Rippling co-founder Parker Conrad will reveal the workforce platform’s plans to expand internationally. He will also give founders an inside look into how Rippling’s “compound startup” model allowed it to build an entire infrastructure-as-a-service solution with a swat team of engineers.
Our next guest is most known for his Last startup zenefits who remembers Zenefits There's a rising star worth a lot uh but He's on to his next thing with Rippling So please welcome to the stage Co-founder and CEO of Rippling Parker Conrad and your moderator Marianne Azevedo Wow hi hello thanks for being here Um I say this in every panel but it's Just kind of surreal every time I sit Down with someone I've only seen on zoom And I'm actually in person so this is Exciting Um Rippling has kind of been on a roll This year uh earlier in the year you Raised at a valuation of over 11 billion Dollars making you officially a deck of Corn right and you recently expanded Into the spend management space and now You're here to launch what you've Described as the biggest launch of your Career Tell us about it yeah so Rippling um Ripley is going global Um and so for those of you guys who Don't know one of our sort of core we Have three Core Business lines uh HR Cloud it cloud and finance cloud and HR Cloud like most HR systems is Intel Today you know really focused on the US You know payroll benefits all that kind Of stuff in the United States
Um but what we're launching is we're Expanding that globally Um and the really interesting thing About this is that we've sort of put in The sort of really hard work to build Native payroll native Ben admin native Hris across all of these different Countries so in Rippling you go and There's one Pay Run each row and that Pay run is an employee in a different Country being paid in a different Currency under a different tax Jurisdiction you hit run and we Calculate all the taxes in milliseconds And the money's out and off to those Employees around the globe there are a Number of other startups in this space Already deal one being one of them When I talk to you about this for the Article I wrote you you described a lot Of these other competitors as more Payroll aggregators yeah can you explain A little bit more about like why how you Think Rippling is different from these Other companies and also Deal is one of your clients right they Are a deal deal uh run runs their HR on Rippling globally Um uh there you have to sort of start With why this is a in some sense a very Crowded space and you have to understand Why that is and this Market what's Sometimes called the employer of record Or eor Market
To help companies hire and pay people Globally is crowded because it's uh it's Sort of a really great Business If You're sort of a growth hacking Entrepreneur it's an interesting Business to start because it's fairly Lucrative Um and you actually don't have to build Very much software and building software Is really hard and uh what companies do Is they go out and they strike like Business Development deals with you know Payroll companies and and stuff and Other you know country by country They've got different vendors and Subcontractors and then as a client what You're doing is when they're helping you Pay your employees what they're doing is They're actually actually Shipping off your data to third-party Systems in each country all around the Globe and then someone is manually sort Of running payroll in those systems for Your company or for you know their Clients and then they're sort of taking The results of that and shipping it back Into their system and uh we think that's Just a terrible product experience we've Done the hard work of sort of building This stuff natively inside of Rippling So that we're not relying on these third Parties and I think it's because of that Approach that you see as a client of These systems you see these often like
Really mystifying limitations you come In and you have to finalize someone's Pay everything has to be locked and Loaded like 45 days ahead of like the Check date and like a lot happens in 45 Days sometimes you hire new people Sometimes they get terminated sometimes You know they get a raise or a bonus or Something like that you know sometimes In these systems you can't pay hourly Employees you can't pay sales Commissions if someone uh exercises Stock options you can't withhold the Taxes that they have to pay in cases Like that I had a friend of mine Actually who who uses deal who told me That he had hired an employee in the UK And he had set them up he'd set up their Pay schedule incorrectly so he he had Them on a bi-weekly pay schedule instead Of a semi-monthly pay schedule the Difference is like 24 versus 26 pay Periods a year and he wanted to switch Them and he reached out to deal and was Like hey I need to move them from Bi-weekly to semi-monthly and they said I'm sorry you can't do that you know Once once you've got someone you know in A country on a particular pay schedule You cannot change them from there and I Totally get why that might why that Probably is it's you know deals got to Deal with that manually and they've got To have an Ops person do that and that
Ops person might screw it up and then They've got to deal with that whole mess And so there's like uh no we don't Support that but it's emblematic of one Of sort of you know dozens of Limitations that you have when you're Working with companies that don't Actually have real underlying payroll And HR software you know themselves that They control Um and so that Um you know that's the real difference Between what with what Rippling has Built versus what these other systems Have built is that you've got native Hris Native payroll native benefits Administration you've got you know local Compliance enforcement in software to Enforce things like minimum wage and Sick leave mandates locally and at the Federal provincial level you've got Required compliant compliance trainings Like anti-harassment training country by Country all built into the sort of one Piece of software to manage this stuff Globally across all of your employees so You feel like your competitive Advantage Is having this existing Tech stack that you built on top of so That everything can be integrated yeah I Think it's it's very different I think The difference with Rippling is that the Existing companies in the market are Sort of incrementally better than some
Of what came before but most of these Guys because they're payroll aggregators They're largely faking it like they Haven't built you know the actual Product and engine it's like look if You're a startup one of the first things You learn is you can't Outsource your Product development to someone else like You've got to build it yourself but That's what you know these companies Almost all of them have done is to Outsource the core product and Engineering work of building payroll To dozens or even more sort of kind of Crappy vendors in different countries All around the globe and it's because They have this now lowest common Denominator problem where you know if For them to build features or for them To support something for their clients They need every single one of these Counterparties to support something or They sort of risk fragmenting their Internal operations process it's because Of that that as a client you sort of Discover these kind of head scratching Limitations of things they don't support Or things that you can't do And the answer to that is like look it's Very simple what you want is you want a System that works just like the best of The sort of payroll and HR systems that You have for employees in the United States like Rippling but also you know
There are other Gusto you know things Like that did do a great job there and And but you just want it to work for Employees globally all across the world You want people in Canada and in the UK And in India and in France and Germany And Australia to be right in the same Pay run along with your United States Employees and have it handle everything The way it handles it for you in the United States and that that would be Super powerful and then of course you Have one set of reports if you need to Figure out like how much did I spend on Engineering last month you got one place Where you can come and pull that data You've got one general ledger Integration that syncs things over to Your accounting system you've got one Set of role-based permissions so that You can have a payroll admin that Accesses people globally Um you know you've got one set of Workflow automations that work across All these different systems it's just so Much easier to have this all in one System So Jordan mentioned you you previously Started zenefits and you were forced to Resign from benefits and a few months Later you started Rippling I'm curious as to what what happened During those those few months Um
What lessons did you learn from your Experience at zenefits was it hard to Convince investors to back you again Yeah I mean so look one of the things That happens Um when things go wrong at companies There are people who have sort of this Institutional apparatus behind them you Know hot and cold running crisis PR Um you know uh and then there was like Me and I was like sort of hiding in my Basement and sort of extremely depressed And not talking to anyone not the media And not you know even like you know a Lot of sort of friends and stuff like That Um and so a lot of you know I sort of Watched the sort of media narrative About zenefits unfold around me with Sort of this growing amount of horror Um and uh and there were a lot of Restrictions I was under that made me Unable to sort of talk about it and I Think that a lot of that story you know Has really not even been told even today Um Um but I sort of there was a certain Point where I realized that look the Only way I was going to be look I wasn't You know I wasn't good at do doing the Whole media dance with this you know Like Um you know the guy who succeeded me at Zenefits David sacks he has this fixer
Named Lanny Davis that he hires who goes Out and just like attacks anyone that Sort of opposes him and you know I Didn't have anything like that and um uh You know I sort of realized at a certain Point that the only way that I was going To be able Um to tell my story Um in order to really to speak to Um you know my former colleagues you Know extended friends and family the Sort of the media the sort of tech Ecosystem to you know folks like you was To build this specific company and turn It into a much bigger you know 100 Billion dollar outcome and that if I did That it would force some kind of sort of Reassessment about everything that had Happened before Um and that was really for for years That was what me out of bed in the Morning and a lot of other things you Know over time you know that kind of Anger sort of Fades and and there are so Many things that are exciting about what We're building that sort of take their Place but that was sort of where it Started Um and the biggest lesson that I learned Is actually very relevant to our launch Today because when I look back at Zenefits you know beyond all the stuff In the media the thing that I think Really sort of killed that company
Was that when we started out it was Almost like too easy for us to grow we Had you know everyone wanted this thing We were the first company to have All-in-one HR and before that if you Want if you hired an employee you had Like eight different HR systems you Needed to set them up in one for medical Insurance one for dental insurance one For 401k another thing over here for Payroll and you know and it was just a Lot of administrative work and we kind Of gave people this one button you could Click to set people up everywhere or Automatically and now the industry has Largely come around to that so like you Know every company that does this in the United States not globally but in the United States is all in one HR like That's their tagline Um but uh you know what what happened is Because we were you know it just there Was everyone wanted this Um you know every perspective customer Wanted this product and we sort of said Okay look our biggest fear was that There were going to be these other Competitors that were going to enter the Market and sort of and we thought we Needed to suck all of the oxygen out of The room we needed to grow and basically Capture all of the demand or someone Else would and then we would be left Behind in their wake and so we made I
Made this very conscious decision that Was a mistake which was you know we said Look we're going to grow our customer Base and you know our product in you Know we're going to outstrip our Engineering capabilities and we're just Gonna you know customers have all this Admin work around this stuff we're going To take it on ourselves and over time We'll work to automate it and the Problem with that is that you know once You scale up these processes manually a Couple things happen one is it gets very Hard to automate them at scale harder And harder the larger those processes Get the second is there's just an Inevitable error rate around this Um you know you people make mistakes They can be right 99 of the time but not A hundred percent of the time and if You're not doing things in software People start to notice like you know Something's not you know the idea behind This is great but the sort of actual Um you know the actual practice of it Leaves something to be desired and so That was actually like when we looked at This Global Market we noticed that Everyone was making that mistake that Everyone was building you know these eor Companies are all building largely with People versus instead of software you Know they have giant operations teams You look at their jobs pages and you
Know it's lots of people that are you Know it's not like Rippling where you Know half of the company is in Engineering Um and and we sort of knew just with Like deep like almost religious Conviction that this approach does not Work Um it doesn't work for the business it Doesn't work for customers it's a Foundation of sand that you're building On Um and that was what led us to decide to Enter this Market in this very different Way to build a product that would help You manage your employees globally with You know payroll HR benefits Administration but build it like real True software end to end all the way Down you know without without you know Making the company about sort of You know managing these sort of Ops Pipelines to get data from you know over To all of these different payroll Systems around the world and then bring It back One of the issues that you had at Zenefits were compliance issues what are You doing now at rivling to ensure that You don't have compliance issues again Yeah Um so there's there's a few things I Mean one thing is I think there's a There's a lot more to the story about
The compliance issues and more than we Can sort of cover and probably just a Few minutes on stage Um but we have a really strong Compliance function at Red plane Um we have hired you know a general Counsel Vanessa Wu who who's incredible And was one of a very early hire at the Company you know hired a lot of legal Infrastructure much earlier than most Companies do Um and look I mean we're very careful Um to dot our eyes and cross RTS on that Stuff Um one of the things that that I find is A lot of companies decide to expand and Grow over time away from their core Product Um you obviously are doing this you've Expanded a lot Do you ever are you ever concerned that Your focus might might be off I mean how Are you balancing your focus with with Growth I mean what if you do you I guess The point I'm trying to make is Sometimes when you try to do many too Many things You don't do any one thing very well how Are you going to make sure that doesn't Happen at Rippling And also another question I'm curious About too where do you see your like the Makeup of your Revenue in a couple of Years now that you have these different
Lines of of business yeah so look I I Have a very different point of view on How to build sort of a really enduring Company from a product perspective then Most people have in Silicon Valley it's Very counter to the conventional wisdom Because most people believe what you say That you should focus extremely narrowly And I was backstage heard someone saying That on stage at either in this room or The other just a few minutes ago and I Think that that advice is true some of The time but it misses entire categories Of very successful companies that could Have been built but we're not because That's the conventional wisdom on how You should build these companies and Look there are some very well understood Advantages of building a focused Business that are not worth covering but I do think it's worth discussing some of The advantages of what I call a compound Startup to distinguish it from like a Focused company and a compound company Is one that's building sort of multiple Different product lines in parallel And there there are a few um there are Four specifically Um the first is that when you build Multiple product lines in parallel one Thing that you can do is you can make These products often sort of somewhat Interrelated products you can build them In a way in which they're much more
Integrated both with each other and Usually with some underlying system of Record in our case employee data and the Thing here is that you know that makes These products let that integration with Underlying employee data and with all of The other products in Rippling it makes These things better products building These things in parallel is not a way it Doesn't work if you build less good Products but there are ways that you can Actually build better versions of all of This software because you're building Them together in this interrelated way The second is that you find in business Software there are a set of things that End up getting repeated again and again And again Basically software elements that you can Build instead of as abstractions um so For us those are things like reporting And analytics workflow automations Role-based permissions custom policies There are a few others but those things What we do is we build them once in this Sort of underlying platform that we Build and what we do is we can go 100x Deeper on those Concepts than any other Company certainly any point SAS Competitor that competes with our Products and so you see with many of our Point SAS competitors and certainly this Is true for other eor and global Companies that like their reports are
Not very good their general ledger Integrations are weak their concept of Permissions are not incredibly strong And in Rippling when we build reports And analytics we're not clutching on Some like CSV dump because our clients made us do It we're trying to build an analytics Suite that Rivals what you see in sort Of best of class applications for that That's then available out of the box in Every product that we build The third thing is that for clients you Get this common user experience across All these different products if you know If you know how to build a workflow Automation in rip Lane if you know how To set up a report if you know God Forbid you've taken the time to learn The scripting language in riplane that We call rql that allows you to build Things like formula fields and a lot of Automations within the system you have Super powers in riplane that now carry Over for you across every single product That you might buy from us right on day One without you having to learn anything New And lastly there are these incredible Advantages from a pricing in a Contracting perspective that if you're a Company that has a lot of different skus You can run circles around competitors From a pricing perspective because you
Know your competitors they have to tie Everything to that one SKU and they have To amortize all of their sales and Marketing investment all of their r d on That one skew and so you know sometimes If you're a compound startup you can Actually give customers a much better Deal because you can say look we don't Have to make it all back on this one Thing and so we can afford to sort of Underprice a lot of our points as Competitors and deliver a lot more value To customers because of that and so I Think what happens is there are some Like if you look at like the really Biggest outcomes in software in business Software in particular over the last 20 Years Some of the biggest outcomes are Companies like Oracle like Microsoft Like Salesforce and those are all Compound companies like they're all Building you know a whole product Suite Of things in parallel and I think that What's happened is like you know Everyone has this focus on building These extremely narrow Point software Solutions and I think it's because you Know really there was this platform Shift that we had from on-prem software To the cloud Um and and that there was this time when Like the best way to score sort of you Know like to get like a unicorn company
Was to sort of peel a specific feature Or product off of one of these sort of Megapolis software vendors and turn it Really quickly into standalones into a Standalone SAS application and that was Just like an instant win an instant like Single or double But what's happening is now that You know now that the underlying Delivery vectors for software you know The shift to Cloud you know mobile now That that's a little more stable Um people have sort of Forgotten these Deep advantages of bundled Contracting And pricing and sort of deeply Integrated software products and systems And all of the ways that those can Improve things for customers and as a Result I think that we're going to see Like a shift back Um towards these much larger software Vendors and I think Rippling is one of The companies that is sort of leading The charge on that I think Salesforce is Another and there are a few others as Well sorry to cut you off I have a Question I want to ask before we run out Of two yeah you alluded earlier to Feeling like you never got a chance to Tell your side of the story about what Happened at senefits we have maybe a Minute minute and a half here if there's Anything you can share I mean anything That you want to say
This is a moment to kind of have tell Your side of the story Yeah I think um I I think I'm probably a Minute is like not not enough time to Sort of really get into it I know but Like if there's to get into something Like that say like just one thing you'd Like to kind of get off your chest Um yeah no I don't I don't I don't think There there's one thing I think um you Know uh Um I I think there were Um Yeah no I mean I think uh it's a longer Story and I've talked about it a little Bit in sort of some of the you know some Podcasts and stuff like that out there For those who are who are curious Um Um and would love you know maybe I can Come back another time and we can talk More about that would you say Rippling Is kind of your validation Um I don't know I don't I don't think uh You know Rippling is has been a a Successful company so far but you know Knock on knock on wood you know um this Is plastic unfortunately oh yeah um but You know I think uh you know the the Story's not over on replay and I think Um uh we're very excited about where It's going and what we're building and Really excited about sort of what we're Doing so far and
Um you know I think of Rippling the the Most exciting part for me about Rippling Is that we think of you know employee Data not as this like payroll and HR Thing but employee data is just a Primitive for business software writ Large that you know you can use employee Data as this way to build much better Software across a whole range of Verticals and that's why we have you Know our HR Cloud but also our teak RIT Cloud our finance cloud and now all of Those things have been sort of Globalized Um you know across the world Thank you thank you so much and Congratulations on the launch of your New product thank you so much
