Scaling Your Team Effectively and Affordably

Ryan: Well yeah no, I think that’s great I–I also think you know how it’s particularly interesting the–the line of work you’re in right now where you’re you know helping outsource remote talent for teams. Seems like that’s perfect  uh– sort of opportunity to be working on these days I mean – if weddings are on pause one thing that isn’t is business by remote and so I wonder if you talk a little bit about how you got into that line of work .

Matthew: Sure, so uh about five years ago I bought an e-commerce portfolio. Uh, so instead of buying a single site I decided – hey! I’m gonna buy three of them at the time all at once and start running it. And don’t necessarily recommended it if you don’t have experience but I did it anyway, uh let’s just say I have an overabundance of confidence where sometimes it’s not wanted. So I, at first it was a it was always a fully remote team so the people were at the time in minnesota. Through attrition and otherwise I started moving workers to the Philippines. And you know there’s this journey that everyone I know who outsources uh goes on which is I’m gonna go get someone for a few dollars an hour in another country and they’re going to change my life it’s just not true right I mean it’s just happens to me not be true but it really is this myth that it can be done so I started just like that and through it you know through the process uh and through some uh i’ll say coaching for my wife I ended up hiring someone to run the entire business uh– which at the time was doing 4000 orders a month.

Ryan: Oh wow

Matthew: And so you know sizable business, thousands of orders and I ended up hiring someone there to essentially run all operations for me, she worked for a hundred person company uh as a Chief of Staff I convinced her to work for my six at the time six person company now It’s I think ten and I went from working and I– you know for years I was getting crushed I mean honestly it was terrible right I was working 14 hour days and It’s no exaggeration right and I think all of us here and your listeners know or your viewers no that just puts a lot of unnecessary pressure on your relationships and your life right and so what have so  but I went from working 14 hours a day to three hours and now I only oversee the business and I did that within 45 days by the way that transition and now a year or so later a year and a half I’m like two hours a weak and just overseeing the business. So in as I mentioned in the opening in the pandemic uh I’m in weddings right so that’s of I have four sites now two are in weddings and one of them is about eighty percent of the revenue and the pandemic  came and boom that’s it. For first day  I remember this was march 14th or 15th when they announced the uh closing of the european border so the european travel ban business was down 95 percent. It was fine I was killing it before that it was it was gonna be a banner year,.

Michael Smith: I don’t know–

Matthew: 85% 

Michael: I don’t know if you know much about me and what I do, I actually DJ and provide entertainment for weddings. And I had, okay. 2020 was lined up to be one of the best seasons I’ve had, or your time, banner year. And it all went away. And I’ve actually had 2021 I’ve lost two, three weddings now have canceled for this upcoming summer. And so I feel your pain. So

It’s – 

Matthew: But there’s nothing you could have done right? There’s absolutely nothing you as an entrepreneur could have done it. Yeah. Realistically. In DJ remote weddings. Not really. It’s just like,

Ryan: yeah, so it does not exactly have the same ring to it.

Michael: So you had to transfer transition over. Before COVID hit you had transferred, transitioned over to having an assistant based out of the Philippines. You said your wife consulted you on that? Is she Filipino?

Matthew: No. I said my wife, I said coached me or encouraged me when–

Michael: she turned me on to like a Filipino. I actually lived in the Philippines for a while. So I I’ve been there and know how it works.

Matthew: Yeah, so Are either of you married? 

Ryan: Yeah. Right. 

Michael: Yes. 

Matthew: Okay. So you’re gonna appreciate the story. So what happened was, we were going to China on a family vacation. And she said to me, we’re going with her parents, I hope you don’t work on this vacation. You know, and it’s not really a request, right? It’s like, this is what you’re going to do. She goes, she goes, go find someone in the Philippines to run your business. I go, honey, I love you. But I know a lot of people who offshore, I don’t know, one person that hires real talent out of the Philippines. And she looked at me like the with the Hey, you dummy, you know, my poor spouse? You know, look, it’s a country of 100 million people that that’s like an idiotic thing to say, like, there are people that can do this, right? Just by nature of it being a large country, right. So this is one person, right? So I spent two months actually looking for Angelica interviewed, probably 100 people, you know, reviewed a ton more, and, you know, found her and just convinced her to come work for me. And so it really all started because my wife said you’re going on vacation, and you’re not working– And that was the end of that.

Ryan: Yeah, no, it’s so true. I mean, you know, I can think of, you know, in my sort of entrepreneurial journey, I can think of, you know, no less than 100 trips, or family, whatever it is, or this, or that’s where, you know, I’m getting the stink eye from my wife, because I’m on the laptop, or, you know, on my phone or whatever. And, you know, I mean, literally down to sitting out with my toes in the sand on the beach, but with my laptop in my lap. And, you know, so I to have sort of backed off quite a little, quite a bit, especially as I’ve gotten a little bit older, and now I have a couple boys. And and so it made sense to back off. But it’s, you know, it’s definitely one of those challenges that when you got to deal with the the needs of the spouse or needs of a family, it’s it’s tough to keep up that entrepreneur entrepreneurial drive.

Matthew: In a lot of ways, I do think that it’s a forcing mechanism, that’s an advantage. So what I think, you know, what I realize now, and I knew then, but I didn’t, I know intellectually, is that like, what my value is, like my value, you know, I have to focus my time and my value, my time should be spent on high value, high value, high growth, things that make you money. Right, that’s, that’s really what I should be doing everything else someone should do. And I had a team and you know, they were just sucking up my time. And, you know, I just realized that it’s just that now upon reflection, it was just a big waste of effort on my part for three and a half years, until I found a jelica, that I should have been doing a lot of things and I think it was entrepreneurs. By the way, it’s my third it was my second business. I think as entrepreneurs, like, you know, we just had a lot of us, at least for me have a tendency to get sucked into things that just are not important and don’t move the needle because you like to do it. Right. I like I like optimizing. Like, it’s fun. 

Ryan: Yeah, me and I think that makes a lot of sense. I think, you know, most people, you know, are a lot of entrepreneurs anyway, I mean, some might be more strategic and just chase the dollar from the jump, but most of them are doing something they enjoy. And when you’re doing that it’s sort of a trap, right? It’s this double edged sword that yes, you enjoy what you’re doing, but then it doesn’t feel like work and when it doesn’t feel like work. It’s easy to work online. And you know, And I think that I think that that’s an important thing to try and avoid or, you know, a figure out how to optimize or work through anyway.

Matthew: Yeah, cuz you find something interesting, right? For me, it’s just optimizing the business and finding cool ways to like, squeeze out more dollars. I mean, I was a management consultant, I was a technology consultant. And I was just tinkering. And like that this kind of stuff is fun for me, right? So I just would do this all the time. And ironically, as a consequence, a lot of things would break, because it was a business built on, you know, duct tape from an infrastructure standpoint. And so when I would start to pull the thread to fix things, all these things will come out. And what I realized, is that stop, right, I’m just causing myself more problems. And so I stopped it. And then I hired someone, and frankly, the business ran better. She hired better, right, I now had, you know, Filipinos, hiring Filipinos, which is just better. And, you know, all these things that I did not like to do or being done better. And you come to the conclusion, that we’re just not special, right? There are people who can do the same job as you, for the most part. And it’s fine.

Ryan: Yeah, well, and I think you’re right to that. I mean, a lot of what hiring is, is trying to find people to do the things that you’re not that good at, you know, like, I come from an advertising marketing background. And my skills are, you know, the things that I’m good at our, you know, our direction, creative direction, you know, running these little creative teams and things like that. But in terms of actually running the business, like, that’s not my strength at all, you know, so it’s a total slog, everything is hard, I end up screwing things up a lot, you know, all that stuff, because that’s not my strength. And so, you know, in the in almost in the same type of situation that you’re describing, I mean, for me to either, you know, hire or outsource or bring on somebody to kind of run the operational aspects of the business so that I can just focus on the things that I’m good at, you know, isn’t a bad idea. Really?

Matthew: Absolutely. And one of the things that people tend to not realize everyone’s like, well, it’s a lot of money. Sort of, yes, it’s an investment. But if it frees you up to make more money, it’s not a lot of money. Right? Yeah. When we start outsourcing, I think one of the things that people think about as they look at the total number, it’s, you know, 30,000, or 40,000, a year, true in an absolute sense, right. But it’s let’s just say it’s 3000 a month, right? And, well, after a few months, you should have freed yourself up. So you could focus on a higher value activity, which will more most likely generate more income for you, and you should pay for it, it should pay for itself. As long as it’s paying for itself, and your life’s easier. It’s a home run, and you didn’t invest 40,000, you invested the amount of money until you broke even on the investment, meaning you were able to grow by 3000 profit a month. Therefore, let’s say that’s a month three, you know, at one three, yes, you invested $6,000 or $9,000. But now it’s free and your life’s better.

Ryan: Sure, yeah. Well, I think that makes a lot of sense. I think, you know, it’s funny, I don’t think people think of, you know, hiring people, or outsourcing in the way that you’re talking about the same way that we think about, you know, buying a product cheap, and then reselling it at retail, you know, buying something wholesale, and then reselling it at retail. I mean, because I mean, really, all of our capitalism is sort of based on the same concept, right? I mean, in this case, you’re talking about you bring on a human being a person who you pay X number of dollars for, but in theory, you can then you know, it sounds bad to say resell that person, but you can resell what their value is, for more than you’re paying for it, which is essentially how business works. So So it’s interesting that people can be so obstinate, and are sort of leaned back against outsourcing, or, you know, looking overseas for sport, when the reality is, you know, it’s no different than buying a widget at wholesale and then re selling that widget.

Matthew: Right? And actually, you know, just to think about it, you’re actually buying the widget at wholesale, you’re just buying it at another company, I’m sorry, at retail, you’re by just paying market rate in another country. Right. And so pre pandemic, I’ve been working this way for years for my business, but pre pandemic, a lot of businesses and I have to be in the office and usually too, and there’s a lot of value. Now we’ve amassed experiments and remote work. And it turns out that work can get done pretty well, in most cases, when you never see people. Right? So if that’s the case, what’s the difference between San Francisco and Dayton, Ohio, or data Ohio or in the valley and Philippines, right? Like, there is no difference? So you can argue timezones, but what if people are working your time zone? That’s what my team does. So when you start eliminating these things, it opens up a whole nother world of professional talent that you can Get at prices that you can afford, right? Most people in the United States will say, Whoa, if I can get someone for 18 bucks an hour can help them run a business. Like legitimately. I can offload TAs. Yeah, hands down. But you can only do that you can’t do that in United States, right? You just can’t I mean, you know, fast food pays 15 days in an hour and a lot of places. Yeah, right there. And, you know, so you’re just doing some arbitrage and thinking differently. And it will absolutely impacted my business in a dramatic way.

Michael: So why why the Philippines? I mean, you could outsource to India, you could outsource to Germany, you could outsource to all these different places that you go with the Philippines? 

Matthew: That’s a great question. So the Philippines has a culture of outsourcing already. So the largest companies in the world, all do business process opera operations, so back office administration in the Philippines. And they do that because there’s a, there’s Americans style English, you can get the minimal accents, education levels fairly good. And they’ve created this culture of a 24 hour workforce. Right. So for operations, this already exists, all I’m doing as an entrepreneur, is leveraging the same approach as these multibillion dollar nationals and applying it for my own business. So I, you know, I so they’re all these people have worked at these BPO companies who are happy to work for you. And there’s a large culture of outsourcing already. So it makes it simple. Why India versus the Philippines, that’s just happens to be where a lot of operations people are, and the people I know, have experience with. But I’m sure there’s talent in India, right. And I’m sure you can play the arbitrage game as well, in India, it’s been done for years with technology with engineers. But there’s no you know, in the Philippines has tended more to the operations than technology.

Ryan: So I would say to me, even in my limited experience, you know, working with with companies who outsource like this, I have come across companies that utilize Philippine talent more than once. And I think that the or at least in the creative space, the big draw is exactly what you said, it’s, you know, their, their understanding of sort of American culture, I’ve heard that it has something to do with Air Force bases, and learning English and watching American TV. So culturally, their design, design work looks more like the design work of an American designer. Versus for example, if I’ve outsourced out of China, or India or Pakistan, places like this, their, their style is different. The way they do design work is different than what you would get from like an American designer, for example. 

Michael: Well, while I was there, I experienced this firsthand. When I was learning, what I what I, which was a dialect that they spoke in that area, all the kids that were going to school, were learning English from day one. So they were learn learning how to speak English since the first day of school. And as I was learning their dialect, they would want to talk to me in English, so that they could practice English. And it was really quite interesting to see. You know how, how it works. And then pretty much if you go to the Philippines, anyone that’s over 18 or 20, that age range has a pretty good understanding of English unless they’re way off in the middle of nowhere, it bigger cities like Manila and Cebu, and cities like that. A lot of people speak English fairly well. When I was it was 2001 2002 ish. There was a lot of internet cafes, and you would go into the internet cafe and they’d have a the front section was where you could rent a computer to get online. And the back area, there was 3040 50 computers of people just sitting there programming or working on Adobe or working on it. They they had a whole team of people set up for outsourcing just like what you’re doing. And I could see how working in a place like the Philippines, the English dialect is already there. The education is already there. They they’ve been doing it for 20 years now, at least that I know of with programming. So I could see how that would work out well for you. Does the exchange rate have play a factor for you? Because I know that when I was there, the exchange rate was almost 98 pesos per per US dollar. Right now, I think it’s sitting at 48. And if you’re in the Philippines, a peso will actually go a lot further than you would think. So if you’re paying someone 4850 pesos per hour or 100, however it works, what you’re paying them that amount in pesos was goes a lot further than that amount in a US dollar. So they’re there. It really helps their economy out and helps bring them up at the same time. How’s that worked with you and your business?

Matthew: Sure. So it’s a great question. So one of the things that we do is typically speaking for my agency business, when someone comes to work for us, they’re getting anywhere from a 10 to 20% Raise automatically. Because, you know, it’s just by nature of they want to increase their salary, we do it or we don’t really negotiate salaries. So if they want to, they want to raise because that’s what they want, that’s fine. It’s my job as an entrepreneur, let’s say it’s worth it or not, and how this plays into effect, it’s not so much the exchange rate, I would say, it’s the market rate for talent in that country. Right. So we are paying market rate or above market rate for a specific level of talent, which is pegged to what they get paid in. In the Philippines. For example, if I hire Senior Manager out of a BPO, company, business process, source business process outsourcing company, to come work for a client, well, my salary I need to pay him is pegged against what they’re actually getting paid now, and then we just translate that into dollars. Right? So, you know, everything we do is, is pay and this is just common industry is pegged to dollars. Okay, you know, so if the, if it fluctuates, the interest rate fluctuates, they’re still getting pegged to dollars. Right? It’s a very, it’s very stable, right. So if all of a sudden the peso was worth half as much, they’re still getting paid in dollars, right. As opposed to Pesos. You don’t have that you have that you have an issue because now you can buy half as much. But it is true that you know, Peso for peso, it goes much further in the Philippines, then it would be the dollar dollars.

Michael: I remember we had house cleaners that would come in and work for us part time, and we paid her I think it was like 100 bucks a month. And that covered doing everything, it was ridiculous how much $1 will go there, and we’re will actually buy? Can you tell me what kind of services or what kind of professionals we can hire from your site? I’ve seen bookkeeping on there. I’ve seen different services that you guys specialize in. If I were to hire a bookkeeper in the Philippines, can I trust them? 

Matthew: Oh, 100% by bookkeepers in the Philippines. And that’s for my you know, seven figure ecommerce business. I listen, I can tell you that it would never happen. I have not encountered dishonest people in that way. Where I’m worried about if access to credit cards, things of that nature, I just haven’t encountered and of course, things can happen. They’re incentivized to keep their job and to do a good job because you’ve created a good work environment. I think that’s the most important thing people need to remember. Right? They’re incented. But they’re not incentivized to steal. They’re incentivized to feed their families and to, you know, to just do the right thing. 

Michael: Yeah, I wouldn’t necessarily be worried about maybe, well, like, I know, you brought it up. But that wasn’t really my concern and nefarious nature of someone stealing my identity. What would concern me more is, you know, do they know tax rules? Do they know proper accounting procedures? Do they know? Am I going to get my reports back at the end of the year and have it all completely messed up? Because they didn’t really know what to do in the US versus the Philippines?

Matthew: Yeah. So you have so let’s just go down this bookkeeper path, right. So you will have bookkeepers that know how to do us books. But you still just generally speaking from a financial perspective, you still need an accountant or someone else to review. That person shouldn’t be it, to review to make sure they’re things you didn’t mess, like, did they quote something as a balance sheet off? Because they coded something right? So you still need to have someone check it? And then you have books delivered that are correct, right? So you still need to do that. But they have people who have been doing us books for years, we find like our bread and butter actually is what I would call the chief of staff or business manager, where we find someone and you can think of as a project manager or EA on steroids. It’s someone who can take off 80% of the tasks on your plate, run all the operation help you run operations. And you can get what I get every single morning, which is I have two businesses, right? I get a Slack message with an overview of what’s going on in every each business. Here are all the different areas that are marketing inventory from a commerce business, you know, sales, any, you know, employee issues for my agency, and here’s what you need to do also. So she says, here’s what’s going on. Here’s what you need to do. That’s what I need from you because you’re a roadblock. I do this and I go about my day. Right? And so what she’s doing is quarterbacking my entire business for me, which I am all of a sudden so now I can do high value things like talks about you. And I don’t have to worry that, you know, someone didn’t do this project or there’s a client issue. She’s take overseeing all of it. And now it only when it raises to the point that it requires my attention to why am I aware of it? Right, which is basically, which is how most larger businesses function, but I’m doing it at a microcosm at my scale, just applying that. So we find we can find people like that we find general virtual assistants, they, you know, they can do social media, Facebook, though, you know, graphics, those type of people that are, I would say, are the next level down where they’re generalists and could do a lot of the things you would need, let’s say, for this podcast, you can find podcast managers, you can find experts in Amazon, we just placed two people with Amazon Pay Per Click experience. So Amazon advertising, Facebook advertising, you can find all these people, because the truth is the back end of many businesses that you know, it’s already in the Philippines, Facebook, Google, they’re they’re all there already. And you’re just tapping into that network.

Michael: So could could I possibly hire a personal assistant that could answer calls, make calls, do stuff like that? Or is it mostly online?

Matthew: No, absolutely. My customer service team for my ecommerce businesses in the Philippines. Okay. My chief of staff, I have a 100. I have two people out of 66. One is in Colombia. One is in the Ukraine, but everyone else was in the Philippines. Interesting. And they’re from I mean, you Summit, many people, you could if you met my Chief of Staff, you would not know she’s not from the United States, you wouldn’t know. You know, it’s just I think a prejudice that many of us in the United States have, like, we can’t imagine that, you know, that people have excellent English overseas, they are as competence. And all these things, I just think we don’t in United States, we have very US centric view. But the truth is all over the world, I mean, not just the Philippines, there are incredible professionals who are just want to work and are eager to be loyal to a company and love working for the people in the United States.

Ryan: Okay, so I wonder if we could go down the path in maybe like a little virtual journey of how this might work? So first of all, maybe we take your experience and sort of, you know, let’s begin with? At what point? Do we know that we need some help, right? Because like, we were talking earlier about entrepreneurs wearing many hats and doing all the things we do, you know, at what point or what did it take, or should it take for us to recognize that it’s time to bring on some help and, and make the decision to outsource?

Matthew: I would say at the point where you just even had this thought that Oh, my God, I’m getting sucked into things. And it’s stopping me from doing more client work or growing my business, if you think you’re being held back by any stretch of the word, then you should go hire somebody with if ands or buts you know, take 80% of the items off your plate, you know, divide your day into two to two columns. strategic and tactical, strategic is anything that requires your thought, your experience, you know, a sales call, right? That’s strategic, right. And you can actually even outsource that, but let’s say, you know, your client work that’s strategic, tactical, is everything else. So onboarding, a client’s managing, certainly managing your email, but managing sales flow, like protecting, you know, protecting you from the world. So everything that bubbles up to use higher value, managing projects, all these things are not high value tasks that should be outsourced to a new team member. And depending on who you are, and where you are financially in the cycle, I would say, the second you have any sort of real work, go get someone had to do it, go get someone else on your team. So you can start delegating, delegating, delegating, so you can go faster.

Ryan: Okay, and so and what does that relationship look like? So, for example, if somebody was engaged with the team like yours, I mean, do you have a pool of professionals that you are using? And these are people who are in your employer in the Philippines, for example? Or is your team more of a, I guess, for lack of a better term, like a recruiter like you then go to the Philippines, and find people to fill these roles?

Matthew: So it’s, the answer is actually it’s both. So we’re building a bench. So I you know, for perspective, I started this agency business in May. And you know, we’re scaling extremely quickly, right? So by the end of this year, my guess is well, about 150 people. And so we’re building a bench, right of people that we’ve talked to, we’ve interviewed three times, and we like, and we’re also doing this, but if we don’t have someone we like we’ve interviewed, we then do a bespoke search for you. So for your $18 An hour employee, we’re actually doing a search like if they were 150,000 Actually headhunting recruiting and it’ll take you know, a few weeks, then, you know, we find them you interview them, do you like them? Great. If not, then you know, we tell us why. And we go adjust and go find someone else for you. And we just repeat the process. Typically speaking, we get it right the first time to be honest with you. Because we know the profiles, it’s really only five or six profiles we’re typically looking for. And we, at this point, we know, as well as people are going through three interviews before they even see the client. Right? It’s not it’s not like, the age thing where like, oh, yeah, here you go. Here you go. Now we’re actually interviewing for your specific role.

Ryan: And how could somebody you know, for example, if somebody tries to engage with you guys, maybe looking for their own Angelica, who was your chief of staff, or your operations manager that you came across, that was your perfect fit? If somebody’s looking for somebody like that, who can maybe resurrect a business or save a business or, you know, take a business that’s not doing much and get it moving forward? Like, how do you find that individual like, hey, if so, if I came to you and just said, Okay, well, here’s all my problems. I mean, do you try and fill that with a an individual? Or do you try and hire a team? Or like, how would you, I guess, address, you know, some small business that that’s on the grow, and needs support, maybe across sales and operations and sort of all these different buckets?

Matthew: Yeah, so what we do is, we only do full time hires. And the reason I only do I do this is because you can get the best people, if it’s a part time hire, and it’s only, you know, 20 hours a week, guess what, they’re getting a full time job also. So now your stuff comes forth, right? It’s just, you’re not gonna be the highest priority. But I would sit down with the client, and I just talk to me about your business. You know, I’m coming from the perspective of an entrepreneur, where I run an E commerce business like this, I have entrepreneur, other entrepreneurs, I’ve started other companies. And so I’m looking say, Okay, well, here’s all the challenges you face, let’s bucket the tasks, and maybe you know, what’s one person? There are times when I tell people there are no unicorns, if you want to be a unicorn, find a unicorn and go pay $400,000, right, because they exist, but they cost $400,000. So for what you want, like, if you wanted an act like someone is an engineer, we don’t do engineering. But let’s say you wanted someone who knew engineering, and could oversee an engineering team and oversee a marketing team. And it’s just, it just doesn’t exist, right? It’s not. So I would say, okay, that’s two people, or that’s three people. Typically speaking, most people have a list of, I must have, and a list of I, it’s nice to have. And so we try to nail all the must haves in one person. And then from there, the team develops a profile, sends it back to you, we do it like, you know, you approve the job description, then we go out and we start sourcing if we don’t have them in the database.

Michael: So I’m gonna play devil’s advocate here. And I don’t want to want you to take this wrong, but yeah, hurt my feelings. You’ve brought up $18 An hour a few times. Now, is that about an average price that I would pay to hire someone?

Matthew: So I would say it depends if you want someone to help run your business 16 to 18. 

Michael: Okay, in the US right now. We don’t even have a minimum wage of $15 an hour. Couldn’t I just go and hire someone for $12 an hour as a personal assistant here stateside that I would have working my normal hours?

Matthew: I mean, could you of course you could. But I’m so by the way, these people will work your hours just age. But of course you could but what level of experience are they gonna have?

Ryan: I guess that’s the point, right, is that you might get a higher level candidate for that 12 to 16 bucks an hour or whatever in the Philippines, versus you know, the skill level that somebody who might take a $12 an hour job here in the states would have?

Matthew: Yeah, and it’s look, it’s my it’s not, it’s just you’re talking about people with, you know, 10 to 20 years experience it, like helping businesses. versus, you know, someone it’s 12,000 around the United States is not someone who’s going to help you run your business. Right? Now, if you’re saying like, I just need an assistant to do some email, maybe, right. But if you want someone to, to, like higher level thinking, a wide scope of tasks, oversee projects, including international contractors, and really just get you out, so you’re protected. You’re not going to find anything like that United States below, maybe 35 an hour. Like realistically, even when you start talking about like go to the Midwest or things like that. It’s just doesn’t in my experience, it doesn’t exist.

Michael: Yeah, I personally would like to see, you know, more jobs stateside and trying to help our own economy but at the same time, like I completely understand that, you know, outsourcing you not only have their quality candidate for a little bit less, but you’re also not necessarily stuck with providing benefits and paying taxes and providing all that other stuff for that person. as well, how does that work? Is there does that come into play?

Matthew: What absolutely comes to play, so don’t forget, whatever salary you pay someone in the United States, if they’re an actual employee, you have to add 20% for benefits and taxes, that’s roughly 20 to 30%. But, right, so if you’re paying someone 30 bucks an hour, you’re actually paying them 36. Right. That’s roughly how it works. And you know, and now you have also employment laws and things like that, instead, you’re using a service, like, let’s say, like mine, or you’re contracting with someone directly. And it’s a typical contractor arrangement, right? In our case, we pay for benefits, we pay, we pay for our healthcare, medical, dental life, we pay for internet, make sure the high speed internet, we require we ask clients pay for one week vacation plus US holidays off, and we have a support system to actually support you. So there’s like infrastructure there. But the day you’re done is the day are done, and you just get the balance of your money back for the month versus in the United States. There’s a whole other level things that you need to do. Right, you know, just as a contracting arrangement, you don’t have to worry about all these other things that United States. I mean, I understand what you’re saying about things stateside. Right. But the reality of the global business market is someone comparable, is probably going to be up 80 to $150,000. And the United States of what you’re going to pay 16 date, that’s just it’s a third of the cost.

Ryan: Yeah, well, I think it’s interesting too, and maybe the pandemic prove this out a little bit, I spent a lot of time in and around the remote working space and can doing a little bit of consulting on remote work and that sort of thing. And one of the things that I’ve sort of discovered is this sort of concept of this global economy. And I mean, in the you know, small version of it, or one version of it is, of course, you want to have the tax base in your own country, and you want to do that kind of thing. But if you flip it around, instead of looking for an opportunity here, you’re just providing an opportunity for another human being, right, this is another person, maybe they don’t live here, maybe they weren’t born here, maybe whatever. But But nonetheless, it’s an opportunity for somebody. So why is that person less, you know, a, you know, how is that person somehow less because they were born somewhere else. And so I think it’s really important, especially as we start shift to you know, it right now, during pandemic two more online, but you know, whatever comes after, I think that the ease or the comfort with which we hire people from other countries, is going to just continue to increase and keep getting better.

Matthew: In my opinion, and, you know, companies will now be built with a component of a remote workforce overseas. I don’t I think the next generation of entrepreneurs, that’s how they’re thinking, Well, you know, look at the look, you know, you look at a city like San Francisco, where it’s expensive. And it’s just, you know, the salaries are expensive, the housing expensive, all these things, many companies are moving to, let’s say, Austin, or they’re saying, Well, why don’t I hire someone in Austin or in, you know, to Moines to work for us, I can tap that, you know, have them work remotely, still be us if that’s what they want. And that’s great. I’m still in San Francisco, but now my dollars go further. Or if you’re starting out, you know, anywhere, it just makes your dollars go further. And if you want to have an office then have an office.

Ryan: Well, and I think as evidence of that, too, there’s a lot of startups right now that I’m aware of that are specifically in the space of of handling money across international borders, you know, like how you can pay contractors, how you can pay people, but still get all the tax documentation, make sure you’re up, you know, compliant in both that country and your own, all that kind of stuff. And there’s a you know, a rash of these kinds of companies popping up which seems to indicate to me that, you know, this is something that’s, that’s coming, not something that’s going away.

Matthew: Well, are you familiar with Upwork? Yeah. Okay. Look at Upwork I mean, it’s built on I mean, that that’s the epitome of of what we’re talking about here. Right that there’s a there’s a market it’s a global market so us people compete, right. And you have to either a competitive on price or skill right so if you’re highly skilled Believe me I go to you know, yes, I can get I can you have better talent, let’s say in Eastern Europe for a great price, but there are things that even at a higher price us talent is better for right so there’s a global market for talent. And you see this just because someone’s five bucks an hour doesn’t mean they’re good. Right and if you’re so you see this and this is in my opinion, the future

Ryan: Yeah, a couple things on Upwork so me for example, I employ right now a copywriter who I found through up work but She happens to be located right here in Salt Lake City where I’m at. And, you know, but so I mean, you know, I think there’s some misconceptions about Upwork, that it’s strictly there to kind of hire your $2 an hour, whoever, from wherever. But you know, but I hire or pay this woman and she, she makes a very reasonable American style salary through this website, but I was able to hire her through Upwork. And Upwork offered me he was basically just access to a network of professionals. Certainly, when I tried to get one, you know, I mean, we have the people from you know, EA, Europe and Asia and places like this all chipping in, you know, trying to make proposals. But ultimately, I pick the person who was most capable, not the person who was the cheapest, right? So I think, to your point, you know, it’s not really about doing a hiring somebody just because they’re cheaper. It’s, again, back to that idea of stretching out dollars a little bit money to–

Matthew: Go meet somebody, if I beat somebody $5,000 a year for my engineer on Upwork. Right? It’s not, you know, it’s it is not the land of the $2 an hour person always.

Ryan: Yeah, and it’s funny, because I remember, in my youth, when I was more of like a freelance designer, I tried competing on that platform, it was Elance back at the time, but it was, but when it was Elance, like, you know, my big struggle as an American designer was fetching a fair rate, because I was losing to all these guys that were willing to do the work for five or 10 bucks an hour. And eventually, like you said, it’s about being competitive on not just price, but skill, right. So I was able to maybe out skilled the $10 guy, and so was able to sort of find my place. And ultimately, Elance never worked that well for me. But I remember having thoughts that it was sort of exploitative at the time to you know, take advantage of these people in these small countries. But then what I, I sort of came to realize, and I think it’s true now and outsourcing and these are think of some of the stereotypes we’re trying to overcome without sourcing is that, you know, ultimately, it’s a global market, right? I mean, people will only take the job for what they’re going to take the job for, right? I mean, you’re not being strong armed into doing this work for five bucks an hour or 10 bucks an hour, or whatever it is, I mean, you’re choosing, you have the opportunity to choose to do the work for that amount of money, and you don’t have to. And so when I when I had that sort of realization, it helps me recognize that it’s not about exploitation, it’s about providing opportunity. And you know, if people can do the work, or if they’re as good or better, why shouldn’t they have the opportunity?

Michael: Well, and I, like I brought up earlier, the dollar to peso exchange rate provides a lot more to someone in the Philippines than someone you know it stateside. So that like that website project I was working on. A few years ago, I got a bid on Upwork to get that project done. And finished in was about $50,000. If I were to go stateside with that and hire the same level of talent in the US, I’m paying a firm in the US 150 to $200,000, to do the same project, just because the dollar goes so much further in, in a market like the Philippines.

Ryan: Well, and like, like you’re saying, there’s an opportunity to get that website done for $1,200 to but what are you getting? I mean–

Matthew: yeah, it’s no different than when I started, you know, I was like, Oh, buddy, we’ll hire some are $4 an hour, right? Guess what, I had all sorts of challenges. And, you know, you just, it’s the talent for the price. Like, I speak to people all the time that said, Yes, I went the cheap route, I just want the good route. And good, will always be cheap. And you know, every step at a time, and people at the end of the day want to pay for quality. Now there’s a quality, there’s a quality balance you have to make, right, you know, is are you getting a marginal benefit for paying that much more. But, you know, for the most part, you know, if you pay up overseas, the answer is yes, you’re getting, like you said a lot of value. I mean, $50,000 it’s not a small website. It’s not cheap. Right. So $50,000 

Michael: Yeah, yeah. And that’s also–

Matthew: that’s 50. That’s still $50,000. Right? And you’re just paying market. So you’re not, you know, people think like you’re exploiting people. No, you’re paying market. I do not I have not negotiated one salary, one salary. Since I started my agency business. I do not negotiate. Even my ecommerce business. I don’t negotiate. Tell me what you want. Either I say yes or no. Right. You want to raise if you think you’re worth this on the market. Fantastic. People they’re not you know, just because they make less money in our mind doesn’t mean they make less money in their country. And it doesn’t mean they’re stupid. Well, they know what–

Michael: the housekeep that that I hired when I lived there. Yeah, so I was paying her about 100 bucks a month to do a lot of work. But that $100 was more than most of her friends were making, at the time, doing whatever their normal job was, she was actually really well paid in compare in comparison to some of her friends that were there. So I I totally know how that works.

Ryan: Well, and it’s all a matter of perspective, right? I mean, for that woman that was a sub, that was a good amount of money to make for that work and shit. And she decided to engage in that work, she made good money. And it was totally fair to her, she also had the opportunity to not take the work if she felt like it wasn’t enough, you know, so I mean, so I think that there’s some some liberty there that, you know, we need to, I guess, recognize the the autonomy of people, right? I mean, I think we have this knack to apply these, you know, some of our biases, because we’re here in the States or whatever. And we sort of, it feels like, well, here, I’m giving you this money, like, just take the job, you know, you’re gonna take the job, because I’m this, you know, big, boisterous American, who told you, you have got this opportunity. But the reality is, these people have the opportunity to choose the work that they want to do. And, and I think that that’s, you know, great to provide them these opportunities that might they might not otherwise have.

Matthew: It’s a pretty fluid market, guess what, if they feel you’re, you know, you’re actually oppressing them, we’ll just get another job, it’s not gonna be that hard for them, there’s a lot of opportunity, given the arbitrage, there’s a lot of opportunity for people. And you know, when you start to get into, you know, higher ends in their market hiring, you know, I hired hired recently, someone who ran a 2000 person division, believe me, this guy is not getting oppressed. He’s a legitimate executive, right now hire people like this all the time. And the prices of this is his rate, and he’s getting an executives rate. So it’s just hard to wrap your head around, because you translate that back to, well, this is poverty in the United States, but it’s not necessarily poverty in another country, if they’re making, you know, 1015 bucks an hour.

Ryan: Sure. So let’s get back a little bit to this journey, or how this works. So we’ve decided to make the decision to outsource we’ve decided, We’re just for sake of argument, we’re in the need of somebody to help us with operations, we need to get our business in order. We need to have somebody start developing processes and things like that, so that we can actually run a successful company. So I come to you. And what’s that process? Like? I mean, we sort of touched on some of the aspects of the interview process and how you hire, but what is the process like when I’m working with you to facilitate this?

Matthew: Sure. So you and I would jump on a call. And just like you’re recording the podcast, I record this call, we talk go through, you know, series of steps and determine exactly what you need, who you like to work with, what are the challenges and really just understand the job, right. And then from there, I hand it off to my team, I actually say, you know, as far as I outsource the rest of the process to my team, and the you know, do our sign some my Chief of Staff manages the process, the recruiter that we’re putting the recruiters will create a job description and get it back to you within 48 hours, you approve. And then depending on what the role is, let’s just say it’s going to take five weeks to get somebody and we spend the next five weeks searching for interviewing vetting people all before you see someone this isn’t someone applied. One interview, hey, they have a heartbeat, let’s give them to you this is we really interview them for the fit. And it’s going through two to three interviews before it gets to you. So it’d be my my initial recruiter, my chief of staff, then I review the videos and then possibly made depending on if I want to ask certain questions that I didn’t feel were sufficient. If they pass through all three, and we’re all looking for different things. They’re looking for Filipino items plus the job of meeting the job in their experience. And I’m looking for American style filters. And once that goes, then it goes to the client client interviews, they say yay, or nay. If they say, Yay, then we figure out a start date. If we say nay tell you tell me why then we, you know, adjust the filters. And then we keep on finding, typically speaking, it’s the first person to be honest with you.

Ryan: So once this sort of virtual handshake has been facilitated by your team, what does the next step in the process look like? So I mean, is onboarding going on between me and my Angelica? Or do you guys stay involved in this process to make sure things are going smoothly? Like, how does the next step go once we’ve made a decision to hire?

Matthew: Sure, so you’ll be assigned an onboarding manager. And these are actual professionals who do this. So I just hired someone who ran onboarding for BPO. My other person ran training for a BPO. And so they will walk you through to understand what tools are needed to make sure that’s set up. Understand the tasks, make sure expectations are set, make sure you have task management setup, if you have it great. If not, we’ll help you with that. If you don’t have SOPs, we’ll walk you through how to create it. And we’ll help you with that. If you need dashboards for KPIs, we’ll help you with that, as well as you know, really just making sure you’re set up for success from the beginning. Now there are some clients, I just had one where he’s like, I’m good to worry about like we’re good. You found me the person that’s what I want. I want you to get help when needed. But otherwise, I’m fine. Other clients need the whole treatment. It’s really up to you. So –

Ryan: yeah. Yeah, it makes sense to me that somebody who might come to you for like an Operations Assistant, for example, may not know what they don’t know. Right. So in terms of getting set up and running, I guess that’s where I’m asking about the guidance component is, you know, if, if you’re not aware of what you even need, well, your operations professional, the person that you’ve employed now, through your agency, be able to help I guess, establish those practices and things like that, that maybe a more established or more mature business might already have. But if you’ve been focused as a tactician, who’s really good at I don’t know, wood carving, or whatever your thing is, you know, but you don’t know how to actually build out your business. I mean, will this operations person be able to come in and sort of help that? Or do you need to provide the guidance to make that happen?

Matthew: No. So it really depends on what you’re hiring for. But let’s just say you hire this person who’s really cheap a staff level, they can just run stuff. I mean, that’s why you’re hiring. So you say I, you know, I don’t have a project management process, I don’t have a process for billing clients. So I build clients, it’s all over the place, right? They could put in structure do that, you can get people that have six sigma certification, if you want it, right, Six Sigma is an operations certification permanently for manufacturing, but it is used in day to day business operations, you can get people like that you can get people with a lot of project management experience. So many times they’re gonna have, they’re falling back on a set of experiences. And you’re, you know, they’re gonna step in, and you’re saying, Here’s my universe, and this is what was done for me, I had processes when Angelica came in and made them a lot better. Here’s my universe, let’s go through and I want you to, as time goes on, develop out the standard operating procedures, write them out, you know, so, you know, when we hire the next person, they just come in and understand what it is, we also will work with that person to make sure expectations are set over the next 90 days.

Ryan: Okay, yeah, no, that I mean, it sounds pretty incredible. And I mean, like, I know, even in my own business, you know, we have some shortcomings as it comes to process or more, I should say, more documentation of process and process. And, and that sort of thing. So as we’re talking, you know, about your Angelica, I’m getting wildly jealous that I needed my own Angelica to come in and just like, make sense of the pile that we work out of every day.

Matthew: Like you working for your business. And that’s really what it comes down to why why wouldn’t you want you just in another country? This is, you know, think about it like that. Right? Answers. Yes, I would want me to another country.

Ryan: Yeah. Yeah, no, I think it makes a lot of sense. So okay, somebody is on you sort of had explained that this is kind of like a, you’ve hired a contractor more or less our relationship is with contractor. So you mentioned though, that it’s full time work. So say, for example, I’ve hired my Angelica, you guys helped me find her. And so do I then now pay you or is my relationship with Angelica?

Matthew: Yeah, so So we’re the agency Angelica works for me, right, and you’re contracting with me as a US company. And I’m paying the benefits and making sure they get paid on time, and doing all these things for them, as well as giving them like, education opportunities, and things of that nature. Right. 

Ryan: So in terms of the financial relationship, it’s with you here stateside. So there’s no like weird tax stuff that we have to be aware of, or any of that kind of thing. Yeah. And then in terms of terminating relationship or something, or if it’s just not working out, I suppose your team helps councils, counsel us through that make a decision and either move forward or not.

Matthew: Yeah, exactly. So, you know, what will happen is a lot of times the big business needs change, right? So I had a client who wanted a business manager. And then it turns out after three months of this person organizing his business, it was really happy about this, he really needed a development manager, different skill set, right. So he, you know, we don’t do that. So he, you know, he said, Okay, you know, by the way, contract is going to end, this is the date, great, we can tell the person or you can tell the person, typically speaking, it’s not, unless it’s, I haven’t run into a contentious relationship, because we’re able to head those off. But we can’t, we’re happy to communicate or you can and then we come in support whatever you want. And the day you start, the day you stop is the day you stop paying. If there’s money owed to you, you get money. If you want us to find someone else, we can find someone else, it’s up to you.

Ryan: So effectively, though, I mean, even though you basically handle all the financing, all the payroll, all this part, the relationship that we have with our Angelica is still one on one, like we’re not working through an intermediary, that person and I, for example, are running our operation together, kind of thing. So you get the, I guess, sort of the benefit of the employee type relationship. Yes, maybe facilitated or managed a little bit differently.

Matthew: Right. And we’re rolling out a process where we’ll do quarterly reviews for you of that employee. So you don’t have to do that. Right. And we can take more burden off of you. If you need extra help. There’s always someone else there to help but day to day you are managing the person as if they’re your employee. Right? You just don’t have a lot of the burden of the ministration and all the backend stuff of running an international team.

Ryan: Right? Yeah, yeah, no, I think that makes a lot of sense.

Matthew: Yeah, it’s different look, it’s different. I just built something because it because it helps me. And so I just said, Well, why don’t I start a business to help others? And I love it. I, um, you know, it’s funny, because a lot of people talk about product market fit, as you both know, right? It’s the right price. You know, my ecommerce business, I product market fit. I’m one of the largest wanting favorite sites on the Internet. But what I don’t have is business entrepreneur fit. I’m just not an ecommerce guy, I realized that, you know, through running the business, that on just the wrong guy for that business. I know plenty of ecommerce people. And Og just won’t be as good as they are. Right. And as opposed to this business where day in day out, I just get to help people. And it’s fun. And for me, it’s fun, right? You know, I get to talk to you, I get to talk to clients, I get to solve problems. I talk to people all the time who weren’t ready for us, right? I don’t view that as a waste. I view that as an investment. And I just like giving back in that way. So it’s really, you know, this this entrepreneur fit for everybody just really think hard about it. Because you’ll see your business grow. My business is growing much faster, when I’m the right person for the business than having a business that makes money and I’m just the wrong person.

Ryan: Yeah, yeah. No, I think that makes a lot of sense. So as we’re starting to get towards the end here, I wanted to ask you just one more thing about sort of, I guess the types of roles. So we went into, you know, we’ve talked a lot about like operations type stuff. But I wonder specifically about like business growth type roles. So can you reach out to people that might help with sales and things like that? And how does that work? You know, internationally? Like, I mean, are they aware of sort of, I guess, American style, sales, customs, and that sort of thing.

Matthew: So in my experience, it depends. We’ve had some success with people who are doing appointment setting, that’s a very common thing where people just set appointments for you. So you know, they’ll pound the phones, you know, in one customer, we have a manufacturer, and they have a customer list, and they just want appointments for their salespeople. So we’ve set that up, you know, for them. American Sally, true sales, I think it depends on the industry, right? So for my business, we can have sale like in the next three months, I’m going to hire a sales team, and then most likely be based in the Philippines, but it fits the business. For other businesses, it may not in my opinion, this is my opinion, it may not be the right fit appointment, setting someone just to get an appointment. Not a problem. But to get that just American style sales, I have a bias towards, you know, you’re gonna people may think, Hey, this is another company overseas. Who are you? And I just think that for a lot of businesses, sales is not the right, there’s not the right fit that it should be an American salesperson. That’s my opinion, my bias doesn’t mean – 

Ryan: Yeah, but I think it makes sense. And I think you’re right, that it probably depends on the industry. And it also probably depends how you do your sales, right? If it’s if it’s one on one, versus placing ads and doing marketing, you know, kind of stuff that could be done behind the scenes, I suppose it would vary quite a bit. So maybe that’s too broad or too broad of subject.

Matthew: But my customer service, no, look at my customer service I have at the current moment, one of my ecommerce businesses is gift baskets. I had my head of customer service was in the Philippines. She’s amazing. I said your corporate sales, now corporate sales can be 1020 $30,000. I was nervous, this can be not one not a hiccup. She you know, service to clients, her largest sale was $90,000 blew me away. Right. So, you know, I, like I said, like, I have a bias towards this. But the market may be actually different.

Michael: Yeah. So we’re kind of at that time, do you want to tell people where they can find you and how they can reach out if they’re in need of your service?

Matthew: Sure. So go to extend your team dot com. And you’ll be able to contact me through there. And so a bit about our services also connect with me on LinkedIn, just shoot me a question. I love to talk to people. You know, give it you know, if I can give you advice on how to even if you’re not the right customer for us, I have no problem just saying hey, think about these five things as you go on your own journey. So please contact me up with me on LinkedIn, or connect with me off the website, you can book a meeting directly or just shoot me

an email. 

Ryan: Yeah, I love that. And I really appreciate you taking the time to meet with people especially I mean, this this conversation has been enlightening, but I think it’s really important as we you know, talk about outsourcing and things like that there are sort of some negative stereotypes and and trepidations that people have and things like that, that we need to work through and overcome. And I think that gets done through more discussion and more education about the process. So I really appreciate you taking the time to visit. 

Matthew: Absolutely. It’s been fun. All right. 

Ryan: Yeah. So thanks so much, everybody who tunes in this week and every week and then we’ll see y’all next time.