With Scott Orn

A Startup Podcast by Kruze Consulting

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Scott Orn

Scott Orn, CFA

Dan Westgarth, COO of Deel - a company that helps businesses hire anyone, anywhere. It’s global payroll for employees and contractors from around the world, all in one place

Posted on: 05/04/2021

Dan Westgarth

Dan Westgarth

COO - Deel

Dan Westgarth of Deel - Podcast Summary

Dan Westgarth, COO of Deel stops by Founders & Friends to tell us more about how newly minted unicorn, Deel, helps businesses hire and pay anyone, anywhere. With their latest Series C funding of $156M, they’re taking global payroll for employees and contractors from around the world to the next level (and hemisphere).

Dan Westgarth of Deel - Podcast Transcript

Scott: Hey, it’s Scott Orn at Kruze Consulting and welcome to another episode of Founders and Friends. And before we start the podcast, let’s give a quick shout out to Rippling. Rippling is the new cool payroll tool that we see a lot of startups using. Rippling is great for your traditional HR and payroll. They integrate very nicely, but guess what? They did another thing, they integrate into your IT infrastructure. They make it really easy for when you hire someone, to spin up all the web services and their computer. Which sounds kind of like not a huge deal, but actually we did this study at Kruze. We spent $420 on average, just getting a new employee’s computer up and running and their web servers up and running. It’s actually a really big deal, it saves a lot of money. And the dogs eating the dog food. We see a lot of startups coming in to Kruze now using Rippling. Please check out Rippling, great service. We love it. I think we have a podcast with Parker Conrad. You can hear it from his own words. But we’re seeing them take market share, so shout out to Rippling and now to another awesome podcast at Kruze Consulting’s Founders and Friends. Thanks.
Singer: (singing) So when your troubles are mounting, in tax or accounting, you go to Kruze. Founders and Friends. It’s Kruze Consulting, Founders & Friends with your host, Scotty Orn.
Scott: Welcome to Founders and Friends podcast with Scott Orn at Kruze Consulting. And today my very special guest is Dan Westgarth of Deel. Welcome, Dan.
Dan: Thanks Scott. Hey, glad to be here.
Scott: Great to have you. We’re excited to do the podcast. We’re sending a lot of business to Deel, and so I thought it would make sense to have you on the podcast so you could tell the Kruze clients about Deel and why they should be working with you. So maybe you can just start by retracing your career a little bit and tell us how you landed at Deel?
Dan: Yeah, fresh out of undergrad, I was always interested in technology companies. I read some books on Silicon Valley and VC, but never really understood much about it. And so, I thought the best way to get exposure and get proper understanding was to join a technology VC backed company. So, age 21, I found this company Revolut, which is a European company. Now it’s a global FinTech company, joined them really, really early on in a coworking space in London. Yeah, I was with them for about four years. So, at the early stage, I was an analyst. 21 years old, so I got a lot of exposure to manual workflow in terms of business administration and I’m learning at what it takes just to run a startup business. [inaudible] I progressed into a product management role, which was really good, so I did some payment integrations with different payment systems. And then eventually I ended up on the international expansion team. So, the team and I took Revolut to North America and into Asia, which was a fantastic experience. And then towards the end of my Revolut days, I started doing some angel investing and advisory work and Deel was one of the companies that I was introduced to. And it just really caught my attention for so many different reasons, and kind of built up a good relationship with the founders and then eventually joined full-time. It’s been a fantastic journey, and in the year that I’ve been with Deel we’ve built so much stuff, and we’ve helped thousands of people, or tens of thousands of people received their paychecks, and thousands of companies pay and employee remote workers.
Scott: Yeah. It’s really beautiful what you guys have done. I mean, that’s cool that you have the Revolut experience too. I think Deel’s going to be on the same kind of trajectory because I just know how much work we’re sending over. And I think for those that don’t know, maybe you can explain exactly what Deel does for international employees and international contractors.
Dan: Yeah. So, the way I think about this question is I think about what it does for the company or the business, which is employing a person or engaging a person, and then what it does for the remote worker. But what it does for the company is very simply allows them to hire anyone anywhere. That’s an interesting tagline that we use in a few different ways. It’s really been quite easy in some respects to go anywhere, for sending money anywhere, or send a letter anywhere, or an email anywhere. But when it comes to actually hiring someone, it’s very complicated.
Scott: Yeah.
Dan: It’s extremely complicated. So, first thing we solve for is we help people hire remote workers, no matter where they or the worker is or are. And we do that in a compliant way. We provide a suite of compliance tools, accounting tools, to make sure that that engagement is set up properly, maintained properly, and make sure the experience is as [pain free] as possible. It can be very onerous to maybe have international engagement, figuring out the accounting, figuring out even just the payroll funding and liquidity side of things is really complicated.
Scott: Well also the legal structure, right? If you’re going to hire someone as an employee in another country, you can work with Deel or you have to set up like a subsidiary and have a whole legal structure set up in that company in that country for one person, or five people… There’s a lot of hoops you’ve got to jump through just to hire someone, an employee in another country.
Dan: Oh, a hundred percent. I think it goes deeper than that. We have clients that come to us, which actually have subsidiaries in the country where they want to hire, but the employment compliance overhead is so great, they would rather we look after that for them.
Scott: That’s interesting. I didn’t know you guys would work with someone who already had their subsidiary open. So, you’ll actually take on the he employment compliance burden for them.
Dan: Yeah. We’ve had some clients, typically U S businesses, that have thought, I want to set up a presence in Mexico, for example. I’m going to incorporate a company in Mexico, I’m going to get an office and that’s for hiring people, and they get partway through that process and they think, well I’ve got the subsidiary, that’s cool, but I don’t really want to deal with employment compliance for 20 people down there, nor do I want an HR leader, a coordinator, and a finance leader. We can look after all of that. We can actually set up and utilize that Mexican entity for the client. What we provide is one system of record and one clean platform for reconciliation, for payment, all of that kind of stuff.
Scott: That’s beautiful. And I think your roots are… You guys handle both contractors and employees, right? I think one of the things I thought was cool about Deel was that it’s pretty transparent when you’re in the Deel platform, you’re looking at one view or as you said, the system of record for all your international team members and you kind of blur the lines between contractor and employee on purpose, it actually is really helpful and effective for the client.
Dan: Yeah. I think the thing to note is that an employment relationship is a certain type of legal mechanism that can be used to pay someone to do work. And so, can an independent contractor relationship, it’s just that is a business to business relationship rather than an employment relationship. And I’m speaking in fundamental terms which aren’t too exciting. The point is, companies shouldn’t be limited by geographical boundary of where they can hire with Deel they can hire anyone anywhere, and I think the pandemic has seen the disbursement of people, the disbursement of talent. Really interesting point for your notes is that I think people come to us and see what we’re doing, and they think we would use a geographical arbitrage when it comes to hiring and when it comes to hiring people. But it’s pretty interesting to see where we’ve formed natural kind of clusters of our own team. And we have a cluster of people in San Francisco, in Toronto, in New York, in London. And the most important point here is it’s the best talent that wins the position rather than where they’re located. And of course, there are some edge cases, out of 120 or so people we have on the team, they’re coming from over 28 different countries. But we do have those kinds of concentrations in some of the cities that you would expect.
Scott: Totally. I’m with you. I think, especially with when COVID hit, everyone got so much more comfortable with hiring remotely and hiring across the world. And people left the United States and went to wherever, maybe their home country or some other place, that it stopped becoming a wage arbitrage and became just a talent arbitrage. Like “Hey, we just want the best person, and if this person happens to live in Europe or Asia or wherever, we want to work with them” and that’s been really exciting. I think it’s really empowered a lot of international team members because there’s so many talented people out there and now they get to work with the best startups in the world. I see that across our client base, like crazy, that is why they’re using Deel. You might save a little bit of in the short term, but I think that’s going to get arbitraged away too, it’s more about just finding the best people.
Dan: Exactly. And then I think once you find the best person, you need to give them the best experience. And that’s how we come in. That comes to the whole other side of the business, which I haven’t spoken to. So as a remote worker, you can get access to benefits as if you were here in the US. Whether that’s healthcare, whether that’s anything else within a typical benefits suite, or whether that’s financial tools. So, we are a payroll company and an HR company, and also a FinTech company. We do financial technology. Being able to collect money in the United States and pay someone in India, requires financial tech to do it really, really well. And I think that we’ve played that financial tech angle to our advantage by developing products, which we take for granted here in the United States or in England, but people working remotely sometimes don’t have access to products like the Deel branded Visa card. And the Deel-
Scott: I saw that, yeah. Maybe talk about that a little bit.
Dan: Yeah, it’s really powerful. Let’s take Philippines, for example. We have some people working in the Philippines or in Singapore for US companies. If they want to receive their money, well, they have to wait for an international transfer and there are solutions like TransferWise, which have already taken away some of that pain by allowing transfers to be switched locally. So, money is debited in the U S and credited in the Philippines rather than going through a corresponding banking network. Now that’s great but I imagine if you’re starting to wait five days for your payment, even with a solution, why TransferWise? Well, the Deel card, because it runs on a Visa network allows the payee, which is the remote worker, to immediately access debt and wages. And that’s a real game changer for a number of our customers.
Scott: So, they’re not waiting five days for the money to hit their account and not seeing a ton of exchange fees and things like that taken out. They can just access it quickly and use it.
Dan: Exactly. Yeah.
Scott: That’s really cool. That’s super cool. The folks who have access to that tool must be asking their employers, or their friend… It must power the word of mouth of Deel pretty well because someone’s working for US company in the Philippines and they see their friend using that. It must be like a nice little customer acquisition conversation for you guys.
Dan: Exactly. And we’ve seen some really interesting stories of remote workers in different countries and we’re seeing some really almost extreme examples of where, we’ve had family members that have left the home country, the home village, they’ve gone to university in a foreign country, and they’ve chosen to return. And now they’re the powering the whole village, the economy of the village has been powered for them by Deel and by the Deel card, which is-
Scott: That’s so awesome. I love it, I love it. Hey, it’s Scott Orn at Kruze Consulting, and before we get back to the podcast, quick shout out to ChartHop. ChartHop is one of my favorite new SAS tools on the market. And basically, what ChartHop does is it puts your org chart in the cloud. And I always like to say, it brings transparency to your organization. And so, everyone in your organization can see who they report to, they can see the full org chart of the company and how their group relates to other groups. It also has a lot of information on the individuals in the company. And so, you can click on the ChartHop profile and just get where people live, their experience, Slack handles all this kind of stuff. And it’s just a really great tool. The other thing is, ChartHop has started doing some cool stuff around compensation and budgeting planning. And so, you can actually start seeing what the cost structure of the company will look like during certain kind of scenarios. So, I’m loving ChartHop, check it out, try We use it at Kruze, we really like it, and I can’t recommend it enough. All right. Back to the podcast. Talk about the benefits aspect of this. How does that work? Do you guys have relationships with benefits providers, or is that in-country thing or… Because I think that is one of the things that people… It causes them to want to be an employee instead of a contractor, the ability to do benefits. How how does that work?
Dan: Yeah. I think there’s two things. I think the legwork that is done, all the heavy lifting that is done to provide US benefits in the US is substantial and getting access to a 401k or to health care is really, really important. It’s not only the access to the service itself, but it’s the point of that heavy lifting being done really, really well. We are aiming to do that no matter where anyone is located. Of course, it would be pretty crazy to go to every single country and do that. So, there is this global strategy here, and we can negotiate really, really good rates with big companies that can issue benefits in multiple different countries. But the prevailing thing that we’re trying to achieve is to deliver the same experience and kind of workplace experience or employment experience, no matter where the person is located. So, someone who is engaged remotely should have the same workplace experience as someone who is employed domestically in the US.
Scott: Which is beautiful from a team culture perspective because it puts everyone on the same playing field inside the company. I think that’s one of the things where you don’t want to have people feeling like they’re a second class citizen, when they’re doing the same work, or just as important to the company’s success. So I think that’s another nice thing you guys do.
Dan: Yeah. I’d say that there’s some deep strategy here. So given that we’re issuing FinTech products, given that there’s a really strong suite of benefits. Well, we all know that the tenure of employment, so the tenure of holding a role is decreasing massively, and gone are the days where you worked for a company for 30 years. Maybe you get a mug and a trophy. So we’re seeing shorter tenures of positions, and our platform is designed to accommodate for that. Most payrolls are not… If someone is leaving a company and joining another one, we want them to take Deel with us and they do.
Scott: That’s super smart. I hadn’t thought of that. So they maintain their Deel accounts on the employee or contractor side, and then they can just re-hook into the next company they’re working at.
Dan: Yeah, exactly.
Scott: That’s really cool. Oh my gosh. Well, that’s really nice for you guys from a business perspective too. Talk about… One of the things we really like about Deel was is how clean it is, how the data comes through from an accounting perspective. Do you want to spend a minute just talking about some of your accounting integrations and how all that works?
Dan: Yeah, absolutely. I think for me as a small business, or at least what was a small business, kind of administrator accounting and finances has been something that… They’re very time consuming. I think the tools that are available, whether it’s QuickBook Zero, NetSuite, or any other software, is designed to speed up that process and make things easier. And I think there are a number of really good tools when it comes to kind of expense management. We’ve seen the rise of companies like RAM, which has done a really great job. I think when it comes to payroll and paying people, especially on an international basis that process is particularly cumbersome and slow around payments, invoices, tax withholdings. Well, what we’ve done is we’ve consolidated that in the system of record that I previously mentioned, and then we’ve done these lateral integrations with the accounting softwares. And they’ve been live for some time. I think we’ve been live with most of the accounting softwares that I’ve mentioned for about six months. But what I’m most excited about is we’ve spent a lot of time refactoring those integrations and improving UX. So it can be as fast as possible when it comes to doing that reconciliation and import of data.
Scott: Speaking as an accountant to tons of startups, that makes our life so much easier. Kind of the only alternative until Deel came along was People would use TransferWire a little bit. TransferWise, excuse me, but TransferWise didn’t have the ability to have invoicing… The invoices [in the] sync very well into QuickBooks. That’s one of the things I like about Deel. You guys actually have a really nice sync and the invoices are available, it’s easy to see, it’s easy to access, makes the accounting for that a lot easier. So kudos to your data integration team there.
Dan: Yeah. And the UX designers as well, because the improvements that we’re launching soon are really, really awesome.
Scott: I love it. I love it. Well, this has been fantastic. I really appreciate your time. Maybe you can just tell everyone how they can reach out to Deel if they’re a new company or if they’re a company that’s actually… Cause I think you guys are doing… Your roots are in startups, but you’re starting to do kind of mid, late stage startups and bigger companies now, right?
Dan: Yeah. We have quite a few publicly traded companies that use us. A few household names, which is really cool. I think if anyone wants to get in touch with us, the onboarding process is really high touch. So we like all of our clients to meet the team so we can probably understand what your needs are and make sure you’re using Deel most effectively. So just head to our website and schedule a demo and someone will be in touch very quickly. In fact, we can handle demos live. So if you want to get in right away, we can be on a video call in a couple of minutes.
Scott: That’s awesome. Well Dan, it’s been great getting to know you. Thank you so much. Give our best to the folks at Deel. And like I said, we’ve seen a really big increase in Kruze clients we’re sending over to Deel. So, keep up the good work and they’ve all had great experiences. So thank you for everything you’re doing.
Dan: Awesome. Thanks so much, Scott.
Scott: Thank you so much.
Dan: See ya.
Singer: (singing) So when your troubles are mounting, in tax or accounting, you go to Kruze. Founders and Friends. It’s Kruze Consulting, Founders & Friends with your host, Scotty Orn.

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