Horatio co-founder and CEO Jose Herrera went back to his native Dominican Republic and turned the idea of an outsourced call center on its head.
Jose Herrera, 34, had always wanted to be an entrepreneur, but was afraid of giving up his perfectly sweet career in investment banking. When he entered Columbia Business School in 2017, he was, in fact, going for his MBA to boost his standing back at Morgan Stanley. Instead, he wound up wrangling classmates Alex Ross, 33, and Jared Karson, 31, into becoming seed investors with him in a direct-to-consumer, ecofriendly cleaning company called Cleancult. In doing so, the three friends learned of one of the startup’s pain points. Cleancult’s founders wanted to build a robust customer support system, but were struggling to find talent. Herrera sensed a new opportunity. His inspiration to provide call center outsourcing specifically for startups came from an unlikely experience — a miserable high school job that appeared nowhere on his rsum. –As Told to Ali Donaldson
I grew up in the Dominican Republic and worked in a call center in high school. The offices felt like a prison: You’re trapped in a cubicle; displays are dark; there’s no collaboration. Everyone’s calling in to complain. It’s horrible. Customer service is a very tough job, and the environment was not conducive for employees to do an amazing job.
With Horatio, I wanted to do the complete opposite of a sweatshop environment. I wanted to build an office in the D.R. that provides everything employees would get at a fast-growing startup in the U.S. — bright, open, co-working roundtables where you can actually ask your teammates questions. We wanted to make our employees feel taken care of and rewarded for their contributions — like they’re a true extension of these companies. Because when they feel happy at work, they can perform better for our clients.
We started the company out of my studio on Horatio Street in the West Village in September 2018. No one from business school or our networks was excited about what we were doing; it was hard to raise capital. Now that’s a blessing, because we never raised capital and we’re profitable.
It wasn’t hard to find employees at the beginning. We leveraged my network in the D.R. Once we got to 30 people, we needed to sell the culture and vision that we’re not just another call center. That involved marketing and a social-media presence to attract young talent.
We had 10 clients when Covid hit, and five went out of business overnight. We had 40 employees and took the risk of retaining everyone instead of doing layoffs. Our five remaining clients were e-commerce. And within a month they grew exponentially because everyone started shopping online, so we reallocated employees to those clients. Our competitors were laying off people, and we were able to capture a lot of that talent. From there, the business took off. Now, we have about 100 clients.
Startups had been focused on growth and were spending money unnecessarily on customer service in-house. Now, with the current economic conditions, everyone across every industry is ultra-focused on profitability and finding ways to be more efficient. We’re seeing a lot of demand from tech companies that want to cut costs across the board and outsource their customer service operations to this $262 billion market.
Today, we’re up to 1,200 employees, and one of our growing pains is just space. In December 2022, we moved into a new office that fits about 1,500 employees. We built a full onsite daycare, a gym, a yoga room, and an outdoor terrace. We have a cafeteria and provide daily catered breakfast, lunch, and dinner. What I keep hearing from new employees is, “What’s the catch?” There’s no catch. It’s meant to be a community, and I’m hopeful that it will continue to attract very good talent. This is why we’re better than our competitors.