David Sacks, CEO of troubled startup Zenefits, thinks it's unfair that the press has been lumping it into the same category as troubled startup Theranos.
He went on a whole Twitter rant about it on Friday, linking to this story in the LA Times about how startups that claim to be "disruptive" are often mostly hype.
The reporter, Michael Hiltzik, starts with Theranos, which has become the poster child for highly funded, highly valued startups that have run afoul.
Hiltzik points out the company's run-in with regulators that have questioned the accuracy of its one-drop-of-blood blood-testing technology. Theranos has recalled the test results from its blood machines, The Wall Street Journal recently reported.
The reporter then notes that Zenefits is another high-flying startup that ran afoul of regulators, which have been investigating the company for selling insurance without a license.
In Zenefits' case, its CEO resigned over the matter, and the company then revealed details of how that CEO created a program that may have let employees skirt the law when studying for their licenses.
Sacks basically accused the reporter of being "lazy."
—David Sacks (@DavidSacks) May 20, 2016
It documented all the ways he changed the company since he took over as CEO on February 8, when founder Parker Conrad resigned. Sacks had been with the company as COO since December 2014.
Unlike others, we have fixed our licensing issues. These are historical issues, not current ones. Today we are operating in compliance.
Unlike others, we self-reported these historical licensing issues to regulators. We've been open and transparent about past failings. Today we are operating in compliance.
Unlike others, we reconstituted our board of directors to provide proper oversight and corporate governance.
Unlike others, we have stood up a robust compliance organization to prevent these issues from happening again.
Unlike others, we proactively commissioned a Big Four accounting firm to audit our licensing and shared the result with regulators.
Unlike others, we have made compliance a central part of our culture, values and expertise moving forward.
Most of all, we have a real product that works for many thousands of small businesses who express appreciation and gratitude.
As a result, our customer base (over 20,000) is sticking with us and ARR remains over $60M.
In summary, Zenefits today is a different company that has addressed its historical issues and is looking to the future.
To his credit, it is hard to clean up a troubled company with more than 1,000 employees whose products are used by 20,000 customers — and do it in the public eye.
On the other hand, Zenefits' problems were not exactly the messenger's fault, and it might take more than a couple of months to prove itself a comeback story.
