Comment by rvivek | Hacker News Reader

Comment by rvivek | Hacker News Reader

Wow, I'm surprised at the level of cynicism here. As a startup, the last thing on your mind is trying to optimize for a situation when a major bank collapses that too in a matter of days. There are many more urgent fires to put off. Sure, as a payroll company, you may wonder if this is indeed an edge case they need to take care of but the way the team, VCs harnessed in such a short period of time to delight customers is commendable. Think about all the things that needed to happen.

--> Move the primary banking provider from SVB to JPMC.

--> Get a set of engineers to have all-nighters to ensure the new payment system actually works. This is hundreds of millions of dollars worth of risk.

--> Raise $500m(?!!) in 48 hours to fund the payroll without any assurance from FDIC whether depositors are going to get the money back or not.

--> While doing all of this, respond to a massive influx of support tickets.

What this really shows is they are willing to go to a crazy extent (raise $500m in 48 hours!) to delight customers.

FWIW, I'm not affiliated with Rippling in any way but I do have a ton of respect for Parker for his ability to bounce back after the Zenefits debacle.

> as a startup

According to crunchbase rippling has raised 1.2b total and has thousands of employees. I mean c’mon

There’s no universal agreed upon definition for a startup but if at all you want to think of one, use growth rate. They have 1000 employees and $1b in the bank now. They had 1000 employees and $500m 48 hours back. They had 500 employees and $250m a year ago. They had 250 employees and $100m 2 years ago and so on..

No “non-startup” can grow at that pace.

They had 800 people in 2021 (via trivial google search) so no - startup pass denied

I have to agree they’re not a startup. By the definition the parent comment provided, a lot of clearly-not-a-startup companies are startups.

How many new hires did Facebook add during the pandemic that are now being fired? Facebook is by no means a startup. It typically works the other way around: gawping headcount by thousands at a time requires the kind of organization that startups typically struggle with.

Isn't this what insurance is for?

totally agree. nice take.

As a customer, are you delighted if the outcome is effectively that they did not fail to provide service?

Glorifying heroes and all nighters…more like celebrating a near miss/catastrophe

Coud they have done any better?

is that your standard for delight?

As a customer I am not sure I would even be delighted to not have to worry in the first place? Like great your business didn’t fail and cause me more issues - do I get a discount now for all the stress?

As James Acaster might say, I am too good for a free banana, and il reserve my delight for situations where I am actually delighted, not just delighted to not be up a creek ;)

Yes, you should be delighted. Normal work of operations is only guaranteed in normal circumstances. Any unusual castrophic situation is grey area, at best.

Not that long ago, Kronos, another time management and payroll company, faced a ransomware issue that caused a complete payroll outage for a month at some of their companies.

The fact that a bank failed in 24 hours and Rippling made changes to the system to route around that bank and raised capital to front customer payrolls on behalf of their employees is incredible. The default action would be to wait it out.

You really should be able to show appreciation in a situation like this. This is not “normal course of business” stuff.

I fully agree this is obviously (and should be!) out of the ordinary.

I’d be glad to do business with a company that cares. In my business, I walk away from prospective vendors that don’t demonstrative proactiveness or that just follow the pack.

I would absolutely expect them to be able to route around issues with a single bank in the same way I would expect Cloudflare to be able to route around issues facing a single data center. with that kind of business it doesn’t make sense to have a single point of failure with the money you manage. There should certainly be more than one bank in their portfolio, and the differences should be small enough to capitalize in an emergency.

If you’re not mitigating risks brought by your most important vendors, then you’re not mitigating your own risks. Any organization that’s serious about payroll will ask it’s payroll vendor about planning for various out-of-band failures.

I appreciate your take here, but frankly I think it ignores the absolutely enormous world of vendors and partners out there, and the challenges that startups face when navigating it.

Quite simply, there absolutely is neither enough time nor mental space to deeply evaluate and understand these types of risks for all of your vendors. Further, this is one of those risks that is abundantly clear in hindsight but a person without deep financial experience or one who hasn't gone through this exact problem would really have no reason to understand or ask about it.

In fact, a person without intimate knowledge in payroll software might have no reason to even understand that there is an intermediate bank account in which funds are parked en-route to employees. It's just extremely unrealistic to expect someone to be thinking about this when picking a payroll vendor. Just like it would be unrealistic for me to expect an employer to perform a deep analysis of an insurance company's historical MLR and books to ensure they're sufficiently liquid and solvent to fund an employee's medical emergency.

Like it or not, social proof is a fairly critical construct in the world, and without it we'd be stuck spending more time analyzing our decisions than we do living with them.

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