A Silicon Valley Disruptor Takes on Outsourcing – with Alex Small of Catalyst BPX

This week’s episode of the Outsource Accelerator podcast has Derek speak with Alex Small, the co-founder and lead investor of Catalyst BPX. 

They talk about how Catalyst BPX operates to disrupt the BPO industry and contribute to a new cultural perspective of outsourcing. 

Catalyst BPX 

Catalyst BPX was born from Alex’s passion and eye for new opportunities. 

“I started to realize there was this huge opportunity to have labor arbitrage. It’s one of the things a lot of folks come to the Philippines for. And I realized that [a lot] of people underestimate what’s possible in the Philippines.

Many look at it as a place where you can find good talents and it’s more affordable, but they don’t realize that the ROI is much higher if you hire very well.” 

According to Alex, Catalyst BPX focuses on quality to “make the outsourcing experience better for the clients and differentiate ourselves.” 

He further outlines what sets Catalyst BPX apart, especially in Silicon Valley. 

“We believe we have the most to offer those businesses from knowing [their] practices, cultures, [and products inside and out. Big advantages for them and for us.” 

He’s also determined to use the Philippine workforce to fill in newer roles.

“My thesis is that there just haven’t been enough companies developing those skill sets in the Philippines for people to feel like it’s an industry that they should focus on. And maybe that’s something to explore in the future as something to build or kind of farm.” 

Shifting outsourcing perspectives

Alex is excited to bring his “Silicon Valley pizzazz” into the outsourcing industry. 

“We find [that] most BPOs [are] very traditional and kind of labor-oriented, where they’re used to hiring and managing people. And so we think there’s an opportunity to really walk the talk [on] tech enablement.”

He also points out that there is still an outdated view of outsourcing within Silicon Valley itself. 

“A lot of companies out there actually think that the best companies don’t outsource, [and that’s] just wrong…

In fact, a lot of them have been [outsourcing] since before the recent semi-recessionary environment that we’ve gotten into now. I think a lot more companies are starting to wise up to it.”  

Alex agrees with Derek’s sentiment that outsourcing capabilities have expanded. He also adds that it must be a mutual partnership to be successful. 

“The bigger, more successful [organizations] ironically are the ones outsourcing first because they have the internal process sophistication to be able to handle the transition.

There’s a cultural [and] operational impact. There’s a new set of disciplines and personnel and skills that need to come on board to really be effective.”  

On the other hand, he doesn’t discount the smaller companies either.

“You find scrappy folks at the low end; new founders [with] small businesses who are in need of that boost to become more effective than each other and using it as a competitive advantage.”

“With the right partner, it doesn’t have to be difficult to build an offshore operation. And there’s a lot of different models, partners, and great talent out there.”  

AI’s intersection with the BPO industry 

Alex brings up the subject of AI within business process outsourcing. He uses the service of customer support to illustrate. 

“You’re [throwing] hundreds of people at customer support because [it’s] a people-intensive thing. [You] need to have the right kinds of conversations, high quality, have someone available, timely, all of those things.” 

“And people have obviously been trying to innovate against that. But no one’s really stopped having customer support.” 

“There’s this new era coming where we see [if] AI will start to really transform some of these things.” 

However, he believes less that AI technology will replace people and more that it will change the processes. 

“It seems like outsourcers, in order to stay ahead with AI becoming a bigger thing, are going to have to learn to build teams that harness AI to solve problems versus try to solve problems so well that AI doesn’t overtake them.” 

Despite this, the Catalyst BPX Co-Founder remains confident that their model is durable. 

“You’re gonna need someone there for escalations, [for] management, [and] someone to watch and train the AI.” 

Still, he’s continually looking forward to the industry’s innovation.  

“We’ve got to stay ahead, and I think the natural instinct [is] to focus more on building new things versus repairing the foundation.

Inevitably, you’re going to have all these teams of varying levels of capability onshore and offshore [that] are going to be able to help with maintaining that shaky foundation of all these developing businesses.”  

You can learn more by visiting Catalyst BPX’s website here. Alex can be reached at [email protected].