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Zenefits Was the Perfect Startup, Then It Self-Disrupted

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Re: Zenefits Was the Perfect Startup, Then It Self-Disrupted

#91

Post by mbesto »

jobu wrote: post #48
GavinB wrote: post #3

So a company that blatantly cheated will pay some fines and still be worth billions. The founders and early employees will all be rich, or richer than they were when they started. The investors will get a very healthy return. The lesson: break the rules and grow so fast that by the time regulators catch up, you can put on a show of reforming and still keep most of the value that you created. Admirable disruption or h…

Breaking rules to set up a sham business that scams and steals is one thing (and often the reason the rules exist). Breaking rules to create a product that most people like and find better than the alternative is completely different. Unfortunately many of the laws created in the name of "consumer protection" do little to protect anything but the entrenched interests that lobbied for the laws.

How precisely do you determine which rules are breakable for a product/service that is "better than the alternative"? I'd love to stay in a hotel and not pay hotel taxes, as would Marriott, so I use AirBnb instead. I'd also like to present fake receipts for reimbursement to my employer so I can make more money. Both are "alternative products" that are better for me, but someone else suffers.

EDIT: Grammar.

Re: Zenefits Was the Perfect Startup, Then It Self-Disrupted

#92

Post by ttruett »

dpark wrote: post #67
nostrademons wrote: post #56

Earlier quoted context omitted.

The complication is that "wrongdoing" is in the eye of the beholder. Is Uber committing wrongdoing? The taxi companies certainly think so. Many municipalities think so. A lot of folks on Hacker News think so. 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 Ub…

> 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? This is quite a stretch. Uber is eliminating drunk driving fatalities now? Those same people couldn't have called a cab before Uber existed?

Not knowing where you live / have lived... I think people in big cities forget how hard it is to find a taxi elsewhere.

I can remember a specific example several years ago in Nashville (which is quickly becoming a big city) where after waiting for 15+ minutes downtown I had to start calling companies telling them to send a car to my corner.

Before Uber came to Chattanooga (a decent-sized city) calling a taxi wasn't even a viable option unless it was for a scheduled 4AM airport pickup.

Re: Zenefits Was the Perfect Startup, Then It Self-Disrupted

#93

Post by st3v3r »

BinaryIdiot wrote: post #33
GavinB wrote: post #3

So a company that blatantly cheated will pay some fines and still be worth billions. The founders and early employees will all be rich, or richer than they were when they started. The investors will get a very healthy return. The lesson: break the rules and grow so fast that by the time regulators catch up, you can put on a show of reforming and still keep most of the value that you created. Admirable disruption or h…

You sir are correct. I'm curious though; are there any really good solutions to this type of problem? You can't rewind time and go back and taking away all assets gained in such a manner, while doable, would pretty much put the company out of business even if they're willing to comply. Seems like there isn't really a good way to prevent companies from breaking the law. Well unless you do some sort of regular inspecti…

"You can't rewind time and go back and taking away all assets gained in such a manner, while doable, would pretty much put the company out of business even if they're willing to comply."

Why not? If enough stuff like this happens, then companies are going to realize that breaking the law does actually have consequences.

Re: Zenefits Was the Perfect Startup, Then It Self-Disrupted

#94

Post by st3v3r »

nostrademons wrote: post #56
maxerickson wrote: post #39

Earlier quoted context omitted.

What's wrong with putting companies out of business? I understand that it ends up having impacts on people that aren't necessarily involved in the misbehavior, but it provides officers and investors a significant incentive to avoid wrongdoing.

The complication is that "wrongdoing" is in the eye of the beholder. Is Uber committing wrongdoing? The taxi companies certainly think so. Many municipalities think so. A lot of folks on Hacker News think so. 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 Ub…

Your entire 2nd paragraph is bullshit. There is absolutely nothing in that paragraph that indicates they had to break the law.

Re: Zenefits Was the Perfect Startup, Then It Self-Disrupted

#95

Post by outericky »

csours wrote: post #60
msandford wrote: post #32

Earlier quoted context omitted.

I'm all for manufacturers being prevented from going back on the deals they struck with dealers; the capital they raised from selling dealership franchises was very important for the growth of the manufacturers. But if a manufacturer never setup a dealer program? Fair game to them, IMO.

It's one step more complicated than that. GM has 5 year renewable franchises, so theoretically they could just wait 5 years and not renew. The issue is that many states have laws preventing OEMs from selling directly. There are similar laws for unions.

I feel the laws preventing OEMS selling directly are antiquated. Dealerships are a scam. It's a game of "how much can i squeeze out of the other party" - which generally is bad for consumers. Since most aren't trained to take advantage. OEM's don't need to sell directly, but allowing a "store" model where prices are fixed, non negotiable would likely be best for everyone in the long run. Well, except for the dealers. But at least there would be predictability. Dealers shouldn't be a protected party - the consumer should be.

Re: Zenefits Was the Perfect Startup, Then It Self-Disrupted

#96

Post by shostack »

robbiemitchell wrote: post #68

> There wasn’t even an IT person to fix the printers. Conrad hadn’t forgotten to fill these positions. The way he saw it, Zenefits was full of gifted engineers; if their computers weren’t working, they should be able to fix them. Of course, time spent futzing with the Wi-Fi was time not spent building the product or dealing with customers. To Conrad, that just meant the engineers needed to work harder. > Zenefits use…

I wonder what sort of chilling effect this had on work/life balance. When the CEO is responsible for approving all vacation requests, are there fewer requests as a result?

Re: Zenefits Was the Perfect Startup, Then It Self-Disrupted

#97

Post by tyre »

They are anything but the perfect startup.

As an early ZenPayroll engineer, I'm biased but also informed. That company was a shitshow from day one. Their recklessness caused a few sleepless nights for our team including one time they overwrote every bank account number (by scripting our front end, after asking SMB users for their passwords and storing them in spreadsheets.) This caused tens of millions of dollars in failed transactions. For _payroll_.

Rule 1 of startups: build something people loved. The last line of the article:

  “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.”
They are the epitome of what's wrong in Silicon Valley, not what is right. Not caring about employees, setting a bar for professionalism as high as a reality TV show, and, to quote Thomas Hobbes, "restless desire of power after power, that ceaseth only in death." Not to mention ethics violations and breaking laws that (unlike Uber and taxis) are on the books to protect protect health insurance.

This was not a grey area.

The Valley has yet to prove that it can build sustainable companies. We can get to about 6 years of hyper-growth, but outside of that it is really questionable. Look at Square, Twitter, and Box post-IPO or the myriad large startups that refuse to IPO. You've got Google, Apple, and Facebook, but that's hardly proof of repeatable success.

Re: Zenefits Was the Perfect Startup, Then It Self-Disrupted

#98

Post by st3v3r »

BinaryIdiot wrote: post #71
maxerickson wrote: post #39

Earlier quoted context omitted.

What's wrong with putting companies out of business? I understand that it ends up having impacts on people that aren't necessarily involved in the misbehavior, but it provides officers and investors a significant incentive to avoid wrongdoing.

> What's wrong with putting companies out of business? 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. I…

Here's the problem: Doing anything other than punishing the company harshly, even if that means putting them out of business, signals to everyone else that the law is not serious, and can be broken at will.

As far as if it's worth putting them out of business, I don't see why that should even be under consideration. You can't do the time, don't do the crime.

Re: Zenefits Was the Perfect Startup, Then It Self-Disrupted

#99

Post by st3v3r »

mindcrime wrote: post #77
jsprogrammer wrote: post #40

Earlier quoted context omitted.

Why should a company that shouldn't have been in business be protected from being put out of business? You can't really prevent people from breaking the law (why have the law if it's impossible for anyone to break it?), but predetermined consequences could be played out when the law is intentionally broken. It seems that RICO would apply to this situation. Multiple individuals and companies/funds conspired to commit…

Because sometimes you're dealing with a bad law.

If that's the case, then the company should have been lobbying to have the law changed, instead of brazenly disregarding it and making money from having an unfair competitive advantage.

Re: Zenefits Was the Perfect Startup, Then It Self-Disrupted

#100

Post by snappy173 »

maxerickson wrote: post #39
BinaryIdiot wrote: post #33

Earlier quoted context omitted.

You sir are correct. I'm curious though; are there any really good solutions to this type of problem? You can't rewind time and go back and taking away all assets gained in such a manner, while doable, would pretty much put the company out of business even if they're willing to comply. Seems like there isn't really a good way to prevent companies from breaking the law. Well unless you do some sort of regular inspecti…

What's wrong with putting companies out of business? I understand that it ends up having impacts on people that aren't necessarily involved in the misbehavior, but it provides officers and investors a significant incentive to avoid wrongdoing.

Even then, you probably haven't solved the problem. A big reason that these products are structured as "startups" rather than within bigger companies is to limit the liability if they fail catastrophically or get caught breaking laws.

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.

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