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Building the full stack for global hiring | Job van der Voort @ Remote
209 Plays1 year ago
Discover how technology is breaking down geographical barriers, allowing individuals to collaborate with the world's best companies from anywhere with a solid internet connection. Remote takes center stage as a key player, simplifying the global hiring process. Job talks about how to create value by solving complex problems.
For more such interesting founder journeys, subscribe to our newsletter www.founderthesis.com
Read more about Remote:-
2.Why remote skilled workers around the world can solve global talent shortage problem
4.Remote launches new HR platform for companies with a ‘global-first’ approach
5.Tech talent shortage: How hiring international employees can help
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Transcript
The Rise of Remote Work and Remote.com
00:00:00
Speaker
Hi, everybody. I'm Joop. I'm the founder and CEO of Remote.
00:00:16
Speaker
Thanks to the magic of technology, the world is increasingly becoming borderless. Today, it really does not matter where you stay. You can work with the best companies in the world from literally any place with a good internet connection. And Remote.com is one of the companies at the forefront of this revolution. Using the remote platform, you can hire people from any part of the world and not have to worry about anything else to make that employee productive.
00:00:40
Speaker
All the dirty work of local compliances and payroll processing is managed by remote at the back-end. And this is why remote was valued at $3 billion. Stay tuned for a freewheeling conversation between your host Akshay Dutt and your bandwidth, the founder of remote, about how to create value by solving complex problems.
Joop's Journey from Neuroscience to Startups
00:01:11
Speaker
So you trained to be a neuroscientist, right? Yeah. I studied neuroscience in university, worked as a researcher for a few years. And then when I was about to start my PhD, I discovered the world of startups and I figured I'm going to do that. I wouldn't build a startup and be all cool. What were you doing as a researcher?
00:01:34
Speaker
I did a few different things. At the end of my master, I ended up being very interested in how the brain processes information. I worked specifically for a lab and I worked in a lab that combined computational neuroscience and experimental neuroscience to try to understand how the brain processes information.
00:01:55
Speaker
In my job, what I did at the time was we would stick electrodes in brains of rats, and then we would play audio to them to see how the brain processes that audio information. Because audio is really easy to control, you can create a sine wave, and we have a good understanding of how the first layers of neurons process that information. But we don't really have a good idea of the more complex, more abstract representations of information in the brain.
00:02:22
Speaker
And so that is what I was researching. The thing with science is it's all very slow. If you have a company and you do well, you can hire a lot of people to do the little tasks for you. But if you're working science, even if you're a big famous scientist, you end up having to do a lot of the work yourself because you're doing something new, so it doesn't exist. So you spend a lot of your time doing
00:02:45
Speaker
In my case, we had this electrophysiology, which is what you call the whole measuring electrical sickness from the brain. We spent a lot of time, for example, removing noise from that system. So I remember vividly that we had these ultrasonic cleaners to clean the equipment where we would use for mice and rats.
00:03:06
Speaker
And that was causing interference in our experiments. And so we had to work to remove that. We struggled with, which everybody does, which is like the 50, 60 hertz from power lines to remove that. And so you spend a lot of time doing fiddly things.
00:03:21
Speaker
in our case, walking around with large rolls of aluminum foil to try to shield everything with your setup. But I really liked it. I thought it was really interesting, but I don't really like the career of a scientist. It's very restricted. Even if you're very successful, there's a lot of luck that plays into it.
Early Startup Attempts and Programming Career
00:03:39
Speaker
It's very hard to control your own fate, very little freedom, because you want to be really great. You have to move from lab to lab, from country to country.
00:03:46
Speaker
And then you end up writing grants for a large part of your career. And I was not too interested in that. So what specifically interested you in the world of startups? Did you have an idea or did you get recruited to build an idea? I thought it was exciting. One, I wanted to be my own boss.
00:04:07
Speaker
And I am someone who has a lot of interests and very easily becomes enamored with something. And so it was more about the way that I wanted to live my life and ambitious that I had for myself that met my interest in technology and computers as a whole.
00:04:26
Speaker
And that drove me to leave science. And the first thing I did actually was I tried to start a startup. And the startup was actually very similar to what I do today, which is we try to build a network to match people with jobs. Interesting. And we tried to use machine learning, which was really early at that time.
00:04:47
Speaker
Which year was this? This was 2011, 2012. And I did this together with my current co-founder, Marcelo. And so it was really early. And I didn't have any money, because I didn't earn any money in science. So we tried for a number of months. I was living in Portugal, where at the time I was not as familiar, didn't spoke the language as well. And the startup scene there was non-existent.
00:05:15
Speaker
And that was really a combination to quickly fail, which I did. And then I had to find a job.
Experiences and Learnings at GitLab
00:05:21
Speaker
That was my first attempt. Were you the one who was coding? What were you doing in there?
00:05:29
Speaker
For the first one, I wasn't. In science, I would do a lot of programming. When I was building that startup, I worked with Marcelo and two other guys who did most of the programming. But again, after a few months, I ran out of money, so I had to find a job. Because I had taught myself to program, I actually worked as a programmer for about a year.
00:05:50
Speaker
Like that one year was with GitLab? So that was before GitLab. No, no, it was before GitLab. I worked for a company called DigiDensity, which works on the identification system of the Netherlands. And so I was working as a Ruby on Rails programmer there, which I really liked. It was a nice job. I loved the program.
00:06:13
Speaker
And there I met Sid, the CEO and co-founder of GitLab. And so one day he left because he was working there as a consultant, you know, to make money because GitLab was not making money. And one day he left, he says, I'm just going to work on GitLab. He was like, if you ever want to do something else, let me know. So a few months later, I ended up joining GitLab. And there I stayed for five years. And what was GitLab's building? Why did you get so fascinated to spend five years there?
00:06:41
Speaker
For those that don't know, GitLab is a competitor to GitHub. It started out as an open source project, and specifically an open source competitor alternative to GitHub. And back then, this was just source code, right? Source code repository. Your Git repository is there, and that was it. And it already existed before GitLab, the company. So GitLab, the open source project, started in 2011. And GitLab, the company, only started to work in 2013 or so.
00:07:10
Speaker
And so we were using it in my prior job. So we're using GitLab, so I was very familiar with it. So that was very exciting. I liked it, and I liked the potential to work on it. And we were a really, really small team. And so I joined a service engineer, which meant I did everything, support, engineering, design, product management. And eventually, I named myself a product manager, and then I ended up leading product until I left.
00:07:36
Speaker
For people who don't understand what is a code repository, like what GitHub, it goes well, just give us a one-on-one. And GitHub also started open source, right? GitHub is not open source. It was never in this. It was open. Yeah, just give us a one-on-one what this product is. What does it do? How does it monetize?
00:07:57
Speaker
Yeah, so if you, so what it does, it is, it allows you to work together on software. So when you're making software, you write code, code is just text. And the problem is, is that like when you work in a Google doc together.
00:08:13
Speaker
Everybody can make changes at the same time. And when you're working on text, that's just text that doesn't matter. But when you're working on software, that matters a lot. Because if somebody makes a change somewhere else in the code that you're working on, it might break your codes, right? Because it gets executed. It runs itself.
00:08:29
Speaker
So what so far like GitLab and GitHub do, which are all underpinned by Git, this is where the name comes from, they make it possible to actually collaborate effectively with other people. And I do that by branching off. So that means that multiple people can work on multiple pieces of code and later bring them together and then GitLab
00:08:49
Speaker
make sure that you test the code and that merging of the things together that actually work successfully. And so it is fundamental that you use Git or an alternative to Git to actually write software. 100% of all programmers use this for working together with other software programmers. And so what does the word Git mean here?
00:09:10
Speaker
I mean, Git is a joke. So the creator of Git, who is very famous because he was also the one that created Linux, he thought it was funny because Git in English means like a silly person, right? So he thought it was funny. And so the way GitLab works and in Business Model is what it's commercial open source software or open core software.
00:09:33
Speaker
which means that there's an open source version that everybody can see and use freely. You can see how it's written, I can see all the source code. Then what we did is we created an enterprise version that was not open source, so you can't just use it for free, you have to pay for that. The difference between these two versions are additional features. For example, if you're a large enterprise and you need a certain security feature, we would make that and we would put that in enterprise edition.
00:10:01
Speaker
Our customers would come to us, they were probably already using GitLab and the open source version. And then they would say, oh, we would like a security vision. And then we say, that's great. You got to pay this much for it. And then you get to use enterprise version and get some support. And that works really well. It's a really nice model because you get the best of both worlds. You get a lot of adoption because of open source. You get people contributing to it because open source also means that people can contribute to your software.
00:10:26
Speaker
And you still get to make money through a proprietary version, right? So you get the best of both worlds. Albeit, it is challenging to manage those two worlds, but nonetheless, it works out really well, and GitLab today is a public company, so it did really well. I guess what today is called financial growth, this would have been like a precursor to, right?
00:10:49
Speaker
I don't know. Product-led growth is one of those things where you talk a lot about what is your funnel, how does your funnel of prospects and leads get you generated. Product-led growth, what you're saying is like, well, product puts the forefront, so rather than sales or marketing.
00:11:07
Speaker
But GitLab, to a degree, had that, although it's more because it's open source, not because we're tuning the pipeline. And in fact, I think our pipeline wasn't very good for a really long time. It was really hard to do it. But we just gave something away for free, and then we created another product which had additional features. So I don't know if you would call it. I think it's just commercial open source software, which I think is a good term for these kind of things, that is almost its own
00:11:32
Speaker
Model and then product like growth was something that we more like pushed into our cloud version because eventually we did is we created a version that runs on a cloud so you don't have to host it yourself. And there we pushed really hard for adoption self serve adoption and that was more product let growth but.
00:11:50
Speaker
Yeah, it really is like open source software and commercial open source that has like a public version and a private version or a cloud version, self-hosted version. I think that is its own model and it's hard to compare it to product-led growth directly. Got it. How did you fix the funnel? You said for a long time the funnel was ready. The thing about GitLab was that
00:12:16
Speaker
it was an open source project that was self-hosted. To me, we take the software, you would install it on your own server. It's very hard to track that usage because the moment you put code into that that says, let me track the usage of this open source software, one, not everybody might run that update, and two, people will just not be happy with that and they will take it out or they will just simply not use that software anymore.
00:12:40
Speaker
And so we knew that we had a suspicion with some tricks, but we didn't know exactly how much usage there was of GitLab.
00:12:49
Speaker
And so over time, we had to find ways to identify places where GitLab was running and also make it clear to everybody using GitLab, hey, there's now a paid version of this. And so that was a gradual thing. There was no magical thing. And it's really not the same thing as if you have a SaaS website and measure what drop-off is. Because for us, it was like, well, for one, we didn't know what top of the funnel meant. How many companies were there? We guessed that there were 100,000 hosted versions of GitLab when we got started in the business.
00:13:19
Speaker
Could have been half of that. Could have been 10X that. And we still didn't know. And like many years later, we would still encounter companies that had massive GitLab installations running, but on a version of like five years ago.
00:13:31
Speaker
And so we would find those companies, they like their whole company was running on GitLab, but it was like an old version. And then they made, I did all sorts of crazy stuff to it. Um, and yeah, so that was, that was very interesting. And in fact, at one point I visited this large Chinese, um, software and hardware manufacturer and they did exactly that. They had this massive installation of GitLab, probably the biggest in the world, but they also had completely customized it. There was nothing, you couldn't recognize it anymore as normal GitLab. They had the whole, um,
00:14:01
Speaker
sort of gaming mechanism to this with rewards and points. And there was no way that we were able to actually help anymore. But over time, what we did is we created things like services that made it attractive to actually check in with us. For example, we added a tool. And this is, if you build an open source, if you build an open source so far, this is a really good trick, which is you add a versioning tool to it. So you add somewhere in your product,
00:14:28
Speaker
something that calls out to one of your servers that then says, what is the latest version? That gave us a sense of
00:14:36
Speaker
Well, how many installations are running out there with at least this version? And which current version do they have? Because you can send along that information. That would give us some more information about what usage was around the world. But we were always really cautious because we didn't want to burn any bridges. And I didn't want to add actual deep tracking in it because the open source community would just reject that and then create an alternative to get there.
00:15:13
Speaker
I think the most important one is it's a cliche, which is to just talk to your customers and talk to your users. But I think one in particular that I feel very strongly about is that GitLab had many large enterprises its customers still has, and also many smaller companies and individual developers. And there is that any large company is still made up of individuals.
00:15:26
Speaker
which ended up happening but they never really took off because they they were not fascinating.
00:15:40
Speaker
When you read about traditional product management and product management of tools that serve the enterprise and such, one, all those kind of tools they have this negative connotation of being enterprise-y, which nobody likes, and for good reason. And two, you read all these things about how to make your product enterprise ready and centered and such. And there's some truth to it. But for the most part, what I found was that
00:16:06
Speaker
the same kind of people that work in small companies or that are individuals using your product.
00:16:12
Speaker
there's a lot of those working in enterprises. And so the things that benefit individuals, the things that you think like, oh, those are important for companies targeting earlier stage organizations, they still remain true for larger organizations. For example, delighting your users or creating things that are really easy to use or that automate a lot, opinionated products, right? So for example,
00:16:39
Speaker
we avoided for a really long time at GitLab, for a really, really long time, too much customization. What do we want to do? We want
Inception and Growth of Remote
00:16:47
Speaker
to give you a lot of power out of the box rather than saying, oh, everything has to be and can be customized. And because we were so opinionated, a lot of our enterprise customers were like, oh, we want to customize everything. But we resisted that. And because we resisted it, we actually had a lot of
00:17:07
Speaker
cross usage because GitLab went from being one product to being many products in a single platform.
00:17:13
Speaker
And to encourage users of all the other things, we made the barrier to adoption as low as possible. And we made it as low as possible by making sure it was opinionated so that you didn't have to do anything. It would just work. Rather than saying, oh, you want to set up this new tool, we were like, here's a new tool. It works. You don't have to do anything. It works. It might not work exactly the way you want it to. You might have an alternative tool that you have now running inside of your company
00:17:40
Speaker
But we're going to give this to you. You don't have to use it if you don't want to. But it's done. It's ready. And it's working. And we did that. And it was extremely successful as a strategy. And it meant that we had, I still remember this, was this large, large financial institution like a bank.
00:17:57
Speaker
And they said, okay, we chose GitLab for this part of our software suite, and we chose another tool for another part of our software suite. And we were like, yeah, but we can do both. And they were like, no, no, no, no. We only choose best of breed. And we need a very specific thing. We're like, okay, whatever. And so they installed GitLab, and we gave the other part for free. I mean, in fact, I made it so that you couldn't turn it off. They didn't have to use it, but you just couldn't turn it off.
00:18:22
Speaker
And so what happened is that, of course, they started to use GitLab for both of those things and ended up constantly in contract with the other business. And that was a really, really good strategy that we used early on. And I think that is one that I continue to think about a lot and try to do with promoters. That's an interesting phrase of building an opinionated product. I'm getting it for the first time. How do you become an opinionated product manager?
00:18:49
Speaker
I don't know. I think it's important to have an opinion. How do you form an opinion? I don't know. I guess being exposed to a lot of things, being inherently interested, seeing a lot of different viewpoints, and then from that, still it is something that you have an opinion about. I think that's the most important thing. It goes back to talking to your customers. There were many assumptions and thoughts that I had about how to build certain kind of products that
00:19:15
Speaker
And then customers would tell me, oh, that's not at all how you think about it. But there were also some things where I felt very strongly about something. Customers would tell us the opposite, but because I felt strongly about it, we ended up doing my way anyway, and it would work out. So I don't know. First principle thinking is always really helpful, and it is in these cases as well. I think it's always valid to ask not just
00:19:39
Speaker
How do you want something? But also just ask to yourself, why is it that we do this thing in this way? Why is this expectation? And in general, I think striving for simplicity and taking away work is almost always a really effective way to build products. In the end, what do you want products to do is that you want them to make your life easier to solve problems and not create new ones or new things that you have to think about or worry about.
00:20:07
Speaker
So I think that's it. At AutoNet, I don't know. I want to know, how do you become opinionated? I guess exposing yourself to a lot of things. I guess Steve Jobs was probably the original opinionated product.
00:20:20
Speaker
I mean, that's what you would call Apple products, right? Yeah, absolutely. To me, Apple is a great example of a company that has product management extremely well. But I think there were many before that, and I think there are many since that. I think most great products that have universal acclaim are quite opinionated about how they do things, rather than just giving you all the options and letting you feel
00:20:47
Speaker
So, how did remote get started? How did the idea come to you? Tell me about the part of remote.
00:20:55
Speaker
So GitLab was working as a fully distributed and remote organization since day one. And what was really obvious that this was the way companies were going to be built in the future, because we essentially only had upsides, no real downsides. But it was counterintuitive. We don't have an office. We don't see each other very often. We avoid meetings.
00:21:16
Speaker
But nonetheless, and because it was counterintuitive, but I lived it for many years, I knew that this was a true thing. This was not an opinion. It's just fact. This works well. But the one thing we struggled with was the part that remote solves today, which is I have a large team that is distributed. I need to be able to pay everybody. I need to be able to stay compliant. How do I do that?
00:21:42
Speaker
And at GitLab, we tried all the things. We tried setting up our own entities and running everything in the house. We tried working with external providers and any other solution we could potentially find to make it easy to hire people from all over the planet.
00:21:59
Speaker
They were all valid solutions, but they were all expensive and painful without exception. There was nothing easy. There was no magic solution to the problem of I have a distributed team and I need to make sure everybody gets paid on time and also make sure that I'm compliant. It's a serious, large business. And so believing that the future was obviously going to be remote,
00:22:23
Speaker
wanting to always have started my own business. Actually, when I joined GitLab, I said to Sid, and we agreed that I was going to stay for one year, and then I was going to start my own business, well, 13 to 5. And I figured, well, now is the time to do something about this. And so Marcelo, who is my best friend, and we already built many other, while I was working at GitLab, I built all sorts of apps and products with him as practice runs, so to say. We were like, OK, let's do this. And so we started.
00:22:51
Speaker
Something like this sounds like it would need both time and money to build an MVP. I mean you can't have an MVP here which is just working for let's say one country. You probably need to cover maybe like 15-20 countries in your MVP. Tell me how you did you raise funds from day zero or like how did you go about this?
00:23:17
Speaker
Yeah, we had a little bit of cash, but not a lot. And so early on we were like, okay, we acquired the domain remote.com and we had the decision. We can either start like a job board and try to build a lifestyle business, or we could do this big idea that we ended up doing.
00:23:33
Speaker
And we knew that if we did this big idea exactly as you say, we needed to raise a lot of money and we needed to go all the way. We're like, okay, well, we live only once. We should do the really crazy ambitious thing. And so when we made that decision, we raised money. And so we raised two rounds in total, like 15 million or so before we made any money. And then, uh, these were like three, three product rounds when you didn't even have a working prototype for sure.
00:24:03
Speaker
Yeah, with nothing to show. And in fact, I also just like my bitches, I barely made a deck. It was just me talking to investors.
00:24:12
Speaker
I knew exactly what we had to do. I knew that this was a real problem. I got lucky, I suppose, with the investors. But yeah, we knew it was really, really hard. I think one of the things that we decided early on was that we wanted to take a different approach than other companies in the space had taken and were taken, which is
00:24:33
Speaker
And they were relying on external infrastructure and external parties to run their services. And I might believe it was always that the only way to build a great product is if you own as much, if not all, of what underlies it. So the hardware, legal infrastructure in our case.
00:24:50
Speaker
And so we never, we said early on, we'd never want to take any shortcuts and it probably hurt us in terms of growth, but it benefited us in terms of building a better product for our customers, which I think long-term is there is a better decision. And so that's it. And then we just worked, we worked for, we started in January, 2019. And we worked for a year and a half before we were able to open the first four countries and a few more after that. And by then we immediately onboarded customers.
00:25:19
Speaker
I guess your timing was amazing. But before that, a little bit more on the fundraise. How many nodes did you hear before you heard a yes? Was it challenging? You had a lot of credibility at GitLab, which helped you. One, I had built a certain amount of credibility, which was really helpful. And so the first ever investor meeting I had, those investors are still investors. Oh, amazing.
00:25:50
Speaker
And I don't know how many no's I faced, but I do know I met with a lot of investors every single round that we did. So most of them would say no. And many of them I would say no too. But I'm really not married to that. I'm somebody who's really focused on what's next and I don't linger on rejection. So yeah, we got countless rejection, but I don't really think about it.
00:26:15
Speaker
I really focus on like, how do I get to what I need to get to? And so we were successful in doing what we wanted to do, actually more so. I think I planned on racing less than in the end I did. And we end up over the past year is raising like 500 million dollars, which I never anticipated. Why did you say no to investors?
00:26:38
Speaker
Well, if you have the luxury of choice, which we had, not all rounds, but some of the rounds we had a luxury of choice, you have to make a decision. So you end up saying no to the bunch for various reasons. When you work with investors, you should always back channel. You should call other founders that they invested in, the ones that they don't refer
00:26:56
Speaker
and ask, well, how is it working with this investor? Would you work with this investor? And then that's a pretty good one. Another one is just simple term sheet, right? You get a term sheet, you get three, you know, there's two good ones and then you end up having to reject two. Okay, got it. And these are mostly European investors. No, we have like one European investor, the rest is all American. Oh, well.
00:27:24
Speaker
So when you were building remote, Deed was already there. I guess Deed would be your primary large global competitor. Yeah, to some degree. I think they are more early in the market. We are some other competitors more upmarket. They started a little bit earlier than us. They were making money when we were barely starting the company.
00:27:48
Speaker
There are quite a lot of companies in the market. And as I said, I think one of the things that we realized early on is that we don't want to take a similar approach because we don't think that results in a good product. So what did you do that year and a half when you were trying to build your FDP? Do whatever it was necessary to build a company. One thing was building the product, making it possible to actually run and payroll everywhere. Because we didn't want to work with third parties, we had to do everything. We had to figure out how to do everything related to
00:28:16
Speaker
setting up payroll, registering people locally, staying compliant, all the contracts, everything else that came with it, and setting up
Remote's Launch and Market Strategies
00:28:27
Speaker
the entities. So I was flying around the world signing contracts because pre-COVID you had to just be everywhere in person. There was no excuse to not be in a country. So we're going to open a business there. So every time we had to open an entity, every time we had to open a bank account, I had to fly to that location, sign something, et cetera, et cetera.
00:28:45
Speaker
I guess the last part of your work would have been to ingest country-specific knowledge of how to employ, how to run payroll and kind of productify it. That's what you would have been.
00:29:01
Speaker
Yeah. And finding people, like finding people that can help you with that. That's very difficult because you know, you want people that are both agile and can work at like startup speed, but you also want to make sure that these people actually know their shit.
00:29:17
Speaker
You hired somebody for each country or like to work with consultants. How did you adjust the knowledge? Yeah, it varied a bit by country. For some country, we had people there and it helped a lot. But for every country, we always had like a local legal team that could help us. Because even if you have one person in the country, which we didn't want to do on principle,
00:29:38
Speaker
But even if we were to have that, there's always cases that you haven't accounted for. Because you can be faced with legal issues, you can be faced with tax issues, you can be faced with immigration issues. And for each country, you can easily be an expert in any one of those subjects, but hardly be an expert in all of them. And so we always have local teams to help us. And still to this day, we are active in so many countries right now. We have a large enough team to theoretically have one person per country, but
00:30:07
Speaker
In practice, we don't. We have local legal teams that can help. Okay, got it. The product is essentially like a rule-based workflow engine where you have to build rules for each country on how to work. Sort of, yeah. That's definitely part of it. I think it's pretty complex. What I think it is, it's a really compliance-centered HR platform today.
00:30:36
Speaker
So there's everything you would expect from any HR platform. You take in all data from individuals, you can manage them, you can register PTO expenses, anything else you would really expect from Platform.net. And then we build in a lot of those rules and they're quite elaborate. There's a lot of it and there's a lot of subtleties to it and we have to continuously maintain them because of how many countries there are.
00:31:05
Speaker
So, by the time you are ready to go live, the lockdowns are already started.
00:31:12
Speaker
Yeah, we went live in May 2020. So yeah, lockdowns were live for two months. And the way we got our first, I don't know how many customers was, on day one of building remote, I was already calling with prospect because I wanted to know what should I build? What are the problems you face? And I did that until we went live.
00:31:34
Speaker
And so there were so many companies that I spoke to that were informed of the progress we were making. There were companies that I spoke to in week two, and in week 20, and in week 60. And by week 60, I could tell them, oh, look, we're going to go live in, at the time, France, Portugal, and then listen to the UK. I think those were the first four countries. And then one of them was like, yeah.
00:31:56
Speaker
We are surprised that they would, but like, yeah, we'll try with you. And so that's how we got most of our early companies. And then of course we raised another round, which we used for PR and press and marketing, so to build our marketing team. And because everybody went remote, we had the domain name remotes.com.
00:32:15
Speaker
And the month for these kind of products increased. And because we were really aggressive with our pricing, which at the time was, you know, really was a real strong differentiator in the market. We were able to gather a lot of inbound. And so we didn't really have to do anything outbound for a really long time. And we just kept growing and growing and growing. Amazing. Amazing. How does it get priced? Is it like a per employee per month? Yep.
00:32:45
Speaker
Yeah, it's just a flat fee per employee per month. Is it a percentage of salary or is it like a fixed salary? Well, it's just a flat fee. We don't charge any other fees. So with all our competitors, no exceptions, there are onboarding fees, onboarding fees, fees for pays, lips fees for debt.
00:33:01
Speaker
A lot of hidden costs, costs that they don't tell you about, costs to break a contract, costs if something happens. We don't charge any of those. So the thing is, is that we have a price we list on our website, maybe your startup get a little discount over that, but then there's nothing else that you pay other than the salary of your employee. And so we don't charge any additional fees. Sometimes we hear it as like, oh, you know, remote church and all these fake fees, but we really don't. I wish we did. We would make a lot more money, but we really don't.
00:33:28
Speaker
And then we can do that because we own the entire infrastructure and over the years initially we weren't, but now we're really, really efficient. And so we actually don't have to take that much and so we don't charge a percentage. I also don't want to charge a percentage because I think it discourages giving people races, which I think is unethical.
00:33:50
Speaker
I think I want to create a world where opportunity is actually equally accessible, independent of where you are. And you're not punished because you live far away. And so we can't do that if we are discouraging giving people a raise, because with each raise, your fee to remote goes up as well. I don't think that makes sense. What's the range length of the 4Q chance per person? Oh, it's $599 a month. $599 a month. Across the wound.
00:34:20
Speaker
Of course, the world has the same everywhere. Amazing. OK. Really simplifies the decision making.
00:34:26
Speaker
It's really simple. If you look at how others are doing, our competition charges hefty fees on transactions, on payments, FX fees, and a bunch of other things. Because we don't charge any additional fees, it's still a lot of money, $599, but it's really cheap for employer record services. Then our contractor product is essentially free, $19 per contractor per month.
00:34:53
Speaker
What's the difference between the contractor product and the employer of record products? So it's just the model of employment. If you are an employee, you actually get full local employment. So you get employment agreement and all the protections and additions that you get and that you have right to. You're an actual employee employed through remote. So in India, you're employed to our Indian entity. You get local benefits with full local protection like any other employee.
00:35:23
Speaker
real difference. And in fact, usually we tend to be a very good employer because we get a lot of discounts because of our scale on benefits, for example. So you get great benefits as well. If you're a contractor, you're a contractor. So you enforce the company you work for, and then what you can do with remote is process those payments as an employer. You can process all of those payments through us.
00:35:46
Speaker
Okay. The contractor business is somewhat like a FinTech business. It is. Yeah. I mean, we process billions of dollars in payroll, most employee records and contractors. In a lot of ways, you could say that we are an HR company. In a lot of ways, you could say that we are a FinTech. And you could call us whatever you want. I don't really mind. I think by the time we go public as a company, then maybe I'll care.
00:36:14
Speaker
Amazing. So you would provide the benefits and charge the employees for this, right? Like say hand control and so whatever other benefits. Yeah, we pass through all costs, right? So if you want to employ Jane, Jane lives in Germany, and then you go to us and we tell you, okay, you know, $5.99 a month, and then whatever seller you want to give Jane, and then the benefits that you have to offer Jane and some optional ones,
00:36:43
Speaker
You choose them, and then we pass all those costs on a monthly basis through to you. And then we add the $5.99 on top. Now, if you pay all of that, nothing more to do. Okay. Tell me about your journey of finding the right customer. And, you know, we've please spoken about that video I saw last year when you spoke of that journey between startups and enterprises, big-level businesses, finding the right customer. And so I'd love to hear that.
00:37:14
Speaker
I think for us, it's not a very standard common path that we took because the demand was so clearly there. But we also were able to identify the demand by, as I told you, early on talking to as many businesses as possible. And there were a few things that we learned. One was that
00:37:40
Speaker
If you start early on, smaller businesses or startups, they are much more happy to take on risk, a risk of a new player. And then they do that, then they get a discount. They get something that's cheaper, potentially better, or better customer service, but they're much more willing to take on risk.
00:37:58
Speaker
Larger businesses are much harder to work with, a priori, because they have a really long vendor process. They are very risk avoidant. They tend to default to whomever's biggest and most well-known or a company in the space.
00:38:15
Speaker
That drives naturally your business to probably serve smaller companies or startups early on. And that mostly was true for us as well. That said, we sell an expensive product. We sell a product that if you don't care about being compliant and don't worry about local laws, you might just hire everybody as a contractor. And so maybe you don't want to use EOR. And so for us, we sort of fell in the middle, right? Where super early startups, they don't really care for us, but really large enterprise we didn't really want to work with yet initially.
00:38:45
Speaker
So the middle range of companies really worked for us from 20 to 200 employees or so. That said, GitLab was one of the first customers and they had more than 200 employees at the time. But beyond that, I think the one interesting thing for us is that there's this
00:39:03
Speaker
The way we build remote is we build this around the idea that all operations are centered around an individual. So if you onboard Jane with us, the process she goes through so that we make sure that you're compliant, that she's compliant, that she's onboard. It's the same as if Apple comes to us and says, oh, we want to onboard these thousand people. Every one of those thousand people are treated the same in our system.
00:39:26
Speaker
And so that meant that, and still to this day, that we can onboard companies of almost any size and we're pretty good at it. And so we certainly started out with many smaller companies and found our way in that sense. Today, it's companies of almost any size, which is counterintuitive and counter like the traditional narrative of you have to be really specific about which market segment
00:39:50
Speaker
we're really happy to help small startups, we're really happy to help large enterprises, which ties into my belief that large enterprises is full of people that also care about the little details. How did the product evolve in response to you understanding what customer segment works for you, what each customer segment wants and so on?
00:40:11
Speaker
Very little, I have to admit, because for the most part, until recently, we were just trying to make it work. It's just like, we have this large demand, and we're doing this really complex thing, and we want to add more and more countries, so it probably becomes more interesting. And so we just have to do whatever is necessary to make it work. And so it was not so much, oh, searching for things to do and deciding whether certain customers want a certain thing. It was much more
Scaling Remote and Entrepreneurial Advice
00:40:39
Speaker
We just have to work really hard to make it work so it doesn't all fall apart or break. And again, you have to talk to customers all the time, and we did, and of course we incorporate their feedback. But for the most part, it was doing the obvious thing, which is, okay, we have contract amendments in this country that are taking a lot of time to process. Can we somehow solve that? And then imagine that times 100 every day for years.
00:41:06
Speaker
Right. So your bigger challenge is essentially operationally figuring out how to solve those challenges country by country rather than building code UI, UX and so on and so forth. Like those would be secondary challenges.
00:41:25
Speaker
I mean, it's the same challenge because you can only do a really good job of making it easy to hire someone in a certain country by having great UI UX. For example, adding some text somewhere in the interface dropped an entire line of support essentially from us where we had all questions about certain subjects and then we were like, okay, if we just explain it more clearly,
00:41:52
Speaker
in the interface, then we're not going to get those questions anymore. And we face those kind of things daily. I think today, less than ever before, is it an operational challenge? Because we sort of figured it out. So we know now how to do it. And we are efficient. And we are fast. We can onboard faster than anybody else. We move faster than anybody else. And so we don't really seek that operational challenge anymore. We sort of solved it. Now we're building new stuff.
00:42:22
Speaker
new stuff like what? What's on the roadmap? I think for us as a business, we built EOR, then we built the contractors business. And now we're seeing, well, we are really good at running payroll. So we want to run payroll anywhere for any kind of business. So that's one of the things that we're really focused on. A few cool things coming. Yeah, okay.
00:42:45
Speaker
Payroll is a fairly competitive market, right? Like very low pricing. Or at least I'm talking of the Indian context. I mean, in India, we have a lot of payroll vendors pricing is 13. Is it worth getting into that payroll processing market? It's worth it in the sense that the market is really big. Every company runs payroll. And, you know, we specifically offer global payroll.
00:43:10
Speaker
for companies that have run payroll in multiple countries. And that is a very different market. It is not very well-served. The products are really low quality. I think anything our competitors have brought out has been extremely low quality. And so we have a belief we can do significantly. So that's what it is.
00:43:33
Speaker
Tell me about building remote as an organization. Who were the first people you hired and why? How did you scale it out? What is the head tell today? So today we are far over a thousand internally. And we started out, the first four hires were all engineers.
00:43:58
Speaker
We roughly knew who we wanted to hire. Then we hired some operations, someone for design, and then another designer. I think that's sort of the order. And so the first year, it was just nine of us, I think, in total.
00:44:14
Speaker
And in the second year, we went from 9 to 50. So we launched our product halfway through the year and we went to 50. And then at that point, we started hiring a lot more people for operations and support. And in the third year, we went from 50 to 650.
00:44:30
Speaker
where we hired everything, every role you could imagine. We basically had to, you know, all hands on deck, try to just get any soul that could help us out as quickly as possible because we were growing so fast. And then we started to, you know, I mean, slightly slowed down until today because we figured out ways to be more efficient. And we tried to keep the team as small as possible.
00:45:00
Speaker
which sounds ridiculous when you're over 1,000. We work really hard to try to keep the team as small as possible. And in particular, we want to be really efficient. So I want people to spend most of their time doing hard things that required creativity rather than operationally boring things. And so that has been an ongoing challenge, a fun challenge.
00:45:25
Speaker
Like what are some of the frameworks that you use for building like, you know, from 50 to 650. How did you that was a particular approach you used because you obviously cannot personally keep an eye on quality of talent and so on and so forth. So help me understand your world building framework.
00:45:50
Speaker
So there are a number of things. The first one was that we very early on created the handbook. It's available through remote.com slash handbook, where we wrote down what our values were. And those values inform the kind of people that we want to hire, the kind of culture we want to build, and how we expect to communicate with each other, which is a whole chapter on how to communicate.
00:46:12
Speaker
That was the most important thing. That's like, that was the foundation of how we wanted to build an organization. And then we set certain standard rules. One, which was that, you know, every individual should have a manager and a manager should have a span of control of maybe, you know, five to eight reports and they should do regular one-on-ones and they should manage performance.
00:46:36
Speaker
And if you start like that, it is doable. Because you have the foundational elements. And then to make sure everybody is well onboarded, we make sure we had great onboarding materials. We were already working asynchronously, so we had a lot of documentation that people could self-serve to.
00:46:53
Speaker
Those were the most important things. And beyond that, it was just like, what do we need? Let's make a pragmatic plan on how do we get there? How big is that team we're going to be? And then, yeah, in the year that we grew so fast, we just continuously revised based on what we believe we could do next. We were really aggressive.
00:47:13
Speaker
What are some of the ways, I mean, you know, a lot of tech companies are now in that return to office mode as you started PR remote and you intend to continue to be PR remote. What makes you both working successful for some companies and not for others? I think if you start out as an office based company, it's much more hard and much harder.
00:47:40
Speaker
I think the most important thing is full commitment from everybody to work remotely. And I think everybody has to work remotely all the time. You can work from an office, but you have to act as if it's remote. So you say hybrid doesn't work? A hybrid doesn't work because the people that are remote or the time that you are remote, you're not facing or addressing the problems or challenges that come with remote working, rather you're just waiting to be back in your office.
00:48:05
Speaker
And if you have teams that are partially remote, right? So I'm in your office, always on remotes, then you get isolation and not good collaboration. Nobody likes that. And so one, everybody has to be remote.
00:48:17
Speaker
Two, you have to build a really strong culture around communication and proactive core communication and transparency. If you do that, you'll be fine because then the time that you do spend in meetings, you can spend more time bonding with each other. You can prioritize what you believe is necessary for your teams to grow, whether it's more time together or meeting in person.
00:48:40
Speaker
But above all, it's about facing new challenges that come with remote work and focusing on actual outputs rather than how long, how many hours somebody is worth. And you get that by transparency, just the clear manager lines, one-on-ones with managers, clear setting expectations, essentially running a good business. I think that's all that's required.
00:49:01
Speaker
I also think it matters a lot about what kind of management you have. It's ultimately management that decides to send you back to the office and it's probably management that's either super comfortable deciding how good people are by how loud they are or how present they are in the office rather than the actual output that they deliver. Or maybe they feel like a sense of control or they feel pressure from shareholders to show more productivity and then by bringing people in the office, maybe that gives a sense of doing that.
00:49:31
Speaker
But I think in many cases, if you're not actually building hardware, if you're just building so far, you should be able to do it from where? You're saying?
00:49:44
Speaker
The fundamental mindset change has to happen from input to output, like instead of measuring input, like how many hours you're putting in to measure output, like whatever unit can best define the output for each role, you need to invest time in setting that up, being able to look at that across the organization and use that as the measure, rewards and so on. Yeah, that's it. Okay, interesting.
00:50:22
Speaker
We do billions of dollars in payroll and we can easily pay the salaries of 11 or 1200 people.
00:50:32
Speaker
You raised two more rounds after series A which you did in 2020. Both were fairly big, 150 and 10 million. Tell me a bit about that journey.
00:50:46
Speaker
The company was going really, really fast. And so we didn't need the capital, but we were opportunistic. We knew that the market was really hot when we raised our Series B. And so we made use of that. And we got a great investor in Excel. And then we saw the market declining a little bit. And we figured, we probably need to raise once more before we IPO. And so we did.
00:51:13
Speaker
We did last year, March, 300 million. And yeah, I don't think we'll have to ever race around. This Softbank was the lead investor for this 300 million. And what do you need funds for? Is it for customer acquisition or is it for opening up new countries?
00:51:35
Speaker
All of the above. I always think if you, especially later rounds, you're not going to say, oh, we're raising funds because X. No, you raise funds because you want to grow. My expectation of my investors is not that I use every dollar for a specific purpose. My expectation is that I allocate capital so that the company grows. That's what we did and that's what we're doing. So we'll continue to.
00:52:01
Speaker
But how much effort is for new initiatives? How much effort is for growing the EOR business? Does the EOR business say you need money? Is it still a cash-growing business? In general, we're not burning any cash.
00:52:16
Speaker
So we can comfortably, so the margins on EOR are really, really high. And so we can comfortably spend most of the money on new initiatives. That said, we're not really growing in the cash. So we're in a pretty good position. Including your customer acquisition costs, you're not burning any money in the EOR business. Amazing. OK.
00:52:40
Speaker
So essentially you're now looking to invest in new product, right? We did. And we continue to do is just, we always want to grow the business, right? And you continuously make the choice, like how are we going to spend money? Are we going to put it in something new? Are we going to do something existing? I think EOR is really complicated, right? It entails a lot of things. And part of it is, for example, opening new countries. You could easily consider opening a new country. It's like a whole new business line. Whereas in reality, I don't know. I don't know what is true.
00:53:10
Speaker
We continue to do what we've always done, which is to work on the things that we believe are best for our business and ultimately best for the planet. I think those go hand in hand with it. And I think I do, I would say if you want to quantify it, I think that the largest part of the investments that we make today or the money that we spend goes into new initiatives. What do you see in terms of
00:53:39
Speaker
Broad trends are a lot of companies in the West, hiring people from India. Is that a big part of your basket? Some broad trends that you've worked on?
00:53:55
Speaker
The market that we serve is essentially companies hiring people internationally. And that market is only growing. And that includes companies from anywhere hiring people anywhere. And there's a really strong correlation to size of a country and how many people get hired there. So you can imagine India being one of our largest markets, one of the places where most people are hired. But we also see a lot of Indian companies, for example, hiring across the world.
00:54:19
Speaker
And so, yeah, India is one of our biggest markets. Easy. Okay. Okay. Fascinating. So, you know, my last question to you, what's your advice to young aspiring founders? Start and do whatever the hell is necessary. That's it. I think stop reading, listening to people telling you what to do. Just start. I think the best way to learn something is just to fail endlessly.
00:54:49
Speaker
Marcelo, my girlfriend and I, we built tens of different things. We had a million different ideas. And of those ideas, we spent a lot of time programming, building, trying to sell things. And none of it stuck until we did remote.
00:55:06
Speaker
And so it just sounds like, oh, you started remote after GitLab, and then everything went well. But it's not true. I was working my ass off for GitLab. And then at the same time, I built all sorts of businesses, some of which made money, the majority of which, nothing at all. And then in the end, there was only one that's successful. That's the one that remained. It's not the one that we tried. And we just failed our way until we built remote. And we're still doing the same approach today.
00:55:36
Speaker
continuously wanting to do better, pushing ourselves, making a lot of mistakes. But if you want to become an entrepreneur, the best day to start is yesterday. The second best is today.
00:55:46
Speaker
And that brings us to the end of this conversation. I want to ask you for a favor now. Did you like listening to this show? I'd love to hear your feedback about it. Do you have your own startup ideas? I'd love to hear them. Do you have questions for any of the guests that you heard about in this show? I'd love to get your questions and pass them on to the guests. Write to me at adatthepodium.in. That's adatthepodium.in.