Our show begins with our first ever guest, Rippling CEO Parker Conrad. He talks about why the tech press spends too much time listening to VCs who don't have nearly as much power as reporters think. He also looks back at the way he was infamously pushed out of his previous company, Zenefits, and the role A16Z played in that saga.
Our thanks to @yungchomsky for our theme music.
Get full access to Newcomer at www.newcomer.co/subscribe
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Welcome, welcome to the first episode of
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dead cat. I'm Eric, newcomer the writer
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and author of newcomer. The newsletter here, with Tom
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Dayton and Katie Benner, who will introduce themselves as
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we've got a very special guest, Parker, Conrad, Katie Tom, and I
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have been friends for years. And I've had this long-running
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sort of message thread, signal thread, where we've chatted
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about the media and Tech and sort of gossiped about sort of,
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you know, the meta story of what's happening in Tech, sort
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of reading the stories, in another light.
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And so we sort of wanted to try out a podcast where we You know,
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talked about tech in the coverage of tech from a totally
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different lens in this in this world, you know, where, you
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know, technology companies are more ascendant than ever before.
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Anyway, so that I mean, that's, that's the very quick
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introduction. I think we should just get into
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it. Tom, you want to say hello?
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Sure. Hey, I thought you give a very
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sanitized version of what. Okay, now we're at was I thought
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it was where we were giving our marching orders to the
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mainstream media in which they would discuss.
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Exactly. What we wanted them to and to
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pick these tech companies in the specifically - and detrimental
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light that we all intend these companies to be viewed.
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So I actually thought there was a lot more power imbued into
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that chat room, but I guess it was just a place for us to push
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it. I misunderstood the point of
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this thread. My name is Tom as Eric said, I
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am a reporter at Insider. I'm supposed to call it that.
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Now, not Business Insider, where I cover, the gig economy, Uber
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Lyft, doordash instacart go. Huff frequently.
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So that's my, that's my beat there.
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But yeah, a newcomer and Katie and I used to work together at
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the information, way back in the day.
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And I think, actually, all of us at some point covered Uber,
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right? Briefly and Eric, you make Isaac
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me and another Uber reporter, all at my house, one night in
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San Francisco, and Reuters broken, Uber story, and none of
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us were able to match it. We were definitely all covering
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Uber At the die. Yes.
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You can see very Insider regroup but yeah.
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Anyway, that's that's that's my background here.
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And I used to write about media. So I'm the, I'm the media guy on
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this show. Yes, I'm covering the justice
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department for the New York Times.
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I really just kind of a special guest here but it's really fun
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to think about tech again because I will say as a beat it
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is more fun in many ways than covering the justice department.
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Cool. And yeah, I'll introduce par
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girl. But I mean, Parker Conrad, you
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know, we got to know him or I've known him for a long time as the
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CEO of zenefits covered sort of the rise of that company.
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I would have businessweek feature on it when it was new
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and exciting. And then, you know, Parker got
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pushed out. It was a huge headline story,
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and I wrote about that and I'm sure we'll be talking about the
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zenefits story, which is given Parker is super interesting
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perspective on the media. I mean I also love that Parker
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is someone who, you know, Did his college newspaper.
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So he sort of got the media there and then, you know, has,
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he's very mixed views about what's great about Silicon
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Valley and not that sort of, I don't know.
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Both both are somewhat in line with the rah-rah story and sort
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of super critical of it. So I am very excited to hear
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what what Parker has say Parker. I mean, what inspired you to
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walk into this death trap of three Reporters on our first
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podcast. The gosh.
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I don't know. I guess you know you're making
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me nervous here. Eric, why did I make a mistake
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here? What is it too, late?
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I mean I think that I guess I think that there are, you know,
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I think I you and I have spoken before about sort of my view of
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sort of the media VC complex in in Silicon Valley and kind of
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how that impacts the narrative and coverage and sort of the
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things that the things, some of the things that I sort of
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dislike about that. And so I think there are
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relatively few people That are willing to give an alternate
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perspective, that I think is government, so that's some of
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it. And then obviously like like a
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like a lot of people who sort of love and hate and need the
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media. You know, I've got a company to
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pitch and and and so there's there's always that that angle
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so. Okay.
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Give us give us the what is the tech VC symbiosis.
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We all have our own ideas but you know how would you
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articulate it? I think that reporters that are
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covering Tech are looking for like repeated players or voices
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of authority that they can speak to about the industry and
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frequently they don't know startup.
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Founders startup Founders. Maybe it's hard to identify
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which ones which companies are important and who you should be
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speaking with. And It's very easy to sort of
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say, oh well, you know, I'll talk to Andreessen Horowitz or,
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you know, some brand-name, VC firm.
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And so, those end up being for reasons that.
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Don't I think make a lot of sense, the sort of voices of
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authority about the industry. And it's sort of strange in a
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way if you looked at more traditional businesses, you
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know, if you're writing about the oil and gas industry, would
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you talk to the banks that are sort of lending the money for
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Capital purchases? And like those are the people
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that you would sort of like would be the authorities on the
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the oil and gas like no that wouldn't that would that would
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be weird. You know it's it's it's sort of
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unusual. Like if you thought of you see
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is as You know, almost more like, like sort of banks, you
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know, that were lending money to businesses.
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You know, you wouldn't, you wouldn't sort of immediately
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think. Like those are, those are the
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people that were going to put at the center of the ecosystem.
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But, but that is the way often media about tech works and and,
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and investors need that. Because in practice, when you
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look at a lot of these early stage deals, I think one thing
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that sometimes people Don't from the outside, don't understand.
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Is it's often just like incredibly obvious to everyone
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on the ground like which that there is a company here that you
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know, it's not guaranteed but this company has a very decent
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chance very early on of having an enormously successful outcome
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and it's obvious to a lot of people there.
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And so there are tons of investors that would you know
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love to put money into that company and in practice the
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founder, you know, just the Of their time, you know these
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rounds come together and you know 10 days they can maybe meet
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with five or six firms. And so who do they end up
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meeting with? Well the end up meeting with the
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person that they saw, you know, on the front page of the
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business section in the New York Times or, you know, in the Wall
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Street Journal or that was, you know, maybe covered recently by
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Eric's blog because that's sort of who they've heard of.
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And, and so from a Aziz perspective that media attention
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is oxygen. You know, it's sort of the
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closest analogy I can think of is, it's like it's like
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celebrities, you know how they like, that's what what they need
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because it's the it's the only thing that's truly
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differentiating for them. And it's really how.
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I mean you've seen that with some firms like Andreessen
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Horowitz that really have built their brand, purely on the back
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of that media exposure. Or almost entirely on the back
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of that media, exposure to such an extent that I think the right
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way to think about that firm is it's not really a VC firm.
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It's a it's a PR agency that has a very specific monetization
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strategy of investing in startup startup companies.
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And like, in that vein, it's not surprising that they've now
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decided to like create their own content arm and all that kind of
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stuff. Because like, they always were
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sort of a media company. First, and foremost.
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Yeah, putting and reason aside, because I think, They are such a
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specific example and you're, you know, you have a history with
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Andreessen, which might be interesting to talk about later.
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But in this formula, the media, the reporters are kind of
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unquestioning in their willingness to feature venture
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capitalist. You know, why is it?
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Do you think that reporters aren't scrutinizing?
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The Venture Capital firms in the way they might be scrutinizing?
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The startups themselves, you know, I don't, I don't know, I
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guess I would sort of ask maybe ask you guys that.
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I mean, sometimes. Times.
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Sometimes, it seems to me that reporters are looking for
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authority figures, you know, they're looking for it, you
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know, they're looking for an authority figure and then like
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sort of the looking for Daddy's, parental figures.
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I agree with partner and the reality of how these companies
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are run. But from the outside, you look
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at it and you're like, oh well, you have, you know, these people
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are board members, you know, they write the CEOs like you.
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No sort of that's their boss. You know, that's not and that's
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that's not the reality of the situation but I think it's it's
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sort of, you know, like in other beats you know if you're if
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you're talking about something that happened at the justice
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department, you ultimately want to speak with like Merrick
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Garland or like, you know, like his his spokesperson right.
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You know. And so like you're looking for
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like who's the person at the top and I think that reporters have
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sort of conclude And perhaps in accurately that that those
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people are the investors and it perturbs.
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And distorts a lot of the things about the ecosystem that there's
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that perception, that's why you see all these people like
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marching out of business school and they all want to become
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Venture capitalists, you know. Because like, you know, that's
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sort of where the perception of kind of, you know, where where
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the where the power is and you know where the sort of the power
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behind the throne or whatever, whatever you would call it.
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It's okay, it's cute. I mean, please say no, if you
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don't want to but would it not be instructive then to look at
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zenefits through this lens? And I don't think we introduce
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benefits and I think we said what it was, but it was the
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company that you started that was enormously successful
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specifically in Silicon Valley terms, meaning, the valuation
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grew and grew and grew meeting investors were is an HR like an
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HR portal. So we're basically trying to buy
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more stock essentially in your company ever, higher prices and
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your company helped, you know, other corporations.
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On board employees and take care of HR functions through you,
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through easy-to-use, software was a great idea.
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And from the media's point of view, we saw this stratospheric
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rise of your company and that attention was sort of built by
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the valuations, which are granted by the VCS, which then
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make them a huge part of the story because the main data
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point, And maybe this is flawed, but the main data point
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especially at the time, reporters used to decide which
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company mattered, was, was the valuation, especially at that
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period and Rocket fueled by Andreessen, which was probably
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at. It's like at then, you know,
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philosophical voice of the Silicon Valley mouthpiece Peak,
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right? That look like from your point
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of view, as you were watching the attention turned to your
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company in large part, because of this, both VC, fueled
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valuation and BC fueled, you know, conversation with the
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Press, Yes, so what did that look like inside to you?
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Yeah, I mean so you know, there are some things that I can talk
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about about zenefits and there's some things that I just can't
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and so I probably can't go as deep in this conversation as I'd
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like to at some point in time I it's definitely true.
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I mean you say that sort of like the Press was fueled by the
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valuation which was in turn fueled by like sometimes the
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Press was field directly by the VCS themselves.
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Like I remember At one point, you know, Kim listen Vic from
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Andreessen Horowitz, coming to me and saying, hey, we have, you
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know, a reporter from The New York Times, who wants to
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profile, a Silicon Valley company and asked us like, which
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company should he do? And we told him the company
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that, you know, that he should do is then if it's and the clear
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implication is like, you know, we sort of instructed like the
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media You know, which company to cover and now they're going to
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cover York. I mean, it was very like, at
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least in the way that they are now.
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I don't know what it was like from the reporter's perspective,
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but in terms of how they described it to me, it was like
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we are telling them to cover your company and that, you know,
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became a think. This is just became a story that
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Farhad Farhad wrote for the New York Times.
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And so there were definite, at least from my perspective, it
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was like, wow. No, these, these guys are You
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know, they exercised a fair amount of direct control over
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sort of the media narrative and, you know, and Eric, you and I
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have talked about, you know, just the dinners that, you know,
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Margot would have for reporters, you know, at her house right?
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Met you. That's right.
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I remember, you know, it was incredible to see, you know,
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everyone, just the extent to which like invites to Those
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dinners were important, you know, like there's an ecosystem
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there between VCS and, and the, the tech media that I think puts
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the VC firms at the center of these stories in it, in ways
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that are sort of sometimes, Miss sort of other other Dynamics.
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Those dinners are extremely canny the way that they're
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handled. Because first of all reporters
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want to be invited to them. Because it shows that, I mean,
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if you're at a big publication, you kind of Default get invited
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to it and you know the information it was always an
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issue at first because for certain places we didn't
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register but reporters are always kind of, you know,
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screwing around there. Like rats trying to like make
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connections with entrepreneurs like you or for VCS thinking
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about like this is, you know I like much more.
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Yeah more than PCS. I mean as a reporter is still
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deep in this bead who's really set up a publication around the
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VCS I think for some of The reasons we're talking about.
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I do think there's a there's a reality that like the VCS are
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just more scalable sources, you know.
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They, they know the facts that I want like a great scale.
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Where is the founder? Maybe knows a lot about their
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company. Nobody wants to leak stuff about
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their own company, well. So one question is like, how
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does this play out in terms of the type of the, the way that
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sort of, you know, coverage, you know, happens for tech.
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And, and one way that happens is that often A set of things that
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a lot of VCS will agree on that ends up getting sort of
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repeated, without a lot of questioning.
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You have an example. One example would be that.
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We pay too much for startups to invest in them and we would
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prefer to pay less for startups to invest in.
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Yeah, but also to your point that sentiment belies the fact
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that the one of the reasons VCS are paying so much isn't just
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because the prices are too high. It's because they're taking in
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too much capital in a world where other institutional,
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investors are trying to get a return.
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Sure. But you know you look at for a
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long time you know, Bill girly was out there talking about how
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all these startups were valued and everyone like the media
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loved him for it you know it was it rests here was an Insider
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sort of like speaking truth to you know his own and everyone
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viewed it as heroic and no one was sort of saying like maybe
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it's this maybe a little bit self-serving.
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You know, like why will girlies who I, you know, I like it.
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I've profiled is expert at saying one thing and doing
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another, you know, are writing blog posts that sort of
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implicitly indict, Uber or we work.
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Well, you know, to sort of hedge against, you know, his firm's
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own actual Behavior, Nasser. And and of course, I think like
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and I look, I've never met Bill girly, but it strikes me that
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bill girly was a big fan of valuations, being lower for
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early-stage startups and and has always been a big fan Fan of the
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idea that public markets investors are paying too little
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for these companies when they IPO, which, you know, maybe
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those two things conflict with each other, maybe they don't.
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Are you able to talk about how this sort of like interplay
00:17:46
between valuations and venture capitalist in the media?
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You know from your point of view, whatever it is.
00:17:52
You can say how that look to you as an if it's hit a road bump
00:18:00
And some of, yes, I will say that.
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The thing that I remember most about benefits as well.
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Frankly, our story about people having sex in the stairwells or
00:18:08
something. It was it was condoms in the
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stairwell. Hey, we found, you know, a
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condom in the stairwell of this Building and that's completely
00:18:30
unacceptable. And the office manager of our
00:18:33
company, sent an email out to everyone at the company saying,
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this is completely unacceptable and look there were 30 35 other
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companies in that building, it's not even clear that it was
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someone at zenefits. But that story got, you know, we
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were the ones that sent out that email and that's the email that
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they got a hold of and that story got written and Rewritten
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and Rewritten in a way that, and okay.
00:19:06
Yeah, by my senses, the zenefits thing was it was, I mean, it was
00:19:10
really a feeding frenzy as far as reporters were concerned.
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I mean, they were reporters. I think actually every ykd Eric
00:19:15
and I all at some point, did some sort of zenefits Insider
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ep's, maybe not like a feature at the same level as you.
00:19:22
No Eric maybe did or will Alden no longer a reporter but he kind
00:19:27
of, you know, wrote probably the most intensive pieces on it.
00:19:30
I mean what did it seem like to you from that perspective as
00:19:34
this many stores are coming out and reporters are essentially
00:19:36
making their careers out of you know, this sort of Story.
00:19:41
I mean obviously there was there was malfeasance that we were
00:19:44
discussing here and certainly when it came to, you know,
00:19:48
flouting insurance regulations in different states.
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You know, you could argue that were Stakes Beyond just And of
00:19:53
condoms in the stairwell, but did it?
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I don't know. I mean, I've always wondered
00:19:58
from the entrepreneur perspective, as reporters are
00:20:01
essentially, you know, we're getting pay raises out of
00:20:04
writing stories, like this ultimately, I mean, what is it?
00:20:06
What is it from the other side? I wasn't, I wasn't aware that.
00:20:08
Were you getting pay raises Eric?
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It was that a none of us have gotten pay raises in a long
00:20:13
time. Well, not nothing.
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It's not like they're like it's more just like, oh, if you write
00:20:18
good stories, you're going to do better in your career, you know
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what I mean, right? Tom, are you?
00:20:23
Yeah, yeah, no. I mean, look, I've like gone on
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vacations before and I've been like, man, you know what
00:20:27
afforded this vacation like Snapchat, really fucked up a
00:20:30
couple years ago and it's, I mean, look, it's true.
00:20:32
It's the nature of the job and obviously we aspire to Greater
00:20:36
reasons as to why we write these stories and tell more important
00:20:40
things in just that. But, you know, there is another
00:20:43
side to what there are people that were writing about that.
00:20:44
I've always wondered. Look, one thing I will say, is
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that when stuff like this happens, there are people that
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have institutional apparatus behind them, you know, then
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have, you know, PR firms, PR agencies, established media
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relationships, Lanny Davis people like like wonderful human
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beings, like Lanny Davis, who rep, David Yaks, and who David
00:21:14
hired, you know, immediately, when this went down and who,
00:21:19
from what I've heard from, from other reporters that, you know,
00:21:22
David Sachs and Lanny Davis were kind of on the phone everyday.
00:21:25
Sort of pitching stories about me for six months.
00:21:28
What kinds of stories that I picked?
00:21:30
I don't know. I mean, I, you know, I heard
00:21:32
about a lot of that sort of second hand, but, you know,
00:21:35
there are people like me who are just kind of like, hold up at
00:21:38
home and kind of ignoring all of it and, you know, largely, you
00:21:44
know, not talking to to anyone but isn't isn't that an argument
00:21:48
for the VC's actually being powerful that like that when the
00:21:52
come With the company happens. And reason orbits is super sort
00:21:57
of the power broker in a way that suddenly the founder isn't
00:22:02
or you know, I mean a conflict in your story to me which I
00:22:06
mostly agree with is just you know, andreasen brings in David
00:22:11
Sachs who caused some of your like there are things where the
00:22:13
VC firm clearly had a big role in the company and, you know,
00:22:17
you want to point to them for some blame but you're also like,
00:22:19
oh they're not really big player.
00:22:20
You know I think one one thing is certain sort of understanding
00:22:24
like the nature of like the VC VC s sort of power over
00:22:30
companies and one thing that I've come to understand is it's
00:22:37
not about board control you know, I you know I had control
00:22:45
of the board at Santa Fitz and I think it's really, you know what
00:22:51
happens is The The Authority that that VCS have over
00:22:56
companies is a media Authority. It's a, it's a, it's a public
00:23:00
at, you know, it's say, it's sort of saying.
00:23:01
Like, look, if you, you will do what we want you to do, or we
00:23:06
will publicly go to war with the company, you know, and we will,
00:23:11
you know, sale, these bad things about you in the press and
00:23:14
disavow, the investment. All that kind of stuff, which is
00:23:16
a surprisingly common tactic that firms employee far more
00:23:22
frequently. Lie in terms of that having, you
00:23:25
know, sort of telling Founders that then actually sort of
00:23:28
pulling the trigger and doing it.
00:23:31
And, you know, that is, I think the nature of the authority that
00:23:36
investors often have over these companies is like, far more this
00:23:39
like moral Authority with the public.
00:23:43
And, you know, that's that's something that that I that I
00:23:49
disagree with. So I just want to make sure that
00:23:52
we have all the people who've just mentioned correct correctly
00:23:56
identified because there are people who might not know what
00:23:58
happened. It's benefits.
00:23:59
But David Sachs he came and he replaced you as CEO.
00:24:02
Is that correct? Yeah.
00:24:04
And he was brought in by Venture capitalists by Andreessen,
00:24:08
Horowitz date. Me David joined a year and a
00:24:11
half two years before I left, and he was CEO of the company
00:24:14
for a period of time. Hmm.
00:24:17
And he, what was that your higher or did feces?
00:24:21
Him to join. He was deaf.
00:24:24
He was definitely introduced to me by the VC firm.
00:24:27
I mean I remember there was this moment right around that.
00:24:30
Actually the time that that that piece ran in the New York Times
00:24:33
where, you know, we were like I said if it's growing so quickly,
00:24:38
I mean we were we went in that year when David joined we went
00:24:42
from you know, 20 employees to 450 and I remember talking to
00:24:50
Like Lars dalgaard who is our board member for injuries and
00:24:53
Horowitz in sort of August of that year.
00:24:56
And I said, look I think we've got a, you know, pump the brakes
00:25:00
a little bit and like, slow down because it's just like, it feels
00:25:03
like everywhere. It's just hard to keep up with
00:25:07
and because, you know, when you're growing really quickly
00:25:10
little things that go wrong quickly, spiral out of control
00:25:12
and become like, very hard to address and Lars looked at me
00:25:17
and he said, don't you dare, if you do that, You don't know that
00:25:22
when you are ready to grow again whether you're even able to you
00:25:28
know whether the sort of focus of the market has turned
00:25:32
somewhere else and he said look let's let's hire a CEO.
00:25:37
Oh and I you know there's this great guy that we've been
00:25:39
talking with who's David and that's and then I met with David
00:25:44
and that's idea joint. He was impressive to you as I
00:25:47
mean, he's like a I was impressed about is like sure was
00:25:50
a big name, you know, PayPal, you know, like I mean it was a,
00:25:55
you know, superficially. You know, he was, you know, he
00:26:01
was an impressive, Brent, you were connected to the mafia,
00:26:04
this is good. I mean, I feel like we I mean
00:26:13
now we've talked about zenefits a lot.
00:26:14
So I want to make the Clear. The clear argument against you
00:26:17
is just, you know, first that there was the macro this tool
00:26:21
that help people stay on their sort of licensing test, when
00:26:25
they're supposed to send a certain amount of time.
00:26:27
Yes it didn't progress them through it but it was a tool
00:26:30
that sort of was meant to skirt, you know, the legal requirements
00:26:36
and then to you know, there were in fact, and this is what we'll
00:26:39
Dalton was reporting legitimately that there were,
00:26:42
you know, Brokers that were unlicensed, you know.
00:26:45
There were license one state but not in the state.
00:26:47
They were selling in and that there's an argument certainly
00:26:50
for injuries since acts that they were going to have this
00:26:53
huge that they had legitimate legal problems and the company
00:26:57
was going to have to move past them and I mean it's a classic.
00:27:01
I mean I think literally I found was it Ben Horowitz or Marc
00:27:05
Andreessen who had written a post that when you turn on the
00:27:07
CEO you need to turn on them like 100%.
00:27:09
So you have these problems, you say, okay it's you know the
00:27:13
responsibilities sort of rolls up to the Top and like we don't
00:27:17
have voting control. So we really need a gun for this
00:27:19
guy. And then I mean that's that's
00:27:21
sort of the strategy. I don't know.
00:27:24
Do you disagree with that portrait?
00:27:27
I mean, you know, look, I, you know, I think there's not enough
00:27:30
time this podcast to get into the sort of ins and outs of all
00:27:33
the of all that of all. Sure enough.
00:27:35
Can I ask you Parker about your, you know, in starting Rippling,
00:27:40
which is the benefits competitor.
00:27:42
Yeah, yes. Yeah, yeah.
00:27:44
And I remember, And you know, you were raised in that initial
00:27:47
round and the stories were coming together, that like here
00:27:49
comes Parker Conrad again and it was something of a comeback
00:27:53
story. Something of a I can't believe
00:27:54
they let this guy in the building again story and you
00:27:58
know, ultimately it's doing very well.
00:28:00
We used Rippling actually at the information switch from zenefits
00:28:03
to Rippling at some point down the line.
00:28:05
So that's one account one. But you know, what did it what
00:28:09
was that process? Like for you, as you were
00:28:11
starting a new company coming back as the guy that had been
00:28:15
deposed. As for the previous one and
00:28:16
effectively, doing the same thing.
00:28:19
So first, I mean, I would I would disagree that it's the
00:28:21
same thing. I think it's extremely
00:28:23
different. It in ways that I mean I'll try
00:28:27
to articulate and then you may say yeah but it's the same thing
00:28:30
I think that the biggest difference for me is that, you
00:28:37
know, the central Insight at my last company that sometimes
00:28:41
sometimes people Miss is that, you know, sometimes people think
00:28:43
zenefits was just online health. And that was actually really
00:28:46
what it was, what made the company work is that you had
00:28:51
this button to hire someone and you would click hire and they
00:28:55
would sort of show up automatically in all of your HR
00:28:59
systems. You know, they'd get set up in
00:29:01
payroll, we get their agreement signed, they would show up and
00:29:04
medical insurance, dental, insurance 401 k.
00:29:07
And before that company came along, those things were all
00:29:12
completely separate systems. Like these were separate places.
00:29:15
As you have to set up employees and there was a lot of
00:29:17
administrative work associated with that and now of course,
00:29:22
that's become sort of like par for the course across a lot of,
00:29:25
you know, payroll and HR systems.
00:29:27
I think one of the big difference with Rippling is the
00:29:30
belief that, you know, employee data is important for almost all
00:29:37
business systems within a company, not just the HR ones
00:29:41
and that, as a result of that, there's this Actually the root
00:29:46
of most of the administrative pain of you know, most at most
00:29:52
companies comes back to this fact that man, all of the
00:29:56
different business systems that you use are different places
00:29:59
where you need to manage employee information one way or
00:30:02
another, you know like why is it, you got it.
00:30:04
It's a pain in the butt. You got to set people up with
00:30:06
email access with slack access with access to Dropbox and
00:30:10
Salesforce and GitHub. And you need to manage email
00:30:13
list, memberships and slack Channel.
00:30:15
And policies that apply to them and all these different systems,
00:30:19
and all of these things are fundamentally about employee
00:30:22
data. You know, it's about someone
00:30:24
gets access to sales force because they work in the sales
00:30:26
department. They, you know, they need to be
00:30:29
subscribed to an email list because they're a manager on
00:30:32
your customer support team. And so if you have an underlying
00:30:36
system that understands all of that, you can give people that
00:30:40
same button, where they click a button to hire someone.
00:30:44
But in this case, People get set up everywhere you know they get
00:30:47
their computer shipped out to them.
00:30:49
They get access to all these different Business Systems, they
00:30:52
get added all the right email list, sock channels and
00:30:55
policies, and groups and license types or whatever.
00:30:59
And yes, they get enrolled in insurance and set up in payroll
00:31:02
and all this different stuff in it.
00:31:03
That was there was a sort of much bigger opportunity as a
00:31:09
result as a result of that. And I think what happened is,
00:31:11
you know, zenefits was probably starting to move in that
00:31:14
direction. Towards the tail end of my time
00:31:16
there, but as soon as I left all of those projects immediately
00:31:21
got killed because they were sort of the Ancien Regime and so
00:31:25
they all got sort of shut down immediately.
00:31:27
And you know, you know the the new CEO came in and you know, he
00:31:37
started firing people and he fired all the wrong people, you
00:31:41
know? And he fired a lot of people
00:31:42
because they were, you know, In some way, associated with me or,
00:31:48
or at least I saw it as like, these are all you're laying out.
00:31:50
And of course, any Founders going to look at.
00:31:52
You know what? Someone comes in afterwards and
00:31:54
say, like they're doing it all wrong, but I sort of felt like,
00:31:58
man, this thing that I wanted to exist this product that I
00:32:03
thought I wanted to use that, I thought was the way that
00:32:05
business should do, this stuff wasn't going to exist, you know
00:32:09
that then if it's was kind of going off in this different
00:32:12
direction and you know, other editor's were not going to build
00:32:16
it and at the same time, you know, I, you know, was feeling a
00:32:24
lot of frustration about what was going on in the media and
00:32:28
sort of what was being written about me in the press and places
00:32:32
like that. And I sort of felt like the only
00:32:36
way that I was going to speak, you know, to the extended, you
00:32:45
know, Kind of Tech Community to the media to my friends and
00:32:49
family. The only way I was going to be
00:32:52
able to do that was to like build this specific company and
00:32:56
turn it into like a hundred billion dollar outcome.
00:33:00
And then if I could do that at some point, that would force
00:33:04
some kind of reassessment of all of this and how far into the
00:33:11
hundred billion, there were all kinds of reasons.
00:33:14
I wasn't able to serve Really talked about it.
00:33:16
There were, you know, I wasn't, you know, that's not, I wasn't,
00:33:21
that's not where that kind of politicking wasn't really where
00:33:24
my my talent slide and but this was something I could do, you
00:33:29
know, like I felt like I had a point of view about what the
00:33:33
market needed and sort of how to get there.
00:33:36
And that that was the thing I was going to focus on and then
00:33:39
if I did that, you know, and so we're you know, I'm 45 pounds.
00:33:45
Now, the story is not, how could you, how could you raise, raise
00:33:48
VC, money again? I mean, sort of, I mean,
00:33:51
basically, the YC crowd sticks with you, Sam Altman, initialize
00:33:55
back. You, I mean, what did you did
00:33:58
you change anything about how you worked with VC's in this or
00:34:01
what or you're just sort of stuck in that trap?
00:34:04
I think I'm extremely grateful. They're there were a bunch of
00:34:08
investors that backed me and supported me when it was not a
00:34:13
popular thing to do. And I will be forever grateful
00:34:18
to, you know, to yc2 Gary tan to Mamoon @k p and all those folks
00:34:29
and yeah and other sort of new investors like CO2 and folks
00:34:34
like that. I think in general, like most of
00:34:36
the investors who really understood what happened?
00:34:40
Did not have any issue with it and and the investors that went
00:34:45
really Upon diligence sort of came out of that.
00:34:48
Be like, we have no concerns did Ben Horowitz, try and scare
00:34:52
anybody off. There were definitely like
00:34:55
people. There were definitely, I don't
00:34:57
know about been specifically, but certainly certainly.
00:35:02
There were, there were people like, like Saks or others who
00:35:06
called up, you know, people in that process and said, don't
00:35:09
invest. And sometimes they did that
00:35:12
success preemptively. Like not as a reference
00:35:14
priapism. Like, oh absolutely would go
00:35:16
around preemptively. Yeah, no, I mean, there was a
00:35:21
firm that I had a GP meeting scheduled with on a Monday and,
00:35:27
you know, I think David called him right before and on Sunday,
00:35:29
they called me up and said up like so and so just talk to
00:35:32
David. He's poker buddies with him and,
00:35:37
you know, sorry I've got to cancel the GP meeting.
00:35:41
I'd like to just, you know, for change course for just a second
00:35:46
and note that you have been starting companies for a really
00:35:49
long time. I think the first company you
00:35:51
started was in 2006. Is that correct?
00:35:55
Yeah, that's right. And it was, it was a financial
00:35:58
services start up of some sort Sig fig.
00:36:01
And so was many things over the course of time that I was there.
00:36:05
You know, your first company wasn't 2006 and I note.
00:36:08
There's an interesting description of your History in a
00:36:12
profile of you from last year. Basically that you start your
00:36:15
first company in 2006 and you're pushed out of the company
00:36:19
because you have a falling out with the co-founder and then
00:36:24
zenefits you leave that company obviously after a falling out
00:36:28
with both investors and with David Sachs and so in this in
00:36:36
this latest iteration of the company or starting, can you
00:36:39
talk a little bit about what it is?
00:36:41
As you learn, you know, you know these these tough Departures,
00:36:44
what it what what has what have you change about yourself in
00:36:48
response to? You know, these startups that
00:36:52
have come and gone for you? You know what, what how do you
00:36:55
see things differently than you did in 2006 or even when you
00:36:59
started zenefits about yourself? I think it's really hard.
00:37:07
I think the only the only thing. I mean I've obviously I've Had
00:37:11
some big successes in my life. And I've had a lot of pretty
00:37:13
catastrophic failures and a lot of big ups and downs.
00:37:16
And, and I think like the only people in Silicon Valley, always
00:37:20
sort of want to sort of mythologize failure.
00:37:24
And the only thing that I've ever really learned from
00:37:27
failure, is how much it sucks and how much you never want it
00:37:30
to happen again and beyond that, I'm not sure that there are a
00:37:36
lot of meaningful deep lessons from it.
00:37:40
To be totally honest. Cool.
00:37:42
All right, this is awesome. Thank you for doing our first
00:37:46
experiment. I think it's like a fascinating,
00:37:50
you know. Yeah.
00:37:52
It's an interesting story and I'm aware has Rippling a raised
00:37:58
secret new funding around. Or what's the secret do?
00:38:01
Funny rods. What's a what's a funny?
00:38:04
It's the latest valuation weapons down.
00:38:28
Cool. Thanks, guys.
00:38:29
Parker. Thank you.
00:38:30
And I hope you have a good time. Beautiful part of me.
00:38:33
Oh thank you. Cool.
00:38:34
And thanks for hanging with a bunch of really annoying
00:38:37
questions at the end. No, no problem.
00:38:39
I'll touch you guys later. Hey everybody, this is Tom here,
00:38:47
quickly, before I sign off, I did want to make sure that I
00:38:50
credited, the great music that you heard in our intro and
00:38:53
outro. That is by Young Chomsky who is
00:38:57
at Young Chomsky on Twitter, very graciously.
00:39:00
Let us use his previously composed piece about Silicon
00:39:03
Valley as our music. So thanks so much to him and see
00:39:08
you guys all back here next week.
00:39:10
Goodbye, So work on Sally. Goodbye.
00:39:21
Goodbye. Goodbye, goodbye, goodbye.
00:39:24
Goodbye. Goodbye.
00:39:21
Goodbye. Goodbye, goodbye, goodbye.
00:39:24
Goodbye.