How to Scale Your Business with an Outsourced Team, with Founder of Freeup, Nathan Hirsch
How do. You scale that business up? Like how do you find good people? Cause that's the, probably the biggest thing I hear from my friends who are doing well is I need a marketing director. I need a person that can do this. I need a graphic designer. How do I find these people? Right. That talent search is really, really tough for a lot of entrepreneurs. So how do you go about finding those people? You're listening to business lunch with Roland Frasier.
This is your seat at the table. Welcome to the show. This is producer Darren Clark and 11 years ago. Nathan Hirsch started his first company in his college dorm room, selling textbooks on Amazon since then Nathan has bootstrapped to multi-million dollar businesses, and we get to hear all about it in this conversation with our host Roland Frasier. Thanks for joining us and for sharing these episodes with your business minded friends, remember to hit subscribe and even better. Write us a review.
Now let's begin. Hey everybody Roland Frasier here. And I am excited to have my guest today. Nathan Hirsch, Nathan, welcome to the show. Yeah, thanks so much for having me. I would love it. If you would give just a brief background on who you are, what you do, and then we'll dive in and, and see what fun things we can elicit.
Yeah. So I started off as a broke college kid looking to make some extra money and I started buying and selling people's textbooks. And I created a referral program, uh, before I knew it, I had lines out the door to the point where I got a cease and desist letter from my college telling me to knock it off. So my parents were both teachers. I didn't want to get kicked out of school. So I pivoted and I'd sold some books on Amazon. This was back in 2008,
2009. No one really knew what Amazon was. There were no courses or gurus. And I started experimenting with products. I was familiar with like sporting equipment, video games, computers, and I kept failing over and over and over until I came across baby products. And for whatever reason,
I got really good at selling baby products on Amazon. If you can imagine me as a 20 year old single college guy with a lot more hair selling millions of dollars, a baby products out of my college dorm room, that was me and I had to start hiring people that the business was scaling. I was doing everything myself and I quickly learned that college kids were pretty unreliable. They were drinking,
smoking weed on the jobs oversleeping for shifts and I pivoted and gotten to the remote hiring world. The Upworks the fibers and hired some VA's for the first time. Didn't really know what I was doing. Had some good experience, a bad experiences, eventually built out some really good systems for interviewing onboarding training and managing VAs. But I still didn't like the platform.
So it just took too long to post a job, get a hundred applicants, interview them one by one. And I kept looking for something faster. And when I couldn't find that I said, you know what, I'll build it myself. And I launched my own called free up, uh, with a $5,000 investment or a really crummy software platform that we just got out there. And people really liked it. They liked that we pre-vetted people, we matched them up quickly. We had great support and protection on the back end.
And we scaled out from a $5,000 investment to a million, 5 million, 9 million to 12 million last year. And we ended up getting acquired by one of our clients at the end of last year, which was kind of cool. And that's a whole nother story we can get into. Then once we sold it, people started asking me how, how we did it, how we scale all these businesses, just with VA's no office, no remote. And so we started this new venture outdoor school that teach other people how to do it.
So that's the short version books to baby products to free up to now outsource school. It's quite a journey. I love that. That's awesome. Thank you. So let's start with the Amazon side of things. So when you were in those first businesses that didn't work out, w where were you sourcing your products from? Cause you didn't really, you were just starting to completely cold. Right? And I know that there's a lot of programs right now that help people do that kind of stuff, but what, what did you do? Yeah, so I kind of looked at it logically because that's how my brain works. I didn't have a lot of money in my bank account to buy inventory.
I didn't even have a place to put inventory. So I said, what if I go to these manufacturers in the U S that were making products? And I said, Hey, you don't know anything about Amazon and e-commerce, I don't know anything about making products. I'll list your products on Amazon. You keep my credit card on file and you ship it. I make whatever the difference is. I'll handle the customer support. And years later, I found out that it was called drop shipping, but at the time that didn't even have a name.
So I started doing that and for whatever reason, baby products, because of the size of them, because of the margins and all that had the most. Okay, nice. And if you were going to do that business again today, knowing all that, you know, what, what would you do differently? What, what would you say is the primary reason that those initial businesses didn't work out and, and what would you do differently if you were starting now to do this? So I think that the reason, a lot of the initial stuff didn't work out is take video games. For example, that everyone sells video games at the same price. So even if I get video games at a little bit of a discount, I'm kind of selling it to the same price as everyone else.
Baby products are a huge industry. A lot of people buy bait, have babies, buy baby products. And the price isn't as much of a factor, moms will pay good amounts of money for their kids.
So I also think if I could do it over today, I probably wouldn't. I mean, drop shipping has just gotten a lot harder. I ended up getting in and out at a very good time. People started to catch onto it, the courses, the gurus came out and all that. And I also just didn't learn marketing when I was doing Amazon, because back then it was, you pay Amazon the 15% they get all the customers and that's that.
And that's why when we started free up, we really had to learn SEO, organic marketing going on, podcast ads, all of that from scratch. So there definitely would have been a bigger ad component than there was just throwing stuff on Amazon. Okay. And so, and so really the big deal, it sounds like was what, what was the difference between success with the baby products that you couldn't get in? The other places was an inelastic market, right. They, people were willing to pay significantly more for these and they wanted what they wanted, right? Yeah, exactly. Yeah. Okay.
And then from there was the next move was to the, to the free up thing or was there one thing in between that I missed, it was the other Amazon stuff. Then the baby stuff, then the, then free up, right? Yeah. Free up. Was it the next venture? Okay. So in the baby thing, what, what happened? Like how did you exit that? Yeah. So at first we were doubling every year and we're thinking, Oh, we're going to take down the world. We're going to take down Amazon.
And then all that, like I said, the course of the gurus, like it becomes more competitive. And so we go from doubling every year to one year, we're doing 3 million the next year, we're doing two. And then 2.5 and throw in the fact that I wasn't really passionate about baby products, then still not passionate about.
How you couldn't be passionate about baby products as a young college kid. Wow. Okay. And in addition to that. We, we didn't really own anything we had. We didn't have any trademarks or patents. We were selling other people's products and they started to learn about e-commerce and there was no building a brand, right.
You're just another seller on Amazon. And so even though it made money, we were kind of just going in circles, adjusting to Amazon's algorithms. So we launched free up on the side and free ops started to take off. And all of a sudden we're we have our own site, our own brand.
We're not relying on Amazon. So we ended up transferring that to a third partner and it eventually dissolved and we focus full-time on free up. Okay, cool. So now with free up, and you're literally helping people, helping other people find people to work for them. Right. How do you scale that business up? Like how do you find good people? Cause that's the, probably the biggest thing I hear from my friends who are doing well is I need a marketing director. I need a person that can do this. I need a graphic designer. How do I find these people? Right. That talent search is really,
really tough for a lot of entrepreneurs. So how do you go about finding those people? So we had, by the time we started free up, we had a really good vetting process, vetting people for skill, attitude, and communication. We had skill questions. We asked, we had a good onboarding process and all of that.
And then it just became about how do we get more VA's freelancers and agencies to apply to be on our platform. And when you're running a marketplace, you kind of have two sides. You're trying to get more clients. You're trying to get more supply at the same time. And over time, we really develop this organic marketing blueprint that helped us get both sides. The bottom line of that is an affiliate program.
We gave out 50 cents for every hour that you build forever to clients. You refer to freelancers that refer. So freelancers started referring their friends, clients started referring their friends and that's the baseline from there. We started going on podcasts. So podcasts are great for networking.
They're good for back links. They're good for a snowballing effect. You get to use them to get into bigger opportunities, speaking, engagements, whatever. And it's good to get in front of thousands of your ideal audience. So we went on freelancer podcast, we went on marketing and eCommerce podcast to get clients. And from there we started a partnership program and we started finding other people in our space that didn't do the thing that, that we did. We went to Amazon software companies and said, Hey, Amazon sellers are our clients. You don't offer VA's.
We don't offer Amazon software. Let's do a content swap every quarter. We'll do a webinar together. We'll do a block, swap, email, blast, whatever it is from there, we put out content.
We started reaching out to influencers to promote us. And really all of that was run with virtual assistants. I mean, I would show up for the podcast, I'd hop the pot on the partnership phone call. But the, before the research to figure out the podcast and the after is really part of our organic playbook and the same type of stuff that, that we teach now at outdoor school.
Nice. Tell me about content swaps. Yeah. So we have what we call the partnership playbook, which is part of the membership at outdoor school. And essentially you're, you're finding people in your industry that have the same target audience. Ideally, you want people that are the same size or bigger than you, and you set up either every quarter, every six months, every year, whatever it is, and your VA organizes all of it.
And they'll reach out to the partner and say, Hey, what do you want to do this quarter? What do you want to do this half year? And I mean, at the low end, it could just be a guest blog swap. They write a blog article for your blog, vice versa. I'm the high end. I've sponsored VIP dinners with people at conferences and everything in between. It could, they all kind of go together. A partnership could lead to a podcast. It could lead to them wanting to be an affiliate and all that.
And you can do different stuff together over time. And over time, it's mutually beneficial. They get in front of your audience constantly as your audience grows and, and vice versa. And it also establishes you as a, as an authority figure and very similar to Russell Brunson's dream 100. We didn't really call it that, but just finding all the big players in your space that don't have a competing service and finding ways to mutually work together and consistently over time, you're constantly getting in front of their community. Nice. That's really cool. And there's no selling on that.
It's just straight content SWAT, literally content swap. We'll go together in different ways. I mean, we've had some of them take helium 10, which was a really, they're an Amazon software company and they were. Members of our mastermind. Yeah. Awesome. Yeah. We love them. And, and they were also clients of free up.
So sometimes that happens. That's not the main objective of it, but sometimes we become clients to them or vice versa depending on what the services. Nice. And so I guess I was just trying to get for folks that are listening to think about, like, how would I do a content swap? Is it that your going to come on and do an educational webinar? Is it that you're going to come on and do, uh, education plus selling? How does you know, is it an organic transfer of business or is it, you know, planned with promotions? How, how let's, let's drill down into that. Just a hair.
Yeah. There's promotions. I mean, the guest swaps are a little bit more educational, maybe the webinars, although there's a selling element as well. And I mean, we've done straight up email blast. We blast helium 10 to our audience and with an offer and, and vice versa, they'd blast it to theirs.
And you're kind of building that relationship over time where you continue to be that trusted referral partner. Now there's other factors as well. I mean, if you don't have a team to make this content or, or your schedule is booked and you can't go on the podcast or go on a webinar, you have to adjust accordingly. You don't just have 500 partners that each one needs a content swap every single quarter, you have to solely tweak things. So it's, Hey, it's every six months it's every year. And you're either being more picky about what the partners are depending on how big your team is, or you're just spreading them out a little bit more.
Nice. Very cool. Okay. So now you're into free up and things are going well. What, what would you say, like as far as growth wise, what were the, besides the content SWAT part and affiliates? What percentage of growth would you say that was? So we really only scaled this organically. I mean, we ran some retargeting ads,
but by year four, uh, when we were doing eight figures, we, we spent about a, a thousand dollars or two a month on retargeting ads and the rest was organic. So we were able to scale it really with the partnership swaps with going on podcasts. Even to this day, I go on about a podcast a day and that's been a big part of it. Um, we eventually launched our own podcast, which you were on, which is good for partnerships and, and other stuff like that. Um, putting, putting out lots of content and influencers, which we do research on who would make a good influencer. And sometimes they want to be affiliates.
Sometimes they don't want to be affiliates or partners. And other times, if you have a good product that you believe in, and they're kind of the gatekeepers of their community, they'll promote you with the agreement that you take very good care of their community, and you kind of have to show them. And we had some creative ways of doing that.
We would find people that had communities that some people in those communities were already clients of free up and we would get the testimonials and we would send it over to them and say, Hey, people in your community are already using us. We'd love to do something bigger to your community. We'd love to add more value there. And, and everyone's looking to hire too. Everyone's looking for a good source to point people to that makes them look good. And that's really what it's all about. Awesome. I love it. Now, free up is going. And you said one of your clients ended up acquiring it.
Is that something that you had planned or did they just kind of approach you out of the blue or what? So we always built the business to be sellable in the sense that we had SOP for everything. We had a team in the Philippines 35 full-time VAs that were doing all day to day of the operations. I might go on the podcast, but the day-to-day operations of the business really ran without me.
So we never woke up. And in 2000 at the beginning of 2019 and said, Hey, we need to unload this thing by the end of the year. But they ended up reaching out to us and they said, Hey, we've been using free up for awhile. We love free up. We, we want to get into the space. They had bought a bunch of other companies and agency, a writing company, and we don't want to build it from scratch.
So they ended up asking us questions and making us an offer that we felt like was fair, if not aggressive. And then the due diligence began. I mean, they had a million questions for us. They want to know how billing works, how customer service works. And we had to show them all our SOP is.
And we had a lot of due diligence on them. We didn't want to sell the company who was going to drive it into the ground or hurt our relationships or hurt our internal team. And we were really impressed by the due diligence, David Martin, Mark Hargrove they're they're great entrepreneurs. And from there, we wanted to make sure that, that we took care of our team because the hardest part of selling the business for us was not being able to work with our team, the Philippines anymore. So we took $500,000 from a sale and gave it to them to make sure that they were taken care of.
And we really looked at it as a win-win win for everyone and tough to turn down a win-win. And I guess the last thing is even when you sell it, you're kind of crossing your fingers and hoping that you weren't getting BS the entire time, but they they've been great. And we work with them and after school they've been referring people to us and we still use free app. We're a client of free up, which is kind of weird. And we check in with the internal team and they're very happy. So it ended up working out pretty well. What were your biggest takeaways from going through that process of selling? Yeah, I left out the really mundane part where the, the lawyers got involved and that wasn't really our fault or their fault.
It was just two lawyers going about their thing, dotting all the I's and crossing the T's. And it took about 60 days and it was a little stressful. The one, the one thing that I think we did well is Connor's my business partner.
And the entire time we acted like the sale, wasn't going to go through that. They were going to pull out at any given time because we didn't want to get to the end, have them pull out, and then we've been neglecting the business for three months. And then we don't really have anything to go back to. So, and it's tough to do you, you've got a lot of outside conversations, a lot of distractions, so we would keep each other focused. And we ended up having our best month of the month that we were acquired.
So we ended up staying focused, but I think that was the toughest thing. And I mean the due diligence questions there, it was felt like it was never ending. So I feel like if, and hopefully I do go through that again. I'll be a lot more prepared of having stuff ready to go up front. And did you. You exit a hundred percent of the company? Yeah. We exit a hundred percent. What was the most surprising thing about the process? What was the most surprising thing? Oh man.
Good question. I think for us, like, we really wanted to make sure that the relationships that we had spent all this time building, because we had partners, we had influencers that had trust us. We had our internal team. Like,
we want to make sure that everyone was taken care of at the end of the day. So it was almost like this big checklist of once we made the sale, like reaching out to all these people, explaining where we were coming from, assuring them, they were in good hands, putting it in, introducing them to the new owners. And again, kind of crossing your fingers and hoping they're not damaging it. And I think from our side, just making sure that we did the due diligence on them.
Like we got to go visit their office. They're like an hour and a half for me in Tampa and meet their team and see what their culture was like and how they interact with people. So I think just the whole due diligence process, like I'd never gone anything gone through anything like that before. Yeah. It's, it's, uh, it's quite interesting.
And you managed to not have to go through integration, which is really nice too. Okay. So now you left that, you've got, you've got your exit and you're thinking about what to do next, or you already knew what the next thing was.
But we had no idea what to do next. I mean, the first conversation with Connor I is, Hey, we've been working together for six years or are we sick of each other? Do we still want to work together? And luckily he still wanted to work with me and vice versa. And then we started reading and listening to podcasts. We want to get into real estate. Do we want to stay in the same space?
Do we want to take a year off? And I mean, we did, this was before COVID hits. So we didn't know that we'd be stuck inside for the next six months, but did we want to travel? And we, people started reaching out to us and they said, Hey, you you've run these remote teams. We've struggled with VAs. We haven't been able to develop these systems and processes. We all, they also saw us grow very organically with VA's and not spending a lot of money on advertising, which now is not necessarily a good thing. Maybe if we could do it over again, we could have grown it, bigger spending money on advertising, but people started reaching out and asking us for the systems, the processes. And that's when we had the idea of launching this course called cracking the VA code that, that taught people, our exact system and process for interviewing onboarding, training, and managing. And just because we sold the company,
doesn't mean every new idea we come up with is going to take off. So we took it to market. We didn't know if people would like it or hate it. And if people didn't like it, we were just going to refund everyone and move on to something different. But luckily people really liked it. And we started rolling out new courses on how to hire VA's to get on podcasts, to do partnerships, to do bookkeeping and customer service, and eventually turned out to our school, into a membership that we're working on now. So it all it solely evolved over time. And I just feel like we're still, uh,
developing the overall company. I love it. Well, who would you say some of your favorite mentors are, or whether, you know, alive or otherwise through readings, through meeting with what, what do you do and who do you talk to to get your inspiration and your education? Yeah, I'm a big fan of Alex. Charfen. I think you guys are familiar with him.
I mean, I've been following his stuff for awhile. I, I'm always very grateful for people that like supported free up very early on before we accomplished anything. And he was super nice to us and, and kind of showed us the ropes and even gave us like critiques of, of what he thought we were doing well and not doing well and giving us an opportunity to, to fix those. Uh, I think Russell, Brunson's an obvious answer. I mean, I'm reading traffic secrets now. It just arrived and I've read his other books as well. I also look to family members. I,
my mom ran a nonprofit for years and I got to see the hard work that she put into it. My aunt ran a for-profit business and when I was pacing around my college backyard, trying to think, Hey, do I accept this real job after college or stick with the Amazon thing? She was very pushing me in the direction of becoming an entrepreneur or while my parents really wanted me to take the health insurance and the nine to five and all that. So I'm always grateful. Nice. Any favorite books? Yeah. I just read hatching Twitter, which I found fascinating. Cause I feel like you're, you always see like Facebook, Twitter, Instagram, and all this success. And then you take a peek behind the scenes and there's backstabbing and brutal partnerships and people try and power takeover. And I thought that was fine.
Fascinating. Awesome. I love it. So for folks that want to learn more about how to do the outsource thing, what's the best way for them to get ahold of you and learn more about all that stuff? Yeah. So I'm pretty easy to contact a Nathan Hirsch on Facebook or LinkedIn. N a T H a N H I R S C H. And that's Nathan Hirsch on Facebook and LinkedIn, real Nate Hirsch on Instagram and Twitter. If you go to outdoor school, we have a bunch of free tools. We have a VA calculator that can help you figure out how many VA's you can afford and you can check out our membership. And lastly,
we're building some really cool SOP building software that, that we're excited about that we'll be launching it in 36 days or so. That's awesome. We'll do thank you so much for hanging out and spending time and you have podcasts now as well. Uh, no. So my podcast called, uh, the outsourcing scaling show was part of the acquisition free up. They now own that, but we'll be launching a new one later this year and we'd love to love to have you back at some point, we will look forward to that. Awesome. Thank you so much.
Really appreciate you taking the time to be with us here today. Thanks for having me. You've been listening to business lunch with Roland Frasier. If you're enjoying the show, let us know by subscribing and leaving a review and for more information, go to business, lunch podcast.com. Thank you for listening.