Fintech Leaders
Fintech Leaders
Josh Reeves, CEO & Co-Founder of Gusto – Building a $9.6 Billion Giant to Serve Small Businesses

Josh Reeves, CEO & Co-Founder of Gusto – Building a $9.6 Billion Giant to Serve Small Businesses

In this 100th Fintech Leaders episode, Miguel Armaza sits down with Josh Reeves, CEO & Co-Founder of Gusto, one of the largest HR & Payroll companies in the US.

This article is part of Fintech Leaders, a newsletter with almost 60,000+ dreamers, entrepreneurs, investors, and students of financial services. I invite you to share and sign up! And, if you enjoy this conversation, please consider leaving a review on Apple Podcasts, Spotify, or wherever you get your shows so more people can learn from it.


In this 100th Fintech Leaders episode, I thought I’d bring you someone extra special. I sat down with Josh Reeves, CEO & Co-Founder of Gusto, one of the largest HR & Payroll companies in the US, focused on serving small and medium-sized businesses. In addition to HR, payroll, and benefits, Gusto is a strong player of embedded fintech solutions and recently announced a very large partnership with JPM Chase.

Founded in 2011, Gusto now serves over 300,000 businesses in the US, and in 2022 Gusto had revenues of more than $500 million. They are backed by General Catalyst, YC, Kleiner Perkins, Obvious Ventures, Felicis, Ribbit, CapitalG, Altimeter, and a very long list of fintech investors.

In this episode, we discuss:

Lessons from building and launching Gusto’s embedded fintech strategy

“Companies always have to choose no matter what size you are, do you build from scratch? Do you partner? Or do you do something in between? And I really think this future built around API's and embedded products is so bright, because it is such a better experience for the customer, versus just lightweight integrations and referral relationships.”

Gusto is a huge believer in a future of embedded products. The company aims to enhance small and medium-sized businesses' user experience by embedding their applications and experiences within platforms that SMBs are already utilizing. This approach reduces the need for users to navigate between different systems and thus provides a streamlined experience.

A critical aspect of Gusto’s embedded strategy involves enabling other platforms to launch their own payroll products powered by Gusto. This is initially focused on payroll but will likely expand into additional apps. This is not a new market strategy, and one of the most successful companies to offer embedded FinTech products is Stripe. For Gusto, it involves making their decade-plus payroll infrastructure, which has processed hundreds of billions of dollars, available to key partners.

Gusto has forged dozens of partnerships, but the most notable (and recent) example is their partnership with Chase Payment Solutions, which will launch its own payroll product powered by Gusto. Through Gusto’s embedded strategy, partners can leverage its robust infrastructure to launch payroll products without building them from scratch, reaching more SMBs with improved and tailored solutions.

Productizing infrastructure adds more resilience and enhances the scalability of the platform. Josh emphasizes that this approach, which ensures security and compliance while operating as a separate product entirely, not only facilitates the firm’s operational robustness but also allows it to focus intensively on making sure that the infrastructure can scale effectively and resiliently. This is particularly pertinent for Gusto as it opens its robust, well-tested infrastructure to key partners.


How Gusto built a structured and scalable hiring process

"I don't think if someone doesn't share Gusto values, they're a bad person. It just means they would be more successful in a different company. And I also don't believe people have separate personal and professional values - you just have your values."

Gusto utilizes a framework centered on ensuring alignment between the company and potential hires in three key dimensions: values, motivations, and skill set. While skill set often gets the primary focus in hiring, with various role-specific evaluation methods (e.g., pair programming for engineers, writing samples for content marketers), Reeves emphasizes the critical importance of also ensuring alignment in values and motivations, especially during phases of rapid scaling and headcount growth. Reeves reminds us that while values derive from personal life experiences and beliefs, there are no inherently right or wrong values. However, alignment with a company’s specific values, like Gusto's, is crucial for mutual success and satisfaction in the work environment.

In Gusto’s earlier days, Reeves personally conducted interviews (up to the first 60-70 hires) but recognizing the non-scalability of this approach, they implemented a structured program that involves training and a peer-shadowing process for interviews. They’ve evolved a participatory hiring model wherein “Gusties” can volunteer to be a part of the interview process, ensuring that the approach scales alongside the growing company, which is currently at 2,500 members. Beyond the moment of hiring, Gusto places emphasis on the entirety of the employee journey, beginning before hiring (identifying needs) and extending through onboarding and ongoing management. They’ve instituted structured mechanisms for management, feedback, performance evaluation, and employee appreciation, with a continuous aim to learn, refine, and ensure that their approaches are always firmly rooted in the company’s values, even amidst growth and scaling.

Finding Product-market fit in the highly complex SMB sector

"Someone told me a long time ago, we say the word SMB, which itself is an acronym for small and medium sized business. But the reality is, it's 3000 sub-verticals or sub-markets."

The SMB sector encompasses 3,000 sub-verticals with significant variance in their size and operation. Josh and team understood that from the very beginning and embraced a more horizontal approach for their MVP. They found product market fit almost immediately, and from the very beginning, they prioritized creating an inbound, organic-driven acquisition engine. The initial strategy was underscored by ensuring that Gusto developed an initial product that was not only user-friendly, accurate, and compliant but was also so intuitively designed that it could generate substantial word of mouth and referrals, proving its efficacy in the real world without the need for extensive external marketing. Betting significantly on three technologies – Cloud, Mobile, and paperless operations, utilizing these not as innovative elements but as foundational tools that enable the creation of vastly more user-friendly products.

Insights and learnings from the evolving role of CEO… and a lot more!

 “I spend a lot more time and I'm much, much more drawn to the eagerness and the, at times, impatience of all the things I know we can, could, and should be doing, going forward. And that’s where I’m focused.”

For Josh, the CEO role has transformed notably as Gusto has expanded. Initially, wearing numerous "hats" and managing diverse tasks, his role has gravitated towards ensuring suitable leadership across various domains and aligning the team towards shared objectives. The application of Objectives and Key Results (OKRs), as well as regular Quarterly Business Reviews (QBRs) and Monthly Business Reviews (MBRs), are key to his strategic approach towards ensuring Gusto's teams remain on course. Reeves underscores the importance of setting clear goals and establishing measurable parameters to gauge whether they are on or off track. He is also a big believer in empowering Gusto’s leaders by providing them with the autonomy to navigate their specific areas effectively while ensuring harmonized directional movement within the company.


Want more podcast episodes? Join me and follow Fintech Leaders today on Apple, Spotify, or your favorite podcast app for weekly conversations with today’s global leaders that will dominate the 21st century in fintech, business, and beyond.

Previous Episodes You May Enjoy:

Video Highlights You Will Definitely Like:

Miguel Armaza is Co-Founder & General Partner of Gilgamesh Ventures, a seed-stage investment fund focused on fintech in the Americas. He also hosts and writes the Fintech Leaders podcast and newsletter.

Fintech Leaders
Fintech Leaders
Exclusive interviews with Fintech leaders reshaping the global financial industry and building transformative companies