Josh Reeves and his cofounders chose payroll as their problem because 40% of small companies still processed it on pen and paper, and a third of US companies faced annual fines for payroll mistakes. They wanted to fix something painful and concrete rather than invent a new category.
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About 40%.
About one-third.
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What we connected around first was actually wanting to tackle something really big that's very concrete and real and ideally dedicate decades of our life to it. And that's not what everyone needs to have as their goal. But the fact that all three of us aligned around, that helped quite a bit. Now, in terms of the kind of problem space, surface area I sometimes describe, you have problems that are very real and established, and the question is, can you build a better solution? And then you have hypothetical problems. Twitter, before it existed, it wasn't replacing something. It was kind of a whole new concept. But payroll is not a new concept. We didn't invent payroll. It was a pain point that existed. There was existing products and solutions out there. We gravitated more towards this bucket, where it's not a question mark of is there a need? The question is, can you build something 10 times better than what's out there today? And can you go build a business around it? Can you go acquire customers effectively? But to the heart of your question, early ideas, I mean, we spent a few weeks iterating through ideas. One was related to, like expert networks and how to access knowledge more effectively. Within a week, we moved off of that. The entry into payroll was actually looking at marketplaces and looking at payouts and the way that people then get paid money and have to do taxes. And then when we started looking at payouts, we started looking at why not do payouts and payroll for every type of work, not just marketplace work. And then that kind of brought us into the payroll pain point. We then did some research, realized actually it's a very, very fragmented market. You do have large players, but they don't have very large market share. Small businesses in particular. You had 40% of companies doing it on pen and paper. You had a third of companies in the US getting fined every year for incorrectly doing it. We did interviews with small businesses, friends and family, and they all wanted to pull their hair out. So we're like, check. Real pain. People really frustrated. Big, big problem. Like, lots of people get impacted. Every business owner, frankly. And then we had a bunch of ideas of how to make it better. And I think I'll pause there.
