The $500MM Startup Making Payroll Painless, with Gusto Co-Founder Joshua Reeves

Lex interviews Josh Reeves, co-founder of Gusto, a company
specializing in payroll, HR, and benefits solutions for small
businesses. Josh shares his journey from academia to
entrepreneurship, highlighting the challenges and strategies
involved in building Gusto. The discussion covers the evolution
of technology from Web 2.0, the importance of understanding
customer needs, and maintaining strong unit economics. Josh
emphasizes Gusto's mission to simplify payroll and HR tasks for
small businesses, aiming to improve their survival rates and
overall efficiency. The episode underscores the significance of
product quality and customer satisfaction in navigating industry
competition.


 


Notable discussion points:


 


1. Solving Payroll as a Massive, Underserved SMB Pain Point:
Reeves highlighted how in 2011, 40% of small businesses were
fined annually due to manual payroll errors. Gusto addressed this
pain using cloud and mobile tech, making payroll fast, accurate,
and accessible—especially for non-experts.


 


2. Product Sequencing and the Power of a Payroll-Centric
Ecosystem: Starting with payroll, Gusto built a sticky,
horizontal product with strong retention. From there, they
expanded into benefits, time tracking, and more—adding products
based on customer pull and reinforcing their ecosystem.


 


3. Organizational Evolution: From Founder-Led to Functional and
Matrixed: Gusto grew from 3 co-founders to 2,600+ employees by
evolving from a hands-on team to a matrix structure. Reeves
emphasized hiring leaders suited to each stage and giving small,
focused teams autonomy to drive new product development.


 


MENTIONED IN THE CONVERSATION


 


Topics: Fintech, Gusto, Payroll, HR, Zazzle, SMB, CAC, Customer,
Scaling, Growth, Web2.0


 


ABOUT THE FINTECH BLUEPRINT


 


Subscribe to the Fintech Blueprint newsletter to stay at the
forefront of Fintech and DeFi: https://bit.ly/3hyhlC2


 


Partner with Fintech Blueprint through sponsorships:
https://bit.ly/3UZllsV


 


Twitter: https://twitter.com/LexSokolin


 


TIMESTAMPS


 


1’13: From PhD Dropouts to Payroll Pioneers: Joshua Reeves on
Building Gusto and Solving Real Problems with Technology


 


4’21: The Web2 Reawakening: Democratizing Creation and Commerce
Through the Internet


 


8’14: From Pen and Paper to the Cloud: Tackling Payroll Pain and
Modernizing SMB Operations


 


11’15: Is Gusto a Fintech?: Ignoring Labels, Solving Problems,
and Building for Small Business from Day One


 


16’07: Cracking the SMB Code: Building Scalable Products with
Strong Unit Economics and Organic Growth


 


19’39: The Fundamentals of Scaling: Navigating CAC, LTV, and
Retention in Subscription Businesses


 


22’49: Building Beyond Payroll: How Customer Demand and Smart
Sequencing Shaped a Scalable Product Organization


 


27’16: Scaling with Intention: Evolving Leadership, Structure,
and Talent from 10 to 2,600 People


 


33’00: Structuring for Scale: Balancing Autonomy, Focus, and
Flexibility in a Multi-Product Organization


 


36’22: From Traction to Tenure: Scaling Impact, Navigating
Competition, and Building for the Next Decade


 


41’12: The channels used to connect with Joshua & learn more
about Gusto


Disclaimer here — this newsletter does not provide investment
advice and represents solely the views and opinions of FINTECH
BLUEPRINT LTD.


Contributors: Lex, Laurence, Matt, Farhad, Mike, Daniella


Want to discuss? Stop by our Discord and reach out here with
questions.