# From $57M in ARR to $297M in Just 12 Months; Why Speed of Execution is the Most Important Factor to Success Hiring 2,000 People in 3 Years Remotely & Secondaries; Why, When and How Much To Take Out with Alex Bouaziz, Co-Founder & CEO @ Deel 20VC · Feb 1, 2023 · 45 min · 10,836 words Speakers: Alex Bouaziz, Harry Stebbings Source: https://www.996.fm/episodes/20vc--ep-28e4e7fa/ ## Cold open **Alex Bouaziz** [0:00]: I would hire someone that works really hard over someone that's really smart any day of the week. When you're building your career and when there's a lot of things to do, you should work freaking hard because nothing is gonna be a handout. **Harry Stebbings** [0:10]: This is 20 VC ## Intro **Harry Stebbings** [0:11]: with me, Harry Stebbings. And what a company we featured today. Their growth over the last few years has been unparalleled. Check this out. From $57,000,000 in ARR to $295,000,000 in ARR in the last twelve months, EBITDA positive since September twenty twenty two, eighty five percent plus gross margins, and over $5,000,000,000 paid out to over 250,000 people. I'm sure that's given it away, but I'm thrilled to welcome a friend and phenomenal founder in the form of Alex Bouaziz, cofounder and CEO at Deel, the all in one platform made to simplify all things HR built for global teams near and far. Alex has raised over $679,000,000 with Deel, pricing the company at the last round price of over $12,000,000,000. Investors in the company include Andreessen, Spark, Coatue, and many more. And the team effort on this schedule was fantastic. Ryan Hoover, Dara Khosrowshahi, Yasmin at Spark, Anish at Andreessen, Dan Rose at Coatue, Janet at La Familia, and many more. We really did our work on this one. I think there were 30 references for this episode in some form or another. So huge thank you for that. 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Eligible startups get advanced intercom features at a 95% discount. So do not miss out. Head over to intercom.com/20vc to find out more. 3210. You have now arrived at your destination. ## Conversation **Harry Stebbings** [4:16]: Alex, I am so excited to make this happen. I met you first, like, years ago when you were starting Deel. So first, thank you so much for joining me today, my friend. Thank you so much for having me. I've been looking forward doing this with you for a while. Oh, so have I. And what incredible numbers you posted the other day. I looked at them, I was like, holy shit. But I wanna go back a little bit. So take me back. Founding moment. When did you decide the deal was what you wanted to spend the next ten, fifteen years of your life on? **Alex Bouaziz** [4:41]: The quick background on myself, and you should talk to her at some point, is we we're both international people. I grew up in France. She grew up in China, moved to The US, and I lived in Israel and a few other places. We met back at MIT, and we diverged. She went and built a company that eventually was acquired by iRobots and then Amazon. I went to start a PhD in The UK, actually. It was a great experience. You know, it wasn't really for me, so I started building companies. And throughout my whole career, I kinda had the luxury to meet amazing people from all over the world and clearly saw that where you're from definitely impacts the type of opportunities you have. You created your own opportunities. But if you would have been in the Bay Area, it would have maybe been a little easier. So the idea for when we started our first companies, at first, couldn't afford engineers in Israel because they're so bloody expensive. So I had to find amazing people in locations where I could actually be able to pay the bills at the end of the month and hire a few people in Ukraine, in Serbia, in The UK. And actually, most of them are still at Deel today for the iterations of companies that we built together. But, yeah, for me, it was always obvious. So the world is a very big place. It's all about working with the best people wherever they are rather than being limited to a 30 miles radius, and that's really what Deel is all about, helping you go global. **Harry Stebbings** [5:44]: I totally agree with you. I mentioned to you before the show we have people in South Korea and Colombia and use Deel for 20 VC. I do wanna ask you, when you think about navigating the idea, mate, and choosing what you wanna work on, I remember speaking to Tarek at before the show about very early iterations, let's just say, of Deel's idea stage. He said, what advice would you give to founders on navigating the idea maze and choosing what idea to focus on? **Alex Bouaziz** [6:06]: What I would say and what we're really good at, I think, with Shuo is just trying things and doing it very fast, like just executing on something, seeing if it works, and then being very realistic of ourself. It's not good enough. Let's just not do it anymore. And, actually, this is a trap that we almost fell in. Right? Like, when we were at YC, they have this thing where they do, like, group office hours, and everybody presents, like, what they've been working on for the last two weeks. You're always enticed to say, oh, we grew x, so we did that, and we did that. And everybody around you is doing the same thing to throw off a little bit. And then you end up thinking, hey. I'm not doing too bad. But when you actually look at what you do and you go from one user to two user, 100% growth, great, but nothing actually happened. **Harry Stebbings** [6:41]: Man, I've had so many investor updates, which are literally like I was like, 200% growth. You're like, wow. We've made $12. **Alex Bouaziz** [6:46]: It's very rewarding as an entrepreneur, but at the same time, you need to think about it. Like you said, right, you're gonna be working on that for the next five to ten years. Is this what one you wanna work on? Is this something you're truly passionate about? But more importantly, are you being true to yourself? Is this gonna be really big? And if the answer is no, it's okay. Like, sometimes it feels everybody's looking at you. Everybody checks everything you do, every launch you do, but most of the time, no one truly cares, and they forget the next hour **Harry Stebbings** [7:07]: or the day after. Right? So he I said this to someone the other day. I said, yeah. You've gotta remember, no one actually gives a shit about you. And it's not you. It's about you as well and me. Everyone's focused on their own lives. **Alex Bouaziz** [7:18]: Doing so they care, But the guys on product line or Twitter, they don't. Then you can relearn like 10 times. No one will ever notice. **Harry Stebbings** [7:25]: Can I ask, Alex? We chatted before the show. We've chatted many times before. You're 29. I'm 26. Obviously, Deel's a great success now and on the path to being an incredible company. Did you always feel growing up that you would be successful? I don't think I would have been **Alex Bouaziz** [7:39]: able to define what success was when I was younger, but I knew that I wanted to build great products. I knew I wanted to build great things. I never really fitted the mold, whether it's like not making it for interviews or not really being excited to work at any large companies. I knew I wanted to build. I come from a family of entrepreneurs as well, so it runs in my blood a little bit. So definitely wanted to do bigger things. **Harry Stebbings** [7:58]: Listen, you mentioned the speed of execution being so important there. I spoke to so many people before the show who mentioned that being your kind of defining superpower. How do you think about the importance of speed of execution for you and for startups today, Alex? **Alex Bouaziz** [8:11]: I think speed of execution is what defines a company. Right? And speed of growth is what makes startup. If you're not growing, you're dead. Right? This is something we got very early on at the company, maybe even from YC, where we just always looked at our week on week, month on month growth, and it had to be, like, really good. So speed of execution is the only way, and it's on everything. Right? Like, operations, customer support, customer success, product building. Like, we actually have a principle at Deel called DeelSpeed, which a lot people misunderstand for when they're looking at our principles like, oh, you wanna go fast and really fast? No. It's about doing things really well, really fast. And I actually find that most of the successful people around me have that in their DNA, which is there's something you can do right now. Just don't push it to tomorrow. Act on it and move really fast. And that execution helps you through every lifestyle of the company. Like, when you're an early startup, that speed of execution enables you to understand, is this the right product? Is this the right company really fast? When you're serving your customers, the speed of execution, the turnaround time, the care and empathy is what makes you have a happy customer that comes back and start expanding. This is really something that's very anchored in the dual DNA in us. **Harry Stebbings** [9:09]: I've heard some founders talk about going slow to go fast. There are some things where you need to deliberately reduce the speed to ensure the highest quality. Is there anything that you think you should go slow on? **Alex Bouaziz** [9:21]: Independent. When it comes to sales, don't think you should ever reduce the speed. I think you should always triple down, so that's something that's to me, very important. The hard part about deal is that when you're dealing with global compliance and global compliance is really complicated. It's not just, like, setting up an ICUI and starting to, like, enable you to hire some people. It's understanding how onboard do you that person? How do you do a complaint? How do you terminate them? How does overtime works? In France, right, like, where I'm from, which is one of the most complicated country in the world. And when you do that, you gotta do it very carefully. And that's why as we rolled out our products, as we rolled out our operational infrastructure, we always took the time to do it really well, and that's what gave us an edge. So that is slow to go fast, but at the same time, when you've got that figured out, you **Harry Stebbings** [9:58]: gotta move really fast too. In terms of bluntly focus, there are so many things that you can choose to focus and spend time on. How do you determine where to focus attention and what's a distraction? **Alex Bouaziz** [10:08]: Yeah. That's a broad question. But the way I like to think about it is if this is not catching my attention, like, think about process that's broken that's getting customer escalations or some some part of the sales funnel or rev operations that's not working. If it's not getting to me, it's most likely that the leadership in that department is doing really well, and they know that I'm here if if they need anything. If things get to me, deal speed, we move really fast. We wanna dive into it, dive into it really in the details. Even at that scale, I think I know most of the business operations really well. I'm able to dive into the details and say, we gotta find a solution for that really fast. And I think that's really the key as you scale. **Harry Stebbings** [10:40]: You said there about if it gets to you, then something has really gone wrong. There's a lot of trust that one places team leaders and managers. Do you start from a position of full trust and it's yours to be lost or it's gained over time? You gotta prove it to me. **Alex Bouaziz** [10:52]: Fully distributed company, no choice. We have to start with full trust and it's here to be lost. We do have very tight KPIs and tight outputs, and we measure people, and we have a tendency to be really tough. We keep the best, and the rest usually don't make it. But when you get that full trust and when you're able to execute, it's the best type of life. You can work from anywhere. You can do whatever you want, and you're delivering something really great. So full trust, it's **Harry Stebbings** [11:12]: all yours to lose. What happens when you have someone who's okay? They're good, but they're not amazing. But they're actually in a role where you need them, and it's a pain in the ass to remove them. It's a pain in the ass to replace them. I'm literally using you as a big brother here. What do you do then where it's like they're good but not great? I think the one **Alex Bouaziz** [11:31]: thing that would be the defining characteristic for me at that stage is how much do they care and how hard do they work. I would hire someone that works really hard over someone that's really smart any day of the week. So if you work really hard and if you care, I will be there to help you scale. I'll be there to help you grow, and we'll have the infrastructure. And if you have that out, you know, stay with us for the rest of time. If you are like this and you don't care and you don't work hard, then you probably will find a better place somewhere else. **Harry Stebbings** [11:55]: When you decide to let someone go, it's a big decision. Four big decisions. Do you have a framework for making them? When you think about deciding on a new product, a move the needle decision, how do you approach those big decisions? **Alex Bouaziz** [12:07]: Yeah. When I wanna let go someone first, I look at the country and understand how to do it right. Don't bias, but big hiring takes so much time. You don't wanna do this unless you really made a mistake. So you really wanna be careful, but you gotta be very decisive. If someone's not working out, it's in their best interest, and it's in your best interest to probably part ways. So those are very clean decisions usually. And, actually, the biggest mistakes I've made is not fire fast enough. A couple of people that really I was doing them a disfavor. Like, they were not doing something that they really enjoyed or they were out of their depth, and I I didn't realize it enough, so it was mainly my fault. When it comes down to decisions, it's super cliche, but this idea of, like, strong opinions that weekly held. I think what we're really good at there is just logically think about what's happening in front of us and make a quick decision. And then if we're wrong, like, one or two weeks in, quickly change it and iterate for it. That has to be the mindset. I don't think anything is set. I think usually as long as you've got a very strong focus on your customers, you understand what they want, you understand the need that you're doing here, you should be able to make the right decision as a founder. **Harry Stebbings** [13:03]: You said about earlier, like, the speed of growth. Alex, if there's one thing that I could be criticized for, it is slight momentum hyper growth investing. My point is speed of growth isn't actually everything. Like, a 100% compounding works well. It's not important to grow a 100%, but continuously and sustainably grow 30%. **Alex Bouaziz** [13:25]: Oh, yeah. 30% is great. That's what we did at Deel. For the first two years of the business, we grew 30% month on month, so I'm all for that. Specifically, when you're building a business where we have lawyers, HR, payroll managers in every country, and there's operations and automations that needs to be built, if you grow too fast, you break the business. The customer experience gets hurt and in Spain from the fact that the operations are not able to scale that. So I think there's a very fine balance between growing and maintaining your operations and your scale and how you do that. Not to be misunderstood for it's okay not to grow. You always need to be growing. Funnily enough, most of the numbers, like, four to 57, which is what we did in 2021, I think. Yeah. And then '57 to 300 to 295 is what we did in 2022. That's actually where we budgeted even a little more at the beginning of the year. So that was calculated growth. **Harry Stebbings** [14:11]: Fuck it now. Can't believe I met you at 30 k a month. You're 29, mate. What have been your biggest lessons on hiring and talent acquisition and determining whether someone has that hunger? By me and you, it's obvious. **Alex Bouaziz** [14:24]: I actually interviewed the first, I think, north of 400, five hundred first people at Deel. Spent a lot of time on that until actually, I thought it was I think it's a mistake. I should have kept taking that funnel, but until my team told me, you heard the bottleneck. You need to stop interviewing people. But I learned a lot through that. What it taught me is to genuinely even if someone has the right CV, if in your conversation, you don't think you have the right DNA for the company, even if everybody tells you hire them, just don't. In your process, make sure that if you think the person is not great or is not the right fit, even if they do everything **Harry Stebbings** [14:53]: on paper, just don't hire them. What's the right DNA? I always say to my mother, go for walks with my mother and I talk about people, and I say, he wasn't or she wasn't a savage. I think this whole generation is, like, entitled Savage, think, is important for what is You need to be a savage. I agree. **Alex Bouaziz** [15:08]: I'm a 100% agree. Not in a bad way. It's just like the you need to be in the stage of your life, then this is what you want to be doing, and this is what you want to be accomplishing. If not, you're just not gonna enjoy your ride. Right? You're not gonna enjoy working with us because we are there. And if everybody's going at a thousand miles per hour and that's not the lifestyle you want, then you're just not gonna have fun. So being very honest with the expectations you have, why are people coming to deal and joining your company, and how life is gonna be. Again, I love what I do. Right? So for me, this is the life I want. You gotta make sure this is the life you want. And if it's not, it's totally okay. You've scaled so **Harry Stebbings** [15:40]: fast. When we look at now over a thousand people in three years. 2,000. Oh, fuck. Anyway. I know when you meet somebody, like, oh, I feel so insecure **Alex Bouaziz** [15:48]: about my own life. Normally, I'm like Being head count is not what makes a company successful, if not the opposite. It's just the complexity of what we do just **Harry Stebbings** [15:55]: But anyway, spoke to Gokul before the show, one of your angels, and he said, ask him, just take me through the blitz scaling strategy. What was the key to such supercharged growth? Because Alex, like, just realistically, there are very few companies that can grow that quickly. What was the key? **Alex Bouaziz** [16:09]: A few things. First, I think our product decisions were pretty on point. We started our product with helping companies hire contractors. We're the only one in the market. When we saw that there was an opportunity with helping people hire as employees and we saw a couple companies in the space because we actually came in a little later on that. We executed really fast. Right? Like, product strategy from the early sales into the hiring and the opening entities. And the same thing happened with global payroll. Right? We started seeing companies thinking about opening their own entity. But, like, I we gotta get on that front. And now that we have all the solution, again, doing a pre pivotal moment and saying, we're gonna be the full HR stack. So I think those product decisions to really grow with our customers and for them to see, wow. Okay. Deel is growing with me. Right? They're doing the right things, and they're moving in the right direction. I can trust them. When we started Deel, the questions people were asking us is how do I know you're not gonna run with the salaries I'm paying out to my people? That's what we started. And how did **Harry Stebbings** [16:55]: you gain that trust with them? Because you were just a young startup, but you didn't have brand. **Alex Bouaziz** [16:59]: I think it's something you win over time. Right? Discussions in your face, marketing, raising funds helps. I think if you looked at our numbers, we've always been pretty transparent as a company. We talk about where we are. We talk about of course, it's easier when you're growing than when you're not to talk about this. But there is, like, intent into sharing what we do, sharing how we wanna help, sharing how we wanna democratize, like, global hiring remote work so that people feel comfortable saying, hey. I can trust that company. **Harry Stebbings** [17:22]: They're really growing. Tell me. I heard about this go to market hack of having 50 customers on WhatsApp. What was that? **Alex Bouaziz** [17:28]: I love having customers on WhatsApp. This is a product reporting to me, and it's probably the place where I spend the most Again, Deel is four years old, relatively young company. When you wanna decide where you're going next, it's better to hear it first from your customers, and what better way to chat with them directly on on WhatsApp. Right? And I make great friends that whenever we're launching a new product, whenever we're thinking of something, I can hit them up and say, what do think of that? And nothing can beat that. **Harry Stebbings** [17:50]: Can I ask, how do you know what advice to take and what customer suggestions to take versus what not to? I have some people that are like, I wanna hear more of the story of the guest. And then I have others who are like, fuck the intro. I just wanna get to the strategy. And it's very subjective. So how do you know what to ingest and take in versus what to reject? **Alex Bouaziz** [18:08]: I think it's different type of feedback. If you're looking at feedback that's like, hey. Your product is shit in here. Right? This is something that's very direct. You listen. You execute no matter what we tell you. When you're looking for where should I go next, what are the type of things I should go, I usually look for more validation. I have an hypothesis, and I'm trying to understand out of the 100 people I'm gonna talk to, how many people are gonna take me there versus not. But the feedback, I think, really matters on generally, for me, at this stage, it's less about the product. It's more about where should we go next. **Harry Stebbings** [18:35]: Matt, how much of your vision is predefined, like, your head internal versus is customer led? **Alex Bouaziz** [18:41]: Vision, I would say, most of it is predefined. Product iterations, product directions, and the nitty gritty of how to make it great. This is what customers are helping us figure out as well as sequencing of what do we come out with first. The cool thing about HR is a lot of things are very adjacent to it. It's like we could probably sell any product to a certain amount of our user base, but understanding what is the right thing to focus on and when, that's much more customer led. **Harry Stebbings** [19:07]: Yeah. We're gonna talk about kind of market landscape and competition. Should be interesting. But 2,000 people in those four year journey. The other question that I had is, what breaks first? When you think about scaling so fast, what are the first things to break? **Alex Bouaziz** [19:20]: At what point everything breaks? Oh, and what broke first? I used to do support 2021, and there was a time where there was too many customers. I couldn't do it anymore. I needed to hire someone, and I had not planned fast enough to hire there. I struggled for me and Shuo were doing support every day till, like, very late on different time zone to make sure that we get that, and that was misplanning. Again, there's lots of things that break when it comes to sales. Invest in sales ops much earlier. We're paying the price of having a now it's much, much better, but at the time, we paid the price of having not a perfect Salesforce that was easy to use. There's tons of stuff that break. It's just a matter of focus. **Harry Stebbings** [19:50]: Talk to me. Why invest in sales ops much earlier, and what was the lessons there? **Alex Bouaziz** [19:54]: If you're sure you've got a form of product market fit, revenue variation, sales operations is what's truly going to enable you to scale because your reps are more efficient, your close rate is better, you have a better understanding of what's going on, Your SDRs are much more efficient. Your customer success are much more efficient. And if you wanna scale as fast as we do, it's all about optimizing so that they can do their job and empowering them to do that. And if you look at today, I think we have easily more than 200, 300 plus reps, right, in the sales organization. Like, optimizing for them and making their life better is such a great investment for us. And as you grow, when it's your first time building a company at this scale, you don't have as much insights, and thank god we brought some really great people to help us there. **Harry Stebbings** [20:29]: Can I ask, what have been the biggest lessons that you've learned in running a team of this scale remotely? That's what's insane. **Alex Bouaziz** [20:36]: I think we might be, like, one of the biggest, if not the biggest private company that's fully distributed, by the way. I mean, there's tons. Right? You ask at the beginning about trust, so I think this is the most important. I think remote works for us because my framework is I trust trust you. Let's execute together, and let's make sure you're the right person, and that really works. And I don't think it will work any other way. I don't think if you don't have that mindset, you'll be able to to really build a distributed company at scale. Do you give **Harry Stebbings** [20:56]: people the room to set their own goals, or do you micromanage? **Alex Bouaziz** [20:59]: At the very beginning, depending on the size of the company, I think you shape leaders, and they shape you as well into building a relationship where, like, they're able to run on their own. So I think it's a mix of both. When you're onboarding someone, it's important to be there for them, specifically on the remote base. As you grow and as you hire very strong people, I think you tend to be a little less micromanaging. Now being in the details is very important. First, you don't need to be in the details and annoy the people you work with. You can just understand the details and then say something when you have something to say and not just say it all the time, and that usually helps. **Harry Stebbings** [21:27]: Final one on team and people. You said to me before that Silicon Valley won't be the epicenter of tech for much longer. There's this, like, revolt on Twitter where, like, everyone's coming back saying, oh, it's back with AI. Why won't Silicon Valley be the epicenter, my friend? **Alex Bouaziz** [21:40]: I think Silicon Valley is a mindset. It's very strong people. They're all over the world. Right? I think I'm a pretty strong embodiment of values that Silicon Valley has. I think you have as well, and you're in The UK, and I'm in Paris right now. So saying that one location is the center of everything here is with the state state of the Internet today and the accessibility and investors being willing to invest, you know, we raise most of our rounds actually without even meeting most of our investors. So that shows that the value has expanded into the world. I lived in San Francisco for a bit. I understand the mindset of you're in a room. There's a lot of smart people. There's nothing to do at night. Everybody's working all the time. **Harry Stebbings** [22:14]: I get that. That's a great way to build great companies. I totally agree. They also go to bed and have dinner so freaking early. It's incredible. But then from Paris and Tel Aviv. Right? You start going out at 09:30, ten. Yeah. No one was also in the office until 10AM in Paris. It's bizarre. I wanna move away from team though, more to the space itself, because the space, it bluntly is holding up. And I spoke to one of your investors who said, it's not a winner take all market, and you vehemently disagreed with them apparently. And you did. It's not a winner take all market, Alex. Why am I wrong? Because we're gonna make sure it's not. Is there a reason, though, why? Is there a structural reason why it's not? **Alex Bouaziz** [22:48]: I think there can be a lot of great companies in this space. I think, like, every space, there is one care winner that's gonna come out of this and that's gonna be significantly larger than others. Will you have a couple of 10,000,000,000 plus dollar companies built there? Sure. I think there's a trillion dollar company that can be built, a generational company that can be built, and there's only gonna be one of those. **Harry Stebbings** [23:04]: They're super nicely, man. You just said, like, a couple of $10,000,000,000 companies. There's not many $10,000,000,000 companies in the non 2021 inflated quantitative easing environment. Like, Twilio is a $6,000,000,000 company. You sure there's gonna be a couple of secondary companies that are worth 10,000,000,000? **Alex Bouaziz** [23:19]: I think HR is such a complex HR payroll, such a complex infrastructure that is always specific needs into specific markets and companies that can be built, and every single company needs a product that's tailored for them or verticalized for something they need as well. Maybe you don't go to $105,000,000,000 plus dollar company. Sure. And they don't need to be blitz scaling. They don't need to get to billion ARR in three years. Those are companies that can be built over the next fifteen, twenty years and get to that revenue because they've built an amazing product in that time frame. **Harry Stebbings** [23:45]: That's what I mean. You mentioned that verticalization. Do you think SaaS is bundling rather than going to vertical point solutions? And how do you think about that? **Alex Bouaziz** [23:52]: I love this conversation because I think one of the beauty of dealing the way we've built it is the ability of bundling and unbundling the both together. If you go into a traditional solution, you come in, and they'll try to feed you everything, and they try to sell you everything, specifically in HR. You gotta be on your own HRIS to be able to buy the other products, and that's how it works. When you look at Deel, you can come and this is how we've been able to go to enterprise as well. You come and you can hire one person in South Korea or in Japan in a couple minutes. If you're Nike or if you're Subway, like some of our customers, you don't need to buy the full ASR solution. We plug and play with your SAP or your Workday. We are also then able to introduce you to different products that we have, and you start having that suite of product that you're buying over time and getting into the account slowly and surely and showing them we're the right people to partner with. And that idea of being able to bundle everything if they want to, but also being able to unbundle and do things we're very specialized in at the same time, I find that super interesting. **Harry Stebbings** [24:40]: Listen, I have Parker Conrad on the show, and he mentioned that, but also how bluntly when you own the stack and own multiple different products all could cater to by the same service provider, what an enhanced product you can build because of the data that you have across the product suite. How do you think about the increased product you can offer because you have multiple different points into the company? **Alex Bouaziz** [25:02]: Yeah. I think I think it's it's good insight. I do think that there's some products that are much more complex to build than others where you need to spend a lot of time on. Building a lot of products that are six or seven out of 10 is a good Microsoft like play. I think some of them needs to be nine and ten, and, you to some extent, doing part of that where we wanna be able to consolidate all of this and enable our customers to really grow. Would I wanna take on a Brexit or ramp? Probably not today. I think you really need to put the right care in order to build the right product there rather than build a product in a couple weeks and pushing out to market. Would you wanna **Harry Stebbings** [25:32]: take on Brexit or ramp in five years' time? Mhmm. I'd love to partner with them. Those are two two very close companies. I love them. Probably not in that space. You're such a good politician. There's a a politician's tactic called the pivot, which is when someone says something and they make a nice little pivot to the side. **Alex Bouaziz** [25:46]: Nike, Kareem, they're animals. They're savages. I want them on my side. My job is to help hundreds of millions of people get to work for the best companies and make sure that they do it compliantly in every single one of those countries. That's not something you launch in a couple weeks. That's something that's taken us years to get to because of how complex it is, and it's super important that we get that right. And when you're dealing with labor laws that are changing every week, with taxes that are changing every week, you have startups or pencil that are, like, literally building a pimp Augusto in one country because that's how hard it is. Doing things right in this space is super important, so we wanna be really focused on doing that. And then adding the things that we find are a little easier to build, like the software, HR stack, adding people, and all this. **Harry Stebbings** [26:24]: Klarna, Europe is not an easy place for compliance. A lot of Americans are like, ah, Europe. Yeah. Europe. Yeah. Is it like a, yeah, we can take Europe, or is Europe actually as difficult and challenging as one would expect Europe to be? **Alex Bouaziz** [26:38]: The last three months, and I can't wait for companies in this space that are coming smiling, thinking, oh, such a high ACV. We're gonna have fun. In the last three months, thousands of people got laid off. In most companies, apart from the one that are really in this space that know how it works, have no idea how to fire someone in The Netherlands on behalf of your customers. The rules to do that, it's crazy. Then, again, the easy part of any or the at least one of those product, people love to say, oh, that's an amazing product. The moat is not that strong. Sure. It's easy to speed up an entity and then get people employed on it and charge for that. But what happens when you go into Germany or France where you need specific licenses to do that? What happens when you start needing to do mass termination when in some countries, cannot terminate more than x people at one time? Those are the things that are truly hard that a lot of people in The US think, oh, this is gonna be easy because it works like in my country, but that's not it. **Harry Stebbings** [27:22]: I think the reason why I've been actually quite successful as an interviewer is I ask stupid questions that probably everyone else thinks. In a world where everyone else is getting laid off, literally every day there's new layoffs, how does Deel grow? Your business is predicated on hiring. How do you grow if everyone's getting laid off? **Alex Bouaziz** [27:37]: Yeah. I think it's a matter of two different things. One, consolidation of tools is super important, and having one solution that helps you grow into different workforce mode, whether it's contractors where we help you do that compliantly, open your own entity so that you settle the cost, and having everything in one platform, that's super appealing for our customers. Second is and I'm getting calls by some of the biggest HRO, CHROs, and CPOs of the market. People understand that paying 500 k and burning tens of millions of dollars per month is not as sustainable anymore, and it's not growth at all cost now. It's about profitability. And a great way to achieve that because the market hasn't come down in some of the key markets is to hire internationally. So building a strategy that helps you navigate the different employment mode, navigate the different countries to get the best talent. I believe it's going to be one of the big play of 2023. I'm super biased, but I **Harry Stebbings** [28:23]: believe that it's gonna be one of them. Do you think that cost focus will drive a bundling? And what I mean by that is traditionally in bundling, you obviously have better economics. You get the whole suite for $49.99 versus point solutions which are kind of $19.99 each and then you end up paying a $100. And they might be nine out of 10 products and these are seven out of 10 products. But do you think that actually that cost for efficiency on savings will drive bundling? **Alex Bouaziz** [28:46]: 100% because the HR leader is not gonna have as much decision power here and the CFO is going to. Right? So 100%. So if you combine the idea of bundling the hard things like global payroll, EOR, contractors, compliant, immigration services, all of the things we do into one product. Let's say if tomorrow were to release a performance management tool, it's maybe not gonna be the best in the market straight away. Hopefully, over time, it will be. But, right, if it's gonna be happy to have a five or six out of 10, even not even seven, five or six out of 10 because it's gonna cost and bundle everything. **Harry Stebbings** [29:13]: You've recently made some acquisitions speaking about product expansions. Talk to me about how you think about making acquisitions because I'm intrigued. Why do you acquire versus build internally? What's that decision making? **Alex Bouaziz** [29:23]: Yeah. A few things. One, it's amazing to add a grand entrepreneurs that are very passionate about what they're solving and telling them, hey. First, here's 15,000 customers from all different segments that we can sell into your product and help us get better. Second, usually what the companies we acquire are doing is very hard. Right? So we acquired, for example, Legal Pad that did US immigration. They actually did my own o one visa. That's very specialized. It's very hard to do. And taking this immigration product now to 26 different countries, like, we can help you hire someone under a visa and get them the visa 26 different countries. This is really hard. That expertise is super valuable for us. Or if you look at Pay Group, which was, like, a bit of a crazy acquisition because they were a public company in Australia, they do payroll in all the way back themselves. Good luck running payroll in China, India, Japan, yourself. This is where we went from, hey. We're working with local people that help us run payroll on our own entities to deploying our global payroll product and saying, bringing everything in house. And those guys are freaking amazing at it, and we're here for it. **Harry Stebbings** [30:17]: They gave you a visa? No. I'm joking. I love visa. I'm not only visa. I know. I'm not just a visitor. You're a special person. Tell me, that's really hard, though. You acquire, you know, this Aussie company that's public, and then you just integrate them in steel. How did you do the integration? And, Alex, how did you know what to do? **Alex Bouaziz** [30:35]: It's hard. We don't know how to do it as well as we want to. Luckily for us, my CFO, who actually is also my father, that makes it quite interesting dynamic wise. His first company who we took public as a CEO did about 50 plus m and a to grow. So they didn't grow as much organically. They were a service business, so they didn't love m and a. So that's actually something he's really good at. So that makes the cost of acquiring a lot cheaper, most of the time and the negotiation a lot easier. And then when it comes to the people side, there's still a lot of work to do, but we're getting better. **Harry Stebbings** [31:01]: Alex, tell me, your father. I didn't know that, actually. What's the secret to making that work? How do you make it work with your dad? **Alex Bouaziz** [31:07]: We're very tight as a family. The way I was raised, we're very close, and I think we have very different skill sets. I'm much more aggressive, make decisions out faster, and much more product, and maybe a bit more Americanized in many ways where I understand the value a bit more because I studied in The US, where he's much more traditional French, CEO of a public company. One of the reason we are a bit now since September, which was one of the big announcement we had, is that in January, he looked at the market and he said, uh-uh. Hiring freeze everyone. You gotta work on your workbooks and what you're doing, and I want us to be EBITDA positive by the end the year. And we're like, okay. And it ended up being one of the best decision of the company. So I think we have a very different skill set, but at the same time, very complementary. And I think there's a lot of mutual respects where he understands. I'm also here to make my mistakes. His favorite thing is that you'll see in three months, I was right. Or in six months, I was right. And he's right most of the time, to be honest. He's a very special person. Obviously, he's very strong, and I'm learning a lot from him. And at the the end of the day, think the trifecta of like finance people and Shuo who is managing most of the sales is really working well together into building Deel today. **Harry Stebbings** [32:05]: I wanna touch on you and then a quick fire. You took secondaries out, my man. But it's always shrouded in secrecy, which I think is what drives so much of the cynicism towards them. I think if there's, like, transparency, how much did you take out? On **Alex Bouaziz** [32:16]: my side, around 10, mainly to buy, like, an apartment and a few different things I wanted to do, like buying some of presents from my father and my parents. But the cool part is that when we did that, Shuo and I, we actually allowed all our early employees to do it **Harry Stebbings** [32:27]: as well if they wanted to. Got you. How did you decide that was the right amount and how much early employees took secondaries? **Alex Bouaziz** [32:34]: The right amount for us, the place I wanted to buy cost x, and then I had a couple other things I wanted to get done. So it was one something we felt comfortable with. And second, getting to the amount that the guys that did the round wanted to get to, so there's both of those things at the same time. How there. They wanted a certain amount of ownership or put a certain amount of money. And when you're at this stage, that definitely is a part of that. How many people did secondaries on the employee side? I can think of 15. But, again, it was 10% of what they had earned. We didn't want them to be checked out, but it was definitely Even some of them more than me, I think they were very happy and they were able to do a lot of great things, and they're still key leaders at the company that are executing and got to where it is today. Mate, if you have **Harry Stebbings** [33:11]: a savage and you give them 10,000,000, they'll be even more of a savage. **Alex Bouaziz** [33:14]: That's exactly what happened. Right? Some of the people that took money off the table, they were able to buy the things that they needed to have a really good life, and now they're like, I'm good. Let's freaking go. And, actually, one of the thing, most of the smart investors I worked with that worked with founders and, frankly, it was not exactly my case. I wasn't as much in need as maybe some other founders, but I think smart investors understand. I don't want the guys that are running the company to be worrying about. I think it's important because when you have so many things to worry about, worrying about that as well is not useful when you can, you know, set a bit of your shares to someone that's interested in it and that take and have a peace of mind on that front. When it comes to secondaries, how do you think about advice for founders? Taking secondary, like the series a, I don't think it's super smart. Taking it a bit later kinda, I think, makes a bit more sense. We had taken a little bit at our series b and then a little bit more at our series d. I felt like this was the right amount, and the way we did it was very systematic where we work on a little bit of secondary there. And then on the second one would be a refresh in the next round for our shares as we go. That's how we think about it. So I think the right amount is what makes you comfortable depending on your situation. I don't have a family. I just wanted to be able to have a nice place I can live in and then put some money on the side so that I can diversify, and that has worked out really well. I don't know if taking a lot of second aries is super smart, but I think, in my case, I think it's gonna be worth a lot more. **Harry Stebbings** [34:24]: So you angel invest with the proceeds. How did you decide how much to put aside? Did you decide, I'm gonna put a million aside for angel investing? **Alex Bouaziz** [34:31]: I think most founders that take a little bit of secondaries, the first few months are very dumb with their angel investing, and they just invested everything that they see because their friends send it to them. And I think this is the case, like, amongst most of my friends that did a bit of secondary, so, like, I'm not the only one. But You do this. I I no. So, thankfully, I actually started investing very early on for a fund before, so I have a bit of experience. And I definitely invested in some companies because it was my friend running it, maybe it wasn't the smartest decision. But now I don't really have time to manage it anymore, so I rarely do enjoy **Harry Stebbings** [34:59]: investing in the last few months. Can I ask, what's been your biggest lessons from doing that investing, both for the fund and angel investing? How has it impacted how you run deals? I think we actually do **Alex Bouaziz** [35:07]: send really great investor updates, and I think a lot of funders send very shitty investor updates. That's something that I've realized where I think I can tell whether a company is gonna be successful by the investor updates. I'm getting very early on. It's a strong statement, but **Harry Stebbings** [35:18]: I really think it. What makes you think it's gonna work early? Is it data clarity? Is it, like, the tone? Is it the **Alex Bouaziz** [35:25]: It's the middle. I'm happy you're doing this, but I want you to tell me how I can help you. How is the company really progressing? At the same time, you have people that send you very shitty updates where you're like, there's no data, and you can't actually even help from the data you're getting. Think there needs to be a middle ground. **Harry Stebbings** [35:37]: So a lot of founders are worried. I think it was Ryan who said this to me because he's another of your investors. He was like, ask him about data transparency because a lot of founders worry that, oh, I shared too much data and all these investors are gonna forward it and share it. What do you advise founders on data transparency in your investor I **Alex Bouaziz** [35:52]: think everything you send is forwarded and read by all your competitors, and that's number one. Number two, even my vortex somehow ended up into competitors' hand. What's important is, like, you can be cigarettes on a couple of product launches, on a couple of your metrics, like, whatever you feel is important. But at the end of the day, it's the same way that you launch. No one actually care. You're a $1,000,000 company. There's another company that's at 5,000,000 ARR. If you think, like, sending your investor update of what you achieved last month is going to be what's gonna change the game between the two of you, then you're probably wrong. So giving the right data is super important. Don't go and share all of the data that you think are critical for your business, but share the things that are actually gonna be helpful and makes people excited about you. If you were fundraising, like, two, three months ahead, show that you're growing, show that you have things that are happening. If you need help with specific things or if you're very proud of something, people are proud that they've invested with you and they're invested in you. So share the right data **Harry Stebbings** [36:38]: and help them help you. How often do you send updates? How often do you wanna see them from founders in the early days? One. And then two, if things aren't going well, how honest are you? **Alex Bouaziz** [36:48]: I sent investor updates every month until September of this year. I realized most people weren't helping anymore, so they so I just stopped sending them, and I'm just sending quarterly now, which is just it's less about help because when I need something, I usually go and ask it to the person directly. It's more about making sure that they have an idea of what's going on with the company and they don't forget us because they have so much things on their mind that it's totally something that I would understand. I think early on, you need to send monthly updates. And I would be transparent but smart in the way I write it. Transparent in a way that things are not going well. Say it. Say what you need, but do not try to have your investors commiserate because they like, what you're gonna get out of them is they won't care anymore, which isn't exactly the opposite of what you want. You have to be thoughtful. Right? And don't overshare, but share the things that you truly are worried about and you feel they're gonna be able to help. Sharing something that's sad just for the sake of it is not useful. Final **Harry Stebbings** [37:36]: one, then quick fire. Who's the single most helpful investor you've had? **Alex Bouaziz** [37:40]: Luckily enough, for example, Andreessen has a big enough position that I get to talk to Ben every month. I actually have a call with him right after you, I think. So but he's super helpful in terms of the big decisions we're making. Maybe you haven't heard of him, but there's a guy called Anthony from a phone called Green Bay Ventures. Anthony Schiller. Yeah. Love Anthony. He's the only person I actually trust I can commiserate with with something that actually goes wrong, so that's super helpful. So Anthony is a beast. I'm very lucky because he's very picky in terms of where he invest because he deeply commits to the company, and I think he's become a lot of my investors are great, but they're busy, and this he's really become a friend, and, yeah, that's something it's very he's a very important version for us. **Harry Stebbings** [38:12]: Okay. We're gonna do a quick fire round, my friend. I'm gonna I'm gonna say a short statement. You give me your immediate thoughts. That sound okay? Sure. I'm scared of what my brain's gonna come out with, but sure. Okay. So what life balance do we live in an entitled generation? A 100% entitled. Why? **Alex Bouaziz** [38:26]: Because there's an age for everything, and it's fine if you value work life balance. That's something important for you. That's great. When you're building your career and when there's a lot of things to do, you should work freaking hard because nothing is gonna be a handout. What have you changed your mind on in the **Harry Stebbings** [38:39]: last twelve months? **Alex Bouaziz** [38:40]: Work life balance. I think there's a stage in your life where it's important for you to take a step back and decide where you put your time and being able to prioritize some of the things that are important. Not saying I got to that stage, but I think there's a few things that I realized on that front where I needed to put a bit more thought into a bit more prioritization here and there. **Harry Stebbings** [38:55]: What's the most painful lesson that you've been through, but you're also pleased to have been through because of the lessons? **Alex Bouaziz** [39:00]: We almost had very early on a showstopper on one of our key products. One of the person I hired I knew was the wrong hire. I let them continue for a couple months too long, and I should have been a bit stronger and cut them. They had everything on paper. Big resume, big companies, supposed to be really good. So I was like, give them two, three months to figure it out. The speed at which we were evolving at and we were iterating and big war that was coming to us if we weren't gonna cut that person, it was a near miss for us, for sure. **Harry Stebbings** [39:25]: The **Alex Bouaziz** [39:25]: boards **Harry Stebbings** [39:25]: really aren't valued. **Alex Bouaziz** [39:26]: Depends on the stage of the company. Depends how well the company is doing. If the company is doing really well, the board is here to be supportive and helps you get the bigger customers and maybe help you see what you don't see. But at the same time, if you're moving really fast, it's hard for people to just have a strong opinion on the company that they sit once a quarter. If you're not doing as well, I think this is where your board has the most value because assuming they have your best interest at heart, which is not always the case, thankfully, it is a deal. I think they're able to navigate you. And Ben said it a couple times, I don't think a company can be successful without their founders. So helping founders through that is super important. **Harry Stebbings** [39:58]: What would you most like to change about the world of venture? **Alex Bouaziz** [40:00]: I still think people have a bit of that mindset of Silicon companies are the best in the world, and they are the only one that can be successful. I think it changed a little bit during COVID, and I think, hopefully, we're the living proof of that being changed. But I still think there's a couple funds that they're not taking the risk approach of funding people. They're really hungry from places where they could really build meaningful businesses. **Harry Stebbings** [40:18]: I hope that changes. Penultimate one. When you look at your existing angel portfolio, if you could put all of your money into one, which would you put it at? At what stage? At the current valuation or the last five **Alex Bouaziz** [40:27]: patients? At the current valuation. I still think Klarna and Tarek, I still think he's got something amazing, and he's got a one in a lifetime company, but he still has to execute a lot before he gets there. I think maybe ideally a devaluation from before or Clickhouse. I don't know if you've heard of them. I did get the valuation from before as well, but Clickhouse led by Aaron Katz is a is a savage in every way. He's really good. You should probably talk to him. I think they can build an iconic company that can properly compete with AWS. I love that. I've added that. **Harry Stebbings** [40:57]: The final one, my friend. Next five years for you. Fuck. It's 2028. Where are you then? Where's the deal then? Are we public? Are we not public? What do you think? **Alex Bouaziz** [41:05]: It's hard to tell, and I think going public is just a milestone in the journey. Right? So, like, here's your politician answer. We'll see. **Harry Stebbings** [41:10]: Yeah. I was about to say. Okay. Well, that **Alex Bouaziz** [41:12]: we'll see where we go on that front. I think right now, unless Microsoft or SAP more Microsoft decides they wanna get into HR, don't see anyone being able to to bring us in. We're very excited to build Deel into helping hundreds of millions of people, and that's not the political answer. That's actually where we wanna get to. And I think we have a very unique opportunity of, breaking down a bit of those borders where I think a lot of people won't have to completely change their life for jobs anymore. They'll be able to work for the best companies regardless of where they were from. That's something I'm super excited about. **Harry Stebbings** [41:39]: Alex, I've absolutely loved this, man. You are such a star. Thank you so much, and you've been brilliant on the show. Thank you so much. I really appreciate it, and chat next year at some **Alex Bouaziz** [41:47]: point. **Harry Stebbings** [41:48]: What a guest. What a show. I wanna say a huge thank you to Alex for being so open there. If you'd like to see more from us, of course, you can on YouTube by searching for 20vc or heading over to 20vc.com. But before we leave you today, ## Sponsor read **Harry Stebbings** [42:01]: the single most important element of any team is their ability to work together in the best and most efficient way. And Coda is the dock where teams can work on entire projects from start to finish with everything they need all in one place. Think about the way your team works today. 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