20VC: Rippling's Parker Conrad on The Four Main Benefits From Building a Compound Startup | Why There Should Never Be a Trade-Off Between Speed and Quality | How Zenefits Gave Parker a Chip on the Shoulder and Why That is so Important?
Rippling takes a compound startup approach, building multiple products in parallel to maximize integration and shared functionality.
Rippling believes in the importance of speed and quality not being mutually exclusive and prioritizes urgency and impatience to deliver high-quality outcomes efficiently.
Rippling aims to become the underlying system that manages crucial business processes within organizations by leveraging employee data and integrating with diverse partners.
Deep dives
Rippling's Mission to Build an App Store for Business
Rippling is focused on building an app store for business, aiming to create a platform that allows businesses to easily manage their employees' payroll, benefits, expenses, devices, and apps in one central place. The company has raised over $697 million in funding from top investors like Sequoia and Kleiner Perkins. Rippling takes a compound startup approach, building multiple products in parallel to maximize integration and shared functionality. They leverage the employee data they manage to drive effective cross-selling to existing customers. The company aims to go beyond being just an HR tool and become an integral part of business software by utilizing their deep understanding of employee data to provide value across various functions within an organization.
The Motivation Behind Rippling and Building a Compound Startup
Rippling was founded with the belief that managing employee data is a critical and distributed task that goes beyond the scope of traditional HR systems. The company aims to simplify employee data management across multiple business functions, including IT and finance, by setting up automation and integration systems that streamline processes. Rippling's founder, Parker Conrad, was motivated to start the company as a response to personal challenges and a desire to tell his side of the story after leaving his previous company. He found motivation in building Rippling as a successful venture that would serve as a platform to communicate his experiences to the tech community.
The Power of Efficiency and High Performance in Organizations
Rippling emphasizes the importance of efficiency and high performance in organizations. They believe that people are capable of achieving more than they think, and it is the role of founders and leaders to unlock that potential. Rippling strives to push their employees to excel, encouraging them to challenge assumptions about what is possible and find innovative solutions that can deliver exceptional results. They believe that accomplishing more with the same resources is what sets successful organizations apart from those that struggle to make an impact.
Balancing Speed and Quality of Execution
Rippling recognizes that speed and quality of execution are not mutually exclusive. They believe that speed is often aligned with higher quality outcomes. They prioritize urgency and impatience when it comes to addressing underlying issues and building high-quality products. Rippling encourages its teams to challenge assumptions about trade-offs between speed and quality and find ways to deliver both efficiently. They believe that being slow or lackadaisical in addressing problems does not lead to better results but rather hinders progress.
The Path to Becoming an Internally Facing 'App Store' for Businesses
Rippling envisions itself as the internally focused counterpart to external-facing business software solutions like Salesforce. They aim to provide a comprehensive suite of products that manage various aspects of business operations using their deep understanding of employee data. Rippling aspires to become the underlying system that manages crucial business processes within organizations, leveraging the employee record as a key primitive for cross-selling different products. By integrating with diverse partners, Rippling plans to create an ecosystem that gives external providers the same opportunities for success as interna
Parker Conrad is the Founder & CEO @ Rippling, the company that lets you easily manage your employees’ payroll, benefits, expenses, devices, apps & more—in one place. To date, Parker has raised over $697M for Rippling from some of the best including Sequoia, Founders Fund, Greenoaks, Bedrock, Kleiner Perkins and Initialized to name a few. Prior to founding Rippling, Parker was the Co-Founder and CEO @ Zenefits and if that was not enough, Parker is also a prominent angel having invested in Census, Pulley and then also AgentSync and TrueNorth, alongside 20VC Fund.
In Today's Episode with Parker Conrad:
1.) Entry in Startups and Zenefits:
How did Parker make his way into the world of startups?
How did Parker end up being kicked out of his own company, Zenefits? How did he respond?
How did that experience of being kicked out of Zenefits inspire him to build Rippling?
2.) Parker Conrad: The Leader:
How does Parker define "high performance"? How would Parker describe his leadership style today?
Why does Parker fundamentally disagree that with speed comes a trade-off in quality? How does Parker ensure Rippling does all things fast and to the best of its ability?
How would Parker break down his decision-making framework today? How does he decide what to prioritize vs not? How does he decide what to delegate vs not?
What are Parker's biggest insecurities in leadership today? How have they changed over time? What does Parker do to combat and mitigate them?
3.) Rippling: The Compound Startup
How does Parker define a compound startup?
What types of business do this verticalized approach work for vs not work for?
What does Parker believe are the 4 core benefits of this approach?
What are the single biggest challenges of building a compound startup?
4.) Rippling: The Economics:
How does this compound startup approach impact ability to cross-sell? How much net new ARR today comes from cross-sell?
What have been some of Rippling's biggest lessons on what it takes to do cross-sell so effectively?
How do the margin profiles differ across their different products? How have the margin profiles changed over time?
Why does Parker not believe that most startup margins are accurate?
How does the compound startup approach change the amount invested in R&D? How does that impact the fundraising requirements of the business?
5.) Rippling: The Partner Ecosystem:
How does Rippling think about building out the best partner ecosystem? What will it take for that to work?
Why do Rippling want to introduce services that compete with their own products? Why do they not only build their own?
How do the margins differ when comparing revenue share on partner products vs Rippling products?
What are the single biggest barriers to this partner ecosystem working?
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