Using AI to evaluate employee performance with Rippling’s COO Matt MacInnis

**Sarah** (0:05)
Hi, listeners. Welcome back to No Priors. Today, Elad and I have a spicy one. We're here with Matt MacInnis, the COO of Rippling, the Juggernaut Workforce Management Platform that unifies HR, IT, Finance and more. They're launching a new AI product that looks at the work output of employees and generates performance management signals. Sound terrifying? Let's discuss. It's so good to have you.

**Matt MacInnis** (0:30)
Thank you for having me.

**Sarah** (0:31)
So, I think a lot of our audience will know Rippling or use Rippling. But for anybody who's missing it, what does the company do?

**Matt MacInnis** (0:37)
Yeah, it's an all-in-one platform for HR, IT and Finance. We do all the boring stuff, but the important stuff to help you run your company. So, we want to eliminate the administrative burden of running a company. That's all the official language, but most people come to us and say they need payroll, and we have payroll. They need a device management solution. We have one of those too. So, we do all that stuff.

**Sarah** (0:57)
The rumor is many hundreds of millions of dollars in revenue, growing fast. Anything else you can say about scale?

**Matt MacInnis** (1:03)
It's going well. We got about 3,500 employees. We've got tens of thousands of customers using the platform. So, I'd say we're doing something right.

**Elad** (1:11)
I guess also one of the things that you all have really pioneered is this notion of reintroducing compound startups or bundled products across a suite of different things. How many different products do you offer now, and what's the velocity in terms of adding new ones?

**Matt MacInnis** (1:22)
We have on the order of 25 unique skews that a customer can buy from us. Products come in different shapes and sizes, and so we ship small new things every quarter, and then we definitely do big things every couple of quarters or so. We're about to ship scheduling, which again sounds unsexy, but is actually really cool. We shipped an applicant tracking system for recruiting, attacking these sorts of things under our HCM suite. We do a lot of this partially because we have so many founders in the business. We have over 150 people who have started companies that now work at Rippling. It's like an explicit strategy to go out and try to either give talented entrepreneurs whose business ideas didn't quite work out like, hey, hand raised, I've been there. A safe place to land and continue either pursuing what they were interested in or do something new at Rippling, and so that's worked out really well for us on the velocity front for shipping new products. The compound startup thing obviously has been in the zeitgeist a little bit in the valley. It's just obviously a huge tailwind for us that businesses generally want to consolidate as much of their software onto a single platform as they can. So, we're going to keep pursuing this and keep recruiting awesome talented entrepreneurs and ship new stuff all the time.

**Elad** (2:28)
Makes sense. I guess one way to think about your business is almost like, instead of one company growing at a certain rate, you're like 25 startups all compounding from a smaller base, which I think is very exciting in terms of the potential upside.

**Matt MacInnis** (2:39)
One of the things that I wished I had learned way earlier in my career as an entrepreneur was just like basic corporate finance. Like understanding an income statement and a balance sheet and how those things play together and what investors look at in that context. I get it now for the record, I think I've mostly figured that stuff out. But when you look at the income statement for Rippling and you think about the 25 businesses or just like the major product suites like IT and finance and spend, they're sort of sub-scale businesses at some level on their own. And then in aggregate, you have this beautiful top-line picture, but from an efficiency standpoint, like it's okay today, but there's clearly just going to be this like blossoming of efficiency over time for us as these different suites all play to one another. In SaaS software, most people don't totally understand that like for a scaled businesses the unit economics of your business converge at the cross-sell motion. Like your new logo sales motion is super important, but as you sell your products into your ever-growing customer base, like your economics start to look like that more than the new logo sales motion because you always have a lot more in the cross-sell bucket. So for us, the compound startup thing also has these beautiful financial dynamics that we have a lot of things we can sell to our existing customer base over time, and that's helped us a lot economically.