How To Build The Future: Parker Conrad

Out of that conversation around founder mode, remember thinking to myself, like, you know, going all the way to the ground floor, particularly when something's broken, is like, that's the way to go. Like, you gotta just really get your hands dirty, get in the weeds.

AI is gonna help companies, like 2,000 person companies be run more like 200 person companies and 200 person companies be run more like 20 person companies. You need to make your business so good. It sort of doesn't matter whether you fit into whatever mold or construct the VCs are looking for. Welcome back to another episode of How to Build the Future.

Our guest today is Parker Conrad who's created a 13 and a half billion dollar company called Rippling. So thanks for being with us. Well, thank you, Gary. Rippling is synonymous with HR, IT, if you want payroll, if you want to understand what's going on with your business. That's really what Rippling is, it's the first thing people turn to, you know. How's it feel right now?

I like that the business feels like it's more predictable and steady. Now, I mean, we're still growing very quickly, but, you know, at at some scale where it feels like, you know, we have we really understand what we're gonna do a year into the future as opposed to early on where it's kinda like you don't know what's gonna happen next week and that's always a little terrifying. Yeah.

Why don't we start off at the beginning? I mean, you know, what were some of your first memories with computers and tech just, you know, even as a child starting out?

I mean, growing up, I didn't do that much that was super entrepreneurial but I definitely, like I kind of figured out like how to use a computer really early on and I had, I guess like just made a bunch of money in like middle school and high school like fixing people's computers.

There was like, you know, friends of like the family, like other like my parents friends that like needed help like getting a computer set up or figuring out how to get online. You actually were really really into the Crimson and so much so that it actually took a drain on your studies at Harvard, didn't it? Yeah.

I spent, so when I was in college I started working on the newspaper there and got just like really into it and spent all my time at the newspaper, didn't go to class and they didn't like that very much. So I ended up getting kicked out and then came back and graduated after that.

You know, a lot of what I liked about that experience was this sort of like esprit de corps of being on this, in this group of people that was like taking on the administration and you you know, really like going out and taking on sort of entrenched powerful interests, that sort of thing. And and I spent a lot of time after college trying to get back to that sort of feeling.

I decided kinda pretty early on I didn't actually wanna be a journalist. But I sort of found that again when I was doing startups. You're taking on sort of usually some big entrenched incumbent of some kind. And that was like, okay, this felt like that experience that I had working on the newspaper in college. From there, you got a degree in chemistry, you know, you're in a biotech firm in LA.

You know, when did you decide to pivot over to entrepreneurship that you could start a company? Because it sounded like you had a lot of things figured out at the biotech firm. I didn't get a lot of job offers after graduation and the job that I got was working at Amgen in Los Angeles.

I had a really great time, I was really enjoying myself, but it was also kind of like this very slow career progression. And one of my roommates from college who was working for Amazon came to me and wanted to start a company. And he was like, hey, let's do something. You know, I'll move down from Seattle. You move up from LA. We both moved to San Francisco.

We did exactly the wrong thing because we decided to start a company and then we started figuring, trying to figure out like what we were gonna do. We came up with a bunch of ideas that sounded like good ideas but were actually terrible ideas which is usually what happens when you when you decide to start a company and then try and figure out what you're gonna do.

I did it because I felt like, man, my career's like, you know, it's going well, but, you know, I'm not gonna it's gonna be a long time before I get anywhere in in my current job. And if if Mike does this and I don't, I'll be like an old man kicking myself for not having taken that leap.

And so we did it and then it was like seven years of slow grinding failure, of just like rejection after rejection after rejection with like nothing working and pivot after pivot after pivot. What was the original idea and how did it change?

The original idea was that it was right around the time that Wikipedia had really taken off and we were like, okay, we're gonna be a wiki for stock research and we were like, here's this like sort of really valuable vertical, People love talking about stocks. We get a bunch of people to produce really valuable content for free.

Wasn't super clear why people would do that, but like, hey, they were doing it for Wikipedia, so why not why not do it here? And and it it just like never really took off. It never really worked. I think a lot of consumer businesses end up being kind of random that, you know, whether things sort of work or not feels like very much outside the control of company.

It's one of the reasons I hate consumer businesses and I think a lot of entrepreneurs that start in consumer end up discovering that and just like completely pivoting their careers to work on b to b as a result of that because it feels a little less random which is what, you know, I ended up doing with my next next company.

I mean, there are lots of things from that era that did seem to work like, I mean, I think Reddit was then or Digg or these other things. Mean, they were all good. All UGC, Yeah. And so, you know, it might maybe those entrepreneurs knew they knew what they were doing and we didn't, which actually, that's probably what it was.

Sometimes when I look at consumer companies, it feels a little bit like, hey, you know, there a bunch of businesses that are all going after something similar and why one of them takes off and one of them doesn't is like, it's a lot of like, sort of butterfly effect of little things, small differences in the starting conditions that lead to this one working and that one not working.

So it's just a little bit less predictable. Yeah. I mean, it sounded like that was one of the bigger challenges that you had to face was, you know, pitching 75 investors back to back on this idea. We raised a small amount of money upfront and we actually, on a pitch deck with nothing built, we raised a 2 and a half million dollar seed round at a 7 and a half million dollar valuation.

And I was like, oh my god. We are rich. Like we This thing's worth 7 and a half million dollars. I was like adding up, you know, how much of it I owned and like I mean this was off of a pitch deck, right? It was very exciting and heady and it was like all downhill from there. You know, nothing that we did ever really worked and we kept pivoting and changing the story. The company's still around.

It ended up being renamed Sigfig and it, right now, I think they make really like back office financial software for banks. And credit to my co founder who's who has stuck with it for, you know, a long time. So we pitched like seventy seventy different investors that all told us no. And went out, you know, really in in 02/2009 at the worst possible time.

No one was investing in anything but they were definitely definitely not investing in subscale consumer driven advertising content plays. That was like the worst place to be of all. And so we were definitely not gonna raise money from anyone.

But we didn't know that and so we were dutifully like marching in to, you know, like all these different And we thought like, well, to raise money we just need to pitch more investors which was absolutely the wrong idea. We should have taken a hint after we talked to two or three and nobody was interested that like it wasn't gonna work.

You know, having gone through that experience, all of these investors, they always they always had something that they were really focused on. Like, you know, there was there was a flavor of the month, like, you know, what is there like a, is there a Facebook app angle to this? Is there What's what's your social local mobile thing?

And those were kind of like the the sort of generative AI, like web three augmented reality kind of like memes of the day within the investor class. But it it sort of changed every six months.

It was like a different, like and even I think you see that today with AI where there's like, at first it's all about these sort of, you know, wrappers around sort of GPT and then it's like, oh, that stuff actually that's not gonna work at all and it's all about data gravity. And then it's like, you know, people keep sort of moving around.

But, you know, investors sort of shift their view of what's gonna work every six to nine months. And I was like, jeez, it takes it takes years to build a company in these spaces. And so, there's no way, you know, the attention span that investors have on this stuff is always so much shorter than the the time that's required to build a business.

And so I I walked away from that experience like deeply cynical about about fundraising. Do you think a lot of startups die actually literally because of this fickleness or this you know, sort of trend chasing behavior? I don't think so. I think the answer is it doesn't really matter what investors think. You can't you can't focus on sort of the thing that they're excited about in the market.

Like, you have to be so good that they can't afford to ignore you.

You know, because I mean, a lot of times people ask me for advice about fundraising and, you know, I usually think that that people should not spend any time trying to optimize for like a fundraising outcome and like, you should just basically wait until you're getting investors that are emailing you term sheets that are signed with like a blank for the valuation and they say just fill in the valuation and send it back to us.

And like when they do that, like then it's time to fundraise. And like until then, you should probably just focus on making your business better and stronger and if you can make your business really good, then, you know, things will happen at that point.

And it was really in that context when I left SIG Fig, you know, and I started started Zenefits that, you know, I sort of thought, man, if I can just like, you know, I can make so much money as an insurance broker that, you know, I had this idea about sort of doing all in one sort of HRIS with, you know, that also managed like insurance and benefits and like a bunch of other things that were actually completely separate for companies at the time and that were a lot of headache that were mostly offline and a bunch of administrative work.

I was like, if I could do them all together, I could really just make this so much easier and I can make all this money on the insurance and and it's like, oh man, if I can just get a few hundred thousand dollars to start off, then I would never need to raise money again and I don't need to talk to any of these VCs to kind of get off the ground and that became the impetus for doing YC.

That it was like, okay, well, it seems like YC has this program that you know, like you know, sort of it's pretty reasonable to think that I'd be able to at least at least get that done and then just like never think about this again. I remember reading your application and saying, yes, I want to meet you. That's awesome, well thank you.

But that, know, so that was why I did YC and that ended up really not being the right reason to do YC. Like it was, I think it's the reason that a lot of people decide to do the program.

The real reason to do it was just the intensity of the program and how much it sets the company up for success by just getting you in this groove of really delivering and executing and a lot of urgency in the business and like that that ended up being the most powerful thing about it.

You know, I remember meeting with PG and and I was a solo founder early on and then my co founder joined a few weeks into the batch. And I had very little built.

It was like a prototype but there was a lot still to build and I told PG, I was like, okay, I've done the math and I think we can get something live a week before demo day and have like a week to kind of try and get customers before demo day. And PG was like, that'll never work. Like, you've gotta figure out how to launch. You know, this was the January.

You've gotta figure out how to launch the February. And I was like, that's in like three weeks. Like, there's Yeah. There's just no way. And PG was like, well, don't know what to tell you. You're screwed then. Like, don't see, like, you might as well give up now and go home. Like, if you can't if you can't do that.

And I was, you gotta understand, I was coming off of seven years of failure. Yeah. You know, I remembered, know, I was like, okay, this is this time it's gonna work. And suddenly two weeks into it, it's already over.

And I remember going back and we sort of figured out a way by hook or by crook to launch, it wasn't the first week of February but it was the February, it ended up making a really big difference because, you know, we launched a few weeks ahead of another competitor in the market that, you know, that and the TechCrunch article about Zenefits was like, oh, this interesting company doing, you know, online health insurance and a bunch of other things and and then this other company launched a few weeks after that.

Was like, what's this weird company that's trying to copy what Zenefits is doing? And so, you know, getting that pace and urgency, you're just making it a part of the fabric of the company really early on is like a really a really hard thing to do when you're starting a company because it feels a lot like being unemployed.

Like you kinda start out and you're kinda like, well, okay, like, what am I gonna do today? And it's like, you don't have any customers. If you don't get anything done, nobody really yells at you. You know, the expectations are very unclear. A lot of people are coming from an environment where there's a very clear deliverable every day, you know, on what they need to do for their job.

And YC is great at just injecting the right level of urgency and pressure into the system to kind of get you going early on. Zenefits, at the time, you know, coming out of YC, one of the fastest growing software companies of all time, how would you explain that first meteoric rise?

I think the sort of insight, the thing that really worked at Zenefits was this idea that like, hey, there was a lot of work kind of like getting set up with all of these different things that you needed for your company. And then they all kind of needed to talk to each other in some way but didn't really. And so that you ended up having to do that manually.

You know, whether it's, you know, going to the insurance company and figuring, okay, this is the list of people in my company and then, you know, these are the plans that they're selecting.

But then going back into payroll and figuring out, you know, what the deduction should be based on what they selected and that if you just did a lot a lot of these seemingly different things in one system, you could just cut out a lot of the administrative work involved in running a business. That was the insight that really worked for us.

But there were there was this kind of magic button to hire an employee and then they sort of got set up everywhere. And that that very much became the sort of key insight behind Riplane.

That Riplane is like really a continuation of Zenefits from a product perspective and then it was like, hey, for the same reason you want this one one place to manage, you know, payroll and benefits and a few other things and offer letters and stuff like that, You actually also want to be able to ship someone their computer or get them set up with access to email and Salesforce and GitHub and and like a bunch of other stuff around your company.

That, you know, over time that became what I now call like this idea of like a compound software business that, you know, a lot of the sort of deeper problems within organizations can't really be solved by very narrow point solution software products. And that if you can build a whole suite of really seamlessly interoperable applications, you can build much better products for businesses.

And that that sort of ultimately became like the sort of thesis of Rippling is that we should be building software in that way rather than in the way that we've been building it, which is to sort of focus very narrowly. And that really came from insights really early on in Zenefits. What did product market fit feel like?

I mean, that's one of the more common questions when people try to release a product. They're like, is this it? Is this it? You know, if you have product market fit, are you asking yourself that? We would always have like We always had plans and we always had, you know, five ideas that we thought would work, you know, that we have things we could try to try and get customers or get users.

And and those five things, like four of them would just completely fail And one of them would mostly fail but maybe there was some glimmer of hope somewhere on the edge of that idea that would lead us to pivot and say, okay, we're gonna do something, we're gonna build something around that for the next six to twelve months, then we're gonna launch again and that's gonna work and we'd have five new ideas.

And it was just that repeated every year for like seven years. You know, there's a lot of advice out there to kind of stick with it, keep going, don't give up. And I think it's terrible advice. I think if it's not if it's not working, like give up immediately.

You know, it very rarely happens that people, you know, with something that's not working end up pivoting the business in a way that eventually it starts working. You know, there's always that Airbnb story. But most of the time that's not what happens. And so with Zenefits, it was the exact opposite.

I mean, we, you know, we had sort of five ideas of things we thought would work and they all worked unbelievably well. Just unbelievably well, like wildly exceeded every expectation that we had. And we would try one or two things that we thought probably wouldn't work, you know, but let's give it a shot. And like those things would work unbelievably well as well.

And so it was just this sucking sound with the market kind of like pulling the product into existence because it was so clearly like, you know, what everyone wanted and how they wanted this to work. That's how you know if something's working and that's, you know, obviously I think if have that then you wanna keep going. If you don't have that, you probably wanna start over somewhere else.

So when Zenefits was sort of really hitting, what sort of growth rate were you looking at both from the revenue side and from sort of growing the team side? We kind of exited YC like six weeks later with like $200,000 in revenue which felt like an enormous amount of money at the time. And then by the end of that year, we were at like like, you know, I think about 1,000,000 in revenue.

Zero to a million in a year. Zero to a million in a year and felt really good. And then the next year we went from one to 20. And That's really fast growth. That was very very fast. And then the next year, our plan was to go from 20 to a hundred. And we ended up going from 20 to 65 and I got fired basically within a week of the end of the fiscal year. And there was some weird stuff about this.

I mean, obviously, you've talked about this very publicly. Yeah. From my perspective, I remember you know, talking to you very briefly that, you know, there was a CEO transition happening, but then there was a shift. So normally when there's a CEO transition, there is a mutual non disparagement, meaning, hey, we're gonna set the company up for success.

You know, I'm moving on, but David Sacks is the new CEO, support him, everything's all good. But, you know, sort of at the eleventh hour, know, things took a turn. Mean, the sort of seeds of the kind of downfall of the company were that, you know, the every things that were working so well for us, top of funnel stopped working. Mhmm. And there are a bunch of reasons for that.

But it was right after people had invested at this crazy high multiple on, you know, underwriting an enormous amount of future growth that suddenly was not materializing. And it was in that context that a lot of this, a lot of these compliance issues came up. And I think people got, like investors got very nervous and sort of lashed out a little bit. And then I ended up getting forced out.

David came in as CEO and I think there's a world where that could have like worked out for everyone and you know, the company could have moved on and you know, would have been like, okay, you know, well I'm a major shareholder, that's great. Instead, what happened is like, you know, I mean, David really sort of, he hired a sort of a comms person that he works with a lot, this guy named Lanny Davis.

And they just focused on like attacking me like over and over and over again for like six months and it became this huge thing. And David, well, he wasn't just attacking me, was attacking the company that he was the CEO of. And so that, I think that really drove the company into the ground in a way that, you know, I think they could have done quite well had they not done that.

Yeah, that was wild to see that, I mean, even maybe from your days as a journalist, it's sort of this is the matched pair to that. Know, if you get a story out and a few publications publish things, you know, some of which are totally untrue, that just becomes the thing that everyone repeats. You know, that sort of narrative control, you know, pretty potent. Yeah.

No, was was eye opening and like, I mean, some of it was I think, I mean, there was definitely like a real pile on, you know, for a long time. But also like, I just wasn't, you know, I was under all these legal restrictions. I wasn't allowed to talk about it.

You know, and so it was this very one-sided thing that was, you know, like I was this thing that I watched kind of helplessly happen, you know, and I wasn't really talking to reporters in the same way that, you know, David and some of the other folks were. And so it was just this one-sided thing that was, you know, being, I was just getting hammered and hammered and hammered.

And took a long time to sort of crawl back from. I mean, it was amazing, you know, really, you and, you know, everyone at YC like really invested in rippling at a time when it was extremely unpopular, and and now it feels like, oh yeah, you know, of course, like successful company blah blah blah, but you know, it wasn't at the time. Yeah.

I remember that being a really big fight, and then some things are really worth fighting for, So I had seen what it was like to work with you at YC. I saw that you had created know, Zenefits would not have existed or created any of that enterprise value without you. And to see what they did to you, it was deeply unfair. And, you know, it wasn't just me and you.

Was also like, I, you know, I knew locks. I knew tons of your executives. And it was just kinda clear that, you know, the reality is something that just wasn't what was out there in the press. And certainly, the narrative that had won out there was exactly the opposite of what you and I lived and experienced. So it was a real honor to be able to just say, hey, you know what?

This is actually what happened. Well, thank you. You sort of took a little bit of a break, but then almost immediately realized you had seen the inside of the idea maze and you had gone so deep into a 65 mil ARR, like you knew what to do basically. And at that point you said, I'm just gonna walk all the way back. I'm gonna take all the twists and turns.

I'm gonna skip all of the sort of missteps and the dead ends that we did along the way, and we're just gonna skip directly to where we were before. Yeah. But we're gonna do it 10 times better. Yeah. I mean, you know, I had either the advantage of or the misfortune to build the same company twice in some ways and so not a lot of entrepreneurs get to sort of go back and rebuild.

And I would advise everyone not to go back and rebuild because it usually means that something has gone very very wrong.

But because of that, I you know, I I felt like I had a lot of insights about the market and what what was needed and very little self doubt, you know, this time around versus the first time when, you know, you have a lot of ideas and a lot of hopes and beliefs but like not much like certainty around exactly how things are gonna play out.

And the second time around in this particular space, I felt like, you know, I just had deep conviction. And I remember talking to Prasano, who's my co founder at Riplane, where he said, well, why do you wanna why do you wanna do this in the same space that we worked in? He had worked with me at Zenefits.

And I said, look, there's a hundred billion dollars just like sitting right there on the floor and nobody can see it except for us. Everyone's just walking by oblivious to it and all we have to do is like walk over there and pick it up. Like we know exactly what we need to build. We know exactly what people want. We know exactly how to make this work.

And at that point, I think, you know, like it like I thought when I left Zenefits that David was going to continue and make Zenefits extremely successful. And then it became clear in a few months that that was not what was gonna happen, that it was just being driven right into the ground. And so I, you know, like at that point I had sort of decided Zenefits was gonna go to zero.

I don't think they had decided that yet but like that that ended up being what what happened. And so I was like, look, they're gonna go to zero. All these other companies are not gonna be able to sort of get there.

And there's this thing that I sort of wanted to kind of exist that I thought we were building at Zenefits that ended up not happening and then, you know, it was here was this opportunity to go do it.

And for a variety of reasons I really thought that employee data was gonna be not just, it wasn't just gonna be this like HR thing, it was gonna be, you know, sort of like the center of just a lot of business software in a much bigger sense of the word that this was gonna be.

If you understood the org, there's a lot of software that you could build for businesses around that sort of key understanding. I guess the other thing that was sort of unusual is I think you spent maybe a year and a half, two years building the software and sort of taking a different approach.

You know, Zenefits, you know, you're a little bit blitzscaling the sales team, customer support, customer success. And this time around, like, I remember that you even took a vow to say, we're not even going to hire Yeah. You know, anyone except engineers and product people for that first segment of rippling. We I mean, so it's weird because I think this is like a good thing for most people to do.

I think, you know, I think most companies should launch really early on because you can get kinda get lost in the wilderness. I had this point of view where I knew where the market was heading but I was so far behind. It was like, you know, Zenefits had hundreds of millions of dollars and, you know, a thousand employees and all these engineers and like, years of head start.

And it was like, and now I'm like trying to catch up and surpass them but I'm starting with nothing. I have no money and like, it's just me and persona and like, how could I ever do that? And so we sort of said, look, we've kind of really gotta try and leapfrog. You gotta kinda skate to where the puck is going, and we knew exactly what we needed to do.

And most people, like, you can you can believe that and you're probably wrong. And so it was just this moment of conviction and we happened to be right because of like our past experience. And so we spent like two years building with, you know, mostly just an engineering team.

There were some great like early, you know, it wasn't just engineering but the thing that we had was no operations and no customer support because that, I thought, had been the critical flaw of Zenefits which was that we sort of scaled too much on the backs of, you know, operations and manual work and it wasn't really software end to end.

And so we wanted to just like avoid that sin that we had at the last company and and do it and build it in this very different way. And sort of, you know, it was gonna require this large build and a lot of capital and a lot of engineering effort to kinda get there, but it ended up working for us. The classic startup advice is, you know, do one thing and do it extremely well.

You came up with this alternate term that I think describes Rippling pretty well. It's the compound startup. It's not merely just this one thing. It's not just laptop leasing and IT. It isn't just identity. It isn't just, payroll or benefits or it's all of these things working together. Yeah. And there's something very sort of almost heretical about, you know, American startups tend not to do this.

This almost resembles Asian startups. Oh, interesting. Yeah. No, I've heard that before. I think it actually resembles a lot of software companies that were built like maybe more than twenty years ago. And so if you look at, you know, companies like SAP and Oracle and Microsoft, they actually look like compound software businesses. Maybe, you know, Salesforce to a certain extent as well.

And what happened is I think there was this moment in time where it really was possible to sort of do this one narrow thing because, you know, there was just so much greenfield territory in software when sort of everything shifted from on prem to the cloud.

And you could go out and you could do this really narrow thing and turn it into a SaaS company and, you know, it turns out that almost all of these things ended up, at least for a period of time, being worth low single digit billions of dollars. And it was really easy to find like a niche. And the problem is that it's not the sort of ultimate sort of optimum strategy.

And eventually, all of these markets got crowded with companies that were just doing this one narrow thing. Point solutions. Point solutions. We call it point SaaS. And then, you know, and actually there are a lot of disadvantages to that approach.

And one is like the types of problems that you can solve for customers tend to be much more limited, you know, if you're so constrained to this one narrow domain and a lot of the bigger problems that that companies have end up being problems of like business process management and decision making and coordination within the company.

You can actually just wipe out a lot of work and make things work function much better if you can take on a whole host of sort of interrelated applications and build one comprehensive solution. And also point SaaS companies can't afford to invest in in the sort of deeper types of research and development.

Like, you know, Rippling spends an absolute fortune on R and D and it's on things that sort of cut across any one category. It's like, you know, analytics capabilities and approvals and permissions and workflow automations that ended up end up being useful across all of the applications that we build and most of our competitors just can't, they can't go as deep on that stuff.

And so there's the theory of like the compound software business is that there's this island of product market fit that's kind of over the edge of the horizon line that's sort of harder to get to.

But if you can build, you know, multiple parallel applications at once, you can get there and and it actually ends up being a much more powerful type of product market fit that's much harder to displace at that point. But I'm not sure that it's like good advice. Like there are a lot of companies that reach out to me. They're like, hey, where do wanna like build like a compound startup?

It's actually, I think, a deeply cynical view of software markets because like, I think it's possible that compound software businesses are the wave of the future and also like, there will be three of them. Mhmm. You know, and there's not, it it is actually an argument for many fewer businesses, but much larger and more successful ones if that's like the shape of software markets in the future.

I remember, I think, your very first pitch to me for Rippling, there was the kernel of this in that you didn't want to be just one particular part of the software stack. And if anything, I remember you were writing memos already right off the bat. And one of those memos actually involved saying, if you're only one of these things, you know, you're $10. 15 dollars per user per month.

But if we add all of these things together, it adds you know, not just tens but hundreds, you know, many hundreds of dollars per You just capture more wallet share. Yeah. One of the arguments I think in favor of this approach is that, you know, it's just sales and marketing has gotten harder and harder and more expensive and less efficient for software businesses.

And you see this at every stage but, know, in the public markets, you know, over the last five years, public companies are spending 50% more on on sales and marketing but they're adding 10% less in new ARR, like with that increase in spend. And so there's just like fundamentally the business model for a lot of software is just broken. It's like the competition.

There's like too many businesses going after There's too many businesses and then there's Infinity AI Slop. So some people say AI SDRs are gonna replace everything. Some people say AI SDR is actually gonna destroy SDR. Right now, I think AI AI SDRs are mostly like don't work. You know, they're sort of tantalizing hints but like they can't actually do the job well.

But the second that it flips and they can, it will it won't have the impact that people are hoping. It won't it won't be that like, oh wow, now sales and marketing is easy. What'll happen is it'll just destroy outbound. As a channel, it will cease to work and cease to function because it'll just get so overwhelmed at that point.

How should people be thinking about AI, you know, whether it's enterprise software or in your space? AI is gonna help companies, like 2,000 person companies be run more like 200 person companies and 200 person companies be run more like 20 person companies. Because like a lot of running a business as it gets larger, there are these, you know, enormous abstractions that you put in place.

Like I have a one on one with my CTO. I'm hoping that something about the conversation that we're having that week is gonna lead to an engineer making a different decision. Like an individual IC making a different decision six months from now. I don't understand like everything that's going on, you know, with every employee at the company in part because my context window's not large enough.

Like I just can't see everything. I can't go and observe like everything that everyone is doing. But like AI can, and so I think that the fact that these systems can read and their context windows are so large is actually much more powerful for b to b software than the fact that they can write. Like the generative AI is actually really a misnomer.

It's actually the it's the sort of the ability to ingest all this information.

And so, I mean, the thing that we launched is an an basically an AI performance management feature that, you know, predicts, you know, that tells you based on an employee's first ninety days of work product, it looks at their pull requests, it listens to their sales calls, it looks at the support tickets, and it tells you, is this person likely, based on what's happened so far, are they on a glide path to being this enormous success story?

Or are they someone who's really struggling and maybe you need to intervene in some way? And and gives you that signal really early on when there's still time to kind of do something about it.

So I think that, and there are a lot of flavors of that within a company whether, you know, it's on, like a lot of people think that in the CRM space that AI is gonna like start doing all of the CRM homework for sales reps and I think that is completely wrong. You actually want the rep's opinion about whether a deal is gonna progress or not. And you don't want the AI to decide that for you.

Like a lot of why people do the CRM stuff, it's not just administrative work. You're trying to forecast and you're trying to use that forecast to intervene so that the deal's more likely to close. You want reps to sort of assess who's the decision maker on this deal and is this deal gonna close this month or not.

And then separately, you wanna have a second opinion from the AI that's listening to all the sales calls on like, who do they think the decision maker is? And and, you know, who, you know, do they think the deal's gonna close this month?

And and you wanna flag for management when those two cases disagree because it's the anomalies within the organization where you can say, look, if you're an executive, you can't look at every deal. You can't spend time with every new hire.

But if if this system can tell you if you only have time to look at five deals or five new hires, like these are the ones that you should look at, that's really powerful.

The other thing that I think is gonna happen is like, I think that AI is gonna lead to a lot more verticalization of software, that there's just, you, companies always have these very bespoke needs and I think with AI you can configure the software much more precisely for specific industries, specific businesses, specific needs.

I think one of the interesting things is can you get no code, can you get back to the promise of no code software development where you can actually get a little bit further without sort of needing to be super technical.

And so that's the other thing that I think is just like, I think there will be a Cambrian explosion of like every software, you know, software will be very precisely configured and tailored to specific companies, specific businesses, specific industries.

Brian Chesky at a recent alumni event went for two hours talking really just off the cuff, but also very personally about what it was like to even have the company he started really ripped away from him by the organization, by sometimes his very direct reports. I guess what's your take on founder mode? Does that resonate with you?

And then in particular, think it's interesting to talk about that with your observation about, you know, hey, the rocks can talk, it's not that interesting that it can talk. You know, actually what it can do is read. Rocks can talk. Yeah. It's more interesting that they can read. Yeah. And then as a CEO or as the founder, it can read for you.

And so your context window grows with how good, you know, your data is and how good your context I think that's gonna be the powerful thing about LLMs inside of businesses is that it can flatten organizations and and and give executives and managers like just a larger sort of window, you know, that they can into what's going on.

I wasn't at Brian Brian's talk and I I I sort of agree with the concept that, you know, as as an as a founder, you wanna, you you need to be able to go really deep and and your superpower is often that you can go all the way to ground on a topic.

And I think particularly when things are not working, it it's kinda like if something has stayed broken and escalated through every layer of management up to you in inside of a big company, I don't think you can fix the problem top down by managing down. You you like, you kinda need to go all the way to ground and go, you know, review the support tickets. Like, listen to the sales calls.

Go like, do the job on the factory floor, you know, for for some period of time until you understand the problem. So don't go here. Don't stay up here. You gotta go Go all the way down. All the way down. Yeah. And I agree with that.

I also think that like, you know, I think there's a risk that like the founder mode thing gets misinterpreted in some way it sort of could easily create a lot of excuses for just kind of bad behavior where people like, oh, like founder mode, like I don't need execs. One, I think you need really good executives and you don't wanna do the founder mode thing unless something's broken.

You know, like you kinda want, cause you can't do it everywhere. Like you need people to help you run the company. And like, and so you wanna do it when something is broken and when it matters. And if it doesn't matter or if it's working, it's like great. And you need most things to work like that most of the time.

So maybe to end, I mean, you've taken us on a journey from Sigfig to Zenefits to Rippling. You know, how are you feeling? Is the job done? Are you just getting started? You know, where where does this go from here? The idea behind Riplane is that business software should be built in a very different way.

That it should be built, you know, with this like data layer and sort of a lot of like abstracted out sort of platform capabilities and then you kinda wanna build this Lego system for then building applications and that that's a recipe for building better software. And I think like, look, the company's doing super well but, you know, there's there's a long way to go still on that on that journey.

Like, the jury's still out. A lot of business like, most software businesses are taking the other approach. The jury's still out on, you know, which sort of way of building software is gonna win out on this stuff. Well, we're gonna find out. With that, Parker, thanks so much for being Cool. Thanks for having me.