Welcome back to another exciting episode of our podcast, where we delve into the captivating world of entrepreneurship. This time Chris, the founder of Zelt, is in the hot seat. Max Shepherd-Cross, founder of Officely, leads the conversation to unravel his career path and uncover the driving forces that led him to take the plunge into the realm of entrepreneurship.
From his beginnings in a small German village to his adventures in finance, private equity, and venture capital, Chris’s journey is both inspiring and insightful. In this candid interview, Max dives deep into Chris’ experiences, triumphs, and the pivotal moments that shaped his entrepreneurial mindset.
Passionate about creating modern work environments, Max Shepherd-Cross is the founder of Officely, a startup focusing on hybrid work & flexible workspace solutions.
Read on for a brief recap of our conversation and the transcript.
Discovering a Passion for Physics and Unexpectedly Entering the Corporate World
Chris career trajectory began with a passion for physics. During his undergraduate years, he immersed himself in the study of the subject. However, he soon realized that the laboratory environment wasn’t his cup of tea. Searching for a new direction, Chris pursued a master’s degree in finance at Cambridge University.
It was during his time at Cambridge that Chris found himself drawn to the corporate world. Joining Merrill Lynch’s equity capital markets team, he became exposed to the exciting world of initial public offerings (IPOs). This experience opened his eyes to the realm of technology and entrepreneurship, areas that were not traditionally covered in the German education system.
Navigating the World of Private Equity and Venture Capital
While Chris thoroughly enjoyed his time in banking, he eventually decided to explore new horizons and entered the world of private equity. Initially hesitant due to its popularity, he discovered that the private equity space offered its own set of rewards. Chris spent two years in this field, further expanding his knowledge and experience.
His time in private equity paved the way for his transition into venture capital. Oliver Samwer, one of the brothers who founded Rocket Internet, approached Chris with an enticing opportunity. Recognizing the potential for personal and professional growth, Chris made the leap, joining the venture capital space. This move provided him with valuable insights into investment strategies, trends, and emerging markets within the Tech space.
The Birth of Zelt: Connecting Data and Automation in People Operations
Through his experiences in various sectors, Chris developed a strong belief in the power of data and automation. He identified the fragmented nature of the people operations space and saw an opportunity to streamline processes and enhance efficiency. This realization gave birth to his brainchild, Zelt.
Zelt focuses on connecting and automating data within the realm of people operations. With the proliferation of different software tools and databases, employee information often becomes scattered and inefficient. Chris’s vision is to bridge these gaps, ensuring a smooth flow of data between various HR systems, thus revolutionizing the way companies manage their people operations.
Choosing the Right Approach: Stitching Together or Replacing Existing Tools?
One of the critical considerations in the development of Zelt is determining the best approach to address the fragmented landscape of people operations tools. Chris and Max discuss two potential strategies: stitching together existing tools or replacing them altogether with a unified system.
For smaller companies, the integration of middleware that connects different tools may be the preferred solution. This approach allows for a more cost-effective and gradual transition while maintaining the existing tools that companies are accustomed to using. Conversely, larger organizations might find it more efficient to replace multiple systems with a consolidated, all-in-one platform.
Milestones and Achievements: Funding, Customer Acquisition, and Team Building
Throughout his entrepreneurial journey, Chris has celebrated significant milestones and achievements. Zelt successfully raised a total of $3.5 million in funding, demonstrating investor confidence in the company’s vision and potential. With approximately 100 paying customers on board, Zelt is making an impact in the people operations space.
Transcript
Max Shepherd-Cross
Cool. Ready when you’re on.Chris Priebe
Yeah, I’m ready.Max Shepherd-Cross
Great. So, um, take me back to the start.Chris Priebe
What was your corporate career? It was very unexpected, unexpectedly corporate. So I started a study physics, my undergrad undergrad.
And really loved studying physics, but then quickly realized I really hated hanging out in a laboratory. Um, and looked for, from the, I didn’t know what I wanted to do.
So I did like a very general kind of finance master in Cambridge. Um, and I think more or less random, I think once you study in the UK at Oxford universities, you get to head-hunted and you stick with a company that just kind of gives you the best pitch.
And that’s kind of what happened. I ended up joining Merrill Lynch, now bank of America. in their equity capital markets team.
Back then I also didn’t know yet. He kind of shouldn’t do ECM for several reasons but I joined it because the team was awesome and I think the bank was awesome and people in there were awesome and frankly really enjoyed it.
I stayed for three years and did I change teams once but basically did banking stuff so back then we did a lot of IPOs and because I was German I worked in the German team and luckily back then I was an ECM that means equity capital markets IPOs is like the ideal thing you want to do there there’s other more boring stuff but back then was a big kind of IPO markets window so we did a lot of cool a lot of the cool IPOs back then like Zandu, Zalando and Rocket Internet and help the fresh and those kind of it’s very transactional and actually you don’t really it’s very
You don’t work over it deep But I mean as a first interaction with like tech and like hey, you know Like there’s like there’s like different industries here and like you do things That you’ve never learned about because frankly that the German education system is very very traditional You don’t learn anything about software and computers and the internet economy nothing so for me that was my first kind of other things than traditional jobs or like banking or finance And I think you know therefore for me very important first job because While maybe I’m I didn’t go to take as quickly as some of the people, you know, it was one of those Let’s say direction, you know, some of that gave me brought me the right direction and people that I work with there A lot of them are now doing interesting things.
So my former Managing a director. He’s now CFO of Hello Fresh which he IPO’d and one of my co-founders found a trade republic which is one of Germany’s highest valid startups and Ricardo founded heroes and a bunch of others so yeah I think very important first stage of my career even though the job itself I’m not that interesting let’s face it but it is a good introduction to tech yeah I think it’s more about meeting the right people and like getting the right exposure frankly you know those three years should have really been only six months or 12 months but nevertheless I think it was a successful first and then unfortunately I did the thing that kind of everybody does I went into private equity I mean in the end I think that’s maybe where the story will head into I never really like doing the things that everybody’s doing so I kind of despised myself for going into private equity because that’s what everybody wants to do
But in the end, actually, it turned out to be pretty cool as well. So then I spent two years in private equity.Max Shepherd-Cross
And what was the, what was the code like both here at the, in private equity and at the bank?Chris Priebe
Um, very different, I would say, very different. Yeah. So I think bankers, the linear, the leaders and banking, I mean, they were like 40 plus, right?
So they were there in the good days and their memories are, um, are shaped by the good, the golden days of banking, right?
A pre financial crisis, pre all that regulation. They were earning crazy amount of cash and like all that kind of lifestyle that came about it, this kind of broke culture.
Um, and I think that was kind of that culture is still very much so, um, dominated by, I think the reminders of those times.
And I’m not saying it was a bad place to work. You know, it’s not like people inappropriate or like.
tracking inappropriate jokes all the time. That wasn’t the case, particularly Bank of America. It’s a public company and being the face of the American S&B economy.
I think the bar there was much higher than maybe places like Goldman Sachs or so. But nevertheless, you could feel that this is a place that very recently is kind of like this, this kind of culture, the kind of broke culture that is well known.Max Shepherd-Cross
It gives some specifics. Was it long hours and then drinks in the city?Chris Priebe
That’s about more culture. Yeah, so it kind of worked out play-hard culture and you would do your annual ski trip and like of course, you know, everybody’s racing to the bottom like maniacs.
Of course, you go out and the table and all that kind of things. And they’re all fun. And I think, you know, I don’t regret it, but very different to TA Associates, the product refund, which is also very work hard.
Don’t get me wrong. But then a lot more or let’s say settled. It’s more like, I mean, there was one partner, it’s quite funny.
Like he was desperately trying to find a wife. He was the only person that was not married, and he felt like it was holding him back because the ideal status of a private equity investor is basically, if you had to describe it in one word, it’s settled, you know, reliable, not volatile, always there, zero risk of churn.
Because when you invest when you buy a company, the people that kind of choose you as their partner, they want you to be then 10 years time.
So basically, that’s the ideal you want to be while in banking, like all of them, these are like singles and dating, you know, like on dating apps, and they go on trips to Ibiza with their three girlfriends.
It’s very, very different mentality. And while the people in P, I actually much richer than one’s banking. They would never show it while I’m banking, you know, people flash their golden Rolex and like their, you know, their suits and their cars and in P every striving Volvos and like, you know, hiding it as much as possible.Max Shepherd-Cross
Very different. That is very different. Gotcha. And so then you move from private equity into venture capital.Chris Priebe
Is that right? Yes. So that was a very kind of opportunistic move. So I was approached by Oli Stumber, one of the brothers that founded Rocket Internet.
Max Shepherd-Cross
Obviously as a German, that’s the kind of meeting you always take.
Chris Priebe
Everybody knows them. Every knows about the also, of course, the what’s the right word? You know, what’s the word?
Infamous? He’s infamous, right?
Max Shepherd-Cross
He’s famous, but not only in a good way. And the problem with TA was there was always, let’s say, a certain expiry date to it because they are an American firm.
And in American firms, you do MBAs and you make you do those MBAs in Harvard or Stanford. Otherwise, you know, you’re a loser.
And they are two years and they call
Chris Priebe
$200,000 and I just didn’t feel like I wanted to do that. So I always knew, you know, maximum three years and he approached me like two years in and it was a good timing and the offer was good.
And frankly, you know, I think for as a preparation for becoming a founder was great because, you know, when you work for a VC, particularly, while GFC doesn’t have a great reputation, they’re actually very good.
In the upgrade investments and actually very good also picking investments and you’re very close to the trends. And like what’s, you know, what’s happening in the market?
While in private equity, you’re kind of 10 years away from like 15 years away. So, yeah, it was, I think again, a very important move into becoming a founder and actually understanding, you know, what are the areas that are actually interesting to build a company in.
Max Shepherd-Cross
And it’s obviously, it’s obviously easy to connect these dots in retrospect, but were you at the time, were you thinking, this is a great stepping up?
stone. So one day I can found a business.
Chris Priebe
My memory isn’t amazing, unfortunately.
Max Shepherd-Cross
So I’m actually kind of struggling.
Chris Priebe
I’m not entirely sure anymore when I kind of sort of made the decision that I want to found. But I do remember, I have a vague memory that I thought I’m going to stay at TA for a year or two.
I’m going to be working on a site. I’m going to working on the site, I’m going to idea and then leave after a year or two.
But then once you join an American project, we’re from the concept of working on the site on anything just doesn’t exist.
Max Shepherd-Cross
You work 90 hours a week and then you sleep.
Chris Priebe
So I feel like that whole plan is always delayed by working for these companies that just work like insane.
And GFC actually wasn’t very different. But I think I had that certainly the feeling that I, this whole thing of like joining some firm, particularly in finance and just kind of climbing the left.
better and like doing the promotions and doing all the things that are expected of you were never going to be my thing.
And I think I want I was interested in founding probably at the beginning at the already.
Max Shepherd-Cross
Gotcha. But I don’t totally remember, unfortunately. And how would you describe the culture at GFC?
Chris Priebe
Very much independent. So you’re almost able to watch Oliver’s summer, but you don’t really report at all. You bring him deals and then he’s as yes or no.
If you bring him enough interesting deals, he’ll keep you if you don’t, he’ll fire you. And that’s it. So you kind of just develop yourself.
When you want to speak to him, you will take his time. So you can always book yourself into his calendar.
But he also wouldn’t now go out as his way to kind of train you or show you, you know, the way or.
So it’s really kind of your own. It’s almost like if you. now funded your own VC fund and now try to do investments and accept the only differences you have on it the top that says yes or no.
And it’s a very incredibly unburocratic, autocratic organizational culture. At TA, I don’t know if you’ve spent any time on reading about this, but there’s like different, there’s kind of three basic, mental organizational cultures.
There’s bureaucracy and there is meritocracy and there’s autocracy. TA was a postcard example for meritocracy and for that market is the exact right format and they are probably some of the best of the best in that sort of way.
They’ve grown up for 50 years and the governance was just perfect in every single way. And then for GFC, that wouldn’t work.
And VC in general, that doesn’t work. For PE, it works very well. For VC, it doesn’t work very well because you have to just be fast, really, particularly when you’re not sequar XO.
Well, the only way you can win is by being fast and the first one. And that only works in autocracy.
That means there’s absolutely zero level of management at all. Everybody is kind of like fending for themselves, not necessarily because they want it that way, but because if you don’t have any levels, that means there is no filter to the top.
And that’s the only way you can progress things fast enough. And that’s kind of how it worked there. You could get, you could book a call on all these calendar, although he’s a, you know, 10 billion plus sort of, you know, with person, you can book a calendar, a call on this calendar within 30 minutes as you have to.
And you will take the time, you know, he will get on a call whenever, 3 a.m. 4 a.m. he’ll wake up.
He’ll do it from a flight or from a car or whatever. On the other hand, yeah, he would not actively support you in making you better or like helping you progress.
Max Shepherd-Cross
Yeah, now I get that. Okay. That’s interesting. And so what was it? What was it that drew you to becoming a.
I found out.
Chris Priebe
It’s very hard to say why. I think you just kind of notice when you’re in these firms objectively, particularly TA, objectively, there’s actually nothing missing.
The pay is amazing. The benefits are off the charts. You fly business, Hong Kong. Hotels are Mandarin. It’s not the married or whatever.
Your colleagues are smart. They don’t hire assholes at all because these firms are so small. They can be super selective.
Everybody is super smart but also really nice and pretty humble and interesting. Arguably, it’s the perfect place to work and retire.
Most people do that.
Max Shepherd-Cross
They stay there forever.
Chris Priebe
They never leave. Most of the partners that are there, they joined two years into their career. They worked at Goldman or Fred Sreez or whatever.
They joined and they never left, except the two years of MBA. Arguably, rationally, that’s probably what I should have done.
But you can just, I just kind of felt it just wasn’t me, you know, and I think it’s also part of my upbringing.
You know, when everybody does A, something tells me I shouldn’t be doing A. Not that A must be bad, but it’s just not my thing.
I just want to do my own thing. Even if maybe it’s not quite as big, but at least it’s my own thing.
Max Shepherd-Cross
Was it, do you think because you had your whole path mapped out for you that pushed you off it?
Chris Priebe
I think it’s part of it.
Max Shepherd-Cross
I think it’s probably 50%.
Chris Priebe
Probably 50% is that and the other 50% is probably my upbringing. Just kind of, I just enjoy like just like the challenge of doing my own path.
But then as a, I think I joined TA when I was 20, it was in 2014, so I was 25.
Max Shepherd-Cross
At that age, the idea to now retire in this company, your second job is for me was a massive loss of Charles.
Chris Priebe
Even if possible. possibly is the best thing you could possibly get. And yeah, so yeah, it was probably 50% of it.
Max Shepherd-Cross
Interesting. And you say it’s about your about your upbringing, but what was it about your upbringing that that made you this kind of person?
Chris Priebe
I think it’s probably most of my dad. You know, the attitude to rules, for example, rules only exist if they make sense.
So if they don’t make sense, it’s as if they don’t exist, right? Basically, you make your own rules and ideally, you know, you, those rules should be made with the same, you know, values in mind.
Like you should be ethical and you should not be harming others and you should be generally acting in good faith.
But sometimes those rules, you know, are meaningless. So you just skip them. And and I’m not saying that it’s about rule breaking, but it’s more about, you know, like not thinking in a box and joining a 50 year old firm and then climbing the letter, it’s literally the definition.
of putting yourself in a box. And it just didn’t feel like, and you know, just like, I guess, just like intuitive-wise, the biggest opportunities are always outside of the box.
I mean, always, right? The box has definitely some advantages. But I think I always look for those kind of other things outside of the box.
I think they’re just more interesting.
Max Shepherd-Cross
That’s great. OK. And so that led you to the Founder’s door. Tell us a little bit about how you landed on this idea, how long it took you to build up, well, I don’t know if it’s the right phrase, but build up the confidence to actually quit your job and talk us through how that all happened.
Chris Priebe
Yeah, I mean, you know, the general theme of, you know, what I’m doing. Or like what I landed on is very simple.
It’s really about data and automation. I think if you look top down at technology, it’s really quite easy to block things together into what’s happening.
So obviously the internet and personal computer and the workplace being ruled by computers, and then you had software, and then you had the internet, and then really kind of SAS, for private equity, SAS was the big thing, right?
Like SAS started somewhere in the mid 2000s. I mean, Salesforce started early 2000, but that was very early, right?
So really most of private equity gains and profits are SAS. And that was a big theme. That’s not happened.
Nobody’s excited about SAS anymore. It’s just a given, right? You want to do something in a business?
Max Shepherd-Cross
You need some software for it.
Chris Priebe
And most companies. He’s now having abundance of software. Now, it’s pretty clear that now the current, log by the current area that we end, is more about automation and closer related to that is data.
Because really, once you think about what software actually is, it’s really just data being stored in a database. And then there’s a bunch of code on top of that that determines what data is manipulated and how it moves and how it’s changed.
But really, the persistent part of software is the database and it’s the data. And if you think about a business process, if you now think that through what that actually means, it just means manipulating data.
In particular, if you have many different pieces of software, it means putting data from one database into another. And a lot of these seed investments is all around that theme.
If you think about plate or plant or whatever you call it, or codad or, you know, a trio or a carto or a mule soft, it’s all the same theme.
It’s just getting data from A to B in an efficient way. and business process optimization and workflow automation is the same thing.
It’s just getting data from ADB. There’s different facets and different ways of how this plays out in different markets, in different regions, in horizontals and verticals.
It’s really just about picking the right application for this. It could be lots of different ways I can do it.
It could be middleware. It could be in application software. It could be horizontal vertical. It could be an API to connect two vertical tools like Plaid, for example, connect a bank account with an underwriter.
Really, the whole audiation process was around that. What are the different application areas? I just started bottom-up. I’ve always been a B2B guy.
I think a function that’s available here $66, so well. that it’s pretty simple. How, where do you start? You just map what software actually exists, right?
In companies, in different verticals, and then you understand what data silos have already been connected, and why, what is it valuable.
And then you pick the ones where the areas are big enough, where there’s still a lot of, let’s say, friction, because the piping or the connections aren’t there yet.
And wherever that happens, people waste time on data input and manual processes and too many tools and those sort of things.
And then I landed on people operations because it’s very large. Every single company in the world needs to do it.
It’s under-invested because it’s a bit further away from revenue than, for example, the revenue operations, right? Your CRMs and sales booking tools and all those sort of things.
Those markets are far advanced. A HubSpot is 100 times better than a personio or like a breathe HR or something.
So it’s under-invested. Very large and I would say only since recently the buyer is savvy enough to really be confident in using those tools.
So the timing is right as well.
Max Shepherd-Cross
Yeah. So one of our top clients, I might have to adapt that comment. So just to repeat that back to you, you decided that within the people operation space, there you’ve got data in different areas and that needs to be connected up.
Chris Priebe
Yeah. So like the people kind of operation stack is extremely highly fragmented. So the more fragmentation you have, the more opportunity for value creation you have.
Max Shepherd-Cross
It’s a sample of that. So people can idea, think of that in their mind.
Chris Priebe
Yeah. I mean, to be very precise, like when you’re onboard, let’s say you get hired by a company, right?
So your first touch point is probably via email. So, you know, that’s one place where information is stored and then you maybe have a data record in the applicant tracking system, right?
So your record exists there, maybe your CV is there on your address and then you get onboarded maybe to an HR system.
This now collects further information from you so that it’s duplicated, so that you may have already sent via email or via the ATS.
So this is yet again another, you know, a database where you exist. Then you’re added to the payroll system, which again is a part copy of the data and some additional data on top of it.
You add it to different kind of benefits platforms to different productivity tools. So this is now more about like access management.
But if you think about it’s the same thing. So if you give somebody access to your Google, you create a new record in the Google database about that user.
And the information about that user is a subset of the very same information that sits in your HR system.
So now you scatter this into your 50 different tools, 50 different copies of your user record and your 50 different tools.
Then there’s like 10 other things and basically all your employee data is just scattered across all these tools and it makes it very insecure and very slow and very manual and very fickle and not very reliable.
Max Shepherd-Cross
So is your vision to stitch all these together or just replace them all?
Chris Priebe
So there’s two things. I mean, there’s two ways, right? So that’s the first question that you have to decide what’s the best way to do this.
And it depends, in my view, the answer depends on how big is the company or how big company are we talking about?
If it’s a 10,000 employee company, the best way to stitch them together. Because the cost of moving, let’s say four core people up systems into a new one is much higher than adding some middleware, getting someone consultant to set it up and getting a few engineers to kind of maintain it.
It needs to be constantly maintained because those systems evolve and the APIs change. So the business processes change and you have to maintain it.
If you’re there’s a certain threshold where that Where that equation changes where the cost of Moving to a new consolidated system is lower than maintaining this sort of middleware and It’s unclear where that barrier is.
I think that barriers also constantly growing because the cost of moving systems is lowering because of APIs But certainly for a company with hundreds of employees It’s much easier to just go to a new system and application where you just sign up and you connect your other different tools to import the data and then just works rather than now getting some API connecting layer and connecting things up and understand what’s You know, who’s the slave who’s the master like we should have go from either be your from B to A and when or maybe some Times may be and sometimes on B to A.
It’s very complicated and most people would not understand it So the markets of certainly you sub 1000 employee companies the application software and basically replacing and still stitching together but like
as a new tool is more attractive while for big companies, the middleware. In fact, the middleware market has been around already for a long time.
So there’s nothing new. Like new softwares acquired by Salesforce for $2 billion or so many, many years ago. There’s lots of tools and they’re ready.
And enterprise started investing this over years ago. But for SMB, this is very new. So they have barely any automation at all.
Max Shepherd-Cross
Okay. And give us some highlights of the journey so far that you’re willing to share.
Chris Priebe
Yeah, I think they change all the time. I think obviously the first hire is incredibly scary and weird. First money raised, I was back then from Village Global, was surprising that somebody would just give me money.
First full-time hire.
Max Shepherd-Cross
Yeah. Give us some numbers. How many employees are you up to?
Chris Priebe
What would have you raised? So we raised a total of $3.5 million. And we speak now on dollars because…
So we have our first US kind of customers and, you know, just kind of be more like, let’s say, international, but we’re to be clear, we’re a UK based, GBP based company, but, you know, three and a half million dollars.
At a time we’re 16 people, but we went back to 11 actually because I realized that’s the optimum in terms of output.
Maybe one engineer actually will be good, but I think this is a perfect size for where we are right now.
So what else?
Max Shepherd-Cross
First paying customer.
Chris Priebe
Yeah, that’s of course a big milestone.
Max Shepherd-Cross
You wouldn’t share how many customers you have now?
Chris Priebe
Yeah, we have roughly 100 paying customers and lots of kind of free customers with that kind of self-serve and they kind of do their own thing and you can use it for free up to 10 people.
So, you know, and most of these companies actually prefer to just be left alone and do their thing.
Max Shepherd-Cross
Yeah, yeah, you can see that as well. Okay, great. I think I’ve got plenty to get. the one thing I forgot to ask you is, tell me more about your background, where you’re from in Germany, where you went to school.
Chris Priebe
Yeah, so I’m from the countryside from a very, very small village. I went to school in that village school.
Well, it’s the school in the neighboring village that is also village because my village was even smaller and then went to the local kind of gymnasium, which was high school, which is also not even a city, I know, 20,000 people.
And then I spent a lot of time in Spain when I grew up because my parents, my dad retired, my dad’s was very old.
So he retired, he was always retired. So we spent a lot of time in Spain all our holidays and stuff.
But whenever basically there was no school, so grew up a little bit in Spain. And then went to Argen, which is a picture because it was the best.
university for physics in Germany, also very small city, 200,000 really not unexciting, but great university. And then pick yet again another small town, Cambridge, to do some more studies, then finally ended up in big London.
Max Shepherd-Cross
That was 22. And what’s the area of Germany you say you’re from?
Chris Priebe
It’s an hour from, it’s kind of this triangle between Hamburg, Hanovern the Lünuburgheheide, heide’s heath, it’s this red plant.
So there’s like this area, it’s actually quite beautiful, like this area where like this heath grows wild and like it’s…
Max Shepherd-Cross
That’s from Hamburg. Hour from Hamburg, is that?
Chris Priebe
How far?
Max Shepherd-Cross
And hour from Hamburg, is that what you said?
Chris Priebe
It’s like an hour from Hamburg, half an hour from Bremen.
Max Shepherd-Cross
Yeah, that’s perfect. Awesome, what I’ll do Chris. I’ll write this up and send it across to you and make sure you’re happy.
Chris Priebe
Mm-hmm. Sounds good. Exciting.
Max Shepherd-Cross
All right. Well, thanks so much for your time. Hopefully this will be the start of something fun.
Chris Priebe
Yeah, pleasure. Pleasure. And looking forward to it.
Max Shepherd-Cross
OK. Right.
Chris Priebe
Right. Thanks. Bye bye.