Back when Zenefits was a unicorn, all the kids wanted to work there and make bank by helping to disrupt the evil health care industry. But now that Zenefits has been revealed as a donkey with a party hat stapled to its head, things are suddenly way less awesome over at Zenefits HQ.
Founder and CEO Parker Conrad was the broiest bro in the Valley of Bros, raising almost $600 million from Marc Andreessen and others. Conrad pitched a future in which he and his team would overthrow the evil reign of the big health care firms by disrupting the entire industry with technology. And Conrad was so certain that he was the Che Guevara of HMOs that his business model provided free HR management to clients in exchange for selling them some dope-ass insurance.
A growing firm aimed at the disruption of a loathed industry using VC money and an insanely bold revenue model, run by a dude who liked to party? Zenefits was like a Mike Judge joke come-to-life. It was silicon perfection.
But then there was this news...
Parker Conrad has resigned as chief executive of health-insurance brokerage Zenefits after coming under fire for what the highflying startup says was inadequate compliance procedures and internal controls.
That piqued Bloomberg's interest, prompting them to ask the question "Like, how inadequate?"
In Zenefits’ early days, the people say, Conrad created a deceptive program called “the Macro,” which made it look like employees were watching legally mandated online training when they weren’t. Workers who claimed to have completed the training may have been well short of the required 52 hours. Conrad used it himself, the people say.
California regulators are investigating Zenefits’ use of the Macro, as well as whether its employees had licenses when they started selling insurance.
So "pretty inadequate."
Which is a pretty big bummer for new CEO David Sacks, who is not only going to clean up the mess of fake insurance brokers and whatever they did with their fake licenses, he's also going to have to create a whole new group of real ones and keep things rolling.
But everyone knows that Silicon Valley talent hates when things get "harder", so Sacks is going to have to really lean hard on what does attract tech talent: Perks!
Unfortunately, according to the WSJ, Sacks is also dealing with the reality that Zenefits employees have been taking pretty liberal advantage of the whole "perky" situation at the office.
Zenefits’s new chief executive, David Sacks, last week banned alcohol in the office of the health-insurance brokerage startup as he tries to reverse its rambunctious culture, especially among sales staff.
Drinking at the office is hardly something millennials will fight too hard to keep, right? That's just basic stuff.
So problem solved, right? Let's talk about getting hoverboards for the design team!
Last June, Emily Agin, the company’s director of real estate and workplace services, sent a note to San Francisco-based employees to cut out crude behavior, lest the company lose access to the building’s stairwells.
The email, reviewed by The Wall Street Journal, read in part:
“It has been brought to our attention by building management and Security that the stairwells are being used inappropriately....Cigarettes, plastic cups filled with beer, and several used condoms were found in the stairwell. Yes, you read that right. Do not use the stairwells to smoke, drink, eat, or have sex. Please respect building and company policy and use common sense...”
Whoa, whoa, whoa, stop the clock!
Is Zenefits now telling employees like "Tyler in accounts" that he not only has to get a license but can no longer mix Old Fashioneds at his desk or bang Sienna from the Full Stack team on the fire stairs?
What is this, Yahoo!!!
After Zenefits, Will VCs Rein in Their Unicorns? [Bloomberg]