In 2021, EasyStaff reached a significant milestone: we registered a separate legal entity in Lithuania — EasyStaff UAB. This step involved considerable preparation: we successfully completed compliance procedures, obtained a legal opinion, undertook extensive infrastructure work, opened bank accounts, and configured payment gateways. On March 27, 2021, we officially separated from KiwiTaxi, marking a significant step towards independence and strengthening our brand internationally.
Let’s delve into the essence of EasyStaff and discuss payroll services.
Let’s delve into the essence of EasyStaff and discuss payroll services.
Expansion and Development in 2021
My career began in 2007 in the financial sector. I initially worked in a telecommunications company before transitioning to an IT specialist role at a bank, where I developed automated banking systems. Subsequent opportunities led me to the gaming industry and then to KiwiTaxi, a company specializing in tourist transfer bookings. Through this journey, I not only solidified my financial expertise but also met my future business partner, Evgeny Fedorov.
My Professional Journey Before EasyStaff
Max Mostovoy, founder and CEO of product design studio Moosehead, and founder of the Russian-speaking startup community in Barcelona Startups, spoke with Vitaly Mikhaylov, founder of EasyStaff, a company that provides an ecosystem of products for finding, hiring, and managing freelancers and cross-border payments to remote workers. The discussion delved into Vitaly’s entrepreneurial journey, the core features of EasyStaff, its competitive advantages, and the global landscape of payroll services.
Vitaly, a traditional question for relocators: where do you currently live?
I live in Bergamo, 50 kilometers from Milan, in the Lombardy region. We moved here four years ago after spending three years in Vilnius.
I know EasyStaff was founded six years ago, in 2018. What happened before then, how did you come up with the idea for this service?
Vitaly, a traditional question for relocators: where do you currently live?
I live in Bergamo, 50 kilometers from Milan, in the Lombardy region. We moved here four years ago after spending three years in Vilnius.
I know EasyStaff was founded six years ago, in 2018. What happened before then, how did you come up with the idea for this service?
Building EasyStaff: An Entrepreneur's Journey in the Fiercely Competitive Payroll Platform Market
The EasyStaff idea emerged in February 2018. While browsing Facebook, I came across an advertisement for Solar Staff. Their offer intrigued me, and after studying their business model, I realized I could create something similar, but more sophisticated. I discussed this idea with Evgeny, and we decided to embark on a joint venture.
The Origin of the EasyStaff Idea
We began by establishing operations through two legal entities: one registered in Russia and the other, KiwiTaxi, for international activities. This allowed us to optimize processes and set up the necessary infrastructure. Working together, we developed a business plan on a napkin, which became the foundation for our future success. EasyStaff was officially founded on July 23, 2018 (by the way, we recently celebrated our sixth anniversary with a team of 30 people in Gudauri, Georgia).
Implementation and Early Steps
Payroll services are integrated platforms designed to manage and optimize payments to freelancers and remote employees worldwide. The primary clients of these services are traditionally legal entities that face the need to comply with numerous international and local legal requirements. Payroll platforms not only minimize tax burdens but also ensure adherence to all labor laws, allowing clients to focus on their core business operations.
Under the Contractor Management scheme, payroll services provide comprehensive freelancer management capabilities, ranging from registering contractors in the system to facilitating financial transactions after tasks are completed. This encompasses account top-ups, task distribution, and performance monitoring. After the client approves the work, funds are transferred to the contractor, who can choose their withdrawal method — bank account, card, or cryptocurrency — with complete legal and financial transparency of operations.
Under the Contractor Management scheme, payroll services provide comprehensive freelancer management capabilities, ranging from registering contractors in the system to facilitating financial transactions after tasks are completed. This encompasses account top-ups, task distribution, and performance monitoring. After the client approves the work, funds are transferred to the contractor, who can choose their withdrawal method — bank account, card, or cryptocurrency — with complete legal and financial transparency of operations.
Functionality and Role of Payroll Services
There's another mechanism – Employer of Record (EoR). Sometimes, clients come to our platform looking for EoR, even though they might be unaware of it. It's a separate service where employees are hired not by the client company, but by a mediator who assumes responsibility for taxes, social and insurance payments, vacation pay, job description drafting, and so on. The client pays a gross salary, as well as all service fees. Typically, this is expensive for companies.
Who are your clients and for what work scenarios do they choose EasyStaff?
EasyStaff caters to a diverse clientele, primarily small and medium-sized businesses, particularly startups. These companies often operate internationally with employees located in various countries. Instead of navigating individual payment processes for each employee, they find it more efficient to partner with a provider like EasyStaff. We charge a fixed fee, typically 5-6% of the payment, a small markup on the freelancer's total compensation. This simplifies the payment process for startups, eliminating the need for complex payment system integrations.Our client base includes numerous companies based in the US, Europe, and Mexico.
We also work with international businesses, including enterprise clients who make payments to over 50 countries through us. We are their key payroll contractor for employees in various countries. This typically involves large businesses that became unicorns a couple of years ago and are now expanding rapidly. Instead of building their own infrastructure and team for organizing payments, they delegate such tasks to professional services like ours, focusing on their core product.
We successfully handle microtransactions, large payments, and compliance. It becomes significantly easier for companies to undergo audits when working with a primary provider – us – under a single contract, which reduces the number of invoices to one or two per month instead of managing hundreds of different documents.
We support businesses working with freelancers in complex regions where independent payment arrangements are difficult. EasyStaff simplifies and legalizes this process. Clients value the ability to maintain relationships with contractors through our platform. We have numerous successful case studies, shared on our blog.
You built your business on the KiwiTaxi infrastructure. Did you attract external investment? Currently, you are building your business with your own funds. Are there any plans to attract investment in the future?
Initially, we considered the possibility of attracting partners. I was actively searching, but I was not so much interested in financial investments because EasyStaff became profitable almost from the first client. Instead, I focused on building networking and strengthening the service's reputation. I wanted to attract a strategic investor to help us reach a new level and gain access to major clients.
In 2021, during the pandemic, I began negotiations with the Yellow Rocket fund. We went through the evaluation process (scoring), but fell short of a few points for approval. Nevertheless, we received positive feedback and a recommendation to focus on development in the United States, as working solely in the European market was not of interest to them. Unlike the fragmented European market, the US market is much more cohesive and larger – it's 300 million people, and it is also the primary hub for the global startup community.
However, after the events of February 2024,clients from the United States began to approach us on their own. I realized that venture financing was no longer a priority for me.At this point, I don't see the need for this path. Perhaps in the future, when our growth rate slows down or when we have a need for renewal and development, attracting investments may become relevant. But at this stage, we do not plan to move in this direction.
Do I understand correctly that both the pandemic and 2022 accelerated your business development?
Yes, they were significant drivers.
You launched in 2018, and when did you break even? How did you celebrate?
We didn't celebrate at all. There was no goal to break even.The priority was finding the right product.. When we achieved profitability, it didn't mean much because the product was still raw. It so happened that we started making money on a crude product, on a fragment of an idea that had crumbled. But our first international client became a unicorn, they grew, and we grew with them. We were a single-client platform in that initial period. They pulled us through and gave us the opportunity to earn capital, which we used wisely and managed to build a high-quality product.
The event of reaching break-even itself was not significant because at that point there was no great product, no diversification, no customer base. We had several versions of the platform. We had several versions of the platform; in fact, we are currently working on the third version.The first one, whose business model was similar to Solar Staff, quickly ceased to function because banks refused to conduct transactions between Russia and foreign companies, leading to the closure of our accounts. I then realized that Solar Staff had a strategic partner bank that facilitated their operations. I won't disclose the name of the bank.
The second version of the platform was focused on companies operating under a simplified tax system. However, it had liquidity limitations and difficulties with withdrawing funds. This scheme wasn't fully developed.
Finally, the third version, which we currently use, turned out to be the most successful. You asked about my feelings when we became profitable. It was a sense of relief. I told myself, "Thank goodness, it worked!" This happened on New Year's Eve of 2021. I realized that the product was starting to work: sales went up, foreign clients started paying to different countries. We stopped being a single-client platform.The key and most challenging task was to find our product, and this process took almost three years – from 2018 to the end of 2020. By the time we finally found the right solution, we were already financially stable. I believe that luck played its part, because in business, a lot often depends on a lucky break.
Have you ever experienced periods where you felt discouraged, unsure about the outcome of your plans, and like you were wasting your time? How did you cope?
Yes, I have definitely experienced those moments, especially throughout 2020. I knew I couldn't simply abandon the project and return to working for someone else, but I also realized that the existing product had its limitations. It was too limited in its capabilities and relied on my personal resources – I couldn't scale it. It was like a small neighborhood store that couldn't become a chain supermarket.
There were certainly moments of despair, but I continued to seek solutions. When doubts arose, I would typically go for a run and brainstorm potential paths forward. This process of idea generation, "solution mining," was a constant endeavor. In July 2020, along with Evgeny Fedorov, we discovered a new idea that could be implemented. We built the current version of EasyStaff using a Zero Code platform and created a personal account for freelancers and clients, initially utilizing the KiwiTaxi infrastructure. We developed a new tax scheme and launched the updated product. The first transaction using this version occurred on October 30, 2020.
Tell me about the emergence of the payroll service market. Who was the first? What's happening with the market leader now? What are the forecasts?
To be honest, the payroll market didn't appear in my mind the way it did in reality. When we built the third version of EasyStaff and started making sales, I discovered Deel.
It's like the era of pre-Columbian voyages. When explorers arrived on a different continent, they were surprised to discover that there was life there too!
Deel is the market maker and pioneer of the payroll market. It's a major player with a powerful product and a market capitalization of around $600 million. On the G2 marketplace diagram, Deel is in the top right corner, while other players, including EasyStaff, are in the middle.
The market has entered a stage known as the "red ocean," where opportunities for innovation are dwindling. We operate in an oligopoly, with Deel and Solar Staff being the main players, particularly in the Russian-speaking segment. Globally, Deel holds the leadership position.
However, EasyStaff boasts its own competitive advantages. We offer attractive pricing and top-notch customer support, setting us apart from our competitors. Unlike other platforms, we provide real, live communication with our clients, rather than automated chatbots. This is a crucial feature that our users highly value. While price dumping is nearly impossible, we remain competitive, and each client finds their niche.
Competing with Deel is challenging, but we possess certain advantages. For instance, we offer broader payment processing capabilities. Ensuring that funds and documents reach clients reliably is critical for us, and we surpass Deel in this aspect. We strive to compete through the quality of our product and service, guaranteeing high payment conversion rates and the reliability of all processes.
The payroll service market is highly competitive, but another significant factor is the stance of governments towards these platforms. Governments are keen on protecting their budgets, and these services raise concerns. For example, Deel has already faced a conflict with the US government, which they successfully resolved. In general, how do countries view such services, are they a source of concern for them?
The relationship between countries and payroll services is a complex one. While these services don't violate national laws, they represent an innovative approach that disrupts traditional financial and labor relationships. This echoes the situation with cryptocurrency, which also challenged the global financial system. Payments became easier, borders blurred, and compliance requirements became less stringent. Governments are forced to adapt to this new reality, integrating innovations into existing systems while seeking balance.
The core issue revolves around "leaking" tax revenues. Freelancers receiving payments through these platforms do not benefit from state-provided services like healthcare or mortgage access. Lacking formal employment, these individuals do not contribute to government tax income. This benefits clients, who enjoy tax savings and flexible staffing options by hiring freelancers on a project basis. Freelancers gain access to global clients and potentially improve their standard of living.
However, the state loses out in this system, but it remains unclear which state – the client's or the freelancer's. Both sides benefit from tax savings, which is unacceptable to authorities. We have seen examples of governments responding to new financial instruments like cryptocurrency by introducing bans and restrictions. Payroll services may also face limitations in the future.
As a market leader, Deel is under intense scrutiny and often the first target of criticism. These discussions about the future of such services may continue for decades until a new generation emerges with fresh perspectives. Developed nations, responding to societal demands, are forced to adapt their legislation to reflect new realities, especially if society endorses these changes and calls for their legalization. Thus, the question remains open.
Who are your clients and for what work scenarios do they choose EasyStaff?
EasyStaff caters to a diverse clientele, primarily small and medium-sized businesses, particularly startups. These companies often operate internationally with employees located in various countries. Instead of navigating individual payment processes for each employee, they find it more efficient to partner with a provider like EasyStaff. We charge a fixed fee, typically 5-6% of the payment, a small markup on the freelancer's total compensation. This simplifies the payment process for startups, eliminating the need for complex payment system integrations.Our client base includes numerous companies based in the US, Europe, and Mexico.
We also work with international businesses, including enterprise clients who make payments to over 50 countries through us. We are their key payroll contractor for employees in various countries. This typically involves large businesses that became unicorns a couple of years ago and are now expanding rapidly. Instead of building their own infrastructure and team for organizing payments, they delegate such tasks to professional services like ours, focusing on their core product.
We successfully handle microtransactions, large payments, and compliance. It becomes significantly easier for companies to undergo audits when working with a primary provider – us – under a single contract, which reduces the number of invoices to one or two per month instead of managing hundreds of different documents.
We support businesses working with freelancers in complex regions where independent payment arrangements are difficult. EasyStaff simplifies and legalizes this process. Clients value the ability to maintain relationships with contractors through our platform. We have numerous successful case studies, shared on our blog.
You built your business on the KiwiTaxi infrastructure. Did you attract external investment? Currently, you are building your business with your own funds. Are there any plans to attract investment in the future?
Initially, we considered the possibility of attracting partners. I was actively searching, but I was not so much interested in financial investments because EasyStaff became profitable almost from the first client. Instead, I focused on building networking and strengthening the service's reputation. I wanted to attract a strategic investor to help us reach a new level and gain access to major clients.
In 2021, during the pandemic, I began negotiations with the Yellow Rocket fund. We went through the evaluation process (scoring), but fell short of a few points for approval. Nevertheless, we received positive feedback and a recommendation to focus on development in the United States, as working solely in the European market was not of interest to them. Unlike the fragmented European market, the US market is much more cohesive and larger – it's 300 million people, and it is also the primary hub for the global startup community.
However, after the events of February 2024,clients from the United States began to approach us on their own. I realized that venture financing was no longer a priority for me.At this point, I don't see the need for this path. Perhaps in the future, when our growth rate slows down or when we have a need for renewal and development, attracting investments may become relevant. But at this stage, we do not plan to move in this direction.
Do I understand correctly that both the pandemic and 2022 accelerated your business development?
Yes, they were significant drivers.
You launched in 2018, and when did you break even? How did you celebrate?
We didn't celebrate at all. There was no goal to break even.The priority was finding the right product.. When we achieved profitability, it didn't mean much because the product was still raw. It so happened that we started making money on a crude product, on a fragment of an idea that had crumbled. But our first international client became a unicorn, they grew, and we grew with them. We were a single-client platform in that initial period. They pulled us through and gave us the opportunity to earn capital, which we used wisely and managed to build a high-quality product.
The event of reaching break-even itself was not significant because at that point there was no great product, no diversification, no customer base. We had several versions of the platform. We had several versions of the platform; in fact, we are currently working on the third version.The first one, whose business model was similar to Solar Staff, quickly ceased to function because banks refused to conduct transactions between Russia and foreign companies, leading to the closure of our accounts. I then realized that Solar Staff had a strategic partner bank that facilitated their operations. I won't disclose the name of the bank.
The second version of the platform was focused on companies operating under a simplified tax system. However, it had liquidity limitations and difficulties with withdrawing funds. This scheme wasn't fully developed.
Finally, the third version, which we currently use, turned out to be the most successful. You asked about my feelings when we became profitable. It was a sense of relief. I told myself, "Thank goodness, it worked!" This happened on New Year's Eve of 2021. I realized that the product was starting to work: sales went up, foreign clients started paying to different countries. We stopped being a single-client platform.The key and most challenging task was to find our product, and this process took almost three years – from 2018 to the end of 2020. By the time we finally found the right solution, we were already financially stable. I believe that luck played its part, because in business, a lot often depends on a lucky break.
Have you ever experienced periods where you felt discouraged, unsure about the outcome of your plans, and like you were wasting your time? How did you cope?
Yes, I have definitely experienced those moments, especially throughout 2020. I knew I couldn't simply abandon the project and return to working for someone else, but I also realized that the existing product had its limitations. It was too limited in its capabilities and relied on my personal resources – I couldn't scale it. It was like a small neighborhood store that couldn't become a chain supermarket.
There were certainly moments of despair, but I continued to seek solutions. When doubts arose, I would typically go for a run and brainstorm potential paths forward. This process of idea generation, "solution mining," was a constant endeavor. In July 2020, along with Evgeny Fedorov, we discovered a new idea that could be implemented. We built the current version of EasyStaff using a Zero Code platform and created a personal account for freelancers and clients, initially utilizing the KiwiTaxi infrastructure. We developed a new tax scheme and launched the updated product. The first transaction using this version occurred on October 30, 2020.
Tell me about the emergence of the payroll service market. Who was the first? What's happening with the market leader now? What are the forecasts?
To be honest, the payroll market didn't appear in my mind the way it did in reality. When we built the third version of EasyStaff and started making sales, I discovered Deel.
It's like the era of pre-Columbian voyages. When explorers arrived on a different continent, they were surprised to discover that there was life there too!
Deel is the market maker and pioneer of the payroll market. It's a major player with a powerful product and a market capitalization of around $600 million. On the G2 marketplace diagram, Deel is in the top right corner, while other players, including EasyStaff, are in the middle.
The market has entered a stage known as the "red ocean," where opportunities for innovation are dwindling. We operate in an oligopoly, with Deel and Solar Staff being the main players, particularly in the Russian-speaking segment. Globally, Deel holds the leadership position.
However, EasyStaff boasts its own competitive advantages. We offer attractive pricing and top-notch customer support, setting us apart from our competitors. Unlike other platforms, we provide real, live communication with our clients, rather than automated chatbots. This is a crucial feature that our users highly value. While price dumping is nearly impossible, we remain competitive, and each client finds their niche.
Competing with Deel is challenging, but we possess certain advantages. For instance, we offer broader payment processing capabilities. Ensuring that funds and documents reach clients reliably is critical for us, and we surpass Deel in this aspect. We strive to compete through the quality of our product and service, guaranteeing high payment conversion rates and the reliability of all processes.
The payroll service market is highly competitive, but another significant factor is the stance of governments towards these platforms. Governments are keen on protecting their budgets, and these services raise concerns. For example, Deel has already faced a conflict with the US government, which they successfully resolved. In general, how do countries view such services, are they a source of concern for them?
The relationship between countries and payroll services is a complex one. While these services don't violate national laws, they represent an innovative approach that disrupts traditional financial and labor relationships. This echoes the situation with cryptocurrency, which also challenged the global financial system. Payments became easier, borders blurred, and compliance requirements became less stringent. Governments are forced to adapt to this new reality, integrating innovations into existing systems while seeking balance.
The core issue revolves around "leaking" tax revenues. Freelancers receiving payments through these platforms do not benefit from state-provided services like healthcare or mortgage access. Lacking formal employment, these individuals do not contribute to government tax income. This benefits clients, who enjoy tax savings and flexible staffing options by hiring freelancers on a project basis. Freelancers gain access to global clients and potentially improve their standard of living.
However, the state loses out in this system, but it remains unclear which state – the client's or the freelancer's. Both sides benefit from tax savings, which is unacceptable to authorities. We have seen examples of governments responding to new financial instruments like cryptocurrency by introducing bans and restrictions. Payroll services may also face limitations in the future.
As a market leader, Deel is under intense scrutiny and often the first target of criticism. These discussions about the future of such services may continue for decades until a new generation emerges with fresh perspectives. Developed nations, responding to societal demands, are forced to adapt their legislation to reflect new realities, especially if society endorses these changes and calls for their legalization. Thus, the question remains open.
Employer of Record as an Alternative Mechanism
09/13/2024
#ForBusiness
Vitaly Mikhailov
Building EasyStaff: An Entrepreneur's Journey in the Fiercely Competitive Payroll Platform Market
Vitaly, a traditional question for relocators: where do you currently live?
I know EasyStaff was founded six years ago, in 2018. What happened before then, how did you come up with the idea for this service?
My Professional Journey Before EasyStaff
The Origin of the EasyStaff Idea
The Origin of the EasyStaff Idea
Let's delve into the essence of EasyStaff and discuss payroll services.
Functionality and Role of Payroll Services
Employer of Record as an Alternative Mechanism
Who are your clients and for what work scenarios do they choose EasyStaff?
You built your business on the KiwiTaxi infrastructure. Did you attract external investment? Currently, you are building your business with your own funds. Are there any plans to attract investment in the future?
Do I understand correctly that both the pandemic and 2022 accelerated your business development?
Do I understand correctly that both the pandemic and 2022 accelerated your business development?
Have you ever experienced periods where you felt discouraged, unsure about the outcome of your plans, and like you were wasting your time? How did you cope?
Tell me about the emergence of the payroll service market. Who was the first? What's happening with the market leader now? What are the forecasts?
The payroll service market is highly competitive, but another significant factor is the stance of governments towards these platforms. Governments are keen on protecting their budgets, and these services raise concerns. For example, Deel has already faced a conflict with the US government, which they successfully resolved. In general, how do countries view such services, are they a source of concern for them?
As someone who has relocated to another country, I have a special attitude towards taxes. When choosing a place to live, tax burdens are always a consideration. While many expats don't pay taxes in their new country, they also won't receive pensions in the future. Instead, they contribute to the new economy, spending money on goods and services, rent, food, and clothing. Developed countries are starting to function like brands, attracting talented individuals who can work for international companies without displacing local jobs.
Speaking of nomads, tell me about your team's formation.
It seems like you wouldn't need to conduct a cast study - you're a typical example of a client who uses payroll services.
Did you ever have an office, or were you a distributed team from the start?
Which industries can connect to EasyStaff? What segments do you work with?
How do you, as a founder, research the market? How do you understand what direction to develop the product?
Does the service comply with any certifications?
What are your current development plans? I know you have the EasyBusy service, tell me about it.
One reason for PayPal's widespread popularity in the USA is that this payment system protects clients. But this can also create problems.
More about EasyBusy and the company development strategies
How will it work?
It sounds like Switzerland, known for its frequent referendums, could be the first client for your platform.
In conclusion, let's discuss one more idea. Have you ever thought about turning your service into a bank?
What about creating a simplified scenario, like launching EasyCard in partnership with Mastercard?
Vitaly, thank you for an interesting interview and discussion of payroll services! I wish you the best of luck with the DAO, and I hope our startup community will help test and develop your idea.
As someone who has relocated to another country, I have a special attitude towards taxes. When choosing a place to live, tax burdens are always a consideration. While many expats don’t pay taxes in their new country, they also won’t receive pensions in the future. Instead, they contribute to the new economy, spending money on goods and services, rent, food, and clothing. Developed countries are starting to function like brands, attracting talented individuals who can work for international companies without displacing local jobs.
It’s fascinating to witness the emergence of a new world where the state is no longer such a critical structure.
Nomads don’t require anything from the state except a residence permit. They find their own place to live, earn money in other countries, and pay taxes for visa renewals and other local services. These individuals create a new flow of money, similar to tourists, stimulating economic growth through the service sector. Countries offering Digital Nomad visas recognize the economic benefits, creating competition for skilled workers.
Payroll services play a significant role in supporting this movement, enabling payment for freelance work worldwide. This creates a new, more flexible, and global economy where countries compete for skilled workers, recognizing that this strengthens their economic development.
Speaking of nomads, tell me about your team’s formation.
We have a large team, over 40 people. They live in Italy, Spain, Finland, Croatia, Montenegro, Lithuania (where our office is located), Cyprus, and Poland. Some team members are located in different cities across Russia.
It seems like you wouldn’t need to conduct a cast study — you’re a typical example of a client who uses payroll services.
Of course, we ourselves use EasyStaff to pay our employees. We operate not only through the Contractor Management scheme, we have full-time employees in Lithuania and Montenegro.
Did you ever have an office, or were you a distributed team from the start?
We began in the KiwiTaxi office; that’s where our first employee started. The project quickly expanded beyond Russia to Europe because I was already living in Lithuania.
Which industries can connect to EasyStaff? What segments do you work with?
Any company can connect, except those under sanctions. We comply with all sanctions restrictions. If your company is not on the sanctions lists, you can connect to the service.
Through EasyStaff, you can pay for marketing and website development services, which is relevant for companies from various industries. The main segments are startups, digital studios, advertising agencies, outsourcing agencies, everyone who uses remote work.
How do you, as a founder, research the market? How do you understand what direction to develop the product?
I rarely conduct market research independently — I usually entrust this task to marketers. However, as the company’s founder, I always clearly understand what needs to be improved in the product. My years of experience in finance and IT allow me to assess the product from both financial and technical perspectives. More often than not, I develop the product without relying on market trends, as we’ve never had a shortage of ideas. Our task list is always overflowing, containing enough ideas for implementation, leaving little time for in-depth market research.
Does the service comply with any certifications?
Our activities do not require mandatory certification. For example, we do not possess a PCI DSS (Payment Card Industry Data Security Standard) license, which is used to ensure security in processing, storing, and transmitting credit card data. This license is mandatory for companies that directly work with card data. In our case, customer card data is processed and stored on payment gateways, not on our servers, so we are not obligated to obtain PCI DSS and do not plan to do so in the near future.
Similarly, we haven’t prepared for obtaining ISO certifications as we don’t currently plan to attract investments. Consequently, certification is not a priority for us at this time.
What are your current development plans? I know you have the EasyBusy service, tell me about it.
EasyBusy is a relatively new project of ours, a platform that connects freelancers and clients. It’s a full-fledged marketplace where freelancers can post their portfolios and look for orders, and clients find suitable performers for their projects.
The main principle of the platform is based on a secure transaction system: until the client accepts the work, the funds remain locked in the system and are not transferred to the contractor. In case of a conflict, we act as an arbitrator, analyze the situation, and decide which party should receive the funds.
Unlike EasyStaff, EasyBusy offers a wider functionality. The platform not only helps clients find contractors but also organizes the payment process and automatically generates all necessary closing documents.
Our immediate plans include integrating with PayPal for the convenience of customers, as we see a high demand for this payment system among users from the US, where it is particularly popular. We recently went through the compliance process with Hyperwallet, a global platform that operates as a financial marketplace. This will enable us to process and send payments more efficiently, which will be an important step in expanding our financial functionality.
One reason for PayPal’s widespread popularity in the USA is that this payment system protects clients. But this can also create problems.
Yes, the problem of chargeback is indeed serious, and PayPal may be less favorable to recipients compared to Visa and MasterCard. In most cases, if the buyer requests a refund, PayPal will almost certainly refund the money.
Various strategies can be used to solve this problem. For example, instead of immediately paying the freelancer, the funds can be held in the system until the completion of the work is confirmed. In EasyBusy, we use such a system: the client must confirm the acceptance of the work by pressing the corresponding button, after which the funds become available to the freelancer. We also have a disclaimer confirming the absence of claims to the work performed. Although we haven’t tested this hypothesis in practice yet, we hope that such a system will help reduce the risks associated with chargebacks.
For Visa and MasterCard systems, this approach has already proven its effectiveness, but it’s unclear how PayPal will react to it. Depending on this, we can adjust financial reserves for such cases.
It’s fascinating to witness the emergence of a new world where the state is no longer such a critical structure.
Nomads don’t require anything from the state except a residence permit. They find their own place to live, earn money in other countries, and pay taxes for visa renewals and other local services. These individuals create a new flow of money, similar to tourists, stimulating economic growth through the service sector. Countries offering Digital Nomad visas recognize the economic benefits, creating competition for skilled workers.
Payroll services play a significant role in supporting this movement, enabling payment for freelance work worldwide. This creates a new, more flexible, and global economy where countries compete for skilled workers, recognizing that this strengthens their economic development.
Speaking of nomads, tell me about your team’s formation.
We have a large team, over 40 people. They live in Italy, Spain, Finland, Croatia, Montenegro, Lithuania (where our office is located), Cyprus, and Poland. Some team members are located in different cities across Russia.
It seems like you wouldn’t need to conduct a cast study — you’re a typical example of a client who uses payroll services.
Of course, we ourselves use EasyStaff to pay our employees. We operate not only through the Contractor Management scheme, we have full-time employees in Lithuania and Montenegro.
Did you ever have an office, or were you a distributed team from the start?
We began in the KiwiTaxi office; that’s where our first employee started. The project quickly expanded beyond Russia to Europe because I was already living in Lithuania.
Which industries can connect to EasyStaff? What segments do you work with?
Any company can connect, except those under sanctions. We comply with all sanctions restrictions. If your company is not on the sanctions lists, you can connect to the service.
Through EasyStaff, you can pay for marketing and website development services, which is relevant for companies from various industries. The main segments are startups, digital studios, advertising agencies, outsourcing agencies, everyone who uses remote work.
How do you, as a founder, research the market? How do you understand what direction to develop the product?
I rarely conduct market research independently — I usually entrust this task to marketers. However, as the company’s founder, I always clearly understand what needs to be improved in the product. My years of experience in finance and IT allow me to assess the product from both financial and technical perspectives. More often than not, I develop the product without relying on market trends, as we’ve never had a shortage of ideas. Our task list is always overflowing, containing enough ideas for implementation, leaving little time for in-depth market research.
Does the service comply with any certifications?
Our activities do not require mandatory certification. For example, we do not possess a PCI DSS (Payment Card Industry Data Security Standard) license, which is used to ensure security in processing, storing, and transmitting credit card data. This license is mandatory for companies that directly work with card data. In our case, customer card data is processed and stored on payment gateways, not on our servers, so we are not obligated to obtain PCI DSS and do not plan to do so in the near future.
Similarly, we haven’t prepared for obtaining ISO certifications as we don’t currently plan to attract investments. Consequently, certification is not a priority for us at this time.
What are your current development plans? I know you have the EasyBusy service, tell me about it.
EasyBusy is a relatively new project of ours, a platform that connects freelancers and clients. It’s a full-fledged marketplace where freelancers can post their portfolios and look for orders, and clients find suitable performers for their projects.
The main principle of the platform is based on a secure transaction system: until the client accepts the work, the funds remain locked in the system and are not transferred to the contractor. In case of a conflict, we act as an arbitrator, analyze the situation, and decide which party should receive the funds.
Unlike EasyStaff, EasyBusy offers a wider functionality. The platform not only helps clients find contractors but also organizes the payment process and automatically generates all necessary closing documents.
Our immediate plans include integrating with PayPal for the convenience of customers, as we see a high demand for this payment system among users from the US, where it is particularly popular. We recently went through the compliance process with Hyperwallet, a global platform that operates as a financial marketplace. This will enable us to process and send payments more efficiently, which will be an important step in expanding our financial functionality.
One reason for PayPal’s widespread popularity in the USA is that this payment system protects clients. But this can also create problems.
Yes, the problem of chargeback is indeed serious, and PayPal may be less favorable to recipients compared to Visa and MasterCard. In most cases, if the buyer requests a refund, PayPal will almost certainly refund the money.
Various strategies can be used to solve this problem. For example, instead of immediately paying the freelancer, the funds can be held in the system until the completion of the work is confirmed. In EasyBusy, we use such a system: the client must confirm the acceptance of the work by pressing the corresponding button, after which the funds become available to the freelancer. We also have a disclaimer confirming the absence of claims to the work performed. Although we haven’t tested this hypothesis in practice yet, we hope that such a system will help reduce the risks associated with chargebacks.
For Visa and MasterCard systems, this approach has already proven its effectiveness, but it’s unclear how PayPal will react to it. Depending on this, we can adjust financial reserves for such cases.
Moving on to another topic, I want to talk about my idea for creating a DAO (Decentralized Autonomous Organization) based on EasyBusy.
I aspire to turn EasyBusy into something more than just a marketplace like Upwork or Behance, where competition is much higher than in the payroll service sector. My goal is to create a unique social platform where all participants can actively contribute to the project's development and receive rewards for doing so. This won't be just a marketplace, but a full-fledged ecosystem where freelancers, clients, and affiliates who attract new participants will receive bonuses for their activity.
I aspire to turn EasyBusy into something more than just a marketplace like Upwork or Behance, where competition is much higher than in the payroll service sector. My goal is to create a unique social platform where all participants can actively contribute to the project's development and receive rewards for doing so. This won't be just a marketplace, but a full-fledged ecosystem where freelancers, clients, and affiliates who attract new participants will receive bonuses for their activity.
More about EasyBusy and the company development strategies
If you attract a new client, you'll receive bonuses. If you actively use the platform as a client, you'll also receive bonuses. Freelancers will be rewarded for posting their portfolios and attracting new clients. These bonuses won't be just symbolic, they will represent your digital voice in the system. Bonus holders will have the right to vote in the development of the project, as quasi-shareholders. By voting, they will be able to influence the addition of new features and the direction of platform development. The more actively you use the service, the more votes you have, and accordingly, more influence on the project.
Additionally, bonuses will have real value because quasi-dividends are planned to be accrued, that is, a share of revenue or profit distributed to bonuses. These dividends can be paid in cryptocurrency or fiat currency, allowing participants not only to contribute to platform development but also to receive real financial benefits from it.
Currently, the idea is in the development stage. There are many nuances that we are still resolving. The economic model is already clear, but the project is still under development. We plan to release the first version and conduct an alpha release by mid-2025.
It sounds like Switzerland, known for its frequent referendums, could be the first client for your platform.
While my idea might seem utopian, its success hinges on thorough development. The deeper your understanding of the subject area, the greater your chances of success. I have a strong understanding of blockchain and cryptocurrency. Back when Bitcoin was gaining traction, I actively mined cryptocurrency. In 2013, I sold two Bitcoins for $300 each and don't regret it, as I considered the project high-risk at the time.
My understanding of blockchain technology allows me to envision its integration. Initially, we'll implement it within a centralized system. Bonuses will be credited on our servers, visible to users in their personal accounts or balances. However, in the future, with version 2 or 3, I plan to transition to blockchain. This will make the project more integrated and intertwined with the business. Over time, in versions 3 or 4, within 5-10 years, we aim to find a jurisdiction where tokens can be legally tied to ownership rights in the project or company.
The bonuses we'll credit users will initially exist within a centralized system, but in the future, they can be transformed into blockchain tokens that will be traded on an exchange. We intend to find a jurisdiction where such tokens will be recognized as analogous to real shares or ownership stakes in the project. In such a scenario, it would be an Initial Token Offering (ITO) or Initial Coin Offering (ICO), where the "coin" represents voting rights.
This approach will open new horizons, creating a legal marketplace operating in a jurisdiction that recognizes tokens as legally valid ownership shares. Of course, numerous nuances and questions arise, particularly related to regulation, for example, from organizations like the U.S. Securities and Exchange Commission (SEC). Such projects require significant financial resources, and for success, the project must grow significant financial resources, and for success, the project must grow considerably beyond its current stage.
Nevertheless, I'm convinced it's achievable. I possess a deep understanding of this field and a strong desire to bring the idea to life. Currently, this is my most ambitious endeavor for EasyBusy, and I'm confident that with thorough development and sufficient effort, we can make it a reality.
Additionally, bonuses will have real value because quasi-dividends are planned to be accrued, that is, a share of revenue or profit distributed to bonuses. These dividends can be paid in cryptocurrency or fiat currency, allowing participants not only to contribute to platform development but also to receive real financial benefits from it.
Currently, the idea is in the development stage. There are many nuances that we are still resolving. The economic model is already clear, but the project is still under development. We plan to release the first version and conduct an alpha release by mid-2025.
It sounds like Switzerland, known for its frequent referendums, could be the first client for your platform.
While my idea might seem utopian, its success hinges on thorough development. The deeper your understanding of the subject area, the greater your chances of success. I have a strong understanding of blockchain and cryptocurrency. Back when Bitcoin was gaining traction, I actively mined cryptocurrency. In 2013, I sold two Bitcoins for $300 each and don't regret it, as I considered the project high-risk at the time.
My understanding of blockchain technology allows me to envision its integration. Initially, we'll implement it within a centralized system. Bonuses will be credited on our servers, visible to users in their personal accounts or balances. However, in the future, with version 2 or 3, I plan to transition to blockchain. This will make the project more integrated and intertwined with the business. Over time, in versions 3 or 4, within 5-10 years, we aim to find a jurisdiction where tokens can be legally tied to ownership rights in the project or company.
The bonuses we'll credit users will initially exist within a centralized system, but in the future, they can be transformed into blockchain tokens that will be traded on an exchange. We intend to find a jurisdiction where such tokens will be recognized as analogous to real shares or ownership stakes in the project. In such a scenario, it would be an Initial Token Offering (ITO) or Initial Coin Offering (ICO), where the "coin" represents voting rights.
This approach will open new horizons, creating a legal marketplace operating in a jurisdiction that recognizes tokens as legally valid ownership shares. Of course, numerous nuances and questions arise, particularly related to regulation, for example, from organizations like the U.S. Securities and Exchange Commission (SEC). Such projects require significant financial resources, and for success, the project must grow significant financial resources, and for success, the project must grow considerably beyond its current stage.
Nevertheless, I'm convinced it's achievable. I possess a deep understanding of this field and a strong desire to bring the idea to life. Currently, this is my most ambitious endeavor for EasyBusy, and I'm confident that with thorough development and sufficient effort, we can make it a reality.
How will it work?
In conclusion, let's discuss one more idea. Have you ever thought about turning your service into a bank?
Working with third-party funds always presents significant challenges, particularly for aggregators, intermediaries, agency businesses, and marketplaces. Such services are often not as clearly defined as, for example, KiwiTaxi, where everything is straightforward - a driver and a vehicle transport a passenger from point A to point B. Or like renting a car, where the service is also understandable and easily controllable.
In our case, the service is not so obvious, which creates additional complexities, especially from the perspective of banks and compliance. We encounter various requirements and inquiries from banks, making it difficult to comply with all regulations. This very entry barrier explains why there aren't many such services. When it comes to the Russian-speaking segment, besides Solar Staff, EasyStaff, and Deel, there are practically no other companies working with this audience.
Platforms operating on the Employee of Record model offer a more understandable and transparent product. They have licenses, pay taxes, pay salaries, provide vacation pay, and offer official employment. All of this is clearly regulated and readily accepted by banks.
However, in the case of contract management, like ours, the situation is much more complex. We enter into a service agreement and issue an invoice, but this may not be enough for banks. Since there are no obvious tax payments in these transactions, we must provide additional documents, such as a Legal Opinion. We collaborate with leading lawyers and pay for their services to obtain the necessary documentation that confirms the reliability and legality of our business, which helps us open bank accounts and maintain their operation.
What about creating a simplified scenario, like launching EasyCard in partnership with Mastercard?
This would be more of a complex scenario. Mastercard will only work with services that hold relevant licenses, such as a banking license, payment license, or Electronic Money Institution (EMI) license. Obtaining such a license requires registration with the financial authority of your country and becoming an official financial service.
This means that you will have to provide regular financial reports, comply with liquidity standards, and have compliance officers. The complexity and costs associated with compliance will increase significantly. I recall the case of Paysera, a leading service in Lithuania, which was fined an amount equal to three months' profit due to a minor violation. These are serious risks.
This kind of financial venture requires substantial investments and capital to maintain turnover and infrastructure. You need to comply with PCI DSS standards if you plan on partnering with Mastercard. Launching such a business demands considerable effort and investment, making it incredibly challenging and expensive.
Considering all these factors, I'm much more interested in developing the DAO concept and creating a convenient, people-oriented service that won't be burdened with such stringent regulatory requirements. Especially considering my Russian passport, the process of obtaining permissions and approvals might prove an insurmountable obstacle. The complexities and risks associated with financial services make this niche too difficult and low-margin for me. I prefer to avoid competition with professionals who have been working in this field for decades and focus on more appealing aspects of fintech.
Vitaly, thank you for an interesting interview and discussion of payroll services! I wish you the best of luck with the DAO, and I hope our startup community will help test and develop your idea.
Working with third-party funds always presents significant challenges, particularly for aggregators, intermediaries, agency businesses, and marketplaces. Such services are often not as clearly defined as, for example, KiwiTaxi, where everything is straightforward - a driver and a vehicle transport a passenger from point A to point B. Or like renting a car, where the service is also understandable and easily controllable.
In our case, the service is not so obvious, which creates additional complexities, especially from the perspective of banks and compliance. We encounter various requirements and inquiries from banks, making it difficult to comply with all regulations. This very entry barrier explains why there aren't many such services. When it comes to the Russian-speaking segment, besides Solar Staff, EasyStaff, and Deel, there are practically no other companies working with this audience.
Platforms operating on the Employee of Record model offer a more understandable and transparent product. They have licenses, pay taxes, pay salaries, provide vacation pay, and offer official employment. All of this is clearly regulated and readily accepted by banks.
However, in the case of contract management, like ours, the situation is much more complex. We enter into a service agreement and issue an invoice, but this may not be enough for banks. Since there are no obvious tax payments in these transactions, we must provide additional documents, such as a Legal Opinion. We collaborate with leading lawyers and pay for their services to obtain the necessary documentation that confirms the reliability and legality of our business, which helps us open bank accounts and maintain their operation.
What about creating a simplified scenario, like launching EasyCard in partnership with Mastercard?
This would be more of a complex scenario. Mastercard will only work with services that hold relevant licenses, such as a banking license, payment license, or Electronic Money Institution (EMI) license. Obtaining such a license requires registration with the financial authority of your country and becoming an official financial service.
This means that you will have to provide regular financial reports, comply with liquidity standards, and have compliance officers. The complexity and costs associated with compliance will increase significantly. I recall the case of Paysera, a leading service in Lithuania, which was fined an amount equal to three months' profit due to a minor violation. These are serious risks.
This kind of financial venture requires substantial investments and capital to maintain turnover and infrastructure. You need to comply with PCI DSS standards if you plan on partnering with Mastercard. Launching such a business demands considerable effort and investment, making it incredibly challenging and expensive.
Considering all these factors, I'm much more interested in developing the DAO concept and creating a convenient, people-oriented service that won't be burdened with such stringent regulatory requirements. Especially considering my Russian passport, the process of obtaining permissions and approvals might prove an insurmountable obstacle. The complexities and risks associated with financial services make this niche too difficult and low-margin for me. I prefer to avoid competition with professionals who have been working in this field for decades and focus on more appealing aspects of fintech.
Vitaly, thank you for an interesting interview and discussion of payroll services! I wish you the best of luck with the DAO, and I hope our startup community will help test and develop your idea.
Customer Support working hours: 8:00 – 17:00 UTC+2
EasyStaff UAB
Code 305643163
Vilnius, Labdarių g. 6A-18, LT-01120, Lithuania
Vilnius, Labdarių g. 6A-18, LT-01120, Lithuania
