Getting Payroll Right is Hard, Especially for Small Businesses
Getting payroll right is a daunting task, especially for small businesses with limited resources. The three founders of payroll and benefits startup Gusto all found this out separately while running their own small businesses before linking up to tackle the broken SMB payroll system in 2013.
A Personal Pain Point Leads to Founding Gusto
Josh Reeves, a co-founder and current CEO of Gusto, shared on a recent episode of TechCrunch’s Found podcast that the founders got interested in this area due to their personal pain points. However, they didn’t just want to build a company that would serve their own problems.
"We immediately started talking to customers," Reeves said. "Even though we were based in Silicon Valley, we actually were really focused on mainstream small business. I love reminding folks there’s more dentist offices in the U.S. than tech startups." He continued, "We would go out and meet them, talk to them, interview them, get feedback."
Building Gusto from Scratch
Reeves talked about how they built the company from scratch, starting with a focus on small businesses. Today, 11 years later, Gusto has grown to serve over 300,000 customers. In addition to payroll, Gusto now also offers healthcare benefits, which was a direct response to customer requests.
Navigating Competition and a Changing Workforce
Gusto has navigated rising competition in the space and helped companies transition to serving a remote workforce during the pandemic. Despite these challenges, the company has remained laser-focused on serving small and medium-sized businesses, a more fragmented market compared to enterprise customers.
"I would describe Gusto as being a great product for one to 500 person companies in all of the United States," Reeves said. "But the reality is, there’s 6.2 million employers in America and 4 million are less than five employees, over half are less than five employees."
Expanding Offerings and Future Plans
Reeves also talked about how more than a decade after founding Gusto, all three co-founders are still involved with the company. He shared plans to continue to expand and offer other tools for small businesses.
"We love fixing stuff in people’s lives," Reeves said. "The truth is, we’re still early. If you look at marketshare, walletshare, and the product mix we have live today, there’s just a lot more work to do. So we’re eager to go get that work done."
Gusto’s Commitment to Small Businesses
Throughout its history, Gusto has stayed committed to serving small businesses, understanding that this market is often overlooked in favor of larger enterprise customers.
Key Statistics and Facts
- Over 300,000 customers
- 6.2 million employers in America
- 4 million are less than five employees
- More than half of all employers have fewer than five employees
Conclusion
Gusto’s commitment to serving small businesses has been a key factor in its success. By staying focused on this market and listening to customer feedback, Gusto has been able to build a product that meets the needs of one to 500 person companies across the United States.
About the Author
Rebecca Szkutak is a senior writer at TechCrunch who covers venture capital trends and startups. She previously covered the same beat for Forbes and the Venture Capital Journal.
Dominic-Madori Davis is a senior venture capital and startup reporter at TechCrunch. He is based in New York City and can be contacted via Signal at +1 (646)-831-7565.
