Why I’m paying attention to an HR startup and why IP leaders should too

Rippling recently raised $200M in new financing at a whopping valuation of $13.5 billion. Their investor memo is worth reading — even if you’re an IP leader. Why? Because it outlines a contrarian view of how enterprises should approach software that’s informative for IP as new tech becomes available in the space.

While most of the software world has been building point solutions that do one task really well for the past decade, Rippling is building a platform that does everything: a single system of record. Rippling’s founders have built their company around this approach and are gaining traction with it, as evidenced by their recent success scaling their “workforce management” software to large enterprises.

The IP space tends to lag behind other software markets, so the Rippling story presents a valuable business case for IP leaders in thinking about how they want to go about adopting new tools. We are just now seeing the proliferation of point solutions for disclosure collection, patent search, infringement detection, and other use cases. But that doesn’t mean IP has to follow the same trajectory that the rest of business software has.

It’s an important decision to make because I believe the “unbundling” of IP software could end up negating many of the benefits IP teams stand to gain from AI. At the very least, there is much IP can learn from business software’s oscillation from one-size-fits-all, to point solutions, and now back again to the type of bundled solutions championed by Rippling’s co-founder and CEO Parker Conrad.

To fully understand Rippling’s hypothesis, we have to start at the beginning.

“Bundled” vs. “unbundled software — a brief history

Until cloud computing came along, software was “compound” or “bundled” — most companies purchased all their software from one of a small number of vendors like SAP, Oracle, or Microsoft, and it was customized to do everything a company needed. These solutions, usually installed on-prem through a painful implementation process, became bulky as more features were bolted on over time. Because each implementation was unique, making changes or updates was a long, painful process and new capabilities were dated by the time they made their way to users.

The shift to the cloud provided an opening for newcomers to capitalize on speed, standardization, and innovative new technologies. Mega-vendors were poorly positioned to rebuild and quickly lost ground. The approach these challengers took was to “unbundle” — to build “point” solutions that focused on one specific and narrow product, and to then grow from there. Building unbundled point solutions has become the conventional strategy for business software development over the last 15 to 20 years.

Rippling’s case for (re)bundling

While it may appear that software tools are becoming more and more specialized, Rippling’s founders argue that unbundling is not an inevitable trend, but an aberration in the long-term arc of software development.

So strong is their conviction that they predict the “death of point-Saas” over the next decade.

At the heart of Rippling’s argument is the primacy of data in today’s enterprise. With point solutions, data is spread across multiple systems that often do not talk to each other. Building on this, Rippling makes a compelling argument for the benefits of compound, bundled solutions that corporate leaders should bear in mind when thinking about IP strategy:

1. Deep integration with fundamental data primitives — in Rippling’s case, employee data, for IP; invention data
   Deep integration with other products (finance, HR, innovation, etc)
2. The ability to affordably benefit from shared components like reports and analytics
3. A single UX pattern that eliminates the need to learn how to do the same thing many different ways across products
4. Bundled pricing and contracting that reflects costs amortized over the entire bundle versus a single point solution

Applying Rippling’s logic to IP

In many ways, IP teams today face a similar software landscape to HR teams in the early 2000s. The rise of cloud computing enabled HR vendors to peel off market share from incumbents like Oracle and Peoplesoft by specializing in payroll, benefits administration, performance management, etc. For IP, most enterprises still rely on legacy docketing systems to store their patent data even though IP management needs have become more holistic, encompassing new areas like IP development, portfolio strategy, and commercialization. As a result, we’re starting to see companies adopt point solutions to fill these gaps. AI has replaced cloud as the catalyst for unbundling, and the nascent point solutions for IP target disclosure collection, prior art search, office action response, infringement analysis, and docketing.

Invention data is key

Rippling’s founders talk at length about data primitives. For IP, inventions are the primitive on which all other meaning is built. Failure to properly track and manage this primitive from the moment it is created means that companies will lack the requisite information to make strategic decisions about their IP.

Consider this analogy: would you expect an HR leader to manage a tricky termination without understanding the employee’s entire journey through the company? Every decision about that employee, from the rationale for hiring them to their most recent review, would provide critical context.

Prior to founding Tradespace, I spent years working on the final stage of the IP lifecycle helping companies sell and license underutilized IP. Through this work I saw just how important it is to build a fact base using inventions as the data primitive. It is impossible to decide whether to license an IP asset without understanding the rationale that went into filing an application in the first place, how the IP maps to a company’s products, or what else the patent’s inventor has worked on.

The future of IP software

So, the question remains….should IP bundle or unbundle when it comes to tech? I have my opinions, but I’m eager to see how the IP community tackles this discussion in the coming years.