In episode 40 of the Legislate podcast, Legislate meets Chris Priebe, Founder and CEO of Zelt.
Zelt is a next-generation employee management software which is centered around the needs of employees, not business administrators. Chris shares his background and experience building Zelt as well as the key things you need to pay attention to in employment contracts.
Below, you can find the full transcript, which originally appeared here.
Charles Brecque: Welcome to the Legislate podcast, a place to learn about the latest insights and trends in property, technology, business building, and contract drafting. Today, I’m excited to welcome Chris, founder and CEO of Zelt. Zelt is a new-generation employee management software centred around employees and their needs, not business admins and HR, IT, or payroll. Chris, thank you for taking the time. Would you like to please share a bit of background about yourself and Zelt?
Chris Priebe: Yes, absolutely, and thank you very much, Charles, for having me. I came to the UK ten years ago to finish my studies, not really knowing what I was going to do with my life and career. I ended up in tech more or less randomly, I think. I worked at an investment bank called Merrill Lynch for a couple of years, and that’s where I, kind of, fell into tech, and have been there ever since. After that I became a software investor in private equity and venture capital, so a lot of horizontal and vertical software investing that I’ve done there. Private equity, rather mid cap, stable, profitable companies, and then in venture capital, very early stage, very fast-growing companies that hopefully one day would come very big, and some of those actually became very big. I was lucky enough to have exposure to some very inspiring and successful people throughout that work. I think ultimately that’s really what inspired me to become a founder, and of course as a software investor you see a lot of things that are happening in the market, and a lot of things that you understand or don’t agree with, or things that could be improved.
So, eventually I found a problem that I was very passionate about, and it felt like there was something that should be improved. Essentially, what I saw was that there’s a really huge market out there of anything, let’s call it business admin software, that could be in HR, payroll, IT and other, sort of, internal departments in companies that really are all about providing a certain service or benefit to employees, but have never been designed actually to work well for employees or give them value, but instead really cater for the stakeholder, and the maybe one decision maker in a department or team. We think that’s fundamentally wrong. We think that not only is it important for employers to, you know, provide software to their employees that is user-friendly and gives them value, but actually it will do them a great favour, because as you realise-, initially, actually, I approached this problem really technocratically or scientifically, I’m a physicist by background, so I just saw all these friction points. By unifying and providing the unified employee empowerment platform, I think that’s maybe how we’re going to call it, actually more or less magically melt away a lot of these friction points that exist, just everywhere across these departments. A lot of tools should be speaking to each other, but they don’t. It’s because they were set up wrongly in the first place. That’s what we are solving on a technical point, but really what we’re doing is creating the first ever employee-centric business management system that is really there to help and create value to employees, and empower them so that they are in control of things that, really, it’s their service and benefit of being an employee.
Charles Brecque: That’s a very interesting problem and, I guess, if you are designing a platform for employee first, how do you win over the stakeholders?
Chris Priebe: I think that’s also part of what’s been happening over the last few years and I think it used to be this two-level relationship where everything was evolving around the employer and the employer was the centre of the universe and employees were seen as a given, and certainly, maybe, in the 4D system that is the case, where people are just standing on these conveyor belts, and sort of just, like, putting screws on the big machine. That’s been really changing, especially with digital workers and maybe the remote era where, you know, maybe you can now tap into talent pools around the world, and talent moving more freely, but also talent becoming a lot more scarce. I think the relationship between employees and employers, and I think even ’employees’ is not even the right term anymore, because remote contractors that you consider full-time team members, they’re not really employees anymore.
So, a lot of these paradigms that have formed over the last decades, or hundreds of years, even, are changing, and that also means that this concept of employee experience, and if you check on Google that the trend of employee experience, similar to hybrid work, for example, has been really growing, and that’s because employers are realising, ‘Hey,’ they actually have to now start caring about their employees, and not just pretend that they are, but they actually do, because otherwise, you know what? They are going to leave. And we’re not really doing that-, our message is not, ‘You should be altruistic, you should give away this, and it’s bad for you, but it’s good for your employees.’ No, it’s actually better for you because a lot of the annoying admin work that you do as an admin, because the tooling that you own doesn’t speak to the three other tools that other people own in the company, but that need data from it, and where your processes run across these different tools, it will also save you a lot of work. In the end you’re also an employee yourself, right, so personally you’re going to benefit from it. I agree, it’s not going to be easy because there are certain paradigms that have been set and it’s hard to change people’s behaviour and the way they think about things, but I think the trend is on our side. So, we just need to follow that trend and be patient enough.
Charles Brecque: Well, good luck. Since building Zelt and founding the company, what would you say is your favourite moment?
Chris Priebe: Everything is just racing by, it’s really hard to say, I think. We closed our funding run last week and we’ve got wire transfers onto our account bigger than whatever we’ve raised before, so it’s, like, crazy, but you’re already thinking about the next one, right? Now the pressure is on to now deploy that, get hires in that help you build something, and now we’re in this problem of finding great people and convincing them to join, and we need now to go to market, we have a totally horrible website. So, it’s sometimes really hard to stop and enjoy the things, or to celebrate the milestones that you should be celebrating, just because there are just many more to come. I don’t know, but in the beginning I think just spinning up the app, the first pages where you can log in and you’re there and you can type stuff in, you can click a button and it works, that was pretty cool, and then I think the first full-time team members joining, that was awesome. And then Paulina joining us as Product Lead, before it was basically just me and engineers and I had to spend 120% of my day with, breaking down the work for engineers but then also testing it and making sure it works, and figuring out what to build next. With Paulina coming in, she’s taken a large chunk of that and that freed me up to actually do more, kind of, other high-level stuff. It’s hard to say. It’s really just-, yes, hard to say, I don’t know.
Charles Brecque: I think that’s a great answer, though. Lots of different nuggets there in terms of what it means to be a founder. I can definitely relate. I guess, maybe, what do you wish you’d known before starting?
Chris Priebe: I think how difficult it is to convince people to join a company that doesn’t have a name or, especially if you don’t have customers yet. That’s, I think, why we built our first website. Not because we had people that wanted to learn about us, but we needed to have something to show for people to actually trust that we’re a real company, for people to join us. I think that is one thing. Convincing people, the right people, to join is really hard. I think there are also some, maybe, technical things, that if I was a bit more technical we could have done some things I think better in the early stages, that we wouldn’t have had to spend months cleaning up afterwards. I think that’s maybe also the function of, I’m a solo founder, a non-tech founder, so there were just some downsides to that. I think that is one of them. Yes, I think those are going to be some examples.
Charles Brecque: I think hiring does become easier as you become more established, so I guess there’s some hope there, but yes. What’s the vision for Zelt for the next three, five, ten years?
Chris Priebe: I think given the fact that we’re set up in the market that we’re playing, this is a very long-term game, a very long-term growth trajectory. We’re not like Hopin or something like that, that can just explode overnight. We’re not that kind of company, but on the other hand I think we’re in that kind of market and also have that kind of vision that can let us grow for decades, and really become the next SAP, maybe. SAP is now a dinosaur, you wouldn’t use them as an example for great software. Back then, when they started, they were revolutionary, and have become I think a really big company. We see this as a very long-term thing. Also I think ultimately it’s to create a platform in the employee universe. It’s really one that only since a few years, I made that point earlier, it’s become important enough for people to see this as a real, sort of, universe, before it was just all of our customers, right? Because employees are a cost centre and customers are revenue, so a lot of great technology has been built in the customer experience side of things over the last ten, twenty years, and Salesforce has become arguably the most valuable platform in B2B, just because they’ve become that centre of that universe and it’s just so valuable.
I think we really have an opportunity here for us to build something and become the centre of the universe for everything around the employee and build an ecosystem around that. So that hasn’t really happened yet, of course there are some strong players in the employee-rated verticals, but they never really had that wider vision they were also just this productivity tool for HR people or for payroll people. They never had that bigger vision of putting the employee in the middle and building a universe around them. So that’s the difference in our approach as well.
Charles Brecque: That’s great. As a CEO especially operating in the employment space, what are the key contracts that you interact with?
Chris Priebe: Probably the employment agreement and the option agreement that are, I guess, the most important ones. Since recently, I have a work contract myself, because we just closed a funding round. Before that I had a salary but I actually never bothered writing myself a work contract because I didn’t see the purpose, but now I have my own as well and that was pretty important, because it determines other important things like governance of the company. Because I de facto have board control, so whoever has control of my employment has control over the board, has control over the company. So there’s a lot of downstream effects on this kind of stuff. But then, besides that, it’s, I think, employment agreements and option agreements. And in option agreements we have two. We have an EMI and we have an unapproved option scheme for international team members.
Charles Brecque: And with those contracts, are there any areas of friction or key questions that often come up that you’ve encountered whilst creating them?
Chris Priebe: I think the thing is there, you don’t know what you don’t know, until you do, and then usually it’s too late. I think I was lucky because I was a VC investor, I know a lot of founders that raised bigger rounds and they also spent a lot of money on lawyers to get those contracts. So I was lucky enough to get those templates more or less for free. When I was in the early days I definitely would not have paid a lawyer. Like, zero. Until actually last week, I have paid zero on any lawyer, on anything. And probably our customer contracts are probably in complying and, like, our privacy policy is probably also not working, but frankly I don’t care. But the thing you need to care are employee contracts and option agreements. I think employee contracts are important. You need to cover some bases, there are some risks there. The UK is friendlier, but maybe if you’re in other countries, particularly there, maybe. And then on the options side, you also want to make sure that you, you know, cover the backs of your employees because you want to make sure that they’re drafted well enough so that when those employee options become valuable, that they can actually get the value from it, and don’t have to pay any unexpected taxes, or can’t exercise them, or stuff like that. Things like probationary period, I think on the employment contract side, things like payment in lieu, which if it’s not in there you can’t use it, some things should just be in there in a good contract, and you don’t know it until somebody tells you that you should have it in there.
Charles Brecque: You don’t know until something goes wrong.
Chris Priebe: Exactly yes. That’s right.
Charles Brecque: And then you realise.
Chris Priebe: That’s right.
Charles Brecque: Yes, that’s a good point. I think that you said something true about the expense of legal, especially when you’re an early stage start-up where you have limited budget, and you’re trying to manage your resources, and sometimes you might want to save on legal. But saving on legal, especially when it’s things like employment contracts, then it can cost you ten times more down the road if you need to fix a problem, so I guess that’s where Legislate comes in. We do try to lower that barrier to entry for quality legals, especially for things like employment contracts, when you are very early stage, but just like with Zelt, if you start early, even when you don’t really have many employees, then later down the line it will make your life a lot easier as you scale and grow. Yes, so Chris, I’m conscious I have already taken a lot of your time, so I’m going to ask you the closing question we ask all our guests. If you were being sent a contract to sign today, what would impress you?
Chris Priebe: Is it any specific contract?
Charles Brecque: You can interpret the question as you wish.
Chris Priebe: Usually I get them sent by DocuSign, so the execution method is almost always the same these days, you just click a button. I don’t know, almost always they’re written in a way that, I guess, you don’t want to read them. I think I appreciate contracts that are written legibly for people to read, because otherwise I always assume they are there to catch me out. Yes, I think just a well-structured document that actually maybe highlights-, that’s actually how I also write our employment contracts. There’s, like, a cover page at the top the highlights all the important bits like the salary, the probationary period and maybe the share options, and then plugs them in almost as variables in the contract. That makes it easier for person to read and understand what are the important bits. Of course you still have to read the whole thing, because maybe the one thing that they don’t want you to see is still in there somewhere. It probably is, but I appreciate that it gives, like, the executive summary so I know, actually, what are the important things in here? Especially when there is a platform in the middle that has a certain level of trust, right?
For example, that’s why I did my first funding round with SAFE Notes, the very standardised investment documents from Y Combinator, because I know I don’t need to understand every clause in there. Of course I read it, but I know for sure that I can trust these framework because it’s written in a way that works well, balances the interests well between founders and investors. If that level of trust is there then I think that’s the real value. And I think that’s also the value that is there that you guys can pursue. Because, for me, the difficulty of getting a template from this employment contract, the contract itself is not a lot of value for me. I can get templates from any company but I just trusted that one guy who sent it to me. I trusted that this would be a good one and that was the value, it’s the trust. The template itself is just a bunch of words that you can just copy and paste from some other documents, but if that person tells me, ‘Hey, this is a good one, this covers you because of A, B and C,’ that’s the value.
Charles Brecque: Yes. I think scaling trust is a challenge for any start-up, but in particular Legislate, where we do provide templates, and you’re right, templates are just words, but they’re words that have impact and then I think what’s also impactful is what you do with those contracts post-signature, because there’s a lot of potential for that. Anyway, thank you very much, Chris, for being on the show. Best of luck and hopefully speak again soon.
Chris Priebe: Great, thank you everybody and thank you for having me on the podcast, Charles.