Working with the Philippines
Howdy y’all 🤠, and welcome to my second blog post!
So you’ve started a business and you’ve got sales to make, customers to serve, and back-office administration to tackle. You started hiring in North America or Europe, but you’re doing some basic math, and you’re thinking sh*t, that venture round isn’t going to get us quite as far as I had anticipated.
Someone told you they’ve got a team in the Philippines, and they’re great. You thought, hey I should look into doing something like that, but you never got around to it. In a world where working remote has become even more the norm (Stanford economist estimated fraction of worker days that are remote will increase from 5% pre-pandemic to 20% post-pandemic!! source : here), you know this is really something you should look at.
Well, you may not have looked into it yet, but the good news for you is that I have, and this post is the more than likely the way ;) cliff notes of how to work with the Philippines.
My Journey
The reason I went deep here is that my last business Setter was a Home Services Concierge. Our product was the pros, the software/UX we wrapped around it, but also in large part the concierge itself. At first we had a team entirely based in North America, but it was costing us a fortune, and the unit economics of the business made no sense. So, in an effort to make it work, we embarked on learning about how to work with the producer of the world’s best mangoes (and yes, from first hand experience, I can confirm that the Philippines has better mangoes than Thailand).
In my journey to work with the Philippines, the first thing I did was hit google, which led to the discovery of the BPO industry. Business.. process.. outsourcing.. My first reaction was this sounds both incredibly boring and like the kind of thing a big Telco uses and was never going to work for us (not far from the truth actually) But I had a couple calls, including with Alexandra at the SnapCommerce team, and it sounded like that’s what folks were doing.
My business partner David set us up with MediaMint to start. In theory it was exactly what Google and the general public suggested, a BPO. But the results were less than ideal. Customers started to clearly notice they were interacting with a poorly designed if this then that (IFTT) framework and were not pleased. 5-star and NPS dropped. It also didn’t seem to be nearly as economical as we’d anticipated (big hairy guess : I bet the BPO kept 66% of the fee for overhead and margin).
Nevertheless, as a home service concierge, we didn’t have the option to fail on offshoring. I figured maybe a different BPO would work. Brandon, who led up our San Francisco business, identified one and we tried that. It was much the same story, although maybe a bit better. The challenge was structural : the firms were designed around optimizing for response time per cost. To do so, they would rotate folks in and out according to customer load. The issue with that is that having folks that worked fractionally with us meant that they never really understand our business, and their lack of home services knowledge frustrated customers. Might work in a Telco, but not in a high end consumer services concierge.
At this point, we were pulling our hair out trying to figure out how we were going to grow revenues, increase NPS, AND reduce operating costs. Among other levers, I was still convinced there was a better way to work with the Philippines. Around then, I called my former McKinsey colleague Danny of Bld.ai who I also mentioned in Creating leverage when hunting. He had previously founded a company called Kalibrr which was a platform helping folks hire in the Philippines. He recommended a bit of a contrarian path, employ directly. So we tried that.
While I had found folks on Upwork prior, I was after a higher-caliber and more invested colleague, and I wasn’t quite sure how to go about sourcing them - e.g. while I know what makes someone a strong performer in North America, I wasn’t quite sure over there. So I had a bunch of conversations with anyone who knew about the Philippines that was willing to talk with me. In addition to markers of high performers, I also wasn’t sure where to find them. Danny naturally pointed me to Kalibrr, and I also listed on Upwork as well.
After probably 50+ interviews, my colleague Jaclyn made our first hire, Abby, and she turned out really great. We paid about half what we were paying via the BPOs (which still turned out to be far above market) and Abby was far more productive and quite hilarious too. Not too far thereafter I hired a team member named Angelica who told me about how her whole team of 70 had recently been let go as their North American-based digital real estate company had just gone bankrupt. I was intrigued. Sounded awfully similar to what we wanted to set up. I asked to meet with her boss, whom she adored, and that’s how I met the rockstar that became our team leader there, known by all his former teammates as “Boss RC”. Well, it wasn’t quite so linear. I did fly down to Manila and meet with over 40 folks to get the lay of the land and make sure that I was hiring the best, but indeed, he was and is the best.
Over the following year, we seriously integrated the Philippines into our way of working, grew a team of 30, and secured an office.
I was and am still blown away by the alpha that can be created in an operational business by collaborating with the Philippines. Through that journey, here’s the Cliffs (**Bryans) Notes about what I learned :
BryansNotes
There’s lots you can offshore. Our team in the Philippines was operating in functions like Business Development Representatives (BDR), Sales Development Representatives (SDR), Customer Service, Research, and Accounting Support. That, however, just scratches the surface of what you could theoretically offshore. See below a table that outlines a few more.
Don’t work with a traditional BPO. If the Philippines is going to become a big part of your business, employ directly. You’ll skip the middle-man margin-layer, and you’ll have team members that really care about your business, and your customers (realize in the other case that a team member reports to a manager who reports to a manager who collaborates with an account manager who has multiple client relationships of which you are one). If you prefer a hassle free-experience, try to find a firm that understands startups.If you do go BPO, tryTaskUs. There’s a whole slew of BPOs, some listed below, but word around the water cooler in Silicon Valley is that they’re the best. They’re known to understand startups, be the best place to work, and therefore retain employees. Can confirm that based on conversations on the ground in Manila.When hiring, look for the following markets of success:Schools. You want folks that studied at University of the Philippines (especially if management or accounting), Ateneo de Manila (for management), or De La Salle University (for STEM).
Previously employers. The following are some of the companies that are reputable and have a great filter for talent.
Startups. Setter’s acquirer Thumbtack is actually one of the largest employers there. Rocket Internet Companies are also great talent filters : specifically Grab, Lazada, Zalora, Foodpanda, or Easytaxi.
Corporates. P&G, Unilever, Globe, Citi, HSBC, Nestle (for their management training program specifically), Shell, McKinsey, BCG, or Johnson & Johnson (for their management training or sales bootcamp specifically).
BPOs. See list of firms by size below. There’s various levels in BPOs of which the notable ones are : Agent (individual contributor), Team Leader (oversees 10-15 team members), Operations Manager (oversees 100+ team members), Operations Director or Head of Philippines (1,000+ team members).
# of Employees by BPO as at 2018 (data a couple years old, but gives you the idea!)
Expect to pay about 1/2 NA rates for similar skill level. This can be a sensitive topic so I’m going to skip discussing in this post, but feel free to reach out to me if you’d like perspective. In short, you should expect to pay about ½ what you’d pay for similar talent in North America. Compensation typically includes base pay, some performance pay, and also benefits. Benefits specifically are considered key in the Philippines.
Received some feedback on the last post to break it up even further so I'm going to end this post here. If you’re considering setting up a team and/or want to learn more about my experience, feel free to reach out!
As you can tell, I’m messing around with content and formatting and reacting to feedback. If you have a couple minutes please share do share feedback so I can make these letters ever more worthwhile. Loved it😍 , it was OK 🤷, it was boring 🥱.
You can also reach me at altmbr@gmail.com, or on twitter @AltmanBryan. Also if you like this post and want to see others in your inbox (and for avoidance of doubt this is free) 👇
Bryan