Sign up FAST! Login

What Comes Before a Fall: Lessons from the Growth and Crash of Zenefits


Stashed in: LinkedIn, Startup Lessons, Growth Hacks!, Software is eating the world.

To save this post, select a stash from drop-down menu or type in a new one:

"Zenefits began as a Software as a Service company devoted to helping small businesses combat the onerous red tape of HR issues, health coverage in particular. An honorable enough mission. But as they scaled with lightning speed, they began taking on businesses with hundreds of employees, long before they were equipped with the culture necessary for handling them and the organization’s scaling to that level. Growth became the only imperative, at the cost of quality, employee morale, and even lawful practices."

Growth at the cost of quality, morale, and legal practices us not good. 

Pretty sure the problem wasn't just that they grew too fast for their culture. By all accounts the CEO took it upon himself to decide that laws were lame, outdated, and subject to disruption by technology. That IS the culture here.

Deciding the laws are lame and disruptible is the culture of Uber and Airbnb too. 

When it works the company does well.

Also, have you heard about CEO rescinding an offer to a developer after he had asked on Quora which offer to take - Zenefits' or Uber's? http://www.businessinsider.com/zenefits-ceo-rescinds-job-offer-on-quora-2015-5

Interwebs were not amused.

And now they announced 17% layoffs, mostly in the sales department:

http://techcrunch.com/2016/02/26/zenefits-is-laying-off-250-employees/?ncid=rss

I wonder if this will help change the culture or if it will be the same as it ever was.