CEO of Gusto, Joshua Reeves, shares how to build a diverse & mission-driven company
Joshua Reeves, CEO of human-resources start-up Gusto, sat down with Shruti Gandhi and Laura Mandaro of USA TODAY to talk about his company and give advice to aspiring entrepreneurs. Reeves graduated from Stanford in 2005, got his Masters in Electrical Engineering in 2008, and sold his first startup in 2010.
What sets Gusto apart?
After launching less than three years ago, Gusto has a lineup of investors that reads like an All-Star team of tech leaders. Notables include the founders of Instagram, Dropbox, Yelp, and PayPal, VC firms like Google Ventures, General Catalyst, and KPCB, and Ashton Kutcher. Enough said.
Unfortunately, Gusto CEO Josh Reeves didn’t provide a “silver bullet” for reeling in big-name investors, but he did explain the way Gusto (formerly ZenPayroll) thinks about the process. Reeves views fundraising as similar to hiring, in that investors represent the company publicly while also providing advice and feedback. Instead of taking money from a big venture firm right away, he chose 20 individuals for his seed round who “didn’t invest because they needed to pay for their kid’s college admission…they invested because they got really excited to be a part of the journey.”
On paper that sounds great, but few startups have the luxury of choosing their initial investors from a stable of interested CEOs. So what did Reeves do to get Silicon Valley royalty interested? He claims it starts with the company’s central tenet — being “mission-driven.”
Gusto’s Mission
What does it mean to be “mission driven”? Reeves defines it as seeing a problem and feeling compelled to solve it by starting a company. He says that the founder should be “obsessed with a problem that isn’t being fixed,” and that the company’s employees and investors should have a stake in this mission. In the case of Gusto, the problem was inefficient, “sterile” payroll and health insurance systems for small businesses — frustrations Reeves experienced firsthand while at his previous startup, Unwrap. The solution to this problem is Gusto’s software — designed makes Human Resources processes treat employees more like humans instead of resources.
If you look at Gusto’s website, you start to understand what he means. It makes paying employees, dealing with taxes, and setting up health plans look as easy as ordering an Uber or playing Angry Birds. That’s Reeves’s mission — use technology to make these annoying workplace processes more human, and more fun.
Gusto’s Culture
Gusto’s mission may seem small, but Reeves connects it to a larger mindset — not accepting the way the world works. He wants his employees to care about the daily challenges and frustrations of running a small business, and to think critically about how to solve those challenges. He gave offers to his first 60 employees personally, and says interviews focused on value alignment, motivation, and skill set. In practice, this means candidates were asked why they chose to study a certain field or to change jobs when they did instead of focusing exclusively on their specific skills and accomplishments.
He also says that Gusto promotes diversity by example — by celebrating engineers, salespeople, and marketers who “buck the trends” of what it means to have their position. The Gusto team set an explicit goal of hiring one female engineer for every male engineer hired this year, and recently opened an office in Denver to expand beyond the San Francisco tech scene.
Gusto is open about its goals for diversity, and Reeves believes transparency helps Gusto treat employees like humans instead of means to an end. In order for employees to embrace the Gusto’s mission, they have to understand all aspects of the company. Every employee has equity, and every financial report and dashboard is visible to the entire company.
Reeves says that no one at Gusto is hired just for a specific job, an attitude that will become difficult as the company grows from 300 employees to 3,000. He no longer onboards each new member of his team — Gusto now has a training program that brings the 20–30 person cohorts they hire up to speed. Reeves acknowledges the challenges that come with growth, saying, “I always tell the company that more people equals more work getting done, it does not always equal better work getting done.” However, he hopes to keep Gusto’s mission fresh in part by using internal polling to get feedback from employees, and has faith that his company will adapt as it grows.
You have to admire Reeves’s commitment to his mission, and clearly it’s paid off so far — to the tune of a $1 billion valuation in a $50 million fundraising round this year.
