How Nearshoring Helps Startups Scale Faster and Smarter

Nearshoring isn't just about saving money anymore. It's about speed, control, and scaling smarter. In this episode, we break down where nearshoring actually works and when it doesn't. If you're a founder thinking about growth, don't miss this one.

Harvest the growth potential of your product or service as we share stories and strategies that'll make your competitors nervous. Now here's the host of the Harvest Growth Podcast, John LeClair.

Over the past 20 years, our team has helped launch and grow hundreds of consumer products, generating more than $2 billion in revenue for our clients. On this show, we break down what actually works in marketing. Real stories, real strategies, and lessons you can put to work in your business right away. Whether you're getting ready to launch or looking to scale what's already working, you're in the right place. Let's jump into today's episode. Today's guest has spent 10 years working across borders, especially in the United States and Latin America, supporting hundreds of companies as clients. He's built 3 different companies from zero to over $4 million in revenue, and really is an expert in nearshoring. So first, I want to welcome to the show, Brian. Thanks so much for taking the time today.

Oh, I'm excited to be here. Thanks for the chance.

So, and if you could tell our audience, what's the name of your company?

Yeah, it's called Plug Technologies, P-L-U-G-G.

And your website address is plug.tech, T-E-C-H.

Correct, team C-H, exactly.

And it's in the show notes for anybody who's driving or references later. All right, so I mentioned nearshoring. Some of our audience may not know what that is. So just in the very beginning, let's talk about nearshoring. What is it?

Yeah, it's good to get some definitions out of the way. So I'm sure your audience is really educated, strong acumen, has definitely heard of offshoring. And the way people think about offshoring is there's an ocean in between. It's almost always a developing country supporting a developed country. So there's cost savings there. We tend to think of everything in terms of the US, but it is a relative term. So for the US, we often look at the Philippines, India, China as the dominant countries that we're offshoring to. And again, it's, you know, usually a 12-14 hour time difference. Nearshoring is, again, with the frame of reference of the States, it's Latin America. So you're not jumping over a whole ocean. You're on the same time zone. But for the most part, developing countries supporting developed countries still holds true. And then just to illustrate the relativity of it, let's say you're in Australia and you have a team in the Philippines. It's actually nearshoring because they're roughly on the same time zone. But if you're in Australia and you're working with Latin America, that's going to be offshoring.

Yeah, that makes sense. Yeah, very well said. And I've got to say, we have used a nearshoring employee for, I want to say it was back in like 2018. She's been with us a long time and she is down in Venezuela and is an integral part of our team. So she helps support a lot of stuff on our backend and really has been awesome. It's been really interesting recently to talk with her about what's going on in Venezuela. And luckily she's safe and things have been going well, but she has been truly invaluable to our company and is relatively inexpensive. And it's, you know, we're able to provide a great wage for somebody in a different country to get a service level significantly higher than we would at a similar wage here. So we get better performance. So for us, it's been a cost savings, and we can do things we otherwise probably couldn't afford to do for some of these roles, right? It just didn't, it didn't make sense. And she's been awesome for that. I do want to ask you, so, you know, I've got my experience and what I know, which is very little compared to you, although it's all been very good. I shouldn't say all. With her, it certainly has been. We've had some bad experiences in the past, really just because we didn't know what we were doing, right? Once we figured that out a little bit and found the right people, we have another one that's actually over in Africa where time zones for us on his role don't make, don't make a difference. And he's been awesome as well. But for her, we interact more similar time zone. It's been much more convenient. But what types of companies, first of all, before we get too much into roles, I guess, what types of companies in your experience can really benefit from from nearshoring opportunities like this?

Yeah, sure. First, I just wanted to comment, I think it's great you've got your team member in Venezuela. And I think what you're describing is how a lot of companies think about talent arbitrage. So they're paying for what would probably be a junior-level salary in the States, but they're getting senior-level performance. So there's this kind of gap there. And often where nearshoring and offshoring are a little bit different is offshoring, especially Asia. It's always going to beat Latin America on pricing. It's close, but you're always going to win the price war if you go to Asia. I think what we've seen in this big shift lately is it's not all about price anymore. And there's this kind of concept of you get what you pay for. So time zone, talent arbitrage, getting senior-level people, dedicated, committed, humble, hungry, they bring professional skills, you know, all that stuff really matters. And I think this segues into your question about what kind of companies, you know, are using it. I think the first way to look at this is what kind of positions are being nearshored. We rarely see companies that want like a junior-level person in Latin America because you're not really getting any arbitrage, you know, that way, right? It's, um, I mean, sure, you can get somebody ultra, ultra cheap, they don't have a lot of experience. Um, and on the other extreme, you're probably not hiring executives that are running core functions for your company. I strongly suggest you do that, you know, in the States and preferably, you know, your own city because there's a lot of intimate details and things that you just want to get aligned with on strategy all the time. But everything else between those two gaps is not only fair game, but has been really successful. So you're getting everything from IT roles, and IT is kind of the first thing that always gets offshored or nearshored because there's maturity into it. Everything from software developers to the infrastructure guys that are setting up the network, QA, operations. And then you've got— I know you're in marketing, John, so a lot of marketing roles, content, social media, things like that. Admin assistants, back office. There's something called BPO, business process outsourcing. So, you know, the back office people, call centers, customer service. So all that stuff. So just about any company can use people in that type of role, but they're looking at it a little bit differently. If you're, say, a really small agency or maybe a small tech company, you're looking for cost efficiencies, right? So you're looking for maybe even somebody 20 hours a week, maybe 40 hours a week, but somebody that you know is not gonna exhaust your funds, right? They're not gonna be so expensive that it feels heavy on your budget. And then as you go upmarket a little bit, The larger the company, the more they're thinking about this in terms of optionality, flexibility, scaling, being able to hire a team of 5, 10, 20, 50, you know, and really scale and invest. And why the scale matters, I think, is important because although I wouldn't do executives Surprisingly, there's a lot of really good management talent in Latin America. So first-line managers, senior managers, directors that can oversee real teams and build real teams to high-success, high-performing teams. So this allows companies to identify some really great leaders, build the teams around it, and build the company that way.

No, thanks for going into so much detail. I think that's really helpful to understand where it works best and, and really how to use it. What do you think has changed over the past, I don't know, maybe 3 to 5 years or whatever? Maybe it's technology, or what changes have happened to make it better than it used to be? I think many of our listeners, myself, you know, I, I used to think about this because 15 years ago it— we tried a couple of things and it was, it was rough. It was a hard experience. So I've got my idea why it works better, but again, you're the expert in this space. What things or what technologies are, are better day to help make this the process easier, to have better, a better nearshoring experience?

Yeah, I think, you know, before COVID remote work was kind of weird, right? Like I remember, you know, once prior to entrepreneurship and I was a W-2 employee working out of Chicago and, you know, it was, it was like I was asking the biggest ask of my life to work from home for 2 days. You know, it was like so restrictive. Now it's so normal, right? But companies really weren't set up for that. So all the infrastructure of remote work and same-time tools, synchronization, WhatsApp, Google Docs, Jira, Slack, this has all been kind of organized for remote work. So number one, you know, that's there. COVID just really changed the game and made this super easy. And you don't need all this infrastructure, you know, in Buenos Aires or Mexico City. People kind of already have it, you know, at their— as long as they've got a laptop and reliable internet, you supply the, the web tools, the web apps, you're good to go. You can also do a lot of things on your phone. Um, the second thing that maybe not everybody's talking about— everybody's talking about AI, but not everyone's talking about that it's global. You know, we tend to in the States think that we're the only ones using it. Latin America is using it, Asia is using it, Africa is using it. So, um, with the pre— with, with the ability to get great talent that is multiplied with the power of AI, and you've got access to synchronized time, man, I mean you can really build your business successfully this way.

Agreed. You know, and it's— you talk about the change to remote. We had a great employee for a few years out of California that worked remotely for us. And I— the comparison— again, she was fantastic, but the process of working with somebody in California from, you know, our business that's based in Colorado is significantly more difficult than dealing with somebody in Latin America, right? It's just in terms of how taxes are set up and reporting and all these things that need to be done, especially when you work with an agency like yours to help find the right people and, and manage them and pay them, etc. It takes a lot of that onus off of your shoulders. I mean, I still— it's been a couple of years. I still just last month was dealing with some tax reporting thing and I've got to prove to California like, no, she's not with us anymore. Like it's, it's this constant reporting nightmare. Maybe that's a California thing more than anywhere else, but, But I will say that the process has become really easy. Again, when you work with the right type of partner to help you find the right people and get them paid and all that goes into it. Well, for some of our audience, they might be curious. They, you know, everyone's heard about this, right? To some extent at least, and maybe is considering it or has thought about it in the past. What's the safest way to maybe test the waters or try nearshoring without feeling like you're overcommitting into this big endeavor before you know if it's going to work or not?

Yeah, totally. So I'll be the first to say we might not be the right agency for a very first-timer, and that's okay. I think the DIY method is totally fine to get started, and there's a lot of great platforms out there. You've got Fiverr, you've got Upwork, you've got a whole bunch of stuff. They've got reviews and you can see who else has gave them a testimonial. You can do little like test work projects. You can see the rate, kind of bid it, get a bunch of applications. And I think there's maybe two threads there. So the first is you are going to make mistakes with the hiring and that's perfectly fine. Wisdom comes from, you know, failures and experience, right? You just have to know that you'll probably make the same mistakes if you hired somebody in Colorado or Florida or whatever. It's just part of hiring, part of management, part of leadership. The second thing is, as you think about pricing, remember Asia's gonna be less expensive than Latin America, whether it's Upwork, Fiverr, or using an agency like mine. And I say this with the utmost respect. I went to— when I did my business school program, I had a really cool experience where I've got a degree from UCLA, an MBA from UCLA, and everybody knows UCLA. Very few people know NUS, which is National University of Singapore. And it's like a top school in Asia. Nobody in the States knows or cares, and that's okay. But I had this unique experience where I got to be educated half the time by Asian professors and half the time by American professors. And as you guessed, the American professors kind of love the intellectual sparring. They like the debate and let's get different perspectives and disagree with me and let's do it. But when we would take the show on the road to Singapore and we would have Singaporean professors, and I love Singapore, tons of respect for the country, but they didn't like to be challenged. And it was a lot more hierarchical in how things were organized. There's a lot of levels and you don't talk to the boss, you don't give negative feedback upwards. Where in the States it's a lot more flat and people are used to sharing their opinions and disagreeing. So all this to say is that if you have something ambiguous, you're like, I'm trying to solve this problem, but I'm not really sure how to do it. I think Latin America is better if you are somebody who's tightly organized you think in systems, um, you've got an 18-step process on how to do this, and I would always go with, with Asia because they're going to follow the process to a T. But if there's any, um, ambiguity in those processes and you take that to Asia, you might be in trouble. So just keep that in mind. If you're very organized, Asia. If you're a little loosey-goosey like me and fly by the seat of your pants as an entrepreneur and the problems come up, I would, I would definitely look at Latin America.

That's great advice. Well, this has been a really fun interview, Brian. You're clearly an expert in this field, and I'm sure there's a lot of people that have questions. If they do and they want to learn more, how do they get a hold of you?

Yeah, thanks for the opportunity. Plug Technologies, plug.tech, T-E-C-H. And my email is simply Brian, B-R-I-A-N, at plug.tech. And we do conversations every day about people that are maybe near short curious and they just want to get a little advice, understand. And we do conversations all the time about Here's my budget. I need this kind of laptop in the hands of my person. And I might need an office later. And we'll kind of talk through maybe Venezuela is the right country. Maybe it's going to be Mexico City, maybe Buenos Aires, maybe São Paulo, and kind of talk through the trade-offs with everything. So anyway, we have these conversations all the time, and we love to do that with anybody. Curious about this world.

And take a minute to talk about— you have a podcast as well that you run. Can you talk a little bit about it, where they can find it, and what do you talk about on your show?

Yeah, I appreciate that. Uh, everything we talked about in this show is kind of a typical podcast for us. It's called the Nearshore Cafe Podcast. Uh, we're 80+ episodes in, and it's all about the stories and people doing business in Latin America. For example, we might have a fintech entrepreneur from Montevideo, Uruguay, talking about how they're building their company and product from there. We might have a venture capitalist from California talking about what they're investing in Latin America and the types of companies and burn rates and things like that. So that and anything in between, we just want to give a spotlight to all these exciting stories.

Love it. Great concept. To our audience, if you want to take the next step in growing your business, visit harvestgrowth.com, connect with our team, and book a one-on-one conversation focused on your business. Well, thanks for listening today, and we'll see you in the next episode.