Gusto founder Josh Reeves explains how they built their first MVP

We're three people who had never ever built anything in this space before. So what is the first thing we need to go prove that we could actually build something that works? So the first milestone we worked towards was nothing to do with the front end, it was entirely back end and it was just the tax filing system, the tax payment system and the money movement system. Right. So just imagine for a sec, those are really key building blocks. The three of us have no credibility saying we're going to be able to do that until we can actually do it. So even before we knew we were going to do fundraising, we had to go in our mind prove that we could effectively go process taxes, process payments, process direct deposit to we thought like up to 10 businesses, five to 10. And so the five to 10 were our friends companies because there's no website. The first customers, there weren't really customers. They weren't paying us using Zen payroll at the time. My co founder would go to their house, they would type into his laptop and they would call his cell phone. There was no web app. He would literally interact with the system entirely through a human. He was always available 24 7. He was very responsive, he was very helpful, high NPS, obviously not scalable in any way whatsoever. That was actually an important moment though because we had the credibility to then say we are now processing X hundreds of thousands x annualized millions of dollars through our system that we've built that's accurate, that's doing taxes correctly, that's calculating it correctly. So that was milestone number one. I'm going to jump to the next big milestone now was obviously launching a web experience because we decided to focus on small business. We had a hypothesis that with cloud, paperless, mobile, this was now a segment that you could reach. We also had a hypothesis that we could build a product that anyone could use without any training or background. You didn't have to read a book, you didn't have to have a prior business ownership background. And so we had to prove that it was necessary for the business model because at smaller business, your acv, your revenue per customer is much, much lower. So the only way we're actually going to be able to scale this was having it be more of a self serve experience with if you want to call in, yes, we can help you but that can't be a frequent interaction. And from a cost effective acquisition standpoint, you know, we need inbound word of mouth referrals to be the way we grow, not outbound. You can't do a high touch sales team with the ACV profile that we had. And so that second big milestone was launching a web app. We did it in December of 2012, and it had to be an experience that you could sign up onboard, add employees and pay them. And that's all it did. It was in California. It was for new companies who had never run payroll before. You had to be a full W2 employee, and there was no employee login. So again, trying to really scope down to proving out that hypothesis on a really easy to use employer signup process. And then, yeah, we could keep going through milestones, but hopefully those are good examples of how to take something big and broad. Decades of roadmap, all the other products we want to launch, we're still doing tons more on payroll and trying to really break it into smaller pieces.