Today, Oyster announced the raising of their seed round, led by Connect Ventures.
We’re very excited to be partnering with Tony Jamous and Jack Mardack on his new venture. I’d like to take this opportunity to share how we built conviction on Oyster, and why we can’t wait to see them pave the way for a new future in hiring for a modern world.
The Lead-up: Hiking and bonding
I’ve known Tony for many years, even before he founded Nexmo (the communication API company he took up to $750m in company value). We’ve met several times, and co-invested in TrueLayer. I’ve huge respect and admiration for what he has built and achieved. However, I only fully understood the breadth of Tony’s calibre recently and in the context of Oyster’s inception.
This past January, Tony and I took a couple of weekend strolls in Hampstead Heath, always toward the little market located on the upper side of the park — they serve one of the best cappuccinos I’ve ever had. During these walks, Tony shared his vision, his commitment, why he believed international hiring was broken, and why the world is clamoring for a different solution.
He walked me through his plan for the team he wanted to build, the product roadmap, the go-to-market strategy, and the pricing strategy. He explained how Oyster would contribute to reducing inequality and creating a future in which the brightest local talent wouldn’t have to leave their country for a better future. The best career opportunities would come to them. Oyster would provide international talent with zero-commute jobs, thus increasing the time a worker would spend with their family, at home, reducing the global workforce’s carbon footprint at the same time. The full vision is now published here.
Then came my time to “pitch.” I shared Connect Ventures’ core mission and belief in the power of the product to transform the way people live and work, on a massive scale. I explained my point of view on the future of work and more specifically on the status quo in the SaaS HR landscape.
Anyone who knows me knows that I love thinking about Category Design. I therefore argued that Oyster has the potential to create a new SaaS category, and I even attempted to design and name it (for more on that, keep reading to the last paragraph). This exercise helped me clarify my thoughts, eat my own minimum viable category design dog food, and, yes, impress Tony and score a point for Connect in what was a very competitive deal.
To be a venture investor, you need one essential quality: the ability to recognize the exceptional when you see it. Tony is an exceptional founder. He is a formidable SaaS company builder and an inspiring leader. Despite his success, he is a very humble and pleasant human being: a sweet father, husband, and dog owner (yes, we met each other’s families too)
At this point, I couldn’t have been more excited at the prospect of backing Tony and Oyster. I introduced Tony to my partners, and we worked together to convince him to pick Connect Ventures as their lead investor. SUCCESS 🙌🏻
The Investment Process: Open-sourcing our internal work
We are a small, collegial partnership, and we’re committed to making investment decisions not by voting, but by understanding, imagining, and debating on two core factors.
First, since Connect Ventures is a thesis-led VC, we evaluate a company’s fit with our investment thesis: We invest in purpose-led founders obsessed with solving hard problems at scale by creating products and companies that people love.
Each partner provides a written assessment on how strongly a potential investment fits within each component of our thesis, after which we hold a live discussion.
Second, we assess the robustness of what we internally refer to as the “Champion View”, which is the core part of the written investment memo. In the case of Oyster, this consisted of vertical points of view related to the founder fit with the market, to the future of work and to the HR SaaS status quo.
In the spirit of openness and future accountability, I’ve included below both the internal investment write-ups I created as part of our investment process in Oyster. Word for word, in its original form, pre-COVID, and still bearing the former company name, “The Anywhere Corp.”
I hope I’ll give you valuable insight into what happens behind-the-scenes at Connect and how we think about things. I do welcome your feedback and questions.
I. Fit with our thesis
a) Invest in purpose-led founders
Tony starts The Anywhere Corp driven by his desire to have a social impact. At scale. He left Lebanon when he was 17 years old to move to France. Inequalities in wealth and job security and reduction in brain drain are strong motivations for him. He is inspired and driven by the mission of providing anyone, anywhere a global career, without the need to leave their home country. As CEO at Nexmo, he also experienced the pain of scaling international hiring from a business perspective.
b) Obsessed with solving hard problems at scale
Being an Employer Of Record (EOR) in a single country and providing professional services on a consulting basis is not that hard. But aggregating multi-local complexity and making it universal, inexpensive, and scalable via software is a very hard problem.
It requires building a solution that is easier and faster to use via automation, with higher accuracy, and cheaper than the existing alternatives (EORs, contractor agencies, setting up local subsidiaries). It takes a formidable combo of work-tech execution across three value layers (infrastructure layer, digital product layer, value add services layer).
c) By creating products that people love…
Companies: HR and Business teams will love the product: it turns the cumbersome and expensive experience of cross-border employment into a liberating one. The Anywhere Corp offers peace of mind and speed through a modern, unified interface, at sustainable prices. This is enough to love it.
Employee: The Anywhere Corp will provide discoverability, employability, fast onboarding, transparency, and timely information and payment. In an elegant UI. It is a lot! Moreover, the platform will give access to further services (benefits and curated financial services). They will contribute to develop a deep, loyal and value-stored relationship with the product and make employees brand ambassadors.
d) …and Companies that people love
If successful at scale, The Anywhere Corp will be transformational for both the employers and the employee. It will dramatically improve the chance of competing and scaling for many businesses, limited otherwise by in-country recruiting. It will impact the lives of hundreds of thousands of workers and will have a relevant credit for enabling a better and progressed future of work.
Its purpose and impact potential will make it an iconic company that everyone wants to be associated with: talent, companies, public agencies, investors. “Employed by The Anywhere Corp” will become a mark of quality.
II. Champion View
Point of View #1 — An exceptional Founder with an exceptional founder-market fit
Tony is a very ambitious entrepreneur with exceptional experience in building global software companies from scratch that succeed to scale locally-regulated industries. His past experience and skills are totally relevant and fitting to the challenges of this venture. Tony sees The Anywhere Corp as an infrastructure business with a SaaS model, exactly like Nexmo.
Nexmo opened local connections with a fragmented network of mobile carriers on >100 countries, each of them with its own peculiarities. It abstracted those in a single API platform and provided unified SMS, Voice & Video services to global customers.
The Anywhere Corp’s playbook is the same: 1. to build a network of fragmented local employment entities and payroll providers, 2. to abstract a single unified platform, and 3. to offer scaling employment services to global companies via a universal interface.
Point of View #2 — Product Zeitgeist Fit and narrative violation
Remote work is a theme that fully resonates with the mood of the times and with the market narrative. But, at the same time, there is a narrative violation: we are still pre-Product Zeitgeist fit as there are many barriers to break down and infrastructure to be built. Those companies who will be able to build a scalable infrastructure will be the enablers of this work revolution and will be multi-billion-dollar companies. One of these key enabling factors is The Anywhere Corp mission: normalizing remote hiring.
Point of View #3 — Potential to build a new category king in the HR SaaS space, the goldmine of B2B cloud computing.
The beginning of the remote work era creates the opportunity for the beginning of a new HR software era. The “made for” remote HR era. It is a rare opportunity to win BIG in the HR and Payroll category, historically the goldmine of B2B SaaS.
As we add the “cross-border” dimension to the mix and think of the need for distributed organizations, a large set of still untackled inefficiencies and untapped opportunities come to light.
Here is the opportunity: in the remote world, there is still room for a category-defining innovation in the HRIS market. By both adopting the old SaaS playbook (ie. bringing offline workflow online) and the more recent SaaS playbook (ie. consumerization of business software). Focusing on overseas hiring is a core differentiation which requires: the local infrastructure layer + a different combo of work-tech capabilities on top of the traditional HR tools + employee-centric services.
This is the Minimum Viable Category Design canvas I did for myself and also shared with Tony prior to working together: