Feb 8, 2024 · 59m · in-depth
Lessons from Gusto & Square on Finding Your Product Wedge | Michael Cieri
0:00 / 0:00
▶ Watch on YouTube →
gold bands on the timeline = statements, start to end. Hover to read, click to jump. CC turns on captions
In this episode of In Depth, Gusto CPO and former Square product leader Michael Cieri shares tactical frameworks for evolving a product wedge into an expansive multi-product platform. He details how to navigate horizontal versus vertical software strategies, balance resource allocation with the Three Horizons framework, and cultivate high-velocity product teams grounded in sharp product judgment.
How this conversation actually went
Every chapter scored 0–10 on four independent dynamics. Hover any point for the reasoning behind the score. Brett holds 20.4% of the talking time here. How this is scored →
Brett as informed peer 4.6 Guest teaching 3.7 Guest disagreement 0.3 Brett pushing back 0.1
speaking balance: gold is Brett, purple is the guest (3 minute bins)
Sharpest disagreement ▶ 49:35 Cieri rejects pure scientific method for innate intuition
Cieri explicitly diverges from conventional product management orthodoxy by arguing that innate customer grasp matters far more than layered-on optimization processes.
Hardest push from Brett ▶ 35:00 Berson pushes on operationalizing risk-taking cultureBerson challenges Cieri to move past generic corporate slogans about innovation and explain how incentives and failure attribution are handled in practice.
Biggest teaching moment ▶ 13:20 Cieri breaks down CAC and distribution limits in vertical SaaSCieri explains the hidden acquisition disadvantage of pure vertical SaaS relative to horizontal platforms with prominent physical counter presence.
Brett holds their own ▶ 51:08 Berson frames product taste via athletic ability analogyBerson elevates Cieri's evolving perspective on innate taste by articulating an analogy comparing baseline talent and coaching in athletics.
the scores for every segment, with the reasoning behind each
| Chapter | Topic | Brett as informed peer | Guest teaching | Guest disagreement | Brett pushing back | Why |
|---|---|---|---|---|---|---|
| Designing Consumer-Grade Software for Small Businesses | 4 | 3 | 0 | 0 | Berson opens with an informed question distinguishing SMB product development from enterprise and consumer. Cieri outlines his background and explains how Square applied consumer-grade simplicity to solopreneur software. | |
| Moving Upmarket and Transitioning to Vertical Solutions at Square | 5 | 4 | 1 | 0 | Berson probes how precise an ICP needs to be for SMBs compared to enterprise segmentation. Cieri explains how shared jobs diverge into vertical needs as businesses grow larger. | |
| The Strategy and Debate Behind Dedicated Vertical Apps | 4 | 3 | 0 | 0 | Berson asks how Square determined verticalization was the right organizational move. Cieri details the internal debates between creating a dynamic super-app versus launching dedicated vertical apps. | |
| Horizontal Versus Vertical SaaS: The Distribution and CAC Advantage | 6 | 4 | 1 | 0 | Berson brings up Toast's vertical restaurant model to explore horizontal versus vertical SaaS trade-offs. Cieri acknowledges Toast's strengths but highlights how horizontal brand presence drives cost-effective customer acquisition. | |
| Diverging SMB Stacks: Gusto's Shared HR Jobs vs. Square's Vertical Needs | 5 | 3 | 0 | 0 | Berson asks how companies expand beyond an initial product wedge without becoming a one-trick pony. Cieri uses Gusto Benefits and Square Capital to illustrate how proprietary data unlocks natural adjacent offerings. | |
| Managing Multi-Product Portfolios with the Horizons Framework | 4 | 4 | 0 | 0 | Berson inquires about portfolio prioritization when managing multiple mature product lines. Cieri introduces the Horizons framework and admits resource allocation across horizons is more art than science. | |
| Structuring Rolling Long-Term Visions at Gusto and Opendoor | 4 | 3 | 0 | 0 | Berson asks for deeper detail on multi-year planning horizons. Cieri details Gusto's rolling 3-year vision process and compares it to Opendoor's 5-year rolling model under Eric Wu. | |
| Translating Strategic Hypotheses into Concrete Horizon Bets | 4 | 4 | 0 | 0 | Berson asks for concrete examples of operating at a multi-year vision altitude. Cieri breaks down Opendoor's real estate thesis and explains how core products like Gusto Payroll contain internal Horizon 1 and Horizon 3 bets. | |
| Bottom-Up Innovation and the Origin of Square Invoices | 5 | 4 | 0 | 0 | Berson asks how leaders assess progress on ambiguous Horizon 3 bets where experiments might fail cleanly. Cieri recounts how Square Invoices originated as a small hack-week project rather than a top-down strategy mandate. | |
| Building a Culture of Safe Risk-Taking and Experimentation | 6 | 3 | 0 | 1 | Berson pushes beyond generic culture platitudes to ask how leaders practically manage downside career risk for failing experiments. Cieri emphasizes clear upfront framing, safe rollout tooling, and risk controls. | |
| Advising PMs on Pitching and Starting Small with New Ideas | 4 | 4 | 0 | 0 | Berson asks how a PM should pitch an entirely new bet to leadership. Cieri shares the 'start small' principle and stresses validating core hypotheses before demanding dedicated team resources. | |
| Overcoming Common Pitfalls in Horizon 3 Proposals | 5 | 4 | 1 | 1 | Berson asks why most bottom-up product pitches fail and whether all big bets can truly be broken down into small pieces. Cieri asserts that even massive Horizon 3 initiatives require a concrete, small first step to validate initial demand. | |
| Evaluating Product Judgment and Decisiveness in Hiring | 4 | 4 | 0 | 0 | Berson asks if product taste and intuition can be taught. Cieri discusses evaluating decision-making under uncertainty during interviews and screening out candidates who over-rely on research and A/B tests. | |
| Innate Product Instincts Versus Process-Driven De-Risking | 6 | 4 | 1 | 0 | Berson introduces a Tom Ford design analogy to explore innate taste versus the scientific method. Cieri reflects on his shift toward valuing innate customer intuition, which Berson further sharpens with an athletic baseline analogy. | |
| Accelerating Execution Velocity and Tuning the Team Factory | 4 | 4 | 0 | 0 | Berson asks about driving execution speed across product orgs. Cieri cites High Output Management's factory concept and identifies team autonomy, purpose clarity, and self-unblocking as hallmarks of high-velocity teams. | |
| Leadership Influences: Urgency with Gokul Rajaram and Scaling with Alyssa Henry | 4 | 4 | 0 | 0 | Berson asks about leaders who imprinted on Cieri's career. Cieri highlights Gokul Rajaram's focus on speed and mentorship, followed by Alyssa Henry's systems-level platform scaling and checkout consolidation at Square. |
Statements from this episode (20)
In 2012, over 70% of Square's merchants were individual solopreneurs
“The majority of Square businesses are solopreneurs. They're individuals, individual sellers. And, you know, the last decade or so, I think the company's really made a successful march up market. So we've got a lot of larger businesses now, but, you know, back …”
Cieri: Square layered vertical solutions over its core POS to serve complex businesses
“At Square, what we did and what the company's still doing is, is came up with a vertical strategy where we had, okay, we've got our base square point of sale out of the box, you know, works for most industries with simple needs. And as you start to get more ad…”
Cieri: One-size-fits-all B2B software fails because industry workflows differ starkly
“This can't just be like a one size fits all thing anymore. Like the differences of jobs to be done across these industries are just too stark.”
Vertical SaaS at the bottom of the market faces high CAC
“The catch on that, and like one of the tricks is just, it's very, very difficult to be able to build awareness and be able to acquire, at least at the bottom of the market, be able to acquire at an affordable CAC if you don't have really great brand awareness,…”
Cieri: Gusto serves over 300,000 small businesses evenly across industries
“So if you break down our customer set and we have north of 300,000 small businesses on Gusto now, And you look at them sort of by traditional industry segmentation, it's very evenly distributed across a lot of industries.”
Cieri: Second products must leverage unique advantages created by the wedge
“If we're going to expand off the wedge, how does the wedge product, whatever the first one is, really help unlock the door to the second? What are the sort of unique insight, unique advantage or right to win? Does the first product open up for the second?”
Square Capital succeeded by leveraging proprietary visibility into merchant revenue data
“That started off the unique insight that like, hey, we kind of have a pretty good view into the revenue of a business. We don't have a full view on the business. We have a unique view on the revenue coming into a business. And so that really puts us into a pos…”
Cieri: The SMB software challenge is prioritization, not finding viable product adjacencies
“To me, one of the best things about working in the small business arena is just there's so many areas that we can help that I'm sure if we put effort into would work because the customer pain is there and the market's there. It's just kind of deciding how many…”
Square's strategic product planning deliberately focused strictly on one-year horizons
“We didn't do much of that at Square, a lot of it was kind of focused on what does the next year look like?”
Cieri: Opendoor maintained an annually refreshed five-year vision under Eric Wu
“Opendoor, where it was for a brief time between Square and Gusto, I thought did an excellent job of keeping it, they did it on a five-year window, but keeping like a vision of where we were headed over a five-year timeline and always refreshing that year over …”
Gusto embeds high-risk Horizon 3 product bets inside its core payroll product
“There are like, even horizons within a product. So you look at something like payroll, for example, our payroll product is our, is the backbone of gusto. There's a lot of things we're going to do that adds into what we already have. That is high rate of succes…”
Cieri: Square Invoices was Square's second biggest payment product at IPO
“Square Invoices grew to be our second biggest, I'm not sure where it is, Now, or if they disclose all this, but it grew to be at the point of the IPO, I think it was our second biggest payment product.”
Cieri: Most Horizon 3 product bets originate bottom-up rather than top-down
“I think that's one thing like for horizon three things is just a lot of it comes bottoms up. So most of it comes bottoms up and like making the space for that to happen then shows up in like an annual planning process where you're like, oh yeah, you know, that…”
Cieri: Back Ambiguous Product Bets When Leaders Articulate the Problem Well
“And a lot of times, if you find a leader that can convince you on the problem, that's where my, a lot of my like, okay, I trust the intuition on this because I can, they can reasonably articulate to me why they believe, we might not know this all yet, but like…”
Cieri: Horizon 3 product bets should begin with reasonable one-year adjacencies
“When you look at it over a three year view, you're like, okay, that's a Horizon three thing. But then when you break it down into what we're going to do in the next year, it's oftentimes a reasonable adjacency that is the first step towards that. And we can ki…”
Product judgment cannot be taught; it must be screened during hiring
“And good judgment is something that is best screened for at the point of interview.”
Great product leaders identify the right answer 70% of the time
“Somebody with good judgment seven times out of 10 will probably pick up on the right answer with less data.”
Struggling product managers merely present options instead of making definitive decisions
“I think the product people that I see struggle the most are the ones that just like, can't really make that like, well, here's all the options. And I'm like, well, it's your job to tell us what we're going to do. So what are we going to do?”
Cieri: The fastest product teams are self-contained and clear on purpose
“I think the ones that I've seen move the fastest are, one, they're clear on why they exist and what they're trying to get done. Two, they're clear on what they're trying to build. You know, there might be some nips and tucks on, you know, where's the button pl…”