In the seven months since new CEO Jay Fulcher was appointed to douse the flames at scandal-tarred Zenefits, he has fired more than 400 employees, flown to visit some of his biggest customers and even surveyed 5,000 people on whether to change his company’s name.
Zenefits’ CEO says his company doesn’t need cash as it rebrands once more
The company considered changing its name, but decided against it.
He insists that Zenefits — and the name “Zenefits” — isn’t fading away.
That wasn’t always a guarantee. After its astronomical climb to a valuation of $4.5 billion in just over two years, Zenefits fell deep into despair after news emerged that it had repeatedly flouted insurance laws, leading to the ouster of its then-CEO Parker Conrad. Last year, the company took the rare step of sharply revaluing its stock to $2 billion.
Still, Fulcher says the human-resources company doesn’t plan to raise money at the moment — and that he isn’t eyeing an exit right now.
“We’ve got plenty of cash,” he said in an interview. “Over time, my job is to build a lot more value than where we were ... Going public is one option. In today’s day and age, there are more options than there ever used to be.”
The company appears to still be assessing its misdeeds. “We don’t shrink from it,” Fulcher said. “We internally spend and have spent a fair amount of time really understanding — what went wrong here? What were the cultural things that weren’t set properly?”
Zenefits is attempting another stab at rebranding what was once a Silicon Valley darling. Corporate cultural rehabilitation has now become part of the broader narrative in the world of high-flying startups — most prominently at Uber, which is trying to reform itself in the wake of a series of sexual harassment scandals and a clutch of lawsuits. Venture firms like 500 Startups also have been gripped by similar scandals, and have vowed to change their policies and practices.
So Zenefits invited journalists in for PowerPoint presentations explaining its new ethos, though its attempt at a new image revolves primarily around a vague willingness to “own” the past and less around proposed new policies.
It is also changing its business model. Zenefits, which sells software that helps small businesses more cheaply manage HR functions such as payroll and benefits, is unveiling its “pivot,” which almost stereotypically accompanies a startup’s path to redemption. The company is now selling its software through existing insurance brokers who already have their own customers, rather than giving it away for free.
That theoretically gives Zenefits access to a much bigger market — for instance, on Thursday, the software company is striking a partnership with OneDigital, which has 1,000 benefits advisers — though it now must share some of the revenue. The partnership with OneDigital is not exclusive, and others are planned imminently.
But much of Zenefits’ overhaul centers on branding and corporate values — as evidenced by the company’s Thursday conference on the “employee experience” in San Francisco, where these changes will be unveiled. Zenefits already tried to relaunch just last year, as part of an initiative it called Z2.
That experience led Fulcher to think he might even need to change the company’s name. But he said the results of his polls were surpisingly relaxing.
So, as Fulcher ticked through numbers showing that only 10 percent of customers or prospective customers have a negative impression of the company’s name, he said he was set on avoiding the “echo chamber” that creates the impression that Zenefits is an unpopular brand.
“Within five miles of here,” he said, “there’s a whole bunch of companies that would love to have those kind of stats.”
This article originally appeared on Recode.net.
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