Our industry is in desperate need of transformation. In fact, we have made that transformation our relentless focus at Q4intelligence. Of course, like change for change sake, transformation without a healthy focus is, as you'd expect, unhealthy. And, in my opinion, it is an unhealthy "transformation" Zenefits has brought to the industry.

I'm sure you're sick of hearing about them, but don't stop reading yet. This article isn't really about them; rather, it's about a weakness of our industry that they have exposed and, in many ways, are perpetuating at an exponentially faster rate. I would argue they aren't truly transformational at all, but are actually the most visible example of why this industry needs real, healthy transformation.

More than being given credit for a "transformation," the guy who started Zenefits is being hailed as some sort of innovative player. There is a grain of truth in that, but it has NOTHING to do with the way they are competing. The only innovation they can be given credit for is the technology solution that is the key to their success. And, to be fair, they seem to have developed an innovative solution (HR administration system) that is very attractive to employers. It evidently satisfies a real need, so much so that a ridiculous number of employers have made Zenefits their broker of record in exchange for receiving the solution for free. Good for Zenefits. I'm not convinced it's so good for those employers.

What's wrong with the Zenefits model

Now, I don't know who I am to criticize the business model of a startup company who has successfully raised $80 million in venture capital, but I'm going to do it anyway. Beyond developing this solution, Zenefits' business model is based on the oldest play in the producer playbook. Their pitch to their prospects is, "We'll give you our solution for free, and all you have to do is make us the broker of record."

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