Gusto Co-Founders: Josh Reeves, Edward Kim & Tomer London
Jan 15, 2025
auto_awesome
Josh Reeves, Co-founder and CEO of Gusto, along with fellow co-founders Eddie Kim and Tomer London, share their inspiring entrepreneurial journey. They reflect on their early startup ideas, including a memorable photo-sharing venture. The founders discuss the evolution of Gusto's payroll solutions, emphasizing their commitment to customer feedback and creating a positive experience for small businesses. They also touch on navigating challenges during the COVID-19 pandemic, showcasing their dedication to supporting clients through turbulent times.
The Gusto founders’ unique paths and shared experiences fostered a deep commitment to solving payroll challenges for small businesses.
Their focus on creating a user-friendly platform originated from firsthand experiences and direct observations of customer interactions and needs.
Amidst unprecedented challenges like the pandemic, Gusto’s proactive support showcased their dedication to being a genuine partner to clients.
Deep dives
Gusto's Founding Journey
Gusto, a leading payroll and HR software company, was co-founded in 2012 by Josh Reeves, Tomer London, and Eddie Kim. Their journey began with each co-founder pursuing their own distinct paths prior to connecting, with Eddie’s initial startup, Pickwing, serving as a learning experience that pushed him towards entrepreneurship. The founders' reunion was marked by a chance meeting during a San Francisco half marathon, rekindling their shared ambitions after having attended Stanford University together. This pivotal moment sparked discussions that ultimately led to a commitment to tackle entrepreneurial challenges and provide a solution that would simplify payroll for small businesses.
Identifying the Pain Points
The founders recognized the myriad of difficulties faced by small businesses when managing payroll, primarily revolving around the outdated, manual processes that were burdensome and time-consuming. They understood that many small business owners operated with little to no specialized knowledge of payroll, relying on inefficient practices that often led to error-prone outcomes. Their personal experiences—such as Eddie’s mother manually calculating payroll for her husband’s practice—provided real-world insights that guided the design of Gusto’s user-friendly platform. This commitment to understanding customer needs helped the founders pivot towards payroll services during their time at Y Combinator, aligning their solution with a genuine market need.
Innovating Through User-Centric Design
Gusto’s development focused on creating a seamless and intuitive user experience, ensuring that payroll processing could be handled without extensive knowledge or expertise. A critical factor in their design process was direct observation of how customers interacted with their product, leading to features that promoted self-service options and alleviated awkwardness in onboarding tasks. The innovative self-service model empowered employees to input their own information, enhancing engagement and privacy. These early iterations and customer feedback led to substantial refinements, forming the backbone of Gusto’s usability that differentiates it in a competitive market.
Navigating Growth and Market Challenges
As Gusto expanded, the founders faced both opportunities and obstacles in rapidly scaling their operations. They managed to keep their mission focused on supporting small businesses amid industry giants like ADP and Paychex, giving them an edge by harnessing modern technologies that allowed for more efficient service offerings. Their seed funding success, which led to a $6 million seed round in 2012, demonstrated investor confidence in their vision to address a major pain point for small businesses. This strategic investment allowed them to build a solid foundation while adapting to the evolving needs of their customer base.
Crisis Response and Commitment to Customers
During the COVID-19 pandemic and subsequent crises, Gusto showcased its commitment by pivoting rapidly to provide support for small businesses in survival mode. The team mobilized to help clients navigate access to government relief programs, including the Paycheck Protection Program (PPP), ensuring they received critical funding to stay afloat. Their proactive care ensured timely payroll disbursement, demonstrating that Gusto viewed itself as a partner to their customers rather than merely a service provider. This philosophy of prioritizing customer needs over profit helped strengthen brand loyalty, positioning Gusto as an indispensable ally through challenging times.
In today’s episode, we chat with all three of the Gusto founders: Josh Reeves, Eddie Kim, and Tomer London. Gusto is a payroll and employee benefits company that YC funded in 2012. The striking thing about Josh, Eddie, and Tomer is their level of commitment: to their customers, their employees, and one another. It's rare to see a startup with 3 founders still being run by all 3 founders 12 years in, but these guys are special.
Remember Everything You Learn from Podcasts
Save insights instantly, chat with episodes, and build lasting knowledge - all powered by AI.
