Zenefits Was the Perfect Startup, Then It Self-Disrupted

One just ruined all the goodwill they built up with me over the past year (which got them countless free hours, crunch time at short notice, etc.) by stiffing my company of about a grand - literally a few hours' work - on some badly structured justification, the real reason being he felt his colleague was not negotiating hard enough with me and he "showed him".

Now I'm going to stick to the contract hours and probably prioritise other work over theirs; I also changed the payment terms to be upfront to avoid stiffing, and if they want extra hours, guess what, their sticker price went up from their discounted price for longstanding cooperative clients to "market rate". I guess the thousand bucks is visible and the value they lost isn't, so he probably thinks he was very successful.

It bewilders me that someone can be in business for years and not understand that cooperation is a better strategy, but there are a lot out there. I've found the short term cost of cooperating with defectors worth it in the long run, though.

Let's also not forget that Conrad is not going to jail. It's a billion dollar company that's going to pay millions in fines.

> Zenefits might also survive for the one reason that made its product so appealing to business owners in the first place: Shopping for health insurance remains really frustrating. The company says it now has 20,000 accounts. “As long as their problems don’t affect our company, we’ll stay,” says Todd Harmond, vice president for finance and operations of the e-book service Scribd, which uses Zenefits to offer Kaiser Permanente and Anthem health insurance plans to its 85 employees.

> “Unless something else goes really wrong with Zenefits, we’ll stick with them for a while,” says BlogMutt’s Yates. “It’s too much of a hassle to switch.”

I don't see what being online has anything to do with it; the spirit of the rule - preventing the manufacturers from competing with dealerships - is valid anyway. I personally disagree with this rule, but the "online" part is just Tesla trying to get off on a technicality.

Or both simultaneously, sometimes even by the same people!

Since you explicitly mention "grey state," it appears you recognize the subjective nature of both law and morality.

With a mining company non-compliance could poison water supplies and sicken/kill people. With Uber (and a lot of the sharing companies) they can cheat workers out of the protections they would normally receive with a job.

On the other side with Tesla, selling directly to consumers doesn't hurt consumers at all, but it does create a slightly uneven playing field with incumbent manufacturers who have to sell through dealerships. With Uber, customers tend to get a better service but it creates an unfair playing field with taxi companies, who have to pay an enormous amount of money for medallions while adhering to tightly regulated fares.

From the government's standpoint, there's usually some amount of discretion in enforcement of the law. Laws that protect people from harm should be pursued more vigorously than laws that maybe protect old business models more than they protect actual consumers.

There is no need to have a perfect system for handling all situations with bad laws and which should be broken.

Humans have brains, we should use them to determine that question for ourselves.

But the folks who had a few too many beers and missed the last Caltrain and would otherwise drive home drunk if Uber didn't exist? The innocent folks that would otherwise have been killed by a drunk driver if Uber didn't exist? The folks who drive for Uber to pick up some spare cash in their spare time, or the ones who do it because they can't find any other income and would otherwise be destitute? The folks who drive for Uber to meet interesting new people? The Uberpreneurs who pitch their wares to a captive market for the duration of a ride? They all benefit significantly from Uber's existence.

That's why this "get big fast and then hope you can avoid the consequences for your wrongdoing" strategy exists. The consequences will oftentimes not be known at the time an idea is conceived. Sometimes they will be much, much worse than is apparent at the time (look at the environmental pollution and global warming caused by heavy industry), while sometimes they will be a lot better (look at the liberalization and toppling of many totalitarian regimes since Facebook and Twitter came out). Oftentimes they will be both worse and better at the same time; someone killed in a revolution has clearly suffered, while someone who can open up a business that would previously have been shuttered by the government has benefitted.

Well you have to decide what is or isn't worth destroying a business entity. Let's say Startup X breaks a law that, while illegal, has little to no impact on the general public. Let's say Startup X isn't found out until 5 years in and they're doing $300 million in revenue but without breaking that law they would be at some unknown number less than $300 million. Is that worth putting them out of business? If so, why? If not then what is the appropriate punishment?

Seems like a really hard problem to be fair all the way around.

Investors keep pouring gasoline on the fire; the message is "GROW GROW GROW" ... but if the fire burns out of control, it's somebody else's problem.

The fact that you understand this could bankrupt and destroy people's lives simply because they worked at the wrong company at the wrong time, but still seek to rationalize it, is more than a little disturbing.

Having draconian penalties for line employees is not going to do anything to dissuade a C-level executive who wants to commit fraud from committing fraud.