The top comment in this tread says: "Why can't businesses get free services off the fat of VC capital?" Perhaps an explanation of Zenefits' business model is i

The top comment in this tread says: "Why can't businesses get free services off the fat of VC capital?" Perhaps an explanation of Zenefits' business model is in order. The explanation of it's software being free is and has always been that they don't make money from the software but from the brokerage fees from insurance which is sold through the software. Think of it like Expedia, they doesn't charge you for flight search and booking software. They make money as a "broker" for the sell of flights. Without any data, I can't nor could a government entity, say whether or not Zenefits is "dumping" using VC money. Zenefits have had their missteps and have paid for them. This case though feels like pure protectionism of existing players. Again, I'm saying that absent the data. Maybe, this seems unlikely, running the business actually does take more money than could potentially be made from brokerage fees. A reasonable measure, in my mind, could be a look at their average(mean) customer lifetime value. All new customers are going to be negative (cost of acquisition being fairly high for a sales driven company) but over time it should recover unless the average customer churns quickly. VC dollars _should_ reasonably be spent on increasing up front spend in order to acquire customers more quickly. If Zenefits have increased that spending so dramatically that the average customer isn't profitable then perhaps it should count as dumping.