Is Nearshoring the Future of Global Tech Innovation?

Welcome everyone to another episode of the Nearshore Cafe podcast. I'm Brian Samson, your host. And if you are interested in the tech world, the startup world, and how nearshore is playing a big role, this is the podcast episode for you. Before we introduce our guest, I want to thank our sponsor, Plug Technologies, plugg.tech. Great way to connect talent all over Latin America with growing US companies. Guys, let me welcome Evan Myers, the Director of Sales for our sponsor Plug. Evan has a ton of experience in this world. Can't wait to get into it. Welcome to the show, Evan.

Thanks so much, Brian. Excited, excited to be here.

So I want to start off with a question around how you're feeling going into 2025. Are you optimistic, pessimistic, neutral? What do you think about the year to come?

Yeah, absolutely. I think I'm naturally an optimistic person. So, you know, take this with a grain of salt, but I am genuinely optimistic heading into 2025. I think in the tech world, if you look back over the last 3 to 5 years, we've had a lot of changes, not just getting out of the staffing world, but just talking about the tech world in general. And as we move closer to AI and ChatGPT is becoming a standard, I think there's a lot of really exciting new startups and technologies that are starting to come to the forefront and we're just scratching the surface. So personally, I'm really excited to see where things start to take off next year.

And Evan, you're, you're in Austin. What does it look like in Austin out there? Are there a lot of AI startups like you mentioned, a lot of SaaS startups? What kind of check sizes are you seeing? You know, what does that look like?

Yeah, absolutely. No, we, uh, we have a joke in Austin that you have Silicon Valley out in California and everyone calls it Silicon, uh, Hills here. We have some hills out on the west side. It's not totally flat like people think. Um, I originally thought that But there is a lot of tech companies that are born out of Austin. There's a lot of really exciting startups in the city. And pretty much if you bump into any, anyone in that community, you go to networking events, happy hours, you hear AI thrown around all the time. There's a lot of interesting different niches of AI, but I've personally have talked to a few founders who seem to be leveraging that in some different spaces. And I think there's a lot of optimism around the city and with AI influencing startups going forward. Very cool.

And when you, when you think about these AI-focused companies or the tech companies on the forefront, what are the roles that they're hiring for lately?

Yeah, it seems one of the most popular roles that keep popping up is some type of natural language Python machine learning engineer. Right now we're setting up the standard for AI, and I think the most common role is finding these engineers that are able to steer AI and build it in the right direction. And currently, like in Austin, I just talked to a friend this week who's in the building AI for construction companies, how to help the administrative side of construction companies. And I think that is a very specific niche, but it kind of represents what a lot of people are looking to do with AI is take it to revolutionize old industries and how to make it more modern and efficient.

Yeah, it seems like we're on really phase 2. You know, phase 1 was taking offline businesses online. Phase 2 is taking online businesses and moving it to the AI world.

Yeah, absolutely. It's, uh, it seems like now we're trying to figure out, um, where can we optimize and make things more efficient. I sound like a consultant in my brain when I say that, but it seems to be a lot of room for growth in these industries. Construction is an industry I never would have thought of AI technology being introduced to, and then it's like, oh well, If you're doing it there, I mean, every single industry has to have some form or niche where AI can play a role.

Yeah. Now, for those roles like you talked about— natural language, machine learning, data scientists— um, is talent constrained? Are, are these companies able to find what they're looking for in, in Austin or San Francisco and some of these other markets?

I think, uh, demand is probably outpacing supply in the AI world, and pretty much everyone I talk to is looking to hire AI engineers, and they're— if they find the quality person, they're adding them to their team. And that really expands like globally. For a lot of companies, they have specific constraints, constraints along like location, cultural fits, all these things. But for these companies that are building new technology around AI, I've heard it more and more that it's like, we don't really care if they're Pacific time, if they're Eastern time. If they're a quality engineer, we want to talk to them, which is I think a good bullish sign.

Yeah, obviously with Plug, we're focused on Latin America. Are there talent pockets or countries that have really emerged as, as places for talent for this space?

Yeah, absolutely. I can speak to a couple from like personal experiences, but personally, I've seen a lot of talent pop up from Brazil, Mexico, and Argentina specifically. Brazil, I know São Paulo, is becoming a budding tech hub. I just joked about Silicon Hills being in Austin. I don't know what they would call it in Brazil, but that is where a lot of talent and a lot of companies are looking for talent. And then we were just in Mexico City, but Mexico City is filled with a ton of talented individuals. And we personally have worked with some AI engineers out of Mexico City along with Buenos Aires as well.

Interesting. Now, I'm sure there are a lot of companies that you've talked to that they've never nearshored before. You know, maybe they're in Austin, but they've got an engineer in Cincinnati or something. And, you know, like that was a stretch enough for them to go 1,000 miles away. You know, what are things like kind of maybe call it common questions or concerns that these companies might have if they've never nearshored before?

Yeah, absolutely. It's probably the most common conversation we have, especially with not just startups, but growing companies, like you said, that have never had an experience hiring outside maybe their state or especially the country. A couple of kind of common upfront questions. Of course, cost is always going to be there. But I think the primary concern for these companies is what is it like to enter into a new space? Is there a barrier to entry, whether it's a cultural fit, an administrative fit? They don't have an office in Mexico City. How can they possibly hire remote engineers? This conversation today is a little different than it was a few years ago. Since COVID of course, we've adopted remote working to be a little more standardized. But that's one of my favorite conversations to have because it doesn't— I mean, you can have a 2-person startup and you can hire someone on the other side of the world. We have the technology and the structure that if you're just looking to hire the best talent, I really implore every company to open up their ideas to not just say Latin America, but anywhere and explore, compare, contrast. What's the pros and cons of each. But myself, I think nearshoring, and I'm sure we'll talk a little bit more about this, is a really good mix for US companies that they want to expand their talent pool. They want to look for some alternative solutions and they start looking downwards towards Latin America.

Now, this answer might come obvious, but it's worth stating because you mentioned earlier about the world is flat now. There is a global opportunity. You could hire somebody in Eastern Europe, Africa, Singapore, wherever. What's the advantage that a US company would have looking into Latin America first?

Yeah, absolutely. I was going to say, if it wasn't just looking outside for US companies of where can I hire, it's companies that have already worked with India saying, or Eastern Europe saying, why should I change our strategy now? Why look downwards? Towards Latin America. And I think there's a few things that line up. I like to compare kind of two parts of hiring. You have cost. You're always working on some sort of a budget, whether you're a small or large company, you have some costs that you're trying to control. And then you also have quality. And I think both play a big part. Yeah, you want to, you want to budget properly, but you also want to hire the right people. And talking to US companies, I think Latin America and nearshoring is really the intersection of those two items. It has the same time zone as the US time zone. So you're not on a 24-hour development cycle. Um, culturally, most of the engineers you're going to be talking to, especially when you work with professionals that are screening the right things, they're going to be advanced-level English speakers. A lot of the engineers you're going to be talking to have already worked with US-based companies before. So I think there's a— and this is surprising for some companies, but there's a really natural and easy cultural fit for engineers out of Latin America to fit seamlessly into US-based companies.

Can you, can you expand on that a little bit more about the, like, the natural cultural fit? Why is that? How would you describe that?

Yeah, absolutely. All of these engineers in the tech world are looking to join, just like any of us. I mean, I think take out the tech world, like, you want to join a company or an industry that's growing. We want to feel like we're part of something that's growing. And for a lot of these engineers based out of Latin America, there's nothing more exciting than joining a US-based company. I think they hear great things. Typically there's some fast growth paths. Startups can be really exciting. So with that being said, they are seeking out these opportunities and many of them that are already looking at these opportunities, like I just mentioned, might have already worked with some US-based startups. So if you take someone that's, say they're born out of Brazil, they're working out of São Paulo, they're fluent in English and they've already worked with a US-based startup. The only thing that might really feel different for you on a Google Meet with them is their background, their video background, the fact that they're not physically where you're at. Everything else, they might be working the exact same time zone, they'll sound similar. Sure, we might have very different, like slightly different accents, but everything else is pretty much the same as what you and I are doing right now. And that's, I think, a mental hump for some companies to get over. But as far as the operations of working day to day, it's pretty natural. It fits in really seamlessly with Teams.

As you said earlier, cost is certainly a factor. And a lot of times it's kind of glazed over, like it's cheaper. Would you mind getting a little more specific? I think for anybody listening to the show, they're like, all right, we get it, Evan, it's cheaper. Like how much cheaper? What does it cost if I want a data engineer, I want a natural language engineer or machine learning? A full-stack developer? Like, what are we, what are we really talking about in real numbers?

Yeah, absolutely. Um, no, that's definitely a buzzword to saying, hey, we have more cost-effective talent, but what does that really look like? One thing I like to be completely upfront about when I'm having these conversations, uh, there's two types of versions of this conversation. One is with a company that is only hired in the US and they're looking to go to Latin America for the first time. And there's a company like we were just talking about that's worked with India or Eastern Europe and they're saying, what does the cost look like to Latin America? I would say that the first things first is Latin America is not meant to be the cheapest solution. It's not the cheapest solution. So you're not going to go from India to Brazil and you're going to save money. It's also not the most expensive solution. You will move from the US to Latin America. And on average, I think you see around 30% to 40% cost savings. That varies role to role, company to company, and depending on the geography of the person that you're hiring. But with that being said, I would expect if you're moving from a US-based role to Latin America, you can kind of generalize around 30 to 40% cost savings. And if you're ever interested in looking at specific roles or countries, there's going to be slight differences, of course. But I think Latin America is kind of built as that, I like to say, middle market solution. If you're looking for, you know, the cheapest solution, yeah, you can go to India, but what you lose with that is the time zone alignment. You might lose a little bit of the cultural alignment. And then ultimately it might be a little more of a Band-Aid solution where you're just, yeah, you hire someone cheap, but you might lose them in 6 months. There might be turnover in 3 months where in the US it's the opposite. You might hire a rock star, but you can only hire one of them because you don't have the budget for more. And I think when you look towards Latin America, that's where you kind of find that sweet zone of the 30 to 40% cost savings is enough that it matters, especially when you're building out teams. but you're still getting the quality that you're looking for.

Yeah. You know, it's interesting what you just said about the turnover. I would actually argue that the US has the same type of turnover problems as going offshore to Asia.

I completely agree. One of the— I think one thing that matters a lot that you don't find elsewhere that you do find in Latin America is loyalty. And I live in the US, I understand this, I have friends that are part of this, but we're a very capitalistic society that if you can make $10,000 and jump to a competitor, there's a lot of people, especially maybe my generation, we get, we're told millennials are the biggest culprit of this. I don't know if that's true or not, but there's a lot of people that'll take a pay raise to go jump around to another company. You don't see that as much in Latin America. There's, these engineers are genuinely excited to join an interesting and growing company. So you see the retention rates at a much, much higher level than you're right, not just India, but the US too.

You hit on a little bit earlier about Brazil, obviously you went to Mexico City recently. Would just love to hear maybe what were maybe your expectations before you ever set foot in these countries and what was it really like and talk through the differences there?

Yeah, absolutely. Some of my favorite travels I've ever done. And I think in general, this is why when I tell people I love traveling, this might be the number one reason why I love to travel. I know I don't have to tell you that, Brian. You're probably the most well travelled person I've ever met. But with that being said, you go in with these expectations of— I don't want to say stereotypes, but you're like, this is what I've heard. This is like— I did that with Austin, Texas. I first came to Austin, Texas thinking it was flat dirt land, and I visited my brother here and it was like green and water and there's hills. I was like, what the heck is this place? And when I was going to Brazil for the first time, one of my first nearshoring companies, we had a team retreat down there and we went to São Paulo to start. And I knew ahead of time, I was like, I'm going to book some extra time. I'm going to get out of the city. I want to see some of Brazil. My parents were telling me, they're watching the news at home. They're like, keep your phone in your pocket. You're going to get robbed. Like, it's dangerous. It's like, I mean, sure, I'm sure there's crime in any cities, but it was one of my favorite trips I've ever done. It's just a beautiful place. The people are really friendly. You know, you don't know if you're going to get off the plane and be able to speak any English, but a lot of individuals there speak English. And you're able to communicate and get around. I maybe only knew like 4 words in Portuguese and I was traveling to a remote destination just fine and the food was fantastic. I'll say this too, São Paulo, I landed in São Paulo and the ride from the airport to the city, very green, beautiful. I was like, yeah, this is awesome. But once you're in the city, it almost felt like I was in New York City in some way. It's a hustling, bustling city. We went to a WeWork, everyone's on their laptops, on their MacBooks, going to lunch at work. You, you get caught up in your box of where you work and you kind of forget what the world's like a little bit. And that was one of my favorite parts of going on that first Brazil trip was really putting myself down, um, feet on the ground and being able to see with my own eyes, like really exciting place, great people and very intelligent people. Um, I could see why São Paulo is considered a tech hub in that way. Recently we had a trip at Plug that we all got a chance to meet up in Mexico City, and it was the same thing for me. I've heard, everyone told me that Mexico City is one of the coolest cities in the world, great food, tacos, everything, but I had to see it for myself. So I was excited that we got that opportunity. It was a great few days that went by way too fast, and I think I ate probably too many tacos, but I don't regret that.

Yeah. And how would you describe maybe the surroundings of Mexico City? And did you have any thoughts or expectations going into the trip of what Mexico City would be like?

Yeah, I thought it was going to almost be similar to São Paulo in some way of being a concrete jungle. And it was anything but a concrete jungle. It was green parks, green trees, everything. Just walking around that city, you really don't feel like you're in a massive metropolitan city in any way. There were some street centers with a lot of storefronts and restaurants, but yeah, I like a very walkable city, very friendly people. The food was awesome, but the scenery was— I did not feel like I was in a gray, rainy city. It was like, this is alive, very colorful place full of really cool people.

Yeah, definitely. Evan, as you've worked with a lot of startups and tech companies whether you can name the companies or not, are there any particular stories that you'd like to share? You know, were they nearshored and what kind of impact that was?

Yeah, absolutely. There's one that's one of my favorites. It is a classic buzzword. They call themselves a stealth startup, so I won't use their actual name. But the reason why this is one of my favorites is there's a couple of reasons why. This was One of the first deals I ever had when I moved into sales, specifically in the nearshoring world, I moved to Austin. I originally took a sales job in Austin. That's how I got into recruiting, staffing. I was doing the US side of that. Then I joined the company and was remotely working in nearshoring. And the founder of this self-startup actually lived in my apartment building. So I met him through— we had like one of these Friday night, come down for a happy hour at the buildings. He was a cool guy. We were both into the same things, so we were just friends before I even knew what he did. And we went to a local bar that we have down the street called Fraser's. They have pool, your classic cold mug of beer. So this whole deal started by just running into this guy and going to get some beers with him. And he just started this company maybe like 6 months ago. They were looking to move from pre-seed to Series A. Grow from 5 people to 10 people, and he had a whole plan for it. And part of his plan was to potentially go the outsourcing route, and he was looking at India. And that was really where our conversation kind of first took off. And he was like, I didn't know that you were working in a space. Like, can you talk to me a little about nearshoring? And one of the nights that we were at a bar— that we probably should have had this conversation in an office, maybe more than a bar, but this is how that conversation started— was looking on a table and kind of drawing like a Venn diagram and this is going to be a little repetitive of what I said earlier, but on that Venn diagram, I drew a circle and wrote cost, and I drew another circle and I wrote quality. And I was like, you're a team of 5. Which of these 2 matter to you? And he's like, well, both. We only raise so much money. We have runway, but we have limited runway. But he's like, yeah, no, we're a small team. I need to hire people that are good at what they do. I was like, well, you're doing my job for me then. What I would put in the middle here is I'd say quality arguably you could write the US there. There's, we can get into, you know, the details of that, but that's what a lot of US companies think. Local hiring, pay for it, quality. India, lower cost. You're a startup, your budget is great, you want to save money. There's not a lot of intersection in the middle that you can find. The cultural fit, the time zone alignment that we were talking about. I was like, that's, that's why I personally, I was working with US staffing. That's why I made a move to I wanted to position myself to work with, um, in nearshoring. I think it's where everything's moving to, and that's where our conversation started, and we ended up getting to do a couple of roles with him. Um, but my, my other favorite part about that first deal, which really taught me a lot, was sometimes I would get an objection to talking about the cost savings, and I would hear, oh, it's only like 30%. Like, if I hire one engineer at $100,000, like, yeah, $30,000 is not nothing, but That's not enough for me to change my strategy. But when you build it out and we did it with this startup, when you take that 30% and you hire 5 people, that adds up. And for him, that was the difference of hiring an extra engineer. And really on paper, when you walk through that, if you ask someone, would you rather have 4 engineers out of Brazil or 3 engineers out of Austin, Texas, which one do you think is going to push your startup further along? It's 4 engineers out of Brazil almost every day of the week. And that was the decision that he made. So they're actually doing great. They made it to their Series A. I'm not sure exactly what the latest news is there, but that was my first kind of experience of talking to a true startup and taking them through, here's the 3 options. You got US outsourcing, nearshoring, let's like figure out what's right for you.

That's awesome. Any others that you want to mention?

There is one big one that was fun. They— you and I have talked about this before, but it was It was the biggest deal I've ever done, and I think it just spoke to the validity for me of nearshoring. This company is one of the largest AI companies currently. You talk about ChatGPT, OpenAI is up there. And for me to just personally being in a space to see that those type of companies are looking to hire resources out of all of Latin America, I think speaks volumes to where we're headed in the staffing world. Back to your original question, like, where is, is, is AI, is hiring AI talent constrained at all? It is. And I think the trend we're going to see when we start looking forward to 2025 and beyond is not just US companies, but companies all over the world potentially looking towards Latin America for some additional talent. And we've already seen that a little bit. I think we've seen some companies that do staffing out of India. They're actually starting to look to work in the nearshoring space as well. So It's always fun to talk about like, oh, my best deal that I've ever done or my biggest deal. It's not that, it was just more for me, it was like, oh wow, this is actually happening. I've been doing this for a little bit now and I'm not talking to a 2-person startup that just raised their first amount of funding. This is a real company with some serious firepower. So I think that's exciting for me.

So I'm sure we have different people listening that are thinking, okay, this sounds kind of cool, walk them through the process. You know, what, like if they were to call you and say, hey, I'm kind of, I think I'm interested in this whole Nearshorn thing, Evan, what does that mean? Like what does it mean recruiting and hiring and onboarding? You know, how does that all look like?

Yeah, absolutely. I think my favorite part about this process is that it's not a copy and paste process for any company. It really depends What you're looking for, you know, what, what size of the company, what industry, like what, what fits your needs. So the first part of that process is learning about the company and what they're trying to build. For some companies, they need to hire a team of 10 as soon as possible. And some companies, they just need one guy, but they need that guy to be the perfect fit for what they, what they're looking for. So I think a couple parts of that is, um, having a call together and seeing how we can build that out. One of the benefits of working with a company like Plug Technologies is we are a team of humans. We're, we're not a platform. You're not gonna plug in your JD online and we're gonna say, hey, here's 5 guys, go, go interview them. We'll work with you. We'll, we'll have a talk, we'll have a discussion, we'll listen to what your needs are, and then we'll go out and do the, the groundwork as far as screening and finding the, the right talent and then walk you through that process for onboarding. So, I think the, the term white glove service comes to mind, but really wanna make it as personal as possible to each company that we work with.

And on that note, if somebody did want to reach out to you, what is the best way for them to connect with you?

Yeah, absolutely. My email is evan@plug.tech, but I'm always open on my phone, even a text message nowadays. I feel like texting people used to be rejected in the business world, but I love having text conversations with potential prospects and walking through needs. I realize that especially if you're a startup founder out there, your time is probably limited and you don't want to get drawn into some phone calls. But if that's helpful, my phone number is 703-999-3995. Happy to be a resource however I can and talk through any of your needs.

Evan, thanks so much for sharing your wisdom on our podcast today. Everyone, this is the Nearshore Cafe podcast sponsored by Plug Technologies, plug.tech. As Evan mentioned, a great way to connect Growing US companies with top talent in Latin America. Thanks for listening, everybody. We'll see you next time.