Ilana Strauss: Do you remember your first day at a new job? Scrolling your playlist for something to pump you up on your commute. Fiddling with your collar in the elevator… Is this too casual with jeans? Nervously practicing your greeting before logging into your first team meeting…
Hello, I’m Ilana. Hello, my name’s Ilana… But no matter where you work, there is one experience most of us share on that first day.....
Voice 1: You need to input your computer and login code....
Voice 2: Here's your 16 digit employee ID number, get ready to write it down....
Voice 3: Payroll will need a blank personal cheque....
Voice 4: The portal for the employee health insurance will be open for exactly 72 hours, it has a separate login code....
Ilana Strauss: So many forms. So many passwords. It’s all pretty overwhelming. On top of the fact that you need to do your actual job.
Parker Conrad: Nobody likes doing administrative work, but I've always felt like I had less patience and tolerance for that than most people.
Ilana Strauss: Today, how too much paperwork convinced one founder there was a business in simplifying employee administration.
Parker Conrad: I said, you know, I feel like there's, there's a hundred billion dollars sitting on the floor right there in front of us and it's invisible to everyone else. But we know exactly what we need to do.
Matt Epstein: You know, my first question was, are people going to get it?
Ilana Strauss: I’m Ilana Strauss and you’re listening to When It Clicked - an original podcast from ClickUp.
On this podcast, we meet the people behind the business stories and the products that you think you know - and bring you the secret history of how it all came together, to the one moment when it all, finally, clicked.
Today; how one founder's struggle to onboard his own staff led him to start - and leave - a company he built, before finally creating a billion dollar business around a radical idea for better employee management software. This is When It Clicked… for Rippling.
Ilana Strauss: The year was 2007. Tech companies were on a tear, and legions of ambitious folks were flocking to San Francisco to build their start-up. 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.
Parker Conrad: I'd have to ask, you know, okay, what's your social security number or your home address. And I'd always, of course, forget to do that until it was time to run payroll. And at which point I sort of do it frantically. And say, oh, like what, you know, 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 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.
Ilana Strauss: 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 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.
Matt Epstein: So I basically threw on a mustache and begged Google for a job, uh, via YouTube, which was still fairly new at the time. And I 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. You know, somewhere in their office probably still has, you know, a giant cardboard cutout of me with my URL.
Ilana Strauss: 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 Sig Fig.
Matt Epstein: 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 just sort of passion is, is really infectious and anyone who knows Parker can pretty much tell you the same thing
Ilana Strauss: Sig Fig, the start-up 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.
Parker Conrad: Nobody likes doing administrative work… but I've always felt like I had less patience and tolerance for that than most people
Ilana Strauss: 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 had 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.
Matt Epstein: If you were a business eight 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 insurance was through a fax machine.
Ilana Strauss: Parker was back in start up mode. And once again, he asked Matt to join him.
Matt Epstein: 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, you know, I moonlit at SigFig just sort of doing this on the side… For the first six months, because it was me and Parker and his kitchen, you know, I wasn't getting paid. I was being paid in Popolo tape burritos, which is a good Mexican chain in San Francisco.
Ilana Strauss: The company they were building was Zenefits. And while it started as an online health insurance tool, it quickly grew to become more.
Matt Epstein: And so, you know, 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 and automate all of it.
Ilana Strauss: In the spring of 2013, Zenefits launched through start-up 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 $1 million in recurring revenue. Big name investors got onboard, and in just a few years, the company grew from 15 to more than 1500 employees. But with this rapid success came scrutiny. In the end, Parker left Zenefits in February 2016. But he couldn't stop thinking about that first idea he had when he started the company three years earlier.
Parker Conrad: 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, that'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.
Ilana Strauss: 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.
Joey Price: Trying to understand is that a four or an H? Is that a three or an E? Is that a one or an I.
Ilana Strauss: Today he runs Jumpstart HR, a Baltimore-based HR outsourcing and project management company. And he admits HR technology can be a tough sell.
Joey Price: HR is one of the last frontiers for a mass adoption of technology at work… When a 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 paid you to do.
Ilana Strauss: Joey says that HR technology hasn’t done a great job marketing it's tools. And tech adoption in his industry? Well it's slow.
Joey Price: When we think about why. Effective HR technology should be critical and mandatory in every organization is that you have to realize that HR is one of the few departments that touches every single employee on a daily basis. And so having tools that work not only for your HR team, but also for your employees should be a no brainer, because essentially it helps them get back working faster if you're not having to decipher through paperwork, to complete tasks, or you're not having to spend a lot of time typing in data where you could just have a tool or technology that knows to auto-fill and auto-populate.
Ilana Strauss: 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.
Parker Conrad: I think, you know, at my last company, I think 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 what was really leading people to buy – you know, 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 automagically. And so you didn't have to deal with a dozen different systems.
Ilana Strauss: Parker wanted to build software to replace ALL the different employee data systems out there, an automated, integrated employee management system.
Parker Conrad: 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.
Ilana Strauss: This was “when it clicked” for Parker. And so just a few months after leaving Zenefits, he set out to launch another start-up. He called the company Rippling.
Parker Conrad: This sort of challenge of building the company that we wanted to build was because there was a lot to do. There's a lot of software to build. There were a lot of things that we needed to integrate with, a lot of pieces that we needed to do ourselves.
Matt Epstein: They were building the product for about a year and a half in Parker's basement. So you literally had Parker's house. And then below that, in this concrete basement, he somehow managed to convince engineers to work for him .
Parker Conrad: I mean, there's, there's nothing fun. About that early part of building the company. It's a real slog. I wouldn't wish it on anyone.
Ilana Strauss: And Parker wasn't 25 anymore. This was his third start-up. The stakes were pretty high. Even people who knew him well had questions about his vision for Rippling - people like co-founder Prasanna Sankar.
Parker Conrad: I remember… we were just at the very early stages, of kind of getting off the ground. And Prasanna asked me, he said, why do you want to take on something that seems somewhat similar to your last company. and I said, you know, Prasanna. I feel like there's, there's a hundred billion dollars sitting on the floor right there in front of us and it's invisible to everyone else. They're all walking by it and they don't see it lying right there, but we know exactly what we need to do. We know exactly how to build this. We know that people want it, we've seen it at Zenefits. All we need to do is just walk over there and pick it up, and that's all that's required.
Ilana Strauss: What was actually required - well, it turned out to be a little more involved. Those engineers in Parker's basement? In the end, it took them almost two years to build the software he'd envisioned.
Parker Conrad: What I didn't know is how long it would take to build that thing. It might take longer than we expected, but, you know, as long as we could build it… I did not suffer from any doubt or uncertainty that if we built it it wouldn't work.
Ilana Strauss: After all that engineering in the back end, Parker was convinced the product was solid. Like many entrepreneurs, he had a vision. But getting others to share that vision? Well, there was still a lot of work to do on the more basic elements. Like marketing.
Parker Conrad: Early on, our product marketing was extremely unsophisticated. We had this one page marketing website that I really liked, but everyone else at the company hated what was deeply embarrassed about. Matt Epstein, who was our CMO, refused to update his LinkedIn profile to say that he was working there until we replaced the marketing website. That was sort of how, how bad it was.
Ilana Strauss: Here's how Matt remembers it.
Matt Epstein: And actually Parker tried to recruit me, after Zenefits. For a year he tried to get me to join Rippling. And for a year I'm like not interested. I don't want to do Zenefits plus, you know, the whole adding IT on to HR is kind of neat, but not really my thing. And a year later, it wasn't until I saw the product where I was like, oh, I get, I get what you're trying to do here.
Ilana Strauss: Matt had always believed one of the biggest indicators of a company's success was how customers react to their product. So before considering the job offer, he asked to sit in on a customer demo of Rippling's software...
Matt Epstein: And literally the first demo I hopped on. Was with, you know, an HR woman in the Midwest, blue collar company. So in general, not… an early adopter, demographic wise and, you know, halfway through the call in her really thick Southern accent, her words, not mine. She goes, holy [expletive]. That is so… cool. How are you doing that? And that was, I think, the point at which a lot of my concerns were resolved and I just knew based off of Zenefits, that Parker was onto something again, and ended up joining.
Ilana Strauss: Matt had been down this road before with Parker. He joined the company as Chief Marketing Officer for Rippling. But the title was where the glamour ended.
Matt Epstein: And they had moved from a basement into what was either, a sort of dilapidated apartment or a dilapidated apartment converted into like a dilapidated office. But it was me and, you know, probably roughly about 20 people.
Ilana Strauss: To get Rippling into market, Matt had a lot of work to do.
Matt Epstein: You know, my first question was, are people going to get it?
Ilana Strauss: To start, he had to fix the website. But on a more fundamental level, he had to figure out how to explain what Rippling was offering in a way that customers could understand it.
Matt Epstein: People don't know what they want until they see it. And so, you know, if you're just coming in, looking for payroll and we start talking to you about this system that can unify every single one of your business systems and allow you to automate it, that's obviously, a pretty grandiose value prop that you weren't coming in the door looking for. So I think this problem is pretty unique to us, but it's a line that we've really had to walk pretty carefully since day one.
Ilana Strauss: This was the challenge Matt was facing in marketing Rippling's product. He needed to do more than just explain a product that people had never really seen before. He needed to change mindsets.
Matt Epstein: I think this sort of underlying issue is, the current space has a very narrow view of employee management. You know, HR does its thing. IT does its thing. Finance does its thing. And in reality, those things are all deeply interconnected. And so I think… our mission that we say is we free smart people to work on hard problems. What we mean by that instead of you know spending tens and tens and tens of hours manually entering a bunch of data into systems. You can instead actually focus on, you know, the work that matters.
Ilana Strauss: In October 2018, after about 18 months in development and testing, Rippling finally started selling. And in the beginning, it was tough. Many people weren't looking for the product Rippling had created. They wanted software for one task, not twenty.
Matt Epstein: Investors were skeptical, candidates were skeptical. People would look at the surface area of the product and they think, I don't believe that you can build these 10 things all at the same time and do them well.
Ilana Strauss: And for some of the companies that were interested, the idea of Rippling replacing systems they were already using - like payroll - was a sticking point.
Parker Conrad: Our marketing website did not even have the word payroll on it. And it was very purposeful because in the early days we were scared that no one. Would want to talk to us if they thought that they'd have to replace their payroll system to use us that they'd be too nervous that a startup couldn't do payroll effectively. And so we were sort of purposefully vague about the payroll piece, so that we could sort of introduce that concept, later in the sales process and say, look, we can solve all these challenges that you're having administratively in your company. And by the way, one of the ways that we can do that is you actually have to give us payroll, because there's no way for us to do it unless we're doing that for you. But we sort of save that, you know, until later in the conversation. And so we didn't want to have it on the marketing website. And that led to these weird dynamics where someone was like, I can't buy a payroll product from a company whose website doesn't use the word payroll.
Ilana Strauss: Eventually, Rippling did add a payroll page to its website. And other pages outlining the different tasks its software could automate. Payroll, single user sign on, device management, security. Rippling was offering it all. Parker's early vision of creating an all-in-one employee management system was a reality - and a business that was growing fast. Six months after launch, the company raised 45 million in its first round of financing. Parker knew his gamble was paying off.
Parker Conrad: The joke that we always had internally was that we weren't building, you know, one company we were building seven. And, we sort of made that joke and we're somewhat embarrassed about it because at the time we thought like, well, that was like a bad thing to do. And I've since developed a real conviction that actually that was exactly the right approach, that there were, and are enough people that are building sort of one extremely narrow product or service. And that actually the next wave of really big successful companies. Are going to build, what I call compound products that you, you actually build multiple products that work together coherently, in sort of one cohesive system.
Ilana Strauss: Today, Rippling is doubling down on this philosophy - building more products to integrate everything from employee spending accounts to software permissions. Just three years after its first product launch, the company has more than 800 employees and investors have valued the company at 6.5 billion dollars. Rippling is now worth more than Zenefits at its peak. All because Parker saw a business problem that no one else had recognized.
Matt Epstein: 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. Is, he always asked himself, how should this stuff work?
Parker Conrad: 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 that is a little bit perverse about, about Rrippling is I think a lot of the 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.
Ilana Strauss: 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.
Matt Epstein: There hasn't been a day that's gone by in 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. 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 an operate, their workforce not to use like really lame Silicon Valley language,; bBut I definitely think there's, there's going to be a paradigm shift and I hope Rrippling is the one who sort of is the winner at the end of the shift, but it's definitely going to be someone like people are going to be working in the equivalent of Salesforce, but for the employee record, over the course of the next decade, a hundred percent that I'm confident about. Now, I'm of course crossing my fingers and, and praying every day that it's rippling, but it's definitely gonna be someone.
Ilana Strauss: You’ve been listening to When It Clicked - an original podcast from ClickUp. I’m Ilana Strauss.
Just like Rippling, ClickUp is committed to simplifying tasks so businesses can focus on what matters.
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