Aderson Oliveira: I have spoken with David Nevogt about tracking time and automating payment for remote teams. He said that these are some of the biggest burdens of working with remote outsourcing providers, and he is solving that with his platform, Hubstaff. We also talked about Hubstaff Talent, which is a free marketplace that brings together clients, agencies, contractors, freelancers to work together. All in all, a great conversation with a business owner that has a lot of experience with outsourcing, but he doesn't like the term "outsourcing". He would rather use "remote teams". Enjoy the conversation.
Hello, hello, Aderson Oliveira here. This is another interview for the OuchSourcing Podcast where we talk to specialists, to business owners, to experts in the outsourcing space, and all the tools as well that can be used for outsourcers. Today, it's my pleasure to be talking to David Nevogt. He is a co-founder of Hubstaff, which is the premier time-tracking tool for remote teams. David, thank you very much for being here.
David Nevogt: Yeah, thank you for having me. Appreciate it.
Aderson: David, that's the first time that I interviewed, for this podcast, a co-founder of one of the many tools that can be used by outsourcing professionals not only from a client side, but from a provider side as well. It's a different type of interview for me. First of all, let's talk a little bit about Hubstaff. Share with me a little bit of what it is, what is not Hubstaff.
David: I've always had a remote team. I always had it ever since 2002, so a long time. It's 15 years now, I guess. It was born out of my own pains of outsourcing and having people from all over the U.S. just not understanding what's going on, trying to make this profitable. So, it was born out of my own pain, but basically it's time-tracking with screenshots, and activity levels, and speeds up communication, allows teams to collaborate, assign a task, integrate with a bunch of project management software like Trello, Asana, that kind of thing, and it's all about assigning priorities and making sure those priorities get done, understanding which team members are your best team members, and that gives a peace of mind as a manager.
Aderson: When I think about tools like time-tracking tools, and then you go and we do -- I cannot not do a parallel with tools used by Upwork, for instance, to monitor what people are doing, to track what people are doing. I usually think of that feeling of having the Big Brother monitoring you and looking over your shoulder. I know it's way beyond that, it's much more than that, but there is that component. How do you help people to see beyond that big brother type of situation?
David: No one, no good manager has time to sit around and look at all the screenshots. That's not what we do. The screenshots are there -- like, for instance, I use them in this way: if we're working with the designer, we're having our blog redesigned, I log in to Hubstaff and I can see that blog design unfold in real-time without having to email the designer, wait for a response. If I see things going in the wrong direction, I can intervene quickly, I save money in that way, and the project is done faster in that way. I don't have time to sit around and look. We have a team of 30, and our customers do too. It's not for that reason. It does help you sleep a little better at night knowing that you can go in there and see what's going on if you want, but I spend less than 60 seconds per month doing that.
Aderson: I was just trying to play a little bit of devil's advocate here, because I'll give you an example. Just yesterday, I was not using Hubstaff, not yet, at least, but I saw a huge benefit of having a tool that could monitor what a contractor of mine was doing, because I'm talking about yesterday. I saw that they were going on the wrong direction on what they were doing, and I could see right away, I could just drop in and, "Hey guys, you are doing something that is not exactly what I was asking. I would like you guys to move this direction here." You hit the nail there. It's not just about make sure that they are working, but it's about are they following the right direction?
David: Most contractors, running a remote team is different than running an office environment. It's not like you can just print something out -- you're in the office with somebody all day long and you can just way, "Hey Dave, come here and check out this design real quick, just make sure I'm on the right page." You can do a lot of that in Slack. You can take a screenshot and say, "Hey, we want to make sure that I'm on the same page here," but the problem is most contractors aren't going to do that. It is not their fault. It's just the way that things work. It's just the way it is. Most contractors are not good about giving you feedback. I'm not going to be sitting around asking for feedback all day long. I've got my own work to do.
This allows me to do my work on my own time, especially when you're in different time zones. You've got somebody in the Philippines, you've got somebody in Mexico, you've got somebody in India, you've got somebody in the U.S. and these people all need to communicate and collaborate. If you're in the Philippines and you're in the U.S., you have an overlap of probably one hour per day of work time. It's very hard to get that feedback from that person. It's hard to talk to that person in the first place. It's just about better communication and automatic communication.
Aderson: Going beyond just the tracking mechanism, let's talk a little bit about the payment side of things. That relationship, the contractor worked for a few hours and he or she needs to be paid. How does that happen within the platform?
David: We don't sit in the middle of the transaction. All we do is take your account information and you hook up your account, you give us access to the account, meaning you authorize it, whatever, and then all we do is trigger the payment from you to the contractor. That's all it is. You have to have a PayPal account, your contractor has a PayPal account, and then you can make the payment to the contractor. They work for -- let's say they're getting paid $10 an hour, they work four hours, you train for 40 hours. You could set it weekly, bi-weekly, monthly, fixed. It can be a fixed payment, whatever you want to do.
Aderson: Let's say if we establish the terms of, "This is my hourly rate," every so often, it will calculate how long I have worked and it will deduct from the client and send the money straight to the provider. Is that the way?
David: Yeah, that's it.
Aderson: That's the payment side. Now, there's another aspect of Hubstaff that I really liked are the integrations that can happen between Hubstaff and project management platforms like Asana, like Basecamp, like Trello as well. Can you expand a little bit on that side as well?
David: All we do there is if you have a team member, you assign a task to them, and Basecamp, for example, it lets you do it in Basecamp, and that then will show up on the desktop timer, and they can see it with the description of what to do, track time to it, and then we sync that time over to Basecamp so you can see how much time was spent on that project, or the hour of that task. It shows up in all the reports.
Our number one client is like agencies and people that are using the human capital as their product, or we had a lot of people that have businesses, affiliated businesses, or e-commerce side, software companies, that kind of thing. But, the majority of them, our number one client are people like the agencies, software development houses, digital marketing companies, that kind of thing, and what happens is if they have 20 people working for them, they let different projects, different clients, different billing rates, all of that. We help automate all that so they can get accurate billing to their clients and reduce all that admin, and also, they can pay their employees accurate rates. All of that combined with actually knowing, "Hey, this person is actually doing the job for me and working hard."
Aderson: What I find interesting, as well, David, is that the platform not only handles the transaction between the agency and the contractors, but from the agency's clients as well, is that correct?
David: You can use it for that as well. The main thing is we do have invoicing, so you can invoice for the time automatically. You can send an invoice to whoever you want because we have that capability, or you can invite your clients in so they can see the work unfold in real-time as well. Most of the agencies aren't doing that. Most of the agencies are just using it for their internal productivity and an admin.
Aderson: Let me explore a little bit your outsourcing experience there. Can you just highlight a few of the, I would say, based on your experience, pitfalls, the roadblocks that an agency has to go through when trying to hire a contractor? They may have not done that before. What are some of the pitfalls that they should be on the lookout for?
David: There's a lot of them. There's a ton of things that can go wrong. There's a lot of things that go right. I guess I'll just dive into it a little bit. We work pretty hard to make sure that we're getting the right people. A lot of it is done upfront. We get references, we do a lot of stuff that you should be doing when you hire an office employee, because when we hire somebody, it's really a pain to have somebody on-boarded and all that, and then to have it not work out. You're looking for character flaws, you're looking for a lot of different things, you're making sure that they're responsive in terms of timing, you're making sure that they have good written and oral communication. All of that stuff needs to happen, and then we usually put somebody on a trial for 30 days.
You put somebody on trial for 30 days. You make it known upfront, "Hey this is a trial. We're going to work together for 30 days and see how it works out." After that, basically, what we do, if they pass that -- and that also makes it very much easier to kind of drop it if it doesn't work out for whatever reason. If it doesn't work out, we basically just unleash it and say, "Work as many hours as you want."
Aderson: Let me ask you that. Do you eat your own dog food?
David: Oh yeah, for sure.
Aderson: Tell a little bit about that. I guess that all your remote workers -- by the way, let me ask you a little bit deeper on that point. How many, more or less, just roughly, remote workers do you manage in your business via your own tool?
Aderson: Spread all over the globe?
David: Yeah. We've got all over Latin, Eastern Europe, India. I guess all over Europe really. We've got two in Canada. We've got about seven in the U.S. Even in the U.S., they're in California, Florida, Indianapolis, Chicago. My co-founder and I, we live eight minutes apart and we see each other once a week maybe, or two hours.
Aderson: Okay, great. Those 30 people that work remotely, who are they? Are they designers, developers? Tell me a little bit about the profile of those people.
David: About 20 of them in development. We've got about 18 in development and about 12 between marketing and support. So, we've got about six in marketing, six in supports, and 18 in development. And in the development, we include some designers. So, we have one designer.
Aderson: As I mentioned to you before we started recording, you have one side of the business which is the tool, time-tracking payments, and project management integration, that's fine, that's great. Now, there's another side of your business as well, and I would like to explore that side a little bit here, which is Hubstaff Talent. Tell a little bit of what Hubstaff Talent is.
David: We realized that our Hubstaff came first, which is our time-tracking software, and we realized that the software would only work if you had new people to put behind it. So, what we did was we just opened up a free directory, more or less, of people looking for remote work, and you can go on there and see the resumes, know requirements to use Hubstaff. It's all just free, and you just go on there and find people, and you can bring them to a competitor if you want. I guess no requirements to use Hubstaff.
But, it's a way for us to tell our story, it's a way for us to help our clients when they come in, they say, "Well, I don't have a team. It's easy for us to say, 'Go check out talent,'" and hopefully they're going to convert into a Hubstaff customer because now they can find the people to do the job. Like I said, we found that one of the big problems was, "This is great. I'm just starting a remote company. I love this but my guy is no good," or whatever. That's an opportunity for us to step in and say, "Here's Talent."
Aderson: One of the things I did to prepare myself for this conversation, David, was to have look at your past interviews, and I saw you talk before about Hubstaff Talent. But, back then, that was, I think, two years ago, it seems that you were doing more of a matchmaking type of --
Aderson: So, you moved away from that?
David: Yeah, we moved away from it. It was just a matter of like our core competency is software, not staffing. Staffing would take up a lot of my time and a lot of my effort for not a lot of ROI. It was a matter of just business decision in saying it's not worth it to break up our focus. We want to just remain focused on what we do really well, and we want to go out and sell the software and go from there.
Aderson: I just want to dig a little bit deeper on Hubstaff Talent there. I guess that you facilitate the connection, but that's it. You walk away from there and the entire relationship is managed by them and you don't have anything to say in that relationship.
David: Nope, 100% right. So, you find them, you contact them. We require that you post a job. If you're going to contact people, you got to have a job posted. You post a job then you can contact them and invite them to the job so that they can see. Because, what was happening is people would email just for an introduction and they wouldn't have a job posted, and it would be the contractors would get a lot of value from that. So, we make them post a job, and then if you post a job, then at that point, you can search and find people, invite them to the job, or people can search that job and apply to the job, and then you can manage all the applications and see all the applications and look at people, and then from there, it's all on you. There’s no contracts. Like I said, you can just hire somebody and work with them over Slack and not use Hubstaff at all.
Aderson: But again, you made that connection, hopefully, at some point they can also use Hubstaff to track time.
David: Yeah, it's good for us.
Aderson: Awesome. I'm assuming if I'm a contractor, freelancer, an outsourcing provider, I can just come to the website, create my profile, and that's it. There's no vetting, there's nothing like that.
David: No, nothing like that, and you create a profile to share the link. You can use that when you're talking to other people wherever on Craigslist, just share that link. A lot of people don't have a website to take people to. This provides that. They don't have a net website for their own personal branding opportunities. This is a profile that they can send people to, and it looks good, the design is good, it feels nice, and they can hopefully show off what they can do well.
Aderson: Let's talk a little bit, David, about the future here just for a little bit. I want to touch another point, but before that, let's go to the future a little bit. Where do you see Hubstaff going from here, because we have this booming economy of freelancing of people working remotely? In a way, let's go to the very cliché question which is, what's next? What's the future of your platform?
David: We're kind of there. We already believe that we have the best out there in terms of managing a team, but that is what we plan on doing is just keeping our heads and keep on building the best platform for remote teams. It's not only going to be for remote teams. There is a time-tracking component to it. But, we get mobile apps that have reports to the managers. We are a software-first business that focuses on trying to help people work remotely in a better manner and also help people hire remotely in a better manner. I do believe that that is the future of the market. Our software is not needed to operate a remote team, but a lot of people do like it or something like a product like it, but we're just trying to expand and build the best product we can.
I will suggest too, we're about to release a project management software that is built on remote teams. It's going to be Talent, the PM software, and then Hubstaff time-tracking, and all those put together. Those are the three real products that we have.
Aderson: Perfect, that's great. That's the future of your platform. Let's look at the market in general. Because you guys run a platform that you see a lot of agencies coming along, you see a lot of contractors. Do you see any trends going on in the market overall. Again, if you don't, that's fine, but I just want to get your take on it. Do you see any trends that people should be on the lookout for, "Hey, this is what is hot right now, this is what's going on. Maybe if you guys are thinking about starting to provide some freelancing services, maybe this is one area that is hot and is getting hotter and hotter as we see more and more of this happening"? Do you have any tips towards that direction?
David: No, not really. Honestly, not really. I think that the main thing is people try to think about remote work as it's different, and it is different in a way, but myself, if I were to apply for a job, I would look at it no different than applying for a job next door. It's the same thing. Speaking from the freelancers, you got to put out your best effort on the application. It's the same thing. You have to report for work every day. The main thing is communicate very, very well both on the business owner side and the freelancer side, communication is the key. But, other than that, it's just the same as office jobs.
Aderson: Great, because one of my last questions is really about what is the one thing that you want people to leave this conversation knowing more about, and I think that you hit the nail there, communication. Anything else to expand on that point?
David: Yeah, like I said, I think that, for me, remote work's always just come natural. I like to live my life the way I like to live it, and for me, that means I work from home. I don't need to report to an office every day. As the owner, I don't want my employees to have to do that or my contractors. I don't want my people go up to that. I love remote work, and we are software as a fit for primarily small businesses. Our average team size is like five to seven people. If you're in that space, the savings in terms of office overhead, in terms of being able to find people from around the world to do the same job, and the talent pool, those two things right there, like for Hubstaff, we would have failed probably if we would have had to do the traditional route of going to get an office, finding a few full-time employees, we would have failed because both Jared and I, my co-founder, we built this on the side, so we were doing other jobs when we were building this out.
So, if we didn't have the ability to work remotely, and our people didn't have the ability to work part-time, it would have been very hard. So, we just kind of keep on scaling that up. We're a bootstrap company and it's always been just slow progress, and I guess I'm just saying without that, without the ability to find people from around the world to come work for Hubstaff and then without those savings and the offices. There was a year where our expenses were less than $5,000 a year, or a month I mean. You put an office on there and it's double and we wouldn't have been able to do that.
Aderson: Would you see a time that you think that it will be required for you guys to have an office, and again, I'm just coming towards an end here, but I'm curious about that. Do you see a moment that, "Hey, maybe after we cross this line here, we need to have some physical presence, we need to bring people inside"? Do you think that there will be a time like that for you guys?
David: We're having a retreat in Chicago in September 1st, first one, but we've been busy enough for like five years, so it's the first one. Our team members are pushing hard for that. Some of our team members are pushing pretty hard for that. I think there's definitely some benefit to knowing your people on a level outside of Slack or project management tools. There's definitely a benefit to that. There's a benefit to being able to know somebody's kids and being able to know their wife, and being friends with them. There is definitely a side of it that they're going to be a better team member for your company if you have that relationship. That's no doubt about it, I think. That's one thing, but you can develop that in other ways.
I think there's also an intangible where it's kind of hard to get everybody on this. We've worked pretty hard to develop a culture and basically try to have everyone understand the mission statement and what we're really trying to do and what we're really about so that it flows downhill, and so they can make better decisions. If they understand that we are primarily trying to help freelancers and people hiring freelancers to do business together better, that changes some other decision making in the way that they are trying to build the software, the way that they build the UI, the everything. It's hard to communicate that on a remote basis. It's almost like you got to spend time on it and put out a pamphlet and try to really make sure that everyone understands this, and they even read. You don't even know if everyone read books. You can't have that in-person meeting. There's things like that that, I think, are harder for me from a remote standpoint.
The question was, "Do I think there's a time when we'll need to bring people in?" Maybe we might at some point if we grow the business very successfully. It would have been more for fun where it's like, "We're going to have an office, we're going to go in two days a week," but that's it, still on a small scale.
Aderson: Very good. By the way, how frequently do you guys meet? I don't assume that there is a meeting with 30 people, but what is the norm on your organization of how frequently do managers meet with their teams? Tell me a little bit about that.
David: We talk on a weekly basis, like through chat, but on the phone, once a month. Not on the phone, but on Skype once a month, and that's mostly to go over the previous months' numbers and KPIs, and on a weekly basis, just to go over the Sprint assignments, but that's mostly done over text so that we can work kind of like on our own time. It's once a month voice like what we're doing right now, and you've got six people. We try to do six-month reviews. So, if I've got 12 people to manage, that's still 12 conversations. It is part of my job to manage, but it's not -- again, the software does a lot of that for me, so my job is really about making sure that everyone is understanding what their goals are, blueprinting the task to be done, developing the strategy, what we're going to do next, where to invest, and kind of making sure that things are being done to the level that we want them done too, and that's about it.
Aderson: Last point here, David. Anything that we haven't discussed here that you find it's relevant to mention maybe about the tools, maybe about outsourcing in general, anything else that needs to be said about the topic?
David: The main things are cost savings not in the typical -- to be honest, I don't really like the word "outsourcing". I say remote team because it's kind of like it is the title of your podcast, that's what it is. We look at it like that. We've got a big company in Minneapolis, we've got a big company here that you hire out teams of 100 people in a different country and you don't get the results that you want from that endeavor.
What I do is on a much smaller level than that -- I've seen teams of people overseas. It doesn't only happen only overseas, but it will be they'll say $3,000 a month per person, and let's say they're developers. So, you're going to get 20 PHP developers overseas. It's going to be 20 times 3, $60,000, or what is that 20 times 3? Say $60,000 per month, right? But, each and every person, or the majority of the people, of those 20 people, they're billing you for eight hours a day, but they have three clients, so that company is making -- what are they doing? Three hours of work for you or two and a half hours work for you per day and they're billing you for eight, and they have the headache of three. So, how would you ever know? That's the problem with the programming side of things too. How would you ever know that progress is being made fast enough? On a big project like that, how would you know that all those people are working eight hours a day? I've seen it happen. It's happen to us.
Aderson: I have my take on that, and I'll give my two cents here. Even though you are the interviewee, you are the guest --
David: Go ahead. I asked the question.
Aderson: I'm going to give my take. I'm a developer myself and I think that, from a development point of view, you're right in the sense that if it's a big undertake, it becomes hard to see if this is what is supposed to be delivered at this time frame, but we go back to commitments. If commitments are being made and being met, I think that's really what makes sense to track. Now, that's the reason why sometimes I find it a bit annoying to have the monitoring system, because what really matters is are people delivering what needs to be delivered in the time that was committed? And if not, are they communicating up front that there's a problem, and this is how they are addressing it? That's really my benchmark.
David: You seem like a good communicator and a good guy, and that's really the thing. It doesn't appear that you have a big team behind you. So, if I were hiring you as a WordPress developer or whatever, like I said, I would want you to use the software, but I would not use it in -- I wouldn't use it because I don't want the headache of having to get an invoice, having to pay the invoice, having to email. I want you begin the team's system, and it will be a fixed price project. If you want to work at it in terms of development timelines, that's great. We've done it before several times. I totally understand. It's just when you're hiring a team of like eight people, it becomes very hard for the manager to manage all of those different commitments, because you've got different companies working for you.
Let's say you've got eight different freelancers, they have different communications style, different time zones. It's not about the management and the monitoring as much as it's about the, "I'm the business owner. I need peace in my life. I want somebody to manage the system for me. From that side, that's where we come in.
Aderson: You're very right, David, from the sense that when you put monitoring, if you add one more piece to the puzzle that will help, in a way, the person that is delivering your project. It might be the coder, it might be a writer, whoever it is, but it helps them to say, "He may or may not look at what I'm doing, but I better get things straight here because he may check or he may not check." It doesn't matter, but it's just one more check to be done through the process, and it's just one more reassurance. That's it, you know.
David: Yeah, and we have a mobile time-tracking. There's no stretch, just mobile time-tracking. We pay everyone hourly. So, it's more about when somebody is submitting an invoice, it's outside the system. I want it to be done automatic. I want to automate so I can focus on how I'm going to grow my business, not like trying to pay invoices. I don't have an admin to do that stuff. I've got a company in New York that they do medical billing, and it's like I'll talk to the founders of these companies, and they're like, "Dave, you don't understand how many hours -- I'm the owner and the founder of this company and I was sitting there doing admin for 20 hours. Half my day was trying to get people to submit time sheets."
That's not a good way to run your business. That, right there, getting people to submit time sheets all in the same format, all in the same tracking so you can bill all your clients, that needs to go away if you are a responsible founder of a company, because you need to grow your company. That's the thing. Again, that's where it is. Turn off the screenshot. That doesn't matter as much. What does matter is the scalability and the founder's focus on growing the company, and then automating all that stuff behind the scenes.
Aderson: I get it. It makes a lot of sense, and I really find it to be an essential tool for anyone working remotely and working with a remote team. David, I can only thank you a lot for your time, for your expertise, for sharing your knowledge there. Before I let you go, how can people reach out to you whether they want to get more information or whether they want to follow you to get your content, because I know that you write as well? I don't know if you write that much anymore but I know that you have some content. How can people reach out to you?
David: The best place is a blog.hubstaff.com, our blog. We write there a lot. I've got a growth series where I talk about how we've grown our company up. It's really in-depth and really everything. It's very in-depth. We've really opened up on it. We're a transparent company. So, we're just on the marketing side, financial side, everything is totally transparent. We share kind of everything that we do on that blog, and then we're @Hubstaff at Twitter and my email is firstname.lastname@example.org
Aderson: Perfect, awesome. David, thank you very much. I really appreciate, and I hope that we can catch up another time, another day in the near future. Thank you very much. Bye.
David: Thank you, bye.