Jason Lemkin: 4 Key Lessons for Building a Compound Startup
**Jason Lemkin:**
Hi everyone, welcome to the second session of saster with Jason Lemkin. I'm your host, Sam Altman, and I'm really excited to be here with Jason today. Jason is the CEO of Rippling, a company that is building the operating system for the modern enterprise. Rippling has raised over $1 billion in funding and is currently valued at over $8 billion. Jason is also the co-founder of SaaStr, the world's largest community of SaaS entrepreneurs.
So, Jason, thanks for joining us today.
**Jason Lemkin:**
Thanks for having me, Sam.
**Sam Altman:**
So, you know, I think you know a lot about building companies and you've been through this a few times. You were co-founder of SigFig which was a point solution, and then you were founder and CEO of zenefits which was more compound, and now you're Rippling which is sort of like the Ultimate Compound startup. So, you've learned a lot along the way, I'm sure.
**Jason Lemkin:**
Yeah, I think I've learned a ton. I think one of the biggest things is that I didn't really know what a compound startup was when I started Rippling or used that term but I think you know I had I had this deep conviction that this was what needed to happen that the market this is what the market needed and customers didn't just want all in one they wanted the allest and honest and that was the way to win.
**Sam Altman:**
And you could click this button to hire someone and they would show up automatically across all of your HR systems in zenefits' case and and and and and and and and and and we just had like this this strong belief that people wanted that button but they wanted it to work for everything across their business.
**Jason Lemkin:**
Yeah, I mean I think when you know when zenefits was really working it was that you could click this button to hire an employee and they would show up automatic hopefully across all of your HR systems in zenefits' case and and and and and and and and we just had like this this strong belief that people wanted that button but they wanted it to work for everything across their business.
**Sam Altman:**
So, um I talked to companies uh regularly with from sort of the investor seat that um
**Jason Lemkin:**
Yeah.
**Sam Altman:**
They are starting as a point solution with aspirations to evolve into um
**Jason Lemkin:**
Uh yeah.
**Sam Altman:**
what we're talking about as a compound startup but uh they may just call it like a multi-product offering. This happens pretty regularly in the revenue stack where I get pitched and it's like you know we're going to start with uh let's just take like a Gong like version it's a bit of a point solution and then they want to transcend and become you know take over Salesforce take over a lot of the other uh rev stack solutions for like knowing what you know and maybe folks in the audience that are founders of a company that is a point solution solution
**Jason Lemkin:**
Um it's a bit of an evolution for you.
**Sam Altman:**
How would you think about like adapting from being a point solution into a compound startup is it possible to do that after day one is it just what comes to mind uh it's really hard I mean there there are sort of two two sets of problems one is they're so and and the answer is like I'm not sure that you really can I think you kind of have to almost refound the company or you know sort of rewind and reverse and start over and go in this different direction.
**Sam Altman:**
Tactically the reason that that big businesses it's real so hard for them to launch like a second product is there so many built-in assumptions that they have around there being a single product um
**Jason Lemkin:**
You have everything from just like the way your sales force instance is set up to the way your sales team is compensated to all of your the way all your training Works to you know how your product marketing and your product teams are aligned it's very hard to just suddenly have like two things where there was one before but the bigger thing is like almost by definition compound startups are solving like different problems than Point solution products products
**Sam Altman:**
like if you um you know if you take the example with gone I mean I don't know the company super well and I'm speaking it you know off the top of my head but you
