To view the full webinar click here. Want to learn more? Join the second episode of Scaling your startup across borders on Tuesday, 6 July. Sign up for free here.
Over the past three years, I have spoken to hundreds of startup founders and entrepreneurs in the capacity of a journalist. One common point of discussion has been about scaling startups across borders- why it is important and what are some of the common challenges faced by startups. The answer to the first question is simple: scaling equals more opportunities, more avenues to do business, more reach and thus, more growth. The answer to the second one can be many things- lack of support, lack of funds, lack of a proper network, weak team and most important of all, the lack of knowledge.
With the world increasingly becoming more connected (pandemic aside), from the surface, it may seem like scaling across borders is an easy task but the truth is far from it. According to a research paper published by Deloitte, the chances of a new enterprise to ascend and scale up are merely 0.5%, which means that only 1 out of 200 surviving new enterprises are able to expand their business. Unicorns make up the even smaller subset of scale-ups; only 104 startups are valued at over $1 billion.
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The main reason why not many startups are able to successfully expand their business is the lack of proper know-how. The expansion of a business entails several things: understanding the product-market fit, building a team on the ground, being aware of the compliance requirements in the new market, and more.
Having in-depth knowledge and the right skills is a necessity for founders looking to scale their startups beyond borders.
Providing startup founders and entrepreneurs with the know-how to scale across borders
With the goal of empowering startup founders and entrepreneurs with the right knowledge to expand their business across borders successfully, payroll and compliance platform Deel recently conducted a one-hour webinar in partnership with AI and fintech startup Plentina.
The topic of the session was “Scaling your startup across borders: A closer look at building your local entity and remote team”. Held virtually on 18th May, the main highlights of the webinar were discussions on legal and regulatory challenges of setting up a remote local entity and ways to build a remote team culture among other related topics. The session was helmed by Abhinav Krishna, Head of Expansion APAC of Deel, and Earl Valencia, Co-Founder of Plentina, which is headquartered in the United States and is currently expanding in Southeast Asia. The webinar was moderated by Madhurima Bhattacharya, Senior Manager of Bain & Company.
Leveraging relevant industry experience to help entrepreneurs understand the nuances of business expansion
The panellists and the moderator of the webinar brought in decades of relevant industry experience and leveraged their knowledge to explain the nuances of business expansion and why it is more pertinent in today’s climate.
Deel’s Abhinav comes with extensive experience in entrepreneurship and handling business across different countries. After graduating from the National University of Singapore and before starting Deel, Abhinav founded an Enterprise Healthcare platform OurHealthMate where he went on to work with clients like Airbus, Colgate and Sony among others for eight years. His time at OurHealthMate gave him insights into the struggles of working with remote teams and that is what led to Deel- a newly-crowned unicorn startup that helps companies with international payroll, benefits, taxes, and compliance. With their Series C of $156 million raised, Deel’s valuation has reached $1.25 billion in just under 24 months.
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Earl is the Co-founder of Plentina that helps retailers in emerging markets offer their customers the ability to pay with credit even without a credit card comes with rich industry experience in helping companies with digital transformation by leveraging technology and innovation. He has previously worked in the fields of digital transformation as well as tech and innovation at various tech. Earl spent 4 years in the Philippines and co-founded QBO, the National Innovation Center of the Philippines, IdeaSpace Foundation, the leading incubator and accelerator based in Manila and was the VP of Corporate Development and Innovation at Smart/PLDT, the largest telco in the Philippines. For his contributions, he was awarded the title of One of the Ten Outstanding Young Men and Women of the country by the President of the Philippines.
Madhurima Bhattacharya specializes in advising companies in technology and private equity sectors with questions on strategy, due diligence, growth and operations. An alumnus of the National University of Singapore and Chicago Booth School of Business, Madhurima has enjoyed the flexibility of being able to work across four continents and “future of work” remains a topic close to heart.
Opportunities and challenges faced by remote teams in Southeast Asia
Southeast Asia has always been the land of opportunities and there is no dearth of talent here. Many foreign companies are hiring remote staff from the region. However, the main barrier has always been a lack of compliance systems.
“I read in an article that around 55 per cent of the people hired remotely don’t get paid on time. The relationship between clients and contractors is increasingly becoming alienating. They don’t feel like a part of the team. The idea of “outsourcing to reduce costs” is archaic and it needs to go away for remote team members to feel like a part of the bigger picture,” shared Abhinav.
Earl added, “the key to a better and more resilient future is having a unified approach- looking at Southeast Asia as one big ecosystem with massive opportunities and scope for growth and development. That way we can produce unicorns that can have a presence across multiple countries. This is where standardised payment compliance systems can make hiring remote teams and scaling across international borders easier.”
Setting up a local entity: When to do it and how to go about it
Abhinav shares from experience that for most companies, once their home team grows to 20 to 30 people, they start incorporating in a new country. “However, I have seen companies with 100 employees in their home country and still not incorporating. That might work in rare cases but on average the golden number is between 20 and 30 based on what I have seen on the client-side so far.”
On the other hand, Earl believes that the perfect time to start looking across borders is once your team has five members in the home country. This contrast in itself goes to show that there is no right or wrong time to scale your business- it depends on the type of business, readiness and the kind of talent you are tapping into.
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It is crucial to remember that when setting up a local entity and incorporating it in a new country, factors like admin costs, HR, accounting and other logistics, such as payroll, taxes, and withholding must be taken into account.
This is where Deel is stepping up and helping startups with international payroll, benefits, taxes, and compliance in some 150 countries.
Interested to take the jump and scale beyond borders? Learn more about Deel and get special discounts as an e27 member. Visit https://www.letsdeel.com/partners/e27
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