Why we’re investors in one of the best product CEOs of our time
Initialized is pleased to share the news that we are co-investing in Rippling’s Series A with Mamoon Hamid from Kleiner Perkins, who is joining the board. Mamoon has moved mountains for Initialized startups in the past, and we’re very excited to be partnering with him again here. We led the seed round in February 2017 when Rippling was just an idea, and this round of funding is an important milestone for what we think will be the defining startup in the HR and IT space.
The idea is simple and needed: Fast-growing companies struggle to on-board employees quickly and reliably. Legal agreements, payroll, health and dental benefits, account management, cloud services, time tracking, flexible spending accounts. In each of these cases, there is a process that is either fragmented or manual that business owners have to worry about. The whole process is repeated when employees leave the company, and that’s where enterprise privacy and security concerns really resurface. Rippling makes it simple for all HR and IT to happen at the click of a mouse for managers of companies, whether large or small.
We’re big believers in software automating all the rote repetitive work at every business in the world. So many processes in HR and IT are completely manual, and the vast majority of businesses struggle to do it right, on time, and on budget, with consistency.
Rippling starts as that utility. However, once they grow into the system of record for computer use, authentication, and on-boarding, then that also means they can be the Business App Store that lets cloud services get up and running with businesses instantly. Imagine getting a team set up on a given tool like Zoom or Dropbox with automatic account provisioning with one click of a button. Over time, this becomes a fundamental piece of the fabric for how cloud software can be deployed to every business with no setup or signup.
In the consumer world, we have the iOS app store, which has already driven $100B in payments to app developers, and along the way helped countless developers build and deploy their software to billions of people. We know that Rippling can do the same for millions of SaaS businesses, and are excited to see this big idea come to fruition.
On November 28, 2012, Parker Conrad came into the Y Combinator offices and interviewed with me and my fellow YC partner Geoff Ralston, who is the creator of Yahoo Mail and former chief product officer at Yahoo, for a company called Zenefits. Parker was a solo founder with a strong vision for a health insurance platform that would be easy to set up and turnkey. He had identified a go-to-market that was obviously dynamite: the Affordable Care Act would give Zenefits the best go-to-market for a startup ever.
The next week I was on the phone interviewing Parker’s longtime coworker and friend, Laks Srini, who would go on to be co-founder and CTO of Zenefits throughout the ensuing years. Over the next year we worked together on design, product, and usability, iterating quickly directly with early customers.
I’ve worked with a lot of founders in my time — more than 1000 at this point — and I know Parker to be the CEO who built the Zenefits software from nothing, just an idea. This was the first startup of its kind servicing a very big need, HR and benefits software, that is now a clear driver of venture returns with multiple multi-billion dollar companies in the category.
He built Zenefits from zero to $60M per year in revenue in less than three years. Startups are like climbing Everest, only most people fail before they ever reach basecamp. Having seen this over and over again, we know that to reach basecamp is an achievement unto itself, even if in that climb you don’t make it to the summit.
In our experience strong product-first founders are incredible gardeners of their product, software, and user experience. Parker is no exception. Rippling customers know that every piece of feedback and every bug report is evaluated with a fine-tooth comb, and it’s remarkable to what degree the team will go to assure their software not just works, but delights their users. They’ve put their 10,000 hours and are building something real that will solve customer problems over the long haul.
The Rippling story is far from complete, but this team is building for the long journey to the summit.