15: Prasanna Sankar | Rippling š¦
Co-Founder at Rippling | Redefining Employee Management.
Ingredients for Success:
Founders are Chief āShieldingā Officers. Prasanna believes that what prevents people from achieving the extraordinary isnāt capital or talent, but belief and optimism. The primary role of a founder then, is to shield out any negativity from outside and create a culture of optimism for employees. The pessimism and doubt from the outside world shouldnāt seep into the business. This is what leads to a culture of excellence. A culture that results in building a $11.4B company, as Prasanna has done at Rippling.
Hire āmispricedā people. According to Prasanna, the process of hiring the best people in the world is similar to the role of a venture investor. In some ways, it means disagreeing with the market. Heās learnt to look for āmomentum breakoutsā ā people that donāt see their own potential, yet have a cascade of success before them.
Chase six sigma events. As Prasanna looks back at his life, the theme that ties together his outlier experiences is his desire to find and chase six sigma events. Events that come together once in a lifetime, and pose significant upside. From making the pilgrimage from India to Canada, and then to Silicon Valley, eyeing and joining YCombinator, Zenefits, and now, embarking on a journey in crypto. Itās always been the intent to find himself in those moments that in hindsight, can be categorized as being in the right place, at the right time.
Growing up in India, Prasanna was not the most conventional of role models. Frequently daydreaming during classes, his interest lay more outside the confines of academia. Success beckoned, as he waltzed his way to winning coding competitions and building up his reputation as a talented programmer. Looking back at his journey, it was the untested paths where Prasanna most felt at home; he felt the need to chase opportunities that were underrated. To do things that other people didnāt appreciate, yet.
This mindset and belief fit well within entrepreneurship. Itās no surprise then where Prasannaās career has taken him - from a parabolic rise to a disappointing crash with his first venture āLikealittleā, to most recently building Rippling ā a $11.4 billion business that is a market leader in enterprise software today.
This Land is Your Land
The immigrant story. A frequently cited tale that seeks to exemplify the opportunities of the West. Through any means, the start of Prasannaās journey fits well into this paradigm. From Chennai, Prasanna landed in Vancouver with a coveted role as a software developer at Microsoft. Everything felt right ā at least to an outsider; it wasnāt the same for Prasanna. āWithin 3 months of starting up at Microsoft, I quickly realised the role wasnāt for me. The hierarchy, the structure, the incrementalism ā it just didnāt fit with what I was looking for. I was itching to get out. Online, I would read about the culture of the Valley ā the risk-taking backdrop where even nerds could start companies and get rich.ā
As I began to unpack Prasannaās story, it struck me how much emphasis and intention he puts into being in the right place at the right time. The āitchā was eventually addressed, and Prasanna found himself in the Valley to start his first venture with his co-founders. In tandem with the āright place, right timeā mantra, Prasanna set his eyes on YCombinator ā he was convinced of the early potential of the program ā and was part of one of the (legendary) initial cohorts.
With YCās stamp branded onto āLikealittleā ā the first venture ā Prasanna and team were ready to build their rocket ship. āIt was a tough time. 18 months of ideation and pivots. We were naturally demoralised. It was like being in a desert with no water in sight. Luckily, my girlfriend who was out in Cambridge University in the UK, mentioned that a business called FitFinder was taking off. The idea was simple: an anonymous social network that allows you to āflirtā with classmates on campus. We quickly put an MVP together and launched on Stanfordās campus. You wouldnāt believe it - within 6 weeks, we went from 0 to 20 million page views. Within 6 months, 20% of US campus students were users. We raised money from a16z, Ashton Kutcher, and Yuri Milner, among a few others. We were honestly over the moon!ā.
Thud. That parabolic rise to āgreatnessā ended quickly. The post-mortem best describes Likealittle as a fad, which was erased from the minds of college students similar to that of memories from a night out on campus. āIt all felt like a dream. After rooting ourselves back to reality, we shut down the business and I moved to the Netherlands with my girlfriend to reflect. I didnāt want to become a founder again ā I felt exhausted. And I didnāt want to work in a consumer business. Likealittle left me scarred and the last thing I wanted was my destiny to be determined by the whims of short-term-seeking consumers.ā
Another One Bites the Dust
Likealittle could have been a tragedy. A disorienting stint that would have left the founders demoralised. The truth is, it was anything but that for Prasanna. āWhen I look back, that phase of hypergrowth at Likealittle was incredible. I felt the challenge every second that I was awake; itās what that kind of growth demands from you. Since that point, Iāve spent my entire life chasing that similar feeling. I want to be in places where I can create extreme amounts of impact in very little timeā.
This yearning for growth led to Prasannaās next step into Zenefits ā a startup focused on scaling human resources. āWhen I was in the Netherlands, I scoured the internet in search of the next big company. At that time, Zenefits was the darling of the internet. Everyone was raving about the company. I took my shot and emailed Laks Srini, one of the founders. The stars aligned, and I joined as their 30th employee when they were valued at $500 million.ā
Prasannaās intuition served him well, as within just one year, the company grew eight-fold into a $4 billion valuation. The carriage moved ahead of the horse, however, as soon Zenefits faced headwinds. When a business grows at such an exponential rate, there are almost always internal trade-offs that compromise the foundation. Within months, the once creme de la creme of the Valley and media, was now deemed as a danger zone. Parker was eventually fired due to mis-steps, while Prasanna and others followed along.
āWhen Zenefits crashed, I viewed it more as an unforced error. I truly believed that the market still needed the product. It was a factory failure, and I knew we could build a better factory. Thatās when I called Parker and asked if I could join Rippling ā his new venture in HR tech - as his co-founder.ā
Third Timeās A Charm
In the competitive world of startups, the consensus is that focus is critical. Go out to market to solve a single customer pain point ā and solve it better than anybody else. Then, to scale, branch out and āupsellā more products once you have ātrust reservesā with your users. For Parker and Prasanna, this consensus advice didnāt ring true. And in hindsight, itās the denial of the norm that led to their success.
After witnessing the rise of HR tech and Zenefits itself, founders globally wanted a piece of the pie. When Rippling was launched, the market had already caught up ā you couldnāt build a business on one offering, you had to provide the swiss army knife to customers.
āThe thesis from day one at Rippling was to build an āall in oneā employee management service, which included HR and IT integrations. Instead of having users input data across systems, we wanted to own the entire stack. Ambitious, of course, but we felt that we had the DNA to make it happen. There were trade-offs ā no revenue for 18 months and we burned through $10M with the 40 people we hired. But we had customers and were confident, day in and day out, that we were building a better product for them.ā
Although Prasanna and Parker faced early success with their launch, there was a missing piece to their puzzle ā a robust health insurance offering. For unfortunate reasons, the team at Rippling had an āunfairā advantage in understanding this need. During our conversation, Prasanna shared a little-known fact that Parker used to have cancer. At his first company, SigFig, the health benefits were abysmal. Given his diagnosis, he had to make sure that treatment for cancer was covered under his insurance. He studied the ins and outs of the insurance industry through this process. A lot of these learnings were then leveraged first with Zenefitsā health insurance product, and then at Rippling.
With the āpuzzleā solved for, Rippling eventually built out the layer that sits underneath all software and services for any business. Market leadership followed, given the access to information, drive, and vision of the founders. Today, theyāre valued at $11.4B, with revenue of more than $100M, and inspiring founders in other parts of the world to solve for admin drudgery. Getting to this point, unsurprisingly, requires insights on company building, founder mindset, and execution, above all else. Thatās what I really wanted to get into with Prasanna.
In Search of Breakouts
Venture investors operate within the confines of limited data sets. The companies are called āseedā for a reason. I often rely on certain tell-tale signs then, to try and understand how a founderās mind works. The thought patterns, the intention, and the threshold for excellence; a few of the things that point to a company heading in the right direction.
An articulate view on hiring is at the top of that list of things to look out for. As I dug deeper into Prasannaās insights on this area, it gave me comfort knowing that he too believes that itās a key factor in building a decacorn.
āI view hiring as an exercise in disagreeing with the market. Itās like VC investing in many ways. Iām looking for momentum breakouts ā people that are mispriced, unaware of their potential, and yet, those who have a cascade of success before them. Early at Rippling weāve had two sets of people: the ex-YC founders ā generally expensive, but with the right DNA to build a billion-dollar company; and high CPU people ā those that can solve complex problems and show strong business judgement. Last thing, I donāt think experience is necessarily a good thing. I stay away from folks that have worked at Google for 5 years. We had a very clear execution map at Rippling, and I was looking for the best captains for our ship ā those that were entrepreneurial, had an ownerās mentality, and were agile in their thinking ā to help us find the treasureā.
Bringing in top-tier individual talent is only half the battle. What unlocks the synchrony required to execute at the highest level, is a culture of excellence. Itās the lifeblood of any business. āI think that the best culture is one that resembles a hackathon. Small teams, toiling hard, having fun, and accomplishing a lot. We do our very best to preserve that even as we scale Rippling. We want to have a culture like a sports team ā when someone passes you the ball, and you drop it, everyone around you is annoyed because you messed up. We want people to be uncomfortable; to push themselves and force themselves to grow.ā
Mind Over Matter
As the conversation progressed, I remained deeply inspired by what Prasanna has achieved in his life. From leaving everything behind in India, to creating meaningful impact through his career in the West. While I valued all the learnings he shared about company building, what most intrigued meĀ is how this experience built him up as a person. I wanted to dig deeper on the mindset and mental stamina that led to the outlier outcomes heās faced as a founder. āStartups are not a game for the meek. Itās a game where you take the most self-confident people in the world and create self-doubt in them. Founding a company builds humility. An analogy I like to use is that as an entrepreneur, you are essentially playing the role of a con. To succeed, you need to create a culture of optimism in your company. You play a shielding role, where the pessimism and doubt from the external world doesnāt seep into the business. Just like the earthās atmosphere seals radiation in space, a founderās main role is to shield employees from negative thinking. I truly believe that the rate limiter for humanity is not capital, but belief, optimism, and faith.ā
It was an aha moment in our conversation, as Prasanna described that optimism is the real limiting factor for humans. Upon reflection, I quickly agreed with this worldview and wanted to unpack a few layers around this idea.
āIf you look back at history, humanityās true potential is unlocked once an initially deemed impossible task is achieved. In 1945, the US built the first nuclear bomb. Fast forward to a decade later, and a handful more countries have achieved this feat. The same with Elon and SpaceX; for example, AgniKul, a startup out of India, is building rockets with just $10M in funding. Going back to my original point, the best founders inject this positivity and belief into their companies, which allows a few upstarts to achieve the āimpossibleā.ā
Satoshi & The New World
As Prasanna reflected on his life, he tied together the rationale for his rich experiences with a single thought: his inability to ignore six sigma events. From spotting the potential of joining YCombinator, to seeing the alignment of tailwinds for Zenefitsā early success, itās acting on trends that has led to his rich journey.
As Prasanna steps back from Rippling, heās ready for the next āzero to oneā adventure; the next six sigma event. āThe internet was a significant inflection point for humanity and we are still riding on the back of it. I believe that crypto is the next major inflection point, and itās going to be bigger than I had initially thought. Weāre going to see three stages of crypto adoption. First, through the displacement of money. The fiat experiment of 1973 ā when the Gold Standard was abandoned by Nixon ā is a failure. Weāre living through it now and feeling the perils of limitless currency printing. Second, we will see the displacement of the internet. Everything will be rebuilt in a more decentralised way; from the social networks we use to Uber. And third, nation states will be rebuilt. I know this last one sounds crazy, but history is the greatest teacher. Most previous nation states were invented when the USA was built ā before that, we simply accepted a world where GDP grew by half a percent every year. The Internet and crypto has a new solution to how states can be run. My view is that the centre of the world will move from Silicon Valley to crypto, and Iām excited to work in the space.ā
It's no surprise then, that the world of Web3 has attracted the talents of Prasanna. From his childhood tendencies of looking beyond whatās taught in the classroom, crypto is the perfect playground for those who seek a new challenge and want to play a pivotal role in shaping how humans interact in the future. I, for one, am excited to see how this next chapter ā and hopefully, six sigma event ā unfolds for Prasanna.
Thank you to Rahul Sanghi and Nynika Jhaveri for reading and editing my drafts.