Richard Hendricks is a low-level programmer with futuristic internet giant Hooli.He is often taunted by his more successful work colleagues, and his ideas are dismissed by egotistical entrepreneur Erlich Bachman, who owns the technology development incubator where Richard lives with fellow programmers Nelson "Big Head", Gilfoyle and Dinesh.However when Hooli stumbles upon the music copyright service that Richard is working on, entitled Pied Piper, they discover that hidden within the useless application is the best file compression algorithm in the world, and news spreads quickly.
Richard refuses to do so, but Big Head decides to take a huge raise and promotion at Hooli instead, where work begins on reverse-engineering Pied Piper to create the same product, branded under a different name.
Richard and Jared discover that the Pied Piper business name is already in use by an irrigation enterprise in Gilroy, California.
While Jared, Dinesh, Gilfoyle and Erlich begin brainstorming new names for the application, Richard attempts to prove that he is a good negotiator by convincing the irrigation company to give up the name Pied Piper.
Meanwhile, Peter Gregory becomes obsessed with Burger King products, leaving his assistant Monica in a difficult position with some of their clients.
Peter assigns an attorney, Ron, to the Pied Piper venture, who accidentally lets slip that Richard's project is one of eight file compression suites that Peter invests in.
This impacts Richard, who suddenly panics that he has no sense of where the company should go and what it should be doing.
Meanwhile, Big Head is removed from Hooli's copycat compression software project, named Nucleus, because of his complete lack of understanding of what Richard actually did to create Pied Piper, and is not reassigned to anything, and Erlich is mistakenly appointed to the Pied Piper board of directors when Richard gets drunk.
After having a panic attack and vomiting on the street, Richard runs into Peter's assistant Monica, who tells him that she believes in him and his idea, and he decides to take the investment and run the business himself.
After rejecting Belson's offer and siding with Peter Gregory, Richard is overwhelmed by the amount of work that needs to be done in establishing the business to Gregory's satisfaction.