118: Josh Reeves, Co-Founder and CEO of Gusto, The 3-Part Alignment Framework Every Founder Needs Before Their Next Hire [ENCORE]

In a startup, I sometimes say you have to be running the train while building the train while laying the tracks while trying to make the train go faster. And so that's building to me. And some people get really excited about that and others go, wow, that sounds really terrible. That's a pretty good self-selection right there. Is someone excited to be in that environment or do they want more of that stability around them?

Right. Like the right person thinks that's exciting. The wrong person thinks that's chaos.

Yeah. It's not good or bad people, right? It's just simply figuring out and sussing out, is someone going eyes wide open into what is needed.

Welcome back to From Startup to Grownup. Today I have an amazing guest, Josh Reeves from Gusto. Gusto is an easy-to-use payroll benefits and software platform that allows you to hire, pay, and manage your team all in one place. Gusto was valued about $10 billion and they have 2,500 employees, but as Josh told me in this discussion, they're just getting started. Josh is super smart and a really deep thinker, so we had a fantastic conversation touching on so many relevant things to you. We talked about his origin story. His parents were both teachers and his mom was an immigrant from Bolivia and what he learned from them that's helped him create a successful startup. We also got into the details of how Josh and his team have scaled the process to make sure the people that Gusto hires are in alignment with Gusto's values and have an aligned motivation with what the company is doing. It's a very interesting framework and you're gonna be really interested in that. We also got into the details of how Josh and the team have scaled the hiring process to make sure the people that Gusto hires are in alignment with Gusto's values and have an aligned motivation with their purpose. We also discussed how Josh thinks about the readiness capabilities of his executives and the symptoms that let him know that they're in over their heads and also the signals that let 'em know that they're used to a larger stage company. We talked about the specific frameworks that Josh uses in hiring, managing his team, prioritizing, and the top tool that he uses to lead through difficult times. This is an incredibly rich conversation, super useful, and you're gonna love it. So please enjoy this amazing conversation with Josh Reeves, co-founder and CEO of Gusto. Josh, welcome to the show. I'm so excited to have you.

Great to be here. Thanks for the invite, Alisa Cohn.

I'm thrilled. And I guess I want to start with, tell us about Gusto. What was the founding insight?

Well, Gusto, we are a company that serves over 300,000 businesses. We offer the people platform. And yeah, excited to get into all the early days, all the stories, all the learnings. So we started the company about 12 years ago in 2011, me and two co-founders, and we wanted to tackle a real pain point, something that was very broken, painful, and try to spend, hopefully, decades making it better. And so our insight was really around the experience of having been prior entrepreneurs with startups, with small businesses, and having gone through the process of building a team, setting up payroll, setting up state tax registrations, setting up health insurance, and finding it more complicated than we felt it needed to be. And also our experience with, with family having run and worked at small businesses and really, really believing that there was an opportunity to make that experience so much easier and simpler.

I love it. And so, you know, I, what I really love about that is the idea of like, you know, sort of scratching your own itch. Like you as entrepreneurs realized, hey, this is a real thing and a real, real pain point. So did you fall in love with like payments or payroll or benefits, or it was more like you fell in love with the, with the problem and solving it, making it easier?

I would say on behalf of the three of us, Tomer, Eddie, and myself, I actually think one of the shared traits we have had then and have now is it's fun to fix stuff. It's fun to problem solve. It's fun to take something that's broken and think about how to make it better, how to improve it. You know, all three of us studied engineering back in school, which is a lot focused on that type of thinking, right? You know, problem solving, solutions, brainstorming, and then building something, right? Not just thinking about it, but actually doing something about it. And so when we came together in 2011, we, you know, it wasn't just our pain point, frankly. We did some research at that point in time. You had, you know, over 40% of companies in the US trying to do payroll by hand, getting fined, penalized, making mistakes. And so we really wanted to tackle a mainstream pain point. So even though we had felt a connection to it, like when we saw how many people were in pain or frustrated, that's actually what got us most excited. Plus obviously some ideas of how we can make it better. And then we didn't really get excited until we started actually making it better.

Yep, totally. And then seeing the impact, that's beautiful. Now, just going back to your founding story, your parents were teachers, is that right?

Yeah, so I was born and raised San Francisco Bay Area. My mom is an immigrant from Bolivia. My dad moved out from Pittsburgh, Pennsylvania. They're both the first in the family to go to college and they both became teachers. My dad was a high school teacher in SFUSD, uh, San Francisco Unified Public School District, and my mom was an elementary school language teacher. And so I would say one of the things that definitely impacted me from that experience was having a value that we have at Gusto, called service mindset, you know, really instilled quite early on this joy, this excitement to be of service to others, to help others. When you have parents that are teachers, you get exposure to that mindset very early on.

Yeah, totally. And were they also in any way entrepreneurial? How did you kind of see around you the idea of being able to be entrepreneurial?

Yes, I think of entrepreneurship as more of a mindset. I think some people associate it more with tech and startups. You know, my mom came here again when she was 18, didn't have anything, didn't speak any English, and found a way to put herself through university, found a way to get a job, found a way to create a community, found a way to learn the language, got a scholarship. You know, all of that to me is entrepreneurial. This idea of turning nothing into something is entrepreneurship. So definitely felt inspired by, by their example. Neither, to be clear, had any connection, exposure whatsoever to the tech startup ecosystem. Actually, I was the one that got really interested in math and science. Both are much more on the humanities side of the spectrum, but I really love their example of through hard work and also pushing yourself to think about what's possible, you can change the world around you.

Yeah, I love what you just said about that. It's sort of a mindset. You know, people can be entrepreneurial in their lives, in the way they do things, in the way they think about things, and definitely immigrants are very entrepreneurial because they've got to sort of find their way inside of a new culture.

Yeah. And, you know, even my dad came out from Pennsylvania. He did move 3,000 miles west, you know, didn't have any relationships here either. And he had to find a way to go create a new life for himself as well. And so, yeah, really grateful to both my parents' example, both on the service mindset dimension, also on that kind of mindset of, you know, see the world around you, think about what you disagree with, and then go do something about it. And that action, that call to action, is something that I've tried to put into my life, definitely in the startup journey, which requires lots of building.

Yeah, for sure. You know, on the topic of service, one thing that you've said is that you feel you're at the bottom of the org chart. You're the CEO, obviously the co-founder and CEO, and yet you're at the bottom of the org chart. Is that literally true? And kind of explain how you think about that.

These days, org charts are all in software, and so there's no real simple visual. I think if we went back in the past, it did have a paper-based org chart. I would put myself at the bottom, but really the mindset here we're trying to communicate isn't just about me and my role. It's about what is leadership and what is management in a company. And at Gusto, we actually have a concept called people empowerment. So this idea is that, yes, it's important for a leader to be very intentional, to delegate when needed, to be directive when needed. But if we've done our hiring process correctly, we're actually bringing in people to the team, we call ourselves Gusties, who already care about this problem, already have an aligned value system, and already have a relevant skill to help us move forward. And they want to keep growing and developing in the company. That's really, really valuable. But if that's already in place when we hire someone, then the role of empowering them, right, is, is not just managing. It's actually about how to unblock and enable them to go reach their potential. That's a mindset that we have across all aspects of leadership in the company, including how I approach my role.

Yeah, I love that so much. You know, I just recently wrote a piece and did a little video about how do you motivate your people. And the key is to find and hire self-motivated people. If you have the right people on the bus, they're gonna be able to flourish. And I will ask you, when you talk about— when you think about hiring your Gustys, how do you make sure that they have that right mindset, those values, they love the problem? How do you really assess that and just interviews which don't really give you real-life examples?

First off, we have a framework here which I'll share, kind of a mental model for hiring. And then I think there are tactical ways to, beyond interviews, assess someone's talent. It can be when I'm hiring, you know, doing things like reference checks or doing case studies. But there's always a leap of faith on both sides there when it comes to joining a business. For the candidate, it's, hey, is it going to be as it's promised in terms of the way we actually work? And for the company, it's, is this candidate going to actually contribute what we expect and want? Because neither party at that point has actually worked together. But I think that's a healthy dimension to the relationship, and it always should have that backdrop to it. So in terms of that mental model that I alluded to, we really think about hiring as a search for alignment. It's not a company convincing someone to join or a candidate convincing the company to hire them. It's kind of both stakeholders figuring out, can we do something amazing together? And then we assess that alignment on 3 dimensions. I alluded to this earlier, but values alignment, motivation alignment, and skill alignment. And so values alignment is really more of a conversation around, How someone approaches partnership, collaboration, what they get energy from, what drains them. And we have very opinionated set of values at Gusto that we're assessing if someone aligns with. If they don't align with our values, they're not a bad person at all. It just means they'll be more successful, more effective in a different organization where that values alignment is there. And so we do think a lot about making sure that that alignment's there upfront. And I really believe people don't have personal professional values. They just have the values that are, are what guide them. And, and again, we want to make sure that that alignment is there from the beginning. Motivation alignment, we also alluded to earlier, I, I think is such a critical one because it ties to interest, passion for our problem space, right? We're trying to go make healthcare more accessible and affordable. We're trying to make it easier for entrepreneurs to start new businesses. We're trying to improve that employer-employee connection and relationship. Those are parts of the mission we have at Gusto. Not everyone in the world cares about those topics, and that's okay. But we do want to find folks that do align with those topics. And we look for examples, not just them saying it, but demonstrated interest in those areas based on their prior experiences. And then skillset alignment is the one I think most folks gravitate towards. And that's where, depending on the role, you do, you know, a variety of things to go assess. Does this person have the skill needed to be effective when they join the organization? But I spend more time, frankly, on that values motivation alignment bucket because the skillset alignment piece is the one that tends to get too much, um, Attention.

Yeah, it certainly gets one that gets most attention sort of commonly. If we go back to first motivation and then, sorry, first values and then motivation alignment. If you were trying to hire me, what's an example of a question or two that you would ask me to look at values alignment? Because I'm a good person, but how do you know if we have the same values? Like, what would, what are some questions to ask and what are some good answers and some bad answers?

Yeah, so the main mindset I have to that conversation is it's really a conversation, like get to know each other better opportunity. And I usually just ask why a lot. So we'll typically be talking about a prior chapter, a prior project, an activity, either a crisis or a big, big successful milestone. And I want to understand what the person did, what role they played, when it was working or not working, why. And I keep asking why is kind of the way I think about it. And I'm trying to get people from answering what they think I want to hear into just sharing. And when you get someone in an interview in just sharing mode, just answering, talking, you know, opening up on their thinking, their thought process, it gives you a chance to then assess, is that alignment of values there or not? So it really depends on the topic and the person. To be clear, I don't have a single templated type of question, but I'm mostly diving into prior experiences and then really trying to get into that second, third order backdrop of what drove them to take that specific action.

Totally. And it sounds like what you're looking for in terms of values is someone— well, actually, I'm gonna ask you kind of what, what kinds of things are you looking for? So let's say that you asked me about my prior experiences and I'll just, I'm just making this up. I, I explained to you that I went off to Israel for a gap year between high school and college. And the reason I did that is because I was so connected to my youth group and it was something that was an important part of our capstone program as part of like being part of the community of my youth group. And that's why I took that year off. Just throwing that out there. How do you think about, how would you, where would you go from there in terms of like thinking through my values?

Yeah, so I'll just put two of ours on the table and then we can go through both. But we have a value around service mindset I mentioned earlier. We also have a value around curiosity, asking why, really wanting to, you know, we think of it as ownership mentality, like understand the reason behind something so they can improve it and make it better. So for your experience, I would be really curious, you know, you alluded to why you went. There was something there around this community you were a part of. And I'm curious, like, you know, why were you interested in connecting with these folks? And in particular, you know, were you the one that was benefiting? Did others benefit? Tell me more about who else was a part of it. Tell me more about, you know, whether you wanted to do it solo or whether you thought it was important to be doing it as a part of a broader service trip. That would give me more of a signal on, you know, do you have this authentic passion for helping others, frankly?

Yes, that makes sense. I probably would answer that we spent 3 of our months in this sort of town helping, volunteering in schools and whatnot. And so that might again kind of signal to you the part of me which is more service-oriented.

And I would probably in that then dive into the why piece. Were you a driver of that or a passenger? So was that just what was assigned to you? Did you say that's what you wanted to do when you were there? What made you enjoy it? And I can tell if someone's describing that, I would imagine if you're describing the actual details of that experience, do you get really excited and kind of remember how meaningful that was to you? Or is it kind of more of like this thing you did because it was just a part of the program?

I love that you just said that because actually it was this thing I did because it was part of the program. Okay, it really was. And so I think that what happens very often is that people stop at like, oh, okay, I can check that service box off. And I think I'm service-oriented, but I don't think that was a good example of that because to your point, it was just kind of part of what we did. There. And I could wax poetic about it, but what you're saying is, as you really continue to kind of go down the path and unpeel this, you would sort of see like, oh, okay, that's nothing wrong with that, but that wasn't something that she initiated.

And it's a conversation. Again, there's limited time, limited topics to cover. It's more of just trying to get a sense of what gives this person energy, how they tick, why they tick that way, what's intentional, unintentional. And again, we have a set of values at Gusto. Someone aligns, amazing. If not, they're probably still a wonderful person. It just means that they might be more successful in another organization because these values drive how we collaborate. They drive a large part of how we make decisions. They drive a large part of how we connect as teammates. And so they're, they're pretty important for us to be aligned around.

I really love that, Josh. And, and I'm going to now ask you some, maybe to talk a little bit more about motivation and how you can really get at someone's motivation? Because I think that these things are easy to say, but the listeners who are listening to this podcast really need to know the tactics and tools to really get it. And hiring is one of the hardest things people do. And it's actually really— it's hard to even articulate, like, what do you mean motivation? So I'd love to hear how you approach sort of the same thing, like if you were hiring me, how you would begin to think about my own internal motivation and how it lines up to Gusto's.

Yeah, so we would, on more of a motivation alignment topic, dive into like, what are some of the proudest moments you've had in your work life or just life in general? And, you know, what are the topics that you gravitate to? You know, why are you interested in joining Gusto really gets to the heart of it. And, you know, we try to assess if someone's saying again what they think we want to hear versus what they authentically care about and are excited about. And And then again, same exercise. It's kind of asking why, getting into the second and third order reasons behind the answer. You know, if someone starts going off about, you know, healthcare and, you know, maybe because of a family member, maybe because of a parent, maybe because of an experience in the healthcare system, you know, and then they talk about an internship they did, or they talk about a volunteer project they had, or they talk about a school project they did. Just again, if someone says they've been passionate about healthcare and, you know, very easy, quick follow-up is, well, tell me what you've done in healthcare. And so it's just trying to get into not just the words piece of it, but the actions piece of it. It doesn't have to have been that they worked in healthcare. It could be that they have a favorite article, a favorite book they read, something that demonstrates intrinsic interest and motivation to have that, that thing be a part of what they want to go impact, make better, and improve in the world.

Yeah, I love that. The idea that to really go into like a treasure hunt of like clues of someone's background and kind of how, how that all lines up into you use your word, aligns with what Gusto is looking for. How do you scale that, Josh? Because you're no longer the one who interviews folks, obvious. How many folks do you have at Gusto now?

Tim, today is getting close to around 2,500.

2,500 people. So I'm very sure that you are not hiring all of them. So how— like, I love what you're talking about, and it's very tight and very elegant. How have you scaled it over time to make sure that that's really being enacted consistently inside of Gusto?

Yeah, so it's had multiple phases, as you can imagine, you know, up through about, I would say, the first 50, 60 people at Gusto. I did interview every person and I did focus on a lot of the topics that we've been discussing because I was just one member of a hiring panel and there was other folks in the panel focusing on things like skillset alignment if I wasn't the hiring manager. And then we went through a phase where I knew a few Gusties who had very similar types of interviews they did. And it was probably around 150 people that we had to formalize a program. So today we have an interview with Gusto that people get trained on. It's called the Values and Motivation Alignment interview. So the VMA, and it's a program. We have people that commit to spending a certain number of hours a week in the company doing this interview. Every candidate at Gusto has a VMA interview as a part of their hiring panel experience. You know, we, as a part of the training process, do shadowing, reverse shadowing. There's a set of content, like a couple-hour workshop. And so it's now a program that's scaled up. We, when we look at, you know, I'm still a part of hiring committee. We look at all the different offers going out every week, all the candidates that we're contemplating making an offer to rather. It's one of the first scorecards I look at is the VMA scorecard. So definitely not involved in every interview at this point, but the program does scale as long as there's intentionality around the training and then bringing in new folks that can kind of carry that same interview format forward.

Yeah, that's great. There's no other way to scale it than to make sure that other people are kind of enabled in some way. So I appreciate that you have groups of people who are really taking it very seriously and being the stewards of the process.

Yeah.

You know, Josh, you've been the CEO for 12 years. 12 years. Can you believe it? You've been the CEO for 12 years. And yet your job on day one was wildly different from your job today. Can you talk about what your job was like in the early days and how that's changed and what your job is like now?

Yeah, I'm going to try to break it down into a couple of phases because 12 years, to your point, there's been many, many changes over that time period. But I would say the earliest phase is probably the one most people can relate to when you're a 3-person team, 5-person team, everyone every day is doing the very heart of building, which to me, if you're a software company, is you have people writing code, you have people obviously, you know, if they're creating a website, writing marketing copy, you have, you know, if you're interacting with a customer in a sales call, you're doing a sales conversation. If they're calling into customer support, you're, you're doing a customer support call. You know, this is the act of building, right? Is all these things that impact customer directly or indirectly and make your product better and are there to serve the customer. So I was in that context, I was initially doing some software engineering and then also in the kind of subsequent phase, really focused a lot on our go-to-market and more of our kind of company operations side of things. So building out our marketing team, building out our sales team, hiring the first folks to those teams, thinking through which roles, responsibilities, what projects. And on the company operations side, really trying to enable as much of the company as possible to be focused on customer-facing building work. So I was working with our accountants, I was working with our lawyers, I was working with our, you know, all this stuff kind of behind the scenes, our environment team, how we order food for folks in the office, our office spaces, everything that kind of is kind of the, what we call foundation, but kind of the building blocks to enable folks to go to do their work to help customers. Now, next phase from there on all of those, you can imagine I had a saying then, which I'll repeat now, you know, my job was to fire myself from as many of those jobs as possible. That's just purely scaling, right? Like I couldn't be the person that was doing almost all the sales calls or ordering almost all the lunches and also setting up a lot of the marketing copy. That just doesn't work when you have more and more work to get done. And so it was about hiring folks to those teams. And then as we got even bigger, it was making sure we have leaders of those specific teams. And so at that point, once we had leaders of these different areas, my job shifted a lot more into really two buckets, I would say, maybe three buckets. It was number one, making sure we have the right leaders. So team building and giving them feedback, coaching, and if necessary, making changes, but really trying to help those leaders be successful. Number two was we have to make sure we're all going towards a common direction. So there's something in bigger companies we would call planning. But early on, it's really just prioritization. Like, what are we doing now versus what are we doing later? And that gets more and more sophisticated as you get larger. So today we have these 3-year planning arcs. We have our fiscal year planning. We have our QBR and MBR process to do quarterly and monthly business reviews. We have OKRs, lots of acronyms to kind of navigate how to set goals. All the letters. Yeah, that stuff all becomes useful when you're a bit larger, but really it's just prioritization. And then the third thing I would add there is I'm still connecting to all Gusties, you know, how we evolve our all-hands, how we evolve our onboarding. And then, you know, frankly, that phase has continued just with more people, right? I'm still focused on leaders and helping them be successful. I'm still focused on planning and prioritization, what we're doing now versus later. And I'm still focused, you know, for sure on how we connect as a broader community, how we equip Gusties to be informed so they can go execute and do their work to the best of their ability. So that's just a quick walkthrough of some of the evolution.

Yeah, that's a lot. Was there a moment that you thought, or could you look back and you sort of think, here I fired myself too early, or here I fired myself too late?

Well, I think I was definitely not perfect in hiring. So, a lot of that is kind of a question of when we bring in leaders for various roles, are they the right person? Are they effective? Are we setting them up for success? But also, are they going to— be able to deliver and do what's needed for the business. And there can be great talent that joins, we had this happen, amazing talent that we hired when the company was too small for that talent. And so then that's a misalignment of the phase of the company relative to the person's skillset and ability to have impact. So in those moments, often I'm jumping in, right? I'm kind of the person when we are making a change in leadership that will jump in if it's someone that I'm more directly empowering or managing to go do that job for a time. But I know that purely from a time prioritization lens, the only way I'm going to be able to keep scaling the company and myself is to make sure that we bring in the right leader for that specific area. So, definitely not perfect scorecard by any stretch, but always trying to learn and improve every step of the way.

Yeah, course correction is what it's all about, right? Josh, I'm so intrigued by what you just said. So, you— this is normal, you bring in a leader And I, you know, it's easy to miss the mark, right? In terms of like the leader was maybe good for the moment, but we passed the moment so quickly, they were not then scaling, even though we brought them in from the outside thinking they were gonna be the right leader. Or as you mentioned, we brought in a leader who was maybe too big almost for that role, which is again, normal for startups. Can you talk about some of the symptoms of one or both of those, that you brought in a leader who was good for the moment but was rapidly outscaled and/or brought in a leader who was too big and too big company-focused for the stage that you were at, and so it wasn't a success? What are the symptoms of that?

Yeah, so I'll get into the symptoms. Maybe one thing I'll add right before is just especially for the folks that are listening that are founders or aspiring founders, just, I really wanna make it clear, this work of of making sure that we have the right talent and we're helping them be successful. That's the majority of the CEO job. And I really find it incredible to have a chance to do it, like being able to, you know, witness and see someone when they've joined or have been here for a long time, you know, tackle a project and be successful and grow and learn and stretch themselves and overcome some blocks or barriers and see the customer benefit, but also see that person grow as a part of it is an amazing, amazing thing to be a part of. It's one of the reasons why I love the role I'm in, frankly. And I think, you know, if that resonates with the listeners, you know, that's actually, again, something that can't be forced or be faked. It has to be authentically something that excites someone because, again, you know, when you're scaling as a founder or leader, a big, big part of the job is, is all about team. So to your question now on symptoms, you know, this is, this is why it's complicated, right? Part of me always wants to believe in the potential of every person I'm working with because I truly believe that people have growth mindset. We hire folks at Gusto who have growth mindset. So it's not a surprise to me. Like they want to improve, they're looking for feedback, they're excited to, you know, grow and gain new skill. And that's, that's definitely what we want in people that join our team. Now, The complicating factor is people can be growing, but sometimes the company and the role is growing faster than they're growing. And that's where I think, to the heart of your question, symptoms can develop. And often a symptom can be someone is working really, really hard and trying their very, very best, and they're feeling overwhelmed. And, you know, they're running out of time in the day. And the answer is not creating more time in the day. The answer is changing their thinking, their thought process. They might have the capacity to do that on their own, or it might be amazing to bring in someone who's seen some of what they're navigating, can join and do that work for this next phase and be a mentor, a guide, help this person grow and learn. And so much of our journey in life is about learning and growing from those around us. And so, you know, for me, that's come a lot from our board, our advisors, our angel investors. But I think that concept exists, you know, for all people in the org, and not even just leaders, right? As an individual in a role, you know, how does one think about growing, gaining new skill? And frankly, both pitfalls can happen. One is getting complacent and kind of it becoming very static and easy, and the job is very simple. Well, that's perhaps good in some ways, but also going to lead to lack of growth. On the flip side, if the job is getting harder and harder and harder, and maybe that growth isn't happening fast enough, well, The solution isn't perhaps exiting from the company. It might be just changing one's role and getting a different set of responsibilities.

Yeah, I totally get that. And I think that we underestimate how much complacency can be the enemy of sort of a good work culture. Have you ever, though, brought in somebody who you thought was going to be the right fit, came from a big company or they had scaled before or whatever, and for whatever reason, because your company wasn't quite at that level, they were not inclined to get their hands dirty, or maybe they were thinking that other people were going to be more differently staffed, or their scope was going to be different. Have you ever sort of seen that? And what are the symptoms of that?

Yeah, I would sometimes describe, I think there's two dynamics there. One is just the phase that they're joining. And so, some people might be more familiar with different infrastructure being available. And if they've never had to build that infrastructure, let's say you're running or someone's running a marketing program, and they kind of are used to having all the instrumentation ready because they've been in a huge company where that stuff was done years ago, then there might be a gap in their skill set. Now, they could hire someone to help them fill that gap, or the gap might be so large that actually they don't know where to start, in which case, you know, that's a good example of someone perhaps being a better fit, you know, maybe a few years later down the line when more of that infrastructure is in place. I think a separate topic though I care a lot about if you're focusing here on hiring from bigger organizations, is you can still find folks that are builders, right? I think there's a difference between being a builder and being a manager. Builders need to also be great at leading people, to be clear, but there is a pitfall for some leaders in bigger companies to be really good at managing the system that's there today. And in a startup, you know, I sometimes say you have to be, you know, running the train while building the train while laying the tracks while trying to make the train go faster. And so, that's building to me. And some people get really excited about that and others go, wow, that sounds really terrible. That's a pretty good self-selection right there. Is someone excited to be in that environment or do they want more of that stability around them?

Right. Like the right person thinks that's exciting. The wrong person thinks that's chaos.

Yeah. And neither is that good or bad people, right? It's just simply figuring out and sussing out is someone going eyes wide open into what is needed. Because, you know, for a startup, and to me, again, startup is more of a high-growth company. You can be high-growth at bigger and bigger scale if you're in a huge market. You know, the change is not happening for the sake of it, right? Like, there's change needed. The train needs to be rebuilt and the tracks need to be kept getting laid because the world is changing. We're adding more customers, we're expanding our product mix. So there's a lot of change happening due to those things. And the whole goal is to be able to maintain quality, obviously deliver a great experience while expanding your customer segments, while expanding your product mix, so you can help your customers with more pain points, so you can fix more things in their life. But all of that drives change. And so again, someone's gonna either be excited about that and go, wow, that's building, this is a chance to go make my mark and, and see how my work matters and how I can change something from just the status quo or incremental improvement. And others, I think, really want to be in large established systems where you, you know, tweak something and it might lead to a billion of revenue or something. And that's good too. That's not a bad thing, but it's just a different mindset and a different way of thinking and working, frankly.

Yeah, totally. And different, right? Different environments work for, for those two different kinds of people. I think that's lovely. You know, Josh, as we talk, I feel like your own values get revealed here in terms of like your excitement about people growing and you're, you know, really wanting people to flourish in the workplace. I'm just curious, how has your leadership style changed as the company has grown, and have you had to change and adapt to the reality of your startup? What, what experience have you had around your leadership style and the change there?

I would say probably the definition of my leadership style is something we should ask the team more than myself. I would say I aspire to, and I, this hasn't changed, you know, think of myself as, as there to enable and, and empower, like that concept of people empowerment we introduced when we were, you know, less than 50 people. So it's been a guiding principle from the early days, the idea that, that I'm here to be of service to the team and, you know, try to, through hiring very intentionally based on values, motivation, and skill alignment, you know, help Gusties achieve their potential. We had that mindset from when we hired the first employee. Now, again, we haven't been perfect in implementing it. We're always trying to learn and improve how we implement it. But the mindset hasn't really changed too much. I mean, what has changed is obviously what I spend time on day to day. What's changed a lot is my knowledge and learning around specific areas. One of my favorite ways to learn, by the way, is when you do hiring. You know, when you're opening a role for a specific area, it's a chance to meet a bunch of incredible leaders in that area and understand what's going to work best for your company. And so, you know, early on, I obviously had not ever hired someone to lead finance, never hired someone to lead marketing, never hired someone to lead, you know, all the different different functions in a company. 12 years in now, I've, I've done a bunch of that hiring, so there's a lot more knowledge and pattern matching there. But I would say that the core philosophy has stayed the same.

Yeah. Well, that's really great. Have you ever experienced, like, because you're so empowering and you want to give people a chance that maybe you wait too long to take action with someone? Do you shy away from, at times, difficult conversations, or would you say, no, that's part of empowering people?

Yeah, I'm a big fan of the Situational Leadership Framework, if you're familiar with it.

I love that. I love it. I think, yeah, you want to just really describe it. Can you describe it for our listeners?

Yeah, so it's just a, it's a kind of a concept around what I like about it is it highlights that even for the same person, if you're leading someone or you're empowering them in the moment, different types of leadership are required. And to highlight two of the dimensions, it's a kind of four different dimensions to the box. Or the model. But, you know, at one extreme, you could be very much in delegating mode, because that's what's needed. The person has lots of confidence, has relevant skill, and has a pretty good sense of where they want to go. And that's a wonderful moment to say, go run with it. Right. But at the other end of the quadrant, there you have directive. And like, there's times when someone isn't sure where they want to go, they're not sure why, you know, something needs to be done in a certain way, or they might lack confidence in and not have the right knowledge set to go get there. And it's actually the job of a leader to be very prescriptive, to kind of help really set a very clear roadmap and make it very, very obvious, hey, this is the thing we need to do, here's why, let's go do it, let's not debate it. And so, I think, you know, that's not to me incompatible with this idea of empowerment. You know, frankly, if someone is lost and, you know, not comfortable and not performing, you know, letting them just stay that way is the opposite of leadership, frankly. And it's the opposite of being kind to them, you know, giving very clear, direct feedback and helping them be more successful through learning a new skill or understanding what was working or not working. I think it is actually being kind.

Yeah, I completely agree with you. Why doesn't everybody feel that way? Why is this so hard for people?

Oh, I think, you know, there's many styles. I don't think I think it is a complicated topic. I think humans, one of the beauties and one of the most amazing parts of society, the world, and definitely building a company is the chance to work with people that all have such different opinions and preferences and backgrounds and experiences. So I don't know, I think when I get asked sometimes like, is leading or building teams getting easier? Is hiring getting easier? You know, I say that if it was ever easy, we probably were doing it wrong. Like, it's the thing that should be taking time and effort and lots of hard work because it matters.

Yeah, I think it's so true. And things are constantly changing. So it should, you know, like the pandemic and remote work and hybrid work, and that's just like the external circumstances. And then people are also very different. I guess I'm just curious, have you ever had like a moment of truth as a leader inside of the company that, you know, sort of helped? Made you either like really get caught short or like thinking about how am I going to handle the situation? And how did that moment, if there was one for, again, for you or for the company, kind of change your philosophy or change who you were as a leader?

I mean, there's been many moments just to highlight my journey and growth as a leader. I've had many things that I need to get better at and improve at. I'll highlight a few in a sec. And my method of mostly working on that has been getting feedback from my teammates, going through our own performance evaluation process, working with a coach. So I think everyone, especially the CEO, is on a journey of growth and development. And if I believe in it, I obviously need to role model it and make sure that I'm living into those values as well. But yeah, one thing that comes to mind, you know, early on, especially when I think we're growing into kind of a couple hundred people, just the simple concept of, is my intent aligning with my impact? Right? You know, I can have good intent with something, could be an all-hands, could be how I share a topic, could be how I give feedback to someone on what I think is working, not working, is it aligning with the impact I wanted to have? And we were shifting from when I knew people really well to now having, frankly, less direct relationships with folks because of the sheer law of large numbers. And so there was some misalignment happening where I thought, hey, I was giving feedback and I was highlighting something that I thought could be any better or something that I was being critical of, and the person was feeling very demoralized afterwards. And I went, well, that's not my goal. My goal is not to demoralize someone. It's actually to give them feedback so we can get better, so they can improve, and I want them to be successful. And it led to some tweaks in, you know, how I frame, make sure that there's always a backdrop of, I'm here to help you be successful. And I thought people knew that, or it was a given, but I started saying it more often versus just feeling like it was undertoned in my comments. And that went a long way. I still wanted to give direct feedback. I still wanted to obviously highlight what was working and not working in my opinion, but making sure that, again, it led to a, hey, let's go tackle and make it better type outcome versus, hey, a demoralizing moment. That was one example that I can point to from the earlier days in the company.

Yeah, I think that's so important. Have you heard of this, of the concept of like the feedback sandwich?

Yeah, heard that concept. It's like an example of how you deliver feedback. And there's obviously many, many pitfalls. And to avoid them.

Yeah, I think so. The reason I mentioned that is because I have personally had a flip-flop on the feedback sandwich for a few times. Like, the idea is that you say— this is the classic feedback sandwich, and this is the manipulative way to do it— say something good, then tell them what you really want to tell them, and then you say something good to make them feel better. And like, when you do it as a tool, or like in that sort of manipulative way, then people are always waiting for the other shoe to drop. It's like, okay, tell me what you really wanna tell me. It feels like disingenuous. But what you are talking about, I think, is much more sophisticated, which is you've gotta frame up the feedback as in, I am on your side, I am an ally, you know, and I want the best for you. And I wouldn't be wasting my breath telling you this if I didn't want the best of for you to help redirect you. And I think that that framing, especially coming from the founder CEO, is so important. Important. Otherwise, people take your, you know, they take your points as criticism and you don't mean them that way.

Yeah. And it's— this is the joy of constant improvement and learning. It's how to get better at that over and over again. I can think of a second thing that I wanted to spotlight in this vein.

Please.

You know, I think most folks are familiar with the golden rule, treat others the way you want to be treated. But I learned, you know, in my journey of growth and development, I forget from who, it might have been from one of the leaders that I was getting advice from, but I learned about the Platinum Rule. Are you familiar with the Platinum Rule?

Yeah, tell us all about it.

Yeah, it's treat others the way they want to be treated. And so, you know, as an example, for me, I'm someone who, you know, when I'm getting feedback, there's still like, here's something working well and here's the things you could get better at. I would love to spend 99% of my time on the things I could get better at. I love that headspace and the kind of more former let's acknowledge, you know, the great work to me is a cool thing to say. And then let's move on because let's get into all the stuff that is not working that we want to improve. And like, that's where the actual work is because, and that excites me, that motivates me. And it is definitely a positive for others. And it's not a judgment, you know, me glossing through and so quickly wanting to jump to the things that we can improve or get better at, you know, this kind of connects to my earlier topic, wasn't landing the way I wanted. And it's because they have a different relationship to this topic, right? You know, golden rule, platinum rule. The way they were processing it is they actually didn't know if I was excited or wanted to celebrate or acknowledge something they had done well. And they didn't know if I even thought they were good for Gusto. They didn't know if I was going to fire them the next day, right? Which can obviously be a really big distraction. And so some of that was more myth-busting. It was making sure I channeled, hey, is it clear to this person how I'm thinking about them? I don't want it to be a surprise, right? Now, there's been folks at Gusto where we have let them go because of performance performance issues, but that should never be a surprise. And on the flip side, if it's someone that I'm really excited to have in the company and I'm giving some feedback to because there's something we want to get better at, the biggest goal I have is to actually, and I believe in them, go achieve that goal, right? And so Platinum Rule became something I kept in my mind quite a bit as we grew.

Yeah, I love that. It's, I think the Platinum Rule is so powerful. It reminds me actually of Love Languages, right? The idea of like you have to speak in their love language, not in your love language. I'm also wondering if you've ever used a tool that I like to use with my clients called the Personal Operating Manual, which is like, hey, here are the things you should know about me, the way I like to communicate, the way I like to get feedback, the way I like to give feedback, how I sort of think about structuring meetings. And then I'd love to know, you employee, you executive, how you like to deal with, have people deal with you. Have you ever done any tool like that?

Yeah, we have a version of that we call Guide to Me. So it's kind of in the vein of, yeah, just putting it on the table and typically earlier in a work relationship, the better. And, you know, it just basically accelerates the potential for a great partnership, becomes less guesswork. And obviously leaders work with multiple leaders. So it's not like it's being reinvented every time. You know, I have a doc that's my guide to me and I share it and then I update it as needed and it becomes something that people can give feedback on or at least just go check on if they're curious as a reminder of how I might process stuff. They know, for example, that I'm much more spatial and visual. And if I'm going to be taking in new information, I prefer to either pre-read or have a chance to talk through it or take notes. And if I'm just going to be purely talking and processing large volumes of information, I almost need to close my eyes to do it because I almost need to visualize it. But that's just a guide to me in terms of how I process information. And it's been that way since I was a young kid.

Well, that's fascinating, and I think so important to share with people. Otherwise, they're wondering why you're closing your eyes, to say the least. You know, Josh, I love about you, you're so introspective. Of course, I'm very introspective, reflective. I'm a coach. I'm like getting into my insights and whatnot. I, I guess I would ask you, why do you think it's important for CEOs to have time and space to introspect?

I think not just for CEOs, I think for, for people, it's good to have time to introspect and for a couple reasons. I mean, one, as a theme of our chat, the feedback loop to get better and improve at stuff— no one's perfect— definitely can come from others, but, but a big part of it is processing it yourself. So, you know, I think of introspection as just setting aside the time. It can be different for different people. It could be through closing one's eyes, it could be through going on a walk, it could be doing some exercise, whatever speaks to each person. But there almost needs to be time to process, and that's, that's what I think introspection very much connects to. I also think it as an outcome isn't just about driving one's own growth development. I think a huge part of a leader's job is prioritization. Where am I going to spend time and why? And so again, needing time to go process that, whether again, inputs can be the calendar, inputs can be various messages, priorities, scorecards of what's working, not working in a company, but ultimately it's all input. It's judgment. Each person's making a judgment every day, every week, every month. On what they're going to spend their finite time doing. And so, I think introspection is a very important ingredient to doing that effectively as well. And the goal is not to be perfect. The scorecard is not 100%. It's just iteration, iteration, iteration, iteration.

I love that. Are there any frameworks that you use or you recommend other people use to help you prioritize or you recommend other people that use to help them prioritize?

Yeah. I mean, I think some people like to jump to like, fancy tools. I think the heart of prioritization is as simple as, you know, in many cases, just stack ranking and drawing a line on what you're doing now versus later. Not overthinking too much, like, should item 9 or 10 swap? It's directional. And yeah, one thing that does come to mind though is, you know, the importance of, uh, yeah, actually two things. Prioritization matters, but also when you're doing the task, doing the thing that you decided to spend time doing. Being really present and in the moment while doing that thing. Those are kind of the two things that kind of connect very closely. Like, it's, it's prioritize ruthlessly, and, and that can be on whatever cadence is right for a person and their work. But then when doing the activity you chose to do in that moment, do it fully and be fully present in doing it. Otherwise, it's super easy to basically, you know, do many things poorly all at the same time.

Yeah. And just get distracted and interrupted because that's kind of the way of work these days. Do you have any tools that you've used and you've learned over your years that help you stay present? Because there's so many things competing for your time and attention. How do you do that?

I mean, I, for the most part, turn off most things that ping me, frankly. I think the whole attention economy and do you want to be in the driver's seat or be a passenger to where you spend your time? Frankly, I think especially for a leader, it's really important to be in the driver's seat. So any type of messaging system that's just the last messages at the top, you know, frankly, text messages are a good example of this and email is as well, at least until it's gotten smarter, is the opposite of prioritization, right? Like doing whatever last came in is not prioritization. It's just, it's using time, I guess, as the mechanism for prioritization. So I try to, as much as I can, to not be driven by whatever is most recent. And then to your comment, I think there's a lot of things out there that can try to interrupt your time. I try to just use all the different tools that are in modern mobile operating systems to control what can reach me. Obviously, there's some things that need to be reactive to, like, hey, if my kid in school has gotten sick, that school calls, I'm not going to somehow have that get routed to something that isn't a queue that I come back to like in 8 hours. I need to pick up in that moment. But not everything should be treated that way.

Yeah, I love that. I think, you know, like you were saying about fancy frameworks, well, a fancy tool to stop being interrupted is to turn off your phone. It's actually the easiest thing and not so fancy.

But they also, I mean, so, but then I would miss that call, right?

Right. That's true.

It's cool. So, so they're actually, I mean, I'm, more on the iOS side of the house, but I think Android has a lot of the same features that probably had it earlier. But there's a lot of controls at the app level, at the notification level, to just be really intentional about, you know, what can, what can interrupt or disrupt you. And I would just definitely spend time editing and managing that. They're at your disposal, right? And the default is everything interrupts you whenever it wants, and that's probably not how most people want to live their life, right?

Exactly. That's really great. You know, you've been a founder, and this has been over a decades-long journey Can you sort of think about— everyone has ups and downs in that period. Can you sort of think about maybe what has one of the real highs been and what has one of the real lows been and how you handled them?

Yeah. Yeah. Lots of highs and lows. Yeah. A couple that come to mind. I mean, I guess we were kind of alluding to some of the earlier days in our chat. So, you know, 2015, we launched health insurance, like just the broadening of our product, tackling a pain point that customers have been asking us to help with for a long time. you know, getting further along in our mission to kind of build out this broader platform and ecosystem of many different apps that can help with building a team and building a company. So that was a big milestone. You know, in the moment, like we, we literally like called, we had like a couple hundred people in the company, I want to say, and we had like 10,000 customers. And so we literally called every single customer over those 3 or 4 days. We also were going through a name change. And so that was just a special moment where we kind of all were able to connect to customers very, very intentionally. I would say a low point, and I think for a lot of folks, you know, the onset of the pandemic and all the uncertainty, you know, the many dimensions to that experience, whether it was guesties, our local communities, our customers, you know, and broader. And I think, you know, the thing that helped us in that moment was thinking through a lot of what's in our control, what's out of our control. Control, which is kind of not a framework or a mental model we invented. It's a pretty simple one. But obviously, focusing on the things in your control can make you feel and have you be more in the driver's seat at a time when it can feel like you're just being pulled along by unknown forces.

Yeah, I think that's really powerful and so true. How did you handle it emotionally? I mean, were you feeling— I mean, well, I'll just say that for my clients, CEOs were feeling like, founder CEOs in particular, concerned about the health of the— concerned about the company, like, are we gonna survive? Concerned about the employees and all their things going on. And also, you know, obviously concerned for their own families and whatnot. And then also the sort of pressure of employees coming to them to be like regularly, when's the pandemic gonna be over? You know, as if you knew. So, that was my experience of the CEOs that I work with. Did you have those experiences? And what was that like for you personally and emotionally?

I think everyone had. I mean, in those moments, everyone had those experiences. I think people went to everyone. It wasn't just to company leaders. We went to the school leaders. We went to— everyone was asking anyone they could for more clarity on a topic that no one had clarity on. And that, to me, you know, in retrospect isn't surprising, right? Like, people in times of massive ambiguity want to create certainty on something. And so, you know, I think I can't opine on broader society, but I can say for me and how I navigated it, like, I think that I've had as an important part of my foundation for a long time is a very robust, you know, gratitude practice. And so, you know, whenever I'm feeling in the moment maybe most stressed or anxious on something, taking a step back to see and realize all the things I am grateful for, whether it's the people that have chosen to join our journey and are contributing their time and their energy towards advancing our mission, customers that have trusted us and are looking to us for help. I mean, again, it's a way to flip the topic, right? A customer coming to us and saying, what's going on, can sound like a burden. A customer coming to us because they trust us and believe we can help is an incredible compliment. And so, you know, whether it's from a Gusty lens, a customer lens, or from a more personal family lens, that tends to be the thing I, you know, pretty quickly go to that can help me quickly reset my thinking into, cool, let's go, let's go make it better. What's in our control? What's out of our control? What can we either action or communicate to move things in a direction that makes things more positive or a better outcome? And so I, I, I jump pretty quickly into that headspace, I guess, to use the term. I, I get through change curves very quickly. Back to golden rule, platinum rule. I know not everyone gets through them at the same rate I do, and that's okay. No judgment. But that tends to not be a big issue for me because I'm just very focused on what's possible. And that's an energy-giving experience for me.

What a great framing. I love that so much. Are you using that also? I mean, I guess I would just say that the current macro environment is very challenging for startups, very challenging for CEOs and founders, very challenging for employees inside of startups because there's so much uncertainty and so much change. I guess I would say, how are you kind of leading through this macro and what advice do you have for other founders?

Yeah, I'll start with advice for founders. I think one of the things, and this does connect to something I share with Gusties, you know, it's called a cycle for a reason. And I'm a big fan of learning from history. And by all means, there can be people on your team, definitely at Gusto, who have not experienced other parts of the cycle, but even just spending some time to go through that history of how the cycle works, why it's a cycle, how there are there are pros and cons to both parts of the cycle and the in-between. And so I think it can actually be quite reassuring because it makes it feel less like this is a unique moment in time. And then I like going back to what we have been talking about then, what's in our control, what's out of our control. And the reality is there's a lot of pros and cons to both parts of the cycle, like I just said, right? It's not just that the frothy time is the best time and the downturn is the worst time. A lot of great companies can build stronger and, and actually deliver real value to customers during downturns. So anyways, I just think a little bit becomes academic, but it's just making sure that no one's falling into that pitfall of thinking there's just one moment in the cycle. There's, there's a cycle that goes up and down for a reason. And so let's focus on what we can do to help customers. Let's focus on what we can do to go make our product better. Let's focus on what we can do to go win market share because we've offered something useful. And the rest tends to work its way out.

Yeah, I think that's so great. It's like in the uptimes, you want to be able to make use of it. In the downtimes, you want to see what's possible, right? So is there more building you can do? Like, what are the opportunities inside of crises or downtimes?

I mean, there's opportunities just on both sides and there's negatives to the up part too, right? It can be really easy to get distracted. There can be obviously a lot of, you know, very irrational decisions and behaviors. People might join startups who frankly are just doing it because it's herd mentality and it's the thing to do. And then, you know, the second it changes, leave. And so, you know, I find in downturns, people joining the company tend to be even more committed and more passionate about the mission. That's just one positive to spotlight. And there's, you know, if you're in a big market with lots of opportunity and there's a big talent pool out there, there's always going to be great talent to go pursue for the roles you have.

Yeah, that's beautiful. Totally true. How do you make sure you continue to learn and grow yourself? What specific tactics do you you use?

I would say there isn't just one. I mean, I think it's maybe not that different than most. You know, I think having a mindset of I can learn from any moment. So when I meet with guests, I'm collecting feedback. What I choose to read, the podcasts I listen to, you know, when we have board meetings, I judge the value of a board meeting by what we learn from that conversation, you know, the things that we can improve or get better at. Board meetings to me are not about getting a pat on the back. I don't need that. That's not useful. I want us to improve and be further along in our mission. And that's why we have a board, frankly, to help us and to push us to achieve more in a way that we're proud of. So yeah, I would say all those can be the inputs avenues, you know, leaders that joined Gusto. I mentioned earlier interviews. The first time I was hiring for a head of, I can choose any function, but let's say finance. You know, I never hired like a CFO before. And so, you know, the chance to go meet, you know, 5, 10, 15 CFOs, calibrate the different approaches, the different ways people do that job, figure out what's relevant to Gusto, what's not relevant to Gusto. And then from that conclude, you know, what's the profile I'm going to pursue? Like, how incredible is that? An opportunity to learn from experts in their field, right? That can be an amazing way to uplevel and grow one's knowledge set. And remember, the interview is always both ways, but it's not just assessing. It can be learning just as much as assessing. The two can happen hand in hand.

Yes. Oh my God. I totally love that. I totally agree. And the idea of like hiring someone for the first time is such a beautiful moment of like accelerated learning. I think that's so amazing where it's like, oh yeah, now I understand what a CFO Pro does. Now, what you mentioned, what you read and what you listen to, I'm curious, do you have some specific go-tos when it comes to podcasts or books or articles or blogs?

Yeah, I mean, podcast, one of my favorite is a podcast called Acquired. And so, it's basically a podcast where they now have, I think, over 100 episodes where they, each episode is one company. Company, right? So it could be NVIDIA, it could be a tech trend like AI, or, but mostly it's companies, right? They'll just dive into a business like Intel or you name it. And so they actually just deconstruct the company in a couple hours and they go through its history and the framing, the backdrop to it is what enabled this company to reach where it's at today. And then at the end, they kind of go through a framework that I like. It's the 7 Powers framework for, for strategy. And so they kind of use that as a scorecard to assess and deconstruct construct kind of what are the, which are the 7 powers this company has kind of leveraged to, to be successful. And some of them are, you know, no longer successful. So they're not just companies that are up into the right, some could be facing challenges. I just enjoy that because it's like a cool way to deconstruct a business. And there's a lot, you know, to learn from other companies. Frankly, there's a lot more similarities than differences in scaling a high-growth business.

That's great. I love that. I, I do know about that podcast. I haven't listened to it yet, but I appreciate that recommendation. I will listen to it. Just a few more questions. Have you ever experienced imposter syndrome or severe self-doubt?

I think everyone does in some way, shape, or form. What I can credit, you know, my mother is probably the biggest force in my life for just instilling a really strong foundation of confidence and the belief that I can do anything I put my mind to. And so, you know, that's something that I've leaned upon. I think, again, having my mom being an immigrant and my dad kind of being, if you will, like a domestic immigrant, both being places we grew up with just my brother and I and my parents and everyone else was thousands of miles away. And we couldn't afford airfare too much. So we would mostly do phone calls every so often, but it was just the four of us in California, building out this new life for ourselves. But yeah, their example and their message of, hey, you can do anything you put your mind to, put in the hard work, put in the effort. It doesn't mean they or I have achieved everything we ever wanted in life, but the point is a mindset where that support and that love and that foundation of support is always there. So, you know, I've definitely worked with many leaders and, and talked about this topic with many folks, but I believe to my very, very core that whether it's me as a leader or Augusto as a company, the ingredients are there for us to go achieve incredible things. But, but that doesn't mean it's gonna happen. You know, it's only gonna happen through putting in the effort, the work, making the decisions, putting in the time. And that, that's exciting for me. I like building, right? If it was just all like lining up the different ingredients and all of a sudden the magical dish gets created, I actually would find that pretty frustrating because it'd be like none of the work happened. It's not as fulfilling or rewarding. So anyhow, I, for me, it's just a kind of a default of absolutely we can achieve something. And I think some people interpret that as extreme confidence. To me, it's, it's just logical. The ingredients are there. Now let's go put it in action. That's why one of our values at Gusto is, is dream big and make it real. Make it real is the key part of that statement.

Right. I love it. That's so great, Josh. What do you wish you had known earlier on your journey?

I would say for Gusto, I think there, there have been a lot of learnings along the way. And, you know, this is where it's, I think, hard to hindsight 20/20, a lot of the things that got us to where we got are not— you kind of can't go edit everything because then you start having trade-offs and then you kind of get into that Back to the Future time loop type problem, right? Which is, you know, make an edit to something and then you create a different future. So I think for me, there's, you know, learnings around how to build leadership teams we spend time on. And we've been more successful than most companies, but I've made a number of leadership hires that didn't work out. Either I had to ask to leave or they left on their own. In a time period much shorter than what I would have loved. That's one big bucket of learnings and obviously informs how I approach leadership and team building going forward.

Yeah, how, how specifically, Josh?

Well, we have, you know, a process at Gusto. We, when we create a new leadership role, we have a document, we highlight what the need is, we highlight what are the different experiences, what are the different responsibilities, you know, what are going to be the, the spikes or what are the big positive areas of strength for this person? And then what are the acceptable and very okay gaps for someone to have? There's no such thing as someone having only strengths and no weaknesses. We go through building out the hiring panel of who's going to be assessing what specific skill or ability for this candidate. And then we go execute our hiring process. So those are some of the kind of more tactical places this would manifest. But obviously what we put in each of those bullets is the thing that, that becomes more and more honed in based on learnings and experience.

Yeah, that's a good point. That's a very good point. Were you going to also share what you wish you had known earlier in your journey in life? You don't have to. Anything come to mind?

I mean, I was just, I was just thinking, um, well, I can tell you a learning I had from my prior startup that led to Gusto. So it's kind of one that's been actioned, but it's still one of the more profound ones I've had in my life. And that's just to kind of go through it a little quick here. Cause I could spend a lot on this topic. You know, my life, my last startup, was more of a business that we built. It was, it was right after Facebook had launched in 2008, their kind of platform for developers to build inside Facebook. And so we're building different apps and ways for people to post different products from their e-commerce stores and stuff like that. But it was almost more like an optimization exercise. And so, you know, we didn't have a big mission, a purpose, a calling, a thing that was going to be our due north. It was, let's build stuff that's useful in the moment and then and, you know, let's, you know, see if people use it. And that's not bad on its own, but, you know, for me, it felt very reactive. That's kind of the way I would describe it. And so when I ended up, I sold that business and I was in more of an introspective headspace for a few months. I thought a lot about what had been missing and I concluded it was, you know, I need to, for me to do my best work, always start with the problem that I'm trying to fix. The thing that's broken, the thing that the customer or the prospective customer is experiencing and that we want to make better. And if that's going to be the thing that draws me in, that is my foundation, then I'm going to be deeply motivated no matter what, because that's always what will most speak to me. And that was, again, a big part of the kind of early days for Gusto was making sure that was in place. And, you know, 11, 12 years in, I feel equally compelled as I was at the beginning by our mission, our opportunity. But, but that piece was intentional. I kind of went through a lot of thinking to make sure that the problem space and the thing that we were going to be tackling could be something I would be excited about for a long time.

Yeah, that's amazing. Thanks for sharing that, Josh. It's so important. And I appreciate that you're now, like, excited about what you're building because of the work you did, you know, over a decade ago. That's beautiful. Josh, the last question, what advice do you have for other founders as they embark on their journeys to grow into leaders?

Yeah, so maybe in the vein of what I was just sharing, I like to give this advice, which is imagine it's the 10,000th time you're describing what you're doing. Will you be as excited as the first time? Because at that point, I think it's impossible to fake it and it'll show. And if someone aspires to build a mission-driven organization or to build a multi-decade business, I think the two are interchangeable. There's probably other types of businesses out there that are much more short-term and that's fine if that's what someone wants to do. But if someone's going to be spending a lot of time doing it, I think you're going to be talking about evangelizing and thinking a lot about you know, your problem space, the reason why you exist, what compels you to dedicate a large part of your, your life to this specific product or thing that you're creating. And so being intentional about it and making sure that the possibility is there, and it kind of gets to the heart of motivation, right? Why is someone starting a business? And if it turns out it was more of just a, hey, there seemed to be an arbitrage, or everyone's tackling the space, I'll do it too, it might surface that as a flag for a founder and highlight that maybe that there's a different space that speaks to them more where that alignment is more, is more strong.

Amazing. Josh, so great. What a great discussion. And I just want to say thank you so much for joining me today. It's such a rich conversation to have with such an introspective founder and, you know, you've built such a wonderful business. So just thanks for joining me today.

Oh, well, thank you. It's a team effort and we're still early. We have lots of work ahead. We have lots more product to build, lots more customers to go help. But I enjoyed the chat. Alisa, and thank you for the time.

Thanks for listening to From Startup to Grownup. If you like what you heard, give it a review on Apple Podcasts so other people can find it. And if you know of a founder or someone else who is meant to be on this podcast, drop me a line through my website, alisacohn.com.