Note that this article has new information compared to the previous articles about the Zenefits incident. (namely, a16z's involvement as the catalyst for the ouster)
No, that information was already mentioned in the second BuzzFeed article:
<<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.>>
I have no issues with Zenefits and I am actually happy they were able to see phenomenal growth. However I must say this whole situation of the CEO stepping down feels staged to me.
It is as if everyone was in on it and this move was calculated by all of them a long time ago. Like when we ready and my stocks are safe and sound blame it on me.
Oh, you have no issues with Zenefits so the whole thing must be staged! Of course! As if it's so hard to believe a CEO would engage in unethical behavior. Sheesh.
I have no issue with them because I did not fully read a single article to form an opinion on whether or not they are guilty.
However what I am sure of is there is absolutely no way this 4.5 Billion company was acting illegally and only one person , the CEO, knew about this for YEARS and is responsible for it end to end.
Stepping down? He was fired by the board. He did a damn good job growing the business but didn't bother with the necessary compliance, legal, and bureaucratic steps. The company needs a new type of leader to take them to IPO otherwise we'll have another disaster like we did with Groupon and Andrew Mason.
It really is a pity we live in a world where a few can ruin the party for all. I'm sure there are worthy startups out there with a solid product, solid team, and solid practices but they may suddenly die out from VC capital because of the fear/panic triggered by the couple of bad ones.
One issue for these startups could be that their facing competition with deep, VC-lined pockets. I actually faced this to some extent with a bootstrapped startup I ran--we were sort of competing against a startup with millions in VC funding that was handing out promotions like there was no tomorrow, and is still chugging along despite an unsustainable business model. It wasn't the primary reason we shut down, but it certainly didn't help.
I think the investment thesis is based on the classic economic theory that draws upon complex natural and psychological forces, sometimes referred to by the acronym "FOMO".
Also, it's a good idea to assume that the documents which established the valuation likely have many terms which make the published numbers not represent the economic reality of the investment/contract. Liquidation preferences make any comparison between private and public companies extremely difficult, if not impossible.
Fastest growing SaaS business ever? The non-compliant activity was not crucial for success and easily rectified. The service offered is core to pretty much every business on the planet and touches every single employee in the business.
Easily rectified? The top shareholder/exec got dumped; the entire business is under multiple states' investigations; employees may have purjured themselves at the behest of the business; and clients may have purchased critical business infrastructure from unlicensed agents (which may affect their coverage).
Clearly someone bought in to the pitch, but what strategy would they believe would easily rectify this situation?
A non start up would pay a law firm to do more investigation and then settle with the government for a pound of flesh but nothing crazy. In the scheme of things skipping a video won't kill a company.
But start ups are all about momentum and PR.
Plus they'll need money for investigations and settlements. VC capital is expensive.
| In the scheme of things skipping a video won't kill a company.
Skipping the video is not in itself what could potentially kill the company. However if clients are able to claim that their insurance was mis-sold by Zenefits, it seems to me that could. Mis-selling of payment protection insurance in the UK has already resulted in settlements north of 5 billion GBP, and the issue is not fully resolved yet.
It's important to note that when the investment was made, enterprise tech companies (like Workday) like were getting a really high valuation, whereas consumer tech companies weren't doing so well. Investors like a16z probably wanted to invest as much as possible before the enterprise IPO market would go south. Moreover, I am sure investors probably had strong liquidation preferences, ensuring a profit in the case of an exit or IPO.
We're now seeing the downsides of their thesis. Workday's market cap has since cratered, down 33% in the past year, indicating a weakening interest in the enterprise IPO market. Zenefits itself has a number of growing concerns- regulatory and competition concerns (ADP is only getting better by the day).
A lot of the HN-cynic crowd is forgetting here that if anything, they were bypassing stupid sets of regulations. There is nothing ethically or morally wrong here.
It is ethically and morally wrong for private companies to privately decide that regulations are stupid, without any checks or balances by the people. Today, they might decide that laws that are in fact objectively stupid are stupid. Tomorrow they may decide that laws that are very important to the protection of your rights are stupid.
Or, at most, I will concede that it is not ethically and morally wrong if we concede that the United States is a plutocracy and not a democracy, and there's nothing ethically or morally wrong with a plutocracy.
If these laws are in fact stupid, get them changed. You have tons of money and tons of happy users, right?
We have a dysfunctional government that's clearly beholden to various powers, including ones whose business model relies on stupid laws not changing. (I'm not personally sure I would even call our government a plutocracy, since that implies some level of control or organization.) At this point the only way we are ever going to get change is if large numbers of people decide that stupid laws are stupid and ignore them. See, for instance, the multi-decade long campaign to decriminalize marijuana.
More generally, I don't see a good way for our society to collectively figure out the cost/benefit ratio for many regulations other than experimentation (the institutions that should be doing so are permanently out to lunch). It's not ideal, but from my standpoint startup companies pushing boundaries is the best solution we've got for dealing with stagnated industries.
Sure, but there's still a difference between large numbers of people in semi-public, and a single company in private. If Zenefits asked even their own customers if they agreed that these federal regulations were stupid, I doubt they'd get many yes answers (partly because, at least in theory, the intent of the regulation is to protect those customers).
I am pretty okay with even large numbers of companies, with different motivations and financial incentives, all deciding that the same law is stupid. (One case seems to be the export regulations on non-open-source crypto-using software, for instance.) Even if they're all companies, that is much more defensible on democracy and not plutocracy.
Imagine you're an entrepreneur, and you've identified a heavily regulated industry full of sclerotic companies with connections to the regulators that serve large numbers of customers extremely poorly. You believe that you can't break into the market without violating some regulations that have a strongly negative effect on product quality.
What should you do? Go to VCs and ask them to fund a decade-long lobbying campaign with a very high probability of failure in which you pour your heart and soul into getting some obscure regulation in some obscure area that nobody cares about changed, and then afterwards start a company to better serve the customer (along with everyone else who is rushing in to benefit from the lightened regulatory load)? Or try to start a company, show everyone that they regulations are dumb, make customers happy, and then force the regulators to change out of sheer embarrassment?
If we don't occasionally reward people who took the second option (and were right!), I don't think we would get safer, more ethical change, we would just get less and everyone would be worse for it. I'm obviously fine with people who break regulations and end up hurting others being punished to the full extent that the law allows, but there needs to be an escape valve for when the government has it wrong.
> See, for instance, the multi-decade long campaign to decriminalize marijuana.
You're confounding tyranny of the majority with corruption; the reason marijuana is still criminalized in most places is because a large enough percentage of the population thinks it should be, for whatever reason.
No, the point I'm trying to make is that seemingly one of the only ways to get stupid laws changed is for them to be broken, and for people to see that the law is pointless (or not pointless!). Why exactly the law is or was in place doesn't matter too much.
Another example would be the woman who has the gall to braid hair without a license - if she hadn't broken the law, nobody would talk about it, there would never be any chance for reform, and we would all be incrementally poorer for it.
I'm not taking a position on specific laws, just that it's important that some laws occasionally be broken so that as a society we can test whether or not it matters if someone breaks them. If breaking a law doesn't result in negative outcomes, it shouldn't be a law.
No, the point I'm trying to make is that seemingly one of the only ways to get stupid laws changed is for them to be broken
The counterpoint is that civil disobedience requires harsh punishment of the disobedience in order to be effective. If somebody flagrantly violates a law because they claim it's bad, and walks away with little to no punishment for doing so, the public's impression will be "well, must not be such a bad law if that's all that happens", which will not serve to change things.
If the law is never enforced, that's almost as good as it being repealed. Given the lack of any other effective mechanism for obsoleting laws, I would book 'this joins the thousands of other bad laws that are never enforced' as a win for anyone who thinks we could do without it.
I'll leave aside the question as to whether individuals faking their 52 hours is "ethically or morally wrong".
For Zenefits/Parker to facilitate and encourage their staff to do it is most certainly ethically wrong.
Telling your staff that they should cheat the rules, sign a false document and perjure themselves is completely unacceptable. Zenefits employees face the risk of jail time because they did what their CEO told them to do - that should never happen and Parker deserved to go for that reason alone.
I'm not sure there's a whole lot from this story to apply elsewhere. David Sacks is who you want to be running the show. He has 2 fairly epic successes under his belt (PayPal and Yammer), one of the keenest product minds in the business, nearly unlimited access to funding and talent, moral authority as a founder and lawyer and operator to clean up the mess, etc.
Considering Airbnb and Uber, two of the largest and considered most-successful startups are carefully dodging the law, the upside is worth the risk. I disagree with it, but I think VCs don't care much about following legal frameworks until it's too late.
Does anyone have any more information about the "52 hour online training program" that "the Macro" allowed them to skip? If that training program is any bit as useless as "online driving school", I can sort of understand how the Macro came to be...
It is perhaps a silly requirement, considering that the salespeople still passed the required exam.
But I see it as symptomatic of a cultural contempt for regulations. It seems like a conflict of interest for a company to wantonly decide which regulations are worth following and which aren't. Especially when the salespeople could be personally liable, and the catastrophic outcome is somebody finding out that their $1m surgery isn't covered by their insurance despite promises it would be from the salesperson.
It is perhaps a silly requirement, considering that the salespeople still passed the required exam.
Supposing that the exam is supposed to test the candidate's actual knowledge -- i.e., their ability to correctly represent things and act in compliance with the law while engaged in conversation with potential customers -- I certainly can see a risk of someone just saying "eh, I'll skip the material, take the exam with a reference open on my desk, pass it and be fine" and then getting into major trouble later when it turns out they did actually need to know a lot of that stuff off the top of their head in order to do their job.
If everyone agrees it is a "silly" requirement (especially because it was circumvented so "easily"), why are we so mad at Zenefits?
We certainly don't want giant companies influencing policy changes (though, that happens frequently). I think a good indicator of whether a policy can justifiably be circumvented is if it actually hurt anybody. Has the "macro" hurt anybody yet? The articles have been vague.
The problem is that they were getting the advantages of being licensed while not actually following proper procedure for licensing. They were effectively lying to everyone. Sure, it's a pretty harmless lie, but I can see how people in the industry would be pissed.
Lyft and Uber skirt similar kinds of regulation but they're completely up front about it. They don't pretend that their drivers are licensed or claim any benefit for having licensed drivers in any way. They're simply offering a different product than what taxis offer - getting a ride with a random unlicensed stranger. They're not trying to get the best of both worlds - the legitimacy of being licensed and the cost saving of not bothering with it.
Lyft and Uber, and Airbnb too, are simply offering a new product that doesn't come with any reassurance for consumers from regulatory compliance. They're betting that reputation systems (ratings, reviews, etc.) will provide assurance for consumers just as well if not better than government regulation. So far the market is showing they just might be right.
I suspect that if Zenefits had offered a platform where anyone can sell insurance to anyone from the beginning then people would be less pissed about it. Of course offering an unlicensed insurance brokerage product would probably be a lot harder to pull off than offering an unlicensed taxi product.
Hmm? I'm not sure I care if the "industry" is pissed if said industry accepts regulations that we all agree are silly
P.S: I'm totally for sensible regulations. However, sensible regulations usually require wide amounts of nepotism, cronyism and backstabbing to break. If a regulation is important enough that people could be hurt by it, then it should not be circumventable by a web script.
The employees who used it and then signed a false declaration are at risk of jail.
That was their choice, but they were seemingly under pressure from their CEO, so it seems fairly evident (to me) that Parker created a real problem for his team, even if the customers are OK.
I still don't see how the macro allowed them to do anything different from just scrolling to the end of a list of terms and conditions. AFAIK, they still had to pass an exam?
Some of the compliance training I've had to take didn't have an exam. But the software tracked how quickly you went through the training. If you went through too quickly, you didn't get credit.
The solution to silly regulations is to change them, not to ignore them or subvert them. Think what a can of worms would be opened if regulatory compliance was contingent on some ephemeral, arbitrary, socially defined notion of "silliness."
Nope. I don't want monied corporations anywhere near my regulations. Let's just have the pertinent regulatory agencies realize that making someone stare at a screen for 'X' minutes doesn't make a training program. You are asking for someone to side step that stuff.
I would actually rather have companies like Zenefits sidestep regulations like that to show the regulators where they screwed up than Zenefits pump money into skeevy Lobby groups.
So you don't want the government to change regulations because it would give rich corporations an opportunity to leverage their lobbying dollars. Instead, you want rich corporations to cheat their way around regulations at leisure. (Note that what Zenefits did was not a legal loophole, it was a method of falsifying compliance documentation.)
In any case, what's the point of "show[ing] the regulators where they screwed up" if you don't want them to change anything anyway? What's the point of having regulations at all if you're going to let them be a joke?
I think we are arguing for the same thing. I just don't want agencies to change regulations because a large company wants them too. Id rather an agency be smart enough to find out that companies are using a loophole, and then close that loophole. A company will always use all loopholes available to it, to not do so would be silly
'Making trainees watch a video' seems like silly regulations asking to be circumvented. Why not make the exams more stringent so people are forced to actually pay attention.
California requires 20 hours of training to get a license for health and accident insurance, 20 hours to get a license for life insurance, and an additional 12 hours on ethics training for people wanting to pass the exam for either. These are tick-box requirements that allow you to take the exam you need to pass to get the relevant license. Several providers have online courses you can take for $50 < N < $100 which fill up the required 52 hours and, importantly for the purpose of box ticking, generate documentation certifying that you put in your 52 hours.
Here's the regulator's description of half of the requirements:
There exist many tick-box requirements in the vast, vast field that is compliance in regulated industries. There is a political valence to this observation.
My personal favorite one is the time where I had to threaten to fire myself if I ever misused patient information. I threatened to fire myself if I ever misused patient information. I then documented the fact that I had threatened to fire myself if I ever misused patient information. If I am ever investigated on suspicion of failing to have threatened to fire myself if I ever misused patient information (a crime which is separate from misusing patient information), I will be able to produce adequate documentation attesting to the fact that I threatened to fire myself if I ever misused patient information.
As further detail, the way these things work is the following. The "training" consists of watching some powerpoints and listening to a voiceover reading the slide. You can't click "next slide" until the voiceover has finished. The voiceovers add up to 52 hours.
Typically the voiceovers are short, e.g. 60 seconds, to ensure that you are actually at your computer clicking "next" rather than just letting the voiceover run while you do something productive.
Once you've clicked "next" 52x60=3120 times you are then permitted to take the exam.
Zenefits "Macro" automated the clicking, allowing their people to simply learn the material and then take the exam.
tl;dr; The state of California says "you must learn this material very slowly" and Zenefits employees are fast learners.
> If that training program is any bit as useless as "online driving school", I can sort of understand how the Macro came to be...
One of my proudest hacker moments* a while back was taking online defensive driving school (to have a speeding ticket excused) and figuring out what to type into the Javascript console to make the 'next' button clickable before the timer on the page ran out. (This technique would have been subverted had there been any server-side checks whatsoever, but nope...they completely entrusted the client to keep the time. I suppose they don't have much of an incentive to make it any more difficult given that the government probably doesn't have a very rigorous accreditation process for these courses.) That cut whatever was left of the required 6 hours down to about 20 minutes. I guess I'm an unethical monster that should never be allowed to run a company. :\
*I know, it's pretty lame in comparison to, say, figuring out how to jailbreak an iPhone, but I'd be lying if I said I wasn't proud.
Dodging the law is risky but can have upsides. Maybe you get Aereo'd or maybe you can pull an Uber. Both airbnb and Uber exploited holes in current regulation.
In Portland, Uber acted directly in defiance of city hall. City hall told them not to operate their service in Portland, and they did. I'm not so sure they're as different as you say. Differences in degree, sure.
I have no idea of the Portland specifics, but a lot of law, especially administrative law in an hoc process. City hall could say "we think you are operating a cab service in violation of our regulation don't operate." But the reality is nobody is sure whether Uber is actually violating the law. You either let city hall sue/make an admin finding or you preemptively sue them and wait for a court to decide.
Plus sometimes you know how bad the worst case legal scenario is and it's the best option. With stuff like taxi regulations the fines probably aren't too bad.
Breaking the law is part of the "disruptive" entrepreneurship strategy for these companies. Incumbent companies tend to influence the law, not necessarily break it. For a disruptor to break the law, the company needs a lot of money to fight back.
Airbnb and Uber are managing to fight the regulatory hurdles with ~5x is ~13x the valuation of Zenefits, respectively. While Zenefits is ~5x the valuation of Aereo, it seems they have some catching up (read: fundraising) to do.
I work building compliance software, and the Zenefits situation stood out to me immediately as very different from other stories. Ben Thompson nailed the reasons why - the comparison doesn't hold:
The limited-liability corporation is fundamentally flawed when it comes to massive negative externalities. Even if regulators take AirBnB and Uber for every cent they have (and I hope they do, both have shown themselves to be fundamentally inimical to the rule of law), the people and organizations that funded their criminality will get away with nothing worse than losing their investment.
This story starts out reporting on a board ousting a CEO after a public scandal involving non-compliance with various laws, which incited multiple government investigations.
It then takes an abrupt turn and starts repeating everyone's favorite Silicon Valley trope du jour: the unicorn bubble is bursting, the fundraising environment is tightening up, and the halcyon days of multi-billion dollar valuations for everyone are over.
One tangential connection...Startup makes progress flouting the law, they hit a wall they can't overcome (get persecuted for). Uber has run the same risk (more lax laws), but approach was basically the same.
Successful startups all, and I mean ALL, have serious compliance issues. They probably do not not realize their problems. Some actively try to avoid knowing, such as by shunning legal advice that may inform them of inconvenient obligations. Part of the going public and/or being bought out process involves measuring the rate of non-compliance.
A unicorn wants to go public, but that means first getting your compliance ducks in nice rows. The growing realization that unicorns are in fact very non-compliant pushes them towards the easier route of being acquired/merged. So there is a direct link between compliance and the very existence of unicorns.
> Successful startups all, and I mean ALL, have serious compliance issues.
This feels like a very hyperbolic claim. There are definitely high-profile examples of startups that had compliance issues and are struggling to bring them under control or remain in arguably grey areas (Zenefits is an example of the former, Airbnb the latter). But it's hard to imagine that it's a truly universal problem; many startups are in industries without heavy regulatory rules. Can you elaborate on what makes you believe this to be the case?
A successful startup is one that has grown rapidly in recent years. No growth = not successful, and not recent = not a startup. Any tech company that grows quickly starts bumping up against any number of compliance issues, both legal (ie HIPAA) and private (ie PCI). Today's growth curves don't keep pace with many of these regulations. As you expand laterally into new markets you constantly run into new obligations. And as you expand vertically (increased sales) you trigger new expectations, especially the PCI DSS. The chances of anything rationally called a startup having accommodated these things is astronomically low.
Ask any tech lawyer to list all the laws applicable to a startup. Bring a lunch. Until a company has devoted resources (ie a full-time compliance team including lawyers) and has a decade or so of experience with the relevant rules, imho proper compliance is a pipe dream. At best you can hope to keep the wolves away long enough to get whatever they want ready asap.
Anyone here working at a startup, just have a look at the PCI DSS, specifically the SAQ you are meant to fill out every year (if you handle credit cards). And this is basic compliance 101 stuff, no lawyers required.
>> "Just go to your security settings and click on “View completed document”. We have pre-filled the documents for you."
Services like these are part of the problem. They can verify that the service they provide is compliant, but nobody can determine remotely whether or not you are compliant with something like PCI. You cannot outsource compliance. It is something you have to actually do.
And fyi these "iframe" services that allows a merchant to opt for SAQ-EP rather than the longer SAQ-D, that might be going away in the next couple years. Merchants may have to go with a full redirect, not a frame, if they want to wash their hands of chd.
I imagine just about every company, startup or not, has compliance issues; it's just a matter of degree. (Then again, I am an environmental compliance consultant, so there's some selection bias in which companies I interact with.)
The qualifiers in "successful startup" and "serious compliance issues" make it hard to say whether the statement is objectively true or not, but I see two factors that probably exacerbate the problem for startups: regulations designed by established companies to thwart upstart competitors, and the "disrupt"/"move fast and break things" attitude that doesn't mesh well with red tape.
They have fallen into an ignorance trap. Too many thing that all regulation/paperwork is just a pointless homage to entrenched power. They think it cool to bypass red tape. They think they know better. They forget that those silly lectures often contain really important information, that someone with far more experience than they decided that regulation was needed.
Correct. What went wrong at Zenefits and other places was failure to correctly execute the kind of submarine approach to compliance exemplified by PayPal. Lots of startups skate near the edge and sometimes get dinged by regulators. The question is whether you do it to excess and/or make yourself a target. Failure to navigate this can make you an ex-unicorn, but it says nothing about unicorns in general.
The obvious connection to me is that when the numbers are excellent, you have to do something pretty egregious to attract scrutiny. But when the numbers are ok or bad, suddenly people become much more interested in the details.
I note that the Zenefits CEO was ousted after missing targets and during a time when I think we can all at least agree that the industry is less exuberant. Maybe he would have gotten sacked anyhow, but missing the numbers sure didn't help him.
I'm skeptical of the source of this article. My guess is Zenefits spoke off the record to do damage control in Sacks' favor. I have no proof but will lay out why below.
> In a Feb. 1 meeting at its blandly luxurious Sand Hill Road offices, venture firm Andreessen Horowitz urged the chief executive officer of one of its most prized and promising companies to resign.
1) The first sentence references a meeting that very few people would know the details of. Likely only those at a16z plus a few executives around Parker/Sacks. Unlikely Parker is talking to the press, given the legal issues swirling.
> Days after Chief Operating Officer David Sacks gave that information to Lars Dalgaard, an Andreessen partner who sits on Zenefits’ board, Conrad was out, say three people familiar with the matter. At Conrad’s suggestion, they replaced him with Sacks
2) Sacks gave the information to a partner, then Conrad (basically blamed for fraud) suggested they replace him with Sacks. Which raises some questions:
a) Why trust Conrad? He's fired + off the board + likely under legal investigation.
b) As COO, no question as to whether Sacks knew anything or that they needed fresh blood? Also, he was suggested by the person who was just removed for fraud.
Lastly, we get a picture that sounds a lot less like Conrad giving a voluntary recommendation:
> At the meeting, Conrad tentatively agreed to resign, relinquish his board seat, and make Sacks CEO, say three people close to the company.
I rather agree this article seemed to connect two related but definitely not connected things.
That being said, it is interesting how many visible unicorns are either flaunting the law or outright frauds (i.e. zenefits, uber, airbnb, theranos).
Happily or sadly (per your point of view) - it's seems still worth it. The Zenefits ex-CEO lost his job but he never ever needs to work again (and can afford the best of the best lawyers if needed)
This is such nonsense. Zenefits allegedly broke the law under Conrad's leadership and he was ousted. This is not a sign of any macro changes - companies that break compliance regulations that could send their employees to jail have never been in fashion.
Read Ben Thompson's piece about how this differs from more "gray area" compliance breaches:
A number of commenters here have compared Zenefits' questionable compliance with Uber, Lyft, and Airbnb. What Zenefits was doing is fundamentally different, and much more problematic.
Lyft and Uber skirt similar kinds of seemingly useless regulation but they're completely up front about it. They don't pretend that their drivers are licensed or get any benefit from having licensed drivers in any way. They're simply offering a different product than what taxis offer - getting a ride with a random unlicensed stranger.
Lyft, Uber, and Airbnb are betting that reputation systems (ratings, reviews, etc.) will provide assurance for consumers just as well if not better than government regulation. So far the market is showing they just might be right.
Zenefits seems to have been driven by a similar cultural distaste for onerous and probably out-dated regulation - who can blame them? But instead of letting the market decide how valuable that regulation actually is they simply cut corners when they hoped no one would find out.
That deceptiveness, more so than the regulation dodging itself, is ultimately really bad for a B2B business.
Lyft, Uber, and Airbnb can't avoid regulation forever. They've just been lucky so far. Eventually there will be a high profile incident—someone important will get raped or murdered. The political response will be 1000x what their lobbyists can handle.
It is inevitable. The reality is that this is how a lot of regulation starts. It doesn't always come from an anticompetitive place. We just forget that we actually asked for the regulation. Once we have, it's nice to always be able to blame the government or some regulator when something goes wrong. And then someone else can come in and "disrupt" the market by using a loophole of pretending like the regulation doesn't apply to them, when it's clearly intended to.
Excellent point. I think it is worth noting regulations can be classified into acute and chronic. Acute taxi regulation would have been disallowing criminal records after a series of rapes or robberies.
Chronic problems would be over charging - put it this way, the day before taxis were forced to charge a certain amount each mile, all taxis would have been free to charge different amounts as uber and lyft can.
We do ask for regulation - and always in response to symptoms. Regulation is not pre planned rational thought ...
I guess, the GP intends to say some "celebrity" figure gets raped/murdered when he/she mentioned "high profile incident". The incidents of the women who have been raped or assaulted by Uber drivers, were not "high profile incidents", that will demand large front page news or equivalent news on TV on prime time for days or weeks altogether on Times like influential, popular news media.
Serious question: what is Uber/Lyft specific about a customer being assaulted? Is that inherently different than rapes or assaults by taxi drivers? Cause I'm sure there's been plenty of cases. Don't get me wrong, those are horrific, but I guess I'm failing to see what in Uber or Lyft makes it easier to happen or why it might require special regulation.
Maybe the fact that cab drivers need a licence and are thus screened more thoroughly?
I think the reason Uber/Lyft are especially vulnerable to this is because they present an easy target for politicians who are being held responsible for a crime in the area. Its much easier for politicians to respond to such a crime with "we're banning taxi apps" rather than identifying and tackling root causes.
Case in point - when an Uber driver raped a woman in Delhi, this is exactly what the Delhi government did.
Another issue that seems to be a major hangup in my jurisdiction (which has banned Uber from operating) is the lack of "proper insurance" for Uber drivers/cars.
Lyft's entire business model skirted regulation. At least when Uber started they required all drivers to have passenger carrier permits and commercial insurance. Then Lyft comes around and completely ignores the law. Completely. Uber starts losing business, and so then Uber responds in kind with UberX.
Now it's legal because it flies under the banner of "rider sharing". But we all know that there is really no sharing to be had. It's just a for hire service. The regulation will return, eventually.
Airbnb regularly pretends that their rentals are legal in their advertisements to consumers despite knowing that the majority of their revenue in places like NYC is derived from illegal whole-apartment-without-the-owner-present rentals.
I think the bigger difference is that the rules that Uber, Lyft & AirBnB are bending directly result in customer benefit whereas in the Zenefits case, there is little or no or even negative customer benefit.
That's an excellent point. And Ben Thompson is super insightful as usual (I'm a huge fan of his).
I certainly do think the value prop to consumers for Zenefits' rule breaking was not very clear. However, I'd argue that lack of clarity stems from the fact that they were breaking rules in small and kind of sneaky ways, and not in a clear way baked into the core of the product.
If they were totally unappologetic about bending laws from the beginning - ie their pitch was more like "Zenefits lets anyone sell insurance and provide other services to small businesses, making these things more accessible and affordable" - then I think people would credit all benefit they get from Zenefits to its rule bending, and put up with a lot more of it.
Instead, Zenefits was kind of trying to have its cake and eat it too, which just pissed people off.
To be fair though, I suspect that creating an explicitly unlicensed insurance brokerage would be much, much harder to pull off than an explicitly unlicensed taxi service.
AirBnB might benefit the customer, but can negatively impact others in the area. For example, if someone is renting out an apartment in a secure building, just giving the keys to an arbitrary someone you're decreasing everybody else's security. Similarly for a house, if a house is being regularly rented by different people, it impacts the rest of the neighbourhood.
In my building, renting out with something like AirBnB is against their occupancy agreement. While I don't know everybody in my building, I certainly know everybody on my floor. I used to know everybody in the building, but a number of people have moved out and I haven't learnt all the new people yet. I'd be really pissed if I found out that someone was offering an AirBnB rental right next to me.
> Lyft, Uber, and Airbnb are betting that reputation systems (ratings, reviews, etc.) will provide assurance for consumers just as well if not better than government regulation. So far the market is showing they just might be right.
Like Zenefits, the government regulation that Lyft, Uber, and Airbnb are skirting has one important consequence: It protects the rest of us who are not their customers from them. If a Yellow Cab driver does something dumb, malicious, or against the rules, I can complain to the city regulatory authority and that agency can take action. If it fails to take action, I can pressure my elected leaders to correct that stance. If it takes action in an open way that is transparent to the populace and finds that I am not correct in my complaint, so be it. I need not be a customer of Yellow Cab to complain about the actions of one of its drivers.
Replacing public rules enforcement with "reputation systems" is completely useless if I never enter into a business arrangement with those companies. As it stands, the only way I can complain about any of them--especially with Zenefits actively working to hide its bypass activities from the relevant authorities--is to be a customer and poorly rank some allegedly-independent-contractor. Or I can use Twitter and complain publicly but get drowned out by the noise.
Lyft and Uber both spent years pretending that their drivers were insured while carrying passengers despite very clear evidence to the contrary. Even today they pretend to prospective drivers that they won't end up screwed if they have an accident while 'on the app' but without a passenger. Airbnb did the same thing.
The main difference is that Lyft, Uber and Airbnb sell mostly to consumers who are quite happy to make their own decision about which state regulations to bend when it's in their interest.
Zenefits sells to HR departments whose raison d'être is to make sure the company complies with its duty of care to employees, including observing all the relevant regulations. The idea one of their partners might have been using inadequately trained and unlicensed insurance brokers that didn't really know what they were doing to sell their employees expensive health insurance plans is kryptonite for that partnership.
(and I say this as someone who always ran the blindingly obvious "how not to take a bribe or sexually harass your colleagues" compulsory videos in the background whilst getting on with more productive work)
I believe (after the investigations are concluded) that a word used to describe the operations for Zenefits will be 'fraudulent.'
For the rest, as you state, they have been largely clear about their opposition to perceived out-of-date regulation and have worked tirelessly across the country and world to have new rules or exemptions or trials put in place.
Being disruptive isn't the same thing as breaking the law with willful abandon.
Can someone tell me why is it such a big deal when person sells an insurance without having a proper license? Its not as if the insurance policy itself is fraudulent. The buyer is buying the insurance policy and not the credentials of the broker.
I think the broker does make a number of attestations that if not properly done are fraud and render the policy void (as the insurance companies wrote the law).
At a guess (and completely a guess), legal compliance. Insurance laws can vary widely, and subtly state-by-state. A licensed broker will understand the relevant intricacies and be able to sell you a policy that is compliant with them.
If you buy a policy from an unlicensed broker, and it turns out not to be in compliance, the carrier probably isn't obligated to pay out, whether you're paid up on your premiums or not. The carrier doesn't want to be at fault for not having to pay out, so they offload that onto the broker, and "protect" the consumer (really, though, themselves) with a licensure regime.
Insurance companies, being in the business of managing and mitigating risk, have all kinds of meticulous i-dotting and t-crossing procedure and regulation. This is — again, at a guess — just another example of that.
Because even for people who are actual high-level experts on it, correctly representing what a policy does and does not offer, and explaining that in a way that's factually correct, compliant with the local laws governing insurance, and understandable without being misleading to a potential customer, is incredibly difficult, to such a degree that your comparison of it to hair braiding should be prima facie evidence of lack of good faith on your part.
It is for a similar reason why buying from a broker stocks, bonds, futures, ect have to pass the series 7 and 63/65/66 from FINRA. Insurance is a financial product, letting someone buy the wrong insurance because they misunderstand it and you will make more money from that purchase is a form of fraud.
My company used Zenefits for a while, mainly because one of our execs is friends with one of theirs. We had many, many problems with payroll. When you have employees repeatedly coming to you because their paychecks are screwed up, you've got to do something. We ended up switching away, and now use ADP for payroll instead. We've had no problems since. (This was before the big public slap fight between Zenefits and ADP, which was made even more amusing given our experience.)
I would not recommend anyone use Zenefits for any reason, regardless of whether it turns out they complied with legally-mandated training requirements or not. The fact that they were so incredibly sloppy is just inexcusable. You cannot mess around with people's pay like that.
(Posted with a throwaway account for hopefully obvious reasons.)
I'll bet your employees hate ADP. I know I do. Would it kill them to make a useable web interface? It's not like we've been doing this for 20 years or anything.
I was thinking of doing a write up on ADP's workforce product recently, some things about the website I've noticed.
The site uses cookies to determine if you have two windows open of the site. The problem is this doesn't work correctly and I often have to blow out my cookies to log in.
On mobile I have to turn on screen rotation to be able to use the menu bar on the top of the screen, then I have to turn it back to be able to see the punch in buttons.
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[ 5.0 ms ] story [ 131 ms ] thread<<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.>>
http://www.buzzfeed.com/williamalden/zenefits-program-let-in...
I have no issues with Zenefits and I am actually happy they were able to see phenomenal growth. However I must say this whole situation of the CEO stepping down feels staged to me.
It is as if everyone was in on it and this move was calculated by all of them a long time ago. Like when we ready and my stocks are safe and sound blame it on me.
However what I am sure of is there is absolutely no way this 4.5 Billion company was acting illegally and only one person , the CEO, knew about this for YEARS and is responsible for it end to end.
Of course it was staged: you have a corporate guard change. What don't you "buy" about this story?
Anyone know the investment thesis on that?
Also, it's a good idea to assume that the documents which established the valuation likely have many terms which make the published numbers not represent the economic reality of the investment/contract. Liquidation preferences make any comparison between private and public companies extremely difficult, if not impossible.
Clearly someone bought in to the pitch, but what strategy would they believe would easily rectify this situation?
But start ups are all about momentum and PR.
Plus they'll need money for investigations and settlements. VC capital is expensive.
Skipping the video is not in itself what could potentially kill the company. However if clients are able to claim that their insurance was mis-sold by Zenefits, it seems to me that could. Mis-selling of payment protection insurance in the UK has already resulted in settlements north of 5 billion GBP, and the issue is not fully resolved yet.
We're now seeing the downsides of their thesis. Workday's market cap has since cratered, down 33% in the past year, indicating a weakening interest in the enterprise IPO market. Zenefits itself has a number of growing concerns- regulatory and competition concerns (ADP is only getting better by the day).
Or, at most, I will concede that it is not ethically and morally wrong if we concede that the United States is a plutocracy and not a democracy, and there's nothing ethically or morally wrong with a plutocracy.
If these laws are in fact stupid, get them changed. You have tons of money and tons of happy users, right?
More generally, I don't see a good way for our society to collectively figure out the cost/benefit ratio for many regulations other than experimentation (the institutions that should be doing so are permanently out to lunch). It's not ideal, but from my standpoint startup companies pushing boundaries is the best solution we've got for dealing with stagnated industries.
I am pretty okay with even large numbers of companies, with different motivations and financial incentives, all deciding that the same law is stupid. (One case seems to be the export regulations on non-open-source crypto-using software, for instance.) Even if they're all companies, that is much more defensible on democracy and not plutocracy.
Imagine you're an entrepreneur, and you've identified a heavily regulated industry full of sclerotic companies with connections to the regulators that serve large numbers of customers extremely poorly. You believe that you can't break into the market without violating some regulations that have a strongly negative effect on product quality.
What should you do? Go to VCs and ask them to fund a decade-long lobbying campaign with a very high probability of failure in which you pour your heart and soul into getting some obscure regulation in some obscure area that nobody cares about changed, and then afterwards start a company to better serve the customer (along with everyone else who is rushing in to benefit from the lightened regulatory load)? Or try to start a company, show everyone that they regulations are dumb, make customers happy, and then force the regulators to change out of sheer embarrassment?
If we don't occasionally reward people who took the second option (and were right!), I don't think we would get safer, more ethical change, we would just get less and everyone would be worse for it. I'm obviously fine with people who break regulations and end up hurting others being punished to the full extent that the law allows, but there needs to be an escape valve for when the government has it wrong.
You're confounding tyranny of the majority with corruption; the reason marijuana is still criminalized in most places is because a large enough percentage of the population thinks it should be, for whatever reason.
Another example would be the woman who has the gall to braid hair without a license - if she hadn't broken the law, nobody would talk about it, there would never be any chance for reform, and we would all be incrementally poorer for it.
I'm not taking a position on specific laws, just that it's important that some laws occasionally be broken so that as a society we can test whether or not it matters if someone breaks them. If breaking a law doesn't result in negative outcomes, it shouldn't be a law.
The counterpoint is that civil disobedience requires harsh punishment of the disobedience in order to be effective. If somebody flagrantly violates a law because they claim it's bad, and walks away with little to no punishment for doing so, the public's impression will be "well, must not be such a bad law if that's all that happens", which will not serve to change things.
For Zenefits/Parker to facilitate and encourage their staff to do it is most certainly ethically wrong.
Telling your staff that they should cheat the rules, sign a false document and perjure themselves is completely unacceptable. Zenefits employees face the risk of jail time because they did what their CEO told them to do - that should never happen and Parker deserved to go for that reason alone.
But I see it as symptomatic of a cultural contempt for regulations. It seems like a conflict of interest for a company to wantonly decide which regulations are worth following and which aren't. Especially when the salespeople could be personally liable, and the catastrophic outcome is somebody finding out that their $1m surgery isn't covered by their insurance despite promises it would be from the salesperson.
Supposing that the exam is supposed to test the candidate's actual knowledge -- i.e., their ability to correctly represent things and act in compliance with the law while engaged in conversation with potential customers -- I certainly can see a risk of someone just saying "eh, I'll skip the material, take the exam with a reference open on my desk, pass it and be fine" and then getting into major trouble later when it turns out they did actually need to know a lot of that stuff off the top of their head in order to do their job.
We certainly don't want giant companies influencing policy changes (though, that happens frequently). I think a good indicator of whether a policy can justifiably be circumvented is if it actually hurt anybody. Has the "macro" hurt anybody yet? The articles have been vague.
Lyft and Uber skirt similar kinds of regulation but they're completely up front about it. They don't pretend that their drivers are licensed or claim any benefit for having licensed drivers in any way. They're simply offering a different product than what taxis offer - getting a ride with a random unlicensed stranger. They're not trying to get the best of both worlds - the legitimacy of being licensed and the cost saving of not bothering with it.
Lyft and Uber, and Airbnb too, are simply offering a new product that doesn't come with any reassurance for consumers from regulatory compliance. They're betting that reputation systems (ratings, reviews, etc.) will provide assurance for consumers just as well if not better than government regulation. So far the market is showing they just might be right.
I suspect that if Zenefits had offered a platform where anyone can sell insurance to anyone from the beginning then people would be less pissed about it. Of course offering an unlicensed insurance brokerage product would probably be a lot harder to pull off than offering an unlicensed taxi product.
P.S: I'm totally for sensible regulations. However, sensible regulations usually require wide amounts of nepotism, cronyism and backstabbing to break. If a regulation is important enough that people could be hurt by it, then it should not be circumventable by a web script.
The employees who used it and then signed a false declaration are at risk of jail.
That was their choice, but they were seemingly under pressure from their CEO, so it seems fairly evident (to me) that Parker created a real problem for his team, even if the customers are OK.
[Edit: Removed out-of-place "committed"]
I would actually rather have companies like Zenefits sidestep regulations like that to show the regulators where they screwed up than Zenefits pump money into skeevy Lobby groups.
In any case, what's the point of "show[ing] the regulators where they screwed up" if you don't want them to change anything anyway? What's the point of having regulations at all if you're going to let them be a joke?
'Making trainees watch a video' seems like silly regulations asking to be circumvented. Why not make the exams more stringent so people are forced to actually pay attention.
Here's the regulator's description of half of the requirements:
http://www.insurance.ca.gov/0200-industry/0050-renew-license...
There exist many tick-box requirements in the vast, vast field that is compliance in regulated industries. There is a political valence to this observation.
My personal favorite one is the time where I had to threaten to fire myself if I ever misused patient information. I threatened to fire myself if I ever misused patient information. I then documented the fact that I had threatened to fire myself if I ever misused patient information. If I am ever investigated on suspicion of failing to have threatened to fire myself if I ever misused patient information (a crime which is separate from misusing patient information), I will be able to produce adequate documentation attesting to the fact that I threatened to fire myself if I ever misused patient information.
Typically the voiceovers are short, e.g. 60 seconds, to ensure that you are actually at your computer clicking "next" rather than just letting the voiceover run while you do something productive.
Once you've clicked "next" 52x60=3120 times you are then permitted to take the exam.
Zenefits "Macro" automated the clicking, allowing their people to simply learn the material and then take the exam.
tl;dr; The state of California says "you must learn this material very slowly" and Zenefits employees are fast learners.
One of my proudest hacker moments* a while back was taking online defensive driving school (to have a speeding ticket excused) and figuring out what to type into the Javascript console to make the 'next' button clickable before the timer on the page ran out. (This technique would have been subverted had there been any server-side checks whatsoever, but nope...they completely entrusted the client to keep the time. I suppose they don't have much of an incentive to make it any more difficult given that the government probably doesn't have a very rigorous accreditation process for these courses.) That cut whatever was left of the required 6 hours down to about 20 minutes. I guess I'm an unethical monster that should never be allowed to run a company. :\
*I know, it's pretty lame in comparison to, say, figuring out how to jailbreak an iPhone, but I'd be lying if I said I wasn't proud.
Just breaking the law is stupid.
Plus sometimes you know how bad the worst case legal scenario is and it's the best option. With stuff like taxi regulations the fines probably aren't too bad.
Airbnb and Uber are managing to fight the regulatory hurdles with ~5x is ~13x the valuation of Zenefits, respectively. While Zenefits is ~5x the valuation of Aereo, it seems they have some catching up (read: fundraising) to do.
https://stratechery.com/2016/zenefits-and-regulation/
It then takes an abrupt turn and starts repeating everyone's favorite Silicon Valley trope du jour: the unicorn bubble is bursting, the fundraising environment is tightening up, and the halcyon days of multi-billion dollar valuations for everyone are over.
There's really no connection between the two.
A unicorn wants to go public, but that means first getting your compliance ducks in nice rows. The growing realization that unicorns are in fact very non-compliant pushes them towards the easier route of being acquired/merged. So there is a direct link between compliance and the very existence of unicorns.
This feels like a very hyperbolic claim. There are definitely high-profile examples of startups that had compliance issues and are struggling to bring them under control or remain in arguably grey areas (Zenefits is an example of the former, Airbnb the latter). But it's hard to imagine that it's a truly universal problem; many startups are in industries without heavy regulatory rules. Can you elaborate on what makes you believe this to be the case?
Ask any tech lawyer to list all the laws applicable to a startup. Bring a lunch. Until a company has devoted resources (ie a full-time compliance team including lawyers) and has a decade or so of experience with the relevant rules, imho proper compliance is a pipe dream. At best you can hope to keep the wolves away long enough to get whatever they want ready asap.
Anyone here working at a startup, just have a look at the PCI DSS, specifically the SAQ you are meant to fill out every year (if you handle credit cards). And this is basic compliance 101 stuff, no lawyers required.
https://www.pcisecuritystandards.org/documents/SAQ_D_v3_Merc...
They had people selling health insurance without a license. This isn't just a failure to sit through the "don't bribe foreign officials" training.
Things move quickly...and that's an understatement...
There is a fever that descends upon a team on the brink of hitting a "home run"...the push is incredible..
Do what needs to be done NOW, we'll clean up afterwards...so difficult to resist...
https://support.stripe.com/questions/do-i-need-to-be-pci-com...
Services like these are part of the problem. They can verify that the service they provide is compliant, but nobody can determine remotely whether or not you are compliant with something like PCI. You cannot outsource compliance. It is something you have to actually do.
And fyi these "iframe" services that allows a merchant to opt for SAQ-EP rather than the longer SAQ-D, that might be going away in the next couple years. Merchants may have to go with a full redirect, not a frame, if they want to wash their hands of chd.
The qualifiers in "successful startup" and "serious compliance issues" make it hard to say whether the statement is objectively true or not, but I see two factors that probably exacerbate the problem for startups: regulations designed by established companies to thwart upstart competitors, and the "disrupt"/"move fast and break things" attitude that doesn't mesh well with red tape.
I note that the Zenefits CEO was ousted after missing targets and during a time when I think we can all at least agree that the industry is less exuberant. Maybe he would have gotten sacked anyhow, but missing the numbers sure didn't help him.
> In a Feb. 1 meeting at its blandly luxurious Sand Hill Road offices, venture firm Andreessen Horowitz urged the chief executive officer of one of its most prized and promising companies to resign.
1) The first sentence references a meeting that very few people would know the details of. Likely only those at a16z plus a few executives around Parker/Sacks. Unlikely Parker is talking to the press, given the legal issues swirling.
> Days after Chief Operating Officer David Sacks gave that information to Lars Dalgaard, an Andreessen partner who sits on Zenefits’ board, Conrad was out, say three people familiar with the matter. At Conrad’s suggestion, they replaced him with Sacks
2) Sacks gave the information to a partner, then Conrad (basically blamed for fraud) suggested they replace him with Sacks. Which raises some questions:
Lastly, we get a picture that sounds a lot less like Conrad giving a voluntary recommendation:> At the meeting, Conrad tentatively agreed to resign, relinquish his board seat, and make Sacks CEO, say three people close to the company.
That being said, it is interesting how many visible unicorns are either flaunting the law or outright frauds (i.e. zenefits, uber, airbnb, theranos).
Happily or sadly (per your point of view) - it's seems still worth it. The Zenefits ex-CEO lost his job but he never ever needs to work again (and can afford the best of the best lawyers if needed)
Read Ben Thompson's piece about how this differs from more "gray area" compliance breaches:
https://stratechery.com/2016/zenefits-and-regulation/
Lyft and Uber skirt similar kinds of seemingly useless regulation but they're completely up front about it. They don't pretend that their drivers are licensed or get any benefit from having licensed drivers in any way. They're simply offering a different product than what taxis offer - getting a ride with a random unlicensed stranger.
Lyft, Uber, and Airbnb are betting that reputation systems (ratings, reviews, etc.) will provide assurance for consumers just as well if not better than government regulation. So far the market is showing they just might be right.
Zenefits seems to have been driven by a similar cultural distaste for onerous and probably out-dated regulation - who can blame them? But instead of letting the market decide how valuable that regulation actually is they simply cut corners when they hoped no one would find out.
That deceptiveness, more so than the regulation dodging itself, is ultimately really bad for a B2B business.
It is inevitable. The reality is that this is how a lot of regulation starts. It doesn't always come from an anticompetitive place. We just forget that we actually asked for the regulation. Once we have, it's nice to always be able to blame the government or some regulator when something goes wrong. And then someone else can come in and "disrupt" the market by using a loophole of pretending like the regulation doesn't apply to them, when it's clearly intended to.
Chronic problems would be over charging - put it this way, the day before taxis were forced to charge a certain amount each mile, all taxis would have been free to charge different amounts as uber and lyft can.
We do ask for regulation - and always in response to symptoms. Regulation is not pre planned rational thought ...
Maybe the fact that cab drivers need a licence and are thus screened more thoroughly?
Case in point - when an Uber driver raped a woman in Delhi, this is exactly what the Delhi government did.
Now it's legal because it flies under the banner of "rider sharing". But we all know that there is really no sharing to be had. It's just a for hire service. The regulation will return, eventually.
Here's a good take: https://stratechery.com/2016/zenefits-and-regulation/
I certainly do think the value prop to consumers for Zenefits' rule breaking was not very clear. However, I'd argue that lack of clarity stems from the fact that they were breaking rules in small and kind of sneaky ways, and not in a clear way baked into the core of the product.
If they were totally unappologetic about bending laws from the beginning - ie their pitch was more like "Zenefits lets anyone sell insurance and provide other services to small businesses, making these things more accessible and affordable" - then I think people would credit all benefit they get from Zenefits to its rule bending, and put up with a lot more of it.
Instead, Zenefits was kind of trying to have its cake and eat it too, which just pissed people off.
To be fair though, I suspect that creating an explicitly unlicensed insurance brokerage would be much, much harder to pull off than an explicitly unlicensed taxi service.
In my building, renting out with something like AirBnB is against their occupancy agreement. While I don't know everybody in my building, I certainly know everybody on my floor. I used to know everybody in the building, but a number of people have moved out and I haven't learnt all the new people yet. I'd be really pissed if I found out that someone was offering an AirBnB rental right next to me.
Like Zenefits, the government regulation that Lyft, Uber, and Airbnb are skirting has one important consequence: It protects the rest of us who are not their customers from them. If a Yellow Cab driver does something dumb, malicious, or against the rules, I can complain to the city regulatory authority and that agency can take action. If it fails to take action, I can pressure my elected leaders to correct that stance. If it takes action in an open way that is transparent to the populace and finds that I am not correct in my complaint, so be it. I need not be a customer of Yellow Cab to complain about the actions of one of its drivers.
Replacing public rules enforcement with "reputation systems" is completely useless if I never enter into a business arrangement with those companies. As it stands, the only way I can complain about any of them--especially with Zenefits actively working to hide its bypass activities from the relevant authorities--is to be a customer and poorly rank some allegedly-independent-contractor. Or I can use Twitter and complain publicly but get drowned out by the noise.
That's no substitute, in my opinion.
Zenefits sells to HR departments whose raison d'être is to make sure the company complies with its duty of care to employees, including observing all the relevant regulations. The idea one of their partners might have been using inadequately trained and unlicensed insurance brokers that didn't really know what they were doing to sell their employees expensive health insurance plans is kryptonite for that partnership.
(and I say this as someone who always ran the blindingly obvious "how not to take a bribe or sexually harass your colleagues" compulsory videos in the background whilst getting on with more productive work)
For the rest, as you state, they have been largely clear about their opposition to perceived out-of-date regulation and have worked tirelessly across the country and world to have new rules or exemptions or trials put in place.
Being disruptive isn't the same thing as breaking the law with willful abandon.
Other wise it seems to me that is requirement is just as unnecessary as requiring cosmetology license for hair braiding ( see http://www.texastribune.org/2015/04/06/bill-would-untangle-m...)
If you buy a policy from an unlicensed broker, and it turns out not to be in compliance, the carrier probably isn't obligated to pay out, whether you're paid up on your premiums or not. The carrier doesn't want to be at fault for not having to pay out, so they offload that onto the broker, and "protect" the consumer (really, though, themselves) with a licensure regime.
Insurance companies, being in the business of managing and mitigating risk, have all kinds of meticulous i-dotting and t-crossing procedure and regulation. This is — again, at a guess — just another example of that.
I wouldn't go that far. It's just the naïveté of "Why there gotta be so many laws obstructing my disrupting?!" taken to its logical extreme.
I would not recommend anyone use Zenefits for any reason, regardless of whether it turns out they complied with legally-mandated training requirements or not. The fact that they were so incredibly sloppy is just inexcusable. You cannot mess around with people's pay like that.
(Posted with a throwaway account for hopefully obvious reasons.)
The language indicates that the VC's are the controlling owners of these companies.
The most valuable asset of a startup seems to be hot air.