Reinventing Zenefits
Parker Conrad is no longer with Zenefits yet many in the insurance industry are still talking about him and the bull-in-a-china-shop entrance he made more than three years ago as the brash CEO of a new start-up called Zenefits. As a pre-funded start-up, Conrad made some bold comments and threatened to "drink the milkshakes" of the traditional health insurance agent with his all-in-one technology. No one seemed to notice or care until we later learned that he raised a large round of VC funding, and then another half billion dollars of funding to start his mission to replace traditional benefits brokers and HR providers. Like him or not, I've never seen a faster rise (or fall) in my nearly 30 years in employee benefits. (Forbes: Zenefits scandal in 60 seconds)
About 18 months ago, I interviewed Zenefits founder and CEO, Parker Conrad and asked about his disruptive business model, growth plans and also, what I considered to be a dumb question at the time, "are all your salespeople licensed?". Much has changed since then. Parker was asked to leave amid missed sales targets, the companies reduced valuation, multiple complaints filed with several state insurance regulators related to unlicensed sales transactions, and other scandalous stories rarely heard in our conservative and buttoned-down industry. For some, that's where the story ended.
Not so. I met recently with David O. Sacks, the New CEO at Zenefits. If you are in the Silicon Valley, you likely know his bio and list of accomplishments. He's an impressive guy and his track record should grab the attention of anyone who thinks Zenefits is done and should not be watched. Also, there's a big company launch event on October 18th in San Francisco which promises to announce new technology and practices for the reinvented company. But first, Sacks will speak to a large room of benefits brokers... on September 20th at the (SVAHU) Silicon Valley Association of Health Underwriters - Plug and Play Tech Center in Sunnyvale. This is the very same audience Parker Conrad addressed in 2014 and also the first time (as far as I know) Sacks has addressed a room full of his competitors; the very same brokers Parker promised to "mess stuff up for" in 2013.
But it's different this time. Sacks is a very different leader and the market has changed and competing technology for traditional brokers are ubiquitous. I am proud to host this interview again and look forward to posting the highlights here. Like my previous interviews with Parker Conrad, I expect the conversation to be very candid and transparent, addressing everything from the removal of Conrad as CEO, the status of investigations with state regulators and what has changed under his leadership.
So why are we meeting with him? I think it's time to turn the page on the Zenefits story and shift focus on having a better understanding of what is happening within our industry and the trends which will undoubtedly transform our whole industry. SVAHU is fortunate to have access to many of the thought leaders and luminaries who shape the changing insurance and healthcare space. Our interviews with Conrad were informative and provided insight and predictions (which proved true) and helped "traditional" benefits agents prepare for their own technology solutions. We are proud to continue this speaker series and help our members stay informed and better serve their clients.
Link to SVAHU 2014 Interview with Parker Conrad & another with audio in June 2015
To learn more about SVAHU or register for this event, please visit: www.svahu.org
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About Michael Lujan
Michael Lujan is Co-Founder and Chief Strategy Officer for Limelight Health, a San Francisco-based start-up with funding from AXA Strategic Ventures, Mass Mutual Ventures and Launchpad Digital Health. Limelight is a quoting technology platform for health insurance agents, carriers, general agents and private exchanges. Called QuotePad, the SaaS-based technology offers small business benefits quoting with integration with benefits administration and other agency tools.
Michael is Immediate Past President of CAHU (CA Association of Health Underwriters) and current board member of the Silicon Valley chapter. In 2012, Michael helped establish the California Health Benefit Exchange, now known as Covered California. A former agent, general agent and Director of Sales for Blue Shield of California, Michael is an outspoken advocate for the agent distribution channel, small business and the uninsured. Learn more at www.limelighthealth.com
Principal Consultant | Insurtech, Employee Benefits, Sales Strategy
8 å¹´Thanks for the comments. The interview was interesting and shared some new insight about the past, present and future of Zenefits. David Sacks is a very different leader and embodies none of the caustic opinions of traditional agents and was very accepting of the changed benefits technology landscape. If, in fact this is an innovation and tech war, there are many "arms dealers" ready to provide tech solutions (weapons) for traditional agents. Companies like EaseCentral, Flock, Employee Navigator, Bernie Portal, BenefitExpress, Zywave, OnCore HCM, BenePay Tech, Insynctive, PlanSource, Paylocity, PrimePay, the list goes on... . Although he did not make the audacious statements about agents, Sacks did express regret and said the company would have been more successful if they did not take on traditional brokers and instead partnered with them. Possibly, a hint that a new broker-partner strategy is being announced on Oct 18th at their "Z2 launch" at Dreamforce in SF? While some brokers may not get why an interview with Sacks matters, the purpose was to give an update on what's happening and how it could impact the benefits industry. The Silicon Valley chapter of NAHU invited Sacks to speak so we could better understand the status of pending regulatory investigations, the real story around their stumble and embarassing scandals and maybe most important, what's next. I think it's time for agents to turn the page from their adolescent growing-pains and pay attention to the reinvented company and the bigger picture. Will he turn the company around? Time will tell. I will post the full one-hour interview here and on www.svahu.org. Limelight Health was proud to sponsor the event AV so we can share the recording with other NAHU chapters and benefits/hr professionals everywhere. Feedback welcomed.
Founder of Rick Bailey and Company
8 å¹´Zenefits was a victim of their own success. It is similar to thinking a stock price will go straight up, without corrections. I think the pressure to keep up their unrealistic growth, drove them to do things that got them in trouble. We can debate their sales practices, but other agencies around the country are using similar tactics to grow market share.