You have to build a product that people Love that organic word of mouth and Referral you know is still the biggest Driver of top of funnel and leads to Gusto and that's because if you're Serving smaller business you're going to Make less Revenue per customer so it Can't just be a paid acquisition game You have to have something that's super Useful people want to evangelize you Know share on social Etc and that has to Be a key part of how you're creating you Know more funnel and more more typ of Funnel leads into your product this Weekend startups is brought to you by Vanta compliance and security shouldn't Be a dealbreaker for startups to win new Business vanta makes it easy for Companies to get a sock to report fast Twist listeners can get $11,000 off for A limited time at V.com twist open phone create business Phone numbers for you and your team that Work through an app on your smartphone Or desktop twist listeners can get an Extra 20% off any plan for your first 6 Months at open phone ./ twist and Dev Squad Dev Squad helps startups design Better products if you need UI and ux Expertise and don't want to hire an Entire design team head to Dev squad.com Startups and book a call mention that You're coming from twist to get 10% off Hello and welcome back to this week in
Startups my name is Alex at Alex over on Twitter one of my favorite startup Clusters in the entire world is the HR Tech space now I know it's not quite as Headline grabbing as Quantum Computing Or I don't know drone-based deliveries But it's incredibly important and so Large that it's actually built some of The largest and most valuable tech Companies out there in the world and Especially on the private markets one of Which is Gusto it's a unicorn worth Nearly 10 billion and today I have its Co-founder and CEO Josh Reeves here on The Pod Josh hi thanks for coming On great to be here Alex I'm excited This is a inaugural like long form Episode for you thrilled to be here tell More of our story and connect with your Audience yeah for he's referring to the Fact this is my first long form Interview uh here for Twist normally Jason does these but we want to do even More episodes so I'm going to pick up The occasional one here and there now Before we get into Gusto Josh I have a Couple of notes about your history I Know you were at Zazzle back in the day But I hear you also were the CEO and Co-founder of a company called unwrap And that was sold back in 2010 I know Nothing about it I couldn't find much on The internet so what was that and why Did you sell
It so I mean there's a bunch of things I Can go through I want to talk about Unwrap I'll just add if you want to that Background I studied electrical Engineering as my undergrad in Masters So hopefully we'll come back to how free Electrical engineering alumni from Stanford got into the HR Tech space uh But uh yeah my journey was graduating Deciding not to do the PHD I worked at An e-commerce company called Zazzle for Three years my first time as a product Manager and then it was in 2008 that I Started a company with a friend Facebook Platform had just launched this is when It was all web Centric uh and desktop Centric so this is kind of still in the Early early days of Mobile you could Build what we're called canvas apps so Kind of third-party Developers for the First time being able to build into the Kind of Facebook e-commerce or uh Ecosystem rather um this is also what Brought about companies like Zinga if You remember back in the day and so we Were honestly just like trying to build Stuff I would say kind of a very Different approach than Gusto um we had Friend starting companies we decided to Go start dabbling ultimately our Products were things like bringing E-commerce products into Facebook you Could kind of build a page with Zazzle Listed there or Etsy listed there kind
Of more of a referral program type Dynamic uh and then we sold the company Like you said there was a period of you Know big fish eating small fish um we Sold the company uh to a company called Context op They got acquired by a company called a Fishing Frontier who was then acquired By Adobe all in the span of 14 months uh And so that was a little bit on that Chapter 14 months were they all just Running out of money like sequentially What how did that possibly come together So quickly um well I wasn't again Running those bigger companies you know The beautiful part about that experience For me was it's when I first got Exposure to running payroll for our Small team hiring some contractors Setting up state tax registration doing Health insurance um but I think what Happened in the space is it just got Pretty frothy uh I think uh there was a Bunch of m&a sales force bought one of The companies in the space Google bought One of the companies again a lot of People were kind of wondering what is Social how will it work and uh these Were the companies that were at least in Theory you know best in a position to Help you know bigger companies navigate That that space it's interesting to hear You talk about the early era of mobile And kind of a desktop focused web
Because that's still the context that I Live in today like I'm always on a Multim monitor setup unless I'm like in The car literally but the world today Seems to be so much more mobile first I'm starting to feel almost left behind By the state of the the web if you will Because everyone now just wants to be on A smaller screen and to me it just feels Like regression like we have these Awesome desktop computers why would we Not default to them but I know that That's me sounding increasingly okay Boomer is but it's not that long ago That that still was the norm I mean 2010 Is less than a decade and a half it's Just not that far back I mean there's Just changes of foot on all Dimensions As you know um obviously you know webl And lots of different types of devices But I'll just bring us back to small Business for a sec the reality is small Businesses actually most of them don't Have computers and monitors and a lot of Them are on the go and so part of what Even enabled gesto was mobile because if You were pre mobile era like going to go Install some software on your family Computer when you get home and your kids Playing a video game it actually made Sense to do stuff like payroll by hand On pen and paper and when we started the Company like 40% of companies in the US Did payroll on pen and paper so we
Actually had a thesis that like mobile Cloud paperless these were the Ingredients that made it possible for Someone to now actually do things like Payroll in a much more digital friendly Way and obviously some of our progress Has been uh made possible by that Transition yeah I mean other companies That came out of a similar idea like the Docu signs and so forth like the idea of Taking something literally off the paper And into I guess the internet has been a Pretty successful business approach now For for a very long time but I want to Double click on smbs because yeah I've Been thinking a lot about the state of How small businesses approach the modern World because it's now very digital very E-commerce based I mean Gusto does all Everything you know through the cloud And so forth and we saw the recent um Call it catastrophe from uh crowd strike That hit a lot of people small companies Big companies kind of up and down the Thing and so you have a lot of S&B Clients who they kind of depend on you To hold a lot of their data because it Passes through your systems and so I'm Just kind of curious from like the CEO Perspective thinking about making sure That you don't let SMB data out has the Crowd strike mess caused you guys to Rethink any elements of I don't like Your cyber security posture as a
Business so first off the crowd strike Issue did not affect us or our customers But uh we definitely had some gusties Who were at airports and and kind of got Stuck waiting there for a period um Which was unfortunate uh but what what I Would say is from day one like for us Starting the company and kind know we Were talking earlier about my prior Startup each of my co-founders that had Prior startups we actually after having Done those experiences like wanted to Tackle a problem that we could spend Decades making better like hopefully Dedicate most of our professional life To so to get to the heart of your Question like we had to from day one Given the product space we're in be Hyper obsessed with how we secure data How we secure All the different private information Like when a company sets up on Gusto They're giving us their Ein their SSN Their bank number their routing number And then you know 10 days later we're Debiting thousands of dollars from that Account to go process payroll pay their Taxes pay their employees so even when We were like five employees this was Again back in like 2012 time frame There's a period in at least silon Valley where everyone wanted to put beta On stuff and you were kind of like proud About that oh yeah Gmail was in beta for
Like 10 years yeah like I know that Almost was a positive thing at some Point like we had none of that with Gusto like it wasn't a page where you Have like the whole team listed like no No this is like a system that works That's reliable that's accurate and it Needs to show up that way every single Step of the way even when we were just Five people now that we're 2600 strong I Would say we're even better at that but It's always been important for our Business yeah well actually just to While I was prepping for our chat today I was going through the the public austo Cyber security like page discussing how You guys keep things safe because I was Thinking about exactly what you said if You're working with these companies and They're giving you their kind of Corporate DNA and access to their blood Veins their cash accounts I mean you Can't afford to make a mistake all That's to say that I'm very glad that I'm not in your shoes because it sounds Like in today's cyber security climate Uh it's going to be hard to always be Right and not have any mistakes and not Have to go apologize to people it's just Data is a is an asset and it feels Slightly like a liability in today's Business climate just because people are Getting compromised and I wonder if We're ever going to reach a state in
Which that's not a concern that people Have to worry about kind of year in year Out I don't I don't know if that's ever Possible but it would be nice to get There at some point I mean if you if you Play it a little bit of the theoretical Right the only way to you know fully not Have anything be dependent on someone Else is to do everything yourself and Like at least in our space again you Know we do many products now we'll Probably talk about that in a bit but Like when we started the company 40% of Companies in the US did payroll by hand And like if that was an easy to use Experience that'd be wonderful like Almost uh 30% of those companies in the US that you know basically made mistakes Like got fined and had problems every Year with the government so you know I Would say the balance here is you want To work with a system that is obsessed With security and then you know what I Say to the team is like when we process Now like over half a trillion dollars Through Gusto right like that's an Incredible Responsibility and but that's also a Sign of like us building something Useful that people appreciate and care About and we got to do it right what's The the time frame on the the half Trillion dollars is that yearly is that Monthly I don't have a good vibe for how
Quickly you're reaching that number um Well we're growing quickly as you know And then because once you set up with a Product like gesto if we do our job Right which we do then people stay on The product uh so there's you know Several hundred billion a year and on Top of that the cumulative gets even Larger oh yeah no I was just going back Through some of your releases and you Were talking about doing um tens of Billions of dollars of payroll each year Back in I think February of 24 so to Hear you say half a trillion I was like Wow seems like quite a lot of growth um But let's start there so back in June of 2023 you guys dropped a pretty Significant Milestone that you had at That point $500 million in trailing Revenue so not uh a run rate but a Trailing number the most conservative Metric possible and I realized that it's Been 13 months since um we had that Conversation and the economy has been Interesting I think it's fair to say so I'm curious how has the last year been For Gusto just from the straight Business perspective yeah I mean we're Growing quickly I'm I'm not going to Share as a private company getting into Like the entire kind of quarter by Quarter I know you would find it very Interesting Alex um but we I would say Are more focused on like what the next
Several years look like so I think Inside the company we talk a lot about Is how do we compound because what I can Share you look at our customer account For example like we're at about 5% of The Employers in America right so that's Pretty small relative to the opportunity You look at the number of new employers Started every year and you know we're Well north of 10% that's still really Small relative to our potential so uh What we're excited about is you know Creating more awareness about Gusto Solving problems for the customer and Then obviously doing more for them over Time so on the 10% number is that all Llc's C Corps es Corps like any Incorporation in the US working with 10% Of the new ones H well more than 10 uh So we focus on employers so there's you Give or take every year actually Millions of new businesses formed so I Think the stat for last year is around Five million new businesses formed got But uh there's obviously fewer employers Created every year so there's about six Million Employers in America and every Year give or take and this is what's Pretty interesting um there can be some Impact from macro you talked earlier About you know obviously the economy can Have an impact on broad-based kind of Business creation hiring Trends Etc but Even at low points of the economic cycle
Over the last several decades you still Have you know 3 400,000 new employers Every year and at the high points of Those economic Cycles you have five 600,000 new employers so several Hundred, employers regardless and that's Kind of really special we think that's Part of like what makes the economy Strong is that people starting new Businesses if something doesn't succeed Try the next business uh and the stat That we also obsess over is only about Half of those new employers make it to Year five historically we hope through Our work we actually start moving that Needle and help companies survive longer Listen a strong sales team can make all The difference for a B2B startup but if You're going to hire sharks you need to Let them hunt and you can't slow them Down with compliance hurdles like sock 2 What is sock 2 well any company that Stores customer data in the cloud needs To be sock to compliant if you don't Have your sock too tight your sales team Can't close major deals it's that simple But thankfully vanta makes it really Easy to get and renew your sock 2 Compliance on average vanta customers Are compliant in Just 2 to 4 weeks Without vanta it takes 3 to 5 months Vanta can save you hundreds of hours of Work and up to 85% on compliance costs And vanta does more than just sock 2
They also automate up to 90% compliance For gdpr Hippa and more so here your Call to action stop slowing your sales Team down and use vanta get $1,000 off At v.com twist that's v.com twist for $1,000 off your sock too so I think a Lot about kind of you know Northstar Metrics for companies and you know of Course we talk a lot about Revenue Employee count customer count and so Forth but I really like the idea of Measuring Gusto's success kind of as What fraction of new employers are using It and if you're over 10% now I mean how Long does it take you to reach 20% at Which point it would be one in five We're making progress Alex is the quick Of it you know we obviously internally Have lots of specific metrics and goals That we set I mean what I can share more Is again a backdrop here is this is not A space that we entirely invented you Have other companies out there and when You look at all those incumbents added Up it's about 50% market share so There's still a huge percentage of Companies in the US like back to the Topic we had previously doing this on Pen and paper and so that's kind of what We obsess over like small business a lot Of technologists entrepreneurs they get Really excited about surveying large Companies Enterprise I'm sure you've met Many B2B SAS companies that are all
About scaling up to like the million Doll $55 million contract uh what I Think is cool is that there's more and More companies out there like Shopify And square and toast and you know uh Obviously in it is kind of the original One and US included now that like really Really care about bringing great Technology to small mediumsized business And in that segment it's a lot of Green Field right it's a lot of folks that Were basically doing it manually before And now are adopting cloud-based systems For the first time if we had this chat a Week earlier I wouldn't have talked to The CEO of Huntress which does um cyber Security for snbs and I was talking to Him I was very curious about how his Company approaches the S&B Market Because it's famously High turn Companies die like you mentioned earlier Or they just run out of money or just Cut back on Services they they're often Difficult clients but what I learned From him is that they work a lot with Managed service providers msps and that Essentially allows them to connect to One company that then has lots of SMS on The other side and he said those are a Bit more saslik and they they're a bit More stable and so forth and I was Thinking of about Gusto and your work With embedded payroll which you launched Back in correct me if I'm wrong
2021 yeah okay cool and some of the work Behind the scenes got started way before That but that was when we first Announced it yeah I remember that Conversation but I I was curious if if Adding Partners on the Gusto invented Payroll site is analogous to perhaps Huntress working with msps on getting Their service out to more more smbs Essentially aggregating demand to single Points that make it easier for you guys To scale I suppose so me actually There's three different parts of our Kind of main go to market Alex and you Just brought up embedded the thing That's more analogous is actually our Gusto Pro Gusto accounting Channel Program so let me talk about that a Little bit and then we can come back to Direct and hopefully that's helpful to Any entrepreneurs out there who are Looking to build you know SAS products For SMB um so it's actually back in 2013 That we went live with uh our Gusto Accounting program so today over 177,000 Accounting and bookkeeping firms are Part of the Gusto ecosystem and the way That looks is these folks join our Platform and then they add their clients Directly onto Gusto so one accounting Firm might add 10 20 50 100 small Businesses onto Gusto and so that's What's I think analogous to the example You gave and so that's been a really
Vibrant part of our go to market um you Know what what helped us I guess with Having that conversation because I think A lot of folks would in theory love to Have channels like that and it's Obviously been a strength of ours is you Have to have a product that makes sense For that partner to bring up and talk About with their client and in our case You know payroll is what we started Building from day one it's the least Optional part of the stack uh the good Thing for the accountant segment was it Was actually something a lot of times They were forced to do themselves by Hand for their clients as just a cost of Like keeping that client so when I said Manual like a lot of times it wasn't Just the business owner doing payroll Manually it was the accounting firm or Bookkeeper helping business owner doing It manually so when we started talking With them and said hey we can bring you A system that actually will save you a Ton of time you can get all the credit Like say you brought this great product To the client it'll build a tighter Relationship between you and them it Actually gives the accounting firm the Chance to go move up the stack kind of Do more higher value added Services um You know was music to their ears and Again beneficial to us in terms of Creating more awareness and adding more
Customers to our platform yeah okay so Then on the embedded side because I I Thought that was going to be a good fit Here but it seems like I missed the mark A little bit embedded then is a way to Let other companies kind of use Gusto Technology inside of their service so I Suppose looking at the direct the Embedded and then also the accounting Partners um which is growing the fastest Right now inside of Gusto all are Growing very very quickly I'll just give Your listeners a little bit can have a Favorite Child by the way I I know I Know everyone says they love all their Children the same but I have I have four Children Alex I mean you literally I Think you might that's not a figurative Thing we have four kids five and under Um and they're all my favorites frankly But yeah gustu embedded for us is a Chance to help other small business Ecosystems like you know Chase for Example has a lot of small businesses um You have a bunch of vertical SAS players Out there that have their you know Business in a box solution and so for us We really obsess over what's best for That small business and customer and When we realized that all these Partners Had these small business customer bases You know they were partnering with Gusto Is kind of a referral relationship what They really wanted was to have native
Payroll inside their product but they Did not want to build it from scratch And that was basically the Insight that Led to gustu embedded so you are right Like it does give us in terms of how we Do customer acquisition once the partner Is set up once they've deployed the Payroll product powered by Gusto then You know it really is them driving Adoption awareness and attach and for us You know it it is scaling nicely in Terms of then you know thousands of Businesses being added through that Avenue um and it's it's a much higher Touch relationship right like going and Signing a partnership like that is the Definition of like Enterprise sales very High touch kind of SE suet to se Suite Engagement but but I'll also highlight On the direct front like that's been our Bread and butter from the beginning and Like I'm confident and excited that that Direct small business focused on new Employer motion will get us to a million Plus smbs in the coming years and we Have't talked about that too much but The key for that kind of uh go to market To work is actually um you know proving Out it's always a big segment in SNB or Small business uh but you have to have Good CA payback you have to have good Unit economics you have to have good Gross margin and if you can execute that Well and proove like right through the
Net dollar retention through your cohort Performance they like yes companies join Some will shut down but others grow Bigger and they also might use more of Your product Suite you know then you can Actually have a great business in that Segment and again it's not just us Several other companies I think have Proven you can have a great a great Business in in small bisland so if You're selling to SBS and you're doing It via a direct Channel putting aside The other things so long as you have a a Multi-product setup such that you can Have a relatively strong long-term net Dollar retention for companies that Survive you can afford to have kind of Higher gross turn from smbs and it Offsets because the other ones are Growing so quickly that actually makes a Lot of sense to me but given that why There one more ingredient there's one More key ingredient the one big key Ingredient I just I kind of skipped Through really fast is like you have to Build a product that people love because That organic word of mouth and referral You know is still the biggest driver of Tap of funnel and leads to Gusto and That's because if you're serving smaller Business you are going to make less Revenue per customer so it can't just be A paid acquisition game you have to have Something that's super useful people
Want to evangelize you know share on Social Etc and that has to be a key part Of how you're creating you know more Funnel and more more type of funnel Leads into your your product if you use Multiple devices and apps to run your Business you need open phone open phone Simplifies your Communications with one Simple app an open phone has rethought What a modern business phone can be What's magical about open phone is that It works through a simple elegant app Right on your existing phone or you can Even use it on your desktop I know Because we use it here at launch and our Sales team loves it and you know what Those phone numbers those discussions All those text messages we need those to On launch phone numbers we don't want Those on people's personal phones where If they leave the company it's Distracting it's annoying to your sales Team as but one example and we love Having a shared number for customer Support as well we do a little round Robin where different people can pick up The one phone number so customers have One number but we can have that phone Call go to multiple people on the team So we you know can just have somebody to Pick up the phone quicker it's that Simple answering the phone quickly is a Best practice and it makes people love Your product Service open phone is
Already super affordable at just $13 a Month my Lord that's affordable but Twist listeners can get an extra 20% off For any plan the first 6 months that's Incredibly generous just head over to Open phone.com Twist and what if you Have an existing number with another Service that you hate well open phone Will Port them over at no extra cost Easy peasy Limon squeezy so head over to Open phone.com Twist and get a free Trial and get 20% off but that sounds That sounds doable and the way that that I've had I've heard VCS and other Founders describe SV focused tech Companies is it's impossible but you're The second CEO I've talked to in a row Who has pretty positive things to say About selling to this particular you Know company demographic or cohort why Is there the distance between your kind Of like lived experience and then the Common wisdom if you will out there in The market because it feels pretty Pretty far apart from one another I mean I I think probably and this is you know All opinion like is it harder than the Like Enterprise kind of SAS Playbook it Probably is and and part of that is Because for a lot of products like SMB Probably isn't a viable segment to Pursue one of the benefits of payroll For example and and there's other Products like it is that everyone needs
It right so like anytime you start Carving the market up to like hey only a Small percentage might need it your life Gets a lot harder because small Medium-sized business is not one segment You have Geographic diversity you have Industry diversity and so you have to Have the right set of product that are Really really widely needed not as you Know vitamins but medicine like if I Used to say when I started the company And I'll say it now I've said it a lot Like if you don't pay someone they quit Right full stop pretty simple statement So what we help solve is not an optional Thing when our customers set up and use Gusto like it has to work and it has to Be something that gets done right and Like if they don't use us like their Employee isn't going to get paid so I Think that was a big big like enabler um And then you have to be able to execute You know once you have one product Scaling and succeeding you know building Out additional product lines and so Again I think you know pros and cons to Every segment but that's some of the Complexity if you overcome it for small Business it can be an amazing amazing Segment to serve so on the expanding the Number of products you guys offer Gusto Has expanded over time you guys now do Some HR onboarding and you do benefits And I know you guys had to deal with
Remote to do International contractors And it's been pretty ACC creative I'd Say on the product side for a very long Time now but one thing that I've also Heard a lot lately is you know Founders Have to focus they need to be super Dedicated to this Niche or whatever Their vision is and and so I'm curious How do you at Gusto balance the desire To expand into doing more stuff for your Existing and future customers but also Not losing a grip on what you do at at Your core and and not losing kind of Focus on the stuff that's made you where You are today yeah I think it comes down To like the definition of what is core Right so like other things can mean Anything like is Gusto going to start Building satellites or Rockets um I hope So oh that's definitely I'm sorry to Burst your bubble but that's not in our Plans um you know we we have a lot of Opinions on like how we can go achieve Our kind of full potential we have again A point of view on like how the employer Employee relationship evolves how the Employer Journey evolves and how the Employee Journey evolves and like we Just really have a I guess a a strong Conviction on like how the future could Look very different than the present but Then it becomes sequencing like what do We do now versus what do we do next and You have to couple that I guess my
Advice would be you can get cut up in Strategy land I think sometimes too much With concrete customer feedback like the Biggest way that we prioritize Additional product lines to launch to Our customers is what they're asking us To go help with and when we are building Out something right and it's sometimes Either first party and I'll talk about Like health benefits as an example which Is a first party like we built that Ourselves there's also obviously in some Cases a thirdparty solution you can use Which we do for 41k for example um but The biggest thing is having it be Something that customers are asking for And then there has to be a way you can Prove that there's a Better Together Dimension to it so with health benefits Like we had employees and employers on Gusto getting paid using payroll and Then they were setting up health Insurance right we're a broker today so We're not the health carrier but you Know all the information you need to go Do that enrollment right to submit the You know your name your address you know Who's in your family all of that Information sits very much in payroll Already so there's right off the bat Just an efficiency from having like one Place to go update stuff and not have to Go enter it into multiple systems and Then second as changes happen as someone
Joins and leaves the company as someone Has a kid Etc like again just one place To go upd that information streamline And simplify just one example of how That Better Together thesis has to be There and if you can prove that then as You launch these additional products the Key in in our space at least is you want To keep the product staying as simple And easy to use as possible even while It's growing more powerful and that can Be really really tricky right it's easy In the 2 by two to make a product more Powerful and more complicated but how do You make it more powerful and keep it Simple is where we spend a lot of time In Obsession well on that point I mean The most powerful and worst software in The world is concur which is I think From the corporate perspective amazing Because you can have it set up with any Rules you want but if you try to Actually use it as an employee it makes You want to physically die so yes there Is a trade-off there have you ever like Looked at a new Gusto service or product And thought to yourself there's no way We can shift this it's too complex and Like pull it back and force a reduction In I don't know UI busyness or whatever The the the vector there is well we we Definitely iterate but like what I would Say is first off our goal is to scope Something pretty narrow pretty small to
Start I mean I can even case study Payroll when we went live in 2012 uh December of 2012 you know it was a Product in only for California based Companies that only if you had never Paid someone so new employers only if They're fully salaried um and full-time Uh and and like that's who we could help Now you know within the next 12 months We expanded to other employment types And obviously being able to migrate from An existing provider but like a key part Of of our at least our approach to Product development is how do you get to That minimum lovable product that's kind Of the terminology we use inside Gusto Like because if there's a thesis we're Trying to prove around hey there's a Paino customers tell us they're Frustrated with something they want us To help solve it like how do we get to The kernel of actually us solving it and Making it useful and then we can layer In all the additional features of Functionality over time but that Iteration is really really important I Want you to double click on uh MLP Because of course MVP is a very standard Bit of silicon value Arcana minimum Viable product people have different Definitions of that to be clear uh Minimum lovable product tell me how you Defin that internally yeah so for us I Mean the the reason why we have that
Framing and how we ultimately then how It shows up in our business model uh we Kind of talked a little about earlier But like with small business these are First off really really busy people Right like they don't have large Departments or staffs they're kind of Wearing 20 hats is our mental model and Like I used to say gusta could take two Of those 20 hats off their head now I Say we take you know 10 of those 20 hats Off head um but like they have to have Something that's easy intuitive simple To use and so that's part of why scoping And simplifying matters so much that's The minimum piece of it and then lovable Um you know it's it's I think easy in Product software land to kind of build Incremental features and functionality Like for us to both stand out as a you Know disruptor to the incumbents and for Us to live into you know just our Potential it has to be something that When you use it or you know engage with It you go wow this makes my life so much Easier simpler I never thought it could Be this fast or this easy and that's the Lovable piece it doesn't have to be Comprehensive yet doesn't have to check Every single checkbox right but if you Get that moment of someone going wow I'm So grateful like thank you this is Amazing I can't like I can't imagine What I did before I forget what I did
Before I'm GNA use this now this is what I'm going to use going forward and I'm Going to tell my friends about it that's The lovable piece that we find really Important and then again there's the Iteration to kind of keep adding Addition functionality is needed but it But it's what's key to our whole growth Model right in small business land you Have to build products people love and I Actually like that I would I would argue It would be great if in every segment You had to build products people love Because that would create a little bit More accountability like the most loved Products are the most successful Companies that's not always the case in Other segments but in small business Land that's a necessity in fact I think It's actually kind of the inverse Because if you think about giants like And Josh is not saying this I am so if There's any hate mail let it come my way But like you know your saps your Oracle These are not companies that are famous For being cuddly with their customers You might say or having user interfaces That are um modern and slick and easy to Grasp uh if that's fair so I I agree With you but I think the SBS then almost They almost sound a little bit more like Consumers in the way we think of like B Toc like it has to be approachable easy It has to have an element of verality to
It so is selling to smbs as a business Kind of like the B2B equivalent of b2c In that case I mean I think it shows up A lot in and talent so when I think About the team and the talent how much We wait things like ux UI is that just The role of our design teams or is Everyone involved in product development Have to have empathy connect to the Customer meet with them interview with Them like we do you know sessions with Our leadership team across down to every Part of the organization to make sure That that customer proximity is very Very clear and evident I'm not sure that Matters quite as much in an Enterprise Setting but I have an anecdote I can Share maybe to add to to your commentary And we'll see hopefully this doesn't Drive too much flame but you know uh it Is what it is it's my opinion um but I I Uh when I was an undergrad at Stanford I Kind of was just a very curious person I'm still a curious person but I for Some reason I was meeting with like the Registar and like understanding better Like what software stack they use and so I was like talking to the person there About how they were migrating at that Point this is you know 20 years ago plus From like a bunch of native homegrown Disparate siloed products to poft if you Remember product that no longer exist so Maybe that's a little bit simpler um and
They said that it's going to take it's Going to take two years to deploy and by Year four it'll be Roi positive was like The theory and I remember thinking I'm Like a 19-year-old kid I never I built Software for fun like not in a business Context but I just didn't like compute For me I'm like what why would software Take two years to deploy and why would It not be actually helping till year Four somehow and I think there's just You know here's a little bit of my diet Tribe like software I love software Software is there in it's in its ideal Form to give people superpowers right Like that's what software can and should Be and when instead it's like people Learning how to use the software like When I see books on how to use software Or people you know God bless them like On LinkedIn saying I'm amazing at using This thing and I took this certification Class like it it bothers me because Software should just give you Superpowers make your life better easier And a lot of software doesn't do that Frankly so know we're doing what we can At Gusto but I hope I mean there's a lot Of other companies obviously that Believe in this philosophy too and yes You could argue it's a little bit of Like a consumer Tech philosophy because In consumer if you don't build a great Product nothing works no one will use it
You don't grow at all but like why Doesn't that same mindset exist in Enterprise like I think it's it's Definitely been Key to Our Success and I Would argue more companies approaching It that way you know will also benefit Hey startups does your product need a Facelift well a lot of companies get up And running quickly and that's part of The idea here in Silicon Valley and in Startup land but hey the design suffer Maybe you got flawed UI the ux decisions Were made in a rush and that can be the Difference between product Market fit And not getting product Market fit or Weak product Market fit medium product Market fit or strong product Market fit Well here's the good news Dev squad's Asynchronous Design Squad is here to Help you our long-term partner Dev Squad Built this service specifically for Startups like ours that means you don't Have to worry about winging it yourself And you don't have to buy a subcription To an unlimited design service and have Them underd delivered no thanks to Dev Squad you can buy hours from expert Designers who will handle everything for You from ux audits to very sophisticated UI design and the result is going to be An improved user experience and Ultimately happier customers and a more Successful business so if you need to Map your user flows maybe you need to
Craft some interactive prototypes or Maybe you need to conduct a rigorous Usability test dep squad has you covered So if you are ready to transform your Startups UI without the painful overhead Of having to hire an inhouse design team Just head to Dev squad.com startups and Book a call that's right Dev squad.com Startups mention you heard about the Service here on uh this week in startups You get 10% off I mean just to answer Your question you're selling in the Direct model like if I'm making Alex Inc As SNB and I have two employees and I Want to use Gusto you're selling to me The person who owns the company But if you sell an Enterprise contract To U he will pack an Enterprise for I Don't know 10,000 slack seats the actual End user is never going to be in that Conversation they're not going to be in The implementation the timing the Selection the prodct nothing and so They're never going to have a say and That's why I think you can get away with Lackluster products but it sounds like Because you guys have to go out there And sell to individual business owners I Mean it has to be good and and that's That's where the verality and kind of People willing to talk about your Product comes into play because if it's Not good not easy to use they're going To go tell their friends I tried Gusto I
Didn't like it you shouldn't use it so There's there going to be a negative Morality element to go direct to SBS as Well me I call that accountability and I Think it's it's actually a good thing Right like and if you have an aligned Business model right like it comes down To business model too we haven't talked Too much about business model but like Our business model is pretty Straightforward a lot of companies have It it's a subscription based business Model you know based on how many Employees are in the company you know Getting paid by Gusto for example and Also how many different products from Gusto that company is using whether They've adopted benefits or whether They've adopted time tracking or 41k Etc Um you that's how we basically make more Or less revenue from that company and It's a monthly billing process so if we Do our job right they're evangelizing They're trusting us more as they have More needs they use more of Gusto and if We do our job poorly you know they're Frustrated and they might churn and That's a feedback loop that we obsess Over right there's the unpreventable Churn and the preventable churn Unpreventable is folks going out of Business longterm we want to move that Needle but the preventable churn is Where we can be obsessed we've had great
Stats on that at Gusto historically we Want to keep it that way but that's Another good feedback loop if you're Serving small business to make sure You're building a healthy long-term Company so I'm kind of curious how much Money or maybe the right phrase is like How much of your sales and marketing Budget goes to essentially talking to Snbs evangelizing to them and maybe even Helping them evangelize for you because I think this is a bigger component of How you approach the market than I Thought and so I'd love to learn more About how you guys think about that from A kind of a top level Gusto perspective Yeah a little bit on like go to market And like tap of funnel um yeah so we I Mean I'll go a little bit through History because I know there's probably Some listeners that are earlier stage Companies uh so maybe one thing that's Interesting to share when we went live In December of 2012 like we knew we had To prove out that we had built a good Useful product not just because like That's what we wanted to and that's like How we' think of like good software Working but it was necessary for the Business model because uh you know we Knew that that organic is what you know You know it's called but most people Call like this category of Word of Mouth Referral content Etc organic uh growth
Um had to be kind of a key key component To our our go to market and so we Actually didn't do any paid acquisition For the first 12 months or so and that's Because it's actually I think quite easy When you're just early launching a Product to start throwing money at Growth and like it's very easy to turn $5 into $1 right like really simple Really easy anyone can do it trust me And it's you know maybe sometimes you Know useful on the edge case but if it Becomes a premier way of growing that to Me is is gambling not company building Right it's kind of the gambling process Of like having either bad gross margin Or bad CAC in terms of customer Acquisition cost and like thinking Somehow at scale you can fix it like Especially in our business and small Business land and s like you want to Have for anything that you're going to Be scaling really good unit economics And so you know the kernel starts with Organic but then you can programma tize Stuff right so like content for example Like content like us producing blog Posts articles doing by lines you know It turns out not surprisingly small Businesses are on their own and they're Desperate for help and they're Googling All the time for things they need help With and like if you can create content That helps them first that's just useful
To them but second it creates a aess for Your brand you know Gusto or at that Point you know Zen payroll was at the Top of the page so content was an Important piece of it and then after a Year we started layering in paid Acquisition so that's things like buying Keywords on Google you know doing Various forms of like ad retargeting or Social advertising um and even in the Last year or two we've only started you Know 10 plus years in dabbling in some More brand Centric work so we think of It as a portfolio there's no Silver Bullet maybe in Enterprise Land There Are silver bullets in terms of like Going to the right conference having the Right salesperson and closing the five Deals and you're good like in our world It's a portfolio of activities that Basically drive more awareness and then Once someone is you know in our Experience you know giving them the best Possible onboarding setup conversion Moment so they can then start you know Using the product benefiting from it and Then paying us uh is something that that A separate team inside Gusto obsesses Over so on the on the blogging point and The organic point the reason why I I Kicked off with a question about cyber Security is I was reading the Gusto blog Again prepping for our chat today and There was um a piece by a woman who was
Discussing you know how to respond to The crowd strike issue if you are an SB And it hit me that you know a lot of SBS Probably were just going does this Matter to me does this impact me should I be afraid and that's kind of where That came to be but the organic side of Things back when Gusto was starting off Back in the I don't know 2012 2013's was Different because search was different And I think reaching an audience via Organic channels was just much easier be It for a news publication or know a Software company and it's definitely Different now so if you were starting You know Gusto today right just putting Everything else aside would you have a Similar approach of of of go to market Or would there need to be a different Set of steps given how much the Landscape online has changed since you Guys started yeah I think I mean I would Definitely start I think with like build Something useful solve the paino have Customers love it I think that has to be The nucleus um you know in terms of the Different portfolio of programs I guess Like getting to having multiple irons in The fire I think I mean same approach Would I do sequencing different perhaps You know there's still a lot of folks Out there that are like confused you Know frustrated like this is a big part Of our philosophy in serving Small
Business Like These are people that Started companies for generally like Very Noble reasons like they wanted to Go help their Community they wanted to Create a livelihood for their family Like no one made them generally start a Small business like it's a labor of love Right like my co-founders grew up their Parents being small business owners my Mother-in-law like helped do payroll for Small businesses um anyone here probably Listening has either a family or a Friend I guarantee you or someone you See when you go to the coffee shop Nearby that that is a small business and So one of the big philosophies we had at Guesta this is kind of getting perhaps Part to your question um is like this Cannot be just a transactional tool Right like if software is there to give You superpowers like how should we Ultimately what's our relationship with You as gust And the framing we keep always coming Back to is we're here as a partner and We should be ultimately an opinionated Partner like if you think about the Analogy go to a supermarket is our job To show you like the right row or aisle To go to and then give you like 20 types Of ketchup to choose that's not actually Helpful maybe it's better than like Nothing but it's still overwhelming to Have so many choices and like if anytime
Someone's using Gusto and has to go Google what to go do that's a failure on Our part like our goal is to actually Surface proactively these different Pieces of context Andor automate Something so that the outcome is it is Easier to be an entrepreneur like if I Think about one big goal we have as a Company it's how do we enable more Entrepreneurship not just in the US but Also around the world eventually yeah We'll get back to that International Point in a second but I have to push Back on your 20 types of catchup thing Because I recently went to the local Bodega and they had like 48 different Types of Red Bull and I thought it was a Triumph of capitalism that I can sit There and drink you know like summer Only flavors of my favorite way to kill Myself and uh you know I think under a Non-c capitalist Society there'd be one Energy drink so I think 20 types of Ketchup is a win um I don't think I want To try them all but I'm glad that they Exist because God I love choice and I'm Using that as a segue to talk about Competition because you guys have scaled Alongside some other companies in your Loose space your rings your remotes your Deals and I know there's bits of overlap That are different with each company but One thing that struck me is just how big Of a Market you're growing inside of
Because it seems that there's a lot of There's several players that you could Call competitors to Gusto and you're all Growing pretty quickly and I'm just kind Of curious what the lesson there is is It just that markets are bigger than People might expect until they get into Them is it that you know the digital Transformation has now come to fruition And therefore there's just almost like An endless Green Field of companies to Sell into both S&B and mid-market I'm Just shocked that you're doing as well As you are and other companies that are Competing with you as well so how do you Think about the size of the market yeah I mean I think shair in the context Augusto and the market were in but There's probably some lessons here for For entrepreneurs thinking of other Markets yeah like you know people talk About Tam and Market size like you I Would just argue that the space we're in Is one of the foundational kind of Segments of like how Society functions What do I mean by that so I'm making a Big assumption that you know capitalism Is the framework for how you know in Economy functions in a capitalist Structure you have currency you have Money you have the concept of work you Have government that needs to be funded You have the concept of taxes right just Like really building block Centric here
Starting very basic the basic Lego is The bottom yeah right like the basic Building blocks here are like people Working right then they have to get paid Something in some form they have to then Be able to use the thing right called Currency to go like buy other stuff Whether it's a home or food in that Shopping store maybe all the Red Bull Maybe they buy all the Red Bull they Talking about earlier uh maybe they have A big family um and so when you think About what we're doing right like first Off just just start on the payroll front Of that you know the economy flows Through payroll right you have to earn Money before you spend it right so Payroll is a very foundational you know Paino or job to be done if you're Familiar with that framework right like We actually directly engage with the Employer the employee and the government And these are local state federal tax Agencies right and there's not just the Payment process piece of it but all the Different filings and documents and Compliance that has to be done right Gives peace of mind to the employer Employee but also you know obviously Helps government you know get the Information they need and so uh I think Part of it is just literally how Foundational this paino is maybe people Didn't think about it enough or realize
But like this is something that Ultimately every single company in the World has a need for and then the Question is you know who's solving it And and like you mentioned some of the More newer folks to the space Like ADP is a hundred billion company Right like you know it's easy to Overlook some of the incumbents and then On top of that you know maybe it would Be different if it was a highly Concentrated Market it is a highly Fragmented market and you have Especially a small business land a huge Amount of Evergreen in terms of folks on Pen and paper where I am convinced to my Very core like that entire segment will Eventually be on a digital product it Just is a better easier more cost Effective less error prone like there's Nothing better about doing payroll on Pen and paper trust me and so you know That's just payroll you connect that Then to like healthcare which is also I'd argue a pretty foundational paino And you think about that evolving Employer employee connection and like You know again I think there's other big Segments out there right like people Talk about CRM and customer record like The space we're in is the employee Record and and again just one of the Biggest spaces out there thinking about I talk earlier about when to add
Products your comments about helping Entrepreneurship flourish and then what You just said I'm kind of curious if There's a next or future chapter in Gusto's history if you will in which you Get a bit more into fintech because what Is the biggest expense in most companies It's payroll they also do other expenses Other payments from already linked Accounts so is is there a world where You guys also offer the minimum lovable Version of like um a stripe uh inside of What Gusto does just kind of tack that On forbs that might want to have that in Kind of one box I mean right in front of Me I have the document that's like our Next three-year road map is that what You're asking yeah if you don't just Hold it up to the camera hold it up yeah I would say I mean I'm trying to be Helpful here because a lot of the things We're executing on obviously we were are Really excited to announce but but we Have a philosophy you know tongue and Cheek here Alex but this is a real Philosophy like again our do North why We started this company why we hope to Build it for many decades is like and Solve pain for these you know small Mediumsized businesses their teams their Employees like whenever we announce Something like I want it to be real and I want it to be something I can have a Small business start using otherwise I'm
Just talking about myself and like That's actually not useful or helpful I'd argue like things we can prove and Show that actually customers can go Benefit from is like where frankly um I Spend much much more of my time but but I will say like from a framework lens You know we do have like lots of Additional pain points we hope to help Customers with and you know it's not Just in the context of people Centric Topics but but any approach we're going To take is going to be based on Customers clearly having a paino us Having a thesis on how we can solve it And then doing it ah I should have asked Are your customers asking for a payment Solution that you might build for them In the future and then flip it around on You no but I I think the way you answer That it brings up something that I Wanted to touch on because and I'm going To dance around this very delicately There has been um an increasing level of Stridency you might say in certain intra Technology and startup conversations People with loud voices saying loud Things both about product and about Non-technology topics and what you just Said was I I don't want to get over my Skis I don't want to talk about it till I have it I don't want to you know I Don't want to blow hot air and your Approach has always been like this as
Long as I've known you and it now seems Seems to be at even sharper contrast to What some of your peers are doing in the Public sphere and I'm kind of curious Why it seems that the other side of the Coin has gone as loud as they have well You have stayed as quiet and I'm curious If you have any insight into what the Hell's going on with other Founders yeah I think there's maybe like an audience Way to talk about this so trust me Inside Gusto we when we do three-year Planning cycles and when we talk about Our 10year vision we have a whole bunch Of really I'd say big stakes in the Ground and like deep ambitious goals Related to how we can go solve more pain For our customers live into our Potential as an outcome you know be a Much much much larger more valuable Company if again we can execute uh into That potential so internal is one Audience I think you're talking more About external I'd say external even Breaks down into a couple different Buckets you know I anchor a lot on small Businesses right like like a a small Business business owner in like Oklahoma Who like needs to set up Healthcare or Needs to set up payroll or needs to set Up time tracking or what have you like Doesn't care about Silicon Valley Companies talking about Silicon Valley Companies they want to know who can help
Them right now and make their life Easier so that's kind of where I'm Always going to Anchor if you're now Talking more about like kind of the Silon valley gossip kind of Community Connection space um yes you know I I've Never really drawn energy from engaging In those conversations i' much rather go Build a great product go serve lots more Customers win higher market share you Know we're a pretty competitive bunch at Guusto don't get me wrong but like what We control what we can go influence to Go actually win and be a bigger market Player is you know what we build right And how we serve and that's just where We frankly spend most of our time so Essentially the the the point here is if You have customer centricity in how you Talk outside of a company you're not Going to end up in a multi part Twitter Fight with other people I think that's a Pretty good point that Founders might P Attention to maybe I'm missing something But I don't know how that helps that Company in Oklahoma who needs healthare Um but I know how I could help them by Like hiring another person to our sales Team or adding a few more Engineers to Our benefits team and like actually Building even better product for them Well one I mean just honestly one nice Thing when I was just getting ready to Talk to you was how I put kind of all
The other stuff aside you know but I Don't have to ask you about you know What your personal super pack is going To be doing because you haven't said Jack about it this actually feels kind Of like an old school kind of like Technology conversation about business And what we're doing versus the the kind Of cause celra of the moment which is The Collision of technology and politics And I don't think it's helping Founders To see their backers and often leaders Like you mention Shopify it's CEO has Thoughts that they share sometimes and I I just wonder who the audience really is For back to your point if it's for their Friends or if it's For their their companies and it doesn't Seem to be super business focused and Therefore it Seems honestly very distracting to Getting work done and a mistake if I me Totally honest just thinking out loud Yeah I mean I think again we can be a Case study if folks resonate with this Approach philosophy wonderful folks Don't there are many ways and reasons to Start a business I'm not saying that our Approach is the only one but I just Really believe companies don't exist for Their own benefit and like Founders you Know we don't start companies to be Founders like we companies exist to Serve and solve the customer and like
Founders start a company because they're So obsessed with solving that pain that They had to start a company to go do it That's just I guess what I believe to my Cor and has been a big part of the Gusto Story from day one and we've tried to Hire people that share that philosophy So like to be clear we have a lot of Things that we care about it's all in The context of like how small businesses Grow develop how their teams evolve how That employer employee relationship gets Strengthened improves like how and when People decide to promote someone like What should they be paid like we're not Going to tell you that but we want to Equip you with the tools to be more Thoughtful and intentional about that Because otherwise the small business Owner is just Googling it right and Being like what should I do and that's Not the right solution the right Solution here is them actually being More informed and and equipped like with Some of the stuff big companies have had Like we're not trying to bring that Enterprise Tech Dynamic to small Business cuz you already highlighted Some of the flaws in it but the reality Is big companies have had access to much Better awesome powerful technology than Small companies have had and we're Trying to write that balance a bit Yeah Thinking about the average S&B customer
Out there how quickly is there it or Software spend growing I hear a lot About the Enterprise it budget but very Little about kind of the S&B world so From your perspective what's the uh rate Of change there oh I mean I think Different cuts on different costs but Like high high I mean one thing I just Saw yesterday I think businesses spent Over $40 billion on just compliance pain Points alone last year um and that's Only one part of what we're trying to Help with so like it's not getting Easier right you think about all the Different rules and regulations you Think about all the different hoops and Hurdles folks have to jump through you Know we have uh a role to play to try to Bring the voice of small business to Policy right we have like a a strong Amazing team of one that's in DC that's Trying to bring data to these Conversations cuz a lot of times policy Gets created you know maybe with Hopefully good intent but like without The right data it can actually lead to a Bad outcome but yeah lots and lots of Pain points around compliance pain Points around Healthcare pain points Around the part of hiring in more Locations we talked about International Briefly but like you know you can now Hire with gusto as a if you want to hire A contractor in over a hundred countries
And obviously in all 50 states that Actually you know sounds simple like Would have been really hard 10 20 years Ago and a business owner would had none Of that flexibility and yeah working With our partner remote uh we're also Enabling uh e hiring so being able to Hire employees in other countries if That's right for your business the whole Point here is to give more and more of These tools that big companies have had To small businesses so they can then do What's right for their business and Again that's that's a big opportunity so So the the underlying ethos then of SMB Technology is to take what has been Offered to the largest companies make it Simple make it dig make it better and Then offer it to small bus this feels a Little bit like um fintech companies That want to like you know Democratize types of investment that Have been historically constrained to The super wealthy and bringing them down To like the the masses I've always Really liked that because it's what Technology should be doing it should be Taking that which was rare and expensive And making it common and and and Inexpensive and I I'm glad that people Like you are still working on that but On International um I know you guys have To deal with with remote we talked about That a couple years ago how's that going
How's that partnership been performing And how much of Gusto's business is now International is I'll start with all of The customers the employers we serve are Based in the US and there will be a time When we expand the employer footprint to More countries we have people that ping Us and and ask can you please open gusto In this country that country um that's Not a matter of if but when but to our Earlier topic you know prioritization Focus is super super important U and for Us you high level there's Geographic Focus there's you know company size Focus and product depth and breadth Focus and we can't slide right and say All the above on all three we have to Have a sequencing now in terms of what Is available for those companies in the US if they want to hire contractors it's In over a hundred countries that's been Growing really quickly and again it's Just a dead simple experience you're Hiring someone we just ask you where They are right it's not a whole separate Flow it's not a whole separate Application or website you're adding a Human a person to your team where are They and then you shouldn't really have To care about what happens behind the Scenes and and actually the irony is Like opening uh a company in a state and Then hiring in another state itself like The US is more like 50 countries than 50
States or one country rather because of The local state um compliance roles and Regulations so like even multi-state had A huge acceleration with the pandemic And companies being able to pull small Businesses uh employees in more Locations um and then yeah from a Employer record standpoint I think we're Now in over five countries um and the Cool thing is remote already is in 75 Countries so there's going to be a Steady drum beat of expanding the Countries there uh but again the main Value here is you're a small business Owner like you're adding someone to your Team you should not have to care about Or know all the details of what happens Behind the scenes that's our job to Abstract it from you okay do you guys End up in competition with remote to Some degree because it sounds like you Have big plans to expand your own Footprint internationally as an e does That mean you even outgrow the remote Deal and become friendenemies down the Road well I think there's always a Ecosystem component to these Conversations I mean I'll ground Us in Like even working with Chase on Gusto Embedded payroll right like we're really Excited to have them launch a payroll Product powered by Gusto if you're a Small business inside that ecosystem That could be the right product for you
So there is some overlap by having these Different strategies in place uh what I Really believe and what's been shown so Far is that what we're doing is just Giving Gusto the chance to serve many Many millions more businesses and so Like I'm very excited by you know our Direct offering the gusto.com and you Know native app mobile you know people Platform experience that's growing and And has huge potential to keep expanding For all the reasons we've been Discussing I'm excited about embedded And how that will bring us to more Companies who will be a part of the Broader austo ecosystem I think at the Stage and scale we're at and this isn't A unique Dynamic to Gusto um having just Multiple ways to reach small businesses And multiple products to help serve them Is actually a really good thing to be in The position of versus just one product One go to market is kind of our entire Way of of scaling the company oh I just Realize that you know earlier talking About your go to market strategy and Doing kind of now some brand advertising That means you can finally do silly Things like sponsor sports teams nice That's got to be a fun place to be you Should pick up like a couple WNBA teams Couple nwsl teams you know brought to You by Gusto I can see it now fantastic I mean I'll tell you this if if the data
Shows there's a meaningful small Business audience that connects to those Different concepts and that this would Enable us to build a tighter Relationship with them yes you won't see Or hear me doing stuff like that for for Ego reasons because I I couldn't care Less about me I just I want to go to Your house and I want to like pour three Shots of tequila in you and then like Just like have you make a slightly silly Decision because you're uh and this is a Compliment like hyper rational is how it Feels right now listening to this like If I was in your shoes and I had been Disciplined for I don't know 12 13 years Now I would definitely Splash out on Like I don't know like the the New York Liberty or something just because hey Let off some steam you know h fine how I Let off steam I I like letting off steam By going running if that helps it also Is a double win I can yesterday I fit Three kids in the single stroller so It's also a win when it comes to Childcare oh we just bought our first Double story and it's terrifying all Right um I have just a couple last timey Moments and then we're out of here so uh June 23 you said that the company was Probably going to reach free cash flow Positivity in the next couple of Quarters it's been four um did you make It yeah we've had several quarters of
Free cash flow um and again we think That's for a scale that we're at you Know what it means to be running a good Business yep uh rest assured we're we're Excited to be reinvesting that cash flow Into new product development into Engineering hiring yeah into to our go To market engines because we're still Small in terms of our market share Relative to what we believe is possible All right and then last question I Promise to let you go why does everyone Now want to wait until they reach a Billion dollars in ARR to go public no Judgment I'm just Curious I can't speak on behalf of Others I mean I can just tell you it's Not as simple as a binary formula um but What I can tell you is you know we're Going to be building gesto for many many Decades and that means at some point we Will be a public company um I also think A lot of stuff that companies wait to do Until they're public you know really big At scale private companies should be Doing already so I know that's not Directly answering your question but We'll just say again like you know I'll Quote actually a story from another CEO You know when gusta goes public I'll Treat it like our high school graduation The rest of our life happens after like It'll be a milestone we'll celebrate it And like what gives me joy and this kind
Of gets to the heart of your rational Statement earlier is like helping people Like my parents are both teachers my dad Was a high school teacher my mom was an Elementary school teacher it's just Really in my bones and my DNA it's in You know big part of our hiring Philosophy at Gusto is like service Mindset people that like really embody This desire to like help others get joy From that are competitive can be kind Can be ambitious but also have humility And those are the type of folks we're Looking for if anyone's interested in Joining gusta I think you should write More about exactly what you just said Because I think that's actually a a note Or a tone that's missing in the broader Symphony that is uh private Market Technology companies but Josh I'll let You go thank you so much for coming on Twist we really appreciate it uh we'll Have you back in uh 12 18 months Whenever there's new news but in the Meantime where can folks find you on the Greatwide Internet uh well gusto.com is what I'm Going to rout everyone towards um and if I can be helpful you know uh I do a Little bit on social but um more than Anything you know my focus is on is on Helping the team as much as I can all Right I appreciate it this has been Twist of course like comment subscribe
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