After Zenefits, Will VCs Rein in Their Unicorns? • Hacker News Board

Re: After Zenefits, Will VCs Rein in Their Unicorns?

#91

Post by rosser » Wed, Feb 17, 2016, 6:08 AM UTC

ubernostrum wrote: post #81

manishsharan wrote: post #77

Can someone tell me why is it such a big deal when person sells an insurance without having a proper license? Its not as if the insurance policy itself is fraudulent. The buyer is buying the insurance policy and not the credentials of the broker. Other wise it seems to me that is requirement is just as unnecessary as requiring cosmetology license for hair braiding ( see http://www.texastribune.org/2015/04/06/bill-wou…

Because even for people who are actual high-level experts on it, correctly representing what a policy does and does not offer, and explaining that in a way that's factually correct, compliant with the local laws governing insurance, and understandable without being misleading to a potential customer, is incredibly difficult, to such a degree that your comparison of it to hair braiding should be prima facie evidence o…

> your comparison of it to hair braiding should be prima facie evidence of lack of good faith on your part.

I wouldn't go that far. It's just the naïveté of "Why there gotta be so many laws obstructing my disrupting?!" taken to its logical extreme.

Re: After Zenefits, Will VCs Rein in Their Unicorns?

#92

Post by mikeryan » Wed, Feb 17, 2016, 6:09 AM UTC

Pyxl101 wrote: post #85

themagician wrote: post #71

Earlier quoted context omitted.

Lyft, Uber, and Airbnb can't avoid regulation forever. They've just been lucky so far. Eventually there will be a high profile incident—someone important will get raped or murdered. The political response will be 1000x what their lobbyists can handle. It is inevitable. The reality is that this is how a lot of regulation starts. It doesn't always come from an anticompetitive place. We just forget that we actually aske…

What regulation are Lyft and Uber allegedly skirting?

Its different from jurisdiction to jurisdiction but basically running an unlicensed taxi or livery service.

Re: After Zenefits, Will VCs Rein in Their Unicorns?

#93

Post by pbreit » Wed, Feb 17, 2016, 6:10 AM UTC

skewart wrote: post #62

A number of commenters here have compared Zenefits' questionable compliance with Uber, Lyft, and Airbnb. What Zenefits was doing is fundamentally different, and much more problematic. Lyft and Uber skirt similar kinds of seemingly useless regulation but they're completely up front about it. They don't pretend that their drivers are licensed or get any benefit from having licensed drivers in any way. They're simply of…

I think the bigger difference is that the rules that Uber, Lyft & AirBnB are bending directly result in customer benefit whereas in the Zenefits case, there is little or no or even negative customer benefit.

Here's a good take: https://stratechery.com/2016/zenefits-and-regulation/

Re: After Zenefits, Will VCs Rein in Their Unicorns?

#94

Post by pinkunicorn » Wed, Feb 17, 2016, 6:10 AM UTC

throwaway479384 wrote: post #83

My company used Zenefits for a while, mainly because one of our execs is friends with one of theirs. We had many, many problems with payroll. When you have employees repeatedly coming to you because their paychecks are screwed up, you've got to do something. We ended up switching away, and now use ADP for payroll instead. We've had no problems since. (This was before the big public slap fight between Zenefits and ADP…

Honestly this looks like an advertisement to ADP.

Re: After Zenefits, Will VCs Rein in Their Unicorns?

#95

Post by hoodoof » Wed, Feb 17, 2016, 6:14 AM UTC

"Will VCs Rein in Their Unicorns? "

The language indicates that the VC's are the controlling owners of these companies.

Re: After Zenefits, Will VCs Rein in Their Unicorns?

#96

Post by tmptmp » Wed, Feb 17, 2016, 7:12 AM UTC

discodave wrote: post #82

themagician wrote: post #71

Earlier quoted context omitted.

Lyft, Uber, and Airbnb can't avoid regulation forever. They've just been lucky so far. Eventually there will be a high profile incident—someone important will get raped or murdered. The political response will be 1000x what their lobbyists can handle. It is inevitable. The reality is that this is how a lot of regulation starts. It doesn't always come from an anticompetitive place. We just forget that we actually aske…

And by important you don't mean the women who have already been raped or assaulted by Uber drivers right?

I guess, the GP intends to say some "celebrity" figure gets raped/murdered when he/she mentioned "high profile incident". The incidents of the women who have been raped or assaulted by Uber drivers, were not "high profile incidents", that will demand large front page news or equivalent news on TV on prime time for days or weeks altogether on Times like influential, popular news media.

Re: After Zenefits, Will VCs Rein in Their Unicorns?

#97

Post by seanhunter » Wed, Feb 17, 2016, 7:22 AM UTC

rhino369 wrote: post #43

jsprogrammer wrote: post #27

Earlier quoted context omitted.

Easily rectified? The top shareholder/exec got dumped; the entire business is under multiple states' investigations; employees may have purjured themselves at the behest of the business; and clients may have purchased critical business infrastructure from unlicensed agents (which may affect their coverage). Clearly someone bought in to the pitch, but what strategy would they believe would easily rectify this situatio…

A non start up would pay a law firm to do more investigation and then settle with the government for a pound of flesh but nothing crazy. In the scheme of things skipping a video won't kill a company. But start ups are all about momentum and PR. Plus they'll need money for investigations and settlements. VC capital is expensive.

| In the scheme of things skipping a video won't kill a company.

Skipping the video is not in itself what could potentially kill the company. However if clients are able to claim that their insurance was mis-sold by Zenefits, it seems to me that could. Mis-selling of payment protection insurance in the UK has already resulted in settlements north of 5 billion GBP, and the issue is not fully resolved yet.

Re: After Zenefits, Will VCs Rein in Their Unicorns?

#98

Post by nostrademons » Wed, Feb 17, 2016, 7:23 AM UTC

sandworm101 wrote: post #59

twright0 wrote: post #52

Earlier quoted context omitted.

> Successful startups all, and I mean ALL, have serious compliance issues. This feels like a very hyperbolic claim. There are definitely high-profile examples of startups that had compliance issues and are struggling to bring them under control or remain in arguably grey areas (Zenefits is an example of the former, Airbnb the latter). But it's hard to imagine that it's a truly universal problem; many startups are in…

A successful startup is one that has grown rapidly in recent years. No growth = not successful, and not recent = not a startup. Any tech company that grows quickly starts bumping up against any number of compliance issues, both legal (ie HIPAA) and private (ie PCI). Today's growth curves don't keep pace with many of these regulations. As you expand laterally into new markets you constantly run into new obligations. A…

Isn't that why many companies are using Stripe and similar payment processors now?

https://support.stripe.com/questions/do-i-need-to-be-pci-com...

Re: After Zenefits, Will VCs Rein in Their Unicorns?

#99

Post by skewart » Wed, Feb 17, 2016, 7:30 AM UTC

pbreit wrote: post #93

skewart wrote: post #62

A number of commenters here have compared Zenefits' questionable compliance with Uber, Lyft, and Airbnb. What Zenefits was doing is fundamentally different, and much more problematic. Lyft and Uber skirt similar kinds of seemingly useless regulation but they're completely up front about it. They don't pretend that their drivers are licensed or get any benefit from having licensed drivers in any way. They're simply of…

I think the bigger difference is that the rules that Uber, Lyft & AirBnB are bending directly result in customer benefit whereas in the Zenefits case, there is little or no or even negative customer benefit. Here's a good take: https://stratechery.com/2016/zenefits-and-regulation/

That's an excellent point. And Ben Thompson is super insightful as usual (I'm a huge fan of his).

I certainly do think the value prop to consumers for Zenefits' rule breaking was not very clear. However, I'd argue that lack of clarity stems from the fact that they were breaking rules in small and kind of sneaky ways, and not in a clear way baked into the core of the product.

If they were totally unappologetic about bending laws from the beginning - ie their pitch was more like "Zenefits lets anyone sell insurance and provide other services to small businesses, making these things more accessible and affordable" - then I think people would credit all benefit they get from Zenefits to its rule bending, and put up with a lot more of it.

Instead, Zenefits was kind of trying to have its cake and eat it too, which just pissed people off.

To be fair though, I suspect that creating an explicitly unlicensed insurance brokerage would be much, much harder to pull off than an explicitly unlicensed taxi service.

Re: After Zenefits, Will VCs Rein in Their Unicorns?

#100

Post by easong » Wed, Feb 17, 2016, 7:33 AM UTC

ubernostrum wrote: post #89

easong wrote: post #49

Earlier quoted context omitted.

No, the point I'm trying to make is that seemingly one of the only ways to get stupid laws changed is for them to be broken, and for people to see that the law is pointless (or not pointless!). Why exactly the law is or was in place doesn't matter too much. Another example would be the woman who has the gall to braid hair without a license - if she hadn't broken the law, nobody would talk about it, there would never…

No, the point I'm trying to make is that seemingly one of the only ways to get stupid laws changed is for them to be broken The counterpoint is that civil disobedience requires harsh punishment of the disobedience in order to be effective. If somebody flagrantly violates a law because they claim it's bad, and walks away with little to no punishment for doing so, the public's impression will be "well, must not be such…

If the law is never enforced, that's almost as good as it being repealed. Given the lack of any other effective mechanism for obsoleting laws, I would book 'this joins the thousands of other bad laws that are never enforced' as a win for anyone who thinks we could do without it.