Bootstrapping an Offshoring Company through COVID to 1000 Employees with Nicolas Bivero - CEO at Penbrothers

The business world is constantly evolving, and companies are increasingly looking for innovative ways to scale their operations. Penbrothers, an offshoring company in the Philippines, is one such example. Founded by Nicolas Bivero and his co-founder, the company has grown from humble beginnings to a workforce of over 1,000 employees, providing high-quality remote teams to global clients.

In a recent episode of Scaling Today, Nicolas shared his journey, revealing how the company achieved this impressive growth without external funding, and how it continues to thrive in a competitive market.

Our focus has always been on providing a high-quality service, not just growing for the sake of it. Quality will bring growth naturally.

Here is the transcript of our conversation:

Yuying Deng

Okay. Hi everyone. Welcome to Scaling Today, the podcast where we explore how companies skill and also the future of work. I'm your host Yuying and today I have a fascinating episode lined up for you with an entrepreneur that I really admire, Nicholas. So Nicholas Bivero, he's the CEO and co -founder of Penbrothers. Penbrothers is a leading offshoring company in the Philippines. I've been following Nicholas actually for a while on LinkedIn and I've always admired the very strong sense of mission that he brings to the Philippine startup ecosystem while building Penbrothers. 

So I'm very excited to have him on this episode. I feel that there's a lot that we can actually learn from his journey, how he actually bootstrap Penbrothers over 10 years and skilled this up to 350 employees spread out throughout the Philippines. And all the while, he has stayed very true to his mission -driven approach. So welcome to the show, Nicholas. Would you like to say a few words to our audience?

Nicolas Bivero

Yeah, no, thank you very much for having me. It's a pleasure having me here. mean, I think this is a very interesting opportunity of continuing our conversation we had the other day when we met in Singapore. At the end of the day, yeah, I mean, happy to be here, happy to explain a little bit more about how we started and how we went about it. Just to correct you one thing, we're not 350 employees. We're actually over a thousand employees across the Philippines. So it's a little bit bigger than that, but yeah, but it doesn't make a difference. Yeah.

Yuying Deng

That's a triple, triple the size. Sorry about that. Okay. All right. So Nicholas, think one thing, you know, when we were at Tiong Bahru Bakery, I think one thing that really struck me, right, was your background and how you actually got started with Penbrothers. So could you share a bit about your background, you know, and specifically what inspired you to co -found Penbrothers and what was your initial vision for the company?

Nicolas Bivero 

Don't worry. Don't worry.

Nicolas Bivero

Okay, let me start with the background and try to get this done smoothly and swiftly without spending too much time on it. Yeah, I'm complicated. So as you can see, I'm not Filipino, I'm not Asian, but I've been living in Asia for 20 years. And that was by pure luck that I ended up in Japan when I was 23, 24.

Nicolas Bivero

But I'm originally from South America and German. So I'm a mixed person. My mother is German. My father is from Venezuela. I grew up mainly in South America with a few years in Germany. Had the opportunity to then study in Switzerland and then from there decided to do an internship in Japan. And I got, I was very lucky. I got very lucky that I actually got a company to offer me an internship. That was not a given because I didn't speak, I didn't speak any Japanese at that time.

Yuying Deng

That was what I wanted to ask. No Japanese.

Nicolas Bivero

No Japanese. My knowledge of Japanese was Konnichiwa and that's pretty much it. But I got really, really fortunate and very thankful and grateful for that, that I had the opportunity of working for a Japanese company in Japan. I was the only foreigner at that time. That was a little bit scary. I spent the first two weeks sitting there thinking, what am I doing here and why am I here? And I don't think they know what to do with me.

Nicolas Bivero

But it was fascinating, it was very interesting. And then out of that internship, actually, it ended up being in total an 18 year engagement. So I worked for them for 18 years. And that was fascinating. Same company, same Japanese company. It's a logistic service provider for oil and chemicals. Very old school, almost 170 years old, family owned business. And they gave me the opportunity to work in their regional Southeast Asia expansion replicating what they did in Japan, in Southeast Asia. 

And Philippines very quickly became one of the main countries where we started focusing our efforts for various reasons. The markets,the partnerships we had here already, so the people we knew, but also to be very honest, the Filipinos itself. It's Filipinos are people who are very easy and smooth to work with and very welcoming.

Nicolas Bivero

So that made it very easy, even for a Japanese company, it made it much easier to do business here than maybe in some other countries in Southeast Asia. We started building between other Southeast Asian countries. We were focusing strongly on the Philippines and that's how I ended up coming, going back and forth, first base from Japan. And then in 2011, the Japanese company actually sent me over here to take over our local operations. And that's how I ended up here in 2011.

And so that experience of building companies together with our Filipino joint venture partner and hiring Filipino teams, growing Filipino teams and delivering a service with a Filipino team is what inspired me or what, well, on the one hand, inspired me, but on the other hand also gave me the courage to actually set up Penbrothers. And so Penbrothers itself came out of an opportunity, again, a lucky opportunity where my best friend and also co -founder of Penbrothers.

Nicolas Bivero

had a serious, had raised serious aid and his own startup. And he was looking to grow his team using that, that funds he had raised and he needed a very diverse group of people. He software developers, needed accountant, salespeople, lead generation. He needed content moderators, Photoshop editors. So it's a very diverse pool of people he needed. And I recommended to him the Philippines based on the experience I had gained with the Japanese.

Yuying Deng

And your co -founder, was he based in the Philippines or was he based elsewhere? I see. Okay.

Nicolas Bivero

No, not at all. He was visiting me. So we were hanging out in Bodakay actually in the beach and talking about this. And he was telling me about his problem and I was telling him about my experience with Filipinos and basically

Yuying Deng

I see. So this was actually an off -short team that he got through you in the Philippines to help his business.

Nicolas Bivero

Exactly. Yeah. So he's the first client. Exactly. So we set this up together as with him, the first client. So he was the first client. He hired three people initially. Initially, it's freelancers, to be very honest. So to try it out, to see if really my recommendation of the Filipinos was based on any factual truth. He really enjoyed and liked the people he hired. And some of them are still with him. think out of the three, two are still with him. That's 10 years later.

Nicolas Bivero

And that's how it started. And then we incorporated properly the company. We made sure that we bring in our own HR, our own little office space. the building where I'm right now, so this is the fourth floor, but in the fifth floor of this building, that's where we originally started 10 years ago. There's still our, we still have an office there. And we had home internet because we didn't know better. So we had to figure it out. And that's how we started. But the courage of actually doing this came from the experience with the Japanese employer of mine before of building teams in the Philippines for our operations in the Philippines.

Nicolas Bivero

Correct. mean, the experience of knowing how good and hardworking and dedicated and qualitatively high qualitative the Filipinos are. So that's the one side of the spectrum. But also my experience of actually by that time, almost 10 years of building operations in the Philippines because experience that that exposed me to was the knowledge about

Nicolas Bivero

You need to do things correctly with HR. You need to do things correctly with the taxation, with the social security. You need to have a good team to manage the people because at the end of the day, it's not only about finding the talent, it's about making sure that when you employ them, they are properly taken care of. retain them and make sure that they're not frustrated so that you're good employer, not just any random employer, but you are a good, decent employer, making sure that they get the proper payment, the proper social security, the also a proper health insurance and so on and so forth. So that knowledge and the knowledge also of the sometimes difficulties of doing business in the Philippines helped me a lot to have, as I said, the courage, but also the knowledge of how to execute this, you know, and what resources to tap. I mean, I was not completely a newbie to setting up businesses and operations in the Philippines.

Yuying Deng

Okay. So Nicholas, one thing that I really admire about what you did right, was that you did everything of what you did without any external funding. So you have grown very impressively without external funding. This is pretty rare in today's landscape. What actually motivated you to bootstrap the company instead of raising funding? And how did you navigate the challenges of growing your team without external capital?

Nicolas Bivero

What motivated me is a good question. think what motivated us both of us, my co -founder and me, was the fact that we did not believe this is a model you can hyper scale. If you start hyper scaling this model, so raising funds to just grow, grow, grow, I think you can grow, definitely. I don't think that's the challenge. The challenge is how to operationalize it without blowing up, without basically providing a bad service, without starting to have real issues on the people, the systems and whatnot. 

So because we are dealing with humans, at the end of the day, I'm an employer, I hire a thousand people. For us, it was very important that we do this correctly, that we provide the employees, our employees, a good service from an HR perspective, but that we also provide our clients a good service. So it's not just, sure, I hire you whatever I can find and let's figure out if this works. It's like, really trying to provide from the get -go a good service. So for me, the quality or for us, the quality of service and doing it correctly was way more important than just hyper scaling because the mindset we have, and we still believe the strongest, if the quality is good, if the service is good, the growth would follow. It will follow because we will get recommended because people will hear from us and come to us.

Nicolas Bivero

Yes, exactly. And this is really what we see. Whereas the hyperscaling is great in certain models, but in our model, I think it's, we thought it was too dangerous. It was too much of a risk because if it goes wrong, we would have a very, we would damage a lot of things and we would also damage the humans that we actually hire. And that's not something we feel comfortable with. So hyperscaling was never a plan. Therefore growing slower but with our own funds and by bootstrapping the company was something we felt much more comfortable with, to be very honest.

Yes. Yes. So the growth was also moderated initially the first years because in the first years to building remote teams was not that common. Let's put it this way. I mean, we found clients, we had people coming over, but it wasn't as common as it's nowadays. So actually COVID to be very honest, as COVID was very, very tough, but at the same time, COVID was also very, very good because it enabled everybody to work remotely and to have that experience. So now we don't have to explain it anymore.

And now that's a given. Now it's more about why us, why the Philippines. But pre -COVID, our growth was by default much slower because it took much longer to actually find clients who were willing to work with companies like us in the Philippines. Because we're not a BPO. So BPO's, they have been around for a long time. We built remote teams. So it is within that spectrum, but it's a different type of offshoring.

Yuying Deng

Sort of like an adjacent kind of market, right, that you're in.

Nicolas Bivero

Correct. Correct. Yeah. It has the advantages of the outsourcing in the sense that you're building, you're hiring people remotely. So you can take advantage of a different talent pool, a larger talent pool, and also to be very honest, potentially a less expensive talent pool compared to your home country. But it has also the advantage that you're not actually rolling over your processes and saying like, just get it done.

But that you actually build a remote team and you keep control over the processes and the quality. it requires more involvement from our clients, but at the same time, you retain much more control and quality. So it is an extension of your team just remotely in the Philippines.

Yuying Deng

So essentially it does become your team, like after a certain period of time, right? Yes.

Nicolas Bivero

It is a dual function. They are our employees, but they're assigned to our clients fully. We don't move them around. They are an extension of our clients. The people have a dual hat, so to speak. They are Penbrothers, but they are also members of the client. We do our best to make them feel that way. By doing team building within the client group, by doing by having offices for some of our clients where there is the merge, like, you know, they have their name and their logos and their vision and mission and core values. So they essentially become employees of ours who are also in a way employees of our clients without actually being really employees of our clients. But from all sense and purposes, from a day -to -day operational perspective, they are our clients' employees, so to speak.

Yuying Deng

Okay, got it. And we spoke about this during the big coffee that we had as well, right? And this was something that really struck me. You told me that Penbrothers had a near death experience during COVID, right? Where you actually had to make some pretty tough decisions. Could you take us back to those challenging days? What was going through your mind as you had to make those decisions? And how did you steer the company away from a crisis into a recovery?

Nicolas Bivero:

I mean, I think COVID, and I might be wrong, but I would assume COVID was very difficult for most companies on this planet. In our particular case, pre-COVID, about 50 to 60% of our revenues were actually generated by coworking. The reason for that is when we started in 2014, WeWork was not yet in the Philippines, and other coworking companies were not yet in the Philippines. I think the only one that existed was one called Aspaces, and then there was another, and then obviously Regis. But Regis was completely unaffordable.

So for us to grow, we had to build our own offices. And every time we built a new larger office, we would have a certain percentage of that office earmarked for our clients who would hire people with us. But then the rest of the office, let's say 60% or even sometimes more, we would then sell as coworking offices, which had a good uptake because there was no WeWork at that time. WeWork only came in about 2018, 19, I think, thereabouts in the Philippines. When COVID happened, as I said, about 50 to 55% of our revenues were coworking, and when COVID happened, yeah, that was quite large. The whole coworking died, partially because companies didn’t need it anymore.

Nicolas Bivero:

Partially because the government didn’t allow it, to be very honest. So there was a very substantial amount of time where the government in the Philippines did not allow people to go back to the office. And only when they allowed it again, it was only 50% utilization. Then by that time, there was so much fear in the Philippines that also the employees didn’t want to come to the office anymore. So that means that from one day to another, 50-55% of our revenues disappeared—they dried up. So particularly overnight. But it’s not like our costs went down accordingly, because we still had to pay rents, we still had to pay internet, and we still had to pay the people who we had hired to manage the offices—they were still on our payroll, obviously.

So that really required, very quickly when we realized this is not a short-term problem, this is going to be a substantial amount of time, we had to then understand, looking at our numbers, if we continued down this path, if we didn’t do something, we would run out of money in three, four months. And that is something which is obviously unacceptable also because by that time we had about 500 employees on our payroll. So that would risk their jobs—not something we could allow to happen. So we had to take drastic measures. I mean, we had to let go of about…

Yuying Deng:

Wow, OK.

Nicolas Bivero:More than half of our office footprint by negotiating with our landlords on how to let it go. We managed to, for the rest of them, actually reduce our lease rates. We had to negotiate with all our service providers to see how to reduce the cash burn at that time. We had to also, unfortunately, restructure part of our team because when you let go of half of your office space, then some people will become redundant.

Nicolas Bivero:It follows by default. It’s extremely unfortunate, and we tried to retain as many as we could. The Philippine government, to be honest, did allow us some tools that allowed us to retain people with less pay, less work. They called it no work, no pay. So you would put them on, for example, two days work, three days no work, and then you wouldn’t pay them for that. So there were different schemes you could use.

But it was brutal, and there were decisions that we didn’t take lightly because, at the end of the day, whichever way you look at it, there were always human livelihoods depending on it. And that’s, I think, the most brutal or tough part of this. But it had to be done. Otherwise, you would have 500 people without a job suddenly. And that was not acceptable.

So that required us to really change our business model. So nowadays, four years later, coworking only makes about 5% of our revenues, if at all. So it’s a very small portion of our revenues. We completely shifted them fully into building remote teams for our clients and focusing on that market. It accelerated a decision we had taken pre-COVID. Actually, in 2019, we had already decided, because WeWork was coming, coworking was going to die for us. We were not planning to shut that down or reduce it that fast. Then suddenly, well, COVID didn’t give us a choice. So that’s part of what we had to do to survive.

Yuying Deng

Well, it was a tough decision, but it does seem that the revenue stream is a lot more stable right now, right? With a different kind of business model. So silver lining, I guess.

Nicolas Bivero

Yeah, I mean, it is a silver lining, but it was not easy. Again, I think what COVID did for us, besides really focusing on our core product, which is then the employment of people and the building of remote teams instead of also doing the coworking side, is that, as I said, because companies had to work remotely globally for at least a certain amount of time, the whole remote work question now is not a question anymore. So that is a real silver lining for us and everybody else in our industry, to be very honest.

Now, you've chosen a different path by focusing on the Philippines. And I understand that, you know, some of your customers had also requested you to do overseas hiring for them outside of the Philippines, but you've chosen not to. Can you walk us through the rationale behind this strategic decision?

Yeah, I think there are various points here. Number one is we chose from a very early point that quality is more important than quantity. So that is something that is part of our vision and mission — really how to provide a high-quality service to our clients. And so when we looked at it and when we got some clients saying, "Can you also hire for me people in Indonesia or Vietnam or Malaysia?" To be fair, we looked at it and we were like, "Well, does this make sense?"

But we very quickly realized that, at least for us, it is not the path we wanted to take at that point in time. And also for the foreseeable future, it is not something we're too keen or interested in exploring because we don't have the management capabilities. We don't have the knowledge. I'm not a specialist in Indonesia or Malaysia or Vietnam. I'm a specialist in the Philippines. The team I have built, we are specialized in the Philippines. That's number one.

Growing quickly globally or regionally even, in my opinion, can very quickly lead to the problem I mentioned a while ago. You do a lot of activity, but you don't do it with a good quality, high-quality service. So that might very quickly become problematic. Again, I'm not a big believer in hyperscaling just for the sake of hyperscaling. I know that can make sense and maybe it makes sense for some, and it will work out, but for others, it doesn't.

The second reason why we also decided against it is we believe at the end of the day that there's still a very large potential of good, high-quality people in the Philippines. So instead of just going and saying, "Sure, I can hire you two here, three there," we're like, "No, no, let's focus on the Philippines." What is it you need? What talent do you require? And let's really try to find you the right talent at a good quality in the Philippines because the Philippines happens to have 110 million people and a lot of young, good-quality individuals. So it's more about focusing on that.

And the third part is, I think, and I might be wrong, that when you scale more regionally or even globally, you need to focus on a certain element of the service. You can't do everything. I don't think that's feasible. So in our case, we decided to be an EOR (Employer of Record) with a lot of adjacent services and bells and whistles. We have our own recruitment team for our clients, so we work very closely with our clients in the recruitment process, and we can adjust our recruitment process to their needs.

We have a very strong HR support team so that we become the HR business partner of our clients in the Philippines and can offer those services accordingly. We have a strong customer success team that works closely with our clients to understand what are the problems, what are the struggles, how can we continue to help, what else would the client want to have? So those are all services that add a lot of value because we want to be that partner to our clients. I don't think, but I'm not too familiar, I don't use them, but I don't think that's what a standard global EOR platform does. You can employ your people, you can make sure they pay the salaries, but I think that's pretty much it. They don't help you with recruitment, offboarding, learning and development, or other things. And so that's great. It's a product that has value in itself if you have a very distributed team.

But in our opinion, if you really want to build a team that is like an extension of yourself with the highest possible quality, then you need a good partner to do that, not just somebody who pays the payroll. So that was the decision — we chose to go the qualitative way instead of the quantitative way. And I think both have advantages and disadvantages.

Yuying Deng

Yeah, I think that's amazing because that's a very conscious decision, right? On your side to do this. It's not like, "Okay, you saw this hyper-scaling venture capital mode and you decided that, okay, I have to do that as well." So I think it's something that all entrepreneurs and all listeners to the podcast can really learn from — this kind of focus on what your core competitive advantage is.

Nicolas Bivero

Yeah, but if you hyperscale, if you think about it, hyperscaling implies to a degree that the main focus is volume. You need to get the volume constantly, and you need to show it to your VCs and your funders; otherwise, you're failing in a way. In our case, the only thing we need to show is honestly high quality. And how do we show this? By having very high retention rates of the employees.

So we have a 96% retention rate, by having a very low churn rate of clients — by literally retaining clients for years and building teams with them, by having positive feedback from our clients, employees, and so on and so forth. It's not always perfect. Of course, we also make mistakes. Of course, there are challenges along the way. But for us, those are our key metrics, not just, "Okay, I need to hire as many people as possible every month because otherwise, I'm failing with regard to my hyper-scale target." I'm not saying that's wrong. That's another model. I'm just saying that we chose very consciously to go a different path and a different route. Maybe we will never be as big as them, but we will be big enough because the market is also gigantic.

Yuying Deng

Yeah, but it's not size, right? That is like, I guess what's driving you. I think it's more, it sounds to me that it's more like customer experience. What your customers actually get out of you when they think about Penbrothers. So it's not just size and it's not just about growth. I think that's the real differentiator.

Nicolas Bivero

No, it's not.

Nicolas Bivero

Basically, yes. And there is one more element which hasn't come up until now. One part of our vision and mission is that we are trying to create really interesting jobs in the Philippines without the Filipinos having to leave the Philippines or even having to leave the countryside for the big cities. And again, if the goal is purely volume, that will also lead to a competition about where can I find the cheapest cost people so I can hire quickly.

Nicolas Bivero: 

In our case, it's not just about cost; it's about quality. The question is: how can I interest a company in the United States, Australia, Singapore, or Europe—an interesting company—in creating a meaningful job in the Philippines, and then find the right talent for that role? This way, the Filipino gets an interesting job with a foreign company, gains exposure, grows as an individual and as a professional, and also receives a really good salary relative to Philippine standards. It's a small contribution towards generating good, interesting jobs and minimizing the brain drain. This is also tied to our backgrounds. Both Guy—my co-founder, who is Portuguese—and I, as someone who is half South American, come from countries where brain drain is a significant problem. In my country, Venezuela, over the past 20 years, we've lost somewhere between eight to nine million people, depending on what news you read. Similarly, Portugal used to lose qualified people because they couldn't find well-paid, decent jobs there. That only started to change in the last maybe eight years—or even more recently, perhaps since COVID.

Yuying Deng: 

Yeah, we were talking about that.

Nicolas Bivero: 

Exactly, and now people are moving to Portugal. That's a new development that didn't happen before.

Yuying Deng: 

Yeah, that's part of the mission-driven approach I really admire about you, Nicolas. I often see you writing about this on LinkedIn, and it's reflected on the Penbrothers website as well. It's something I really respect.

Yuying Deng: 

Okay, Nicolas, you're an expert in distributed teams. Many of your clients have embraced this kind of structure, thanks to the methods you've developed through Penbrothers. From your experience, what are some of the key considerations that founders should keep in mind when implementing a distributed team structure?

Nicolas Bivero: 

That's a great question. I think, from my perspective, you need to have reached a certain size or maturity as a company, as an organization, and as a founder before a distributed team setup makes sense. If you're in the very early stages of your startup, still trying to figure out your product and its fit, and you're constantly pivoting, building a remote team can be tough. At that stage of your journey, you're often throwing things overboard, trying new approaches, changing direction. One day you might be working on a business plan, and the next day you need to shift focus entirely. Doing that remotely is hard because you need close collaboration for brainstorming and quick changes.

But once you have a product that is selling, and the focus shifts to scaling and growing your company in a more operationalized way, that's when remote and distributed teams become more attractive.

Nicolas Bivero: 

There are several reasons why this makes sense. First, you might not be able to find all the people you need locally. Second, you might not have the funds to build the size of the team you require. If you're raising funds from a VC, you want to extend your runway as long as possible, so you need to be cost-conscious about scaling and building your team.

Yuying Deng: 

This was also how your co-founder got involved with Penbrothers, right? He wanted to extend his Series A fundraise.

Nicolas Bivero: 

Correct, yes. It was about extending the Series A, but also about building a team. For example, if you allocate half a million dollars to software development, you could hire two highly skilled developers in Europe. Or, alternatively, you could hire one strong lead developer and a whole support team in the Philippines, and extract much more value from that half a million.

So it's also about how to extract more value out of the same funds by being a little more creative with a distributed team. Another reason could be if you have a product that’s scaling and now you need to provide 24/7 customer service or 24/7 support.

Nicolas Bivero: 

Or, you want to have your coding team working around the clock. In this case, having a distributed team that takes advantage of different time zones could make sense. There are various reasons to build a distributed team, but for these benefits to really take effect, the company needs to have reached a certain level of maturity. You need to have clarity, knowing you have a product and now you're focusing on scaling it. To achieve that, you need to build a team and establish an operational cycle.

Nicolas Bivero: 

At that point, you start looking at how to optimize your service delivery with a distributed team. We also see this clearly with our clients. We are very appealing not just to startups but also to more mature companies, including SMEs.

SMEs are often in a similar situation. They look at their organizational chart and ask themselves, "How do I optimize this from both an operational and cost perspective?" It’s an interesting position because we often help our clients ideate through these challenges and come up with solutions.

Yuying Deng

It used to be that everyone was working around Manila, but post COVID, like people are spread out across the Philippines, your own employees. So how do you yourself like maintain a strong and cohesive company culture with such a setup? Were there any kind of initiatives that you've taken or practices that you've had, which you found to be very effective in keeping everyone connected and aligned?

Nicolas Bivero

Well, to be honest, it's a great question. To be honest, it's something which we're still developing and working on and it's a constant, it's a work in progress. It's not easy because having a distributed team, even for ourselves, you need to find creative ways of engaging with everybody and making also the people feel engaged and feel as part of your team.

Yuying Deng

What can progress? Yes.

Nicolas Bivero

While you don't have the simplicity of just saying, everybody come to the office and therefore we see each other and we... Exactly. But we do do that. So, I mean, it starts with the simple things of our HR team doing regular check -ins with all our employees. That's both scheduled and unscheduled to really make sure that we understand what is happening with our remote team members.

Yuying Deng

And let's have a party. Yes.

Nicolas Bivero: 

Then we do online events, and we also do face-to-face events. At least twice a year, we hold larger events where we fly people in. So, our HR team, together with other departments, is trying to be very creative and come up with ideas and solutions. That’s on the engagement side, which is very important. On the operational side, we had to build a different type of operational team during and after COVID.

We needed a team to ensure that the internet is working and troubleshoot issues remotely, such as problems with the internet, computers, peripherals, and so on. In the office, you didn’t need a team like this because people could just walk over and say, "Hey, I have an internet problem."

But with remote work, you need different capabilities, and building those capabilities isn’t always easy. Another challenge we faced was how to manage the inventory of all our equipment when the team is distributed across the whole country. We also had to manage logistics. Within our IT operations team, we now have a small logistics team because we need to send, retrieve, and repair equipment. These are problems we didn’t face before.

We had to think through these issues and start providing solutions. We also worked with partners, such as logistics and procurement partners. For example, we can now buy computers not only in Metro Manila but also regionally, and have our logistics partner ship them directly to the employee. Our IT team then sets up the equipment remotely. We’ve had to develop all these processes, and we’re still developing them, as it's never perfect. There’s always a new challenge coming up.

Yuying Deng: 

Yeah, and the Philippines is an archipelago, right? There are so many islands everywhere, and it takes a surprisingly long time to ship something from Manila to Davao or Cebu. I was quite surprised the first time that happened.

Time is one thing, but the other issue is the cost. I used to work in logistics in the Philippines when I worked for the Japanese, and the shipping cost is a big issue. I’m not completely up-to-date, but it used to be that a container from Japan to the Philippines was way cheaper than a container from Manila to the countryside. That’s another factor people forget—the local shipping cost is also very high.

Okay. And Nicholas, I understand that Penbrothers is now about 10 years old, right? So the company has been around for 10 years.

Nicolas Bivero

Correct, we're celebrating actually this December, we're celebrating 10 years of opening our first office.

Yuying Deng

Okay, congrats on that. So one of the questions I wanted to ask you, Nicholas, is how do you find that your role as a founder has evolved? Like ever since the very start of the company until where it is today where you have like posted thousand employees? How has your responsibilities evolved? How do feel that you yourself have evolved as a leader and as a person?

Nicolas Bivero

Thank you. That's, I think I need to do a little bit more of a background. I actually, I actually know it and it's perfectly fine. It's not that, but I need to explain that my, my founder experience is very different to the standard you read in the news or you read in magazines or whatnot about like, you know, I had an idea. I left my company and I went to work for my own and that's what happened. And I spent, I did a, actually chose.

Yuying Deng

It's a bit more of an introspective question.

Nicolas Bivero: 

Smartly, or maybe because I'm sometimes very opinionated about what I want to do and how I want to do things, I chose a different path. I used to be in business development for a Japanese company, and when I looked at the opportunity of setting up my own company with a partner, it was very clear to me that I didn't have to do everything myself. I didn't need to quit my job to focus solely on Penbrothers.

Normally, you're told to quit what you're doing and become a 100% founder. But I didn’t do that. I continued working with the Japanese for another eight years. The reason for that was when I looked at my own role as a business development manager with the Japanese company, it wasn’t like the owner of the company would quit his role as CEO to go build a company in the Philippines or Singapore. He would hire people like me. So, one of the things we did very early—along with my co-founder—was hire our first employee even before we officially started the company.

She helped us set everything up: finding the office, building the office, recruiting our first accounting person, and so on. She’s still with us now and has become our VP of Transformation, just one level below senior leadership. We decided to build the company by hiring the right people that we could afford at the time, and my role as a founder was more of an advisor.

I spent hours working on it and helping out, doing a lot of work.

Yuying Deng: 

So, more on the strategic level and not as much on the operational or executional side?

Nicolas Bivero: 

No, it was also operational to a degree, but not day-to-day. I would work a few hours in the evenings or mornings, or on the weekends. So, there was some operational work involved. For example, I would sign all the checks at that time, as everything had to be done by check. I would spend two hours every Friday in the office going through things with our accountant and HR team. But at the same time, I wasn’t involved every day, all the time. We were growing the business, and as we built a team, the team started handling more tasks. I provided both strategic advice and some operational involvement, but I wasn’t doing everything constantly.

I continued working for the Japanese from 2014 until I left them in 2022. During that time, I built two other companies for the Japanese. So, it was a different approach, not the most common one. The pro was that I minimized my risk by continuing to work for the Japanese. But the con, to be very honest, was that I eventually burned out. I was doing so many things that I didn't have time for anything else, and I gained a lot of weight during that period. Then COVID happened, and things became overwhelming.

At that point, my co-founders and partners asked me, "Nicolas, can you now move over? We've reached a size where we believe you would make a good CEO." This was also because the person managing the day-to-day operations of the company, who was critical to our success, had decided to start his own company in a different field. He told us, "Guys, I want to move on. It was a great experience, but I want to do my own startup. You need to replace me."

So, the conversation was about how to replace him. Do we bring in an external person, promote someone internally, or does one of us step in? At that time, we were three partners, and I was the only one in a position to make the jump. I was ready to leave the Japanese company and fully commit to this business. So, the opportunity just fell into place.

Yuying Deng: 

And is this something, Nicolas, that you would recommend to other people who are thinking of starting their own business—sort of maintaining a primary job while trying to build up a company on the side—until, you know, the point in time that it can actually sustain them?

Nicolas Bivero: 

Yes and no. I think it depends a lot on the product you're building. It depends a lot on your willingness to take a risk or not take a risk when it comes to your own income. To be honest, I was a little bit more conservative. I think it also depends, at the end of the day, on your willingness to basically work all the time for a certain amount of time.

Because you need to juggle both. It's not like you have a full-time job and then founding your own company is like a hobby. You still need to spend a significant amount of time working on that.

Yuying Deng: 

It's two full-time jobs, basically.

Nicolas Bivero: 

Yeah, I mean, 1.5, 1.6, 1.7—sometimes two. It really depends. I don't have a perfect answer to that, but it does become a lot. It's not as simple. You also need to be fair. At least in my opinion, I was always trying to be fair. I didn't want my other job to be impacted by me not doing a good job there.

Yuying Deng: 

For sure, yeah.

Nicolas Bivero: 

And that was a commitment I made to myself. I was like, "I will do this, but I will make sure that my employer doesn't suffer." So, it’s not like I didn't show up at work anymore or ghosted them to do my own thing. That’s not how I did it. So, it's not as easy.

Yuying Deng: 

Your employer, yes.

Yuying Deng: 

But you said you think it would depend on the product. Could you elaborate a bit more on that? What kind of product do you think this would be possible with versus where it would be more difficult?

Nicolas Bivero: 

I think if you're growing something slower and maybe bootstrapping it—if you don't need to hyperscale, if it's not like, "I need to immediately go out there and be everywhere at the same time and grow this like crazy"—then you can do it, and it's possible. I think it depends a bit on the market, the team you can build around you, and the funding, let's be honest. If you don't have the money to hire someone to actually run the operations, then yes, you need to do it yourself because you're the cheapest source of labor for your own company, in a way.

I mean, you could also turn it around and say you're the most expensive person for your own company, but that’s a relative thing. It depends on the perspective. Whereas if you've raised funds with a clear selling argument to your VCs that you're going to hyperscale, I don’t think the VCs would be very happy if you then tell them, "Yeah, but I'm not going to do it. I'm going to hire somebody to do it." Exactly. So, it depends on how you're funding it, what you're doing, and the external and internal pressures you're facing. If you want to grow as quickly as possible, then I guess you need to do it yourself. But if this is more like a...

Yuying Deng: 

"I'm gonna hire someone to do it." And they'd be like, "We'll fund that person instead."

Nicolas Bivero: 

If it's a midterm or long-term project you're trying to build, then I don’t see a reason why not.

Yuying Deng: 

Okay, okay. Well, Nicolas, I have learned so much from you today. Like every session that I have with you, it’s, you know, it's really an eye-opening kind of revelation because you have a very contrarian take. I can see you smiling, but it's so true. It’s very refreshing for me, and I’m sure for all of our listeners, to hear what you had to say today as well. So where can our listeners find you? What’s the best way for them to reach out to you and also to learn more about Penbrothers?

Nicolas Bivero: 

Well, honestly, I think LinkedIn is most likely the best way to find me and to also reach out to me and to learn more about Penbrothers. I’m very active there, trying to explain more about the Philippines, Filipinos, how to work with Filipinos, how to build teams here, and obviously about Penbrothers itself. And if not, I’m just one email or one LinkedIn message away. So I think that’s the easiest way.

Yuying Deng: 

And you come down to Singapore pretty often as well, right? You were mentioning every two months or so.

Nicolas Bivero: 

I do, yes. Correct. Absolutely, yeah.

Yuying Deng: 

Okay, good that our listeners know where to reach you then. Well, Nicolas, thank you so much for coming on Scaling today.

Nicolas Bivero: 

Yeah, thank you for your time. Thank you for having me.