11 ms·

How High-Flying Zenefits Fell to Earth

102 points by bootload 11y ago

skywhopper 11y ago
I'm out of the loop with SV startup culture, but banning alcohol in the office is "a step that many in tech would view as crossing a red line"? I hope I'm reading that wrong. If there are restrictions as to time and place, then sure some alcohol in the office might be okay, but as a general rule alcohol + work = problems.
- rm_-rf_slash 11y ago
  The typical SV startup attitude is often: "get it done, we don't care how." There are good reasons for this. People - especially in SV - value their freedom. Having that peace of mind allows them to focus, which can be better than the old school, Java-shop, get-20-support-tickets-done-by-Friday style of management. Another reason: there's a reason startup offices are so "fun": they don't want you to leave. Nerf guns and hard liquor make the office seem like a place to hang out at, so working 10,12,14+ hours a day doesn't seem so bad. You're hanging out with your friends, right? Overtime pay? Never heard of it. We get stock options right? No, our founders wouldn't dilute our shares to favor late stage investors, would they? So maybe that's the problem.
  - deleted 11y ago
    [deleted]
- SFjulie1 11y ago
  You read correctly. And it has consequences. The startup culture is very toxic in terms of use of psychotrops. People takes all kind of drugs (alcohol included) often with a laxist attitude from supervisors and drugs + workload + stress = lot of catastrophs. Ho! And of course, the more crunches the more open bar there are to reward you from keeping on with the good job and release the pressure. EDIT and it happens that drinking overlaps with production duties during crunches, when people are already lacking of rest. Thus, generating of course more production incidents. Startup are brain crunchers and are free to go on since there is no legal liability for this, and they don't pay the price for the damages since they just fire burnt out employees who have to pay for fixing themselves afterward and tell customers there are no guarantees software works, it is a lose-lose-win situation.
- bbulkow 11y ago
  SV startup culture has been about personal responsibility since at least the glory days of Atari, which ( according to my sources and a published movie ) had an MRD - Marjuana Research Division - built in a small rooftop shack, and sometimes meetings would be in the MRD. Reputedly, people had nitrous tanks in the office, too, and would huff during the workday. Apple really championed the "beer bust" culture in the early 90's. I have been in "dry offices" and do find it a morale killer, because there's the sense that the HR department knows better than you. We have beer in our office, and a bottle or two of hard stuff, but honestly no one ever touches it. We have a hard working and professional culture and know alcohol and coding don't mix. ( Or, as I say, "Don't drink and write drivers." ) Sometimes the inside sales guys knock off at 3pm on a friday and have a can of beer. They start early - calling the east coast - so it's good to see them blowing off a little. More professionally, we tend to troop to the dive bar around the corner, which is honestly more fun than setting up a kegerator. Having beer and not drinking it is a more solid culture than banning beer from the top.
- goldbrick 11y ago
  I've had a number of jobs in different cities (none in SV and only a couple that were really "startups") and I find it completely normal to have alcohol in the office and eerily sterile to ban it. Nobody really starts drinking before 5pm and almost everybody finishes up their work for the day first. I've never found it to be a problem. I would have a hard time trusting people that I felt like I couldn't have a drink with.
ivraatiems 11y ago
> “Zenefits has changed a TON in the past couple weeks, and because of that a large part of what I fell in love with at the company no longer exists,” this employee, who insisted on anonymity, said in an email. “For Zenefits employees, it literally feels as if our Zenefamily was overthrown and replaced with government officials that could care less if we come or go. > “It’s almost as if they want us all to quit so they can start over.” Oh, wow, gee, that's so awful! Wow! I'm so sorry you can't get away with lying to the government and your customers any longer. I'm so sorry you can't get drunk at work and pretend you're still in college! Oh, this is just awful. Won't somebody do something? (/s, as if it were necessary) The "move fast, break things, grow as much as possible" mindset is not always a good thing. If the product you're making has high potential and low risk, if it's replacing something that isn't critical to people's safety and livelihood or to your customer's day-to-day operations, it's great. If you're making something new the world has never seen before, it's great. But if you're making sure people are getting paid and have medical coverage? That's not an area where it's an acceptable mentality. I think the issue here is not so much that this ethos is fundamentally flawed (though I guess one could make that case), it's that it is not universal and shouldn't have been treated as if it were. Also - respect to Buzzfeed for taking what could have been a hit piece and making it fairly comprehensive/thoughtful. (edit: formatting)
- deleted 11y ago
  [deleted]
  - simonw 11y ago
    Yep - and Buzzfeed have been on a bit of a streak of hiring high-caliber journalists recently (cynically, I imagine they are helped by the fact that many of the old-guard publications are having to cut their staff).
- sgrove 11y ago
  Your reply would have been significantly more compelling without the sarcastic rant. Your point afterwards is worthwhile, but the first paragraph made me sad to read.
ryan606 11y ago
So was Lars Dalgaard from A16Z pushing Zenefits to grow faster, or more methodically? This article makes it seem like he was trying to have it both ways, or maybe it was just Lars trying an after-the-truth comes out CYA?
leroy_masochist 11y ago
> While Conrad had planned to hire 20 sales reps by the end of 2014, Dalgaard said the target should be five times that. “You guys gotta get your heads out of your asses, start focusing on going big here,” Dalgaard said, according to Conrad. Conrad and Dalgaard would later clash, with the investor pushing the CEO to stop hiring altogether in the summer of 2015, a person familiar with the matter said. Dalgaard also urged Conrad to run audits, conduct an employee survey, hire more top executives, and expand the board — all things that Conrad resisted, this person said. Hmmmm, "a person familiar with the matter" sure makes it sound like Dalgaard was doing everything in his power to encourage Conrad to act responsibly. I wonder who this person could possibly be and whether they have a personal agenda of some sort. Does it strike anyone else as maybe a little bit irresponsible that a partner at one of the world's preeminent VC firms would pressure a founder-CEO to hire as aggressively as possible and shortly thereafter castigate said founder-CEO for their company exhibiting all the telltale signs of hiring too quickly?
Avenger42 11y ago
> Managers urged new recruits to try to score not much higher than the minimum passing grade of 60% on the California broker license exam. I don't get why the passing grade is so low. At the very least, I'd want someone who only scores a 60 (and thus is barely qualified) to be forced to take it again the following year to ensure they're still qualified. I wonder if you could enforce a graduated system based on scores? If you score a 60-70, you have to re-certify the following year; if you score a 70-80, you have to re-certify in two years, and so on. In that case, scoring as high as possible is in the best interest of companies, because then their employees go as far as possible before having to retake the test.
bbulkow 11y ago
Potential customer here. One guy's experience. As a technical founder of my own company, the founder of Zenefits ( reportedly, they maybe use that line but coming from standard sales reps ) reached out and suggested I take a look at Zenefits. I looked. I asked two different "startup CFOs" about Zenefits. I found the following conclusions: * The market is crowded. Trinet is what everyone in the valley has been using, and no one has serious problems with them. It's not like, you know, fighting the intrenched taxi mafia. Zenefits is not disrupting anything, they're simply competing. * According to my sources, Zenefits is the hardest company to work with of benefits suppliers. Compared to Trinet, when your CFO-type calls Zenefits, they get long wait times and unprofessional answers. One of my sources was forced to use Zenefits ( by a founder ) and considered them a time sink. * High prices. Because of a small installed base, Zenefits didn't have the ability to create a large insurance pool and have market power with insurers. They claimed low prices, and did have low prices for their service, but the numbers penciled out higher because of higher health insurance prices. If they think prices go down when they get bigger, maybe the would have needed to subsidize prices. Not a win. Part of our startup culture these days is "damn the law, make customers happy". I'm not super thrilled about that attitude, but it is what it is. The zing against Zenefits in this article is poor technology ( uh, chasing MPV is all about poor technology ), and poor legal practices. I honestly didn't care about either - I care about user experience and prices. My internal recommendation not to use Zenefits was poor user experience, and high prices. I didn't like having a sales person tell me prices were low when I had done my research and prices were higher. I didn't like being told Zenefits was easy to use when my people said it was harder to use. And, yes, I sent a note outlining all the to the founder, in the interest of helping a brother out. I don't remember what I got back, but it wasn't encouraging.
minimaxir 11y ago
Note: there is a lot of new information in this article relative to the previous articles this week. (!) Such as the party culture and the influence of a16z.
- bootload 11y ago
  "there is a lot of new information in this article relative to the previous articles this week" Didn't see the previous ones, [0] and lots of them. What did stick out, was this quote: "“Why are you guys so fucking bush league?” Dalgaard said, according to Conrad, who recounted the conversation while on stage at a software conference in February 2015. While Conrad had planned to hire 20 sales reps by the end of 2014, Dalgaard said the target should be five times that. “You guys gotta get your heads out of your asses, start focusing on going big here,” Dalgaard said, according to Conrad." The expectation from Lars Dalgaard of Andreessen Horowitz to grow big at ^all costs^. VC money egging on the unethical. [0] https://hn.algolia.com/?query=zenifits&sort=byPopularity&prefix&page=0&dateRange=all&type=story https://hn.algolia.com/?query=zenifits&sort=byPopularity&pre...
  - minimaxir 11y ago
    Correct URL: https://hn.algolia.com/?query=zenefits&sort=byDate&prefix=false&page=0&dateRange=all&type=story https://hn.algolia.com/?query=zenefits&sort=byDate&prefix=fa...
    - bootload 11y ago
      thx @minimaxir
dkarapetyan 11y ago
This is beating a dead horse at this point. We get it. Hypergrowth at all costs is not cool.
lpsz 11y ago
I'm still not catching why selling insurance requires licensing. This is not practicing medicine, this is not giving people haircuts, it's not even preparing food, all of which make sense to be regulated. It's just selecting from a list of plans. In an ideal world, people/employers should just be able to do it themselves and cut out the middleman.
- skyhatch1 11y ago
  Imagine someone comes along and convinces you that you need insurance. Years later, you finally need to make a claim. You call the insurance company only to learn your situation was underinsured or not insured correctly at all. In that situation, they have no legal obligation to pay you. This would not have happened if the person selling you the insurance was under a legal (read: license) obligation to provide you the most appropriate insurance.
  - prostoalex 11y ago
    Do agents have a legal obligation to set the customer up with the most appropriate insurance possible? I could see how even an old-school agent could forget to mention earthquake insurance for home insurance or lack of acupuncture in health plan.
- mmayberry 11y ago
  you would rather the guy who cuts your hair have a license than the person that picks your health plan?
- st3v3r 11y ago
  "I'm still not catching why selling insurance requires licensing" Well, reading what Zenefits was doing, and how badly they screwed up might enlighten you.
- smileysteve 11y ago
  Especially that licensing requires X time in an app. Test about consumer protection, knowledge, or meanings, but don't require meaningless time.
achow 11y ago
Now I'm wondering whether Zenefits was even a technology startup or more of a hustler operation which went online. Excerpt: Zenefits’ technology was frustratingly limited. The software is built around a central dashboard and lets small businesses onboard new employees, generate health insurance quotes, and manage 401(k) plans and other benefits. But while this system looked slick and did a fine job with small tasks, much of the important work on the backend was done manually. “The back office is really heavy in terms of bodies,” one former Zenefits employee said. “It’s really archaic. It just seems automatic to the customer.” This kind of work is standard practice in the insurance brokerage business, but it’s notable for Zenefits, which purports to be an “automated” solution. The lack of true automation behind the scenes led to numerous problems. With one customer, Plated, a food delivery startup in New York, mistakes by Zenefits staff in entering payroll deduction information caused a string of erroneous paychecks to be issued, according to one former employee and an online comment by Plated co-founder Nick Taranto. Zenefits is “not connected well enough with payroll providers,” Taranto wrote, “so we’re having to cut lots of manual checks.” The first public indication that something was amiss at Zenefits came last summer, when BuzzFeed News reported that customers were complaining of software glitches and seemingly careless errors.
- puranjay 11y ago
  This reminds me of FoodPanda India, the Indian arm of Samwer Brothers' FoodPanda food delivery service. The app was just a front-end. When customers ordered something, people sitting in call-centers would manually order the items at restaurants. There was zero compliance, widespread scams and no checks and balances, all along with minimal technology. Full story for anyone interested: http://www.livemint.com/Companies/rYKC6HjnShogjE62jO5lpK/The-trouble-with-Foodpanda.html http://www.livemint.com/Companies/rYKC6HjnShogjE62jO5lpK/The... I'm becoming more and more cynical of the startup world and the press that makes founders out to be heroes.
  - brianwawok 11y ago
    Startups are supposed to do things that don't scale. Seems a reasonable way to get going..
vincentleeuwen 11y ago
"Pervading the offices in San Francisco and Arizona, meanwhile, was an almost fraternity-like atmosphere, with whiskey shots, kegs, and bottles of champagne." Sounds like an awesome place to work.
- x1024 11y ago
  "until the money runs out".
- nols 11y ago
  Just not a good place to do business with. I can appreciate having fun at work, believe me I can, but as someone who spent nearly a month without insurance because of a screw-up on my insurance company's side (completely unrelated to Zenefits), and the absurd lengths I had to go to to fix their problem, seeing all this shoddy work on Zenefits end makes me really sympathetic to their customers. Medical insurance is heavily regulated for a reason, and I can't imagine the clusterfuck that could happen if Zenefits screwed something up when providing insurance for a company and one of its employees ended up without insurance and then used their (nonexistent) insurance at the hospital.
  - Smushman 11y ago
    I have to say that your attitude here is more forgiving than is deserved. Problems such as being without proper health insurance can cost lives. I myself have been forgiving in the past about such things; but that attitude was born out of an ignorance I had that everything on the back end was being handled as well as possible. After reading this article I am now much more concerned.
- ivraatiems 11y ago
  Sure. Also sounds like a sexual harassment lawsuit/insurance liability/customer privacy catastrophe waiting to happen.
  - simonswords82 11y ago
    Buzz Killington.
shade23 11y ago
on a side note: Loving the diversity of buzzfeed. FB would be filled with listicles And HN would get the occasional long form article which is a very intersting read

102 points by bootload 11y ago

I'm out of the loop with SV startup culture, but banning alcohol in the office is "a step that many in tech would view as crossing a red line"? I hope I'm reading that wrong. If there are restrictions as to time and place, then sure some alcohol in the office might be okay, but as a general rule alcohol + work = problems.

rm_-rf_slash 11y ago
The typical SV startup attitude is often: "get it done, we don't care how." There are good reasons for this. People - especially in SV - value their freedom. Having that peace of mind allows them to focus, which can be better than the old school, Java-shop, get-20-support-tickets-done-by-Friday style of management. Another reason: there's a reason startup offices are so "fun": they don't want you to leave. Nerf guns and hard liquor make the office seem like a place to hang out at, so working 10,12,14+ hours a day doesn't seem so bad. You're hanging out with your friends, right? Overtime pay? Never heard of it. We get stock options right? No, our founders wouldn't dilute our shares to favor late stage investors, would they? So maybe that's the problem.
- deleted 11y ago
  [deleted]
SFjulie1 11y ago
You read correctly. And it has consequences. The startup culture is very toxic in terms of use of psychotrops. People takes all kind of drugs (alcohol included) often with a laxist attitude from supervisors and drugs + workload + stress = lot of catastrophs. Ho! And of course, the more crunches the more open bar there are to reward you from keeping on with the good job and release the pressure. EDIT and it happens that drinking overlaps with production duties during crunches, when people are already lacking of rest. Thus, generating of course more production incidents. Startup are brain crunchers and are free to go on since there is no legal liability for this, and they don't pay the price for the damages since they just fire burnt out employees who have to pay for fixing themselves afterward and tell customers there are no guarantees software works, it is a lose-lose-win situation.
bbulkow 11y ago
SV startup culture has been about personal responsibility since at least the glory days of Atari, which ( according to my sources and a published movie ) had an MRD - Marjuana Research Division - built in a small rooftop shack, and sometimes meetings would be in the MRD. Reputedly, people had nitrous tanks in the office, too, and would huff during the workday. Apple really championed the "beer bust" culture in the early 90's. I have been in "dry offices" and do find it a morale killer, because there's the sense that the HR department knows better than you. We have beer in our office, and a bottle or two of hard stuff, but honestly no one ever touches it. We have a hard working and professional culture and know alcohol and coding don't mix. ( Or, as I say, "Don't drink and write drivers." ) Sometimes the inside sales guys knock off at 3pm on a friday and have a can of beer. They start early - calling the east coast - so it's good to see them blowing off a little. More professionally, we tend to troop to the dive bar around the corner, which is honestly more fun than setting up a kegerator. Having beer and not drinking it is a more solid culture than banning beer from the top.
goldbrick 11y ago
I've had a number of jobs in different cities (none in SV and only a couple that were really "startups") and I find it completely normal to have alcohol in the office and eerily sterile to ban it. Nobody really starts drinking before 5pm and almost everybody finishes up their work for the day first. I've never found it to be a problem. I would have a hard time trusting people that I felt like I couldn't have a drink with.

ivraatiems 11y ago

> “Zenefits has changed a TON in the past couple weeks, and because of that a large part of what I fell in love with at the company no longer exists,” this employee, who insisted on anonymity, said in an email. “For Zenefits employees, it literally feels as if our Zenefamily was overthrown and replaced with government officials that could care less if we come or go. > “It’s almost as if they want us all to quit so they can start over.” Oh, wow, gee, that's so awful! Wow! I'm so sorry you can't get away with lying to the government and your customers any longer. I'm so sorry you can't get drunk at work and pretend you're still in college! Oh, this is just awful. Won't somebody do something? (/s, as if it were necessary) The "move fast, break things, grow as much as possible" mindset is not always a good thing. If the product you're making has high potential and low risk, if it's replacing something that isn't critical to people's safety and livelihood or to your customer's day-to-day operations, it's great. If you're making something new the world has never seen before, it's great. But if you're making sure people are getting paid and have medical coverage? That's not an area where it's an acceptable mentality. I think the issue here is not so much that this ethos is fundamentally flawed (though I guess one could make that case), it's that it is not universal and shouldn't have been treated as if it were. Also - respect to Buzzfeed for taking what could have been a hit piece and making it fairly comprehensive/thoughtful. (edit: formatting)

deleted 11y ago
[deleted]
- simonw 11y ago
  Yep - and Buzzfeed have been on a bit of a streak of hiring high-caliber journalists recently (cynically, I imagine they are helped by the fact that many of the old-guard publications are having to cut their staff).
sgrove 11y ago
Your reply would have been significantly more compelling without the sarcastic rant. Your point afterwards is worthwhile, but the first paragraph made me sad to read.

ryan606 11y ago

So was Lars Dalgaard from A16Z pushing Zenefits to grow faster, or more methodically? This article makes it seem like he was trying to have it both ways, or maybe it was just Lars trying an after-the-truth comes out CYA?

leroy_masochist 11y ago

> While Conrad had planned to hire 20 sales reps by the end of 2014, Dalgaard said the target should be five times that. “You guys gotta get your heads out of your asses, start focusing on going big here,” Dalgaard said, according to Conrad. Conrad and Dalgaard would later clash, with the investor pushing the CEO to stop hiring altogether in the summer of 2015, a person familiar with the matter said. Dalgaard also urged Conrad to run audits, conduct an employee survey, hire more top executives, and expand the board — all things that Conrad resisted, this person said. Hmmmm, "a person familiar with the matter" sure makes it sound like Dalgaard was doing everything in his power to encourage Conrad to act responsibly. I wonder who this person could possibly be and whether they have a personal agenda of some sort. Does it strike anyone else as maybe a little bit irresponsible that a partner at one of the world's preeminent VC firms would pressure a founder-CEO to hire as aggressively as possible and shortly thereafter castigate said founder-CEO for their company exhibiting all the telltale signs of hiring too quickly?

Avenger42 11y ago

> Managers urged new recruits to try to score not much higher than the minimum passing grade of 60% on the California broker license exam. I don't get why the passing grade is so low. At the very least, I'd want someone who only scores a 60 (and thus is barely qualified) to be forced to take it again the following year to ensure they're still qualified. I wonder if you could enforce a graduated system based on scores? If you score a 60-70, you have to re-certify the following year; if you score a 70-80, you have to re-certify in two years, and so on. In that case, scoring as high as possible is in the best interest of companies, because then their employees go as far as possible before having to retake the test.

bbulkow 11y ago

Potential customer here. One guy's experience. As a technical founder of my own company, the founder of Zenefits ( reportedly, they maybe use that line but coming from standard sales reps ) reached out and suggested I take a look at Zenefits. I looked. I asked two different "startup CFOs" about Zenefits. I found the following conclusions: * The market is crowded. Trinet is what everyone in the valley has been using, and no one has serious problems with them. It's not like, you know, fighting the intrenched taxi mafia. Zenefits is not disrupting anything, they're simply competing. * According to my sources, Zenefits is the hardest company to work with of benefits suppliers. Compared to Trinet, when your CFO-type calls Zenefits, they get long wait times and unprofessional answers. One of my sources was forced to use Zenefits ( by a founder ) and considered them a time sink. * High prices. Because of a small installed base, Zenefits didn't have the ability to create a large insurance pool and have market power with insurers. They claimed low prices, and did have low prices for their service, but the numbers penciled out higher because of higher health insurance prices. If they think prices go down when they get bigger, maybe the would have needed to subsidize prices. Not a win. Part of our startup culture these days is "damn the law, make customers happy". I'm not super thrilled about that attitude, but it is what it is. The zing against Zenefits in this article is poor technology ( uh, chasing MPV is all about poor technology ), and poor legal practices. I honestly didn't care about either - I care about user experience and prices. My internal recommendation not to use Zenefits was poor user experience, and high prices. I didn't like having a sales person tell me prices were low when I had done my research and prices were higher. I didn't like being told Zenefits was easy to use when my people said it was harder to use. And, yes, I sent a note outlining all the to the founder, in the interest of helping a brother out. I don't remember what I got back, but it wasn't encouraging.

minimaxir 11y ago

Note: there is a lot of new information in this article relative to the previous articles this week. (!) Such as the party culture and the influence of a16z.

bootload 11y ago
"there is a lot of new information in this article relative to the previous articles this week" Didn't see the previous ones, [0] and lots of them. What did stick out, was this quote: "“Why are you guys so fucking bush league?” Dalgaard said, according to Conrad, who recounted the conversation while on stage at a software conference in February 2015. While Conrad had planned to hire 20 sales reps by the end of 2014, Dalgaard said the target should be five times that. “You guys gotta get your heads out of your asses, start focusing on going big here,” Dalgaard said, according to Conrad." The expectation from Lars Dalgaard of Andreessen Horowitz to grow big at ^all costs^. VC money egging on the unethical. [0] https://hn.algolia.com/?query=zenifits&sort=byPopularity&prefix&page=0&dateRange=all&type=story https://hn.algolia.com/?query=zenifits&sort=byPopularity&pre...
- minimaxir 11y ago
  Correct URL: https://hn.algolia.com/?query=zenefits&sort=byDate&prefix=false&page=0&dateRange=all&type=story https://hn.algolia.com/?query=zenefits&sort=byDate&prefix=fa...
  - bootload 11y ago
    thx @minimaxir

dkarapetyan 11y ago

This is beating a dead horse at this point. We get it. Hypergrowth at all costs is not cool.

lpsz 11y ago

I'm still not catching why selling insurance requires licensing. This is not practicing medicine, this is not giving people haircuts, it's not even preparing food, all of which make sense to be regulated. It's just selecting from a list of plans. In an ideal world, people/employers should just be able to do it themselves and cut out the middleman.

skyhatch1 11y ago
Imagine someone comes along and convinces you that you need insurance. Years later, you finally need to make a claim. You call the insurance company only to learn your situation was underinsured or not insured correctly at all. In that situation, they have no legal obligation to pay you. This would not have happened if the person selling you the insurance was under a legal (read: license) obligation to provide you the most appropriate insurance.
- prostoalex 11y ago
  Do agents have a legal obligation to set the customer up with the most appropriate insurance possible? I could see how even an old-school agent could forget to mention earthquake insurance for home insurance or lack of acupuncture in health plan.
mmayberry 11y ago
you would rather the guy who cuts your hair have a license than the person that picks your health plan?
st3v3r 11y ago
"I'm still not catching why selling insurance requires licensing" Well, reading what Zenefits was doing, and how badly they screwed up might enlighten you.
smileysteve 11y ago
Especially that licensing requires X time in an app. Test about consumer protection, knowledge, or meanings, but don't require meaningless time.

achow 11y ago

Now I'm wondering whether Zenefits was even a technology startup or more of a hustler operation which went online. Excerpt: Zenefits’ technology was frustratingly limited. The software is built around a central dashboard and lets small businesses onboard new employees, generate health insurance quotes, and manage 401(k) plans and other benefits. But while this system looked slick and did a fine job with small tasks, much of the important work on the backend was done manually. “The back office is really heavy in terms of bodies,” one former Zenefits employee said. “It’s really archaic. It just seems automatic to the customer.” This kind of work is standard practice in the insurance brokerage business, but it’s notable for Zenefits, which purports to be an “automated” solution. The lack of true automation behind the scenes led to numerous problems. With one customer, Plated, a food delivery startup in New York, mistakes by Zenefits staff in entering payroll deduction information caused a string of erroneous paychecks to be issued, according to one former employee and an online comment by Plated co-founder Nick Taranto. Zenefits is “not connected well enough with payroll providers,” Taranto wrote, “so we’re having to cut lots of manual checks.” The first public indication that something was amiss at Zenefits came last summer, when BuzzFeed News reported that customers were complaining of software glitches and seemingly careless errors.

puranjay 11y ago
This reminds me of FoodPanda India, the Indian arm of Samwer Brothers' FoodPanda food delivery service. The app was just a front-end. When customers ordered something, people sitting in call-centers would manually order the items at restaurants. There was zero compliance, widespread scams and no checks and balances, all along with minimal technology. Full story for anyone interested: http://www.livemint.com/Companies/rYKC6HjnShogjE62jO5lpK/The-trouble-with-Foodpanda.html http://www.livemint.com/Companies/rYKC6HjnShogjE62jO5lpK/The... I'm becoming more and more cynical of the startup world and the press that makes founders out to be heroes.
- brianwawok 11y ago
  Startups are supposed to do things that don't scale. Seems a reasonable way to get going..

vincentleeuwen 11y ago

"Pervading the offices in San Francisco and Arizona, meanwhile, was an almost fraternity-like atmosphere, with whiskey shots, kegs, and bottles of champagne." Sounds like an awesome place to work.

x1024 11y ago
"until the money runs out".
nols 11y ago
Just not a good place to do business with. I can appreciate having fun at work, believe me I can, but as someone who spent nearly a month without insurance because of a screw-up on my insurance company's side (completely unrelated to Zenefits), and the absurd lengths I had to go to to fix their problem, seeing all this shoddy work on Zenefits end makes me really sympathetic to their customers. Medical insurance is heavily regulated for a reason, and I can't imagine the clusterfuck that could happen if Zenefits screwed something up when providing insurance for a company and one of its employees ended up without insurance and then used their (nonexistent) insurance at the hospital.
- Smushman 11y ago
  I have to say that your attitude here is more forgiving than is deserved. Problems such as being without proper health insurance can cost lives. I myself have been forgiving in the past about such things; but that attitude was born out of an ignorance I had that everything on the back end was being handled as well as possible. After reading this article I am now much more concerned.
ivraatiems 11y ago
Sure. Also sounds like a sexual harassment lawsuit/insurance liability/customer privacy catastrophe waiting to happen.
- simonswords82 11y ago
  Buzz Killington.

shade23 11y ago

on a side note: Loving the diversity of buzzfeed. FB would be filled with listicles And HN would get the occasional long form article which is a very intersting read