# Inside Gusto's Founding Story | Co-Founder & CTO Eddie Kim NEW ECONOMIES · 2026-06-06 Eddie Kim, co-founder and CTO of Gusto, reveals how the company grew from a 2012 YC startup called ZenPayroll to $1B in annual revenue and 500,000 customers by cracking the small business market against investor skepticism. He credits the 15-year co-founder relationship with Josh Reeves and Tomer London to shared values and radical directness, arguing that packaging feedback undermines trust. Kim describes building Gusto Co-Founder, an AI agent that automates back-office tasks via chat, with a team of five in eight weeks using Claude Code, embodying how the distinction between engineer and designer disappears. He calls the blank canvas problem AI's main barrier to mainstream adoption and predicts solopreneurs will thrive as AI enables anyone to become a builder. ## Questions this episode answers ### What is Gusto Co-Founder and how does it help small businesses? Gusto Co-Founder is an AI agent that acts as a co-founder for small businesses, providing proactive insights and automating back-office tasks. Built in eight weeks by a team of five, it connects to external tools and communicates via chat, SMS or Slack. Eddie Kim says it solves the 'blank canvas problem' by embedding AI into Gusto's payroll and benefits data to deliver specific, actionable advice. [35:35](https://neweconomies.podhood.com/8849f9cd-6e5e-4464-bf3c-e9011782eecd?t=2135000) ### How do the Gusto co-founders give feedback to each other after working together for 15 years? According to Eddie Kim, the three co-founders practice radical directness, forgoing careful packaging because their deep trust means they can 'just say it how it is.' He likens it to talking with siblings, where feedback doesn't hurt. This candor developed over 15 years of recovering from disagreements, and he believes it's an underrated trait that more people appreciate than commonly thought. [25:29](https://neweconomies.podhood.com/8849f9cd-6e5e-4464-bf3c-e9011782eecd?t=1529000) ### Why did investors and industry veterans advise the Gusto founders against starting a payroll company? Eddie Kim recalls hiring being extremely hard because candidates in 2011–2012 wanted to work on mobile and social apps, not payroll. Investors also discouraged them; one, PayCycle founder Renee Lacerte, urged them, 'Do not get into that business,' saying it was too difficult. But small business owners themselves were so frustrated with existing solutions that they begged the founders to solve the problem. [2:24](https://neweconomies.podhood.com/8849f9cd-6e5e-4464-bf3c-e9011782eecd?t=144000) ## Key moments - **[0:00] Intro** - [0:17] Eddie Kim recounts investors saying the small business payroll market was too hard to succeed in. - [3:36] Eddie Kim shares how PayCycle founder Rene Lacerte warned him not to get into the payroll business. - **[5:40] YC Lessons** - [8:06] Eddie Kim ran the San Francisco Half Marathon on a bet and reconnected with co-founder Josh Reeves at the starting line. - **[9:30] Co-founder Bond** - [13:14] Eddie Kim reveals his mother, Josh's mother, and Tomer's mother went on vacation together to Spain. - **[15:00] Radical Feedback** - [15:56] Eddie Kim: 'I don't really want Josh to think about how to package feedback to me in a way that's going to not hurt my feelings.' - **[17:45] Early Days** - [18:04] Eddie Kim explains that the Gusto founders refused to pay themselves until they processed payroll accurately through their own system. - **[21:10] Gusto Co-founder** - [21:35] Gusto Co-Founder is an AI agent that provides proactive advice and insights to small businesses, describes Eddie Kim. - [24:21] Gusto Co-Founder features a button to switch from Gusto Classic to a completely different user experience, says Eddie Kim. - [25:49] Gusto Co-Founder connects to Gmail, Sheets, QuickBooks, and Notion to bring all business data together, details Eddie Kim. - [26:20] Eddie Kim envisions small business owners using Gusto Co-Founder purely through SMS and Slack, not a web browser. - [27:33] Eddie Kim: 'To me, this is as big as the launch of Gusto itself.' - [28:56] Eddie Kim pinpoints the ChatGPT launch in late 2022 as the moment that felt different and potentially disruptive. - **[33:05] Launch Features** - [34:04] Eddie Kim recounts how they invited customers to a room, activated Gusto Co-Founder, and silently observed them using it. - [35:36] Eddie Kim: 'It is the most fun I've had in many, many years at Gusto.' - [36:38] Eddie Kim's team of five went from zero code to full launch of Gusto Co-Founder in eight weeks. - **[38:15] Solo Entrepreneurs** - [38:34] Eddie Kim observes that the way his team built Gusto Co-Founder mirrors how future small businesses will operate, with the distinction between engineer and designer disappearing. - [40:22] Eddie Kim predicts a wave of solo entrepreneurs who can start businesses without needing a technical co-founder or design skills. - **[41:25] Avoid Distractions** - [41:56] Eddie Kim reveals his team uses only Claude Code for all development, avoiding tool distraction. - [43:16] Eddie Kim describes his team's 24/7 permanent Zoom call with no meetings, just hopping in and out to collaborate. - **[45:20] Relaunch Today** - [45:32] Eddie Kim argues that Gusto Co-Founder is impossible without 15 years of building deep payroll, benefits, and insurance capabilities. - **[47:00] Lightning Round** - [47:52] Q: Who is Eddie Kim's favorite AI company? A: Anthropic, for changing what it means to be a builder. - [49:47] Q: What market would Eddie Kim build in if not SMBs? A: Solopreneur tools, as he believes one-person businesses will become dominant. - [50:44] Eddie Kim predicts a solo founder will eventually build a unicorn, as inflation and AI make it only a matter of time. - [51:48] Eddie Kim: 'I sometimes say, speak your left-hand column. What's the thing you really want to share with that other person?' - [52:53] Eddie Kim spends his free time lifting weights and attending music festivals like Bottle Rock and Stagecoach. ## Speakers - **Ollie Forsyth** (host) - **Eddie Kim** (guest) ## Topics Software & SaaS, AI Coding ## Mentioned Anthropic (company), Bill.com (company), Gusto (company), Intuit (company), OpenAI (company), PayCycle (company), Tesla (company), Y Combinator (company), ChatGPT (product), Claude Code (product), Claude Cowork (product), Gmail (product), Gusto Co-Founder (product), Notion (product), OpenClaw (product), Optimus (product), QuickBooks (product), Sheets (product), Slack (product), ZenPayroll (product) ## Transcript ### Intro **Eddie Kim** [0:00] When we started the company, hiring was one of the hardest things because we just couldn't convince people to, like, want to work on payroll. Late 2011, early 2012. That was the era of, you know, mobile, social, local, fast-growing companies that were growing in engagement and page views. So we got a lot of, like, honestly, some discouraging comments from investors and folks that were saying, like, it was just too hard to be successful in that space. But I think we did it. I think we were one of the few companies out there that proved that if you can crack the small business market, you can be really, really successful. And hence, hence why we were able to hit, you know, 500,000 customers and more than a billion in revenue at the beginning of, part of this calendar year. **Ollie Forsyth** [0:47] Hey, Eddie, welcome to NEW ECONOMIES. This is actually a pretty special moment as you guys just reached $1 billion in annual revenue, the almost megacenter achievement that every company wishes to achieve. And the company you started 15 years ago with two others, and I'm sure there are so many, you know, achievements and lessons and sleepless nights you've learned along the way. So super excited to have you here. So welcome to the show. **Eddie Kim** [1:12] Thanks for having me. **Ollie Forsyth** [1:14] So this is a pretty fun time to be building. But I will be honest, when I hear founders going down the route of, "We want to build and help SMBs, we want to, you know, tackle this kind of, like, boring industry," I'm always a bit skeptical. And especially back in 2011, when the world was very different. When you guys launched and you were going to go down this route of helping small enterprises, were people just like, "Good luck, guys. This is not going to work"? **Eddie Kim** [1:44] Um, I would say it's a mix of both in different dimensions. Interestingly, hiring was really hard because back then, late 2011, early 2012, that was the era of, like, you know, mobile, social, local. There were all these, like, very fast-growing companies that were growing in engagement and page views. And your success was largely measured by how many eyeballs that you had, how many downloads you had on the App Store, and things like that. And so when we started the company, hiring was one of the hardest things because we just couldn't convince people to, like, want to work on payroll. So in that sense, it was really difficult. People were like, "I don't want to, I don't want to be a part of this." And, but then on the other hand, when we talked to a lot of founders, friends of ours, about, like, how they run their payroll, what do they think about it, they would just get so passionate because they were so frustrated with the current solutions. And they're like, "You have to do this. Like, it's a huge problem. Like, if you can solve this problem, it would be huge." Right? So on the one hand, like, we heard from a lot of folks that this was a pretty big problem. On the other hand, nobody wanted to solve this problem because, you know, it's, you see a lot of companies solving, like, quote-unquote, "boring problems" these days. But, like, 14 years ago, that was very, very rare to see and very unpopular. Like, nobody wanted to do it. And so, yeah, I would say it was a little bit of a tale of two cities in that sense. I remember one of the first days that we were talking to investors at the end of YC, we ran into this guy named Renee Lacerte. And Renee Lacerte had started this company called PayCycle, which was one of the very first web-based payroll companies out there. We were, there was actually, Gusto wasn't actually the first one. It was very successfully bought by Intuit and is now successfully, you know, the basis of Intuit's QuickBooks Online payroll product. Renee also currently founded and runs Bill.com. So we saw him from across the room. We ran up to him. This guy is like, "Oh my God, like, this guy, we need to talk to him about our idea." By that time, he had moved on from Intuit and I think was working on Bill.com. And we were like, "What do you think about this idea? We want to, like, solve payroll." And he just kind of, like, was like, "Do not get into that business. It's so difficult. It's so hard to, like, reach small businesses. It's just a slog." And you could just tell he looked kind of, like, beat up as soon as we, like, mentioned it to him. So we got a lot of, like, honestly, some discouraging comments from investors and folks that were saying, like, "It was just too hard to be successful in that space." But I think we did it. I think we were one of the few companies out there that proved that if you can crack the small business market, you can be really, really successful. And hence, hence why we were able to hit, you know, 500,000 customers and more than a billion in revenue at the beginning of part of this calendar year. **Ollie Forsyth** [4:54] When I think about, I mean, similar companies like you mentioned, you guys, HubSpot, I mean, there are not actually that many writers who kind of started in the same era. **Eddie Kim** [5:05] Yeah. Yeah, there's not that many. I think you can count it on your fingers,right? I think for me, it's like, I think of Gusto, Shopify, Intuit. **Ollie Forsyth** [5:12] Of course. **Eddie Kim** [5:13] eBay, like, a lot of small businesses there, but honestly, not much more after that. **Ollie Forsyth** [5:19] Yeah. And it's just hard, like you said, reaching small businesses, startups. A lot of them just don't make it as well. I think that's, you know, probably a fair assessment. But I think one of the really cool things about YC is, you know, every company needs support,right? And at some point, as we've seen a lot of YC companies go on to do great things. So if you can help with payroll and kind of get in early, that probably kind of helps. Let's talk about YC. ### YC Lessons **Ollie Forsyth** [5:42] Why did you go into YC? And yeah, how did you meet your co-founders as well? **Eddie Kim** [5:47] Yeah. So I'm actually a second-time founder through YC, both companies through YC. So I joined YC with my first company in 2008. YC looked really different then. It was just starting out. We actually had to move to Boston to be with our batchmates. That was during the summer YC sessions. And obviously, much smaller. Paul Graham was very intimately involved. And I had, even though that company was not successful, I had such an incredible experience. I knew the value that it brought that when we started working on Gusto, there was kind of, like, no question in my mind that we would apply and go and start the company through YC. By that time, I had already known Paul Graham and Jessica Livingston pretty well and just, you know, sent them a note. And they were like, "Yeah, come in and interview." And we all, all three of us co-founders interviewed with YC and, you know, we joined the winter 2012 YC batch. And that's how the company got started. As to the question of, like, how did I actually meet my co-founders, I first met Josh, who's our CEO, Josh Reeves. And I actually went to school together. We were both at Stanford, class of 2005. And we were both studying electrical engineering. So we were the same year, same major. That meant we, and it's not a big major at the time at Stanford. I think there were, like, 90 students in double E at the time. It might actually be the same. I don't think it's ever, like, a really huge major. So naturally, you have a lot of, like, classes and we had labs together. We just had a lot of, like, you know, intersections throughout school just because we were in the same major. And of course, we were friends throughout college as well. But, you know, like, a lot of, like, college friends after you graduate. And we both graduated. We both actually did our bachelor's and master's over five years there. We both left in 2006. We kind of, like, lost touch a little bit. You know, it's one of those things where you stay in touch on Facebook and say hi once in a while, but, like, you don't actually meet up in person. Until one day, I was actually, you know, sort of in between this startup and my first startup. I had a little bit more free time than I do now. And I ran, I just signed up on a whim, the San Francisco Half Marathon. And I'm not a runner. I just did it just because I actually did it because my friends bet me that I couldn't do it. And I was like, "I could do that. That's simple." Turns out it's not that simple. But anyways, at the starting line, I ran into Josh. Like, and it was one of those moments of, like, "Hey, like, it's so good to see you. Like, it's been a few years since we caught up. Let's do this race and then let's get coffee at this coffee shop called The Creamery, which no longer exists but also has its own, like, storied history with startup founders and investors. Someone should do, you should do a podcast about that someday, about The Creamery." But we met up there and we just kind of caught up. And that's kind of how we got to, like, rekindle our friendship and eventually sort of start this company together. And at the same time, Josh and Tomer, Tomer's the other co-founder, the three of us, so it's myself, Josh, and Tomer. Josh and Tomer were actually housemates down in Palo Alto. Tomer was here at Stanford for his PhD program. And Josh and Tomer sort of got to know each other through this, like, alumni networking program. They ended up becoming roommates. And so I met Tomer through Josh. And that's how the three of us linked up. ### Co-founder Bond **Ollie Forsyth** [9:32] That's so awesome. You know, I think there are so many great companies who start with co-founders, which I always think is a great thing, but not many of them last 15 years. What makes that relationship so tight-knit today? **Eddie Kim** [9:46] Yeah, it really is a rare thing. And, you know, to have all three co-founders in the company after almost 15 years. And it's not a thing that I take lightly or take for granted at all. In fact, like,right before coming and joining you on this conversation, Josh, Tomer, and I were hanging out together for about an hour and a half in the office. And we were just talking about, like, literally that thing and how appreciative we are of, like, our ability to just sort of have this really close relationship, but then also be building this company together, know each other so well that we can talk about our successes and our failures, give really, really direct feedback to each other, help each other grow, and still have this, like, deep love for each other. Like, that's such a rare thing that we have. And we were literally just talking about how incredible that is and how we shouldn't take it for granted. And I totally agree. Yeah, it's something really, really special. **Ollie Forsyth** [10:55] What do you think makes it so special? I think there are so many different characters, like, when I think about this, there are so many different characteristics. Yes, giving really good feedback. Is it you're just super aligned on the mission? Is it, you know, you have key calls with each other? I mean, there are just so many different elements you could, you know, have with this. **Eddie Kim** [11:18] I think, I think, I think first and foremost, like, we have, like, really similar and strong set of values as human beings. I think we, all of us, like, family is really important to us, doing theright thing, leaving, like, kind of a positive impact on the world, something we all share. And I don't know, just, like, wholesome good people. Like, it's hard to, like, it's weird for me to talk about myself in that way. But I think if I were an outsider and describe, like, what kind of person we are, like, I think, you know, wholesome, kind, just very grounded people. So we're not in it for the money or anything like that. We're not, like, you know, trying to cash out or anything like that. Like, all of us really care about the problem that we're solving and the mission that we're on. And I think first and foremost, that is probably what has kept us around for so long. Like, you know, I could have retired. I think all of us could have retired by now. But we still feel like there's so much to do and we all care about small businesses so much that, like, yeah, we're just 100%, like, passionate about this problem. And it's like, that is what is driving all of us, I think. And then beyond that, like, you know, you establish over 15 years, like, a strong bond with each other,right? And in fact, our families have started to, not started, but are, like, are really interconnected to each other as well,right? It's a little, it's, we don't like to use a family analogy because, like, it's, you know, it's not always a good thing to use in, like, a more of a company setting because a company is not a family. I want to be, like, super clear about that. But there is an element of, like, like, our moms, like, for example, they hang out with each other all the time. Like, there was this one time they went on vacation with the three moms to Spain and, like, just hung out for a week. My mom lives in LA. Sometimes she'll just fly up to see Josh's mom and she just calls me up and she's just like, "Hey, I'm visiting Josh's mom. I'm going to stay there at their house for a couple of nights. If you want to come say hi, like, let me know." And I'm like, "Okay, cool. That's awesome." Like, I love it when people hang out, like, through a connection that I made that, but I'm now no longer, like, needed to make that connection continue to thrive. It's like more of a self-sustaining relationship now,right? And so we have, like, that kind of, like, interconnectedness with each other, which, like, you know, we're, you know, we're just bonded with each other. Like, it's hard to, like, undo that,right? And I think that's really important because that kind of solidifies this very long-term mindset. And, like, if there are challenges in the short term, there are difficulties, we get into an argument or, you know, disagreement. We have so many other things that, like, kind of just, like, keep us centered and just with this mindset of, like, like, we get through this together, you know? Like, there's no other option,right? And yeah, so I think that's part of what makes it so special. **Ollie Forsyth** [14:42] I think it's very rare. Like, I haven't heard that many companies which have gone through this immense cycle of challenges, opportunities, but also just for so long. And, you know, the founders are still here, you know, 15-ish, like, years later. I think, you know, one of the hardest parts maybe of being in this relationship is getting through those challenging days when actually you really do disagree with each other or have a massive argument. And, you know, I've met many startups over the years and just the founding relationship doesn't work. ### Radical Feedback **Ollie Forsyth** [15:14] Most importantly, when you do disagree with each other, how do you give that feedback in theright way where it doesn't, you know, come off in the wrong way with your, you know, co-founders? **Eddie Kim** [15:29] I think the answer to that in my mind is, to a certain extent, is you don't, you don't, like, you don't have to. Like, you obviously have to be respectful of each other, but, like, at the end of the day, when you know someone so well, like, I don't really want Josh to think about, like, how to package feedback to me in a way that it's going to, like, not hurt my feelings or, you know, I'm going to get offended. It's going to hurt our relationship,right? If he's thinking about that, like, it in some ways tells me that, like, we're not tight enough yet,right? So we have kind of, like, one of those relationships, all three of us have those relationships where we just say it how it is to each other,right? A little bit how you, you know, talk and share something with your brothers or sisters, you know? Like, it doesn't hurt. You know, it's like, "Oh, you're my brother. Like, you're my sister." Like, it's like, like, that's what makes it so special,right? And that doesn't happen on day one,right? It happens after 15 years, I think. Like, you have to, like, kind of have many, many years of building trust, having disagreements, and knowing that you always recovering from them and knowing that, like, "Okay, this happened the, like, hundredth time. We're going through this. Like, I'm pretty sure the hundred and first time, like, we're going to be fine and we're going to have this disagreement. We're going to get out of it. We're going to figure out a solution and we'll be fine again,right?" Like, it does take a lot of trust building over many, many years. And so, yeah, I guess the thing that I'll say to, like, maybe startups, founders who have co-founders that are going through difficult times, obviously, you know, it's a lot like marriage. Like, there are situations where you should break up, honestly,right? But a lot of times, and I think more often than not, like, you put in the work to get through it. Like, you put your ego aside and what comes out at the end, like, you get rewarded with a much deeper, tighter relationship and the ability to get through these things much better and the company benefits as a result,right? Because all that means this ultimately translates to, you know, better leadership for the company. ### Early Days **Ollie Forsyth** [17:48] Totally. And, you know, it's not just the co-founders, it's also the team,right? So you guys get going in 2011. What does that first 12 months actually look like? You launch your product. I mean, it's not actually also the, you don't start with payroll,right? Or did you? **Eddie Kim** [18:04] We started with payroll, yeah. Actually, the company originally was called ZenPayroll. So, you know, very on the nose of what we do. The very first thing we did was we said to ourselves, "We're not going to pay ourselves until we can do so using our own payroll system." And so, like, basically, you know, it's very much, like, heads down mode. We need to get this thing working. We needed to calculate payroll accurately. We needed to submit filings, deposits to the government agencies, federal and state. We needed to move money through the banking system because, like, we're not going to just handwrite checks to ourselves. We're going to, like, do it through ACH. And so we had to get all that working. And then and only then did we say, "Okay, if we can pay ourselves legally and accurately using our own system, we deserve to, like, take a little bit of money so we could, like, you know, pay our rent and things like that." And so that was really kind of the first, I would say, two months of the company. And then after that, like, it was a lot of, like, taking this to other companies to say, "Hey, can we run your payroll for you? Like, let us take care of this for you." You know, through YC, that was our first, like, YC was perfect for us because, like, every YC company, as soon as they finish YC, they need to start to pay themselves, or most of them do. And so they all need payroll for the very first time. And so a lot of our first set of companies were really just our friends in our batch who we asked, and, you know, you can't say no because it's like you're in this batch together. You're supporting each other. And so that's kind of how we started. But, you know, after that, like, you know, people were just blown away by the product that we had built, how much better it was than what was out there. And then so from then on, it was just like, it just spread like wildfire. Those founders would know other founders that are starting companies and they would say, "Yeah, you should just use Gusto for your payroll." And, you know, it's kind of a boring answer, but, like, that's kind of how we've grown over the past 14 years. And that got us from our first customer to our 500,000th customer and more than a billion dollars in trailing revenue. **Ollie Forsyth** [20:27] Wow. And today is still like that, kind of all word of mouth mostly? **Eddie Kim** [20:31] Yeah. Yeah. That is mostly how we grow. We have some channel stuff, but I'd say all of it is just kind of a minority of, you know, our main, like, sort of word of mouth channel. Now, obviously, we've added, we do way more than just payroll. We do benefits, HR, compliance. We do tax credits, retirement, like 401(k), business insurance. And so the majority of our revenue is no longer payroll specifically,right? It is still a big part of our revenue, but, like, we obviously have a much broader offering for the entire small business back office. ### Gusto Co-founder **Ollie Forsyth** [21:12] You know, times have moved on so much just in the last 15 years, even just in the last 12, 24 months,right? And when I think about actually the insights you guys are setting on, it actually presents such a big opportunity. Is there some form of AI agents you can create to actually help, you know, founders grow and give them better insights into how they can build amazing companies? **Eddie Kim** [21:35] Yeah. I mean, just imagine, like, first of all, like, you can just only imagine, like, how much data we have on, like, you know, first of all, what's going on in the world on, like, trends that we're seeing in the small business world. And then also, like, what are things that we can correlate to, you know, a small business making it past year five because many don't make it past year five. And so we have this, like, sort of treasure trove of data that we've collected over the past 14, 15 years that we can leverage to help our business, our customers, not just be compliant with all the, like, laws that apply to them in, you know, in running their business, but actually to be more successful,right? To sort of, we can do a lot to give them proactive advice and insights into their business. Not just, like, insights based on questions that they're asking, but, like, proactive insights on things that they may not be asking. And that was really the kind of premise of Gusto Co-Founder, which is really, like, you should think about this thing almost as your co-founder,right? This is the person that just like Josh, Tomer, and I have this deep trust with each other and we're completely bought in in making this company successful. Like, we want to take all that knowledge that we've accumulated across 500,000 customers and more because we have 500,000 current customers,right? So the actual, like, cumulative number of customers that we've seen through the 14 years is actually far higher. Actually, I'm curious to get what that number is. Probably north of a million easily. But, like, taking all that and making it accessible to every customer on Gusto so that they can not only, like, get insights and, you know, make sure that and save as much time as possible in running their business, but also, like, sort of be proactively guided on how better to run their business,right? And so we really want to have people think about this as their partner. And that's why, like, you know, we thought deeply about this name. And it is a bold name to call it co-founder,right? But we thought that that honestly represented the ambition, the kind of vision we had for this product. **Ollie Forsyth** [23:59] This is awesome. So this is an agent tool that's inside the product? **Eddie Kim** [24:06] Yeah, you can call it inside the product, but, like, if you, like, basically, like, imagine you have, like, what I call now Gusto Classic. So it is, the Gusto Classic is, like, what everybody knows Gusto as,right? It's the web app. You log in, you have, like, forms, you have workflows, throw in your payroll, benefits. But on the bottomright, if you get this enabled on your account, there's a button that says switch to co-founder,right? So it's not, like, really in the product in the traditional sense of, like, there's a link here that, like, you click and, like, there's a new, like, page. It is literally, like, a new experience,right? And in fact, we originally toyed with the idea. The original idea was to actually package it up as a desktop application. Just to make it very clear, this is completely different. You download this desktop application. It's still a web view. That's kind of how a lot of these desktop apps work, like Slack, where it's really this, like, web powered. But that's kind of how different this thing is. We ultimately are not launching with that, but it is, like, a completely different user experience,right? And front and center are, like, kind of insights, automations that we can suggest to you or you can write on your own. And then just like a chat,right? And you connect it to all of your external tools because we understand that to run your business and get the best insights and advice and automate all the things that you do in the business, it's not, you're not doing it all through Gusto. Like, I think we have to, like, be humble enough to recognize that. You have stuff in Gmail, you have stuff in Sheets, you have stuff in QuickBooks, you have stuff in Notion. And so you have, like, kind of the, you know, the MCP connectors that you can connect into it to bring all that information together with Gusto information at the center. And then you have this thing called channels, which is, like, how do you communicate with this thing? Yes, you can open up the login and chat with it through the web interface, but you chat with this thing also through SMS. You chat with this thing through Slack. And so, like, I think in my ideal user of this, they're not using a web browser at all. They use a web browser to sort of set it up, to set up the channels, to set up the NCP connections. And then they just kind of, like, never log in again and they just, like, text this thing or Slack this thing, just like you would do a co-founder,right? And that's how you get the work done. That's how you get your Monday morning briefing that we send to you every Monday of all the things that you should know about your business and advice that we have. And that's how you get notified of all your automations and if they ran or not. Ideally, this thing just runs your business for you,right? All the things that you don't want to be dealing with, as well as gives you a lot of advice on things that you should be thinking about. **Ollie Forsyth** [27:18] This is a pretty bold move. **Eddie Kim** [27:22] Yeah. **Ollie Forsyth** [27:22] Just launched it so quickly,right? **Eddie Kim** [27:25] It's hard to understate. Like, to me, this is, like, I think this is as big as the, like, launch of Gusto itself. **Ollie Forsyth** [27:33] Yeah. I was going to say. **Eddie Kim** [27:35] Yeah. And honestly, it's, like, kind of the accumulation of a lot of what's happened in the AI world over the past few months. A lot of stuff that I've been playing around. A lot of what I described, probably the components for a tech listener are not that unfamiliar,right? It's a lot of a, it's basically, like, kind of a mashup of OpenClaw, Claude Cowork, but with all the Gusto data and capabilities. Like, if OpenClaw, Claude Cowork, and Gusto were to have a baby together, like, that would be Gusto Co-Founder. **Ollie Forsyth** [28:14] So cool. **Eddie Kim** [28:14] And that's kind of, like, the vision of this. **Ollie Forsyth** [28:17] When, so, okay, so much has changed just in AI in the last, like, 1,400 days. Was there a moment in the last 1,400 days when you as a team realized we have to make some changes to stay relevant? **Eddie Kim** [28:38] I think, I don't know if there was, like, an actual moment, but I think it was a slow, like, okay, this AI thing. I remember, like, when ChatGPT came out in, what was it, like, October 2023? **Ollie Forsyth** [28:56] '22. **Eddie Kim** [28:57] '22. Yeah. And I was like, okay, this is different. Like, but then it was like, if I'm honest, like, maybe six months of, like, let's, like, keep tabs on this thing. And then after that, it was like, okay, this is, like, going to be very disruptive to the world. And if we don't, like, understand this and, like, know how to harness this, that is a huge difference in the trajectory of the company,right? And I really do liken it to, like, sort of the shift from, like, desktop software to cloud software,right? And there are many companies that didn't make it past that,right? And there are many companies that thrive through it. And ultimately, the world's a better place. Businesses, like, it's so much easier to start a business now because of this. And so I think we kind of realized that, like, this is something that could be potentially very, very big for small businesses. And we need to sort of put this in the power of small businesses. And when I looked at things like OpenClaw, Claude Cowork, I saw a ton of potential there. But, like, you know, if anyone who has used OpenClaw, like, tried to set it up, it is only for the highly technical and only for the, like, bleeding edge of AI native, like, folks out there. And there's, like, maybe 0.1% of the world that know how to, like, harness this thing and, like, use it to, like, transform how they run their families, how they run their business,right? And the other 99.9%, like, it's just, it's like too conceptual, it's too dangerous, it's not user-friendly enough. There's many reasons why the vast majority of people out there in small businesses, like, have no idea how to use this thing, but the potential is there. And so that was, like, when I started using these things and I was like, okay, this is pretty awesome. Like, OpenClaw, like, me talking to it on Telegram, sticking out my phone, like, it sounds simple, but, like, when you experience it yourself, it's, like, such a mind-blowing experience. We need to figure out a way to take all this goodness and make it much more accessible to small businesses,right? And yeah, I mean, I think a lot of it, like, kind of boils down to sort of this, like, what I call the blank canvas problem. Like, you install OpenClaw, you install, like, Claude Cowork, or, you know, it's like, okay, now what do I do,right? It's like, cool, I have, you have all this capabilities, like, all this power of AI. But it's like, there's no use case that comes attached to it. There's no, like, problem that it says, I'll solve this problem for you,right? It's just like, okay, like, I could do anything for you. And, like, how do you respond to that? You know, like, most people don't know how to respond to that,right? But just imagine, like, if it comes, if you take that from, like, a more Gusto angle of, like, you do your payroll, we take care of your benefits, business insurance, like, we have so many things that you have to deal with. Now, let's take the power of all these things that have come out that the tech world knows about and let's, like, kind of actually give customers a grounded, like, real-world, like, use case on, like, how this thing can apply to you to solve your actual problems that you're having today. That's, like, that, I think, I think this is how we bring all this stuff that I know is coming into the mainstream, get it not just in the hands of, like, tech bros who know how to use all this stuff, but, like, in the hands of the mainstream small businesses that are out there. **Ollie Forsyth** [32:46] And, you know, one thing I'm actually being pretty surprised about is, you know, a lot of these SMBs, especially maybe the slightly newer ones, they're actually pretty well equipped with all of these new AI tools. But then there's a whole bunch of, you know, SMBs who are run by family legacy businesses, which maybe just don't quite understand about this,right? ### Launch Features **Eddie Kim** [33:07] Yeah. **Ollie Forsyth** [33:07] How does one, one has 500,000 customers, they have this massive black canvas. How do you actually go around launching this? Do you have to go around, is it done in batches every 5, 10,000 customers? **Eddie Kim** [33:22] Yeah. I mean, yeah, we're definitely not rolling it out to every single one of our customers because, like, there's still so much that we have to learn. So, like, the very first thing we did was, obviously, we just kind of, like, many of us have connections to small businesses or are familiar with small business ourselves. So we kind of, like, just, we built this thing, we dogfooded it ourselves. Then we have at Gusto, like, something called the Gusto Small Business Council. I forget the exact name, but it's basically like a customer council that we have where we actually invited a bunch of them to New York City about a month ago. And they were the first ones outside of Gusto to see this product. We got them in a room. They all sat in a room together and we turned it on for their account, their Gusto customers. And we just, like, kind of, like, said, hey, here's this thing, like, use it. We didn't want to guide them too much. We just had them use it. And then we just, like, it's kind of funny, like, a bunch of engineers and designers, like, just kind of, like, observing them and taking notes on, like, how they're using it. We learned so much from doing that. And then just kind of, like, launch it to more and more, like, cohorts of people. And we just kind of see what things, how do people perceive this, like, how are they using it? How do we need to, like, guide them a little bit better in how we think this should be used and how should they guide us in telling us, like, no, this is actually what I like about it. And so how do we need to change how we think about this? And so, yeah, I mean, I want to get this ramp to all of our customers as soon as possible, but I also want to, you know, kind of make sure that we deliver an incredible product experience to as many customers as possible. And so that also just means, you know, ramping it up and learning and iterating very, very quickly. **Ollie Forsyth** [35:17] Yeah. Like we said, Gusto 2.0, which is super exciting, but I also imagine it's a little daunting, no? I mean, you're almost, like, going back to day one again. I mean, when you and your co-founders were sitting in the room and hacking this thing out, praying it's going to work. **Eddie Kim** [35:36] Honestly, I have to say it is the most fun I've had in many, many years at Gusto. And the folks that I'm working with on this. So I basically, the funny story is, like, I basically in the last, like, eight weeks have, like, gone back into individual contributor mode. I'm probably one of the most, like, prolific contributors to our code baseright now through this co-founder that we've been building. And it wasn't, like, you know, it started out as, like, kind of, like, a small project that I had the idea for. And, like, I just kind of roped in a few of our best engineers and a designer into this. And it was five of us. It was myself, three other engineers, and one designer just working on this thing. We went from zero code, just an idea, to a full launch, everything that I just talked about, in about eight weeks. And it wasn't easy. Like, we've been working, like, nights and weekends, burning the midnight oil. Like, I've never worked so hard in my life. But, like, I have never also been as energized as I have been as long as I can remember. It's been so much fun. And if I were to go talk to these folks, these engineers and designer that's working on this, like, I think they would say the same thing. Like, they're not, like, working this hard because, like, I asked them to. In fact, I didn't even ask them to. I just showed them, like, I just showed them, like, hey, what do you think about this thing? And they're like, and I wanted to work on it with them and it just kind of happened. So, like, I never got to the point where I had to sit them down and be like, hey, I really want, I really, really need to, like, make this happen. They just did it on their own. And it's like, I don't know, it's been daunting. It's like kind of, like, starting all over again, but at the same time, like, this excitement of, like, you know, you're building something completely new. And I think I had the same excitement when we were starting the company as well,right? Like, you have so much, so much potential and promise and you're so excited about the future. **Ollie Forsyth** [37:47] It's changing also, just like the way AI is changing. It's changing so much. It's changing every day. Just in the last, what, four years nearly since November '22 when ChatGPT came out, it feels like every six months there's a new shift. It was like generative AI, then AI agents, now it's kind of like vibe coding, now maybe going down, like, verticalized AI. Like, this is just all just changing so much. And I think it's going to be really interesting. **Eddie Kim** [38:13] And the way we work. **Ollie Forsyth** [38:14] Yeah, and the way we work,right? It was actually going to be, like, my next question just around actually how you do work. But the speed of innovation is amazing. Now anyone can build, like, building these lovable products. People can get paid pretty much instantly, hopefully, by using platforms like you guys. ### Solo Entrepreneurs **Ollie Forsyth** [38:30] And it's just probably the best time to be building, no matter who you are. **Eddie Kim** [38:34] Yeah, 100%. I think the way, also, I think the way that this team of five built Gusto Co-Founder is sort of a microcosm or, like, a little bit of insight of how businesses and small businesses will get built in the future. It was like, it was not like the traditional build. It was not like, here's the roadmap, here's the designs, here's the Figma. It was like four engineers and a designer just becoming builders. Like, the distinction between an engineer and the designers on this team was very, very little. The designer is coding and submitting and landing pull requests as much as any other engineer. And the engineer is designing stuff. And they'll, of course, have their specialties, but, like, there is this, like, sense of, like, I'm the E, you're the P, you're the D, like, that completely went away. We didn't write any documentation. We didn't do any sprint planning. I think still to this day, we don't have any talks that I can produce. And people, and I know that people, like, as we started to launch this thing, people have asked me, like, do you have any documentation that you can share about this? I'm like, I'm sorry, I don't. Like, what's your question, you know? And, like, it's, like, such a completely different way of working. It's, like, kind of jarring to some people who are not okay with that. But it was like, you can move so much faster, you can build so much better. And it's, like, so much more fun when everybody's actually, like, hands-on building together and you have, like, different specialties that you can bring to the mix, but it's not like you're not defined by that,right? And so, like, if I think about, like, the future of small businesses, like, I think it looks something a little bit like that,right? Like, you don't, there's a lot of, like, reasons people don't start a business. Like, oh, I'm good at this, but I'm not good at that. I need to find a technical co-founder. I need to, like, I don't have a good sense of design or, like, I'm just really bad at business or talking to investors. Like, all that stuff, like, kind of doesn't. **Ollie Forsyth** [40:40] Gone. **Eddie Kim** [40:40] It's gone. Yeah. And everybody's just, I think if you just have this builder mindset, like, I'm a builder and I have a spike in certain things, but, like, everything else that I'm not spiking in has suddenly kind of, like, I've leveled up on this because I have AI to lean on. Like, that is, like, I think going to spur, like, a whole wave of small businesses getting started,right? People are suddenly going to be like, wait, I can actually start a pretty successful business on my own and I could do all the things that are needed to run a small business. And that's pretty cool. I think the future world is going to be amazing when, like, people just have this option available to them. **Ollie Forsyth** [41:25] Yeah. And, you know, when you see these 18, 19-year-olds going through YC and they're getting to a million dollars in annual revenue, like, in six months, it is crazy. But I think there are two sides there. One is also there are so much distractions around us. ### Avoid Distractions **Ollie Forsyth** [41:39] I'd love to get your thoughts around this, around, okay, like, there's this new tool, oh, we can do this, we can do that. Oh, there's this new technology, let's try this. How do you avoid all of this distraction and actually just focus on building and building the best possible product? **Eddie Kim** [41:56] I mean, I could answer that, I guess, like, more in the context of how we built Gusto Co-Founder. Like, honestly, it's pretty simple. Like, we just use Claude Code for everything and, you know, we don't really need any much anything else. Like, just Claude Code. It's writing code. You're not just vibe coding it. You're actually, like, you know, making sure that there's no slop there. Like, really thorough, disciplined code reviews. But that's pretty much it. I don't know if you're building something, like, technical, if you need anything much beyond that,right? And so, yeah, I think with, especially these days, there's, like, a lot of potential to get distracted by, like, oh, there's this new thing that, like, you know, that thing. And, like, maybe this can accelerate. But, like, you know, I think just sticking, to me, like, maybe I'm, maybe, like, my mindset is just, like, it's simpler to have a smaller set of tools that work really well for a broad set of things and get really, really good at using it. **Ollie Forsyth** [43:03] Yeah. Super exciting. You know, one of the questions I love to ask on the show is, if I was to come and join you as your chief of staff for a day, what does that day look like? **Eddie Kim** [43:16] I think you would see me, okay, so you would see me. **Ollie Forsyth** [43:19] Maybe I wouldn't see you. Maybe I wouldn't see you, you'd just be building. **Eddie Kim** [43:24] Yeah. I think you'd see me, like, talking to Claude Code, like, multiple Claude Code instances. I'd kind of, like, just join, we have, like, this team of five. Like, basically, the way we work is, like, there's this perma Zoom. So we don't have any meetings. We don't have any, like, you know, retros or sprint plannings or anything like that. There's just one forever, like, 24/7 Zoom that's going. And people, when they're working, they just hop in it. Sometimes they hop out, but, like, you just kind of hop in there. So you'll see me hop in and out of there, see what's going on. Like, I'll talk about, you know, oh, yeah, I wrote this thing. Like, what do you think about this? Could you take a look at the pull request I submitted? But then in the background, like, I have, like, a Claude Code going of, like, the next three things that I'm working on. Two of them are, like, planning how to build it. One is actually building itright now. In fact, I had one start to build somethingright before I hopped on this call. And it's been the hardest thing in the world to not look at itright now. And, yeah, and that's, I think that's pretty much what you'll see. I mean, I wish it was more interesting than that, but, like, when you're in this, like, building mode, you just maximally spend as much time, like, using AI to build code and reviewing it and landing it. And that's it. Like, that's all I want to be spending my time doing because I think that's the way we, like, move quickly and build something amazing. I actively, like, kind of these days, like, say no to any unnecessary meetings or documents I'm asked to read. Like, I just kind of have this ruthless prioritization of, like, what's the most important thingright now? And I think the most important thingright now for most companies, and especially in the age of AI, is maximizing builders. ### Relaunch Today **Ollie Forsyth** [45:22] It's so exciting. And I also just think if Gusto was to relaunch today from scratch, how would that look like? **Eddie Kim** [45:32] I think what we built is, in some ways, not possible if had we not gone through this journey because we had to build over the past 15 years, like, lots and lots of different capabilities,right? Huge depth in payroll, which is not an easy domain,right? And the same can be said for health insurance, being a small group health insurance broker, 401(k) as a fiduciary. There's all these complicated things that, like, we had to, like, sort of go through and has made the business to what it is today and has made the life of small business owners much, much easier. But the Gusto Co-Founder layer, like, it would not be possible without leveraging all of those deep capabilities that we've built over the 15 years,right? Otherwise, it would be no different than OpenClaw or Claude Code,right? It would just, like, have the power of AI and that would be it,right? And so, like, I think honestly, we'd have to go through the same exact thing. Like, we'd have to go through building all these capabilities diligently and earning the trust of customers and then build this co-founder thing as sort of the, like, sort of, you know, final, like, cherry on top, I guess. **Ollie Forsyth** [46:59] Super exciting. This is not launched yet, but by the time this episode launches, it would have launchedright. ### Lightning Round **Eddie Kim** [47:04] Yeah, yeah. We launch on June 2nd. **Ollie Forsyth** [47:08] Amazing. Well, we're super excited. It feels like, you know, Gusto 2.0 is coming and hopefully it's going to empower, you know, millions of, you know, SMBs in the near future. **Eddie Kim** [47:19] Thanks. Yeah, I'm really excited as well. **Ollie Forsyth** [47:21] Amazing. Well, before you go, we always love to do a quick rapid-fire questions. So just. **Eddie Kim** [47:26] Oh, man. I didn't look at these, actually. **Ollie Forsyth** [47:28] Yeah? Well, let's see, you know. We may have added in a few more, but just quick, you know, quick questions, rapid-fire answers. And the purpose of this is we just love to get a better understanding of what's actually happening inside Eddie's brain. So who is your favorite AI companyright now, obviously, apart from the projects you're working on? **Eddie Kim** [47:52] Anthropic. I think they just, like, really built something incredible that has changed the profession of software development and, you know, much more beyond that, to just kind of, like, change what it means to be a builder. **Ollie Forsyth** [48:08] I don't know what you think, but I actually thought a year ago, ChatGPT, OpenAI was just going to completely own this market. Now my perception is actually maybe Anthropic is going to win. **Eddie Kim** [48:19] I think that too. **Ollie Forsyth** [48:20] Yeah. Early days, but super exciting. Which founder do you most admire? **Eddie Kim** [48:29] Oh, I know this will probably be controversial, but Elon Musk. I think he is a huge visionary. He's deeply technical. And I think those two things are a really potent combination to change the world. Now, put aside all the other things about him, the politics, all that stuff. But, like, if I just look at that dimension of Elon Musk, like, I think it's a really powerful, like, yeah, I think he's an incredible founder. **Ollie Forsyth** [49:08] Which one of his companies are you most interested and excited about, if you have one? **Eddie Kim** [49:17] Tesla, probably, with Optimus. **Ollie Forsyth** [49:21] Yeah. SpaceX IPO in the next few weeks. That's going to be really interesting. **Eddie Kim** [49:25] That's going to be really exciting too, yeah. **Ollie Forsyth** [49:27] If he cracks space, I mean, it's almost, it feels like whoever gets to space first and can, like, just own the land, that's going to open so many new opportunities, hopefully. **Eddie Kim** [49:36] Yeah, yeah. **Ollie Forsyth** [49:39] Which market category, if you were building in tech, would you be building in if it wasn't for SMBs? Where is the biggest opportunity, do you think? **Eddie Kim** [49:47] Outside of SMBs? **Ollie Forsyth** [49:49] Yeah. **Eddie Kim** [49:52] Hmm. I don't know if you would still count this, but solopreneurs. Like, I think there's going to be a lot of, like, just one-person businesses because I don't think you need, necessarily will need to hire employees to run most businesses. I think they can be run as a solo person. **Ollie Forsyth** [50:17] This is going to be really interesting to see. You know, there's been this whole trend and, you know, theme around can there be a billion-dollar unicorn founder as a solo, you know, type of company. I think that's going to be quite hard. It's happening. There is one founder that just raised 30, 40 million dollars. I think that's going to be quite hard. I think you get to maybe 100 million dollars, but getting to unicorn might be quite hard. **Eddie Kim** [50:44] Yeah. Well, you know, there'll be some inflation and things like that. So, like, it's only a matter of time, I think. **Ollie Forsyth** [50:49] I think so as well. You know, with so many awesome CEOs and co-founders, I feel there's always a few underrated traits that they have in them, characteristics that maybe other people don't know about. What is the one co-founder trait and characteristic that some people might not know about you? **Eddie Kim** [51:13] I think just being very direct, saying it how it is. I think there's been a lot of emphasis on, like, how do you package things theright way? How do you deliver feedback well? And I think those are really, really important. But I think something, like, that has gotten underrated as a result of that is just sort of the, like, ability to sort of, what I sometimes say, speak your left-hand column,right? What's the thing that you're kind of, like, saying to yourself that, like, you want to, you really want to share with that other person? And I think that's kind of an underrated quality. And I think more people appreciate that than we give credit for. Like, a lot of it, a lot of attention has been given to how do you softly deliver something so that it lands well? Like, feedback is measured by the listener, not the giver,right? And I think while true, I think there is, like, kind of an underratedness to directness. **Ollie Forsyth** [52:22] I love that. You know, I heard a quote earlier this year and they said, "Ollie is okay to be selfish." And similar to you now, I'm like, no meetings, no calls, just, you know, be completely 100% focused as this is the greatest time to be building. And I think it's okay to be selfish and I think you have to. **Eddie Kim** [52:40] Yeah. I agree. **Ollie Forsyth** [52:42] How do you spend your time outside of, you know, building when you're not, you know, vibe coding or talking to Claude all day? How do you spend your time outside work? **Eddie Kim** [52:53] I like to stay healthy, so I like to, like, lift weights. And then these days I've been going to a lot of, like, concerts and music festivals. So I just got back from Bottle Rock in Napa Valley this weekend. I was at a festival called Stage Coach down in Palm Springs, which is a country music festival. I'm a big lover of country music, believe it or not. And, yeah, so I've been doing a lot of music and gym time, I guess. **Ollie Forsyth** [53:20] I love that. What are you lifting these days? **Eddie Kim** [53:24] Like, what do you mean? Like. **Ollie Forsyth** [53:25] Weight-wise. **Eddie Kim** [53:27] Oh. So I hit my goal of being able to do a two-plate bench, so 225 bench, as well as 225 two-plate squats. So I've been kind of really focusing on strength recently. And that's been a lot of fun because, like, you do feel this, like, sense of progression,right? It's like, I've actually, like, I can measurably show that I have actually changed my human ability. And that's just, like, kind of a cool thing. The engineer in me, like, just makes that really fun. **Ollie Forsyth** [54:03] I love that. Lift weights, vibe codes, talk to Claude all day, and Gusto 2.0 is coming. **Eddie Kim** [54:11] Yeah. Living the dream. **Ollie Forsyth** [54:14] Amazing. Well, hey, Eddie, thanks so much for coming on the show. This has been super awesome. We can't wait for Gusto 2.0 and hopefully it's going to go and help, you know, hundreds of thousands of new small businesses. **Eddie Kim** [54:24] Thanks, Ollie. Really excited. And thanks for having me. --- This library is powered by PodHood (https://podhood.com), the podcast website platform.