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Zenefits Software Helped Brokers Cheat On Licensing Process

296 points by LukeB_UK 11y ago

NDizzle 11y ago
Can someone give me a good explanation of how the COO wasn't responsible for this kind of stuff? It's mind boggling to me how hard Sacks is throwing Conrad under the bus, despite possibly being just as guilty. I mean, I get it - power plays and all. But aren't they both responsible?
- exw 11y ago
  According to the article, Sacks discovered the issue in January, and then forced the company to report it to the California regulator - if you believe that sequence of events, he can't really be held accountable for the action of Conrad. Let's say you are an engineer, take a new role at a company to work on their database, and then discover that one or your managers has stolen money, do you think you should be held accountable, assuming that you report the issue immediately when you discover it?
- timv 11y ago
  You're questioning the reality, when all of this is about perception. The board needed to hold someone responsible for this mess in order to satisfy the regulators that they're taking the problem seriously, and things are different now. Effectively, the message they want to send is that the adults are in charge now. There was no way Conrad could stay. Even if they could somehow hide any evidence that he knew about the violations (and they probably couldn't), it's very clear from his public statements that he had built the fast and loose culture the had allowed and sustained the problems. He had to go and the message needed to be that the company has no place for him anymore. He's not stepping into a reduced role, he doesn't have a board seat, it's over, he's dead to us. Sacks has a different record. He wasn't there from the beginning, he hasn't been the public face of the "ready, fire, aim" culture, there's plausible deniability. And he has credentials to justify his position - Yammer, Microsoft, PayPal - he can be painted as a safe pair of hands. And, since he's been the COO for a year, he can step straight in an take over without needing a handover period from Conrad. The board need Sacks to stay on and be the new face of Zenefits. And they've decided that the regulator investigations are not going to find damning evidence against him. Maybe because he had no idea. Maybe because he was smart enough not to leave any evidence. Maybe because there's a paper trail of him reporting the issues up the chain in way that makes him look like the good guy. You're asking the question "How can a COO not know about all this stuff, and not have had some responsibility over it?" and that's a good and fair question - the regulators will ask it too. I take it the board will be able to provide a plausible answer to that question when the regulators come knocking. But that's not really the #1 question that the board's worried about. They want to know "who has the best chance of saving this company?" And what Sacks provides is: - Plausible deniability - Credibility in the market - Credibility with the regulators - Knows the business - Can do the job - Ready to start now There's no one else with those credentials, so Sacks needs to take the job. Once that's decided it's a matter of execution - almost literally. If Sacks is going to save Zenefits then he needs to look innocent, and blame Conrad for everything. That might actually be true, but that's actually not the key question for the board. They just need something that they can sell to the market and regulators.
  - NDizzle 11y ago
    Thanks for taking the time to write that up. It makes sense from that perspective.
- xkeemy 11y ago
  Not to say Sacks shouldn't be responsible but, to my understanding, all of these issues being reported on are coming out of the sales org (which is what Parker primarily focused on) where as Sacks primary focus as COO was on post sales customer success (product, ops, support, etc.)
fennecfoxen 11y ago
The mandatory 52 hours spent logged into the course requirement hearkens back to this recent discussion on occupational licensing: https://news.ycombinator.com/item?id=11054527 https://news.ycombinator.com/item?id=11054527
- taurath 11y ago
  Its the same kind of restriction that would tie programmer pay to lines of code written. I understand it though to some extent - its more of a "cheating prevention" program, but I'll bet a very very very high percentage of test takers would find it a very large waste of time.
- maxerickson 11y ago
  However arbitrary or dumb it might be, it's still a rather low bar. edit: which I think might not sound how I intend it. I meant to get at it not requiring a great deal of investment of time or other resources to become an insurance broker.
  - lmm 11y ago
    It shows a real lack of faith in the exam, I think. If the exam is testing the requirements of being an insurance broker correctly, why have an "x hours of training" requirement as well?
    - maxerickson 11y ago
      The interesting discussion from the occupational licensing story was whether a given licensing requirement creates an undue barrier to people that want to pursue the career. That's what I was getting at, regardless of how terrible this hours requirement might be, it doesn't create much of a barrier to people that want to become insurance brokers. It's little more than an inconvenience. (There's an argument to be made that an inane hours requirement is unfair to people that must work long hours to support themselves, but in this case it was the company urging paid employees to spend their time otherwise)
jasode 11y ago
Another source[1] had more info about "The Macro": Many of our California sales representatives received access to a software tool called a “Macro” that may have allowed them to complete mandatory online pre-licensing education courses offered by a third-party test preparation provider in less than the legally required 52 total hours. The Macro functioned to keep a person logged into the course and prevented the person from being logged out for inactivity. The Macro did not advance through the required material or quizzes in the education course -- the Macro only kept the person logged in. The Macro only pertained to the prelicensing education course and did not affect the broker exam taken later. Use of the Macro enabled -- but did not cause -- a person to spend less than the 52 hours of required time in the prelicensing course. Ok, I have no judgement about the morals of this but I think the "hacker" mentality is hilarious. I was at a Fortune 100 company that had an obligatory "security training" webcast that you had to watch and then at the end, answer some test questions. This was required to get a door badge and network id. Well, one programmer simply wrote a script to "watch" the video and automatically answer the questions. The manager knew we all used it and condoned it because the security video was out-of-date and irrelevant. I can see someone at Zenefits using that mentality and justifying it because skipping the training material gave them no benefit to passing the actual exam. [1]http://www.businessinsider.com/zenefits-using-secret-fake-training-2016-2 http://www.businessinsider.com/zenefits-using-secret-fake-tr...
- zekevermillion 11y ago
  Love the passive voice "may have received access to" -- OK, who gave them access I wonder? I would normally applaud the hacker mentality of using a computer to automate stupid or repetitive tasks, as long as any dishonesty is limited to a white lie. Like the obligatory security training video watching. But running a compliance company that doesn't comply seems more fundamentally problematic.
- semi-extrinsic 11y ago
  There is a bit of fun to be poked at startups/the hacker mentality in this case, sure. But what's appears to be a refreshing break from what happens when big corporations are caught red-handed, is that the leaders responsible have been fired/disciplined, while the employees on the floor have been told they will not be punished (though they will be if such things happen again). At least that's what I understand from the email reproduced in the BuzzFeed article linked in another comment.
minimaxir 11y ago
The BuzzFeed Article on Sacks' memo was written/submitted first and is more comprehensive: https://news.ycombinator.com/item?id=11083597 https://news.ycombinator.com/item?id=11083597
- brown9-2 11y ago
  HN seems to have what amounts to a systematic ban on buzzfeed, even though their news org helped break this story (and many others).
  - maxerickson 11y ago
    There are several highly voted and discussed Buzzfeed articles in just the last couple days: https://hn.algolia.com/?query=buzzfeed&sort=byDate&prefix&page=0&dateRange=all&type=story https://hn.algolia.com/?query=buzzfeed&sort=byDate&prefix&pa... The previous increment of the Zenefits saga was one of them. I guess given that many of their articles aren't real topical here there is probably a penalty for the site, but it doesn't stop everything.
  - mortenjorck 11y ago
    Buzzfeed's curious chimaera of its trademark virally-targeted fluff content and a burgeoning hard news organization probably merits at least some kind of reconsideration of the penalty applied to submissions on HN. It would be nice if Buzzfeed had something like a separate subdomain for its non-trivial content, but I'm not aware of any such thing that would enable automated differentiation.
  - dang 11y ago
    Of course we don't: https://news.ycombinator.com/from?site=buzzfeed.com https://news.ycombinator.com/from?site=buzzfeed.com. Two of the biggest HN stories from the past two days alone were from Buzzfeed: https://news.ycombinator.com/item?id=11075336 https://news.ycombinator.com/item?id=11075336, https://news.ycombinator.com/item?id=11061992 https://news.ycombinator.com/item?id=11061992. Usually the complaint I hear is "why is Buzzfeed on HN". Buzzfeed is one of a class of sites that produce a lot of dreck as well as the occasional high-quality article. There are many such sites, mostly media outlets. HN's solution is to penalize them (a little) by default, but take the penalty off under different circumstances, such as if a moderator sees than an article is good or the submitter has a solid track record. This has proven to be a reasonable compromise. The alternatives—not penalizing these sites at all or banning them altogether—are a lot more problematic, which is how we arrived at this strategy in the first place.
jefftchan 11y ago
https://www.ycombinator.com/ethics/ https://www.ycombinator.com/ethics/ > Some examples of ethical behavior we expect from founders are: > ... > - Not using misleading, illegal or dishonest sales tactics. > ... Does this mean Parker is no longer a YC Founder, if the allegations turn out to be true?
- Implicated 11y ago
  I have a feeling it doesn't exactly work that way... How would someone be un-YC'd?
  - calbear81 11y ago
    Meaning, ex-communicated from the YC network. Not be invited back to YC as a mentor, no demo day invites, etc.
- iaw 11y ago
  I don't think any of their sales tactics fell under "misleading, illegal, or dishonest." It was their California pre-certification practices that was blatantly illegal.
  - jsprogrammer 11y ago
    Wouldn't they have represented that their employees were properly certified for the business they were engaging in?
  - ceejayoz 11y ago
    Well, that still falls under the "Not behaving in a way that damages the reputation of his/her company or of YC" and "Generally behaving in a professional and upstanding way" rules listed on that page.
  - FireBeyond 11y ago
    "Our brokers were not properly trained and licensed by the state for the products we were selling" certainly sounds sales related to me.
Analemma_ 11y ago
I guess this is a useful lesson to any would-be founders who want to make a business out of breaking the law: make sure you don't break laws higher than those on the municipal level. The difference between Uber and Zenefits/Theranos is that cities have limited resources and angry citizens can convince them to back down (and if you lose, hey, just ignore that city and try somewhere else), whereas state and Federal agencies can nuke you at any time and don't really have to worry about the vox populi.
- nostrademons 11y ago
  It reminds me a bit of the Ben Horowitz essay "Why I did not go to jail" http://www.bhorowitz.com/why_i_did_not_go_to_jail http://www.bhorowitz.com/why_i_did_not_go_to_jail In general, laws are not something you want to fuck around with as a startup. You can break proprieties, you can do things that will piss certain people off (you're almost guaranteed to piss off your competitors if you're doing anything interesting, for example), and typical business ethics assumes that everybody is looking out for their own interests and can advocate for themselves. But when someone has explicitly said where the boundaries are - and particularly if that "someone" is a government - it's good to respect those.
  - x0x0 11y ago
    because I remembered reading it, there's a wee bit more to the story than Ben shares. It took a while to find it since Bloomberg reorganized their site [1] but here you go [2]. tl;dr: what Sharlene really went to jail for was more than shifting grant dates around (some by more than 60 days, which is more than a month last time I checked.) She appears to have changed grant and exercise dates both to increase income and to shift exercise income to long term capital gains, and then mislead auditors about these practices. Specifically, she want to jail for listing a false exercise date on her income tax return. The point is, according to the reporter, what she went to jail for was more clear-cut than Ben is claiming. [1] http://go.bloomberg.com/market-now/2014/02/12/dont-worry-ben-its-a-long-way-to-san-quenti/ http://go.bloomberg.com/market-now/2014/02/12/dont-worry-ben... [2] https://web.archive.org/web/20140309175428/http://go.bloomberg.com/market-now/2014/02/12/dont-worry-ben-its-a-long-way-to-san-quenti/ https://web.archive.org/web/20140309175428/http://go.bloombe...
tyre 11y ago
I used to work at Gusto (ZenPayroll back in my day) and dealing with Zenefits was always a pain for this reason. They were the consummate hackers, using screen scraping and automation to do whatever the hell they wanted. One nightmare example was when a bug in their "automated" system rewrote bank account information for tons of employees to just be the last 4 digits of their account number. Such a mess. Even if this weren't a tightly regulated industry, you're dealing with how people are paid and covered for health conditions. We didn't hire hackers[1] because that attitude just doesn't fit for certain classes of problems. Hats off to the investigative journalism by BuzzFeed, uncovering some frightening immaturity pervasive in Valley companies. [1] I authored this post about our hiring at the time: https://gusto.com/blog/zenpayroll-is-not-hiring-hackers/ https://gusto.com/blog/zenpayroll-is-not-hiring-hackers/
- deleted 11y ago
  [deleted]
- mixmastamyk 11y ago
  > uncovering some frightening immaturity pervasive in Valley companies. This is one of the dark sides to having an entire engineering team in the 25-30 age range. They can sling http just fine, but sometimes don't fully grasp the consequences of their work.
  - tyre 11y ago
    I was 22 when I started and cared very deeply about the consequences of what I was doing. It's more about heavily interviewing for alignment with your mission. If people care deeply about the problem you're solving — not just the technical problem, the people problem — then you're far less likely to have these issues. I interviewed dozens if not hundreds of people at ZP and there were two red flags for engineers: 1) They only care about the technical problems. In this case, they're likely to make decisions more aligned with "that's interesting" than "that helps our customers" 2) Once we raised our Series A, we had a lot of applicants wanting to join a rocket ship. I literally heard that in an interview with a Facebook engineer who found us by "googling startups with 9 figure valuations." If you care about growth at all costs, you're going to cut corners and fuck over your customer. Mission matters. Values matter. Interview for them.
maxcan 11y ago
In this one particular instance, good for them and its a shame that they got caught. I've had to watch quite a few of these "unskippable" videos for various government mandated trainings and there are a complete waste of time so that some bureaucrat can check a box and some company's lawyers can mitigate some liability. They don't educate the captive viewers and they don't protect consumers. Lets see how any customers were actually harmed by this.
- uptown 11y ago
  Yes, it should absolutely be up to the individual to decide whether they've met the legal requirements for their job. I hope my surgeons self-certify that they're ready to operate, and the technician that repairs the airline I'm flying on should have the last word on whether he's qualified to start tinkering with the ailerons!
  - scarmig 11y ago
    The spirit behind the hatred of the "you must stare at this screen for 52 hours" type requirements isn't that anyone should be able to do anything they want, but that it's a stupid requirement. Acknowledging the existence of a stupid requirement doesn't at all require thinking that all requirements are stupid. That said, I'd never want to do business with a company that thought it could choose to ignore certain requirements, and deceive regulators about their fulfillment of them, even if they're stupid requirements.
  - unethical_ban 11y ago
    If, after 8 years of med school, your surgeon had to sit through a 2 hour video made 15 years ago about "The importance of surgery" and "where to keep the scalpels", he's probably be a bit frustrated.
    - ___ab___ 11y ago
      The situation isn't really the same; these are valley sales-types making decisions about how to provide medical insurance to thousands, and it's likely that they haven't had any formal training on what (and what not) to do.
run4yourlives2 11y ago
Let's just forget about the entire ethical argument around breaking an existing policy/legal condition of doing business, as important as that is wrt health insurance. Who in their right mind thinks taking the time to design, then publish, a way to defeat a relatively straightforward education requirement is in any way a worthwhile thing to do? There is a level of ego there that goes beyond rational decision making: you aren't cheating the system for an advantage; you're cheating just because you can, because it makes you feel better than others. That's some borderline psychopathic behaviour really. Did Zenefits employees really gain anything from not having to complete the required 52 hours? Was it really that big of an ordeal? Or was this a matter of just being smug about 'not needing' to do some very basic requirement they felt was beneath them? There is an element of hubris there that is unbecoming in and of itself. These are (very minimal, really) licencing requirements. There is a minimal amount of effort that an employee should be expected to put in to do their job legally. The assumption is that exposure through time to the subject matter will increase knowledge. That may not be true in every situation, but it likely is in a majority; the rule exists. The exposure generated from choosing to "fight this battle" and losing is miles greater than any particular payoff achieved in victory. That alone indicates to me that the person in charge has a poor grasp of weighing risks/rewards, regardless of personal ethics. Some things just aren't worth fighting because the risks in losing are so disproportional to any net gain from winning. This is a perfect example. A good CEO needs to know how to pick and choose the hills to fight on. Lesson learned here: Not every component of your business needs to be disrupted. Some things aren't worth disrupting at all, really.
- stordoff 11y ago
  > Did Zenefits employees really gain anything from not having to complete the required 52 hours? Was it really that big of an ordeal? That was my first thought as well. I can see the appeal in streamlining (what at first glance seems like) an arbitrary process if the final exam is passed legitimately, but a one-time commitment of 52 hours at the start of employment (a good chunk of which you'd probably need to do anyway for the exam) barely seems worth bothering with. As you say, the risks are disproportionate - it certainly makes me wonder what other corners are being cut.
dang 11y ago
We changed the URL from http://techcrunch.com/2016/02/11/zenefits-under-investigation-in-california/ http://techcrunch.com/2016/02/11/zenefits-under-investigatio.... That article points to an earlier Buzzfeed story (http://www.buzzfeed.com/williamalden/zenefits-under-investigation-in-california http://www.buzzfeed.com/williamalden/zenefits-under-investig...), but since this one appears to be the current canonical source, we'll use it instead.
- uptown 11y ago
  Just curious - since you switched the URL, why did you credit this version instead of the one I submitted about an hour earlier? My submission was even referenced in a thread you'd replied to.
  - dang 11y ago
    I'm afraid I don't understand the question. What do you mean by "credit this version"?
    - uptown 11y ago
      When a link from a HN post is changed, and the link it's changed-to had previously been submitted by another user, should the "posted by" and karma attribution get re-assigned to the user who submitted the link to-which the story is re-pointed, or does attribution and karma continue to credit the user who submitted the link which was replaced? Just curious how the internals of link-replacement works.
      - dang 11y ago
        It's the latter. We do try to privilege the original submission when we can, but that's not always easy. It's a bit of a lottery who gets the karma in any individual case, but in the long run it evens out. We would like to make the duplicate detection system give more credit to original submitters. I used to think that didn't matter, but have changed my mind, because doing that would incentivize users to find good stories that no one has submitted yet, and that seems like it would be in the community's interest.
1stbubblevet 11y ago
I think the focus on "TheMacro" is a bit overblown. "TheMacro" sounds sinister, but AFAICS it just keeps a web session from expiring. Depending on Session timeout length, the 52 hour requirement can still be gamed by having multiple browser windows open.
trevmckendrick 11y ago
This is being way overblown IMO. If you've worked at a big, regulated company, you know there are tons of trainings that you have to do. Often said training provide little to no value, other than covering the ass (CYA'ing) of the employer. But what's worse: these programs will sometimes log you out if you're not paying 100% attention. Everyone I knew working at our Big 4 accounting firm would do our real work while these "training" videos played in the background. Some engineer likely thought s/he was helping everyone out. And rightly so...their time was likely much better spent in other places given their incredible growth.
- i_too_cheat 11y ago
  There is a bit of a difference between the training videos the big co's force you to watch and the training required to get certified by the state to do business in a highly regulated industry. I too created "macros" for the insufferable training they put you through, but it was for training videos on the "new" HTML4 standard and about the "new" invention ajax requests -- all while I was working on a team using angularjs every day.
- brown9-2 11y ago
  You are mistaking annual compliance training for things like "don't insider trade" for training on how to do the job legally to gain entrance into the profession.
- giarc 11y ago
  There's a huge difference between this happening and the CEO actively building the work around. When the CEO demonstrates this behaviour is appropriate, the whole company adopts this culture of "what laws?!". >That was how executives discovered the macro, which Conrad had created based on a belief that 52 hours was too long to spend in training, the lawyer for Sacks said.
- phonon 11y ago
  LIC-EN-SING This isn't some perfunctory blah-blah training. Unlike professions where you are expected to get a post-college degree and pass a multi-day difficult test given once or twice a year, all you need to become a health insurance broker is take some classes (in person or online) for a few hours, pass a test (which you can retake as often as you like) and pay ~$100. That's it! Zenefits is large enough they could actually not treat licensing as a nuisance (gotta SELL SELL SELL) but could have had a full time in-person instructor give a week+long onboarding/training/prelicensing class for every new sales-person. You know, so that people who are expected to be explaining the intricacies of health care laws and pro and cons of $100,000+ yearly group policies might actually know a little of what they are talking about. How many of those accountants didn't study ACCOUNTING for at least 52 hours?
batmansmk 11y ago
I moved in USA recently, so maybe can help me understanding the impact of this beyond not respecting the law. What value this license provides to american workers? Do the healthcare system get better with the help of trained brokers? Thanks!
- dininglogistics 11y ago
  Yeah it does, especially now in the USA because new healthcare laws don't allow insurance companies to refuse coverage to consumers for any reason. If you have medical issues, or your spouse does, or your kids do, a licensed knowledgeable health insurance professional will take the time to help you select a plan that will actually be beneficial for you and your family. Zenefits was hiring people who worked at the Yellow Pages and Yelp, previously selling advertising, and was turning them into "insurance brokers". Apparently in very short order. Healthcare is complicated, and assuming that it could be treated in such a careless and reckless manner, or that 52 hours of training is a waste of time, it is beyond irresponsible, it shows an incredible lack of respect for the companies that Zenefits is supposed to serve, people who are relying on them for advice on the most important benefit employers provide, and finally their families. It's shocking and sad that Parker, someone who survived cancer, would be careless with peoples lives. If Zenefits ended up being the "hub" that millions of consumers within the USA had to rely upon, there would be a lot of people hurt by that. There are lots of companies who not only struggled to get coverage for their employees via Zenefits, but some didn't end up getting coverage through them at all. I have heard direct from CEO's of some small but successful companies who very much wanted to support Zenefits, that they gave up on working with them after exhaustive efforts to get coverage that in some cases went on for as long as seven months. Not providing coverage for your employees for seven months, that's disgraceful. I can not imagine how the CEO's of these companies felt. Parker had to go, as should Sam Blonde, his right hand. Parker just cared about scaling the business, at any cost, he didn't care about the collateral damage.
merkle_tree 11y ago
All I can say is way to go! Buzzfeed journalist. Literally nothing positive came out of this for anyone. It sounds like all of the brokers were capable of completing the training material in under 52 hours. Now this is getting blown up #bureaucracy
deleted 11y ago
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ryporter 11y ago
How is Sacks able to assert moral authority when he was the COO working side by side with Conrad? Are there any Zenefits employees here who can tell us what the internal opinion is of the two?
free2rhyme214 11y ago
I think Parker is really, really smart. If you hear him talk he sounds like he's somewhere on the intelligence level of Patrick Collison. It's too bad he tried to shortcut a regulated industry but I'm curious what his next ambitions are.
leroy_masochist 11y ago
I wonder if this incident and others such as the recent Homejoy / Flymaids kerfuffle have caused PG to rethink whether he's still looking for "naughtiness" in founders [0]. That's not meant passive-aggressively. I completely get why naughtiness might be indicative of a propensity toward innovation -- it's a pretty straightforward and intuitive concept. I'm just wondering whether PG still puts as much faith in the heuristic as he used to. [0]: http://www.paulgraham.com/founders.html http://www.paulgraham.com/founders.html
- username223 11y ago
  I doubt it. "Naughtiness" is creativity combined with a lack of conscience, which is a good way to make a quick buck. Regulatory arbitrage or capture, exploiting known cognitive biases, and creating subtle information asymmetry should all feature prominently in "YC 1[6-9]."
  - leroy_masochist 11y ago
    If we're trying to define the better side of naughtiness, I'd substitute "an irreverent and inquisitive attitude" for "a lack of conscience" in your definition above.
wiseleo 11y ago
I took pre-license training while developing some software for insurance brokers to better understand their industry. There is not enough material there to spend 52 hours studying. You spend 12 hours on code and ethics, 20 hours on life, and 20 hours on medical. The material is very simple. The hourly requirement is based on the offline classroom, but should be compressed for online learning.
hosh 11y ago
Huh, I was wondering why the new CEO had emphasized culture and value on his day 1 letter.
deleted 11y ago
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BRValentine 11y ago
FWIW my company had a terrible, terrible experience with Zenefits and ditched them after less than a year. Incompetent customer service, crappy software (one problem we had was a result of a corrupted database record, according to one of their reps, that had to be manually corrected by a developer), no one seemed to know what they were doing. As a founder I told their reps multiple times that we were a startup too -- ostensibly their target market -- and that we were willing to work through some problems with them, but they didn't seem to care and frankly just kept fucking up. Once we hit 5 people we switched to TriNet and have gotten great service AND we're saving tons on the insurance side, even accounting for TriNet's monthly per-employee fee. Generally I avoid rooting for others to fail, but I can't help but feel just a teeny bit of schadenfreude with this recent news. For the last couple years I've been rolling my eyes with each new piece of breathless coverage. The Zenefits people are talking about now sounds a lot more like the one I experienced dealing with.
- jasonlaramburu 11y ago
  This sounds like sponsored content for TriNet :)
ralmidani 11y ago
One aspect of this whole debacle that needs to be highlighted more is the culture that allowed Zenefits to behave in shady ways. The culture I'm referring to is the "give me complex software, and host and maintain it for me, but have someone else pay for it" culture. Whether it's through intrusive ads, creepy data practices, and/or Zenefits-like shadiness, insisting that software should be paid for by anyone but the people using it is a disaster waiting to happen. I'm founder of a startup building an application that is free (as in freedom) for small businesses. If future customers want us to support and maintain the software for them, they will need to pay for it the old-fashioned way. Any other arrangement would compromise both our customers' interests, and our company's integrity.
gadders 11y ago
Move fast and break things. Laws, mostly.

296 points by LukeB_UK 11y ago

Can someone give me a good explanation of how the COO wasn't responsible for this kind of stuff? It's mind boggling to me how hard Sacks is throwing Conrad under the bus, despite possibly being just as guilty. I mean, I get it - power plays and all. But aren't they both responsible?

exw 11y ago
According to the article, Sacks discovered the issue in January, and then forced the company to report it to the California regulator - if you believe that sequence of events, he can't really be held accountable for the action of Conrad. Let's say you are an engineer, take a new role at a company to work on their database, and then discover that one or your managers has stolen money, do you think you should be held accountable, assuming that you report the issue immediately when you discover it?
timv 11y ago
You're questioning the reality, when all of this is about perception. The board needed to hold someone responsible for this mess in order to satisfy the regulators that they're taking the problem seriously, and things are different now. Effectively, the message they want to send is that the adults are in charge now. There was no way Conrad could stay. Even if they could somehow hide any evidence that he knew about the violations (and they probably couldn't), it's very clear from his public statements that he had built the fast and loose culture the had allowed and sustained the problems. He had to go and the message needed to be that the company has no place for him anymore. He's not stepping into a reduced role, he doesn't have a board seat, it's over, he's dead to us. Sacks has a different record. He wasn't there from the beginning, he hasn't been the public face of the "ready, fire, aim" culture, there's plausible deniability. And he has credentials to justify his position - Yammer, Microsoft, PayPal - he can be painted as a safe pair of hands. And, since he's been the COO for a year, he can step straight in an take over without needing a handover period from Conrad. The board need Sacks to stay on and be the new face of Zenefits. And they've decided that the regulator investigations are not going to find damning evidence against him. Maybe because he had no idea. Maybe because he was smart enough not to leave any evidence. Maybe because there's a paper trail of him reporting the issues up the chain in way that makes him look like the good guy. You're asking the question "How can a COO not know about all this stuff, and not have had some responsibility over it?" and that's a good and fair question - the regulators will ask it too. I take it the board will be able to provide a plausible answer to that question when the regulators come knocking. But that's not really the #1 question that the board's worried about. They want to know "who has the best chance of saving this company?" And what Sacks provides is: - Plausible deniability - Credibility in the market - Credibility with the regulators - Knows the business - Can do the job - Ready to start now There's no one else with those credentials, so Sacks needs to take the job. Once that's decided it's a matter of execution - almost literally. If Sacks is going to save Zenefits then he needs to look innocent, and blame Conrad for everything. That might actually be true, but that's actually not the key question for the board. They just need something that they can sell to the market and regulators.
- NDizzle 11y ago
  Thanks for taking the time to write that up. It makes sense from that perspective.
xkeemy 11y ago
Not to say Sacks shouldn't be responsible but, to my understanding, all of these issues being reported on are coming out of the sales org (which is what Parker primarily focused on) where as Sacks primary focus as COO was on post sales customer success (product, ops, support, etc.)

fennecfoxen 11y ago

The mandatory 52 hours spent logged into the course requirement hearkens back to this recent discussion on occupational licensing: https://news.ycombinator.com/item?id=11054527 https://news.ycombinator.com/item?id=11054527

taurath 11y ago
Its the same kind of restriction that would tie programmer pay to lines of code written. I understand it though to some extent - its more of a "cheating prevention" program, but I'll bet a very very very high percentage of test takers would find it a very large waste of time.
maxerickson 11y ago
However arbitrary or dumb it might be, it's still a rather low bar. edit: which I think might not sound how I intend it. I meant to get at it not requiring a great deal of investment of time or other resources to become an insurance broker.
- lmm 11y ago
  It shows a real lack of faith in the exam, I think. If the exam is testing the requirements of being an insurance broker correctly, why have an "x hours of training" requirement as well?
  - maxerickson 11y ago
    The interesting discussion from the occupational licensing story was whether a given licensing requirement creates an undue barrier to people that want to pursue the career. That's what I was getting at, regardless of how terrible this hours requirement might be, it doesn't create much of a barrier to people that want to become insurance brokers. It's little more than an inconvenience. (There's an argument to be made that an inane hours requirement is unfair to people that must work long hours to support themselves, but in this case it was the company urging paid employees to spend their time otherwise)

jasode 11y ago

Another source[1] had more info about "The Macro": Many of our California sales representatives received access to a software tool called a “Macro” that may have allowed them to complete mandatory online pre-licensing education courses offered by a third-party test preparation provider in less than the legally required 52 total hours. The Macro functioned to keep a person logged into the course and prevented the person from being logged out for inactivity. The Macro did not advance through the required material or quizzes in the education course -- the Macro only kept the person logged in. The Macro only pertained to the prelicensing education course and did not affect the broker exam taken later. Use of the Macro enabled -- but did not cause -- a person to spend less than the 52 hours of required time in the prelicensing course. Ok, I have no judgement about the morals of this but I think the "hacker" mentality is hilarious. I was at a Fortune 100 company that had an obligatory "security training" webcast that you had to watch and then at the end, answer some test questions. This was required to get a door badge and network id. Well, one programmer simply wrote a script to "watch" the video and automatically answer the questions. The manager knew we all used it and condoned it because the security video was out-of-date and irrelevant. I can see someone at Zenefits using that mentality and justifying it because skipping the training material gave them no benefit to passing the actual exam. [1]http://www.businessinsider.com/zenefits-using-secret-fake-training-2016-2 http://www.businessinsider.com/zenefits-using-secret-fake-tr...

zekevermillion 11y ago
Love the passive voice "may have received access to" -- OK, who gave them access I wonder? I would normally applaud the hacker mentality of using a computer to automate stupid or repetitive tasks, as long as any dishonesty is limited to a white lie. Like the obligatory security training video watching. But running a compliance company that doesn't comply seems more fundamentally problematic.
semi-extrinsic 11y ago
There is a bit of fun to be poked at startups/the hacker mentality in this case, sure. But what's appears to be a refreshing break from what happens when big corporations are caught red-handed, is that the leaders responsible have been fired/disciplined, while the employees on the floor have been told they will not be punished (though they will be if such things happen again). At least that's what I understand from the email reproduced in the BuzzFeed article linked in another comment.

minimaxir 11y ago

The BuzzFeed Article on Sacks' memo was written/submitted first and is more comprehensive: https://news.ycombinator.com/item?id=11083597 https://news.ycombinator.com/item?id=11083597

brown9-2 11y ago
HN seems to have what amounts to a systematic ban on buzzfeed, even though their news org helped break this story (and many others).
- maxerickson 11y ago
  There are several highly voted and discussed Buzzfeed articles in just the last couple days: https://hn.algolia.com/?query=buzzfeed&sort=byDate&prefix&page=0&dateRange=all&type=story https://hn.algolia.com/?query=buzzfeed&sort=byDate&prefix&pa... The previous increment of the Zenefits saga was one of them. I guess given that many of their articles aren't real topical here there is probably a penalty for the site, but it doesn't stop everything.
- mortenjorck 11y ago
  Buzzfeed's curious chimaera of its trademark virally-targeted fluff content and a burgeoning hard news organization probably merits at least some kind of reconsideration of the penalty applied to submissions on HN. It would be nice if Buzzfeed had something like a separate subdomain for its non-trivial content, but I'm not aware of any such thing that would enable automated differentiation.
- dang 11y ago
  Of course we don't: https://news.ycombinator.com/from?site=buzzfeed.com https://news.ycombinator.com/from?site=buzzfeed.com. Two of the biggest HN stories from the past two days alone were from Buzzfeed: https://news.ycombinator.com/item?id=11075336 https://news.ycombinator.com/item?id=11075336, https://news.ycombinator.com/item?id=11061992 https://news.ycombinator.com/item?id=11061992. Usually the complaint I hear is "why is Buzzfeed on HN". Buzzfeed is one of a class of sites that produce a lot of dreck as well as the occasional high-quality article. There are many such sites, mostly media outlets. HN's solution is to penalize them (a little) by default, but take the penalty off under different circumstances, such as if a moderator sees than an article is good or the submitter has a solid track record. This has proven to be a reasonable compromise. The alternatives—not penalizing these sites at all or banning them altogether—are a lot more problematic, which is how we arrived at this strategy in the first place.

jefftchan 11y ago

https://www.ycombinator.com/ethics/ https://www.ycombinator.com/ethics/ > Some examples of ethical behavior we expect from founders are: > ... > - Not using misleading, illegal or dishonest sales tactics. > ... Does this mean Parker is no longer a YC Founder, if the allegations turn out to be true?

Implicated 11y ago
I have a feeling it doesn't exactly work that way... How would someone be un-YC'd?
- calbear81 11y ago
  Meaning, ex-communicated from the YC network. Not be invited back to YC as a mentor, no demo day invites, etc.
iaw 11y ago
I don't think any of their sales tactics fell under "misleading, illegal, or dishonest." It was their California pre-certification practices that was blatantly illegal.
- jsprogrammer 11y ago
  Wouldn't they have represented that their employees were properly certified for the business they were engaging in?
- ceejayoz 11y ago
  Well, that still falls under the "Not behaving in a way that damages the reputation of his/her company or of YC" and "Generally behaving in a professional and upstanding way" rules listed on that page.
- FireBeyond 11y ago
  "Our brokers were not properly trained and licensed by the state for the products we were selling" certainly sounds sales related to me.

Analemma_ 11y ago

I guess this is a useful lesson to any would-be founders who want to make a business out of breaking the law: make sure you don't break laws higher than those on the municipal level. The difference between Uber and Zenefits/Theranos is that cities have limited resources and angry citizens can convince them to back down (and if you lose, hey, just ignore that city and try somewhere else), whereas state and Federal agencies can nuke you at any time and don't really have to worry about the vox populi.

nostrademons 11y ago
It reminds me a bit of the Ben Horowitz essay "Why I did not go to jail" http://www.bhorowitz.com/why_i_did_not_go_to_jail http://www.bhorowitz.com/why_i_did_not_go_to_jail In general, laws are not something you want to fuck around with as a startup. You can break proprieties, you can do things that will piss certain people off (you're almost guaranteed to piss off your competitors if you're doing anything interesting, for example), and typical business ethics assumes that everybody is looking out for their own interests and can advocate for themselves. But when someone has explicitly said where the boundaries are - and particularly if that "someone" is a government - it's good to respect those.
- x0x0 11y ago
  because I remembered reading it, there's a wee bit more to the story than Ben shares. It took a while to find it since Bloomberg reorganized their site [1] but here you go [2]. tl;dr: what Sharlene really went to jail for was more than shifting grant dates around (some by more than 60 days, which is more than a month last time I checked.) She appears to have changed grant and exercise dates both to increase income and to shift exercise income to long term capital gains, and then mislead auditors about these practices. Specifically, she want to jail for listing a false exercise date on her income tax return. The point is, according to the reporter, what she went to jail for was more clear-cut than Ben is claiming. [1] http://go.bloomberg.com/market-now/2014/02/12/dont-worry-ben-its-a-long-way-to-san-quenti/ http://go.bloomberg.com/market-now/2014/02/12/dont-worry-ben... [2] https://web.archive.org/web/20140309175428/http://go.bloomberg.com/market-now/2014/02/12/dont-worry-ben-its-a-long-way-to-san-quenti/ https://web.archive.org/web/20140309175428/http://go.bloombe...

tyre 11y ago

I used to work at Gusto (ZenPayroll back in my day) and dealing with Zenefits was always a pain for this reason. They were the consummate hackers, using screen scraping and automation to do whatever the hell they wanted. One nightmare example was when a bug in their "automated" system rewrote bank account information for tons of employees to just be the last 4 digits of their account number. Such a mess. Even if this weren't a tightly regulated industry, you're dealing with how people are paid and covered for health conditions. We didn't hire hackers[1] because that attitude just doesn't fit for certain classes of problems. Hats off to the investigative journalism by BuzzFeed, uncovering some frightening immaturity pervasive in Valley companies. [1] I authored this post about our hiring at the time: https://gusto.com/blog/zenpayroll-is-not-hiring-hackers/ https://gusto.com/blog/zenpayroll-is-not-hiring-hackers/

deleted 11y ago
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mixmastamyk 11y ago
> uncovering some frightening immaturity pervasive in Valley companies. This is one of the dark sides to having an entire engineering team in the 25-30 age range. They can sling http just fine, but sometimes don't fully grasp the consequences of their work.
- tyre 11y ago
  I was 22 when I started and cared very deeply about the consequences of what I was doing. It's more about heavily interviewing for alignment with your mission. If people care deeply about the problem you're solving — not just the technical problem, the people problem — then you're far less likely to have these issues. I interviewed dozens if not hundreds of people at ZP and there were two red flags for engineers: 1) They only care about the technical problems. In this case, they're likely to make decisions more aligned with "that's interesting" than "that helps our customers" 2) Once we raised our Series A, we had a lot of applicants wanting to join a rocket ship. I literally heard that in an interview with a Facebook engineer who found us by "googling startups with 9 figure valuations." If you care about growth at all costs, you're going to cut corners and fuck over your customer. Mission matters. Values matter. Interview for them.

maxcan 11y ago

In this one particular instance, good for them and its a shame that they got caught. I've had to watch quite a few of these "unskippable" videos for various government mandated trainings and there are a complete waste of time so that some bureaucrat can check a box and some company's lawyers can mitigate some liability. They don't educate the captive viewers and they don't protect consumers. Lets see how any customers were actually harmed by this.

uptown 11y ago
Yes, it should absolutely be up to the individual to decide whether they've met the legal requirements for their job. I hope my surgeons self-certify that they're ready to operate, and the technician that repairs the airline I'm flying on should have the last word on whether he's qualified to start tinkering with the ailerons!
- scarmig 11y ago
  The spirit behind the hatred of the "you must stare at this screen for 52 hours" type requirements isn't that anyone should be able to do anything they want, but that it's a stupid requirement. Acknowledging the existence of a stupid requirement doesn't at all require thinking that all requirements are stupid. That said, I'd never want to do business with a company that thought it could choose to ignore certain requirements, and deceive regulators about their fulfillment of them, even if they're stupid requirements.
- unethical_ban 11y ago
  If, after 8 years of med school, your surgeon had to sit through a 2 hour video made 15 years ago about "The importance of surgery" and "where to keep the scalpels", he's probably be a bit frustrated.
  - ___ab___ 11y ago
    The situation isn't really the same; these are valley sales-types making decisions about how to provide medical insurance to thousands, and it's likely that they haven't had any formal training on what (and what not) to do.

run4yourlives2 11y ago

Let's just forget about the entire ethical argument around breaking an existing policy/legal condition of doing business, as important as that is wrt health insurance. Who in their right mind thinks taking the time to design, then publish, a way to defeat a relatively straightforward education requirement is in any way a worthwhile thing to do? There is a level of ego there that goes beyond rational decision making: you aren't cheating the system for an advantage; you're cheating just because you can, because it makes you feel better than others. That's some borderline psychopathic behaviour really. Did Zenefits employees really gain anything from not having to complete the required 52 hours? Was it really that big of an ordeal? Or was this a matter of just being smug about 'not needing' to do some very basic requirement they felt was beneath them? There is an element of hubris there that is unbecoming in and of itself. These are (very minimal, really) licencing requirements. There is a minimal amount of effort that an employee should be expected to put in to do their job legally. The assumption is that exposure through time to the subject matter will increase knowledge. That may not be true in every situation, but it likely is in a majority; the rule exists. The exposure generated from choosing to "fight this battle" and losing is miles greater than any particular payoff achieved in victory. That alone indicates to me that the person in charge has a poor grasp of weighing risks/rewards, regardless of personal ethics. Some things just aren't worth fighting because the risks in losing are so disproportional to any net gain from winning. This is a perfect example. A good CEO needs to know how to pick and choose the hills to fight on. Lesson learned here: Not every component of your business needs to be disrupted. Some things aren't worth disrupting at all, really.

stordoff 11y ago
> Did Zenefits employees really gain anything from not having to complete the required 52 hours? Was it really that big of an ordeal? That was my first thought as well. I can see the appeal in streamlining (what at first glance seems like) an arbitrary process if the final exam is passed legitimately, but a one-time commitment of 52 hours at the start of employment (a good chunk of which you'd probably need to do anyway for the exam) barely seems worth bothering with. As you say, the risks are disproportionate - it certainly makes me wonder what other corners are being cut.

dang 11y ago

We changed the URL from http://techcrunch.com/2016/02/11/zenefits-under-investigation-in-california/ http://techcrunch.com/2016/02/11/zenefits-under-investigatio.... That article points to an earlier Buzzfeed story (http://www.buzzfeed.com/williamalden/zenefits-under-investigation-in-california http://www.buzzfeed.com/williamalden/zenefits-under-investig...), but since this one appears to be the current canonical source, we'll use it instead.

uptown 11y ago
Just curious - since you switched the URL, why did you credit this version instead of the one I submitted about an hour earlier? My submission was even referenced in a thread you'd replied to.
- dang 11y ago
  I'm afraid I don't understand the question. What do you mean by "credit this version"?
  - uptown 11y ago
    When a link from a HN post is changed, and the link it's changed-to had previously been submitted by another user, should the "posted by" and karma attribution get re-assigned to the user who submitted the link to-which the story is re-pointed, or does attribution and karma continue to credit the user who submitted the link which was replaced? Just curious how the internals of link-replacement works.
    - dang 11y ago
      It's the latter. We do try to privilege the original submission when we can, but that's not always easy. It's a bit of a lottery who gets the karma in any individual case, but in the long run it evens out. We would like to make the duplicate detection system give more credit to original submitters. I used to think that didn't matter, but have changed my mind, because doing that would incentivize users to find good stories that no one has submitted yet, and that seems like it would be in the community's interest.

1stbubblevet 11y ago

I think the focus on "TheMacro" is a bit overblown. "TheMacro" sounds sinister, but AFAICS it just keeps a web session from expiring. Depending on Session timeout length, the 52 hour requirement can still be gamed by having multiple browser windows open.

trevmckendrick 11y ago

This is being way overblown IMO. If you've worked at a big, regulated company, you know there are tons of trainings that you have to do. Often said training provide little to no value, other than covering the ass (CYA'ing) of the employer. But what's worse: these programs will sometimes log you out if you're not paying 100% attention. Everyone I knew working at our Big 4 accounting firm would do our real work while these "training" videos played in the background. Some engineer likely thought s/he was helping everyone out. And rightly so...their time was likely much better spent in other places given their incredible growth.

i_too_cheat 11y ago
There is a bit of a difference between the training videos the big co's force you to watch and the training required to get certified by the state to do business in a highly regulated industry. I too created "macros" for the insufferable training they put you through, but it was for training videos on the "new" HTML4 standard and about the "new" invention ajax requests -- all while I was working on a team using angularjs every day.
brown9-2 11y ago
You are mistaking annual compliance training for things like "don't insider trade" for training on how to do the job legally to gain entrance into the profession.
giarc 11y ago
There's a huge difference between this happening and the CEO actively building the work around. When the CEO demonstrates this behaviour is appropriate, the whole company adopts this culture of "what laws?!". >That was how executives discovered the macro, which Conrad had created based on a belief that 52 hours was too long to spend in training, the lawyer for Sacks said.
phonon 11y ago
LIC-EN-SING This isn't some perfunctory blah-blah training. Unlike professions where you are expected to get a post-college degree and pass a multi-day difficult test given once or twice a year, all you need to become a health insurance broker is take some classes (in person or online) for a few hours, pass a test (which you can retake as often as you like) and pay ~$100. That's it! Zenefits is large enough they could actually not treat licensing as a nuisance (gotta SELL SELL SELL) but could have had a full time in-person instructor give a week+long onboarding/training/prelicensing class for every new sales-person. You know, so that people who are expected to be explaining the intricacies of health care laws and pro and cons of $100,000+ yearly group policies might actually know a little of what they are talking about. How many of those accountants didn't study ACCOUNTING for at least 52 hours?

batmansmk 11y ago

I moved in USA recently, so maybe can help me understanding the impact of this beyond not respecting the law. What value this license provides to american workers? Do the healthcare system get better with the help of trained brokers? Thanks!

dininglogistics 11y ago
Yeah it does, especially now in the USA because new healthcare laws don't allow insurance companies to refuse coverage to consumers for any reason. If you have medical issues, or your spouse does, or your kids do, a licensed knowledgeable health insurance professional will take the time to help you select a plan that will actually be beneficial for you and your family. Zenefits was hiring people who worked at the Yellow Pages and Yelp, previously selling advertising, and was turning them into "insurance brokers". Apparently in very short order. Healthcare is complicated, and assuming that it could be treated in such a careless and reckless manner, or that 52 hours of training is a waste of time, it is beyond irresponsible, it shows an incredible lack of respect for the companies that Zenefits is supposed to serve, people who are relying on them for advice on the most important benefit employers provide, and finally their families. It's shocking and sad that Parker, someone who survived cancer, would be careless with peoples lives. If Zenefits ended up being the "hub" that millions of consumers within the USA had to rely upon, there would be a lot of people hurt by that. There are lots of companies who not only struggled to get coverage for their employees via Zenefits, but some didn't end up getting coverage through them at all. I have heard direct from CEO's of some small but successful companies who very much wanted to support Zenefits, that they gave up on working with them after exhaustive efforts to get coverage that in some cases went on for as long as seven months. Not providing coverage for your employees for seven months, that's disgraceful. I can not imagine how the CEO's of these companies felt. Parker had to go, as should Sam Blonde, his right hand. Parker just cared about scaling the business, at any cost, he didn't care about the collateral damage.

merkle_tree 11y ago

All I can say is way to go! Buzzfeed journalist. Literally nothing positive came out of this for anyone. It sounds like all of the brokers were capable of completing the training material in under 52 hours. Now this is getting blown up #bureaucracy

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ryporter 11y ago

How is Sacks able to assert moral authority when he was the COO working side by side with Conrad? Are there any Zenefits employees here who can tell us what the internal opinion is of the two?

free2rhyme214 11y ago

I think Parker is really, really smart. If you hear him talk he sounds like he's somewhere on the intelligence level of Patrick Collison. It's too bad he tried to shortcut a regulated industry but I'm curious what his next ambitions are.

leroy_masochist 11y ago

I wonder if this incident and others such as the recent Homejoy / Flymaids kerfuffle have caused PG to rethink whether he's still looking for "naughtiness" in founders [0]. That's not meant passive-aggressively. I completely get why naughtiness might be indicative of a propensity toward innovation -- it's a pretty straightforward and intuitive concept. I'm just wondering whether PG still puts as much faith in the heuristic as he used to. [0]: http://www.paulgraham.com/founders.html http://www.paulgraham.com/founders.html

username223 11y ago
I doubt it. "Naughtiness" is creativity combined with a lack of conscience, which is a good way to make a quick buck. Regulatory arbitrage or capture, exploiting known cognitive biases, and creating subtle information asymmetry should all feature prominently in "YC 1[6-9]."
- leroy_masochist 11y ago
  If we're trying to define the better side of naughtiness, I'd substitute "an irreverent and inquisitive attitude" for "a lack of conscience" in your definition above.

wiseleo 11y ago

I took pre-license training while developing some software for insurance brokers to better understand their industry. There is not enough material there to spend 52 hours studying. You spend 12 hours on code and ethics, 20 hours on life, and 20 hours on medical. The material is very simple. The hourly requirement is based on the offline classroom, but should be compressed for online learning.

hosh 11y ago

Huh, I was wondering why the new CEO had emphasized culture and value on his day 1 letter.

deleted 11y ago

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BRValentine 11y ago

FWIW my company had a terrible, terrible experience with Zenefits and ditched them after less than a year. Incompetent customer service, crappy software (one problem we had was a result of a corrupted database record, according to one of their reps, that had to be manually corrected by a developer), no one seemed to know what they were doing. As a founder I told their reps multiple times that we were a startup too -- ostensibly their target market -- and that we were willing to work through some problems with them, but they didn't seem to care and frankly just kept fucking up. Once we hit 5 people we switched to TriNet and have gotten great service AND we're saving tons on the insurance side, even accounting for TriNet's monthly per-employee fee. Generally I avoid rooting for others to fail, but I can't help but feel just a teeny bit of schadenfreude with this recent news. For the last couple years I've been rolling my eyes with each new piece of breathless coverage. The Zenefits people are talking about now sounds a lot more like the one I experienced dealing with.

jasonlaramburu 11y ago
This sounds like sponsored content for TriNet :)

ralmidani 11y ago

One aspect of this whole debacle that needs to be highlighted more is the culture that allowed Zenefits to behave in shady ways. The culture I'm referring to is the "give me complex software, and host and maintain it for me, but have someone else pay for it" culture. Whether it's through intrusive ads, creepy data practices, and/or Zenefits-like shadiness, insisting that software should be paid for by anyone but the people using it is a disaster waiting to happen. I'm founder of a startup building an application that is free (as in freedom) for small businesses. If future customers want us to support and maintain the software for them, they will need to pay for it the old-fashioned way. Any other arrangement would compromise both our customers' interests, and our company's integrity.

gadders 11y ago

Move fast and break things. Laws, mostly.