Fidelma McGuirk of Payslip: Targeting Multinational Companies as a Global Payroll Disrupter
Fidelma McGuirk is the founder and CEO of Payslip, an automation and integration technology which delivers standardised global payroll for multinational employers. Clients of Payslip include LogMeIn, Teamwork, GetYourGuide, and Airbus. Prepaid business card solution Soldo, spoke with Fidelma about the secrets behind successfully pitching to enterprise as a startup.
Most people won’t have spent much time thinking about payroll – unless it goes wrong and they don’t get paid! So would you tell us a little about payroll and where Payslip fits in?
The rules around payroll change country by country. So companies end up with different local payroll systems. Even Gartner, the analysts, have announced that no single payroll provider can give equally good service in all countries.
Payslip brings all the products in a multinational payroll process together, to give large companies, especially fast-moving tech firms, useful data and resilience against failure.
Here’s why tech, in particular, is different. In the old days, a big business would employ 5000 people in a country, and that would include local payroll talent. But modern tech firms are different. Hubspot for example, employed just 150 people when they landed their European HQ in Ireland – and then expanded from there. Tech companies therefore invariably outsource their payroll, because it’s not considered to be a core competence.
And tech firms have very creative and customised compensation packages in order to attract the best talent. It’s all foosball tables and free lunch benefits! All that customisation makes payroll and compliance uniquely complicated.
So in tech, payroll is both complex and local. We bring all that local payroll tech together with automated processes – a standardised global model, a single view of payroll, integrating into any system, so that finance professionals can use that payroll information to do more useful things.
How does that data help a big multinational business?
This is not just about understanding payroll spend after the event.
Take what ought to be a basic question to the CFO: “We need another team of software developers. What is the most cost-effective place to roll out a new team: Hungary, Peru or Singapore?”. Very few CFOs can answer that in real-time. Because we standardise the data and consolidate it back into one system, we can create real insight to answer that sort of question.
I’m really interested in your business model, because here at Soldo we speak to lots of SaaS ventures; but catering to large enterprise customers is quite different: longer sales cycles, a risk-averse attitude etc.
Our business model is based on a license fee. It reflects the value that we offer in terms of delivering visibility and clarity on management of the payroll.
Our market is multinationals; the ROI becomes clear for businesses operating in five or more countries and with 1500 or more people across countries outside of their HQ. We also have some smaller companies who are scaling really fast. And we also serve some very large, mature enterprises who are trying to digitise and get some visibility from their legacy systems.
We always work the same way. We explore the problems that the customer is trying to solve. We provide demos on how we can solve those problems and set up a trial with some sample data. Every client that has activated the trial platform has gone on to license it, and every client that has licensed it has expanded well beyond their original specification. That validates our proposition and also realises increasing value for each client.
The best credibility comes from customer stories. Our customers have been very generous with their support. But big companies have big procurement requirements on information security, for example. You just have to be ready for those hurdles.
It’s very difficult for a start-up to go straight into enterprise sales. I’m known to have said in meetings, ‘We’re not a big company, and we’re not going to be an awful lot bigger in six months when you finish your procurement process. So if our size is an issue now, it will be then too, so what validation of our ability are you going to need, or can we shortcut this conversation?’
But what’s going to persuade an enterprise giant to take a gamble on a start-up? You’ve clearly managed it…
We’ve a strong balance sheet, because we have excellent investors (our lead investor is Frontline Ventures, based in Dublin and London), which gives reassurance. I have taken investment, not only because we wanted to have more capital in the bank, but in recognition of the fact that our clients want to make sure that we will still be around in a few years. And the best reassurance is to attract solid investment from great VCs. We were oversubscribed on all of our investment rounds.
There’s a great quote attributed to Alan Coleman (Brite:Bill, Sweepr): ‘Innovation doesn’t usually come with a strong balance sheet’.
Large companies have to have very formal procedures and procurement compliance, which bring with them an overhead of costs and a reluctance to take much risk. We’re winning great clients, and every client creates a positive impact towards the next one. But I still see stakeholders in enterprise companies struggle with the idea of getting beyond that classic motto: ‘Nobody got fired for choosing IBM’.
In a start-up targeting enterprise, you are always competing against IBM. You are always David against Goliath. So we go the extra mile. We provide huge amounts of support to our clients. We help the personas engaging with us to sell our idea internally in their organisations, and to help them explain why it’s important to embrace innovation at this time.
We also want to give them comfort that they won’t get burned. Nobody in any big company is going to care as much as I do about making sure it all works out for our clients. Because, especially when you’re still in your first hundred clients, you’re going to make sure that absolutely everyone is successful. Everyone in this company has chosen to join Payslip, and I have a vested interest that nobody else is ever going to have to make sure we are successful for our clients.
What’s next for Payslip?
Internally, we’re growing the team significantly. I’m growing out a larger sales team this year. We paused it for five weeks due to COVID, but we’ve restarted the process already. We’re also beefing up our engineering and integrations team.
We’re focused on getting our message out a little more. It used to require a lot of explaining, but in 2019 Gartner set up a new technology category, “Multi-country Payroll Solutions”, which has really helped us to define our space.
We’ve also recently won awards from the American Payroll Association – I was awarded the Global Visionary award for 2020. We’re competing with the marketing power of some huge traditional aggregators; the thrust of our work over the next year is to evangelise for the fact that there is an alternative way of managing global payroll from a technology perspective, and do a lot more with it.
How did you join the Frontline Ventures portfolio?
Prior to Frontline’s seed investment, I had funded the company and we had taken some small support from Enterprise Ireland. It’s opened up a little since then, but at that time there were really only three suitable investors, Delta, ACT and Frontline. I ran a structured evaluation process and spoke to all three.
I knew I wanted a VC in the investor mix, and I liked what Frontline had to offer with their support platform. Frontline are also very efficient – they move very quickly if they’re interested. They had everything ready, including due diligence in only around three weeks. So it was a very efficient process. Led by Frontline, our Series A ultimately featured EI, the HBAN network, and SaaS investment specialists, Tribal VC (Box, Stripe).
Looking more broadly at Ireland, we have a very vibrant investment market. We get plenty of approaches from investors in the US and the UK. There has been a lot of activity in the global payroll space over the past couple of years, and every time there’s a significant event, we’ll get a flow of people coming in to have a look at what we’re doing.
We deliberately stuck with our own investors this time (again we were oversubscribed), but there is always money available if you’re solving core customer problems and you’ve evidence of product-market fit.
You mentioned Enterprise Ireland a moment ago. They are also supporters of ‘Going for Growth’, an organisation you’re heavily involved with. Tell me more about that.
Yes, Going for Growth is supported by Enterprise Ireland and KPMG. Founded by Paula Fitzsimons,‘Going for Growth’ supports female entrepreneurs across Ireland. The programme is built on roundtable discussions facilitated by other female entrepreneurs, and it’s been phenomenally successful. It’s now in its 12th annual cycle, and this year is supporting 83 entrepreneurs running businesses with a combined annual turnover of €170M and employing over 2,400 people.
We can see the gender gap is beginning to narrow with the increase of female entrepreneurs since the programme began. This is supported by the recent Global Entrepreneurship Monitor (GEM) Report for Ireland which shows that compared to 2017 there are more female entrepreneurs in 2018 with higher growth expectations. In 2018 the rate of entrepreneurship among women increased (7.5% compared to 6.3% in 2017) and more of these female entrepreneurs have high growth expectations (25% compared to 9% in 2017). The programme has delivered to the Irish economy by enabling female entrepreneurs build businesses in a geo diverse way, use their skills and grow employment and wealth in a way that wasn’t happening before the programme was on offer.
Does Ireland’s position as a favoured European HQ for the world’s leading tech firms help?
In terms of talent, in Ireland you’re competing with some very big names; and that can be trouble because they pay a lot! But there are also plenty of talented people who go into the big multinationals, learn their trade and then want to go back into a start-up environment. In the Irish start-up/scale-up space it is automatically considered attractive to be involved in something creative and new. Talent is interested in joining companies where it can have a real impact, so in that respect you can attract good people. We’re hiring some senior tech people at the moment, and the calibre of the candidates is absolutely amazing.
There are other, less noted benefits of operating here. Selling into enterprise as we do, it’s not just that there are plenty of target multinationals in Ireland. The Irish business culture is not too dissimilar from the US business culture in that it’s very direct. It’s easy to get in and talk to people: there’s not too much bureaucracy around getting a meeting with somebody very senior. You can have a conversation and if it’s no good to them, they’ll just tell you.
That openness meant I could find out whether Payslip was going to be useful to senior decision-makers pre-product and pre-launch. I showed plenty of potential customers our platform before we were ever selling it. It’s an amazing way to get buy-in and interest early, without making lots of expensive mistakes.
This article first appeared on Soldo, a solution providing multi-user business expense cards that empowers employees by automating their expenses. You can read more interviews from Soldo’s interview series here.