Why the leaders of an HR tech startup bet on failed founders

• Failed ventures can have silver linings: they build skills that some companies actively seek out.
• More than 32 employees at HR tech company Rippling are failed founders.
• Insider spoke with the company's cofounder and CTO and head of people to learn why.

When HR tech company Rippling cofounder and CTO Prasanna Sankar founded social network Likealittle in 2009, the company attracted 20 million pageviews in six weeks, only to collapse three years later.

It was a difficult time of introspection for the tech entrepreneur. Sankar said he experienced serious burnout after Likealittle and decided to leave Silicon Valley. He moved to the Netherlands briefly to recharge and consider what he wanted his next steps to be.

But Sankar was still drawn back into the world of startups, pulled in by the exciting prospect of autonomy and high-speed growth. In 2016, together with his cofounder and CEO Parker Conrad, he launched Rippling.

The experience taught Sankar firsthand how failure can be an opportunity to learn and grow as a leader, and Rippling has integrated that lesson into the heart of its hiring strategy. The startup has hired 32 former startup founders and has around 300 employees.

The strategy may be paying off.

The company received a $1.35 billion valuation last year, a nearly five-fold increase from its $295 million valuation in April 2019.

Insider spoke with Sankar and Neha Sharma, Rippling's head of people, about why failure is so instrumental for effective leadership, and how it's fed into the company's rapid growth.

Bouncing back from failed ventures

Sharma is also a failed founder.

Sharma's on-demand childcare startup, Ease, met its end when she found demand for her business concept falling out of relevance during the pandemic.

Like Sankar, Sharma entered a stage of reflection after the experience, and recommends that anyone experiencing a failed venture takes the time to consider what they're actually passionate about.

"Take some time to introspect," Sharma told Insider. "Be very honest to yourself and try to understand what it is that you truly care for."

The company's executive leadership view failed founders as the company's secret weapon, because of the drive, leadership, and resilience that they're able to demonstrate through their experience.

"It's actually fairly simple to succeed," Prasanna Sankar, cofounder and CTO of Rippling, told Insider. "If you really want to go out and do something original and exciting, the positive aspect of failure is something that you have to accept."

An 'entrepreneurial spirit'

Because of their experiences, they were able to bring a new set of skills to the table.

Sharma said that her experience with Ease gave her the ability to make quick decisions and learn on her feet, and that it also taught her resillience.

"It takes a lot of courage to start all over again after making bad decisions and then move on," Sharma said.

That's why failure shouldn't be a mark of shame, Sharma said, but rather an indicator that someone has the skills and entrepreneurial spirit that it takes to be successful in the future.

"It's very unfortunate that there's still so much stigma around failing as a founder," Sharma said. "You have to be clear that you are not your startup. The startup failed; you did not."

And chances are, employers won't see you as a failure either. In fact, Sharma said, there are plenty of companies who value failed founders for their grit and drive.

Building a recruiting strategy around failed founders

Sankar and Sharma know firsthand that failed founders can make for great leaders. That's why Rippling seeks them out.

"[Former founders are] able to adjust with a fast-evolving corporate structure and the skills expected of them that keep changing," Sankar said.

And the enthusiasm is mutual, Sankar said: these founders are drawn to Rippling because they're able to gain the autonomy they might lack at another company, coupled with the excitement of a high-growth startup.

"As a failed founder myself, that's the best job that you could get," Sankar said, "because the part of being a founder that's really exciting is actually starting something from zero to one and growing it really fast."

You might think that bringing such a large number of natural leaders together in one company might cause them to butt heads. But that's not the case, Sharma said; in fact, their collective experiences have made them more receptive to hearing different perspectives.

"We have a lot of healthy debate and discussions," Sharma said. "The fact that all of us have been failed founders means we come with strong opinions. But I think when you're in a startup, you kind of learn to be more humble, and to be more open to listening and accepting a counter point of view."