Deel CEO, Alex Bouaziz on Raising $300M+ at a $17BN Valuation

1. 0:00 – 1:20

   Intro

   1. ABAlex Bouaziz0:00

      I feel pretty confident that the same way we've been winning in the marketplace, we'll win in the court of laws. We just need to play it out. I think I'm in constant wartime, sadly. September was our first 100 million revenue month, which is a very exciting milestone for the business. This round, these new investors, all our board has always been with us, kind of shows for where we stand as a company towards these type of litigations.

   2. HSHarry Stebbings0:19

      Ready to go? (instrumental music plays) Alex, dude, it has been, like three years? It's been a while since we last sat down and chatted on the show. Uh, you've been actually working really hard instead of talking to podcasters like me. But thank you for agreeing to do this, man.

   3. ABAlex Bouaziz0:45

      Well, thank you for having me. We actually did a stage together not too long ago, right, in Paris or something like that.

   4. HSHarry Stebbings0:51

      Ch- I was actually pissed about that. You know why? 'Cause you were so good, and we didn't have it recorded, and I actually wanted to use it for a podcast (laughs) . And the team were like, "No, we didn't- we- this wasn't a podcast session, Harry." I'm like, "Damn it, we missed a chance to put some great ads in. Fuck that." (laughs)

   5. ABAlex Bouaziz1:06

      Well, um, I'm very excited to do this with you. It's been a while. And thank you for being a, a great, uh... a great friend, and amazing.

   6. HSHarry Stebbings1:12

      Dude, y- you've got some exciting news, so I'm gonna start with the exciting news. What is the exciting news that we've got today?

   7. ABAlex Bouaziz1:19

      Yes, um,

2. 1:20 – 3:00

   Announcing $300M Fundraise at a $17BN Valuation

   1. ABAlex Bouaziz1:20

      well, it's been a while, actually, since we've raised primary money. Uh, we did a small round in, I think, 2023. Uh, but since then, like, the... I think the last time we raised significant primary capital was in 2021. So, I think the big news for us is we're actually gonna announce a round of over $300 million at over $17 billion plus in valuation. So, it's gonna be a big deal for us, and we're super excited to share that with the, the rest of the world, and, and actually the company 'cause you're getting the... You're getting this a bit early. (laughs)

   2. HSHarry Stebbings1:47

      Dude, I- I'm thrilled and honored. Really, I, I was so touched when you said that, you know, we could do this. Over 300 at over 17, who's doing the round, dude?

   3. ABAlex Bouaziz1:56

      Um, so I'm genuinely so excited about our investors. Uh, so it's actually co-led by three, um, three investors. The first one is Ribbit Capital, which is our new investor. It's actually the first time that they invest into Deel. And maybe we'll talk about this after, but I've been... Uh, tr- I actually love the team there. I've been trying to get them to (laughs) invest into Deel for... since our Series A, I think, actually. Uh, and then by our amazing and, uh, longstanding investors from Andreessen Horowitz and Coatue. Um, so both of... Three of them actually are co-leading this round.

   4. HSHarry Stebbings2:27

      I got you. Uh, fanta- By the way, I love Ribbit dearly. N- you know, Nick and Miki are some of my favorites. Three great ambassadors there. Dude, massive congrats. Why was now the time to do it, by the way?

   5. ABAlex Bouaziz2:37

      Yeah. And, you know, it's quite interesting 'cause Deel has been a profitable company for three years now, so we've been generating, uh, cash, which is always a, a great thing to do. Uh, and we haven't needed investment for, for quite a long time. Um, I think there's a couple things here that were very critical for us. First, um, we've been pretty aggressive on the M&A front, you know. Uh, I think we've done about 13 acquisition, which really

3. 3:00 – 3:44

   How Deel grew through 13 acquisitions

   1. ABAlex Bouaziz3:00

      helped us grow really fast, uh, build new products, bring amazing founders in, and really kinda take over a big part of the global payroll market share. So, you know, bringing in from... new, fresh capital, and, you know, resetting the valuation is also something that's important to the actual value of the company. The second part is, uh, like I was telling you, I think, uh, Miki and Nick are some of the best investors (laughs) in the world. And, uh, I wanted them involved in the business for a very long time. So, uh, you know, them wanting to invest with the Coatue team, with the A16Z team was a great opportunity, and it just made sense to, to kind of go for it when they came with the offer.

   2. HSHarry Stebbings3:35

      Dude, I would be in trouble from the Twitter sphere-

   3. ABAlex Bouaziz3:40

      Oh, yeah.

   4. HSHarry Stebbings3:40

      ... if I didn't progress this conversation and say,

4. 3:44 – 4:35

   Responding to Rippling and media drama

   1. HSHarry Stebbings3:44

      there was obviously a lot of, um, publicity around the Rippling story. What's the latest with the longstanding litigation with Rippling?

   2. ABAlex Bouaziz3:52

      Yeah. So obviously, I can talk about ongoing litigations. Um, I think it's unfortunate that the, the way they're trying to compete is, uh, through media and through headlines and things like that. But I think the thing that really matters is how the business has been growing, right? Um, actually, we're going to announce as well that September was our first 100 million revenue month, uh, which is a very exciting milestone for the business. Um, and, you know, I think this round, these new investors, o- our board has always been with us, kind of shows for where we stand as a company towards these type of litigations. And, you know, we're looking forward on building for our customers and being focused on delivering.

   3. HSHarry Stebbings4:30

      It's so hard, dude, 'cause like, I just have questions that come up mid,

5. 4:35 – 7:30

   Being an outsider to Silicon Valley's inner circle

   1. HSHarry Stebbings4:35

      mid, mid-conversation, and I'm like, "Oh, I'm gonna get in trouble for this." Do you ever feel like you are chastised for not being a Valley company? And what I mean by that is, like Rippling have the Silicon Valley illuminati around them. And in the same way for me, like, there are some media companies, which I'm not gonna name 'cause they'll hate me for it, but like, they just have the Silicon Valley, the Collisons and the YCs around them which anoint them, and I feel chastised for not being there and not being in their circles. Do you feel the Rippling inner circle and Deel outside of it?

   2. ABAlex Bouaziz5:07

      So I- I- I think I can't really comment o- on Rippling. I would say that we're kind of in the middle. You know, we're not... Uh, s- I'm not a Silicon Valley-based founder, uh, but we do have Y Combinator as an investor, right? They were one of our early backers. Um, so I, I would say that there is advantages into being in the Valley, right? I think seeing a lot of people and, you know, them understanding the business very thoroughly is very important. I think a good example for us is, um, looking at Deel from outside of the Valley. You know, a lot of people, we kinda went, you know, "You're the hero until you kind of become the villain, and then back to the hero story," because people were kind of looking at us thinking, "Hmm, they're growing so fast. It's so amazing. They're growing so fast. It's so amazing. How are they growing so fast?" Right? And like, if you're not in the Valley and people don't understand you, uh, they can, you know, have a lot of questions, and, you know, if you're not there (laughs) to answer them, you're not in the side conversation, it's a bit harder. Not that it matters, to be honest, because it hasn't mattered to us. I actually think a good learning for me is-... pros and cons on this. I'm not, I'm not 100% sure how I feel towards it. But the fact that we didn't raise money since 2021, if you were not really counting 2023, uh, means that I actually didn't spend a lot of time with investors. So, no one actually knew our numbers apart from our shareholders. Uh, we've been buying every single secondary on the market every single time they could. Uh, so a lot of people were kind of looking at us, like announcing one billion in AR and being like, "What's going on there? We don't really understand it." So, uh, you know, it was, I think maybe that would have been a good learning opportunity to spending more time with investors on my side. Just that they really understand how fast we're growing and why we're actually growing, which is the most important part.

   3. HSHarry Stebbings6:43

      I- I- I see it with one of our companies also, Airwallex, which is an incredible business.

   4. ABAlex Bouaziz6:48

      I love Jack.

   5. HSHarry Stebbings6:48

      They're not love Jack too. And the business is like one of the best businesses that I don't think people know enough about. But because it's not in value-

   6. ABAlex Bouaziz6:56

      Right. It's, it's a catch up. I'd say, it's, it's like, it's kind of a mix, right? 'Cause as a founder, you wanna be super focused on your business. Uh, but if you look at Jack's growth, it's like outstanding, right? And you're thinking, "Okay, like it's an Australian founder, not based in the Valley. How is this business growing as fast when some similar businesses in the US are not growing as fast?" And I think there is value into actually spending time educating investors that may be your investors of tomorrow, especially if you go public eventually as well, right? So, I'd say that, that was maybe a small mistake we made, where the fact that we've been profitable kind of like made us not go out in the market as much.

   7. HSHarry Stebbings7:29

      Can I ask

6. 7:30 – 9:20

   Playing Offense vs Defense as a wartime CEO

   1. HSHarry Stebbings7:30

      you, in terms of lessons, if we're honest, what have you learned about playing offense versus defense, in terms of going through this public dispute as a CEO?

   2. ABAlex Bouaziz7:41

      A- again, I didn't pay attention too much to it because I knew, I know where we stand, I know the facts. And I think, you know, having our board behind us has been, has been really helpful. I think it's always interesting, right? Like this wartime versus peacetime CEO concept as well, right? And, uh, funnily enough, Ben is, uh, like my board member. I spend a lot of time with him, so it's always amazing to learn from him. Uh, I think there is moments where you need to understand where you're strong and where you're not strong, right? Like which fields do you play in, when do you play your hand, and how do you do it? We took an approach that really worked for us, which is like focus on what we know how to do best, focus on like navigating the stories and the places that are important for us and telling our truth. And I think that was the, the best thing to do. There's still a lot of work to be done, to be very honest with you. And, uh, I'm pretty, you know, I feel pretty confident that the same way we've been winning in the marketplace, we'll win in the court of law. So it's just, we just need to play it out. I do think one interesting thing which I was telling you about is like, I've learned a lot about the media as well. Um, it's like, you know, I've never really looked at it from these eyes, but you see like those big tech journals that are kind of going and like making up stories for clicks. Uh, which, you know, when I was, uh, a bit younger or maybe like an early stage founder, like, you know, our dream was to get on like some of those articles, right? And like when you see the things that they can publish with unnamed sources that are completely false, with no retractions and things like that, you kinda start thinking that in many ways, there's something super broken about media. And, uh, I'm looking forward to someone solving that problem, really (laughs) .

   3. HSHarry Stebbings9:11

      Did you flee to Dubai?

   4. ABAlex Bouaziz9:14

      (laughs) No. I'm very happy living in Tel Aviv, and I've been living here for the last five years. You know, you can come visit

7. 9:20 – 11:23

   How Alex stays calm through public disputes

   1. ABAlex Bouaziz9:20

      (laughs) .

   2. HSHarry Stebbings9:20

      You said you don't really think about it. Do you really not? And you said like you go through hero, villain, hero. When you're a villain, do you really not? It hurts me when I have shit about me and it's nothing compared to what you got.

   3. ABAlex Bouaziz9:32

      No, of course. I mean, you know, the person that gets a bit more pissed is maybe my wife, 'cause she reads some of the stories and she's like, "I know that's not true. I know that's not true," which is kind of like funny. Uh, on my side, I, I try my best not to, right, always, because, uh, there's so many things are happening in the business. Our customers give us our trust and they understand where we're going. I think a lot of the facts also make it a lot easier, uh, to, to explain many of the things that, that are being, uh, being said and, uh, are not true. So, I, I don't think about it. I definitely don't think about as much as, uh, maybe in March, right? When I had to deal with like the early stage of the litigation. By now, it's like old school, old news for us until we really can beat it out in the court of law. So, I think I'm being rigorous enough where, you know, I try to focus on my customers because that's the only way, right? And if anything, I think it's proven to be the right way of dealing with it. And we've been able to really grow in the last two quarters, which actually shows for an amazing resilience of the business as well, right?

   4. HSHarry Stebbings10:26

      I think you actually mastered a comms strategy in a very different world. And I don't know if this was a very... I'm sure it was deliberate and thought through. But when you think about the, the cadence of comms today, when OpenAI gets a $100 billion investment from NVIDIA, it's super in- interesting for 30 minutes. And then it's like, "What next?" And the speed of news cycles is so fast. The best way to get over something is to say nothing. The worst thing to do is to start a response, and then it becomes something. That's a desperately bad mistake.

   5. ABAlex Bouaziz10:54

      Yeah, there's different ways of dealing with, uh, with this in general. I think, uh, my stance is, uh, you know, when I feel right in my shoes and I know what I'm doing, I know where we're going, there's no point in, uh, trying to fight, uh, useless battles, right? Like, uh, let's win in the court of law. Let's put this behind us. Just like, uh, you know, I don't know if you saw, but, uh, we had something in January, a similar lawsuit, uh, you know, that we believe, uh, from... came from a similar company. And, you know, putting that to bed was the best way of showing that, uh, we know what we're doing and we're doing great.

8. 11:23 – 14:58

   Why Deel's leadership culture is so hands-on

   1. ABAlex Bouaziz11:23

   2. HSHarry Stebbings11:23

      So, I spoke to many of your ambassadors before. Yasmin-

   3. ABAlex Bouaziz11:26

      How was that? (laughs)

   4. HSHarry Stebbings11:27

      Yeah, it was great. Honestly, it was super lovely, 'cause I know most of them already (laughs) . Um, but like Yasmin, Anish, many more. And they all said that you're the most hands-on CEO that they work with. And dude, like I introduced you to a Project Europe company. For context, this is like two, three teenagers building an amazing business. And I'm like, "Who should I introduce them to on your team?" And you were like, "Me." And I'm like-

   5. ABAlex Bouaziz11:52

      Oh, yeah.

   6. HSHarry Stebbings11:52

      "No, no, this is like a junior AE job." No disrespect to junior AEs, but like, you're the only CEO who would be that hands-on. Let me... And they said you're the most hands-on CEO they work with. How do you respond when you think about how hands-on you are?... and your approach.

   7. ABAlex Bouaziz12:10

      So, I think being hands-on is very critical for the business as you grow. I think the worst mistake you can make as the companies scale is to be too far away from the business to really know what the problems really are. And I think this is kinda like a cultural point for Deel, right? Top down, all of my leaders are hands on, and then if my leaders are hands on, middle management is hands on, and the ICs see this the exact same way. So, I think culturally, it's always been very important for us as a business. It's always been very important for me, and it really helped me navigate different paths of growth, new products, uh, or even spotting gaps into the organization, right? I think every company at more than 50, 100 people start having flaws in their designs, in their org, in terms of response time, in terms of how things are happening. And if you are 10,000 feet above, kind of looking, um, looking down at, like, the organization, hoping to figure out what's wrong, it just doesn't really work. Um, so being, actually even being seen by our customers, 'cause it's not just you, right, and our investor, my customers, um, I get a lot... Uh, it's not that we get that many, but I- I get people pinging me about, "Hey, like, I have a problem with this," et cetera, directly. That really does help me have a better view of, like, what's wrong in the organization in everyday basis. And when you're growing at the pace where we are, right, like, billions in our profitable business, acquisitions, 7,000 people around the world today, like, it's very easy to lose sight of what's going on if you're not really hands on and really focused.

   8. HSHarry Stebbings13:37

      Deed, how many direct reports do you have, speaking of being hands on?

   9. ABAlex Bouaziz13:39

      (laughs) Um, not that many. I'm not Jensen at all. (laughs) I have, like, 20, uh, or a little over 20. Uh, the thing is, my direct reports are really strong, so, um, I've never had one-on-ones with them. I've never truly had performance reviews with them. I kind of give them continuous feedback all the time, and we talk all the time. We work all the time, and that is, I think, a much better setup from a hierarchy perspective than the traditional, like, uh, I only have a few reports, and I talk to them on a day-to-day ca- like, on a one-on-one cadence every week or whatever that is.

   10. HSHarry Stebbings14:14

       If you don't do one-on-one cadence every week, how do you think about building that continuous information flow, especially when you're not in the office, but how do you have that tight feedback loop together?

   11. ABAlex Bouaziz14:23

       Um, I speak to them all the time, (laughs) literally. If you, if you take any of my reports, they get messages from me, or they send me messages every day. My- my job, the way I view my job is I'm here to enable. So, what's broken? What's not working? Why is it not working? What can I do to make it better for you? Uh, is it resources? Is it just prioritization? Is it, um, reorging? Like, my job is kind of like looking at the different parts of the organization and being present for you to be your best- your best self, right, and do your best work. And being hands on with them and the problems they see every day really enables me to do that.

9. 14:58 – 16:07

   Work ethic: Alex's thoughts on the "996 hustle"

   1. ABAlex Bouaziz14:58

   2. HSHarry Stebbings14:58

      Deed, 996 and hustle culture is more pronounced than ever before. You said about that kind of work ethic, hunger. How do you feel about the 996 obsession today?

   3. ABAlex Bouaziz15:08

      I mean, I wish I worked 996. I think (laughs) I work a little harder than that personally, uh, and I think most of my leadership does, too, but I just don't think it- it works at scale really, right? Like, I- I think there's moments in the company where you need to push hard, and there's moments where things are a bit more in control. Um, I actually like to break down this in, like, different organization. Like, not everybody needs to be going at a thousand miles per hours all the time. Right? Some parts of the organization, at a very specific moment, need to, and as long as you're in control and you're pushing for the right places at the right time, you're not gonna burn through amazing talent, right? So, being, actually being hands on is very helpful in there, right? When you're able to say, "Okay, you know what? Like, that product is not good enough. Open a war room. Everybody's gonna work more than 996 for a couple weeks to get it ready." That makes a lot of sense to me. If you're just pushing the pedal all the time, you're just not gonna do it. You're not gonna do yourself a favor, and your team is just not gonna work out.

10. 16:07 – 20:09

    Does wealth make founders better or worse leaders?

    1. ABAlex Bouaziz16:07

    2. HSHarry Stebbings16:07

       Does being rich help you be a better leader?

    3. ABAlex Bouaziz16:11

       Um, I've done less secondaries than you think, actually. Um, so the way-

    4. HSHarry Stebbings16:16

       But I think being, I think being rich as an investor makes you a better investor. You see upside, not downside. You're actually able to align more with founders because your career is not on the line. You've- you've already got enough money. It's fine, and you're much more level.

    5. ABAlex Bouaziz16:32

       Yeah, I'm torn on this, uh, because I do think, and I'm not gonna name anyone, (laughs) but I do think that a lot of my friends that have built amazing businesses go through, like, this awkward phase where they've made enough money to not work as much anymore, and a lot of things happens in their life because they get pulled by so many different external topics that want their attention. Um, and the business starts stagnating a little bit, because I do think, like, founders create a lot of momentum within an organization until they actually get pulled back, (laughs) and when they see the business is n- not- not as growing anymore, and they start having maybe some troubles with their board and things like that. So I- I- I- I actually do think it has a form of a negative impact if you're not thought out about how you're gonna manage this at scale and how this is going to impact your day-to-day work. Um-

    6. HSHarry Stebbings17:29

       How does it, how does it have a negative impact?

    7. ABAlex Bouaziz17:32

       I mean, just very, very pragmatic, right? Like, if you've never had money, and you suddenly have a lot of money on your bank account, and you start spending it on a lot of different things, then your mind is just somewhere else, (laughs) right? So, uh, I've- I've-

    8. HSHarry Stebbings17:43

       Yeah, but I would s- I would say that's just, like, a B-tier founder, and I- I'm being direct with that, but, like-

    9. ABAlex Bouaziz17:49

       No-

    10. HSHarry Stebbings17:49

        ... okay.

    11. ABAlex Bouaziz17:49

        No, no, A-tier founders as well. (laughs) I've seen it happen with, uh, amazing founders. It's easy to get lost, um, and I think, eventually, you get a big reminder of why you're here and get your ass kicked because no matter how many of them has made money, um, you know, it's typically not as much as, uh... You know, it can be a lot of money, but it's- it's not as much as the potential money they could make over time, right? And there's a lot of people eventually on your cap table that are here to remind you that they've trusted you with a lot of money, and they want you to, uh, deliver on the promises you have. So-... I'm pretty fa- again, if you've very thought out about what it means to you and how you're going to manage this and how it's going to affect your life over time, then it's fine because it is going to affect your life, right? Uh, and I've seen that trap happen to a few of my friends, but thankfully they've turned it around big time, so I can't- can't say anything bad. (laughs)

    12. HSHarry Stebbings18:43

        Did you ever get high on your own supply? We mentioned both being young there. I- I was a little bit younger than you. I definitely got high on my own supply at 21, 22 thinking I was the shit.

    13. ABAlex Bouaziz18:54

        Maybe. Um, I think there is a moment where you're like hot shit, everybody wants to invest, you're getting term sheets left and right, where you start being, uh, inconsiderate. But I actually kind of, like, have gone through enough cycles now, although it's not been exactly a long time, where I- I actually kind of regret not having been, um, some of those times slightly maybe nicer or more considerate than I was. And, you know, I see it with some of my friends or some people that are raising, like, crazy rounds right now where my take is, like, at some point everything that goes up must go down. (laughs) And at that point in time is when you start thinking, "Uh, maybe I shouldn't have done this or I shouldn't have done that," right? And I think, um, I don't think I was that intense on this. I'm sure e- I'm sure some people might think I was. Uh, if I- if it was, it wasn't ever intentional, so I'm sorry. Uh, but I- I do think that, uh, that over time it happens to founders that build companies that have significant traction for a short amount of time.

    14. HSHarry Stebbings19:53

        Dude, what's the craziest VC story you have of like term sheets flying to see you, you name it? Like, we were- you were and are one of the hottest companies in the world, but also during your 20s-

    15. ABAlex Bouaziz20:03

        Hey, we're still hot. We're still hot. Thank you. (laughs)

    16. HSHarry Stebbings20:06

        Yeah, yeah, yeah, yeah. You just scaled. Um,

11. 20:09 – 22:22

    Raising $700M over Zoom during Covid

    1. HSHarry Stebbings20:09

       what's like one of the craziest stories?

    2. ABAlex Bouaziz20:11

       I- I has some crazy stories that are not good stories, so I can't really share those ones. One of our investor at our series A calling me about COVID and telling me, "You guys, uh, you need to fire everyone and stop doing whatever you're doing 'cause COVID is gonna kill the company." And me answering to them, "No, we're doing okay. We're actually gonna raise to Series A." And then getting back channels from this saying like, "Yeah, the guy thinks you're a carpet seller. He just thinks that you're bullshitting for your (laughs) for your Series A and there's nothing that's going to happen." And then me going back to two weeks later with a term sheet from Andreessen Horowitz telling them, "Look, this is my Series A, but, uh, you know, you weren't very nice to me, so (laughs) you're not getting your pro rata." Uh, that- that was a funny story for sure. I would s- I would say, look, if you wanted like a crazy story, I mean we did raise $700 million from my living room in Tel Aviv, right? Like, on Zoom without meeting any of our investors.

    3. HSHarry Stebbings21:04

       What? Well, tell me this story. Is- when was it?

    4. ABAlex Bouaziz21:06

       Well, do you mean every single round we raised was during COVID, 2020, 2021, 2022. I was in Tel Aviv, you know? (laughs) So, I did raise most of the capital we had in the company without meeting our- our investor. Actually, you know what? The Ribbit guys flew in to see me and I flew, like, we kind of met halfway in the country. And that was the first time I ever had a closing dinner in my life, so... (laughs)

    5. HSHarry Stebbings21:29

       No way. Did you not want that? Like, before I make an investment, rule number one, from 2021 mistakes, I will not invest unless I meet a founder in person. It just led to bad investment decisions. So much is learnt from s- me seeing you. Dude, I love you s- like, as a person. When I see you, I feel your energy, your charisma. It- you need to be in person.

    6. ABAlex Bouaziz21:52

       Yeah. But- and yeah. I mean, I agree with you 100%, but, you know, in 2020, 2021, I couldn't be in person. (laughs) And this is when we raised most of our money. (laughs) So- and we didn't do any big fundraise until this one now, right? So that was my experience, right? The- from fundraising without actually meeting, uh, meeting people.

    7. HSHarry Stebbings22:10

       Dude, do you think pro rata should be an actual right?

    8. ABAlex Bouaziz22:13

       No. I think pro rata should be earned.

    9. HSHarry Stebbings22:17

       Hmm. Do you advise founders always raise at the highest price?

12. 22:22 – 25:35

    Are high valuations and investor brands worth it?

    1. HSHarry Stebbings22:23

    2. ABAlex Bouaziz22:23

       No. Because I think M&A is a very viable option, a very viable option, and I think that the higher you are, the harder it is to get done. Um, and it depends what you want in life and it depends how big your business is actually gonna be. I think trying to go for the home run, I'm very glad I did, uh, in terms of like the ambition. We still have a lot of work to do, but I'm s- very glad that we went for the billion-dollar valuation and all of those things. It could have backfired as well. Um, so I think that was much more naive from my part, which worked out okay. (laughs) Um, but I do think that there is some optimization where you need to think about the future of the company, and m- highest valuation does not always mean best outcome for the business and the people.

    3. HSHarry Stebbings23:07

       Do you think venture investors do actually add value?

    4. ABAlex Bouaziz23:10

       I mean, you know, I think Andreessen Horowitz has been adding tremendous value. And I'm not saying that for like, uh, they help me find board members, they help me place amazing people in the business. I think general companies-

    5. HSHarry Stebbings23:19

       Have Andreessen been the best?

    6. ABAlex Bouaziz23:21

       Andreessen has been top tier, uh, by far. And they've always been super supportive through rainbows and unicorns all the way to shitstorms. They stood by us like no investor ever did. I- I think in a journey, if you can get investors that are value aligned with you and that truly care about the business, not just the return, then you can make good friends that you can, like, untrust yourself with. It's a long and tough journey.

    7. HSHarry Stebbings23:47

       The hard thing is though, dude, like today, and this is like fundraising on the ground in venture today, founders run a more transactional process now than ever. I meet you today, you say, "Hey, Harry, round's moving fast. I need a decision by Friday. Uh, it's Wednesday today."

    8. ABAlex Bouaziz24:03

       But, but th- but that means you didn't spend time with me before. (laughs) You're coming in at the last minute to- to be jumping around a round that's already more or less done.

    9. HSHarry Stebbings24:10

       No, because they've been told by their prior round investors, "Do not take an investor meeting until you're fundraising. Don't build relationships." And so you're, you're asking-

    10. ABAlex Bouaziz24:18

        Yeah. Yeah. So that's a mis- yeah, no, that's a mistake. I think building a relationship with great people is helpful. And I think there's a lot of ways for founders to make those meetings useful. For example, I would have never taken a meeting with an investor, building up the relationship if the outcome of that re- that meeting wouldn't be, for example, like two, three business intros of potential customers, right? So, you know, there's value for you, there's value for me. If I can get a bit more value, it's even better.

    11. HSHarry Stebbings24:39

        Do you share numbers in those meetings?

    12. ABAlex Bouaziz24:41

        ... I share high-level numbers? Why not?

    13. HSHarry Stebbings24:44

        Yeah.

    14. ABAlex Bouaziz24:44

        Like the thing is, most of your numbers are valuable if someone really wants to figure them out, right? Like, it doesn't truly matter. Uh, un- like, I don't believe in, like, hiding numbers. The, the way I think about venture capital transactions, it's not them giving, like... Sure, very early on, it's them giving you money to try to build something knowing it's gonna fail. But as you grow as a company and there's a brighter future and a clearer vision of where it's going, I see this much more as a transaction where it's you selling them a part of your business for them bringing you value, which goes beyond money.

    15. HSHarry Stebbings25:13

        Do you know, Mickey taught me one thing. He said, "Harry, you've never won or lost. You're only ever ahead or behind. This is an infinite game. Remember that." And, uh, it was especially about relationships and the value of long-term relationships, not being here for the quick win or getting something quick. And it-

    16. ABAlex Bouaziz25:31

        I've not got into the other advices from Mickey just yet, but I'm excited about them. (laughs)

13. 25:35 – 26:20

    Do investors really add value?

    1. ABAlex Bouaziz25:35

    2. HSHarry Stebbings25:35

       Dude, it was fucking great. Uh, how important is investor brand? You have big brands behind you now with your Andreesens, with your Ribbits, with your Cote. Does investor brand really make a difference?

    3. ABAlex Bouaziz25:47

       I think so. I think if you wanna assemble the best team in the world, you gotta have the best investors in the world. And I think in many different ways, they can help you attract talent, they can help you attract more capital, they can help you navigate through complex situations that they have lived before, right? Like, every time I talk to Ben, right, like, um, it's crazy the amount of knowledge that he has, right? It's crazy the amount of pattern matching that he has in terms of how the b-

    4. HSHarry Stebbings26:09

       What's your Yoda knowledge from Ben? I gave you mine from Mickey. Come on.

    5. ABAlex Bouaziz26:14

       Oh. Yoda knowledge. I hope he doesn't get mad at me for saying that one. Uh, but in his mind,

14. 26:20 – 35:45

    The truth about CMOs

    1. ABAlex Bouaziz26:20

       in his mind most chief marketing o- officers are no good. The truth is, I actually agree with him, and for a while I was looking for a CMO with this experience, that experience, that experience. And what I've realized is, like, the best CMOs I've encountered over the last few years are the ones that are just able to be so much more first principle into understanding what's going on, and going really deep into the data instead of being super superficial. Uh, and you don't usually get that from a traditional CMO background. So, like, the contrarian stance me and him have kind of developed is that your CMO should be an engineer. (laughs)

    2. HSHarry Stebbings27:02

       Do you know what's so funny? The best CMO in the world to me is Alex Schultz from Meta. He's also the VP of Analytics at Meta. He is engineering mind. He's a physicist also, but he's also incredibly creative, um, and he is this unicorn of he's an artist, visionary, creative with an engineer, analytics, growth engine. And the two...

    3. ABAlex Bouaziz27:24

       That, that, that, that, but that's not the classic CMO background. So, like, there's amazing people at brand, there's amazing people at lots of different things. I think if you want to efficiently drive marketing strategy at, like, a high intense growth company, you gotta be much more engineer in my ground, right? Like, I was sitting with the CMO of Wi- of Wiz who is, like, I think one of the strongest CMOs I've met in a long time. You should probably interview her. She's like Asaf's, uh, magic weapon. Um-

    4. HSHarry Stebbings27:50

       I'm writing it down now. Yeah.

    5. ABAlex Bouaziz27:51

       Yes. And, like, the way she just thought through some things that are just accepted in marketing, right? "Oh, we're spending X amount of money on paid ads, and that's returning X." Kinda like, you know, taking over the role, kind of going back and saying, "Okay, that is a lot of money. Let's go back. Let's understand. Let's deeply understand how this works." And, like, I think being able to, like, cut spend by half but increasing the number of leads by half by just going really deep into understanding the problem, only people that care about truly understanding how the system work deeply can get done is what I found out to be the right people. For all roles, but specifically for marketing given how much money goes there.

    6. HSHarry Stebbings28:29

       Insane amounts of mon- It's the hardest thing, you know, there's this age-old statement which is, you know, 50% of my marketing spend is very efficient and 50% is totally wasted. I just have no idea what you want.

    7. ABAlex Bouaziz28:37

       Yeah, just, you know, 50% for me (laughs) is a lot of money, right? So I actually wanna (laughs) wanna make sure I'm optimized on this.

    8. HSHarry Stebbings28:43

       Yeah, don't be so tight, dude. Um, listen, uh, R- Revolut, I interviewed Nick, and he was like, "The biggest mindset change I've had is actually in the value of brand marketing." Do you think brand marketing is as valuable...

    9. ABAlex Bouaziz28:56

       Yes.

    10. HSHarry Stebbings28:57

        ... as people-

    11. ABAlex Bouaziz28:57

        And this is new to me. Um, by the way, Nick is my favorite founder, probably the person I look up to the most in many different ways. He knows that, so it's, uh, it's, uh, aligned. Um, yes, 1,000%, but now, not before. So I think when I look at Deel and growth over the next few years, the only way for us to be what I think we can be, which is a $100 billion plus company that truly changes how HR and payroll is perceived and really disrupts this, this whole market, is for our brand to be aligned and for the brand to be much more known, right? And that didn't actually matter to me two, three years ago. But today when I see the path to get to the numbers we want, which is not insane by the way, like what I told... What I love to tell investors is, like, "Okay, today we have..." Yeah, have you done any consumer deals or are you, like, anti-consumer?

    12. HSHarry Stebbings29:51

        No, I've done consumer deals.

    13. ABAlex Bouaziz29:53

        Okay. Like, what would you say to... Like, if I was a company coming to you and telling you, "Okay, today we have 1.5 million people getting paid on Deel. We're gonna get this to 10 million people." Like, would you think that's crazy?

    14. HSHarry Stebbings30:04

        No.

    15. ABAlex Bouaziz30:04

        Okay. (laughs) So 10 million people (laughs) given that today we're over a billion in, in, in AR would mean, uh, quite a bit more revenue, right? So g- given this-

    16. HSHarry Stebbings30:13

        Well so, basically you need to get to 10 billion in AR to be the $100 billion company you want.

    17. ABAlex Bouaziz30:16

        Exactly, but you can also push that even further, like, again, consumer investors. If I was telling you that we will do payroll for 100 million people over the next few years, it's not that crazy.

    18. HSHarry Stebbings30:27

        But it's quite crazy. That, that's actually harder to believe. When you actually look at TAM and when you look at-

    19. ABAlex Bouaziz30:32

        What do you mean? Everyone needs payroll. Every single person in the world gets payrolled almost, right? Like, okay, maybe not every single person in the world, but most people in the world get payrolled, right?

    20. HSHarry Stebbings30:41

        Yeah, I, I mean, A, there's like, actually-

    21. ABAlex Bouaziz30:42

        That's, that's your TAM, every single worker in the world. (laughs)

    22. HSHarry Stebbings30:46

        ... yes, is, and no. Like, I don't think it works for all parts of all companies, one. It doesn't work for all geographies, two. Um, you're not working in Japanese agriculture, my friend. You're not working-

    23. ABAlex Bouaziz30:58

        I, I, I do payroll for oil and gas, for agriculture companies, for airlines. You're wrong. (laughs) We do payroll for a lot of people. (laughs)

    24. HSHarry Stebbings31:07

        And then you actually look at assumptions on, like, market take. Like, there's always gonna be... Okay, let's do this. In five years time, what does the market map look like? Is there, like, one winner who gets 80% or is this like a 25, 25, 25, 25?

    25. ABAlex Bouaziz31:23

        Hmm. It depends how much I spend on brand awareness. No-

    26. HSHarry Stebbings31:27

        Really?

    27. ABAlex Bouaziz31:27

        Uh, no, no, it doesn't. Well, see, I think we can be very aggressively winning most of the market. I actually think the gap between 10 to 100 million over the next five to 10 years is not that big, uh, if the brand is known, if we build infrastructure, that really changes.

    28. HSHarry Stebbings31:40

        Where would you most like to spend on brand marketing that you haven't yet? Do you wanna do an F1 car?

    29. ABAlex Bouaziz31:47

        Well, we'll do some of those actually, so you'll see some of them coming, uh, already in the works. Um, the thing about brand marketing is I actually don't know the subject well enough, so you're gonna have to give me a little bit of time to get educated in terms of how this works properly. And we'll probably make a bunch of mistakes in, in the meantime, but we're gonna try really hard. I, I do think there's value into F1, into football, into, uh, golf and things like that. For us, it's an interesting thing to navigate 'cause, like, I wanna be able to kinda make both sides of the equation happy. So, you know, if we own B2B assets that we can bring, you know, customers at events and things like that, it's great for short, like, investing into our customers and getting them to, to be excited about the company. But at the same time, if I can get the end user and the funds excited, I think there's, like, a long-term value aligned brand here as well.

    30. HSHarry Stebbings32:35

        Where would you most like to cut spend that you haven't cut spend or can't cut spend?
15. 35:45 – 44:20

    Lessons from Nikolay Storonsky of Revolut

    1. ABAlex Bouaziz35:45

       internal tools and processes. I told you, I look up to Nick a lot (laughs) and Nick's mentor is build everything. If you own everything, you do everything well. So I don't know if you know, but Revolut builds everything. Um, and I think he's right. I think in many ways, like, uh, software is... Sa- a lot of SaaS are not tailored enough to do different applications that we wanna build. And owning most of the software makes a significant difference in many different places. But let, let me give you a very s- like, small project that we're very excited about. A very, like, strong example. Um, over the last year, we built our own Jira-like product internally. So basically, like, ticket management at scale, because being able to route the right tickets to the right person. So let's say you have a problem with your customer. You wanna talk to payroll, you wanna talk to HR, you wanna talk to finance, whatever that is. Being able to write your own tickets is very critical, right? And, like, no software was really agile enough to, to be able to do this. And now what we are launching, like, this week internally is, like, the ability to just as a salesperson, as a CSM, a- whatever within the company, being able to type your problem and, like, basically with AI, automatically create the right ticket, automatically routing it to the right person and cutting the time by, like, 90% in terms of resolution that we can have. And, like, that only comes from being able to build a lot of your internal infrastructure and is the dumbest thing to do when you're small.... but it's the smartest thing to do, I think, as you scale. And the moment at which we should have started should have been a lot earlier, because when we knew we were on the path of, like, "We know where we're going," we can start making longer investments and longer bets. We should've, like, transitioned this a little bit.

    2. HSHarry Stebbings37:17

       What is the sign that you should transition to build-own?

    3. ABAlex Bouaziz37:21

       I think, uh, (laughs) a couple 100% year-on-year growth plus profitability is a good sign. When we started, here's another ex- example, right? Like, building your own payroll engine, like I'm geeking to you about earlier, is, like, a very bold move, right? It's something that you go like, "Why would you do this?" Right? Like PayFit is a unicorn in France, just doing payroll in France. Gusto is a unicorn in the... decacorn in the US, just doing payroll in the US, right? So building our own inf- internal infrastructure from ground up with the ambition of rolling out to 100-plus countries is like something that most people will look at and go, "You're a little crazy." And that's true. It's like a very crazy play actually, but, you know, when you're four years into the business, you're profitable, you're on path to grow really fast, you kind of have some decisions to make, right? Like, how big of a company do you really want to build? Can you make a lot of those long-term plays that you think are going to be significant for the value of the company and for your customers? And that's where we kind of got into a place where we're like, "Okay, do we want to be an acquisition outcome with a great one, two, three products? Or do we want to actually own the rails," like the actual m- like, be as close to the metal as possible in a way that no one has ever done before. Uh, and I think you can only start making those plays when you are, you know, truly profitable and truly growing at the pace where it's okay to take a couple 100 people and build the infrastructure that's going to serve you tomorrow.

    4. HSHarry Stebbings38:42

       I think my biggest takeaway from Nick actually is how he treats Revolut in some ways like an incubation unit for new product testing, and he has like 26, 27 new product bets where he gives people like two million bucks a year and then really measures cadence and how they progress.

    5. ABAlex Bouaziz38:57

       Yeah. I'm not there yet. I'm not there yet. I think for me what's most important is we've kind of gone through... It's an interesting phase at the company today. We've gone through having two amazing products into having now, like, 10. And, like, for me, the most important is making that system work amazingly well together. So, like, I'm not really looking to launch, like, 10 new products next year. It's not really my thing. It's more like, how do we give the best end-to-end HR and payroll experience to our customers? And then when I get into a place where I'm like, "Okay, we've kind of, like, killed the market the same way we had for, like, global payroll, ER, et cetera," then that's when we might make more, more new bets.

    6. HSHarry Stebbings39:30

       Do... How do you do sales teams there? Because when you have 10 products, you think that verticalization is great, they can really know the product, really know the problem.

    7. ABAlex Bouaziz39:39

       Mm-hmm.

    8. HSHarry Stebbings39:39

       But then it's really hard to do the cross-sell well and sell a suite. What- what's-

    9. ABAlex Bouaziz39:44

       Yeah.

    10. HSHarry Stebbings39:44

        ... the winning solution?

    11. ABAlex Bouaziz39:44

        Yeah. Well, he- here's an interesting, uh, data point for you. I know you love data. 60% of our revenue actually comes from cross-sell today. Um, so, so cross-sell is actually a big part of what we do. (laughs) Well, expansion. Cross-sell and exp- and expansion as well for our customers, right? So we do well and they want to open new countries or they just hire more people and things like that. Um, so the way we've done this is basically... And I think it's pretty similar to, like, a couple other big organization, like Oracle and others, but it works really well for us. We basically have what we call our core salespeople, and they sell the product that we feel are fully mastered inside of the company, right? From an enablement perspective, from, like, an experience perspective, from, like, an end-to-end perspective, we feel like we're in full control. Our core AEs will have... will quickly ramp up and quickly be the best in the market at selling this. And then we have what we call those overlay teams. So it's like, our IT business... So we acquired, uh, Huffy, for example, a company you invested in, which is doing amazing for us. You know, it's grown almost 100% year on year. Um, it's very specialized, right? And we're building a lot of IT products. So you have an overlay team that is brought by the core AE team when this is an interesting product for the customers. But at the same time, it's a standalone and a lend product. So it's... it can actually... you can actually have leads that are only interested in this, and they will be the ones selling it before moving into a core AE. And we do this across, like, all of the different products. So immigration, global payroll, like, some of... all of those different products. And, like, an int- an interesting thing is, over time, some of your product become mature enough and your organization and your data and your knowledge becomes mature enough that you can bring some of those products into the core team, right? That's like our holy grail, is for things to be so smooth that I can bring one of those products into the core team rather than having overlay AEs on that front.

    12. HSHarry Stebbings41:22

        Totally get you. Can, can I ask you, when you think about building out the sales team, what's been the biggest lesson for you in how you've done it successfully? It is a fricking hard part to scale.

    13. ABAlex Bouaziz41:32

        One thing I always tell early stage founders, um, that we did really well actually, and really helped us, because if you think about Deel's revenue split today, 50% from... comes from the US, a little over 35% comes from Europe, and the rest is like kind of rest of the world, and we're growing all parts. One move we did pretty early on is hire salespeople in different geos pretty early on, uh, just to understand the market. So instead of having, like, a lot of salespeople just in one country, like hiring a few salespeople into other countries and kind of say like, "Go and figure it out," was really helpful for us, because it really helped us ramp up across all markets really fast and having a strong understanding of what's gonna work, what's not gonna work, and how we should reshape our strategy. For example, we launched Japan two years into the business, and, like, it didn't work for the first year and a half. And then eventually we changed country leads with all of the learnings from the first one, and now it's doing really well, right? And, and all of this kind of happens in parallel where, like, a lot of people are like, "Yeah, it's gonna defocus you. You shouldn't be doing that." I'm like, "Hire sales guys, see if he sells (laughs) or if she sells." And if they do, amazing, you can ramp up and hire more of them. If they don't, then it's fine. You let them go and-

    14. HSHarry Stebbings42:41

        H-

    15. ABAlex Bouaziz42:41

        ... change them. (laughs)

    16. HSHarry Stebbings42:42

        I get you, but how do you think about defocusing? You know, w- which could apply-

    17. ABAlex Bouaziz42:46

        I don't- I don't think having one person running around when you're like 10 people, 20 people trying to sell something is defocusing. Uh, the only thing that can be defocusing is if they come and start telling you, "You know, for Brazil, I need this specific thing, for this country, I need that..."

    18. HSHarry Stebbings42:59

        Oh.

    19. ABAlex Bouaziz42:59

        And, and here you just say like, "No, sell what you have." But I really don't think having salespeople in different places is defocusing, and that really helped us move really fast in shaping go-to-market.

    20. HSHarry Stebbings43:08

        Listen, it clearly worked, and so this is a hilarious debate because I know shit and you know everything having lived it. But like, I don't agree. If it works, they need more time and more resources. And if it doesn't, you need to cho- do something about it. So it does objectively defocus you. Like, I, I think of this with our media companies today. We could do new shows. I- we could do different types of shows. We could do politics, we could do consumer, fashion, food. We could... Defocus, right?

    21. ABAlex Bouaziz43:36

        (laughs)

    22. HSHarry Stebbings43:36

        Win what we do.

    23. ABAlex Bouaziz43:38

        I don't- when it comes to sell, I don't think, uh, I don't think there is any defocus because if they sell (laughs) it works, then if it works, you'd be the happiest person in the world to give them more resources. If it doesn't work, it's okay, you tried.

    24. HSHarry Stebbings43:49

        You said 50% US, 35% Europe, 15% el-

    25. ABAlex Bouaziz43:54

        Yeah, maybe it's 30% Europe, but it doesn't matter.

    26. HSHarry Stebbings43:56

        Eh, a kind of ballpark, yeah, or circa. Um, when you're at 100 billion market cap, 10 billion in revenue, what are those numbers then?

    27. ABAlex Bouaziz44:07

        I think it will be more or less the same. More or l-

    28. HSHarry Stebbings44:10

        No change?

    29. ABAlex Bouaziz44:10

        It hasn't changed from 1 million ARR to this stage, so I don't think it will change.

    30. HSHarry Stebbings44:15

        That's fascinating. You mentioned Hofy. One really interesting element

16. 44:20 – 1:06:30

    Deel's Acquisition Playbook

    1. HSHarry Stebbings44:20

       is 13 acquisitions in six years. It's a lot. And all of your board members told me I had to touch on this, and they're really successful, which is also a surprise.

    2. ABAlex Bouaziz44:29

       They are not all really successful, but we've made the most of them, let's put it that way. (laughs)

    3. HSHarry Stebbings44:34

       Hof- Hofy is really successful.

    4. ABAlex Bouaziz44:35

       Hofy's very successful.

    5. HSHarry Stebbings44:36

       Hof-

    6. ABAlex Bouaziz44:36

       This is why you backed them in the first place. Yeah, I actually think it will- it can be a $10 billion company. I think Deel IT, um... So basically what we do with acquisitions, we have a quite an interesting playbook. I think that's what most of the investors were mentioning you. What we do is we do two types of acquisitions. We either hire acqu- either do acquisitions that are core to our market and then we, in a way, buy the team, buy the revenue, bring them in-house, and kind of, you know, rip and replace their infrastructure with ours pretty fast. And we're pretty good at this actually. Or we buy smaller companies that are in adjacent domains that we want to get into. And what we usually do is we n- we don't try to patch things together. We take the founders and we rebuild the full infrastructure from ground up. And the way we do this is kind of interesting 'cause it really worked for us. So, theory of sales, most salespeople take nine months to a year to be comfortable selling a product. And in that process you're gonna have a couple early adopters which are actually the best people in your organization, that are willing to try to sell something new because they're curious and they want to. And what happens with acquisition and the way we operate is we basically bring the product, rebuild all of the front end inside of Deel, while being connected to the backend of the current company. And that happens in, like, two months. So we can basically, like, launch the product that we've just acquired in the space of two months, and then give it in the hands of our sales organization so they can start learning how to sell it. In parallel, we're rebuilding the full backend of the product inside of Deel, natively. And in the period of, like, depending on how complex the product is, it takes us, like, one, like, three months to 12 months to rebuild the full backend and migrate all of the customers and all of those things in parallel. But in parallel, your sales org starts selling your product. The early adopters see Deel IT and they start selling it, and you know, doesn't work as well sometimes, and it takes time to ramp up, take time to fix bugs, and they hate you for having sold this. But over time, you learn so much that you can really quickly, quickly close the gap and build the best product really, really fast. So that when the organization decide itself that it's ready, which is actually nine months later, you can actually start ramping it up and selling it much more aggressively because it's amazing and it really works. If we weren't doing this, you would basically spend 12 months integrating, and then start selling and have another delta of, like, 12 months to be able to really reach the scale that your go-to-market team needs to have. So that, like, very interesting playbook of, like, integrating the front end, giving it to your sales org, migrating all the customers in parallel in the backend, like, really paid dividends to us, and all of the acquisitions we have have grown by like hundreds if not thousands of percent in the last few years.

    7. HSHarry Stebbings47:21

       Dude, after 13 acquisitions, you, you do build a real nose for deal-making. H- (laughs)

    8. ABAlex Bouaziz47:26

       (laughs)

    9. HSHarry Stebbings47:26

       And you're a deal-maker. Um, (laughs) I love you for many reasons, but you're a brilliant deal-maker. What have been your big lessons on how to price a company when you're buying it? How to incentivize founders with re-ups, with stock, with cash comp? What are those lessons?

    10. ABAlex Bouaziz47:45

        Yeah, I have one founding principle on this actually, who came to me from my father. Um, so my father, in his past life, did over 50 plus M&A. That's actually how he grew his business. And one thing he taught me on deal-making was the only way to get an- a great deal done if, if both parties come out of the equation five years later saying, "We're happy this deal was actually happened." So structuring the deal in a way that's fair for both sides, not even if you have the upper hand, right? Making it in a way that, like, you look back on this and say, "Hey, you know what? As the founder of the other business, I'm so happy this deal went through," is the most important part. So whether it's on retention package, whether it's on, like, how many people from the team you keep, whether it's on, like, how brutal you are about the integration, like, a lot of the things that go there need to be aligned so that you're optimizing for both sides to be really happy about the deal. And i- it's not obvious because, like, a lot of those negotiations, transparently, like, we have the upper hand as the company that's buying, right? So, uh, you- we could be assholes and be like, "Whatever. You know, I'll just get the best deal possible." But sometimes we'll over-optimize on, like, the outcome of the acquisition down the line versus the best deal we could get.

    11. HSHarry Stebbings49:02

        Is now a good time to buy? Are you seeing a lot of companies who are not in the AI wave and not doing insane, insane lovable growth, where they've fallen out of favor with venture investors, and you have the chance to pick them off at good prices?

    12. ABAlex Bouaziz49:19

        Yes, of course. And I think this, uh, fundraise is definitely going to be helping on, on that front and doing more acquisitions. That was one of the reason we also raised the capital. Um, I, I think, you know, as you know, venture capital always comes in flavor of what's, uh, what's, uh, everybody looking at at the moment, right? So this comes in circles, right? And in cycles, right? So eventually things will shift and I think the companies that are maybe not AI first or in the AI hype just need to kinda hold tight and, uh, make sure that they deliver for their customers and stay close to their customers and kinda rise above the noise. And if they can do that, I think, you know, they'll come up on the, on the stronger hand. If they cannot do that, uh, and they're amazing, then, uh, we're always looking to buy. (laughs)

    13. HSHarry Stebbings50:03

        How do you think about the founder packages in terms of like cash versus stock, more cash, less cash? How, how to do those incentive plans right?

    14. ABAlex Bouaziz50:13

        It's situational. Um, sometimes we make acquisitions where we really, really want the founder to stay, and sometimes we actually don't think the founder is needed, you know? Um, so I'm gonna assume you're talking about the, the part where we do want the founder to stay. (laughs)

    15. HSHarry Stebbings50:28

        Do you tell them that?

    16. ABAlex Bouaziz50:29

        Yeah. Why not? (laughs) Like, it's not, it's not a bad thing, right? Like, when you get to a point where you've worked for seven, eight years in your business, there, there's kinda two ways to behave, right? First way of behaving is acting like you're gonna be there for the next five years and then leaving after one year, (laughs) which I've seen many people do. Or there is just being honest, like, "Hey, is this what you wanna do for the rest of your life? Is this where you wanna work?" Like, "If you give, if we give you the resources, if we give you the infrastructure, do you wanna be here for a long time?" And I, again, you cannot always measure those conversations and you're not, maybe not always gonna get the right, honest answer, but I think it's important to have, like, frank and honest conversations here. And like, for example, going back to, to Hoffy, uh, when we acquired Hoffy, like, I was not gonna run the IT, right? (laughs) Like, it's, it's so far out of my scope in terms of like truly understanding the business, the buyer, the profile, what we need to build, et cetera, that, like, if you remove Sami and Michael, um, it's gonna be very tough, right? So, like, the alignment here has to be very package-equity-oriented. It has to be very aligned that, like, they're gonna be here for a long time and they're here to really build. Um, some other companies, you know, it's a bit different where actually, if anything, I don't even need the leadership, right? I just want the customers, the infra, and a few other things that they have, right? So being very upfront around like, "Hey, this is what we're gonna need." Just sets you up for a better relationship. This is what I told you before, it's about keeping people happy. I've made the mistake of keeping a founder for a year or two into a business where he wasn't needed anymore, and it's sad. It just doesn't, you know, it's, they lose their grit, they lose their, their effects and it just doesn't work out. So having this conversation, I think, is part of creating a deal where both sides of the equation come out happy.

    17. HSHarry Stebbings52:04

        The beautiful thing about venture is it's the most forgiving business in terms of your buy price, because the upside is exponential. It's very different to PE where, like, you know what? You've got like a two to three X bandit upside in most cases. If you spend 50% more than you should, you're fucked. If you buy Hoffy... I'm just taking bullshit numbers here 'cause I really can't remember. (laughs) But if you buy Hoffy, ehm, or X company at 75, not 50, if you do it well, it doesn't make a difference. How price sensitive are you on buy?

    18. ABAlex Bouaziz52:40

        I like to pay fair market value. So revenue, growth, quality of the team, gross margins, potential of the business, you know, we'll pay depending on like how, and in that case, adding a full new line of business to deal, which is very critical, right? Not just being core product. We'll, we'll, we'll pay the right price. Uh, we won't overpay, we won't underpay, and we're known to pay the fair price. So, you know, if it wasn't between a 50 and 100, I'll go at 75 probably. (laughs)

    19. HSHarry Stebbings53:10

        Stack rank, me and you, uh, in review, what's the number one acquisition you've made? Best performing?

    20. ABAlex Bouaziz53:18

        In terms of what? Infrastructure, long term of the bus- impact or revenue?

    21. HSHarry Stebbings53:23

        It could be either. It could be impact through revenue, it could be impact through infrastructure, but like the-

    22. ABAlex Bouaziz53:28

        Um, PaySpace. So PaySpace is a company, amazing company. We acquired them about a year plus ago. 15-year-old business. Three brothers and one brother from another mother, that's how they like to talk about themself, uh, in South Africa. And they basically had been building the payroll infrastructure we wanted to build for the last few years. We looked at every single company in the market, and I have a very aggressive corp dev team, as you may realize. And nothing, nothing was good. Most of the infrastructure, most of the technology, most of the teams were very weak. And we just stumbled upon that team in South Africa that not only understood payroll really well, but were forced to build global payroll because South Africa was such a tiny market that they had to expand to all countries in Africa in order to be able to create a real business that can really scale to their ambition. And without realizing how they had built payroll infrastructure that could scale in multiple countries because they were forced into it from the get-go. And we met them and we looked at the product and we said, "That is probably one of the best product we've ever seen. We are just gonna bring it in-house, give them the resources, and just start building out on top of this, like all of the infrastructure we really need." One year into this, we've got infrastructure in Singapore, in Canada, in Australia, in India, in Malaysia, like, and we're building, like, 10 to 15 new engines per, per year. And that is giving such an incredible experience to our customers. If I would've gone into building payroll engines and infrastructure on my own, it would've taken me 5 to 10 years to get it right. That just fast-tracked everything we could do in like, it literally shortened our timeline by five plus years in terms of getting it right.

    23. HSHarry Stebbings55:16

        How much did you pay for it?

    24. ABAlex Bouaziz55:18

        (laughs) Uh, you know.... over $100 million. Let's put it that way.

    25. HSHarry Stebbings55:22

        Over 100 million. Yeah. It's a nice rule, which is like, you can say ra- uh, over X, yeah, yeah. Uh-

    26. ABAlex Bouaziz55:26

        Over $100 million, yeah. A bit more than that. But it's like, look, I think long-term strategy of the company, quality of the founders, of the people, of the product, and how much it helps from an infrastructure perspective, from a gross margin perspective, from an experience perspective, is probably, it's probably the Instagram to our Facebook.

    27. HSHarry Stebbings55:53

        That's fascinating. Uh, okay. On the flip side, you humbly said not all have worked. You don't- I'm not expecting you to name a company. I don't want to shit on it.

    28. ABAlex Bouaziz56:02

        No, I won't name them. I won't name them.

    29. HSHarry Stebbings56:03

        I'm not expecting you to name a company. Name the founder.

    30. ABAlex Bouaziz56:07

        Yeah. (laughs)
17. 1:06:30 – 1:12:09

    Quick-Fire Round

    1. ABAlex Bouaziz1:06:30

    2. HSHarry Stebbings1:06:30

       Dude, I want to do a quick fire round with you. So I say a short statement, you give me your immediate thoughts. What have you changed your mind on in the last 12 months?

    3. ABAlex Bouaziz1:06:39

       Being much more prepared across different topics. So, you know, we had policy situations, litigations, like, uh, PR, right? Like, and I think a lot of those things there showed and exposed a lot of things in the company that we hadn't thought about, right? Like, I don't exactly wake up thinking, "We need to be really strong at policy. Oh, oh, we need to be really strong at litigation." So, we're much more prepared and we're consistently thinking about where do we need to reinforce ourself, which is external to purely product and customers experience, which maybe we didn't do as much before.

    4. HSHarry Stebbings1:07:12

       Are you a wartime or a peacetime CEO?

    5. ABAlex Bouaziz1:07:16

       Um, I think I'm in constant wartime, sadly.

    6. HSHarry Stebbings1:07:19

       Do you kind of enjoy the fight? Like, is there a masochistic enjoyment?

    7. ABAlex Bouaziz1:07:25

       Uh... I like fighting people.... in product and go to market. I want you to kick my ass because you build a better product. But I'm gonna, (laughs) I'm gonna give you a roundup for your money because I'm pretty decent at building good products. (laughs) Um, so I to- I love the fight when it comes to fighting through who is going to serve our customer better. And I think there's some amazing companies in our space building that way. And, you know, all of the money that flew into this space and the quality of the people that we have just makes it a super, super interesting fight. Uh, other fights, just not my style. I'm not a very litigious person.

    8. HSHarry Stebbings1:08:01

       How would you have liked Redfin to behave?

    9. ABAlex Bouaziz1:08:04

       (laughs) Well, I think you should read our lawsuit in Delaware. Uh, you know, three years of, uh, poor way of competing in the market. You should have a read. Uh, again, I think a lot of those things are tied to, uh, old stories and old demons and we're in the crossroads. But it's okay. You know, it's not deterring us and we're able to perform for our customers. So it's all that matters.

    10. HSHarry Stebbings1:08:26

        Which founder do you think is most underrated today?

    11. ABAlex Bouaziz1:08:30

        I was- I would have said Tariq a year ago from Kalshi. But-

    12. HSHarry Stebbings1:08:33

        Dude, you introduced me to him, like, three or four years ago.

    13. ABAlex Bouaziz1:08:36

        (laughs) Th- th- yes, he was one of the most underrated founders I ever knew. And then the guy just turned the heat around like fucking crazy and is now one of the most hyped companies in the world. So, um, I've actually learned to love two founders that I think are some of the most underrated founders in the world. Um, and I think th- their companies are amazing and everything they'll touch in the future will be just as amazing. Uh, I don't know if you know them, but, uh, the first one is Johannes from Kry.

    14. HSHarry Stebbings1:09:06

        Dude, he's in Project Europe. Um, I met him through Project Europe. Uh, he inve- he invested in it. What a dude.

    15. ABAlex Bouaziz1:09:12

        He's one of the, one of the most underrated founder I've met. So, like, very clear thinker.

    16. HSHarry Stebbings1:09:17

        Why do you say that with him?

    17. ABAlex Bouaziz1:09:18

        I think he's the right mix of clear thinker, first principle, and at the same time, relentless. And he's got that, like, hands on fire that someone that has built a 4,000 plus people company usually loses. And on the same spirit, um, I don't know if you know Fred from Voy, uh, but those two guys... I've, I've been falling in love with Swedish tech recently. I think a lot of people have, but I've been, I've been falling in love for the last few years. And those are two of the people that I've met that, um, I know are gonna either take those companies to huge numbers or build new businesses that are gonna be just significant.

    18. HSHarry Stebbings1:10:02

        Why have you been falling in love with Swedish tech?

    19. ABAlex Bouaziz1:10:05

        I think the mentality of the founder there is really good. I think they're good people, honest people that truly care about building great companies and great products. Um, they're those tall giants but are sweet at the same time. They're in an ecosystem where, like, it reminds me in many ways of the Israeli ecosystem where it's a very tight-knit community. Like, if you look at the s- the successful Swedish founders as well, right? Like the Klarnas of the world or the Spotifys of the world, like Daniel, Sebastian, they kind of paved the way for those founders to be able to build great companies and I think they've really capitalized on this in a way that no one has before.

    20. HSHarry Stebbings1:10:39

        How do you feel when I say this? I love Fred and Johannes too, but I think they're both in really shitty markets.

    21. ABAlex Bouaziz1:10:45

        I bet on the founder and not on the business, remember?

    22. HSHarry Stebbings1:10:49

        I do, but dude, at scale, you've got to fucking add in some market.

    23. ABAlex Bouaziz1:10:52

        No, for sure, but I think they're going to have very long careers. So, uh...

    24. HSHarry Stebbings1:10:57

        Oh, I agree and if they're listening, let me do your seed of your next company. Who do you not have on the board that you'd most like to have on the board?

    25. ABAlex Bouaziz1:11:04

        Well, he's gonna love this. Um, I really, really love Alfred Lin from Sequoia.

    26. HSHarry Stebbings1:11:11

        Hmm.

    27. ABAlex Bouaziz1:11:11

        Um, I've, you know, he's gonna be sad about that one. Uh, he passed on my seed round, uh, when I had no idea what I was doing. Me and Shu met him in a coffee shop during or right after YC and I've just learned to know him over the years and just like, I actually think he's one of the best investors in the world.

    28. HSHarry Stebbings1:11:32

        Why?

    29. ABAlex Bouaziz1:11:33

        He cares about founders in a way that's very rare. Um, and he understands the businesses a lot more deeply than a lot of board members want to. Uh, and I saw that firsthand, right? That, I mean, Alfred is on the board of Kalshi and Tariq is a very close friend and I think the impact Alfred has had on the business is very significant. Same thing for DoorDash and others. I think he's the right mix of sweet, sharp and well-advised person that has seen things before and I think he was an operator before as well.

Episode duration: 1:17:01