Parker Conrad’s last venture at Zenefits didn’t end so well with his departure as CEO and the company having to re-orient itself. But he’s once again starting a company that will figure out how to build an employee system of record and management, starting off with smoothing out the process of on-boarding employees and focusing on other major life events for those employees.
Conrad’s new company is called Rippling, which is launching today. The goal is to turn the process of bringing on an employee and assigning them hardware and the services they’ll need to operate — like Gmail or Salesforce — right away. Rippling integrates with a bunch of major services on the back-end and automatically assigns those accounts to new employees, and also helps managers set up payroll in several states.
By doing that, Rippling becomes a store of information for all the details about that employee. Rippling assigns the computer, so it’s able to remotely manage and observe the health and status of that computer. It assigns which groups are available in Salesforce, so it can manage the security of those accounts and who gets to use them. And it can also quickly turn off those services, looking to also smooth out the process of off-boarding an employee that’s on the way out.
“I’m not sure as I’d describe it as a wedge into something else,” Conrad said. “The reason I believe it’s critical is because if you are the system a company uses for on-boarding new employees and setting them up in different systems, it makes you into the system of record for employee data by definition. That’s because of the fact you’re literally ingesting all the different attributes that make up that employee record.”
Rippling is designed to not only help those managers deal with those life events — like a raise or sending off an offer letter — but also quickly integrate new services. The hope is that instead of having to add new services that employees will use fully manually, there will be processes in place that make it easier to essentially on-board those new services into its suite through a series of categorizations. Automating all of this, at the end of the day, is the goal in order to scale up everything.
“It’s really if you scale things up manually, one of the things, the mistakes we made or I made, is, if you scale things up manually you can come back and automate them later,” Conrad said. “The difficulty of automating a manual process, I’m convinced it grows not just with the employees doing that manual process but as the square of that difficulty. It’s very hard to write down the spec to automate it completely. You have to start automating things when it’s done at a small scale or you’re screwed.”
All of this is processed down to the point that the offer letter is algorithmically generated, ending up with a mad-libs style letter with different fields that sync up to the boxes a manager ticked as they went through the process. Managers select the role, the department, what the compensation is, how many shares, and so on. These processes are then detailed in the checklist, with Rippling handling sending employees and getting them to sign their documents.
Conrad seems to want to keep focusing on the problem because he’s continually run into issues around it — especially at Zenefits when the company was growing at a break-neck pace. Early in Zenefits’ life, Conrad was running to the Apple Store or ordering computers off Amazon and basically handing them out to employees. In the first day, one new employee (of around the first 10) who had been given a laptop had already been locked out of their computer. The password hint, “Mark McGuire,” wasn’t helpful either. And because there were no systems in place to manage that laptop, the employee ended up coming in every day with an iPad and a keyboard after that.
“Eventually I was like, dude you’re on your own,” Conrad said of dealing as a manager with a fast-growing and small team. “If we were using Rippling you just go into hardware here and I can click right here on their computer and reset their user account right here. We great we’d have a bunch of people starting Monday and I’d run to the Apple Store to buy a bunch of laptops the night before.”
All of this still needs to be viewed under the lens of what happened at Zenefits, though Conrad laid out a few things he’s trying to do differently this time around. For one, the company has already hired a CFO and is looking for a general counsel early as it looks to scale up — such as expanding to new states through payroll and other more legally-hairy situations. That was a major failure of Zenefits as it was slammed for compliance issues with Conrad resigning after that.
Still, around 90% of Rippling’s investors also invested in Zenefits — which happened around two weeks ago. The team already has around 12 engineers, he said, and it seems this time around Conrad is looking for a more calculated approach after the mayhem of Zenefits, which very quickly hit a $4.5 billion valuation and was on track to be one of the fastest growing SaaS businesses ever.
“We’re just investing a lot more in infrastructure up front, both on the engineering side and on others,” Conrad said. “It’s understanding the sort of complexities of growing a business and what’s around the corner as you grow and the challenges that emerge. I have a much bigger appreciation for getting infrastructure in place, the scaffolding on the tech side but also the company itself, in place early. We’ve been ahead of what’s around the corner, so that things are set up correctly.”