Do you remember Parker Conrad? Probably not, but you might remember the scandal he’s famous for. He’s the original founder of Zenefits that was ousted over big regulatory problems along with a $500K settlement to the SEC over charges alleging that he misled investors in the process. Zenefits aim was to “disintermediate” the health insurance brokerage industry by giving away free core HR software for the right to be a small employer’s insurance broker, which would give Zenefits perpetual commissions and fees. It sounded too good to be true. And it was.
Well, Kleiner Perkins is giving him another shot.
Rippling has announced a $45 million round to “kill HR and IT busy work.” It’s targeting the employee onboarding process with an integration play it calls a “biz app identity layer.”
It’s clear that when Conrad launches a startup, he’s not satisfied with disruption or transformation that helps a function get to the next place in their evolution. He likes to blow things up. Exciting, but what he blew up at Zenefits was Zenefits. And here’s the thing about employee onboarding – the busy work and process isn’t what’s broken. In our recent Workplace Intelligence Report, we looked at onboarding and specifically all of the associated “busy work,” as Parker calls it. We asked just over 4,000 employees in the U.S. and U.K. how their employers fared. What we discovered is that HR and IT have pretty much nailed the process of onboarding. We’re talking overwhelming sucess, as you can see in the chart below. Process improvement and busy work elimination isn’t where the biggest opportunities for improvement are today. Most all modern HR and IT support systems are integrating and addressing this. As I talk to employers of all sizes, they are looking for more strategic improvements to the experience that will translate into big gains for the business in productivity and revenue.
I tell buyers when they are considering licensing a startup’s products, to consider the track record of the founders no matter how brief. That advice just moved to the top of my list.
Parker Conrad’s last startup, Zenefits, drowned in busy work. Now with Rippling, he wants to boil that ocean. Instead of trying to nail one thing then expand, “very counter to conventional wisdom, we took on something that’s a lot broader and more ambitious.” That meant spending two years with 40 engineers working in stealth to build integrations with nearly every popular business tool to combine HR, IT and single-sign on services. The result is that when you hire an employee, Rippling onboards them to all those services in a single click. Goodbye, busy work. Hello, gateway to the enterprise app ecosystem.The past few years have seen a Cambrian explosion of startups building specialty software for office productivity and collaboration. But that’s left customers struggling to get their teams set up on all these fragmented tools. As such, Rippling had a very good first year on the market with rapidly growing revenue. So when Rippling went out to raise money, Conrad was signing term sheets in just over a week.