The CEO of a $4.5 billion startup was so freaked out by a competitor that he rented a room in the Marriott and built a competing product in 60 days

On Monday, HR startup Zenefits launched a free service that will automatically do a company’s payroll, with no human interaction required at all.

The product was built in just 60 days, after Zenefits had a scary run-in with its much larger competitor, ADP.

Internally, Zenefits calls its new product ‘self-driving’ payroll after Google’s self-driving cars.

“Self-driving payroll is sort of doing for payroll what Google is doing for cars, the payroll runs itself,” Zenefits CEO Parker Conrad told Business Insider.

What does that mean exactly?

When companies use Zenefits’ other HR products, such as time sheets, benefits management and onboarding, those services gather all the necessary details to do payroll. The new free payroll service then pulls information from those services automatically.

For example, it can automatically calculate wages (by taking hours from the time sheets app, for instance) or figure out flexible spending accounts from the benefits app. If an employee moves, it automatically updates the address and if the move is to another state, it automatically deals with the new state taxes, and so on.

The process is so automated that customers are actually locked out of the free app, Conrad says. They are not allowed to input data directly into it even if they want to, although a paid version offers a manual input feature ($US25 per month plus $US4/employee/month on an annual contract).

The payroll app came out of Zenefits public brawl with payroll giant ADP. ADP sued Zenefits, but the lawsuit was dropped at the end of October.

During the fight however, ADP blocked Zenefits’ HR software from accessing ADP’s payroll system for hundreds of their joint customers. That was a scary moment for Conrad, he told us. Payroll is the “plumbing” of all HR software, he says. No one wants HR software that doesn’t work with payroll.

So Conrad decided Zenefits must offer its own payroll system and pronto.

Zenefits free payroll serviceZenefitsZenefits free ‘self-driving’ payroll service

He secretly rented a room at the Marriott across the street from the corporate offices, took his best engineers to the room and told them, “Don’t come out until you have a payroll system. Our goal is to get it live in 60 days,” he said.

In 60 days they emerged with a payroll system good enough to use for Zenefits’ own internal payroll.

After testing it with beta customers for a few months, Zenefits is now rolling it out to everybody and offering the service for free.

Free payroll is a way to hook Zenefits customers onto its whole HR system. That’s Zenefits’ business model. It gives away its core HR products for free, making money on commissions from selling things like insurance products, or in offering Zenefits premium paid-for services.

Zenefits has been in the public eye lately, with some saying that it will miss its lofty internal sales targets of $US100 million annual recurring revenue by January 31, 2016.

Conrad tells us that Zenefits he’s happy with Zenefits’ fast growth and there’s still time to hit the number. And he thinks this new self-driving product will help.

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