How Gusto built a $9.5 billion company by identifying a burning problem
Description
Tomer London is the co-founder and Chief Product Officer at Gusto, the payroll and people platform used by over 400,000 businesses. He grew up helping run his dad’s clothing store in Israel — an experience that sparked his mission to build better tools for small business owners. After moving to the US for a PhD at Stanford, he met his co-founders and started Gusto.
In today’s episode, we discuss:
- Reinventing payroll without any prior experience
- Why you should hire for humility, not just talent
- Gusto’s scrappy customer research: cold calling from a walk-in closet
- Why founders should embrace customer rejection
- Why “emotional urgency” matters more than polite feedback
- The weekly co-founder ritual that built trust
- How Gusto expanded from payroll to a multi-product platform
- Building products customers actually love
- And so much more
Referenced:
- ADP
- Eddie Kim
- Gusto
- Intuit
- Josh Reeves
- Paychex
- Steve Jobs’ “Secrets to Life” clip
- Steve Jobs’ Stanford Commencement Speech
- Wells Fargo
- Y Combinator
Where to find Tomer:
Where to find Brett:
Where to find First Round Capital:
Timestamps:
(00:00 ) How a childhood around SMBs shaped Tomer’s founder mindset
(03:24 ) The three things that led to the creation of Gusto
(07:17 ) Hiring for humility, not just talent
(09:28 ) The tug-of-war test for product-market fit
(11:58 ) Why founders should actively seek rejection
(15:34 ) Gusto’s scrappy customer research: cold calling from a walk-in closet
(17:45 ) Betting on SMBs – and ignoring investor advice
(20:44 ) “It’s not an MVP, it’s something that wows people”
(24:09 ) Serving SMBs vs. startups
(28:36 ) How to find the right co-founders
(31:09 ) The weekly co-founder ritual that built trust
(35:02 ) Reinventing payroll without any prior experience
(38:49 ) Gusto’s “start small” GTM playbook
(42:16 ) The big opportunity Gusto wishes they tackled sooner
(43:58 ) How switching costs became Gusto’s moat
(47:25 ) The two lucky breaks that gave Gusto an edge
(51:56 ) What Tomer learned about customers from his dad’s clothing store
United States
