you're watching tvpn live we are not live from the Temple of technology today we are broadcasting from the Temple of Technology because I am traveling I'm in the nation's capital Washington DC it is a balmy 60 degrees outside it's not cold at all uh Jordy where are you right now and uh how you doing I'm home in Malibu
uh the home of magnitude 4.0 earthquakes there an earthquake there was an earthquake Quake last night it was like a 40 just as we were sort of going to bed and the fascinating thing is that there's been a ton of earthquakes literally right on my neighborhood like if you look at the map there was there was an LA Times article
last week I think it was Monday about how this area of Malibu has just had a bunch of earthquakes so we've basically had two 4.0 earthquakes in the last week in the exact same spot and a bunch of others so um we're moving and shaking over here John uh love it and uh yeah I so the the the funny thing it doesn't seem like a
SE it's seismologist right like people that like study it doesn't seem they they describe their own craft as trying to read the tea leaves because they can't they actually aren't like they aren't able to make really accurate predictions other than we think a big one's coming yeah but they have no sense
like you know there's been this massive uptick in activity over the last like six months they're not able to make any type of more accurate projections other than at some point there's going to be a big one um but uh but anyways we have some news Shak the timeline today uh there is a post I wanted to pull up um
from a guy named Anan he says uh about the story that we're going to cover this is an incredible tale of Espionage and Intrigue until you remember it's HR sass um but it's real it's real Espionage and Intrigue for our world and uh do you think it's do you think it's an accident that they that they did this on St St
Patty's Day well just to set the just to set the tone uh if people haven't been following um today Parker Conrad the founder of Rippling announced that they suing deal for embedding a spy in Rippling which is crazy in in the uh in the Irish office in the Irish office and yes it is St Patrick's Day and so you know we got to
put on the tinf foil hat and wonder what's really going on here is this some Hibernian conspiracy going on uh are the are the Irish Lads uh up to something but but it feels like it's potentially Irish on Irish crime and you know we hate to see that especially on a day as important to me as an Irishman as
St Patty's Day not wearing any green John had the decency to throw on a green where's my green I even thought about leveling it up and going double green with the bezel but um I'm gonna I'm Gonna Leave it off for now um well let's set the let's set the table uh there's actually a new article that just dropped in Bloomberg that I
think we should actually kind of pivot over to by because it's by Matt LaVine uh over at uh at Bloomberg spies in the sales slack I'll send this I'll send this over to the crew I'm pulling it up yeah this one nothing like there's nothing like breaking news nothing like breaking news yeah uh and and and Matt
LaVine is is a fantastic writer and I think he'll break it down pretty well so we'll read through this we'll take you through some of the actual complaint the PDF that's been shared it's a 50-page document I have some ideas of what where the interesting stuff is where the interesting anecdotes are and then we'll
go through uh a list of other corporate ESP just to give some history because it's a fascinating topic uh won't do too many deep Dives there but there's some there's some fascinating ones in this list I put together uh somebody tried to steal the Coca-Cola formula at one point uh the Chinese were stealing Google
self-driving car stuff there's been there's been fascinating stories uh throughout the business history so is the Coca-Cola formula I don't know if you know offand is it still actually trade secret secret I think so they've they found a way to to maintain that secret over a century plus I think so I think they I think they divided up in in
such a way that no one can get a full look at everything and so they've never been able to because it would be off patent by now and so someone would have copied it um but yeah uh highly guarded Trade Secrets including a new product sample and sell them to arch rival PepsiCo someone tried to steal it and
sell it in 2006 this happen anyway we'll go into that at the end of the show uh we we we got to cover the breaking news first um so let's read about uh Matt LaVine he says spies in the sales slack deal I wonder how much corporate Espionage there is like if you work in a high touch high dollar sales business
enterprise software Investment Banking Etc um much of your time will be spent pitching new customers who are choosing between you and your competitors or pitching customers who currently work with your competitors or trying to retain customers who are thinking about switching to your competitors if you
knew what your competitors were up to that would help if you knew a competitor was coming to your customer's office next week to try and steal them away from you if you saw your competitor's pitch deck you could take some actions you could get to the customer first and offer a discount you could see the arguments in the pitch deck and try to
counter them you could see what your competitor says about the features of its own product and try to build those features into your product it's not a magic cheat code you still need a competitive product and pricing and good sales people and all that but it surely helps so you know find a salesperson at
a competitor and recruiter uh not to quit your competitor and come work for you but to stay at your competitor and spy for you you give her quarterly bags of cash she looks at your competitor's Pipeline and keeps you up to date on who it is pitching and what it is saying obviously this is not
legal advice it seems problematic in all sorts of ways but surely people try it from time to time the downside is that apparently if you get caught doing this you will get a hilarious lawsuit uh and there's a and there's a big quote here from kind of summarizing what's going on workpl workplace software uh company people center Inc I
didn't know this is the real name of ripling that's their I guess ripling is just their BBA people Center is suing its Chief competitor over alleged corporate Espionage both companies were valued in excess of 10 billion ripling in its complaint says deal cultivated a spy to systematically steal its
competitors most sensitive business information and trade secrets in a deliberate attack that lasted for more than four months the alleged spy at ripling its ireland-based global global pay uh payroll compliance manager was identified after he was observed accessing slack channels and documents with no no legitimate reason to do so
the complaint says crazy I know I just want to go I just want to go out and say that this 100% is happening at other companies yep and those people right now are shaking oh yeah and and they deserve to be this is deeply wrong and uh you know you get into this situation because deal and ripl were able to go grow
extremely quickly yep initially doing very different things right oh yeah Rippling was distinctly focused on the US market they they allowed you to pay people internationally but it wasn't a core Focus deal focused on helping us corporates move internationally and then both these businesses are sort of have
been converging over the last call it two years and given the scale that they're at now yes there are companies running on Legacy systems and other competitors and things like that but for the big logo clients you can imagine that they're almost always competing uh you know nobody is saying hey I'm gonna go sign up for I want a
new payroll provider and then not getting bids from deal and Rippling right that would be like bad practice from uh the the HR or Finance team uh at any company right you should be getting competitive bids so yeah it's not at all it's not at all surprising that like these companies have basically been in a
blood Feud where what is surprising is that they would go far enough to allegedly uh you know plant a spy um and I'm excited to get into the Honeypot component because uh so much here ripling was really playing some some 4D chess I love 40 CH yeah I mean I I made a whole documentary about Rippling uh I
I used Parker's previous HR company in 2012 2013 uh zenitz uh worked great uh interesting hack there where they'd give you the product for free and then act as your uh your health insurance broker and so they would take the brokage The Brokerage fee and that was when when you sign a health care contract as a company
the Healthcare broker gets a commission and those commissions can be really really high because yeah you're you're sending you're like you're you're committing to spending a lot over a long time and they're very low churn and so it was a very interesting uh uh it was a very interesting like go to market hack they grew extremely quickly
they were the fastest company to hit a billion dollars in in sales in Silicon Valley or ARR like ever they're multi-billion dollar company then of course there's all the drama with Parker and Sachs and they've been that's been litigated and relitigated a million times um but uh when I talked to Parker
I was I was asking him like okay so like you're basically building the same company twice like what how did you think about it and it seemed like much more focus on hris early on they wanted to do uh this vertical this uh he called it the compound startup model so they do multiple things he really looks like
what Microsoft does where they have Excel and PowerPoint they're not this Pure Play vertical SAS company they're horizontal and on day one he wanted uh you know payroll benefits and it and so rippings go to market was hey you have all these employees Mo some of them are working from home you buy them laptops
what happens when they quit or they get laid off well they got to send their laptops back it's a hassle you're probably not like refurbishing them properly and putting them back in the cycle we will just handle all that for you it was a unique go to market grew a ton and then I asked him like Hey like
what's going on with International this seems like it hasn't been that much of a focus for you uh and you know the subtext of the discussion was kind of like what's going on with deal and he wasn't really mincing words it you know he's obviously sees them as like a very serious competitor but also just I think there was a little bit of
acknowledgement that Co caught him off guard and Co really really accelerated what di was doing because di was built for international and super crazy remote work and the the fundamental and and anybody that's an entrepreneur or investor should go back and read the deals or sorry not deal ripling series a
memo like on the compound startup y Parker basically lays out the master plan he even published the memo himself yep uh deal didn't have to you know steal that one yeah um but uh but but it puts out this master plan of like if you basically own the employee graph you can launch every meaningful piece of workplace software yep on top of that
and and something to be you know I think we covered this last week it's something like 70 plus percent of all like PRI uh public companies are based in the US yep and uh what that means is that Rippling should own the Glo should dominate you know if they're going to come in the US and sort of dominate the American uh
Market here and then you know eventually expand into Global payroll then of course they're going to eventually get to upselling and so for deal to move into traditional payroll and hris that's also something that's sort of critical for their long-term uh viability uh like they're not going to basically dominate the
global payroll Market without also having a ific sort of foothold in the traditional HR Tech Market here in the US yeah yeah it's uh yeah I mean the compound startup thing is fascinating uh it's funny because we we we're actually working on setting up payroll right now and so uh we we we uh you know uh our decision is
being informed by the war on the timeline whoever win yeah we should just condense this down and and set up a zoom link between a deal rep a Rippling rep a gusta rep a warp rep just get them all on the same call and say hey guys like let's build in public here let's keep transparent yeah yeah come on the show
and Pitch us and then whoever pitches us the best will it'll be good content and we'll and we'll get a good uh uh we'll get a good payroll provider it is fascinating that you obviously like there's this almost like holy trinity of unicorn Silicon Valley companies and they're all they're all funded by Founders fund and andreon and seoa and
stuff and like all the serious VCS have piled into these like unicorn decorn payroll companies Gusto Rippling and um and deal uh but if you look in the public markets there's another three companies that are all in like the tens of billions and they all have basically the exact same name it's like paycom
Paylocity and there's another one with pay and then above that higher end ones that are worth even more so it's just a massive Market when you're taking a cut of just payroll it's just so easy to justify oh yeah 50k a year or 50k a month yeah you can you can look at um you can look at uh historically I think
the payroll Market has always been you know the the the narrative has been this is not a win or take all Market y uh deal and ripling and Gusto can all be worth tens of billions of dollars just by eating ADP right ADP totally yeah ADP is the big one ADP is at 120 billion today there's no new companies signing
up for ADP that I know tot totally uh it's just not happening I I I never interacted with a startup in coming up like 10 years in in startups that was on ADP I'm sure they reach out to companies but they're just not winning any companies so so it's almost like a cable style business where it's just running
or like the Oracle it's like you know it's like a huge business but like for older School companies and bigger companies and ADP I'm sure is great if you're Disney I think I think when I was at Disney they were on ADP and it was like yeah they have like the most insane Enterprise compliance needs and ADP
fills that probably pretty well but it's probably so cumbersome if your startup and you're like actually I have no need for 25 of these features yeah anyway uh let's continue with the Matt LaVine article uh so a deal spokesperson said Rippling was attempting to deflect negative attention from itself weeks
after Rippling is accused of violating sanctions law in Russia which we'll get into in the information article it seeding falsehoods of deal ripling is trying to shift the narrative with these sensationalized claims the spokesperson said we deny all legal wrongdoing and look forward to asserting our counter claims sorry but yes that absolutely
works if you are ever accused of violating sanction laws please do bring a sensational spying law suit against your competitor that will certainly me anyway so to be clear here this is a this is a good line from from Deal's uh PR team the thing that's sort of uh hurting them on this is is that the alleged spy hid in the bathroom and then
fled the scene you read the complaint and you're like this looks very bad um so this is the right line from from deal but um it's I don't know I think Matt's seeing through it a little bit yeah so he says this is not legal or public relations advice it's just an expression of my own interests anyway
here is Ring's complaint which refers to the alleged spy as DS for a deal spy the guy allegedly lurked in a bunch of slack channels devoted to Rippling sales process so he could Channel information back to deal Guided by deal as his primary search term DS surreptitiously accessed Rippling slack channels replete
with its sales and marketing Trade Secrets and proprietary and confidential information the channels accessed by DS contain highly sensitive and confidential information about customers prospective customers including details such as customer name contact information Revenue at issue and current
issues and problems the customer is facing and details of sales relationships uh conversations between Rippling and its customers or prospective customers all of these are details that a competitor such as deal could exploit to convince such customers to purchase their products rather than Rippling products it is not clear how
much this actually helped deal but there is at least one suggestive case here DS navigated to a mention of deal in a channel focused on a particular p on a particular perspective customer who is considering both both Rippling and deal this is known as Prospect B B DS previewed the channel which included
details for a call scheduled with Prospect B the next day and Communications in which Prospect B relayed to Rippling specific concerns with the products and services offered by deal the channel also contained Rippling sales teams internal pitch strategy discussion including confidential details about how ripling
planned to highlight certain advantages of its products to address the prospects pain points with deals offering on February 20th 2025 this is like just weeks ago recent yeah the the the scheduled call between Rippling and pro DS previewed the B related channel 66 times later that D later that day Prospect B abruptly canceled the
scheduled call with ripling in which ripling was going to deliver its proposal and explained that they were go that they were doing so because they had decided to select deal for the product they were interested in even though ripling believes that customer would have been better served by rling and
it's fascinating here that like my my takeaway is like we are in a very new age of especially with like the gong iOS and the sales recordings and stuff like like if you're in an organization and you have access to the slack like there's more information than ever because you don't have to walking cabinet and grab their notes off their
desk like it's possible that like every single interaction with a customer is recorded verbatim and then also summarized and then you see all the slack channels that they're in and some of them are like it's it's literally just a ticker of like this company is about to sign for this much money this company is worth this much this company
wants us to build this feature and it's just like valuable data to me this is just surfacing the reality of business which is that it's it's everybody in Silicon Valley has had this Nar generalized you know competitive CEOs will talk to each other they're friends it's sort of like hey posi some we're
we're eating you know we're eating these sort of Legacy businesses like there's enough market cap for us to go around yep and so this type of story is basically surfacing what has been I'm sure happening in the background in a bunch of different ways right I was joking earlier that you know imagine a
world where uh somebody bugged all the Whos in SF because there's no driver in them you could just like hire a Jason Bourne type to just like you know bug them keep calling weos dropping like an air tag off with a microphone yeah and you would just get this constant stream of of private conversations right and
this is why the ski lifts are so important I mean people are talking about bugging the ski lifts because that's where the capital allocators really exchange the proper Alpha yeah yeah that too um but anyways uh you know I I think this is going to be a big wakeup call for the industry that again it's not all positive some yep we are
competing for the same customers and and you know we certainly um we have our own counter op Counter Intelligence operations lead against other podcasts right yes we know that that uh competing uh you know podcasts have tried to get moles into the system but um yep but yeah we're just embracing that head-on
right and I think every SAS needs needs to have a counter Counter Intelligence operations lead you know yesterday definitely definitely anyway um yeah but but like let's be clear here if if Rippling is coming for damages and they have uh this you know this example here where it's very clear that deal had
insight into the sales process um you know this is all you know it's up to deal to like you know prove uh whether this is real real or not but in this situation that ripling is highlighting deal had Direct insight into the sales process down to the dates down the individual selling points and they were
able they were able to leverage that information to get the prospect to drop out of the process completely with Rippling and if this was happening at scale there's totally a world where there was tens of millions of ARR that was on the line especially if you look at collectively and ripling is able to
say look our average customer stays are thus for seven years you guys you know uh you know were had a sort of you know leverage these sort of Trade Secrets and sort of corporate Espionage this could be the settlement here could be well into the tens of millions of dollars or or you know even who knows it's it's not uh this is going to be you
know deal is going to be fine Rippling is going to be fine but this is uh you know not going to be an inexpensive blunder yeah yeah it it it gets to like the of this particular business which you know you talked to like the nuclear Founders the you know they were just literally all in that Jason kman documentary together and they have a
very positive sum mindset because for anyone in this like far out R&D heavy energy business like they'll even let their their lead VC invest in another nuclear company often because they're just like look like a if we both succeed it's really good for the industry and we're all just selling energy onto the
grid like we're competitive with oil and gas more sure we are competitive with each other but it's much less Zero Sum at this point whereas uh with these with these HR and and B2B SAS products they're much more directly comparable and then the other thing is that I mean this is a very high margin business
where the the pricing is super opaque and what the price that you're throwing at a customer is basically just like an idea of how much value they're going to get from this maybe and if you have the ability to come in and quote just a little bit under you're going to win those deals again and again like because
it's just it like you just have to throw out a number and you kind of get an idea from you can take the temperature of people well what are you paying for 8p maybe they'll tell you no and think about how many people at Rippling it seems like there's enough proof to that like out there already
that if the alleged spy is hiding and and all this stuff and you know it seems like there's enough proof to know that like some information would pass the deal somehow y think about how angry if you're the ripling exec team if you are that that one's obvious Parker being livid is is obvious the uh the team the
sales team right where they're they're losing deals because people are you know uh basically just have you know this sort of information Advantage if you're the engineering team who's like and the product team that's trying to compete on features and you're spending all this time to build the best possible product
but then you're losing out on revenue and you know uh growth because uh again this sort of unfair Advantage I can see why they took it this route versus just you know this is sort of Beyond just putting up an X thread and being sort of totally being angry right yeah uh let's continue with this Matt LaVine article uh if you have
had your competitor's whole pitch deck for a potential customer you both wanted that wouldn't guarantee you a win but it would help anyway most of the fun in the lawsuit is the tradecraft ripling Apparently discovered the alleged spy not because he was snooping on their sales information uh but because an
investigative reporter at the information contacted ripling about a forthcoming article concerning deals Russia related sanctions activity and asked ripling about its dealings with Russia the reporter included internal slack messages in his email and ripling investigated who might have accessed those messages and quickly identified
the alleged spot crazy right wait I didn't even I I didn't even see anything about this yet yeah and so we can go we can go over to that information article but uh the the possible lesson here is that tech companies are much more sensitive about leaks to journalist than they are about Shing sharing sales information with competitors so if
you're doing corporate espionage don't blow up your spot by trying to plant negative stories not any sort of advice having identified the Spy ripling then tried to prove that he was working for deal the smoking this is a quote from the from the uh from the complaint uh The Smoking Gun came earlier this month
when ripling set forth a test of or what is known by Security Professionals as a Honeypot to confirm Deal's involvement ripling general counsel sent a legal letter to Deal's senior leadership identifying a recently established slack Channel called D- defectors in in which the letter implied Rippling employees
were discussing information that deal would find embarrassing if made public it's such a weird like thing to send just be like hey yeah we're we're we're talking trash about you in our slack yeah I know but it's just to and it's like I I don't know why you would share that with your competitor but well it
just apparently didn't matter yeah I guess it just didn't matter because they fell for it well well and and here's the thing so uh we're not picking we're not picking sides here if anything I've been incredibly impressed with ripling growth and Deals growth they're both tremendous examples of you know you
know what what's possible in Silicon Valley many many people many people almost couldn't believe how quickly deal was growing but deal hasn't been without its own sort of crises because anytime you're these are moving huge amounts of money around the world all the time right and anytime you're in that business you're it's somewhat crisis
prone because tot let's say let's say some sort of like account manager doesn't catch that oh this entity you know set up a deal account and they're using our product to pay out people that are doing prop trading right so they had this sort of Crisis around prop trading I think it was probably a year and a
half ago I can't quite remember and then on the other hand you have ripling who's hey uh you didn't noce no this but you know you've been paying out a sanctioned entity in Europe right you know I'm just I'm just making up an example I've no knowledge of this specific instance but um but yeah you can imagine this is a
war at the feature level it's a war at the sales level it's a war at the capital markets level it's a it's a war at the sort of like you know uh narrative PR level so it is so funny to compare to like War uh because when I made the Rippling video I I wanted to make it like as dramatic as possible
basically and I was like what is the like what what is like the hardest moment in your career here like what what's been the hard moment to talk about and they gave me a pretty interesting anecdote about like early on something happened with like one of one of their customers had a weird character in the name of the company and it
completely messed up the entire payroll file so payroll just didn't run and they were on the phone with some of their clients who like a lot of the tech companies are like oh okay like the payroll is going to go out on Monday instead of Friday like all of our employees will be fine with that like we'll just deal with that
but um one of the companies was like running like Trucking and he was calling the team being like guys are going to like lose their mortgage over this like this is this is like bad like you need to help that and so the entire Rippling team had to go to ATMs get cash go to Western Union and like wire individual
amounts to people and they just like and it was like super dramatic but it's so funny because it's like it is dramatic but at the same time like we're talking payroll software here it's not really life or death but it is actually very important and and the stakes are high with like sanctioned entities and even I
mean the abuse that can happen just moving money any system that moves money whether it's venmo or PayPal or stripe like it can be abused it can be hacked and by definition there's a lot of money at stake and so uh it is it is serious business even though you know we we we like to joke like oh it's B2B sass like
it's it's so easy it's so like you know not it's not as like World historically important as everything else but like there there is stuff here that's pretty that's pretty important uh let's move on so uh about this D Defector channel uh in reality the channel was not used by Rippling employees and contain no
discussions at all it had never been searched for or accessed by the Spy would not have come up in any of the spies previous searches and the Spy had no legitimate reason to access the channel crucially crucially This legal was only sent to three recipients all associated with deal Deal's chairman the Chief Financial Officer and the general
counsel Deal's head of US legal which is the Founder's dad oh is that is that who that is I I know baz it's like it's got to be someone related to him uh and Deals outside Council uh neither the letter nor the D Defector channel was known to anyone outside of Ring's investigative team and the deal recipients yet just hours after ripling
sent the letter to Deal's Executives and Council Deal's spy searched for and accessed the D defectors Channel proving Beyond any doubt that Deal's top leadership or someone acting on their behalf had fed the information on the D Defector channel to Deal's spy inside ripling and then says amazing yeah so
pretty good good enough to get an Irish court order to seize the alleged Spy Phone at which point he also did tradecraft but here's the thing this is in the days leading up to St Patrick's Day can you imagine what can you imagine the evidence that you need to get something like this to happen coming up on on St Patty's Day I
assume Ireland shuts down for the entire month of March yeah it's it's what what's the the Chinese New Year you know in China they sort of shut down a lot of factory operations us us Irishmen are known for for liking the bottle and uh and and uh St Patty's Day is good good as an excuse of any so you
know I certainly wouldn't be going to work if I was in Ireland in the high this is this is the natural you know you know how in 2020 2021 there was this sort of like you could go on Reddit and there's people that have two jobs you know like software engineer like meta and Google you know or sort of meta like
some unknown this is the Natural Evolution of that and you just work for work for all the expense management companies work for all just pass all the info back I mean that that is my real question here is like so this spy was clearly w2d at Rippling might even had might even have had stock options which is kind of hilarious to think about um
but how was how was the Spy getting comped by deal like was it literally like cash in a duffel bag or so basically deal makes a really good product for uh paying people globally oh okay I see where you're going this and so so it's Pro it's very possible that he was dog fooding the product yeah maybe maybe the longterm here is like
okay ripling has like the normal like business midmarket startup Market Enterprise market and deal pivots to being like tradecraft payroll so like when the CIA like paler for payroll that would be a good like Rebrand be like hey there's a massive network of spies all over the world we're not going to use
the traditional payment rails anymore but if you need a duffel bag of cash dropped to an X kg member at the Kremlin like we can get it done for you crazy crazy I think that's a good that that's potentially a good like growth story out of this drama it completely repositions the company tuner for payroll crazy uh
we got to go through the actual like uh the bathroom scene do you want read this uh yeah yeah yeah I know this is your favorite part uh so deal spy initially told the independent solicitor that his cell phone was in a bag on another floor floor the solicitor offered to have an associate retrieve the bag but deal spy
insisted that he retrieve it himself the solicitor informed DS that if he was lying he would be breaching the court order the solicitor accompanied DS downstairs and took possession of the bag but in fact DS had lied the bag only contained a notebook it held no mobile device on information and belief DS's
cell phone was on his person the entire time after miss directing the independent solicitor DS then went to a bathroom locking the door behind him and refusing to come out despite the independent solicitors repeated warnings that these actions were in violation of the court order rather than comply DS
Was Heard doing something on his phone by the independent you can just do things doing something he's just playing candy cr probably the hoptics are going crazy he's just addicted to Tik Tock maybe it's just ice cream so good in the bathroom just watching a live stream suggesting that that DS may have
attempted to flush his phone down the toilet rather than provide it for inspection later that day ripling had the plumbing of its Dublin offices inspected but did not locate any mobile devices while in the bathroom and continuing after leaving the bathroom DS was again told repeatedly that he was required to provide the device and he
would be in violation of a court order after DS left the bathroom he was informed that taking another step forward rather than handing over the phone immediately would be an additional breach of the order DS then replied I'm willing to take that risk Diaz then stormed out of the office and fled the scene I
mean the Netflix doc is going to go crazy except I don't think it'll actually happen because it's it's at the end of the day it's Enterprise SAS yeah oh me or Jason Carmen are the only hopes for making this well no to be honest to be honest the right for factor with this is a South Park Style cartoon age you
that that releases basically this week and it just sort of uh breaks it down because it's too it's too silly to to actually be made into a documentary almost it's so funny but yeah I mean this is like this the people keep saying like oh like you know we need Silicon Valley back we need HBO Silicon Valley back things are getting too crazy you
know the VCS are in the White House now like it's truly like next level um uh well let's finish his what Matt has to say the thing I don't understand is is the Spy not intelligent enough to understand that all this stuff can be um what what's the word for it uh subpoena from like apple or or Google or short
of I'm sure he was using ened yes I mean Slack's not endend encrypted and then also uh like like Salesforce owns slack they're happy to hand this over and then also like when you run slack at the Enterprise level like ripling does like they own all the data I'm sure they have like their own copy they don't even need to go to
Salesforce and say hand it over I think what's what's totally possible is that he was communicating over an encrypted Service uh to the deal people to the deal team and then you know he who knows maybe he had a handwritten note with like basically like the login information and was just like okay I'm
going to flush this down the toilet and like that's basically it right I don't know how much that's going to help him um but uh but yeah you know innocent until proven guilty right so yeah uh so Matt closes out by saying when they come to raid your office locking yourself in the bathroom until they go away probably
won't work not legal advice but it will make you something of a legend also Imagine dredging the toilets for the possible Spy Phone oh hilarious hilarious wild wild stuff should we go to the New York Times article just give some extra context uh because uh ripling did comment on this and gave some extra information around
this yeah I don't know how much of the the New York Times we need to really cover but mostly it's just that you know you you can see obviously Parker posted about this but uh Vanessa woo Who I actually interviewed for that documentary uh she's Ring's general counsel she said in a statement we're all for healthy competition but we won't
tolerate when a competitor breaks the law weeks after ripling is accused of violating sanctions law uh and then yeah deal also fired back with that um it's a a Brazen Act of corporate Espionage uh Logan Bartlett on the timeline wait real quick somewhere it says ripling ripling told the New York Times that it also
discovered correspondence between DS and Alex DL and co-founder I didn't see that anywhere else I didn't see that but maybe it just didn't make it into the initial complaint maybe I don't know is is that yeah ripling said it had also discovered correspondence between DS and Alex baziz uh deal CEO and co-founder um earlier
this month they sent a letter which we heard about to the father of the of the founder uh within hours DS started searching the channel and the company asserts hard crazy stuff Ring's bringing in the Heavy Hitters they lead lawyer is Alex speiro of Quinn Emanuel urkhart and Sullivan pasadina Law Firm by the way
nice shout out John Quinn named partner lives in my neighborhood great great dude uh he's known for representing Elon Musk Jay-Z mayor Eric Adams of New York City some Heavy Hitters on this also I think he represented Evan Spiegel uh at Snapchat uh and Mr Beast was also a Quin Emanuel client giving you a little bit a little
bit of world tour Quinn emanuel's up to shout out Quinn Emanuel doing things they're doing things yeah I went to went to high school with all the kids that were affiliated with this law firm uh I honestly Wonder so I I really wonder how how this sort of plays out right so you have deal spy who's an employee of
Rippling not an official employee of deal I would hope yeah he's just W2 I'm spying and they pay me 20 bucks an hour it's great and then and then the issue is then you have deal who's repres you know Deal's Council and any outside Council that they would hire is representing deal yep but then they also
have some interest in like making sure that deal spy has good representation but at the same time if they represent if they represent they can't like fund his lawsuit because then it looks like you know Jordy I think you need to read more spy novels because this is what's called being out in the cold like the Spy is
burnt they're out in the cold and they got to go uh they got to go figure it out got to get a new identity go Jason Bourne mode yeah and it's a challenge because deal has billions of you know potentially a billion dollars on their balance sheet and the Spy probably made uh you know what's that quote it's like
I'm you know uh I you know you should be embarrassed at how you know not that you sold out but like how little it it actually took right like this deal spy like I could imagine him making $200,000 and then imagine he just got 10% of the company deal spy if you got if you got less than 5% you got hosed you got hosed
yeah if you're if you're gonna do it for less than five perc you're you should be a co-founder for this have co-founder stake board seat for sure board seat apparently you can you can tweet from prison and you can do podcasts from prison so uh come on the show but also uh join the board smart why not call in
be the remote board member yeah great great call if they're really gonna pivot to paler for payroll you know and and run spying operations across the world he'd be an expert anyway wild wild times in the timeline uh should we go to Logan Bartlett he says today is like the not like us drop for people who know what T3 T2 D3 is
which is triple triple double double double which is how you grow uh a really high growth B2B SAS business of course um is not not like us is the is the Kendrick song right yes uh I'd like to see I would love to have had a little little birdie you know flying around uh following Parker Conrad because I wonder if he did a face to
face you know with with his employee who was spying on him you know like like the king you know the king you know there's a spy within the castle walls and the King like you know yeah yeah I mean you got to hand it to Parker like like Enterprise sass is normally so boring and his his entire life has been
fascinating somehow it's just always filled with also that you gota like one thing the two reasons to be really bullish on on Rippling after this you know and again we're the news so we're not we're not taking sides here but but just sort of objectively like incredible execution on both the law like the the
the law here the the execution of the Honeypot uh you know how quickly they moved on this uh you know less than a month ago they were still sort of uncovering uh a lot of this and then uh you know it's not super you know companies that are that are winning and you know crushing markets don't typically feel the need to uh hire uh
spies that being said the best ones probably do it and don't get caught you know yeah um uh yeah yeah if you're an Enterprise SAS thought leader now you need to parody uh Josh steinman's how many foreign sabotage teams are operating on us soil you need just post that every day how many Enterprise SAS
sabotage teams are operating in Silicon Valley right now just ask the question every day there you go good morning we're gonna win and how many Enterprise how many corporate Espionage teams are operating within you know American SAS comp American unicorns yeah uh well you you had a good post about this it's a
it's a photo of a soldier doing a house clearing uh kipus SAS Bellum EST Enterprise is war there was some debate in our group chat about whether or not translation uh but I think the message got across and you got a couple hundred likes already because it's a lot of fun uh and P asparuhov says uh the east in
the East India Company had a private Army why shouldn't the corporate expense management platforms militarize Back to Basics also says imagine you're in Valhalla explaining to King leonitis The Great Battle of banking products amazing I also said Richard Nixon would have loved B2B SAS for if he were around today I'm sure he would have
been Angel Investing into into one of these you know companies I'm in DC I almost stayed at the Watergate I'm a big fan of that hotel uh they have fun with it when you when you pick up the uh the phone at the Watergate it says uh like welcome to the Watergate Hotel you don't have to break in like and everything is like branded
around like the Breakin uh and they've really leaned into that as their like it's pretty fun I like it uh Adam Ranken I think who's over at warp says the world of payroll moves fast but join warp ships faster announcing our latest product launch SAS sue your competitors as a service try it out now he's having a lot
of fun with it yeah warp is just happy to not be in the be at the the Forefront of another uh dramatic payroll in I was um war wars portfolio company uh they they've just been uh they had a little hiccup last year related to some marketing stuff but they just have stayed laser focused and now uh if you
look over at Luke Metro he's posting uh I will share this in the in the in the YouTube chat um Luke Metro has the Emoji where the two people are fighting and then like the guy in the background you know like smoke oh yeah yeah yeah yeah that's warp yeah chilling in the back just not paying attention I mean honestly like it
it I wonder what's going on at Gusto today like they got to be so happy that they're just out of it uh yeah the only thing is like I I I legitimately believe that Gusto isn't actually competitive with these companies uh from from everything that I know they don't um they really say if you have more than 20
employees like just go elsewhere like it's really meant to be for sort of the UMB category so that's cool I have to imagine that they're just sort of like cool we're glad that you guys are you know duking it out but yeah I've been a Gusto emplo uh customer for almost a decade like years always good experience
um and yeah I mean it was interesting because Gusto launched as Zen payroll and then Parker went through y they were is a YC company Parker through YC with zenefits and gets so big so fast and like completely sucks the oxygen out of the air and then quickly is like compound startup mode take over the
world mode I'm GNA do payroll I'm gonna do everything and so Zen payroll rebranded because they didn't want to be confused even though they were the they were their first mover they were like ah we're just gonna like not deal with this chaos stuff that's going on you can have the Zen name and then zenefits of course
like sold and got shut down like rebranded and so they could have stuck with Z payroll the whole time but I I mean gust is a good name too I I think it all worked out and also it feels easier to Rebrand a uh a B2B SAS product than it does a consumer product uh just because there's like like the Goodwill
doesn't build up the same like you have your install base yeah most of most of your sales motion is coming from you know Word of Mouth uh you know direct sales like it is much easier um uh I don't know if there's any other yeah yeah I mean there's interesting stuff I mean honestly people should go read the entire complaint because it is
written in like plain English uh and also I just think it's a fascinating tour of of like how Enterprise SAS works like it's not like they're leaking Alpha here but if you're running a B2B SAS company like you should read this just to just to understand how Rippling works because they're explaining the whole
process like like from leads to most valuable Pro Prospects they have like this five-stage funnel research customer development a demo then refinement then a contract stage uh each stage of the sales pipeline requires significant effort and he kind of goes through like it's kind of a playbook for building
Enterprise SAS and I thought I thought it was interesting because like you you often like these playbooks are repurposed by like oh you hear Sam blonde who worked with Parker on a podcast cast on like the Jason Lin like saster right you could learn some of the stuff there but this is laid out in like with legal precision and so it feels
like there's actually and I very implementable here I actually have some breaking news so this um this story has apparently reached LinkedIn oh a lot faster than I thought because my buddy who's a who's a big LinkedIn user he doesn't use x he just sent me the story um and uh I want to reply back I'm not
gonna reply right now but I want to reply back uh buddy six hours too late six hours no that the my the first text that I got this morning were like check X people are tagging you know people are tagging tvpn in this story they're calling it The Watergate of sass Watergate of SAS um let me see do we want to go do we
want to go through some of those examples of other big uh yes we do I I I I I do want to highlight this one image from the uh complaint uh it's it's like page 16117 and and I think this is what people are going to be pointing to on like the was something actually nefarious going on or was this
guy just acting weird uh Rippling slack logs show that the deal spy began searching and accessing and accessing Rippling slack channels at an unprecedented rate beginning or around November 2024 notably DS searched the term deal approximately 23 times a day and so it seems like it seems like this
person uh was maybe at Rippling and then started spying and it kind of goes from like a before and after it's not like they were planted there beforehand um the below illustrative example demonstrates why a search for deal is powerful and alarming namely this example shows that deal is mentioned in discussions concerning Rippling sales
leads as as well as discussion related to a potential customer for ripling per uh peo product um yeah so the Challen the challenge here and what I think deal is going to run into because Deal's own internal slack messages in regards to their entire like it's it's not like the the sort of deal spy at Rippling could
just pass information to one person at Rippling on Signal and then that's like the end of the information it's the information gets passed and where the evidence will be really damning is if there's sort of this top down hey focus on Shopify we know R like uh we're at risk of and then there's sort of this uh
record of uh this sort of information coming in from unknown source and then using that you know that that information being used to change the um change outcome of this sort of sales process I wonder if the Spy knew that there are records of Channel previews use because that's some because wait just for some clarity when you're when
you're in when you're in an organization there are private channels which you can't even access or search for uh there are public channels which you can join when you join them it sends a little message like hey Jordy joined the TBN guest planning chat or whatever uh but you can also just preview them which
means you're just like looking and scrolling through but no one funny because this the organization knows but the it guys know this is B basically one of the the sort of things that ripling pitches which is like you should have one sort of uh sort of database for all your employees and then it should connect to every application
that you use so that there's sort of this like graph of activity uh so well there's a graph baby and the graph is look like this like flat flat flat and then just massive growth clear and it's like oh no yeah what's going on there uh something changed all it's funny it's interesting to think about how that relationship
would have popped up because it's possible that deal was you know and totally speculating here it's possible that deal was wanting to recruit this person and then the person was like I actually really like deal or I like Rippling and the culture here and like I've got like a pretty great like stock option plan but I'm down to
Moonlight yeah Give me the give me the cash bags uh so the the the the the interesting thing here from the complaint is they really lay out how they actually found the spy and uh the title of this is Tiny Bird I love these like little spy terms on February 27th 2025 when the information published the
article for which its reporter saw comment from ripling ripling learned two important things for the first time that Tiny Bird a startup disgust in the article is Deal's customer and two that Tiny Bird reportedly made payments to sanctioned rushing Banks using the deal platform specifically quote tiny bird
followed instructions currently hosted on the website of a sanctioned Russian bank that guided companies on how to skirt sanction Rules by using deal prior to the publication of this article no one at ripling including deal spy had any other work work rated reason to know about any connection between Tiny Bird
and deal let alone search that name through through ripling slack archives nevertheless ripling investigation revealed that DS had searched for Tiny Bird 20 times between February 19th and February 20th so before the article broke and before the information had been passed back over a week you got to give the you got to give uh DS credit
for just being incredibly locked in on the task it's hard to imagine him getting any other work done other than like spamming these different Search terms and yeah you know we talk about like 10 engineers and we talk about a players and it's just seems like let's just call balls and Strikes in terms of spying
potentially a 10x spy potentially an a player here although he did get caught and the whole spy lasted like two months rough and and also the handling of the phone afterwards was pretty bad but clearly on the grind for a while gotta give credit credits do what did DS flush that's the big you know it's like
what did Ilia know what did Ilia see yeah what did Ilia see what did De flush you got post that um uh on information and belief DS most likely knew to Search for Tiny Bird because he was instructed to search for that term by deal presumably after the reporter indicated to Deal's Communications team led by VP of
communications Elizabeth Diana that Tiny Bird was a focus of his reporting or of of the reporting uh upon learning of the Tiny Bird searches ripling strongly suspected that deal was directing DS's actions but to ensure ripling conceived a test a Honeypot and this is where we go into the d-h defectors tab which is
fascinating anyway uh so we we we should re we should quickly read through that information article that actually kicked all this off uh it's in the information was an exclusive that dropped on February 27th 2025 uh less than a month ago it's called the bitter fintech Feud that stretches from Silicon Val Valley
to Moscow de and Rippling have stirred up a hornets nest in the stayed world of HR and payments software um uh the seemingly mundane world of Human Resources management startups is not the place you'd expect to see Cutthroat corporate Blood Sport battles linked to global geopolitics and questions about whether companies took
on the wrong customers to boost growth but deal and Rippling are hardly ordinary startups their feuds spilled open spilled o spilled into open view earlier this year in a Florida courtroom a court appointed receiver to a fraudulent investment scheme accused deal in a complaint of becoming a magnet
for people moving money into Russia and making it easy for Bad actors to do business with our nation's enemies in violation of national sanctions the takeaway here deal and Rippling are trading Jabs over payments in Russia rival fintechs are both under pressure from Partners over sanction risks Feud spills out into the open uh deal
immediately pointed the finger at R rling calling the calling the accusation a coordinated effort by rling to damage the reputation of its main competitor deal applied to dismiss the case Deal's evidence was that the receiver's attorney was an investor in Rippling and represented in Licensing and Regulatory
matters including helping set up its Insurance Brokerage so yeah there there's been this like go back and forth on like Parker and the Rippling team clearly go pretty hard at deal he's taken shots like I I think there's been interviews where people have kind of asked like hey what's going on in the international market and he'll just be
like deal is not a good product and he like is very aggressive about that where most most Founders would not like cross that line because it can it's just like it's just High downside risk it can be seen as go or you know improper or impolite um everyone in Silicon Valley is usually like hey we that might be a
future acquirer or someone we acquire we might have SIM similar investors similar employees like let's just keep it cordial and say yeah we love what we're doing but fundamentally we have very different visions and you know different cultures pick whatever you want what you yeah so so one data point that's
interesting ripling had barred former employees who went to deal from participating in in tender offers so he's basically saying sure you're still a shareholder in Rippling but you're not going to get access to liquidity the way you would if you went and worked it you know someone like ramp yeah yeah I mean just very aggressive
stuff across the board and then do you remember the uh the snake oil Fiasco this whole thing no so so there was something where where uh I think it was I think I'm gonna get this I'm gonna get this close but I think it was like ripling was calling deal snake oil and they created a snake game that you could
play like you know a browser based game uh to kind of like take a shot at them and a lot of people on on a were kind of like just like like like this is like too much like just focus on building like play a clean game this is roughing the passer this is getting a little aggressive and we the trash talking like
you know maybe maybe this is maybe Tech should like the NFL not like deal just launched they said deal just launched a page comparing themselves to Rippling good news they know who's beating them bad news they're selling snake oil and then that was you could you could play of the game yeah yeah it was it was
their response to Deals competitor page which are very standard like almost every startup will have like the side by side of like Oh and it turns out like we check all the boxes and our competitors check none like you know it's like everyone just does that it's seen as just kind of normal normal stuff uh normally you don't use a use a uh a
phrase like snake oil which is aligned with like almost like illegality right because you like snake oil is a is a fraudulent medical claim usually although Brian Johnson famously you know just sells oil that's called snake oil and he's leaning into it and kind of re repurposing the term but in general snake oil is a is
it's a little bit harder harder phrase it's harder Edge than just saying look like you know we think we're better than deal in boom boom boom boom boom six different ways and like that's why our product better and I'm sure ripling has that landing page as well and deal does too but uh but people were like oh okay
this is really really heating up but now we see like okay well thing like maybe that was all Justified like maybe there's really a reason for there to be a blood Feud here uh and and maybe there's a reason why they were uh doing that snake oil jab at deal and not at Gusto or pelocity or ADP even though
they might be competitors with any one of those companies uh yeah anyway uh we should we should move on to some of the uh the greatest corporate Espionage uh things in history oh we we should give some context on just where these companies are sitting there's a good uh there's a good data table in the in the
information uh comparing Global payroll platforms deal and Rippling uh valuation deals at 20 uh 12.6 billion ripling is at 13.5 billion on Revenue deal allegedly is at 800 million ripling is at 580 million and so a lot of people which is I think which is crazy I mean such if you just had to estimate their
revenues it it's deals growth has been almost unbelievable it's insane and so when articles pop up you know they had an article uh this is also in the information back in September of 2023 it said how deal became the payout provider for prop trading firms including a site Frozen by the cftc so this stuff um this is potentially one
way that they're able to to put up you know I don't know deal I think came out in this article and said this represents like you know very minuscule amount of our Revenue uh but but clearly deal is a real threat to Rippling right y it's not uh it's not this isn't Rippling like sort of beating up on some if anyway you know
they almost have double the yeah yeah uh and so ripling raised 1.4 billion deals raised 600 85 million deal has 5,000 employees and ripling has about 3,000 employees ripling is available in more countries 185 countries compared to 160 for deal so that just gives you some uh some some context around uh the size of
these companies but they're pretty close and it makes sense that they Rivals and it does feel like increasingly they're going after the exact same customers uh whereas maybe the adps and the gustos have found like different segments that are less hotly contested at least for now um but it'll be interesting to see
where it happen what happens with it and uh and whether like one of these companies breaks out um or or if we're just doomed to a an oligopoly and payroll forever which uh which is certainly what's happened at like kind of the the the public market decacorn territory but we'll see yeah anyway should we move on to other
corporate Espionage cases involving us companies yeah should we start with IBM versus Hitachi let's do it do you want to read this one or do you want to explain what these companies are John since this was kind of more your era brutal uh yeah back in 82 I almost interned at IBM but decided to go over to Hatachi uh you know yeah was 21 at
the time didn't Hitachi try to get you to go back and work at IBM and then come back they said you know go go do a summer internship with IBM then come back next summer we got you on a you know a maxed out six-figure four-year deal yep y yep yeah have have you seen uh wargs where Jonah Hill is like it's
like IBM no one knows what IBM stands for and then the the actor like the one guy's like international business Mach yeah and uh and he's like get out of here you're fired it's the greatest clip I love it I actually filmed an ad with that actor he was like oh yeah was a great great experience he has like one
line in the movie he was really stoked about it nice guy nice uh anyway uh in 1982 IBM became the victim of a major industrial and Espionage scheme when agents of Japanese firms Hatachi and Mitsubishi sought to illicitly obtain IBM's confidential Mainframe computer designs the FBI set up a sting operation
to catch the conspirators in the act you love it um an FBI undercover operation uncovered that 12 Hitachi and five Mitsubishi employees were conspiring to purchase or steal IBM's proprietary technical manuals and software tapes for were they is this one of those things it's like a COR what's it called a ketsu
where yeah I mean yeah I wouldn't be surprised if the Japanese government owns part of Hatachi and Mitsubishi or they own pieces of each other this like why why are two companies coordinating on something that's so obviously illegal totally this is why we need American K we should deal ripling Gusto pity let's
get you all together you all get 20% of each other's companies and then we can all work together to destroy Japan Japan doesn't stand a chance in play in payroll once we build American B2B SAS K redu let's get everyone in there it's great uh the scheme was halted with multiple arrests and the case was described at the time as
possibly the largest industrial Espionage case in history right so this is crazy Hatachi pleaded guilty uh in 83 with two Executives and they paid findes of $10,000 $10,000 never how would they ever recover yeah they also issued an apology to IBM and entered a legitimate technology licensing agreement the the
case uh the early case raised awareness of overseas competition targeting us technology and Lead companies uh to tighten their security on sensitive R&D yeah wild it's funny uh should we go into the hair care product Espionage of 2001 of course people have been asking about our hair care routines again you
know the answer is we is is we conduct a large Espionage uh on on thej we have moles inside of un Unilever and Proctor and Gamble and they're they're just giving us you know sort of uh you know chemicals out the back door that won't hit the market for another decade that's really yeah uh so in 2001 consumer products giant Proctor and
Gamble was caught spying on its rival unever to gather Intel on unilever's hair care business png's tactics cross the line from normal competitive intelligence I just have to say something really quick so when governments do this or hard tech defense they do it it's like oh this is like this is really bad and then when when
when uh hair care companies and HR SAS it's hard for the general public to really get that riled up it's like okay you won this customer and and internally these companies has got to be so frustrated and annoyed and it's like the most yep depressing biggest issue uh to them but then for for the general public
to be like wait you stole a secret shampoo recipe uh you know it doesn't doesn't land that that totally intensely um and so png's tactics cross the line from normal competitive intelligence into corporate Espionage causing a scandal in the industry PNG operatives reportedly including hired
investigator rummaged through dumpsters in at a unil lover office in Chicago over a six-month period retrieving about 80 internal documents on Unilever shampoo and hair product plans tactics allegedly include included misrepresenting themselves in phone calls to unil staff PNG Executives discovered the clandestine project and
halted it and then self-reported the misconduct to Unilever that's an honorable it's an honorable way to go you know and honestly it's it's it's not the worst uh no not the worst strategy because it makes it seem like oh we as a company didn't want to do this it was just sort of this Rogue uh internal and I think that does happen
I mean we heard about that with um during the nft boom there was a guy who was front running them at uh open open openc I believe and um and it seemed like you know the founders would have no reason to do that like it like they were they were paper billionaires from their Equity stakes and like why do they need
to like oh make an extra 100K on the side from like some nft launch it was clearly like rogue rogue employee Rogue Trader um so PNG admitted to the Espionage and negotiated an outof Court settlement to avoid a lawsuit the settlement terms were not fully disclosed but PNG is said to have paid unil lever's investigative investigative
costs sever million dollars and agreed to oversight measures the incident embarrassed PNG leading to it leading it to publicly apologize and reinforcing that even Market leaders can suffer reputational damages if caught in unethical spying it's funny uh let's go on to Coca-Cola yeah okay so in 2006 cocacola
company was the target of an Insider plot to steal its highly guarded Trade Secrets including a new product sample and sell them to its arch rival PepsiCo the case highlighted the role of Insider threats in corporate Espionage so what happened uh Joy Williams who was an administrative assistant at Coke and two
accompli intending to sell secrets to Pepsi uh they had access to confidential Coke documents and a sample of a new Coke product they conspired to steal and sell this information so again seems like rogue rogue employee uh she enlisted two outside Associates to approach PepsiCo offering cocaa very
detailed and very confidential information and even a sample of the new secret beverage it's so great this is this is this is what everything I love about corporations John just two corporations Brewing down saying you know what we don't stand for this yep we don't want your formula but you yeah I'm just imagining like metal
briefcase handcuffed you you you walk into PepsiCo I have something very important I need to get straight to the CEO you pop the Code PO open it up Coke Zero Cherry Lemon it's going to blow up the whole industry you gotta taste this thing I got the formula right here and the FBI just walks out yeah yeah yeah they kick down
the door like the meme ladies and gentlemen we got them boom yeah um so rather than take advantage PepsiCo alerted Coca-Cola and the federal authorities the FBI launched a sting operation in which the conspirators demanded $10,000 for additional documents for initial documents and $75,000 for the product s
Le in July 2006 Williams and her accompli were arrested by the FBI after one accomplice accepted a duffel bag of cash for the trade secrets let's go uh the three perpetrators were this is what we were saying earlier it's was was the was the deal spy getting paid with deal they support usdc payments or was he is
there a feature on deal that you can pay somebody with a duffel bag of cash and that is the real that if if deal wasn't using their own their own software to pay their spies it's like is it really a fully functioning B2B SAS payroll product at that point like you have to ask yourself like there are gaps
in this system that you've built if you can't if you can't with one click dispatch a duffel bag of cash to someone in a in a non-extradition country yeah the other the other the other you know point we got to give deal some credit on is they have as of 2024 Revenue $220 million more ARR than Rippling but they're not
resting on their Laurels they're saying we are you know like job's not finished jobs not finished you know we're gonna do whatever it takes to you know continue to maintain this lead and as an investor you're thinking you know how are they applying this strategy to legal things in their business you know are
they bring that they clearly have that dog in them they do in this nice with it I I think that this is this shows that that while they have that dog in them they might not be nice with it yeah and that is that's one of the saddest outcomes here um the three perpetrators were swiftly prosecuted uh Williams received an eight-year prison sentence
while her accomplice has got five years and two years for wire fraud and stealing Trade Secrets no Coca-Cola information ever went to Pepsi Coca-Cola's brand security was validated and Pepsi's decision to notify Coke earned public praise the case underscored the importance of internal security and trustworthiness even a
single Rogue employee can pose a serious risk to intellectual property it's great uh let's move on to Google there was some cyber Espionage by China in 2010 uh this is operation Aurora this is interesting State actors involved we're not quite at that level with this uh Rippling deal B2B SAS Fiasco but uh
still an interesting example in mid 2009 a number of prominent US tech companies were hit by a sophisticated cyber Espionage campaign later C named operation Aurora the most notable victim was Google which publicly disclosed the incident in January of 2010 making one of the first times a major company had
openly admitted to state sponsored hack the attacks resulted in stolen intellectual property and exposed the lengths to which nation states would go to spy on corporations the attackers infiltrated corporate networks using ma malware and zeroday exploits uh an Internet Explorer vulnerability was cited what irony I mean of course
they're using Internet Explorer to test their apps but it is hilarious that you get the way you hack the Google Chrome company is with Internet Explorer uh undefeated one of the most vulnerable platforms clearly that's all time all makes sense why Microsoft switched to Edge which is built on chromium it's a
lot more secure I think um once inside they stole source code and proprietary information Google confirmed that some of its own intellectual property was taken notably the attackers also attempted to access Gmail accounts of Chinese human rights activists it's not enough just to steal the algorithms you
got to go after the human rights activists every single time indicating Espionage motives Beyond just corporate Secrets more than a two dozen organizations were compromised Google's internal investigation traced the attack to China and the consequences Google reacted by announcing it would no longer
comply with Chinese censorship and considered shutting down google.cn entirely uh in January 2010 Google redirected it China traffic to Hong Kong in an uncensored format effectively withdrawing its search business from the main from mainland China the US government up to the Secretary of State condemned the cyber attacks and demanded
answers from Beijing operation Aurora was a diplomatic flasho in us China relations and for the private sector Aurora was a wake-up call it spurred companies to significantly bolster cyber security leading to Greater informations sharing about threats and inaugurated a new era of public private Co cooperation
against stateb corporate spying I mean speaking of uh Chinese spies Boeing also suffered uh a similar issue in Era 2010 a US defense contractor Boeing suffered a long uh a long-running case of Insider Espionage that came to aead in 2010 a former Boeing engineer who had quiet been quietly been spying for China for decades was convicted
under the economic Espionage Act this case Illustrated how state sponsored Espionage can burrow with in a company for years and uh Dong Dong fun Greg he went by Greg GRE CH a naturalized US citizen engineer born in China acting on behalf of the u Chinese government and this is crazy he worked for Boeing and previously Rockwell on
the space shuttle rocket and aircraft programs over 30 years he stole proprietary documents and FBI raid found over 300,000 pages of Boeing documents hidden in his home including designs for the space shuttle Delta 4 Rockets F-15 Fighters and other military technology if you've ever wondered how China seems
to make everything look exactly like our stuff but for 100 the R&D cost you have your answer now yeah uh yeah uh I have this riff about how like yeah the F35 is way over budget but it's actually a pretty good plane and yeah if you didn't have to spend a trillion dollars on the R&D Bild bu out and you could get the R&D
done for free and just manufacture it you do that all day long and that's exactly what the Chinese have done deal they didn't have to do any the R&D and instead just manufacture exactly what we spent all the work all the time like in all the Kinks are done like all the Kinks are out so um czy he was finally
caught as an offshoot of a separate investigation into another spy uh chimak in a Navy contractor uh which led agents to Chung uh in February of 2010 Chung aged 7 for its sentencing was convicted on multiple counts of e economic Espionage and lying to the FBI he was sentenced to 15 years in prison a severe
punishment that was the first trial convicted under the economic Espionage Act of 1996 the conviction demonstrated that us authorities could successfully prosecute long-term Espionage strategically the case underscored the threat of insiders Boeing and other defense contractors enhanced their vetting and monitoring of employees it
also fed into the broader us concerns about Chinese spying in the defense sector fascinating should we go into weo and Uber I think most people will be familiar with this 2017 uh there was a rapidly evolving autonomous vehicle industry a bitter legal dispute erupted in 2017 when way Mo sued ride haling company Uber for
allegedly acquiring Ramos's Trade Secrets the high-profile case put a spotlight on Silicon Valley Talent Wars Anthony levendowski a star engineer on wh's team resigned in 2016 and immediately founded a a self-driving truck startup called Auto unbeknown to whmo at the time just before leaving he
downloaded about 14,000 files including designs for wh's liar sensors critical autonomous driving technology uh Uber acquired Auto soon after for 680 million and weo alleged that Uber did so to obtain the stolen weo intellectual property evidence showed leevan dowski had transferred wh's confidential files
and that Uber had indemnified him for potential IP lawsuits the case went to trial in 2018 in San Francisco amid intense media coverage 5 days into the trial Uber agreed to a surprise settlement avoiding further litigation Uber granted weimo 0.34% of Uber's Equity worth about $245 million and agreed not to use whamos trade secrets
in it self-driving Tech lean dowski meanwhile faced criminal investigation in 20 he pleaded guilty to trade secret theft and was sentenced to 18 months in prison though he was later pardoned in 2021 the cas's outcome forced Uber to abandon its internal liar designs and delayed its autonomous program a
strategic setback more broadly whim versus Uber sent a message through the in through the tech industry about the dangers of Insider theft and the value of corporate IP companies began implementing stricter controls on data access for employees and robust exit protocols when key Engineers left to guard against similar incidents
fascinating crazy it pretty good it'd be funny to go back in time and do an entire week of the show just around that that story like know in real time that would have been a good uh uh unfortunately I was still in college had never had never fired up a podcast microphone at the time um but yeah I mean what a great
time to be a a technology and business podcaster right this is why we do it what a time what a time you know I I I wish we could have gotten some people on the show but I I understand why at this point everything that is said in this uh in this discussion is going to be on record in a it's gonna be litigated it's
going to be litigated so I understand where they're coming from uh hopefully we'll get more information uh would love to have Parker on the show at some point um and I mean he has so many interesting stories hopefully this can resolve itself and then we can hear more about the story uh and hopefully it gets to a
place where uh this is water under the bridge and everyone just has a fantastic and reliable B2B Enterprise sass because isn't that what we all want in this world that's what we all want John yeah it was funny we we you know before the show we were talking briefly and we're like there's literally no one with
inside information or perspective that can come on the show today because anything they say can and will be used uh in a court of law we have to mirandize them before they come on you have the right to remain silent welcome to TB TBN live you have the right to remain silent anything you say can and will be used in a court of law uh thanks
for being here first off uh tell us about the case how'd you find the Spy what is he flushing uh what what did DS flush did D the question of the day that's the answer for the fans uh today if you're watching send us your theories what else did they flush uh and uh maybe it's a good time to look at the plumbing
situation in your bb saf startup make sure you have you knowall C security you need good uh sanitation security yeah yeah basically filters that sort of filter out potential want if a phone is going down the pipes you want to be able to catch that exactly uh documents Etc it should be like standard like we
oh it's Class A office space it's in San Francisco great but like what's the plumbing sit situation like like flush phones I think the main thing here is it's clearly illustrating There's an opportunity for corporate Espionage as a service right it would be amazing if deal could just you know you know or it's really you say your corporate
intelligence but then really you know you're just doing corporate Espionage but y you know if deal could just point at this firm and say hey we were paying them for you know sort of sales insights we didn't realize like where they were getting this from uh this is all the big misunderstanding you know point point at
them yeah but uh now now DS is left out in the cold hopefully I mean he's Irish um hopefully he's enjoying a pint a pint of Guinness despite the circumstances and uh I hope I hope everyone can resolve this everyone can be happy and everyone can just uh drink a keg full of green beer next uh next St Patty's Day
yeah it'll all be Guinness under the bridge and maybe there'll be a pot of gold at the end of the rainbow for everyone involved everyone involved for everyone one billion AR is clearly the pot of gold the pot of gold yes well that's a great place to end it we'll be back together tomorrow thank thanks to
everyone for for listening and tuning into this special episode this episode yeah thank you to ramp public adquick eight sleep wander and bezel they make this show possible uh we're very grateful to them and um I'm excited to be back in the studio tomorrow with the full team can't wait safe travels uh make sure to have the camera ready if
there's any sort of you know you're there's going to be some Heavy Hitters on that flight I'm ready we need to get those shots get those Paparazzi shots up we saw that you know Augustus Rico was photographed yeah leaving a gas station earlier with a white monster y we have eyes everywhere whether you're sort of
court side uh or you're you know getting ready to testify on the East Coast uh we will find you we will you know uh uh you know uh you know make sure make sure that the technology industry is informed exactly that's our job that's report the bring you the facts the facts um all right John uh safe travels have a great day