Startups Outsource, Too

Have you ever called up customer service at Uber? How about at Tinder? Most likely, you haven’t. In fact, you probably couldn’t find a phone number for these companies’ customer-service departments if you tried; they go out of their way to solve all of your problems over email.

While a quick, documented response is (sometimes) great for customers, it turns out it’s great for startups such as Uber and Tinder, too: Eliminating a customer-service number means these companies don’t need to support the massive call centers traditionally set up to tackle customer inquiries. Instead, they just need a workforce that can handle emails. That might seem like a small difference, but it isn’t: Not only do emails speed up (and simplify) communications, they eliminate the need for a speaking customer-service representative on the other end of a phone line. That change, in turn, has allowed many tech companies to quietly outsource their support efforts—and other simple, labor-intensive tasks—without facing the blowback many large corporations have received for doing many of the same things.

Uber, Tinder and others, including Groupon, Hotel Tonight and Whisper, are leading a new wave of outsourcing among startups. Instead of employing large teams of U.S. workers, these companies have small teams in the Philippines that address all of their customers’ queries; they’re all clients of TaskUs, which specializes in outsourcing customer support and backend services for startups and fast-growing companies.

Primarily located in the suburbs outside Manila, TaskUs hires and manages a labor force that handles everything from customer support, to data entry, photo retouching, and content curation for Whisper and other applications. The company determined (correctly) that as long as it provided exemplary service, nobody would question where the service was coming from. The rising popularity of text-based communications over calls has made building the customer-support side of the business even simpler.

Although the company claims it hasn’t tried to do so, there’s no doubt flying under the radar has proven essential to its success; no startup wants the negative attention that typically goes along with outsourcing. (The company’s founder, Bryce Maddock, even admitted that many of TaskUs’ customers don’t allow the company to name them.)

TaskUs employees are responsible for only one company, so they can get fully immersed in its brand and messaging. By ensuring agents are educated on the brands they support, the company is able to provide service that adheres to the client’s voice.

Given that startups have a reputation for hiring primarily from referrals, and marketing themselves as close-knit places to work, outsourcing may seem like a surprising move. But startups don’t want to spend their resources worrying about simple tasks; cutting costs on simple chores such as data-entry and customer support allows them to spend the money they’ve raised from investors on improving and marketing their product.

Outsourcing is actually particularly appealing to startups because they haven’t yet invested resources in perfecting the services they’ll outsource. As Ashir Badali, director of marketing for TaskUs pointed out: “A lot of our clients are emerging companies that are either experiencing rapid growth, or that have been recently funded and need to grow quickly. In these situations the jobs aren’t outsourced—the process or activity is—because no one is doing it in-house either because they don’t know how, or they don’t have the bandwidth.”

TaskUs doesn’t seem concerned about the public reaction to the idea of startups outsourcing; so long as agents can solve customers’ problems, goes their thinking, the customers won’t care. “We have a really rigorous hiring process that is designed to find support specialists who have the experience and skills to do the job, but who also have the aptitude and attitude to live up to our company’s core values,” Badami said.

But limiting customer service to online and email support also features problems: No matter how streamlined and efficient the online communications, there are always some people who aren’t satisfied unless they can get a person on the phone. According to Uber marketing manager Kate Magoc, a number of drivers have expressed frustration over the lack of a phone number they can call for help. “We’re still figuring a lot of things out,” she said, adding: “What we’re really trying to do is understand the data we get from the app to better serve people.”

So is outsourcing the secret to quickly scaling a new business, or merely a passing fad? Given the relative newness of outsourcers like TaskUs, it may be too early to tell. The answer will likely depend on the fate of companies who have been transparent about their outsourcing.

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7 Responses to “Startups Outsource, Too”

  1. Fred Bosick

    “But startups don’t want to spend their resources worrying about simple tasks; cutting costs on simple chores such as data-entry and customer support allows them to spend the money they’ve raised from investors on improving and marketing their product.”

    There ya go! Marketing is *more* important than customer service(a simple chore?).

    How is it that a small team in the Philippines is better than a large team in the US? Typical outsourcing is the reverse. And depending on the product, US employees are much more likely to see similar items than Filipinos will.

    It’s OK. We see the trend here. After awhile, everything except the idea man and the investors will be outsourced. Middle managers and director level guys had better look around. They’re next to be outsourced! India, China, and the Philippines are looking to go upmarket.

    So, if the rest of us become Walmart greeters or unemployed, whose taxes are going to pay for the legal machinery they so depend on to protect their IP and make their money? At least one judge isn’t going to wait to find out. An East Texas district judge just joined the dark side of IP law by taking a job at a law firm. I guess more frivolous patents will be defended with all the sneaky tricks the judge formerly ruled on.

    When we all end up at workhouses or debtors prisons, we’ll be looking for the guys who used to be managers and who laid us off. They’ll be surprised when they suffer the same fate. Their surprise won’t last long because as soon as we find out the new “inmate” has an an MBA or PMP, we will disassemble him until his parts are smaller than the storm drain grates.

    When you outsource, you start a slippery slope that even you cannot avoid.

  2. emilov

    For those who follow job openings on linkedin, this was news… a few years ago.
    No more outsourcing, it’s the new jobs that are created offshore in the first place.

  3. What a male bovine excrement article. Without customers you don’t have a business! Do you understand that simple concept? I ran into a situation that could NOT be solved by email tag and HAD to handled over the phone. Using simple searches I was able to get the phone number to customer service and the problem was solved.

    Quit glorifying the full of themselves Silicon Valley jerks who seem to lack basic business skills.

  4. we do care where the support is and that they are in the us and that we can get in touch w someone if needed. And it affects how long we use an app in some cases.

  5. The sooner the companies get to understand the differences in culture and logistics with which they are in the business of outsourcing, the better it is for them. in the era of social networking it is easy for companies to fail based on their performance in a short duration.
    As we see more of these failures there will be an opportunity for every individual to start thinking of their own way of getting things done instead of relying on companies that provide service using outsourcing means.
    Very soon people will leave US seeking immigration in the countries where work is being outsourced.
    Every year the number of citizens giving up their citizenship is on the rise. It is going to be more in the coming years.

  6. I agree with Steve. It’s getting worse isn’t it.

    Personally, I don’t want to wait for resolution if there’s an issue. I want to talk to someone now! No one wants to wait. I’ve stopped using several apps because it’s not handled immediately and here at home.

  7. Paul Carver

    Companies & government agencies have been outsourcing for decades. To IBM & other companies. The subject is offshoring; outsourcing to other countries.

    A side note. I have found that most Filipinos can speak English much better than they can write it. I guess that is what grammar checkers are for.