# Rippling's Parker Conrad on Why The VC/Founder Marriage Analogy is Weird Why The Notion of Focus, Focus, Focus is Overrated, Why Narrow Point Solutions Are Not Best in Class Products & The Rise of the "Compound Startup" 20VC · Apr 26, 2021 · 41 min · 8,522 words Speakers: Harry Stebbings, Parker Conrad Source: https://www.996.fm/episodes/20vc--ep-da88c341/ ## Cold open **Harry Stebbings** [0:00]: Welcome back. This is 20VC ## Intro **Harry Stebbings** [0:01]: with me, Harry Stebbings. And today, I have a guest on the show who I interviewed three or four years ago since their company has skyrocketed. And I think both me and this individual has changed a lot in this time. We get really quite deep and personal in this episode, which you all know I love. But with that, I'm thrilled to welcome Parker Conrad, founder and CEO of Rippling, the employee management platform allowing you to manage your employees payroll, benefits, devices, and more all in one place. To date, Parker's raised over a $197,000,000 for Rippling from some of the best, including Founders Fund, Kleiner Perkins, Initialized, Bedrock, Greenoaks, and Coatue. Prior to founding Rippling, Parker was the cofounder and CEO of Zenefits. And if that wasn't enough, Parker's also a prominent angel investor, having invested in the likes of Census, Pulley, and then also more recently, AgentSync and TrueNorth alongside 20VC Fund. I'd also want to say a huge thank you to Jeff at Bedrock, Gary Tan, Boris and Alex at Founders Club, and the wonderful Mamoon at Kleiner Some amazing questions, suggestions there, real team effort on the schedule, and it made such a difference. 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But that is quite enough for me, so now I'm very excited to hand over to the dulcet tones of Parker Conrad, founder and CEO at Rippling. Three, two, one, zero. You have now arrived at your destination. ## Conversation **Harry Stebbings** [2:56]: Parker, it's such a joy to do this today. My word, it's been incredible journey since our first episode. So thank you so much for joining me today. Thanks for having me. Not at all, but I do wanna start on you. And for those that missed our first episode, we've gotta start with some context. So what was that founding moment for you with Rippling? **Parker Conrad** [3:11]: So I think Rippling has one secret underlying insight, which is that employee data is a lot more distributed across a company than most people realize. Most people, when you talk about employee data, they think HR department and HR business systems. But I actually think that, like, almost every business system a company uses is full of of about employees and that because of that, employee data is the right foundation for sort of a broader business systems management platform. **Harry Stebbings** [3:38]: I do have to ask you, Nick. You've done many companies before, and I think you've learned a lot from it and one changes their leadership. Leadership. When you look back at the prior entrepreneurial endeavors, how do you think about effective leadership given the experiences that you've been through? **Parker Conrad** [3:52]: I'm not sure that I'm that different as a person today than I was ten years ago. I've had some big ups and downs, obviously, in my career. And I think there's a platitude in Silicon Valley that you learn a lot from failures. And the only thing I've ever really learned from failure is how much it sucks and how much you don't want it to happen again. **Harry Stebbings** [4:09]: I do agree with you. I think a lot is learned from success as well. I think the trouble is people actually just don't spend the time to analyze success that they do failure, and so they think you pay less from it. I do wanna touch on probably the most striking thing, it's like we've spoken before about this previous show. Everyone loves to talk about the power of focus, and I know you have a slightly different view when it comes to focus itself and why it's often lauded. So starting on that, why do you think maybe people have the wrong idea when it comes to the traditional notion of focus? **Parker Conrad** [4:36]: I think, I mean, one of the sort of easiest things for usually investors to talk about is how the secret to startup success is focus, focus, focus. I think it's actually wrong. It might have been true at one point in the past. Today, the biggest problems that at least in, like, b to b SaaS, the biggest problems that companies face are often sort of business process problems that span a lot of different business systems, a lot of different parts of the company. Actually, best way to solve them is to build a set of closely integrated tools. I call it a compound startup to take on a bunch of different things at once and make them work together seamlessly. And the traditional advice to focus is actually really holding back the industry because it's leading everyone to build these very, very narrow point solutions that don't interoperate. And actually, the sort of best product out there would be one where you roll up a couple of these different things into one seamlessly interoperable product. **Harry Stebbings** [5:34]: You've said before that very few have successfully expanded upon the initial insertion point and then added adjacencies. I wanted to kind of push back on that and go, whether it's in consumer with your Revolutes or your Chimes of the world, which start with current accounts and then expand with student loans and mortgages and all the other financial offerings they have, or it could be your data dogs of the world, which start with their core offering and then layer on additional additional products over time. How do you respond to that as a pushback? **Parker Conrad** [6:02]: I think that, obviously, there are some companies that succeed by being focused. I think that there are some that succeed that way doesn't to me change the fact that there are a lot of companies that could succeed, particularly now with a more compound approach. And one example of this is actually precisely that the SaaS markets ten years ago or even five years ago, there was this sort of moment in time opportunity where you could sort of peel off, like, any sort of point solution business process or thing that companies need to do, turn it into a SaaS cloud solution, and then you could build a business around that. And at the time, there was a question, well, how many of these companies can be billion dollar companies? The answer was, like, pretty much all of them as it turns out. But now those opportunities have sort of been picked over. And so if you wanna do sort of a really narrow point solution SaaS company, the odds are that someone's already done that. And so now you have to sort of take it to the next level and you have to think about how do we solve a broader business problem that might span a lot of these different business systems. And one of the big opportunities is precisely that there's a lot of greenfield territory there because everyone else is telling people, oh, well, don't want to do that. You've got to start with just one narrow thing. But that today, I don't think that gets you very far. **Harry Stebbings** [7:16]: How do you think about breadth and quality? Because I agree with you in terms of it not getting you very fast today, but when you look then at what one has to do, how do you provide that sufficient quality with the breadth that you wanna build? **Parker Conrad** [7:27]: So it's definitely if you're gonna build a compound startup, that is what makes a a compound startup hard. And to be clear, you can't build a crappy startup. You've gotta not just build a bunch of interoperable products. You have to build ones that are really good. And I think the biggest misconception that I think people have about this is that most people believe that narrow point solutions are the best in class products. But what if that's actually wrong? I think that the best products are the ones that interoperate seamlessly with a lot of other systems in ways that are almost impossible to do when you build them as standalone point solutions. And so I think that even investors have got this wrong because they think that the best product is gonna win and the best product is the one that people focus on and go really deep. But the problem is is the advantages that you have as a compound startup or a compound company is you can have one data schema across all these different systems, which means that you have sort of seamless reporting. You can look at metrics across different systems. I mean, to use one example, you know, if you had customer support systems that were deeply integrated with time tracking systems, you could look at every time you approve a time card, what's the ratio of the number of support tickets that someone closed out in a pay period divided by the number of hours that they worked as a rough measure of efficiency. And those things are trivially easy to do when these systems are deeply and tightly integrated. **Harry Stebbings** [8:54]: First thing that comes to mind for me is I I totally see the advantages there. But then when you look at the build out, how does compound startups and that approach change the funding requirements for companies in the early days? **Parker Conrad** [9:06]: I think I would ask a separate question, which is how does the difference in the funding environment today enable this different approach? Because part of why everyone said five years ago, you have to focus, focus, focus is that was the reality. That was the sort of bite sized chunk of risk and product that investors were willing to fund. And now in this new world where unicorn rounds are the new series a, you actually can raise the capital and the resources to go after something a lot more ambitious. And you can afford to try and build out a much more ambitious product that takes on a couple of different interrelated areas and solves a much bigger problem for customers as a result. **Harry Stebbings** [9:50]: How do you advise founders in terms of communicating that vision to investors without also being overly ambitious? I think a lot of investors would go, woah, woah, woah, woah, too much too soon, if they heard that you're gonna try and take on x, y, and zed incumbent at the same time. How do you advise them to communicate that grand vision in a way that's, like, attractive and fundable for investors? **Parker Conrad** [10:11]: You have to have a sort of clear point of view around why it makes sense to do all these things together. And I do think that there are a lot of investors that will really go all in for someone with a bigger and more ambitious vision. And that is another advantage of doing a compound startup is the execution is way harder Because to your point, you can't just be good at one thing. You have to be good at three or four things or five to eight things or something like that all at once, which is much more challenging. But if you can do it effectively, the upside is that you win because you're building something that is usually better in a fundamental and foundational way. And it's also sometimes in some ways easier to attract capital, talent. People want to be a part of something that could be really transformational. If you can articulate a broader vision and, you know, look, if you look at the really big outcomes, most of them end up being compound companies. You look at Microsoft, Salesforce, those are all companies that succeed because they have this broad product portfolio and because of the ways that all of these products interrelate with each other. Can I speaking of the **Harry Stebbings** [11:19]: broad product portfolio, you said something before that was really interesting? You said the integration is the product. In terms of like that execution playbook, what did you mean by the integration is the product? **Parker Conrad** [11:28]: So I think it depends on what is the particular compound startup that you're building. So Rippling, I think, is one example of a compound startup. And for us, the underlying thesis is that deeper integration with the employee record unlocks product capability that is critical across a wide array of business systems. Any business system with the concept of a policy. Policies are much more potent if they can be applied based on role than if they're applied to a discrete set of individuals. Any system with concepts of approvals or alerts or workflow, those things are more powerful if the logic on when they're triggered can be based on role and if the routing can be based on role. Like, you might need approval from your manager or the VP of your department or the finance business partner aligned with your team. And those are different people depending on who you are within the company. And those concepts, you know, concepts of like workflow and policies and approvals and routing and reporting capabilities, those are things that are very common. They're common threads across a wide variety of software. And so building sort of one system that sort of nails that kind of stuff and nails it by tying everything deeply into the employee record allows you to build a lot of, like, much more powerful products that are better products because of their integration and not sort of mediocre products that happen to be integrated. I think the next **Harry Stebbings** [12:51]: logical, like, challenge in my mind when I hear kind of you said there about the roles, the capabilities, and then the product set. Is that how does one think about pricing when really laying out the foundations for a compound startup? **Parker Conrad** [13:01]: So I think one of the biggest advantages that you have as a compound startup is that you can run circles around competitors from a pricing perspective, because you can maximize the price of your bundle rather than the price of any one SKU. And so that means you can actually underprice competitors on a SKU basis and save clients money while sort of still maximizing the value of your contract, which is ultimately what you care about, what funds your r and d, what funds your sort of sales and marketing and customer acquisition. You know, Microsoft Teams is one small part of their portfolio. Right? And so they can think about pricing for Microsoft Teams very differently than Slack could, and they can afford to deploy sales and marketing resources on the basis of, like, a much larger portfolio of products than Slack could afford to do with just one product. Look, I have enormous respect for Slack and that team, and they built something so much more successful than anything that I've ever built. But I wonder, like, what would have happened if Slack had taken the compound startup approach? If they had built early on, not just sort of messaging, but Zoom and video communication, like, really gone deep on that on day one, if they had built a set of productivity tools like what you see with Notion or Coda to sort of compete directly against the Office suite. You know, if they had said, look, now we're gonna take on Microsoft rather than saying, well, we're just gonna do the very narrow thing around messaging. How might that have sort of turned out differently? Can I ask the instant **Harry Stebbings** [14:24]: kind of question for me then is when you have that breadth of product approach from the early days and take that compound startup route from the early days, it prevents a real kind of product marketing challenge that you don't have when you have a very thin sliver that is very clear in your product marketing message? How do you think about effective product marketing for the compound startup approach? **Parker Conrad** [14:42]: It's actually, I think, one of the biggest challenges because the question is like, what is this thing? You know, in our case, it's like, well, Rippling is like, well, it's like a payroll system and employee benefits, but also a single sign on and device management and, you know, like a whole bunch of other things as well. And it's something that's a level down in the stack that's a little more fundamental. And so we talk about it as like, look, this is an employee system. And an employee system stretches across a lot of different functional areas in your company, you know, HR, IT, finance, and most of the different functional areas of the business, and that you have problems in all these different areas. And you see a lot of these problems when you're hiring someone that you need to add them to a 100 different places. And when you're terminated, there's a bunch of places you forget to remove them. And you gotta maintain their information in all these different places. And those are sort of symptoms of this underlying issue, which is that you have a 100 databases for employee data in company because you have a 100 different business systems that are directly tracking information about employees or where employee data is critical to all the decision making and administration of that system, who gets access, what access they get, what they should be able to do with the system, who needs to approve and sign off on what. And therefore you need an underlying system that's not really a payroll and HR system or an IT system, but that is an employee system that happens to sort of tie all these things together. So that is in a nutshell, like our product marketing. You got to step back and talk about the bigger problem that ties all these different things together rather than talking about like, well, this is a time tracking system or this is a payroll system or this is single sign on or device management or whatever the individual product is. **Harry Stebbings** [16:17]: Do you see extensions in sales cycles then? Because you do have to do customer education to unpack that. Like, an employee system, as you said, okay, versus, like, specific CRM for SDRs. Oh, I got it. That makes total sense. Like, is there an extension sales cycle given the customer education that's required to unpack the compound startup? **Parker Conrad** [16:36]: I think they're in the sales motion, you gotta do a couple things. And one is, ideally, you wanna make all of the different buying decisions separatable. So you can buy one product if you want to buy one product, and you can buy seven products if you want to buy seven. But often someone who comes in the door looking for one specific thing, you can upsell them on a whole series of things that are much more interoperable. And often they'll loop in other people, other constituencies within the company to get them on a demo, to sort of take a look, to do an evaluation, and maybe not. Maybe it's your job to upsell them six months later or a year later. But one big advantage it gives you tactically from a sales and marketing perspective is when you have more products and more buyers, you actually have more people you can reach out to. And so if you happen to ping, in our case, the HR person and they don't respond, sometimes you ping the IT person or the finance person, and they do get back to you. And they see it and they're thinking about it from the lens of their function. But if they buy into the bigger vision, then they'll say, well, you know, let me loop in the HR person. Let me get them on a call. And then sometimes you can talk about a much bigger sale and a much bigger contract. You mentioned CRM, by the way. I mean, that is the ultimate example. Like Salesforce is, at least for us, one of the best examples of a compound company because they're taking this underlying primitive concept of customer data, and they're saying that there are a whole bunch of systems and applications that need to be built on top of that. But that ultimately, what Salesforce is is not pipeline reports. It's not marketing automation software. Software. What it is is a system for managing business process and workflow that happens to be built on this underlying concept of the customer record. And in our case, we think of our business very much in that vein, that Rippling is a system for managing a different set of business process and workflow within a company that just needs to be built on a different underlying primitive. This, like, more inwardly facing understanding of employees and their roles and their relationships with one another rather than the more outwardly facing one that you have with Salesforce. **Harry Stebbings** [18:39]: Can I ask how do you think about churn in terms of how it differs between compound startups and then more siloed product focused startups? **Parker Conrad** [18:47]: With compound startups, you want to allow customers to churn individual products without the logo churning. So we actually track those two things separately in Rippling, and we often see product churn where someone for one reason or another, sometimes companies start out early on and they get insurance benefits through our company. And then as they grow, they want to work with an outside broker. And so they churn that specific SKU. But instead, they're now paying for Benadmin Software to work with an outside broker, but the logo stays in place. And, you know, I'm sure you see the same thing with something like Salesforce where companies buy a suite of products from Salesforce and sometimes they switch out one particular item for something else that integrates with Salesforce. But but Salesforce is sort of always there as kind of the central customer record. When we think about, like, the **Harry Stebbings** [19:35]: org chart itself, does the org chart differ when building a compound startup versus building the traditional focused product startup? **Parker Conrad** [19:42]: I think with a compound startup, the biggest thing you have to overcome is how can you be good at multiple things at the same time? One of the ways that you can do that is organizationally to give specific teams a lot of focus. And so what we do is we have almost more of a business unit organizational structure where we have people leading individual cross functional teams that are building specific products, whether, you know, in our case, that's payroll or insurance or device management or any number of other things. And that allows those teams to sort of individually have a lot of focus even as the company is sort of moving forward on multiple fronts. That can be actually a really powerful approach, and you want it to be organized where there's a team of people, you know, engineers, product managers, designers, but also customer support people, product marketers, like, the whole nine yards, like, all focused on sort of one specific product. **Harry Stebbings** [20:32]: You know, when we look today at your Salesforce or your Microsoft, as you mentioned, of the world, I don't know if it's retroactively looking back and going, oh, like, compound startup. Like, you and Angel Investor Day, you engaged with a lot of early stage companies as well. Are there any early stage companies which come to mind, pre Rippling, in stage, where you're like, they're taking a compound startup approach? **Parker Conrad** [20:52]: Yeah. I think there are a number of companies that seem to be trying to take on a whole suite of products. You know, Notion is one of them. The more focused approach would have been to do just one of the sort of several products that are in that suite. And I don't know how they think about the world, but if you want to take on a productivity suite, you gotta have a suite. You've gotta sort of do like a whole bunch of different things at once. I think there are companies like Ramp that are doing corporate cards and expense management and bill payment and, like, sort of really taking on half of the general ledger system, the expense side of the general ledger system. And again, even their marketing, you know, it's like, look, we're trying to help companies control spend. If you're trying to help companies control their spend, you can't just build one product. When you're oriented around a customer pain point or problem, they're often like a whole suite of systems that touch that that you need to take on. I **Harry Stebbings** [21:40]: totally get you, and I like these two as examples. For people looking to build the compound startup, it takes a certain style of founder. It takes an ambitious founder. And I spoke to Jeff Lewis at Bedrock before the show, and he said Parker has the most insane drive to win, but it's completely unparalleled. He asked what drives that, and have you always had it? **Parker Conrad** [21:58]: I mean, there's a couple things. One is I mean, this is not necessarily always the most admirable character trait, but I've always been, like, incredibly impatient. And I think that's the part of my personality that probably shows up the most at work and is sort of some part of, I think, the company's ambition. And some of that is, you know, I had cancer when I was 23 years old, and so I have always felt like, you know, you never know how much time you have, and I don't know if, you know, I can wait around until I'm 65 to get something done. And then also, you know, I think with Rippling specifically, I love the product that we're building. I love winning, but winning, you know, as a team with a group of other people that I really like working with. But for me, there's also a part of it that, you know, I've always wished there was a way and there isn't for me to sort of rewrite history and say, like, look, if I had fought at my last company being forced out by a sixteen z and David Sacks and had stayed in place, like, if we could replay the videotape, what would the outcome for that company have been? I believe that it would have been very different. And a big part of how I think about Rippling is that this is a way for me to sort of prove mostly to myself, but also to the extended community, to my friends and family, to the general public, and all that kind of stuff that this is how things might have turned out. And so that particularly early on at Rippling, that was a big part of kind of what got me up in the morning. **Harry Stebbings** [23:20]: Can I ask, you know, and I I hope it's not too personal, how do you feel about your relationship to that chip on the shoulder? **Parker Conrad** [23:26]: I mean, it's very real. I think there are a lot of people that work at Rippling that have a little bit of that, that have something to prove, who are a little bit impatient, a little bit kind of in a hurry. People who are like that, but also with like a sense of humor, I think you need to have kind of both like, if you're just kinda impatient and a chip on your shoulder, it's like sometimes you're a prick. But like, if you have that, but also like a good sense of humor, those are just people that I really like spending time with, working with. And I think we've got sort of bunch of people like that at Rippling, and that's sort of one of the fun parts of work for me. **Harry Stebbings** [23:58]: Can I ask another one? You've said before on Twitter that an analogy of, like, a founder to a VC relationship being a marriage is maybe wrong or, in your words, weird. And you said before that it was more aligned to a general contractor. I guess, why is it a weird analogy, and why do you think general contractor is more apt? **Parker Conrad** [24:15]: The marriage thing is weird. Like, I mean, I think about the relationship that I have with my wife, and it's very different from the relationship that I have with my investors. I think what people are trying to say is that this interaction that you have with investors is one that you can screw up. And that's true of a general contractor as well. You can mess that up and then suddenly you're in a bind. The reason that I think about it in this way is I remember there was a VC firm that I visited once where they had on the wall, they had this big poster that said, we view ourselves as a service provider to our entrepreneurs. And I remember thinking, no real service provider actually has to have that poster on wall. Like, when you visit an auto body shop, they don't have a poster that's like, we view ourselves as a service provider to car owners because, like, of course, you're a service provider to car owners. And I think that sometimes, like, I wish that the relationship that companies had with investors was more like that. Banks provide financing for people to buy a house, but you don't talk about the relationship with your bank as being like a marriage. And so particularly given sort of some of my history with investors, And by the way, I love Mamoon and Founders Fund and Napoleon and the folks that I work with today, but the nice thing about when you hire a general contractor, you wouldn't expect that if you had a disagreement with the general contractor, suddenly you'd show up one day and the locks were changed and you've been kicked out of your house. And so I think, like, the idea of VCs is really deeply involved in a company and providing a tremendous amount of value, and it's just very dangerous. **Harry Stebbings** [25:41]: You know, we have hundreds of thousands of entrepreneurs that listen. I would just love to double click on that. How would you advise them just to protect themselves in their own situations, fundraising, entering legal contracts with investors to ensure that the locks don't **Parker Conrad** [25:54]: get changed on them? I wish I had that answer. Because the power that investors have in companies, you can structure things so that you have board control, you can structure things so that you have voting control. None of those things actually really matter. The power that investors have over you is more than anything a moral authority that comes really from being on your board. And seed investors, like that doesn't matter. That's a more natural type of relationship with seed investors. But with real institutional investors that are taking a seat on your board, the power that they have over you is this moral authority. And, you know, at my last company, I had board control and everything, but when investors sat me down and said, look, if you don't resign, we're gonna sue the company. We're gonna go to war with you. You know, suddenly, you're like, crap. How do I survive that? Or how does the company survive that? And the strength that investors have is that they have a portfolio of companies. And so you say, well, you shouldn't do that. I mean, it would destroy your investment. And they can turn around and say, we have 30 other investments. We're prepared to take that risk. How many investments do you have? How many companies are you a founder of? And so you're just inherently at a disadvantage as a result of that. And I don't have a really good answer to that. And I think it is one of the sort of big risks of the nature of how companies fundraise that you're bringing in investors that get like playbill billing on the company that's like, you know, you're the founder and these are the board members and these are the two big firms and their logos are on your website. That gives them a hold on you that cannot be removed by having legal structures like board control or voting control or anything like that in place. **Harry Stebbings** [27:26]: Can I ask you, I'm always looking to improve how I act in the ecosystem as a board member? As a board member, think a lot about. Like, help me here, Parker. What can I do? What can other VCs in their more formative years of being board members, what can we do to be better board members to you without sounding like, oh, service provider bullshit? But, like, what can I actually do to be the best board member for you genuinely? **Parker Conrad** [27:47]: The things that I have, like, really appreciated from board members, including from a 16 z, like, I've always found the hardest part of starting a company is just dealing with these wild swings in emotion. You have a great month, you make an incredible hire, you close a big deal, you launch a really exciting product, and you're like, yes, I'm king of the world. You feel really excited. This is all gonna work. And then you have a month where things don't go well, you miss your target, something's delayed, a critical employee quits, and you're like, oh my gosh, what's gonna happen? I told all of my friends and family when I went home for Christmas that I was building this company and it was going to be really big and successful. What are they going to think? It's all going to go under like, how am I going to explain this to my parents? Those cycles of kind of like deep depression and incredible excitement are really tough to manage, and it's something that I think that almost all founders go through. And I think one of the ways that board members can be valuable is just talking people through because it's very rarely as bad as you think it is and also very rarely quite as good as you think it is, of course. And being sort of a stabilizing force can be extremely helpful. **Harry Stebbings** [28:59]: Yeah. I think shock absorber is a good word. I always think of that myself. Can I ask a couple of times you said about proving ecosystems wrong? You've said just now about telling family and friends about this thing you're building. A weird one. Are you doing this for yourself or for other people? **Parker Conrad** [29:13]: Oh, that's that's an issue. Man, you know, my therapist appointment was on Thursday, Harry. This is as though was yesterday. You got me on the couch here. No, I think, I mean, everyone has sort of complex motivations. I love doing what I do. I think that it's really fun. It's really fun to build something. I really love winning. You know, I hate to lose, and unfortunately, you also lose a lot, which is the crappy thing about doing a startup. But when you win, it just kind of makes up for it. But I also like I really like doing that with a group of other people. I mean, one of the things that I've sort of realized now, I mean, Rippling is my third startup. And one of the things that I sort of realized when I did it was that what seemed most important to me in retrospect about past experiences, the things that I ended up really enjoying were working with a set of people that I enjoyed spending time with. At Rippling, some of the things that have felt like the biggest successes have been bringing people into the company that I just am really excited about working with. And a lot of those people are people I've worked with before, are people who have been sort of long standing friends of mine. And there are some people that I met in the course of just working with them at Rippling that are really important relationships to me today. And some of the biggest disappointments as well at Rippling have been people that I've, like, really wanted to spend time with and work with at the company that have turned me down, that I haven't been able to sort of bring on board. And so that part is really important to me as well. **Harry Stebbings** [30:40]: You mentioned the incredible people that you bring on, Nina. All your investors said the same. One in particular strikes me when I look at your team. I mean, obviously, it's an incredible team and a very broad bench, but Matt is fantastic. And when I saw you bring Matt on as COO, the thing that I found intriguing was it was a little bit earlier, actually, than traditionally people bring on COOs. How did you think about when was the right time and why that time? **Parker Conrad** [31:01]: So I hired Matt for a few reasons, and one is that he and I have been friends for a long time. He and his husband were one of my closest friends in San Francisco. We went to college together and we actually worked on the college newspaper together. And he was president of the Crimson. I was managing editor. We were friends in college, it was also almost kind of a quasi work relationship. And Matt was also the thing that convinced me I should hire him is when I was raising my series a or I was starting to go out to raise my series a, I would like to think that one of my strengths is sort of really painting a big vision, articulating sort of like the strategy of the company for investors in the fundraising process. And one of the things Matt said was you better make sure that you've really like nailed down your p and l, which I definitely had not. This was at a stage of the company where we had revenues and caught, but like in terms of like nailing it down, like we did not have an accounting function. We did not have any then and I was like, man, here's a guy who will compliment me really well, who is gonna be very strong at making sure that all of this stuff that is really critical, that things can go off the rails unless you have this infrastructure in place, that all of that is gonna be there. Obviously, he's been a successful CEO as well and built a great company. And so it was an opportunity to divide the CEO job with someone who I had a lot of respect for and who I think complemented me really well. One final one I wanna **Harry Stebbings** [32:19]: touch on before the quick fire is, you know, with success with company scaling, with success of angel investments, one's personal kind of wealth also changes. How do you think about relationships to money? And does that ever factor into your thinking in terms of how it's changed over time? **Parker Conrad** [32:34]: You know, I'm in a better situation financially than I was in ten years ago. I also have not had, like, a big outcome or anything like that. So mostly, I would describe my relationship to money as inattentive. I mean, like a few years ago, I need a new cell phone and my wife had to, like, sign up and, like, get me a cell phone because I had been in a little bit of a tiff with Verizon where they thought I owed them money. And I was like, I don't owe you this money. So I refused to pay the bill. So I have terrible credit as a result of that. And when I tried to get a cell phone, they were like, your credit score is too low. And so my wife had to get me a cell phone because of that. So I'm generally not super focused on it and much more focused on building the company than I am on any particular financial outcome. **Harry Stebbings** [33:15]: And if Verizon, you're listening to this, we want a new credit score for Parker. **Parker Conrad** [33:18]: Exactly. I would love you guys to wipe out this, you know, $200 bad debt so that my credit score is not 500 or whatever it is. I **Harry Stebbings** [33:25]: love it. Listen, I wanna move into my favorite, which is the quick fire round. So I say a short statement, you give me your immediate thoughts. Does that sound okay? Sure. So what's the favorite book and why? **Parker Conrad** [33:34]: My favorite book right now is actually I just recently read Matilda with my daughter, and that was a lot of fun. Okay. You mentioned your daughter there. What three traits would you most like your children to adopt? Probably impatience, a sense of humor, and curiosity. What do you know now **Harry Stebbings** [33:49]: that you wish you'd known when you started? **Parker Conrad** [33:50]: I think that the most important thing to me was going to be working with people that you enjoy spending time with. And it sounds like such a cliche. It sounds like, oh, the real startup was the friends we made along the way. But it really is true that those are the things that have ended up being most fun and most important for me in my career so far over the last ten or fifteen years. I'm unpinning the grenade **Harry Stebbings** [34:11]: for this one, but I'm sitting in The UK. I just see this hate towards chesser Budin on Twitter. How do you feel about that? **Parker Conrad** [34:18]: I'm on a very weird and opposite end of the spectrum, which is that I think that the fact that we lock lock human beings in cages for these extended periods of time is such an awful thing that we're gonna look back on hundred, two hundred years from now with just absolute horror. The way people look at sort of some of the corporal punishment from two or three hundred years ago and just feel like it's outrageous that people were doing that. And so, look, I understand that. I mean, I'm frustrated by many things in San Francisco and the crime and all that kind of stuff. It just seems that, like, the political push you're channeling your anger towards just, like, locking more people in cages, it's the worst element of human nature, and it's what leads to this massive carceral state that we have in The United States. And I think that anyone who believes that we should do more of that should visit a prison. Like, they should go there and spend time with the people who have been locked away in prison for decades And understand, it's hard to sort of look someone in the eye and see that what it is that we're doing and think that this is okay. But it's very easy to do it when you don't have to confront the reality of the very real human consequences of what happens as a result of that. Yeah. I totally get that. I'm Norwegian, so our prisons are more like boarding school. Very different. That's right. Yeah. And I think that one of the problems with the system right now is that most prosecutors, they are rewarded politically for locking people up. And the longer the amount of time they lock them up for, the more they're rewarded. It's they're rewarded with elections and higher office and all that kind of stuff. And so I love the idea of having prosecutors who were defense attorneys, who understand the other side of the spectrum. Because in our system, people believe they believe falsely that it is juries and judges that decide these sentences, and that's not true. It's prosecutors. Prosecutors decide the whole thing because 98% of these cases don't go to trial. They plead out, and the system is designed to prevent people from going to trial on these cases. I did not know that. That's fascinating. Yeah. It's because what happens is prosecutors have such discretion and the sentencing has gotten so incredible that everyone gets an offer they can't refuse. You go to trial, and we're gonna put you in prison for forty years if you lose. And you look at this and, like, the juries always side with prosecutors. There's a ninety five percent convict rate. And if you plead, we'll put you in prison for twenty years, and maybe someday you'll see the outside of those cells. And people when confronted with that choice, what are you gonna do? Like, of course, there are innocent people in prison. So the whole system is oriented to give prosecutors enormous power, and I think with that power, I would much rather have someone who is really merciful or thinking about people as something more than what they are at the worst moment of their lives, instead of someone who sees it as their job to put as many people in prison for as long as possible. Would **Harry Stebbings** [37:21]: you ever like to get involved, be it politically, be it next startup in terms of rehabilitation, civic education? Would you like to, like, really get involved on the front line? **Parker Conrad** [37:29]: I spend every waking moment of time right now working on my startup, but that has been for me for a little while something that I thought if I got to a point where I had had a lot of money and an ability to sort of think about what I wanted to do or what causes I want support. I think that is definitely the one that I'd wanna get involved in. And **Harry Stebbings** [37:48]: then final one and probably the most exciting, Nate, is that the next five years for you and for Rippling. Paint that picture for me. Just how big can Rippling get, Parker? **Parker Conrad** [37:55]: I think Rippling is going to be the Salesforce for employee data. It's gonna be like Salesforce, a system for managing business process and workflow, except built on this different underlying primitive of employee and organizational data instead of customer data. And I think that there exists within companies a whole set of business process and workflow that needs a very similar set of tooling to what you find in Salesforce, but it just needs it to be built on this different underlying primitive. And that's what we're trying to build. **Harry Stebbings** [38:25]: Parker, this has been so much fun, Stebb. I can't thank you enough for putting up with my incredibly wayward questions, but I really appreciate it. **Parker Conrad** [38:32]: No. Thank you so much. **Harry Stebbings** [38:36]: I mean, my word, I just love doing that show. And apologies to Parker for making him feel like he was in the therapist chair. If you'd like to see more from Parker behind the scenes, you can, of course, on Twitter at Parker Conrad. Likewise, it'd be great to see you behind the scenes on the twenty minute VC. You can do so on the site at the 20minutevc.com. As always, I so appreciate all your support. But before we leave you today, ## Sponsor read **Harry Stebbings** [38:54]: Mercury is building full stack banking for startups. Apply in under ten minutes from anywhere for FDIC insured bank accounts, physical and virtual debit cards, domestic and international wires, and integrations with Stripe, QuickBooks, Plaid, basically every other tool your startup uses. 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Well, that's where my friends at Terminal come in. Terminal helps fast growing companies build remote high performing tech teams by connecting you with elite global talent and owning the end to end processes from hiring to onboarding to remote teams integration. Terminal delivers the product building powerhouse your business needs to grow from workspaces to on the ground support, they take the guesswork out of remote team management so that you can really thrive. But don't take my word for it. Just ask high growth companies like Gusto, Chime, Earnin, and HIMs, all trusting Terminal with their remote teams. You can find out more today at terminal.io. As always, I so appreciate all your support, and I can't wait to bring you a fantastic episode on Wednesday for the memo with Chris Frailick on Roblox.