Why did you decide to start PartnerHero?
The truth is I had failed as a founder/CEO with my last startup and I desperately needed to understand if I could learn from that experience. I wasn’t sure I would be able to raise capital again given what had happened at my last startup and I had a ton of self-doubt. I had an idea based on working as an executive at Accenture and working with Fortune 500 companies and then startups and seeing how incredibly different they are. I had a thesis about how to bring services that are traditionally only accessible to bigger companies to startups. And I had this personal albatross I had to get rid of. That’s really why I started PartnerHero.
What was your vision?
My vision was to productize services in the same way that the most interesting startups had created new business models or experiences for their offerings and technologies but apply that to something that had not had much innovation: outsourcing. I started with the idea of: what’s so delightful about Netflix or Dropbox? What was delightful is that it was really easy to start and really easy to cancel, it just worked. The alternative was cumbersome and difficult, going to a store and going through a catalogue or videos, or sending files back and forth and wondering where files were. What would it look like if we did something like that but with something with a big barrier to entry and bigger to exit, like outsourcing? At Accenture our average deal was 7 years - that a big commitment. Most startups can’t plan 90 days out. What if we started with the premise that if this doesn’t work you can just get out? Designing outsourcing with that criteria in mind had never been done before.
Has anything about the vision changed?
Yes. A lot of my focus initially was on the partner facing experience. Putting our agreement online. Making our rate card public. There’s no sales person, you fill out a form and it comes straight to me. Now, when I think about the vision it's really about where we do the work. Who does the work. How do we empower them? How do we create long-term career paths for them? How do we really extend these opportunities outside of the very tight circles that investor dollars have chased. Silicon Valley, New York, LA, Austin maybe London. How do we extend the impact of this innovation and investment to underserved communities? That is equally interesting and rewarding and that’s how the vision has shifted to really focus on the people side as well.
Is there a story or memory you can think of when something shifted in the way you were thinking about the business?
Yes, I know exactly when it was. It was late 2015 when the business was about 18 months old. We were still very experimental, trying to find product market fit, but there was traction. A partner of ours, an Ops Executive from San Francisco was in Honduras visiting their team. We were at dinner in one of the associate’s homes with their family. He turned to me and said, “how do you do it?” I said “what do you mean?” He said “how do you find these amazing people?” At first I thought he was just flattering me. But he was genuinely curious. We spent the next few hours just talking about his question. I realized I didn’t have an answer to it. I had largely thought that it was luck or maybe somehow, the jobs at PartnerHero were just somehow incrementally better than other jobs in Honduras. I hadn’t realized that all the little things that I had been doing that felt right to me added up to PartnerHero being a radically different company than other outsourcing companies. Honduras has been exploited for cheap labor for over 200 years, first with bananas and the banana republics, then with factories and now, the past few decades, with call centers. By doing things our way, we had stumbled into something totally different. And, as we’ve grown, we’ve learned that there are places like Honduras all over the world, where people have been exploited, really for generations.
If call centers are the third wave of labor exploitation in places like Honduras and the Philippines, what makes PartnerHero different?
It starts off with understanding the systems that big call centers who have been in these regions for a few decades put into place to create advantages for themselves to the detriment of workers. One example is that in San Pedro Sula, the largest outsourcing companies had an unspoken rule as to what the starting salaries for employees would be. And they kept it artificially low to create a ceiling for labor. When we started paying people and our salaries were higher we were called into a meeting that included the 20 largest outsourcing companies - really in the world - that all had operations there. We were asked why we didn’t honor the gentleman’s agreement. Being naive and being an outsider we said, “is this a law? Is this something written down?” In fact, it's illegal, it's a form of price fixing. When we told them we weren’t going to honor that and that we were going to pay people what is fair and right we were threatened by these companies. They said they would make it impossible for us to hire. We ignored it and continued to grow and we now have 500 associates there. We have helped elevate the wages of the entire sector. Even though we don’t represent a significant part of the labor pool, we have a significant enough pool that it has had an impact on wages across the board.
Another example is that there’s a practice in some countries called the 13th month, some countries even the 14th month. Essentially, it means that workers get paid for a 13th and 14th month of work, which sounds like a good thing on the surface, but actually it's a gimmick that is used to keep wages low and to pressure people to stay in jobs that they don’t like. Instead of paying people a fair hourly wage, these companies pay them a very low rate with the promise of these 13 and 14 month payments. It means these companies get to keep the money in their bank accounts longer, earning interest and acts as a mechanism to keep people around until they can access these payments, making it really hard for people to leave roles where they are unhappy and potentially even mistreated. We quickly realized this and took a different approach. We pay people a fair rate every month - this is money that they have earned. We want people to stay because they are happy here and it's the right place for them, not because of some power that we have over them.
Every region where we’ve expanded has their own flavor of these practices. We try to understand what is going on and where we can bring meaningful change. And then we focus on doing those things. One example is our commitment to providing benefits for same sex couples, which is a radical idea in many of the countries that we operate in. Another example is how we think about the difference between an employee and contractor. We’re committed to having contractors feel valued and receive the same benefits, or something comparable, to an employee.
Have you course-corrected at all? Any big challenges?
Our first core value is to be humble so I’m reluctant to say “no, there haven’t been any course corrections.” Speaking truthfully, our thesis has always been that the most interesting companies in the world started off as an idea with two or three people who obsess over that idea, they start doodling and experimenting and they end up with something like ThredUp or GRINDR. I’m really attune to the challenges people in those industries face. A lot of them are existential and I understand those, I’ve been through a lot at PartnerHero and at my other startup. There is no way to TED talk your way through this. You have to go through the valley of fire. You have to go through it to understand what it is to be tasked to build something that hasn’t been done before, that you haven't experienced before.
We want to work with these interesting companies. We’re not built to work with massive airlines or banks or federal governments. There’s a simple test: if it's not work I’m willing to do myself then I don’t want to ask anyone else to do it. And it turns out there’s plenty of interesting work out there.
Behind the scenes there have been a million and one changes, big and small. There have been a ton of Kaizen moments.
How have you seen the mission come to life? Any stories you can think of?
Our software is being built by people who started off in customer support at other companies and were told that that’s your lane, you shouldn’t consider doing anything else.
For example, Clementina is our lead engineer but she actually joined PartnerHero as a Support Associate. She went on to build Compass (our internal calibration and promotions tool) and now she’s building a workforce management tool. Exeli was a content moderator for one of our partners and now he’s managing UX design across our software products. When a startup partner says that they want to outsource Customer Support, we don’t just take that and do the minimum. We wrap our own spin on it and create a multiplier - we think, “what other technology can we apply to improve efficiency or quality? How can we innovate around training?” Doing those things is not only great for our partners and their businesses but it creates real opportunities for growth and learning for associates.
At other outsourcing companies there are executives, based in the US, who fly in periodically. Before they come, the offices get cleaned up. Employees are instructed to not look at executives in the face, they are literally told not to make eye contact and to keep their heads down. PartnerHero local offices are run by locals in that region. They aren’t run by someone in a far away place who doesn’t have a cultural understanding of what is important for people in that location. When we do get together, we go into each others’ homes, we are a part of each other's rituals. We spend time in all the regions to get to know people and understand their gifts. We create meaningful relationships.
The first thing I learned in Honduras and the Philippines is that if someone invites you to a 1:1 it means that you are getting fired. During COVID I’ve messaged 350 people to check in on them. A common reaction is that they think they are in trouble, that they did something wrong. It's because they are coming from a culture of fear and opacity.
This is why we’ve decided not to raise a PENNY of outside capital. You can’t say you want to extend values to these communities and then have some outside stakeholder. The moment you take a dollar you are beholden to growth and to exploiting margins, which comes at the expense of employee well-being. Instead of giving money to shareholders we are reinvesting money to the business. To pay what we think we should be paying.
How does the mission statement relate to partners?
Without our partners there are no opportunities. But it is not their responsibility to think about the regions and the communities that we work in. Their job is to build really great products that will disrupt the world and that’s a full time job. By choosing to work with us we take care of the rest. We extend that value chain. But it's not a charity, it's delivering real value and creating meaningful long-term opportunities. All the up-leveling and investment in people that we do is so they develop hard skills and technical skills so they can add more value to their teams and have a solid foundation to launch them into their next endeavor.
We’ve done this in bits and pieces. One thing I’ve been thinking a lot about recently is that for every one person that we hire we say no to ten. What resources are we providing the other nine so they can improve what they’re doing? That’s how you really create more opportunity by open-sourcing our content and training. There are only a certain amount of jobs we can create but there’s 10X the amount of impact we can create by sharing resources in that way and upskilling even people who don’t work at PartnerHero.
Our partners benefit from this approach too - there’s a reason why our partners picked us and a reason we have a 98% contract renewal rate. The partners benefit because of a very direct metric - retention. This is something that isn’t talked about. We have world class retention both at the associate and partner level. When you work in the way that we work the partner gets a team that is really committed to their roles and to that brand. That results in tangible monetary benefits to the partner vis-a-vis low turnover, insights and the team can scale without having to keep replacing associates and managers. That’s just not the way it's done in other outsourcing environments and the employees, and the partners, end up paying.
What do you want the world to know about PartnerHero?
I want the world to know that anyone can do what we do. I think most businesses hide behind this veneer of proprietary knowledge and NDAs. Things that create zero sum games. And I want the world to know that anyone can copy what we do and do it successfully. Determine what the right thing is, then do that thing. For me, this was around determining what gets me into trouble: a big ego. So the first thing I wrote down was Be Humble. It shows up in our lack of marketing. We don’t say we’re number one. It manifests in 100 different ways. Anyone can do it. As humans we tend to overcomplicate things, that gives us an illusion of being smarter or more capable, it doesn’t have to be that way. It can be super straight forward. Building something that benefits society in a sustainable way. We’ve been told that to be successful you have to raise money, you have to crush it, you don’t give away these things. And none of that’s true.
