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Solving a Real Problem

Josh Reeves likes to solve problems. So much so that he decided to build a startup that tackles some of the biggest problems in the world of HR such as payroll management and benefits.

“We built a business to solve problems, not for our own sake,” said Josh, the CEO and co-founder of Gusto recently during a fireside chat with me at our latest Norwest Enterprise Cloud Leaders Forum.

Gusto began, like many ventures, by taking aim at a problem that the founders had struggled with personally. Josh and his cofounders had themselves faced difficulties running payroll at various startups.

Eventually, they began to wonder: How common is this problem? Quite common, actually. More than 40 percent of businesses in the U.S. still do payroll by hand—and one-third of them end up getting fined for filing incorrect payroll taxes each year.

Josh and his team realized this payroll issue could take decades to solve. And, being problem-solvers by nature, they were actually excited by this realization. At last, they told themselves, a worthy challenge.

“We had spent a good amount of time thinking about what is a big enough problem that we could dedicate decades to fixing,” Josh said.
Sean Jacobsohn and Josh Reeves

Getting the Idea Off the Ground and into the Cloud

Challenge accepted. That was step one. Step two was rolling out Gusto’s cloud-based payroll, benefits and workers’ comp solution for U.S. businesses. Since then, Gusto has attracted 40,000 small-business customers.

What Gusto has invented is an easy-to-use, inexpensive cloud solution that SMBs can use to manage payroll and benefits. Part of the reason SMBs
prefer Gusto is its approach to HR. It embraces the idea that companies should treat humans like, well, humans, not resources. When that happens, work becomes a source of energy rather than fatigue. It creates a virtuous cycle where life improves work and work improves life.

I’ve been involved in the enterprise software world for 17 years, as an operator, investor and board member at companies including Cornerstone OnDemand (CSOD), WageWorks (WAGE) and Engagio.

What I like about Josh’s approach to solving HR problems is that it emphasizes people. It goes beyond quantitative data metrics or saving money to the heart of people’s values and motives. This is a philosophy not often found at software companies, whether they address HR or some other business need.

Josh’s Leadership Philosophy

Here are some other super helpful grains of wisdom Josh shared with the audience:

• Don’t optimize for the short term.
• Celebrate what you don’t know.
• Alignment happens around values, motives and skillsets (also the company’s three pillars for hiring).
• Keeping the team focused revolves around mixing life and work. Life happens at work.
• There are a lot of ways to do something beyond the way I want to do it.
• Make the workplace comfortable. Gusto has had a “shoes off” policy since its founding days, based on the notion that people feel more at home with their shoes off.

Putting People First

As relaxed as Josh is, he also has relentless drive. Literally. He recently embarked on a cross-country 4,000-mile road trip in a Winnebago with several Gusto team members to meet and interview customers in 11 cities and 9 states. Josh’s inspiration for the trip was to reconnect with customers and learn what motivates entrepreneurs, business owners, and employees. The trip taught him a lot, raised new problems to solve, and reinvigorated his commitment to serving the customers and his employees. Perhaps a business road trip is something we should all try!


A video highlight reel from the event may be viewed below.

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