# 91,000 Crore Software CEO Reveals Entire Playbook

## Метаданные

- **Канал:** Varun Mayya
- **YouTube:** https://www.youtube.com/watch?v=EINXOfWFRGM
- **Дата:** 01.02.2024
- **Длительность:** 57:38
- **Просмотры:** 38,326
- **Источник:** https://ekstraktznaniy.ru/video/12355

## Описание

00:00 - Highlights
00:58 - Introduction of Parker Conrad and a brief about his accomplishments.
01:32 - Discussion on the concept of "The Compound Startup."
04:37 - Concept of bundled solutions in business.
05:35 - Challenges in building CRM platforms and the importance of the underlying platform.
07:14 - Discussion on the necessity of having natively built software for business operations.
11:04 - Discussion on talent management and hiring strategies at Rippling.
13:06 - The significance of cross-selling and its impact on revenue.
15:19 - Structure of sales team at Rippling
18:30 - Rapid growth of newly launched products and the strategy behind it.
22:54 - Overview of sales activities and conversion rates in different market segments.
24:03 - The role of the Indian market in Rippling's business strategy.
26:11 - Insights into the early days and challenges faced at Zenefits.
29:58 - Strategic decisions made to capture market share quickly.
35:34 - Discussion on the importance of findin

## Транскрипт

### Highlights []

I think ripling looks like an HR software company and a lot of people are like HR software that's boring we're really saying like look we have like a fundamentally new approach to how you should build software and employee data is like a fundamental building block of sort of I think how a lot of software should be built you were talking about your 4:00 a. m. flights right like came in at 4:00 a. m. India time you're leaving I asked you a question do you use maraton to reset your sleep cycle and then you told me something very interesting about an app I use this app called the time shifter it's basically you give it your flight information and it gives you this whole recipe like hour by hour of like what it wants you to do there's a couple different things there's like using caffeine wearing sunglasses being in the dark trying to be like having getting direct sunlight and using melatonin and it sort of tells you hour by hour like I followed the set of instructions the way over it was way easier ladies and gentlemen welcome

### Introduction of Parker Conrad and a brief about his accomplishments. [0:58]

back to I guess the first episode of the numbers game I just changed the name of the podcast on the Fly was it used to be open conversations today I have Parker Conrad Parker it's an honor to have you on the Pod you have raised billions of dollars you now run an 11 billion company these numbers are mindboggling for me by the way and you've not just done it once you've done it twice right so you're the one person with multiple um sort of successes at this scale so thank you so much for being here in the first place thanks for

### Discussion on the concept of "The Compound Startup." [1:32]

having me yeah so I'm going to get straight to the questions I'll tell you these all going to come from my own Curiosities as a Founder right I want to learn a lot of things and there is this narrative in India of this is a VC Narrative of build one narrow Focus don't do anything else get really big at that okay and this was the prevailing narrative for about 78 years right uh the last 7 eight years but in the last year or so things have changed because a because people realized India is not such a large Market but you have an interesting Counterpoint to this which is that all these very Niche spaces have kind of been exhausted and you believe in a completely different narrative which is you got to do parallel things multiple things and you have to keep that experimentation bandwidth open as an early stage company right and you have a name for it it's called The Compound startup so I would love to hear your thoughts on this yeah so basically my belief is that we've been building software WR for the last two decades um because everyone's been focused on these sort of very narrow Point solution problems particularly in B2B SAS which is sort of the area that I tend to know a lot about um and one problem with this is that a lot of the problem space has been exhausted um so you know basically any vertical you can imagine there are a couple different SAS companies that are sort of going after that area um but the second thing that goes wrong with that is there there's actually an opportunity a lot of the biggest problems that businesses face are problems that sort of span multiple departments multiple functional areas they problems of business process decision making the way the organization operates and to solve them you really need to sort of operate like many of these different systems and get them to like work together in like a seamlessly kind of interoperable way um and so when you're building multiple products in one there are a lot of product advantages that you have um things are more integrated um with each other but also usually with like underlying business data um in our case like employee data um you can go really deep on shared componentry um so ripling I sometimes say that Rip's mission is to decompose business software into its constituent parts and then rebuild software and all these different verticals out of these underlying elements um and what that allows us to do is to go really deep on Concepts like reports and permissions and workflow automations and approvals and other core Primitives that you see again and again across a lot of different business software and build those way better then point solution competitors would be able to afford to build them um so there are all these like product I'm convinced that like the global like Minima the best products are the ones that are actually sort of allinone um and that's a way not just to sort of win a sales and marketing game but it's a way to build better product experiences for end users would you say

### Concept of bundled solutions in business. [4:37]

the word for this the common speak for this is a bundled solution you're building a bundled solution so what I don't like about the world the word bundled is it implies that the driving force is the sales and marketing the packaging um that um you do have a bunch of advantages from a go to market perspective but I think you can also build better products like I think that you know a lot of times compound products are not they're not just um sometimes people mistakenly believe that you're selling good enough versions of these products but you have these sales and marketing advantages because they're you know bundled together um I think there's an opportunity if you take the right technical approach um to actually build products that are better um each individual product is better than its Standalone competitors and you also obviously have these sales and marketing advantages from selling them you know all together but where do you start like

### Challenges in building CRM platforms and the importance of the underlying platform. [5:35]

let's say you were starting Rippling tomorrow in a different space right let's say we're starting in sales software for example would you start with like a narrow wedge like play the story for me from the day you started Rippling to the point where you're like okay now we do multiple things or was it like day one hey we're going to bet here and I can tell you exactly the way I would build um a ripling for sales software um but it there there's a huge upfront investment um I think that you know there are a few what would that number be if you had to put a number on The Upfront investment man I don't know I don't I I'm not sure I could put a dollar number to it but I think what you need to do you know the tricky thing particularly on the sales side is that you need to build the underly platform like a lot of people have made the mistake of trying to go after CRM the application layer so they build this CRM application but the way that you need to win in CRM is you actually need to build the underline sort of platform system so things like custom objects workflows configurable views reports dashboards workflows permissions like all of that stuff and you have to invest really deeply there because that's the you know everyone that sort of tries to go up against Salesforce sort of crashes and burns because they don't do the hard work of building that stuff they just build the sort of application on top and it's never without that underlying Machinery it's like never configurable enough you can't dial it in enough to kind of get it right the second thing that I think you need to do is one of the weaknesses I

### Discussion on the necessity of having natively built software for business operations. [7:14]

think the the sales space is a great example of an area where because there are so many different applications you need to string together to run your sales organization um and they're not natively built together they're connected via apis but these apis are often just very thin straws to pass data between applications and so if you had like natively built software not just for cor CRM but also for call recording and transcription what you know products like gong do for sort of email and sequence management what products like Outreach do for you know scheduling and calendaring products like calendly chili Piper things like that if you had like data orchestration tools that are often like add-ons to Salesforce to manage you know lead databases and contacts and things like that D you know if you had all of those things in one system it would solve an enormous number of problems for businesses that have struggle with sort of the way Salesforce is dependent on this ecosystem of sort of thinly connected services um now how do you build all that you know all at once how do you build the full platform layer all of these different applications the answer is it's like probably impossible um uh I don't know how you do it I think that like it's one of the things that makes doing startups hard is because like doing a startup and making it successful is somewhere between completely impossible and just very very hard and between those two extremes there's such a narrow ray of light that passes through um so I don't have the answer on how you do that but I think that like you know the big advantage of compound software businesses is like in so many places with software the central question is like well if I build this like does it even matter you know like will anyone care and with a lot of sort of compound software products the answer is very clear that if you can find a way to get there it's Superior in fundamental Prof ways um it's just like really hard to sort of get there but it's against conventional wec wisdom which is like hey build a calendly competitor and then get really good at that don't touch any of the other you know verticals in the area but you're saying that just go raise a bunch of money build the infr layer first build authentication and your views and stuff first and then build these individual components on top think of cly as one thing your product offers versus that's the entire thing yeah because you you look if you can build a software suite that solves a fundamental business problem which is like really managing the sort of the customer the prospect Journey you know from become from like lead to like customer and then the customer life cycle um you want to solve the whole problem and to solve that whole problem you need a whole bunch of different applications um and you need them to sort of be seamlessly interoperable and when you try and string together a dozen different point solutions to do that stuff there are always these interstices between the products that you know where they don't quite fit together right and um and you need uh a lot of human intervention to kind of make things work um and that ends up being you know the central advantage of compound software businesses is that you know those gaps sort of fade away um when you're building these things natively on one system interesting so I think this is on

### Discussion on talent management and hiring strategies at Rippling. [11:04]

the the vision side of the company right this is how you've built tripling but I think all of this is built by talent and you have a very special recipe SL playbook for how you build an Aug and one thing that ripling is famous for every podcast I've ever watched off rling everyone I've ever spoken to is like you hire the most number of exf Founders in the world you put them all together you have a Playbook and I'm hoping I can you know tease out that Playbook over this conversation you take the founder you say here's the idea here's the Playbook and then once that product is mature you drive this fire hose of demand SL distribution to it and then that product starts working right uh we do this a very small scale we figure out this one small thing about YouTube like the alpha is uh it's all about edit and packaging people don't believe this but it's actually a lot about just compressing that video from something that could be 20 minutes to 10 minutes right and then everything that you put away uh you it's your judgments depending on what you put away right yeah and if you can repeat this over multiple channels which is what we've started doing now then you have a Playbook and then now you're like okay what's the kind of talent that could be able to create this so you've done the same thing but you've done it in software you pick up the most number of EX Founders curiously I don't know what the Playbook is yeah I so the Playbook on the hiring side is I mean we'd love to hire former found um you know people who like have know what that grind is like um and they know sort of like how pre precious it is to find like product Market fit and there's like a hustle and maybe even like a desperation to sort of like trying to get something to work um because you need someone to kind of drive that internally um and we sort of say look you know this is the only place where you can be a founder and you can build a product where it's true that like if you build it they will come um because we really can bring a lot of you know if you build a great product we can bring a fire hose of distribution to it how have

### The significance of cross-selling and its impact on revenue. [13:06]

you built that distribution is it based on the existing ripling uh user base and the connections and the network that you have it so it's we're really good at Cross sell it's one of the things that's very unique about our goto Market motion um so ripling you know last month did about $8 million in net new Revenue just from Cross cell so we our in our are increased by $8 million just from a cross sale perspective and then we also did a lot of new logo sales as well for the audience can you explain what a cross sell is in your context it means selling new stuff to existing customers so you already have some kind of relationship with a company you know they're buying maybe they're buying payroll from us maybe they're buying our it products for you know single sign on or device management and we're saying hey look um you know you should also be using our recruiting software applicant tracking system or um we see that you have employees in India we have an Indian payroll system so even if you might be a us-based company you can actually use rip Lane to manage your employees in India to pay them to do all that kind of stuff we handle all the money movement and taxes and withholdings and all that kind of stuff um and so we can sort of sell these sort of new SKS to the same customers and deepen their relationship with us um and it's interesting I mean we've built um you know there's a lot of there are a lot of things that we do from a sales perspective to make that work um one is we tend to really we try and Shard our sales organization so we have um in addition to just the new logo the AES that sell rip Lane sort of like the overall package to new prospective customers we have individual product sales organizations that come in that sell are focused on just one product you know where we have like you know our Global sales team that sells Global capabilities for companies that are you know have employees you know outside of the country that their headquarters are in we have our spend management team that sells things like corporate cards expense reimbursements bill pay corporate travel software you know we have a team that sells our talent Suite you know applicant tracking uh Performance Management that kind of

### Structure of sales team at Rippling [15:19]

stuff and I have a question there right like sorry to interrupt you but important question this sales team what are they doing on a daily basis like what's the sales team structured like what's a pod look like and what are the activities they're doing are they going and meeting these clients physically are they sending out call emails are they going back channeling through messaging saying hey do you have an intro to this VP like how do you close a new client well so usually what the an account executive is taking over once we have an interested Prospect so someone wants to get on the phone learn more take a demo it's almost all inside sales so it's all marketing till that point till the point it's marketing until that point um we do have an outbound sales motion that's a different team sdrs that do cold calling but a lot of it is actually marketing driven um to sort of get people to the point where they take a demo um and then what will happen is an account executive will get on the phone with a prospect um and they'll sort of pitch them on the overall Rippling Vision because every client's coming to us usually with a very specific need they'll say you know uh man it's a lot of work for me every time I hire a new employee to set them up in all these different systems that I use in my company um and I heard you guys have a solution for that I know you guys also do payroll I don't want to touch my payroll system I'm happy with that I don't want to move this other stuff but can you help me solve this problem and we we'll try and talk to them in that call and say look this problem that you believe that you have around managing user access in all of your different sort of business applications we can solve that for you we have you know an identity product that manages user provisioning and single sign on across all these system systems but really this problem at a more fundamental level the problem is actually about the fragmentation of employee data within your company that you have 20 different systems that need to understand who your employees are and this is One symptom of that deeper underlying disease um and if you let us solve that for you at a more fundamental level we could solve these like 15 other problems for you that you didn't come to talk to us about today but that we could run you through the list and you probably have those problems too and so frequently customers come to us with like one thing that they want but they buy a whole Suite of services because they buy into that Vision um but usually they buy some but not everything and then what happens is then later on down the line you know the other teams are sort of calling into them and saying like hey look you know you guys um you guys didn't you know are you interest you've hit a size now where maybe it makes sense to set up like an a recruiting software for example um we can help you do that or it makes sense to set up performance management software are you interested in talking to us about that sort of thing so if I'm a founder and I join ripling today let's say I built a company and didn't work out I've been through the grind for three years and I join ripling and then I say hey um Parker I have this great idea for a cly competitor these are all the benefits it has for Enterprises and I build that let's say you say okay and we build that over like let's say a year what's the kind of user base that calendar like product could get access to about people so it used to be

### Rapid growth of newly launched products and the strategy behind it. [18:30]

I mean I'll give you the progression um so um you know when we started doing this you know maybe a couple years ago um we would launch products and consistently the new products that we would launch would get to a million in run rate Revenue in a year now the products that we've launched most recently like in the last year 12 to 18 months could you give me an example uh of a product we launched last 12 to 18 months yeah um well one is our ATS product so it's recruiting software for recruiting teams another is our Global products that you we that are for companies to manage employees outside of their home country um so you know things like payroll benefits Administration you know local sort of compliance in those markets um those products now every single one of them makes it to a million in run rate Revenue in month zero like the month that it launches um and the record is actually our Global products um when we launched them about uh like 15 months ago they went from 0 to 12 million in AR in four months so it's like literally this just massive uptick in a very short period of time and that's SDR sending out emails or is it just you have one Central email list and you're like hey here's now we have ads well so some of it is um now you know all of the new prospects that we're talking to got it um all of them now are presented with hey here's you know are you interested in like adding a recuit recruiting software and many of them will say actually that's you know I should add that on like that becomes a part of the package that they buy but actually what a lot of it is like an internal ad system that we've built um that's basically you can think of it as like the Facebook ad exchange The Way businesses buy ads on Facebook and the thing that I think makes the Facebook ad exchange work so well um is that um the social graph is like the right underly primitive for selling consumer products so you can go in you can Target People based on their interest based on you know all kinds of different things and say like oh you know this is maybe this is a good person to sell you know mobile phones to for example I actually think that the employee graph the data about the internal organization is the right underlying primitive for selling business software um and so we can Target people very precisely and we might say look here's a company they just posted a job uh for someone in Bangalore um you know it's a US company but they're looking to hire someone in Bangalore like we have like a whole Suite of products for you know payroll in India for you know managing employees in India we should reach out to them and sell them that or you know we can say look here's a company that just hired their first recruiter um they probably need you know recruiting software or um you know they hit a certain size where maybe they have remote employees um but they don't buy our they haven't bought our it management uh warehousing software so we have a basically a thing that we call Inventory management that gives you like basically a virtual Warehouse I mean our warehouse is very real but it's virtual to you where when you terminate a remote employee we send them a box and a shipping label and they can put their computer in the box and it ships it back to our warehouse where we store it and clean it and wipe it and so it's ready to go and then the next time you hire an employee you don't have you can just sort of choose that computer from our warehouse we ship it back out to them so if you have you know maybe someone terminates a remote employee and we're like how are you getting their computer back we can help with that maybe you should buy this service um so those are the kinds of things that those are all very marketing driven we have like a whole like growth team that does most companies their growth team are focused on using systems like you know Google or Facebook or like other types of sort of paid marketing channels to acquire new logos like new customers we have a team that does that but we also have an equally large team that just uses our own internal ad system to generate demand from existing customers for new ripling products got it so give me some rough numbers right

### Overview of sales activities and conversion rates in different market segments. [22:54]

like how many conversations are let's say the sales reps doing on a monthly like you know it depends a lot on the team um because some depending on the size you know a lot of the these the sales teams are segmented by customer size and then by product and so depending on sort of you know reps that go after larger companies tend to sort of work with fewer prospects at a time and you know reps that work with very small businesses often do like a ton of the so you know it rang you know at the high end you know maybe you know there are 10 demos a month you know sort of new prospects that reps sort of take onto their calendar at the high end it could be you know 3540 got it and out of those 354 you have maybe three four conversions a month something like that oh I think it it's higher than that I mean we um you know for in our SMB segment you know they I actually don't I don't know up handw the conversion rates are right now so I'm kind of like making this up but I think it's like 30 to 40% that they end

### The role of the Indian market in Rippling's business strategy. [24:03]

up winning interesting and is India like a big market for you guys well it depends so India is not a huge market for us we don't um we don't sell SAS software to Indian companies for the most part is that a reason we' we've struggled with it we've kind of looked at it a little bit um some of it is the price point um you know the company's oriented around selling software a price point that often Indian businesses look at that and they're like I don't want to pay that much money for software um and we're not set up to sell software at a price point that would make sense for a lot of Indian businesses um it's just hard if your cost structure is set up around this price point to sell at a very different one and make it work um so that that's probably the main reason but India is a very important market for us for a number of reasons one is just there's an enormous employee base that we have in India one um but two um India is one of the biggest markets for our Global products so we weirdly we I think we have a great sort of payroll and HR System for Indian employees so we you know I run payroll for you know everyone that works for Rippling in India there's you know roughly 700 or so employees and I run payroll in ripling and it manages you know payroll benefits you know food coupons like all that kind of stuff for our employees in Bangalore and we sell that product actually usually primarily to non-indian businesses that have employees in India um and India is obviously one of our most popular um U sort of countries for that Global product um so businesses all around the world you know have offices and locations in India um so I think the top one for us is Canada because we're headquartered in the US and there's a lot of you know lot of Us Canada um but then I think India is number two and then you know after that it's the UK Australia and sort of France Germany places like that you know

### Insights into the early days and challenges faced at Zenefits. [26:11]

digressing here but sometimes I go on Twitter right and there'll be this like really young kid uh who you know points at a Founder he's like hey this Founder's made a mistake or this founder is not doing well or this company's going to die and when I was young I was like oh that's interesting Insight right but as gotten older I was like it's like 3 seconds to put out a tweet but building a company takes like 5 six years and having built companies myself and having been through like really hard times and you know it's just hard running a company I can't imagine what it would have been like to run a company and then have to move out of that one and do it again so are you comfortable talking about the Zenit story and everything that transpired there yeah sure I mean I like you know it's not the most fun but uh but uh definitely like happy to jump into it yeah is that an insight you had towards the end of zenitz where you're like you would have done things differently you know I think there are a few things um the biggest one was actually was just like very unrelated to the headlines around zenitz and like in a lot of ways like probably sort of boring and unexciting but one of the big mistakes that we made was that early on at zenefits um I think the Insight that we had was that um was that companies you know had before zenefits businesses had in the United States multiple different systems related to HR so they would have an HR System but then separately they need to enroll employees in a bunch of different lines of health insurance like Medical in the US like the way this works as medical benefits are provided directly by your employer um dental vision life disability but then also retirement what would be pensions in India um you know Provident funds is something called a 401k in the United States um and these were all just completely separate systems that people would manage and we sort of said look we're going to give you one button that you click to hire someone and we're going to send out offer letters employment agreements um you know get all the right documents signed uh and then we're going to set them up with all of these different systems and all of this different access and all these different benefits and you just have like one button that you need to click to sort of make this happen and that was you know this like and by the way it's going to be free because we make all this money sort of on the insurance side um and uh we had sort of uncovered this like great kind of like product Market fit um and everything worked so well for us like we would just um you know my the company that I did before zenefits nothing ever worked for us like we would try and find a way to get customers and we would have five or six things that we would try that we were sure these would have to work there was no way that this wouldn't work and they would all fail except for like one of them that would kind of like sort of half maybe kind of like a little bit Market Fish yeah and then at zenefits we would everything that we tried would work um and it was almost like too easy to get new customers and the big fear that we had was that actually it was so easy that there were all these other companies that started pivoting into our space that were like okay these guys have found something that works and so everyone was sort of moving into that area every B2B founder in India at some point he said I'll build his benefits for India is that right oh that's interesting only those cires like benefits for India it's an open opportunity yeah so what everyone sort of moved in started moving in the space and we thought look the only way what we have to do is we have to take all the oxygen out of the room so we have to suck up all the demand find every customer get bigger faster than all of these others sort of second movers that are moving quickly into the

### Strategic decisions made to capture market share quickly. [29:58]

space because at some level of scale there will be some Network effects to this business but if we sort of take it slow if we don't put the gas pedal all the way to the floor then like someone else is going to be the one to kind of get to that scale we're going to lose this thing that we sort of stumbled upon um and so one of the critical decisions that I made early on that was really a mistake in retrospect was you said look you know we need to scale the commercial activities of the company ahead of the underlying engineering capabilities and so we said all of these companies have there's this big administrative burden that they have managing all these different systems we're just going to take that administrative burden on we're going to kind of do things manually for them behind the scenes and we'll work to sort of automate it over time um and the problem is that um we ended up scaling up this sort of manual operation to sort of handle a lot of the these internal business Ops administrative issues and then there a lot of people and then people is liability people well people just are they let you down they're you know it's hard um you know people make mistakes um so you can't you know our clients were expecting like a software system that was Flawless and instead there were there was human error behind the scenes and that led to this sort of sense in the market that like you know the idea behind zenefits is great but there's just a lot of execution problems um and once that became the conventional wisdom about the company sort of everything that was working so well for us top of funnel it all disappeared and went away um and it happened at like exactly the wrong moment you know right after we'd raise a huge amount of money at a very high price um and so we were you know growth was collapsing we were upside down on Gross margins because of how expensive it was to have all of these people doing this sort of manual Ops work um and it was all at the right time and it was in that context that I think you know a lot of this sort of stuff about you know compliance started coming out and I think um you know like the investors really I used that as sort of an excuse to sort of say like maybe let's like switch things up get rid of Parker or see if someone else you know see if the COO the sort of you know old hand at this can come in and sort of like that was davidx that was David yeah um and I mean it didn't work very well for them like David I think sort of was kind of like the dog that catches the car and then like doesn't know what to do with it you know and sort of like suddenly he was running the company which is I think what he wanted to be doing or what he thought but then sort of like lost interest um and uh and kind of ran the thing into the ground um and then from there you know he moved on about a you know a year and a half later um and in the meantime you know I sort of said look once I left it the like um you know I felt like David was making all the wrong decisions he he cut all the wrong product initiatives he you know fired all the wrong people he promoted and I sort was like this thing is not going to work um and so I started um with Pana who was um one of you know my sort of close colleagues its benefits um started Rippling um and said look we're going to this is an extension of what we were trying to do at zenefits and at zenefits the idea was you know allinone HR software you know taking sort of giving employers one place to go to deal with all this HR stuff and sort of towards the end of my time at zits I kind of had this realization that for the same reason that employers wanted one system to kind of manage all the HR stuff they actually wanted one system for much more than that and I started realizing that fundamentally employee data and the employee record it wasn't it was actually like a primitive for a lot of business software um that there were all these areas that we don't think of as HR where employee data was critical to the operation of these software systems you know it was any system with permissions you know those permissions are much more powerful if they can be role-based permissions um any system with reporting and analytics anytime you're looking at business data of any kind you want to cut and slice and dice that data by role you know you want to look at it by Department by manager by work location you want to filter out your interns and you know drill down on this specific kind of area and look at it by tenure and and so you're constantly taking business data from all these other systems and joining it back to the underlying employee data and that that's actually one of the things that I think makes analytic systems very powerful um anytime you have approvals who needs to approve something for an employee well first of all depends on who they are you know VPS need different approvals than it's complicated and you get to simplify it with software yeah and well it's not just that you simplify it with software it's that this mixing in of this understanding of who your employees are and their job and role and function simplifies and allows you to build better products in all of these different unrelated areas you build better it software better finance software you know maybe some way someday even like better sales software interesting and I picked up a piece of startup gold from there you have to tell me whether it's gold you found pmf I mean you spent

### Discussion on the importance of finding product-market fit and scaling appropriately. [35:34]

years not finding pmf and you tried everything then you tried the same things but you had pmf and it worked and then you had this realization that well if we don't pull all demand and bring it here somebody else is going to eat that market yeah is that always true you get pmf and then you have to hit the accelerator raise money capture all the demand or do you give away pieces of your Market to other people well I think so what um I was talking about the I I left off the second part of the story which is you know the thing that we did differently at rip Lane was the opposite we said look we're not we're gonna we're going to take a much longer time to build this um but when we build it it's going to be software end to end and so you know for a long time the company was you know basically me and mostly a whole bunch of really sizable engineering team you know 40 or 50 Engineers getting this to the point where you know everything sort of worked and worked really well and was software and end and then um you know and then things took off from there um I think that like what I got wrong at zenefits is that you know the market didn't turn over as quickly as I expected you know we thought um zenitz was really competing with insurance brokers in the United States um and we thought that the entire Market the insurance brokerage Market was going to turn over in 5 years that it would be like you know in the US there used to be when you wanted to book travel you'd go and you talk to a travel agent you know like a per you pick up the phone and call someone and they would book your travel for you and then of course things moved online and travel agents basically disappeared um in favor of online services and we thought the same thing was going to happen with insurance brokers um and it was going to happen very quickly and it happened you know first of all it hasn't actually it hasn't happened but to the extent that there was a transition it was much slower than I initially expected um and so we probably could have taken the time to sort of like really focus on the software and the R& D investment for a little longer and get it right and sort of nail it before scaling up the sales and marketing uh machine and the only reason you hit the pedal there was because you thought competition was inbound yeah I mean it was um I mean I you know I had you know the psychology of it is that I you know I had seen so many years of failure um yeah that suddenly when something was working it was like oh my God is this thing going to sort of slip from my grasp you know you need to go after it and grab it um and I think a lot of Founders who have you know who know that struggle who have seen you like how hard it is to get something to work yeah suddenly have just like such some combination of desperation and appreciation for things suddenly and fear that you lose it and fear of what it could be if it Slips Away um and so I think you know I don't know Travis well but I'm told that like that was a lot of like Travis's sort of psychology at Uber um and um and so I think you know that that's a powerful motivator for second time Founders um yeah not losing the market yeah parak you've done things multiple times right like you now had two success stories and I think what you were when you were maybe 20 and today there might be a lot of changes a lot of things you've learned but also what I've come to learn is to make a million dollars you need the kind of person who can make a million dollars right to run a billion dollar company multiple times there's something there's a way you think that other people don't and

### Personal philosophies and approaches to business and leadership. [39:16]

I'm sure you have wisdom that's inside that head that is different from uh conventional wisdom right where you would disagree with the VC on certain points let's say or you disagree with other Founders on certain points is there a framework you have like if I had to ask you what is Parker Conrad's set of Secrets right or differences from the average person that's made him who he is today what would you put that down as and the easy way to ask this question is you've seen that Meme where there's this guy and there's like thousand he's surrounded by thousands of sworts and the question is what's an opinion you have that other people would you know be like this like they theyd come up and hold a sword to your throat like one of these for example is the fact that you don't believe in the idea of radical Focus anymore yeah or it's not that I think that I that I don't believe in Focus it's that I think that there are opportunities that we miss you know because of this assumption that you have to start with something very narrow um I mean that's probably the thing that was like sort of the most kind of heterodox Viewpoint that I had around how to build these businesses like when ripling was getting started um I mean I think they're I'm trying to think like what else do I like disagree with people on it could also be differences in your life right for example I met this one founder who's like The Secret of My Success is I don't eat carbohydrates which is it probably doesn't apply to everybody else sucks it's probably very unique to him right life is not worth living at that point it's probably very unique to him but like this is an open space so I can to give a few things I'm um I'm very skeptical of the idea of like investor value ad in companies um I think that most investors most investor involvement is actually very dangerous for companies um just because like it I think it's dangerous to have people who are incredibly smart and capable who have like a few hours a quarter of context about your company like it almost never goes well like their opinions are almost always wrong um so like my preference is for like as little investor involvement as possible like I think VCS generally talk about how you want to pick great investors that are going to help you and like I think that's like a very scary Prospect of like of having that um so that that's probably one area of disagree although I love my current investors at rip Lan and I think they're great um another thing is I'm like skeptical of um being like too like data driven at organizations like I tend to think that like um it's really hard to figure out what's going on like top down looking at dashboards um and actually I think that like anec data tends to be a lot more powerful than data which is anecdote Plus data yeah you usually just anecdotes actually like I think that if you want to know if something's going wrong in sales and you want to know what's going wrong in sales usually like you could stare at any number of dashboards and you'd never figure it out um and the right thing to do is actually probably to go like sit on sit in on the next 10 to 20 sales calls with prospective customers and like you're going to know exactly what's wrong at that point um and you know if something's not working in support you need to go um you know go read the last sort of 10 or 15 support interactions and see like what happened um you know if there's an Ops process that's broken you need to go sit and do it like as the Ops person for a day um and figure out like why is this like screwed up um and the reason that like data is sort of often unsatisfying is like you know when you have data it shows you to the answers to the questions that you know to ask and when things are broken it's usually broken because there's something that you don't it's the sort of unknown unknowns that cause problems it's not captured in the data um because it's you know you're not looking at that specific thing it's not instrumented in that particular way and so you need to go look at like individual like anomalies and sort of like and then you sort of look at a few of them and you immediately understand what's going on um and so that I mean that's another sort of piece of conventional wisdom that I think I generally disagree with um I'm trying to think what else um I think that like um I probably tend to um like one thing I don't know how like different this is but um like iend tend to be very skeptical of like tradeoffs um so um in inside the company

### Challenging conventional trade-offs in business decisions. [44:00]

like people often come to me and do what I call like CEO in a box um where they where they'll say like okay you can have like a or b like which one do you want like a or b um and often these trade-offs are framed as like speed versus quality or um you know speed versus feature completeness or you know something like that um and my response is usually when I get that like a versus B tradeoff is to say like wait hold on like time out um I want both A and B like why can I not have a and b um and usually what's happening is like the person that's bringing you that decision is actually all making the decision for you they're deciding that like these are the constraints that they're imposing on the problem and giving you sort of the illusion of choice um when usually like you can sort of say look why where is it written that A and B cannot coexist you know where like does it violate the second law of Thermodynamics like what's the reason that you can't have these two things at the same time um and often you can find like a third path like you can find a different approach um way to get both of them um speed versus quality is like my favorite one because like I've I have seen many engineering teams that move slowly have never known them to build high quality products um and so but everyone believes that like secretly you or not it's like speed versus quality is this thing and it's almost always like moving slow is almost always correlated with like very low quality outputs at the same time um off you know definitely people can move fast and build bad products but like almost never is like moving slowly like the answer to like building high quality things interesting uh last question right and this is on talent management I find it

### The process and criteria for hiring executives at Rippling. [45:58]

hard like in the past to run like a 4050 man Aug right you have what like thousand employees like what's the about 2500 employees how do you hire people what's your frame what are your red flags so when I so most of the time when I'm when I'm hiring someone it's usually someone in an executive role um and so you know this there different ways I think there are different things that are appropriate for hiring people at different levels but usually what um what I do when I'm hiring an exec is I'll send them a bunch of material about the company um you know stuff that I prepared you know for investors for you know youve written those things yeah so there's a you know usually like once a year I sit down and write an investor memo um that's sort of like almost like the manifesto for the company like what are we doing why how does the business work what's the strategy um and I usually like we I have written that memo and like often like not used it to raise money because like you know we weren't raising money that year and instead it ends up like being used almost exclusively for recruiting do those memos get leaked to the media and stuff we published we actually published the first one um and I don't think the subsequent ones I don't think have leaked and we haven't published them um we send them out pretty broadly to perspective can you don't mind if the competitors see it yeah and I think we're sort of like I sort like the the the there was a point where I realized like At first we were like very secretive about it and there was a point where I realized like you know what it's if other people see this competitors like there there's nothing that they can do about it and so like it's actually okay like even if people if it leaks um but I'll send them all that material and we'll set up a call and generally I'll say like look I have no agenda I have no questions for you it's really like this is your chance to sort of ask me about the company and the business and the role um and we'll just sort of start a conversation and uh generally what I'm looking for is I want to learn something in the course of that conversation um so like the best interviews are things where people like you know they they have first of all usually very smart questions and the smart question are like the really bad ones are the ones that start off where people are just kind of like how are you so amazing you know like you built such an amazing company and like that it's like sort of like okay that's not you know that person's probably not going to work out um but the the really good people are people that have that can really get right to the sort of central issues on like well I it's interest you know they sort of say look it's interesting how you're thinking about this but how do you handle this problem and like isn't it going to break because of this reason um and you know these are usually things that I've thought about before and so you know I have answers to like sort of those Central questions um but like I also know that they're like the right objections versus like there are stupid objections and there are smart objections and some people get right to the really smart objections um and we have a conversation about that and often like in those conversations like I'll learn something new or they'll have advice you know about sort of you know if I'm interviewing someone for like I don't know engineering they'll have a point of view on the engineering side around some of the challenges and how you might address them and sometimes they'll be like whoa like that's a really smart Point um and so and generally if I learn something from them that's almost always like someone that I want to hire so it's like you put out a document where you're like hey here's what the company does here's here are my expectations and then what you judging execs for when you're hiring them is Clarity of thought yeah I think that's right and like can they can they challenge me on my thinking and do I learn something about sort of you know how their function should operate from that conversation um and some people and then also like you know everyone's going to start out they're not going to totally I mean I've spent a lot more time thinking about this than they have so they usually are going to have questions and some people in the course of that conversation they're were they're sort of like completing my sentences they're kind of like oh you know you they're like oh yeah and that means this or they see the implications you know where they're like oh okay if that's true then also this and also that and that means that the following and they're you they just get it really quickly um and it's sort of I think those people tend to be very Su because that's actually the most natural interaction that we're going to have and you're hiring EX for judgment anyway that's right you know you want people where sort of like they're going to immediately sort of like fit into a Groove get in a Groove and sort of understand you know move get Beyond you know you want people who are going to see ahead of you on this stuff like once they they're going to pick it up and they're going to see sort of around the corner on this and so you want people that in that first conversation that tends to be kind of

### Red flags to look out for when hiring executives. [51:10]

how they're operating and any red flags when you're hiding exx but like that's a no goal red flags um usually people who are kind of you know the first conversation they uh you know want to know about work life balance or you know like so you know there's like that that's sort of usually like not that you know that's not a thing but if probably not the first you know the first conversation I have this Theory by the way that like actually um that like the that one of the sort of interesting ways to judge a company is um if you look at Glass Door reviews they're like highly correlated um with sort of people's answers on work life balance um what does that mean I mean could you explain it in a simpler way for the audience the Glass Door reviews and the um there's a score that is on glass door for the company as a whole and there's a score for work life balance um and I think that actually the best companies are ones where the uh the difference between those two scores is really telling because there's a high correlation between those scores but I think you want to work for companies where sort of like the um you know that the the company rating is much higher than the work life balance you know that people are like look the company's like working really well in comparison to like the amount of work that it is um to be there yeah it's a nice place to work but hey you can't expect perfect work life balance yeah it's like look um you know you want I think you want companies to be like um you want to be livable like you know I have three kids I take my kids to school every morning um you know read them a story at night before they go to bed but also like I think you want to work somewhere where there's some ambition and there's um there are other people with sort of a chip on their shoulder that want to get something done um you know like we're not um you know no one no one's here on

### The correlation between company ratings and work-life balance. [53:10]

this planet forever and like you know you know it's a short time that we have and you want to I think you want to try and accomplish something um and sometimes people think that they want to work at a company um where there's really good work life balance and a lot of times people end up at those companies they don't like it and then the problem is like you end up at that company and you know everyone else around you doesn't give a you know they're kind of phoning it in um and that ends up being really frustrating you know if you're someone who's motivated and ambitious like you want to be somewhere where your colleagues are all you know really care you know you have a sense of popus yeah exactly um and that look can be a lot of work but also very inspiring and engaging and exciting at the same time um when you have an environment like that yeah one last thing I picked up

### The challenges and process of writing investor memos. [54:05]

from this conversation is you seem to write a lot is there like a correlation between quality writing and you know General startup success um I don't know I don't I mean I don't know if I like I find it really hard and painful to write I think that like you know like doing the investor memo thing like frequently what happens is like the business gets ahead of like the last memo and so is kind of out of date now because like things have evolved and there there's more to the story than what's reflected there and so I get a lot of pressure from my team to like update it and it just like it takes like months for me to like do it I'm supposed to be doing one right now um how many pages is the memo I usually about like 20 Pages or so um and like I was supposed to be doing it on the flight over while I'm here you know in Bangalore and have some downtime I've done absolutely nothing you know the and like and the reason is like you sit there and you kind of like stare at the screen and until your eyes start to bleed and like you know and suddenly and hopefully like a like the memo comes out and I find it like very difficult um and then and so usually there's sort of like a long like months of that until finally it's like there's some deadline and I only have like this weekend to finish College all over again yeah and it all comes out in like this sort of like Torrid like manic sort of like heavily caffeinated weekend of just like locking myself in a room and like you know sort of sitting there until so that's like the only way that I found a right um yeah so I don't think of myself as particularly good at it I think of it as like extremely painful and then eventually you know it just kind of you squeeze it out somehow interesting thank you so much Bak I think I learned a lot little more on how I should probably run a company when I do it next and I think that I'm sure that the people who stayed so far have learned a lot do you have any last message for them before we bid aduk um for like listeners um yeah I'm trying to think um I think

### Final remarks on Rippling's unique approach to software development and business. [56:18]

ripling is a really special company in ways that are not evident from the outside because I think ripling looks like from the outside like an HR software company and a lot of people are like uh HR software that's boring and I think people shouldn't think of it that way we're really saying like look we have like a fundamentally new approach to how you should build software and employee data is like a fundamental building block of sort of I think how a lot of software should be built um and so I think that like particularly for many of your listeners like they should check us out and come uh you know come see if it might be good fit awesome if you're in India and you're looking for a job and you have been in the startup ecosystem where did they go ding. com jobs I Ripley there's a career I don't even know what the URL is but yeah Ripley figure it out you'll figure out in the footer there's a link there um you know we're hiring tons of people growing very aggressively how many people are you hiring in India you have a rough number um we I know that on the engineering side we're hiring roughly a hundred people in just in Bangalore next year but then we're also hiring sales and marketing product design um you know we're hiring Finance Customer Support about 300 jobs at minimum guys go get it exactly awesome thank you Bako and I hope you had fun thanks a bunch that was fun