Setting up a tech company's new foreign office
Seth Phillips | CEO | Bound
Expanding a tech company to a new country
In 2017 I was working for Paxos in New York City. After some back-and-forth with our CEO over the course of 6 months, I agreed to move to London to set up an office and build a team there.
Paxos had an office in Singapore, so this wasn’t the first time it had opened a foreign office, but it was the second. ;)
We were working on a big project with some UK partners and I was traveling to London for one week each month anyway–YOLO.
There were a million things to figure out when opening up a foreign office. Set up the legal entity. Find a payroll provider. Find and rent office space. Get new employment contracts. Learn the local laws. Get a visa for you and others. There is a lot.
One thing that I didn’t think much about personally, and the company didn’t think much about either, was how volatile exchange rates could potentially impact salaries.
Not thinking about currencies
For me, of course, the Post-brexit era wasn’t great on my newly negotiated USD-converted-to-GBP salary.
I was negotiating a cross-currency compensation package around this time.
I negotiated hard. At first, I was feelin’ good.
I paid rent and food in GBP, but all my savings and investments were going back to USD.
Then this happened.
Feelin’ less good.
I took roughly a 15% pay cut in my disposable income.
From the job perspective, on the other hand, I was hiring UK staff. UK salaries were looking better and better for our USD-funded startup accustomed to NYC salary demands.
We built the headcount up from 1, to 3, to about 25. Talent in the UK looked like a bargain.
Then this happened.
Now, personally I was feeling a bit redeemed, but our payroll budgets were getting blown out and it looked like the UK-office was overpaying for talent.
Felt like I couldn't win.
My personal takeaway
Well, that was the lesson.
I’m a product manager. I’m not a currency trader. Should I really be surprised that it felt like I was always bleeding from exchange rate movements?
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