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How TaskUs Is Powering LA's Technology Startup Boom

Story by Benjamin F. Kuo

 

Los Angeles has been in the midst of a technology boom over the last few years, with many of high profile startups growing in the area. However, one of the biggest beneficiaries of that boom--TaskUs (www.taskus.com) has been far lower profile--but has grown from only five employees three years ago, to over a thousand employees today who are helping behind the scenes to power those startups. We spoke with Bryce Maddock, founder of TaskUs, about the company and how it has been providing the manpower behind a lot of LA's technology startups.

So, what is TaskUs?

Bryce Maddock: TaskUs is the best provider in the world of customer care and back office services for emerging growth companies. If you look at the companies in the startup space both here in Southern California, as well as across the country--especially those that are expanding rapidly and hiring hundreds of people--we're the go-to source for how they manage their customer care and back office. Customer care, obviously, is emails, phone calls, and customer service back office services. It's all over the map, from content moderation for applications like Whisper and Tinder, to photo retouching for e-commerce websites. We'll do things like retouch photos for sites like HauteLook, which is now owned by Nordstrom, and Gilt Groupe. We'll also fill in product descriptions, filling in the copy you see associated with products on those sites. We do a whole host of other back-office services in that space.

It looks like you have quite a Who's Who list of startups you're working with. Who are some of those companies?

Bryce Maddock: We're fortunate enough to work with a vast majority of today's most successful startups. It's likely, if you started your company in the last five or six years, and have been growing really quickly, some part of that operation is run by TaskUs. Many of our customers don't allow us to mention them for various reasons, but some that do are like Expensify, Savings.com, Autodesk, Wikipedia, and others.

What's the story behind the company?

Bryce Maddock: I started the business with Jaspar Weir, my business partner, when we were 22 years old. I had worked a year in investment banking, and Jasper was out of USC. Before that, I was in New York, City. The two of us really wanted to be entrepreneurs. We'd gone to high school together in Santa Monica, and we were both very entrepreneurial in high school. We knew that starting our own business was the only way to succeed. In 2008, we started to throw around ideas, and eventually settled on this one. With globalization, and the rise of technology, we believed that you were going to see more and more individuals looking to outsource tasks. For our first three years, we actually were not helping companies, we were helping busy professionals, who were sending us work on a task-by-task basis. We discovered that the model didn't really scale, because the frame of reference of an individual is so unique, and also because business professionals don't have all that much money to spend.

So, we took a look at what we had created after three years, and decided we wanted to open our own office in the Philippines. Seventy five percent of the population there speaks English fluently, and 53 percent of the people are under the age of 25. It's a highly educated, English speaking workforce, and they love working for American companies. We also had a relationship with startup companies, because we also thought of ourselves as a startup. After three years, we saw that the virtual assistant idea wasn't working out, and there were much more successful startups than us. So, we wondered what we could do at a low price point, things like transcribing voicemail, things like social media sentiment analysis. We worked with companies finding tweets mentioning Fortune 500 corporations, and figuring out if those comments were positive or negative. It was very simple work at the beginning, but over the last three years we've really moved up the value chain, delivering world class customer care and more complex back office services.

What caused you to rethink your business and pivot the business three years in?

Bryce Maddock: I think, it was because we were 25 years old, and still living with our parents. That was really what did it. We were really stubborn entrepreneurs, and worked at it for three years, because we were really determined to make it work. Neither of us was a particularly adept technologist. After starting TaskUs, we had a total of $25,000 in cumulative life savings. I think we saw ourselves, at 25 years old, still driving a car from 1982, and living at our parents house, and thought--we have got to start making money here. In some part, it was the necessity of needing to have money to take girls out to dinner, so we iterated and pivoted the business, and found where things worked and could scale.

You now have quite a huge number of employees, how did that happen so fast?

Bryce Maddock: It's insane. It has been sheer madness. We went from just five people three years ago, to over 1100 full time staff in the Philippines and twenty people here in Santa Monica. In the last eight months, our staff size has doubled. Just eight months ago, we had 550 people, and we're now at 1100, and our pace of growth is really accelerating. I think the result really is because we've been building a brand in this space, and our clients have been so damn successful scaling, and they keep needing more and more people. That's kind of the beauty of the business model. An example is one of our clients, HotelTonight, where we started with just two people, and scaled with their growth into hundreds of people. That said, hiring hundreds of people and managing them has been a total nightmare. I realized that while technology businesses are beautiful, they don't have to deal with many of these issues. You really have to love the complexity and nuance of human beings, to be successful at this business. We have a great team on the ground in the Philippines, who are phenomenal at managing, training, and investing in staff.

One thing we've done, is although most large call centers in the Philippines are in the center of Manila, the capital, we took a different approach. We're located in the suburbs, about an hour south of Manila. We found out that most people who work in call centers commute into Manila, where the traffic is horrendous. It makes Los Angeles traffic look like a walk in the park. Some of those people commute two or three hours each way to get to their jobs. By locating in a suburb, we were able to hire everyone who lived around us, and their commute time is an average of just seventeen minutes, versus a couple of hours. That gives them lots of time to spend with family instead of commuting. Using tactics like that, and thinking about the well being of your workers, and really bringing the philosophy of Silicon Valley in terms of employee perks and benefits has helped us to attract top talent, and bring us stability of operation. That said, I'd be lying if I'd say everything was smooth sailing. With 1100 employees, there's a crisis every day with at least one employee.

You've built quite a big business--how did you fund all of that?

Bryce Maddock: We have had no outside funding until now. We're very fortunate in running a service business, which is a cash flow business. We started with $25,000 in our cumulative life savings, and we were able to make a little profit and reinvest that into infrastructure, and build the business. At this point, we're growing very rapidly, and potentially looking at taking some outside funding in early 2015, so we can speed up that growth. At this point, when you're at 1100 people and where we are in revenues, you have to make decision to what kind of business you want to be. We're really challenging some entrenched, publicly traded, outsourcing companies, so some external capital is necessary, because building call centers is not cheap.

Finally, what's the big thing you're thinking about now?

Bryce Maddock: I'm thinking a lot about what the future of work looks like. Ultimately, TaskUs wants to be a one stop shop for emerging growth companies who want to get work done. The Philippines is a phenomenal place to get work done, but we're not at the end of our journey. We've been looking at Northern Mexico, domestically here in the US, and looking at distributed workforces, to bring the next generation of work to our customers.

Thanks!


 

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