ADP

“ADP Took 20 something years to grow from a billion to ten billion in revenue. And then the next wave of companies like Adobe took about 20 years to go from one to 10. And then you fast forward in time and you have things like Salesforce or SAPs for an even mor…”

“When you look at Greenfield opportunities, you need two things to be true. You need the entrepreneur to be very, very patient and say, I'm not going to try to sell to everybody who's, if I'm starting a net new payroll company, I'm not going to try to sell to G…”

“So, to give you an idea, a construction company that has billion dollar revenue. They have about six workers who manually reconcile all the compliance and regulatory stuff that's mandated. They are dealing with about 40 unions.”

“I met Alex at Deal when it was two on 10, and I looked at paychecks.com and ADP, and I was like, nah, shit market, incumbents, distribution advantage, crap investment. What a mistake.”

“I don't think it's a market win all, win most. Like, our big competitors when we started are still around and are doing really well. Like you know, Intuit, ADP, Paycheck all have really large payroll businesses still today.”

“So we have someone in HR that couldn't find an org chart tool that really fit what you want to do, or it was too expensive. She spent three days. She spun up this org chart tool with like connection to ADP and sort of versioning history. And it's amazing. She …”

“You had this amazing combination of, you know, some big incumbents like paychecks and ADP worth, you know, over a hundred billion dollars together at that point. So like clearly big, big incumbent market presence in terms of like economic value, but also an in…”

“And you look at ADP and paychecks and like, they weren't selling 10,000 plans in a year.”

“In the US, 50% of payroll is paid by the big guys, ADP, Paychecks, Paycom, these big players, right? 50% though is, is effectively mom and pop independently owned payroll companies.”

“In Canada is much different. We don't need to get into that, but you know, it's like ADP and Ceridian are the 80% and then 20% is, is everything else.”

“Whether it's, like, a DocuSign or a Zoom or all the ones I just talked about, like, and look at what they trade at. They trade at, like, three times revenue. You know, these are, DocuSigns are great products. Zoom is a great product, but they trade at the shit…”

“I've always told investors just, you know, you'd be better off buying a basket of stocks that have the lowest NPS of all, and they'll outperform the companies that have the best NPS. And you'll be like, well, it doesn't make sense, but think about the companie…”

“Yeah, so, so I would say the biggest competitor for us is the internal teams today. you know, because what we're doing is we're integrating these 15, 16 different systems that exist within the organization. So, you know, you're working with ServiceNow, with A…”

“Some of the numbers are kind of astounding, so we pay in any given month about forty million people around the world.”

“So last year we moved about 3.2 trillion dollars.”

“So we've got about 950,000 clients in this database.”

“So in any given month, right, those forty million people, there's about twenty one million job titles. We run some pretty sophisticated, ah, machine learning to boil that down to about 6000, ah, or now 7000 key job categories.”

“The turnover predictor, for example, uses 57 attributes.”

“We're in full production on top of some of those large, large language models.”

“Instead of having it all done by hand, it's, pfft, 95% automated.”

“We pay in the US, you know, something like 18 or 20% of people, and then we do the taxes on another You know, similar size.”

“The piece we didn't bring from the data mesh was the notion of federated query. Because the problem with federated query is the latency of the query is the worst performing member of the federated group. Right? And so we still have a centralized data repositor…”

“We use Databricks as our, as that data layer, and we use Snowflake to do very specialized analytical database workloads that it's very, very good at.”

“In France, we're also, we pay something like 20 or 30% of the French population.”

“We actually have something in our system like 30,000 downstream systems. You know, Fidelity, Blue Cross Blue Shield. They all get reports.”

“We do use an awful lot of MLflow for our MLOps. We do SageMaker work. We're working with this really interesting company called Robust Intelligence in California that's helping us with bias monitoring, compliance, supply chain attacks on machine learning”

“We went with Informatica, and the reason why we're on Informatica is very clear. Not, as Spencer was saying, not everything is in the cloud. And unfortunately for startups, they're making decisions about where to build, and so they're building in the cloud. In…”

“So, I can launch a product today and have 5000 clients on it in a year.”

“We have external people on that as well. We have industry experts. We invite external representation. People that aren't associated with the company, except for the ethics board participate. They're under NDA. They see exactly what we're doing in terms of prod…”

“At least in my team, they don't get the meeting if we didn't actually already know what they were doing.”

“And what we said was, is that we don't believe that bias doesn't exist. In fact, we believe it does exist. And so our role isn't to mitigate all bias, but our role is to at least measure it, understand it, and express it, and make sure that people understand i…”

“So the EEOC has a thing called the, ah, Test of Means, and we actually use that internally to gauge our machine learning systems, and then we'll test and monitor for that.”

“If we're paying 18% of the country, we're recruiting about 15 to 18% of the country as well through those systems, okay?”

“Education's an interesting factor, and it's in our system, but skills turn out to be a much more interesting factor as well as, not job titles, but the nature of the job.”

“The first thing we did after our bias statement is take a decision that we want to treat the employees of our clients as consumers. And so, each employee has the ability to opt out.”

“We use our own aggregation rules, but we call it a five in 10. Right? We won't give out data about, in, in any aggregation unless there's 10 employees spread across five companies.”

“ADP is one of the world's largest HRIS and payroll companies in the world, and I think ADP really was one of the first SaaS companies.”

“So we knew at the time that ADP and paychecks were We're pretty crappy software companies. Like the software was terrible. There was not a monopoly on either side. Both companies, you know, had roughly equal market share.”

“We have about 700 customers now, and it's kind of a who's who in technology, so publicly traded SaaS companies like an Okta or Workday or Twilio or DocuSign, big companies that have gone to the cloud like an IBM or an Adobe or a Cisco, as well as companies in …”

“ADP, when they first came on back in 2014, they started with 80 sales reps and they did the split test for 90 days where they had every rep, every other deal they would use consensus as part of the sales conversation. And sales process. And then they compared …”

“Typically we deal with the upper end of the market. So we call it majors and enterprise majors is typically call it about a hundred employees to 2500 employees. In those cases, we're usually handing off to an ADP an ultimate software, a Ceridian at the high en…”

“And to my mind, namely is the leader in that particular segment that we think is an important segment. And then if you look at the space that they're running, which is the 50 to, actually it's 20 to 2000 employees is the size range that they work in. There's r…”

“No no, because actually if you look at companies in our sector ADP is in, has gross margins in the forties.”

“So we really have clients like General Motors and ADP and Paytex and MetLife and New York Life and AT&T to big companies.”

“We're investors in a company called Zen Payroll, ah, and we're investors there because they demonstrated in, on a very small amount Really, of their own money, that they could gut ADP. That customers deserted ADP in droves to have essentially single click, ove…”