Markus Albers — Journalist & Autor

“The recession got Europe waking up to the idea of outsourcing and VPAs”

The concept of Virtual Private Assistants (VPAs) is currently almost unknown in Germany, as the service was available only in English up to now. This situation should change with the start of two German-language VPA services. Berlin based startup Strandschicht is currently in beta to offer affordable assistants from eastern Europe. And already VPA-pioneer, Indian company GetFriday, has startet their own German-language service a few weeks ago.

I have tested and compared both providers for German business magazine Wirtschaftswoche. While researching the article I conducted an interview with GetFriday CEO Sunder P (pictured above). As always only a few quotes were used in the actual piece, so here’s part one of the uncut version of my conversation with the man who some say is the inventor of the original VPA-concept. Part two will be published in a few days.

Dear Mr. Sunder Prakasham, you are one the pioneers of the VPA-business. How did you first come up with the idea and how did it develop?

Yes, we are the pioneers of VPA as an organized business. The VPA industry in America and Europe has existed for decades now with experienced individuals providing freelance support to people locally. But the concept of providing it in an organized manner, remotely across continents was first experimented by us. We have been providing concierge services in India for indians (NRIs) living overseas since 2000. And apparently due to our service quality, someone mentioned about us to Mr AJ Jacobs, the editor of popular men’s magazine, “Esquire”. He was at that time inspired by Thomas Friedman’s book, but wondered why the benefits of outsourcing should be restricted to only Fortune 500s. So he set upon to test the limits of outsourcing and approached us with the idea of personal outsourcing. At first, we thought it was a joke but nevertheless went ahead with the experiment as a challenge. He outsourced his personal life to us for 3 months and wrote about it in this hugely successful article in Esquire.

So what started with one temporary employee deployed to one client (AJ) grew steadily since 2005 to where we are now. We were also fortunate to be featured on Tim Ferriss’s ‘The 4-Hour Work Week’ which was on the NY Times best seller list for quite some time.

How is business these days in times of financial crisis?

Business was definitely affected post recession in Sep.2008. We lost clients on the US sector and some in Europe as well resulting in a 25% drop in business. However, we found that recession actually got Europe waking up to the idea of outsourcing. People who previously would never have thought of outsourcing were now warming up to the idea. So it was a mixed bag but we could sustain even during peak recession levels without any lay offs. Of late, interest from the US market is picking up again showing signs of a revival and that the worst may possibly be behind us. We are slowly moving back to the pre-recession level revenues.

With labor in India getting more expensive, will services as yours migrate to countries with an even lower average income?

Even with labor costs increasing in India, the average income in india as well as the cost of living is still much lower than the US and very much lower than Western Europe. So while cost arbitrage and economics will play a significant role in determining which country is a favorable destination for such work, the more important factor in the long run is going to be the quality of service and the availability of good talent at reasonable prices. So while there certainly are many lower cost destinations than India, this country still retains an edge due to the large pool of educated work force. Not all of them are employable (good enough for employment), but still the numbers are significantly higher when compared to any other country which is in competition. China, still has a long way to go due to their lack of English language but will sooner or later catch up, again due to their large pool of resources. They are the real competition.

For my German readers who are not familiar with the concept: Why would they need a VPA service in India at all?

VPA is an acronym for ‘Virtual Personal Assistant’. A VPA gives people the flexibility to get work done without needing to worry about employment issues. In our case, we call ourselves as VA (Virtual Assistant) because a good deal of work is both business and personal. With GetFriday, the benefits are as follows:

a) You not only get the personal touch of your assistant, but also access to the entire range of skills sets in the team or GetFriday as a whole.
b) Even if your assistant falls sick or quits, there is a seamless transfer of knowledge to a new assistant thereby not affecting your business or personal life as much.
c) You can ask for work to be done during your business hours or even while you sleep. (This is presently possible only with the English service, since the german team is still very small)
d) You can scale up or scale down on the numbers of hours you require on a monthly basis depending on your requirement. (Change of plan with due notice)
e) You can ask for a change of assistant if you don’t like their work, but you can’t do that if you employee someone (without actually firing them). In our case, the first assistant may still do well with some other client after redeployment because individual client needs are very different.

Who are your typical customers?

It is perfect for busy individuals and small businesses who want to seek flexible assistance. That is our audience though it would be hard to pinpoint any specific subset within this. We have academics, doctors, attorneys, small businesses, professionals working in the IT and financial services, artists, web marketeers, you name it.

Why now a German service?

We always had clients from Germany, Austria, Switzerland using our English services for quite some time now. Hence it was a natural progression towards the German language after our success with English. Especially with the new interest about outsourcing post recession. The german language also covers 40% of Europe and hence it looked lucrative. Germany has a strong economy too. We could have done French, but we picked German first. In order to stay ahead and retain leadership position, we need to keep innovating continuously.