Our guest today is Kevin Zhang of Kreator Consulting who runs a very successful $20M eCommerce business employing more than 50 remote workers.
Kevin, why did you opt to run an all-remote company?
I started my business as a 22-year-old with $3,000. Back then, I had just graduated from college with no prior entrepreneurship experience. Nevertheless, I knew that infrastructure is incredibly important to develop, and ultimately, the talent within an organization is what drives it. I didn’t have time or capital to deal with the hassle of traditional recruiting, so I went online and looked for freelancers.
I quickly realized the benefit of an international, remote-based team – there’s no red tape or hassle, and a lot of cost savings. My COO is a doctorate from Ukraine, where the economy has not treated him well, but he is one of the most hardworking and intelligent people I’ve ever met. Due to the differences in living standards, he’s happy with a salary that I can afford to pay. A COO based in the US would probably demand $200K+ a year and equity options.
My experience with freelancers was very positive and I decided to adopt an all-remote concept and hire remote workers regardless of their location. Even those members of our team that are based in the US are working remotely.
If there isn’t a need for an office, then why have one?
People like the flexibility of working wherever they want. As long as they get their job done and do it well, I don’t care when and where they work from. My procurement team is in China, my customer support team is in the Philippines, my COO is in Ukraine, my CFO is in Atlanta, and my legal team is in Chicago. I live in Los Angeles.
I trust these people with my life, and they love the business that we’ve created even though I’ve never met any of them in-person. The world is a different place now.
Trust is hard to build even in a traditional environment. Are remote workers more or less loyal than in-office employees?
I’ve found that remote workers are even more loyal than in-office employees. Working with foreign talent – many come from countries that just don’t have that many opportunities due to the economic conditions, provides a different perspective. When I give my COO a bonus of $500 or $1,000 at the end of every month for doing such a great job, he goes above and beyond and always exceeds my expectations. In the US, bonuses are perceived as granted.
When my business is not performing well, it is the entire team that puts an extra effort to have it back on track as their income depends on it. When people are paid above the industry average and have a work-life balance, they are more committed than ever.
Work-life balance is almost always associated with remote working. Are remote workers more productive than their peers working 9 to 5?
In my opinion, people are most productive when they are happy and have the flexibility to work and live the way they want. My remote workers can work from their homes or if they really love traveling, work from any place around the world. All of a sudden, work isn’t an obstruction to their ideal lifestyle, it’s an integral part of it and even a driver of it.
I pay my workers far above market rate, I let them work whenever and wherever they want as long as they get the job done. Happy workers are also the most effective workers.
Flexible working is appealing but may result in bottlenecks if key team members are in different time zones. Is it easier or harder to manage remote teams?
Remote teams seem like they would be a lot harder to manage because of distance, but technology has made things easier. One of my favorite platforms is Upwork – they leverage technology to create analytics and reporting on all of my employees. If I wanted to, I could see screenshots of their computer screen every 30 minutes (I did this in the beginning, but now there’s a lot of trust). For my customer support team, I can see how many emails they respond to in how much time and how satisfied customers are that receive their responses. It’s very clear when one customer support agent is slacking compared to their peers or not treating customers the right way – it’s all in the data.
The one thing that is a bit harder to do with a remote team is to build trust. Prior to onboarding anyone, whether it’s a customer support team member or a graphic designer or an accountant, I have a video call with them so they know that I’m a real person who cares about them and my business. To me, it is important that they understand our mission and their role in the broader scope of things.
Training is something that I’ve worked hard to automate. Now, we have a playbook and guidelines that are given to every new employee. My managers also know exactly how to train new joiners in a short period of time and get them up to speed. This system took a long time to develop and polish, but it’s allowed us to grow at an incredible pace.
We were able to generate $20M in sales in our first year because of our ability to find, train, and retain talent.
You mentioned that your remote team is scattered around the world. Do remote working arrangements allow you to tap into a diverse talent pool?
Yes. For the first time in the history of business, technology has allowed for business owners like me to not limit their talent pool by geography. Interviews, training and business can all be conducted remotely. I can find the perfect candidate where the price and talent intersect perfectly. Sure, a Harvard MBA sounds sexy and looks great on paper, but my guess is that a PhD in Astrophysics from Ukraine is just as smart and hardworking. A lot of institutional companies ignore the latter option because “on paper” doesn’t look appealing so I can get that talent for a really good price. They’re also super happy because I’m paying them way more than they would have earned domestically.
Some people also just love to travel or work from home. One of my graphic designers is an avid traveler who never spends consecutive months in the same country. He is incredibly talented but obviously his preferences aren’t met by traditional businesses. He normally has to either sacrifice opportunity or happiness. With me, he doesn’t have to sacrifice either. My customer support manager is very family-oriented and has old parents that need attention. She loves that she can work from home and take care of them.
The internet is also such a wonderful place to look for talent. Need a developer? You can see their portfolio of the projects that they’ve worked on and the things they’ve built. Need a graphic designer? You can see their designs. Furthermore, most of the platforms that curate talent like Upwork, Fiverr and Transformify, have review features so you can see what previous employers and clients have said about the freelancers and their quality of work. It’s truly the democratization of human resources and I love it.
Technology has opened a lot of doors when it comes to talent search. Restricting your business’ growth only to the talent available in particular geography will not take you far.