BUILDING GUSTO’S BUSINESS TO SERVE SMALL BUSINESSES
Gusto is scaling and raises Series D
From Day 1, we set out to create a durable and sustainable company, with a focus on serving our customers. Our mission is to create a world where work empowers a better life — for everyone, everywhere. And with over 100,000 customers, we still feel like we’re early in the journey. There are approximately 5.6 million employers in America, and 98% of them are small businesses (with <100 employees). We want to help each one of them.
There have been two ingredients for how we’ve approached scaling:
- Our belief from the early days has been that a service mindset is core to building a successful business. We exist to serve our customers, and this has meant at times choosing to trade-off short-term growth in order to create long-term value for our customers and for Gusto. An early example of this was taking 3+ years to reach nationwide coverage, even with long waiting lists in each state, because we wanted to maintain the quality of our service no matter what. And that takes time.
- Customer success equals your success. We wanted to design a business model where if we’re serving the customer well, then they will trust us more and become a closer partner. This results in customers continuing to use Gusto, and us helping them with more parts of building their team, which then drives more revenue for Gusto as well. A great example of this is health insurance, which many of our customers now manage through Gusto. We set up our customers with the right plan for them, and make it very easy to manage payroll and benefits (plus much more) all in one place. It’s a win-win.
We’re building Gusto as a multi-decade company because we have a lot of work ahead of us to serve millions of small businesses. Unfortunately, longevity is not the norm for small businesses in America. According to the Bureau of Labor Statistics, only 50 percent of small businesses survive past year five. We want this to change.
Small businesses form the foundation of many communities across America, and there isn’t enough being done to help them. There needs to be a wake-up call that investing in the success of small businesses is vital to accelerating the national economy, local economies, and personal economies.
Gusto is committed to helping small businesses. We want to change the status quo by helping small businesses build great places to work where their employees can thrive, so they can serve their customers and become durable companies themselves.
In order to accomplish this goal, we’ve been focused on helping Gusto scale. I’ve summarized below some of the steps we’ve recently taken to advance our efforts:
New investments — We’ve raised $200m in new capital through a Series D round of financing. We chose five investors for the round, based on their long-term perspective. We’re thrilled to welcome Fidelity and Generation Investment Management as new investors to Gusto, and we’re excited to strengthen our partnerships with T. Rowe Price Associates, Inc., Dragoneer, and General Catalyst. These investors are committed to our view of creating a durable and sustainable business, and their investments will fuel our ongoing creation of equitable solutions and inclusive economic growth for everyone. Many of Gusto’s earliest investors also participated, including CapitalG, 137 Ventures, Y Combinator Continuity, and Emergence Capital.
Expanding Gusto’s people platform — Building a people platform for small businesses has been our plan from the beginning. We started with payroll in 2012 because it’s core to every business. We added employee self-onboarding in 2013; health insurance benefits in 2015; 401(k) in 2016; time-off requests in 2017; time tracking and flexible pay in 2018; and there’s much more to come. We’re going to continue doubling down on research and development, so we can further expand Gusto’s people platform and solve even more pain points for our customers.
Growing our team — We are adding to our teams in Denver and San Francisco, and recently announced the opening of our Research and Development office in New York. Our focus is on hiring great people who care about serving the customer, and this philosophy manifests in all our teams. Our goal is to make the lives of our small business customers easier so they can build better companies.
Welcoming great leaders — We’ve added incredible leaders to Gusto over the past year, who join existing Gusto leaders on the team.
- Danielle Brown, Gusto’s Head of People, was formerly the Chief Diversity and Inclusion Officer at Google
- Fredrick Lee, Gusto’s Head of Security and Privacy, was formerly the Chief Information Security Officer at Square
- Kenny Wyatt, Gusto’s Head of Sales, was formerly the Chief Revenue Officer at Vonage
- Kent Beck, a Gusto Software Fellow and Coach, is an original author of the Agile Manifesto, which has heavily informed modern software development
Building a stronger expression of our brand — We just launched a new look and feel. Check it out at www.gusto.com! We’re the same Gusto, but we’ve redesigned everything to be clearer, more usable, more accessible, and more delightful. You can read more about the change in this blog post by Tomer, who leads Gusto’s product and design teams.
Thank you to our customers for trusting us. We exist to serve you, and we are looking forward to building a stronger and stronger relationship with you over the coming years.
Thank you to all of Gusto’s employees (“Gusties”) past and present who have helped bring our culture of service to life. Your dedication continues to have a tremendous impact on so many people, and you are what makes our continued growth possible. I am excited to be on this journey with you as we continue our commitment to creating a world where work empowers a better life — for everyone, everywhere.
For anyone who wants to join us on our journey, we’re hiring!
Co-Founder and CEO of Gusto