I hate being that person (hindsight is 20/20, I know you’ll roll your eyes at me), but when I saw Deel at YC’s demo day years ago, I knew they were going to be big. I never thought it would happen this quickly and they’d hit this scale though. My only indication was the fact they were making an unbearably annoying process a lot easier. Like every other person in this world (minus Hermione Granger, probably), I hate paperwork.
It’s obviously never that simple. Many founders solve annoying problems without becoming decacorns. You can be solving the most soul-wrenching problem, but if it only helps 10 people or if you’re waiting 3 years to launch your MVP, it surely won’t get you there. TAM and execution sometimes matter more than the idea itself.
Deel started as a performance-based payment system, but no one wanted to use it. It reminds me of something I see frequently. Many founders pick ideas to work on because they think they’re cool, fun, and seemingly like something that would work (hi, it’s me, I was trapped there once).
Most of those ideas never end up working (i.e. “unbiased news aggregator,” “micropayments,” or “Tinder for X”). You ask people what they think about those and they get all excited. Then you build it and try to convince them to use it, but no one does. Fundamentally, most ideas don’t work unless they (1) save you time (Command AI, Deel), (2) save you money (Amazon), or (3) make you popular (Twitter).
Enter Deel (post-performance-based payment system idea).
What’s the deal with Deel?
If you haven’t heard of them before (lol, what?), here’s the simplest definition: Deel is a global HR and payroll company. It started out by establishing its own legal entities in numerous countries around the world (yes, a real person went there and did this for you). When a company wants to hire internationally, Deel employs the worker through its local entity in the worker's country. This arrangement allows the company to bypass the complex web of international employment laws, taxes, and payroll requirements. Essentially, Deel acts as the employer on paper in each country, handling all legal and regulatory obligations, while the worker performs their duties for the hiring company.
Deel has now evolved into a full-stack HR & payroll platform, addressing other global work complexities like payroll, compliance, immigration, HRIS, and performance management/L&D. Deel has over 40,000 customers and native payroll engines in 50+ countries. It has the ability to be the system of record for HR organizations worldwide and can give its customers a simple and single interface to manage their global teams. Its goal is to make running a global business as simple as running a local one.
They grew from $1M ARR to $100M in 20 months. For some context, it takes the median startup 33 months to reach $1M ARR. As of 2024, they’re at $500M ARR (5 years after founding). This doesn’t just put Deel in the top percentile, it makes them one of the fastest-growing startups in history.
What’s the secret sauce?
They built something people NEEDED.
Boo, boring!
I remember Alex, one of the co-founders of Deel, mentioning in one interview how he’s lived in different countries across the world and how unfair it seemed that people born on one side of the world couldn’t work for companies in the Bay Area as easily.
One interesting mistake from their early GTM strategy was going to the freelancers trying to convince them to use the product. They quickly realized they were not the decision-makers and that they should instead try to sell the product to the companies hiring those freelancers.
When you find an idea people get actual value from, everything else becomes easier. You don’t have to come up with smart messaging–your customers do it for you. You don’t have to beg users/customers to give you feedback, they do it because they care enough.
The more time passes, the more clear it becomes to me that unsexy ideas are almost always the ones we should be working on.
Alex and Shuo saw an opportunity to make something slow and annoying, easier to access by anyone.
Timing in the market
Some will say it was luck. I say it was noticing a trend in its infancy and betting on it. Deel was founded in 2019, right when companies started to experiment with a hybrid schedule. The pandemic accelerated that and as a result, companies started to hire globally more and more.
Stellar customer support
…which translates to excellent marketing.
The perfect example of “do things that don’t scale.” I’ve rarely (or ever?) seen a founder/CEO of a company valued at $12B+ handle support tickets or encourage folks to DM him with feedback/questions about his company. They’re usually busy with important stuff. You know, like talking about Ayahuasca with a tech bro on a podcast somewhere. 🤭
I see it every day in a YC alumni group chat (not the Ayahuasca, the “talking to customers” bit). Search for his name and there are thousands of messages of him offering to help. And he gets to them so fast.
Alex knows what he’s doing. Not in an evil, elaborate marketing stunt to get their NPS up kind of way. He’s always been helpful and approachable. I remember asking him how EOR (employer of record) worked years ago (before Deel was this big)--he gave me a super detailed reply on WhatsApp, minutes later. He knows no amount of paid ads, influencer campaigns, or growth hacks get you the value of regularly talking to your customers. He understands the power of the superfan, even 40k+ customers later.
It’s truly mind-boggling to me how many founders start delegating this once they hit a certain milestone (often not even that impressive) because they think they’re above it.
Founders, Alex is single-handedly doing better PR than most of the agencies you’re hiring.
“Always on culture”
To the dismay of 4-day week proponents, companies like Deel don’t get to where they are without some blood, sweat, and hard-working, willing-to-sacrifice-some-things people.
This is a funny anecdote, but whenever I spot an interesting company that seems like it’s on its way to crazy growth, I subscribe to their Glassdoor reviews email digest. There’s nothing more raw and honest than an anonymous employee pouring their complaints on an online forum. Especially when the company is large (and therefore the risk of being identified is small).
I’ve been subscribed to Deel’s Glassdoor page for ~3-4 years now (please don’t use this weird habit against me). It’s fascinating to see how people love and hate Deel for the same thing: how fast they move.
They call it “Deel speed.”I think this review puts it very eloquently:
Deel is not for everyone and that is OK - I'd love to be a football player but unfortunately, I'm really bad at it, so I just need to deal with it and not criticize the sport itself when I'm not a fit, period.
So all in all, if you're up for a ride of your life, this is for you! If you want something stable with minimum change and at snail speed, then Deel is not for you.
Content is King
It’s how a lot of people find out about Deel.
If you visit their blog, you’ll see very targeted articles like “A Guide to Employee Background Checks in Hungary.”
It’s quite simple. By zeroing in on highly specific topics like these, they don’t just demonstrate their expertise but also directly address the pain points of their target audience. Creating practical, value-first content can help startups establish credibility in their niche. It's about solving real problems for your audience before they even sign up for your service.
They’re not PLG 🙂
Now, this might be a little ✨confirmation bias ✨, since we, too, at Command AI, have seen our numbers 📈 when we had customers go through sales to use the product. It’s more complex than that, go read about it here.
Deel does have a free tier (you can only use it for HR admin), but you can still only get that once you book a demo. We talk about this at length in the article we wrote about being sales-led, but in short, my guess for why this works well for Deel (and contributed to their success) is:
- It allows them to qualify leads much more easily.
- Human contact allows prospects to have someone to reach out to during their evaluation process.
- Deel has become a complex product (doesn’t just offer one thing). Having prospects go through sales helps them understand how the product works as a whole.
- Easier to upsell. 🙂
- More incentive for the customer to learn and use the product, instead of signing up and forgetting about it.
Conclusion
As you’ve guessed, there’s no one secret sauce. Instead, Deel does the all “boring” basics extremely well.
James visualized this in a useful way a few months back.
“While innovation is great, we rarely discuss the one thing that drives success.
I firmly believe innovation has a greater impact when narrowly targeted.
Don’t sprinkle startup fairy dust across every single part of the company. Funnel it narrowly into your keystone.
Build a novel product, not a novel everything.
Suppose a startup makes 100 important decisions per year. Roughly 5 decisions should focus on major innovation, i.e. big opinionated bets. Innovate in the most defensible/unique areas of your business. The other 95 areas should probably just piggyback on standards.”
