Practical Advice to Grow Globally on a Path to Recovery with Velocity Global Founder/CEO Ben Wright

Okay.

What's going on, everybody? Hey, this is Ben Wright. I am CEO and founder of a company called Velocity Global. I am joined by my colleague Laura. Laura, please.

Hi, Ben. Nice to see you today. Hello everyone, my name is Laura Isaza, Vice President of Growth and Strategy for Velocity Global.

And we are here talking with you today about practical advice to grow globally on a path to recovery. I will tell you that we have seen some pretty significant changes in the last month or two with companies going global. So this is This is timely.

Yeah, absolutely, Ben.

So let me just start really quick, tell you about— you got who we are, you got our titles— tell you just a little bit about kind of the company that we work for, only to help identify kind of why we're able to talk about the topic here today. Our company is called Velocity Global. We're actually headquartered in Denver, Colorado, in the United States. Founded in 2014, we are an international PEO company. That stands for Professional Employer Organization. I would best describe it as if you're a company and you're trying to hire someone in a foreign country and you don't have a legal entity or the ability to employ that person yourself in that country, we will become the employer of record on your behalf so that you can employ that person in that country. It gets you in fast and inexpensively. We do it in over 185 countries, so we've got a pretty good perspective on what's happening globally today. We are supporting and have supported thousands of employees all across the globe. And because we're here talking about SaaS-ter, we've got over 150 software as a service clients, so we know that sector particularly well also. Anything you'd add, Laura?

No, I would only say that in my role as Vice President of Growth Growth and Strategy, one of my main tasks is setting up our Velocity Global entities around the globe. We currently have more than 20 entities that are active and operational or will be operational by the end of this year. And this is, this is huge. This is one of the biggest, or the, the, the one of the compliant ways of setting up operations internationally and growing and ensuring that you are entering different markets. This is what we do on a daily basis. This is my job. And with my team, I just make sure that we are understanding what's going on locally. What are the new changes to employment regulations, changes to how to do business in X or Y country, and especially with what we're seeing today after or during a pandemic, because I guess it has not ended yet. There is a lot of changes out there, and we just We have the responsibility to keep ourselves educated on the new ways of doing business and all the new flexibility that these changes are bringing to companies that want to grow and especially expanding to other countries.

Yep, great call. Absolutely great call. And, you know, a couple main reasons why we're seeing why companies are doing that global expansion today, and this may resonate. I would suspect this will resonate with quite a few of you who are in attendance today. One is growing revenue, right? Companies, particularly the most forward-thinking companies, are starting to identify there are regions, there are countries, there are parts of the world that are potentially doing better economically at this time than others. And so the more forward-thinking companies are actually taking that as an opportunity and proactively going and targeting those markets. It is also globalization and global expansion simply hasn't stopped. It may have paused for a brief moment, but it really hasn't stopped. And we're seeing it certainly again in some regions, APAC kind of leading the charge, is they're really kind of starting to grow and expand and companies are employing people everywhere. And one thing I should note, and we just flashed this slide up here on the screen, that I think is important for everybody to know is we do, an annual survey, over 1,000 companies, particularly focused on kind of US and UK headquartered companies, but this is applicable and pertinent to companies all across the globe and honestly across all sectors. And we asked them lots of questions and we poll them every year in terms of why they go global, how they go global, what their plans are. And this came out pre-COVID. So bear in mind, this came out pre-COVID. 62% of companies said that they are planning to expand to grow their customer. Base, right? So there you go, reason number 1. And we're actually seeing that today in the COVID time. The second reason why they're planning to expand globally is access to top talent, right? So interestingly, this came out again pre-COVID, before this great experiment about working from anywhere happened, right, for better or for worse. Um, and accessing top talent was the second most important reason why companies were going global. Now, in the time of COVID when suddenly you— some of your employees may be saying, hey, I'd like to go work from anywhere, or you're suddenly realizing, gosh, we can actually employ anywhere if people don't necessarily have to be in the office the way that they used to be. Maybe I find a great Ruby on Rails developer in Greece, and maybe I would go hire that person now. Right? So I think that's a really important thing. Finally, one of the things that we identified was that 90% of US tech companies plan to enter an international market this year. Right? So US companies already planning on going global. They absolutely are. If you all here on this, you know, software as a service companies on this presentation here today are thinking about global and going global and haven't done it yet, Bear in mind, your competition is thinking about it. UK, that number was actually 75%, right? So if you're not going global, your competition is thinking about it. And so I think the important takeaway here is 9 out of 10 SaaS companies are planning to enter an international market in 2020. I will tell you that we saw a slight pause in the second quarter, but it's happening again. Well, what do you think, Laura?

Yeah, this is— companies are not stopping their growth. They are basically changing the strategy. And as we get used to what we call now the new normal, one thing has not changed, and it is the global expansion and more need for flexibility. So what we're seeing now, it's some sort of experiment where companies are putting in place all the processes and procedures that will allow them to virtually work from anywhere in the world. That means that whether you have a very well-established entity in X or Y country, you need to allow your employees either now because of the pandemic or later, because it actually, it's a new acquired habit to allow your employees to work from anywhere. So long they have good internet connection, that's what the marking is asking for now. It's, it's allowing individuals to have more mobility, to feel secure at their own environments, and to also kind of provide them the tools that they need so that they can move around or stay at home and not necessarily come to an office.

No question. You know, Laura, one of the things— and you know this— one of the things that we're trying out now, which I thought hadn't ever even crossed my mind pre-COVID time. One of the things that we're trying out is if you have job responsibilities in a country or a region, or your team is in a country or region, we're exploring you having the ability to work anywhere plus or minus 2 time zones from that region and really kind of creating that flexibility in a way that we haven't had before. If again, we're headquartered in Denver, Colorado, so if an employee who was working in Denver wants to go to work in New York, you know, no big deal, no problem. Interestingly, if somebody from our Singapore office wants to go back and work from China, then you're talking about something completely different. Right. They're going into an entirely new country, an entirely new structure. Fortunately for a company like us, like, that's what we do. We can employ people in the case where we have our own legal entities, or if we don't, we can employ them under our kind of structures anywhere else around the world. But it's creating a really interesting kind of diaspora of people going everywhere and thinking about working from anywhere. Uh, interestingly, and I'm sure some folks listening here today have probably seen this, um, Barbados recently announced— did you see this too, Laura— where Barbados announced they will give you a work from anywhere visa, right? So you can work in Barbados for a year, work from anywhere. And actually, the really unique and cool thing about that is you don't actually have to be employed by a Barbados company. Which is typically the rule if you're going to get a visa. So it's a very, very unique one that was— that went viral instantly around our company. And we've already gotten a few requests.

Yeah, yeah, I already got one. I was sent the link and all the requirements were kind of met. So definitely top of mind for many of the employees now, whether here in the US or in other jurisdictions. Reality is that the workforce and the workflow have significantly changed with the pandemic, and this is not going to go back to what was normal to us before. This is also particularly relevant to you guys and software companies that are— whose service is vital for everyone, right? Your workforce, sorry, your workforce can now be anywhere. You can hire top talent, whether you have your own entity or not, you can have top talent found in the US, but working from Barbados and still have them be part of your team and delivering on your product. The client base and the employee workforce is now global. That is, there is no doubt about that. And, and you will need food on boots on the ground to provide your service. And it is actually really good to, to start thinking about what are the best practices and how you can provide these. Again, going back to the flexibility and, and give your employees the tools to do their job, but also make them feel part of your company and everything that's happening in your headquarters, because that is not going to change. You still have a company that's based say in New York or San Francisco or us, Denver, Colorado, but we have employees working from home in many other countries around the world and they are still feeling part of Velocity Global because we are keeping in touch with them and giving them the tools to do their job from wherever they are.

That's a great call. Yeah, that's a great call. You know, Laura, let's talk about a couple other trends that we've seen recently. One that I don't know if surprised us is the right word, but has crept up, which is not, yes, COVID-related, but potentially no. And again, specifically talking here about the US is Washington, DC. The administration has recently changed some rules around immigration, right? It has made it more difficult to be able to bring talent in from elsewhere around the world. This impacts a fair number of companies. The tech industry and the tech space in particular for a long time has relied upon talent from all across the globe and the ability to bring them from time to time here to the US. Getting visas, in particular, the H-1B visas, which is the most popular, is incredibly difficult, in some cases paused right now. And so what we're seeing is companies who either have someone who they were planning to bring in or, and are unable to, or would like to hire someone and they just don't believe they'd be able to get them in right now. Again, they may be in a country and they have no way to employ. And so that's one of the big requests that we're getting these days is there's a way to be able to get folks on board, get them employed in that country until such time that potentially some of those regulations may loosen a little bit and we can get really good talent to actually come here and work in the US. So that's— go ahead, Laura, something you're gonna—

I was gonna say, there is no reason to miss on that challenge anymore. This flexibility and working from everywhere, it's, it's actually an opportunity. When we talk in our company about the SWOT analysis, yes, freezing the visas is a threat to our business. But then there is also an opportunity. And that opportunity comes from the environment that we're in today, which is work from anywhere and The tools are out there. The flexibility that the market is providing now, it's showing more opportunities than those we had before, companies had before to do business abroad.

Well said, well said. All right, cliffhanger. There's a second trend I wanna talk to you about, but real quick, here's a cliffhanger. We're talking in generalities of what we're seeing out there. If you are listening here and you have questions, right? And you're wondering about how to take your company global, what other companies are doing, what's happening in this environment. If you have a specific question, log them, right? There's a Q&A portion on there. We will save time at the end for questions that you have, so go ahead and log those. Okay, I'm gonna get right to it. Second trend that we're really seeing, Laura, right? And I'm gonna direct this to you because of your job here at Velocity Global. We are seeing a lot of companies who are saying Given all the uncertainty and all that's happened, I do not feel comfortable right now going and setting up a legal entity around the world. Right. It's not very flexible. I don't know what's going to happen. I don't know if we're going to be there. I don't know if we have to pull out. I don't know if we're going to have an infection flare there, if they're going to shut it down, so on and so forth. A lot of uncertainty. And so setting up that, that structure, most companies that I talk to right now are saying not right now. You've had some experience. That's what you do for us, setting up companies and legal entities kind of all across the world, right? Why is that? Why do— why is it that companies, those who at least know, know that setting up a company can be inflexible, can be time-consuming? Talk a bit about your experience.

So there are many reasons. The most common reasons for companies not to be sure to set up their own entity come from compliance. There are a ton of regulations that you need to be aware of and fully understand before deciding to go into a country and setting up your own entity. There is also the cultural aspect and the communication aspect. You're entering into a completely different market that you also need to understand. There is new legislation. There are also new taxes that you may have not seen in the US, and you still don't know how to navigate them. So with setting up an entity, there should be a ton of due diligence preceding the decision of setting up an entity. And testing that market is one of— is a good option before making a decision to fully commit into incorporating your own company directly. The other— I would say the main advice that I have for anyone that's actually thinking into going to a new market is Remain flexible. And I have said this, I have mentioned this word throughout this conversation many times. Flexibility is at the top of the list, and it's definitely key. Flexibility is the only thing that will allow you to navigate the different processes that you now will encounter in this new jurisdiction. 30, 34% of the businesses that we know, that we talk to for the, our annual report, have said that they at one point have had to pull out from an international market. And that comes from— that happens for many reasons. There are some things that you can control, such as learning the market, learning the business, testing the market, knowing the team that you will work with, and understanding the culture. But there are things such as this pandemic that you cannot control. And that is where putting the right guardrails in place to keep you flexible and help you navigate any obstacle that you may find in that country is so important.

Great call, Laura. Great call. Yep, I think that's spot on. Last thing I think that we may want to address and hit on, and there are just some kind of key things. Is just overall flexibility, right? I mean, Laura, companies right now, every company that I'm talking to, I heard someone say the other day, all of our crystal balls are opaque right now, right? We just, we have a really difficult time. And if you don't, you know, God bless you, that's fantastic. But a lot of the business leaders that I talk to, as we look forward, we're just not totally certain as to what's coming next. So we're all looking at taking advantage of opportunities around growth, around accessing our clients, supporting our services, you know, staying one step ahead of the competition, but doing so in such a way that gives us a greater sense of flexibility, right? And so I think for that reason, we are seeing a lot of companies starting to take a look at hiring people from anywhere How are we going to employ them? How are we going to get them payrolled? Right. What do we need to know about employer contributions? If someone raises their hand and says, you know, I want to go back home to India, right, how am I going to employ them? What do I need to know about that? At the same time, I don't think I'm comfortable right now going and setting up a company in India just because one of my, and maybe very important employees, is going to return home to India. That may not just be the best thing to do right now because of that flexibility. Flexibility. And so I know I find that we're advising a lot of companies around that, and even us ourselves. I mean, we're taking a look at how to invest in a really smart way that continues to stay flexible.

Yeah. Yeah. Focus— you companies need to continue to focus on their core business. And this is one of the I would say items that it's a little bit related to your previous question, Ben. Why companies get scared or are afraid of setting up into a new market, going into a new market that may take them away from putting 100% of their effort and attention into their core business, which is selling, increasing their sales, managing their clients. It can also be retaining their talent. So with this flexibility that we are mentioning and the new opportunities that we're seeing, there is no reason to miss on talent. There is no reason to let that Indian employee go because they want to go back to their home country and they feel better there. They want to be with— closer to their family. There are many tools in the market out there. And if at one point you determine that an entity is necessary because you have tested, you have learned, and you now understand the market where you're going, then that's also a possibility. And that's exactly what we're doing now when, with our entity setup initiative, but we did not get here without fully understanding these mobility and kind of the markets we're going into, which is pretty important. And again, it's part of seeing the opportunities when you think that there is a threat for your business. These employees moving to India may help you open a new market. This employee will, will help you also understand the different culture. And this is very important for anyone that's here, especially again, going back to the vital service that you offer, which is software that can be implemented and sold from anywhere.

That is a great lead-in, Laura, to a question that we received. Okay.

Yes.

Love this. So question we received from Robert in Chile. Possibly Roberto, who knows, but Robert in Chile. Thanks, nice to meet you. Regarding the COVID-19 in LATAM, Latin America, if not the world, given the growth of remote working plus the rapid deployment of digital solutions, do you think that the SaaS footprint will increase and accelerate? For me, claro, right?

I would agree.

You would agree? Absolutely. Right. There's absolutely no question about that. One of the things that we are seeing— incredibly difficult time. There's absolutely no making light of what's going on out there. And it's really difficult on a personal level for a lot of people, an economic level globally. This is a tough time, but there are a handful, I think, of silver linings. And for SaaS companies, the breaking down the walls, the breaking down of barriers, the further breaking down of, man, we can do this. Anywhere, we can employ people, and we can have clients anywhere. And you know what, we may not actually have to have a salesperson physically located next to that office now to get some of this stuff done. Conversely, maybe we do need to have a salesperson there, and they can't travel in anymore. And so we actually do need to hire someone locally. But either way, there's this whole expansion that is happening from a software as a service footprint. And across Latin America, you know, Laura, listen, I'm an American born in the US, right? Come on. My Colombian colleague, why don't you speak to this one for LATAM?

I mean, I hope you all know that LATAM is a big tech hub, a big service hub for many companies based not only in Europe but also the US. So I mean, that alone answers the question. As a hub, that's going to significantly increase the opportunity for business and business to expand and expand and increase their footprint and also opportunities locally to provide those services and sell the software as a service. So there is no, in my point, my way of seeing what's happening now, there is no reason not to say that This is going to significantly increase the footprint and increment the leads for software companies such as like yours.

Absolutely. I actually have a friend named Roberto in Santiago who is working on literally doing a tech hub startup type environment and community there, and he's been talking about it for a year. It is just absolutely fantastic. Maybe that's a plug. This actually may be my buddy Roberto who's, uh, who's writing this here, but, uh, Santiago, by the way, one of my, one of my favorite cities in Latin America. I like Bogotá too, Laura, but Santiago is pretty cool.

Thank you.

Okay. We've got another question here. This is a question from Chris. When you are looking to expand globally as an international business from an IT perspective, seeing that cloud costs in 2020 are going to continue to grow, how does that How does Velocity Global scale their cloud or server infrastructure globally? Excellent question. Um, I sure wish my Chief Technology Officer Dave Martillon was on this call. He would be fabulous to answer that question and probably better equipped to answer the question than I do. But I can tell you, I will tell you, not just from cloud cost perspective, but there are, you know, starting with GDPR, And there are a lot of different regulations which are being rolled out around the world about data privacy, data security. I'm a huge proponent of it. I think honestly that we all as, as global citizens need to do a better job of protecting data for everybody. So I think this is— it can be onerous as a business, but I think it's a good thing. That's just my own personal opinion. Where you store that data Right, and how we see— and we think about how we scale and place our cloud and server infrastructure globally. It's about cost, but it's also about how are we complying with laws like GDPR and others. Again, there's just way too many to list now at this point. That's a big— that's a big point of emphasis for us and something that we closely consider. Okay, I think we're getting pretty close to the end of the hour, so Laura, what I suggest we do is maybe we just kind of run through a few quick takeaways.

Absolutely. What do you think is going to be the first one?

Be flexible.

Yes.

Right, be flexible. So You know, we talked about this a little bit briefly. As a business owner, as a CEO, I think about this daily. How do I address the needs of my clients? How do I support my employees to the very best of my ability? And how do I continue to grow and stay one step ahead of the competition while being flexible? That is huge, and that is important. And, you know, as it relates to going global, if I or we can ever answer questions for you or be just be a sounding board in different ways of approaching that flexibility, please reach out. We'd love to be able to help. What's— Laura, you want to talk about number 2?

Absolutely. There are many reasons for companies now to go global that actually go beyond the need to setting up an entity. And going back to the example of employees employees wanting to go back to their home country or having difficulties with their visas, retain, maintain, and find top talent is top of mind for companies wanting to grow today. That is very important as you start exploring other markets, that top talent is always available and it's just a matter of finding them, nurturing them, and keeping them, and actually growing the revenue of our company as well. Which is gonna be a product of finding, maintaining that top talent in different jurisdictions.

Yep, great call. And then finally, and again, this is pre-COVID, 9 out of 10 SaaS companies plan to enter an international market. I can tell you that it's back on, right? It is back on. So if you're not global today, if you're, thinking about going global but haven't sort of taken that next step, the time is now because your competition is going to be doing that. You may be forced to do so from this work-from-anywhere experiment, right? But in terms of proactively thinking about opportunities, doing it in a flexible way, growing revenue, accessing that top talent, it's important to be able to do. So, all right, hopefully that was helpful for everybody. Again, my name is Ben Wright. Laura Esaza, obviously, thank you, Laura. We happy to be able, you can reach out to us. We're at velocityglobal.com. Happy to answer any questions that you have. If we weren't able to get to questions, I'm so sorry, but we'll do our best to actually see if we can reach out to you afterwards and answer any questions that you have. Have fun at the conference, go global. Laura, muchísimas gracias, es un placer.

Gracias, Ben. Thank you, everyone. And available here for you if you need it. Thank you all.

Thank you so much, guys.