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a sale not on last season's closeout; but on top…notch software engineering talent 
that I would have been hard…pressed to find elsewhere。 I needed to spend a lot of 
money defending and extending my core business and continue to take care of my 
customers; who 
562 
were working off my current programs。 And at the same time; I had to make a giant 
leap to offer my customers what they were asking for next; which was a much more robust 
and total online solution to all their ethics; governance; and compliance questions。 
If I don't meet their needs; someone else will。 Partnering with MindTree allows me 
to basically have two teams…one team 'mostly Americans' that is focused on defending 
and extending our core business; and the other team; including our Indian consultants; 
focused on making our next strategic leap to grow our business。〃 
Since ethics is at the core of Seidman's Los Angeles…headquartered business; how he 
went about outsourcing was as important as the ultimate results of the relationship。 
Rather than announcing the MindTree partnership as a done deal; Seidman conducted 
an all…hands town hall meeting of his 170 or so employees to discuss the outsourcing 
he had in mind。 He laid out all the economic arguments; let his staff weigh in; and 
gave everyone a picture of which jobs would be needed in the future and how people 
could prepare themselves to fit in。 〃I needed to show my company that this is what 
it would take to win;〃 he said。 
Have no doubt; there are firms that do and will outsource good jobs just to save money 
and disperse it to shareholders or management。 To think that is not happening or will 
not happen is beyond naive。 But firms that are using outsourcing primarily as a tool 
to cut costs; not enhance innovation and speed growth; are the minority; not the 
majority…and I would not want to own stock in any of them。 The best companies are 
finding ways to leverage the best of what is in India with the best of what is in 
North Dakota with the best of what is in Los Angeles。 In that sense; the word 
〃outsourcing〃 should really be retired。 The applicable word is really 〃sourcing。〃 
That is what the flat world both enables and demands; and the companies that do 
sourcing right end up with bigger market shares and more employees everywhere…not 
smaller and fewer。 
〃This is about trying to get bigger faster; about how we make our next leap in less 
time with greater assurance of success;〃 said Seidman of his decision to source 
critical areas of development of his new platform to MindTree。 〃It is not about cutting 
corners。 We have over two hundred clients all over the world now。 If I can grow this 
company the way that I 
363 
want to; I will be able to hire even more people in all our current offices; promote 
even more people; and give our current employees even more opportunities and more 
rewarding career paths…because LRN's agenda is going to be broader; more complex and 
more global。 。 。 We are in a very competitive space。 This 'decision to use outsourcing' 
is all about playing offense; not defense。 I am trying to run up the score before 
it's run up on me。〃 


Rule #7: Outsourcing isn't just for Benedict Arnolds。 It's also for idealists。 
One of the newest figures to emerge on the world stage in recent years is the social 
entrepreneur。 This is usually someone who burns with desire to make a positive social 
impact on the world; but believes that the best way of doing it is; as the saying 
goes; not by giving poor people a fish and feeding them for a day; but by teaching 
them to fish; in hopes of feeding them for a lifetime。 I have come to know several 
social entrepreneurs in recent years; and most combine a business school brain with 
a social worker's heart。 The triple convergence and the flattening of the world have 
been a godsend for them。 Those who get it and are adapting to it have begun launching 
some very innovative projects。 
One of my favorites is Jeremy Hockenstein; a young man who first followed a 
time…honored path of studying at Harvard and going to work for the McKinsey consulting 
firm; but then; with a colleague from McKinsey; veered totally off course and decided 
to start a not…for…profit data…entryfirm that does outsourced data entry for American 
companies in one of the least hospitable business environments in the world; post…Pol 
Pot Cambodia。 
Only in a flat world! 
In February 2001; Hockenstein and some colleagues from McKinsey decided to go to Phnom 
Penh; half on vacation and half on a scouting mission for some social entrepreneurship。 
They were surprised to find a city salted with Internet cafes and schools for learning 
English…but with no jobs; or at best limited jobs; for those who graduated。 
〃We decided we would leverage our connections in North America to try to bridge the 
gap and create some income…generating opportunities 

for people;〃 Hockenstein said。 That summer; after another trip funded by themselves; 
Hockenstein and his colleagues opened Digital Divide Data; with a plan to start a 
small operation in Phnom Penh that would do data entry…hiring locals to type into 
computers printed materials that companies in the United States wanted in digitized 
form; so that it could be stored on databases and retrieved and searched on computers。 
The material would be scanned in the United States and the files transmitted over 
the Internet。 Their first move was to hire two local Cambodian managers。 Hockenstein's 
partner from McKinsey; Jaeson Rosenfeld; went to New Delhi and knocked on the doors 
of Indian data…entry companies to see if he could find one …just one…that would take 
on his two Cambodian managers as trainees。 Nine of the Indian companies slammed their 
doors。 The last thingthey wanted was even lower…cost competition emerging in Cambodia。 
But a generous Hindu soul agreed; and Hockenstein got his managers trained。 They then 
hired their first twenty data…entry operators; many of whom were Cambodian war 
refugees; and bought twenty computers and an Internet line that costthem 100 a month。 
The project was financed with 25;000 of their own money and a 25;000 grant from 
a Silicon Valley foundation。 They opened for business in July 2001; and their first 
work assignment was for the Harvard Crimson; Harvard's undergraduate daily newspaper。 
〃The Crimson was digitizing their archives to make them available online; and because 
we were Harvard grads they threw some business our way;〃 said Hockenstein。 〃So our 
first project was having Cambodians typing news articles from the Harvard Crimson 


from 1873 to 1899; which reported on Harvard…Yale crew races。 Later; actually; when 
we got to the years 1969 to 1971; when the turmoil in Cambodia was all happening; 
they were typing 'Crimson stories' about their own story 。 。 。 We would convert the 
old Crimsons; which were on microfilm; to digital images in the United States through 
a company in Oklahoma that specialized in that sort of thing; and then we would just 
transfer the digital images to Cambodia by FTP 'file transfer protocol'。 Now you can 
go to thecrimson。com and download these stories。〃 The Cambodian typists did not have 
to know English; only how to type English charac365 
ters; they worked inpairs; eachtyping the same article; andthen the computer program 
compared their work to make sure that there were no errors。 
Hockenstein said that each of the typists works six hours a day; six days a week; 
and is paid 75 a month; twice the minimum wage in Cambodia; where the average annual 
income is less than 400。 In addition; each typist receives a matching scholarship 
for the rest of the workday to go to school; which for most means completing high 
school but for some has meant going to college。 〃Our goal was to break the vicious 
cycle there of 'young people' having to drop out of school to support families;〃 said 
Hockenstein。 〃We have tried to pioneer socially responsible outsourcing。 The U。S。 
companies working with us are not just saving money they can invest somewhere else。 
They are actually creating better lives for some of the poor citizens of the world。〃 
Four years after start

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