He's 32 and raised $136m in Funding But It's About More Than That with Josh Reeves EP 186:

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Prior to co-founding Gusto, Josh was the CEO and co-founder of Unwrap, a SaaS startup which was acquired in 2010, and he began his career as an early employee at Zazzle. Josh holds a BS and MS in electrical engineering from Stanford University, where he was a Mayfield Fellow and a recipient of the Terman Engineering Award. Josh, are you ready to take us to the top? I am indeed.

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It's great to be here. Yeah, I'm excited to have you here. This is going to be a lot of fun. Let's jump in first. Unwrap. What year did you found that in and what did that do? Yeah, Unwrap was a business that we started in 2008, right when Facebook platform launched. And it was a business that was helping, at that time, small businesses tap into this new ecosystem.

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And so we had an app publisher platform. Think of it as a way to help people that are non-technical build apps on Facebook. And that business was acquired in 2010, but the journey was very formative and helpful for me in understanding kind of how we wanted to build Gusto over the last few years. And how old were you when you created that business? Um, I was, let's see, 2008.

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So I was 25 years old when we started that. Nice. Very good. And what did, who did you sell to? Which company? Um, we sold to a company named Context Optional. They were acquired by Efficient Frontier and then they were acquired by Adobe. So a lot of big fish eating smaller fish in that journey.

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But, um, the main part of that journey was really more the lessons part, but, um, it was a really healthy two year chapter for me. That was one of those you have to assign, decide when you want to earn and when you want to learn. And that was a learn for you. Yeah, I describe it as although we were financially successful, when I think back in retrospect, it was a very reactive business.

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This people side of how you run your business, if you've seen the movie Office Space, you know what I'm talking about, in terms of a lot of companies that I think end up feeling very, very sterile. We wanted to build a product, a piece of software that actually treated a human being like a person, not like a human capital or a human resource. And so it's a monthly subscription.

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We have now over 25,000 small businesses spread across the country, over half a percent of all employers in America using the product, partnering with us. Are those free users? I know you have a trial. Are those paid customers? Oh, those are all paid customers. So we give folks a one or two month free trial when they start and over 98% convert from the free trial to being a paid customer. Wow.

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That's impressive. We're proud of it. Why is it so high, Josh? That's really high. It's very high because if you think about it, once someone gets set up, you know, that trust piece is so important. They're giving us their EIN, their bank number, their routing number, and then we're starting to process payroll debit from their account. So once we're doing that for them, they're very much

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Already committed to working with us. And so after the free trial expires, again, 98% plus continue using our products. And that's when we start earning our revenue. And on average, I'm curious how this kind of the team size of these 25,000, are they, is there typically, you know, are these two person teams? Are they five person teams? How many, what's the average number of seats per team?

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Yes, we don't disclose average, but I would say it's a broad swath. Right now, 1 to 100 employees is our sweet spot. So we have a lot of one-person, five-person companies, but we also have now companies 25, 50, 100 employees in size spread across the entire country. So every zip code, every... geography, every industry, bakeries, flower shops, cafes, churches, hotels, you name it.

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And I've always enjoyed chatting with him, reading what he's shared. Very much a mission-driven entrepreneur. Number three, is there a favorite online tool you have? Obviously, besides Gusto. One that we use quite often at Gusto is Slack. And it's a way to augment email. It's very much an analogous experience to using text messaging, but it's internal to the company.

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What we love most is the extensibility of it. So we can add in lots of different better, basically different actions, different reactions, different comments, functionality. It actually acts as a good kind of water cooler environment for the company when we're not all in the office together. Very cool. Yeah, they're connecting the two teams. Okay, number four. Josh, what's your situation?

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How old are you? Are you married, single? Do you have kids? Yeah, I just got married this year. Congratulations. Thank you. I'm 32 years old. I just got married earlier this year in New Zealand. My wife and I did a destination wedding. And we don't have kids yet, but give us a couple years. Very cool. So here's the big question. Yes or no, do you get eight hours of sleep every night?

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I do sleep great. I sleep great because, and I do get plenty of sleep because this is a long-term journey. There's definitely stages of my life where I was not getting enough sleep. And, you know, we have a lot of work to do. It's an intense experience, but I do have a saying, which is that, you know, heroism doesn't scale. Heroes become martyrs. Sustainable business means building out

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a company that has great teams that you trust, where everything is about scalability and thinking long-term. I love that. Last question, Josh. Take us back 12 years to your 20-year-old self. What would you tell him?