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Parker Conrad

09/10/24

@ The Social Radars Podcast

I'm Parker Conrad, the CEO and co-founder of Rippling, and my story is intertwined with Zenefits, the company I started before that.

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Parker Conrad

09/10/24

@ The Social Radars Podcast

Zenefits handled payroll, health insurance, and employee benefits for businesses, growing rapidly and becoming a media darling.

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Parker Conrad

09/10/24

@ The Social Radars Podcast

In 2016, I was ousted from Zenefits in what was essentially a palace coup, and the press painted me as a tech villain.

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Parker Conrad

09/10/24

@ The Social Radars Podcast

The media focused on three main controversies regarding Zenefits: insurance licensing issues, macroeconomic factors, and a supposed party culture.

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Parker Conrad

09/10/24

@ The Social Radars Podcast

Regarding the licensing issues, most benefits were properly licensed in home states, but not in other states, which was a mistake based on our lawyers' advice.

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Parker Conrad

09/10/24

@ The Social Radars Podcast

By the time I left Zenefits, compliance with out-of-state licensing rules exceeded 95%, and obtaining licenses in other states was straightforward and inexpensive.

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Parker Conrad

09/10/24

@ The Social Radars Podcast

The macro issue arose when I needed an insurance license to build a prototype for Y Combinator, leading to a misunderstanding about the licensing exam requirements.

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Parker Conrad

09/10/24

@ The Social Radars Podcast

I wrote a script to keep my session active during the licensing course, which was misinterpreted as cheating, although I had passed the exam legitimately.

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Parker Conrad

09/10/24

@ The Social Radars Podcast

The third controversy was about a supposed party culture at Zenefits, which I believe was exaggerated; while there were cultural issues, it wasn't a party atmosphere.

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Parker Conrad

09/10/24

@ The Social Radars Podcast

The narrative around Zenefits was shaped by a Wall Street Journal article that misrepresented the company's culture, leading to a lasting negative perception.

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Parker Conrad

09/10/24

@ The Social Radars Podcast

The real problems at Zenefits stemmed from business and financial challenges, not the controversies that the media focused on.

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Parker Conrad

09/10/24

@ The Social Radars Podcast

When I left Zenefits, I believed the company would resolve its compliance issues, but the situation changed drastically after my departure.

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Parker Conrad

09/10/24

@ The Social Radars Podcast

The strategy proposed by the board after my resignation was to have David step in as CEO temporarily, but I felt that a clean break was necessary. I didn't intend to start another company in the HR space at first, but it became clear that David was not making Zenefits work and was driving the company into the ground.

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Parker Conrad

09/10/24

@ The Social Radars Podcast

I went from having $600 million in the bank and 1,500 employees to starting over from zero, but I was determined to rebuild what we had started at Zenefits.

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Parker Conrad

09/10/24

@ The Social Radars Podcast

The idea behind Rippling was to manage employee data across all business systems, making it easier to onboard employees across various platforms like payroll, email, and project management tools.

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Parker Conrad

09/10/24

@ The Social Radars Podcast

When Rippling was in Y Combinator, I faced a lawsuit threat from Insight Partners, which was an intimidation tactic to force me to sign a non-compete agreement.

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Parker Conrad

09/10/24

@ The Social Radars Podcast

David's approach to media was aggressive; he believed in attacking competitors relentlessly, which turned against me after he took over as CEO.

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Parker Conrad

09/10/24

@ The Social Radars Podcast

I was deeply depressed during the turmoil at Zenefits, but I realized I wanted the product to exist and that no one else would build it if I didn't.

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Parker Conrad

09/10/24

@ The Social Radars Podcast

The opportunity for Rippling lies in the fact that employee data is widely distributed across organizations, and we can solve the problems created by this fragmentation.

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Parker Conrad

09/10/24

@ The Social Radars Podcast

Rippling aims to build a suite of integrated products based on a deep understanding of employee data, which we refer to as the employee graph.

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Parker Conrad

09/10/24

@ The Social Radars Podcast

The mistake we made at Zenefits was focusing on grabbing market share early without automating our processes, which we did differently at Rippling by building everything in software from the start.

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Parker Conrad

09/10/24

@ The Social Radars Podcast

At Rippling, I handle a lot of the administrative work around HR personally, including running payroll and managing payroll and employee benefits for 2,000 employees across a dozen countries, while we also have a strong HR team for compliance and other functions.

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Parker Conrad

09/10/24

@ The Social Radars Podcast

I approve every expense above $10 in the company, which helps streamline our expense management process.

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Parker Conrad

09/10/24

@ The Social Radars Podcast

The product works well for customers because we focus on automating administrative tasks, allowing companies to operate with fewer people in those functions.

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Parker Conrad

09/10/24

@ The Social Radars Podcast

Founders who use their own products gain a significant advantage, as it gives them a deeper understanding of their product's effectiveness.

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Parker Conrad

09/10/24

@ The Social Radars Podcast

Many payroll competitors do not use their own systems, which limits their understanding of their product's capabilities.

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Parker Conrad

09/10/24

@ The Social Radars Podcast

YC advises founders to talk to customers, but being your own customer allows for more insightful conversations and quicker feedback.

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Parker Conrad

09/10/24

@ The Social Radars Podcast

At Rippling, we build multiple products in parallel, which goes against conventional wisdom that suggests focusing on one narrow area.

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Parker Conrad

09/10/24

@ The Social Radars Podcast

The traditional approach to building business software is often limiting; a compound approach with one system that handles multiple functions is more effective.

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Parker Conrad

09/10/24

@ The Social Radars Podcast

The best way to build software is to create an all-in-one solution rather than piecing together separate components, which can lead to inefficiencies.

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Parker Conrad

09/10/24

@ The Social Radars Podcast

We focus on making our unconventional approach to software development work by identifying and solving the various challenges it presents.

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Parker Conrad

09/10/24

@ The Social Radars Podcast

To succeed, you need small, focused teams that can quickly build products, and we often hire former founders for these roles.

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Parker Conrad

09/10/24

@ The Social Radars Podcast

Our underlying system integrates employee data across different business units, which will facilitate the introduction of AI in the future.

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Parker Conrad

09/10/24

@ The Social Radars Podcast

I'm skeptical of companies that suddenly declare themselves as AI companies; the focus should be on integrating useful AI capabilities rather than just adopting a chat interface.

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Parker Conrad

09/10/24

@ The Social Radars Podcast

B2B AI applications require a deep understanding of the organization and its employees to be effective.

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Parker Conrad

09/10/24

@ The Social Radars Podcast

My experience with Y Combinator was incredibly intense, creating a sense of urgency that is crucial for startup success.

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Parker Conrad

09/10/24

@ The Social Radars Podcast

YC creates urgency from day one, which helps founders stay focused and productive, contrasting with the often unstructured nature of starting a company.

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Parker Conrad

09/10/24

@ The Social Radars Podcast

The level of urgency was heightened during my first YC experience because we had direct competitors in the same batch.

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Parker Conrad

09/10/24

@ The Social Radars Podcast

I faced significant challenges during my first company, including being fired, which taught me the harsh realities of entrepreneurship.

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Parker Conrad

09/10/24

@ The Social Radars Podcast

Despite the ups and downs, I believe that tenacity is key to overcoming challenges in the startup world.

FULL EPISODE: Parker Conrad, Founder of Zenefits & Rippling w YC Co-Founder Jessica Livingston

Takeaways