Parker Conrad Steps Down as Zenefits CEO
buzzfeed.com
buzzfeed.com
But the worst crime of all is announcing Conrad's resignation and providing zero credit, thanks, or goodwill towards him for being the birther of the company which wouldn't exist in the first place if not for him. Even if he had recently run into trouble setting the company straight or other problems, it's outright shameful to simply skip right over his contribution to making the company what it is and for being responsible for making it happen from day 1.
This crime wouldn't be so awful if it had come from someone who wasn't already a previous entrepreneur himself.
This is pretty sad... Parker probably would have gotten a nicer goodbye announcement had he died.
I'm not exaggerating here, Sacks is making a deliberate decision not to mention Conrad and act as if he's taking this as seriously as possible. It seems that nobody was hurt by this non-compliance so I hope deeply that nobody goes to jail for this - but that is what is on the line, make no mistake.
> Washington law is particularly severe when it comes to the unlicensed sale of insurance. Under the law, anyone who knowingly sells, solicits, or negotiates insurance without the proper state license can be punished with a prison sentence of up to 10 years, as well as a civil penalty of up to $25,000 for each violation.
http://www.buzzfeed.com/williamalden/80-of-zenefits-deals-in...
I can't imagine any reasonable company wanting to do business with Zenefits right now or even some time from now even if there is evidence they've improved and corrected things. Its too risky for a company to entrust them with their HR & insurance needs, and I wouldn't even want to be remotely associated with them. Any company with a smart CEO or General Counsel would advise to wait a while, and I think that'd be best case scenario. There goes your "growth"
Sacks is smart. Parker is too and he wouldn't take it lying down but clearly wants to do the right thing: preserve the integrity of the company and its employees over himself. You can see that in his actions as he resigned from the board and is being really quiet -- that's tough as a founder.
I wouldn't overly judge the memo. The audience isn't you or me, it's the employees of Zenefits. It's their message to interpret and internalize. And they already know who their founder is and what he contributed to Zenefits.
I remember a book amount management consulting and it mentioned one firm (only referred to as the "Butchers") who only ever recommended this one action regardless of the actual state of the company. Of course they spent vast amounts of chargeable time analysing operations to produce data that supported the conclusion they had already made.
http://www.amazon.com/Rip-Off-Scandalous-Management-Consulti...
People were complaining more about too-big-to-jail. Had the bankers actually have been prosecuted, you might have a point.
Given the Glassdoor reviews of Zenefits, I found it interesting that Sacks also tackled making it a place people want to work.
It seems Parker was fired, and not 'stepping down'.
This was someone willfully, knowingly committing many (hundreds? thousands?) of felonies in the interest of making money and growing the company.
Inadequate process controls means employees were supposed to follow the law but things slipped through the cracks sometimes. Seems that happened a lot in Washington. But I'm pretty sure most of Zenefits' business is in CA. I would assume the brokers for most sales were licensed properly.
In a memo to employees about the management change, Sachs didn’t dance around the company’s issues when it comes to regulatory compliance.
“The fact is that many of our internal processes, controls, and actions around compliance have been inadequate, and some decisions have just been plain wrong. As a result, Parker has resigned,” writes Sachs. “In order for us to move forward as a company, we cannot seek to hide or downplay the problem.”
http://fortune.com/2016/02/08/zenefits-parker-conrad-resigns...
* There is basically 0 credit given to the Conrad (the company's founder) in the memo. That's likely because this was a fight and not a mutual decision.
* He's giving up his board seat. When it's merely a case of needing a new CEO, you don't necessarily lose your board seat.
'The fact is that many of our internal processes, controls, and actions around compliance have been inadequate, and some decisions have just been plain wrong. As a result, Parker has resigned.'
Not much subtlety there. Presumably as COO he had nothing to do with 'internal processes, controls, and actions around compliance' which seems a little odd to me. So what was he doing all day then?
I also like how the company values are instantly changed...
'Effective immediately, this company’s values are: ...'
Which is interesting because most companies spend ages coming up with the correct values for the company and it usually involves feedback from employees.
So unless he wanted to change these processes and Parker stopped him, it does feel like there is another side to this story... (modulo many of the other issues that must of driven this change)
"Operate with integrity", "put the customer first", and "make this a great place to work for employees" seem like pretty generic / good values (that are probably based on a lot of experience Sacks has from Yammer).
The fact that they are called out in this email seems pretty telling of why Parker had to go...
He needed to finally accept that his company has some serious internal issues that have cost a not-unsubstantial amount of people a lot of time, money and grief over the years, including some of my own employees. The company certainly has a lot of promise, but was managed the wrong way from day 1 and it needs someone with some real experience to right the ship if they are to stay viable.
"But what the former chief operating officer didn’t acknowledge is that for a long period of time he and Mr. Conrad worked closely together, sitting next to each other at work and meeting regularly for dinner, according to a person familiar with the matter.
The person said that Mr. Sacks, who describes himself in his Twitter profile as a “hypergrowth addict,” helped spearhead the company’s large fundraising shortly after joining the company in December 2014 as well as its strategy to grow quickly despite a lack of internal controls and processes."
http://blogs.wsj.com/digits/2016/02/08/zenefits-ceo-parker-c...
Whenever a major organization develops a new system as an official standard for "X", the primary result is the widespread adoption of some simpler system as a de facto standard for X...
Your point is worth considering...
"Starting with the upcoming August review, every employee will have a formal discussion of how they are doing on values with their managers."
shiver
http://www.crn.com/news/channel-programs/18828507/ballmer-mi...
<<Mr. Conrad, 35 years old, is known for his brash style and the company’s operations reflected that. His company’s mantra — “ready, fire, aim” — is followed by many Silicon Valley startups meant to encourage aggressiveness.
Such a cavalier approach often works well for tech companies, such as Facebook Inc., whose motto in the past was famously “move fast and break things.” But it may have served Zenefits poorly as it operated in the regulated insurance industry.>>
http://blogs.wsj.com/digits/2016/02/08/zenefits-ceo-parker-c...
The analogy of conquering armies pushing forward and failing to nail down resupply lines comes to mind...
In football it's called out kicking your coverage...
Hypergrowth is not necessarily an evil, but the old maxim "cover your flanks" is generally apt...
Business is war...
In Washington state [...] 83% of the insurance policies sold or serviced by
the company through August 2015 were peddled by employees without necessary
state licenses [...]
[...]
Washington law is particularly severe when it comes to the unlicensed sale
of insurance. Under the law, anyone who knowingly sells, solicits, or
negotiates insurance without the proper state license can be punished with a
prison sentence of up to 10 years, as well as a civil penalty of up to
$25,000 for each violation.
It's not particularly hard to get licensed (usually around $100, a training course of 40-100 hours (which they are large enough, they could set up inhouse), and possibly fingerprinting). Is it a hassle to get licenses in multiple states? Yeah--though most states honor other state's licenses, and just require the fee then.
In any case, this is table stakes--and if they can't get this basic aspect right (after being warned for years!) how well do you think they manage the tricky stuff? And why aren't they hiring experienced health brokers in the first place?
(The stuff about illegal rebates because they give away their software is garbage though. I'm 100% on their side for that.)
I'm curious because there must be something obvious I'm missing.
Do you feel drivers should have to get a drivers licenses? I hope you don't think Uber should just hire people off the street and put them in cars without proper licenses.
A simple health example off the top of my head - you sell health insurance to someone without understanding the product because you're so keen to 'make the sale'. Meanwhile you promised the buyer it would cover that heart condition he has when in fact you have no idea that it doesn't. A couple years later he needs heart surgery and finds out the plan he's been paying into doesn't cover his condition and now he cannot work to provide for his family, nor can he get treatment to get better.
That argument is about as valuable as "think of the children."
> Do you feel drivers should have to get a drivers licenses?
That's not the right analogy. The equivalent would be requiring special licenses for all car dealership employees, which is not required. Salespeople aren't themselves doing anything medical and there's no reason they should have additional requirements beyond normal salespeople. We already have laws covering both (a) fraud, (b) minimum requirements of healthcare plans.
> A simple health example off the top of my head
Existing consumer protection laws would cover this. You can't sell a product and claim it has a feature which it doesn't — that's fraud.
Nothing about health insurance should mean that salespeople should require licensing. It's pure rent-seeking. There are plenty of other dangerous things which are sold by salespeople without licenses.
The lady in this example is clearly not competent, and should not be selling products that people depend on for their health.
Not sure why you feel having gone through the hoops to demonstrate competence, learn about the various products, and how to advise clients of their options is merely 'rent seeking'.
---
"I made like $15,000 in the time I was there, just on commissions. And I never got my license," said an insurance salesperson who left Zenefits this summer. She estimated she had more than 100 conversations with different customers about insurance. "I took my test three times in a row, and I failed. They still let me work."
Without her license, she had to improvise on calls with customers.
When faced with a tricky question, "I would just google it,” she said. She would tell the customer, "Hold on one second, let me email the expert, he's on the line, hold on one second, I'll get back to you.” But in reality, “I would pick one of the first three links and I would just go off of that."
http://www.buzzfeed.com/williamalden/zenefits-under-scrutiny...
I deal with incompetence on a daily basis. Everyone from banks to airlines have incompetent employees, and we're not demanding that all customer support agents undergo licensing requirements. We live in a free market and the best way to deal with incompetence is the market. (Ex. I switched my bank after getting frustrated with incompetent tellers.)
Once again: the worst that an insurance salesperson can do is sell you bad insurance. They're not actually involved in medical procedures, so any harm they can do is financial. And if that harm is due to fraud (misrepresenting a product to you), you have legal remedies. Bank customer support people have just as much potential to cause financial harm, but we don't require them to be licensed.
Even more to the point: I can personally sign up for insurance directly on the internet, without talking to any licensed salesperson. If licenses salespeople are so essential to insurance, why can I buy insurance without interacting with one?
As far as I'm concerned, the only professions which should require government licensing are those where tort is insufficient to correct wrongs. (ie. someone can die: doctors, civil engineers, etc.)
Sorry, there are very clear knock-on health effects here you're sweeping under the rug. Eg, if you're expecting to be covered for an urgent emergency life-saving procedure. Maybe you personally have sufficient cash on hand to pay for any required emergency surgery, that doesn't mean it's just a 'financial' problem to everybody else.
Do you really think it's appropriate to have someone be denied a medical procedure, and hope they survive so they can go through a legal challenge afterwards for 'fraud', and hope they can successfully provide proof of fraud over incompetence based on some phone conversation several years ago?
Instead of the much simpler solution of requiring some minimum license for the insurance seller?
I'm not sure about your online purchase example. Are you 100% sure these are the same insurance products requiring licenses as mentioned in the article, that no human sanity checks the product during the purchase process, or that the online algorithm itself didn't go through a sufficient license-compliant certification process?
You will never be refused emergency treatment just because your insurance doesn't cover it. That's the law in the United States.
You will get a huge bill afterwards and there will absolutely be financial consequences, but not medical ones.
It's illegal for a hospital ER to refuse you due to lack of sufficient insurance. The point is that you won't die, so you will be around to come back and sue the broker. (In fact, insurance lawsuits are super common.)
Not to mention that we're dealing with a hypothetical case where you do actually have insurance but it's somehow insufficient (which, by the way, is unlikely under Obamacare). In that case, you would absolutely get treated, but your insurer would refuse to cover the bill and would pass it on to you. You could then sue Zenefits for misrepresenting the product and seek damages to cover the bill.
> same insurance products requiring licenses as mentioned in the article
They're not the same in that I'm talking about individual insurance and the article is group insurance, but that's irrelevant to the point. If there are serious medical consequences to buying insurance without licensed supervision, I shouldn't be able to buy my own insurance online.
This happens all of the time, people cannot go see a doctor or receive a medication because of an insurance goof up. And then they have to wait. And wait. And legal remedies are not guaranteed to solve the problem, and such remedies should not be relied upon as a fallback for untrained insurance salespeople.
What exactly are you trying to convince us of? That insurance sales should be have no licensing requirements? And you're hinging your argument on the fact that it is "financial" and not "health" related (which like I said above is not true). In that case are you also in support of getting rid of licensing and other regulations in the banking and finance industry?
You will never be refused emergency treatment just because your insurance
doesn't cover it. That's the law in the United States.
You will get a huge bill afterwards and there will absolutely be financial
consequences, but not medical ones.
The law you're citing -- EMTALA -- merely requires hospitals to stabilize patients.
Yes, and that's what's necessary in an "urgent emergency."
That's it, huh? Just financial? Only, you might get stuck holding the bag for a bunch of medical bills that aren't covered by some insurance policy you bought, so you get to spend your sick days fighting a legal battle against a company you might never be able to recover a cent from.
>"Bank customer support people have just as much"
Completely ignorant.
What part of that is not financial?
> Completely ignorant.
Is there a licensing requirement for bank CS representatives that I'm somehow not aware of?
Ad hominem attacks are not an acceptable form of argument on HN.
Providing insurance advice is the same as financial planning, mortgages, investments and any of a number of professions that are all licenced by the state. The reason for these licences is because not having them creates a wealth of misinformation that can (and historically has) resulted in massive amount of fraud and theft from consumers, because - like you - they generally aren't knowledgeable enough to be able to discern a difference of professional opinion from someone selling snake oil.
A licence is a minimum requirement to show to everyone that you have grasped the basic concepts and rules surrounding the product you are advising others on. It does some other things as well, like ensure you have proper E&O insurance and stay up to date with changing legislation, but that isn't its primary purpose.
Licencing is a form of consumer protection. End of story. Arguing that it isn't necessary and/or consumers in these industries don't need protection to counter their ignorance (which is the entire reason they are buying advice in the first place) is naive almost to the point of being moronic.
Uber, Airbnb and Theranos come to mind first. As much as I want to see the daily fantasy sports put out of business, they at least had the foresight to punch a legal hole in the system to try to create a business (and not to mention they seem to be in the death throes anyhow).
It bothers me that investors seem to be so nonchalant about investing in a business that is in very questionable legal circumstances. I don't really know how to solve it, but it feels like investors do their due diligence (I hope!), but figure that the legal system is slow so there's a good chance that they can exit before any legal ramifications kick in.
And selling insurance without a license? If it was just flouting protectionist laws I'm all in favor. So many regulations are about keeping some lobby profitable, and not protecting the public.
There's no reason to simply sell insurance you should need to be licensed. Now to PROVIDE insurance, sure.
Just another stupid overreach IMO. Exactly the same as Uber/AirBnB/etc.
Cars are complicated too, why don't their salespeople need a license?
A pretty big clue, of the "writing in the sky with fire" variety.
Maybe Parker will make a triumphant Jack Dorsey-like return when the time is right. Or maybe he'll disrupt another multi-billion dollar industry. Whatever it is, smart people will follow him.
* disclaimer: I am a very happy Zenefits customer
Not sure about that. We tried working with Zenefits for our benefits and their agents screwed up so many times while trying to onboard our small team that we got alarmed and went with another provider (who ended up being a lot cheaper too).
Previous company had the following in their contract:
TriNet Group, Inc. (“TriNet”): The Company’s payroll and other human resource management services are provided through TriNet, a
professional employer organization. This arrangement between the Company and TriNet means that TriNet will be considered your
employer of record for payroll and human resource management purposes and your managers here at the Company will be responsible for
directing your work, reviewing your performance, setting your schedule, and otherwise directing your work at the Company. This means
that the Company and TriNet are co-employers, and you are technically a “co-employee”. As a “co-employee” of TriNet, you will be
required to accept the policies and procedures set forth in TriNet’s Terms and Conditions Agreement (“TCA”).
TriNet is a Professional Employer Organization (PEO). As a PEO, we enter into a so-called co-employment with our clients.
Here's an overview: https://en.wikipedia.org/wiki/Professional_employer_organiza... http://www.trinet.com/company/news_and_press/resources/peo_f...
Through this co-employment, TriNet becomes the employer of record for the 314,000+ employees of its 12,000+ clients (as of 9/30/15).
Because this co-employment gives a PEO significant scale, the PEO can offer its clients services/rates that a smaller company with less employees can never access.
In addition, through the co-employment model, a PEO also has 'skin in the game' with compliance issues, because everything is reported under their FEIN number.
Hope this helps. Happy to explain more or give you additional (independent) resources. jock.breitwieser AT trinet DOT com
Zenefits is a weird mix of wall street sales types and ex Yammer employees, the former might be out the door pretty soon.
Yes, but what would have sales been if they hadn't used unlicensed brokers?
Then the day comes when you need to become above board and someone has to be the fall guy. The important question here is not what the press release says but the money being paid....
Knowing when to sell and when to hold is a very tricky decision, plenty of people don't know what call to make and end up riding their companies all the way into the abyss. If you've done considerably better then maybe it's time you told the story, if you didn't admit you're jealous and get over it.
But that goes to the original problem: YC participation is advertised as a way to make money beyond your wildest dreams, but the only people who can actually expect to do that are investors. So many good and competent founders fail that even a modest success is enough qualification to lead YC; at the same time, the fact that so many good and competent founders fail is so taboo that pointing out that YC's president was only modestly successful looks like an insult.
And, to bring this back on topic, it is more-or-less this taboo that compels companies like Zenefits to prioritize stupendous growth over complying with the law. They could have grown cautiously and still made well over a 10% RoI, but they wanted to gamble harder.
Investing in, founding, and leading a company are three different skillsets. The best founding CEOs usually are not venture capitalists; you don't see Larry Page, Elon Musk, or Steve Jobs wishing they were investors. Similarly, it's possible to be a good founder and terrible leader (eg. Parker Conrad, Pierre Omidyar), or a good leader but incapable of founding something (Eric Schmidt, Sheryl Sandberg) or a mediocre founder but excellent investor (Sam Altman, Paul Graham, Eugene Kleiner, Don Valentine).
1. Wait for a misstep by the current leader.
2. Play it up as a huge problem that could threaten the company.
3. Suggest that maybe someone else could do better.
It absolutely was a HUGE problem. Even if he was set up, Conrad created a toxic culture that had to change.
Parker never seemed to understand that he could not flout laws & regulations like Uber; Uber has leverage because consumers love their product, and is able to put pressure on the incumbents and regulators; in contrast, NOBODY would stand up to defend Zenefits, and regulators will shut them down unless they clean up their act asap.
Edit: fixed typo (thanks @gingerrr)
http://techcrunch.com/2015/11/25/zenefits-under-investigatio...
Ummm… what were the values before the switch?!?
2. Make more money
3. Make so much money
1. Survive until next year 2. Survive until exit
#2 - Put the customer first (except when listing our core values, then put them second).
I understand the sentiment, just a weird juxtaposition with "#2" and "first"
#1 Operate with integrity. -> don't go to jail.
#2 Put the customer first. -> stop swindling customers.
You are quite wrong, if anything, employees appreciate openness and decisiveness, vs. sweeping changes under the rug with generic language. There is actually a ton of upside to creating honest communication, but it's much harder than hiding behind empty phrases, which then builds a culture of speculation (of what "really happened"), politics, and distrust.
I have no idea what really happened behind the scenes and why exactly the new CEO used this language, but I can assure you that any email from David Sacks will not be clumsy, but very deliberate and written to achieve a specific purpose. (There is some speculation on earlier threads around of why it might have been written this way).
If you are in that type of situation, you have to chose between your employees and external parties, and looks like he decided that creating a trusted relationships with his employees was more important...
"Effective immediately, this company’s values are: ..."
What about the fact that breaking the law is (often) morally wrong in its own right? Even if you disagree with the law, I don't want to live in a place where laws are toothless and optionally followed; the side effects of such lawlessness would be horrible, and huge.
This whole thing really got me thinking about how we in SV/SF think about laws and their enforcement. It might sound a little mean, but I almost hope they make an example out of Parker Conrad and Zenefits to nudge the pendulum of VC-funded companies a bit back toward respect for laws and compliance, rather than this "fuck it, they won't enforce it and if they do, we'll just have our well-connected VC partner make an off-record call to the governor/senator/regulator and magic it away" that seems so common today. All in the name of GROWTH.
That might not be a bad thing. It could be precisely because it was inappropriate that Zenefits got ahead.
...for now. But if the end result is massive fines, plus a bunch of their sales staff (and maybe their superiors) getting thrown in prison under Washington's criminal laws relating to selling insurance without a brokers license, plus ruining the company's relationship with customers and with the insurers whose products it sells (and possible breach-of-contract actions from those insurers).
Well, then, getting ahead for a little while before the whole thing caught up to them isn't going to seem like a big advantage.
> Effective immediately, this company’s values are...
Translation: This will no longer be an enjoyable place to work.
Effective immediately, this company’s values are:
#1 Operate with integrity.
#2 Put the customer first.
#3 Make this a great place to work for employees.
Did these not exist prior to Conrad stepping down? If they did, and this still happened, they're clearly bad values to hold.
For one, they're unspecific and don't have a clear opposite. No one is going to take the opposite on these, meaning they can't really be values.
No one will proudly state that
#1 Don't operate with integrity.
#2 Put ourselves first.
#3 Make Zenefits at least a mediocre place to work.
Are good values, so the values the new CEO espoused aren't really actionable or value-able in any way.
Anyone have a different take that I might be missing?
He goes on to say that he wants to push decision making ability down in the company, but if you're looking at those 3 values, it seems hard to make clear decisions based on them.
I have no idea about the termination clause for his contract, but it is a definite possibility to lose it all.
It's looking like at least some of the success of this company involved breaking the law. And we are worried about whether the CEO will be wealthy enough after being canned? Why are we not calling for heads?
-says someone who doesn't know much but can spot obvious trends.
https://en.wikipedia.org/wiki/Racketeer_Influenced_and_Corru...
Mail and wire fraud, which can include pretty much any knowing misrepresentation for commercial gain using the covered media, are among the predicate acts for RICO, along with the offenses you list.
So, it may not be as far out as you seem to think to imagine RICO applying.
ianal
Interestingly, "criminal copyright infringement" also somehow got on the list of RICO predicate offenses. Guess someone had a good lobbyist...
There are quite a few interesting undeveloped analogies across the greater hip hop industry vs. startups.
also, I did not say that you mentioned beheadings. I mentioned beheadings to illustrate a point.
USA Today reporter > https://twitter.com/jguynn/status/696847880921833473
Fortune reporter > https://twitter.com/eringriffith/status/696847400456097792
> Zenefits’ company values were forged at a time when the emphasis was on discovering a new market, and the company did that brilliantly. Now we have moved into a new phase of delivering at scale and needing to win the trust of customers, regulators, and other stakeholders.
i.e., they valued growth over integrity and following the letter of the law. That evidently works for some startups some of the time, but this seems like a bad industry to try that approach in.
Probably not the last we'll hear from him.
But this is an important reminder to Fintech companies: compliance is your life.
This might not be a bad thing. It could be precisely because it was inappropriate that Zenefits got where it is today.
> Zenefits also removed Conrad from its board of directors, while adding three prominent investors, according to an announcement on Monday.
It doesn't bode well for regulation and our society in general when flouting the law has a higher return than following the law, even if you get caught.
It would be a lot more suprising to see them go after employees or look at prison unless there were agravating factors like actually defrauding the buyers with regards to the nature of the coverage.
How do Zenifits compare to Paychex (the old standby of payroll processing) and Workly? What are folks using right now to expedite/automate employee provisioning (& termination) around HR things?
And the article: "Parker Conrad has resigned as CEO of Zenefits, following a number of regulatory compliance failures"
The irony..
I hear that it was compliance-related, and that Zenefits is holding a mandatory all-hands right now for all employees. Peter Thiel also joined their board.
The buzzfeed article cited elsewhere in the thread goes into to details on at least one of the major compliance problems: most of their policies in Washington State -- which has rather strict, including potential prison sentences, rules on this -- were apparently sold by unlicensed brokers, in violation of both the law of the State and Zenefits contracts with insurers.
http://www.buzzfeed.com/williamalden/80-of-zenefits-deals-in...
Eventually we'll have some system to aggregate related urls that isn't so all-or-nothing.
If you would like to engage in a polite debate over the extent to which it's appropriate for governments to regulate the economy for consumer protection, I'm happy to do so.
I will not, however, engage with ad hominem insults.
If I argued - as a non-doctor - that anyone should be able provide medical advice to people without being an MD, or that Joe Shmo should be able to provide legal advice without being admitted to the Bar, you'd rightly call that attitude ignorant and naive. The same holds true with your argument. It simply comes from a place too far removed from the topic at hand to be considered even remotely viable.
Don't take it as an attack on you, it isn't. Do take it to mean that you are clearly out of your element, and that with a little bit of research on your part, you'll understand why this is so.
You clearly have experience and knowledge. There was no need to make this personal. If someone is ignorant, show them that by responding factually and stop there. Don't rub their face in it.
2. I provided a few paragraphs telling why these conditions exist, and why arguing against them is not something someone educated in the topic would consider even attempting.
3. When you continue - over the course of several comments - to progress with your argument from a position of clear ignorance, it does indeed require increased naivety to the point of absurdity.
If you are going to take a stance on a subject you know little about, and then continue to assert that opinion, you can't get upset when people use more and more direct means to communicate with you. Don't assert a position that is based from a position of ignorance; seek to learn instead.
Also: I'd just like to point out the ironic nature of asserting meaningless comments are against 'guidelines' while at the same time suggesting guidelines are irrelevant for a much more important human concern.
The distinction here is simple. Factual comments about insurance and licensing: great for HN. Comments about people's knowledge levels and getting tangled in personal bickering: bad for HN.
Is that really all they sold? Utah had pretty dismissal numbers as well. How did they get to multiple billion valuation?
They "signed up" 10,000 companies as of a year ago[1]...but I'm not sure how many of those they sold health insurance to!
[1] http://www.siliconbeat.com/2015/01/15/zenefits-releases-grow...
Parker didn't accomplish anything positive as CEO of Zenefits, ever. There's a ton of companies using Zenefits services who aren't happy. They haven't left because switching is a major pain in the ass. You think it's by accident that Parker chose to disrupt three of the industries with the highest customer retention rates. This board knows damn well that it's not because the (industry) solutions are awesome, it is because switching is painful and costly. Zenefits overall customer satisfaction sucks, as does feedback from employees and overall morale, check GlassDoor.
Parker found a way to piss off not just one highly regulated industry (health insurance) but three. He told a "journalist" from BI that the CEO of ADP "threatened him like Dirty Harry" in true SF/SV tabloid fashion. You think Warren Buffet ever did something like that?
From day one, on stage at TC Disrupt, he acted like a cocky spoiled brat, which is precisely what he is.
He managed to create enemies with many of the companies Zenefits originally did business with, and then relished in it when it made headlines, ala "project nutshot".
Zenefits is a company that is not only on track to lose hundreds of millions of its investors money, but it literally put its employees freedom at stake. People could be facing jail time because of how blatantly Zenefits ignored the law. More than 80% of sales in WA were by unlicensed reps. Tip of the iceberg.
Had Zenefits reached a $60M run rate without breaking the law, without requiring over $500M in VC, without requiring a near $100M burn rate, without Parker being abusive and unprofessional, well I'd have no choice but to congratulate Parker on his accomplishments.
All this guy did was burn through a ton of money, make a fool out of his investors and mismanage this company to the point where the massive fundraising at a $4.5B valuation, and all but inevitable write down, have sent every employees shares into a watery grave.
Learn from this. Don't try to romanticize the Zenefits story. If you look beyond the PR machine, you'll find a company that has done almost everything wrong under the helm of someone who was more interested in accomplishing something for himself, "proving people wrong", because of the self-described chip on his shoulder.
Just be glad you're not David Sacks, because unwinding this mess is going to be nearly impossible, and investors are going to be brutal. I wouldn't want to have to answer to Jordan Catalano.
Thats certainly winning for the investors.
Also, invoking TK is pointless and shows that you can't distinguish apples from oranges.
This is complete nonsense. It's not hard to become a licensed commercial insurance agent, and the rules around selling commercial insurance are very clear - you have to be licensed. This is neither new territory, nor disruptive, it's simply sloppy and not something that would be tolerated by the CEO of a 20 person startup, let alone a billion dollar unicorn.