Outsourcing Everything for Scale w/ Joe Rare of Level 9 Virtual | builders podcast

0:00For so many years as a kid, I was like, I don't want to build somebody else's wealth. I want to build my own. And then I was like, well, I'm going to go start a business. And so I literally dropped out of college and went and started a business.

0:15Hey, entrepreneurs, this episode is for you. Joe Rare has built multiple companies since he was 20. And his biggest business, Level 9 Virtual, is about outsourcing everything you do so you can run your business. We talk about mistakes, entrepreneurship, give advice for product market fit, and much more. You're going to like this one.

0:38Hi, Joe. Good to see you. Good to see you. Thanks for having me. Yeah, of course. You were just, when we were off air, you were pounding, I think, a rock star. I just finished my coffee. So we're good to go. Hopefully we got some caffeine. Let's do it. Yeah, yeah. I'm high energy today. So I want to talk about your business and how you grew it. But I actually, before we do, I want to talk about the process that you started to become an entrepreneur. You've been the founder of multiple businesses. When did you know you wanted to be an entrepreneur? Is this something you always wanted to do as a kid or what led you down this path of founding and starting businesses?

1:14When I was a kid, I kind of wanted to play baseball, but that didn't turn out. For me, it kind of started, I watched my parents struggle financially and we weren't by any means like this isn't a rags to riches story. We weren't poor, but we didn't have stuff. We didn't get the newest basketball shoes or anything like that. My parents just very much had to budget and stay on a budget and we didn't get fancy stuff and we didn't live in this amazing house. And so watching them struggle when I was in high school, I picked up a book at the end of high school, Rich Dad, Poor Dad, which obviously everybody understands.

1:49and the concepts it, it like, it just registered. And I, and I'm like, Oh, that's it. Um, then through doing a ton of podcast interviews and a lot of people asking similar questions, somebody pinpointed a quick story I ended up telling. They were like, that's your origin. That's where you understood entrepreneurship. And, um, so for me, there was a moment in time, There's a guy, his name is Jim. He's still around. So it's not like he's gone. He's father of a friend of mine. And we all love baseball. He played, I think, in the minors for the Oakland A's. We lived in Northern California. He would take us to baseball games in the middle of the week.

2:31And I couldn't understand how he was able to do that when my parents couldn't. And it was like, what? And it was like, we were in our seven, eight, nine years old. And I'm like, why is this guy able to do this all the time? At whim, whenever he wants. on a Tuesday in the middle of the day, you know, for a day game. And then later I learned that he owned the biggest businesses in town and we lived in a small town. There were 2 ,500 people in town. You know, my stepdad was a police officer. My mom was a waitress. And later I figured out, I'm like, oh, that's it. And I think watching that and experiencing that for so many years as a kid, when I had read Rich Dad, Poor Dad, and the idea around the cashflow quadrant and building businesses instead of working for other people.

3:15And, you know, I was like, I don't want to build somebody else's wealth. I want to build my own. And so it was kind of there. And then I went to college just because I was going to walk on and play basketball when I didn't get to play because I'm the 5 '11 white guy. It didn't, it just didn't, didn't work out. And then I was like, well, I'm going to go start a business. And so I literally dropped out of college and went and started a business. So that's a great origin story. And I want to get into your current business level nine. But before I do, you had this idea, you read Rich Dad, Poor Dad, you wanted to start your own businesses, build your own cash flow, easier said than done.

3:50Maybe you could talk about as you started out, as you first started, think about what business you want to generate or in the early days, what do you think is the hardest part of being an entrepreneur? I think it's actually, it's a mental thing. It has to do with courage. It has to do with stepping, stepping out on your own and having no, you know, quote security, you're putting everything on the line to take something that hopefully you believe deeply in, and you're going to turn that into an income source. And, you know, down the road, as you get older and you have a family and so forth, that becomes hopefully what feeds your family.

4:30The risk is gigantic. And I think the mental side of somebody being able to take that leap of faith is really, really challenging because it's so easy to just go work for somebody else, make a paycheck, you know, you're getting it and you enter that rat race and you can do that. And then you get trapped in it, but it's so much easier to do that. So I think for my belief is that that first step from like, just making the decision that I'm going to do it. And then actually like actually taking that step to do it. I think that is the hardest part in entrepreneurship because once you get going and there's some momentum and you start to really enjoy it and you start to love it, you just find ways to make it work.

5:12Totally. And there's an interview that I don't know if it's a recent interview or not, but it's with Eric Schmidt, former CEO of Google. And he was talking about the importance of founders being frugal and just only spending the money on the absolute essentials at the beginning. I don't know if that resonates for every founder or for you, but I'm kind of curious about how you sort of approached that topic at the beginning. I was an idiot. And I thought that because I started making money that all of a sudden, like that meant something, you know, but I was young, I was 20. Let's see, I launched like the first business I actually had any success with.

5:52I was 20 years old when I started it, sold it when I was just just over 22. So I was young and dumb and I rolled into something that was working. Conceptually, I was able, I, I, like, I understood it, right. I studied enough. I read enough books. I just constantly consumed, but I also worked from 7am until 10pm, seven days a week in the beginning. And so it was torturous, right. I had no other life, but then once I started making some actual money. And I'm like, Oh my gosh. And then it was like, okay, new car. And then it was upgraded, you know, a newer apartment still doesn't do anything fancy, but newer apartment.

6:33Um, I started spending money on clothes and I started like, I was like upgrading my lifestyle to fit this status that I believed I had. You know, it's funny. I always talk about this with a buddy of mine and we always look back and it's like, God, can you imagine if we didn't do this, this, this, this, all these things, how much more money we'd have? We had just invested and said, hey, let's take that extra$1 ,000 a month that we just screw away on something dumb. What if we just took that and we put it in the S &P or put it into something, silver or something like that? God, how much better would that have been?

7:08Everybody reads the article. When you read the article about what's the difference if you start a 401k earlier or you just invest earlier. And we all read it. few of us actually do it. But I would say that if you're listening and you're of that age, take it from us. We're going to look ahead for you. And we're talking the difference in millions of dollars, millions. And that's if we were just super conservative, putting a tiny bit in. Then as you get more success and you put more in, I mean, it could be$10 million. I mean, it's just obnoxious. So should you be frugal in the beginning? Yes. Don't spend money.

7:49Nobody needs a watch. Nobody needs fancy clothes. Nobody needs to upgrade their car. Drive a piece of crap as long as you can until the wheels fall off. We didn't realize we were going to drift into savings and financial life advice. But okay. So let's talk about your current company. So your current company, Level 9 Virtual. In fact, one of your virtual assistants booked you on this podcast. And I know that you try to outsource everything and you suggest that others do so too. What gave you the idea of starting this business? And then what's the story behind the name? So again, I'm an avid learner and I'm an avid reader.

8:26And so I built my first business, sold my company, not very much, didn't make a ton. Decided I was going to now become a real estate investor because that was hot in 2003, 4, 5. Got in, started buying investment properties. I was doing a lot of fix and flips. When the market tanked in 08, I lost everything. And I went to zero. And so from there, I was kind of scrambling. What am I going to do? What am I going to do? And then I became the biggest reader of self-help and everything else because like, please get me out of this situation. Buddy of mine, still my best friend today, hands me the four-hour work week.

9:03And I understand the concept. Oh my gosh, yes, you can outsource everything. And that was the beginning. And so I started with that. I decided I was going to build a business literally from the book. I went page by page and I did every single thing in the book, built a business that I ran from essentially 2000, late 2008, all the way through 2014 ish, almost into 15. And it was fully run by virtual assistants. And that was my step into using outsourced staff for the first time. Everything from helping with my marketing, helping with web design and all that stuff. I had a fulfillment house for our products because it was e-commerce.

9:45Everything like that was all done using virtual assistants and outsourced staff. And so that was my step into it. The way I ended up building Level 9 Virtual was one of my actual staff members came to me and said, hey, you know that you keep telling everybody how you go hire virtual assistants. Why don't you just offer this service to them? And I was like, yeah, I don't really want to do that. And then she actually showed me, she's like, here's how many people we referred this past year. Here's how much money you could have been making. And I was like, whoa, that's a real business. And so then I said, okay, let's do it.

10:17That's really cool. And when someone hears virtual assistant, when you're trying to convince somebody to learn what you did, what are the biggest kind of objections that you get? There's a piece of it where somebody thinks that just because somebody's in a third world country or in a developing country, there's no way they can do what we can do. Right. So they always assume everything's going to be lower quality. So that's kind of the feeling going into it. It's like, okay, it's those little things that you don't care about. That's what you outsource. And my, you know, and it's getting better because I think, you know, during, during the whole COVID thing, when everybody was doing everything remote, outsourcing and remote working became normal, it became very normalized, like really fast.

11:06So I think that's improving, but people still do have that, Hey, they're in another country. How can I trust them? How can the quality be as good? All of those things. That's probably the biggest hurdle is just overcoming that piece of it. And then the other side of it is, you know, we typically work with a lot of entrepreneurs and so they suck at delegating and they don't know how to get rid of things off their plate. They don't even know how they don't recognize that when they look at their desk and there's 30 to do items on their desk, their email is pinging nonstop and they're overwhelmed.

11:41They don't even understand how to organize that into a task to give it to somebody else. And so that's where we have to step in and support them. Let's talk about that process because like in my business, we have offshore and nearshore call centers and they perform just as well, if not better than many US-based call centers if you put the training and resources and investment into that. So talk about maybe at a high level, what the investment training or onboarding expectations someone should have if they're going to onboard a virtual assistant? It should be just as if you're bringing on somebody local.

12:19Don't skimp out on it. Don't reduce the amount of attention you think you're going to have to give this person. If nothing else, your best investment is when they come into your business, spend an ungodly amount of attention and time with them and make sure that every single thing that you want them to be able to do, document it. And I mean, SOPs, right? And so, but the cool part is, is we actually have our team, our outsourced staff create our SOPs. And so we have a process that we actually, you know, give, give access to it, to our clients. And we let them go through our training that shows them what we do to create an SOP so that we don't create the SOP.

12:58We teach the virtual assistant to do the work, to create the SOP so that it can be retrained over and over again through multiple people. And so putting that investment into the first person could have a long-term tail end effect over tens of staff, right? It could be 20, 30. And so when somebody comes in, the first thing to do is to sit down. My belief is you sit down, you treat them just like they're local. You figure out what their wants, their needs, their desires, their goals, their dreams, all of those things. What is it that you're actually looking for? is this a transactional relationship where it's just like, I just want to come in, do the work and leave.

13:36I don't want you calling me for an emergency. Like I don't want any part of that. Understand who they are and what their, what their, you know, their lifestyle needs to be like, figure out what are their triggers? Like, what is it that makes them motivated? A lot of times everybody wants to just toss a bonus at somebody. What we found sometimes is like, if you just give somebody an extra day off, so they have a long weekend and they can just go do something. If they're a family who likes to do stuff like that and travel and they need that one extra day. And so as a bonus, you've been doing an amazing job, do this, you know, go take this extra day.

14:07But if you don't have the conversation day one, you'll never have the conversation you won't know. And so when you onboard somebody, like get into the nitty gritty, find out who they are, find out what their family life is like. Do they have something important that you should be aware of that might come up later, have a child who's, you know, has an illness and it's most likely going to have a challenge where there's going to be a day off here, there that you need. Knowing those things on the front end is really, really important. That really resonates with me. And also the fact that you create the, the SOPs because an entrepreneur might be super creative.

14:48They might be great at X, Y, or Z, but might not be great at onboarding new employees. And if you're doing that, you're sort of outsourcing that part too, in a way. Of course. I think one of your differentiators appears to be outsourcing for all different kinds of skill sets, not like a traditional secretarial job or something like that. Maybe if you could talk about some of the unique things that some of the virtual assistants either do for you or do for your clients that someone who hasn't used VAs before might not expect. It's kind of funny because the answer is think about a business and then take every piece of that business and outsource it.

15:27And I know that's like a vast, right? But so we have everything from our bookkeeper, our finance team, right? Billing, bookkeeping, all of that. That's all outsourced to the Philippines, right? So my team in the Philippines is my finance team. And I have one finance manager who's outsourced in the US, but he's still outsourced. And he's my personal finance manager though. And he oversees our investments and all of that stuff. And then he oversees the finance division of our companies to make sure that everything's in line. Operations. So we have an operations director who's in the Philippines.

16:02She manages how things operate and that they all function inside the business from top all the way down. She's essentially a COO, though we don't really do C-suite-like roles. project management. We have people in project management. We have an HR team. So from recruiting, hiring, managing team members, we have what we call placements, which is when our side of the business, we have the virtual assistant side, which is the staff. And then we have the client side and we have to connect the two. And so a placements person is in the middle and that's how we bridge that gap. That is an outsourced role.

16:40Marketing, all things marketing is all outsource everything from graphic design, video editing, any single thing you see on the internet that has to do with me or any of my companies all done by virtual staff. The running ads, so paid media, all of that stuff's done by virtual staff, getting me on podcasts. I don't do it, but we do hundreds of podcasts and I have never reached out to anybody to get on one. I have an assistant that does that checking my email. Probably the most important thing I think that most that that happens in my life is that I have an executive assistant who checks my email.

17:15So I never opened the email app. I don't look at it. She sends me a synopsis on in, you know, basically a breakdown every day in Slack twice a day. Here's the stuff that's critical. It has to have you touch it. Here's what's, you know, not so important or waiting on somebody's response or, you know, whatever that might be. I've passed all these things over to the right people. And but I don't believe any entrepreneur anywhere should be checking their own email. It is the biggest waste of time. It is a mind suck that takes a ton of your mental capacity and you can't flip in and out of it effectively.

17:55Like they've done studies. They know that the, that, that multitasking, the pinging of the email, you check an email. The next thing you know, you've burned 30 minutes. If you're a high performing entrepreneur, email is a detriment. You should never look at it. That's a really interesting observation. Let me kind of ask the flip side of the question then. If you're not supposed to be spending your time on that, where do you think an entrepreneur should be spending most of their time? Where do you spend most of your mental energy? Today, it's different than where it was. So let's say, let's look at the beginning.

18:28You're building your business. It's still early. dollar productive activities is the only thing you should focus on. If it doesn't generate revenue, you shouldn't touch it as the entrepreneur. So that could be, you know, tweaks to improve your service, to make your service better so that you have more retention and people stay longer, or you improve your offer. You know, things like that. Maybe you're doing sales or you're building channel partnerships and you're working with referral partners and things like that. You should be focusing all your energy on relationships, service quality, and ensuring that you're actually going to keep people for the longest period of time possible.

19:05Right? I think that's kind of it. As things get going and you have other people that you put in roles to do all those things, now you get to focus on bigger items. So I consider myself a strategic advisor and an investor. So I say, here's the direction I want the company to go. Here's what we're trying to reach, whether it be revenue or whether it be whatever goals. um okay team all these people have to go execute these different things what do you guys need what resources do you need is it capital is it human capital is it technology like what things do you guys need then i decide okay yes we're willing to invest here we're willing to invest here we're not here and then okay great we've made the investment everybody go and that's the role that i get to play and it sounds like fun it sounds like um like you're you're doing your your highest value things and things you like doing the most.

19:54I want to shift back to the virtual assistants. Do your virtual assistants consider themselves level nine employees that they identify as a level nine employee? Yeah. Yeah. They work directly in the company. It's the only thing that they do. They're dedicated to the company, the team. I mean, we have a fantastic culture. So, you know, the people here that we have, especially like, you know, there's the staff that works with our clients and then there's the staff that works for like the actual company and they operate the company. The culture wide through everyone is strong. It's really impressive what our team can do.

20:29I know that that's not my strongest suit is creating that culture. Like the gel that holds people together. That's not my strength. I'm not good at it. And so I have people who are. So they all know the importance that they have. And then I step in and do my best to remind them of what they, their importance is to me, how, you know, what, how I see them as family and all those things. And just recently we had a team member, unfortunately, the longest tenured team member we had just passed away and it was super unexpected. And the way that the entire company like came together reminded me of how deep, like the culture of the company is.

21:15and it just it kind of like kind of shook me for the fact that like I know it's good but when something happens and then you see it it's a completely different feeling and so it's really it's really unique that is really unique and also unique that you have thought about outsourcing culture building it's kind of it when I when I hear that for the first time it kind of doesn't make sense and then as you as you explain it I understand it now there are a lot of new products coming out that claim to be an AI assistant. The robot will do everything. And how do you think about AI, generative AI, any kind of AI enhancing what you do, maybe competing with what you do?

22:00How do you react to that? One of the cool parts that I think about the human experience is that AI cannot have a human experience. You can't have it. What I just saw with the culture of the company, when somebody passed away, AI can't do that. It can't even enter that realm of existence. It can't do it because that is a real human experience that a robot will never be able to do. So I get the question all the time. Is AI going to take over and then virtual assistants are dead? it's like, well, no, virtual assistants are going to get more efficient. So now they're just going to get either better, faster, or more knowledgeable because everything now, I mean, we thought smartphones were it, right?

22:48Everything at our fingertips. So take that and compound it with the fact that AI is now at your fingertips, but it's not just at your fingertips. It's at everyone's fingertips. So even somebody who's outsourced and you say, well, I've got this outsourced AI assistant. That's awesome. But do you trust yet? Do you trust the AI assistant with your credit card number? Are they going to book your flights? No. Are they going to send a message to somebody private in your business and you have full trust that it's just going to go correctly and it's not going to ruin a relationship? It's not going to hinder a business deal that's going on.

23:32I can trust my executive assistant to send an email, email on my behalf. You and I have a relationship just simply because some other human being connected the two of us. AI isn't there yet. Could it get there at some point? Maybe. I mean, at one point, everybody said I would never put my credit card into a computer, but now you carry your credit cards inside a phone app. So it's like, could it get there? Yeah. but what I think it's going to do is it's going to open opportunities that didn't exist before. It's going to make people better, faster, more knowledgeable. And I think that people who aren't afraid of where it's going, I don't love AI to the extent if it's going to wipe out the human race, I don't know.

24:13But in the moment, the way that businesses are leveraging it, most people have no idea that they can just be more efficient, keep the same staff in place and become way better, way faster, more cost effective. And so you take somebody who costs, you know, who has an overhead in your business, and then you roll AI into their world. And all of a sudden they're better and you get more output out of the same dollar. And with virtual assistants, you were already doing dollar leverage, right? Because you have this third, you know, this third, uh, or this, uh, this currency that's in another country and you're playing that dollar, you know, um, leverage, then you throw technology into it.

24:53Now you can leverage it further. And so it's like, it's, it's just getting better. So I'm not fearful of it at all. Let me loop back to the beginning of our, our conversation as a way of a way of closing out. So, um, we talked about your, your journey as an entrepreneur, some of the things that you had, you had to get, get past. Um, and you also told the story about how someone came to you, someone on your staff came to you and said, this should really be a business for helping others outsource. So you haven't just started one business, you've started many. How do you know when there's really a thing there?