How Gusto built a $9.5 billion company by identifying a burning problem
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Episode: How Gusto built a $9.5 billion company by identifying a burning problem
Pub date: 2025-07-01
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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:
Twitter/X
Where to find Brett:
Twitter/X
Where to find First Round Capital:
Website
First Round Review
Twitter/X
YouTube
This podcast on all platforms
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
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