Get ready for some juicy B2B Enterprise HR software drama! Okay, maybe that sentence has never been uttered before, but this week’s episode dove headfirst into a fascinating, almost Netflix-level espionage story unfolding between two industry giants: Rippling and Deel.

Shaan and Sam broke down the allegations, the backstory of the key players, and then spun off into some incredible historical examples of corporate espionage. If you enjoy business drama, history, and a little bit of informed speculation, this one’s for you.

Here are the detailed key insights and stories discussed:

1. The Rippling vs. Deel Allegations (The Baseline Story):

• The Accusation: Parker Conrad (CEO of Rippling) publicly accused Deel of cultivating a spy within Rippling who conducted extensive searches (allegedly 20-23 times/day) in Rippling’s systems, potentially stealing trade secrets and customer information.
• The Honeypot: Rippling claims they suspected spying and set a trap. They created a fake private Slack channel named “#deal-defectors,” supposedly for ex-Deel employees now at Rippling to talk trash. They then (allegedly) informed key Deel executives about this channel’s existence.
• The “Proof”: Rippling alleges that shortly after notifying Deel, someone attempted to access this fake Slack channel. Since only a few Deel executives knew about it, Rippling concluded the spy must be one of them.
• The Bathroom Incident: The alleged spy, working out of Deel’s Dublin office, was reportedly served papers requiring him to hand over his phone. He allegedly locked himself in the bathroom, was heard “doing something” on his phone (potentially deleting data) despite warnings, and then supposedly flushed the toilet (prompting Rippling to check the plumbing – no phone found) before fleeing the premises.
• Deel’s Response: Deel denies all wrongdoing, calls the claims “sensationalized,” and suggests Rippling is trying to shift the narrative away from Rippling’s own alleged issues (like potential sanctions violations in Russia). They intend to file counterclaims.

2. Backstory: Parker Conrad (Rippling CEO) & The Culture

• Zenefits History: Parker Conrad previously founded Zenefits, another HR/payroll company that experienced hypergrowth. He was famously fired by his board (including investor David Sacks, who took over as CEO) amid accusations of compliance issues, specifically around licensing requirements and creating software macros to bypass training tests. Parties and a “Loosey Goosey” culture were also cited.
• Rippling as Revenge: Rippling is widely seen as Parker’s “revenge company,” built after his dramatic exit from Zenefits.
• Reputation: Parker has a reputation for being aggressive, pushing boundaries, and perhaps enjoying the “bad boy” image within the HR tech space.

3. Historical Corporate Espionage Examples:

• British East India Company vs. China (Tea Secrets):
  • The Problem: In the 1800s, China had a global monopoly on tea production, creating a massive trade imbalance with Britain (who traded opium to compensate, leading to the Opium Wars).
  • The Spy: The British East India Company hired Scottish botanist Robert Fortune. He disguised himself (questionably, as he looked very Scottish) as a Chinese merchant, infiltrated China’s restricted tea regions, studied their entire production process (planting, harvesting, drying, packaging), collected thousands of tea plants/seeds, and recruited Chinese tea growers.
  • The Result: Fortune smuggled the secrets, seeds, and workers to India. India quickly surpassed China in tea production, breaking the monopoly and de-escalating the trade conflict. An incredible feat of industrial espionage.
• Oracle vs. Microsoft (’90s Antitrust Era):
  • The Context: Microsoft faced intense antitrust scrutiny and lawsuits over alleged monopolistic practices.
  • Oracle’s Move: Larry Ellison’s Oracle hired private investigators, not to dig up dirt on Microsoft directly, but to investigate supposedly independent think tanks and advocacy groups that were publicly supporting Microsoft.
  • Dumpster Diving: The investigators literally dug through the trash of these organizations and found evidence that Microsoft was secretly funding them.
  • Ellison’s Spin: When caught, Ellison framed Oracle’s actions as a “public service,” exposing hidden information about Microsoft’s influence, rather than admitting to corporate espionage.
• Coke vs. Pepsi (The Failed Formula Sale):
  • The Setup: In 2006, a disgruntled Coca-Cola employee (Joya Williams) attempted to sell Coke’s secret formula and information about a new unreleased product to Pepsi.
  • Pepsi’s Response: Pepsi acted as the “good guy,” immediately notified Coke, and cooperated with Coke and the FBI to set up a sting operation.
  • The Result: Williams was caught, arrested, and sentenced to 8 years in prison. Pepsi declined the trade secrets.
• Google (Waymo) vs. Uber (Anthony Levandowski):
  • The Theft: Star engineer Anthony Levandowski downloaded thousands (reportedly 14,000) of confidential files related to Google’s self-driving car project (Waymo) before leaving to join Uber (recruited by Travis Kalanick).
  • The Fallout: Uber was sued, settled by giving Google’s parent company Alphabet a significant stake in Uber (initially ~$250M stock, now worth closer to $1B), and Levandowski was fired and sentenced to 18 months in prison for trade secret theft.
  • The Pardon: Levandowski was later pardoned by President Trump.
• The USA’s Founding & Intellectual Piracy: Alexander Hamilton, the first US Treasury Secretary, recognized Europe was technologically ahead. He actively advocated for policies that encouraged and rewarded bringing industrial secrets and improvements (i.e., intellectual property theft) from Europe to the US, effectively making the early US a safe haven for industrial spies like Samuel Slater (“Slater the Traitor” in the UK, but an American hero).

4. Other Insights & Takeaways:

• HubSpot’s “100 Customers” Report: Shaan plugged a free PDF resource from HubSpot analyzing how various successful founders (including himself and guests) got their first 100 customers. (Link likely in show notes).
• Glassdoor Reconnaissance: Sam uses Glassdoor reviews (especially negative ones, read cautiously) to get insights into company culture, CEO blind spots, and industry trends, though acknowledges the bias.
• Network Effects (James Currier): The guys touched upon the idea (popularized by investor James Currier) that your life outcomes are heavily influenced by the networks you join (college, company, church, country). Gilly’s Cyberstarts fund is a powerful example of leveraging multiple, overlapping networks (military, CSOs, founders).
• Cyberstarts Playbook: Gilly’s fund has a repeatable playbook (shared in a little-known YouTube video) for taking cyber security startups from idea to significant revenue ($2M ARR target in year one) by leveraging his CSO network for validation and initial customers. Whiz followed this path to a $32B exit in ~5 years.
• Vision, Capital, People (Mark Laurita): Referenced the “Vision, Capital, People” framework from diapers.com/Jet.com founder Mark Laurita as a model for massive success: Find a big idea, raise huge capital, hire the best people, and get out of their way. Whiz exemplifies this.
• The Burden of Success & Motivation: Discussion around why billionaires like Elon Musk still chase status and power, suggesting a framework of Money -> Status -> Power as fundamental human drives.

Final Thought:

This episode was a wild ride through the surprisingly cutthroat world of HR tech and the long, often shady history of corporate espionage. Whether it’s stealing tea secrets or source code, the drive for competitive advantage has fueled some incredible and often ethically dubious stories. The Rippling vs. Deel saga is just the latest chapter. Grab your popcorn!

Listen to the full episode here: [Link to Episode]

Until next time,
Podcast Notes Team (Allegedly 😉)