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April 14, 2021
Build a Remote Team Like Deel
This week we’re having tea with Alex Bouaziz, Founder of Deel. Prior to founding Deel, Alex Bouaziz was Founding Partner at Sarona Ventures and Co-founder at Lifeslice, a mobile app for creating collaborative videos.
Highlights from Series Tea with Alex Bouaziz
This interview has been lightly edited for length and clarity.
How many people work at Deel and where are they?
Three months ago, we were 40 people. Now, we have 85 people in about 27 different countries.
How did Deel start? What’s your story?
I'm originally from France. I lived in Israel, the U.K., the U.S., and Spain. Similarly, my co-founder, Shuo, was born and raised in Beijing. Both of us have had the experience of meeting amazing people through school and work. And when we started building our own companies, we had to figure out a way to hire them back home. When I started my first company, in Israel, it was bootstrapped. Israeli developers are almost as expensive as San Francisco-based developers. There was no way I could afford them.
I started looking for amazing engineers in eastern Europe to start bootstrapping my product and my early companies. And what we realized there is that they're as talented as the Israeli ones. The price comparison is crazy. Where does that gap come from? That's how we started the journey in hiring people outside of our countries.
Fast forward a couple of years, we got lucky with this idea of enabling other people to hire all over the world with Deel. That happened at the end of 2018. We got into YC.
The basis of Deel is very simple. There is talent everywhere. We want to make sure you can hire them. We want to make sure all the overhead that comes from compliance, legal, payments, invoice, etc., is handled for you. We support over 1,200 companies from SMEs to public companies. We've enabled tens of thousands of people to start working with amazing companies around the world.
Post-covid, do you believe in having local offices that people can still meet in if they're geographically co-located?
Whatever makes people happy is what we should do. If you feel happier with a small office, a WeWork, or a small location, you should do it. And we're here to support it and make that happen.
Personally, I'm happy working remotely. But we're hiring people with different characters, personalities, and methodologies when it comes to working. I don't think it's our place to impose any methodology when it comes to how they get their work done.
If they are happier there, then I'll be happy to pay for it.
Let’s talk about the logistics of hiring internationally. If I hire someone in Brazil, for example, why should I make them an independent contractor vs an employee?
Deel helps companies do either.
If you want to make them an employee, in Brazil, we'll hire that person on your behalf and give them all the statutory benefits, taxes, everything. That’ll be a little more expensive because we take all the employment liability for you. We're the employer there.
Internally, how you make that decision is up to you but here are things you’ll want to consider: Is that person really an employee? Do you want to treat them as an employee? Do you want to pay them what it means to be an employee? In some countries, you'll have up to 50% taxes on top of the fees that a company like us will charge.
What sets us apart is deep expertise in understanding what model is the best for you and being unbiased in terms of where you want to go. We're here to help you and make it work, regardless of what you think is the right decision.
So on a high level, independent contractors are cheaper for the company, but the person who is the independent contractor gets fewer benefits. And full-time employees are more expensive for the company, but the person gets better benefits.
It depends where. In Ukraine, it's much better to be an independent contractor and the country is a lot more favorable to that. In Brazil, it's a lot better to be an independent contractor, but the country hates it. They'll come and find you if you do that after a certain amount of time. Timing is a big thing. You can start an independent model and then move into an employment model later. Understanding what's right for you today doesn't mean it'll be right for you tomorrow.
I've noticed that as Mercury has gone remote, we've been biased towards hiring people with more experience. In-person, it was a little easier to train junior employees. Is that true for Deel as well?
It depends on the department. For business ops or sales, I'm much more inclined to give someone junior a chance. On the engineering side, I tend to hire more experienced people. We're growing fast and we can't take any chances on the infrastructure of Deel.
What are your feelings about cost-of-living adjustments? How are you thinking about salaries and different locations?
The word for me is everything but San Francisco. I think the prices there make no sense. So it never comes into my mind when it comes to salary adjustments. But after that, we benchmark it based on the role, experience, and location. Obviously, some amazing people want to pay people around the world the same salary, regardless of where they are. I think that's great. I owe it to my investors to give a good living to my employees, but also do what's right for the company. The locations impact how we think about hires. What I love to do is, for better or for worse, ask the people we interview what they would like to earn, a ballpark. And based on what makes them happy, give them a good offer.
From an employee perspective. It wouldn’t feel fair for an employee in New York to be making 2X what someone from elsewhere earns, right? Especially if their jobs are relatively similar.
They don't pay the same rent, right, in different countries.
Sure, but what they give to the companies is the same.
I look at it in a very pragmatic way. I want to do what's best for the company and what's best for them. The most important thing for me is that wherever they are, they're paid right.
What if someone is in a more expensive location, gets the highest salary band, but then moves? Would you readjust them?
No, I don't think it's worth having that conversation. If that person is from there and they've given a lot to the company, that's what they've negotiated and that's where they are.
When I'm hiring someone in France, great engineers are getting paid in the four or five thousands. I think that's a great market salary. You coming in and saying, “I'm going to pay them a 10K salary as an engineer there,” is just wrecking the market. You're making it uncompetitive for the local companies. I don't think that's healthy for the local ecosystem.
We pretend a little bit that incentives don't matter, but this is a huge incentive. You're saying you'll get a 50% higher salary if you live somewhere for three months first. That's going to influence people.
I agree with you in principle. I just think that my fiduciary duty to the company is to do what's the right thing and my fiduciary duty to my employees to give them what makes them happy.
We talked to some people in the Bay area or even in Austin. Their salary requirements are way too high for the value that they'll bring to the company. I think about it from the company's standpoint, which is, there is a reason why we think it's amazing to hire talent and pay them more than what they're looking at earning. But you've got to stay, to some extent, within the market.
I do think that over time salaries in areas like New York or SF, geographies that have super high salaries, will be suppressed.
That's what's going to happen. People are going to get paid less in those regions.
Maybe the average will be similar, but people in lower salary bands will get pushed up. How do you think about employee performance and performance reviews? Do you use any tools that you think work well?
Over 70% of the company has been at the company for less than six months, so this makes it a little easier on my side. We're doing it internally right now using Notion. We do a full 360 review, give a template to our teammates, make them fill it out, get feedback, and hopefully act on it, and vice versa.
You're doing performance reviews asynchronously as well?
In sync. We'll give you a template, you fill in whatever you want, and then a hiring manager and the person would review it together and see what we can do to be better.
Are you tying compensation to those performance reviews?
Yeah. We do compensation yearly, unless, for exceptional reasons, we'll do it on a six-month basis.
Curious about your weekly cadence given your remote culture. Can you go deep into your scrums or any other standing meetings you do? Do you try to standardize across the departments, or does everyone do something slightly different?
Everybody does something a little different. On the engineering side, they have two standups a day: one in the morning, and then another for the people in the North America time zone, all together.
We ship pretty fast in general, so product engineering is quite in sync, and we try to deliver features weekly. We've got a team of high performers that are very passionate. From a department basis, they all have their own things. Growth has a weekly meeting, sales has two meetings a week. It's completely fragmented on that front. I trust my direct reports to run the departments the way they see fit and the way that is most optimal for the company.
What would you say was the biggest mistake you made in running a remote team?
Reference checks. At the very beginning, I didn't do it and got burned a couple of times. The wrong person can make the worst out of an environment. That's one of the things that I overlooked at scale that you shouldn't.
And the second thing is, very early on during our YC times, we worked hard, and being remote, we worked around the clock. We burned a couple of people out very early on. We fixed that right away when we understood. That mainly came from a high-pressure environment combined with remote, where some people are in Israel, in the UK, and you're just working all the time. You have to take care of yourself.
When you say reference checks, is that just on managers and executives, or do you do them on everyone?
Do you just make a quick phone call?
Yeah, quick phone calls for pros, cons, and data reference checks. For example, on our recent new head of sales, that was the best reference I've ever heard. And so far, every single word has been true. So, it can also help reinforce your judgment on making that hire.
Do you often do a reference and then go, "Based on all of the things we've learned, the decision we've made should be reversed right now?”
When we think someone is a right fit, we'll have them hop on a call in two, three days. It's not a process that takes three weeks or a month. It can happen at such a fast pace that doing the references at the end doesn't hurt us too much. We haven't spent three weeks or one month on a specific person.
How many fun non-work-related team-building things do you do every month?
Not enough. After all hands every week, we have 30 minutes of fun time. I'll say that the time zone makes it a little annoying because the sales guys are starting their day in California. But it's helped with bonding quite a bit. Donut helps there, too.
We're not where we want to be on that front, and it's one of my goals this quarter. Making the team bond more matters a lot to me.
How do you do reference checks without any biases? Are there best practices for that?
Actually, I'm looking for bias. I want to understand why you think that person is great, or not great. Where do you think their weaknesses or their strengths are? Getting more than one reference is important, but I think biases are important.
What about removing your own biases about the person?
My own biases? No. If we get to the reference check, it means my biases are positive. I'm here to try to understand if there's any red flag, rather than anything else.
Let's say an employee isn’t performing well. How do you decide between helping to improve their performance vs firing them?
My job is to make sure people have a fair shot at their jobs, and understanding why they're not performing. This is quite literally what I'm here to do: give them the right tools for them to do their job right.
The first step is spending time with them. Where are some of the flaws in the systems they're building, and the processes that they have, and how can we improve doing that over time? Your people are what's most important, so involving your time there is critical. And what I found is if you spend the time with the person trying to help them out, they'll either succeed or realize that there's something wrong at the core, or how they're approaching the job from a cultural standpoint, and it usually becomes a mutual decision.
How do you judge if your team is motivated and enjoying themselves? Do you have surveys?
Yeah, I haven't done surveys and I'm not sure I'm a big fan of them either. I always ask my direct reports to spend the right amount of time with their teammates, making sure that everything's in order, and triggering the right meetings and one-on-ones when it's needed. One of the things I'm trying to do is proactively message everyone on the team every couple of weeks to see how they are doing, what can we do better, and If they have any feedback for me.
You have time to go message 80 people?
All of us interact quite a bit. So just pinging them and saying, "Hey," or, "How are you doing? What are you working on? What can we do better? What are some of the things?" I enjoy doing that, I do that pretty often.
What's going to happen with remote work post-pandemic? Will people go back to offices or stay remote?
There were always companies hiring around the world, that hasn't changed. Remote work is here to stay. I think you'll see a hybrid model in some of the hubs, like New York, San Francisco, where you'll have an office just for the sake of having people over. Whether or not you keep it open, or if no one shows up, is another discussion. It's going to be very company and culture-centric. How does your company react to all of this being open again?
There's no straight answer. But I think people are more forward about being okay with remote work. And you'll see a hybrid model, and some companies will feel they need to connect in location. You will be forced into finding a company that's suited for your personality.
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The Mercury Team