How Gusto Built a $9.5B Company with Co-founder Tomer London

Turner Novak (0:02)

Tomer, welcome to the show.

Tomer London (0:04)

Good to be here.

Turner Novak (0:05)

So, Gusto is about 15 years old. You're doing over a billion in revenue. You have over 500,000 customers.

I'm curious how the product has changed, how you build things inside of Gusto has changed over the past 15 years.

Tomer London (0:21)

Yeah. Well, okay. Well, there is a lot that has changed for sure, but I'll tell you what did not change. Because I think there is, in a way, that's kind of the secret sauce and the thing that really makes Gusto special, in my opinion. That's just the obsession with the customer and building empathy towards the small business.

Have a true understanding of how the day-to-day looks like, understanding their pain points, then going and building real solutions for them to just build a better business for them too. We talked about it earlier, right? Everyone has an entrepreneur inside of them. Some people go and build technology startups, some people go and build whatever, a baking business, some people go and build something else. And some folks have this dream in the back of their mind that one day they're going to go and do it. And what we're trying to do with Gusto is to make that dream come true, make it easier for folks to take that dream, take that idea, and then go and build a whole business behind it. So when we build products, we start with really focusing on the customer. Now, I think I heard that expression when we started the company. So we started the company in YC, my combinator, and I remember talking about like, hey, it's so important to focus on customers. Don't forget to focus on customers. I remember just thinking like, it sounds like such an obvious advice. Like, how can you not focus on the customer?

Turner Novak (1:40)

I also think it's hilarious. Like that's, it's become like a meme almost, but it's so simple and it's actually really hard.

Tomer London (1:46)

Exactly. So why is it hard though? Why is it hard? And I think when you work at a larger company, you kind of understand that because what happens is, you launch something or you build something could be like a pricing, you're changing your pricing of your product or you're developing a new feature or you're building a marketing. There's so much going on inside the company that just distracts you and takes your mind space every single day, that you just sometimes the kind of the prioritization, the time that you end up spending on the customer just goes smaller and smaller and smaller over time. It's kind of like, think about it as a small business, right? If you're like, let's say, you're selling lemonade in the street, right? And it's just you and you have your little lemonade stand, what do you do?

Turner Novak (2:28)

Well, you just talk to the customer all day, right?

Tomer London (2:31)

Exactly. But now you have a huge, 10 years later, look at you, you have 5,000 employees and you're still, your lemonade business now is this huge industry. It's huge.

You have multiple plants across multiple places in the country. Well, what do you spend all your time on? The operations, right? Like the machines and the financing and the people and all that stuff, you kind of forget about the customer. So I think that's one thing the startups are incredibly, have potential in is like, hey, focus on the customer, build great products for customer. And then the challenge is how you do it, not just when you're three people out of Y Combinator or when you're just starting, but how do you scale it when you get to like 2,000, 3,000 people?

Turner Novak (3:14)

Yeah. Well, it's almost like at that point, your customer is the co-worker that you're working with on your team or your boss or the vendor that you work with and whatever. Like it's not the end consumer of the product in a way. So you still kind of talk to the quote unquote customer, but it's not the customer in the same sense that we kind of think about when we describe this.

Tomer London (3:40)

Exactly. Yeah. You're not in the eliminate stand, selling to the customer and asking them, what do you think? Is it too cold or too sweet? You're inside the office talking with your co-workers about how do you make the next OKR meeting successful?

Turner Novak (3:54)

Yeah.

Have you been able to resist getting pulled into that world? How do you guys stay focused on just building things that the small businesses that run on Gusto actually need?