An Interview With Ken Babcock
One of the top mistakes I’ve seen companies make starting out is not hiring the right people. Again, candidates may be qualified on paper, but it’s oftentimes the mistake that companies don’t assess whether or not they are a good fit for the company. You can have the perfect candidate on paper, but they will not be successful in your company if they don’t hold the same values, have certain essential soft skills, and don’t feel tied to the mission of your company.
Startups usually start with a small cohort of close colleagues. But what happens when you add a bunch of new people into this close cohort? How do you maintain the company culture? In addition, what is needed to successfully scale a business to increase market share or to increase offerings? How can a small startup grow successfully to a midsize and then large company? To address these questions, we are talking to successful business leaders who can share stories and insights from their experiences about the “5 Things You Need To Know To Successfully Scale Your Business”. As a part of this series, we had the distinct pleasure of interviewing Pavel Stepanov.
Pavel Stepanov has become a renowned business owner in the outsourcing and virtual assistant industry. In 2016, he founded Virtudesk, a virtual assistant company that focuses on supplying business owners who want to scale their businesses with highly-trained virtual assistants from the Philippines. He has turned Virtudesk into an Inc. 5000 company, and is also the founder of Tymbl Technologies.
Thank you for joining us in this interview series. Our readers would love to “get to know you” a bit better. Can you tell us a bit about your ‘backstory’?
Let me start from the very beginning. I was born in Siberia. In Ulan-Ude, Russia. I decided to emigrate to the United States in 1997 to look for better opportunities and pursue my dreams of achieving financial freedom. After I came to the States, I planned on going to a four-year college, but I wasn’t quite sure what to study. I initially picked journalism, but switched to law when I realized journalism wasn’t for me. While I was in Law school, I took some real estate classes and was fascinated with the concept of property ownership and the opportunities it could unlock. After graduating from law school and passing the bar exam, I discovered that real estate was more in tune with my entrepreneurial mode and DNA. So, I became a real estate broker.
For three years, I practiced real estate at a 100% commission brokerage. At the time, I was working 12–16 hour days with no real break. I was doing everything from marketing, scheduling appointments, outbound calling, meeting with clients, going to showings, and more. After spending so much time working in my business, I finally decided to hire my first virtual assistant. My virtual assistant would be responsible for doing outbound calling and setting up appointments for me. I decided to hire a VA from the Philippines through a VA company because I had heard about the benefits of outsourcing.
The results were dramatic. I could barely keep up, because she was setting so many appointments for me. After hiring her, I spent a lot of my time just simply going to these appointments. My sales that year tripled! No joke. I started to realize the value of virtual assistants, the power of delegating, and the cost savings this unique business model enabled me.
After those three years, I started my own brokerage, Nexus Realty, in 2015. As I brought on more brokers, I realized they had the same problem too — time. Just like I did. I discovered they needed virtual assistants as much as I did, and they started asking me about it. That’s when the idea of Virtudesk came on. I realized most of the agents around me desperately needed help, so I started Virtudesk to assist Nexus, and saw how I could expand past my brokerage due to this common pain point that all agents and entrepreneurs face.
A couple of years after starting Virtudesk, I started building a new product, called Tymbl. This autodialer was designed to automate outbound calling for real estate agents, sales agents, and other business owners in need. I designed this platform so I could help agents keep track of all of their leads, create campaigns around their lead status, and bulk analyze the calling metrics. It is still in its start-up phase, but it has helped Virtudesk and other agents so much already!
Now, that it has been six years since I started Virtudesk, I’m proud to say that we have grown tremendously. Just last year, we made the Inc. 5000 for achieving 454% growth in a 3-year period. This has enabled us to win many other recognitions, including growth awards from the Titan Business Awards, Stevie Business Awards, and Growjo. We have big plans for the future. We don’t plan on stopping our growth. The best is yet to come.
You’ve had a remarkable career journey. Can you highlight a key decision in your career that helped you get to where you are today?
That’s an easy answer. One of the key decisions I’ve made is hiring my first virtual assistant back when I had my own real estate business. Because it taught me some valuable lessons. It made me realize that you can’t do everything yourself if you want to grow and scale your business.
Definitely, you can do anything, but you can’t do everything.
Hiring my first virtual assistant taught me the necessity and the power of delegating properly and hiring the right people for the right roles. This particular lesson and skill only improved when I had to grow Virtudesk, and started to build teams.
It’s also not just about hiring the right people, but where to hire them from. Outsourcing to the Philippines showed me a cost-effective way to delegate business tasks, and scale my business faster than what I could do with 100% local hires. Because of the lower cost of living in the Philippines and the high value of the USD to the Filipino peso, it allowed me to pay a lower wage for the same work done. Plus, I wasn’t paying for the infrastructure of an office building and equipment. The virtual assistants were supplying that equipment themselves. These savings allowed me to re-invest it back into the business to grow it.
I’ve also learned that you have to consult other people who are experts in their fields or specialties and who are more skilled than you. They will help you and act as your consultants to move your company forward in the right direction. They will also take responsibility for all of those time-consuming tasks you were trying to do yourself.
Deciding to hire my first virtual assistant, who is now the Director of Operations at Virtudesk today, got me to where I am. I could never take that experience back. It taught me the fundamental model of scaling a successful business.
What’s the most impactful initiative you’ve led that you’re particularly proud of?
I would have to say Virtudesk. When I hired my first virtual assistant, it really taught me about the power and importance of delegation. It gave me the strategy I needed to unlock unlimited growth and revenue potential in my own business.
To be able to share that with others through Virtudesk has been amazing. The growth and scale we have achieved is something I’m really proud of because this business model is something I’m really passionate about. I’m proud and very happy about how we have helped our clients scale their businesses as well. To know that my team and I have helped make that happen for them is great.
Sometimes our mistakes can be our greatest teachers. Can you share a mistake you’ve made and the lesson you took away from it?
Especially in the beginning of Virtudesk, I was too fast to hire and slow to fire. I onboarded people quickly, because I needed help, but didn’t take the proper time to truly evaluate their skills, their intentions for the company, and their background.
I didn’t take the time to determine whether or not they would be a good fit for the job or with the company. I believe this is paramount to a successful working relationship and the employee’s success as well. You can hire 100 qualified people, but if they don’t think similarly to you on where to take the business or they don’t get along with the teams already on staff, then progress can be slowed. Less will get done to benefit the company overall and in the long term.
Even firing slowly was a problem I had to overcome. Hiring someone can be scary, as you are taking the leap to trust them with part of your company. That’s why in the beginning it was hard for me to fire, as you do invest and put faith in them that they’ll do well. When you let someone go, you’re letting them and yourself down. At least that’s how it felt in the beginning.
I would say this is still something I struggle with even today, but I’ve gotten a lot better and I’ve learned a lot from making these mistakes. You learn what questions to ask candidates. You learn to be more selective and careful about who your hire — even if you’re spending time interviewing a lot of candidates.
I always go with my gut too. If I get a good feeling about them in the interview, I never regret hiring them.
How has mentorship played a role in your career, whether receiving mentorship or offering it to others?
I’ve never really had a mentor figure in my life, especially on a professional level. When I moved to the United States, I didn’t know anyone. I was kind of alone to figure it out on my own. Of course, there were people who helped me by giving me advice, especially in my first few years living in the United States. I would ask questions about how to find a job and get scholarships. Throughout my life, I would find people I could ask questions too.. However, overall, much of the business stuff I just figured out.
If anyone was a mentor to me during my life, it’s been my mom. She’s very supportive, but she has also instilled internal accountability into me. She has had a big impact on my life and how I make decisions.
In terms of giving mentorship to others, I definitely don’t seek it out. However, I’m always there for my family, friends, and employees when they need me. And I definitely see my employees like family. They can ask me anything. I love spending time with them, and giving them my advice.
Developing your leadership style takes time and practice. Who do you model your leadership style after? What are some key character traits you try to emulate?
I guess I would try to emulate some traits from Gary Vaynerchuk, especially when it comes to kindness. I’m a huge fan of his. I even met him once. He’s a good leader, and has a lot of great advice when it comes to building businesses and managing others.
I also want to give my employees the autonomy and feeling that they can implement any idea that makes sense or flies with me. There shouldn’t be a lot of barriers to implementing ideas if it makes sense to implement. I have the mindset of just doing it. Don’t overanalyze, because it will waste time. Making mistakes trumps inaction. When you sit on an idea analyzing how to execute it perfectly, your competitors start getting ahead of you.
You have to rely on your employees as consultants to give you ideas to move the company forward.
Thank you for sharing that with us. Let’s talk about scaling a business from a small startup to a midsize and then large company. Based on your experience, can you share with our readers the “5 Things You Need To Know To Successfully Scale Your Business”? Please give a story or example for each.
#1 Hire a virtual executive admin
If you’re a start-up or solopreneur, then start scaling by starting small. Just hire one virtual assistant, who will be your executive admin. Again, I recommend hiring a virtual assistant over an in-house person, because it’s going to help you conserve costs while you’re still in the start-up phase.
This will allow you to save money that you can put into other channels and initiatives. Your first virtual assistant will be assigned all of your task overflow, or assigned the tasks you don’t want to do, aren’t good at, or don’t have time for. They’re going to be pretty busy. They will act as your go-to person for everything in the business.
Your executive admin will run the day-to-day operations of your business and act as your Director of Operations. They will set the tone for your business and allow you to focus on the 20% of the work that produces 80% of the results.
#2 Hire for your second and third roles
Once you’ve had your executive admin on board for a while, and you and your executive admin start feeling overwhelmed again, it’s time to start looking at a second and third hire. You’ll want to start looking for a second hire when both you and your executive admin are getting overwhelmed with tasks again, and don’t have the bandwidth to complete all the tasks needed or work on new initiatives.
Your second hire should be someone that can take care of that task overflow. However, I recommend hiring someone that is specialized in some kind of work. Usually, I recommend hiring a marketing virtual assistant after hiring an executive admin, so you can have a designated person for all marketing activities, and then any overflow from the business.
However, you don’t necessarily have to start with marketing. You can start with prospecting or customer service. Just identify what areas of the business need the most help and attention.
As your company experiences greater brand awareness and you start to increase the number of leads you are generating, you will need to make a third hire. You can hire an Inside Sales Agent (ISA) in order to reach out to your growing contact database. They will manage a lot of your company’s outbound efforts. Or, you can hire a video editor to edit all of the content that you produce. Again, it just really depends on the needs of your business. Hire someone who can address a gap in your business.
#3 Designate in-house staff to manage teams or departments of virtual assistants
As you start to grow your business, and you move from start-up to midsize company, first, congratulate yourself. You did a good job, and you made it this far.
Next, focus on how you will scale your employee base and structure. I recommend mapping out organizational charts for different departments or functions within your company. When you create those org charts, map out the chain of command, the specific roles you would hire for, and the main responsibilities of each role. This will act as a roadmap for you as you build your teams gradually with more people.
Then, once you have this roadmap, you can continue hiring, but in a more informed manner. For all department and/or team leads, I recommend designating in-house staff. For every role under department heads or team leads, hire virtual assistants. This will give you the perfect blend of employee background, diversity, and perspective to give your business an edge in moving forward and making decisions that grow it.
Plus, by hiring virtual assistants for most of the roles in your org charts, you will be able to scale your savings as you grow. This gives you the real power in being able to scale your company faster, because you’re conserving the cost that is usually a company’s biggest expense — payroll.
The department heads who are in-house staff will report to you. They will report on how their departments are doing, what decisions and ideas they want to implement to grow the company, and how their virtual assistants are performing.
#4 Hire a virtual call center for scaling customer interaction
Now, you may be entering the stage of a large company. Congratulate yourself again, this isn’t easy.
You can continue growing large teams and departments with a mixture of in-house staff and virtual assistants. I recommend you do this. But you should also look at how you can scale customer interaction and lead generation. Hiring a virtual call center from the Philippines managed by an in-house department head will allow you to do just this.
Start by hiring 5–10 virtual assistants to act as your call center agents. Set your business number with a VOIP, so all your inbound calls come in through this VOIP, and straight to your virtual assistants abroad. You won’t need your virtual assistants to go to a physical location, they will be in their homes. But, their functionalities will be the same, and collectively they will act as a call center.
Not only will they be able to take your inbound calls 24/7, but they will be able to answer inbound website inquiries, text messages, emails, and more. They can manage your chatbots and even send outbound emails and make outbound calls.
#5 Overall, focus expenses on virtual assistants and technology
Overall, you should focus on your strategy of scaling virtual assistants and technology. Again, virtual assistants will allow you to scale your cost savings so you can scale your operations. Integrating as much technology into your business will allow you to automate and increase the efficiency of your workflows and systems. This is big.
In my advice above, I focus a lot on hiring virtual assistants to conserve costs, but focusing your systems on automation and technology integration will help you with this too. Combined, your company will be unstoppable.
Focus on getting a robust CRM that has a ton of integration capabilities with other apps and platforms. This will set up the foundation for automation. Make sure you have a company database that centralizes all of your company data and information.
If you want to go above and beyond, and you have the resources, build out your systems internally. Build your own CRM, company database, and other software you use, instead of buying the ones in the market. This is what we do at Virtudesk. We’ve built our own CRM, time tracker, and VOIP system so we have more control and creative flexibility with the features these systems offer, and how our employees use these platforms.
Can you share a few of the mistakes that companies make when they try to scale a business? What would you suggest to address those errors?
One of the top mistakes I’ve seen companies make starting out is not hiring the right people. Again, candidates may be qualified on paper, but it’s oftentimes the mistake that companies don’t assess whether or not they are a good fit for the company. You can have the perfect candidate on paper, but they will not be successful in your company if they don’t hold the same values, have certain essential soft skills, and don’t feel tied to the mission of your company.
When you’re hiring, you also want to make sure that people always have the best interest of your company in mind. In my experience, I’ve learned that when you hire people who don’t think similarly to you, it can be harder to take on new projects together. I believe this is very important in the early stages of a company. You have to bring on hard-working people who have a vision for your company as well.
Another mistake I see companies making in the start-up phase when they are trying to scale is that they will allocate money towards unnecessary places. For example, can you afford to cater lunches weekly or daily for your employees as a start-up? Probably not. You may want to give your employees a sense of good culture, but there are more effective and cheaper ways of doing that.
I also see companies spending a lot of money on physical infrastructure like office buildings, office equipment, office supplies, and more. That’s why I’m such a big fan of virtual assistants. In today’s age, you don’t need to be in a physical location every day, especially when you’re just starting out. If the pandemic has taught us anything, it’s that we can get a lot done from home — more than we ever thought. Take advantage of that, especially when you’re small. Even large companies can conserve a lot of costs by requiring employees to work from home.
Scaling includes bringing new people into the organization. How can a company preserve its company culture and ethos when new people are brought in?
It starts with having strong company values, and knowing what those are. Pick 3–5 core values your company stands for. These values should inform everything everyone does in your company.
Keep these core values, explanations of these values, and what acting them out looks like in a physical document. Keep this internally, and bring it out every time you hire a new person. I even recommend discussing these values with people during the interview process. That’s because, if they don’t resonate with them, they can leave before they accidentally get hired. Because, again, you want to find and hire people who align with your company’s core values and mission.
Then, it’s all a matter of communicating those values regularly to your employees and holding them accountable too. That’s because, if your current employees aren’t consistent in enacting those values and reflecting their behavior and decisions on these values, it’s going to be impossible to integrate new employees into this culture — and essentially sustain the culture itself.
In my work, I focus on helping companies to simplify the process of creating documentation of their workflow, so I am particularly passionate about this question. Many times, a key aspect of scaling your business is scaling your team’s knowledge and internal procedures. What tools or techniques have helped your teams be successful at scaling internally?
I try my best to give my employees the tools and strategies they need to scale internally, as that helps everyone in the organization. I start by encouraging the creation of checklists and Standard Operating Procedures (SOPs). This helps new hires and current employees understand the standardized processes we have for everything in the company. The checklists help individual employees know exactly what they are responsible for, and what their daily and weekly tasks are.
We create and house a lot of training documents and videos. This way, if a current employee needs a refresher on how to do something, or we’re training a new employee, it’s more efficient.
We also do corporate training for departments on a need basis. If department heads express a need for corporate training to improve operations, workflow, or team skills, then we get someone in-house or outside to facilitate that training. For some departments upon request, we also offer online training courses for the skills that a department is needed or expected to know. This gives our employees more tools and knowledge to come up with and implement new ideas.
Besides that, we also have our in-house online academy, Virtudesk Academy, for all the virtual assistants we employ. This is managed and facilitated by our training department, and provides further opportunity for our employees to learn new skills as needed.
If you want to give your employees the autonomy to scale internally, then you should reduce the barriers to hiring new people, especially for department heads. That’s what I do at Virtudesk. If a department head wants to hire more people to their department, they should come to me with an expressed need for help, and the ability to show me an outline of the job title and description. Once they demonstrated that help is needed, 9/10 I let them start the hiring process. I want to make it easy for the company leaders to grow their teams as they need. Depending on their need, new hires can be in-house or virtual assistants. I also have the same mentality regarding new technology our department heads express we need.
What software or tools do you recommend to help onboard new hires?
Right off the bat, I recommend using a project management tool, at least one communication tool, and a cloud storage platform to help get your employees onboarded to the company. At Virtudesk, different departments use different methods for tracking projects. Our marketing department uses a project management tool, Clickup. Whereas our operations department uses our in-house time tracker. As a whole company, we mostly use Skype and Zoom for our all communication, as you can text, call, and host virtual meetings.
We also onboard our new employees to our shared drive and company databases and CRM, so they are equipped with the knowledge of how to navigate the company internally. I recommend doing the same.
We don’t do this at Virtudesk, but I know of many companies that have special onboarding software for HR and training. Softwares like intelliHR, Sapling, and Eddy can help give guided onboarding to new employees that save HR time, and automates the process. It can be very helpful and increase your efficiency. There’s even training software, like Lessonly, where companies can build e-lessons for new employees to go through on their own.
Because of your role, you are a person of significant influence. If you could inspire a movement that would bring the most amount of good to the most people, what would that be? You never know what your ideas can trigger.
I feel like I’m kind of already doing that with Virtudesk. Although it’s not a non-profit organization that’s saving millions of lives every year, I still feel like Virtudesk is helping and impacting a lot of people. Ever since I hired my first virtual assistant, I’ve been passionate about scaling businesses with virtual assistants and sharing that good news with other entrepreneurs. It’s exciting to help them out and see them experience growth as I did.
It’s encouraging to see how this business model has allowed businesses to not only survive but thrive.
How can our readers further follow your work online?
You can follow me on my social media accounts and visit my company website to learn more about me and virtual assistants. I also encourage you to follow my LinkedIn newsletter. You can learn more about me this way, and how I’ve leveraged virtual assistants, technology, and outsourcing to scale my business. Plus, you can get my thoughts on what’s happening in the industry.
LinkedIn: https://www.linkedin.com/in/pavelgstepanov/
Twitter: https://twitter.com/pavelStepanov77
Instagram: https://www.instagram.com/thepavelstepanov/
LinkedIn Newsletter: https://www.linkedin.com/newsletters/6928489178179518464/
Website: https://www.myvirtudesk.com/
My company’s social media:
Facebook: https://www.facebook.com/virtudesk
Instagram: https://www.instagram.com/virtudesk/
Twitter: https://twitter.com/virtudeskcom
LinkedIn: https://www.linkedin.com/company/13385012
Pinterest: https://www.pinterest.com/Virtudesk2021/_created/
YouTube: https://www.youtube.com/c/VirtudeskVirtualAssistants
TikTok: https://www.tiktok.com/@virtudesk?lang=en
This was truly meaningful! Thank you so much for your time and for sharing your expertise!
About the interviewer. Ken Babcock is the CEO and Co-Founder of Tango. Prior to his mission of celebrating how work is executed, Ken spent over 4 years at Uber riding the rollercoaster of a generational company. After gaining hands-on experience with entrepreneurship at Atomic VC, Ken went on to HBS. It was at HBS that Ken met his Co-Founders, Dan Giovacchini and Brian Shultz and they founded Tango.
Pavel Stepanov Of Virtudesk On 5 Things You Need To Know To Successfully Scale Your Business was originally published in Authority Magazine on Medium, where people are continuing the conversation by highlighting and responding to this story.