The following interview is a conversation we had with Dirk Doebler, Founder/CEO of Parento, on our podcast Category Visionaries. You can view the full episode here: $4.5 Million Raised to Build the Future of Paid Parental Leave
Dirk Doebler
Thanks for having me not abroad.
Brett
Really looking forward to this conversation. Let’s kick things off with just a quick summary of who you are and a bit more about your background.
Dirk Doebler
Yeah, yeah. Before I founded Parento, I used to run finance and operation for a company called Game Product. They’re a consumer goods vibrator startup. It was one of the first hires there. Helped them from very early pre product market fit to raising run away a few million dollars in revenue and profitability. And then before that, Rae was in finance and data analytics in both equity research and eventually a helicopter manufacturer. So my career had primarily been mostly in finance and data analytics and operations and non insurance, which we’ll get into.
Brett
As you were working through those roles, did you have in the back of your mind this idea that you’re going to start a company someday, or where did that come from?
Dirk Doebler
Yeah, early on when I was internally in college, I didn’t want just a boring old desk job. I wanted to do something different and interesting and certainly get that as a Founder. I didn’t want to have to report someone day in, day out. I want to work on problems that I wanted to. And so for years I’ve been working on different ideas and business plans and thoughts and did a lot of research for a number of things. And I think some of them are pretty good and then some of them were easier than others. And it was old buddy, really. When I stumbled upon printed, I really decided this is the one based on the business plan and social good that.
Brett
We’Re going to be able to pursue. When it comes to inspirations for you, who would you say is the most inspirational Founder that comes to mind?
Dirk Doebler
I don’t know if I have an inspirational Founder. I focus so much on what I’m trying to build and trying to do that I don’t pay nearly as much attention as to what’s going on out there as I probably should. I think a lot of founders do, and I think there are lot of stories out there, too, where some of these doubters kind of live to see themselves become the villain as, and eventually kind of like, oh, no, they shouldn’t be so into them.
Brett
Yeah, that makes a lot of sense. And I think we’re seeing that story arc play out a lot over the last year or two, so makes perfect sense to me. What about books and the way we like to frame this? We got this from an author named Ryan Holiday. He calls them Quickbooks. So a quickbook is a book that, like, rocks into your core, really influences how you think about the world and how you approach life. Do any Quickbooks come to mind?
Dirk Doebler
Yeah, I would say the sea to sound really kind of odd, but, like, see to choose by Milton Friedman. I read that years ago and that really changed my perspective and ultimately drove me to get really into economics and major economics and then pursued finance with that book is probably one more influential book in my life.
Brett
Jeff, nice. I haven’t read that yet, but I’ll add it to the Amazon card here after the interview. Let’s switch gears now. Let’s dive a bit deeper into Parento. So I think it’s probably pretty clear from how I introduced it what you do, but let’s look expand on that a bit more. What problem does Parento solve?
Dirk Doebler
Yeah, we make it easier and more affordable for companies to invest in gender neutral, paid correctly so to offer paid maternity and paternity leave to any and all employees, whether adopt, fostering or welcoming childhood birth, and then making sure that if you’re paying an employee not to work for a certain period of time, that employee actually returns to work and returns full time.
Brett
Take us back to the early days. What was about this problem that made you say, yep, that’s it. I’m going to go build a company around this.
Dirk Doebler
Yeah. So I would do a lot of work, research, talking to a lot of finance leaders to understand how would they budget for paid plentifully. And the answer is really that they weren’t, because most companies, as I think we’re all probably aware, don’t offer any paid premium paternity leave. So they weren’t doing anything. But as I dived into it was really a problem for finance more than HR because HR generally understands why they should offer paid parental leave, but they can’t convince finance. And finance is oftentimes reluctant based on the fact that one to they don’t know how many people will take leave in any given year. So what is it actually going to cost? But then two, if you’re paying, plan to work for three months, what’s the RoI? Where’s the value there?
Dirk Doebler
And as I dove into this problem, I discovered there’s a very clear RoI on offering paid parental leave, because today, about a third of women will quit their jobs year they have a kid if they don’t have access to paid parental leave, and many of them will stay out of work for five years or more. And you lose a significant portion of talent to something that pretty much is going to happen year in, year out. 90% of Americans have or want kids, and companies arent properly solving for this. And ultimately it came down to the fact that theres finance, theres a hold of.
Dirk Doebler
And so for me, this is a financial problem that needs a financial solution, that HR needs someone that could help them speak to finance and tell them, hey, it was worth it to invest and not have an employee take paid per inclusion for three months. And here’s their Roi. It was really when I discovered that HR was struggling to have that conversation and convinced finance realized, no, this is something I should be solving. It’s a huge social good. Paid probably, it has huge benefits for both men and women, but also the company and my background being in finance means that we’re able to understand each company individually, help them build the business case, help them understand their situation in their risk profile, and then convince them to invest in genuine pain. Print believe.
Brett
What are some of the misconceptions that you see from companies when it comes to paid parental leave?
Dirk Doebler
Yeah, the first is that they think that suddenly, when they offer paid parental leave, everybody didn’t go out and have a kid, and then you have tons of people who are out for months on end. And that’s not true. You do see an uptick in birth rate versus historical rates, but you’re not going to suddenly see everybody out. And then on top of that, a lot of them think men are going to be taking hundreds of leave. But men traditionally don’t take their full leave. They will take more time now than prior generations, but oftentimes they’re not going to take their full leaves. And then a lot of time people think, hey, if I also believe there’s going to quit, they’re going to have their kids and quit. And the reality is that’s not true. People want to stay employed. They need to.
Dirk Doebler
And frankly, millennials need to have two incomes these days anyways. But the reason people quit after having a kid is not because they want to, but because usually the company’s not supportive enough. They don’t have the financial means. Get themselves back to work easily in the short period of time the company requires. Because you may not be able to take that child to daycare before a certain age, they oftentimes parents to go back by like six or eight weeks. That’s not as too young for newborn daycare. And so it’s too challenging for them to actually return if it’s not enough, leave. So we always tell companies, offer longer length of leave and offer higher percent of pay, and you’ll actually see higher ROI.
Brett
That’s super interesting. Who are you primarily trying to target and speak to then? When we just look at website messaging? Is it finance? Is it HR? Are you trying to speak to both of them?
Dirk Doebler
Were generally trying to speak to both of them. So for finance, we need to convince you that paid parentally is a worthwhile investment in that you need to offer more than just six or eight weeks, but like 1012 weeks at 75 or 100% of salary. And then for HR, because it’s insurance, we need to convince them that insurance is the best mechanism. If finance gets wide, you want insurance, you want cost certainty, you want risk mitigation, you want budget ability, which is why you have your health, dental, vision, short term, long term disability. But HR doesn’t always understand that.
Dirk Doebler
When we simplify the financial reasoning for the HR audience, when we’re talking about the insurance, we spend a lot of time focusing on broader employee experience of our offering, say, well, a lot of wraparound services on top of the insurance that just immediately clicks for HR, because most of the time we’re talking to senior HR leaders and being through this experience. And so it can really relate to what we’re talking about on a personal level.
Brett
Trey, what about your ICP today? What does that look like? And how do you go about uncovering that ICP and finding that ICP?
Dirk Doebler
Yeah. So for us, were going out after small mid sized businesses, usually 50 to 250 employees initially, because it seemed like a group that would be interested in the program and insurance, but also could move quickly. As a startup, we wanted to get companies and clients sign quickly so you can get more information. And what we discover after doing that and going out there, groups across industries, like every industry out there, blue collar, white collar, technical, non technical, discovered that the things that people think about when they like, oh, what kind of companies they run out or size or industry or demographic makeup really aren’t that impactful for us? There is a certain overlap, but it’s not a strong correlation. What really works for us is not so much what industry this employer in, but what is their genuine concern around their employees?
Dirk Doebler
Are they genuinely investing real dollars in their employees? So they genuinely care about getting more women? Or will they say that? Do they care about denying? Should they really say that? And so for us, we look more about sort of the characterization of the employer then we do. Specifically, are you the right size? Are you the right industry? And so we’re hoping on discovery calls, we’re asking specific questions that tease a lot of that information out about how you approach your human capital. And do you care about outcomes, or do you just do what you need to do to retain talents and follow the benchmark? And you’re kind of a laggard around what other people are doing.
Brett
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Dirk Doebler
You show up and host, and we.
Brett
Handle literally everything else. To set up a call to discuss launching your own podcast, visit frontlines.io Slash podcast. Now back today’s episode. How have you seen this conversation evolve since launching in 2019? And that conversation specifically around paid parental leave?
Dirk Doebler
Yeah, when we first launched, were heavily focused on the insurance because that company was a cheap innovation of military insurance in the market. You cannot buy it for anybody else. We’re the only one with it. And my background, finance, I got it right away. But were primarily not talking to finance during a sales process initially. We’re primarily talking to HR initially, and the final conversation didn’t resonate with them as much. And so what we’ve had to do is shift their conversation around the fact that insurance enabled your paid parental lead, and it does so in a budget friendly way. That finance is going to care about what you as HR going to care about the most is our employee experience.
Dirk Doebler
They were simplifying the paperwork and the administration, we’re helping them file for short term disability if they’re paid, mom being parental leave, or if they have a family policy in a certain state. And then we’re providing emotional support, parenting advice, work life integration, help to any and all employees. But practically when they’re having kids, as I mentioned, these are mostly HR leaders, more senior they’re more likely to have kids and bank was autistic. Who then more likely to be moms. And so we shift our focus more to our cocktail of the overall employee experience and lean it back to probably the bad experience that HR leader had when they were welcoming their kids. So we can avoid that situation for current future parents with our program.
Brett
What about your market category? How do you think about your market category?
Dirk Doebler
Yeah, I think really when you think of how any kind of company out there would be interested in our type of program and we view ourselves as sort of the cusp of both insurance and like an Eap type program or an employee experience like program. You look at the landscape for total awards. Most insurances are just purely insurance. You file the state part and that’s it. And if you get a check or not approved there’s not a lot else out there. Whereas for us when we have that piece with the insurance by the claim get some money it’s approved. But we also have these resources that are critical to experience that were proactively engaging companies with to make sure they have easy access to all these services. So its well beyond what you would typically see with an insurance carrier.
Dirk Doebler
And so for us were kind of creating this new category where were standing up a whole holistic program that enables them to easily budget for something and make sure that we have a good experience which is kind of counter to the entire insurance industry. Regardless of type of insurance. People hate insurance companies. We have a 95 NP’s score. People love our program and it’s because we have these wraparound services that take us beyond just an insurance offering.
Brett
Makes a lot of sense. And like you said, that’s very impressive. I don’t think I’ve ever heard a human say oh man, I love my insurance company. That’s not a very common thing at least. So amazing work there.
Dirk Doebler
Yep.
Brett
What about growth and adoption? Are there any numbers that you can share today?
Dirk Doebler
Yeah, yeah. We have really great numbers around adopting our program. And we do that as both one, our company purchasing this but then ultimately our employees using it. And our diving star is the employee we’re selling to the company. They pay 100% like cost. But for us the way we stay with companies is whether or not employees are using the program. And they’ve given us good feedback. And we see over two thirds of parents who are having a kid using our support program which is huge. And then when they do they’re using about 13 hours of support on average. And on top of that, when they do that they go back to work and tell their coworkers about our program.
Dirk Doebler
So we see pretty high adoption rates internally, about 10% of all full time employees that our clients end up using our program in some form, whether talking to one of our parent coaches, they can pay parental leave and need administrative paperwork help. So you have very high adoption rates within the overall category of what were doing. Were really proud of that because were clearly showing that we add so much value to these employees lives.
Brett
What do you think you’re getting right? How are you rising above all of that noise thats out there today?
Dirk Doebler
Yeah, for us we really like tap into the broader zeitgeist around paid parental this is such a hot topic generally, is there gonna be a federal policy or not? Has been a topic we made for a while. Probably not gonna have one for a long time. And then on top of that, the general family friendly sort of discussion and the benefits and rewards landscape post and wanting flexible work and all of that. And so there’s nothing more family friendly than offering someone paid parental leave and support, because you’re really giving them the ability to create a family or build their family, and then you’re giving them the resources to prove that you want them to care about them by providing that additional support to them. And so that’s really what we’re seeing, is we’re tapping into site based on critical lead.
Dirk Doebler
The fact that family friendly policies are huge and this is an easy signaling device for companies to prove to people, especially millennials, who care about family friendly businesses, that they are genuinely family friendly.
Brett
Makes a lot of sense. As I mentioned in the intro, you’ve raised 4.5 million to date. What have you learned about fundraising throughout this journey?
Dirk Doebler
It sucks and it’s the worst thing it encounters. Do easily the least enjoyable part in many cases, and you have green investors that you deal with. It’s great, but it’s a slog and it’s very difficult. And it’s very important that companies stay sort of on the trend that they’re going and that founders stay disciplined around what they’re looking to do because investors are going to give you so much advice. And almost all of it is garbage, especially if it’s coming from a fund who doesn’t necessarily stand the category you’re building or your clients, your customers in any way.
Dirk Doebler
It’s very easy to be pulled into a direction that investor would want to see, just because you feel like maybe it’ll close this round or reach around, but it’s not the right thing for the business and the investors always tell you not to build your product around what one enterprise company wants. I think the same thing. Don’t go too far down the line of what one random investor wants. They’re a good investor because they probably don’t really know your business or your categories. Be very methodical about what advice you implement when it comes to what investors are saying to you.
Brett
Lets imagine you were starting the company again today from scratch. What would be the number one piece of advice you’d give?
Dirk Doebler
So insurance is a slog to get to market. The average insurance policy takes like 18 to 24 months to launch. Its not something you can just turn on within a couple of days or weeks and test out. And you really need to know what you’re building. I would say for now, for me I would say be patient and don’t worry about it. The idea of starting this business and having no income for a long time was a very big concern, but it worked out. People love the program and just be patient. Let the results come in and don’t try to rush anything.
Brett
Final question for you before we wrap. Lets zoom out. Three to five years into the future, whats the big picture vision that youre building here?
Dirk Doebler
Yeah, we are looking to be the go to provider for companies to support not just working parents, but working families, where they come to us because they want to maintain those working parents but also their caregivers. How do they offer paid parental and single leave in budget friendly way? Then how do we support them from the emotional side, the logistical side? How do we make sure that we return them back to work full time? So were building out a suite of products built atop this financial program of the insurance because that’s the biggest differentiator of our program. That’s what companies really need and drives the most ROI.
Dirk Doebler
Now we’re laying in all these additional support services to go beyond just the one thing and that we’re that one stop shop for companies, regardless of specific need for one employee where they can provide universal support and leave to anyone who needs it.
Brett
Amazing. I love the vision and I really enjoyed this conversation. We are up on time so we’re going to have to wrap here before we do. If there’s any founders that are listening in and just want to follow along with you from a company building perspective, where should they go?
Dirk Doebler
Yeah, they can check us out. Usually LinkedIn is probably the best place to find us. So they go to our LinkedIn page and just search for Parento though. That’s parent with an o at the end.
Brett
Awesome. Dirk thank the you so much for taking day the time to chat. This has been a lot of fun. All right, keep in touch. This episode of Category Visionaries is brought to you by Front Lines Media, Silicon Valley’s leading podcast production studio. If you’re a B2B Founder looking for help launching and growing your own podcast, visit frontlines.io podcast. And for the latest episode, search for Category Visionaries on your podcast platform of choice. Thanks for listening, and we’ll catch you on the next episode.
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