TBPN Live - BREAKING: Rippling v Deel, Tech Feud, Corporate Espionage Drama

Episode Date: March 17, 2025

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You're watching TBPN 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, D.C. It is a balmy 60 degrees outside. It's not cold at all. Jordy, where are you right now and how are you doing? I'm home in Malibu, the home of magnitude 4.0 earthquakes. There's an earthquake? There's an earthquake last night. It was like a 4.0 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 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 basically had two 4.0 earthquakes in the last week in the exact same spot and a bunch of others. So we're

moving and shaking over here, John. Love it. And yeah, I so the funny thing, it doesn't seem like size, it's seismologists, right? Like people that study, it doesn't seem they describe their own craft as trying to read the tea leaves. 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. 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. But but anyways, we

have some news shaking the timeline today. There is a post I wanted to pull up from a guy named Anand. He says 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. But it's real. It's real espionage and intrigue for our world. And 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, if people have been following today, Parker Conrad, the founder of rippling announced that they're suing deal for embedding a spy in

rippling, which is crazy. In the 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 tinfoil hat and wonder what's really going on here Is this some hibernian conspiracy going on? Are the are the Irish lads? up to something but but it feels like it's potentially Irish on Irish crime and thing. But it feels like it's potentially Irish on Irish crime.

And 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. I'm wearing a decency to throw on a green. Where's my green? I even thought about leveling it up and go double green with the bezel, but I'm gonna I'm gonna leave it off for now. 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 Levine, uh, over at, uh, at Bloomberg spies in the sales slack. I'll send this,

I'll send this over to the crew. There's nothing like breaking news. Nothing like breaking news. And Matt Levine 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 where the interesting stuff is, where the interesting anecdotes are. And then we'll go through a list of other corporate espionage just to give some history because it's a fascinating topic. We won't do too many deep dives there, but there's some fascinating ones in this list I put together. Somebody tried to steal a Coca-Cola formula

at one point. The Chinese were stealing Google self-driving car stuff. There's been fascinating stories throughout the business history. Is the Coca-Cola formula, I don't know if you know offhand, is it still actually- Trade secret. Secret? I think so. They found a way to maintain that secret

over a century plus? I think so. I think they divide it up 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. But yeah, 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 is easy. Anyway, we'll go into that at the end of the show. We got to cover the breaking news first. So let's read about Matt Levine. 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, et cetera, 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 salespeople and all that, but it surely helps. So, you know, find a salesperson at a competitor and recruiter, 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. Workplay, workplace software, uh, company people center, Inc. a big quote here from kind of summarizing what's going on. Workplace software company People Center Inc. I didn't know this was the real name of Rippling. I guess Rippling's just their TBA. People Center Inc. is suing its chief competitor over alleged corporate espionage. Both companies were valued in excess of 10 billion. Rippling 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 Rippling its Ireland based global global pay payroll compliance manager was identified after he was observed accessing slack channels and documents with no legitimate reason to do so the Complaints that I know. 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 they deserve to be. This is deeply wrong. And you know, This is deeply wrong. And you get into this situation because Deal and Rippling were able to grow extremely quickly, initially doing very different things, right?

Oh, yeah. Rippling was distinctly focused on the US market. 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 going to go sign up for, uh, 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, not at all. It's not at all surprising that like these companies have basically been in a blood feud. What is surprising is that they would go far enough to allegedly, you know, plant a spy. And I'm excited to get into the honeypot. Yeah, because there's so much here. Rippling was really

playing some, some 40 chess. Yeah. I mean, I, I made a whole documentary about Rippling. Uh, I, I used Parker's previous HR company in 2012, 2013, uh, Xenefits, uh, worked great. Uh, interesting hack there where they'd give you the product for free and then act as your health insurance broker. And so they would take the brokerage fee. And that was when you sign a healthcare contract as a company, the healthcare broker gets a commission. And those commissions can be really, really high because you're, you're sending your, 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 and Silicon Valley or ARR like ever their 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.

But 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 this vertical, 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 SaaS company. They're horizontal. And on day one, he wanted payroll, benefits and IT. And so Rippling's go-to-market was, hey, you have all these employees, some of them are working from home, you buy them laptops, what happens when they quit or they get laid off?

Well, they gotta 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 as 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, 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 COVID caught him off guard and COVID really, really accelerated what Deal was doing because Deal was built for international super crazy remote work. And the fundamental, and anybody that's an entrepreneur or investor should go back and read the Deal, sorry, not Deal, Rippling Series A memo, like on the compound startup. Yep. Parker basically lays out the master plan. He even published the memo himself. Yep. Deal didn't have to, you know, steal that one. But, but, but he

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 something to graph, you can launch every meaningful piece of workplace software on top of that. And something to be, you know, I think we covered this last week, it's something like 70 plus percent of all, like, public companies are based in the US. And what that means is that Rippling should dominate, if they're gonna come in the US and sort of dominate the American market here, and then eventually expand into global payroll,

then of course they're gonna 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 viability. Like they're not going to basically dominate the global payroll market without also having a significant sort of foothold in the traditional HR tech market here in the US. Yeah, yeah, it's the Yeah, I mean, the compound startup

thing is fascinating. It's funny because we're actually working on setting up payroll right now and so we, you know, our decision is being informed by the bore on the timeline. Whoever wins. Yeah, we should just condense this down and set up a Zoom link between a deal rep, a rippling rep, Augusta 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 get out. Yeah. Yeah. Come on the show and pitch us and then whoever pitches the best.

Well, 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 know, 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 Andreessen and Sequoia and stuff and like all those serious VCs have piled into these like unicorn, Deca corn 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, 50K a month. Yeah, you can look at, historically I think the payroll market has always been,

the narrative has been this is not a winner take all market. Deal and rippling and gusto can all be worth tens of billions of dollars just by eating ADP, right? ADP today- 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 of. Totally.

It's just not happening. I never interacted with a startup in coming out like 10 years in startups that was on ADP. I'm sure they reach out to companies, but they're just not winning any companies. So it's almost like a cable style business where it's just, yeah, 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 you're startup and you're like, actually, I have no need for 25 of these features. 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's seeding falsehoods about deal Rippling is trying to shift the narrative with these sensationalized claims The spokesperson said we deny all legal wrongdoing and look forward to asserting our counterclaims Sorry, but yes that absolutely works. If you are ever accused of violating sanction laws Please do bring a sensational spying lawsuit against your competitor that will certainly be anyway so to be clear here This is a this is a good line from from deals PR team the thing that's sort of hurting them on this is that the alleged spy hid in the bathroom and then So this is the right line from from deal but 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's rippling's complaint, which refers to the alleged spy as DS for Deal Spy. The guy allegedly lurked in a bunch of Slack channels devoted to Rippling's sales process so he could channel information back to Deal. Guided by Deal as his primary search term, DS surreptitiously accessed Rippling's 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 and relationships,

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 On a particular perspective customer who is considering both rip both rippling and deal This is known as prospect 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 specific concerns with the products and services offered by Deal. This is like just weeks ago. The day of the scheduled call between Rippling and Prod, DS previewed the B-related channel 66 times. Later that day, Prospect B abruptly canceled the scheduled

call with Rippling in which Rippling was going to deliver its proposal and explain that they were doing so because they had decided to select a deal for the product they were interested in, even though Rippling believes that customer would have been better served by Rippling. And it's fascinating here that like 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 walk by filing 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 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, yeah, well, it's 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 narrative generalized, you know, competitive CEOs will talk to each

other, they're friends. It's sort of like, hey, some we're eating, you know, we're eating these sort of legacy businesses, like there's enough market cap for us to go around. 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. I was joking earlier that, imagine a world where somebody bugs all the Waymos in SF because there's no driver in them. You could just hire a Jason Bourne type to just bug them. Just keep calling Waymos, dropping an air tag off with a microphone.

Yeah. And you would just get this constant stream of private conversations. And this is why the ski lifts are so important. People are talking about bugging the ski lifts 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 exchanged the proper alpha. Yeah. Yeah. That too. Um, but anyways, uh, you know, I, I think this is going to be a big wake up call for the industry that again, it's not all positive. Yep.

We are competing for the same customers and we certainly, we have our own counter intelligence operations lead against other podcasts, right? Yes. We know that competing podcasts have tried to get moles into the system. But yeah, we're just embracing that head on, right? And I think every SaaS needs to have a counter intelligence operations lead yesterday. Definitely. Yeah, but like, let's be clear here. If Rippling is coming for damages and they have this, you know, this example here where it's very clear that deal had insight into the sales process, you know, this is all, you know, it's up to deal to like, you know, prove whether this is real, real or not. But in this situation that Rippling is highlighting,

Deal had direct insight into the sales process, down to the dates, down to the individual selling points. And 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 Rippling's able to say, look, our average customer stays with us for seven years.

You guys, you know, 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 nature of this particular business, which, you know,

we talked to like the nuclear founders, the, you know, they were just literally all in that Jason Carmen documentary together and they have a very positive sum mindset because for anyone in this, like far out R and 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 B2B SaaS 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 gonna get from this maybe. And if you have the ability to come in and quote just a little bit under, you're gonna win those deals again and again, like, cause 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 ADP? 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 all this stuff and you know, it seems like there's enough proof to know that some information would pass the deal somehow. Think about how angry if you're the rippling exec team, if you are, that one's obvious, Parker being livid is obvious. The sales team, right? Where they're losing deals because people are

basically just have, you know, this sort of information advantage. If you're the engineering team who's like in 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, growth because, 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 being angry. Right. Yeah. Uh, let's continue with this, Matt Levine article. Uh, if you had your competitors, 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

Rippling apparently discovered the alleged spy not because he was snooping on their sales information But because an investigative reporter at the information Contacted Rippling about a forthcoming article concerning deals Russia related about a forthcoming article concerning deals Russia related sanctions activity and asked rippling about its dealings with Russia the reporter included internal rippling slack my black messages in his email and rippling investigated who might have accessed those messages and quickly identified the alleged spy Wow crazy right wait I didn't even I didn't even see anything about this yet yeah crazy, right? Yeah.

The possible lesson here is that tech companies are much more sensitive about leaks to journalists than they are about 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, Rippling 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 Rippling set forth a test of, or what is known by security professionals as a honey pot to have confirmed Deal's involvement.

Rippling's general counsel sent a legal letter to Deal's senior leadership identifying a recently established Slack channel called D-Defectors 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 talking trash about you and our slack Yeah, but it's just you and it's like 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 cuz they fell for it Well, and here's the thing. So didn't matter. Yeah, I guess it just didn't matter because they fell for it. Well, 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 Rippling's 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. Deal hasn't been without its own sort of crises because anytime you're...

These companies are moving huge amounts of money around the world all the time, right? And anytime you're in that business, it's somewhat crisis-prone because 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, uh, people that are doing prop trading, right? So they have 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 Rippling who's, Hey, uh, you didn't notice this, but you know,

you've been paying out a sanctioned entity in Europe. Right? I'm just making up an example. I have no knowledge of this specific instance. 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 war at the sort of like, you know, a narrative PR level.

So it is so funny to compare it 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 early on something happened with 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. A lot of the tech companies are like, oh, okay, the payroll's gonna go out on Monday instead of Friday. All of our employees will be fine with that. We'll just deal with that. with some of their clients, a lot of the tech companies are like, the payroll is going to go out on Monday instead of Friday. All of our employees will be fine with that. We'll just deal with that.

One of the companies was running trucking and he was calling the team being like, the entire rippling team had to go to ATMs, get cash, go to Western Union and wire individual amounts to people. And it was super dramatic, but it's so funny because it is dramatic, but at the same time, we're talking payroll software here. It's not really life or death, but it is actually very important. And the stakes are high with sanctioned entities. And even 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 SaaS. 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. Like, it's so easy. It's so, like, you know, not as, like, world historically important as everything else. But, like, there is stuff here that's pretty important. Let's move on.

So about this D defectors channel. In reality, the channel was not used by Rippling employees and contained 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 letter was only sent to three recipients all associated with deal deals chairman the chief financial officer and the general counsel deals head of us which is the founders dad

oh is that is that who that is i I know Boisies, it's like, it's gotta be someone related to him. And Deals outside council. Neither the letter nor the D defectors channel was known to anyone outside of Rippling's investigative team and the deal recipients. Yet just hours after Rippling sent the letter to Deals executives and council,

Deals spy searched for and accessed the D defectors channel proving beyond any doubt that deals top leadership or someone acting on their behalf had fed the information on the D defectors channel to deal spy inside rippling. And then the amazing. Yeah. So pretty good. Good enough to get an Irish court order to seize the alleged spies phone, at which point he also did trade crap.

But here's the thing. This is in the days leading up to St. Patrick's Day. Can you imagine the evidence that you need to get something like this to happen coming up on St. Patty's Day? I assume Ireland shuts down for the entire month of March. Yeah. What's the Chinese New Year in China, they sort of shut down a lot of factory. I mean, us Irishmen are known for for like a bottle and and and St. Paddy's Day is a good as good as an excuse of any. So, you know, I certainly wouldn't be going to work if I was in Ireland. This is this is the natural you So, you know, I certainly wouldn't be going to work if I was in Ireland.

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, software engineer like Metta and Google, you know, or sort of Metta and 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 off the info back. I mean, that, that is my real question here is like,

so this spy was clearly w twoed at rippling might even had, might even have had stock options, which is kind of hilarious to think about. But how was, how was the spy getting comped by deal? Like was it literally like cash in a duffel bag or? Was it some sort of stock option? Deal makes a really good product for paying people globally. Oh, okay, I see where you're going with this.

And so it's very possible that he was dogfooding the product. Yeah, maybe the long-term here is like, okay, Rippling has like the normal business, mid-market, startup market, enterprise market, and Deal pivots to being like tradecraft payroll. So like when the CIA, like Palantir for payroll, that would be a good rebrand, be like,

hey, there's a massive network of spies all over the world. We're not gonna use the traditional payment rails anymore, but if you need a duffel bag of cash dropped to an X KGB member at the Kremlin, like we can get it done for you. Crazy. Crazy. I think that's a good, that's potentially a good growth story out of this drama. It completely repositions the company. Palantir for payroll. We got to go through the actual, like the bathroom scene. Do you already read those?

Yeah. Yeah. Yeah. This is your favorite part. So deal spy initially told the independent solicitor that his cell phone was in a bag on another floor. The solicitor offered to have an associate retrieve the bag, but deal spy insisted that he retrieve it himself. on another floor. The solicitor offered to have an associate retrieve the bag, but Dill 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 misdirecting 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 solicitor.

You can just do things. Doing something. He's just playing candy. Probably the haptics are going crazy. This is addicted to tick tock. Maybe, uh, it's just ice cream. So good in the bathroom. Just watching a live stream. Oh, ice cream so good in the bathroom just watching a live stream suggesting that DS may have attempted to flush his phone down the toilet rather than provide it for inspection. Later that day, Rippling 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 Diaz 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. Diaz 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 at the end of the day, it's enterprise Sass. Yeah. Oh, me or Jason Carmen are the only hopes for making this. Well, no, to be honest, to be honest, the right form factor with this is a South park style cartoon. I agree that that releases basically this week and it just sort of, uh, breaks it down

because it's too, it's too silly to actually be made into a documentary. It's so funny. But yeah, I mean, this is like the people that 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,

uh, uh, what Matt has to say. The thing I don't understand is, is the spy not intelligent enough to understand that all of this stuff can be, um, what, be, what's the word for it? Supina from like Apple or Google or sort of. Oh yeah. I mean, Slack is not even. I'm sure he was using.

I'm sure he was using like signal and stuff like that. Yes. I mean, Slack's not end-to-end encrypted. And then also like Salesforce owns Slack. They're happy to hand this over. And then also like when you run Slack at the enterprise level like Rippling 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, hey, hand it over. I think what's totally possible is that he was communicating over an encrypted service to the deal team. Yeah. 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, yeah, basically it, right. Yeah.

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 because Rippling did comment on this and gave some extra information around this. Yeah, I don't know how much of the New York Times

we need to really cover, but. Mostly it's just that, you know, you can see obviously Parker posted about this, but Vanessa Wu, who I actually interviewed for that documentary, uh, she's rippling'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 rippling is accused of violating sanctions law. Uh, and then yeah,

deal also fired back with that. Um, it's a brazen act of corporate espionage. Logan Bartlett on the timeline. Wait, real quick. Somewhere it says Rippling told the New York Times that it also discovered correspondence between BS and Alex, DLCO and co-founder. I didn't see that anywhere else. I didn't see that either. But maybe it just didn't make it into the initial complaint. Maybe I don't know is that. Yeah. Rippling said it had also discovered correspondence between DS and Alex Bozze's, 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 stuff. Rippling's bringing in the heavy hitters. They the lead lawyer is Alex Spiro of Quinn, Emmanuel Urquhart and Sullivan Pasadena law firm, by the way. Shout out John Quinn named partner lives in my neighborhood. Great, great dude.

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 Eben Spiegel at Snapchat. And Mr. Beast was also a Quinn Emmanuel client, giving you a little bit of world tour of what Quinn Emmanuel is up to. Shout out Quinn Emmanuel. They're doing things. Yeah, they're doing things. Yeah, I went to high school with all the kids that were affiliated with this law firm. I honestly wonder, so 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 W-tiered. And then, and then, yeah, 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 repers, you know, deals 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, yeah, I is burnt. They're out in the cold and they gotta go, uh, they gotta go figure it out You gotta 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 You know, what's that quote? It's like I'm you know, uh, You know, what's that quote? It's like I'm you know, uh,

You know, you should be embarrassed at how you know not that you sold out but like how little it actually took right? Yeah, this feels like I could imagine him making $200,000 and then imagine you just got 10% of the company Deal spy if you got if you got less than 5%, you got hosed. You got hosed. If you're, if you're going to do it for less than 5% you're, you should be a co-founder for this. Yeah. 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 going to pivot to Palantir for payroll, you know, and run spying operations across the world, he's, he'd be an expert. Anyway, but 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 T three T two D three is, which is triple, triple, double, double, double, which is how you grow a really high growth B2B SaaS business. of course. Is not like us is the Kendrick song, right? Yes. Yeah, that was the- I'd like to see, I would love to have had a little birdie, flying around following Parker Conrad. Cause I wonder if he did a face to face,

with his employee who was spying on him, like the king, you know, the king, there's the spy within the castle walls and the king, like, you know. Yeah, I mean, you gotta hand it to Parker. Like, enterprise SaaS is normally so boring and his entire life has been fascinating. Somehow it's just always filled with.

Well, also the, you gotta 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 just sort of objectively like incredible execution on both the law, like the, the, the law here, the execution of the honeypot, how quickly they moved on this. Less than a month ago, they were still sort of uncovering a lot of this. And then, it's not super, companies that are winning

and crushing markets don't typically feel the need to, uh, hire, uh, spies. That being said, the best ones probably do it. Yeah. Yeah. Uh, yeah. If you're an enterprise SaaS thought leader now, need to parody Josh Steinman's how many foreign sabotage teams are operating on US soil. How many enterprise SaaS sabotage teams are operating in Silicon Valley right now? Just ask the question every day. There you go. Good morning. We're going to win. And how many How many corporate espionage teams are operating within, you know, American SAS, American unicorns. Yeah. Well, you had a good post about this. It's a, it's a photo of a soldier doing a house clearing, uh,

Co-eap to SAS Bellum asked enterprise SAS is war. There was some debate in our group chat about whether or not the translation But I think the message got across and you got a couple hundred likes already because it's a lot of fun And Paul Paul Aspergall says the East into the East India Company had a private army Why shouldn't the corporate expense management platforms militarize back to basics. Imagine you're in Valhalla explaining to King Leonidas about the great battle of banking products. Amazing. I also said Richard Nixon would have loved B2B SaaS for sure. If he were around today,

I'm sure he would have been angel investing into one of these companies. I'm in DC. I almost stayed at the Watergate. I'm a big fan of that hotel. 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 it. Like, and everything is like branded around like the break in. Uh, and they've really leaned into that as they're like shtick. It's pretty fun. I like it.

Adam Rankin, 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 forefront of another dramatic payroll incident.

I was Warp's portfolio company. They've just been, they had a little hiccup last year related to some marketing stuff, but they just have stayed laser focused. And now 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, uh, the two people are fighting and then like the guys in the background, you know,

like, Oh yeah, yeah, yeah, yeah. That's warp. Yeah. That's what we're chilling in the back. Uh, paying attention. I mean you know, like, Oh yeah, yeah, yeah, yeah. That's warp. Yeah. That's what we're chilling in the back. Uh, 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 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 S&B category so that's cool yeah I have to imagine that they're just sort of like cool we're glad that you guys are you you know, duking it out. But, um, I've been a gusto customer for almost a decade, like years,

always good experience. Um, and yeah, I mean, it was interesting cause gusto launched as Zen payroll. And then Parker went through wise. They were, is YC company. Parker goes through YC with Xenefits 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 gonna do payroll, I'm gonna do everything.

And so Zen payroll rebranded because they didn't wanna be confused. Even though they were their first mover, they were like, 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 sold and got shut down and rebranded. And so they could have stuck with Zen Payroll the whole time.

But I mean, Gusto's a good name too. I than it does a consumer product, just because there's like, the goodwill doesn't build up the same, like you have your install base. Yeah, most of your sales motion is coming from, word of mouth, direct sales, it is much easier. I don't know if there's any other. Yeah, I mean, there's interesting stuff. I mean, honestly, people should go read the entire complaint cause it is written in like plain

English. Uh, and also I just think it's an interesting 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 B2B SaaS company, you should read this just to understand how Rippling works. Because they're explaining the whole process. They have this five stage funnel, research, customer development, a demo, then refinement, then a contract stage. Each stage of the sales pipeline requires significant effort.

on like the Jason Lemkin, 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 may be very implementable here. I actually have some breaking news. So this story has apparently reached LinkedIn a lot faster than I thought, because my buddy who's a big LinkedIn user,

he doesn't use X, he just sent me the story. And I want to reply back. I'm not going to reply right now, but I wanted to reply back. Buddy. Six hours too late. No, the first text that I got this morning were like check X. People are tagging, you know, people are tagging TVPN and this story they're calling it the water gate of SAS.

Let me see. Do we want to go, do we want to go through some of those examples of other big corporate? Yes, we do. I do want to highlight this one image from the complaint. It's like page 1617 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? 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 search the term deal approximately 23 times a day.

And so it seems like, it seems like this person 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 at Rippling and then started spying, discussion related to a potential customer for Rippling's PEO product. Yeah. So the challenge here and what I think Deal is going to run into because Deals own internal Slack messages in regards to their entire... It's not like 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 rip, like we're at risk of, and then there's sort of this 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 change the outcome of this sort of sales process. I wonder if the spy knew that there are records of channel previews because that's something because just for some clarity when you're when you clarity, when you're in an organization, there are private channels which you can't even access or search for.

There are public channels which you can join. When you join them, it sends a little message like, hey, Jordy joined the TBPN guest planning chat or whatever. But you can also just preview them, which means you're just like looking and scrolling through, but no one in the organization knows knows but the IT guys know this is basically one of the sort of things that rippling pitches, which is like you should have one sort of 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. So there's a graph baby and the graph is looking like this like flat, flat, flat and then just massive growth. And it's like, what's going on there? Something changed. 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, give me the, give me the cash bags. Uh, so 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 sought comment from Rippling, Rippling learned two important things for the first time. That Tiny Bird, a startup discussed 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 Rippling including Deal Spy had any other work related reason to know about any connection between Tiny Bird and Deal, let alone search that name through Rippling's Slack archives. Nevertheless, Rippling's 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 DS credit for just being incredibly locked in on the task. It's hard to imagine him getting any other work done other than spamming these different search terms. And yeah, you know, we talk about like 10 X engineers and we talk about a players and

it's just seems like corporate athletes. Let's just call balls and strikes in terms of spying potentially a 10 X spy potentially an a player here. Although he did get caught and the whole spotting thing only 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. What? How to get credit credits to what did DS flush? That's the big, you know, it's like, what did Elia know?

What did Elia see? What did Elia see? What did what did you guys watch? You got to impose 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, of the reporting. Upon learning of the Tiny Bird searches, Ripling strongly suspected that deal was directing DSS actions

But to ensure rippling conceived a test a honeypot and this is where we go into the D Dash defectors tab, which is fascinating Anyway, so we should read we should quickly read through that information article that actually kicked all this off It's in the information was an exclusive that dropped on February 27th 2025 off. It's in the information is an exclusive that dropped on February 27 2025 less than a month ago. It's called the bitter fintech feud that stretches from Silicon Valley to Moscow dealing rippling have stirred up a hornet's nest in the state world of HR and payment software. 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 feud 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. Deal immediately pointed the finger at Rippling, calling the accusation a coordinated effort by Rippling to damage the reputation of its main competitor. Deal applied to dismiss the case deals evidence was that the receivers attorney was an investor in rippling and represented in licensing and regulatory matters, including helping set up its insurance brokerage. So yeah, 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 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 a high downside risk. It can be seen as gauche or, you know, improper or impolite. Everyone in Silicon Valley is usually like, hey, that might be a future acquirer or someone we acquire.

We might have 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 and pick whatever you want. What is that? Yeah, so one data point that's interesting,

Rippling had barred former employees who went to deal from participating in a 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. Interesting the way you would, if you went and worked at, you know, someone like Ram. Yeah. Yeah. I mean, just very aggressive stuff across the board. And then do you remember the, the snake oil fiasco, this whole thing? No. So there was something where, where,

I think it was, I think I'm going to get this, I'm going to get this close, but I think it was like, Rippling was calling deal snake oil and they created a snake game that you could play. Like, you know, a browser based game to kind of like take a shot at them. created a snake game that you could play, like a browser to kind of take a shot at them. And a lot of people on X were kind of like, just like this is too much, just focus on building,

play a clean game, this is rough in the passer, this is getting a little aggressive. And the trash talking like, you know, maybe, maybe this is maybe tech. Yeah. They said like the NFL not 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 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, yeah, everyone just does that. It's seen as just kind of normal, normal stuff. Normally you don't use a, use a, a phrase like snake oil, which is aligned with like, almost like illegality, right? Because you, 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 repurposing the term. But in general, snake oil is a, is,

it's a little bit harder, harder phrases. It's a 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 It's better, and I'm sure ripping has that landing page as well and deal does too, but but people were like oh, okay This is really really heating up, but now we see like okay Well things 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,

a deal and not at gusto or pay loss city or ADP, even though they might be competitors with any one of those companies. Uh, anyway, uh, we should, we should move on to some of the, uh, the greatest corporate espionage,ionage things in history. We should give some context on just where these companies are sitting. There's a good data table in the information. Comparing global payroll platforms, Deal and Rippling. Valuation deals at 12.6 billion.

Rippling's at 13.5 billion on revenue deal. Allegedly is at 800 million ripplings at 580 million. And so a lot of people, which is crazy. I mean, it's crazy if you just had to estimate their revenues, it's deals growth has been almost unbelievable. It's insane. And so when articles pop up, you know, they had an article. 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, this is potentially one way that they're able 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 miniscule amount of our revenue. But, but But clearly deal is a real threat to Rippling, right? It's not, this isn't Rippling like sort of beating up on some, anyway, you know, they almost have doubled up. Yeah. Yeah. And so Rippling's raised 1.4 billion,

Deals raised 685 million, Deal has 5,000 employees and Rippling has about 3,000 employees. Rippling's available 3,000 employees. Rippling's available in more countries, 185 countries compared to 160 for Deal. So that just gives you some context around the size of these companies. But they're pretty close and it makes sense that they're rivals and it does feel like increasingly they're going after the exact same customers. Whereas maybe the ADPs and the Gustos have found different segments that are less hotly contested, at least for now. to the exact same customers. Oligopoly and payroll forever, which, uh,

which is certainly what's happened at like kind of the, the, the public market, Deca corn 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 Yeah back in 82. I almost interned at IB. Yeah, I decided to go over to Hitachi

You know, yeah, but it was 21 of the top Didn't hit Tachi try to get you to go back and work at IBM and then come they said, you know Go go do a summer internship with IBM. Come back next summer. We got you on a, you know, a maxed out six figure four year deal. Yep. Yep. Yep. Yeah. Have you, have you seen a war dogs where, uh, Jonah Hill is like, it's like IBM. No one knows what IBM stands for. And then the, the actor is like the one guy's like international business machines. And, uh, one guy's like in international business

machines. Yeah. And he's like, get out of here. You're fired. It's the greatest. I love it. I actually filled an ad with that actor. He was like, Oh yeah, it was a great, great experience. He has like one line in the movie. He was really stoked about it. Nice guy. Anyway, in 1982 IBM became the victim of a major industrial and espionage scheme when agents of Japanese firms, Hitachi 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. 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- Wait, so were they, is this one of those things it's like a correct, what's it called? A kuretsu where you have the- Kuretsu, yeah.

So, so- I mean, yeah, I wouldn't be surprised if the Japanese government owns part of Hitachi and Mitsubishi or they own pieces of each other. This is very common in Japan. Well, I'm just like, why are two companies coordinating on something that's so obviously illegal? Totally, totally.

This is why we need American K-Retz's. We should, Dino, Rippling, Gusta, EDP, Paylocity. Parker, Alex. 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 been payroll once we get the American B2B SAS K. Ratsu. Let's get everyone in there. It's great. The scheme was halted with multiple arrests and

the case was described at the time as possibly the largest industrial espionage case in history. But this is crazy. Hitachi pleaded guilty. espionage case in history. Right, so this is crazy. Hitachi pleaded guilty in 83 with two executives and they paid fines of $10,000. $10,000. How would they ever recover? Yeah.

They also issued an apology to IBM and entered a legitimate technology licensing agreement. The early case raised awareness of overseas competition targeting US technology and lead companies to tighten their security on sensitive R&D. Yeah, wild. It's funny. Should we go into the haircare product espionage of 2001?

Of course, I mean- People have been asking about our haircare routines again. The answer is we conduct a large espionage on, on the, yeah, we have, we have moles inside of Unilever and Procter and Gamble. Yes. And they're, they're just giving us, you know, sort of, you know, chemicals out the back door that will, won't hit the market for another decade. Exactly. That's really exactly. Yeah. So in 2001, consumer products, giant Procter & Gamble was caught spying on its rival Unilever to gather Intel on Unilever's haircare business.

P&G's tactics crossed the line from normal competitive intelligence. I just have to say something really quick. So when governments do this or hard tech, oh yeah, fence they do it. It's like, oh, this is like, this is really bad. And then