20VC: Rippling's Parker Conrad on The Four Main Benefits From Building a Compound Startup | Why There Should Never Be a Trade-Off Between Speed and Quality | How Zenefits Gave Parker a Chip on the Shoulder and Why That is so Important?
The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
The Twenty Minute VC
4.4 • 637 Ratings
🗓️ 3 October 2022
⏱️ 45 minutes
🧾️ Download transcript
Summary
Parker Conrad is the Founder & CEO @ Rippling, the company that lets you easily manage your employees’ payroll, benefits, expenses, devices, apps & more—in one place. To date, Parker has raised over $697M for Rippling from some of the best including Sequoia, Founders Fund, Greenoaks, Bedrock, Kleiner Perkins and Initialized to name a few. Prior to founding Rippling, Parker was the Co-Founder and CEO @ Zenefits and if that was not enough, Parker is also a prominent angel having invested in Census, Pulley and then also AgentSync and TrueNorth, alongside 20VC Fund.
In Today's Episode with Parker Conrad:
1.) Entry in Startups and Zenefits:
- How did Parker make his way into the world of startups?
- How did Parker end up being kicked out of his own company, Zenefits? How did he respond?
- How did that experience of being kicked out of Zenefits inspire him to build Rippling?
2.) Parker Conrad: The Leader:
- How does Parker define "high performance"? How would Parker describe his leadership style today?
- Why does Parker fundamentally disagree that with speed comes a trade-off in quality? How does Parker ensure Rippling does all things fast and to the best of its ability?
- How would Parker break down his decision-making framework today? How does he decide what to prioritize vs not? How does he decide what to delegate vs not?
- What are Parker's biggest insecurities in leadership today? How have they changed over time? What does Parker do to combat and mitigate them?
3.) Rippling: The Compound Startup
- How does Parker define a compound startup?
- What types of business do this verticalized approach work for vs not work for?
- What does Parker believe are the 4 core benefits of this approach?
- What are the single biggest challenges of building a compound startup?
4.) Rippling: The Economics:
- How does this compound startup approach impact ability to cross-sell? How much net new ARR today comes from cross-sell?
- What have been some of Rippling's biggest lessons on what it takes to do cross-sell so effectively?
- How do the margin profiles differ across their different products? How have the margin profiles changed over time?
- Why does Parker not believe that most startup margins are accurate?
- How does the compound startup approach change the amount invested in R&D? How does that impact the fundraising requirements of the business?
5.) Rippling: The Partner Ecosystem:
- How does Rippling think about building out the best partner ecosystem? What will it take for that to work?
- Why do Rippling want to introduce services that compete with their own products? Why do they not only build their own?
- How do the margins differ when comparing revenue share on partner products vs Rippling products?
- What are the single biggest barriers to this partner ecosystem working?
Transcript
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| 0:00.0 | This is 20 VC with me, Harry Stebbings, and this week we have a special two-part episode |
| 0:04.0 | focused on the incredible business that is Rippling. Over the last few weeks, they announced |
| 0:08.3 | their entrance into spend management and another step in their mission to build the app store |
| 0:12.7 | for business. And so today, I'm so excited to welcome back to the show, Rippling founder and CEO, |
| 0:18.1 | Parker Conrad. For those that don't know, Rippling lets you easily manage |
| 0:21.6 | your employees' payroll, benefits, expenses, devices, and apps in one place. To date, Parker has |
| 0:28.1 | raised over $697 million for Rippling from some of the best, including Sequoia, Founders Fund, |
| 0:34.0 | Green Oaks, Bedrock, Kleiner Perkins, and initialised, to name a few. |
| 0:37.7 | And prior to founding, Rippling, Parker was the co-founder and CEO at Xenophis. |
| 0:41.5 | And if that wasn't enough, Parker's also a prominent angel, having invested in the likes of |
| 0:45.4 | Census, Pooley, and then also Agents Inc and True North, alongside 20VC fund for the last two. |
| 0:51.2 | And I want to say huge thank you. |
| 0:52.5 | This was such a team effort on the schedule. |
| 0:54.5 | Neil at Greenoots, Gary had initialized, Mamuna Kleiner, Ben Ling, and many more for some amazing |
| 0:59.5 | questions suggestions today. But before we move into the episode today, Harvard Management Company |
| 1:04.3 | is constantly seeking out the next generation of great investors and entrepreneurs. |
| 1:08.9 | HMC has managed Harvard University's Endowment for nearly 50 years |
| 1:12.9 | and was one of the first institutional investors in venture capital. Their experience and long-term |
| 1:17.8 | investment horizon makes some ideal partners to get world-changing ideas on a path to viability and |
| 1:23.6 | success. They work as a true partner, providing insightful perspectives to help managers succeed. |
| 1:29.1 | I personally have had the pleasure of working with the HMC team and can say that they are |
| 1:33.0 | truly exceptional partners and savvy investors. Whether you are launching your first fund or your fifth, |
... |
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