Papaya Global's Eynat Guez Doesn’t Make a Plan B
With a multi-billion-dollar valuation under her belt, the payroll platform CEO shares perspective on staying humble through hypergrowth, bridging global cultural divides at work, and seeing the upsides—and dark sides—of truly global remote work.
Here at Primary, we're very enthusiastic about supporting Israeli founders expanding to New York. And one of the top embodiments of that trend is Papaya Global, led by Eynat Guez.
A serial entrepreneur and expert on global workforce management, Eynat Guez cofounded Israel-originated and NYC-HQed Papaya Global in 2016 alongside Ofer Hernan and Ruben Drong. Their vision was to reimagine the global payroll and HR space for a world of distributed employees, aided by innovative software. Since then, the team has grown to more than 400 people and Papaya's platform has been used by over 700 companies worldwide, including Microsoft, Github, and Shopify.
In the last couple of years, Eynat has successfully led the company through a pandemic, impressive revenue growth, multiple funding rounds, and into a valuation of over $3.7 billion. She's also a mother of three children—and has written candidly about her journey of leading a unicorn business during a pandemic while pregnant.
I recently spoke to Eynat about the biggest lessons she's learned from building a multi-billion-dollar company. She touched on the challenges of managing a globally distributed workforce, why she initially thought raising funding was a waste of time, what her experience expanding to New York was like, and how important it is to reframe discussions about parenthood in the workplace. I walked away inspired and wildly impressed by this force of nature of a founder.
Brad Svrluga: Let’s go back to the beginning. Tell us about the genesis moment that led to the creation of Papaya Global and what made you want to dedicate the next decade of your life to it?
Eynat Guez: It's funny because I think the idea for Papaya Global was growing in me for a long time. I started my career in the global workforce management space 15 years before I cofounded Papaya. First, I worked with LR Group, a holding company that did large projects in Africa. Then, I started my own company supporting inbound and outbound corporate relocation needs. Afterward, I founded another company that focused on global mobility and employment in China, before expanding across Asia. During this period, I was often frustrated by how time-consuming it was to communicate with clients and how manual the processes were.
When I began thinking about what to do next, I started exploring potential opportunities in the global workforce management space. It was easy for me to identify the pain points in this space because I had experienced the challenges firsthand. So Papaya came out of envisioning an ideal product that would help manage good relationships between employees and companies, and between companies and us.
From the outside, it might be easy to look at Papaya and say, "Wow, what an amazing bit of luck to build a business that experienced tailwinds from a global pandemic," but I'm sure it's not that simple. Did the aggressive shift to working from home and distributed workforces create challenges for you? Or has it been mostly good news vis a vis Papaya’s journey in the last couple of years?
So obviously, it's not good news for the world, period. I would be much happier if the global pandemic hadn't happened. But companies had global workforces and relocated people even before the pandemic. These issues have existed even prior to it. But the pandemic might have accelerated our growth in two ways.
First, people started understanding that payroll is a core process for an organization. I think we were taking it for granted before that. In reality, payroll is one of the most complex processes in an organization. It's monthly, or a shorter period. It's recurring. You need to get tons of data points from individuals, the government, the contract, and so on—and you need to calculate everything in a short amount of time. If I have 1,000 employees and I calculated 900 pay slips correctly, that's not a success. You still have 100 employees that aren't happy, and this affects every employees' trust in the organization.
Second, payroll continuity became very important as well as access to the data necessary to continue payroll processes in case the person responsible couldn't be present to fulfill their duties. The reality is that many companies were resistant to innovating this part of the organization and so the pandemic has accelerated its digital transformation.
One thing I witnessed within our portfolio and among other companies I know is that a lot of founders rushed into becoming distributed teams. In a time when nobody was going to the office by default, they exercised the luxury of being able to recruit people from anywhere, which made it easier to find a unique backend engineer or whatever. But now these companies have become distributed by default—not because they were intentional about it. Since you intentionally built your organization in a distributed way from the beginning, do you have any insights to share that others could learn from?
I always think there's something romantic about founders saying, "You can work from anywhere," and "We're going to be a globally distributed organization." There are a lot of downsides to the work-from-anywhere approach that cost time and money. If I were to advise founders at a relatively early stage about being remote-first, I'd say you need to be willing to develop a strategy. There are many things to consider. It's not just a magical approach that means everyone will work well together. In reality, there will be different time zones and different languages. There will be people who don't know each other and probably won't be able to meet anytime soon, which may not necessarily result in the best team.
If you're not ready to invest time and effort into it, think of a more centralized approach with hubs. Do some research and choose three or four locations that make sense in terms of tax, labor laws, and, of course, scale. Ensure that you are hiring in those locations so you can still keep your options open for growing globally but you don't create an organization where you're out of control. For example, you can lose track of when employees are on holidays, depending on which country they live in. Or there might be conflicts between team members rooted in cultural differences that can't seem to be bridged. Hiring quickly can also result in firing quickly, and this is the worst kind of damage you can leave on an organization.
You built Papaya in a distributed, global way. If you could go back in time and change one thing about how you did it, what would it be?
I would build the company with a more regional approach from day one.
Obviously, we're in Israel, so the first key management team was in Israel. Currently, we're shifting them to the U.S. because that's where our main customer base is. We are building this regional approach because we believe that people should eventually manage and work where their customers are. In terms of communication, that's probably going to lead to better outcomes for the business. But of course, redefining the organization takes time.
Secondly, I would have taken bigger steps forward at an earlier stage. So everything I did in terms of laying the foundation for the business, I would have implemented a year earlier than we did. For example, we implemented Salesforce two years ago, so going back in time I would have implemented it three years ago.
I think that's a common tension among growing companies. At some level, you're saying that you need to plan for your own success and get ready to be able to support it. But at the same time, when you're a $4 million run rate company, starting to build to be a $20 million run rate company can feel a bit risky, or like a distraction when what you're fighting every day to do is get to $6 and then $8 million. If you're talking to a founder in that position, how would you give them the confidence to make those kinds of foundational investments when they're fighting fires all over the place?
It's a good question. I still have these kinds of discussions internally in the organization. When we're planning or launching something, I say, "Let's not plan for today because we're growing year-over-year by more than 300%. Let's plan for the next six months to a year at least, because we're going to get there so quickly." And year after year, people still ask me, "But how do you know we're going to get there?" And I say, "Because this is my role."
One piece of advice I would give to any founder is to be honest with yourself when you set goals. Don't set targets in order to meet 60% or 70% of them because that will be a reflection of your decision-making approach as a leader and the organization. I never have a Plan B. I always present one plan for my budget, goals for the year, and so on—and they're always very aggressive plans. But if I don't 100% believe that I'm going to meet those targets, I won't present them. Obviously, things come up that can mess up plans and you can also overachieve, but you need to provide confidence to your organization that, "This is where we're planning to go and this is where we want to land." I think this is the one thing that every CEO and founder in a company should do.
Previously, you started two companies without raising any venture capital. Then you started Papaya and also didn't raise venture capital right away. Was that intentional, or was it a harder time to raise funding right out of the gate?
So first, I'm a builder and an operator. I really believe that I need to do things my own way. For my first two companies, it was by design that I didn't raise any external funding. For the first company, I ended up selling 30% of the shares two and a half years after it was established and then bought them back two years later because I didn't feel that bringing investors onboard helped me make decisions. Actually, I felt it slowed things down and wasn't the right move for the company.
With Papaya, it was a bit different. It took me a while to understand why people wanted to spend so much time raising funds instead of working. When I started the process, I thought, "Okay, it's going to be an easy one. Let's just do it and then get back to work and build the best company we can." In reality, we spent tons of time raising funds. At one point, I thought, "This is a complete waste of time. For every hour I spend explaining to people why there's a need and a market for the product, I could be bringing on a new client and creating proof for it."
It was actually the team at Insight Partners that gave me an amazing lesson on this. A few months after we started Papaya, they heard about us through some portfolio companies that were using our services and were very happy clients. They called us and, of course, we were thrilled that Insight was interested in what a small startup in Israel was doing. During our first conversation, they said, "Okay, we're just maintaining the relationship. Let's keep in touch because the sweet spot for investment is probably going to be in two years." I thought it was kind of funny for them to say, "Let's maintain a relationship for two years," to a startup that was trying to survive tomorrow. It took some time before I understood their approach and how important it is to understand the needs of your startup at a particular stage in order to know which investors to reach out to. Having Insight as an investor on day one probably would have created tons of barriers and pressure on the company. So there are a lot of things you just learn by doing.
As someone who didn't raise any capital for your first two companies and then with Papaya only raised $5 million in the first three years, do you think it's gotten too easy for early stage startups now to land their first $5 million and then first $25 million? Have you seen any bad behaviors emerge from that kind of environment?
Yes and no. I think some founders are still struggling to raise funding. It might seem too easy, but I think it's only easy if you're currently in the right industry, or if you're a second-time founder, or if you have the right network. Otherwise, you can feel like everyone around you is raising money easily and quickly while you're struggling.
Founders need to remember that raising capital isn't the end game. I see young founders that raise their seed round then run to raise their Series A round just two months later. Eventually, you need to deliver things and build a company. I don't think it's a bad thing to be in survival mode at the beginning, because you're forced to be more creative and efficient. You stay focused because you don't have a choice. Sometimes, if you have too much funding it can become a distraction.
Early last year, Papaya became a billion-dollar company and by the end of the year it had tripled that valuation. But the most impressive thing is your revenue growth. The top line of the business has tripled three years in a row. That's not about bubbles or hype or whatnot – that’s genuine hyper-scaling. In the midst of that kind of growth, what are the keys to keeping your team grounded and maintaining company culture?
So we, as a team, try to take a humble approach. Unfortunately, we're not saving the world or solving the ten most critical problems in it. We're developing a great tool to help companies build a global workforce. And we need to be humble in everything we do. As much as I like Papaya and the product we're building, we need to always listen to our clients and learn how we can do better—not try to defend the product or have an attitude of being better than anyone else. We're not. I think what's grounding is trying to constantly remind the team where we were a year ago, two years ago, and so on. And how hard we worked to make things happen and how hard we still need to work to make big things happen.
I don't know how to celebrate things. I'm always kind of looking to the next big thing we need to do. But I think we need to get to a level where we're respecting the challenges and targets along the path—and not just the outcome of, "We raised tons of money. We received an amazing valuation." We know that things around us can change very quickly. The only thing that won't change is if you have a great product, great customer feedback and real customer obsession, this can lead to real value in the market. Instead of being dependent on market trends, we're growing through the things we're developing.
I would say it's easy for you to be humble but it might be hard for the kid who joined the rocket ship as it was lifting off, right? But you’ve surely got dozens of employees who joined just before the company achieved that unicorn valuation early last year. These people have cheap options that are suddenly worth 10, 20, 30x. They weren't around in the beginning when it was hard and maybe haven’t even been at the company for 12 months. I’ve seen that become a real challenge for culture. How do you look for the right character and values when hiring, and trust they'll stay grounded?
Yeah, that's correct. I think it's a combination of two things. First, you hire people that potentially share your DNA. Second, they work hard. The fact that we're going to achieve 100% year-over-year growth requires a lot of work. We can't constantly hire people to meet the growth. People are working very hard to take things to the next level. We always try to remind everyone that if we have an unhappy client or if an employee has an issue—it all matters. It's not about the valuation. It's not about raising funds. It's about tackling the problems we came to solve.
It's also about perspective. Sometimes I hear leaders talk about their startups and say, "We're the most amazing company in the world. We've raised so much funding in a short amount of time, and everybody wants to invest in us." But that means nothing. I think it's about what you put at the center. Speak about your clients, the people you serve, the problem you're solving, not just about money and the market. We're all here to make money, and that's okay, but this can't be the only end goal.
What are your favorite things about operating in New York?
The time zone is closer to Israel's. It's a great place to visit. You can get a direct flight there. Although the team in New York was harder to hire, they've been growing with us in a substantial way. It's an easy place to create a diverse team environment, with so many people coming from different backgrounds and speaking different languages.
I'm impressed by and fascinated with your involvement in Israeli and Palestinian initiatives. That's obviously a topic that's sensitive in New York and the U.S., let alone in Israel. You have succeeded at building a company with Palestinian and ultra-Orthodox employees working side by side. With the political landscape in the U.S. in the past few years, there's been a lot of debate about how engaged leaders and companies should be in political discussions. Do you have any advice for leaders who want to foster an inclusive work environment yet also want to engage with topics they're passionate about but may have hesitations about potentially alienating employees who have different perspectives?
Wow, that's a hard one. I think it's very important to create an organization where people understand that you respect different cultures, religions, and perspectives. It's also important to understand that you can ask others how they are without getting into politics because those kinds of discussions can become endless arguments. There was a time when I was ashamed about things that Israel was doing but we tried not to say anything that might be potentially disrespectful. We tried to see each other as fellow humans and asked if others were okay or needed something, and so on.
When you were about to give birth to your first child, you talked very openly about it and your post-pregnancy plan for the business. Can you tell our readers about what that was, and why you were so intentional and public about it? How do you think that ultimately helped the company and you as a leader?
Good question. I think pregnancy can be the elephant in the room. Everybody sees it but nobody wants to discuss it. We need to change the way we approach it. Looking back, the plan I made was probably the wrong one for maintaining my own interests. I thought that if I felt 100% confident about how to manage my company after giving birth and that it wouldn't change the future plans of the company, this would be enough. I didn't need the approval of anyone else but I also didn't feel the need to tell people anything other than, "I'm on it. No worries. Everything is under control."
In reality, it's much more complex. If you don't clearly outline your post-pregnancy plans and say it aloud, instead of asking you, people will fill in the gaps themselves and might not fully understand what's going to happen next. Whether it's investors or employees, they'll create their own story about what's going to happen afterward and it can look completely different from the truth. In reality, I took calls from the delivery room and went back to work 48 hours after I gave birth because it was my decision—not because I owed it to anyone.
Sometimes, I don't think we understand that pregnancy can be one of the most vulnerable periods of a woman's life. Priorities change and shift to focus on diapers and babies. You might feel the need to protect everything you had in your pre-baby life. And so, when people at work ignore the subject and build plans without you, it can make you feel that much more vulnerable. I think the dialogue needs to change from "Are you planning to work afterward or not? And do I need to find a replacement?" to "How can we support you?" Ultimately, I think it's just about respecting this period of time and understanding that it's just a short period of time. A big part of why I decided to share my experience is because I saw how people around me, as well as myself, were trying to deal with it alone, as if we had superpowers and it wasn't working.
Is that something that has to culturally change at the top of organizations?
I think so, especially if somebody is telling you about it loud and clear. One positive side effect of COVID is that it changed the way we see being sick and taking time off. Suddenly, being sick isn't seen as a vulnerability. It could happen to any of us. People would be off for a week or two because of COVID and others would just say, "Sorry mate. How can I help you?" Before that, I think we were all trying to be superheroes and coming to work when we were sick. So I think that it's important to remember that we're all human beings. Whether it's COVID, a pregnancy, or anything else. Things happen. That's just how life is.
That's a great perspective.
In this increasingly distributed work environment, I'm fascinated by the phenomenon of many younger people simultaneously holding two jobs. Papaya sits at an interesting place because it's a payroll company and has the names and social security numbers of workers. Can you look at your data and see whether Sally Smith is simultaneously working for two different companies?
Yes and no. If an individual wants us to calculate their tax deductions from the two jobs, they will provide this information to us. But they could do it behind our backs as well. What I find more disturbing is the new trend of people that are doing job interviews and then getting someone else to do the work. So you're interviewing someone thinking they're an expert in a domain, and in reality they've been applying for someone else who is less of an expert. But it's remote so it's hard to track. This reminds me of what we discussed earlier about the dark side of remote working. I don't think companies realize how common these things have become. Unfortunately, I think there might be less trust and loyalty among employees because you don't see the people you work for and so you feel less engaged.
Last question: What is the single most influential piece of advice you've gotten while building Papaya?
Be focused all the time. It's a very important piece of advice that I give myself over and over again because I always want to do this and that. There are so many ideas and you can create so many products. But I have two great cofounders that are always keeping me in check and saying, "Okay, no. We have a focus. We have a clear roadmap for the next six months. Forget about it." You always need to look ahead but you also need to keep a very clear focus.