Podcast: Startups of London
In this episode of the Startups of London podcast, Ozan Dağdeviren meets Chris Priebe, founder of Zelt, to discuss the importance of the employee experience, how companies can empower employees with the right software tools, and also talk about Zelt’s roadmap for 2022 and beyond.
Below, you can find the full transcript of the episode.
Ozan Dağdeviren: Hello and welcome to the Startups of London podcast. I’m your host Ozan, I’m the founder of Startups of London. Today I’m joined by Chris, founder of Zelt. Zelt is a next generation employee platform that lets you manage payroll, benefits, devices and apps, seamlessly in one place. Welcome, Chris.
Chris: Hi everybody. Thanks for having me, Ozan.
Ozan: This is a very competitive space, isn’t it? How did you decide there was a user need that is not currently being met?
Chris: Yes. So I used to be a software investor myself actually and was involved in looking at many different parts of the software market and realised that fundamentally, the way we work as individuals has really fundamentally changed over the last 20 years or so. We’ve migrated away from manual work, from mainly manufacturing work, to a more digital work-based society. And most modern companies are knowledge worker based or service based, and that also means that the way companies are managed and run has really massively shifted and changed over the last 20 years as well. And what I saw is that actually the software that is used in companies to manage people, to manage flows, to manage people operations, has actually not changed that much. Sure, the software looks better now and has better design and better UX. And if you look at the existing leaders in the relevant HR software markets, for example, they’re now on the cloud. And SMBs and smaller companies can very easily use them. But the way they fundamentally worked hasn’t really changed.
So, we are building something new with this new reality in mind, that optimises not just for this new type of company but also with the ultimate beneficiary of the software in mind, which is all employees. And that’s another major difference, which is that most of these best in class existing solutions, that exist out there, are really focussed on pleasing the buyer, which is a couple of users or a few users in a company, rather than on the 95% of the rest of the company which is the employees. So that is the north star we’re sailing for in this new reality of us being these digital workers, knowledge based workers.
Ozan: In my experience, even if the organisation needs something, if the decision maker does not want to buy that product, it’s very difficult to make that business a profitable one. How do you overcome that dilemma?
Chris: There’s a gradual shift happening in the community of professionals in that field and it’s not quite clear, it’s not a clear definition of what it means, but there’s this term called employee experience and you can break down a modern company as I described before into two things that are important. It’s the customer experience, and then it’s maybe, the one that has been focused on almost solely in the past because it’s more directly relevant to revenues. And there’s the other one, which is employee experience, because employees are the backbone of what you build and what you can offer in the first place. Because it’s the engineers that build your product, it’s the sales people that get you your customers in the first place, and it’s the operations people that try to keep everything together. And this element of a business has been overlooked and also under-invested. I think there are many reasons why this is changing but it is changing.
If you look at opinion pieces, content, or leaders in the space that talk about important things that are going on, it’s clear that this is becoming more and more important. I think one of the reasons is that top talent has become so much more difficult to attract. And the fact that the skillsets needed in modern companies has shifted towards very specific skills that are underserved. Companies really need to try harder to do better in serving their employees and build this more like a symbiotic relationship. I think in the past, employers were seen as not on eye level, but at a higher level, and employees were the servants that in exchange for cash were serving the employer, serving the company. And I think that is generally changing. It’s now more seen as something at an eye level where it’s employer, employee, coming together as something on an equal level to contribute to something together.
Employees are also asking themselves, ‘Why do I work?’ or, ‘What do I work for?’. Not just an exchange of time for cash. The meaning has increased in importance. So I think there’s a lot of changes happening and that contributes to the fact that this construct of employee experience has become important. And I think you’re right. Not 100% of companies that I would like to have as customers today would buy into this because they may not care yet. And maybe they want to buy the stuff that makes their life the best. Or, historically, it’s just what others have been buying because there’s also these self reinforcing patterns that people fall into. But there is a certain percentage of people that care a lot about this new trend. And those are the ones that are early adopters. But it’s spreading, it’s going to be a larger increasing percentage of the market over time.
Ozan: For Zelt, correct me if I’m wrong Chris, but the foundational idea that the business has been built upon, at least one of them, is a bigger trend in the overall global marketplace, that employees are being valued more, and on the back of that trend, organisations will want to create better employee experiences and when they have that problem, you’ll be the solution. You are the solution. Is that right?
Chris: That’s correct, yes. At least we strive to be. It’s an ambitious product to build and one that doesn’t build overnight. And while we’re now just over a year into the building process we’ll have many years to build the software that we strive to build. That’s our mission to get there. To build something that’s hopefully 10x better than the alternatives that are being used today.
Ozan: How does Zelt differentiate itself from other tools in the market? Are you trying to build a certain angle? Or do you want to build this company in a way where you say it’s actually a combination of all of these factors together but in a better package that saves time?
Chris: Yes. I realise what we’ve talked about so far has been very high level and abstract so to make it very specific to what we do. Generally, I would say there are two sides to Zelt. One is of course that we still have to be able to serve the needs of an administrator, or a HR person, or an operations person, or a company running processes because they’re the ones who are in charge of these processes and running them. And then there’s the other side which is every single person in the company which is an employee. Employees get certain resources and certain, let’s just call them resources from their employer, and that spans across for example, payroll.
Why do you join a company? Well, for many reasons, but you definitely want to get paid. You have bills to pay so you want to be on the payroll. You want to get paid. That means employees receive a salary, they receive a payslip, they receive some tax information. On the other side, you have the admin who has to run this stuff. You have to make sure that payroll is run on a certain date to make the wire transfers, etc. There’s a constant amount of work involved in this process. The second thing we do, for example, is giving people access to their pension and benefits. So, in the UK you need to have a workplace pension. Now, as an employee on Zelt, you can very easily get access to your pension, you can make choices like increasing your contributions, opting in, opting out, adding additional contributions voluntarily, very easily.
And on the admin side, any choices that are taken by the employee are automated because it’s a fully integrated platform. Today that involves a lot of manual work to implement. And it continues across other areas. So as an employee, what else do you need to be productive? You need a work email so you can communicate, you need an account in Slack, if you’re an engineer you need your AWS account, if you’re a salesperson maybe you need Salesforce and perhaps a Pipeline account. So within Zelt, you can very easily set these up, you can request access, and a lot of the manual admin work that’s happening today to set all of this up, for example in an employee onboarding flow, we almost entirely automate away because we’ve built the bridges to these other systems to automate the flows via APIs. So in practical terms, in Zelt, you can connect to Google Workspace that you’re using in the company, you can connect your Zoom, your Slack, your AWS. And that means that you can monitor in real time who has access to what but then also very easily make changes. And give people additional access or remove access as and when needed.
Ozan: Can you tell us a bit about your growth journey in terms of the investments you’ve received? The team that you have in place? And what is your cost structure?
Chris: We raised a pre-seed round that we closed in January last year with a total of £650,000. And we’re currently closing a, roughly, two and a half to 3 million pound seed round. In terms of the team, currently we are 6 people. We used to be slightly bigger a few months ago but unfortunately a few people left the team. So we’ve always been around the size of 6 to 8 people. For the majority of the journey and of course we started with 1 when I started out with the idea, in the ideation phase back at the end of 2020. In terms of the cost structure, I mean it’s 90% salaries, essentially. And then you have some costs like office rent. That’s probably 95%. And then you have smaller items like insurance, AWS, and Google, and that kind of stuff.
Ozan: So in terms of profitability, is that something that’s on the horizon? Or is it about user acquisition now?
Chris: So ideally, we’re not going to have to become profitable over the next 5 years. I guess as long as venture capital investors are allowing us to grow fast without needing to be profitable. I guess it depends on your growth trajectory. We’re just starting to grow now because we launched our product in December so we’re entering the growth phase now and that means we want to open the tab and invest in our growth. Profitability is not really a topic for us in the next 3 to 5 years, hopefully.
Ozan: What’s the biggest focus in terms of the customer acquisition?
Chris: It’s really our entire go to market strategy and execution. This is the kind of product you can’t really build an MVP for in 3 months. So for the majority of the last year, the big focus was building a product that actually has enough differentiation and distinction to alternatives out there, or at least fulfils a meaningful part of our mission, which is creating a better experience that we can actually go out and sell. So now we’ve been in that position for roughly 3 months, where we have a product where we can actually at scale make available to our customers. We’ve signed up roughly 30 customers in the meantime, these are mostly London based startups, most of the VC backed as well, so they’re in a very similar situation as us and growing fast. And now the challenge is to build a repeatable sales channel across the different channels that there are. Across email, and content, plus some traditional sales tactics, to scale that. So we can get to 2, 3, 400 customers in the next 18 months or so.
Ozan: When you are making decisions about the startup, is it just you or do you work with other people? How do you get feedback? What is your general decision making process?
Chris: I’ve started very actively building out a strong network of London based founders because it turns out everybody has more or less the same problems. I’m a first time founder, while I was a venture capital investor before, I didn’t have a friends network in the founder ecosystem. Of course I have some founders that I was close to because I backed them, for example. But just by the fact that I spent most of my time investing rather than building or operating that wasn’t my biggest network so what I did was I actually started this thing with a friend of mine called founders society where we just tried to get together founders in a similar stage as ours and maybe some later stage founders, to get together on a frequent basis. We’ve started organising these dinners, we’re now 36 people, we have a WhatsApp group, we meet very regularly, and that’s been a very big help in bouncing new best practices, learnings, questions, from each other.
And usually when I want to know about something that I haven’t thought about before in detail, or a problem that I’m trying to solve, usually, there’s a handful of people with valuable insight. And then it’s just about triangulating between other people’s opinions and experiences and then also of course using your own mind to kind of follow your intuition and triangulate. Sometimes that means you go with learnings from others and sometimes that means you trust your own opinion, in case that’s different, and you just go with that. Obviously, we have people in the team that have leading roles. So Paulina for example, in product. Or Rafa and Sandeep in Engineering. But in growth for example, there’s nobody in the team right now that a) is doing growth. Or b) has any meaningful experience in it. So it’s me now having to teach us or hire somebody into the company that gets this expertise into the team. And for that I heavily rely on the networks I described earlier.
Ozan: Are you actively recruiting?
Chris: We’re actually making around 10 hires in the next let’s say, 6 months. I think probably half of those we want to do in the next 2, 3 months and then maybe slow down slightly, but we want to get to roughly 15 people by the middle of the year.
Ozan: What type of people are you looking for?
Chris: We’ve learnt already in our journey that we know very much what our values are and that’s why the 6 people that are on the team right now are working so well. One, I think as a startup there’s a certain type of mentality that thrives in a startup. Things aren’t certain. Like you don’t really know exactly what you’ll be working on in a month’s time. I don’t know what I’ll be working on in 3 month’s time. So you have to be really adaptable and you have to be comfortable with that uncertainty. And the other thing is you’re thriving on being proactive and seeing things that need to be done and for yourself also identifying the areas where you can add the most value right now and then just doing them because realistically if you have a certain skillset or a passion, you’ll be the person best placed to identify what the area is that you can add the most value right now. And others won’t tell you, ‘Hey, you should probably do this.’ Or maybe you would add the most value here right now. Because they probably don’t know themselves. So it’s important to take the initiative and just go on the things where you can drive the most value and just own those and bring those forward. And I think in startups where they’re growing there are always so many areas where basically jobs, or titles, don’t even exist yet, where you can create your own path. But you have to know what your passion is or what you’re good at and proactively drive those forward.
Ozan: What type of professionals are you looking for? Designers? Engineers? If so, in which area, front-end, back-end? Are you looking for product people?
Chris: A designer is one of the key hires that we’re looking for. Because we now have a very deep amount of functionality that is very useful to our users, but we want to be world class in UX. So that the confusion that often exists in these kinds of complicated B2B SaaS tools, especially when it comes to internal business operations or administrations, we want to make that a lot easier. So we’re looking for a designer that can help us achieve that. And ideally somebody that has a strong visual design background as well. Because while we are a B2B product the final consumer is the employee.
And the normal consumer now has a very high standard in consumer-grade apps and that’s the kind of experience that we want to build for. So designers are very high priority. Then the second one that is most urgently needed as in we don’t have anybody in the company with that knowledge, or that specific set of responsibilities, is somebody in growth. And growth I would break down in marketing and maybe sales but we want to focus more on the marketing side. While I can focus more on the sales bit which is what I have been doing. So somebody with a growth background particularly in marketing. But then we’re also looking for somebody in content because that goes hand in hand with communicating with our customers and users, whether existing and potentially new customers. Customer success and experience, because I now don’t have the time anymore to manage these 30 plus companies, so we really need somebody there. And then of course we will hire engineers. Because so far we’re still a fairly small team and we’re accelerating on and off runs and that also means that our velocity in shipping has increased which means we need some world class engineers to join the team. Currently we’re 5 and we probably want to grow to 10
Ozan: What are your aspirations and goals for 2022?
Chris: I would break it down into three things. So, the first one is the team. Put that team in place that I just described to you so that we can cover all of the important areas for company building. That means hiring a world class designer, some world class engineers, and somebody who is extremely strong in growth and can help us drive these core aspects of the business. And the second piece is, I think just on the KPIs, we want to get to several hundred, maybe 200 or so customers by the end of the year, that means close to 8x our current customer base which is ambitious but I think it’s possible. And then on the product side, and maybe that’s most important, we’ve spent a lot of time building infrastructure and functionality in the last year because that is at the bottom, that’s where we had to spend a lot of time, and now it’s really making that as accessible to our core users, the employees, and drive as much value to them as possible. That means connecting with them at the right point of time where there’s value for them. Having the right notifications in place to make them aware of things that they’re interested in that are going on in the company. And I think that on the product side is the biggest focus for this year.
Ozan: There’s a lot of uncertainty in a startup. So uncertainty tolerance, ambiguity tolerance, seem to be the key attributes that usually successful people in the world of startups have.
Chris: Absolutely, I think uncertainty is great if you’re in the right market. If there’s change happening, you can position yourself in the right direction, you can grow something big and something important. If somebody’s interested, please reach out to firstname.lastname@example.org, I’d be happy to chat.