Parker Conrad: How I Got Ousted from Zenefits and Came Back with a Vengence | 20VC #932

1. 0:00 – 1:40

   Parker’s Background

   1. HSHarry Stebbings0:00

      (beeping) Three, two, one, zero. You have now arrived at your destination. Parker, I am so excited for this. I loved our last discussion, and so, uh, I was desperate to make this one happen. So thank you so much for joining me once again, Parker.

   2. PCParker Conrad0:18

      Thanks for- thanks for having me.

   3. HSHarry Stebbings0:19

      Not at all. Uh, I did a lot more work this time, and, uh, I have a lot more research notes, so this should be more in-depth. Uh, tell me, for- for- for those that missed the first show, how did you make your way into the world of startups, and how did you come to found Rippling most recently?

   4. PCParker Conrad0:32

      So I started Rippling really, um, as, uh, I guess sort of a, a round two after, after my last company, um, you know, that, that en- ended in, in, in a lot of ways that were, you know, sort of, uh, unpleasant for me, but also sort of really unsatisfying. And, um, uh, and so I, I started Rippling really, um, sort of with this thesis about w- you know, sort of em- employee data, and what the market that we're in really required. And, and the idea was that employee data, because it's a lot more distributed, we think, than just the HR department and HR business systems, um, (clears throat) you know, companies need a system that manages employee information in a way that's not merely just about HR, that sort of also cuts across a lot of the other functions of the company, and, and, uh, when you hire someone, sets them up in all the different business systems in your company, and manages a lot of employee data across all these different places, across E- IT, finance, you know, things like that.

   5. HSHarry Stebbings1:32

      So this is quite a deep question, uh, given it's like the first question, but I find it very revealing of one's character. You know, it was actually Jeremy Liew

2. 1:40 – 4:50

   What are you running from/towards?

   1. HSHarry Stebbings1:40

      at Lightspeed that asked me this one, and he said, "We're all a function of our histories." So Harry, what are you running from, and what are you running towards? And I, I think it's really revealing of character. So when you think about that, what are you running from, Parker, and what are you running towards?

   2. PCParker Conrad1:56

      Well, I think, (clears throat) you know, um, you know, there was definitely a moment, you know, when, um, you know, after I was forced out of Zenefits, um, when, uh, you know, there were a whole bunch of reasons, like, legally and, and different restrictions I was under that sort of pres- prevented me from really talking about what happened, um, and, and sort of, you know, the proverbial sort of like my side of the story. Um, and there, there was this period of about six to nine months when, uh, there was just this overwhelming sort of like institutional apparatus that was like sort of a- arrayed ag- against me and sort of domini- you know, sort of writing this narrative about what had happened, and, and I sort of watched that unfold from like the basement of my house with, you know, um, this sort of growing horror. Um, and I, um, y- you know, at a certain point, I kind of decided that the only way I was going to be able to talk about sort of what was happening and sort of tell my side of the story... Because, you know, I wasn't, I wasn't sort of r- really, you know, in addition to just the restrictions I was under, I wasn't... You, you know, it's not my sort of forte sort of doing that kind of like, you know, media PR jousting.

   3. HSHarry Stebbings3:17

      Mm-hmm.

   4. PCParker Conrad3:18

      Um, and I started to say the only way I was gonna be able to sort of, um, communicate about this to, um, you know, people in the tech community, to sort of the, the world more broadly than that, was to build this specific company, and, um, try and make it into like a, a really big, you know, $100 billion outcome. Um, (clears throat) and so I don't know if that's something I'm running away from or running toward, um, but it was, um, you, you know, it was really sort of deeply motivating for me about just, you know, at this period of time when just kind of like getting sort of, you know, putting one foot in front of the other and getting out of bed in the morning was, um, was a struggle. Um, and I think since then, I mean, there are obviously lots of other things that I love about what we're doing at Rippling. I really, really love the people I'm working with. Uh, really excited about the products that we're building. (clears throat) Um, and so a lot of, you know, maybe some of those more positive, um, motivations have kind of sort of come to the forefront, but for a long time, you know, that was, that was sort of what was, um, what was getting me going in the morning.

   5. HSHarry Stebbings4:24

      Parker, I love a quote from Josh Wolfe at Lux. He says, "Chips on shoulders, put chips in pockets." And I, I totally agree with you. You need that fuel. I remember I once lost a load of weight because a girl dumped me, and I thought, "I'm gonna prove you wrong." And it turns out she just disliked my personality, not my weight. (laughs)

   6. PCParker Conrad4:39

      (laughs)

   7. HSHarry Stebbings4:39

      Um, but, (laughs) but I, I wanna ask, and just kind of speaking of that, I did speak to Garry Tan before the show, and he mentioned obviously, um, that tough time and, you know, Slack's hiring

3. 4:50 – 7:02

   The Rippling Comeback

   1. HSHarry Stebbings4:50

      PR firm. (laughs) And my question to you, which is like, in that moment, what do you tell yourself? Like, what's your mind-speak to pick you up from the basement where you are feeling the weight and the headwind against you to say, "No. I'm gonna come back. I'm gonna get Rippling off the ground, and I believe in myself again. Bat up"?

   2. PCParker Conrad5:11

      Um, I mean, it, it was hard. I think that, um, you know, the, uh, some of it was that, you know, when, when I left... You know, and some, some of this is, I think, as a founder, um, you know, it's really hard to watch someone else, like, you know, making decisions with, with, about your company. But, you know, it was sort of, I, I got to this point where I was convinced that, um, you know, David was not really interested in making Zenefits successful. Um, and, you know, almost every decision he made at the company was wrong. Um, you know, he, uh, the, the decisions he made from a product perspective, from a strategy perspective, the, the people he, he fired, the people he promoted, like, almost all of it was just, like, completely wrong. Um, and, and, uh, I sort of felt like, "Well..."... uh, you know, I think there's a huge market here and a huge opportunity that's now gonna go unfilled. Um, unless... Uh, you know, I was talking with Prasanna. I said, "Unless you and I kind of jump in and do this, you know, this is never gonna happen, and there's like $100 billion, like, sitting on the floor over there, and nobody can see it except for us. Um, and we just have to figure out a way to sort of walk over there and, like, and pick it up." And, like, we know that if we sort of do these things, um, y- you know, it- it's gonna work. And so whether it was, like, delusional or, um, or just, like, an e- sort of extreme sort of confidence in what we were doing, um, (clears throat) uh, you know, that- that was, that was sort of what- what kept me going.

   3. HSHarry Stebbings6:50

      I- I totally get that. You said about kind of seeing the $100 billion on the floor. I get that. That's insight. But you need execution and performance to actually achieve that and to achieve the vision there. When I say high performance

4. 7:02 – 12:06

   What does “high performance” mean to you?

   1. HSHarry Stebbings7:02

      to you, what do you think, and what do those words mean to you?

   2. PCParker Conrad7:07

      Well, so one thing... I think it's actually... For me, it's actually sort of very related to what- what you talked about with sort of chips on shoulders, um, 'cause I think that- that people are capable of so much more than they believe themselves to be capable of. Um, and, uh, y- you know, like, when you think a-... And- And I think that one of- one of- one of your jobs as a founder or as a CEO of a company is to find ways to sort of pull that out of people. Um, and a lot of times, I think people think that, you know, the difference between, you know, like, you know, the same set of people or the same organization, maybe it's like if you work really hard and you sort of burn the midnight oil, maybe you get sort of, you know, 20% more done. Um, but actually, you look at this, and- and the difference between organizations that really accomplish a lot and the organizations that accomplish very little, it's orders of magnitude difference in output. Um, you know, there are, there are just so many great examples of organizations and institutions that accomplish incredible things in a very short period of time, um, as well as, like, organizations and institutions that accomplish almost nothing in... with sort of a lot of effort and money and energy expended. Um, (clears throat) and so, um, I think that-

   3. HSHarry Stebbings8:22

      Can I just... On- on- on people... I'm sorry. I'm too intrigued. On people being able-

   4. PCParker Conrad8:25

      Yeah.

   5. HSHarry Stebbings8:25

      ... and more, more wi- not willing but, like, having the potential more than they think they do, what do you think you do to pull out people's brilliance or talents in a way that they might not elsewhere? How can I do the same?

   6. PCParker Conrad8:39

      Um, so I mean, uh, one, one thing I... Um, one thing that I think happens sometimes in- in companies is people come- come to you, and they wanna, they wanna do what I call, like, the- the CEO in a box, where they- they sort of say, "Look, we can do A or B." Like, "Which... Do you want us to do A, or do you want us to do B? We could do it quickly, or we could do it high-quality. We can, we can do this thing, or we can do that thing, but we can't do both." Um, (clears throat) and I think, like, uh, you know, my- my general reaction is, like, "No, I don't..." Uh, like, "I don't, I don't wanna have to make that choice, so why..." You know, is it, is it like the second law of thermodynamics that's violated if we do A and B? Like, what is the sort of fundamental impossibility of, like, getting both of those things done? Um, and, uh, and o- often, I think people will sort of, you know, go back to the drawing board and think about, you know, a different approach or, you know, sort of reconceive of sort of how they... you know, how this might happen and find ways to sort of do both of those things, um, in- in both A and B in- in the timeframe that- that you have. Um, um, so I mean, sometimes, you know, that can be, that can be, like, you know, un- unreasonable CEO, but- but often, I think, um, it really forces people to sort of think about and pressure test, like, their underlying assumptions about, um, what's possible and what would be required. Um, and so that's- that's probably, um, sort of one- one of the biggest ones, is just w- w- refusing to accept, um, the sort of, uh, the set of implicit assumptions that people come to you with about why certain things are possible and certain things are not possible.

   7. HSHarry Stebbings10:29

      Can I as-... How do you give that effective feedback? How do you push them and challenge them? 'Cause I struggle with this. I'm either too wet and too floppy, or I'm dictatorial. "I'm Parker. I don't understand why we can't do this. Go do it," (blows raspberry) which is not right either. H- how do you give that effective feedback and direction that's kind of the middle ground?

   8. PCParker Conrad10:48

      I mean, I don't, I don't know that I... I don't, I don't claim to have, like, any- any sort of special insight there, um, but I think, you know, sometimes it- it, it's about, um, sort of articulating the- the sort of genuine and real consequences of not- not being able to do A and B, um, and sort of, you know, what- what that leads to, you know, what- what the sort of upside is if we can get it done, what, um, y- you know, what, um, you know, what- what sort of bad thing happens to the company if we can't do it, and, uh, and also sort of trying to understand why, like, what is... 'Cause sometimes, you know, just asking why you can't get both of those things done can reveal... You know, maybe it's like, "Well, you know, to do that, we'd have, um, you know, we'd have to, uh, do X," or, "We'd have to, you know, find a way to move someone o-..." You know, and- and- and- and sometimes it's like, "Well, maybe- maybe we should do that." You know, maybe those are things that make a lot of sense to do, um, and you can, you can sort of find ways to square the circle.

   9. HSHarry Stebbings11:48

      How do you think about the balance between squ- speed and quality of execution? I always say that speed of execution is the only thing that matters, like go, go, go. Better-

   10. PCParker Conrad11:57

       Mm-hmm.

   11. HSHarry Stebbings11:57

       ... to get it 80% done than 99% perfect. How do you think about instilling urgency versus instilling perfection?

5. 12:06 – 13:36

   Urgency vs. Perfection

   1. PCParker Conrad12:07

      Um, so we- I mean, we have an- I think, an extremely high-quality borrower. I'd like to think that we have an extremely high-quality borrower at Rippling.

   2. HSHarry Stebbings12:13

      Yeah.

   3. PCParker Conrad12:14

      Um, but I also... I think that, like, I don't- I don't really agree with that trade-off between speed and quality. Like, yes, it's possible to do things fast and bad. It's also possible to do things, like, slow and bad. And, um, I think that speed is often, like, more, uh, in, uh... more sort of aligned with quality than the other way around. Um, like, it's very rare that you see projects that, like, really move slowly that end up just really nailing it at the finish line. Like, usually what happens is they're slow, and then when they get done, they're also bad. Um, and, like, companies that move with urgency, um, you know, um, sort of being, uh, y- you know, sort of, you know... Like, I think that, like, having a lot of urgency on fixing underlying issues and building a high-quality product is a virtue. And, you know, being sort of slow or lackadaisical about addressing underlying problems is, like, not a virtue, and doesn't- doesn't lead you to sort- doesn't sort of result in higher-quality products.

   4. HSHarry Stebbings13:21

      You're absolutely right. Very, very rarely is it very slow and then it's like, "Wonderful. What a brilliant display. I'm so glad you spent three months working on it." Never happens. Uh, can I ask you, Parker, when we think back to your, like, leadership style itself, we've spoken about kind of communication, goal-setting,

6. 13:36 – 17:04

   Parker’s Leadership Style

   1. HSHarry Stebbings13:36

      speed. How would you describe your leadership style today on reflection? When you sit back, how would you describe your style of leadership?

   2. PCParker Conrad13:46

      Uh, my style of leadership. Um, I'm not sure. What, uh... Like, I'm trying to think of, like, what the d- like, what the different styles are. Um, I think-

   3. HSHarry Stebbings13:58

      So you can be, like... Yeah. Y- you know, you can be like the dictator who is like, "It's a... It's a complete, um, Parker show, and I set the direction, I set everything, and we do this." Or you can be the kind of patriarchal figure, which is much more family-oriented and... What... Do- do you see what I mean? There's many different variants.

   4. PCParker Conrad14:18

      Well, I... You know, gosh. I guess, I'd- I'd like to think I'm- I'm- I'm sort of a wonderfully empathetic, uh, sensitive leader. Um, (clears throat) I- I'm not sure, I'm not sure I have all that- all that figured out. Um, um, I think that, like, I'm definitely, like, extremely goal- uh, extremely goal-oriented, so trying to sort of like, um, move the company forward, um, y- you know, towards sort of where- where I think we need to get.

   5. HSHarry Stebbings14:46

      Mm-hmm.

   6. PCParker Conrad14:47

      Um, uh, I don't- I don't... I certainly- I don't think of myself as a dictator. Um, uh, but, uh, you know, certainly in a situation-

   7. HSHarry Stebbings14:57

      Has there ever-

   8. PCParker Conrad14:57

      Oh, I'm sorry.

   9. HSHarry Stebbings14:58

      Has there been a moment... Has there- has there been a moment or two which have been... It could have been leaving Zenefits, it could have been raising a particular round, hitting a particular milestone, that really changed how you think about how you act and lead though? So like, for me, it was, you know, when I left my old fund and started Twenty VC Funds. It was a catalytic moment to me realizing how I would take ownership and structure of my career.

   10. PCParker Conrad15:25

       I don't- I don't really think I've changed very much, to be totally honest. Like, people always want, um... y- you know, want, um... You know, want- want you to have some- some story of, like, personal growth. Um, uh, and I- I think I'm, like, basically the same person that, you know, I alwa- I always was. So, I don't- I don't think I've had that kind of, like, transformation or- or insight. (clears throat) Um, uh, I think I-

   11. HSHarry Stebbings15:53

       What do you think you need to... What- what do you think you need to figure out in leadership, then? You said there were things that you had to figure out. What do you think now, "I would like to figure out and change"?

   12. PCParker Conrad16:02

       Um, well, I think for- for better or for worse, I think that like, my sort of like governing, uh, sort of personality trait is- is impatience. Um, and there are things that are really good about that for the company, and there are things that are probably, um, you know, frustrating and, um, and difficult about that. Um, but that- that I think is like sort of... It's- it's certainly probably one of- one of my sort of dominant personality traits. Um, and, uh, uh, I think that that... that that's probably the- the sort of like, you know, biggest strength and greatest weakness kind of like rolled into one.

   13. HSHarry Stebbings16:45

       I- I- I think impatience actually is- is good in many ways too. Um, I think in terms of like... The thing it makes me think about is prioritization. And m- many of your investors told me that kind of your ability to prioritize efficiently is one of your biggest skills. I wanted to know, how do you determine, like, which new efforts to prioritize, and what's that decision-making framework

7. 17:04 – 27:49

   How to determine what to prioritize?

   1. HSHarry Stebbings17:04

      around where you focus?

   2. PCParker Conrad17:06

      Yeah. So Rippling, I mean, one of the things that's very unusual about Rippling is that, um, most, um... You know, most companies, they're- there's sort of a conventional wisdom around startups that you- you ought to do, like, one extremely narrow thing, um, and that focus is, like, the way to build companies. Um, and I think that, at least for Rippling, we've sort of taken the opposite tack. Um, and it's- it's something we've talked about before that I call a compound startup, which is basically doing a bunch of different things in parallel.

   3. HSHarry Stebbings17:36

      Y- you mentioned there about kind of focus, and one of your, uh, investors in particular said that prioritization was one of your key skills. And so I wanted to talk about your decision-making framework of prioritization. So, how do you think about what you prioritize and focus on today versus what you don't?

   4. PCParker Conrad17:52

      So, one of the things that- that's unusual about Rippling is that most people think that the right way to do a startup and to build a tech company is to do one extremely narrow thing.... um, and like, and focus on that one thing. And, and Rippling's a little bit different. I sort of take the, a very different point of view. I, and I call it building a compound startup, which is building, you know, multiple different products in parallel as opposed to, like... and, and focusing on sort of, um, sort of breadth versus sort of like one, doing one extremely narrow thing. Um, and, uh, there, there are a lot of reasons that are pretty well understood about why this sort of focused approach works or what makes that easier. Um, there are some distinct advantages to the, the compound approach, to building a couple of different things in parallel. Um, and generally speaking, my view is that the, the way that we make decisions about what products to build are, are sort of really focusing on what I think are the four critical advantages of a compound product or a compound company, and you wanna build products that maximize those four advantages. Um, and those four advantages are, um, in my view, first, like much deeper integration, um, both with the other products and usually with some underlying, uh, system of record, in our case, employee data. So generally speaking, that means, like we like to build products where that integration matters, where employee data is really relevant and important and can, and can improve, um, the product that we're building, um, if it, if it has like a much deeper connection to that underlying employee data. The second is that when you're building a lot of products in parallel, you can, you can often sort of abstract out repeated or common functionality. Um, and so with B2B software, for example, there are a lot, you know, there are a lot of patterns that get repeated across many different sort of B2B software verticals. Things like, you know, reports and analytics, role-based permissions, workflow automations, approvals, policies and policy assignment. Um, and when you're building a bunch of different products, you can start to think about, what are these things that we can actually build once? Um, and, and build them like 100 times better, because we're gonna just make a much deeper investment, you know, rather than building, you know, reporting, for example, as an afterthought. Um, you know, the sort of, "Eh, our clients are bugging us about some reports, so let's kludge on a CSV download." Um, you can go really deep and start to think about, how would we build reporting capabilities that would compete with Looker, um, a- and, and make them available across like all of our different product lines? Um, and so you wanna build products that, um, you know, where the, what we call the middleware capabilities that we've built are relevant, you know, where it actually... You know, reports and analytics and workflow automations and role-based permissions and approval, you know, approval chains are really critical for those specific products. Um, the third advantage-

   5. HSHarry Stebbings20:56

      First, is that not... Is that... Sorry to interrupt. I'm just going to interject while I have you there 'cause my memory's terrible. Does that not hinder speed? If you're gonna go for real granularity and, and depth on things like reporting, things like RBAC, things like, that are template-able but also kind of common across other products, does that not massively hinder your ability to move fast if you're spending huge amounts of time making them as good as the best in class?

   6. PCParker Conrad21:21

      No, 'cause like what, um, what happen... We, the, the advantage is that we get to build once and then reuse that across every single product that we build. Um, and so, uh, like when, when Rippling builds a new product, I think that, um, you know, our goal is, is to be able to, you know, match or really ex- exceed in a lot of ways the capability of the current sort of best in class products on the market with like 20% of the R&D investment. Um, because so much of like building a new B2B software product is building these fundamental concepts that when we have a team that's going after a particular area, they get for free. Um, you know, they don't, they don't have to build reports and analytics. They don't have to build role-based permissions. They don't have to build like capabilities for approvals. Um, y- you know, we have s- sort of really well built out concept- concepts of how you build a policy and how do you assign people to that policy. Um, uh, we have a workflow automation system that, you know, does a lot of the heavy lifting there. And so, um, as a result of that, um, you know, for example, we're, we're very close to launching, and I think by the time this comes out, we'll already have launched our, our spend management, um, what we call our finance cloud vertical, which is corporate cards, expense reimbursements, bill pay. Um, and when you think about that product, um, you know, so much of it i- or is built on capabilities that we already have in Rippling. It's like, you know, well, you need really strong concepts of approvals. Um, you know, like sh- i- is this expense valid? Should it be reimbursed? And those improval- approvals are often need to be routed based on role. You know, you need approval from the VP of your department, from the finance associate that's aligned with your team, from the site lead for your particular location. Um, and those relationships between employees and your company are not really well understood by other systems. You know, maybe they know who your manager is, but they don't know who the VP of your department is. Um, you need analytics and reporting to sort of understand, well, what are you spending and, and, well, you know, and by, by department, like who, you know, who's spending what. You need role-based permissions because you want your CMO to be able to see all of the marketing spend, right? And, and just have that happen automatically out of the box. And, um-

   7. HSHarry Stebbings23:43

      Can I ask, are you d- are you, are you displacing Brex and Ramp with that product? And why do you think that your insertion point with Rippling as the core is naturally more advantageous to then layer on banking to displace them?

   8. PCParker Conrad23:58

      I think... I mean, so, I'm, I'm not sure that we're going as far as like banking. You know, we're not, we're not doing bank accounts and things like that. But, um, I do think that like, um, spending, uh, y- you know, things like corporate cards and expense reimbursements just has an incredible nexus to the employee record, because so much of like...... who's allowed to spend money on what, what approvals are required, is about your role within the organization. Um, you know, it's different if you're an IC or a VP. It's different (clears throat) if you work (coughs) excuse me (coughs) . It's different if you work, um, in this location versus this other location. It's different if you're in this department or another department. Um, and a lot of sort of how you can dial in and just change the amount of time you need to spend on this stuff, is having a system that fundamentally understands role within the company. Um, whether it's role-based permissions, whether it's approvals that are routed based on role, whether it's policies that are applied based on role (coughs) , um, whether it's workflows that are managed based on someone's role within the company, that- that sort of takes this entire exercise and- and just collapses it down to something that requires just a lot less of your time. Um, and, um, look, one of the most interesting things about Rippling right now (coughs) is when we look at, um, you know, obviously, you know, because of the changes in the macro environment, you know, everyone's trying to sort of look at, you know, in their product, how do we, how do we pitch someone on why they sh- why the sort of ROI and the cost efficiency of our service? Um, and one of the things, you know, I, those analyses, they always seem like BS to me. People come to you and they've got some, like, time tracking that shows that, like, "Ah, eh, you spend less time with our product." (clears throat) What we did is we really looked, we tried to look for something that would hit a higher bar, and so what we looked at is how many people do companies hire into a lot of these functions when they use Rippling versus when they- they use a com- competing product? And, you know, for companies that are on Rippling, we can look at the data, you know, inside of Rippling in the aggregate, and for companies that don't use Rippling, we can look at the data on LinkedIn. And what we found is that at almost every stage of growth, you know, of companies between zero to 25 employees, companies, you know, like between 500 and 1,000 employees, they have almost double the number of people in HR, IT, and finance for companies that don't use Rippling than companies that do use Rippling. Like almost double. So, you know, if you're, if you're a company between zero and 25 employees on Rippling, you have an average of .4 people in HR, IT, and finance (clears throat) , and you have an average of 1.2 if you don't use Rippling. And when you get up to, you know, a company that's, you know, 500 to 1,000, you have an average of 24 people in those functions on Rippling and an average of 45, um, if you don't use our system. And so it's- it's a really dramatic difference, and it's because so much of the work that people in these functions are doing is managing employee data broadly across your company, whether it's adding people to systems or managing policies and approvals and workflows and things like that (clears throat) that can just be, like, entirely automated if those systems really understood, you know, what everyone's job within the company is and- and how it- they related to one another.

   9. HSHarry Stebbings27:41

      How truly effective is the cross-sell? You know, when you think about the compound startup and the multi- multiproduct line that one has with a compound startup, you think about the

8. 27:49 – 31:45

   How effective is the cross-sale?

   1. HSHarry Stebbings27:49

      cross-sell being so natural, it's never as easy as it sounds in that-

   2. PCParker Conrad27:53

      (clears throat)

   3. HSHarry Stebbings27:53

      ... "Oh, come in and buy everything." Eh, but how effective is it, and what are the biggest barriers to preventing fir- like, adoption of full suite of products?

   4. PCParker Conrad28:02

      (inhales) So, I mean, no one... It's very rare for a company to come in and buy absolutely everything that we sell on day one. (clears throat) Um, but one of the things that, um, that we've spent a lot of time thinking about is how do- how do we do this cross-sell effectively? Um, and the results are really incredible. I mean, we have sort of m- millions of dollars in net new ARR every month from cross-sell, which is selling, you know, existing customers on new SKUs within Rippling, and it's not like there's, like, it's not like there's one thing. I mean, I think the- the single biggest SKU is, you know, way less than 10% of that, um, and there are 25 different SKUs (clears throat) that we're selling to people. And the secret to this is that what we call the employee graph, this data about employees, um, it is, like, the right underlying primitive for doing cross-sell to an organization, um, because we understand in our system all of the data about all of the employees in your company, which is another way of saying we understand your organization very deeply, and that allows us to identify, like, the exact right moment that we should ping you about a particular product that maybe you should be using in Rippling. And so one example of this is, um, you know, when you terminate a remote employee in Rippling, um, we have a product that we call inventory management, which basically, you can think of it, we call it a cloud IT closet, um, and what it is, is- is we ship a terminated employee a box and a shipping label for them to, like, put their computer in (clears throat) , and then it gets sent back to, like, our warehouse or one of our partner's warehouses, and where they sort of get it cleaned and configured for your next hire, and the next time you hire someone, you know, you just can choose that computer in Rippling and send it out to your next hire, and you never touch or see that computer. It's all handled, you know, sort of in- in the cloud for you. And so when companies that don't have this product, when they terminate a remote employee, we're like, "Hey, you're in San Francisco. This guy's in, you know, Montana. How are you getting that computer back? Um, and by the way, we have a service for this, like, here, you can sign up right here, and we'll manage this for you end-to-end." And we can do that for our own products, um, and we... You know, that one ad unit...... you know, adds, you know, 300K a month in net new ARR for that SKU every single month, like clockwork. (clears throat) And we can do that for, um, for other- for partners as well. Um, so we, um, you know, we are, um... We have a, a, a partnership with a company called Tilt that does parental leave management, and look, you know, anytime someone has an employee that adds a baby to their medical insurance, w- we sort of know with some, with some level of confidence that, like, "Hey, this is a company that's probably struggling with, you know, how to manage parental leave right now." Um, and we can reach out to, you know, the, the payroll admin, (clears throat) , um, you know, the HR admin for that company and say, "Hey, you know, if your- if this is something that you need help with, you know, here's a, here's a company that integrates directly with Rippling that manages this for you." And so, we can do this for, like, our own products and also for, for partners as well. And it's, it's, you know, for the companies that we- that have, you know, that are integrated with Rippling and that we're sort of helping them sort of cross-sell their products, you know, it, it's become, I think, like, a pretty big channel for a lot of companies to, to sort of get new customers.

   5. HSHarry Stebbings31:36

      Can I ask you, when we think about margins, um, how do the margin profiles look, uh, along the different, uh, products that you have today? Obviously, you have

9. 31:45 – 34:38

   Profit Margins at Rippling

   1. HSHarry Stebbings31:45

      physical products too where you're managing, you know, l- laptops coming back from Montana-

   2. PCParker Conrad31:50

      (coughs)

   3. HSHarry Stebbings31:50

      ... to a warehouse. Everyone associates that with low margin, tough, real world, low margin business. Um, like, uh, how do the margin profiles vary on a per product basis, and have they changed over time?

   4. PCParker Conrad32:03

      (clears his throat) We... I mean, so most- we really target, um... Y- you know, we, we, we try and maintain sort of 70% to 80% software margins for all of our products. I think the, (clears throat) , the biggest exception to that for us is actually payroll, um, where, um, you know, payroll is much lower margin for us. Um, but it's also, like, the core of what we do, and the reason it's lower margin is just the support burden is much higher, um, and so we, we view that as sort of, like... you know, we sort of subsidize, um, payroll from a margin perspective with the revenue that we're making from all of these other things, um, and all these other products that we sell.

   5. HSHarry Stebbings32:46

      Were you able to have such high margins in the early days? Often, you kind of scale into those margins with time, with efficiencies of scale. Were you able to have them from the earliest days?

   6. PCParker Conrad32:55

      (clears his throat) Yeah. Although, I think- You know, I think a lot of software companies, um, understanding margins is something that takes a lot of time and a lot of maturity in the business to understand. And so, (clears his throat) , um, you know, I think we always had caveats early on about sort of, uh, what our margins were and sort of our level of confidence that that's sort of actually what they were, and I, I sort of personally distrust what most early stage software companies say about their margins 'cause I think you just don't understand it. I mean, like, early on, you know, even if you sort of add up all the costs that look like cogs, um, one of the things that you find is that there just- There are lots of little things that, like, you know, you have some engineers doing over here, or that you as a founder are sort of handling as a one-off when they come up, that aren't getting counted in, in your sort of cost of delivering the service, because you don't have, like- you don't yet have, like, a team doing it. It's not sort of carved out in a way that you can allocate those costs in the right way. Um, and so often, like, early stage companies look like they have very s- good margins that then get worse as they scale. Um, it can also really be hidden by growth, right? Like, growth can sort of screw up your assessment of margins in a lot of ways, so I j- I just think it takes a long time for, like, margin profiles a company to stabiliz- companies to stabilize and for them to really understand, like, what they actually look like.

   7. HSHarry Stebbings34:20

      I, I totally agree with you. Uh, I always love it when you get, like, Cat to LTV, you know, in seed stage startups and you're like, (laughs) "We have no idea where this is gonna go from here." Um-

   8. PCParker Conrad34:28

      That's right. Yeah.

   9. HSHarry Stebbings34:29

      ... my, my qu- My question to you is, you mentioned w- working with partners. Why work with partners? When you work with partners, obviously, you have revenue to share, but you don't internalize

10. 34:38 – 36:03

    Why does Rippling work with partners?

    1. HSHarry Stebbings34:38

       the margin and enjoy, like, the full economic benefits of having it vertically integrated. Over time, do you want to own every provider service that you have inside the company?

    2. PCParker Conrad34:50

       No. I think, I mean, we have a, a really robust partner ecosystem, (clears his throat) , and I think, um, you know, our, our goal is to have, um, you know, companies that we partner with that, that compete against internal Rippling products on even footing. Um, and, and not just in the sense that, you know, you have access to, you know, the integration capabilities, um, but, but even access to sort of the distribution. Um, and so, um, you know, when I talk about, um, sort of the, the cross-sell efforts that we have and the systems that we have to sort of target and figure out, "Hey, like, this is a company that, um, y- you know, really ought to be looking at, um, sort of maybe spend management or something like that," our goal is actually to have, you know, um, you know, companies that are competing with our own internal products that can, can be a part of that on even footing with our own SKUs. Um, and so, (clears his throat) , that's, that's a big part of the whole philosophy, is to, to sort of be able, um, to sort of work with partners like that.

    3. HSHarry Stebbings35:54

       Can I ask, what are the biggest barriers to you building the app store for business? 'Cause that's kind of what I have in my head when I hear you talk now. What are the-

    4. PCParker Conrad36:01

       (laughs)

    5. HSHarry Stebbings36:01

       ... biggest barriers that would prevent that,

11. 36:03 – 39:00

    What is preventing Rippling from becoming the App Store for business?

    1. HSHarry Stebbings36:03

       and in your mind, what are the hurdles you need to overcome to fulfill that vision?

    2. PCParker Conrad36:08

       I mean, I- You know, that, that's, that's, I think, a lot of what, um, of, of sort of Rippling's thesis is that, (clears his throat) , look, there are a lot of companies that, uh, talk about wanting to be, like, an, an app store or an app shop for, for business software, um, and the, the problem is, is that they're- it- they're- it's always clear why that's valuable to them. It's, it's never been obvious, like, why anyone else wants you to be an app store for business software, and I think in, in Rippling's case, uh-... um, the sort of thesis on why this makes sense is, is really the employee record. Um, that because, you know, employee data is, in my view, not ... It's not an HR department thing; it's, it's a, a, a fundamental primitive for business software writ large, (clears throat) you know, that almost every business system either directly has a bunch of information about employees that needs to be maintained and updated, and that's, and that ends up being sort of secretly the root cause of a lot of the administrative work and a lot of G&A functions within companies, or they have, you know, they need things like, um, role-based permissions or approvals or reports and analytics that, that are also themselves, like, have this deep dependency on employee data. Um, and then that information about employee data, and r- really about your organization, is, is sort of the right underlying way to sort of do a lot of sort of ... effectively do sort of targeted cross-sell to companies, um, to sort of say, "Hey ..." Um, uh, you know, the, the analogy that I think of is, is like Facebook, that, (clears throat) you know, Facebook is such a powerful system for, um, selling consumer products because the social graph has turned out to be this really powerful underlying system for selling consumer products. And I think in the same way, um, you know, understanding, um, you know, when we look internally, understanding, like, hey, this is a company that has, um, you know, that, that has a need for ... Um, you know, they just ha- hit a certain size, and they need to offer a 401 (k) , um, you know, we can be like, "Hey, like, you should ... You know, d- did you know that you just hired an employee in California, and California has this rule at your size that you need to offer a retirement plan, and you guys don't appear to? (clears throat) Here's an easy way to get started with that, and, you know, here are sort of, like, three partners that we work with that you can get up and running with very quickly." Um, um, I think that's an e- it's an extremely effective way, um, for ... you know, we can, we can sort of, you know, drive a lot of business to, to partners, um, and also really help customers that, you know, need to get up and running quickly with sort of a lot of just s- sort of core functionality.

    3. HSHarry Stebbings38:51

       Can I ask, what gets easier over time, and what gets harder? Everyone always says with leadership and with business and company-building, "Oh, it doesn't get easier over time."

12. 39:00 – 40:43

    What gets easier/harder over time?

    1. HSHarry Stebbings39:00

       I'm always a little bit skeptical. What does get easier, and what gets harder?

    2. PCParker Conrad39:05

       Um, I mean, I, you know, I've f- found ... I mean, I thought, um ... Look, starting a company is, um ... It's a real grind for a long time. Um, like, I, uh, I desperately want to never do it again, (clears throat) um, and desperately wanted to never do it again the last time around, and unfortunately, found myself in a position where, uh, that, that wasn't an option. Um, um, but early on, it's, it's just, like, such a grind, um, and I think, um, you know, some of, some of the grind kinda goes away. Like, early on, it's just, it's so hard to convince ... You know, everyone's skeptical, you know, every customer, um, you know, every prospective employee, every, um, uh ... You know, in- investors, not as much, but, like, y- you know, like, just the, the difficulty with, with hiring, with, you know, convincing a prospect that to ... You know, it ... Like, getting that first customer to con- convincing them to use your ... It's so hard. Like, uh, why would somebody ... It's a company they've never heard of that no one else is using. Um, (clears throat) uh, that stuff gets easier over time. Um, it, it does feel like the, the pace picks up over time. Um, just the, the, the fire hose that you're sort of, you're kind of, uh, you're drinking through, um, gets sort of bigger and bigger and bigger over time, and sort of finding ways to sort of deal with that, um, is, is harder, um, I've found.

    3. HSHarry Stebbings40:36

       Y- y- uh, Rippling has this incredible thing which I think is that you have more founders as employees than, like, any other company. What

13. 40:43 – 46:21

    Rippling has more founder-employees than any other company

    1. HSHarry Stebbings40:43

       does that do to an organization?

    2. PCParker Conrad40:44

       Well, I think that, that's sort of some of how I deal with that sort of fire hose effect, is (clears throat) , um, and it's a big part of, of this kind of compound approach of building a lot of different products in parallel, is we, you know ... For us to start a new, a new product, you know, step one is, like, finding someone to, like, be the founder of that product within Rippling. And often, that person has founded a company before, but not always. I mean, there are people that are, like, really successful at doing that internally that, that (clears throat) have not done that before outside of Rippling. Um, and they run it. I mean, they run it as, um, y- you know, as a, a, a general manager, as, as sort of, you know, the ... they, they recruit the early team. They set a lot of the kind of product vision direction. They, like, build it. (clears throat) Um, you know, early on, they, they, they're doing a lot of the support or working with the support team, uh, to sort of make that work, um, thinking about a lot of the product marketing and the cross-sell strategy. Um, and that, that wouldn't be possible if we weren't, if we weren't hiring people that were sort of preternaturally inclined to sort of do that. Um, and I think for them, it's a great ... You know, it's a, uh, you know, the, uh ... A lot of those people, you know, they wanna run something, and they wanna run something on their own, and (clears throat) , um, you know, we, we find ways to sort of make that sort of really compelling.

    3. HSHarry Stebbings42:06

       Is there any challenge with them being all-stars within a team? Often, like, founders and CEOs, they're the founder and the CEO. Bringing them into a large organization is challenging from a culture perspective. Does it pose challenges from a culture perspective having many CEO minds?

    4. PCParker Conrad42:22

       Um, I, you know, I haven't found that to be the case. I mean, I (clears throat) , um, uh, you know, I mean, I, I really enjoy working with, with those types of people, um, you know, whether, um, you know, whether, whether they, they've sort of started companies or, or not. I think, you know, the type of person that has that mindset, I think, you know, those are, those are the most fun people to sort of work with. Um, um, and, uh, I think you want, you want people who, who kind of, um-... you know, have a real sense of ownership and- and, uh, to- to our point earlier, a little bit of a chip on their shoulder sometimes. Um, y- you know, that's- that's what kind of makes it really fun.

    5. HSHarry Stebbings43:03

       Rippling last round was... I think it was an 11 billion valuation. Um, do you still have a chip on your shoulder, Parker?

    6. PCParker Conrad43:09

       It's interesting, 'cause the way- the way you asked that question, it sort of... (clears throat) The implication is that r- raising money at a high valuation would, like, remove the chip from the shoulder. Um-

    7. HSHarry Stebbings43:20

       It is- it is external validation that what you're doing is valuable, so that would- one would think that that makes a difference.

    8. PCParker Conrad43:27

       (clears throat)

    9. HSHarry Stebbings43:28

       Or does it not?

    10. PCParker Conrad43:28

        Yeah. I don't know. I mean, like, I, um... You gotta remember that I, um... You know, at- at Zenefits, (clears throat) you know, I- I raised money at a massive valuation. What was then, you know, a lower price point, but- but probably in comparison to sort of where the markets were, like, even more extreme, um, (clears throat) at the time. And, you know, less than a year later, I was, you know, out, fired, (clears throat) um, you know, deeply depressed and- and, um, you know, worried about, you know, being broke and- and, like, for- for me, like, you know, there's- there's- there's, like, uh, I have a- probably a bigger apprecia- appreciation than most people about, like, what a financing round is and is not. Um, and, uh, I think it's, um... I think it's- it's- it's money to kind of get where you're going, you know? And- and, uh, and that's it. And I think people make too much of- of sort of financing rounds and sort of where people are raising at and what that means, and (clears throat) you know, I look at it sort of very practically as, like, um... You know, Rippling, uh, one of the other things that's unusual about Rippling because of th- the way that we approach the market, because it's a compound startup, is that our R&D costs as a percent of revenue are several standard deviations away from the mean, um, for software companies of our size, for B2B software companies of our size.

    11. HSHarry Stebbings44:57

        Right.

    12. PCParker Conrad44:57

        Um, the average B2B software company between sort of 100 to 200 million in ARR (clears throat) spends about 20% of their revenue on R&D. Um, we spend now, I think, north of 60, 60%. Um, and, uh, so it's- it's highly anomalous. Um, and, uh, as a result of that, you know, I- I need cash to sort of, like, continue to make that investment, um, and I think it leads to a lot of sort of really anomalous, in- in a positive way, um, underlying metrics, you know, with our, you know, net dollar retention or revenue growth, you know, like all this- all this kinda stuff that comes from the way that we approach the market. Um, (clears throat) but it is... Um, you know, as a result of that, I look at it as, like, "Okay, you know, I need- I need cash to finance the business until, you know, a point where, you know, we turn cashflow positive." And fundraising's like nothing more than, like, doing that.

    13. HSHarry Stebbings45:59

        Can I ask you a question? Which is, like, you know, obviously the markets have changed now and, like, a- are you a little bit nervous about scaling into the valuation? It is a big valuation.

    14. PCParker Conrad46:08

        (clears throat)

    15. HSHarry Stebbings46:08

        I mean, Twilio's valued at 13 billion with four billion in ARR. Are you nervous about scaling into that valuation and how would you advise founders today going, "Ooh, I raised at a high price. Ooh." How do you advise

14. 46:21 – 52:13

    Are you nervous about scaling into your $11 billion valuation?

    1. HSHarry Stebbings46:21

       them?

    2. PCParker Conrad46:21

       (clears throat) Yeah, I mean, I... So, um, look, I, um, I think that the- the- the folks that... First of all, I mean, Rippling raised... You know, we didn't raise in November, we raised in May, um, and I think, um, yeah, it's possible, like, maybe markets have deteriorated a little bit since then, but a lot of the deterioration happened before then. Um, (clears throat) and, um, I think the investors that, uh, uh, that put money in at this valuation wi- with the caveat that, like, you know, I'm a terrible investor. Um, I never know, like, where prices should be or, um, you know, and- and, like, you know, I'm- I'm sort of like a buy high, sell low type guy when I- when I... You know, in the sort of rare occasions where I've tried to be an investor. (clears throat) Um, and so don't recommend following my advice about any of this. But, um, when, you know, when I think about sort of e- the investors that- that decided to sort of bet big on Rippling, I think the reason that they did that was- was- was really a lot of the sort of data in Rippling about how successful we were at cross-selling such a broad ar- array of SKUs into our customer base. Um, and that... It was just really unusual. Like, there aren't a lot of companies in SaaS that are able to do that. I think there are... Um, you know, most companies struggle with sort of that, you know, second SKU or the third SKU, but, you know, at the time where you're sort of c- you know, there's, like, 25 different SKUs that- that you're selling consistently in- into your customer base, you know, there's- there's... The only other company that I know of that- that sort of looks like that is Microsoft. Um, (clears throat) and I think, uh- uh, you know, the, um, you know, that and sort of the- the sort of, uh, the NDR that we have and the sort of increase over time in the just, uh, the per employee per year amounts that- that we make because companies buy additional SKUs from us over time, um, that was... You know, people thought of that as, like, thought of Rippling not as a SaaS company but as a... sort of an underlying machine or system that produces new SaaS businesses. Um, each of which have sort of unusual, um, unusual sort of growth characteristics and, um, like below average, require below average sales and marketing and R&D investment because of the way that they're being built on this platform. (clears throat) And so look, I don't know where valuation should be right now, but I do think that wherever you would value, like, sort of a singular SaaS company, um, a- a- a company that produces... Like a meta company that produces, you know, that produces SaaS businesses, you know, probably should command, uh, I think a- a higher multiple, and that was- that was sort of some of the thesis behind, um, behind the round. Um, so, um-Yeah, I mean, that... So I- I sort of think that, um, you know, there's some really... You know, we're- we're focused on building a really valuable business. Um, you know, I don't know sort of where the markets are- are going at any given time. I don't- I don't think anyone does. Um, I do remember, though, (clears throat) like, you know, this is not my first downturn, um, so I- I remember sort of, like, the pain of, um, you know, in a- i- in 2009, um, at my first startup being told, "You need to go out and raise a round." And we went out with a- just a terrible business. I mean, a business that was a consumer-driven-

    3. HSHarry Stebbings49:47

       What-

    4. PCParker Conrad49:47

       ... advertising model, went out and tried to, you know, ra- with no- with very little traction, tried to go out and raise money and talk to 70 different investors, all of whom told us no. Um, (clears throat) but one of the things I remember at that time is I remember just the incredible sort of bearish sentiment that investors had that reminds me a little bit of sort of what s- what I hear from some investors today, and I- and look, I don't know, maybe, you know, maybe people are right. But, um, (clears throat) I remember talking to a firm, you know, a- a really big prominent firm back in 2009 that said, "Look, you know, we think the new normal for a series A is gonna be a $2 million investment on a $2 million pre-money valuation, and that's just what- that's what it's gonna be. You know, like, if this- the bubble that we were going through in 2005 to 2007, that's gone, you know, c- crazy, heady times." (clears throat) "New normal is gonna be, you know, we're gonna put in $2 million, we're gonna own 50% of the company, and that's where we think these markets are gonna be." And, you know, that- the sort of most grim... And there was a lot of consensus around that for a period of time, um, and- and most of the sort of most grim pred- predictions about sort of where things would stabilize ended up being sort of way too negative. Um, you know, things came back, and (clears throat) valuations recovered, and, um, you know, look, you know, there, uh, people look at sort of multiples and valuations, um, in, uh, y- you know, in- in this sort of, you know, period of time and sort of (clears throat) , uh, you know, were, and say, "Look, you know, valuations got- got crazy," and I, you know, I don't know, maybe they did, but at the same time, um, you know, I- I remember that when d- at this time when valuations were lower for SaaS businesses, there was also a real belief that, you know, markets for software were much smaller than they turned out to be, um, you know, that people believed that a lot of the SaaS software, the market for it was, you know, other tech companies, you know, and no- n- normal businesses were not gonna do the whole cloud and SaaS thing, and, you know, I'm not sure that those multiples make a lot of sense either. Um-

    5. HSHarry Stebbings51:57

       Can I... I- I think one of my lessons is actually just from markets and market timings is, like, take money off the table in the good times. I didn't, and I- I had the chance to, and I was stupid. I was n- young, and it's my first, you know, downturn, whatever. Bluntly, did you take money off in the,

15. 52:13 – 56:41

    Did you take money off the table before the downturn?

    1. HSHarry Stebbings52:13

       you know, upswing, and how does that impact your mindset? How does taking secondary off impact your mindset? 'Cause I'm always a big proponent of it for founders.

    2. PCParker Conrad52:21

       (clears throat) Um, I, um, I- I sold some stock, not- not in our most re- recent round, so I- I didn't sell anything in the most recent round. Um, but I- I sold some stock earlier on, um, before that, before the most recent round, um, and when- when I've done so, it's always been (clears throat) whenever I've sold stock, um, as a founder, we've always offered, um, it on sort of basically the same terms to employees in the company, um, so I- I've never done it, you know, without sort of employees being able to participate, um. Um, um, so, uh, you know, how has it impacted my mindset? I mean, I... Gosh, I don't know. I mean, um, I feel like it, you know, it give- it give- you know, g- maybe it gives you a- a- a little more security. I mean, I- I get, you know, sort of deeply paranoid about- about that kinda stuff, so (clears throat) , um, you know, for a long time, um, you know, everything that I'd sold in secondary was just sitting in a checking account, um, which is, again, like, I'm a terrible investor. Like, don't... (laughs) Uh, it's not- not- not the right thing to do, (clears throat) um, but, um, sort of I- I tend to think- be sort of, like, fairly conservative about- about, um, about that stuff.

    3. HSHarry Stebbings53:40

       Can I... Final one. Where does the paranoia come from on- on the money side? I am, too. My- you know, my family lost everything when I was young, and I saw how painful that was for my family, and so I'm very much downside protectionist. Where do you think your paranoia comes from on it?

    4. PCParker Conrad53:56

       Gosh, I don't know. I mean (clears throat) I guess, um, I guess it's probably, like, having, you know, in- in my career, having seen, like, how- how- how low things can get. Um, you know, I've had some- some big highs in my career, but also some really low lows, um, where it felt like, you know, there, you know, there wasn't really a path forward, or, you know, there were just, you know, all the doors were closed. Um, (clears throat) you know, I remember when I, um, sort of when I left my first startup, you know, before I started Zenefits, you know, we had gone through this period of time where we had pitched, you know, 70 different VCs, m- m- mostly unsuccessfully, although we'd- we'd gone pretty deep with a number of them, and I remember when I left...... I emailed, you know, like, like, 70 of these, th- these partners that I, you know, at different firms that I had sort of met with (clears throat) and said, "Hey, you know, like, really enjoyed, you know, getting to know you at, at SigFig and, uh, you know, I'm starting something new and would love to meet with you, sort of get your advice and talk about it." And, and I think out of, like, the 70 firms that, that I emailed, I think I got one response. Um, you know, one or two responses. Um, one of them I remember was, like, from, from the folks at Venrock who ended up investing in, in Zenefits's seed round. But for the most part it was like, you know, it was really hard and, and I didn't... By the way, I also, I did not want to start a company because, like, starting a company was such an awful thing and, you know, such a terrible ex- you know, had been just such a soul-sucking experience. And, you know, I applied, I tried to apply for a bunch of jobs at other tech companies and, and at the time, I had been co-founder of this startup for seven years that nobody had ever heard of, and it was really hard. I, you know, I didn't really get, you know, any job offer. You know, it was like, um, 'cause people were sort of like, well, what was I qualified to do? I wasn't (clears throat) you know, you wouldn't hire me to sort of, like, be in any kind of leadership role, you know, at the time in any function. You know, I wasn't qualified to sort of really run sales or engineering or product or anything like that. Um, and so I always felt like, you know, I started my second company, like, uh, largely out of sort of necessity. Um, and, and same thing, you know, similar kind of sentiment with, with the third, and so (clears throat) um, uh, you know, and it, it sort of, you know, it, it worked out in different ways in, in, in both times. But, um, y- y- you know, for me, like, whenever, whenever entrepreneurs come to me and ask me, you know, they say, oh, they're thinking about starting a company, my advice is al- my advice is always like, "Don't do it." Like, "It's a terrible idea." (clears throat) Um, and nobody ever listens to that advice, of course, because it always, it only makes them, like, more inclined to sort of go down this path. Um,

16. 56:41 – 1:00:58

    Advice for VCs

    1. PCParker Conrad56:41

       but it's, it's super hard.

    2. HSHarry Stebbings56:43

       Final, final one, I promise, for a quick fire. You said there about kind of 70 investors, one response. I'm early in my career in venture but, um-

    3. PCParker Conrad56:49

       I, I'm not sure it was only one, I think there were, there were maybe, maybe two or three, but, but it was, it was a small number.

    4. HSHarry Stebbings56:55

       You've worked with an array of different investors. Um, if you were to give me advice other than, you know, don't kick out the CEO, um (laughs) , sorry, that was a low blow-

    5. PCParker Conrad57:05

       Yeah.

    6. HSHarry Stebbings57:05

       ... um, what would, what would the advice be for me in terms of what I can do to be the best VC? What do your best VCs do for you?

    7. PCParker Conrad57:13

       I think there are a few things. Um (clears throat) , I mean, one, one, one thing that I think is very real is that, um, there, there are investors that bring this sort of brand imprimatur to a company, um, that, you know, immediately, you know, this, this firm invests, and suddenly (clears throat) , um, things get easier. Like, um, people that you email from prospective employees are more likely to respond to outreach about, um, sort of, you know, coming to interview. Um, other investors are more likely to respond to you when you reach out to them, prospective customers are less skeptical about, um, about working with you, um, uh, the media is more interested in speaking with you, um, and it, it's this sort of magic pixie dust that gets sprinkled on your company when the... some of, some of these firms with really big brand names invest, and it's very real. Um, um, and so that, um, you know, i- it's not, it's not about the, the sort of particular behavior or competency of, of the investor, it's, it's about, like, the brand halo that comes from that. Um, but it, it's definitely a real thing. Um (clears throat) , the second thing is I think that, um, you know, in- investors that I... I mean, I've, I sort of, like, really come to appreciate investors that are, you know, sort of fairly calm and even-keeled, um, you know, that don't get sort of too excited when things are going really well, and, um, you know, don't, don't get sort of too down or negative about, um, sort of when things are going badly, because that's definitely not me. Like, I'm, you know, I'm, like, very much, like, sort of like this, um, and, uh, and so people who are kind of, like, a little more steady, um, whether, you know, people that I hire as executives or people that I work with as investors, like, that's (clears throat) , that's, uh, you know, something that I've, I've found to be extremely useful. Um, and, um, and then I think, you know, there, there are some firms that, um, you know, I, I found have just really been, you know, really been incredible at, um, sort of, um, from a recruiting perspective. You know, like, looking back, I mean, there are some, there are some really great hires that, that we've made at Rippling that we would not have made if it weren't for, um, you know, those, those firms, like, introducing us (clears throat) , connecting us, like, finding, finding folks. Um, 'cause if you don't do that, you're stuck with sort of executive recruiters, and, um, y- you know, uh, it... like, those firms are often extremely helpful, um, and it... and good, good idea to sort of hire them when- Dad? No, no. I n-... Dad? Shale told me to get Scott. No, no, not right now. Sorry. (clears throat) Um (clears throat) , sorry.

    8. HSHarry Stebbings59:58

       (laughs) I love that.

    9. PCParker Conrad1:00:02

       Uh-

    10. HSHarry Stebbings1:00:04

        ... ............................ asked. I love that.

    11. PCParker Conrad1:00:05

        Uh-

    12. HSHarry Stebbings1:00:05

        Yeah, exact producers, helpful-

    13. PCParker Conrad1:00:06

        Uh, yeah, I mean, I think... Look, tho- those, those firms are... I highly recommend sort of, like, hiring someone to, like, sort of keep a process on track, but, you know, I think often, like, the, the best candidates are not ones that, um, that you find through exec recruiters. They, they come in, you know, through personal networks or through, um, through sort of, like, you know, GPs and investors and things like that. Um, and so that, um, you know, that ends up being, being critical as well.

    14. HSHarry Stebbings1:00:33

        Is the Sequoia pixie dust the biggest?

    15. PCParker Conrad1:00:38

        Um (clears throat) , look, I, I love, I love all of my investors, and I'm deeply grateful of, um-

    16. HSHarry Stebbings1:00:44

        (laughs)

    17. PCParker Conrad1:00:44

        ... to all of them for-... for, for believing in me, um, and I, I think they're, um, they're all really, really great.

    18. HSHarry Stebbings1:00:54

        Brilliant answer. Uh, (laughs) listen, I wanna do a quick fire round.

17. 1:00:58 – 1:01:18

    Parker’s Favourite Book

    1. HSHarry Stebbings1:00:58

       So you know the drill. I say a short statement and you give me your immediate thought. So let's start with your favorite book and why.

    2. PCParker Conrad1:01:06

       Um, so right, right now my, my, my favorite book is always, uh, is, is always the book that I'm reading with my kids, so I'm reading Lord of the Rings with my daughter right now. (clears throat) And, and that's

18. 1:01:18 – 1:01:53

    How did becoming a father change you?

    1. PCParker Conrad1:01:18

       a lot of fun 'cause she gets, she gets really excited about that.

    2. HSHarry Stebbings1:01:22

       How did becoming a father change you, P- Parker?

    3. PCParker Conrad1:01:26

       Uh, you know, I don't think it did, to be totally honest. Um, uh, I was, I was sort of thinking about this question and, uh, I think I'm, like, largely... I mean, I'm, I, I guess I'm, like, sort of more boring now, you know, don't... can ba- basically never leave the house except for work. Um, so that's a little bit different, but, um, but I don't think I'm, like, much... uh, you know, unfortunately not much of a different person. No, no, like, major

19. 1:01:53 – 1:02:18

    What do you know now that you wish you’d known at the start of Rippling?

    1. PCParker Conrad1:01:53

       insights that, that came from having kids for me.

    2. HSHarry Stebbings1:01:56

       What do you know now that you wish you'd known at the start of Rippling?

    3. PCParker Conrad1:02:00

       I guess, like, sort of given, um, you know, g- g- sort of knowing that, that, uh, that it w- it would've been nice to know that it, that it was gonna work, at least so far, you know, knock on wood. Um, I think that would've been, um, sort of a hu- uh, sort of a huge re- relief and sort of picked me up ear- early

20. 1:02:18 – 1:02:54

    What have you changed your mind on recently?

    1. PCParker Conrad1:02:18

       on when, you know, when, when it is sort of really hard to get things going.

    2. HSHarry Stebbings1:02:22

       What have you changed your mind on recently?

    3. PCParker Conrad1:02:24

       I mean, this is very specific to... (clears throat) it's very specific to our company, um, but, um, for a long time I thought that Rippling would be, um, you know, focused, like, entirely in the United States, um, and, uh, and that it would be sort of, like, y- y- you know, focused on this one geographical market, (clears throat) and I was, was very wrong about that, and we're... you know, we're f- we're really looking at sort of,

21. 1:02:54 – 1:04:14

    What would you most like to change about the world of startups?

    1. PCParker Conrad1:02:54

       um, y- you know, markets outside the US at this point.

    2. HSHarry Stebbings1:02:58

       What would you... M- if I had an ultimate one, what would you most like to change about the world of startups?

    3. PCParker Conrad1:03:04

       Um, for me, I think that, um, there's this... the, the sort of media view of, like, founders, um, it, it's sort of like y- y- you're either a superhero or a supervillain, and, and there's only room for those two. It's li- it's like you're... y- you know, and, and there's such a, like... y- y- you're either... y- it's either like saint or supervillain and, and there's such a, like, thin fuzzy gray line between those two and you can slip so easily from one to the other. Um, uh, and I think that that's just not... like, the reality is, like, you know, um, I, I don't think I'm a saint, but I also, like, don't think I was... I, I don't think I've ever really been, like, a supervillain, but I have been portrayed as both in, in the media at various different points, and I think that, um, that that, um, that's the thing I wish I could change. I wish that there was just like, "Look..." Like, they're just people trying to do a job, um, and, and the sort of... the heroism and, and the super- sort of supervillainy, I wished

22. 1:04:14 – 1:05:58

    Advice for founders who are being portrayed as villains in the media?

    1. PCParker Conrad1:04:14

       that that thing, image was just kind of like out of the ecosystem.

    2. HSHarry Stebbings1:04:17

       One of my friends is a supervillain right now and being portrayed as one and, and he's not at all. What advice would you give to him having been the supervillain before?

    3. PCParker Conrad1:04:30

       (sighs) I don't know. I mean, (clears throat) when I, um... when things went south for me, like, one of... one of the things that I deeply appreciated is there were, there were a number of people that reached out, um, you know, that, uh, that, that really... that were just like, "Look..." That sent me sort of long emails that were just kind of like, "Look, this too shall pass. Like, it will, it will get better. People will move on. You know, there's... there will be more for you in, in the future." Um, and, and I, I so deeply appreciated it (clears throat) when, when they did that, um, and some of them, like, you know, I didn't, I didn't respond to for years. Um, you know, I remember, um, like, Ron Conway in particular who's often, you know, someone that, you know, y- you know, people talk about as sort of just, like, a really genuinely decent person, um, in, in the ecosystem, reached out repeatedly, um, and kept wanting to check in, and I was just... I was, like, mentally in this place where I couldn't... I didn't respond to anyone, you know. I was just so depressed and... (clears throat) um, but it, it meant a lot to me, and so, um, you know, for people who are going through that, I think, um, you know, knowing that, um, you know, the... you know this will pass and, and just you c- kinda gotta put one foot in front of the other and get through it. Um, uh, you know, that's,

23. 1:05:58 – 1:08:42

    Where do you want Rippling to be in five years?

    1. PCParker Conrad1:05:58

       that's probably what I would tell them.

    2. HSHarry Stebbings1:06:00

       I love that on Ron Conway. Um, but I wanna finish on, uh, a final one which is 2027, okay? Five years from now we're gonna do round three. Where do you, and where do you want Rippling to be then? Is it a public company? Is it... you know, wha- how do you envision that five year time?

    3. PCParker Conrad1:06:17

       Five years from now? Um, (clears throat) I, I would, uh, I would hope so. Um, I don't... you know, and, and, and to... like, just to be clear for, for, uh, you know, there's, like, no plans on any... you know, people are gonna be like suddenly, like, timing our IPO and that's not... (clears throat) they're... it's not something that we spend a lot of time thinking about, but, but I, I would think that in that timeframe, um, um, you know, we, we would be. Um, and I think that, (clears throat) you know, um, for, for Rippling to be successful, um, you know, other than sort of, you know, the sort of metrics like, you know, revenue and profitability and, you know, valuations and things like that, I think that the, the real sign of our success will be this idea that, um, um... you know that... you know, I think of, I think of Salesforce as this, um, sort of system for managing business process that's built on this underlying foundation of customer data. Um, and I believe that there exists this entirely sort of other side of the coin, this bizarro world version of Salesforce where you have a lot of the same tooling and a lot of the same functionality, but it's just built on a different underlying primitive. It's built on this understanding of your employees in your organization (clears throat) and there's, like, a whole bunch of business process that you should be managing in a very similar way to, like... all of the business process that has to do with customers and customer interactions and support and sales and marketing all ends up being managed, like, inside of Salesforce or in systems that are deeply integrated with Salesforce. I think there's a whole bunch of stuff... you know, there, there's th- the externally facing system and the internally facing system. Um, and for Rippling to be successful, (clears throat) like, we, we really wanna become that in- internally facing sort of, you know, other side of the mirror bizarro world version of Salesforce (clears throat) that's managing this host of other business process within companies that, um, you know, are more internally than, than externally facing.

    4. HSHarry Stebbings1:08:29

       Parker, I always love our chats. I've absolutely loved this. We've absolutely done a great job keeping it to 20 minutes, so, uh, brilliant concision from me there. Uh, but thank you so much for joining me and I so appreciate it.

    5. PCParker Conrad1:08:41

       Thanks so much, Harry.

Episode duration: 1:08:42