Josh Reeves, CEO and co-founder of Gusto, discusses how small businesses operate and why they need active guidance rather than just software menus.
Disclosure
Reeves: Gusto rejected 11 VC firms to raise seed solely from angels
“We had, I think, like, over 11 VC firms offer to invest. We actually chose to do the round with no VC firms. It was all angels, so we raised from, you know, twenty-plus CEOs and founders. It was, you know, the CEOs and founders of, you know, PayPal and Stripe …”
Assertion Supported
Reeves: 40% of US companies faced annual penalties for payroll mistakes
“40% of companies in the U.S. Were making mistakes and getting penalized every year.”
Disclosure
Gusto founders withheld salaries until software could process them
“We're also gonna add the pressure of, well, we won't pay ourselves until we can use our own system to pay ourselves.”
Assertion Supported
Gusto delayed public self-serve launch until months after Demo Day
“After demo day, we actually did not launch the product. That was also kind of a non-obvious choice we made. We'll probably talk about the seed round we did, but we actually didn't launch publicly where you could like come up as a stranger who we've never met, …”
Assertion Partly supported
Reeves: $100B incumbents ADP and Paychex served under 30% of small businesses
“You had this amazing combination of, you know, some big incumbents like paychecks and ADP worth, you know, over a hundred billion dollars together at that point. So like clearly big, big incumbent market presence in terms of like economic value, but also an in…”
Disclosure
Reeves: Gusto's early angels included Systrom, Stoppelman, Shah, and Collison
“Kevin is a friend from college, and Instagram, I mean, he's an investor in Augusto, so, you know, it was fun to talk to him about some of the scaling stuff, but actually, I think, ah, you know this more than anyone, like, tech is pretty broad, so even back the…”