Remember when Zenefits imploded, and kicked out CEO Parker Conrad. Well, Conrad launched a new employee onboarding startup called Rippling, and now he’s going after another HR company called Gusto with a new billboard, “Outgrowing Gusto? Presto change-o.”
The problem is, Gusto got it taken down by issuing a cease & desist order to Rippling and the billboard operator Clear Channel Outdoor. That’s despite the law typically allowing comparative advertising as long as it’s accurate. Gusto sells HR, benefits and payroll software, while Rippling does the same but adds in IT management to tie together an employee identity platform.
Rippling tells me that outgrowing Gusto is the top reasons customers say they’re switching to Rippling. Gusto’s customer stories page lists no customers larger than 61 customers, and Enlyft research says the company is most often used by 10 to 50-person staffs. “We were one of Gusto’s largest customers when we left the platform last year. They were very open about the fact that the product didn’t work for businesses of our size. We moved to Rippling last fall and have been extremely happy with it,” says Compass Coffee co-founder Michael Haft.
That all suggests the Rippling ad’s claim is reasonable. But the C&D claims that “Gusto counts as customers multiple companies with 100 or more employees and does not state the businesses will ‘outgrow’ their platfrom at a certain size.”
In an email to staff provided to TechCrunch, Rippling CMO Matt Epstein wrote, “We take legal claims seriously, but this one doesn’t pass the laugh test. As Gusto says all over their website, they focus on small businesses.”
So rather than taking Gusto to court or trying to change Clear Channel’s mind, Conrad and Rippling did something cheeky. They responded to the cease & desist order in Shakespeare-style iambic pentameter.
Our billboard struck a nerve, it seems. And so you phoned your legal teams,
who started shouting, “Cease!” “Desist!” and other threats too long to list.
Your brand is known for being chill. So this just seems like overkill.
But since you think we’ve been unfair, we’d really like to clear the air.
Rippling’s general counsel Vanessa Wu wrote the letter, which goes on to claim that “When Gusto tried to scale itself, we saw what you took off the shelf. Your software fell a little short. You needed Workday for support,” asserting that Gusto’s own HR tool couldn’t handle its 1,000-plus employees and needed to turn to a bigger enterprise vendor. The letter concludes with the implication that Gusto should drop the cease-and-desist, and instead compete on merit:
So Gusto, do not fear our sign. Our mission and our goals align.
Let’s keep this conflict dignified—and let the customers decide.
Rippling CMO Matt Epstein tells me that “While the folks across the street may find competition upsetting, customers win when companies push each other to do better. We hope our lighthearted poem gets this debate back down to earth, and we look forward to competing in the marketplace.”
Rippling might think this whole thing was slick or funny, but it comes off a bit lame and try-hard. These are far from 8 Mile-worthy battle rhymes. If it really wanted to let customers decide, it could have just accepted the C&D and moved on…or not run the billboard at all. It still has four others that don’t slam competitors running. That said, Gusto does look petty trying to block the billboard and hide that it’s unequipped to support massive teams.
We reached out to Gusto over the weekend and again today asking for comment, whether it will drop the C&D, if it’s trying to get Rippling’s bus ads dropped too and if it does in fact use Workday internally.
Given Gusto has raised $516 million — 10X what Rippling has — you’d think it could just outspend Rippling on advertising or invest in building the enterprise HR tools so customers really couldn’t outgrow it. They’re both Y Combinator companies with Kleiner Perkins as a major investor (conflict of interest?), so perhaps they can still bury the hatchet.
At least they found a way to make the HR industry interesting for an afternoon.
After years of development, an exciting new scientific research spacecraft has launched on its journey to study our solar system’s central player: the Sun. The Solar Orbiter, developed jointly by NASA and the European Space Agency (ESA) and built by Airbus, lifted off from Cape Canaveral Air Force Station in Florida on Sunday night, launching as planned at 11:03 PM EST (8:03 PM PST).
Solar Orbiter launched atop a United Launch Alliance (ULA) Atlas V rocket, feating a special, unique configuration of the launch vehicle designed specifically to get the nearly 4,000 lb observation craft off Earth and onto its target path to eventually approach the Sun. The Atlas V used for this launch was configured with a payload fairing 13 feet in diameter to accommodate the Orbiter, and used a single solid rocket motor to provide the necessary propulsive power.
From here, Solar Obiter embarks on a journey that will take just over a year and a half, and include two close passes to Venus and Earth in order to take advantage of their gravitational pull to propel the spacecraft towards its target destination while conserving as much fuel as possible. After it swings by those two bodies to gain momentum, it’ll end up in an orbit around the sun with a close approach distance of just 26 million miles – still about 100 times as far as the Moon is from Earth, but so close that temperatures at their peak at the spacecraft will reach nearly 1,000 degrees Fahrenheit.
Solar Orbiter’s mission sees it orbiting the Sun for at least seven years, gathering data about what’s going on in the star’s heliosphere, which is roughly equivalent to Earth’s atmosphere in that it surrounds the Sun. These findings should shed new light on what goes on in the heliosphere, which will definitely be advantageous for scientific study of our solar companion, but they could also provide new information that leads to better understanding of so-called ‘space weather,’ which includes things like solar storms and flares that actually impact the proper functioning of infrastructure including communications and navigation technology back on Earth.
Onboard Solar Orbiter, there are 10 instruments to measure various phenomena and gather different types of information from the Sun, including permeating ultraviolet imaging and taking measurements from the solar wind that radiates off the star. All of these instruments had to be hardened to withstand not only those extremely high temperatures from the Orbiter’s closest approach to the Sun, but also down to nearly -300 degrees Fahrenheit, which is an amazing engineering challenge when you’re dealing with instrumentation designed to detect very fine detail. They’ll be protected in part by a heat shield made of titanium and covered with a calcium phosphate coating that will absorb most of the 1,000-degree temperatures, however, resulting in a more tolerable range of between 4 and 122 degrees Fahrenheit for most of the actual instruments themselves.
Solar Orbiter won’t be alone in its study of the Sun: NASA’s Parker Solar Probe, which launched in 2018, will be simultaneously in solar orbit, gathering solar gas samples and providing information which can be used in tandem with data provided by Solar Orbiter for a more complete picture of what’s going on at the center of our solar system.
Between 2005 and 2018, the five biggest U.S. tech firms collectively spent more than half a billion dollars lobbying federal policymakers. But they shelled out even more in 2019: Facebook boosted its lobbying budget by 25%, while Amazon hiked its political outlay by 16%. Together, America’s biggest tech firms spent almost $64 million in a bid to shape federal policies.
Clearly, America’s tech giants feel they’re getting value for their money. But as CEO of Boundless, a 40-employee startup that doesn’t have millions of dollars to invest in political lobbying, I’m proposing another way. One of the things we care most about at Boundless is immigration. And while we’ve yet to convince Donald Trump and Stephen Miller that immigrants are a big part of what makes America great — hey, we’re working on it! — we’ve found that when you have a clear message and a clear mission, even a startup can make a big difference.
So how can scrappy tech companies make a splash in the current political climate? Here are some guiding principles we’ve learned.
You can’t make a difference if you don’t make some noise. A case in point: Boundless is spearheading the business community’s pushback against the U.S. Department of Homeland Security’s “public charge rule.” This sweeping immigration reform would preclude millions of people from obtaining U.S. visas and green cards — and therefore make it much harder for American businesses to hire global talent — based on a set of new, insurmountable standards. We’re doing that not by cutting checks to K Street but by using our own expertise, creativity and people skills — the very things that helped make our company a success in the first place.
By leveraging our unique strengths — including our own proprietary data — we’ve been able to put together a smart, business-focused amicus brief urging courts to strike down the public charge rule. And because we combine immigration-specific expertise with a real understanding of the issues that matter most to tech companies, we’ve been able to convince more than 100 other firms — such as Microsoft, Twitter, Warby Parker, Levi Strauss & Co. and Remitly — to cosign our amicus brief. Will that be enough to persuade the courts and steer federal policy in immigrants’ favor? The jury’s still out. But whatever happens, we take satisfaction in knowing that we’re doing everything we can on behalf of the entire immigrant community, not just our customers, in defense of a cause we’re passionate about.
Taking a stand is risky, but staying silent is a gamble, too: Consumers are increasingly socially conscious, and almost nine out of 10 said in one survey that they prefer to buy from brands that take active steps to support the causes they care about. It depends a bit on the issue, though. One survey found that trash-talking the president will win you brownie points from millennials but cost you support among Baby Boomers, for instance.
So pick your battles — but remember that media-savvy consumers can smell a phony a mile off. It’s important to choose causes you truly stand behind and then put your money where your mouth is. At Boundless, we do that by hiring a diverse workforce — not just immigrants, but also women (we’re over 60%), people of color (35%) and LGBTQ+ (15%) — and putting time and energy into helping them succeed. Figure out what authenticity looks like for your company, and make sure you’re living your values as well as just talking about them.
Tech giants might have a bigger megaphone, but there are a lot of startups in our country, and quantity has a quality all its own. In fact, the Small Business Administration reported in 2018 that there are 30.2 million small businesses in the United States, 414,000 of which are classified as “startups.” So instead of trying to shout louder, try forging connections with other smart, up-and-coming companies with unique voices and perspectives of their own.
At Boundless, we routinely reach out to the other startups that have received backing from our own investor groups — national networks such as Foundry Group, Trilogy Equity Partners, Pioneer Square Labs, Two Sigma Ventures and Flybridge Capital Partners — in the knowledge that these companies will share many of our values and be willing to listen to our ideas.
For startups, the venture capitalists, accelerators and incubators that helped you launch and grow can be an incredible resource: Leverage their expertise and Rolodexes to recruit a posse of like-minded startups and entrepreneurs that can serve as a force multiplier for your political activism. Instead of taking a stand as a single company, you could potentially rally dozens of companies — from a range of sectors and unique weights in their fields — on board for your advocacy efforts.
Every company has a few key superpowers, and the same things that make you a commercial success can help to sway policymakers, too. Boundless uses data and design to make the immigration process more straightforward, and number-crunching and messaging skills come in handy when we’re doing advocacy work, too.
Our data-driven report breaking down naturalization trends and wait times by location made a big splash, for instance, and not just in top-ranked Cleveland. We presented our findings to Congress, and soon afterward some Texas lawmakers began demanding reductions in wait times for would-be citizens. We can’t prove our advocacy was the deciding factor, but it’s likely that our study helped nudge them in the right direction.
Whether you’re Bill Gates or a small-business owner, if you’re quoted in The New York Times, then your voice will reach the same people. Reporters love to feel like they’re including quotes from the “little guy,” so make yourself accessible, and learn to give snappy, memorable quotes to reporters, and you’ll soon find that they keep you on speed dial.
Our phones rang off the hook when Trump tried to push through a healthcare mandate by executive order, for instance, and our founders were quoted by top media outlets — from Reuters to Rolling Stone. It takes a while to build media relationships and establish yourself as a credible source, but it’s a great way to win national attention for your advocacy.
To make a difference, you’ll need allies in the corridors of power. Reach out to your senators and congresspeople, and get to know their staffers, too. Working in politics is often thankless, and many aides love to hear from new voices, especially ones who are willing to stake out controversial positions on big issues, sound the alarm on bad policies or help move the Overton window to enable better solutions.
We’ve often found that prior to hearing from us, lawmakers simply hadn’t considered the special challenges faced by smaller tech companies, such as lack of internal legal, human and financial resources, to comply with various regulations. And those lawmakers come away from our meetings with a better understanding of the need to craft straightforward policies that won’t drown small businesses in red tape.
Political change doesn’t just happen in the Capital Beltway, so make a point of reaching out to your municipal and state-level leaders, too. In 2018, Boundless pitched to the Civic I/O Mayors Summit at SXSW because we knew that municipal leaders played a critical role in welcoming new Americans into our communities. Local policies and legislation can have a big impact on startups, and the support of local leaders remains a critical foundation for the kinds of change we want to see made to the U.S. immigration system.
It’s easy to make excuses or expect someone else to advocate on your behalf. But if there’s something you think the government could be doing better, then you have an obligation to use your company’s energy, talent and connections to push back and create momentum for reform. Sure, it would be nice to splash money around and hire a phalanx of lobbyists to shape public policy — but it’s perfectly possible to make a big difference without spending a dime.
But first, figure out what you stand for and what strengths and superpowers you can leverage to bear the problems you and your customers face. Above all, don’t be afraid to take a stand.
It wasn’t that long ago that digitally-native, vertically-integrated brands (DNVBs) were the talk of the startup world.
Venture capitalists and founders watched as Warby Parker, Casper, Glossier, Harry’s and Honest Company became the belles of the D2C ball, trotting their way towards unicorn valuations. Not long after, the “startup studio” was unmasked as the elusive unicorn breeding grounds (think Hims). Today, there’s yet another buzzword that’s all the rage and it goes by the name “D2C Holding Company.” And it’s not going away anytime soon.
In 2017, DNVBs were a game-changer. Different than e-commerce, DNVBs sell products online directly to consumers and maintain control and transparency through each stage of the production and distribution process, all without the involvement of middlemen. This allows DNVBs to determine where and how their products are sold and to collect customer data that helps optimize their marketing strategies.
DNVBs have exploded over the last decade, growing sales and venture capital funding at a rapid pace. These brands use digital engagement strategies to create stronger relationships with consumers, which — when implemented alongside captivating content — contribute heavily to brand success by increasing customer LTV and creating compounding unit economics.
In the last three years alone, more DNVBs have launched than in the entirety of the previous decade.
While this growth is encouraging, the problem is that these DNVBs are raising so much venture capital that in order to meet the return requirements of their investors, they need a significant purchase offer or IPO valuation. With more than 85 percent of acquisitions happening below $250 million in purchase price, strategic acquisitions offers that meet investor expectations are few and far between.
This ultimately creates a state of startup purgatory where DNVBs have no choice but to take a downround to find a lifeline — sorry, Honest Company — making it difficult to develop disciplined operational habits and achieve sustainable growth. With these challenges becoming more glaringly apparent in recent years, there came a need for a new approach to D2C at large. Enter the modern D2C holding company.
Today’s version of the holding company model takes what companies like Procter & Gamble and Unilever did in the 1950s and modernizes it for the existing D2C market. Instead of taking a siloed approach, brands pool resources, operational costs and institutional knowledge to accelerate growth and achieve profitability at a faster rate.
DNVB darlings Harry’s and Glossier are great examples of this. Harry’s diversification efforts have been centerstage as the company works to grow beyond men’s grooming to include personal care for men and women, household items and baby products. In May, Edgewell Personal Care, which owns brands like Schick, Banana Boat, and Wet Ones, acquired Harry’s for $1.37 billion. Glossier is also working to diversify its portfolio, with the launch of Glossier Play, a younger, more colorful sister brand to its original.
For DNVBs to successfully pivot to a holding company model, they will need to prioritize 1) diversification to satisfy customers’ short attention spans, 2) a data-first mindset to deliver the best possible customer experience, and 3) operational and capital efficiency to not only stay afloat, but thrive.
The landscape for D2C holding companies is just starting to take shape, but here are some of the key players who have adopted this approach and are finding early success:
Babies have options these days when it comes to what goes in their mouths. No more is it just the standard mush in a jar. Now they’ve got everything from pouches to organic purees delivered right to their parents’ door — and Yumi is one of several startups cashing in.
The company has just announced that it raised another $8 million from several of Silicon Valley’s household names, including Allbirds, Warby Parker, Harry’s, Sweetgreen, SoulCycle, Uber, Casper and the CEO of Blue Bottle Coffee, James Freeman. That puts the total raised now to $12.1 million.
But it’s a tough and saturated market full of products all vying for mom and dad’s attention, and that’s not a lot of cash to go on, compared to the billion-dollar industry Yumi is up against. According to Zion Market Research, the global baby food market could reach as much as $76 billion by 2021. However, you wouldn’t know Yumi was up against such odds if you ask them and their financial supporters.
The advantage, according to the company, is in providing fresh food alternatives, and that “shelf-stable” competitors like Gerber lack key nutrients parents want for their little ones.
“Our goal is to change the standards for childhood nutrition, and completely upend what it means to be a food brand in America,” Yumi co-founder and CEO Angela Sutherland said. “This group of visionary leaders have all redefined their categories and now we have the opportunity to work together to reimagine early-age nutrition for the next generation.”
Will that bet pay off and help this startup stand out? Sales continue to rise and have risen by 10 times in the last year, according to the company — we’ve asked but don’t know what those sales numbers are, unfortunately. However, Yumi’s bet on fresh and delivered could prove to be just what parents want as the company continues to grow.
“As a parent, Yumi’s mission immediately resonated,” said co-founder and co-CEO of Warby Parker Neil Blumenthal . “As we’ve seen at Warby Parker, and now at Yumi, there is a massive shift happening in the world of retail. There’s now a new generation of consumers who are actively seeking brands that reflect their values and lifestyle — the moat that big, legacy brands once enjoyed has evaporated.”