Latest / Beyond Fulfillment Podcast / From Financial Crisis to Scaling Startups: Luis Derechin’s Entrepreneurial Rollercoaster

Transcript

From Financial Crisis to Scaling Startups: Luis Derechin’s Entrepreneurial Rollercoaster · Beyond Fulfillment Podcast

• 0:04
  Dave I got caught by the law, right?
• 0:06
  And, and, and as a, and as the.
• 0:09
  The song says, the law won.
• 0:12
  So my business was shut down.
• 0:14
  Today's guest is Luis Dretchen, a lifelong entrepreneur who's built, lost and rebuilt companies across borders and industries.
• 0:23
  Starting with selling Mexican Candy at age 11.
• 0:27
  Luis's journey took him from importing housewares with his family to pioneering direct sales in Mexico and even founding Jack B, Mexico's first tech startup to secure major US Venture capital funding.
• 0:39
  Currently the CEO and founder of Near U, a nearshoring firm, Luis is redefining how companies build remote teams in Latin America.
• 0:48
  In this episode, we dig deep with Luis into his wild ride of entrepreneurship from from the gut punches of economic collapse to catching lightning in a bottle.
• 0:58
  With new ventures, you'll hear hard won lessons on resilience, innovation, building successful remote teams, and discovering the offshore team death trap that derails so many global projects.
• 1:11
  Whether you're an entrepreneur, a startup leader, or just love stories of perseverance, this episode is packed with wisdom and energy that you won't want to miss.
• 1:21
  As always, if you found value from this content, please like and subscribe.
• 1:25
  All right, Luis Dretchen, welcome to Beyond Fulfillment.
• 1:29
  Thanks, Dave.
• 1:30
  It's a pleasure.
• 1:31
  And I thank you for giving me a space to talk to your audience.
• 1:36
  Yes, sir.
• 1:37
  So our audience is entrepreneurs and you are certainly a lifelong entrepreneur.
• 1:44
  Looking at your story here, it's fascinating.
• 1:47
  So you're currently the CEO and founder of near you, which is a near shoring for firm.
• 1:54
  Firm that's doing very well and does things differently.
• 1:57
  So we'll certainly get into that.
• 1:59
  But you've been a lifelong entrepreneur starting from childhood where you grew up in Mexico.
• 2:05
  So if you could just kind of give us your backstory and how you got here, that, that'd be very valuable for our audience.
• 2:11
  Sure, sure.
• 2:12
  Yeah.
• 2:12
  I certainly have the, the scars, the to.
• 2:16
  To.
• 2:16
  To prove that I'm an entrepreneur.
• 2:18
  Right.
• 2:19
  Both psych, psychological and dare I say, even some physical ones.
• 2:23
  So I, I think the, the story you're referring to, Dave, was, was my first entrepreneurial attempt at greatness.
• 2:32
  I was born in Mexico, but I actually grew up in San Diego, California.
• 2:35
  And, and it was there in San Diego that my parents, being true to the our Mexican origins or our Mexican culture, would with us, cross the border once in a while.
• 2:50
  San Diego is right on the border with, you know, Tijuana and San Diego and we lived about three miles from the border.
• 2:56
  So this is, imagine, if you will, in the mid to late 70s and we, we'd cross over, go have tacos, go, whatever, and then, and then go back the.
• 3:05
  It was much easier to navigate the border back then.
• 3:09
  And I got it into my mind that given that I like Mexican candy, I would take some Mexican candy and sell it at my school, right?
• 3:20
  So I took a couple bucks, I bought some Mexican candy on our next travel to Tijuana, took it back to San Diego, and I sold it out, you know, incredibly fast.
• 3:32
  That's called product market fit, right?
• 3:34
  So all of a sudden I was, I was 11 and I had found product market fit.
• 3:38
  So I figured, let's go gangbusters.
• 3:42
  I asked my father to loan me $20.
• 3:45
  I bought $20 worth of candy, which back then was a lot of candy.
• 3:49
  I stuffed it into my bag, went to school, and proceeded to sell it.
• 3:54
  The only problem is, even though I had found product market fit, I forgot about the regulatory aspect of being an entrepreneur in elementary school.
• 4:02
  And I got caught by the principal because the kids had spent all of their money on candy and the cafeteria didn't sell any lunch for a couple days.
• 4:17
  Because everyone was spending that money on me.
• 4:20
  And rather than giving kids a proper nutrition, they were all eating spicy and sour Mexican candy.
• 4:26
  So if your business is an E commerce brand, this message is for you.
• 4:32
  Logistics can make or break you.
• 4:35
  If you're tired of being just a number to those big box 3pm you need to check out our team at Easy DC3PL.
• 4:43
  We're a different kind of partner built specifically for growing brands that ship between 1,000 and 10,000 orders per month.
• 4:51
  We offer warehousing, fulfillment and transportation with a focus on personalized service and flexibility.
• 4:59
  Our Central Kentucky location gives you nationwide reach, turning logistics into a competitive advantage.
• 5:05
  So if you're ready to partner with a 3PL that actually gets your brand, visit EasyDC3PL.
• 5:12
  Calm, Dave.
• 5:13
  I got caught by the law, right?
• 5:15
  And, and, and as a, and as the, the song says, the law won, so my business was shut down.
• 5:24
  Wow.
• 5:24
  So you were a disruptor from a very early age, disrupting the, the school lunch profits so much so that they, they shut your company down.
• 5:34
  So.
• 5:35
  Okay.
• 5:37
  Yeah, that's an amazing story.
• 5:38
  So you clearly had that entrepreneurial bug from, from a very early age and, and just being able to experiment and, and have that intuition and take action like you did.
• 5:49
  And obviously it got shut down and, and whatnot.
• 5:52
  But so how did that develop over the years and, and kind of into your, your, your teen and your adult life and the other businesses that you started?
• 6:02
  Yeah, so bitten by the bug is correct.
• 6:06
  And, and given that, that your audience are all entrepreneurs, they're probably all, you know, nodding their head.
• 6:11
  All of them or most of them would have a story similar to my candy story, right?
• 6:15
  Whether it's the lemonade stand or, or plowing snow, you know, for those that, that lived in a, in a climate where, where snow fell and whatnot.
• 6:25
  But you know, as, as I, as I grew up.
• 6:30
  I, I was always looking for what, what to do.
• 6:33
  And I remember move moving back from the US to Mexico when I was about 19, I, I moved back chasing a girl who's on my wife of 33 years.
• 6:45
  So successful Chase.
• 6:47
  But after college in the US I went back to school in Mexico and I was, I was doing my studies in, in Mexico.
• 6:55
  And then basically.
• 6:59
  What happened is in, in the mid-80s, late-80s, Mexico went from a closed economy where it didn't let any imports in, to an open economy.
• 7:12
  And all of a sudden people were importing all sorts, all sorts of things to sell in Mexico.
• 7:19
  So having been bitten by the entrepreneurial bug, I figured here's the opportunity.
• 7:24
  And my father and I, you know, we spoke about it and we went into business together.
• 7:29
  So what, what we would do is we would buy housewares.
• 7:32
  Housewares being everything from electronic, well, not electronics, but appliances, blenders, juicers, those types of things to dinnerware sets to silverware tumblers.
• 7:49
  Everything that you could buy for a house.
• 7:51
  We would, we would buy it in Germany, Italy, Netherlands, Turkey, Greece, Indonesia, bring it into Mexico and sell it.
• 8:01
  So there I was at 20 years old, and I was tasked, given that my father was an incredible salesperson, I didn't want to take the focus away from sales because as you know, every entrepreneur will tell you, sales
• 8:16
  is number one task.
• 8:17
  So I was given the responsibility at 20 to travel the world and go find products that we could buy elsewhere at a good enough price, right?
• 8:26
  Negotiate proper terms, bring them into Mexico and, and sell them.
• 8:31
  And you know, that went well for four or five years.
• 8:34
  We grew it and it was where my, my entire family.
• 8:42
  Lived off and, and, and made some decent money until there was a huge economic debacle 1994.
• 8:48
  The, the, there was a devaluation.
• 8:51
  Most Americans, when you say devaluation, won't understand what, what that is, but basically imagine if you will, the foreign currency being X and then the, the following day it was worth about 40% of what it previously was.
• 9:07
  And it was a debacle for us because, you know, we had receivables in pesos and we had payables in dollars.
• 9:15
  So now it turns out that the money that we rode is only worth 40 cents to the dollar.
• 9:20
  And you know what, what we owe is, is, is in dollars.
• 9:24
  So that company sort of went the way the dodo, right, Went extinct.
• 9:31
  And it was there that I thought about a new business selling housewares.
• 9:35
  But we did it in, in a very different manner, through direct sales promoters that would, would carry a catalog and sell it in order to make larger margins.
• 9:46
  And we grew that to about 35, 000 independent distributors that had our catalog and would sell all sorts of housewares in Mexico.
• 9:57
  And did that for a while until, until I founded a technology company.
• 10:01
  I was bitten by the dot com bug as well.
• 10:05
  And I found that technology company that became Mexico's first tech startup to raise US Venture capital funding.
• 10:12
  Okay, yeah, and that's called Jack B.
• 10:14
  We'll get into that here in a second.
• 10:16
  But I just want to go back to the housewares company.
• 10:18
  So, you know, you had this idea.
• 10:21
  Mexico is a closed economy.
• 10:23
  All sudden it opens up, you spot the opportunity, you partner up with your dad, who's a great salesperson and I'm sure kind of mentored you too.
• 10:31
  And you start, start this great business in terms of importing all these different products, you're traveling the world, you're making good money, the family's eating, life is good, right?
• 10:42
  You're having fun.
• 10:43
  And then like you said, this, devalue, this currency devaluation happened and overnight, right, you're upside down, really, through, through no fault of your own.
• 10:54
  That's just sometimes the life happens and that's what happened.
• 10:58
  Like, what was it like in that moment when you have this thriving company that you're growing and you've grown over several years to get hit, like you really get punched in the gut with something like that.
• 11:07
  What was that like?
• 11:09
  Dave, punch in the gut is the absolute understatement.
• 11:14
  I mean, in your question, you made three or four statements that I want to emphasize.
• 11:20
  First of all, it's.
• 11:22
  Here we are thriving business.
• 11:24
  I just gotten married, right?
• 11:26
  So I was, I was fortunate enough that, that I had, I had bought a plot of land and we, we were beginning to buy a house, right?
• 11:34
  I, I was 24, 25, living the dream.
• 11:37
  You know, my, my recently.
• 11:40
  Married bride is, you know, has all the faith in the world that things are going to be okay.
• 11:47
  My family, you know, we had our home in, in Mexico City, vacation home in Acapulco, whatnot, and all of a Sudden, through no fault of our own, right, we get punched in the gut.
• 11:59
  And then you said underwater.
• 12:01
  Well, upside down.
• 12:03
  David was being upside down and underwater.
• 12:05
  And all of a sudden, you're sitting there flailing.
• 12:07
  You have no idea what to do.
• 12:10
  But ultimately, you got to keep living, and you got to keep figuring things out.
• 12:13
  And as entrepreneurs, what other options are there, Right?
• 12:17
  You, you, you have to look at.
• 12:20
  Look at yourself in the mirror, face reality and say, yeah, you know, it sucks.
• 12:24
  So we had to sell the vacation home in Acapulco to make good on our debts.
• 12:29
  I had to sell the plot of land where I was building my home.
• 12:32
  I had to come home and tell my wife, well, you remember that you married someone successful.
• 12:37
  Well, now you married a pauper, right?
• 12:39
  I have nothing to my name.
• 12:40
  I lost everything I had overnight.
• 12:43
  Because we have faith in these systems and in the country and in the foreign exchange rate.
• 12:49
  But as I'm sure a lot of your listeners will know, you have no other option but to continue.
• 12:56
  There's only one way, and it's forward, right?
• 12:58
  Backwards, never.
• 13:02
  Yeah, absolutely.
• 13:03
  It's such a great attitude through something like that.
• 13:06
  And so you pivoted.
• 13:08
  Same industry, housewares, where you'd been so successful, but then you, like, what made you do that?
• 13:15
  Was it just because you had the experience in that industry?
• 13:17
  And then you figured, okay, if we just switch up the model and we're not so dependent on foreign exchange, that we can really just leverage our experience and create something successful again right away?
• 13:29
  So the answer is yes, but it's a little more complex.
• 13:31
  And the complexity comes in that one of our largest customers in Mexico was a gentleman that created.
• 13:42
  Most of your listeners won't understand this, but it's, it's.
• 13:45
  And it exists in the US These are called saving circles, and these are things that existed back in the late 19th century in order for people to save when there was no consumer credit.
• 13:59
  This is before credit cards, before consumer credit, and when.
• 14:02
  When money was more difficult to get.
• 14:04
  So what it consists of is you would bring together a group of 10 people, and those.
• 14:09
  Those 10 people would agree that they would pony up, let's say, $10.
• 14:14
  So everyone would pony up $10 twice a month, right?
• 14:17
  Every fortnight.
• 14:19
  And then we would.
• 14:20
  The.
• 14:21
  They would gather the $100, and then one person would get the $100 one fortnight, and then the next one, and then the next one, and then the next one.
• 14:30
  So it was a community event in order to motivate people to sort of contribute to the saving Circles understanding that each person was going to get their, their distribution, their allotment.
• 14:43
  So this gentleman that we were selling to in Mexico realized that he could do the same thing, but selling products instead of doing the savings.
• 14:52
  What he would do is, well, I'm going to sell 10 TVs and he would find 10, 10 people who wanted to buy the TVs.
• 15:00
  So those 10 individuals would all put up 10% of what the TV was owed.
• 15:05
  Right.
• 15:05
  He would take the money and then he'd give a TV to one person and then another person and another person.
• 15:11
  And these were the numbers or the order were given through, through luck.
• 15:16
  Right.
• 15:17
  That were allotted through a drawing.
• 15:19
  This seems simple enough.
• 15:21
  And it is, mind you, in a lot of countries.
• 15:27
  You were able to buy housewares, automobiles, you know, different types of things in the savings circle.
• 15:34
  So to your question, I had seen what this gentleman was able to do.
• 15:40
  Providing credit without really providing credit.
• 15:43
  It's what's called auto financing.
• 15:46
  We were broke.
• 15:47
  We didn't have two pennies to rub together.
• 15:49
  Dave, I kid you not.
• 15:51
  So, you know, I sort of face reality and said, well, what am I going to do?
• 15:56
  All I know how to sell is housewares, but I have no money to invest in anything, so I can't sell anything that I can't invest.
• 16:03
  I know if I can convince 10 people to buy the same product and take their money, then I basically take their money, buy the product, make a margin, and then distribute the product.
• 16:14
  And if I could do that often enough and make it repeatable, then, you know, it could be a good business.
• 16:21
  So it was sort of out of desperation, out of something I knew and out of just the sheer reality that we were broke and this was a way to make some money when there was no other way that,
• 16:32
  that, that we could go on.
• 16:34
  Okay, and how quick did that, that company take off?
• 16:39
  So first six months it was, it was slow.
• 16:43
  You know, we all had to tighten our belts and then we sort of hit the hockey stick and, and it grew in five years from zero to about US 15 million per year, 35,000 distributors.
• 16:56
  And you know, and, and going gangbusters.
• 16:59
  I mean our, the, the warehouse where, where we had our, our products was 10,000 square meters, which is about 100,000 square feet.
• 17:06
  So, you know, we went from, from zero to, you know, a pretty frothy business that had been self, self financed, you know, just on the value of finding enough of these groups to jointly buy the products over five
• 17:23
  years.
• 17:23
  So it was, it was interesting.
• 17:25
  Okay, wow.
• 17:27
  And like to go through such a tough time, right, to kind of be like, living a high life and then be broke overnight and have to claw back and, and use your ingenuity and then you build something like
• 17:40
  this again, build an even bigger business, Right?
• 17:43
  What, what, like, what was that feeling like?
• 17:48
  Look, I was, I was young and stupid, and I thought, you know, I thought that I was, I was it, right?
• 17:53
  I mean, if I could do this, I could, I could do it over and over and over.
• 17:58
  And again.
• 17:59
  Most of your listeners will know that sometimes you catch lightning, you know, in a bottle, and sometimes you don't.
• 18:07
  So I was, you know, I was a bit.
• 18:10
  I try to be humbled, but I think within that humility, I was still, I was still a bit cocky, but it was, it was exciting.
• 18:19
  You're.
• 18:20
  There is nothing as exciting as, you know, been being proven right by the market.
• 18:26
  Whenever you find that product market fit, it's.
• 18:30
  It's like.
• 18:31
  And I'm not a, I'm not a golfer, but I, I've played golf a few times, and when you strike the ball just perfect and watch it sail, you know, in a straight line and far away that golfers claim
• 18:43
  that that's the feeling that they're after every, every stroke.
• 18:47
  You know, being an entrepreneur, it's like that, right?
• 18:50
  You, you have an idea.
• 18:51
  Once you prove it, once the market accepts it, you're addicted to that feeling.
• 18:57
  So, you know, it was like that.
• 18:59
  And fortunately, you know, we.
• 19:01
  We had hit the feeling, so much so that over time, I figured that I would quit that company and left it to.
• 19:10
  To my family to run.
• 19:12
  And me and one of my brothers, we founded a technology company.
• 19:17
  Mind you, I was not a techie.
• 19:19
  I had no idea what I was doing.
• 19:21
  But I figured my brother was a techie and, and I, I'd been, you know, relatively successful that, that we could do this.
• 19:30
  Okay.
• 19:30
  All right, so let's talk about that.
• 19:32
  So that company was Jack B.
• 19:33
  And a tech company, and you weren't a techie, but your brother was.
• 19:37
  And clearly you'd had some entrepreneurial success and a lot of experience given your, you know, even though you're relatively young at that time.
• 19:44
  So.
• 19:45
  So talk about that company and, and how you went about growing that.
• 19:49
  Sure.
• 19:49
  So the, the company was.
• 19:54
  In.
• 19:54
  In when we started it.
• 19:56
  This is probably around the year 2000, and we were one of the first anywhere to adopt Web 2.0 technologies.
• 20:08
  And a lot of your listeners won't understand what that means, and I won't get into a whole lot of Detail.
• 20:12
  But it was a different way to, to generate web pages.
• 20:16
  We now live in an age with broadband and a lot of interaction with, with web pages.
• 20:24
  25 years ago, web pages were static in nature with not a whole lot of interaction.
• 20:28
  You know, they were informative.
• 20:30
  So we were one of the first companies that allowed web pages to be far more interactive than they, than they currently are.
• 20:38
  And we, we leveraged the fact that we were in, in a country where the web hadn't yet sort of exploded.
• 20:47
  It was beginning to do so, and, and we created some technology for, for use locally that, that we were, we're fortunate to sell to some, some large enterprises in, in Latin America.
• 21:03
  And with that, without really looking for funding, funding sort of found us and we, we decided to take the technology to the US market.
• 21:15
  And let me tell you, if you know, being, being punched in the gut is, is something we mentioned previously, I wasn't prepared to do business in the US because it, it is, it is incredibly different.
• 21:30
  The way you market, the way you sell, the way you promote everything about business.
• 21:35
  All of us think that if you can do business in one geography, it's the same in another.
• 21:40
  Nothing could be less true.
• 21:42
  And when I moved to the US I had no idea what I was doing, despite the fact that we had been, you know, relatively successful in Latin America.
• 21:51
  And I spent the first year, you know, just, just, just trying to figure out what to do.
• 21:55
  Fortunately, you know, through some hires, hired some really good people, some people that helped me, investors that were able to coach me and mentor me, we sort of found our way.
• 22:07
  And, and that that company was around for about 13, 14 years, raising a lot of money until its eventual acquisition.
• 22:16
  So, you know, we found our way.
• 22:18
  Okay.
• 22:19
  All right, so you were the, you started this in Mexico and you said you weren't looking for funding, funding found you, and you actually became the first Mexican, Mexico's first tech startup to get major US VC funding.
• 22:34
  Especially given someone not only with no experience selling in the US Let alone no experience negotiating venture capital funding.
• 22:44
  Like what, what was that?
• 22:45
  And not even you said you weren't looking for it, that it found you.
• 22:49
  Like, what was that process like?
• 22:53
  I mean, it's, it's, it's like anything you, you sort of learn.
• 22:58
  I, I, I heard fake it till you make it.
• 23:00
  So you sort of do fake it.
• 23:02
  You know, try trying to get advice here and there, trying to figure out exactly what to do.
• 23:08
  But it was, it was an interesting process in that fortunately I was, I was a U.S.
• 23:14
  citizen, right?
• 23:15
  And I'd been raised in the U.S.
• 23:17
  so it's not like the U.S.
• 23:19
  was totally foreign to me.
• 23:20
  So I had the culture, didn't know how to conduct business.
• 23:23
  But still, at least, you know, I, I spoke it well.
• 23:27
  I understood the culture.
• 23:28
  I understood, stood many of the nuances.
• 23:31
  I'd done business elsewhere.
• 23:33
  So I think given the fact that probably the valuation, given that we were a Latin American company, was lower and the risk was, I guess, lower because they were investing less into my company than they would to a
• 23:48
  similar company in the US VCs were willing to take a bigger risk on us, but, you know, they did it and it sort of worked out okay.
• 23:59
  But it was.
• 24:01
  Super.
• 24:01
  What?
• 24:02
  Interesting.
• 24:03
  It was, you know, exhilarating, right?
• 24:05
  I mean, yeah, one day I'm working out of my proverbial garage in Mexico, and the next day I'm in Washington, D.C.
• 24:13
  you know, trying to figure out how to, how to penetrate the US Market.
• 24:17
  It's, it's, you know, challenging but interesting.
• 24:21
  Okay, all right.
• 24:23
  And then that led you to your.
• 24:26
  Well, it looks like there was another company in between, but now you're the CEO and the founder of Near U.
• 24:34
  And that's got an interesting story about how that started almost by accident.
• 24:38
  Could you just talk about how that happened?
• 24:41
  Sure.
• 24:41
  And it has a lot to do with Jack B.
• 24:43
  So one of the things that happened at the tech company is when I moved to the US and then realized that the technology that we were selling in Latin America wasn't as germane or didn't have as good a
• 24:59
  fit in the, in the US Market, we had to figure out, you know, how were we going to pivot.
• 25:04
  And the first thing you do is you look at your cash balance and then you look at your expenses and realize that the Runway, we didn't have a very long Runway.
• 25:14
  So we had to build out a team that could market the technology, sell the technology, and, you know, understand the nuances of the American market and how to make the company pivot.
• 25:27
  But at the same time, we had to keep building technology.
• 25:29
  So, long story short is we built a hybrid team with a fair number of individuals in Mexico and some others in the U.S.
• 25:39
  mind you, this is in the early 2000s.
• 25:41
  So no Skype, no Skype existed, but no zoom, no slack, no real time communication.
• 25:48
  So, you know, it was a mess, but we figured out how to give it a go.
• 25:53
  And as we grew, we grew offices in Mexico.
• 25:57
  We had some people in Colombia, some people in India.
• 26:00
  We had offices in the D.C.
• 26:02
  area, in Silicon Valley, in Fremont.
• 26:04
  California.
• 26:05
  So through distributed offices kind of came to realize that remote work was incredibly important.
• 26:12
  So skip forward 14 years, the company is acquired and I start getting calls.
• 26:19
  I was given the, the proverbial thanks of the new acquirer because most, Most founders and CEOs don't survive an acquisition.
• 26:28
  So that was my case.
• 26:30
  I didn't survive.
• 26:30
  I was sent home with, with a check and, and a boot in, in, you know, up my butt.
• 26:37
  And, and while I was there I, I got some phone calls from some other CEOs in the region that were trying to do offshore or nearshore projects and their projects weren't going could consult for them.
• 26:52
  So I started doing that, you know, to, to take up some of my time and to have something to do.
• 26:59
  And I came to realize that parts of the offshore or nearshore model were broken.
• 27:08
  Identified what we call the offshore team death trap, which is.
• 27:14
  73% of all offshore projects or nearshore projects failed.
• 27:18
  Okay.
• 27:18
  I mean it's a huge statistic.
• 27:20
  People will hire in order to save money.
• 27:24
  And if they don't know how to do it correctly, then the.
• 27:29
  They probably save money, but the project won't be successful.
• 27:31
  So the savings didn't materialize.
• 27:33
  Right.
• 27:34
  They save on wages, but unsuccessful project.
• 27:37
  So came to identify the offshore team death trap and the components that make up the offshore team death trap and, and founded a company to, to try, try to inject the, the fix to those offshore teams.
• 27:52
  And that company is now called near you.
• 27:55
  Okay, and so let's talk about that too.
• 27:57
  Right?
• 27:57
  Because near shoring and offshoring is so huge these days in so many industries.
• 28:03
  So what like in.
• 28:04
  And that's a stat.
• 28:05
  I hadn't heard that.
• 28:06
  And it's not one that I think is really.
• 28:10
  You know, put out there at least.
• 28:14
  Like that in terms of 73 of all these projects fail.
• 28:17
  So talk more about that.
• 28:18
  What is the offshore team death trap and how does near you do things differently?
• 28:23
  Sure.
• 28:24
  So.
• 28:28
  There have been studies, I believe Boston Consulting Group and a few universities that, that have these similar statistics to, to, to what I'm going to say.
• 28:38
  These are.
• 28:38
  Although we've lived this and these are our numbers, it's backed up by several studies, although.
• 28:47
  It'S not really put out there in the ether, so to speak, because.
• 28:54
  More and more companies want to leverage talent outside the US and the reason is pretty simple.
• 29:00
  The war for talent in the US is brutal.
• 29:03
  Right.
• 29:03
  With unemployment at where it is.
• 29:07
  Any company that wants to be successful looks to be able to hire the right talent.
• 29:12
  And if they can do it at the right cost, even better.
• 29:16
  So a lot of these companies are looking elsewhere, right?
• 29:19
  Whether it's India, Philippines, Ukraine or Nearshore, which is Latin America, in order to hire.
• 29:26
  And many of these engagements are small engagements, onesies, twosies, where you hire virtual assistant or you hire, you know, a programmer here, programmer there, a marketer, a customer support representative or a business development representative.
• 29:41
  And statistics aren't really kept for a lot of those projects.
• 29:45
  But again, three quarters of most of those fail and they fail because they go into it thinking that it's going to be as easy to execute as if you had someone who working shoulder to shoulder with you, right?
• 30:01
  The culture is, the people are going to be able to pick up the culture as easily as if they were there with you.
• 30:08
  The tasking, the, the management, you know, working with with people remotely requires a lot of intentional effort to create, create the right systems, the, the right feedback loops.
• 30:24
  When you hire, you have to hire not only for skills.
• 30:29
  For the right attitude, the right personality.
• 30:33
  So it requires a lot more going into it than just hiring someone else to work in an office.
• 30:39
  And because of that, most engagements people will go into it sort of eyes wide shut, not realizing that they have to do things differently.
• 30:49
  And that's where my company stands out because we understand how it has to be done from the get go.
• 30:55
  And we work with many startups and mid market companies in order to help them be successful from the get go.
• 31:02
  And then as their projects evolve right in the, in the natural evolution of their projects and their hiring.
• 31:10
  Okay, all right.
• 31:11
  So you see this gap in the market and you see, you know, people are asking you to consult and you see how that the model you say is broken.
• 31:20
  So you start this company and that was in 2020.
• 31:24
  And I mean was that, that's right in the middle of COVID I mean, did that, I mean that.
• 31:31
  Suppose that probably helped you given that remote work really took off at that point.
• 31:36
  So the answer is yes, it helped.
• 31:38
  It also hindered because.
• 31:42
  You know, you're not able, I wasn't able to travel, you know, to the US Meet me, clients, meet all those things.
• 31:48
  So it helped because remote work became more of a natural thing, right?
• 31:53
  Whereas, whereas before, I don't know the exact statistics, but people were certainly more reticent to hire people to work remotely in during the pandemic.
• 32:03
  There was no other option.
• 32:06
  And frankly, if, if, if you were going to hire on the other side of the city, then it'd be almost the same to hire on the other side of the state, the other side of the country or even
• 32:16
  cross the border and do it in another country.
• 32:19
  So yes, it helped in one sense and it hinder another, but started in 20 and as you said during pandemic 2020 and, and then have sort of grown, grown from there.
• 32:33
  Now we have about 400 people that one way or another, right.
• 32:40
  We, we help manage in different projects and you know, we're, we're incredibly proud of the work that we do with startups and mid market companies to help them lower their costs by 60 to 70% while maintaining their effectiveness
• 32:54
  and efficiency.
• 32:56
  Okay.
• 32:56
  And so given this is your, I guess I've lost count with like what number business this is of yours.
• 33:03
  But how did I mean, because it sounds like you scaled that, you know, nicely in, in just a few years.
• 33:10
  How did all your previous experience and the ups and downs and all that stuff you've been through kind of help you with, with growing near you?
• 33:20
  So like anything, I think that entrepreneurship, a lot of it has to do with identifying patterns and then, you know, trying to figure out how you put those patterns together.
• 33:30
  So, so the first thing if I could is, is we, we identified the seven components of the offshore team death trap, right?
• 33:40
  And these are patterns that we saw playing over and over.
• 33:44
  And as executives and founders tried to hire remotely from Latin America or elsewhere, we saw things like talent mirage, right, where people were hiring for skills that look solid on paper but, you know, sort of crumbled under real
• 34:04
  project pressure.
• 34:06
  Or the cultural chasm you hired initially without realizing that you had to hire for cultural adeptness, right?
• 34:17
  Not only skills.
• 34:18
  So the fact that sometimes the people as skilled as they were, they, they just didn't mesh.
• 34:26
  Their cultural didn't mesh.
• 34:28
  The hidden cost spiral.
• 34:30
  You hire a third party to help you do, you know, whatever it is you want to do and you have faith and trust in that company and then realize that, you know, their only goal is to make your,
• 34:41
  I wouldn't say their only goal, but their goal is to make money for themselves and in doing so, don't partner as nicely as you thought they were going to partner.
• 34:51
  So we call it the hidden cost spiral.
• 34:53
  Management quicksand, not knowing how you manage remote teams.
• 34:58
  Communication fog.
• 34:59
  If you don't have the right level of communication cadence and the ability to communicate both asynchronous and, and synchronous, then you're going to create communication fog, which may lead to the retention revolving door and quality erosion.
• 35:16
  So the first thing was identifying these components.
• 35:21
  And then we created a business model through what we call the remote intelligence framework that so sort of works to counteract all those components of the death trap in order to attempt to create successful projects.
• 35:36
  So you know, it was easier because we were able, in my consulting gigs, we were able to identify all of the things you shouldn't do.
• 35:44
  And then we created a business model in order to create what you should do and make sure that, you know, the model followed that.
• 35:54
  Okay, once again a true entrepreneur, right?
• 35:57
  You, after your acquisition you kind of get thrust into consulting where people are just asking for your help and, and then you identify a whole new business model and you're seeing what's wrong and everything not to do.
• 36:09
  And then you reverse engineer a company that does things the right way.
• 36:14
  So yeah, hats off to you.
• 36:18
  So with near you, I mean if people want to get in touch, find out more about what near you is doing or they need some, some help with remote assistance, what's the remote work?
• 36:29
  What's the best way people can reach out to you for that?
• 36:32
  So LinkedIn is, is the, the, the, the best way.
• 36:36
  It's the only social media I'm currently on so near you nir dash yu and you can go on LinkedIn on our website that my contact information or email whatnot are, are Both in, in LinkedIn is there we have
• 36:51
  a toll free number that people can call.
• 36:54
  So happy to help and if uh, we, I, I published a book recently, a few months ago called the Offshore Team Death Trap, obviously in which I explain what the seven components of the Death Trap are and then
• 37:10
  I explain also the Remote Intelligence Framework and I want to put it out there to the world.
• 37:16
  This isn't a trademarked framework or anything.
• 37:19
  We're putting it, you know, open, sourcing it so that other people can see what they have to do in order to be successful.
• 37:26
  If they need help or want help, happy to provide our services.
• 37:30
  But if they just pick up the book and I believe we're selling it at nine bucks or something for the digital version.
• 37:37
  So it's not like, you know, I don't make any money from the book, seriously, we just put it out there in order for people to read it, gain the knowledge the, you know, it's best to gain someone else's
• 37:48
  experience by reading a book.
• 37:49
  So if we, if we can help them do that and if they have any questions, there's the Offshore Team Death Trap.
• 37:57
  Website where they can download some guides, execution guides, you know, what, what to do, how best to do it or email us, we'd be happy to reply and answer any questions that they may have.
• 38:09
  Okay.
• 38:10
  Love that.
• 38:11
  And we will link all that info in the show notes for everyone so they can just click on it here.
• 38:15
  All right.
• 38:16
  Well, Luis, wow.
• 38:17
  Incredible story.
• 38:18
  Thank you so much for taking the time to be here and share all this valuable wisdom from your journey with our listeners.
• 38:23
  We greatly appreciate it.
• 38:25
  Now it's me who appreciates you giving me the time.
• 38:28
  Look, as I'm sure you and your audience knows, each entrepreneurial journey is unique, but we all have our similarities.
• 38:36
  And the more we listen to other people, we're able to spot patterns and improve in our entrepreneurial journey.
• 38:43
  So I'm happy that I was able to contribute to that.
• 38:46
  Absolutely.
• 38:46
  Okay.
• 38:47
  Thank you, Luis.
• 38:50
  Sam.