Deel Spy Tells All!
This is the most INSANE story in SaaS. Should Deel customers switch vendors?
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The Deel spy tells all the juicy details about the Rippling/Deel corporate espionage case. This story is officially the most INSANE story from B2B SaaS…
My mind is still blown from what went down!
If you haven’t read about the initial lawsuit Rippling filed, check out my previous post
I was waiting before I reacted too strongly to the accusations against Deel (even though the evidence was already strong). But the testimony of the Deel spy leaves little doubt.
If you are a Deel customer, should you switch to a Deel competitor?
Deel Spy’s Affidavit
Here are the biggest revelations from the Deel spy’s confessions:
Deel CEO is the person that started recruiting him to “spy”. Deel CEO said he would be like James Bond! 🤣
Paying the Deel spy was clearly for fraud and illegal activities.
Spy received $6K/month from someone named “The Watchman”.
Payment was clearly for something illegal as they funneled outside of the company and used cryptocurrency to “leave no trace”.
Deel CEO instructed their CFO (who is his father…) to negotiate payment
The initial payment of $6,000 was allegedly sent from an account owned by Deel COO wife.
Deel CFO created code words and communication to discuss payments
Deel CEO refused to sign a consulting agreement about the relationship. For obvious reasons…
Deel CEO managed the spy directly. He told the spy what channels to search, what to look for, etc
Deel lawyers with some questionable tactics:
Told spy to delete his telegram account and destroy his phone after the spy was presented with a court order to hand them over
The lawyers offered to relocate the spy and his family to Dubai immediately
Deel lawyers coached the spy to lie to Deel’s own outside counsel and to the Irish court
Deel’s CEO seems good at trying to cover his tracks. This is leading people to assume that this isn’t his first illegal rodeo. He may have other spies out there…
Should Customers Leave Deel?
Deel has a $12B valuation (or at least it did before all of this lol). They have built a good product and have lots of customers.
The Deel service likely won’t be really impacted or disrupted from all of this drama. So if you are on Deel then there likely isn’t an immediate requirement to switch vendors.
BUT….if I am a Deel customer then I am definitely looking to switch asap.
Why?
Lost Trust
Because they lost all my trust. Not just a little bit of lost trust, but all of it. Trust is one of the last remaining moats in software (and it’s the most important).
Why would I trust my company’s most confidential information (payroll and employee information) with a company that is willing to go so far into fraud, theft, etc?
There are plenty of Deel competitors. And often their product is just as good (or even better). So why would I want to use Deel now that I don’t trust them?
Cheaters Aren’t Long-Term Winners
Folks that cheat are always going to be at least one step behind in innovation and product development. Rippling was winning so Deel resorted to cheating in desperation.
Product Innovation Will Halt
While Deel’s current service likely won’t be disrupted, they are going to get left in the dust now that all of Deel’s attention is going to be all on their legal troubles.
I highly suspect that Deel will swiftly fire A LOT of top leadership (at least they should). There will then be significant internal disruption (employees will quit, customers will leave, employees will be distracted, etc).
If Rippling (and other competitors) were winning before, then they are definitely going to leave Deel in the dust now. So why sign up for a service that is only going to weaken compared to the competition?
Final Thoughts
Deel has yet to really respond to these allegations, but I see absolutely no scenario that this ends well for Deel.
Corporate espionage is rare in B2B SaaS, but I am positive this isn’t the only incident (although this is likely one of the most extreme cases). There are likely some folks doing some light corporate espionage without fully realizing it (or at least breaking their confidentiality agreements).
This should be a wake up call for many companies that this can actually happen.
Most importantly…folks should not sacrifice their souls for $6K/month. B2B SaaS is not worth it. And $6K per month is definitely not worth it.
Best Deel Spy Memes
Footnotes:
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