How Do Payroll Firms Make the Inc. 5000 List? Chris Caputo Reveals How Zuma Did It 4 Years in a Row

But it wasn't very long before I said, oh man, we're going down the same path we did with credit card processing. I don't like this. We're commoditizing our industry. We've got to really start finding some pain points.

All right. So I'm literally sitting up in my chair right now because I want to make a point to the people out there that have not hired a sales rep yet or they're about to put one in territory. Chris just gave you the blueprint.

Welcome to Payrollin', the show where you will learn how to operate and grow your payroll business from the most dynamic minds in the business. If your company offers payroll services, this is the podcast for you. And now, here's your host, Matt Vadie. Let's go!

Chris, great to see you, sir. You guys started Zuma Payroll back in 2006, so that's been a minute. But the last 3 years in a row you've made the Inc. 5000 list. What has been behind this recent explosive growth?

Well, as of today, happy to say it's actually 4 times the list. Just— yeah, yeah, I'm pumped about it. No way!

Are you allowed to say that on the air?

Believe it or not, as of today I can because the list was public at 7 AM this morning. Oh, so here we sit here August 12th, 2025.

And now we— you heard it here first, breaking news, no matter when you're listening to this. Congratulations. That's such an incredible honor, man.

You know what? The last 5 years have been really explosive since COVID We've been very, very fortunate. You know, I would say everything changed right before COVID when we kind of got into the construction niche, literally just before COVID But You know, the truth is we've been in business since 2006, but the name of the company is Zuma Payroll and Processing. And the reason for that is we started actually as a credit card processing company. We didn't do payroll until 2012. We started that line of services in 2012, and then really kind of took us a few years to learn what we were doing. COVID hit and we came out of COVID just with a lot of things lined up. The right people, the right tenacity, the right time, a little bit of luck, probably a lot of luck sprinkled in there. And, you know, being in New York, it's a great market to be in. Yeah, it's been a ride. It's been a ride for sure.

That's amazing. Congrats again. So you guys, so let's unpack this a little bit. So pre-COVID, all of a sudden you go into the construction niche. Why then? What caused that? And what has that done for the business since focusing on a singular niche?

Yeah, so today, you know, it's not all we focus on, but it's a big part of our focus. We've got a second dedicated division in the company called Zuma Payroll for Contractors. What basically happened was, again, a lot of timing and execution at the right time. So a few years ago, their Benefit Mall was purchased by ADP. I'm sure everyone kind of remembers that. Part of Benefit Mall, they had a little niche themselves of the original DSI employees, which were people that only worked in that heavy construction area. So job costing, union benefit, calc, union remittance, things like that. But when ADP bought Benefit Mall, it kind of left a hole in the market. And a lot of contractors here in New York and the tri-state area realized that ADP was not going to be able to fulfill the needs that they had. So a lot of them converted over to, I think I'm going from memory here, but I think it was Paylocity. And as that happened, we actually got one of those clients. One of our sales reps went out there, got one of these clients, and as we started onboarding them, we realized they had these really unique needs that we were not qualified to do. So we started digging into accurate job costing. You know, a lot of payroll companies out there can do job costing, but really what they're doing is they're applying a percentage. I'm talking about actual counts, union remittance, like, like doing the in and outs, but then remitting that data electronically to the unions in their format. A lot of payroll companies can't do that, and we started seeing that what they were getting done by DSI was really custom to them. And we saw now that this didn't exist. Wow, there's really a hole in the market that somebody needs to fill. We kind of just thought, you know, one of the things we've always been a fan of is having IT and people in-house. So I've had, you know, my IT team with me for since before we were Payroll, and we started talking to them about what we would need to build. We're an ISoft shop, so we ended up getting ISoft on the phone after many, many attempts at kind of going up the line, up the line. We eventually got a head programmer on the phone. We told them how we needed to build out what we needed, and they looked at us and they said, you can't— ISoft's not going to be able to do this. And we're like, what do you mean? They said, the calc said you're asking for are like contrary to basic payroll calculations. We would have to go back so far back in the code to make this happen. It's not going to happen. So we hung up the phone like really disappointed, like, man, there's this niche market out there and we're not going to be able to do it. And all these clients are with Paylocity now because they've all transferred over and they're not getting what they need. So I'm like, wow, they're going to be able to do this before we are. And my IT guy Dave, he looks at me and he goes, No, based on what I just heard, they're not going to be able to do it either. They just may not know they can't do it yet. So they're still sending out letters to all these clients who transferred over saying, hey, we're working on it, we'll get there, we're going to, you know, it's top of mind for us. And, uh, yeah, because they were getting a lot of complaints. So I said, Dave, are you telling me that we've discovered that they may not be able to get this product over the finish line? He's like, if what we were just told is true, they haven't realized yet they're not going to be able to do this in their current software. Anything can be done outside. So I said, let's, let's start programming. So we kind of put a team together and we came up with some independent software, really not the best looking thing in the world because we did, we did it fast, right? Once we tested that and were able to get that out and able to get these calculations right, number one, and number two, get the data remitted to the unions, that was when we were able to start marketing people. And then the day actually came that Dave was saying where I'll never forget all these clients at once that we've been prospecting and they didn't want to leave because they're like, no, they're, they're going to do it, they're going to do it. They got a letter basically saying We're not going to be able to do it.

Oh man.

At that point, it was just, we were trying, we were fulfilling orders faster than we could, you know, that we could handle. At that point, it was just really getting a lot of market share. Then the unions themselves started referring clients to us. And that's what really expedited the growth. That revenue allowed us to now hire more salespeople. Going to diversified markets. Yeah, that was, you know, kind of prior to that, like anything else, we were just like every other bootstrapping company out there, knocking on doors, building relationships, one sale at a time. But that, that whole ADP acquisition of BenefitMore was game-changing for us.

That is incredible. So, I mean, you guys saw a unique gap in the market, you capitalized, Dave was right, you placed a big bet. You did, you know, a lot of people describe me the same way. Doesn't look good, but it works, right? So I appreciate that about the software, right? And I mean, that's, that's what it is. I mean, people at the end of the day, while, while the sexy UI can sell some things at the end of the day, you know, Gusto is a good example. Gusto is a fine system and all that, but I mean, it was when it first rolled out, especially really aesthetic user interface. People love that, but then they quickly discovered it's only in 2 states, 3 states, 4 states, 5 states. I can't do a lot with it. And over time they become a great system small businesses, but they solved a unique problem, a small problem, and continued to expand. And this is such a— I know people are getting tired of me talking about niches on the podcast, but man, everybody that comes on with the most sizable payroll companies in the country are the ones bringing up niches. I've sort of stopped pounding the drum and I let you guys bring it up first, right? But if you're listening to this and you're not niching down, you're not listening to the market as you're going out and you're hearing these types of problems, then, then you're going to miss out. You know, we talk about all the time the, you know, what is it, constructionpayroll.com you know, these ones, they're big companies because they just focus on singular niches. And you guys are in such a unique market to be in in New York, man. So how do you compete in a market like that where, I mean, there's, you know, I remember our ADP guys when I was back at ADP, you'd have your territory would be one building. And so like the, you know, I can't even fathom that. Like, how do you compete when you've got so many competitors, so much pressure versus maybe what we might have in some more secondary markets?

I'm not going to say it's not tough. You know, we're located in Long Island. We're about 30 miles outside of the city. And if you just Google Long Island payroll companies, there's 20 of them on this little tiny island. It's unbelievable. So I always say, like, you know, we're in a great market. There's a lot of competition here. Luckily, there's a lot of opportunity. And it really, like you said, niches are one of the areas where you're going to, you know, win competitively. We also have a very strong sales team. It's a small team of 5 people. But all 5 of them are located here in Long Island. So while, you know, we do have accounts nationally, we have a heavy presence in the tri-state area. And each of the salespeople actually have a little bit of a different niche. You know, I have one that is 100% construction. That's all he does. We have one that only works the financial advisor 401 market, one that only works the insurance market, one that only works the CPA, and one that is out cold calling, knocking on doors. So it's a good variety. I can't take any credit for that. That is just who happened to cross our path, who we saw, you know, vision aligned with their vision. And it's like sales, like anything else. You hire 5 people, maybe one of them lasts at the end. So these are kind of the last survivors, if you would. So it did turn, and part of that might be that they're not really competing with each other. That they're getting their business in different ways. So when you, in a way, that alone is niche, right? If you're working with a CPA, you're not competing with other people. You're working off their referrals and obviously multiple CPAs. And same thing with construction. You're not really competing with anybody if your level of understanding is more so than your competition. That's what I would really say the differentiator is.

Y'all are going into war. Only about half of you are coming back, right? So help me explain, understand that. I just want to clarify. So when you say financial services, 401, CPA, are they channel partners? So they're calling purely on channel partners and then opening the accounts could be any industry that that partner brings?

Yeah, absolutely.

Excellent.

As much as I would love for them to diversify, believe me, I do. They don't. Human nature. They're going to go with what works for them. Path of least resistance, you know. So it's— believe me, it's got its good and it's got its bad, right? Because the bad is when that CPA or that partner is dry, your pipeline's a little dry.

The things you and I have talked about— we were at an IPPA conference before, I remember this explicitly— you said, you know, there was a point in time where all of a sudden you stopped caring about price. And so you stopped competing on price, you did not come off your price. I don't recall it entirely, but I think you even said maybe you don't discount anymore and you guys just stuck to it. Talk to a little bit about that and how you guys compete when it comes to value versus price.

That is a great, great point. And that's exactly what has happened. That started on our construction side. We kind of changed mindsets, if you would. I talked about that a lot at the IPPA where the early days we were going to these partners and really just begging for business. When we're prospecting, just like the ADP rep, just like the paychecks rep, you know, let me see your invoice. I could save 30%. We came from the credit card processing industry, and the reason we got out of that industry was we called it the race to zero. You would sell somebody a credit card processing machine, no real value there. The machine works, they swipe the card, the money went into the bank. That's it. There's no real relationship. Well, next week the next guy knocks on the door and they say, we'll do the same machine for 25 basis points less. And then you go back and go, we'll do it for 25 less than them. And you're just racing down to zero. And I hated the business. I absolutely hated it. And that's why we sold that business off and decided to get into payroll. Well, in the early days of payroll, that was the only way we knew how to sell. We weren't from the payroll world. So we went out and we applied our merchant credit card processing skills to payroll, which was, let me see your invoice, how much can I beat it by? And you know, in the early stages it works, it works. We got some deals. That's how a lot of people sell. But it wasn't very long before I said, oh man, we're going down the same path we did with credit card processing. I don't like this. We're commoditizing our industry. We've gotta really start finding some pain points. We've gotta really start selling solutions. And we took some sales training. Part of it was Sandler sales training. That helped us a lot. We invested in some other training and we invested in kind of a lot of reading, a lot of material, and knowing that we had to change the way we were gonna think. That people were buying on price because we were selling on price. That, that's it. That's the only reason they're buying on price. And then we started thinking, how many times do we go out and we make purchases Do we do it 100% on the cheapest product? No. So we started really looking at our sales process and turning it from more of getting a referral, going in and just blowing out a discount, to getting the referral, setting up a consultation, and seeing where their pain points were. You're being referred to me. Why are you being referred to me? If you're being referred to me, you probably have pain, what's going on, really digging into that pain, getting that to the surface, and then not being afraid to say, not really a good fit, we don't do that. We don't, you know, if you could have the confidence to say to people, I can't help, then the ones you can help, you are so sure you can help that the clients are willing to invest with you.

The not a good fit thing is so crazy because it's funny, we had a sales call earlier this week where we told the guy in the first 7 minutes like, look, we are definitely not a good fit for you guys. Here's all the reasons why. And then they make you explain for the next 30 minutes why they should do it. You know, please tell me why we're not a good fit. And then they're trying to come up with all the reasons why they could be a good fit. And I'm like, man, this is not some psychological thing. Like, I literally am telling you we can't fulfill the needs that you have based on our system and the target market. It's such a— and it's actually a Sandler technique too, where they tell you to kind of push away from the table. And I'm like, dude, I'm not using any techniques here, man. Like, we just can't serve you. It's not a good fit. It'll be bad for you and it'll be bad for us. And it's funny, every— we laugh about it internally because we try— the only thing we are good at here when it comes to the sales process is getting people out of the pipe quickly that are not a good fit. It's— we have an incredibly high close rate because we shoot people out fast because we have a very mature sales team that doesn't have time or patience to drag people through sales processes.

But so smart what you're saying there, Matt. That's so smart because I would rather have less of a better quality client, a relationship that's mutually beneficial. They're glad you're a client of ours and you see value in us.

Sales leaders, what you have to think about there is what happens is the reason people drag bad prospects through a pipeline is because of pressure from sales leadership. They have to have salesforce.com filled with deals, and so therefore they want all this stuff in there and they keep dragging them along. But if you're focused on the, the leading indicators— hey, did they set enough appointments? Have they been doing the activities that get to get in front of people and then maybe they're not pushing that many people through, okay, that's a decent pipeline. But if they're not setting on the front end, yeah, then you've got a problem or they're not getting in front of enough people. But you can't get mad at people for not closing enough deals if they're closing the ones that are good fit prospects for what you do. And that's, again, that comes with maturity, that comes with time. And it's, you know, one of those things, early stage reps, guys in their 20s are really just trying to drag everybody along. And quite frankly, they don't know who's a bad fit, who's a good fit because they don't know what the heck they're talking about. And that's just a byproduct of being a young, young cap. But you talked about a couple things in there. There's so many, so many ways as you talk we can go here. I did have a note though. I remember, I know I've mentioned this on here before, but Paycom in the early stages, man, again, back to my ADP days, my clients would actually send me over their emails and postcards that just said, we'll cut your ADP bill by 20 to 30%. You, you can get along cutting prices for a minute, but that's not Paycom's value prop anymore, right? Like, they, they don't— that's not their deal anymore. That'll get you to a certain stage, and then you've got to push past that. So if you're listening to this and you're still in the spot where you're going, hey, we're just going to undercut everybody locally, we're going build a base, that's okay, but you have to mature past that at some point in your business development. Speaking on development, you— I had a question here for you later on. I always want to hear what you're, you're reading because I know that you're, you're a voracious reader. But the learning and development you talked about there, so you talked about the team getting some sales training, different things you guys do. Do you guys have like a process, an internal kind of thought mindset system around how we train, who we train, how we put those things in place? Talk to me a little bit about the learning and development internally.

Honestly, I wish it could be a lot better at that. You know, something that is on the forefront of what we're doing right now, what we're doing is we're trying to mature as a company and a sales organization, right? So when we talked about construction kind of being that catalyst, right, that generated some revenue for us to go out and hire some experienced reps. And how do you get experienced reps over here? You give them a better opportunity. No, no territory restrictions, a better compensation plan, a better culture where they feel they can grow. And that's worked for us. Now we're at the point where we're trying to say, okay, how do we go from 5 salespeople to 20 salespeople? We're not going to keep getting those experienced veterans over here. And if we do, I don't even know if the economics are worth it, right? So we've now got to create a training and development system for new people. It's really funny that you ask that question because I'm about 30 days into a true real-life experiment. We have a, um, right now we have a brand new rep who is going out every single day. And what we said is, we said, listen, we've got 1,000 active clients in this area. And we thought about the old ADP model. Here's all I want you to do. I want you to go knock on their doors, walk in there, brighten their day. Don't sell them anything. How are you? What do you need? Is there anything we could be doing better? But, you know, drop off some information, drop off some tchotchkes, and just let them know we're here. It's so nice to have that human connection. Ask for a referral. Ask for a Google review. That's another huge area because— and remind me to go back to the importance that True Importance of Google Reviews. Ask for a Google review, then knock on the door to the left, knock on the door to the right, the old ADP model, reference the client, pick up the cards, you know, and I don't have to tell you the model. We all know the model, right? And it works. So, we're about 30 days into that and we're seeing great results. So, we just had a meeting Friday where, you know, this rep is out doing that 5 times a week. Monday through Friday. Now she's gotta hone it down because she's created such a pipeline of prospects, and now you gotta start calling on them, and you gotta mix that in. So it's new to us. Up till now, we've been hiring people and saying, hey, who's your most successful rep? Go spend 30 days in the field with Dennis. Go spend 30 days in the field with Larry. Follow them, learn them, kind of that very, very unofficial shadowing someone. But now we're trying something new and I'll report back how it goes.

I'm literally sitting up in my chair right now because I want to make it a point to the people out there that have not hired a sales rep yet or they're about to put one in territory. Chris just gave you the blueprint. How are they going to learn faster than going out and talking to your customers? Right. So I'm not here to sell you anything. I want to hear about your experience. I want to understand the solutions better. I'm new on the team. Dummy up is a technique in sales, right? Like I dummy up to the prospect. Well, in reality, this is again, you don't have time, if you're an organization, you know, $750K to $1.5 million or wherever that mark is where you're getting ready to hire that first sales rep, this is the most simple playbook you can execute because let's face it, when you hire a salesperson, it takes a ton of your time. The first salesperson is so hard because they are attached at your hip or they're just wavering in the wind, right? Or unless you have big bucks in your pocket, you went out and you hired an experienced person that's gonna run a territory, very rarely is that your first salesperson. So just gave you a perfectly executable training process for that person. Spend some time with them. Hey, here's the account list. Go out, talk to them, knock on the door next to them, knock on the door next to them. Again, this is the model. Ask for a referral, ask for a Google review. They'll create more value in the first 30 days than if you've got them back in the office hammering the phones, going through scripts. That is 100 times more effective. And again, if you've got to that revenue point, you've got 2, 3, 400 clients that got you there. They've got plenty of people to go out and visit over those first 30, 60, 90. That is awesome, dude. Yeah, I had Google— I literally had it written down here— 347 Google reviews, bro. What, like, what are you guys doing? Out there to get all these reviews, man. That's amazing. What a— 5 stars, of course, across the board.

You know what? When we do something nice, we ask for it. You know, if you satisfy a client, maybe they have a crazy request, maybe they went out of their way to send— you've probably seen this before— you get an email from a client that says how pleased they were with the onboarding process. Just ask them, that's awesome. Can you do me a favor? Leave me a Google review. And like any other sale, you just have to ask for it. But here's the importance of Google reviews, and obviously there's all sorts of analytics. I mean, I'm not even going to talk all the positive analytics that it generates. I'm just going to talk brand awareness. When you drop a card off or you meet somebody, nobody's going to your website directly. They're Googling you to get to your website. I count on that. I don't want people going— go to my website, don't get me wrong, but it's way more impressive if you just Google Zuma Payroll to get to my website. Because what are you going to see? You're going to see that Google widget with the almost 350 5-star reviews. You're going to see the Inc. 5000 article. All that stuff you're going to see before you get to my website. So I think such a valuable tool is, and I am not a social media guy or an internet guy, is what I call kind of your Google presence. I want people to Google me and then go to my website. Don't go straight to my website. And that's a big differentiator when they're, you know, looking at your payroll company versus someone else's payroll company. Then obviously we could go down a million wormholes about the other SEO, you know, implementations of Google reviews. I just love them.

And I mean, look, testimonials sell all day, every day, right? Social proof. You've nailed it. I hit your website. I see tons of social proof like you mentioned. Like, let's talk about each stage of this. If you, if you're not at a point where you got 350 Google reviews, you can get a couple and you can market that. If you go to any good website, homepage is going to have a lot of social proof, right? So like this, this is why people debate early on, do I discount? Do I go in cheaper? Do I give my product away for free when I'm first getting started? You got to do whatever you got to do. To get social proof, to get the next batch of clients. And a lot of people don't give any services away for free. Don't discount, dude. If you're just getting started, you got to do what you got to do to get the seeds planted, man. And there's a, you know what, 80% of businesses fail in the first 5 years. You don't want to be one of them. You got to do what it takes to make sure that you're getting the social proof that attracts more people to you. Because earlier you'd mentioned talking about the referral and the piece I wanted to even bring up there is like, not only, hey, they referred you there because they had a problem or a need, but they referred you there because they trust you. And so that deal is already partially closed before you even walk in the door, right? And, you know, we see Marcus Sheridan every couple years here at the IPPA conferences. And what does he talk about? People do 70% of their buying cycle before they talk to you. So if I am Googling payroll services in Long Island, I'm 75% of the way there before I even walk in the door. And I love you, this thing about your website too, where if I hit the homepage, I see right there one of the first things, construction and union payroll. Boom, right out of the gates, man. So I know like, oh cool, this is exactly why I got referred here, because they take care of construction and union payroll. So that's why my CPA or my 401 guy or whoever referred me over. I love it. Now let's talk about this. So I see the products are expanding, right? And they have over— you started to add some more HR things over the years, layer in different things. How do you guys consider when to add services, or even when to— you talked about eliminating credit card processing or selling off that part of the business. How do you decide when to add things in or kill off services? I talk to founders in the payroll, HR, and accounting industry every single day. They all tell me they need more of one thing. It's not more money. It's not more AI tools. It's more time. How do I get more time? Well, I hired a virtual assistant through OutsourceScale.com that helps me manage my inbox, manage my calendar, handles administrative tasks for me, helps support my marketing efforts, and much, much more. The cool thing about Outsource Scale is that they actually train the virtual assistants on the latest and greatest AI tools to make sure that they can only do that administrative work for you that you need to get off your plate, but they're doing it in the most efficient and effective ways possible. I've been so happy with my assistant from Outsource Scale that I've actually added multiple other teammates to our other companies through them. Their pricing starts at only $7.99 a month, and they make it super easy to get a new teammate onboarded and part of your team. Very quickly. Check them out today at outsourcesscale.com.

I, I'm a big believer in narrowing your offerings. I would rather be really, really good at less things. Okay, so we, when we add new things or when we feel We're up for that challenge. Okay. And even today, as we sit here, you know, if you use iSoftSoftware or UKG Software, there's so many different offerings you can offer and we don't offer them all, right? We focus on what 95% of the market needs, right? They need good payroll, they need onboarding, they need time and attendance, they need benefits, they need HR, you know, Things like LMS, are there, is there a place for this? Yes. You know, or applicant tracking. They are things that we do but don't necessarily focus on. We have a client that needs that solution, we can offer that solution. I find that's a dangerous road to go down is just that wide variety of offerings. Again, these, this industry is shifting from payroll to HCM. We all know that, but we need to be really, really good at the core competencies, right? And we've had a lot of growth really, really quickly. So the only way to really survive that growth, keep your Google reviews where they are, keep the revenue where it is, not drink out of the fire hose, right? That's a big expression. I feel like I'm drinking out of the fire hose. Why? Why? Just, just back up a little bit and don't go in aggressively. So when we were in the credit card business, the reason we got rid of that is we didn't like the business anymore. We decided to go into payroll and, you know, it wasn't just done overnight. Next time you're at the IPPA and Elise is there, ask her how she found out we were in the payroll business. Right? And here's how she found out. You know, we did a lot of research. I did a lot of reading on it. She came in one day to work and there was a second phone on her desk. And if this is not just any entrepreneur, this is how entrepreneurs do things. And she said, what is that? I said, if it rings, answer it, Zuma Payroll, put them on hold and come get me. And she looked at me, she goes, what? Yeah, so you have to take action. Right? That's what entrepreneurs do is they take action. But it's very easy to take action and then let things get away with you. You have to— we were payroll only in New York only, and we had to learn how things worked. And then into New Jersey, then into Connecticut. So very, very slowly and methodically. It's how you truly bootstrap a company versus taking in, you know, money from, you know, venture capitalists, angel investors, hiring everybody. I don't have experience with that. I only know, I only know how to go slow, steady, and well thought out.

And it's so hard to start. I think that's the thing a lot of people struggle with. And for us, about between 2 and 3 years, it was right in our second year. I remember we had a client, it was our biggest, and we were offering this sort of ASO offering right from the start. And it was, cobbled together crap show of just different things. And, and like, we had this customer come to us, they had about 200 employees. They were retail. We'd never served retail before. I didn't know anything about retail. Our core markets were white collar, but they were 200 employees and they were willing to pay for ASO. And I was like, man, this is a monster deal. We are not turning this deal down.

We're going to figure it out.

But so check this out. We had Payroll Relief for payroll. We had SwipeClock for timekeeping. We had SwipeClock Scheduling, which was a second login for timekeeping. And then in SwipeClock, each manager had a secondary login for each of those. So they had 4 SwipeClock logins., and then they had a login for payroll. Then they needed an applicant tracking system. So we went out and found some applicant tracking system, which was another login. Oh, that didn't have onboarding. So we went and added an onboarding system too, as you can imagine. And then we're just like, don't worry about it. Like we'll handle everything, right? Like we, me and one other person. So the, you know, this thing is blowing up daily. I'm over there and they're like, their entire staff is military veterans and they're just super feisty and sassy and they got all these crazy HR issues happening all the time. And I'm on the phone with them constantly trying to solve HR issues that their stores. And then finally it just blows up, you know, and they, they leave. And this is a $10,000 a month client for us at a point where we, you know, $10,000 a month was an astronomical amount of money to us. And they just went away. And then I had, because of the same reason, I had two other customers go away that are about $3,000 to $4,000 a month. And at that point, as small as we were, man, I think that was 25% of our revenue, 30% of our revenue. And this was going right into Q4. So you know the deal, Q1 is when you stack your new units, it's when you grow, it's when you take off, it's when the next year years sort of started, we were going into January losing 30% of our revenue, not growing. And so, and I couldn't even backfill what I lost. And so I thought I finally had it figured out. I was finally starting to take a paycheck and then all of a sudden I lose all this money and I was like, man, we're done. But this is the thing, man. So here we are 11 years in and we're doing the same thing right now where it's like, hey, you kind of get, you expand, you offer all this stuff and then you see what the clients actually want and need over time and what you can serve and serve well.

And then you prune all that stuff back and you focus on what matters.

And this is going to happen over and over again in the course of your business. But it's something that, you know, you just have to get used to and you're going to make those mistakes. And it's the one thing I tell, you know, if I've said on here 25 times and I've said it on sales calls for our white label payroll another 500 times is, hey, if I could have been dentalpayroll.com and never sold another product to another company, we'd still be growing. We'd still be expanding our market. We would never run out of dentists. And they just need payroll, right? Like, it's really tempting to add all these things. Applicant tracking to me is the funniest one because the customers all think they need applicant tracking. And I'm like, dude, so little data even comes over from an applicant tracking system that it's just, it's almost, it's comical how much time and energy people spend maintaining. Now look, recruiter, like resume database, okay, I'll give you that if that's your thing, but it does not need to be integrated in any way, shape, or form. You heard it here first. Just ask Wipclock. They struggled. SwipeClock was giving away that applicant tracking system for a while because they couldn't get anybody to buy it.

Yes. Yes. What's really interesting though is that story you just told is such a great story because that goes back to— and it's really just the same message over and over— you're at that point in the beginning of your business where you'll do anything, you'll price the deal however it needs to be priced. And you know what? You have to do that at that time. That's what you have to do. I think the hardest part in any business is making the transition from that, you know, sole proprietor, 1, 2, 3 man company that's gonna go out and sell anything at any price and take it all and turn that into a business that is going to qualify their clients. That is the hardest part. Hardest transition. Once you make that transition, and I would imagine many of the people that listen to your podcast are probably in that sole proprietor, maybe they got 5 employees, right? 6 employees, and they're out there and they're just undercutting prices and they're doing what they should be doing right now because in the early days, that's the only way to get the business. So you're not doing anything wrong. But like you said before, there becomes that time time where if you don't shift, you're gonna lose out. Someone's always gonna be cheaper. There's gonna be software solutions out there if they're not there now where it's free. You're commoditizing yourself, which you do need to do in those early stages, but I just hope you have a game plan on how you're gonna transition out of that.

Well, that's a, that's a good segue into because you can't have a podcast or talk to somebody in the year 2025 without talking about AI and the wave of technology that that we're up against right now. Because to your point, like, you know, how commoditized is this going to get? We don't know yet, but it's not going to get better, right? Like, I remember I saw an accountant in my LinkedIn feed one day talk about, oh, AI is only going to make me raise my rates because I'm just going to, you know, be there to fix the mistakes that AI is making. It's like, that's a sort of cute thing to say right now, but let's face it, they're in the same business we are. It's numbers and information being processed, which is what large language models are built to do. Right? And so it's sort of only a matter of time, to your point, until it's a race to zero on the core of this thing, which is paying people, paying taxes, and filing taxes. Like, that stuff's going to get cleaner than we've ever seen it in our lives, which is hard to believe because the IRS will continue to get in our way for a while, but eventually the dam will break there and there will be a monumental shift in this industry. Uh, but let's talk about kind of what you guys are doing today. You know, are you leveraging any AI internally, anything that you care to expand on? And what are your thoughts on sort of the future of the industry as we look at how technology is going to advance and what we're already seeing?

So I think AI in this industry, for how we're using it in Zoomer, you know, we're very new to it. We're, we're just now starting to unroll technology where we can get the, uh, sentiment of people's emails, right? So emails come in, and now if an email from a client comes into a CSR and the tonality of that isn't good, we want want management alerted. So that's one basic way we're using it now. We're using it like anybody else as to craft emails, craft responses. There's a lot of AI tied into our Salesforce, which is awesome. As to where it's going, you know, I think like you, ultimately what we do here long term, the technology of AI may be a threat long term. But you've always got to balance out when things don't go as planned. So a perfect example might be— and I'm not saying we're going to have another COVID, right? But when COVID happened, and now all these new— all of a sudden everybody needed to speak to a payroll person, you know, to get that PPP data, to get, you know, uh, employee retention credits. Things did that AI may not be programmed for. You're gonna need, you're always gonna need human interaction. You're always gonna need some sort of expert for when things are not down the middle of the road. But AI, I, you know, I can see AI picking up a lot of what we do. Like anything else, I think it's gonna take, I don't think it's gonna be our worry. I think it's gonna be more of our kids' worry. And what I mean by that is like, okay, I have not, I don't know if you have, I've not been in or, you know, comfortable in a self-driving car yet, right? So the first time that happens, I don't think I'm going to be very comfortable on that, right? But in 25 years from now, I wouldn't be surprised if cars don't have steering wheels anymore, right? So we're just gonna have to slowly get used to it. So AI is so new to our industry that, yeah, I think the next generation, it's going to affect a lot more than us.

I saw a tweet the other day that made so much sense and they were like, look, it's going to be called self-driving when you drive pretty soon. I was like, oh yeah, that actually makes a lot of sense. So I have a self-driving car, so I have a Tesla and when I brought it home, I don't pay for full self-driving anymore, but it stays in the lane. It will slow down, speed up based on the car in front of me. It will not leave the lane that it's in. But when I bought it and I brought it home from the dealership, I that 30, 60, 90 free day trial of Full Self-Driving, and it drove me from Charlotte to Columbia, which is about an hour and a half, and I probably drove less than 5% of that trip. It was changing lanes, it was passing people, it was— and it's got so many cameras around. Honestly, dude, like, after a little while you go, this is safer than me driving. It's got eyes everywhere.

We know technology, it's going to eliminate the human error to things, right? But where is that point that you trust it.

Like, oh, my wife doesn't trust it.

I mean, like, you know, thing be hacked while it's driving.

Well, that's the biggest concern to me.

So many things that— but listen, in many ways I am also probably a little bit of a dinosaur. True. I'm just not comfortable there yet.

We're doing one thing that— well, a couple things inside of our app, and I'm gonna produce some more solo YouTube videos on this stuff because I've seen the appetites there. So inside of our app, we've— we're going to be launching in the next couple of months, the ability to say, tell me how much PTO Chris has, and that'll just surface in the chat instead of you having to click around, go into a field. Yeah, I want to go ahead and request time off. Time off requests happening in a chat interface, much like ChatGPT. So being able to take actions, I think if you look back 2 years from now, it's going to be table stakes. Almost every app is going to have an interface where you're simply— I'm sure iSolved is not far behind in that respect.

They've got something launching soon, I'm sure, in that, hey, that we're using it really, really cool now is like internally we want to train our employees, right? Everyone's looking for more training, more education, more development. So we have an internal company intranet just used on SharePoint, right? So Copilot integrates with SharePoint. So, you know, rather than we found ourselves constantly telling employees, "Go to SharePoint," they come to you with a question. Okay, did you go to SharePoint first? Because one of the mindsets of our organization is we want you to be a resourceful problem solver. So did you try to solve this problem on your own before you just ran to your manager, you know, to solve it for you. So we're constantly referring people to SharePoint. Well, AI now, you know, utilizing Copilot, you could kind of just ask it what you want and it's going to mine through your internal intranet and get answers. So we, you know, we do use AI that way internally and that's been awesome. I'm excited to see where it goes. I wish I knew more about it, but I think I'm too busy counting numbers and pushing salespeople Well, that's the thing too, is you got to find that delicate balance.

And I struggle with that every day of like, how much time am I going to spend playing around with this stuff, trying to solve business problems with it versus doing my job, right? There's a fine line there because, you know, but, but it's something that you've got to push through. And, you know, I read some people out there might know Jason Lemkin. He's the founder of SaaStr, big SaaS conference out in Silicon Valley. He's one of the godfathers of Silicon Valley. He kind of was one of the early players in SaaS to make a big unicorn exit. SaaStr does tens of millions of dollars in revenue with 5 people. And 60% of their team right now is AI agents. Every time someone leaves, they're replacing them with an agent and they're fine-tuning them. But the thing that was interesting that jumped out to me more than that was that he himself is the one in there training these things in the morning. He's looking at them, he's tweaking them. He's very hands-on with it. And sometimes I find myself going, ah, you know, I need to find somebody else to do that. You know, the who, not how, when everybody, you know, that big book came out, oh, who, not how, I shouldn't be doing anything. I should be delegating everything. There are certain things you just gotta get your hands dirty and understand. And nobody else on your team is going to put the level of care and effort and energy into it that you will. Of course. You know, there's a line there, but I would say make sure that you're not trying to, if you think you're going to delegate technological expertise, like, man, we got a lot of living left to do, bro. Like we got to make sure we know what the heck is going on for the next 30, 40 years, right?

Absolutely.

Look, man, this has been a great conversation. I appreciate you coming on. Where can people find you? Where would you like people to connect with you?

With you? Like I said before, Google us. How about that? Zuma Payroll, obviously, zumapay.com. We're located in Long Island. I'm happy to, you know, answer any questions that I can. I think it's great what you're doing, Matt. You know, I've gotten to know you over the years. I think it's— the podcast is awesome. I think you got a great company, great at marketing yourself. So, you know, hats off. You're doing a great job out there.

Thanks, brother. I forgot to mention Smitty while we're on here, so we'll throw it in at the end. That way we'll make him watch it. Like, Michael Smith, reliable Payroll. So the, you know, Chris and I have a common connection. Uh, one of my fraternity brothers in college is, is a good friend of his down in Long Island, and they're competitors down there. I'm sure they bump into each other a little bit. But he, I think he did the same kind of track you did, right? Didn't he start in payment processing and then go into payroll?

No, believe it or not, he came right out of— he was an ADP guy.

He was an ADP guy.

I have lunch with him tomorrow.

Nice, nice. Well, tell him I said hey. We'll talk to you soon, brother.

I appreciate Catch you later, Matt. Bye.