Posted on: 01/11/2017

Josh Reeves of Gusto - Building People First Payroll

Josh Reeves

CEO - Gusto


Podcast Summary

Josh Reeves of Gusto shares his vision and people first values. Gusto is the premier payroll system for startups and a huge Kruze Consulting partner. The company has added Insurance Benefits, 401k and Employee Onboarding & Management in recent months and early feedback from the Kruze Consulting client base is excellent.

Podcast Transcript

Scott Orn:

Welcome to Founders and Friends Podcast with Scott Orn at Kruze Consulting, and my very special guest today is Josh Reeves from Gusto. Welcome, Josh.

Josh Reeves:

It's great to be here.

Scott Orn:

So we are in Gusto's headquarters. I've been told that the Christmas party was last night a holiday party. Everyone's looking very fresh, though. Josh is looking super fresh. Josh is wearing a suit right now.

Josh Reeves:

I'm currently in a three-piece suit. It's actually what I got married in last year, but it's a part of a tradition at Gusto called Fancy Friday. It's a completely optional traditional, but today it happened to match up with the day after our holiday party.

Scott Orn:

You look fantastic and I know why your wife married you. So, Gusto is a huge, huge channel partner with Kruze Consulting. We work for you guys. We have 150 clients working with Gusto. We love Gusto, so we wanted to have you on the Podcast to hear your story and also let our clients and customers and everyone at the startup community hear the Gusto story.

Josh Reeves:

I'm honored to be on the podcast.

Scott Orn:

Yeah, thanks. So where did this come from? What made you want to start the company?

Josh Reeves:

The beginning?

Scott Orn:

Yes.

Josh Reeves:

We started Gusto, now getting close to 5 years ago, we launched 4 years ago. But the real catalyst was number 1, we had all run prior companies. I have 2 co-founders. So it's 3 of us that started Gusto. We had all used other products, and running those businesses had been frustrated with our experience. Each of us have family that have run small business. My co-founder Tomer; his father runs a small clothing store. My other co-founder Eddie; his mom runs a small doctor's office. Then my mother-in-law actually runs payrolls as well. Those were the different experiences that gave us some exposure. We realized that it wasn't just us and our family that had been in pain here, a lot of folks were pretty frustrated with the current solutions in the market. Page1|7

Scott Orn:

It blew me away that how difficult it was to use, and then Gusto comes along and it's so simple. The design is amazing. It's super intuitive. You have Autopilot. We'll talk about some of the features. Your customer service is amazing. You must be so proud. You guys took a major leap forward in the market.

Josh Reeves:

It's always a team effort, as we were talking about earlier. But we really had a belief that this thing, this area called HR Payroll Benefits that today many people think of us as a chore and a hassle, could really be amazing. It's actually really wonderful things that we do for our customers. We give them peace of mind; make things easier and simpler. There's modern technology we can leverage to take off - in a way -5 of those 20 hats off the small businesses' heads. And say, 'We'll be your partner and help you with that.' That pain - getting rid of it - was what really motivated us.

Scott Orn:

Yeah, well also for small businesses especially. It's one of the first things they set up so they want to do it right. They are also hiring someone that's taking a risk on them. They are employee based, so usually a few people start off within there. It might have been like this when you started Gusto, with Tomer and like, 'This Josh guy, it's crazy enough to work - let's work with him.' But the last they want to see after taking that leap is to have their payroll messed up and not be able to pay the rent.

Josh Reeves:

Yeah, one of the things that has been really important to us from the beginning is this customer focus. And it really comes back to why we started the company. We're solving a problem by building a business. We didn't start a company for the sake of it. But we're doing something very mission critical. It's amazing to be here in Silicon Valley. We have a great office in Denver as well. We love the technology exposure that comes with being here. By all means, our focus is not Silicon Valley, we're trying to help companies across the country.

Scott Orn:

First of all, how much time did you spend with your mother in-law? You said she did payrolls. Was she sitting at the kitchen table all the time? Who were the people who really got a hold on you and were like, 'Josh you've got to fix this. You've got to fix payrolls.'

Josh Reeves:

Yeah, we definitely had a number of discussions at the kitchen table with my mother-in-law, and had a chance to discuss, talk, because Tomer, Eddie and I had never actually worked in this industry before, and that has been one of our strengths. We have folks on the team that have lots and lots compliance experience, but we're not approaching this from the lens of how it's been done in the past. We're thinking about it in a fresh way from what we think is best for the customer. We were previous employers. We were previous employees. What's best for those two stakeholders? Page2|7

Scott Orn:

One of my favorite features is Autopilot, and I actually talked about it every time we bring a Kruze Consulting client on. It's like, 'You just run it. It just runs. You don't have to stress.' By the way, it saves our clients a lot of money because we don't have to log in and run payroll and charge them that amount of time. We're into the idea of Autopilot - and that's great branding by the way, where did you get the idea of that term?

Josh Reeves:

Autopilot - I think, Tomer probably came up with that specific term. But that's the thing. If you're a business that isn't doing hourly workers, or that doesn't have any changes to make to payroll. It almost felt like common sense. That's the benefit, when you approach the industry and think about it from scratch, truly bottoms up, from first principles is you are not encumbered with some of the legacy ways of thinking. So we didn't have any debate. A company that doesn't have any changes to make, should not come in and just click a button. They should just work. Right? Are employees getting their own dashboard and having their own access point? That wasn't a big debate. That just makes sense.

Scott Orn:

It's so intuitive. Actually [inaudible 00:05:33] because we get these companies up and running on Gusto within an hour or even less. They are like, 'No, we're good. We don't need your help anymore with any of the payroll stuff. We got it.'

Josh Reeves:

The way we think about that is, there are definitely things that should be automated. So doing tax calculations, doing forms and filings -these are things that human beings are not better at. You have to deal with millions and billions of documents, millions and billions of dollars in payments today at Gusto, and they have to be accurate. It's way more scalable to do it in software. But when you have a complex question, when you want to think about how to build your business more efficiently, when you want to think about how your hiring should look like for the next year - you should talk to a partner like Kruze and have the ability to go have a sounding board. But if the thing is around tax filings, payments and insurance enrolments. These are things that we are happy to automate, and make much, much simpler.

Scott Orn:

The software should be doing that. Now you've talked about all these things you've automated, but at the heart of Gusto I also think it's not just your beautiful design and simplicity, but you guys have an amazing customer support team. We're constantly tweeting out Sam, 'Hey, shout out to the NT at Gusto, or shout out to the rest of the team.' How did you build this culture of customer support at Gusto?

Josh Reeves:

It definitely starts with why we started the company in the first place. We had our own experience which I mentioned earlier. We did some research and found out that a third of the companies in the US get fined every year, give or take, for making mistakes with Page3|7 payrolls. So there a tremendous amount of pain. We knew this was something very, very mission critical. Why we are here is to go solve this problem and serve the customer. Silicon Valley companies debate a lot; are they engineering driven, sales driven, products driven - we're all customer driven at Gusto. That has been part of our hiring process from the very beginning. When it comes to our customer care team - whenever someone has a question if they are going to email us, chat with us, call us we're going to help them and give them an amazing experience. As soon as that call ends, we're going to try figure out how to prevent it from ever happening ever again, because that makes your life even better. But that feedback loop is super critical. Tomer, my co-founder, who runs our Product Team, used to run the Care Team and the Product Team together, because that's a shared mission. It's the same purpose - in software and in people - to go make the customer's life better.

Scott Orn:

I love that. You were talking off mic that you have actually expanded and you have a big group out in Denver.

Josh Reeves:

Yeah. We celebrated our one year anniversary a few months ago. We have over 130, 140 Gustees in Denver, right in the middle of town but I go out there about once a month.

Scott Orn:

It's a little bittersweet, because when I used to call back in the day, I could recognize all the voices because we had talked so many times. Now you guys have grown so much. It's great. It's what you needed. You needed to have more people in customer support, but I can tell I never get the same voice again but it's always friendly. The people are always super helpful.

Josh Reeves:

There are no short cuts when it comes to hiring. We hope that everyone has that similar interaction. A lot of our hiring screens around things like motivation; people that really are passionate about serving small business. When I do a new hire on boarding every 2 weeks, I do a workshop and I ask people, 'Why did you join Gusto?' It's amazing to hear that same theme. 'I have a family member running a small business. I have a friend running a small business. It's awesome to go make their life easier.'

Scott Orn:

You guys are started getting into Benefits. We are starting getting clients now who are using Gusto for Benefits. Maybe you'd talk about how you came up with that idea and where you are in the process.

Josh Reeves:

Yeah. Benefits is something we've been planning to do since the very beginning of Gusto. It's because we really believe the future is an All In One system. Again, almost common sense, why does a business have to go to multiple places for HR Payroll Benefits? There should be one place to go. Payroll is the core of that. It is the natural system of records Page4|7 for all your data sets. If you're hiring someone, you're definitely not going to forget them to add them to Payroll.

Scott Orn:

They won't let you forget.

Josh Reeves:

If you don't pay them, they are probably going to quit pretty fast. So Payroll is that core. We spent several years building out that foundation, but for Benefits many customers want to be able to add health insurance for their employees. We try to make that just as simple as paying your employees.

Scott Orn:

It happens. We always say, 'Payroll comes first.' Then they start having the benefits conversations. A lot of time we have companies that wait two or three months. Or maybe they are seed-stage companies that signed up with us and then they close the Series A and they go, 'Okay, now's the time to do Benefits.' Are there any learnings or things you can share with the audience? You've now gone into Payroll, and now Benefits, and you're doing really well in both categories - any CEO observations for the people listening?

Josh Reeves:

What's really important for every company to know is what problem are they fixing and what is their vision for the future. For Gusto, that's been pretty clear from Day 1. It's this people platform that helps you hire great people; onboard them; enable them to go do great work; pay them; stay compliant; set up insurance. We have a strategy to get there, because we can't just snap our fingers and get there all at once. Today it's an All In One platform in all 50 states. That helps companies with not just Benefits and Payroll, but also Workers' Comp, Life& Disability Insurance 401(k). So we're really honored to help folks in that way. More to come - obviously, we're not done with any part of this journey.

Scott Orn:

Talk about, first of all the Workers' Comp integration. You just triggered this in my mind. We always use you guys for Workers' Comp. There's a really slick integration. Maybe you'd talk about how you had that idea and how you made it come to life.

Josh Reeves:

Again, it comes back to really believing that a business owner should have a simpler -Again these are people wearing many different hats. It's a labor of love to start a company. They've been on their own for a long time. So it's amazing to have modern technology now be brought to them. But they don't want to have to go to separate systems and separate logins. A lot of that data is already inside Payroll. So a lot of this is just about how do we make their life easier. So with Workers' Comp we knew that many folks still don't have the ability to do Pay As You Go, because it's really complicated to go enter pay stubs and payroll details on a monthly or quarterly basis. So a lot of times people pay annually and then have to do this reconciliation, which is a nightmare. Page5|7

Scott Orn:

Totally. It's a nightmare. It takes like an hour. Again, no value add for our client. We don't want to do that work. Our clients don't want us to do that work, and you guys made it so simple.

Josh Reeves:

Again, it comes back to having that core relationship, that trust with the customer around us doing something for them like Payroll or Health Insurance.

Scott Orn:

And then 401(k), that’s a pretty new offering, right?

Josh Reeves:

Yeah. Our philosophy has been to add new features over time as we serve larger and larger companies. We love, love serving small businesses as well - 5, 10, 20 person companies. We have many, many on them on Gusto. But as we get into 50, 75, 100 person companies there are sometimes additional features you need, like 401(k). Surrounding more of those and more to come in the future. I've always seen some more great adoption for 401(k).

Scott Orn:

By the way, I should say Kruze Consulting is not only just a partner but we use you guys for all of our Payrolls as well. Amazing. We love it. So keep doing a great job.

Josh Reeves:

Honored to serve you.

Scott Orn:

Yeah, thank you. Maybe you just have everything together. The company is doing so well. Maybe you'd talk about where you're going in the future. We've talked about your key latest offerings, but where do you see Gusto in the next 2 or 3 years.

Josh Reeves:

Thank you for that compliment.

Scott Orn:

Sometimes it doesn't feel like that, right. Sometimes you're like, 'Oh, Gosh.'

Josh Reeves:

Well, it's a team effort. This is never meant to be easy. I feel honored and grateful to be on this journey. We have 400 amazing people that I work with. We have 40,000 plus customers now - businesses across the country that we're truly honored to serve.

Scott Orn:

You must be touching 5 million people or 20 million people, who are using Gusto payrolls. There must be some huge number.

Josh Reeves:

There are a lot of people using Gusto. I walk around these days wearing my Gusto T-shirt in the street. I was in New Orleans earlier this year with my parents. Someone recognized me - or the Gusto T-shirt rather - it was a customer. They sat in New Orleans. So, it's been awesome to see that adoption. But the feature for us is more of what we do today. Our mission is very clear. Every single business in the world will have a people platform, That's because people, the team, the community inside a company of all types is always the thing that really enables that company to reach its potential. The way people interact, the way they feel when they join a company, when they get paid, making sure that the employer-employee relationship is really strong, is a universal problem. Page6|7 For us it means adding larger companies over time, adding additional geographies over time. But right now, our focus is very much on the US market. There's many, many more millions of companies for us to get to. We're still very early in the journey.

Scott Orn:

Well, if you guys are out there and you're not using Gusto, definitely check it out. It's made our life as an accounting firm so much easier. It's made our clients' life so much easier. You touched on it. People don't go into business so they can deal with the payroll situation. They go into business because they want to follow their dream, build something amazing. You need great people to do that, and you have to take care of your people. And Gusto makes it really easy to take care of your people.

Josh Reeves:

Amen to that. That's the way it should be.

Scott Orn:

Awesome. I think that's it. Do you want to tell them where they can find Gusto? Any promotions coming up on the New Year or anything like that?

Josh Reeves:

Yes, end or year is a great time to switch. We love having folks come over in January. Call us. Email us. We're here to help. If you see someone of us wearing a Gusto T-shirt, say hello. We always love talking to customers. We get out and about quite a bit as well. Gusto.com is probably the best way to sign-up. We'd be honored to serve you.

Scott Orn:

Awesome. Thank you, Josh. Really appreciate it.

Josh Reeves:

Thank you. Page7|7

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