Q&A with Josh Reeves, Cofounder of Gusto

by Y Combinator10/17/2018

YC posted a list of top alumni companies by valuation, as of October 2018. You can see the full list at https://ycombinator.com/topcompanies.

Here’s a Q&A with Josh Reeves, the cofounder of Gusto, one of the companies featured on the list.

What does Gusto do?

By making the most complicated business tasks simple and personal, Gusto is reimagining payroll, benefits and human resources for modern companies.

Each year Gusto processes tens of billions of dollars of payroll and enables thousands of businesses to provide employee benefits like health insurance, 401(k) retirement plans and 529 college savings plans, many for the first time.

How many employees does Gusto have?

Gusto has more than 700 employees in San Francisco and Denver.

How many founders?

Gusto was founded in 2011 by Josh Reeves, Eddie Kim and Tomer London.

What is your most impressive recent product milestone?

Gusto recently launched Flexible Pay, a new feature that enables employees—both salaried and hourly—to choose when they want to get paid. For the first time, people can get paid independently of their employer’s pay or payroll schedule. Flexible Pay is free for employers and their employees.

Employers can offer Flexible Pay without any changes to their existing pay schedules or debit frequency. They also don’t need to run additional payroll, manually approve requests or worry about their payroll taxes because they’re offering Flexible Pay to their employees.

We believe Flexible Pay is how everyone will get paid in the future. Someone told me that their son gets paid more rationally than they do because when he is done mowing a lawn, he gets paid, while he has to wait two weeks for his next paycheck.

What is the larger impact / societal impact of your product in the space you work within?

Although small businesses employ half of all U.S. workers, they have been underserved and ignored by human resources companies. As a result, small businesses have traditionally struggled to provide competitive benefits and attract talent. Gusto is leveling the playing field and enabling small businesses to surpass large companies as the best places to work.

What’s an interesting element of Gusto’s company culture?

Gusto is a shoeless office. My two co-founders and I didn’t wear shoes at home growing up, and since we were working from where we were living when we founded the company, it carried over. Everyone wanted to keep the tradition, even when we moved to a real office, so we did. Offices can often be sterile and feel nothing like your house, but at Gusto we want everyone to be comfortable and excited about spending time in the office.

Traditions need to be authentic. They slowly self-reinforce over the years to become culture. If we had set out trying to manufacture a shoeless office policy, it probably wouldn’t have become a company tradition.

Looking back, what motivated you to start Gusto?

Eddie, Tomer and I all have family that has struggled with payroll, taxes and complicated paperwork at their small businesses. We saw how many people were doing these things by hand and how painful things could be if anything went wrong, so we sought to automate, expedite and simplify the process.

What was a particularly important insight you had about your market that made your product work?

Every year in the U.S., 40% of companies get fined for doing their payroll taxes incorrectly. We created Gusto to automate processes like paying and filing payroll taxes, so small businesses can ​run payroll​ entirely online and on their own without having to become payroll or tax experts.

What’s one piece of advice you’d share with a young founder?

Be bold and opinionated with your values, especially when you’re hiring. You shouldn’t have to convince people about your values—there’s either alignment or not. Surfacing values during interviews and having traditions that reflect and reinforce those values is paramount. At Gusto, we have core values, and if someone’s not a good fit with them, it doesn’t mean they’re a bad person. It just means that they could probably do better work somewhere else.

How is the company addressing diversity in the industry?

Our small business customers come from all walks of life, so to serve them well, we’ve created a diverse team and an inclusive workplace. We’ve been recognized for our approaches to mitigating bias in our interview process—searching for alignment in values, motivations and skill set and not culture fit—as well as our successful efforts to improve gender diversity on our engineering team. We are also progressive in our approach to employee benefits. For example, in 2016, we became the first company of our size in California to make fertility benefits inclusive for LGBT employees.


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