A damaged reputation is difficult to restore, but that is exactly the mission of David Sacks, the Zenefits chief executive who succeeded its disgraced founder Parker Conrad.
Once a Silicon Valley darling, the human resources software firm that caters specifically to small companies watched as its sterling reputation went up in smoke with the exposure of a program Conrad worked on that allowed sales representatives to dodge requirements in a state insurance licensing course. Then it was all downhill from there.
These days, Sacks has his hands full with crisis management, which mainly entails settling with state regulators and repositioning the company, refocusing its core corporate values, and winning back its markets.
“This will be the month where we close the chapter on all that stuff, we move past it and we launch the future of the company,” Sacks told reporters, referring to the launch of its new product next week with the focus on playing it straight from hereon in.
However, second chances may not be as easy to come by as Sacks imagines. In the time it has taken to regroup, competitors have flocked to this potentially lucrative market.
Such software, offered through cloud technology through the software as a service (SaaS) business model, has become cost efficient to offer to small companies because of economies of scale. Technology firms have sat up and taken notice, and have been careful to toe the line, especially in the highly regulated world of human resources software.
Among them is Gusto, said to be Zenefits’ closest competitor. It also offers its software for subscription to small businesses, but has not been as rabid as Zenefits was to hype its products.
Joshua Reeves, one of Gusto’s founders and its chief executive, said, “It’s about trust. And when you endanger that trust, it’s hard to rebuild it.”
