Matt Wallaert - CXO at Oceans

Welcome to another Founder Wisdom podcast. We have Matt Wallert for round 2 on the podcast today. Matt is CXO/Chief Experience Officer at Oceans. He's also the founder of bsci.io. He's the author of an interesting book. I think it's called Start at the End. And yeah, Chief Behavioral Officer previously He uses applied behavioral science to transfer global talent. So Matt, welcome to the pod again for round 2. Tell us a bit more about yourself and what you've been up to since last time we spoke.

Charles, good to see you again, man. What have I been up to? Well, I agreed to take on this gig with a good friend of mine, helping embed Sri Lankan talent into American startups. We now have about 600 people. We call them divers because they go deep with our clients. that are embedded into over 300 startups here in the US. So I'm back and forth to Sri Lanka, which is new and different. Otherwise, things are good, you know, continuing to spread and evangelize applied behavioral science in the world, continuing to work across a bunch of different companies, enjoying the time. You know, I need to get down and see you. Clearly, I, you know, you turned the camera around and showed the view. Clearly, I'm in the wrong place. I need to hang out with you, man.

Yeah, we have a retreat here next Monday with a bunch of my partners, clients in Oaxaca, Mexico. It's a nice place. Why Sri Lanka of all places?

Yeah, Sri Lanka is a really interesting talent market. I always sort of say it's like India and Jamaica had a baby, right? So you get the sort of culturally it has Indian overtones, right? Traditionally, Indian kings would marry Sri Lankan queens, right? It's an island right off the coast of India. But from a cultural perspective, it's much more island culture. So India can be very competitive. Sri Lanka is very collaborative. People are a little more laid back. There's a little bit more of a convivial attitude about sort of like how work gets done. Education's really important. So there's a huge amount of very well-educated people, and unfortunately there's just not enough opportunities in the market. It's an underdeveloped market. And so there's a ton of people who end up emigrating to other countries in order to get access to opportunities. And look, I'm all for immigration. I've lived abroad. I love living abroad, but no one should have to leave in order to access opportunity, right? That's something that everyone should be able to have the ability and the right to do. And so, you know, Sri Lanka becomes this really interesting place to say, well, you don't have to emigrate. You don't have to leave. You can still work with really amazing startups around the world in really amazing capacities. And then, you know, for American startups, there's obviously a cost of living difference, right? So, you know, there's sort of a wage arbitrage that happens that allows you to get incredibly talented talent that really, really, really wants to work with you at a very attractive sort of wage arbitrage.

Why not India? Is it just like an arbitrage play? And why now? You know, I hired thousands of freelancers from India, from Serbia. Back when I would do business in Quebec, Canada, I would hire French people from Morocco, Tunisia. I burnt out of this. I'd rather outsource to AIs that can do the work for me and systems, right? So why now?

Yeah, I mean, I think there's— so there's 2 questions in there. One was why not India? I mean, I think India is a fascinating market, but I also think India is, you know, it's a huge geographic market. I think part of this, in order to sort of clarify and say why we can't— this sort of isn't a, like, doesn't compete with AI outsourcing. It's not. These are full-time embedded team members who generally have 5 to 10 years of work experience, definitely a college degree, often a master's degree. They're usually doing the stuff that can't be automated, right? Or they are the person who's writing the AI for you. You know, it's things like financial analytics, right? They're your CFO, they're your COO, your chief of staff. And they're going to work with you on an embedded basis. So they're not rotational talent that, you know, you're going on Fiverr and getting somebody for a month to do something. It's not project-based. This is something most of our divers are with their clients for 2, 3, 4 years. They're continuing to grow with that person. You know, we have many of them are the brains and bodies behind very famous podcasts. We have a bunch of, you know, sort of podcast hosts where they're sort of, you know, one of our folks is the producer. So I do think there's a lot of stuff that can and should be automated by AI. We train all of our folks. They're all, you know, they get 3-week full-time training when they come into the company that includes sort of AI upskilling. And then we have continual education while they're with the client. But I don't think an AI is a replacement for everything. I think there's stuff that we need humans to do. And, you know, some of those humans happen to be in Sri Lanka.

Man, it's so intriguing. I see like all the co-founders, there's like Austin Reef, right? Morning Brew. There are like 5, 6 co-founders, why so many co-founders? Why so many smart people would launch a talent outsourcing business, right? Like, I mean, in Morning Brew, this guy does his homework, right? He did his market research for sure, and he's seen product-market fit there. To enlighten myself, let's talk about your ICP. Are these like large enterprises? Like, who do you target?

Yeah, I mean, I think, You know, unsurprisingly for somebody, for something founded by folks like Austin, you know, our target is generally startups. Now, startup, as we know, is kind of a diverse term. It can mean everything from sort of a solo entrepreneur all the way through, you know, we have clients who have 5,000 employees and we are a talent partner with 20, 30 people running around inside their company. And so, you know, it does vary a little bit. You know, I do think they're entrepreneurial environments in general, right? They're places where ambition is valued. Because that's why people come to us, right? The very reason Sri Lankans want to work with us is because they are ambitious, because they want to grow. That's sort of the growth potential. It's a big reason, you know, you asked why India versus Sri Lanka. We believe in talent density a lot. So yes, these are remote jobs. Yes, they're flexible. Yes, there's hourly overlap, but we have an office that you can come to if you want to. I was just there and we had our badminton tournament on the Saturday I arrived. Then we rented out a theater and watched the new Spider-Man movie. Then there was our internal version of what we call Tide Talks, which are like short 5-minute talks that were the culmination of a speaking training series that a bunch of divers had engaged in. When you can have a bunch of people in one place, they can work remotely for a bunch of clients, but still be part of an organization where they feel like, hey, I can be around other people when I want to be around other people. I have other people to learn from. And it makes sense, right? Because you talked about AI replacement as an example. If you want A players, A players want to go someplace where they are around other A players. They have access to training. They have access to a community. A players don't want to sit at home by themselves doing drudge work through a computer. And so we're not interested in that market. You asked why so many co-founders. I think this is a problem that people like Austin and Ian and I experienced for ourselves, right? When you have experienced operators who have exited a bunch of businesses, grown a bunch of businesses. We needed people who could operate our portfolios. We needed people who could help us grow our own things. And so Oceans became a way to serve not only our own needs, but those of our community. And then it grew. We roughly double in size every year. So we started 4 years ago. You know, we'll have 1,000 people by the end of this year. Because, you know, almost everybody that becomes a client refers somebody else. We do very little marketing, very little paid sales. A lot of it's just, hey, if you have a diver and you know how great they are, when you're talking to a friend, you're telling them about it and then they get one and it just sort of spirals.

So I did this full spiel, right? Like I said, I hired thousands, right? So I feel I was way before my time there. Um, my new model is, yeah, creating systems and, and AIs. So like avoid laziness and just outsourcing something that a system can do without me constantly following up on it. My second system is also pretty unconventional. It is only working with founders. They all start in sales, they all paid commission, and eventually they get rev share and equity in the company. I feel that would be a company of the future, not outsourcing to people at the other side of the globe. You talk about A-players, I haven't ever spoke to one A-player from Sri Lanka, and in India, someone that grew up in India, it's really hard. Who are A-players? You're an A-player, Austin's an A-player, these are savages, right? They're all like founders. So isn't that like a better strategy?

I mean, first of all, there are plenty of founders in India and plenty of founders in Sri Lanka that have been very successful. Chamath is Sri Lankan. Like, there are plenty of amazing Sri Lankans who've—

Yeah, he grew up in Canada.

I mean, there are a bunch of amazing Sri Lankans—

He's Canadian. He's Canadian.

Oh, you dropped out for a second. You back?

Yeah, sorry. I said Chamath is Canadian. He has origins of Sri Lanka, but he grew up in the Canadian and American culture.

Ah, okay. But so there's a key, there's a key determinant. When people have access to markets that allow them to, to succeed, markets that allow them to pour resources into things, they have more opportunities. It's not a difference in people, right? There are amazing people all around the world, but they may not have access to the opportunities that allow them to grow their fullest potential. So by creating those opportunities, we feed that talent ecosystem. We get people who can grow. And there are people like that at Oceans, right? They start out as a business operations specialist working on a specific thing, and then they're with a startup for 4 years and now they're managing people. They're the head of a department, right? And if you can get those people at a fraction of the cost that it would cost in the United States, we're doing that. None of us started as a CEO. We all worked our way up. We all learned things along the way. That's Austin. That's me. That's anybody, right? You got to learn from other people. And there's no reason those people have to be in the United States. There's the only, you know, the only thing that's special about me being an American is that I happened to be born here, and then I had a bunch of opportunities because I inherited that privilege of being— having been born here.

Yeah, no, 100%. This is not a convo about privilege. I, uh, you and I, we have privilege, but it's more about like me as a ruthless operator. I want like A-grade talent. I want founders and entrepreneurs to work with me, people that are of the same cloth, right? Like, they, they want to start stuff, they're super entrepreneurial, they don't depend on a 9-to-5 job or salary. I mean, that's the folks I want to surround myself with. And as a result, if I do that, my, my businesses are gonna skyrocket. Plus, we're just— I'm not gonna have to go down to their levels and explain them very granular stuff. It's just, oh, we both know what we need to do, we both have extreme accountability. And I think that system that— and I want to ask your feedback on that foundership system of recruiting other founders to sell your stuff, and then you take the highest performers in there, and then you partner up with them, you do rev share, and you give them equity. I think that's a business of the future. That model is working incredibly well for me right now. Um, don't you think, like, the, the future agile organization— people talk about one-man billion-dollar company, I don't think it's gonna be one man, right? I think, yes, there's gonna be a bunch of AIs, but I do think it's like, I don't know, 10 entrepreneurs, uh, that got through this system and went together and created a billion-dollar company as like 10 high performers, like not one, right? So what do you think about that system? I'm curious.

I mean, I certainly think that dense networks of high performers can be amazing. I also think that they share common biases, right? And so when you surround yourself with a bunch of people who are, to your words, cut from the same cloth, it's really easy to miss things, right? I think part of what makes healthy, resilient organizations is diversity. And on the hustle factor, I mean, we take 10 founders in the US and 10 founders in Sri Lanka, and let me tell you, those Sri Lankans are hustling pretty hard. You know, we have—

for sure, Asia is like next level on the— but I don't think founders are yes-mans, right? They'll tell it to your face if something is not going, even if they're gonna lose money. So I don't think it's like an echo room, an echo chamber. Founders, I think, are so well placed to build and scale, maybe not on the operating and hyperscaling part of it, Like just doing stuff. But my thesis is you outsource this work to agents.

Yeah. I mean, I think there is a— the question is the gap between— so let's take your, you know, hey, I wanna work with a Downs Talent Network of 10 other founders, and then the rest is gonna be powered by AI agents. I think for a lot of business, there's a lot in between there. Right? It's a pretty big gap. If you look at our clients, you look at people like Magic Spoon, Right? This sort of cereal company, you can't run a cereal company off a bunch of AI.

Shout out to Magic Spoon, that StreamYard is owned by Magic Spoon.

Oh, well, there you go. So you need a bunch of things in between. And so I think there are small hyperlocal businesses for sure that can be run with a very small team and a bunch of agents, but I think to say that that's all of the business that exists in the world, You know, one of our company— one of our clients is a plumbing company in Philadelphia, right? And they use us for all the back office stuff. Someone has to bill, someone has to schedule, someone has to be there to sort of, you know, do stuff in a proactive way that, you know, you can outsource some of that to agents, but, you know, there has to be somebody managing the agents. And, you know, I don't know, I need plumbers, right? Like when my water's off, I want help. Right? And so I think agents have a place in the future, but I don't think that necessarily that's all of the business that there ever is.

Yeah. The physical world especially. And you're right. I'm mostly talking about like B2B service or SaaS. I want to talk about Oceans a bit more though. I'm pretty sure you guys have reached a gargantuan stage at the moment. Like how much lines do you have? Like how big? Are you guys— how's been the growth in the last couple of years?

Yeah. So, so we double in size every year. So we started the year with about 400 people. We'll be at 800 or 1,000 by the end of the year if we stay on sales track through the end of the year. So we have—

Did you say 8,000?

800. 800 people. So it's 4 years old. We are now up to 800 or 1,000 people by the end of the year.

That's big.

It is big. Hiring velocity is, it's hard to hire 800 people a year.

Who's in charge of onboarding all of these people?

I mean, that all falls under my team. So as CXO, all of the sort of operational stuff reports up to me. So we have a training team, we have a large TA team. Obviously, we get about 20,000 inbound applications a year in Sri Lanka. So there's a large TA team finding the best talent out of that. And then there's a training team. So they go through 3 weeks of full-time training when they come into the company across AI fundamentals, some soft skills, some of getting used to American culture and business culture, right? Differences in the Sri Lankan market, American market, et cetera. And then, so they go through about a 3-week training process, and then we have an integration success team. So let's say I become your diver, Charles. I come to work for you. There's a dedicated person Who is helping us connect, especially through that first initial period to make sure we get those systems set up correctly. So you talked, you know, about how important a system is. We have to ask questions like, hey, Charles, like, do you want Matt to ask you questions as he goes or batch his questions for the end of the day? Do you want those questions in writing? Do you want them in a Loom? Do you want a little voice note? Do you want him to text them to you or do it in Slack? Like those communication preferences, those like rhythm of business things. We have a dedicated integration success team that's helping get those paired up because, you know, in a sort of Mary Poppins way, well begun is half done. If we can get you and your diver really in sync early, we find out that pays very long-term dividends.

Why not Serbia, dude? I've done all the countries. I've obsessed. Like, I've gone through a very deep rabbit hole. And back then, after what, 7 years and thousands of employees hired, Serbia was like number one because of connectivity, because they were European. They ask fair rates. They're incredibly well educated, way more than Sri Lanka. And dude, I never hired one Sri Lanka in like all these years. It's like, what? I'm still super missing out, clearly. You know, tell me where I'm missing out.

Well, you're missing out on Sri Lanka. Have you never hired a Sri Lankan? How do you know? I mean, my sister-in-law is Serbian. I love Serbia. I think it's an interesting market to do this kind of work. What we have found is we try and go country at a time, again, because we want that density of talent network. We want to be able to have an office, have in-person training, have events, be able to give you a community. Because what makes global sort of talent drop out of working with Americans is like, it's hard to be at home on a Zoom call. working at your computer with nobody all day long, and it just wears people out in the 3, 4, 5-year timeline. You can get a good A-player for a year, but then they want to go off and do other things because they don't experience growth. No A-player is going to stick around unless there's growth. And in order to create growth, we need that density. So who knows, maybe Serbia will be my next stop after Sri Lanka. Right now, with 20,000 inbound applications a year in a 20 million person country, We haven't tapped out the talent pool yet, but when it gets hard to find good Sri Lankans, I'll be looking for my next market. Might be Serbia.

It's like 0.1% of population or something. Isn't that insane?

Yeah. I mean, we are hiring sort of the very, very best of the country, which is not sort of surprising. You want those people who typically have— right now, their existing options are Sri Lankan sort of very traditional corporate companies. They have these conglomerate type, whether those are apparel or food or agriculture, they have these conglomerate places, and that's where really talented people end up. And unfortunately, there's not a lot of mobility. You're there as a middle manager, and maybe 5 years later, you get to move up a rung. But there's not— if you are a hungry person, if you're Charles and you're hungry and you're ambitious, there's nowhere for you to go. Whereas we can give those people an opportunity for extreme rapid growth, right? They can be Charles's chief of staff, and as he grows, they can grow. Many of them, you talked about equity. We are pass-through entities, right? So we employ them, but you are able to give them bonuses. You're able to give them equity. We've had startups give their divers equity. So we have divers that also have equity in the companies they work at. We are there to make sure they have the training, the onboarding, the support, all of the things that make them successful. There's no reason that you can't, that they can't grow with you.

Is Sri Lanka a British colony? Did they learn English early?

Um, so they've been colonized a bunch, uh, is the answer. Uh, yes, most recently they were a British colony. Um, the English penetration rate is incredibly high. And interestingly, like English is, English is the first language of our company. What do I mean by that? Well, so there are 2 major dominant languages in Sri Lanka, Tamil, and Sinhala. And so not all of our divers even speak the same language. So at work, we all speak English because it's the only language that everybody at the company speaks, because some of them speak different native languages than each other. It's sort of like in India, some people speak Hindi and some people speak Gujarati. The lingua franca is English, right? And so English is actually the bridge language for our 2 Major ethnic groups in Sri Lanka.

So fascinating. You know, I would expect an answer like, uh, oh, Sri Lanka, I don't know, has very good taxes or has a treaty in which you don't have to do this and that. Uh, how do you manage that, by the way, the cross-border payments? Are you guys power users of Deal?

Shout out to our friends at Revolut.

But do they handle the taxation and the papers of the workers and all that?

Yeah. So we have local representation that helps us with all that. From a payments perspective, we have Revolut as our payments partner. And we are established there. We've been there for years. We have great local benefits partners. So everybody's getting health insurance and life insurance and maternity leave and all of the things that you need to make, because Because again, if we go back to that A-player, nobody's going to stick around if you don't have all that stuff. Nobody just wants a paycheck. They want some of that stability. And so we give you the combination that is high growth, but also with the stability. You talked earlier about 10 founders working together, often for pure equity. The difficulty is risk, right? Not everyone is in an opportunity, is in a position to take on that same risk, whether they have kids or are supporting family members or other kinds of things. And so creating these sort of hybrid situations where You know, people's basic needs are met, right? Even their advanced needs are met, but there's no cap on their growth. That's what you want— high, high, high standard wages living, high, high, high standard of living, but then the opportunity to continue to grow.

Yeah, you need to have a very good opportunity as well, and you need to do a lot of the legwork before you reach out to full commission, rev share, and equity offer. In my case, it's like a full go-to-market system that I build, and I, I provide their full pipeline, their full lead gen pipeline, right? And all they need to do is close for me. And even the close, there's like a lot of SOPs, so it's pretty predictable, right? I really think I have a golden goose here. So this is definitely not for everyone. I did it back then and I didn't have a solid product and people were churning like crazy, right? Also, I didn't target founders back then, right? I target 9-to-5ers and that never fucking worked because these guys are not in for the risk. So, and yes, you're right, risk profile. What's best for you? Yeah.

Risk is an important part of it because, you know, if you wanted to take no risk, you would just stay at a Sri Lankan corporate, right? You could, you know, you can stay at a manufacturing apparel company for 10 years. They're probably not gonna fire you. You're probably not gonna get pushed that hard. Everybody who comes to Oceans comes because they want the growth you're talking about. They want the ability to say, hey, I'm gonna take a slightly less— like at Oceans, You know, we, we do— we're not— if you don't perform, you're not staying, right? Whereas at a Sri Lankan corporate, you could stay for years. Risk is absolutely a part of it.

Yes, dude, this is fascinating. This company really got my attention. How did they get a hold of you? How did they recruit you, right? Because obviously they're doing that well. It's like you have a weird profile. You're a founder, you're a speaker, you're an author. So it's not conventional recruiting at play here.

Yeah. So Ian, the founder, is a very good friend of mine. He worked in corporate venture at a Japanese bank at the same time that I was running Microsoft Ventures in New York City. So we knew each other from corporate venture. And then he kind of went down the VC path, but I had exited some startups. And so when he had a crazy operator idea, I was always kind of the guy he called. So when he first started the company, he called me and said, hey, I think I'm going to do this thing. Do you think it's a good idea? And I said, yeah, here's where I think there's opportunity. So I had been meeting with him once a week, once every 2 weeks for the first couple of years. And then it got to a sufficient size, 300, 400 people where he needed that next level of sort of operational help. That wasn't necessarily his skillset. And so that's when I sort of stepped in to sort of be on the CXO side and bring up our operational capacity.

How do you manage all that pressure, dude? Like there's a lot under you, right? Like if you're onboarding all these people, How do you maintain your sanity?

I mean, I think having, you know, you talked about surrounding yourself with the right people. You know, most of our, most of my leadership team is in Sri Lanka. It's 80% women. Um, you know, these are people who are very, very good. They're very, very experienced. They haven't had as much opportunity in the local market. Um, and so Oceans is a big chance for them and they absolutely help me distribute the load. You know, having this really good leadership team of people that you can trust, we have what we call an accountable autonomous culture, meaning All right, Charles, like, you know, if you're in charge of talent acquisition, you do it the way you want to do it, and you're responsible for the outcomes of how that turns out. And so you make your own choices. I do very little approval work. They make their own choices. I just hold them accountable to the outcomes. And that's worked out really well for us, you know, because again, as you talk about that A-player, what distinguishes somebody that you want to work with is that they want the ball, right? They want to say, yeah, absolutely. I believe enough in my tactics. I believe enough in how I'm going to run this thing. I believe enough in my operational skill that I'm willing to accept the risk of the accountability. I'm not going to shift that ball to somebody else. I'm going to say it's me. And that has been really key for us. It's a stressful job, but I have a lovely wife and a wonderful son, and San Diego is great. On bad days, I get out in the ocean and go surfing for a little while until I feel better.

Yeah, dude, that's a good one. Um, do they still let you run your own company, BSI? Also, are you still planning another book?

Yeah, I don't know about another book. We'll see. Uh, it's a lot of work, and that feels like maybe the, the straw that broke the camel's back.

Oceans is worth writing a book for, for sure. It's like your current experience is, is pretty unconventional.

Yeah, it is an interesting playbook. I try and write about it as I go along. I try and write little LinkedIn things when I can about things that are working and not working for us. I do still run bsci.io on the side. We still have a collection of really senior folks that are helping to build behavioral science teams in companies, still on this sort of 6 to 12 month model where we're helping them create their own team. That's been good and successful. There's a lot of demand for applied behavioral science right now, in part because of AI. Right? As AI changes people's behavior, there's a renewed interest in sort of like, how do we change people's behavior in more conscious ways? AI also unlocks a lot of capabilities that, as behavioral scientists, we like, right? The ability to personalize and analyze in ways that we aren't necessarily previously able to do. So yeah, it's a lot of exciting work. You know, the bags under the eyes are getting deeper. I'm— there's a lot going on. But again, you surround yourself with really great people. You set up good systems that reduce the inhibiting pressures and you kind of get there.

I love it, dude. Where can people find out more about you?

I mean, I am privileged to have an extraordinarily unique name. So if you search for Matt Waller, you'll generally find me one way or the other. I don't spend a bunch of time on X or social media these days. I am on LinkedIn a little bit, but But I'm trying to write as I go and share some of the journey. But you know, a lot of the time, I went back and forth on 27-hour flights to Sri Lanka, so I get a little time to write while I'm doing that.

Oh boy! I love these flights, right? I'm pretty sure you have like your own routines in flight knowing you, right? So thanks for being on again. I was Matt and Charles.