20VC 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, CoFounder & CEO @ Deel

In a dynamic conversation with Harry Stebbings on 20vc, Deal's co-founder and CEO Alex Bouiziz shares insights into the company's remarkable growth trajectory, from $57 million to $295 million in ARR within a year, while maintaining EBITDA positivity and gross margins above 85%. Deal, an all-in-one HR platform designed for global teams, has attracted significant investment, valuing the company at $12 billion with backers like Andreessen, Spark, and Code2. Alex emphasizes the importance of hard work over sheer intelligence in career building and the necessity of executing swiftly and effectively in the startup landscape. He also discusses the challenges and strategies behind scaling Deal, including the role of trust in a distributed company, the impact of product decisions, and navigating complex global compliance. The conversation also touches on the nuances of secondary markets, angel investing, and the evolving venture landscape, underscoring Alex's vision of transcending borders to democratize global employment opportunities.

• Work ethic is valued over intelligence when hiring for a role.
• Hard work is emphasized as critical to success and career development.
• Handouts are not expected; individuals must put in the effort to achieve results.

"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."

The quote emphasizes the speaker's belief in prioritizing hard work over innate intelligence when considering candidates for employment, especially in the context of career growth and the absence of easy success.

• Deal has experienced significant growth in Annual Recurring Revenue (ARR).
• The company has maintained high gross margins and has been EBITDA positive.
• Deal has paid out substantial sums to a large number of individuals.
• A diverse group of investors has contributed to Deal's funding rounds.

"From $57 million in ARR to $295,000,000 in ARR in the last twelve months. EBITDA positive since September 2022, 85% plus gross margins and over $5 billion paid out to over 250,000 people."

This quote details Deal's financial growth, profitability, and the extent of its payouts, illustrating the company's rapid expansion and financial health.

• Alex Bouiziz is the co-founder and CEO of Deal, an HR platform for global teams.
• Deal simplifies HR processes and supports companies with international employees.
• Alex has successfully raised a significant amount of capital for Deal.
• The company has a high valuation and is backed by notable investors.

"Alex has raised over $679,000,000 with deal pricing the company at a last round price of over $12 billion."

The quote highlights Alex Bouiziz's fundraising achievements and the valuation of Deal, indicating the company's success in attracting investment and its market position.

• Coder is touted as a comprehensive project management tool.
• Brex is highlighted for its financial services tailored to startups.
• Both tools are presented as essential for efficient team collaboration and financial management.

"With Coder, you'll never need to ask, where are the latest project updates? Anyone know where the performance stats are? This is what really slows teams down and prevents collaboration."

The quote explains the advantages of using Coder for centralized data and project updates, suggesting it enhances team efficiency and collaboration.

• Intercom provides modern customer service software.
• The platform facilitates direct business-to-customer interactions.
• Intercom is designed to help businesses scale support without additional resources.

"Intercom is used to send over 500 million messages per month and enables interactions with over 600 million monthly active end users."

The quote demonstrates Intercom's extensive use and reach in the customer service industry, implying its effectiveness in supporting a large customer base.

• The founding of Deal was influenced by the international backgrounds of its founders.
• The founders' experiences with diverse global opportunities shaped the company's mission.
• Deal was born out of a necessity to find affordable engineering talent outside of local regions.

"So the idea of when we started our first companies, first, I 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."

This quote explains the practical considerations that led to the creation of Deal, highlighting the challenge of finding affordable talent and the solution of hiring globally.

• Founders should quickly execute ideas, assess their viability, and be critical of their success.
• Avoiding the trap of overvaluing minor successes is important.
• Long-term potential and passion for the idea should guide the focus of a startup.

"It's not good enough. Let's just not do it anymore."

The quote captures the speaker's approach to iterating on ideas and the importance of recognizing when an idea is not meeting expectations, suggesting a willingness to pivot or abandon underperforming concepts.

• Speed of execution is crucial for a startup's growth and success.
• Deal emphasizes executing tasks well and quickly, a principle ingrained in the company's culture.
• Speed is important across all company operations, including product development and customer service.

"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 quote underscores the importance of speed of execution in defining a startup's identity and its critical role in ensuring continuous growth.

• Some areas, such as sales, should always maintain high speed.
• In complex areas like global compliance, careful and well-executed rollouts are crucial.
• Once foundational elements are established, rapid movement is again essential.

"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."

The quote reflects the speaker's belief in the importance of careful execution in complex areas, suggesting a strategic approach to balancing speed with quality.

• Effective leaders focus on areas that require their attention and trust their team with the rest.
• Leadership involves diving into details and finding fast solutions when necessary.
• Trust in team leaders and managers is key, with the expectation that they will escalate issues as needed.

"If things get to me, deal speed, we move really fast. We want to dive into it. Dive into it really in the details."

The quote highlights the speaker's hands-on approach to problem-solving and the importance of swift action when issues escalate to the leadership level.

• Deal operates as a fully distributed company, necessitating a culture of trust from the outset.
• Performance is closely monitored through KPIs, and the company maintains high standards.
• Employees who demonstrate hard work and care are supported and valued.

"We have to start with full trust and it's here to be lost."

This quote conveys the foundational trust given to employees in a distributed company, with the understanding that it can be diminished based on performance and conduct.

• Discusses the importance of being careful yet decisive when letting someone go.
• Emphasizes that not acting quickly enough on firing was a mistake.
• Highlights the concept of having strong opinions that are weakly held.
• Stresses the importance of customer focus in decision-making.
• Mentions the need for adaptability and quick iteration when wrong.

"So you really want to be careful, but you got to be very decisive." This quote underlines the balance between caution and decisiveness when it comes to terminating employment.

"The biggest mistakes I've made is not fire fast enough." This quote reflects on past mistakes regarding the timing of firing employees.

"Strong opinions, but weekly held." This quote introduces a philosophy of having confident yet flexible beliefs to enable quick adaptation.

"As long as you've got a very strong focus on your customers... You should be able to make the right decision." This quote emphasizes the centrality of customer focus in making the right business decisions.

• Discusses the importance of sustainable growth over hypergrowth.
• Shares the company's growth figures and the concept of calculated growth.
• Talks about the balance between growth and maintaining operations.
• Suggests that rapid growth can break a business if not managed properly.

"30% is great. That's what we did at deal." This quote shares the company's experience with a sustainable growth rate.

"If you grow too fast, you break the business." This quote warns about the risks associated with overly rapid growth.

"That's actually why we budgeted even a little more at the beginning of the year. So that was calculated growth." This quote explains the strategy of planning for growth while accounting for operational capacity.

• Discusses the personal involvement in the hiring process and the lessons learned.
• Stresses the importance of company DNA and cultural fit in hiring decisions.
• Mentions the concept of being a "savage" as a desirable trait in candidates.
• Suggests that alignment with the company's pace and lifestyle is crucial for employee satisfaction.

"I actually interviewed the first, I think north of 400 501st people at deal." This quote shows the speaker's deep involvement in the early hiring process.

"If in your conversation you don't think you're the right DNA for the company... just don't hire them." This quote emphasizes the importance of cultural fit over qualifications on paper.

"You need to be in the stage of your life, then this is what you want to be doing." This quote discusses the alignment of personal and professional goals for potential hires.

• Highlights the company's product decisions and their alignment with market opportunities.
• Discusses the evolution of their product offerings and the importance of being first or fast in the market.
• Talks about gaining customer trust as a young startup.
• Shares the approach of being transparent with customers and stakeholders.

"Our product decisions were pretty on point." This quote reflects confidence in the company's product strategy choices.

"It's something you win over time, right?" This quote acknowledges that customer trust is built over time through consistent actions.

• Shares the practice of having direct communication with customers via WhatsApp.
• Discusses how to discern what customer feedback to act upon.
• Reveals that most of the vision is predefined, but customer input is crucial for product iteration and prioritization.

"I love having customers on WhatsApp." This quote illustrates the value placed on direct and informal customer communication.

"It's less about the product, it's more about where should we go next." This quote distinguishes between immediate product feedback and strategic direction feedback.

• Reflects on the challenges faced when scaling the business rapidly.
• Shares experiences of operational breakdowns and the importance of planning.
• Discusses the benefits of investing in sales operations early in the growth process.

"At what point everything breaks?" This quote acknowledges that rapid growth leads to multiple challenges.

"Revenue operations, sales operations is what's truly going to enable you to scale." This quote highlights the critical role of sales and revenue operations in scaling a business efficiently.

• Talks about the significance of trust in managing a remote team.
• Discusses the balance between micromanagement and autonomy.
• Shares insights on leading and onboarding people remotely.

"I think this is the most important. I think remote works for us because my framework is I trust you." This quote reveals the foundational principle of trust in the company's remote work culture.

"When you're onboarding someone, it's important to be there for them." This quote suggests the need for support during the onboarding process, especially in a remote setting.

• Discusses the competitive landscape in the HR space.
• Shares the belief that while there can be many successful companies, there will be one clear winner.
• Talks about the globalization of Silicon Valley's mindset and the decentralization of tech innovation.

"Because we're going to make sure it's not." This quote expresses the speaker's determination to dominate the market.

"Silicon Valley is a mindset." This quote suggests that the essence of Silicon Valley is not tied to a physical location but to a set of values and behaviors.

• A belief in the potential for a generational trillion-dollar company in the HR and payroll infrastructure sector.
• Acknowledgment of the complexity and specificity required in HR solutions tailored to individual company needs.
• Anticipation of significant future growth for companies in this space over the next 15-20 years.

"I think there's a trillion dollar company that can be built, a generational company that can be built and there's only going to be one of those."

The quote suggests that Speaker A believes the HR and payroll sector has the potential to produce a company of unprecedented value, one that defines a generation, due to the complex nature of the industry.

• Discussion on the benefits of SaaS companies offering both bundled and unbundled services.
• The ability to tailor services to enterprise needs, such as hiring internationally without needing a full HR solution.
• The strategic advantage of slowly introducing additional products to customers.

"I love this conversation because I think one of the beauty of dill and the way we've built it is the ability of bundling and unbundling the both together."

Speaker A emphasizes the flexibility and strategic advantage of offering both bundled and unbundled services in SaaS, particularly in HR, allowing for customization and gradual engagement with customers.

• The advantage of owning multiple products in a stack for enhanced product development.
• Some products require more complexity and care in their development.
• The importance of building high-quality products over time rather than rushing to market.

"But also how bluntly, when you own the stack and own multiple different products, all catered to by the same service provider, what an enhanced product you can build because of the data that you have across the product suite."

Speaker B acknowledges the insight that owning multiple integrated products can lead to better overall product development due to the comprehensive data available.

• The complexity of compliance, especially in Europe, and the underestimation of these challenges by companies unfamiliar with local laws.
• The recent layoffs across the globe and the difficulties in managing terminations in different countries.
• The value of expertise in navigating complex labor laws and termination processes.

"In the last three months, thousands of people got laid off. Most companies, apart from the ones 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."

Speaker A highlights the recent layoffs and the complexities involved in firing employees in different countries, emphasizing the need for specialized knowledge in HR compliance.

• Strategies for business growth during times of widespread layoffs.
• The importance of tool consolidation and international hiring strategies for cost savings and efficiency.
• Anticipation of the growing relevance of international talent acquisition in 2023.

"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 a different workforce mode, whether it's contractors, where we help you do that, compliantly open your own entity so that you set all the costs and having everything in one platform, that's super appealing for our customers."

Speaker A discusses the importance of providing a consolidated toolset that allows companies to adapt to different workforce models and international hiring as a key growth strategy.

• The influence of a cost-focused approach on the trend towards bundling in SaaS.
• The potential for CFOs to favor bundled services for cost savings, even if individual products are not the best on the market.
• The strategic decision-making behind bundling to meet financial goals and customer needs.

"Bundling 100% because the HR leader is not going to have as much decision power here and the CFO is going to. Right. So 100%."

Speaker A predicts that cost considerations will lead to increased bundling of SaaS products, with CFOs playing a significant role in the decision-making process due to their focus on financial efficiency.

• The rationale for acquiring companies with specialized expertise and passionate entrepreneurs.
• The strategic value of acquisitions in hard-to-navigate areas such as immigration and global payroll.
• The challenges and learning experiences involved in integrating acquired companies.

"One, it's amazing to add 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."

Speaker A explains the benefits of acquisitions, including the addition of passionate entrepreneurs and the ability to provide immediate customer access to new products.

• The dynamics and challenges of working with family in a business setting.
• The complementary skill sets and mutual respect between Speaker A and his CFO, who is also his father.
• The importance of different perspectives and experiences in making sound business decisions.

"My job is to help hundreds of millions of people get to work for the best companies and make sure that they do it compliant in every single one of those countries."

Speaker A expresses his mission to facilitate employment compliance on a large scale, highlighting the importance of this goal in his work, even as he collaborates closely with his father.

• The approach to secondary sales for founders and early employees.
• The decision-making process behind the amount taken out in secondary sales.
• The positive impact of secondary sales on employee motivation and commitment.

"My side around ten, mainly to buy like an apartment and a few different things I wanted to do, like buying some presents from my father and my parents."

Speaker A shares the personal reasons behind his secondary sales, providing transparency and insight into the decision-making process for personal financial moves.

• Taking secondary investments at the Series A stage is not advisable; it's wiser to consider it at later stages.
• The speaker took secondary investments systematically, a little at Series B and more at Series D.
• The right amount of secondary to take is subjective and should make the founder comfortable.
• Secondary investments allowed the speaker to secure a nice living space and diversify their investments.

"Founders taking secondary at like the series A? I don't think it's super smart. Taking it a bit later kind of, I think makes a bit more sense."

This quote emphasizes the speaker's belief that founders should be cautious about taking secondary investments too early, such as at the Series A funding round, and should instead consider it at later stages.

• Founders often invest indiscriminately in the first few months after taking secondaries.
• Speaker A had prior experience with angel investing and now rarely invests due to time constraints.
• It's common for founders to invest in friends' companies, which may not always be the smartest decision.

"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."

This quote reflects the speaker's observation that founders often make hasty and poorly considered investments soon after receiving secondary funding, frequently influenced by their social network.

• Sending high-quality investor updates can be indicative of a company's potential success.
• The speaker believes there's a correlation between the quality of investor updates and company success.
• Data transparency is crucial, but founders should be selective about what data to share.
• Not all data should be shared; critical business information should be kept secret, while other data can be shared to solicit help and maintain investor excitement.

"I think we actually do send really great investor updates and I think a lot of founders send very shitty investor updates."

This quote reveals the speaker's opinion on the importance of quality investor updates and their belief that many founders do not prioritize this aspect of investor communication.

• Monthly updates were sent by the speaker until they were no longer useful; now quarterly updates are preferred.
• Updates should be transparent but not overly detailed about struggles; they should focus on areas where investors can provide help.
• The frequency of updates can depend on the company's needs and the stage of growth.

"I sent investor updates every month until September of this year. I realized most people weren't helping anymore, so I just stopped sending them."

This quote indicates the speaker's strategic approach to investor communication, adapting the frequency of updates based on the level of assistance received from investors.

• The value of a board depends on the company's stage and performance.
• Boards are most valuable when the company faces challenges and can help navigate difficult situations.
• The speaker finds regular discussions with specific investors, like Ben from Andreessen and Anthony from Green Bay Ventures, extremely helpful.

"Depends on the stage of the company, depends how well the company is doing."

This quote suggests that the utility of a company's board is contingent upon various factors, including the company's developmental stage and current performance.

• The speaker believes there's still a bias towards Silicon Valley companies in venture capital.
• There's a need for venture funds to take risks on founders from diverse locations who are capable of building meaningful businesses.
• The speaker hopes for a shift in the venture capital mindset to embrace global opportunities.

"I still think people have a bit of that mindset that Silicon Valley companies are the best in the world and they are the only one that can be successful."

This quote reflects the speaker's perspective on the prevailing geographic bias within the venture capital industry and their desire for a more inclusive approach to investing.

• Speaker A asserts that the current generation is entitled, particularly regarding work-life balance.
• They believe that there's a time for hard work and a time when work-life balance becomes more important.
• The speaker has recently reevaluated their views on work-life balance, recognizing its importance at certain life stages.

"100% entitled."

This quote succinctly captures the speaker's view that many in the current generation have an unrealistic expectation of work-life balance without putting in the necessary effort early in their careers.

• The speaker learned painful lessons from not acting quickly enough on personnel decisions.
• They believe that being transparent with investors about challenges is essential but should be done thoughtfully.
• The direction of the speaker's company, Dill, is focused on enabling people to work for the best companies regardless of location.

"We almost had very early on. A showstopper on one of our key products."

This quote alludes to a significant challenge the speaker encountered due to a delay in addressing a hiring mistake, highlighting the importance of timely and decisive action in management.

• Speaker A is focused on building Dill to help hundreds of millions of people.
• They aspire to break down employment barriers, allowing individuals to work for top companies from anywhere.
• The speaker avoids speculating on whether Dill will go public, emphasizing that it's just a milestone in the company's journey.

"We're very excited to build still into helping hundreds of millions of people."

This quote underscores the speaker's ambitious vision for their company, aiming to create a significant impact on the global workforce.