Wisdom list
Mar 19, 2023

The Wisdom List: Alex Bouaziz, CEO of Deel

Deel’s co-founder on speed, execution, and scaling a $12 billion business.

Artwork by 
Eleanor Taylor
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If you only have a few minutes to spare, here’s what investors, operators, and founders should know about building a business, according to Deel’s CEO and co-founder, Alex Bouaziz.

  • Need for speed. What does Alex Bouaziz consider his company’s most important cultural trait? Speed. From the top down, Deel is a business that aims to move fast (without breaking things). That sense of urgency contributes to an intense culture that champions hard work.  
  • Problems of scale. Few companies have grown as rapidly as Deel over the past four years. While that’s a problem most CEOs would love to have, it does lead to its own issues. Bouaziz has particularly grappled with the tendency for his business to “outscale” its senior executives. Careful hiring and continuous support are required to ensure leaders don’t get out of their depth. 
  • Customer obsession. Despite its current size, Bouaziz maintains personal relationships with customers. By his estimation, he holds “hundreds” of WhatsApp conversations with clients at a given moment. Not only does this help him keep a pulse on how Deel is doing, it’s a valuable source of new ideas.
  • Fiercely competitive. Bouaziz is unabashed in his desire for Deel to out-execute its competitors. He devised one of the company’s most lucrative features after a rival beat him to a sale. Even at a $12 billion valuation, his drive to stay ahead of the competition appears undimmed.

The Wisdom List is a series that asks successful founders to share their tactics, strategies, secrets, and lessons learned. 

Alex Bouaziz couldn’t have timed it better. In 2019, he and M.I.T. classmate Shuo Wang decided to build a human resources (HR) platform focused on the remote work movement. They named it Deel

Deel was not the first to identify the opportunity in the space. Others came to market in the years prior to Bouaziz and Wang founding their business. But as John Doerr used to note, Google was the 17th search engine to market. Which is to say that first-mover advantages are not unassailable and that new founders can take an existing idea and make it their own. 

At least from one vantage, that is the story of Deel. As 2020 forced the world into lockdown, employers’ demand for remote work tooling reached ravenous levels. Thanks to its self-professedly intense culture, Deel rose to the occasion, rolling out a comprehensive suite handling global hiring, payroll, equity management, perks, immigration support, and more.

That feature set has powered a rapid ascent for Bouaziz’s firm. At the start of 2021, Deel reportedly had $4 million in annual recurring revenue (ARR); twelve months later, it had risen to $57 million. By the end of 2022, 15,000 customers – including big names like Nike, Shopify, Reddit, Red Bull, and Klarna – drove ARR to $295 million. Notably, Deel reports 85% gross margins and EBITDA profitability as of September last year. 

Though Bouaziz has not formally shared new figures since January 2023, a little extrapolation suggests Deel’s current revenue may be considerably higher. Last week, as part of its commitment to loan $120 million off its balance sheet to assist startups affected by the Silicon Valley Bank collapse, it reported a client count of 18,000. If the average customer value has remained constant, ARR could be closer to $354 million. 

Forbes, TechCrunch, and estimates from The Generalist

Deel’s steep growth persuaded Emerson Collective to invest $30 million in Q2 of last year at a price of $12 billion. Such a valuation would not have looked out of place in 2021; even using its end-of-2022 numbers, the round pegged Deel at approximately 41x ARR. 

That pricing suggests Deel can ill-afford to let up in the coming years. As you’ll soon read, Bouaziz is minded toward value maximization – though his sights are firmly focused on Deel’s ceiling rather than its potential floor. Even among tech’s wide-eyed optimists, few dare to suggest, as Bouaziz does, that they are building a trillion-dollar company. Recent months have seen Deel bulk up in pursuit of that mammoth figure, acquiring equity-management firm Capbase and Australian payroll provider PayGroup. The latter cost $83 million.

Despite Deel’s ascent, Bouaziz’s role is not an easy one. Hypergrowth brings its own managerial difficulties, as does creating a culture equipped to fight and win in a hot market. So far, Deel has looked every inch up to the challenge. 

Ultimately, few entrepreneurs have had as productive a four-year operating spell as Alex Bouaziz. As such, I believe founders, operators, and investors can learn much from his hard-earned wisdom.

What was the first thing Deel did 100x better than anyone else?

I would say execution. It was as simple as that. We were relentless in outworking and outbuilding bigger players in the space. 

Other companies may take a different approach, but I believe that if you want to win, you have to work extremely hard. From the top down, we instill a mentality of speed and hunger – you feel it in our C-Suite, and you feel it from individual contributors. We created a team that was focused on the work, above all. 

How do you scale yourself?

The primary blocker to scaling yourself is a lack of trust in the people around you to do their job at an exceptional level. While no business operates perfectly, I’ve reached a point where I have increasing confidence in the team to excel without my input. 

That’s how I assess whether a team leader is making an impact – if I can step away from a part of the organization and that team still performs, I know things are working. That’s the best-case scenario: I can give them the room to execute to the fullest of their abilities. 

There are challenges, of course. For example, there’s a tricky period in many companies when you go from, say, a ten-person team of generalists to needing more specialists. Some of those more broadly-skilled athletes can struggle to adapt to the demands of a more narrowly focused role, which means bringing in people above them or changing the team composition. In general, we think of Deel as a team, and if people are not performing, you either need to give them more support or replace them with someone better equipped. 

When I think about the type of work I was doing even just two or three years ago, I feel how I’ve managed to scale my role. Back in 2020, for example, I was still responding to support queries. Now, we have a great team that doesn’t need my input. As a CEO, that evolution is what I like to see. 

What do you look for in potential teammates?

So much of our success has come from hiring the right people. Of course, many qualities make a great teammate, but by the time I’m interviewing them, I already know they will be smart and talented. I trust my talent acquisition team to filter for those traits. 

What I look for is a low ego, a customer-centric mindset, and a hunger to succeed. Are they ready to get their hands dirty and build? Will they run through walls to give customers the best possible experience? Are they prepared to prioritize work and accelerate their career trajectory?

We want people to be challenged, take on responsibility, and grow quickly. That’s not for everyone, and we all might have different parts of our lives where our priorities shift, but that energy is what you need to make a startup succeed. Deel isn’t where people come to cash a paycheck and retire.

What is Deel’s most important cultural trait?

Speed is everything. One of our core values is called “Deel Speed.” The idea is that at every part of the organization, we want to move rapidly to improve the lives of our customers. We ship fast. We communicate fast. We respond to support tickets fast. We grow fast. 

That’s more than just rhetoric; it’s been baked into the organization. For example, we respond to support tickets in 75 seconds on average. The average time for us to onboard a new employee for a customer is roughly 6 hours. 

All of this isn’t to say we compromise quality for speed. Deel Speed is about pace but combined with attention to detail, care.

Where do your new ideas come from?

Customers, customers, customers. I have hundreds of WhatsApp conversations with them at all times. I want to understand their problems and the places we can improve. 

The more I talk to them, the more I realize how big our opportunity is. Human resources (HR is a large, fractured space full of old, poorly-built platforms. Our average customer uses roughly sixteen software platforms to manage their HR needs. We want to make their lives easier, step by step. 

Because there’s so much opportunity, the tough part is prioritization. What is the best thing we can build in the next quarter? What will make a huge difference to our customers and partners?

My co-founder Shuo and I joke that we have one really good idea a month. And we get those ideas from talking to customers or hitting friction in the marketplace. 

I’ll give you an example. Today, one of Deel’s most important offerings is our “Employer of Record” (EOR) product. An EOR is an organization that acts as a legal employer for foreign employees. So if you’re a company in the U.S. that wants to hire someone in France, you can do so via an EOR, which abstracts away the complexity and liabilities of setting up a true foreign entity. 

Offering EOR support wasn’t part of Deel’s original product suite. But after losing a big deal to a company that could help with employee onboarding, I woke up the next morning feeling like we had to build something new. Something that solved an even bigger problem for our customers and put us on a different level. Now, EOR support drives the majority of our SaaS revenue. 

How do you decide what to focus on?

By this point, we have a good idea of Deel’s boundaries. We know our mission, the boundaries of the product, and the different opportunities we could pursue.

Because of that, picking our next big bet comes down to customer feedback, timing, and intuition. We’re always asking what pain our customers are going through, and that helps guide us in an interesting direction. Then, we assess whether it’s the right moment for a product to solve that pain. Finally, I listen to my gut. As I mature as a CEO, I think I’m getting increasingly good at sensing the right move in situations with imperfect information. When those three pieces align, that’s where I direct my energy. 

How much do you think about competition?

I don’t think about competition too often. Why? I’ll give you two reasons.

One, because I know I - and the team - are laser-focused on out-executing everyone. That’s who we are at Deel. Two, because our product gives us an edge. We’ve built something powerful and unique – and we’re just getting started.

What has been your best branding or marketing decision?

I’ll tell you about one that makes me proud. Paris is the home of Euro Disney, right? And what is Disneyland’s famous saying? “It’s a small world,” of course. 

So, in Paris, we ran a series of billboards that said (in French, of course): “It’s not just at Disney that the world is small. Hire from anywhere today.” Given Deel’s core value proposition, it was a message that suited the city and felt like a perfect fit. 

In general, youthfulness and playfulness help Deel stand out. HR companies don’t tend to be the most creative or expressive. They’re rigid, complex, and very by the book. By being a newer brand, we have the chance to stand out and establish ourselves as the HR brand of the future. We’re a B2B company, but we have a consumer sensibility when it comes to branding. That’s what I want. 

What has been your greatest managerial challenge?

As a CEO, you want your company to hit hyper-growth. But it comes with challenges.

One of the biggest is that the business scales faster than your leaders. For example, you might hire someone perfect to drive the company to $20 million in annual recurring revenue. That’s great – but what happens when revenue doubles the next month? Sometimes, they don’t know how to cope. When your trajectory is as sharp as Deel’s, people can quickly find themselves out of their depth. 

Because of that, we try to hire people with experience building businesses at least 18 months further along than Deel. That gives them the time to settle in, ramp up, and prepare for further growth.

What is Deel’s narrative?

Look, every company is going to be global. We take that as a given. If you believe in that reality, then it’s inevitable there will be a platform that manages a business’s most important asset: its people. That’s Deel’s story: it’s the HR platform designed for a global future.

What do you worry about?

What I get scared about isn’t that we’ll fail. I know that Deel can be a $20 billion to $30 billion business, even without increasing our pace of execution. But I believe we’re operating in a market where a trillion-dollar company can be built. I really believe that. And if we don’t hit that size, it’s because we failed somehow; we didn’t reach our fullest potential. That’s what I’m afraid of.

How do you manage during a crisis?

Bring my leaders together, and act quickly and compliantly in the best interest of our customers. This past weekend with the S.V.B. news, we were in constant contact on Google Hangouts and WhatsApp, trying to assess the S.V.B. crisis and what we could do to help. We announced right before the Fed’s news that we had freed up $120 million of our free cash budget to help provide payroll solutions for startups that need it. Let’s hope we don’t have to do much more on this front, but seeing the whole team rise to the challenge was inspiring.

How will Deel change our era?

I think we’ve already changed some parts of the world. It’s now radically easier to hire internationally because of what we’ve built. That has major ramifications, increasing opportunities for talented people globally. By making the world smaller, we can improve many people’s lives. I think we’re at just 0.01% of what we can achieve. 

The Generalist’s work is provided for informational purposes only and should not be construed as legal, business, investment, or tax advice. You should always do your own research and consult advisors on these subjects. Our work may feature entities in which Generalist Capital, LLC or the author has invested.