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No More Hustleporn

No More Hustleporn: Deel founder Shuo Wang on the opportunity to build an international Treasury product

We pulled out the highlights from Deel founder Shuo Wang's interview with Rex Salisbury. Transcription and light editing by Anthropic's Claude, curation by Yiren Lu :-)

Highlights

Shuo Wang: Yeah, definitely. I think we're a default global company when it comes to fintech. Financial related is treasury systems. Because they have offices at different places, they automatically need to manage different kinds of currencies. For FX, all those exchanges, how do they lock the rate and how do they do the hedging between USD, Euro, GBP? How do they manage their internal treasury system? I think that's a big trend and a big direction that new companies and new projects can start to build.
Rex Salisbury: Yeah, I think international treasury is a huge, huge potential opportunity area and a huge problem today. I'm curious how you guys have approached international treasury. Is it something you've largely just had to build in house that you found good solutions for?
Shuo Wang: Yeah, we tried many different products out there, so we couldn't find anyone that can support Deel at our scale. We are very big. We're the largest remote company in the world today. We also have 450 bank accounts globally. And then we manage a lot of international transactions every single month, just so that we can pay all those global employees and global talents.
Shuo Wang: Remember, I always say that we need to pay them on time or each time is actually very, very hard to do when it comes to global transactions, global payroll and how you move the money around. So we have built our own internal treasury infrastructure and treasury systems, and then we have to do hedging, sometimes on our own as well. That could be a very good direction for new companies and new founders to build.

Full Transcript

Rex Salisbury: So we have an awesome program for you today. We're gonna be talking with Shuo, the founder of Deel. Deel is the all-in-one HR platform for global teams. They help companies of all sizes, anywhere from a two-person startup to publicly traded companies, manage contractors and full-time employees in 150 plus countries around the world.

I first met the founders in 2019, shortly after they had graduated the YC's winter batch. They were a small, scrappy team, but clearly onto something pretty big. They'd had a lot of success selling their product to their other batchmates, and so I actually had them present at one of our events for the Cambridge community in downtown San Francisco in October of 2019. And then a few months later, when I was still at Andreessen Horowitz, we ended up leading their series A. We were obviously quite excited about what they were building, even back in 2019, and they've become one of the fastest growing companies in the history of a16z.

So, why did they exceed expectations? Well, in 2019 remote work was a trend. In 2020, the pandemic happened and all of a sudden, everyone is running distributed teams and being able to pay people around the world goes from not just a nice-to-have, but a necessity. But even as the pandemic has waned, Deel has continued to scale impressively.

In February of 2023, Shuo shared some stats about what that growth has looked like over the last twelve months. They grew revenue from around 60 million to 300 million, and so far, they've paid out a total of over $5 billion to 250,000 individuals around the world. So really great team operating a critical piece of infrastructure at scale.

In this interview, we're going to cover how Shuo and Alex went from being friends at MIT to scrappy startup founders in YC to eventually building one of the most important companies that is powering the future of remote work. So excited to dive in. I think you're really going to enjoy this one.

Shuo, welcome to the program. Really great to have you here.

Shuo Wang: Thank you, Rex, for having me here. I'm excited to be here as well.

Rex Salisbury: Really looking forward to our conversation. I want to back up and kind of start all the way at the beginning, talking about how you and Alex originally met. Way back, I think, even before 2014. And Deel wasn't started until 2019. So tell me a little bit about the story about how you and Alex originally met.

Shuo Wang: Alex and I met at MIT around 2013. I did my undergrad at MIT, and after that I stayed to continue my graduate school studies. That's when Alex came to MIT to do his masters. That is about almost ten years ago.

Rex Salisbury: Yeah, I know. It's crazy how much can happen in ten years. And over the course of ten years, of course, you didn't necessarily think you're going to be building fintech, let alone in international payroll. I'm curious, you guys talk through the early years of your career and then how you and Alex reconvened.

Shuo Wang: I always wanted to build a fintech company, even though I didn't start immediately, because my background while I'm at MIT, I studied robotics, so I built exoskeletons. I'm a big fan of robots at that time.

After school, I went back to Beijing, built my first company. It's a consumer electronics company. We built products, hardware to clean air qualities. We sold the company to iRobot later on, and then I was the CTO of the company.

After that I moved on to the next project, which is Deel.

Rex Salisbury: To help orient the audience, when did you start that company? When did you sell it? And then when did you start kind of thinking about the ideas around financial services?

Shuo Wang: Around 2018, I left Beijing and moved to San Francisco, and I wanted to explore more around fintech and what would be my next project.

At that time, mobile payments were very popular. We have WeChat Pay in China and we have Venmo in the states as well as there are some crypto transactions to support international payments. So at that time, payments was very interesting to me.

I talked with many people, and a lot of my MIT friends worked at big companies like Google, Facebook, all those companies. A friend of mine, his office is in Mountain View, but he lives in San Francisco. And he only needs to be in the office for three days per week instead of five days. I was thinking, wow, that's so cool that you can work remotely from home. I was like, yeah, if big companies like Google are already supporting that, maybe other companies will be doing the same.

So that's when I started to think about work remotely, plus payments. At that time, Alex was in Tel Aviv and Alex and I were really good friends, so we have very international backgrounds as well. We work with international talents, and we understand that the world is a big place, and talents are all over the place. So if we want to work with the best talents out there, it may not be just in San Francisco. That's why we started to think about building an international payment platform to support and pay talents globally.

Rex Salisbury: You're ideating on this, and I think that's important to mention in 2018, and then went to YC in early 2019, which is before the pandemic, before there's this huge mega trend behind remote work.

Shuo Wang: Inside Y Combinator, we started to interview and acquire a lot of companies to use us. What we realized is that the idea is good. A lot of the founders in our batch really liked the idea. We had around 200 companies in the same batch and around 460 founders. We tried to spend our time interviewing them, trying to get their product feedback.

We definitely tried many different methods. Initially, we did crypto payouts, and then we did PayPal payouts. Later on we decided to add not only payments, but also compliance as well.

Our demo day pitch was that we wanted to build a Gusto for international contractors.

Rex Salisbury: And so basically a series of rapid iterations. Over the course of Y Combinator, you move from being focused just on the payment aspects of things to more of an international compliance engine on top of payments and then getting a lot of continuous feedback from your batchmates, et cetera.

I'm curious to understand, too, what was the MVP? Because today you have 250 employees. You've helped disperse over $5 billion around the globe. You support 15,000 customers. But there was a time when you were very small, you were very scrappy. So what did that MVP look like, say, just after demo day?

Shuo Wang: Just after demo day, we built our infrastructure based on top of all kinds of payment providers. We first integrated with PayPal, and then later on we added Transferwise and basically all the digital wallets out there that support international contractors to receive payments. We would aggregate and integrate it to our platform.

At the very beginning, we started with international independent contractors. To add the compliance piece, we built a locally compliant contract on our platform. For example, if you are a US company and you want to hire a talent in Sweden, we will provide you a template that is compliant with Swedish local labor law.

Rex Salisbury: Yeah, I think that's a very important point is, you know, you didn't have to build the payments layer, right. You were able to stand on top of pre-existing infrastructure. And I think that's one of the really exciting things about fintech today, is that the infrastructure is better. So you have these building blocks where you can try and build and launch a new product like Deel, but then you have to build your own set of infrastructure and kind of critical products on top of that, which in many ways for Deel is the kind of compliance aspects of what you do. Right. Digesting all the local labor laws in 150 countries and making that easily accessible to the companies that you work with.

Rex Salisbury: So you're not just moving money, you're helping move money in a compliant fashion. So you graduate from the batch in winter of 2019. I'm curious to understand what the six months or so of the company's timeline right after demo day looked like in terms of what you had to build. Basically get a sense of the early days of Deel as you started to scale.

Shuo Wang: So we started with our batchmates and then after that we expanded our user acquisition across the entire YC community. And our first 100 clients are all from Y Combinator, as well as with a lot of our investor introductions. Then from that we realized that, hey, there is actually a huge need. We interviewed a lot of clients. We gather their feedback and then we develop our product based on their feedback.

Shuo Wang: So we first started with payments and then we added the compliance. We worked with local labor lawyers and then we created the 160 contract templates that embedded the other platform. So wherever that you want to hire an independent contractor in any specific country will be able to support you on that.

Shuo Wang: And then I think the third one is we started to build products around to support all kinds of independent contractors. Not only the fixed contracts, but also hourly contract, milestone contract, task based contract. And after that, Alex and myself, we spent the first six months of our time doing support. I was visiting the states at that time, and Alex is in Europe, so we cover pretty much all time zones.

Rex Salisbury: I want to pull on a couple themes. You talked about how having lawyers go through and review all the local regulations was a big part of the initial product. And I think that relates to a theme I often like to talk about, which is sometimes the most important product people at a tech company, or at least at a fintech company, are your product counsel, people who understand the regulatory aspects of what you are doing and then can help translate that and implement it in code.

Rex Salisbury: And then also, I think another thing too is one of the best ways to learn how the business operates and to get customer feedback is to be in support. And for founders, often you have no choice because you're a very small team. But even at scale, having your employees rotate through support functions give you a great lens of how the product is actually working or not working at scale in the real world.

Rex Salisbury: So that's great just to understand some of the initial build over those first six months, and then you ended up raising an A from us, or at least at the time I was at Andreessen Horowitz when the business was growing very quickly. But then in 2020, the global pandemic hits and remote work was already a trend. Now remote work is the default for everyone everywhere, and the growth and the customer demand gets a huge acceleration. And I'm curious if you could talk through for those two years post the pandemic, what were the hardest parts about scaling the company and what it looked like to help build and grow the revenue organization at Deel?

Shuo Wang: Yeah, definitely. We reached our series A at the beginning of 2020, right before the pandemic. Remote work is already very popular at that time. My problem of scaling the team and then keep up the growth is changes all the time. So every year, every different stage, I would have different problems. And then I need to solve those problems, hire different people, build a different team, and then build a different strategy as well to grow the company.

Shuo Wang: And then when it comes to manage one person sales team versus ten people sales team versus 100 people sales team versus what we have today is 500 people in the sales organization is all very different. At the very beginning, it's all about how you develop the pitch, how you deliver the product, what our product is. Later on is more around how we can solve a problem for our clients.

Shuo Wang: And then also as we grow. So initially our focus is around SMBs, but today we have a lot of global strategic accounts and enterprise companies using Deel to run payroll and then to support their companies across, let's say like 20-30 different countries.

Rex Salisbury: And I think that's not uncommon for tech companies or fintech companies, where you start with a bottom up, go to market serving really small clients. You guys started with people who are your YC batchmates, but as you grow, you often end up moving dramatically up market and having large enterprises rely on your product. And that's a completely different sales cycle, sales motion, whole different set of product needs that whole enterprise sales motion is a big leap for a company to make. So I'm curious to hear your thoughts on how you made that transition from more of the SMB kind of small scale sales to the enterprise type sales.

Shuo Wang: Deel is a little bit unique because we are very international and fully remote team since day one. And then that makes our product be able to serve or help clients not only based in North America, but also globally, including EMEA, LATAM and APAC. So that was our strategy initially. We have a global sales team since day one that help us to understand the market, understand our clients from different stages, from SMB, mid-market to enterprise.

Shuo Wang: So when it comes to hey, we want to close some of the enterprise clients, we're already in the radar. We will need to build accounts strategy for every single account out there. Because typically for enterprise clients you don't only talk with one person, you may talk with their entire legal team, you may talk with their entire payroll team or their entire HR team. It could be 10-20 people when it comes to enterprise sales, it's all about project management.

Rex Salisbury: Yeah, absolutely. I think that's one of the hard parts about growing an enterprise sales org. It's not like you're just building an enterprise sales team. You often having to build a lot of other organizations as well. Cause you're not just a product company, you become a solutions company. So you need the sales team, you need the sales engineering team, which relates to the implementation, and then you need the customer success team. And you're having to do this while building a team of 500 sales folks around the world in different centers with a changing product. And so it's a lot to build.

Rex Salisbury: But you mentioned something else I wanted to touch on, which is not just how you have to change the enterprise sales organization, but also how you had to make a lot of product changes to become more enterprise ready. And I would love to hear what some of those product changes you have made over the last few years are that have been big unlocks in terms of enterprise readiness.

Shuo Wang: So our aim is to deliver the talents, their salary, on time and then all the time. And that's number one. And then number two is that we want to make sure that when our clients hire talents out there, regardless their country, their status, that it is always compliant. On top of that, for enterprise clients, what is special, what they need is all kinds of integrations because they have a very mature tech stack.

Rex Salisbury: Where are the big buckets of integrations that matter? So I'm sure accounting software, I'm sure there are a lot of other HRIS systems. Probably there are other payroll systems.

Shuo Wang: Accounting software is number one is typically what enterprise clients care the most. And then number two is HRIS system.

Rex Salisbury: And then outside of long tail of integrations you need to support. Have there been other big product unlocks for the enterprise clients?

Shuo Wang: Annual billing and then prepaid features requirements are all very different compared to SMB clients or mid-market clients. And how we build the net pay, how we build invoices that fits into different enterprise clients needs are all very, very customized.

Rex Salisbury: So you guys are mostly a B2B company. You're selling international payroll to companies to support their workers, but you also have the end employees on your platform who are now getting paid through Deel. And I'm curious what kind of products and features you're thinking about building out now or have built out recently for those end employees.

Shuo Wang: So we have different models today. We started to support companies to pay independent contractors. And then towards the end of 2020, we added our employer of record product. And then in 2022 we released our global payroll product. For any companies that have an entity in any specific countries will be able to help them to run payroll locally.

Rex Salisbury: So basically the kind of product progression has been originally support independent contractors who are probably not associated with any legal entity of the company or of Deel to them being able to support employees globally who are technically affiliated with the deal legal entity, but employed or contracting in some sense for the poor to now actually allowing people to run what's truly global remote payroll, where they bring their own legal entities. And you're simply the payroll and compliance engine on top of that, which is super exciting, I think points to the ways in which the product has grown over time.

Rex Salisbury: I also want to talk a little bit about culture. So something I see floating around whenever people are talking about deals, they'll sometimes reference deal speed. And I'm curious what deal speed means to you and how that's manifested itself within the organization.

Shuo Wang: So deal speed, that means we execute and then we deliver. We constantly develop strategies based on market demand, develop product roadmaps based on client feedback, and then deliver both. And then we deliver those in a faster manner.

Rex Salisbury: It seems to be working. I know in February of 2023, you guys shared some of your revenue numbers and you went from essentially around $60 million in revenue twelve months before, to about 300 million revenue, which is phenomenal growth for that scale. So hopefully deal speed can keep unlocking some big wins.

Rex Salisbury: One other thing I want to talk about, because you have a front row seat to this. The pandemic is starting to ebb, but obviously that doesn't mean remote work is stopping. So what are some of the trends you're seeing in remote work now?

Shuo Wang: I think remote work is mainstream and it's going to be a kind of lifestyle. A lot of talents prefer to work from home versus spending the time to go back to the office. For a lot of the time in person meetings are important, but it does not need to be every day.

Shuo Wang: This hybrid model and companies hiring remotely is still a very popular trend. I'm also seeing a lot of finance departments, from company controllers to CFOs, making decisions to hire talents internationally. This is because they will be able to expand faster, expand into different markets, gain different revenue, as well as cut their fundamental operating costs. So hiring internationally, hiring globally and building a global expansion strategy is still on top of company leaders' minds.

Rex Salisbury: So definitely still seeing lots of companies do it, which is not surprising. But also maybe the types of employees and the kinds of departments they're hiring internationally from has changed. Whereas I feel like originally it was a lot of folks in product or in engineering were kind of the key folks people are hiring remotely. Whereas now you're seeing a lot of people within finance departments, for example, being sourced from around the world.

Shuo Wang: Yeah, finance department, sales and marketing - the finance department are the ones that are making the key decisions. They would make the decisions to say where they want to hire, which markets they want to expand to, and where are the most financially efficient or cost effective markets that they can hire talents from.

Rex Salisbury: So yeah, not just different departments, but also kind of the level of seniority and the types of folks who might be very crucial to the high level strategy behind the company. Increasingly even those folks are based remotely.

Rex Salisbury: But you see a lot of other companies that are default global, to borrow a term from my colleagues at a16z, which default global is essentially just saying companies from day one will have employees and go to markets in many countries around the world as opposed to just starting in the US. Are there other bits of infrastructure that you see people struggling with or that Deel itself as a default global company? It's like, man, it'd be great to have better support and tools for these because these might be ideas for entrepreneurs who want to build international infrastructure and financial services to pursue.

Shuo Wang: Yeah, definitely. I think we're a default global company when it comes to fintech. Financial related is treasury systems. Because they have offices at different places, they automatically need to manage different kinds of currencies. For FX, all those exchanges, how do they lock the rate and how do they do the hedging between USD, Euro, GBP? How do they manage their internal treasury system? I think that's a big trend and a big direction that new companies and new projects can start to build.
Rex Salisbury: Yeah, I think international treasury is a huge, huge potential opportunity area and a huge problem today. I'm curious how you guys have approached international treasury. Is it something you've largely just had to build in house that you found good solutions for?
Shuo Wang: Yeah, we tried many different products out there, so we couldn't find anyone that can support Deel at our scale. We are very big. We're the largest remote company in the world today. We also have 450 bank accounts globally. And then we manage a lot of international transactions every single month, just so that we can pay all those global employees and global talents.
Shuo Wang: Remember, I always say that we need to pay them on time or each time is actually very, very hard to do when it comes to global transactions, global payroll and how you move the money around. So we have built our own internal treasury infrastructure and treasury systems, and then we have to do hedging, sometimes on our own as well. That could be a very good direction for new companies and new founders to build.

Rex Salisbury: Well, thanks so much for sharing your perspective and kind of the story on Deel, how you guys have gone from being one of the small companies at YC's winter 2019 batch to now powering some of the largest companies around the world as they run their own international talent operations. So thanks very much for coming on.

Shuo Wang: Thanks, Rex, for having me again. And then thanks for always supporting us.

Rex Salisbury: Well, awesome. Thanks so much. It's been great having you.

Shuo Wang: Bye bye.

Rex Salisbury: Thanks so much for joining us. Hope you really enjoyed this conversation with Shuo. If you'd like to follow and discover more content like this, feel free to hit subscribe. And oh, by the way, we also now have a podcast so you can listen to these same interviews on the Cambrian Fintech podcast, which we'll be linked to in the show notes. So thanks so much for joining us and hope to catch you next time.

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