What-if certainty 3/5 debate potential 2/5

Zenefits should have recognized the Utah dispute was political, not legal

Parker Conrad · a16z Podcast | How One Startup Went from Being Banned by Regulators to Being Open for Business · Jan 2, 2019 · at 10:50

Parker Conrad, CEO of Zenefits, reflects on lessons learned from the company's regulatory battle in Utah regarding its free HR software model.

0:00 / 0:15exact quote · 15.6s
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“I think what I probably would have done differently in the case of Utah is I probably would have, I wish I had realized earlier in the process that we were in sort of a political battle rather than a legal battle with the Department of Insurance.”

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Assertion Supported
Utah threatened Zenefits with fines for offering free software to businesses
“In Utah, the insurance commissioner in Utah decided to take action, said that, listen, one of their missions as a DOI was to make sure that there was fair competition between all brokers in the state, and everyone was on a level playing field, and they said th…”
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Assertion Contradicted
Utah legislation clarified that Zenefits was never illegal under existing state law
“Technically what the bill did is I think it actually didn't change the law. What it did is it clarified that the existing Utah law never made benefits illegal in the first place. So it was a clarification rather than a change to the law”
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Insight
Small business B2B clients are highly influential political allies for startups
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Disclosure
Zenefits gives its HR platform away free, monetizing as an insurance broker
“We give the core system away for free, and we make money in, in a variety of different ways, but one of them is that we act as a broker on companies lines of health insurance.”
Parker Conrad Jan 2, 2019 ▶ 0:51 a16z Podcast | How One Startup Went from Being Banned by Regulators to Being Open for Business
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