Remember when Zenefits imploded and threw CEO Parker Conrad out. Well, Conrad has launched a new onboarding startup for employees called Rippling. Now he's chasing another HR company called Gusto with a new billboard: "Outgrowing Gusto?" Presto change-o. "
The problem is that Gusto Rippling and the poster operator Clear Channel Outdoor issued an injunction. This is despite the law that normally allows comparative advertising as long as it is correct. Gusto sells personnel, social and payroll software, while Rippling does the same, but adds IT management to tie together an employee identity platform.
According to Rippling, growing out of Gusto is the main reason why customers say they switch to Rippling. There are no customers with more than 61 customers listed on the Gusto customer stories page. According to Enlyft research, the company is most commonly used by 10 to 50 employees. “We were one of Gusto's biggest customers when we left the platform last year. They were very open to the fact that the product didn't work for companies of our size. We moved to Rippling last fall and were very happy with it, ”says Michael Haft, co-founder of Compass Coffee.
All of this suggests that the rippling ad claim is reasonable. However, C&D claims that "Gusto counts multiple companies with 100 or more employees as customers and does not indicate that companies of a certain size will" grow "out of their platform."
In an email to TechCrunch employees, Matt Epstein, CMO of Rippling, said: "We take legal claims seriously, but they don't pass the laugh test. As Gusto says on his entire website, they focus on small businesses."
Instead of taking Gusto to court or trying to change Clear Channel's mind, Conrad and Rippling did something cheeky. They reacted to the injunction in the Iambian pentameter in Shakespeare style.
Our billboard apparently hit a nerve. And so you called your lawyer teams
who started screaming: "Stop it!" "Omission" and other threats too long to list.
Your brand is known to be chilled. So that just seems like an exaggeration.
But since you think we were unfair, we really want to purify the air:
Rippling's Advocate General Vanessa Wu wrote the letter, saying: “When Gusto tried to scale itself, we saw what you took off the shelf. Your software has come up short. They needed Workday for the support, ”claiming that Gusto's own HR tool could not handle the more than 1,000 employees and had to contact a larger company provider. The letter concludes with the implication that Gusto should drop the cease and desist and instead compete on merit:
So, gusto, don't fear our sign. Our mission and goals are the same.
Let us keep this conflict worthy – and the customers decide.
The rippling CMO Matt Epstein tells me: “While people across the street could disrupt competition, customers win when companies push each other to get better results. We hope that our lighthearted poem will bring this debate back on the ground and look forward to surviving in the market. "
Rippling may think the whole thing was smart or funny, but it seems a bit lame and tiring. These are far from 8 miles worth of fighting rhymes. If it really wanted to let customers decide, it could have simply accepted the C&D and carried on … or could not have operated the billboard at all. There are four others that don't beat competitors. Still, Gusto looks petty when he tries to block the billboard and hide that it isn't equipped to support massive teams.
We contacted Gusto over the weekend and asked again today to comment on whether the C&D will be dropped, whether an attempt is being made to drop Rippling's bus ad, and whether Workday is actually being used internally.
Given that Gusto raised $ 516 million – ten times what Rippling has – you might think Rippling could only spend on advertising or invest in building HR tools for businesses, so customers really don't care about it can grow out. They are both Y Combinator companies with Little Perkins as their main investor (conflict of interest?), So maybe they can still bury the hatchet.
At least they found a way to make the HR industry interesting for an afternoon.