- Onboarding startup Rippling bought targeted ads in San Francisco attacking competitor Gusto's focus on small businesses. The ad reads: "Outgrowing Gusto? Presto Change-o."
- Rippling's comparative advertising is technically legal, as long as what is stated therein is accurate. But Gusto wrote a cease-and-desist letter stating that the company believes it is not, threatening legal action if it's not removed.
- The whole ordeal "started to feel like an episode of Silicon Valley," according to a Rippling spokesperson, so Rippling responded to the letter with a brazen poem written in Shakespearean iambic tetrameter.
- The billboard ad has since been taken down, and now Rippling's bus ad vendor Intersection told Business Insider that it's removing the bus ads as well.
- The debacle has become a prime example of how startups can take aim at each other in the region's competitive market.
- Visit Business Insider's homepage for more stories.
An ambitious onboarding startup pays for an ad on a San Francisco billboard targeting a competitor. The competitor, a tech unicorn valued at $3.8 billion, writes a cease-and-desist letter. One Shakespeare-style poem and an internal email circulated later, and we've got a petty, 21st-century billboard battle on San Francisco's Highway 101 that's long been a battleground for such almighty tech startup squabbles.
As first reported by TechCrunch's Josh Constine, onboarding startup Rippling recently brazenly targeted its competitor, Gusto, via a San Francisco billboard and city buses. The ad reads: "Outgrowing Gusto? Presto Change-o," with Rippling's company name and motto alongside it.
Gusto, in what a company spokesperson told Business Insider is a standard business practice when a company's trademark is used, notified Rippling by way of a cease-and-desist letter and ordered Rippling and billboard operator Clear Channel Outdoor to remove the billboard ad, as well as any similar advertising elsewhere, before Gusto takes legal action. Rippling called the legal threat "baseless" in an email to Business Insider.
Transform talent with learning that worksCapability development is critical for businesses who want to push the envelope of innovation.Discover how business leaders are strategizing around building talent capabilities and empowering employee transformation.Know More The entire ordeal has become an example of how San Francisco startups can, and do, play the game in the region's ultra-competitive tech market, using the city's advertising real-estate as their gameboard.
Both Gusto and Rippling provide customers with human resources software. They're both spawned from famed seed accelerator Y-Combinator and their services are a product of a market need for onboarding software that can easily integrate new employees into the many tools used by a company.
But, as Constine noted, Gusto has historically had more of a focus on small businesses. Rippling told Business Insider that the main reason why its customers made the switch from Gusto to Rippling is they outgrew the company and needed a platform more appropriate for a larger workforce. Gusto itself has scaled so much in recent years that its own software couldn't support its staff - it transitioned to Workday, which a Gusto spokesperson confirmed to Business Insider.
In a statement to Business Insider, a Gusto spokesperson said that more than 100,000 businesses of varying sizes use Gusto nationwide.
"A core, but not exclusive focus, are small businesses, where we can serve as their broker for small group health insurance," the spokesperson said in an email.