When It Clicked: The Story of Rippling
👋 Welcome to "When It Clicked," a podcast that explores the stories behind successful businesses and products. In this episode, we'll be diving into the story of Rippling, a company that's revolutionizing employee management software. From its humble beginnings in a basement to its current valuation of $6.5 billion, we'll explore how Rippling's founder, Parker Conrad, saw a problem that no one else had recognized and built a solution that's changing the game.
Table of Contents
- Introduction
- Parker Conrad's Struggle with Employee Administration
- The Birth of Zenefits
- The Idea for Rippling
- Building Rippling from the Ground Up
- Marketing Rippling's All-in-One System
- The Future of Employee Management Software
- Conclusion
Parker Conrad's Struggle with Employee Administration
Do you remember your first day at a new job? Scrolling through your playlist for something to pump you up on your commute, fiddling with your collar in the elevator, nervously practicing your greeting before logging on to your first team meeting. Hello, I'm Alana. Hey, my name's Alana. Hi, I'm Alana. But no matter where you work, there is one experience most of us share on that first day: you need to input your computer and login code. All right, here is your 16-digit employee ID number. Get ready. So many forms, so many passwords. It's all pretty overwhelming, on top of the fact that you need to do your actual job. Nobody likes doing administrative work, but I've always felt like I had less patience and tolerance for that than most people.
Today, we'll be exploring how too much paperwork convinced one founder that there was a business in simplifying employee administration. I'm Alana Strauss, and you're listening to "When It Clicked."
The Birth of Zenefits
The year was 2007. Tech companies were on a tear, and legions of ambitious folks were flocking to San Francisco to build their startup. Parker Conrad was one of them. He'd left a good job in pharmaceuticals to found a company called SigFig, and like many founders, he was doing it all, including putting new hires on the payroll.
"I'd have to ask, 'Okay, what's your social security number, your home address?' And I'd always, of course, forget to do that until it was time to run payroll, at which point I'd sort of do it frantically and say, 'Oh, like what? What's this information so that we can get you added in the system?' And then when you enrolled them in insurance, the only way to do that was really to fax something in. And so you need to get them to fill out a form manually, and then I'd need to stop off at Kinko's after work because we didn't own a printer, and we definitely didn't own a fax machine. It wasn't exactly the best use of Parker's time, but it was what he had to do to bring new people into the company."
People like Matt Epstein. Matt had quit his job at an ad agency in Atlanta to chase his dream of working in tech right as the dot-com bubble was bursting. After six months without a single job interview, he decided to get creative.
"So I basically threw on a mustache and begged Google for a job via YouTube, which was still fairly new at the time. 'Google, please sit,' as they often say in Canada. And I also paid to have a propeller plane fly around their campus with my URL. I printed out six-foot cardboard cutouts of myself and shipped them to every single HR department. So some poor HR person somewhere in their office probably still has a giant cardboard cutout of me with my URL."
Matt's unusual job search worked. He got some media coverage and a bunch of offers from tech companies, but instead, he opted to join Parker and his team at SigFig.
"I wanted to really go the startup route, and I thought Parker's idea was really interesting at the time. And so I joined because of the idea, but also Parker's passion is really infectious, and anyone who knows Parker can pretty much tell you the same thing."
SigFig, the startup Parker had co-founded, was creating software to automate investment advice, and the business was solid. But Parker had come up with a new idea for a different company, a company that would help others avoid all those long hours faxing documents at Kinko's.
The Idea for Rippling
Nobody likes doing administrative work, but I've always felt like I had less patience and tolerance for that than most people. So in 2012, Parker left SigFig to start a brand new company. The business idea was pretty straightforward: Parker wanted to take all that manual administrative work he'd been doing to onboard employees and put it all online. He wanted to create a company to solve for a problem he had faced as a business owner.
Matt saw the problem too.
"If you were a business 8-ish years ago, literally the only way for you to get health insurance was to go to a broker to fill out paper forms, and then that broker had to fax them to the insurance carriers because literally the only way to get health."
Parker was back in startup mode, and once again, he convinced Matt to join him.
"He told me the idea, and I forget if I asked him or he asked me, but one of us brought up the idea of helping get the first 30 customers. And so that's what I did. I moonlit at SigFig just sort of doing this on the side for the first six months because it was me and Parker in his kitchen. I wasn't getting paid. I was being paid in Papalote burritos, which is a good Mexican chain in San Francisco."
The company they were building was Zenefits, and while it started as an online health insurance tool, it quickly grew to become more.
"So I had spent the last few months sort of getting ready for launch, positioning and messaging this thing as an online health insurance tool. And at the last minute, Parker's like, 'You know, I actually think there's a bigger opportunity here to sort of integrate all this HR stuff together.'"
In the spring of 2013, Zenefits launched through startup incubator Y Combinator. It was offering software to help businesses manage payroll, health insurance, and employee benefits all in one place, and it quickly became a success. After just eight months, Zenefits was on track to make one million in recurring revenue. Big-name investors got on board, and in just a few years, the startup grew from 15 to more than 1,500 employees.
But with this rapid success came scrutiny.
Building Rippling from the Ground Up
In the end, Parker left Zenefits in February 2016. But he couldn't stop thinking about that first idea he'd had when he started the company three years earlier.
"With Zenefits, for most of my time there, I was the only admin for the system. So I was personally doing most of the things related to employee onboarding, including doing things like creating email accounts and adding people to email lists and stuff like that. And so I sort of saw the same headache over there that I saw over here, that, you know, man, it's a pain in the butt getting people set up in all these different places. And we made small tentative steps in that direction while I was at Zenefits. We spun up an integration with G Suite and one or two other places, but then those projects were largely shut down, I think as a distraction once I left. And my conviction was that actually that was the future."
Joey Price has seen the same inefficiencies. His first job in HR was 15 years ago at a large law firm, and he spent his days manually inputting employee data into a bunch of different software platforms.
"Trying to understand, is that a four or an H? Is that a three or an E? Is that a one or an I?"
Today, he runs Jumpstart HR, a Baltimore-based HR outsourcing and project management company, and he admits HR technology can be a tough sell.
"HR is one of the last frontiers for mass adoption of technology at work. When an HR professional goes to an executive to say, 'Hey, we need this tool. It's going to make our organization great,' the executive's vantage point is, 'I thought that's what I pay you to do.'"
Parker saw the same inefficiencies in HR processes by running his own companies and onboarding his own staff. He'd figured out there was a gap to fill, and the software he'd worked on at Zenefits, he was convinced it was just the tip of the iceberg.
"I think, at my last company, a lot of people misunderstood what made Zenefits work well. While it was working, they thought that what the business built was online health insurance. And I think what I actually understood was that having insurance be done online was a precondition to being able to have this all-in-one system for HR. But that what was really leading people to buy, having seen it on tens of thousands of customer demos and across tens of thousands of clients, was this idea that you could click a button and everything happened automatically. And so you didn't have to deal with a dozen different systems."
Parker wanted to build software to replace all the different employee data systems out there, an automated, integrated employee management system. And the goal was instead of condensing a dozen systems, how do we condense thousands of them, all the different things that companies are using, and have one system that manages employee information broadly across the entire organization?
This was when it clicked for Parker, and so just a few months after leaving Zenefits, he set out to launch another startup. He called the company Rippling.
Marketing Rippling's All-in-One System
Rippling seems to have figured out its value to customers and how to keep growing the business, but at the same time, Matt says he and Parker have no illusions about the road ahead.
"There hasn't been a day that's gone by my career where I haven't been paranoid. Even today, the company is very successful. There's no Achilles heels. There's no big red flags. But even today, I find it really hard personally to celebrate and say we are successful. You know, we've got a long road ahead and changing the way people think about and operate their workforce, not to use really lame Silicon Valley language, but I definitely think there's going to be a paradigm shift. And I hope Rippling is the one who sort of is the winner at the end of the shift, but it's definitely going to be someone. People are going to be working in the equivalent of Salesforce but for the employee record over the course of the next decade. 100% that I'm confident about. Now I'm, of course, crossing my fingers and praying every day that it's Rippling, but it's definitely going to be someone."
The Future of Employee Management Software
Rippling is now worth more than Zenefits at its peak, all because Parker saw a business problem that no one else had recognized. He realized, I think because of Zenefits, that this problem of disconnected data, disconnected systems, it's actually far broader and far deeper than just HR, which I think when people think an employee, they just think, oh, payroll, benefits. You know, I think ultimately what always made Parker successful on the product side is he always asking himself, how should this stuff work?
"I've always felt like everyone's job has some stuff involved that, you know, is not your favorite part of the day, that feels sort of low level and like a grind. And so one of the things that is a little bit perverse about Rippling is I think a lot of things that we're building, I take a lot of pleasure in sort of stamping out that kind of work for everyone else. And so the things that we handle are the things that otherwise, like most people wouldn't want to deal with."
Conclusion
Thanks for listening to "When It Clicked." We hope you enjoyed this episode about Rippling and its founder, Parker Conrad. Rippling is just one example of how a simple idea can turn into a billion-dollar business. If you're interested in learning more about how Rippling is revolutionizing employee management software, visit their website at rippling.com. And if you're looking for a productivity tool to help you manage your own business, check out ClickUp at clickup.com.
