smart and having the training, but also about understanding modern software projects and U.S. software development organizations in Fortune 500 companies. The people we’ve found in Costa Rica all have a lot of sophistication around the nuanced challenges and processes that are critical to delivering complex enterprise software.
Where could Costa Rica improve? What kinds of things is the country still lacking?
The one issue for anyone working in San Jose is certainly traffic, but because the internet and power infrastructure is so reliable, our folks are able to work remotely part of the week. Our customers are well aware that our staff works half of the time at work and half time at home. That is how we manage the traffic issue. Certainly, in terms of setting up a business and conducting business down there, as well as employment law, all of these things have not presented any challenges to us at all.
Considering Costa Rica’s small population, how is Gorilla Logic sourcing its professionals amid industry competition?
A lot of enterprises look at nearshore and offshore providers primarily for maintenance work rather than complex development work. Gorilla Logic has always specialized in complex projects, either in terms of complex functionality, complex integration, or massive scalability. We also specialize in senior level talent, which has been a big differentiator for us. As such, it has been easy to attract people in Costa Rica.
The company has been developing a reputation in Costa Rica as a place where the best engineers work. We’re very geeky; always have been – that is our culture. I was a hands-on engineer and have managed engineering and IT consulting organizations my entire career, and so has our Co-founder Ed Schwarz. We have a very deep understanding of our technology and modern software development, and have always recognized and celebrated geek culture. When you have a lot of really talented and bright people working together, it creates a dynamic culture that is very satisfying for high-performing engineers.
We are also aggressive in our recruiting process; we hold meet-ups, recruiting events, and hire people that are known in San Jose as being leading technologists – that is, people that speak at meet-ups and publish articles. There is a mystique that we have developed in being the place where great engineering talent wants to work. Yes, Costa Rica is a fairly small country. However, it is rapidly growing and sees around 22,000 engineering graduates a year. In terms of our need and pace of growth, there is more than enough talent in Costa Rica. The pipeline continues to be tremendous.
How do you approach salaries for such experienced engineers? Is local competition driving salaries higher?
Although we pay competitive wages, we are able to attract talent simply for the quality of work and people, as well as the culture of the company. We are certainly not using money, per se, to attract top talent. On the flip side of that, we are not having to pay a premium to attract talent; we are simply paying competitively. We are not having a problem with engineers being poached away from us, as our attrition rate is extremely good, and our retention has been tremendous.
Are financial services, telecom, media, and transportation still your primary verticals, or are other industries starting to work with you?
We primarily deal with aerospace, media, healthcare, and retail in San Jose. The core techniques for building web- and mobile-based enterprise transactions systems is fairly standard across all industries. In other words, the way you build a healthcare portal is not fundamentally that different from a financial services portal. Obviously, the data that you are delivering is completely different, but in terms of the technical approach required to build that app, integrating it with a backend, updating databases, and securing and scaling those systems, is very standard across all verticals these days.
Generally, enterprises are more concerned with the technical talent, but the understanding how to build the software can generally be learnt by the development team in a just-in-time fashion. A developer that does not necessarily have any experience in the particular industry can ramp up on that stuff quickly enough to write the software.
Before you decided on San Jose, were you considering any other initial countries like Mexico or Colombia?
We did, and if we should start to run into resource constrains, we are absolutely opening up offices in other countries. However, the plan is to keep growing in Costa Rica until such time arrives and there are not any signs of that right now. We have over 100 engineers in San Jose and we fully expect to double in size next year. We will hire at least another 100 employees. No question about that.
Be that as it may, we did consider the usual suspects, such as Mexico, Colombia, Brazil, and Argentina. Mexico was certainly an option in terms of proximity and economic stability.
Does the company already have offices in place to support the doubling-down on staff, and how are the costs of real estate linked to talent availability?
Our biggest cost is people, everything else is really going incremental. We are anticipating that we are going to open yet another office next year, probably somewhere on the other side of the city to make it easier for half of our people to commute. Our capacity is sufficient right now, considering our staff members work from home half of the time. Even with a two to one density, we are still anticipating the need for another office next year.
Was you decision to settle in Costa Rica merely cost-related after looking at other markets?
Cost was not the determining factor; it was a matter of looking at things like the education system and political stability of the country. You want a place where spouses would not be nervous to travel to. There is a negative perception of security in some countries that are not necessarily warranted, but Costa Rica sounds like an exotic destination that they would be willing to visit. All things considered, it is physically very close, there is 97% literacy, and there is a large volume of English speakers. Gorilla Logic only hires engineers with excellent English.
What are the new trends in the mobile app space? Are there certain demands that have changed in the past two years?
Customer expectations are getting much higher in terms of what they can do on mobile or website platforms. There is a rise in functionality that we can all see, where apps can do more every time. This is really driving companies to look at how they can deliver this in a cost-effective manner.
Over the last ten years, enterprises have been figuring out mobile development. The technology of developing native apps was very different back then, enabling companies to understand how to design, develop, deploy, and support these applications. Now, all these companies have reached a maturity level that allows them to raise their own bar in terms of functionality, which will in turn meet customer expectations. One of the things driving companies to look at nearshore as opposed to offshore is that it’s too difficult to develop complex applications when you cannot have close collaboration among the engineering team.