Factorial CEO raised $150M at a $2.5B valuation – without needing the money (Jordi Romero)

00:00:00: Still a vision in your head or is it absolute reality?

00:00:02: That's what

00:00:02: they happen.

00:00:02: Any industry, in twenty-twenty sick either becomes an A.I native Or become irrelevant.

00:00:07: In our industry you have like two to three months to do the transition Admin work that used to be amplified with software Now its replaced With AI.

00:00:15: When company uses factorial and employee gets sick The manager of restaurant get notification.

00:00:19: this person holding sick Here is document same as before.

00:00:22: You don't even need anything about It.

00:00:24: We had six people at the same sitting who are off today.

00:00:27: Who could potentially replace these persons?

00:00:28: I called All of them, only this one is available.

00:00:31: it's already on his way.

00:00:32: Like the AI is calling people The AI is submitting form to government The AIs updating payroll at end-of-the month and we have no idea what could do that.

00:00:40: One year ago which was like four years after Chachi PD was released My definition for intelligence is weight learning And my definition success rate adaptation.

00:00:50: What will be able in about twelve or

00:00:52: twenty months?

00:00:54: Jordy, with Factorial you're spending more and money on expanding to Germany.

00:01:01: The market's growing very fast.

00:01:03: the business is going in general.

00:01:05: I'd like to understand where Factoria started but also why Germany has an importance right now because knowing people helping building a Munich office knowing from your personally how many people are onboarding at that moment.

00:01:21: Please get us up to speed.

00:01:24: unlike The German market the HR software market that I need to know To understand factorial as good as possible in

00:01:34: a short

00:01:35: amount of time.

00:01:36: Okay, you tell me how sure?

00:01:37: um i think.

00:01:38: well Thank You for requesting and i think they important concept.

00:01:42: uh to realizes an entrepreneur is That most basic math that there is.

00:01:48: We help companies, we help people be more productive achieve more with their resources, we helped them grow achieved the business objectives and you realize where are more companies based what size of company different economies have?

00:02:04: And which ones need more health?

00:02:07: Factorio was founded in Barcelona Exactly ten years ago.

00:02:11: right now.

00:02:11: We're celebrating and it's funny

00:02:13: because for me, It's like ten years of the podcast in a month.

00:02:17: So we've grown together In the last ten years.

00:02:21: so we started experimenting on learning from Spanish businesses Because literally our friends were entrepreneurs And we could learn from their realities.

00:02:29: But very quickly realized that The business of all our friends who are tech entrepreneurs Are not where they reality Of economy restaurants, they're retail businesses.

00:02:41: They are manufacturing their distribution there logistics companies not everywhere.

00:02:46: so very early on at factorial we became a generalist in terms of industries that we serve and most the vast majority of our customers or not companies like factorial The company's.

00:02:56: like you know people managing building were sitting right now.

00:03:01: Spain is great place to learn and experiment but German, a german market is much better ecosystem because the quality of these mid-sized businesses it's much higher.

00:03:13: The lack And the impact of good technology on very solid businesses is massive.

00:03:20: So, the customers that we're working with in Germany are very grateful.

00:03:24: now.

00:03:24: it wasn't a straight path.

00:03:25: I can tell you It was an easy transition but i would say just this basic math Of how many people and How big the problem Is?

00:03:31: Then You start multiplying these numbers then Try to understand what's The impact your solution To This Problem and you convert That to euros.

00:03:38: and thats pretty much how We do business plans and market assessments.

00:03:42: What are the numbers and facts that you can tell me about Victoria's investment in a German market, that your like?

00:03:48: hey we're here to stay?

00:03:52: So factorial as whole is kind of reference number.

00:03:55: We have seventeen hundred people.

00:03:57: headquarters are in Barcelona but our second biggest office is Munich And we just opened it this year.

00:04:04: So you can see the trajectory of, off-the-growth.

00:04:06: I think We hired fifty people in the first two months Of opening the office and were nonstop hiding.

00:04:12: Last week.

00:04:12: we onboarded about ten more People Just last week to join our, our Munich Office.

00:04:17: It is Our second largest market After Spain which Is where we started and by far the largest, at the fastest growing market.

00:04:26: We did an announcement earlier this year about our series D. we raised one hundred fifty million dollars from general catalyst two point five billion dollar valuation.

00:04:36: And when we raise these round which was fun in the middle of the suspocalypse as journalists call it uh...we didn't need any money.

00:04:43: so The only reason we raised around to be able acquire companies country where we want to grow faster is Germany.

00:04:52: So, we are deploying many tens up to hundreds of millions dollars in the German market alone.

00:04:59: How you're approaching M&A?

00:05:00: In this case I mean for your own business.

00:05:04: You started before COVID.

00:05:06: so dilemma and hype cycle in one.

00:05:11: You had this, you have the pre-AI and now post AI... ...you need to rethink everything from ten years ago and reshuffle a lot of things I'm very sure.

00:05:21: And then there are companies that we're looking at not only beneficiary for all those things happened last year with funding environment etc.

00:05:32: So how do you think about M&A?

00:05:34: And also figuring out who to buy or who not?

00:05:38: Yeah, one comment on the way you started.

00:05:40: The question now I think my definition of intelligence is uh...the rate of learning?

00:05:45: um and My definition of success Is the rate of adaptation?

00:05:49: No so the companies that make it are the ones That adapt.

00:05:53: Uh even if we're not that old at ten years Old but We've already lived through You know some cycles in different dimensions In health in geopolitics in economy or all Of them together.

00:06:03: So It's definitely you Know figuring out What does the future look like with what we know today?

00:06:09: And we've had to ask this question way more often in these last few years than maybe, before that.

00:06:17: AI completely changed... ...what work looks like and especially what works will look like which is stressful and confusing at the beginning Luckily recording it in September of twenty-twenty six quite a lot of what this technology is actually good at, and we have some pretty solid ideas on what will be able to do with it.

00:06:41: We still you know there's a lot to dream about then I think it would be way more impressive than we think today.

00:06:56: but So one of the challenges that we realize is like, okay.

00:07:00: We need to help people upskill and re-skill way faster than they did pre AI because a lot of jobs are being affected by this wave off technology.

00:07:10: so as As a business with put a lot emphasis on training And the funny thing is training come in a lot things and we do all them.

00:07:17: Training can mean The technology software the AI products to help employees from our customers get trained but it also means the training itself, the content itself.

00:07:26: So at Factorio one of things that we just launched is what we call AI campus which is an education for employees and companies not necessarily technology companies or even office workers so they can also learn about their job will look like thanks to AI.

00:07:44: We announced acquisition based in Berlin called Empion.

00:07:49: I think it's a good example on company doing very well.

00:07:56: They research and build an AI technology that helps companies assess talent, both for recruitment as well as development of the talent inside a company.

00:08:04: And they were selling directly to customers with their technology... ...and then when we met we realized this technology in combination.

00:08:10: all the context that factorial has about our customers allows a lot of our customers who are not even thinking how they're assessing talent to use AI, to proactively help them and teach them how find the right people for their role inside a company.

00:08:24: And we're just in process of integrating that two companies together which is close to acquisition.

00:08:29: but I think this an example.

00:08:31: what's possible now once you have context.

00:08:34: Contexts are words.

00:08:35: if you use Cloud or ChargeBT because you run out of context then your prompts start complaining.

00:08:42: so Factorio has a lot of contexts has context from the moment you hired somebody to the one on ones, what they're expending money onto.

00:08:51: What promotion do want?

00:08:52: What training did they need?

00:08:54: Which teams have been part of all this?

00:08:56: information about their employees' job positions and success in a company is fantastic for AI but it needs to be inside its product because you don't want to give your context another solution outside of control, outside of GDPR privacy and security strict requirements.

00:09:14: So what we did is instead of waiting for our customers to take this context out of factorial in their company into other tools it's bring the AI inside of the context that they have.

00:09:25: That opened a door to M&A and acquisition opportunities.

00:09:31: I think you also, the way you asked a question.

00:09:32: You were asking about companies that maybe where better off before the wave of AI and may be they're struggling a bit after the Wave of AI?

00:09:40: The biggest angle there is fundraising.

00:09:44: like you talk to investors often as well... ...the world is binary right now!

00:09:51: You are either hotter than ever so you need an entropic or very similar to entropic Or your debt to investors.

00:09:59: And there's a lot of great businesses that are not entropic, That they're having really hard time raising money.

00:10:05: But their actually great business and even greater when part of the platform with more data or context maybe with distribution engine like sales people marketing funding to continue to grow.

00:10:17: So we have seen many companies I talked about two years ago.

00:10:21: They were not interested in talking about acquisitions.

00:10:25: The vast majority of founders i reached out recently that at least open to talk about and most are very interested in potentially

00:10:41: selling.

00:10:54: Fast like what was good?

00:11:00: Like five years ago, but it's not good anymore.

00:11:03: And then people are like We'll wait for the next lovable or an ex-anthropic and It's really ridiculous to see how black and white the market is right now.

00:11:15: Yeah

00:11:16: So from in Perspective of managing a company with like seventeen hundred eighteen hundred people eight

00:11:24: hundred people as of yesterday

00:11:26: as obviously eighteen hundred the amount of changes that's happening every month or every week, not even inside a product but also like in outside world where you have to reflect on okay AI now can do this.

00:11:40: Like through last year there was lot of moments when it is like oh I can How do I implement this into the product?

00:11:49: How to implement it as a team.

00:11:51: What, how does is affect that theme?

00:11:54: so are you navigating these moments of growth?

00:11:58: they're challenging enough but also these moment change like how can we do work and deliver solutions and products for your customers to navigate the organization growing on the edge of learning and growth all the time.

00:12:24: Yeah, I think in our case we are fortunate because with a company that was born to invent... To research to develop new technologies.

00:12:37: So by definition our culture and our talent has always been, even if you didn't ask them too wanting to research in technology is trying things experiment.

00:12:47: we are also very forgiving with mistakes And bets that don't work because We want incentivize people To take bold bets.

00:12:54: as long enough Our hits In the long run You're well off But make sure it encourages.

00:13:03: It's pretty natural Now, with the headcount that we have which is like right now, just a month ago.

00:13:12: I have to say not everybody was ready for such disruption.

00:13:18: so... We've seen people who are more engaged and fired up than they ever had.

00:13:25: literally some don't sleep because they finish whatever their working on and then there playing with what potentially it could be doing next day.

00:13:33: And that's fascinating to see, I have say happens too myself as well... Then you can see people who are overwhelmed.

00:13:41: maybe they forgot how leave a disruption like this so some of them struggle.

00:13:46: So go back training.

00:13:48: in education we try offer solutions a lot of training platforms and a lot content, time and budget so that people can re-skill themselves into using this.

00:14:02: And I think it's contagious at some point now not everybody makes it.

00:14:06: there is people who say like i didn't sign up for this which in startup should be forbidden sentence because you don't know what to do when you join the start.

00:14:14: but someone might want more calm and predictable environment, then definitely that's not what we can offer to people.

00:14:21: Luckily the vast majority of our profiles are more like in this ambiguous chaotic innovative growing reality over a startup or a scale up that is growing as fast as we are.

00:14:34: How you're maintaining your relationship with your leadership team being close enough to manage how?

00:14:41: And also review their performance on also all things changing and making your own mind if you think like, hey for the next one to three years that's a right person.

00:14:52: or also Hey maybe I'm not sure of it is.

00:14:55: Let me think about this.

00:14:57: some years ago This war this concept of digital native used to be thrown around then.

00:15:03: now everybody using AI native.

00:15:04: here i think use it as well.

00:15:06: um...I don't think You're born A Digital Native Or Your Born an AI Native?

00:15:14: So an executive or a leader of any company, any size and industry in twenty-twenty six either becomes an I native.

00:15:25: Or it becomes irrelevant depending on the industry.

00:15:28: you have two months to do that transition maybe ten years through the transition.

00:15:32: In our industry we have like two or three month's to do this transition.

00:15:35: so one hundred percent.

00:15:37: performance management conversations feedback conversation using factorial.

00:15:41: obviously They're very clear about that.

00:15:43: How are you personally not just improving your productivity with AI, like our company sells the AI to our customers?

00:15:50: So we all need to be experts in AI.

00:15:53: The same way We all have to be expert's in HR and we have to Be experts in finance.

00:15:58: We have two be experts In IT management because at the end of today these Are the problems will help our customer solve.

00:16:03: I don't care if You're ahead Of marketing or they had a technology Or their head off sales.

00:16:08: We All Need To be Experts in AI so there is a lot of pressure on our leadership to catch up and be as much of an expert in AI.

00:16:17: As they were, you know the cloud or the SaaS world before us now.

00:16:23: I have not typically relied on insiders In general for recruitment.

00:16:28: we like to hire raw attributes and attitude characteristics in leadership strength resilience curiosity ability to learn And then figure everything out.

00:16:41: So for example, our VPF customer experience came to a BtoB SaaS company back then with exactly zero experience in BTOB and zero experienced in SaaS or in software.

00:16:56: Our VP marketing came to factorial with zero experience on software, zero experience at all.

00:17:03: It doesn't matter smart people good working ethics and mindset.

00:17:09: And they both worked out fantastically, so I think it's the same for you can learn if your smart enough.

00:17:13: but

00:17:13: It's interesting because many of the VCs or also the founders listening might say hey But what make you faster to have somebody who already did?

00:17:22: Like What would you say is the counter argument today?

00:17:24: because i hear it often like especially vcs talk too early-stage founders that They just invested in were anything.

00:17:31: my strong recommendation to founders is not listen much what the VCs have to say.

00:17:37: You know, go pitch your business and get their money.

00:17:40: but I think you are a founder of this business.

00:17:42: they're VCs so it's better for them to listen to other founders saying that i love VCs some others.

00:17:51: we raised a lot from great VCs But I don't think its there job.

00:17:55: tell founders how be a founder.

00:17:57: So really encourage the founders not spend too many time listening to what vcs has.

00:18:02: I think it's tempting to think that there is a shortcut.

00:18:07: My experience, if you need to get somewhere... You'll have to figure out yourself!

00:18:14: If for example your founder- I'm a tech founder like a software engineer no?

00:18:21: Like okay i am the tech guy and we will do sales.

00:18:24: so just hire this great sales person or American VP of Sales.

00:18:29: He or she will teach me how to build a sales function.

00:18:33: I just don't think this would ever work.

00:18:36: and guess what, i did that?

00:18:37: It'll never work!

00:18:39: How does it

00:18:39: work?!

00:18:40: Well you're an engineer good for your structure.

00:18:44: You can design the system.

00:18:45: so learn how to sell.

00:18:47: impossible, like just try to sell.

00:18:49: learn how to sale.

00:18:51: Learn how sales organizations work.

00:18:52: ask all the founders asked other VP Sales get their numbers and then tried to model what's working with them.

00:18:58: Try to learn was not working with him And they come up with your own playbook.

00:19:01: that one thing that the factorial we're very strongly opinionated about is We have a Playbook but it's our own.

00:19:07: I don't care About other people's playbooks and i definitely Don't want to listen To What bc stuff to say?

00:19:12: I had One example once shared With The portfolio of one of our investors.

00:19:17: When we started Factorial, We were originally selling to relatively small customers.

00:19:21: Now our average customer is like many hundreds of employees Like you know one hundred five hundred eight hundred employee company.

00:19:26: that's a typical customer of Factorial.

00:19:28: but You know seven or eight years ago when we're starting to scale Our sales um...we Were selling the companies off twenty-five forty fifty employees and The VCs said you need to be product led growth.

00:19:43: You need to be a self-service business where companies magically show up at your doorstep and give you money.

00:19:49: And I'm like, that sounds awesome but it's not really happening... ...and i just don't think that makes sense!

00:19:55: I think my customers needs someone to walk them through what he means to use factorial.

00:20:00: What are all the problems we can solve for them?

00:20:03: It is very delicate operation of a business Their payroll their labor or taxes The compliance of our businesses delicate.

00:20:11: You don't just sign up on a random website and give them all their data in hope for the best, I think you need A little bit of trust building.

00:20:17: so we said We think we should build a sales team And the VCs literally In this case our vcs even set.

00:20:22: that doesn't make sense because look at The rule of thumb or the playbook?

00:20:26: Or good practices.

00:20:28: all say SME sales should be PLG product like growth.

00:20:32: It shouldn't not be sales touch and with it why not as like yeah Because unit economics are not good enough and I'm like, what good economics?

00:20:39: And they're like yeah the unit economics are not good enough.

00:20:41: We said okay let's do the math.

00:20:43: how much does an average customer pay us this?

00:20:45: How many leads we need to get a customer?

00:20:48: This okay multiply the number.

00:20:50: These are how many conversations you have?

00:20:51: How many hours of day Can an SDR or an account executive spend talking with customers?

00:20:56: these many How long does it talk?

00:20:57: You know which is that basic math like you know?

00:20:59: multiplications and divisions.

00:21:02: Then at end-of-the-day The math works.

00:21:09: It doesn't work in San Francisco, it does not work in New York but it works in Berlin and Barcelona or Paris.

00:21:16: so we could totally make the math work now for two reasons.

00:21:19: one because the salary is in Europe are not the salaries in San Fransisco.

00:21:22: that's still true today although things have changed these last eight years.

00:21:27: But second what we charge our customer Is more an absolute than with a typical productivity tool charges a fifty employee company because when the company uses factorial of fifty employees The fifteen please are using factorial and we charge per employee.

00:21:41: So, we're adding more value.

00:21:42: We're charging a little bit more than you're not taking application.

00:21:46: that it's what the SME software the VC is thinking about.

00:21:50: It's a long answer to say just do the math Just think for yourself And you know like just dump things down To the point where?

00:21:57: You really and deeply understand them and then you can make their decisions.

00:22:00: That's why I tell today all the founders

00:22:03: Let's go into the example of hiring VP marketing, who has no experience with BWB and not even software or SaaS.

00:22:13: So how much is getting this person up to speed about teaching them about industry?

00:22:20: And like letting them assemble a team that can... What are then core function in the core skill set you're hiring for?

00:22:32: That's a great example, actually.

00:22:34: This was last year so it still resented my mind.

00:22:37: one start up yet is like ten years I think for normal people.

00:22:42: Look in this case

00:22:44: We

00:22:45: Think we did pretty good the software stuff.

00:22:48: Like we built a good software with had to lot of customers who have been growing with SEO With paid advertisement and sales.

00:22:56: But what?

00:22:57: I understand as marketing which goes way outside of just bottom-of-the-final lead capture, which is what later I understand we were doing.

00:23:07: Goes well beyond that.

00:23:09: Guess where this is very important?

00:23:11: Not in enterprise sales but when you're selling dish soap and no offense to people producing dish soap the product is pretty similar.

00:23:20: so the reason you choose one over another it's because somebody convinced means something that you feel more connected to.

00:23:30: That's the power of brand building, which what is really difficult to do... ...is in consumer fast-moving products not in BtoB software where we're pretty unique.

00:23:38: There are a lot of products like us.

00:23:39: So if somebody who has been doing something very critical and very difficult In another industry then they apply this into your industry Where their product already differentiated And boom!

00:23:49: The impact is huge.

00:23:51: For me it makes sense.

00:23:52: Now I would say The basics of understanding how the business of software works took a couple months to learn, not more.

00:24:02: Because you hired the leader but already have team so they will help the leaders catch up and the rest is not very difficult.

00:24:10: So I like explain You know be a bit teacher gather on whiteboard do all numbers and explain everything we did.

00:24:18: We had lot data And then also it's very experience.

00:24:22: All this in first few month was a catch-up.

00:24:25: The interesting thing is how everybody else started learning marketing outside of what we used to do as a software company.

00:24:33: And I think that took much longer because it's an ongoing thing, and the software part isn't difficult at all.

00:24:38: Marketing parts are really valuable impactful things.

00:24:42: so you hire new profiles then move around teams and spread knowledge which takes more time.

00:24:52: But my experience is software, it's not particularly complicated to understand.

00:24:57: Building software is extremely difficult.

00:24:59: so you don't hire a CTO or the chief product officer from Dish soap and put them to build the software.

00:25:07: definitely but in sales any marketing and business operations and customer service why?

00:25:14: I like the example and also, of course it makes sense.

00:25:17: If you're looking out there for how many products are your paying five bucks instead of a buck because you just liked the brand more?

00:25:24: You don't know

00:25:25: why but you do!

00:25:27: And that is... There's lot work to make sure that you choose the product as five bucks and even recommend it and feel great about buying this product.

00:25:34: Why is that?

00:25:35: No.. That's marketing ..that's art-of-marketing.

00:25:37: It's very impactful on business already working without this magic.

00:25:43: How would you say it's a team reacting if they're getting a new leader?

00:25:47: And, okay the leader is great because they did marketing and brand for this company.

00:25:53: But

00:25:54: now we still need to help them in teaching their basics about our business.

00:25:59: So these are common struggles for founders.

00:26:04: I just regularly do things like hire somebody.

00:26:11: The only way in my experience for this to work out is to be radically, brutally transparent.

00:26:17: To why isn't somebody from the existing team growing up to that role?

00:26:22: Which?

00:26:22: by the ways?

00:26:23: what we tried to do first?

00:26:24: most of our leaders have been homegrown and promoted internally but not always.

00:26:29: no I think it's like seventy thirty seventy percent of her leaders are homegrown Thirty percent higher directly as a senior person on the outside.

00:26:37: so we spend months interviewing challenging and helping people understand why they are not the VP, what's missing.

00:26:46: What results?

00:26:47: What performance?

00:26:48: What skills or experiences are missing for me to be able to promote this person into

00:26:54: VP?".

00:26:56: Then we say okay!

00:26:56: We know exactly what is missing.

00:26:58: because when you look at all of these things... ...we need go find it outside.

00:27:01: So if a pretty clear benchmark to compare against candidates then you involve them in their recruitment process And You Need Their Buying.

00:27:09: So you need their buying.

00:27:10: You expose the team, so you ask for feedback... ...you take into account the feedback.

00:27:16: it doesn't mean that you asked for permission but if you ask to give them feedback and when they know you found a right person It works!

00:27:25: In my experience I think i've only seen one leader who was hired immediately rejected by your team.

00:27:38: That guy is it Total asshole.

00:27:40: And we totally missed that during the interview process, okay?

00:27:43: Like it's happened once and I've hired a ton of leaders

00:27:46: what happened during this interview process?

00:27:48: That let you miss it.

00:27:50: hurry hurry came strongly recommended.

00:27:54: So don't trust recommendations that much.

00:27:57: Um, and we we rushed to hire never again.

00:28:00: i am very slow.

00:28:02: who drew there?

00:28:04: What does flow mean in a fast paced environment?

00:28:08: up to year?

00:28:09: Very slow, which kills me because imagine at a company that grows up our pace You realize you need somebody.

00:28:18: You don't have the person.

00:28:19: The plan is always very ambitious.

00:28:21: in our case We're very ambitious with ourselves and you know That they are not gonna Have a person this quarter probably Not the following quarter.

00:28:28: even if you find it In the next three to four months he'll take At least another quarter.

00:28:31: two either join or ramp-up.

00:28:34: so If you know the person Is needed today?

00:28:37: And you hide it Today It will only be useful in six months.

00:28:41: If it takes you a year to hire the person... you're talking six quarters out until this person starts impacting

00:28:50: the business.

00:29:10: candidate.

00:29:11: That gap is usually not a diligence problem, it's an access-problem and that is what SAS Light our sponsor of this episode works on.

00:29:17: they build go to market teams at SAS and tech companies sales marketing customer success.

00:29:24: the people running the search come out of GoToMarket themselves so there are no just forwarding any CVs.

00:29:30: they are coming from the inside.

00:29:34: They also do not stop at the signature, they additionally help with onboarding ramp up internal systems that make a new hire productive instead of just employed.

00:29:43: and here's my attention when factorial staffed their Munich office what Jordy talked about.

00:29:48: Factorial hired twenty five roles in two months.

00:29:51: ten came through saslite around candidate events on ground as well to fill the pipeline.

00:29:59: We have pointed a few of our podcast guests their way this year and roles that had been opened for months got filled in weeks.

00:30:05: So if the key role at your company has been open too long or opens up into next week's, then you keep telling yourself he would rather wait for perfect candidate than get it wrong.

00:30:14: either go to www.saslite.com and tell them Fabian sent you Or book a fifteen minute discovery meeting with Andy one of the saslites founders himself.

00:30:22: That is www.SASLITE.COM.

00:30:24: The link is on show notes.

00:30:25: It spelled S A A S L Y

00:30:28: T

00:30:28: E.

00:30:29: It's horrible, but guess what?

00:30:33: Even worse hiding the wrong person.

00:30:35: I've done that a few times.

00:30:36: That was the most extreme case where like somebody was bounced out like literally the first week.

00:30:40: But The cost of the wrong hire is way more than the cost of not having to person and just.

00:30:48: you know stretching existing team in yourselves until Until they have to write higher.

00:30:53: So, who is doing the work then?

00:30:56: Like are you... There's some founders that say like hey I'm missing this role so i need to step in and somehow do it.

00:31:03: To the extent they can.

00:31:05: or are you distributing onto a team?

00:31:08: how are you approaching these?

00:31:14: the responsibility in two or three, make it manageable for two of these people to do an interim leadership role.

00:31:30: It's a stretch!

00:31:31: A stretch for both... The team and person that CEO is trying to fill up.

00:31:38: but I repeat this, when there are doubts then no doubt so.

00:31:44: if they're yellow flag its huge red flag.

00:31:47: If you aren't super convinced you should not hire the person and wait, give it another month or another quarter.

00:31:55: Or even we've given up on roles.

00:31:57: sometimes We have tried to hire an executive but haven't found a person.

00:32:02: I say we because its alot of us.

00:32:04: But i specifically talk about my co-founder Bernat and myself.

00:32:06: No?

00:32:07: With this cast about stretching the hired at end of day... ...we decided that is better just stop recruitment process.. We havent' found someone who want!

00:32:17: We are going live without these imaginary persons.

00:32:19: Because if it doesn't exist, so what's the point on imagining something that we haven't found in a year?

00:32:24: So you know change the org and move forward without this imaginary executive.

00:32:29: They will solve all of your problems.

00:32:30: It does not exist.

00:32:32: How would he say?

00:32:35: Because like you're building HR software, so looking into a lot of and ton of teams on how they are working.

00:32:41: How their changing?

00:32:43: And You were managing a large organization of like eighteen hundred people.

00:32:46: So you have to think about like house due to AI.

00:32:51: Teams will change roles will change businesses will change.

00:32:55: What would you say our the most impacted?

00:32:59: Roles at departments in an organization due to what's currently happening two knowledge work

00:33:04: All of them.

00:33:05: So first of all, we have a privileged position because we built HR software

00:33:10: We also

00:33:11: build finance software and we also build IT management software.

00:33:15: And now we're building a lot of AI products that help just pure raw productivity.

00:33:19: so we see chief, like CIO or Chief Information Officer.

00:33:38: Like what we are seeing is all the admin work that used to be let's say amplified with software.

00:33:46: now it's replaced with AI.

00:33:48: you just don't need to do any of that.

00:33:49: but you go straight through the answer no?

00:33:51: You... We SaaS use help people a little bit more productive and a little automation.

00:33:57: But its still process where humans are involved.

00:34:00: Now there is not process.

00:34:02: It's magic, like things happen.

00:34:04: The AI takes care of everything and it gives you straight the answer proactively that he knows your looking for.

00:34:11: so That's a huge Void in what used to waste a lot of our time And didn't really add any value was necessary but it did not really at any value.

00:34:19: So that's across all roles and responsibilities.

00:34:23: The other interesting thing is a lot people use to consider the AI as the worker Used to I mean as in like six months ago used to be worried that we will now have humans leading swarms of agents.

00:34:37: in a way that humans cannot comprehend the volume of data and depth skills, languages parallelism.

00:34:56: What we're doing is like what's most valuable thing this human can do?

00:35:00: That no AI will probably ever be able to do.

00:35:03: Let's amplify it and remove all noise around essential skill In sales.

00:35:10: its very clear.

00:35:11: People used to think AIs are closing deals.

00:35:15: Guess what people don't want.

00:35:16: talk about AIs.

00:35:17: So the best humans, you know relational smooth generous empathetic salespeople are doing amazing.

00:35:29: And they're doing way more deals because their not wasting any time updating CRM Because the CRM is kind of somewhere and it's updating itself.

00:35:36: so there spending more talking to human.

00:35:38: The value for a salesperson didn't go down when up And despite it between an average or mediocre salesperson and a great sales person, went up.

00:35:46: same with creative work.

00:35:48: Same with software engineers who are definitely not writing lines of code at all anymore but they're guiding the product.

00:35:54: They're guiding decisions on what AI is building and AI's building like huge amount of code On their behalf.

00:36:00: I think there many ways to dig deeper into.

00:36:03: one is founders Who year ago said hey we probably staying as size of a company, but we're doing like five X or ten X the money.

00:36:14: that then realized hey But wait a minute.

00:36:17: if my competitor is hiring these people and this ten x more productive with the people Then yeah I should probably get up to speed two And grow again.

00:36:26: The other part did.

00:36:26: it's interesting and i'd Like To hear your perspective because hr software and also finance offer often was like dashboards That were filled With data.

00:36:35: and A friend Of mine who's regularly on the podcast Who built adjust a company for marketing, app-marketing and tracking billion dollar exit.

00:36:45: He was like hey it's nice to have dashboards especially for all the new founders but I'm interested in your mind And you're thoughts on your own products.

00:36:56: It's cool to have Dashboards But we are just building products or the dashboards because they were used too Often.

00:37:02: The New Interface isn't a dashboard anymore.

00:37:05: What Are Your Thoughts On This?

00:37:08: So the new interface is not a dashboard.

00:37:12: I think that new interface, it's a new dashboard every day with the topic of today.

00:37:18: so I still look at dashboards all the time.

00:37:20: The difference is they're created on-the-fly With whatever i want to know more off.

00:37:25: and then nice thing Is?

00:37:26: It doesn't take me A lot Of clicks To create a dashboard And there no team building.

00:37:30: static Dashboards That They hope are what the user wants to see.

00:37:34: Factorial one, which is the AI of factorial.

00:37:38: What about this?

00:37:38: I didn't even tell it.

00:37:39: create me a dashboard.

00:37:40: I say how are we doing on This area?

00:37:43: on you know hiding for our new Munich office like How were we doing versus plan?

00:37:47: he'll create me at dashboard He'll show me the names will show me pictures It's only the gap and it even might draft me a message to the sales leader so i can Say hey René, what's going on?

00:37:58: Why are we missing four people or seven people in our September plan.

00:38:02: Or the other way around is like hey I see you're ahead of a plan.

00:38:05: do need to grow marketing budget so that can have enough pipeline for all salespeople who hired ahead-of-plan.

00:38:11: So this is how learning to interact with software.

00:38:17: The best interaction with software though Is when there no interaction and it just solves your problem of a CEO or leader, out-of-a manager interacting with what's going on in my business.

00:38:31: Which is like something that you also as a business owner are constantly asking yourself What's going up?

00:38:35: With my business?

00:38:36: where can I put more attention to make it better To grow...to fix the problem etc.

00:38:41: But there Is A lot Of Stuff That Just Needs To Happen And It Used To Take Dashboards and Workflows and Forms and Clicks.

00:38:49: This Stuff Is Just Gone.

00:38:51: So One Example When Somebody Is Sick somebody falls sick, gets sick and you know this person works for a restaurant.

00:39:01: There is the bunch of paperwork that needs to happen so that they basically at end-of-the-month can reflect on whether or not he was sick.

00:39:08: probably need to notify government.

00:39:10: So there's some sort of sick compensation going On in these restaurants.

00:39:15: if it wasn't someone else who cooked You'll have to find replacement.

00:39:21: When company uses factorial an employee get sick who is supposed to show up at eight

00:39:25: a.m.,

00:39:26: some location, and start cooking the lunch service.

00:39:29: What happens?

00:39:30: The manager of restaurant gets this person called in sick.

00:39:35: Here's his document Same as before.

00:39:37: You don't even need anything about it.

00:39:40: We have six people that are off today That could potentially replace him.

00:39:45: This one is available in half an hour.

00:39:47: It's available, this is available but we'll need to compensate extra because it's their special resting day or you have to cover for transport and whatever it is.

00:39:55: I called all of them.

00:39:56: only these ones are available.

00:39:58: so he was already on his way And don't even do anything.

00:40:02: You get notified that the human is still responsible.

00:40:07: But this person went from like, oh you're sick.

00:40:09: Are you sure?

00:40:10: You are sick can't make it.

00:40:11: Oh crap!

00:40:12: You cannot make it okay Can you come?

00:40:14: No no yes I'm sorry.

00:40:16: yeah you're off this week.

00:40:16: so Like waste two hours.

00:40:18: the person shows up late extra cost a lot of bureaucracy in administration.

00:40:23: This is all gone.

00:40:25: It's the AI calling people The AI submitting form to government The AI updating payroll at end of month.

00:40:33: This is huge and there is no interface And that's my favorite type of software.

00:40:37: The ones you don't even need to talk about and it just gets done,

00:40:40: still a vision in your head.

00:40:41: or is an absolute

00:40:42: reality happening?

00:40:43: That's the realty

00:40:44: for us

00:40:45: today.

00:40:46: Not for all restaurants because not everybody ready yet.

00:40:49: also there isn't adaptation and this technology isn't better.

00:40:53: It's in hands of customers.

00:40:55: but we're getting used We are getting tested.

00:40:59: But these things already happen today.

00:41:01: and imagine If in September, twenty-twenty six we can do that and We had no idea.

00:41:07: We could do that one year ago Which is already like four years after charge EPT was released.

00:41:12: what?

00:41:12: We're gonna be able to do in like twelve or twenty for months.

00:41:14: It's just insane.

00:41:15: yeah

00:41:15: you are sometimes thinking oh Yeah now it's

00:41:18: a little over the big uh

00:41:20: not that steep anymore learning curve.

00:41:22: And then your like.

00:41:23: I hear later You look Oh there stuff happening.

00:41:26: That's crazy.

00:41:28: So What would you say for the next months, looking to the German market just because we have that exposure here.

00:41:37: What are like you announced the acquisition?

00:41:41: You're obviously integrating now always your looking at other companies to acquire or hiring strongly.

00:41:52: so what will be next month's bring for factorial in Germany?

00:41:57: It's the most fun part of the year for us because a lot of businesses, like people in their private lives have new-year resolutions.

00:42:06: And they say next year I really need to assist them to automate all this compliance and know what is going on with my business or help employees upskill themselves with AI.

00:42:17: so we see a lot activity over these last few months.

00:42:21: So these next few month are gonna be crazy in Germany In general Hiding alot of people Also hiding a lot of people from Germany in Barcelona.

00:42:31: So if anybody's listening to the podcast just takes

00:42:34: me intro slightly

00:42:35: better weather.

00:42:37: We have a fantastic Team, very large team in Barcelona as well.

00:42:41: That's

00:42:41: interesting for your go-to market.

00:42:42: by the way The German Go To Market didn't start with the German office.

00:42:45: It was like hey we have like People in Barcelona now that are German that we relocated and were Founded in Barcelona already.

00:42:54: yeah mostly relocate.

00:42:56: It's mostly so when we started now.

00:42:57: Now, We have a more variety of profiles.

00:43:00: that at the beginning was young people Early on in their career which is also something I learned.

00:43:06: it So much easier to teach People too unexperienced talent than two.

00:43:11: and teach things To very experienced people That already know how Things are done Is like dude?

00:43:17: I don't Know How Things Are Done.

00:43:19: Why should I believe you know how things are done?

00:43:20: So, i think it's better we both humble and learn together.

00:43:24: And usually younger people have an easier time being humbled.

00:43:27: so... We started hiding young people from Germany to Barcelona created the, you know very tight community that has exploded obviously since then to hundreds of people right now.

00:43:38: But at some point it wasn't enough.

00:43:39: we're doing a lot of stuff on the ground.

00:43:42: We have a lot partners and customers.

00:43:44: in Munich area particularly like Microsoft is big partner.

00:43:48: factorial DATEF are all close To that region And with the latest acquisition of Empion It's not just because the one in Munich, but it is also going to be a very important office for us.

00:44:04: In Berlin we're gonna participate on lot of events.

00:44:06: I'll be here again in a month For bits and pretzels And then will be hosting and participating A lot of event in HR space Business management space AI for business space.

00:44:19: You might see factorials name everywhere Because were doing a lot of brand building Sponsorships activities in this area.

00:44:28: So we need to talk.

00:44:30: Everywhere also includes the Unicorn Bakery podcast and everything.

00:44:33: We'll see each other a lot, not just in Germany but everywhere in Europe especially in Germany because it's the market that were growing faster?

00:44:42: Yeah interesting I'm already thinking my head.

00:44:47: who is building like in this space... Who could be on your target list for M&A?

00:44:52: of course you won't this close anywhere, but I'm already like...

00:44:57: Introduce them to us.

00:44:59: We might be talking to them already?

00:45:00: Yeah that's what i am thinking Like.

00:45:02: who are you talking about?

00:45:04: What we look for is ambition and talent But in my experience they go together because ambitious people learn They're willing to do what it takes.

00:45:13: That something thats very important from me.

00:45:15: Everythings possible or impossible Is upto-you.

00:45:18: If your'e really into doing what its take then a lot of things are suddenly possible.

00:45:22: We connect very well with people that are very ambitious.

00:45:24: Maybe the cycle in the market doesn't allow them to raise a great ground, maybe they realize as a standalone product you know customers of the market is not going to favor it and want more platform approach which we can provide.

00:45:37: There's lot reasons why ambitious people might wanna join other ambitious people and leverage their strength.

00:45:44: I would love these people.

00:45:46: so if you know them especially Germany but all over Europe if

00:45:50: somebody feels spoken to just text me, I can happy to intro.

00:45:56: But yeah in general it's crazy we do not have enough time really dig into every part of the journey but its a ten year journey with a lot growth too like as you mentioned eighteen hundred people more than one hundred million and AOR two point five billion valuation.

00:46:14: so It is a crazy ride chance to pinpoint a few things, but in the most interesting phase of company building at.

00:46:46: Thank you so much for the invitation, Fabian.

00:46:48: I'm very happy and hopefully come back in the future to tell me more about new discoveries.

00:46:54: Also you had bits of pretzels

00:46:56: Sure

00:46:57: Bye!

00:46:59: and would like to ask you to subscribe to the channels if you don't want to miss anything.

00:47:18: Honestly, mostly German interviews.

00:47:19: in our next one will be with current CMO of Scalable Capital and Current Means from beginning onward how-to build brand.

00:47:27: so If You Like The Episode With Yordi please feel free to share it with a friend.

00:47:32: And if need an introduction because your are like hey I can imagine talking him about selling new company etc.

00:47:39: just shoot me a message, happy to intro whenever something like this becomes relevant.

00:47:44: Thanks for listening to the Unicorn Bakery and then I'll be back with the episode with Max Mayer who's a CMO of scalable capital next week!