How to deliver 500 home offices in 5 days during lockdown

In this episode, Legislate meets Sami Bouremoum, co-founder and CEO of Hofy. Sami shares the story behind Hofy and the fatal legal risks early-stage startup founders can make if they're not careful!

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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 Sami, co-founder and CEO of Hofy, the company which equips teams globally in a few clicks. Sami, thank you for taking the time. Would you like to please share a bit of background about yourself and Hofy?

Sami Bouremoum: Thanks for having me, Charles, it's a pleasure to be here. Yes, absolutely, I'm Sami, one of the co-founders and CEO at Hofy. We are a venture-backed business and the mission that we're in is trying to make it really easy for businesses to support their employees all around the world after they've employed them. And the area that we're starting with is the process of actually equipping them. So to some people it might sound like a fairly trivial thing, how do you get someone a laptop and microphone and webcam wherever they are? But if you're hiring all around the world that can actually be quite a manual and slow process. So the way that we ended up on this project is we were actually building, my co-founder and I, a micro-mobility business before, trying to solve the inverse problem which was commuting. And we saw the writing on the wall for commuting when Covid started to loom around the corner. And we believed that Covid was going to create a long enough disruption that people would actually learn how to work in a distributed way because as humans we have an uncanny ability to adapt to the world. So we did a 180 and then worked on this. Instead of trying to help people commute, try to help people avoid the commute altogether. And yes, it's been 2 years since we started and it's been a fun journey. We've got just under 200 customers who are employing people in 80, 90 countries as of today.

Charles Brecque: Congrats on the journey and successful pivot. What's been your favourite moment so far?

Sami Bouremoum: That's an easy one because I think the favourite moment has been the first customer employment. So in true founder approach it was a little bit of fake it until you make it, so we came up with the idea of Hofy on a Sunday about 3 or 4 days after we decided to pivot. We incorporated the business on a Monday, Tuesday we registered for tax, Wednesday we launched a fairly crappy website to be fully transparent. And so, you know what, let's build a real MVP of this product, which was a typeform, airtable and just a very basic token, gated website. There wasn't even user authentication. And then we started calling and emailing everyone that we could think of. And we managed to close a customer who is a branch of the National Health Service in the UK and we promised them 500 home offices delivered across the country in 5 working days. But the challenge is, between when we started pitching people and when this thing actually signed, the UK went into lockdown. All the factories closed down. Everyone started buying chairs and desks and so on. We had to really improvise to actually get that done. I'm happy to say that we delivered every single one of them on time, but it involved an abandoned warehouse in Stoke-on-Trent for local people on hourly rates assembling that equipment, and Michael and I manually creating delivery routes for 40 vans across the UK with 500 stops. It was a very intense week but it worked out really well. Customer was really happy. Vendors were really happy. So it was literally a win-win for everyone and on the back of this single customer we raised our first round of investment. And so literally it was I think a combination of right place right time, an incredible amount of luck and sheer determination that basically got us to where we are today.

Charles Brecque: That's really in incredible story and congratulations and I can't imagine, I wouldn't even know where to start if I had that challenge.

Sami Bouremoum: Neither did we.

Charles Brecque: And what do you wish you'd known before starting Hofy?

Sami Bouremoum: It's a good question. There's 101 things. There's one thing I can say, I wish we'd had certitude that remote and distributed working was here to stay. That was in a way the big gamble that we took. I remember vividly that the first 3 to 6 months when we were pitching customers and this was March to September 2020, the vast majority of the work that we had to do is convince the prospect that this is not going to be 1 to 3 months of disruption and, while yes there might be some regression to the mean in terms of people going back to the office, it's not going to go back to what it was before, which was a de facto 5 days a week in the office all the time. And I guess I wish I had known with certitude that was going to be the case because I was very much feeling rather than something that I knew.

Charles Brecque: I think that's a great answer and the key takeaway is, as a founder, you need to be really confident in your idea and vision even if the trends are not actually 100 percent confirming it yet, so well done. And you mentioned at the beginning, right now you're equipping employees remotely around the world. What's next and what's the vision for the next 5, 10 years?

Sami Bouremoum: I think the vision is continuing to scale and automate. A lot of the background work is still manual. We've invested a huge amount of time and effort and mind-space and capital into building the tech and infrastructure that makes our proposition really scalable and automated for the customer but also for our back office because the thing I'm proudest of over the last 18 months is that we've managed to hit 99 plus on-time delivery rate all around the world within our SLA. Which is incredibly difficult. So for me what we need to focus on right now is really productising a lot of the things that we've cracked and we've solved over the last 18 months into something that is really, truly scalable. And what I want Hofy to be in the next 5 years is to be a no-brainer name that is such a household name when it comes to businesses hiring around the world. It's like, if you want a co-working space the first word that comes to your head is WeWork. If you want a messaging app for a staff, the first name that comes to your head is Slack. I want the same level of association with equipment, right? You want to equip someone or anyone in the world, I want the word Hofy to come to people's minds. And I do believe that we have by far the best product in the market and we'll continue building to make sure that it remains the best product in the market.

Charles Brecque: That's a very bold vision and I think given everything that you've achieved so far you're on the right trajectory and that will happen. So as a founder I imagine you interact with quite a few contracts or you've interacted through contracts through the journey of Hofy. What are those contracts and what insights can you share with us?

Sami Bouremoum: Yes, this is a really interesting one which is one of the reasons I was so excited to be joining the podcast. Because one of the things that you know about me is I'm very detail oriented and quite obsessive. I was very deeply involved in all of the contracts from very early on. I also married a lawyer, there's a lot of legal talk at home and I feel like it's taught me a lot of the basics which is super exciting. But from the very early days of Hofy, I wrote our first terms of service and entered into a contract with the NHS on terms of service written by me. That really kept me up at night in case something went really badly. But no, it's the NDAs, employment contracts, terms of service, there's been also, because we're a global company, even stuff like data privacy, data handling, all of that is really complex. And probably one of the hires I was most desperate to make is a head of legal or a GC and now we've got someone in the team and that's really a huge pressure from me from a time perspective also from a risk perspective because we're building something that's very complex and very large. So I think the saddest way to go is basically through a bad contract and I know a couple of start-ups who basically went down because they had poor contracts and I think making sure that's really tight is super important. And I was a bit nervous I must say in the first week or 2 when Verity joined because she was doing an audit of all the legal processes and all the contracts we had and I'm like, 'Oh my god, I really am dreading to see what's going to come up out of this.' But actually it turned out we were all good. Aside from the huge amount of effort, time and mental energy we dedicated to it, I'm very happy to say that we actually did pretty good on that side. But I'm also really glad I'm not dealing with contracts myself anymore. And I think so are my investors.

Charles Brecque: Congratulations on signing the NHS with the terms of service, I've never heard that one before but it's possible. And maybe the terms of service route is an approach which start-ups should always try to push first before pushing for a broader agreement. You mentioned some start-ups that went down because of legal, what are maybe some of the risks that start-up founders, maybe in those cases or just generally, should watch out for?

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Sami Bouremoum: Yes, the 2 cases that I can think of of people I know, 1 of them is a founder in London that basically agreed to an unlimited indemnity clause which most founders who don't have a legal background say, 'What does that even mean?' This is very basic contract 101 and without having the guidance, if you're a 3 man band trying to sell to a really big client and you've never seen these papers, 'Okay let's just sign here.' And it's a very easy thing to miss out. And then the second one that I know of was someone who entered into a very large supply agreement where there were no SLAs associated with the delivery of that agreement. Meaning there was a minimum committed volume and that volume was just so high, it was a multi-year contract, that when the supplier failed to deliver the level of service that they wanted it was impossible for the start-up to get out of that agreement. Because there were no great clauses related to an SLA. And so they ended up with this massive contract where they were obliged to pay tens of millions and they couldn't get out of it. And they couldn't afford to go into big litigation with this massive supplier either. So they literally had to close shop because they didn't put SLAs and exit clauses into the contract.

Charles Brecque: Those are very sad stories.

Sami Bouremoum: Both of them were good businesses as well.

Charles Brecque: But I guess lessons which should be generalised for founders and I think at Legislate that's something we do try to do is provide a lot of education around why is it important to have good contracts from day 1? It's so that you're protected because when things are going well then, sure, contracts don't really matter. All that matters are the key terms around payment, delivery, etc. but when something goes wrong that's when you need a good contract.

Sami Bouremoum: Exactly.

Charles Brecque: And we make that at Legislate cost effective.

Sami Bouremoum: Yes, I think that the thing that I got from that is especially in places like Europe where people aren't inherently litigious like they are in the US, I think legal risk is not something that we grow up living with something like that. We have top of mind as huge risk elements as European founders. I've also noticed a very significant difference of how much focused time, let's say, founders that have grown up in the US as opposed to European ones would think of this. They're just not used to it, and I put myself in the boat of people who weren't used to it. When I look at how big our legal database of contracts is right now, well objectively we're not that large a business, it's just mind blowing.

Charles Brecque: Yes. Our chief legal officer is actually American and obviously I'm European so there's a nice balance. I agree also around the volume of contracts. Even a small business of 10, 20 employees can easily create over 100 contracts a year with unstructured data, it's really difficult to do any form of filtering or triaging with that amount of contracts. One more reason to use Legislate. Sami, I'm conscious I've already taken a load 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?

Sami Bouremoum: So I think that's a good question and it's something that we try to apply in the contracts that we write as well. But what would impress me is something that is very easy to read, a contract that really highlights the key terms in the first page, just like a great summary let's say on page 1 or 2 of the contract with commercial clauses. And that doesn't have backhanded clauses buried deep in the text, because I think those are the worst, right? And that's especially important if you're putting the summary page up front. If you're putting the summary page up front with the commercials you should also highlight everything, right? And we try to write our contracts in a way that really minimises the amount of red lines and the way that you do that is by making the contract. So if you basically introduce anything into the contract that could be a red flag to the other party signing, they're also going to pick up the other 20 yellow flags. Whereas maybe if there wasn't that red flag in there, they might have just not even bothered with the 20 yellow flags and then just signed it. So I think the contract needs to be fair for both parties, it needs to be well summarised at the beginning, no hidden nasty clauses buried deep in the text away from the summary. Oh and obviously via a platform that's easy to sign, because who uses pen and paper anymore?

Charles Brecque: Yes, that's a great answer. And I think it's really important to start with fair wording even if you think, 'Oh, I want to give myself an advantage in the legal negotiation.' It undermines trust and at the end of the day just makes the negotiation longer. Because you'll end up in the middle anyway, why not start from the middle if that's where you're going to end up.

Sami Bouremoum: Exactly. And if you're a small company, actually the cost of you going through that process I just going to hurt your sales motion. When getting those customers signed quickly is important. And if you're dealing with corporate they're going to ask you to sign their terms of service anyway. And the small customers that might accept terms that are favourable to you, they're not material anyway, and if it went down to litigation it's like drawing blood out of a stone. So in most cases trying to put an advantage into your own contract doesn't generally work, because those people for whom it matters are immaterial anyway to the business.

Charles Brecque: Yes, that's really good advice. Thank you Sami for taking the time and best of luck conquering equipment around the world.

Sami Bouremoum: Thanks Charles, it was a pleasure being here.

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