Managing Hypergrowth & Global Expansion, with Pedro Monteiro de Barros of Remote
While 2020 was tough for many startups, there are a few that found themselves in the right place at the right time. Companies addressing the new pain points brought about by the crisis experienced explosive growth in 2020 — and Remote was one of the rising stars.
Founded in 2019, Remote manages international payroll, benefits, taxes, and compliance for distributed teams. In 2020, they doubled their customer base every month, and attracted plenty of investor interest, raising a $35M Series A just six months after their $11M seed round.
To hear more about Remote’s rapid growth phase, we sat down with their VP of Finance, Pedro Monteiro de Barros, for a community Ask Me Anything session. Questions centered around hot topics like opportunistic fundraising, finance KPIs, how to quickly scale your finance team, the challenges of hypergrowth, and of course - best practices for managing a distributed workforce.
Here’s some of the highlights & key learnings from our conversation with Pedro:
How are you thinking about structuring the finance team in this growth phase? Which positions did you hire for first, and why?
The team will grow organically. I'm not trying to just increase headcount for the sake of increasing, because I can leverage outside help for that. I want to have critical strategic functions that can not only do the work but also think ahead.
One of those key functions is treasury. Obviously we are flowing millions of dollars across the world, invoicing and then paying out to employees. It's crucial. We need to make sure that our treasury functions are very well established and even enable our own technology to connect and to accelerate our treasury management.
Another is Controlling. We need to make sure that we are compliant, that we have the processes in place first. In other parts of the business, we are still in the very early days of experimentation in terms of feature and product development. But on the finance side, we need to be slightly ahead and working with the scale-up mentality.
What qualities do you look for in a finance hire at a fast-growing company like Remote?
It’s people that can have an impact straight away. You can see and understand that they have the drive to make an impact from day one. Obviously there is a ramp up period, but they clearly know what they're doing and how they can contribute. Ownership is very important.
Have you found it challenging to create a budget and hiring plan given your rapid growth and the unpredictability of the market?
Very. Usually, we go into defining our business plan for 2021 and then after focusing for a couple of days, we pause it and then we go back and revisit. It's really, really hard. We have very scarce data to base our growth on.
Even funnel metrics are very limited. Just assumptions for assumptions sake. So we are still trying to build some more data to be able to more easily and more rationally build a projection model.
What keeps you up at night during this hyper growth stage?
I think one of the most challenging things for me has been that we didn't scale the team fast enough, especially the finance team. And even working with third parties, it's never the same thing as having your team supporting that growth. I think that was one of the key things that kept me up at night, was trying to grow the team. It's not easy, especially for a startup.
Everyone kept telling me - just hire. Focus on hiring. Everyone knows it, but when you have so much to do, how much can you really prioritize that? In a scaling mode, what you need to do is hire very good people, people that are better than you at doing their thing. Thankfully, we are now growing the team in all aspects with this, which is good.
In a scaling mode, what you need to do is hire very good people, people that are better than you at doing their thing.
What finance infrastructure (people, processes, systems) do you build first for each new country you open? How do you integrate those into the HQ finance infrastructure?
That was one of my biggest challenges initially. It was’ how are we going to do financing in a very fast-paced company, opening new countries?’ And it's not one country every month. Now it's multiple countries, and in batches, per month. So how do we go about it?
We had very different options of centralizing everything in Remote, which would mean I would have a very, very large team to be able to cover everything from tax managers to transit pricing to financial reporting, having everything in-house and with different specializations across the world, which then seemed the best option for acceleration and scalability.
Or we could have local partners, but again, managing 10, 20, 60 local partners on the finance side just in accounting, bookkeeping, reporting seemed rather complex.
So, we decided to centralize and we are establishing a shared service center to work with us on all the finance functions.
We work with global players for the scale that we want. But obviously we need to engage locally to get local expertise. But we are opening entities country by country growing quite fast and will continue delivering on that. Obviously the challenges of opening an entity in Canada, UK, etc are different. So we need expertise from advisors and partners to enable this.
The business model is quite simple, but the complexity comes out of the global structure. We have a very strong network of teams that we work with globally.
How does Remote manage the company culture in a fast-growing distributed team?
We proactively focus on that. You have two co-founders that are obsessed with that and they're obsessed with how people are working, how people are behaving. They're a critical example of that.
We focus a lot on asynchronous communications, so for us to be able to actually know who's who, we need to have frequent meetups. Before, we had the question of the day every day at 4:30. We used to meet on a call. We are too big for a call these days, but we still have in two time zones team bonding calls for example, where we just engage and spend some time with our colleagues on a very informal way.
We meet frequently with each other, just without any agenda. We spend time on hangouts outside of our normal work stuff so we can just relax.
Values are always very well ingrained in everyone. People are hired towards our values and not the other way around. I think values was the first thing that was established in our company actually. Before anything else was drafted, Job and Marcel drafted our company values and we continue hiring for that. Kindness being one of them and for that, it trickles out to everything — people are very open, very receptive and engage very well with each other. But it's very proactive. We don't leave it to chance.
Would you recommend going with opportunistic fundraising? How much funding is “too much”?
I think more than anything, you need to know what you’re going to do with your capital. Having capital sitting and not being worked, it's painful for everyone watching, for yourself and every investor. As long as you have a way to use that capital towards growth, that’s what is critical.
How much is too much? I think the market dictates that. Usually the market doesn't leave you too much. If the market is giving a certain allocation of capital, it's because there is a belief that there is a delivery on that allocation of capital. Obviously there are some cases that are a bit extreme, but I don't think we're talking about those.
More than anything, you need to know what you’re going to do with your capital. Having capital sitting and not being worked, it's painful for everyone watching, for yourself and every investor.
Obviously, for us, it's not like we needed it. It’s not like we were running out of capital. It was more about our investors being fully aligned with our strategy for growing our global presence, of really accelerating our commercial operations so we could fully deliver our solution to more companies that were in need of it.
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