Found: Has Rippling won? with Parker Conrad from Rippling

HR software is big, big business. And no one understands that better than Parker Conrad the CEO and co-founder of Rippling, a global HR company that offers global payroll, onboarding, time tracking, benefits management and more. This week, Equity is bringing you an episode of our sister show, Found. The Found crew talk with Conrad about what goes into building a leading HR tech company—from what it’s like building out features companies love, to dealing with fierce competition in this ever growing landscape. Conrad also gets into the power imbalance that can arise between VCs and founders and the drama at his previous company that inspired him to build Rippling. Found posts every Tuesday. Subscribe on Apple, Spotify or wherever you listen to podcasts to be alerted when new episodes drop. Check out the other TechCrunch podcast: Equity . Subscribe to Found to hear more stories from founders each week. Credits: Equity is produced by Theresa Loconsolo with editing by Kell. Bryce Durbin is our Illustrator. We'd also like to thank the audience development team and Henry Pickavet, who manages TechCrunch audio products. Learn more about your ad choices. Visit megaphone.fm/adchoices

• 0:01Speaker 00

  If the future of work trend proved anything, it's that HR software is big, big business. Our guest today, who you may or may not have heard of, can speak to what goes into building a leading HR tech company. From what it's like building out features companies love, to dealing with fierce competition in this ever-growing landscape.

• 0:19Speaker 01

  You're listening to Found, TechCrunch's podcast that brings you the stories behind the startups. And today, we're talking to Parker Conrad, the CEO and co-founder of Rippling, a global HR company that offers global payroll, onboarding, time tracking, and much more. I'm Becca Scutac, and I'm joined by my fabulous co-host.

• 0:36Speaker 00

  Dominic Midori Davis. And of course, before we get into our conversation with Parker, we have our two truths and a lie, so listen carefully to see which one of these statements isn't true. Is it that Parker is a serial founder? That Rippling intentionally started with no one on its operations team? Or that Parker thinks founders should stick to doing what they love?

• 0:52Speaker 01

  Ooh, listeners, you will have to keep listening, and I will add that there is some fun stuff toward the end of the conversation you are not going to want to miss. But before we dive into that conversation with Parker, just a reminder to rate and review the show. You can do so wherever you are already listening to this episode, so it should be super easy on your end, and it is very helpful on ours. So, without further ado, let's get to our conversation with Parker.

• 1:20Speaker 01

  Hey, Parker, how's it going?

• 1:21Speaker 02

  Fine, thanks. How are you?

• 1:22Speaker 01

  I can't complain. Hanging in there. Thanks so much for coming on the show.

• 1:26Speaker 02

  Yeah, thanks for having me.

• 1:27Speaker 01

  And now, listeners, Parker Conrad is probably not an unfamiliar face to many of you, as well as the companies we're talking about today. But for those of our listeners who maybe aren't aware about what you are up to currently, maybe you want to start by telling us a little bit about Rippling.

• 1:41Speaker 02

  So Rippling is an all-in-one system for a bunch of different back office functions, for payroll, HR, finance, and IT. The idea is that we give everyone a single system to manage all this stuff with one set of data about your company and your employees that's used seamlessly across all these different applications.

• 2:01Speaker 01

  And I know Rippling, of course, is not the first company that you've started, but I was going through some of your history on LinkedIn, and it looks like the first two companies you founded were definitely more financial services focused, or more focused in that space in general. And then thinking about Zenefits and thinking about Rippling, there's obviously that HR piece to it as well. And so I wanted to ask you, what prompted the switch? And why did you sort of... Change your career to focus on this more HR space that you have for the last two companies?

• 2:32Speaker 02

  So actually, the first company that I started, it was one company with two names. So it started out being called WIC Invest and then it was called Sigfig. It was a consumer oriented product. It still is. It's gone through a number of different iterations under my co-founder, Mike Shaw. I mean, while I was there, it was just a complete struggle. It was a company that was, when you hear these experiences from entrepreneurs, it was like seven years of slow grinding failure. And I left that company with a couple of like things that I had a lot of conviction about. And one was, I didn't want to work in consumer because consumer felt random. You know, consumer felt like things kind of took off or didn't. And it was hard to understand, predict what would or would not take off. And I just, I couldn't stand the sort of pressure of that.

• 3:17Speaker 02

  So I felt like building business software, you had a little more control over the outcome. The second thing, when I was at Sigfig, we pitched 75 different investors over the course of like two years, basically just constantly trying to raise money. And we were never able to raise money. And we would meet with these investors, you know, they would kind of look at us and ask us like, "Hey, does this have a social local mobile angle? Or what's your Facebook app strategy?" Or, you know, their whole series of sort of buzzwords that at the time, those were the generative AI, the augmented reality, the web three sort of buzzwords of their time. And what I noticed is like what investors asked us about, and the answer was always like,

• 3:58Speaker 02

  "No, there's no social mobile angles. This is an investing app. What are you talking about?" But what they would ask us for was different every six months. And so these things kind of had a life cycle to them, where investors were very focused on this one thesis for like six months. And then they were like on to the next thing. And I remembered thinking like, geez, like it's impossible. It just takes too long to build a company and it's impossible to build one within the sort of attention span that investors have on any of these topics. And so what brought me to this was a few things, like first, My co-founder and I at my first company dealt with a lot of this stuff ourselves. And so Zenefits started out really focused on health insurance.

• 4:41Speaker 02

  And when a new employee joined Zenefits, I had to stop off at Kinko's to fax in their insurance application because there was no other way to get people enrolled at the time. And we didn't own a fax machine because it was like 2008, not 1988.

• 4:56Speaker 01

  Right.

• 4:56Speaker 02

  But things were still stuck in that timeframe. So, you know, I thought, geez, well, all this stuff should really be online. And I feel like I understand the pain point. This is a problem that I have, a lot of other companies surely have it as well. And one of the things I realized at the time is that there was a lot of money in insurance specifically, and that that was a way for us to build a business that would be less dependent on investors. And so when I applied to Y Combinator with Zenefits, the thinking was, man, geez, if I can just figure out a way to raise a few hundred thousand dollars from investors, then we can sort of make this thing work from there on its own, from the cash flows of the business. Obviously, we ended up raising a little bit more than that.

• 5:39Speaker 01

  Right.

• 5:39Speaker 02

  That's largely because it turns out that those are exactly the types of businesses that investors want to invest in. And so my first company, I could never raise money. And my second company, it was just incredibly easy. You know, the capital was always very cheap for us.

• 5:54Speaker 01

  And I know, of course, Zenefits and Rippling are not focused on the same area, but they definitely would fall under the same flavor in a way that maybe a large company would have products for both of these areas. So I'm curious, when did it make sense to leave and start Rippling?

• 6:09Speaker 02

  Well, I didn't have a lot of choice in the matter. So I was really forced out of the company. You know, I started Rippling very purposefully believing and wanting to convince everyone that Rippling was the company that Zenefits would have become had I stayed there. Early on, that was a big part of my motivation in starting the company. I think there are some critical differences, but when you start a company in sort of a related industry, again, one of the great things you get to do as an entrepreneur is you get to sort of undo all of the mistakes. Stakes that you made the last time around, you know, things that you know, you wish you'd built in a different way or done differently, or you can fix a lot of that stuff. And so there's a lot of that, obviously, at Rippling.

• 6:53Speaker 02

  But the biggest difference between the two companies is that at Rippling, we really came to see employee data as not just this thing for HR software, but as a primitive that was really critical for business software in a much broader sense. That many of these different business software applications, and especially and importantly, all of the ones that are not traditionally thought of as being in the HR department. They all really need to understand who your employees are and their job and role and function and their relationships to one another. So the need to kind of maintain that directory of information about your employees in all of these other SaaS applications

• 7:33Speaker 02

  is this hidden tax on businesses that it creates an enormous amount of administrative work for them to update all of it. But more importantly, if you could sort of take it for granted, that every business software application that you use deeply understands your org. You could build that software in a different way. You could build it much better. And there are many different parts of like the foundation of how business software applications are built that rely on this understanding of your employees that work much better if that understanding of your org is embedded in the software. And it's things like permissions are much better because permissions usually are a function of your role.

• 8:12Speaker 02

  Like at TechCrunch, I'm guessing editors have different permissions than reporters and HRVPs have different permissions than managers do. It's things like approvals. When things need to be approved, who needs to approve them? That all depends usually on what someone's role and job and function is within the organization. The same thing is true with reporting and analytics, where if you can sort of look at data by job and role and function, you know, look at like your interns versus your full-time employees, your people in San Francisco versus people outside the United States. Those are often ways that you want to cut and slice and dice data. Understanding all of that org data makes your analytics better in every business software application.

• 8:53Speaker 02

  And then there are a bunch of other things like that, but that's become the sort of real thesis for Rippling is building business software out of these sort of underlying Lego blocks that each have this deep understanding of the employee data within the org. Definitely.

• 9:08Speaker 00

  Yeah, and I was actually gonna ask about that because I was reading the investor memo and you were talking about how building across different sorts of products, or I guess like "compound" was the word used, and how that necessarily isn't supposed to work, but that was the strategy you took. And so I thought that was really interesting and I wanted you to kind of explain a little bit more about that and why you decided to build throughout all these different verticals rather than, I guess, focus on one specific thing.

• 9:33Speaker 02

  So I think the conventional wisdom for how to build business software has been that you should focus very narrowly and you should build this one very narrow thing and go very deep. And I think that as a result of that conventional wisdom, we've been building business software wrong for the last 20 years. Because the sort of side effect of building these very narrow applications is that, one, that businesses now have to manage 100 different separate pieces of software to run their business and there's a lot of inefficiency in that. But, two, the applications that are extremely narrow, it's really hard for them to go as deep on a set of capabilities that end up being important across systems. And so you tend to get things that go very deep on this one tiny little niche thing,

• 10:18Speaker 02

  but all of the basic framework of how business software operates is sort of lackluster. You know, their reports are not great, the permissions are not great, the approvals are not very expressive, the policy conditionals are really limited, the workflow automations aren't there. And so I think that actually the secret to building better business software is building a system where you can build multiple parallel business software applications that are all like natively built into the same system. And the advantage is that there are lots of reasons why that should not work, that are very well understood. There are five reasons why it wins. And the five reasons are, first, that these applications

• 11:03Speaker 02

  are better integrated with one another. Second, that they're more integrated with usually some underlying data. In our case, that ends up being data about employees in the organization. You can build them on top of this reusable set of platform componentry. So There are a set of really important things that you can build once that then get reused by 20 different applications. And that allows you to build those set of components much better, to build them much more deeply. So, you know, a great example of that is analytics in Rippling. When we build analytics, we're trying to compete with BI tools like Tableau. When our competitors build reports, they're like, ugh, our customers are asking us for reports.

• 11:46Speaker 02

  Like, ugh, let's like give them a CSV extract or something like that. And then the fourth one is that you get a common user experience. So you know how to do everything in all of these different applications. And then lastly, there are a lot of pricing advantages because if you can sell people a bundle, you can often end up in a spot where they save money buying software, they pay less, but you still make more because you're getting a greater share of their wallet over time.

• 12:11Speaker 01

  That makes a lot of sense and it's so interesting to hear you talk about that now because I feel like this is a conversation that definitely exists in vertical software, but it's happening across the AI space right now a lot too of companies being like, doesn't make more sense to go really deep, build AI into a vertical SaaS play, you know, have these really specialized large language models for these niche areas verse, okay, we're trying to serve everyone at the same time. We just had Cohere on last week. He was talking a little bit about that for their own decision making. So it's interesting to hear you say that in the vertical software space too. It seems like AI is dealing with the same conversation right now.

• 12:46Speaker 02

  I think there's a pattern when there are big technology shifts where often there's a speed to market advantage that you have if you can go very narrow because you can sort of peel off like one specific thing and you can launch very quickly and build this one thing. I think what led to this sort of Cambrian explosion of SaaS applications starting 15 years ago was really the shift from on-prem to the cloud. And that the fastest way to build out cloud native versions of different business software functionality was to sort of peel off isolated features from these more all-in-one

• 13:25Speaker 02

  Megopoly systems like SAP and Oracle and Microsoft, quite frankly, and turn them into standalone SaaS applications. And then that's sort of the fastest way to kind of get it done. But then over time, as the market gets saturated, look, 15, 20 years ago, you could do anything in the cloud and it would be reasonably successful and you'd be the only one doing it in that narrow area. Now, every single software vertical has like a dozen competitors. It's extremely crowded. Now, companies have this problem where they have like 100 different tools they need to buy.

• 14:00Speaker 00

  Right.

• 14:00Speaker 02

  Actually, now, the market dominant approach is to push a little further out and say, let's build the system that sort of recombines all of this and gives people sort of one system that combines a lot of these capabilities and wins for the reasons that I described earlier, you know, the integration, the shared componentry, you know, those sorts of things. And I wouldn't be surprised if something like that happens in AI, where people buy their bunch of different point solutions for different sort of use cases. And over time, it sort of consolidates back into having more singular systems within your company that can bring AI capabilities to bear across a lot of different functions and use cases.

• 14:42Speaker 00

  You spoke with our boss, I think a few months ago, where you spoke about your AI strategy. And I thought it was really funny how you said like you were skeptical of things that were like super trendy in AI. And you were like, I can tell you what the AI strategy is not. And so I kind of wanted to go deeper with you on that in terms of what skepticism do you have about AI right now? And why Rippling might not be implementing a bunch of AI right now?

• 15:03Speaker 02

  One of the things that happened with AI, there's this novelty element that I think is really confusing a lot of businesses about product market fit, which is that, oh my gosh, like, you know, the computer can like write back. It can like respond to you and interact with you. And that novelty is so powerful that everyone's fascinated by the fact that these systems can write. And so everyone's implementing chatbots into their software. I just think that no one actually wants to chat with their HR software beyond the sort of novelty of like, oh, my gosh, it responds to me.

• 15:34Speaker 00

  And confirm.

• 15:36Speaker 02

  And so I think a lot of companies, there's this sort of superficial. wrapper around GPT that a lot of companies have implemented. And a lot of existing businesses are what I call AI washing their business because they're like, gosh, you know, geez, if I'm a SaaS company, my multiple is seven X. But if I change my name to whatever my name was before dot AI, my multiple is like 50 X. And so everyone's like trying to superficially sprinkle in some AI pixie dust into their products. And so I think there's just a lot of really insubstantial stuff out there in the AI world. That's not to say that AI is not going to be transformative. There are a lot of capabilities that are really important.

• 16:18Speaker 02

  It's just I've been like unimpressed by many of the ones that I've seen. You know, our view on this is that the things that are going to be most powerful about the sort of current version of these capabilities is not the fact that they can write, but the fact that they can read. And their ability to like absorb massive quantities of unstructured information about your company and how that can help you run your business from there. And a lot of it, I think, in my view, ends up being about sucking in enormous amounts of information and then flagging anomalies for you because that sort of solves for the problem that these things are today only probabilistically and not deterministically correct.

• 16:57Speaker 02

  And so that's okay in a world where what the systems are doing is flagging anomalies for management. So they can say like, look, you don't have the time to sort of go and exhaustively see everything in your company this month, but if you're only going to look at five things, like these are the five that you should look at. And, you know, if one of those five is like, you know, actually, that's not totally true or accurate. That's okay because, you know, it's sort of flagging it for you to review versus taking action on it. And I think that like in our world, a lot of the ways that AI systems could take action is really dangerous until it gets to a point where it's more accurate than humans are. I'm a little skeptical of sort of the idea of agents for at least a little while.

• 17:41Speaker 01

  Becca and I were talking today, actually, because we're trying to figure out, like, do you think AI is in a bubble right now? We were trying to think, like, is AI in a bubble? What is a bubble? Like, people have been talking about it, but is it really?

• 17:51Speaker 02

  The way I think about it is the build out of, you know, fiber and communications capabilities in the late 90s and some of like the early internet companies and sort of, there was very clearly a bubble in the sense that there were many, many companies that were not going to make it. And there was an enormous amount of capital that was incinerated. But also, like, you look back on that time and you're kind of like, well, obviously, the economic impact of the internet was enormous. It was just very hard to see early on exactly how that would shake out and like which companies it would actually be. To the extent I have like any type of critique of this, it would just be that like, I think it's really hard for anyone to figure out. They sort of over index on the first mover advantage thing.

• 18:35Speaker 02

  I don't think that like the companies that are like first to market with an AI thingy are usually going to be the ones that end up winning. It probably ends up being, like, if you think about mobile, when the iPhone first came out and when even when the App Store first came out, no one was thinking that one of the really big outcomes as a result of that would be taxis. That would not have crossed anyone's mind, I think. But that ended up being one of the really large outcomes or the really, the largest industries to be impacted by this. And so I think the same thing's true with AI, where it's just going to be like hard to tell where value is going to accrue when the dust settles. And like, I have my opinions about it, but it's sort of hard to see from here.

• 19:17Speaker 01

  Definitely. And switching gears a little bit to something that you had mentioned earlier, you have started multiple businesses. Some things that you did the first time around, you have kept through and brought along with you to these other companies that followed, but some of it's not. And so I'm definitely curious what your advice is there? What practices, policies, approaches did you keep when you went to start Rippling that you had used in the past? What were you like, eh, I think I can do this better this time around?

• 19:45Speaker 02

  Well, I think a lot of the stuff that we did differently was like, it was very much about just product and technology stuff. But like, a lot of companies, when they build HR software, one of the mistakes, as an example, that they make is they have like a notion of an employee in the software. And then you have customers that want to hire contractors and you're like, well, Contractors are not employees, legally, they're not. They're not employed by your organization. They're like, well, contractors are not employees. So we're going to have a completely separate concept of a contractor from an employee. And then what happens over time is like, you start to realize that contractors and employees, the way businesses actually treat them in practice is often more similar than it's different. You think, well, you build time tracking for employees, but then you're like, sometimes

• 20:28Speaker 02

  people want to track time for contractors and pay them hourly. And you have basically all of the things that you need for employees, you end up needing for contractors as well. And so having just like at the data model level, even though contractors and employees are legally very different, in software, treating them as two different types of the same thing ends up being really powerful. And if you don't get that right on day one, it's like really hard to fix later on. So there are many little things like that on just understanding how the product and the business works. The biggest one, though, in terms of the way we operate the company, at Zenefits, we really grew the commercial operations of the business ahead of like our underlying technology capabilities.

• 21:09Speaker 02

  And we ended up doing a lot of things with ops and doing it manually. And quite frankly, I think that was in retrospect, the biggest mistake of the company. And I see a bunch of businesses today in our industry that are making that mistake all over again. What we did at Rippling is we sort of said that there were going to be really no ops in the company. And so from very early on, we didn't hire anyone in ops. We didn't have anyone with that title. You know, if there was something that needed to happen operationally to work for a customer, like one of our engineers had to do it. And that meant that they automated it very quickly. You know, things moved into software very naturally because like they didn't want to have to do it over and over again. Even to the extent that customer support, we were about 5 million in revenue before we hired our first customer support person.

• 21:54Speaker 02

  And until then, Wow. I did about usually 20 to 25% of the support tickets each day myself. And the rest of them were done by the engineering team. So literally the engineers would jump in and answer support tickets. It sort of meant that when we launched, I mean, today, we're not as religious about this, like we do have some ops functions within the company, but they're much smaller and more focused than they otherwise would be. And the culture of the company is always like, everything has to be software first and software end to end. And that's really important for a number of reasons when you're building a business like this.

• 22:32Speaker 01

  And I did want to ask you a little bit about the competition in this space, especially because you mentioned a little bit yourself in ways that you guys are kind of building differently than some of your other competitors. I know, especially HR tech, you guys, of course, were founded before the pandemic, but it's kind of exploded, not in the same way AI has, but it does have a similar flavor in some ways. There's a lot of companies that have gotten really big in the space in recent months. And I know you guys have more direct competitors, some more similarly flavored competitors, but I am curious how you think about it because we definitely see some interesting headlines around you guys and some of your competitors. So I'm curious how you guys think about approaching that and how you guys think about standing out in a space that has gotten kind of crowded.

• 23:12Speaker 02

  I think it depends. I mean, so Rippling, we've got a very weird competitive set. You know, we often, like when we're competing for a client, usually things end up being often very head to head against sort of like core payroll and HR systems. But even that, you know, varies by geography and by customer size. And so for really small companies, we might be competing against Gusto or Intuit. As companies get a little bit larger, it might be Paylocity or Paycom. As they get larger still, it might be like UKG or Workday or something like that. But then if it's in the UK, we're probably competing against Sage. And in other markets, you know, in France, it might be Cile or Payfit. In Australia, it's Employment Hero. So it's very different by geography and by customer size.

• 23:56Speaker 02

  But then, you know, we do a lot more than just core HR. And so, you know, if we're talking about device management software, we might be competing with Jamf or, you know, there are a series of other companies that do device management software. You know, on the identity side, same thing in our IT cloud. In finance, we might be competing with Ramp or Brex or Nivon or even Concur. And so who we compete with depends a lot. It's very situational. And in some sense, I think we have such a broad competitive set that Rippling isn't really competing with any of those companies directly. Like, yes, in any one deal, it might be, you know, there's a sales team at Rippling that might be in like deep competition with one of those companies. But overall, it's kind of like, hey, the competitive set.

• 24:41Speaker 02

  It's much more about having a system that sort of wraps up all of this for your company. Yes, we have incredible win rates head to head against greenhouse and lever as ATS systems and against deal and remote as sort of global EOR systems. But like usually that's happening because you're like, hey, I don't really want to have stuff to pay global employees in a different system than I just have, you know, all of my core HCM software. And so it just makes sense to kind of have it all in one place. And that's really the big difference.

• 25:13Speaker 00

  And this is a question I feel like I have to ask. This might be like a personal thing for me. So every time I'm taking the New York subway, I see Rippling ads everywhere. For months, I've been thinking, what is this company's marketing strategy? I see you everywhere. And so now, now that you're here, I feel like I just need to know, like, what is the marketing strategy? Or maybe like some early marketing tactics you thought of? Because I truly see you guys everywhere.

• 25:36Speaker 02

  That's awesome. I'm definitely going to get off this call and tell our marketing team, you know, give them like a thumbs up. I'm glad to hear that. We haven't done like a ton of outdoor advertising. And so I think there happens to be a campaign that I think it might still be running in New York, I'm not sure. But, you know, it's just kind of like right now in New York, that happens to be live. But it has not been a huge commitment. You know, we have not done a ton of branded or outdoor advertising as a business. And like, we actually see that vis a vis a lot of our competitors, that when we go into, you know, even just like a payroll deal, for example, our win rates are very, very high. But one of the things we have to overcome is that when we talk to, if you're in finance

• 26:15Speaker 02

  or HR or a business between, call it 100 and 1,000 employees in the United States, the odds that you have like heard of pay lossity, I think it's like 40 or 50% if you ask people unprompted. And the odds that you've heard of Rippling are like, you know, single digit percentage points, like very, very, very low, actually. And so that's something that we always have to overcome in deals is that our marketing investment is much lower than most of our competitors. And so there's much less aided and unaided recall of, you know, who we are and what we do. And so we're experimenting a little bit with that in different markets. But Rippling is a company, we spend an enormous amount of money on R and D, and we spend much less on sales and marketing than most similarly sized businesses.

• 27:00Speaker 00

  I was going to ask if there was a plan to increase the marketing? Or like, did you have plans for like this big blowout marketing bash? Or you're just going to stay focused on like research and development and stuff?

• 27:11Speaker 02

  The thing that's always really been outsized about the company is the R and D spend. And that goes into really making first and foremost, the existing products really excellent and better tomorrow than they are today. But second, we launched a lot of new products. So we have about five new applications in development right now as a company, two of which will launch probably September, October. And we also have two new clouds. So right now, Rippling, we have three clouds. We have HR, IT and finance. There are two new ones that we're building, one of which will launch towards the end of this year. And then another one that's a little bit further out, but we're constantly building more and trying to do more for customers. And you know, that really requires a deep R and D investment.

• 27:54Speaker 02

  And on the sales and marketing side, we have unusually efficient sales and marketing. So if you look at the median public software company, one of the ways that companies measure their sales and marketing efficiency is they look at CAC payback periods, which is how many months does it take you to earn back the amount that you spent to acquire a customer? And for public software companies, depending on how you measure it, the median is somewhere, I think it's either 28 or 33, depending on some of the elements that you include. For Rippling today, it's 17. And so it's much, much lower than the median public software company. And that's in part a reflection of the fact that we've, you know, just been able to be really efficient.

• 28:34Speaker 02

  You know, we've been growing pretty well, but have not been doing it with like a brute force, spend a lot of money approach. But I'm very glad that our ads on the subway system are very visible.

• 28:43Speaker 00

  No, literally, I was like, do I need to sign up for Rippling? What is this? I was like, Google.

• 28:47Speaker 02

  For sure. Absolutely.

• 28:50Speaker 01

  No, I definitely wanted to ask you too, based on what you said earlier about that transition of leaving Zenefits, going to Rippling, thinking about where Rippling is now. You guys were recently valued at $13.5 billion. You've grown this huge company. And you mentioned this is sort of what you always imagined Zenefits would be. How do you feel now, looking back that you have been able to successfully build what you set out to do in the first place, but it's on your own terms, it's a different situation? Like, how do you think about that personally for yourself?

• 29:20Speaker 02

  I think it's like a little too early to declare a mission accomplished. Look, we've been extremely fortunate, extremely lucky that at a time when a lot of software businesses are not growing super quickly, like we've been able to like maintain our growth rates and do really well. But we're also, you know, we're not profitable yet. Like, we don't have any intention to be in, call it, the next year or so. And we're obviously still a private company. So I think it's still in this phase where it's promising and working well today, but like nothing's guaranteed and the jury's still out. I think we've got to be vigilant about what we need to get to. And, you know, it's too early to sort of celebrate.

• 29:58Speaker 01

  It's gotta feel a little satisfying though, right?

• 30:00Speaker 02

  I mean, the things that I really enjoy, I mean, it's obviously always better for things to be working than not. I think you always have to stay very paranoid about how it might break. The things that I find like most satisfying, that I enjoy the most about Rippling, I really like the people that I work with. You know, a lot of the people on sort of the exec team or the sort of broader leadership team at Rippling are people that I know really well, that I know really well from like past experiences or have just gotten to know really well over the course of the company. And so it's a group of people that I like coming in to work with every day. A lot of people with a good sense of humor, a lot of people with chips on their shoulder and they want to prove something too. And I feel like I get to work with some of the most talented people out there and that's just a lot of fun.

• 30:42Speaker 02

  Like, I feel very grateful that I get to do that. And I really like the product that we're building. One of my favorite things about the company is that I am the main user of Rippling at Rippling. Rippling's now, I think it's about 3,200 people across 15 to 20 different countries. And I'm the only person in the system that can do a whole bunch of critical things. Like, I run payroll for all 3,200 employees in, you know, every country. I manage benefits for the company. I manage a lot of policies around device management, systems access. I still approve every expense reimbursement over $10 in the system. So I'm like really using it day to day. So I appreciate the product that we're building.

• 31:24Speaker 02

  And I think that's a really great feedback loop because it means that if things aren't working well or if it's a pain to use, like it gets fixed very quickly because I'm using it day to day.

• 31:33Speaker 01

  That's so interesting because we've definitely talked to a lot of founders on the show about the role that their job becomes as the company gets bigger. And I know we had a founder and CEO of Glean, Arvind, on the show, for example, and he was saying, he was like, well, yeah, as the company grew, like, I was getting further and further away from the product, which is like, that's what I really loved. And like, founding a company kind of, you know, comes with all of those other pieces. And so it's so interesting to hear that you're still that directly involved in the nuances, in the details. And obviously, there's definite pros to that, but that's probably a huge time suck. Why do you think that the pros outweigh that kind of a con that comes along with having that level of insight?

• 32:13Speaker 02

  You know, me using the product every day is the thing that I think gives me a right to an opinion about like, what we should be doing. I think it's probably the most important thing that I do. And it's like, day to day, it doesn't feel like that. You know, it feels like, oh, you know, I've got this backlog of administrative work to do often. Each time I do it, there are frequently slack pings that are going out to individual product and engineering teams about, hey, this didn't work quite right, or this was slower than it needed to be, or, you know, the experience wasn't clear. And that sort of drives, I think, a lot of iteration on the product side. We have a set of like, sort of management leadership principles at Rippling. And the first one, and the one that's like nearest and dearest to me, is go and see. And the idea is that like, a

• 32:55Speaker 02

  lot of companies think that leaders should like manage top down. And so if something's not working, you sort of talk to the people one level below you, and you sort of have them cascade it down into the org. And, you know, maybe at some point, you assess whether you have the right person in that seat, you make a change. But it's fundamentally about managing someone like one level down from you and having them go. And I think that that never works. The only way that I've ever been able to solve problems is to go all the way to the ground on this. And if you've got something that's going wrong in sales, you've got to go, you know, watch the last 20 sales calls and gone, and see what's happening with interactions between reps on this team where things are not working,

• 33:39Speaker 02

  and customers, and go and see yourself. And if something's not working in support, You go read the last 50 support tickets or you go work as a support rep for a day or two. And usually like the problems become really apparent from there. And it's very, very hard to manage through data and dashboards. Like you've got to go to the anecd data rather than the data to sort of like understand what the issue is. So I try and spend my time sampling anecd data instead of like managing through like data and dashboards. That's important to me. The other thing, you know, sadly, the answer is almost never to do what you love. There's a school of thought around that of people who think that, look, as a founder, you should really find the things that you love and you should do those things.

• 34:23Speaker 02

  And you should hire other people to do the things that you don't love to do, that do love those things. And although that sounds very nice, I can tell you that it's bullshit. And like what you should do is you should find if, you know, for people who are founders or listening to this, you should find the things that you hate within the company and you should run towards them and bear hug them. And just really take them on and focus on those things because those are the things that are probably going to kill you. And those are the things that you're probably avoiding because like it's uncomfortable to sort of focus on them. I've definitely seen that in myself and like the things that you really hate, like that's where you should spend all your time, unfortunately.

• 35:01Speaker 01

  Yeah, no, that makes a really good point. And I also definitely want to give you full credit to coin the term anecd data because I really like that. And I think that does not get as much credit as it should. We're running up against time, but there's one thing we had to ask you about just based on when we were having this conversation. We're not going to rehash the details, but there are a couple of weeks ago, there are some tweets flying around between you and some folks in the venture community, we'll leave them unnamed. I'm sure everyone listening already knows exactly who I'm talking about. But it made me think about the fact that we try to talk to founders and VCs as well about hard issues in the industry all the time. And there's always this sort of like bubble of quiet. No one wants to appear difficult. No one wants to appear like they have too strong an opinion on X, Y, and Z.

• 35:46Speaker 01

  And so I think my first question is, what prompted you to say something? And then building off of that, when does it make sense to put yourself out there? Say something publicly about a situation you don't think necessarily is right. What can founders take from that?

• 36:01Speaker 02

  I've always been pretty transparent about the situation at benefits. I think the one exception sadly for me was in the sort of 12 months following my departure where for a bunch of legal reasons I couldn't be. And I think, you know, ever since then, you know, a lot of the press post benefits was this sort of very one sided thing that was being driven largely by David and his colleagues. And I sort of reached a point where I was like, look, there's nothing that this guy has like said about me or that he could say about me that he hasn't already said, or that he would take from me that he hasn't already taken. And so I was just kind of like, I'm not going to be held back

• 36:45Speaker 02

  by that. And, you know, have had a lot of very sort of straightforward conversations that really get into a lot of the nitty gritty about this on, you know, a couple of different podcasts. And, you know, we probably don't go into all the he said, she said on it about that here. Yeah. So I've always been pretty open about it. And I think the tweet that I sent was relatively mild. It was sort of what I would describe as kind of like a, you know, a sort of like t he kind of, you know, like, because, you know, here's this guy going off about, you know, like coups. And it just sounded so ridiculous. I was like, let me tell you, this guy knows about coups. And it got much more of a reaction than I was expecting. Like, I did not expect it to blow up.

• 37:24Speaker 01

  I think I screamed when I read it. Like, actually.

• 37:27Speaker 02

  Did you really? That's awesome.

• 37:28Speaker 01

  I was like, oh, no, the girls are fighting.

• 37:30Speaker 02

  Yeah, I mean, it was sort of, you know, it was just mildly insucient and sort of a little bit funny. I mean, it was not, but it wasn't, it wasn't sort of over the top. And then I think a lot of stuff went very, you know, David certainly responded. It's very much David's view on how to handle these things is to attack, attack, attack, attack, and when in doubt, attack some more. And so I think that was him sort of pulling out that thing. And, you know, it sort of exploded for a few days. And then I think fortunately kind of died down a little bit after that.

• 38:00Speaker 01

  Yeah. And just a little follow up to that is, what is your advice for founders on stuff like that? I've seen so many founders keep their thoughts to themselves, even on things that seem to be pretty detrimental to them or experiences that they've had. When does it make sense to say something? Even as what you said you did, you, it was kind of tongue in cheek.

• 38:19Speaker 02

  You mean like specifically about investors and things like that?

• 38:22Speaker 01

  Yeah, like things they're seeing in the market. Cause I know we hear so much about bad behavior and then you try to talk to someone about it and no one will, everyone's afraid to, which makes sense.

• 38:31Speaker 02

  No, it's really hard. And I think there's a structural problem here. And one of them is, you know, just for people in the media, venture capitalists are usually seen like they are repeated players in the game. And so it's just very natural for people in the media to have close relationships with the VCs who, you know, just see like all of the companies and see them over and over again versus entrepreneurs where it's kind of like they only see their own company. And sometimes, you know, they're kind of here today, gone tomorrow. And so I think that a lot of the media coverage about tech and the venture ecosystem has this sort of implicit, kind of reflects the views of venture investors more than the people starting companies as a result of that. I don't know what the solution that that is, but it's an observation that I've had.

• 39:15Speaker 02

  There's that issue. And then I think, look, when I was forced out of Zenefits, there was a very clear, Ben and Lars, who are the two VCs on my board, were in this board meeting and it was very clear. They were like, if you don't leave, we're going to go to war with the company and you'll never work in this town again. You know, like, and I've since spoken with a lot of founders that have had similar interactions with investors where, you know, they sort of come to you with an offer you can't refuse kind of thing. You're terrified on the way out of these things. I'm like, oh my God, am I ever gonna, what am I gonna do? You know, cause they're, historically, there hasn't been like a career path.

• 39:53Speaker 01

  Right.

• 39:53Speaker 02

  My first job, when I left my first company, I actually really didn't want to start another company. Like I applied for a bunch of other jobs, like didn't really get any job offer. It was sort of like, I was not really qualified to do anything except like starting another company. And that's changed a little bit now, but I think there's a lot of like fear that people have on like, oh shit, like what's next? Like, what do I do? I think it's a very sort of imbalanced relationship from a power perspective as a result of that for a lot of founders. And that's why I think people clam up and like, don't want to talk about it and don't, you know, I don't want to piss anyone off. And my view is like, look, I just got attacked by this group of people relentlessly for

• 40:35Speaker 02

  six to nine months, just over and over and over and over again, that I was kind of like, look, you know, that's all already happened. There's nothing, nothing more that they can say about it.

• 40:43Speaker 01

  Yeah, no, that's true. And unfortunately, we are now way over time. So we're gonna have to wrap it there. But thank you so much for coming on the show, Parker. This has been really fun.

• 40:51Speaker 02

  Yeah, of course. Thanks for having me.

• 40:59Speaker 01

  So that was our conversation with Parker. Dom, what was the lie?

• 41:03Speaker 00

  The lie was that Parker thinks that founders should stick to doing what they love. He actually thinks that you should find things that you hate and then dial into them. The idea is that, you know, the things that you're afraid of, you need to overcome them. You need to work through it because those are the things that could really hurt and harm your company.

• 41:19Speaker 01

  I thought that was such an interesting thing to say because while he was saying it, I was like, oh, yeah, totally. Like, that makes total sense. Like, you know, you kind of have to do hard, challenging things in life in general to make things work. But then I think about it, we've had so many founders on who have been like, well, I wasn't good at this. So like, I hired an expert in there. And I'm like, yeah, like, yeah, like, that totally makes sense. So now I'm like, well, now I have to think differently.

• 41:43Speaker 00

  I know. It's actually a really good life lesson. There's like a quote that was in my grandparents' home where it's like, courage is not the absence of fear, but the mastery of. And so I was just like imagining Parker like coming at all of like his problems and troubles like an axe or something. You know, you have to embrace, I guess, the failure. Because it's funny, because when we first started the conversation with him and he was talking about his first company, he described it as like a series of failures, right? And that was so honest and like just so open and honest about failure, I guess. I feel like a lot of people sometimes are nervous to admit that they failed something.

• 42:15Speaker 01

  Yeah, and I definitely can see why founders would fall into the trap of just like immediately hiring for things that they can't do. Cause it's like, okay, you raise money from investors, they're backing your idea, they're backing your company, and you know you're not good at something and they just gave you all this money. And like, I could see the temptation to be like, well, I'm just gonna hire someone who can just like, not like fix that problem, because that makes it sound like it's deceptive in some way, but obviously it's not. But then being like, no, it actually like works better if you really just stick to the grind and like force yourself to figure it out.

• 42:47Speaker 00

  Yeah, because then you figure it out. The idea is that hopefully you do figure it out. It also just makes you a better founder. Like, I imagine if Parker didn't have all those experiences of starting two companies before Rippling, like, who knows what Rippling would have been in the very, very beginning.

• 42:59Speaker 01

  Right, it's true. And I think, I also thought it was interesting how much of like a direct involvement he has with everything still, like, how he still gets a lot of the customer service emails, and he still like, has to approve so much stuff that goes on in the company, which has grown to be like a decent size. So that sounds kind of like a pain logistics-wise, but yeah. His approach to leadership is like different than I think people we've had on, especially recently.

• 43:24Speaker 00

  I know. When he said that he was involved, was giving the founder of Backmarket, who was saying that he had his number on the customer service website.

• 43:32Speaker 01

  Right.

• 43:32Speaker 00

  And I was like, oh my gosh. I was like, take that down. But then like, I guess it makes sense, right? I loved hearing that, like, you know, Rippling uses Rippling, because I feel like founders should use their products.

• 43:42Speaker 01

  Yeah, and I mean, they've been able to grow a crazy amount, so maybe it does lean to the notion that maybe founders should really have more of those day-to-day check-in, those insights. Sounds like a bottleneck to me, but if it's not, hey, it sounds like it's working for them.

• 43:56Speaker 00

  I had so many questions about the marketing strategy, because I was like, what do you mean, you don't have a robust marketing budget? But yet I see you everywhere in New York. Cause then I was like, well, I guess like the companies who would need it know about it. But then I was like, then also, how do you reach new consumers? But then I was also like, for months, every single train, I look up and it's like a Rippling ad. And I'm just like, how are you following me around the city?

• 44:17Speaker 01

  Oh my god. No, and of course, I have no confirmation if Rippling actually used this specific company, but I talked to a startup a couple of months ago. Called One Screen and they do like out of home marketing, which would be like the subway ads, billboards, et cetera. And I, reason I talked to them is because I was like, why is there an MTA bus wrapped with a Ramp ad? Like, I was like, that's literally a B2B company. Like, that doesn't make sense to me to advertise in that way. And he told me that it's like, pretty cheap marketing for a pretty good return, is what the founder of One Screen told me. And of course, he's selling his book, of course, of course. But like, I mean, you just nailed it on the head. You take Subway here, all your ads are like Ramp, Rippling, Mercury's always on there. I think that's supposed to be like relatively inexpensive for like, marketing, or at least like compared to

• 45:01Speaker 01

  doing like digital ads and stuff. So maybe that's why. But I mean, he's probably being modest in the fact that he's like, not giving himself name recognition of why people would come to Rippling, just in general.

• 45:11Speaker 00

  Oh, yeah, that's also very, very true.

• 45:14Speaker 01

  And I thought it was interesting, what he's doing with Rippling is what he imagined Zenefits would always be. Like, he's building what he thought Zenefits could have turned into. And I just think it's so fascinating to think about what he's been through, like getting pushed out of the company he founded with Zenefits, and then essentially launching a company that is a competitor. And now it's been years and it's doing well. Like, I'm just like, I don't know how many people in that scenario would just be like, you know what, I'm actually gonna try the exact same thing.

• 45:40Speaker 00

  Me, I would do it.

• 45:41Speaker 01

  And they're not exactly the same, but.

• 45:42Speaker 00

  I know I would do it because I am, I'm that petty. I would actually do that. That is a brilliant idea. I love that for him. I like, you know, it's like, you can't just oust me from my company. I'm gonna do the exact same thing. It's that thing that's like, no one can do what you do. I love this for him.

• 46:00Speaker 01

  On the one hand, building a company in the exact same category with very similar goals would be repetitive, or like, would you be able to come at it with a better lens the second time? But then again, it's also like, he talks a little bit about, oh, there are things that I did at Zenefits that I kind of regretted later on. And then it's like, okay, start a new company, same area, just do those things differently. And it's like, well, all right.

• 46:22Speaker 00

  Yeah, I mean, he learned from it. So I mean, when you're a founder and you have the opportunity to have like, many, many chances.

• 46:28Speaker 01

  Yeah.

• 46:28Speaker 00

  He learned a lot from that experience and he brought it to Rippling. And now Rippling seems to be doing very well.

• 46:33Speaker 01

  Yeah. So I mean, it works out. I was glad he talked about it a little bit at the end per our request about what's been happening recently, really bringing that old Zenefits gossip to Twitter, which I was shocked to read at the time, but I'm glad. It is nice that he's so open about it, which is definitely why I asked him that question about how founders should think about it because, well, I totally understand why founders don't like to talk about things that have happened to them, especially in relation to investors, because they fear they will look like they're hard to work with. That culture has allowed VCs in some cases to just completely steamroll founders and to completely just commit bad behavior. And like, people are too afraid to call them out about it. So it is nice. And of course, that happened years ago. There's like no consequences for him to say something now,

• 47:17Speaker 01

  which is obviously different than a lot of founders are in, but it is always nice to be reminded that it's like, no, like you really should say something sometimes.

• 47:24Speaker 00

  No, yeah, I have a lot of founders who message me about their investors and bad behavior and, you know, even getting pushed out. And a lot of people, of course, are scared. Like, there's this deep power imbalance in the industry that people have always spoken about with VCs and investors. And that kind of odd relationship that I think is still trying to like, even be legally defined in the courts. But for now, it's like this weird power imbalance and people are afraid of being, you know, blacklisted of retaliation. They're afraid of speaking out of what their peers would say. And so, I mean, it's really, really good to see someone who's like, not afraid, to see someone who spoke out, because it lets people know, like, everyone's situation might be a little different,

• 48:04Speaker 00

  but you know, you should always, you should speak out. If not on Twitter, then you can always come to us.

• 48:10Speaker 01

  Right. And I mean, if I was the head of a $13.5 billion company and was talking about my last startup, I probably would feel a little bold as well, or compared to other founders. But I think it's good. I'm happy pretty much anytime I see anyone in the community just say something. Cause people always, I mean, we always talk about them on Slack. It's like, people will post something that sounds absolutely devastating and then be super vague about it. Like, oh, I'm not gonna say who said this, or like where this is from. And then it's like, you never find out. And you're like, well, if it was so bad, you felt the need to flag it. Like, well, it kind of seems like we should maybe... Do something about it? I don't know.

• 48:45Speaker 00

  I know. I'm like, send me the tea. Sometimes I message people who tweet those vague things and I'm like, just because I'm nosy, tell me the tea. Like, I can't just live like this without knowing who is the op. Like, come on now. And so I was talking to our editor and she said to remind people that it always helps to know reporter. If anybody wants to talk, we are always here.

• 49:05Speaker 01

  We are always here. Give us your company's start again stories. Give us your you were pushed out at your last company stories. We are here for all of them and in between.

• 49:16Speaker 01

  Found is hosted by myself, TechCrunch senior reporter Becca Scutac, alongside senior reporter Dominic Medori-Davis. Found is produced by Maggie Stamets with editing by Kel. Our illustrator is Bryce Durbin. Found's audience development and social media is managed by Morgan Little, Alyssa Stringer, and Natalie Kreisman. TechCrunch's audio products are managed by Henry Pickavet. Thanks for listening and we'll be back next week.