#358 – Scaling Your Amazon Business Through People, Processes, And Tech with Yoni Kozminski

#358 - Scaling Your Amazon Business Through People, Processes, And Tech with Yoni Kozminski Speaker 1: Welcome to episode 358 of the AM-PM Podcast. This week my guest is Yoni Kozminski. Yoni and I are gonna be talking for the next hour or so about a lot of great things. Everything from hiring talent in the Philippines and some special things you need to consider and know about that and actually what does it actually cost. We're gonna be talking about systemizing your businesses. When should you actually take those steps to actually systemize and put SOPs and processes in place? As well as what if you're on an upward trajectory and you're looking to exit in a few years, what are some things you could do and even a incubator type of program that really doesn't exist outside of the one that we talk about in this episode. We're gonna be talking about all of that and more. It's a great episode, it's jam-packed with actionable, cool stuff, so enjoy. Unknown Speaker: Welcome to the AM-PM Podcast. Welcome to the AM-PM Podcast, where we explore opportunities in e-commerce. We dream big and we discover what's working right now. Plus, this is the podcast where money never sleeps. Working around the clock in the AM and the PM. Are you ready for today's episode? I said, are you ready? Let's do this. Here's your host, Kevin King. Speaker 1: Yoni, welcome to the AM-PM Podcast. Such an honor to have you here today. How are you doing, man? Speaker 2: I'm doing great, Kevin, mate. It's an honor to be here. Speaker 1: Now, you've been in the Helium 10 Elite a couple times, I think, right? And actually presented in there on creating SOPs and hiring processes and all that kind of stuff. You're kind of known as the guy that can help big sellers and small sellers get things done, right? Speaker 2: Well, I'd hope to think that that is what my perception is in market, and most importantly, helping sellers to grow their businesses, but sure, I'll take it. Speaker 1: Correct me if I'm wrong, you grew up in Australia, right? Speaker 2: I did, I did indeed. Speaker 1: And what brought you back six years ago to Israel? Speaker 2: So I grew up in Australia, actually lived in Los Angeles for three years in between. And my journey really was I was sponsored in the US. I was on a professional work visa, working in agency land and just really wasn't sure what my next step would be, whether I would go and work for another agency, take a bit of time off. I just I really had no idea. And so What was expected or based on the US government is within 90 days you have to find another role, otherwise you're out. So when I resigned, I came to Israel, I thought it would just be a month, recharge, figure out like what I'm gonna do next, maybe go back to the US. I have a real love affair and I'm over there a lot with the states and probably two days in I just said, why would I leave this place? And it's been six years ever since. Speaker 1: You have family in Israel, right? Speaker 2: Yeah, I have my grandmother's here, my dad's originally from here but he lives in Australia and I have a bit of family, I have an uncle here as well but I mean the truth is I moved here mostly because you know you got 300 days of summer, the weather's incredible, you have arguably one of the best culinary scenes on the planet and I haven't had to get in my car on a weekday in Almost six years, realistically, unless it's an emergency. I walk everywhere. It's a tiny city, Tel Aviv, and then you got the tech scene here that's just exploding. So, super liberal, free, incredible food, perfect weather, and well, I'd say beautiful women and men as well for that case, but found my one, so I'm stuck here. Speaker 1: Yeah, but the one you found is British, right? That's kind of funny that an Aussie and a Brit go to Israel and they meet and get married. Congratulations on your recent marriage as well. Speaker 2: Thank you very much. It could be the start of a joke, Kevin. Speaker 1: That could be, that could be. Speaker 2: An English girl and an Australian guy come to a bar in Israel. Speaker 1: That's going to be funny when people come up, maybe you already get this, people come up to you and people are always trying to guess accents and they always get it wrong. They hear a British accent like, oh you're from Australia, like no, no I'm not, or vice versa. Now you have one of each, so that's kind of the, to strangers that might be a lot of fun, you could have some fun there. Speaker 2: I mean, I feel terrible for my poor son who's going to grow up with a heavy northern English accented mother with an Australian father growing up in Israel with Hebrew as the first language. He's the poor kid, that accent, he's doomed. Speaker 1: He may be, but he's going to speak three languages then because you've got British, which is a different type of English, you've got Australian, another type of English, and then you've got Hebrew. Speaker 2: He's going to struggle. Speaker 1: Poor guy. He's going to be, do I call it a lift or an elevator? I'm not sure. Speaker 2: I get confused with that one now, having lived in the States. I never know what to say. Speaker 1: Is it a car park or a parking lot? Is it a fry or a chip? Speaker 2: Is it a tomato or a tomato? Speaker 1: Exactly, exactly. So he's gonna be just totally, totally lost. Cool, so what, you said you came to the US and you're working for an agency. Was it like in the econ business or some other type of a business? Speaker 2: Yeah, it was, so I was in creative advertising, digital marketing for 10 years, right about the time where there wasn't social media for brands yet. So I launched in Australia, Mercedes-Benz, Australia, New Zealand, Facebook and Instagram and YouTube and Pinterest and did All their SEO and PPC work and stuff like that. When I was in the US, I was doing similar stuff for the likes of Sony, Mastercard, Medtronic, Snapchat, and a ton of these larger companies. But with that came smaller companies and a lot of e-commerce websites back in the day, well before Amazon was as popular as it is today. Speaker 1: So were you overseeing the creative or you actually were involved in actually creating the creative? Speaker 2: I was end-to-end so I was in smaller agencies typically from sort of 15 to 40 people with a lot of these bigger companies so I'd be sat there in the room with our creative director, art director, actually coming up with a concept work. I was strategy and client services so I'd be sat there working with the concept, bringing it to market, buying a lot of the media myself against the campaigns, presenting to the clients, Getting told how terrible it is until we had like the 15th iteration and then they finally went for it. So yeah, I mean, end to end. Speaker 1: So how did that evolve into creating a company like Multiply Me that actually helps people with systemize their business basically? And did you have experience doing that with this agency stuff or is that just something you've always been good at or you saw an opportunity for? How did that evolve into that? Speaker 2: Yeah, the journey happened where I'd come from 10 years of agency land. On the back of that, I met a couple of guys that had an Amazon business. They were stuck at around 2 million and Lippy, my co-founder and I came into this business, this e-commerce business that was very focused on Amazon and grew it from 2 to 5 million in 12 months. Thrasio acquired it on the back of that experience and we realized that we could help a lot of sellers Effectively, one, from the Multiply Me side, understand what a creative director, designer, operations manager, project manager, PPC manager, brand manager, whatever the role is, understand who they actually needed in the business and then help facilitate finding them that talent through Multiply Me. And then a year later, we started Escala after I interviewed a ex-Ernst & Young management consultant with a process improvement background. Really what had happened is I'd spent my whole life Learning everything wrong or being taught really how to run an inefficient agency, but that's a lot better than the average e-commerce business owner just given the exposure and when we started working with her I just changed my whole perspective of like how far you could take it in terms of building systems. So, Escala, effectively, we have like a team of 35, mostly ex-Ernst & Young management consultants out of the Philippines that will go in and systemize businesses based on people, process and technology, building out org charts and SOPs and training videos and documentation. So, I would be lying, Kevin, if I said to you like, I'm the absolute or I was the absolute master in building out these systems and, you know, And I was the brainchild behind the perfect service delivery, but I definitely saw the opportunity in Lippy, my co-founder is, you know, he's the systems guy to a level that I'll never get to. Speaker 1: So when, like with Escala, when should someone like, let's listen to this, they're an Amazon seller, and most Amazon sellers, the vast majority, start off as a single man operation or a single woman operation. And then they might hire a customer service person out of the Philippines or Pakistan or somewhere or they might hire a few people or a shipping person but it's usually pretty lean and mean in the beginning. At what point do you recommend they actually either do this on themselves or come to someone like you guys and actually start systemizing the whole process? Speaker 2: So my first bit of feedback there is really you know to anyone who would be coming and considering working with a process improvement consultancy or like looking to build processes in their business is really understanding like What is their bandwidth and what are their capabilities in their current state? So I think rather than, you know, throwing out and saying there's a dollar figure and once you become a million-dollar seller, you come and you start working with someone like us, I think a couple of factors come in here is one, how much time are you investing into your business on things that actually have a material impact in growing The revenue, growing the profitability, expanding the brand, things that really have a material impact into the bottom line of that business. And when you identify that you actually are wearing too many hats, that you're doing things that aren't really, they need to be done but they're not most critical, I'd say that's when you really need to start considering building systems into your business and that's sort of the baseline. That would be my first answer to that question. And then I would say on the back of that, only once things really start to get out of control would be the wrong terminology. But before things get too deep, where you have a bunch of people working with you and They're operating in silos and you don't have that centralized or that overarching vision and visibility and you are serious about building a significant business and you really are on to something like you have a degree of product market fit and you're starting to move into that scale-up phase where you've built some degree of processes even if in your head things are repeatable that's when I would suggest you really start to document this stuff and build it in because to come in too early Really, you're going to have to rebuild and rebuild and rebuild. It's once you find a little, you know, degree of insight where we're heading in the right direction and this is something that is systemizable. Speaker 1: Is there ever a time where it's too late to come in and systemize it? Speaker 2: I would say there's not too late, it's never too late but I would say that with waiting really long into the game comes like some pretty significant challenges that's when you know things like change management Really need to be considered and you know our approach when we're working with companies that are sort of close to that 150, 200 million dollar, 5 to 10 year, you know, 10 years into the business like it's a very different set of principles that need to be rolled out in terms of how we notify management, what are the things that are actually happening today, how do we actually help build buying and move them from a degree of wherever they are on our, you know, on our hierarchy or rather on our framework of how systemized a business is based on people, process and technology, the later into it, the harder it is to create that change. And honestly, the more mess there is inside of the business. So you want to get in as early as possible where it makes material sense to start actually delegating Accountabilities and not just, you know, how you would typically have a lot of early stage founders where they'll find VAs and they'll delegate tasks, which isn't a true unlock or relief valve. You're still accountable to the delivery of everything they're doing if you're building lists, whereas if you're really thinking about what is this individual going to own inside of the business, it totally shifts your ability to expand and focus on the things that matter. Speaker 1: So it's almost that old saying is that once you get to the point where you know, maybe when you're first starting out, you're the guy or gal doing everything. And you're working in the business. But at some point, you've got to as the founder and the, the, the guide of the business, you got to be working on the business instead of in the business. And that's probably the big point of when you should actually consider actually either systemizing your processes, whether it be with on your own or with someone's guidance, like what the scholar does, right? Speaker 2: Absolutely, absolutely. To give you some use cases or examples, there's often people that will come to us and they're like a solo founder and they have Grown to two million in revenue and they still have no internal team members and resources like that to me is someone that's waited too late into the equation because you've gotten to that incredible feat whether it's in one year, two years, five years, whatever it is but you're leaving a lot of opportunity on the table because you could have been focused on the things that take you to double, triple, quadruple that and also impact the bottom line so that it becomes a very valuable business. Speaker 1: Some people look at it, I know solo entrepreneurs, they like, you know, I'm too focused on my PPC or my marketing or I'm running my ideas, I don't have time to stop and create all these processes and write all this stuff down. That just sounds boring and like a chore to me or they may have a pushback that, yeah, I'm doing all this myself, I can do it better than somebody else can because I know how to do it and I don't have to have it redone. And if I hire somebody else, that's just money out of my pocket. You know, if I'm going to hire three people that's I'm taking a pay cut basically to do that. So how do you deal with that type of mentality? I'm sure a lot of solo entrepreneurs or two-person partnerships have that. Speaker 2: Definitely, definitely. You know, I think it's one of those limiting, it's not limiting beliefs, it's one of those limitations that you'll often have as a founder, especially a bootstrap founder and I'm a bootstrap founder and I think like there's a degree in the business where you have to be comfortable in relinquishing a degree of control and so when we talk about delegation, Looking at bringing someone in that can deliver 80% of where you're at is usually the metric, 70 to 80% is where we say delegate that accountability and responsibility and find ways to build in that delta. But if you're looking at it and you're saying, well, I'm the best person to, like, one, I hate, you know, for anyone listening out there, I hate to tell you guys, but the reality is, especially when you're talking about PPC management and things like that, you know, Sure, you can have an impact and you know the product the best and the brand the best and there's definitely arguments to be said there but ultimately, is that really going to be the difference between you growing from a $5 million revenue, $1 million EBITDA business to doubling that? Is you spending all of your time, 80% of your time on that PPC really growing you to that point. Like another, like the considerations or the things that it really unlocks when you talk about a Scala and process improvement and building SOPs is ultimately You know, what's stopping you from launching? We all know how important it is to launch new products on Amazon, right? It's the lifeblood of the business. And so, if you're focused solely on PPC management or a huge chunk of your time is focused on that, it might be holding you up from launching 50 products this year that you have all these ideas but you can't get to them. So, building up that process and having someone run that process really, you know, it's a step change for the business if you can free yourself up to focus on the things that will actually grow it. Speaker 1: What if I'm robbing Peter to pay Paul to grow my business? I'm at that two million point, but I have no extra cash. I'm just flipping over. Everything that comes in is going right back out the door. I'm not taking a big salary. How the heck am I going to set up systems and pay people and to bring people in when I don't even have the money to do it? How am I going to do that? Speaker 2: Yeah, yeah, that's a great question and I think that comes down to a, like, really understanding, one, and I think most importantly for entrepreneurs building e-commerce businesses, what is your strategy? You know, are you building something that is going to have 25-30% margin in the business and really allow you to grow without having to borrow loads of money from seller's fire or other sort of capital, you know, lending platforms or Are you looking for that ultimate exit where all this stuff is meaningful and you need to manage that cash flow but there's a growth roadmap, there's levers that you're guiding toward and therefore the exit is really what's going to be the big release and where you really make material money inside of it. So I would say one, I mean to share from my experience, You know, I built a bootstrap, I mean three bootstrap businesses here effectively. Well, you know what, let's call it two of them that are really genuinely bootstrapped and multiply me in a scala. And on the back of that, you know, we've been able to grow to a team of nearly 120 at the moment. Every single thing we have are in-house functions. You know, we use some fractional solutions, but I have a whole marketing team, all these things. You know, obviously we're not a small company in terms of operation and our revenue is obviously, it's in a healthy place but we've offset high cost local talent and built our entire infrastructure out of the Philippines and as a result we could take things significantly further and build a much bigger company and team without really having to raise capital or really be that concerned about a cash flow crunch. Speaker 1: So of those 120, how many of those are there in Israel with you or spread out in the Western world? How many are in the Philippines? Speaker 2: So there would be five of us in the Western world. Out of Australia, here in Israel, there's three of us and an intern. And so there's five of us, 115 are in the Philippines, including all of our senior leadership team. Speaker 1: How often do you get over to the Philippines to see him in person? Speaker 2: Not often. And the only reason why is because the pandemic happened as we had launched the business. So we'd had like a whole beautiful trip planned and at the time, you know, we had a team of about 15. We'd hired a villa. March 15 was the day we were super excited and Manila went into lockdown on March 15, 2020. So that's definitely a very different reality now for us to fly everyone in, 120 people. We're looking at a much bigger company cost to achieve that than what 2020 looked like. Speaker 1: So they spread out all over the Philippines or you have like offices and mostly in Manila or in Cebu or just are they are spread out? Speaker 2: Yeah, we are purely remote. So we built the business pre pandemic with the intention not to have people commuting from You know, in Manila, for context, you could commute two hours each way and it'd only be like five miles. And so we made the considered decision, you know, I used to commute from Hollywood or from Venice Beach to Hollywood and that was, you know, in traffic could be an hour and a half and, you know, that was as good as it was listening to all of my podcasts. You know, that's not the life that I want to create for myself, let alone anyone else. So we made that real considered decision to have it remote and I think what it's also done is enabled us to build like we have hubs in terms of like we have loads of talent that come from Manila, Cebu, Davao would be like the three major hubs in terms of our talent pool but you know it really it's it's allowed us to get better talent. Speaker 1: And we'll talk about that and more in just a minute, but I want to finish on this, on the Escala stuff. So if I, if I come to you, what is it? What am I looking at? If I'm a, if I'm on that guy, that's built my business to a million, 2 million on Amazon, and I'm like, I'm ready to take this to the next level. Am I paying you a flat fee? Am I paying you by the hour? Am I paying you some sort of royalty or percentage or what? How does that work? Just for a scholar, just straight up for a scholar. Speaker 2: Yeah, for a Scarlett's project-based. So typically for us, you'll pay, you know, for hours, we deploy two management consultants into your business, typically for a four to six month period, I would say would be like the average time that we would be deployed. And that's it. On the back of that, you retain all the SOPs, training videos, documentation, click up workflows and integrations. We teach you how to update it yourself. We'll build all of your org charts, accountability charts, job descriptions. Build your future state, what it looks like in an optimized manner, and we do now have another, we call it the accelerate phase, where for a pretty small fee, I think it's maybe even under a thousand dollars, we'll continue to maintain processes if people don't want to have to have, you know, their skin in the game and having to actually update these on a perpetual basis. Speaker 1: So what am I what's just a I know it's probably depends on the project and size of things But what's a ballpark that I could it starts at 5,000 and goes up or what what should I be looking at? Speaker 2: Yeah, so it starts it starts that typically we wouldn't do a project that's under four months Realistically like doesn't even matter if you're a really small business. It still wouldn't make sense for us to the entire business I'm talking about documenting the entire business and our typical model so it would start at probably about I'd say just under 25 grand would be a project and I'd say that the average projects are probably $25,000 to $30,000 and so you're looking at about $6,000 to $7,000 a month on average for two consultants deployed into your business spending hundreds of hours building on all these processes and Auditing the current state, building the future state and so on. Speaker 1: How much time is it for me as the founder? Am I in constant meetings with them like every day explaining this is why I do this, this is how we do this, or is it a few meetings and then they take it from there and then develop it out and then I kind of look at it like no that looks good or no we need to tweak this two steps or whatever. How does that work? Speaker 2: Yeah, so in our model we'll interview, it's front-loaded, so the bulk of the time that's spent in that data gathering component where we're interviewing, shadowing and reviewing, you'll have a couple hour meetings at the start and then we'll go off, the consultants will go off, they're much smarter than I am and they'll actually do all of the work and then we come back for what's called a steering committee where we'll firstly before that we'll validate and we'll say is this how it looks. Obviously I think for everyone Who's thinking about this, like if you have a team of five people, there's the way that Kevin sees it, there's the way that Yoni sees it, there's the way that Lippy sees it, and there's a truth somewhere in between. And then there's the future state that's how do we do this in a more efficient way. So we'll validate, we'll say that's where it's at, and then we'll move to providing sort of the strategy and what we believe to be the future state. Then there'll be what we call sprint rounds where we'll build all the SOPs but we'll get your guidance and your feedback. So I would say if you wanted to look at it as a percentage, the consultants do 90% of the work, you would be responsible for 10% of the work, most of that is done up front and then when we're building the SOPs, we'll validate and we'll get some input when we're building that into project management tools like ClickUp. So relatively low touch for the body of work that's created at the end of the project. Speaker 1: Now that you've done something else, and I think this is really brilliant, where you guys as Scala partnered with SellersFi and with GW Pandas. Yeah, yeah, exactly. And to create this like, almost like a, like an incubator in a way, like for the e-commerce space, it's like, you know, you hear about all these guys that go to Silicon Valley and they get into this, what, Y incubator and, you know, 95, 95 doors or whatever, you know, all these different names. And there's nothing really like that truly in the e-commerce business. And you guys, I guess, would be kind of the closest thing where you're bringing the financial part You're bringing the strategic exit part and you're bringing the systemization part together and then you're going out. It's called South South Coal, right? So you're basically partnering in a way with with Entrepreneurs who have proven, basically they've already got to the MVP, they've already got to the minimum viable product and they're on a rocket ship. And you don't just take anybody, you're picky on who it is, but these are companies that are on the way up and you're like, let's take you by the hand and help you. And you guys come in and provide all that, the funding, the exit strategy, and the systems. And I think that's brilliant and I know you have Several companies already in that and how's that going or could you talk about that a little bit more? Speaker 2: Yeah, yeah, absolutely. So I'll explain the model and then I'll explain to you how it's going. So the model South Pole, like South, like the South Pole and then C-O-L. Coal is the business and it's actually, it's the last base camp before you summit Everest. That's our brand story is that there's nothing like this in market today. Kind of like you were suggesting a Y Combinator where we're coming in. So through SellersFi, we've stood up a $50 million facility. So $50 million to invest in e-commerce businesses that are looking to grow to exit with obviously GW Partners and with us. Speaker 1: Is that an investment or loans? Speaker 2: It's a debt facility, so it's a loan, but the terms are quite different to anything. Like even if you went to SellersFi or any one of their competitors, it's interest only for the duration of the time we're working with them at, you know, the lowest rate that you can imagine in market today. So the idea is that... Speaker 1: That's really good. Speaker 2: Yeah, the idea is that the founder never feels it and our objective inside of SouthCoal is saying, Kind of like what we're talking about here. Founder, even if you are spending a tremendous amount of time inside a PPC management, we have all the answers to the cheat sheet. You know, GW Partners are responsible for north of a billion dollars in transaction value. They've sold companies over the last seven years in the e-commerce space purely for well over a billion dollars to date. And so, what we're doing is we're coming in and we're saying, you built something great, What we're going to do is help guide you on how do you actually create multiple expansion, how do you actually improve your SDE or EBITDA depending on how big your business is will dictate how you're talking about it. And so us wearing the process improvement consulting hat will come in and we'll say this is where you're going to derive the most value to achieve the guidance that GW partners will suggest. So we remove the founder, we give them the capital, they're still the majority owner of the business, they're still making all the decisions. But ultimately, what we're doing is we're saying these are all the things that need to happen over the next 80 weeks because we go Into our accelerate phase where we're understanding the business, we're building the roadmap and then every single week we're actually sitting with the founders. One of us of the five who are the founding partners will sit on your advisory board and you'll also have access to a dedicated couple of management consultants that are actually almost like an accountability partner but making sure that throughout the entire journey we're getting you to where you need to be because how we actually are implicated in this entire thing is we don't charge for anything. What we do is we take a percentage of upside on the impact we have to the business. So for us, it's a model that really spoke to me personally and I would say also my partners because Unlike going and selling a business or even going to, you know, let's say an investment bank like GW Partners, there's only so much work that can be done in that 90-day period or if you really extend it, that 180-day period. What we're saying is we're going to actually give you two years working with us. We're not going to take anything through that period. We're going to help get you to a point where You know if you let's say a million dollar EBITDA, five million dollar business today and let's say a generous market value might be 2.5x on that million dollar EBITDA multiple just given the current climate last year it might have looked almost like double that. What we'll say is let's give you that valuation and let's grow you from a million To 2 million in that period EBITDA 5 to 10 million in revenue if you're more comfortable with revenue numbers, making sure that we're very focused on the EBITDA and the margin that we're trying to build in here. That multiple goes up to maybe a 4 or a 5 at that point and all of a sudden When we're taking minority stake in the upside, the founders made significantly more money even after they pay back the principal and ultimately, we're only being rewarded for the upside. So it really, it's a win-win scenario helping founders get to levels that they, you know, likely wouldn't have got to by themselves, leveraging all the resources and experience that collectively, I think there's probably 25 years of experience across the group of businesses inside of the e-commerce space. Speaker 1: Are there any criteria, if someone listening is like, this sounds really cool, what are the baseline criteria to actually be considered? Speaker 2: The baseline criteria at a really high level would be, we're looking at businesses that are doing at least about 4 million in revenue and operating at about a 20% margin and have shown two quarters, quarter on quarter growth. And are committed to exit over the next two years or, you know, in the next two years. So I would say that's the baseline. Obviously we're looking for products that we can sell. Like if you're, if you're reselling, for example, that's going to be much harder for us to, you know, to, to find the buying audience and it's, it's less sellable, but that's the baseline criteria. You know, we're open to having a conversation with anyone that meets that criteria or even if you're slightly out of it. Speaker 1: I think I saw someone, I think it might have been at Capcon or something, one of Ryan Moran's events, where he had someone come on and they were talking about the different levels. They're like, anybody can get a business to a million dollars on Amazon. I mean, that's not hard to do. But the next level was like one to 10 million. It takes a little bit different mindset to go from one to 10 million. And then I think it was from like 10 to 25 was like, it takes a different structure and a different mindset and each level going up like 25 to 50 and then 50 to 100 and 100 plus. And so that's where the stumbling block is. And that's what keeps a lot of people back is they can't make that switch. They either can't let go or can't set up the systems that it takes or can't hire the right people that it takes. To do that, and by you guys coming in and spending a couple years, and maybe right now, those two years, it's a good time because it's more difficult to sell. The market's gonna turn back around. I don't know if it'll ever be the frenzy it was, but interest rates will go back down and things will get better. They always do. And this two years is the time to just put your head down and optimize and get it working so that when things do get better, you're positioned way ahead of the pack, I would think. Speaker 2: That's exactly the logic, that's why we also the reality is like you need time to actually have a material impact in the business and while sure for our model if we just did 12 months and we saw, you know, the founder exit and us take our clip like from a cash flow on a business model. That's great, but we know better and we understand that for these founders to have a really meaningful exit, like that real life changing money, that FU money, it takes time. And even if you've been through before, we are in a very different time today and having the right resources and structures And having the right people around you, it makes a world of difference. So yeah, we also believe that the market will obviously turn around and that's why it's also, you know, a lot of these things are lining up for that as a business model but I think like the most important thing is that there's nothing really that exists in market today that really puts the founders first before they've gone through an experience like this and helps Build that alignment where we're not a PE strategic or aggregator trying to buy the business, you know, at the lowest possible value because it's in our counter-interest and we're not a broker who, sure, like they are much more aligned. They're aligned. They are tied to the upside and so I would, for anyone here, I mean, I think that that's definitely a really smart move. I wouldn't sell my house Without a realtor, I would probably not sell my business without an investment banker or a broker, but this really ties us to the outcome and has us really have skin in the game. Speaker 1: And like GlobalWired, one of the partners, you call them GW, they've actually presented at the Billion Dollar Seller Summit and sponsored in the past. And every time they present, their presentation is always one of the ones that I want to pay attention to because it's not a lot of nuts and bolts and hacks and tricks or anything like that. It's more like they have such a good pulse on what's happening out there in the investment world, in the financial world, economic indicators, you know, everything. And their presentations are always just full of like Just data, data, data, data, data, data, like this is what's happening, this is where it's going, this is the trend, this is this. So having them on the team along with you guys and SellersFi, which used to be called SellersFunding. So if you're like, I never heard of this SellersFi. It used to be called SellersFunding. They changed the name. It's a really good team and it's something that hopefully one of my businesses can get involved in at some point as well because it's a no brainer. Speaker 2: Would be the dream, Kevin. Speaker 1: It's a no brainer. Cool, so let's talk about the Philippines a little bit. We touched on it earlier. I know back in April, I put out in the Helium 10 Elite, which is the monthly training that we do for advanced sellers for Helium 10, I oversee that. I put a little, I have a 7 Ninja Hacks section that I do every month. We bring on three speakers, like we said at the beginning, you spoke on it a few times, and we share different things, and then I always do 7 Ninja Hacks at the end, and those aren't necessarily hacks. You know, how to black hatch your way to getting the bestseller badge or something like that. They're tips and tricks. Sometimes it's software, sometimes it's, hey, did you know you could do this on Amazon to get a review removed? It's that kind of stuff. And one of the things that I mentioned in April was like, hey, if you're looking at getting a ballpark of what you can get in the Philippines and what's it going to cost you, go over to Multiply Me and go to this link and download this really good 23-page PDF called, I think it's called like the Philippines Pay Guide or Salary Guide or something like that. And I got so many people saying that was one of the best resources, that was really, really cool. Because inside this guide, you like broke it down, because I've always wondered, you know, I work with some Filipino VAs through like Helium 10 and through, my partnership was on Product Savants with Steve Simonson. I don't personally have, directly have somebody that works for me. On the Philippines, we're talking about changing that right now and adding a few people through you guys. There's lots of services out there. You've heard of FreeUp, there's Filipino VA, there's a bunch of them, but Multiply Me is one of the ones that I think is probably, from everybody that I've known that's used you guys, is one of the better ones at vetting and actually making this process simpler. And you put out this guide With the monthly salaries. And you compared Filipino salaries to the US salaries. And in the guide it'll have, it's broken down into like categories. It's not like this is what a VA costs. It's like, here's accounting and finance. And this is what a payroll manager costs. This is what a bookkeeper costs. This is what a financial analyst costs. This is like, it's like 10 or 15 different little sections. And you did like operations people. You did creative design people. You did marketing and advertising and sales and support. You talk about what are the special benefits and stuff and it's really eye-opening to see some of the differences. And so why, why, let's talk about this a little bit. Why the Philippines? Why should someone, you know, there's Pakistan is kind of emerging as a place where a lot of VAs are coming out of, you know, you get the enablers group that has over a million people in their Facebook group, has set up like little campuses all over Pakistan to actually teach people how to do stuff, but then you have the Philippines, you have Indonesia, and you have India, you know, it's commonly known as a place to get cheaper outsourced talent, but why do you guys focus on the Philippines, and what's the advantages to Filipino talent? Speaker 2: Yeah, so I mean firstly, I'm glad that you saw value in the guide. We definitely spent a tremendous amount of time looking at, you know, we've placed well over 700 people over the last nearly three and a half, four years into a lot of e-commerce businesses and Amazon businesses. We have about 100,000 people in our database and cross-referenced, I mean, you know, how we got to those insights is all written there, but I've always found it like a real black hole. You know, obviously I've spent nearly 10 years or a little over 10 years now working with the Philippines. And I have a deep knowledge of the culture, the climate, of the talent pool. And I really, this is like a first step into really giving high value content. And by the time this is live, I'm sure there's probably a handful of other pieces of collateral that we put out to help guide people and help them understand how to approach these things. But really, my love affair with the Philippines started about 10 years ago, but went into hyperdrive about five years ago. So, a bit of context before I share my personal story. The Philippines, for those of you who don't know, has a population of about 120 million people. And of those 120 million people, those that work in what's defined as the BPO, the business process outsourcing space, they all have a, or rather 95% have a college degree or higher in terms of their final education and all college is taught in English. That is the education, the official education language of the Philippines where it's a super westernized culture. So going back about 30 odd years ago, the whole call center space, no one can see me doing the air quotes, but the call center space was built in the Philippines. And Kevin, you can, you got a bit of a laugh out of it. But essentially people were trained with American accents and it was built on that baseline. And so I came in and I originally had thought to myself, you know what? I'll hire a VA and they can do some really menial baseline tasks and data scraping and data entry and you know, even things like when I was an Amazon seller, managing my PPC but not from actually the strategic buying, pulling the reports, getting them to a point where I can analyze it and then come in and do the work myself. And when I started hiring, what I realized was there's talent that exists that's way beyond just a VA where Coming back to it, it's a third the size of the US in terms of its population. It's five times bigger than Australia for context and in terms of population and all of a sudden I was able to find talent that had done Serious things, my original COO, Joan, she used to wrap companies up for sale. She used to go in and build out the operations and businesses, fix the things that were broken and when I hired someone like Joan, I just realized like there is a much deeper world that exists that's not really baseline like You know, just baseline VA work but you have serious professionals here and if you're talking about paying a VA, you know, $4 or $5, what's possible an hour, what's possible when you put that up to $7 or $8, you know, what is the real delta in terms of output and so pretty quickly, I started hiring people. I brought on a recruiter who had 15 years of experience and we were able to find talent that was just far better than what we could on things like Upwork and, um, you know, and other platforms and onlinejobs.ph for example. And it just rapidly shifted my whole visibility that I could now delegate accountabilities to people that were much better than I was in the skill sets that I needed. And I didn't need to sit and have, Are they doing all of their repetitive task work? And so that was really the shift, Kevin, in a really long-winded way of explaining it. Speaker 1: The cost of living in the Philippines is much cheaper. So therefore, you can actually pay a much cheaper rate. And so you may be thinking like, man, we're just paying someone four or five, you know, even seven or $8, $10 an hour. And some of them cost a little bit more than that as well. But why do you feel like you're like taking advantage of somebody or something, but you're not? I mean, that's actually good pay for them over there. That's like, you know, 10 bucks an hour could be life changing pay for some of them, right? Speaker 2: Absolutely, so to that point I started Multiply Me because I wanted talent in the Philippines to actually receive a fair wage. So everything that we're doing is benchmarked against what are fair wages and what's more is we offer things like health care benefits and fringe benefits and a whole lot of things as well which makes it a lot more attractive and why people love our services because we're able to get talent that most people Won't have access to and it's about 60 to 80% cheaper in terms of the cost of living than it would be in the US and the Philippines. So that's really sort of the math that you want to be doing here. So your point like $10 an hour is something like 60 to 80% times that by 60, 30% more of what it would look like and all of a sudden that's a pretty decent wage in the US, right? Speaker 1: Yeah, I've been to the Philippines and I can confirm that things are definitely way cheaper there for the most part. And just the quality of the people are good. I mean, they're highly educated. There's a lot of Spanish influence in their language, their local language, plus most of them speak English because the US is basically, throughout the World War II especially, it had a base over there. So there's been a big, huge influence of Western culture. So it's a really strong place to actually recruit from. They're hard workers. I mean, there are some cultural differences though where, that you can, you know, in dealing with them. Can you talk about a little bit of the cultural differences between the West and what, you know, if you tell them something, tell something to a Westernized employee, they may take it one way. You tell that to a Filipino, they may disappear for a week. And not, and you're like- Or forever. Or forever. You're like, what did I say? What did I do? So can you talk about a little bit of that? Speaker 2: Yeah, absolutely. So there's definitely cultural differences. Make no mistake about it. From the first point, I actually find in a lot of cases that Filipinos will actually work way more hours and much harder than most people I've encountered in the US or Australia or other geographies. I think that that's a blessing and a curse and one thing that you really need to make sure that you're checking on them and making sure that they're not burning themselves out but to Kevin's point here and I like to call it the Disappearing Filipino Act is you really need to build a high degree of trust and help them understand how you give feedback and work on it because one of the cultural differences and I think that this might be somewhat of an Asian cultural, you know, it sort of happens across the region is that there's a lot of pride in the work that is being delivered And they have a real apprehension or they're quite conflict diverse. So what you'll have and coming back to the point I was making that they work so hard is that if you send them on a wild goose chase and they don't understand exactly what's expected of them, they're trying to figure it out in the background without getting any further toward the objective. And so when you come and you critique them and you hit them really hard on, Hey, like this is terrible. Like what have you been doing for the last two days? Um, you know, you can, you can find instances where that's it and they just go because they're embarrassed that they hadn't delivered. So I think like in dealing with cultural differences like that, it's about really establishing clear communication and clear touch points and understanding when do you come in and have reviews and building degrees of structure where They feel like there's a safe space to say, I don't have all the answers or I'm struggling here. Like that's, I think that's one of the most important things. If you've not worked with the Philippines, that's the one thing that you need to get right really quickly in order for it to be a successful working relationship. I'm, I'm using generalizations here because I've got team members that are more direct and more blunt than I am. And I love that. But as a general rule of thumb, the experience I've expressed is, is one that's probably more typical. Speaker 1: What about like infrastructure things? I hear all the time you know you got to give them some money to buy a decent laptop or the internet goes out or the electricity goes out and especially if they're all remote and they're not working in one central office. How do you deal with those types of things? Speaker 2: Yeah, so for us when we're interviewing people like one of the things we're looking at their internet speed, we're understanding the hardware that they have and we're going through that as a baseline and making sure that they have a backup generator and that they're at a point where they can operate themselves. We also have a service where we can help facilitate and get them the hardware and the software and the infrastructure and help sort of facilitate that. But what I would say in my experience having worked with the Philippines for a long time is It's not something that comes up very often. I would say that I could count the number of like down days that I would have a year and it's usually based on a natural disaster. You know, it was pretty good for a few years and then there was a couple of cyclones or hurricanes that had come through and some heavy weather. But in general, You know, if you're having more than, I would say, five days a year where this stuff is happening, then typically something's not quite right or maybe you're hiring in like very much the provincial areas that have like less access. Having said all of that, Starlink is now live, I believe, in the Philippines. So, you know, you pay the hundred bucks a month and you've got better internet than I would say I have here in my office right now. Speaker 1: Yeah. What about, a lot of people don't realize too, the bonus you have to do at the end of the year, the 13th, they call it the 13th month. Can you talk about that a little bit? Speaker 2: Yeah, absolutely critical guys and you know that e-book covers a lot of the benefits, the statutory benefits that are given in the Philippines but 13th month, to express it really simply, it's a bonus that's given in December and it's accrued one twelfth each month for the duration that the team member has worked with you. So, if they start in January, right, the January 1st, you'll pay them a double month in December If they start in June, you'll pay them six months plus their monthly salary. And what that 13th month is, Really the thing to think about it and I think like one of the cultural differences, maybe not differences, but one of the cultural norms that I see in the Philippines is like notoriously terrible savers. So one of the things that's really important from a cultural perspective is having regular work and having a regular salary is really important. So that's why when we approach full-time work, we have a high degree of success because there's that consistency. A lot of Filipinos that are actually in the workforce It's inverted compared to the Western world where, you know, I would say like my parents will always make sure that I'm okay and that I have enough money to live and if things, shit hits the fan, I'm going to be able to turn to them and say, hey, like I really need help. In the Philippines, as soon as you're of age and making money, it sort of inverts and you are now providing So your parents and your grandparents if they're around, so these things become really important. But coming back to the question about 13th month, that money is also going to be spent on mostly gifts for friends and family. Like it's a Christmas bonus that's expected and so it's not going to like a future saving event. It's literally I'm going to get my kids and my parents, my grandparents and my cousins and my siblings gifts for Christmas. Speaker 1: I think I read or I heard somewhere it's also difficult to let someone go in the Philippines. There's some sort of process if you're going to fire somebody where you got to pay them a certain amount or you got to have some sort of, there's some sort of special rules around that if you get, if you end up hiring someone that just doesn't work out. Is that true? Speaker 2: It depends on how you'd be structured. So, if you're leveraging them as full-time employees under an EOR, then there's parameters that need to be taken to actually effectively achieve that. But mostly speaking, I actually see most of the challenges with the contracts, like the standard contracts that exist in the Philippines where, you know, I find it pretty Pretty tough to hear that they'll have two-year non-competes as an employee working for a business and so to go into a competitor actually becomes problematic. So they really cut off their ability to work and stay in the same industry. So I would say it depends on the structure would be the long-winded answer to it but there are definitely ways around it and you know I would say we've definitely figured out you know how to manage these things the right way. Speaker 1: So, a lot of the Filipino workers are, they work in, us in the West, there's huge time differences. Not so much for you, I guess, in Israel, there's still some, but for like in the United States, there's huge time differences. 13 hours for me in Texas, 12 for New York, and 14 for California. So do a lot of these Filipino workers, including the more higher end people, the accountants and the auditors and stuff, are they working nights to actually be able to correspond with their Western counterparts during the day? Or what's the typical, or are you just, there's a little bit across, they're working days, a normal day, and then there's a little bit across over a couple hours here or there. How does that work? Speaker 2: So it'd be all of the above and it comes down to a real case-by-case basis not just on the employers perspective but the employees too. So I'll give you an example. I really wanted to bring on this really high-level ops manager. And we wanted him to work on Philippines time because our whole team does and he refused to come across because he was spent 13 years working graveyard shift with US based clients and he wasn't committed to making that shift. So a lot of the Philippines has been built on outsourcing from the US and you can find candidates that are very happy to work. That graveyard shift, I would say my personal recommendation to anyone, and I think this comes down to building a systemized business, is really to, sure, have a bit of overlap time. I think that that is constructive and it's helpful to have those meetings, but realistically, if you build the role and the accountability the right way, then there's no need for that to be extended, and you also end up having 24-hour production. I love, for example, where You know, now when I'll knock off work, I'll send a bunch of loom videos of what I'm looking to do with my design team. By the time I'm awake tomorrow morning, it's already done. And I think like Coming back to working with the Philippines case-by-case basis, you know, I think like how I treat the world is trying to have my team living their best life and so I'm trying to create those means where they're not working too late into the evening. But again, I have guys and girls that will say no because they want to stay on the US time zone. So it comes down to a case-by-case basis. Just being very prescriptive in what you're looking for when you're going down that hiring path I think is important. Speaker 1: So how does Multiply Me work? So I come to you and I say, hey Yoni, I need a PPC specialist, I need a copywriter, and I need an executive assistant I'm looking to hire. What happens next? Speaker 2: Yeah, so you'd get on a discovery call. We would understand in more detail, not just about the role, which we'll build the job description for you. You don't need to worry about that. We'll actually understand, you know, where the business is at, the company culture, all of those insights, and then it'll go to one of our 25 dedicated full-time recruiters, who will then start to, sure, post it into all the job boards that we're connected with, but mostly spends time Doing passive candidate sourcing. So they'll actually go and headhunt talent that meets the criteria that we're looking for. We're not training talent from scratch. We're finding ready-built people to place into businesses to shortcut that learning gap as much as possible. And so through this entire process, you're getting bi-weekly updates, how many candidates have come through the funnel, how many we've interviewed, how many have made it to Client interview stage and where we'll get to is once we have a top three, then we'll submit it and say, right, you've got three candidates to interview, these are their profiles, if you have any test tasks, which we highly recommend that you share with us, we'll have them go through that process and then we'll get you onto a call with our recruiter, with the talent, we help book it in for you, we have booking links, go through that whole process and then our model is that it's a Success based pricing. So only once you are happy with the candidate that we've submitted will we even look to engage and start charging you money for working with them. Speaker 1: So do you just charge a fee for actually finding them or is it equal to like their first month's salary or is it I'm actually paying you and you're covering like some of their health benefits and stuff and then you're paying them or how does that work? Speaker 2: Yeah, we're chatting about this at a very interesting time in our business's evolution. So historically, and just for the audience, I know if you've listened this far into it, I'll just share with you a little bit of an overview. The typical BPO company is one where you rent the staff. So you'll take anywhere from 20 to 30% monthly on top of their base salary. They'll be taking money and then on the back of that, you'll then pay them like for their infrastructure and the location and all of that stuff that's going on. That's like the typical BPO model. What we've made a material decision is to move more to the recruitment model where we take a one-time fee for finding that talent because our logic was that in years 2 and 3 and 4 and 5 to be taking that percentage in perpetuity, we're not adding value in anymore. You've built that relationship, it's established. So, we take a one-time recruitment fee for finding the talent. And then we'll charge a monthly recurring fee if you want us to handle the payroll and the benefits and everything that's attached to it to facilitate where we'll invoice you the salary plus about $99 for the monthly which is what we take and we pass through the entire cost. We'll handle the 13th month, the leave tracking, all the work that's done. We've built a platform that actually lets us do a lot of this work and helps facilitate for our audience. Yeah, it's a one-time fee. It's a really long way of saying it's a one-time fee with us handling payroll becomes recurring and then we have what we call these value-add services. So if you're not really good at onboarding, you don't have a lot of experience, we'll help build the KPIs and the onboarding framework and hold your hand through it. If you want us to find you hardware and get you computers for your talent, we can do that too. We have a whole lot of these. Elements that we're looking to really support even where we have an account manager that does weekly check-ins and handles the performance management and gets a lot more entrenched in your business. So again, I like long-winded answers here. Speaker 1: What kind of guarantee is there if this person doesn't work out after a month or quits? Do you like go and find me another one or do I gotta pay you all again to go find another one? Speaker 2: We offer a replacement guarantee, so 60 days replacement guarantee if it doesn't work out, we'll probably send no questions asked. If you go through the Talent Accelerator program, that extends that lifetime out to 90 days because we've actually helped guide you through the onboarding, so we'll take on more of the accountability saying, okay, We actually know that you've done this the right way, so we'll extend that out. And then we also have, for a monthly fee, you can have a replacement insurance. So I'm not exactly sure what the cost is. Like I said, we've just moved the model. But for a relatively inexpensive amount monthly, you can pay us, I think it's about $49 a month, don't quote me, where You can extend that out in perpetuity. So if at any point that person leaves, we'll then replace them. Speaker 1: So that one-time fee, does that depend on the type of person I'm hiring or is that pretty standard across no matter whether I'm hiring a copywriter or a catalog specialist? Speaker 2: It's 25% of first year annual salary. So, you know, if they're at the low end, you know, it might cost you, you know, let's say $700 a month. I'm terrible at math here. So 25% of what that annual salary would look like. And at the high end, you know, you can have roles, like you were saying, that start to be into that. You know, we have people that we pay probably $5,000 a month for. Speaker 1: So it's times 12 or times 13? Speaker 2: Times 12. You know what though, you've given me a great idea. Maybe we'll change the model and we'll include the 13th month. Speaker 1: So just for easy math, if they're making $1,000 a month, that's 12 grand for the year. So for you to find this person, take all this headache out and really do all the screening and a lot of the actually hard work, it's going to cost me about three grand. Speaker 2: Yep. Speaker 1: Roughly. Roughly. Okay. And do I pay that all up front or am I paying that monthly over the first year? Speaker 2: You would pay that, you'd pay that all up front. You pay that all up front. That's our model now. Speaker 1: Okay. And just, just for comparison purpose, I'm looking at your, your like Filipino pay guide right now. And I encourage everybody to go grab this. We'll give you a link or a way to get that here in just a minute. But I'm just looking like PPC specialist. The way he has it broken down, he has the Philippines salary range. So it'll show if someone has one to two years experience, a PPC specialist would cost you 900 bucks a month. If they have three to five years experience, you're looking at roughly $1,400 a month. And if they have five or more years experience, You're looking, it's probably going to cost you about two grand a month to hire someone in the Philippines to be a PPC specialist. Now, if you did that in the US, someone that's one to five years in the US is going to start at about $4,300 a month and go up to $12,400 a month, depending on experience. So that savings right there, according to the guide here is 76%. And you probably get someone that, like he says, is harder working, that's more devoted, and you get a lot of those extra benefits. That's just one example. And just another quick example. It's like an executive assistant. One to two years, $900. Three to five years, $1,200. Five years plus, $1,600 in the Philippines. Versus in the US, it's $3,800 to $9,500 to get an executive assistant. I'll just grab one other one here. Let me look at a creative person. Speaker 2: It's a great little guide, isn't it? Speaker 1: Yeah, it is. I mean, each of these categories, you have like a video editor. Here's a video editor. Someone to edit all your social media videos, let's say, or even a podcast editor. Let me do podcast. No, I'll do video. A video editor, $800 a month for an inexperienced one. $1,200 a month for someone that's got three to five years and about $1,500 a month for someone five years plus versus you hire someone in the US, it's gonna cost you between three and $9,000 for that. So even at the most experienced level out of the Philippines, it's half of what an inexperienced person is in the US just by comparison. So if they wanted to get this guide or actually find out more about Multiply Me, how would they do that, Yoni? Speaker 2: I mean, I would love to give you a link to drop in here, but multiply me, me spelled M-I-I dot com. It'll all be there. And by the time this is up, we're going to have at least probably a lot more, 150 free job descriptions for all the roles in the guide and beyond. We might even have live our own job description builder where you can come in and put in some inputs and using AI, we're able to build the logic that works for us. And that's, you know, we would say, Best practices in building job descriptions. So even things like org charts, we should also have for different sized businesses, whether you're an agency, larger e-commerce business, smaller e-commerce business. We're really in, like we were talking before we hit record, like my goal is just to create value for everyone so that we can demystify so many of these things that You know, obviously we have the answers to the cheat sheet because we've been doing this for many years and we have the visibility across so many businesses. So yeah, very excited to just get that stuff to you. So it'll all be on our multiplyme.com website. Speaker 1: And again, that's multiply me, but me is spelled M-I-I instead of M-E. So multiply and then M-I-I dot com, not M-E dot com. Just to clarify on that. Yoni, I really appreciate you taking some time today on, I would say on a Sunday, but it's like a Monday for you. So it's awesome. Speaker 2: I appreciate your time, Kevin. Speaker 1: To sit here and chat and I think I've learned a lot of stuff and I think the audience has probably learned quite a bit too. It has a lot of things to think about, whether that be hiring VAs, working to systemize your business or actually getting involved in what I call your incubator deal. Some really great opportunities there and some really good stuff you're doing. So thanks for helping the community in the way that you do. Speaker 2: Thanks for having me, Kevin. I'm honored to be here and hopefully, like always, that I can add some value and demystify some of the things that otherwise were pretty tough for me sort of five and ten years ago. Speaker 1: Awesome. Thanks, man. We'll see you soon. Speaker 2: Cheers. Speaker 1: Great talking with Yoni in this episode. Lots of good information there that I hope you're able to to utilize in some way depending on where you are in your business. Yoni's always giving back and doing really good things for this space and kind of has carved out his little niche and they're doing a really good job at it. So reach out to the guys at Multiply Me or Escala or or South Call, depending on where you're at, or maybe all three of them. And I think you will find that you can get some good value from that. We'll be back again next week with another amazing episode of the AM-PM Podcast. Thanks for listening. Be sure to hit that subscribe button on your favorite podcast listening device or tool or app or whatever, wherever you're listening to this. And before we leave today, I still have a little bit of words of wisdom for you. I always think of Steve Jobs when I see this quote. It always comes to mind because you know you've accomplished something if they miss you when you're gone. You know you have truly accomplished something if they miss you when you're gone. See you again next week.