The PEO Industry Lost 40% of Its Players. What's Next?

you mentioned it earlier, this overcrowding, right? There's so many options and there's so many paths and so many ways. And you can solve with, you know, through your HCM, you can solve payroll, you could go to a fintech, you could go to whatever. But what are your thoughts just like on all that overcrowding? Does it make it harder for you guys to try and differentiate and compete, or what's it like for the buyer? I'm just curious what the, what the pulse is on that.

Yeah. Is there some angle of that, you know, like that just really drags you back in and, and keeps you from running off or some outcome or some, you know, like warm and fuzzy fuzzy or something that just makes you say, man, I wouldn't want to do anything else now that I know better?

Yeah, I think it's inevitable, right? Because if you're a guy sitting here like me and you own a PEO and the multiples keep going up and the regulations keep getting more challenging and the environment and the climate in which you're trying to do business keeps getting more complicated, you keep getting older and whose kid wants to take over a PEO? 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 Vaadi. Let's go!

Welcome everyone to another episode of the HR and Payroll 2.0 podcast. I'm Pete Tiliakis, and as always, I'm joined by the legendary Julie Fernandez. Welcome, Julie.

Thanks so much, Pete. I'll let you introduce our guest here so we can get rolling.

Yeah, yeah, I'm excited. Today we have a great guest, someone I'm a fan of personally. Longtime payroll and PEO marketplace executive and leader, CEO of Guru HR and Payroll. And an entrepreneur that, like I said, keeps— just keeps collecting brands. And the host of the Payroll On podcast, Mr. Matt Vaadi. Welcome to HR and Payroll 2.0.

Thank you so much for having me. I'm excited.

Yeah, man, look, I love listening to your show. I like— I was saying before we started here, I think it's probably less about payroll and more about going to market as a payroll and HR provider. And you just have some great, great insights that I always appreciate, you know, in that sort of downmarket S&P space that sometimes doesn't play with analysts quite the way the bigger firms do. So I appreciate your insights, man. I just knew we had to get you on here. But Julie, you want to go ahead and do the honors?

Yeah, sure, Matt. As you might know, we are always curious to know what got you into this space and why you're still here.

Oh man, it's probably going to sound a lot like everybody else, right? I was recruited into this space in 2008 by ADP, the Big Red Machine. And, you know, I don't know if it's some form of Stockholm syndrome, like you fall in love with your captor, but you know, here we are, you know, almost 20 years later or whatever the math is on that. I try not to do career math too often. I try not to do public math ever, but the, you know, so been around for a long time, like Pete alluded to, worked for ADP for a while, uh, decided about 11 years ago that it was a good opportunity for me to turn away from that and start my own thing, and have been building payroll and PEO businesses ever since. And so it's been a, a fun and rewarding time in this industry, and I look forward to sharing some of the things I've, I've failed at, hopefully, and maybe learned along the way with your audience.

Yeah. Yeah. Is there some angle of that, you know, like that, that just really drags you back in and, and keeps you from running off or some outcome or some, you know, like warm and fuzzy or something that just makes you say, man, I wouldn't want to do anything else now that I know better.

You know, I'll be honest, probably more honest than most in that there, there's something about mastery and that's if you've spent the 10,000 hours and you've invested a lot of time and energy and the resources into learning something and understanding it and just being genuinely curious about how it ticks. Um, I'm more of a business guy than, than a particularly industry-focused guy, right? So if it wasn't the payroll industry, let's just call it what it is, or the HR industry or the HCM industry, then it would be whatever other thing I would fall in love with the mechanics of how the machines worked. So this is just the industry that I happened into at the time and fell in love with along the ways. And to Pete's point, I'm much— I'm a lot more interested and focused on that go-to-market on the front side of the journey for how we, you know, capitalize our businesses and bring them to market and also acquire new customers. But Yeah, I wish I could tell you I just had this deep passion for cutting checks and paying taxes, but that's not it.

Hey, here's a new spin on our question. If somebody had asked you before you had that mastery, what do you want to be when you grow up? What would that have been?

Yeah. Oof, man.

That's a good one.

Yeah. So, at that point in my life, it was definitely a, hey, we're not here to cure cancer. How can I make money and as much money as I can? So, that's why I went into sales initially. It was like, you know, some friends said, hey, here's how you can make money early. You know, and I was very very young, I wanted to be a lawyer and a politician, which is definitely, there you go. I don't know if that's a common path for a 5 to 10 year old to want, but that's what I wanted until I was old enough to know better. No disrespect to our lawyers and politicians in the audience, and I have some good friends who are politicians, but no longer on the bucket list for me. So, you know, like a lot of folks in your 20s, you get wayward and you, you know, hey, what am I going to do with my career? And then you do, I think Steve Jobs in the commencement speech at Stanford in 2010 or 2011 said, you can't connect the dots looking forward. You can only connect looking backwards. There is a deep passion for around the people side of the business. I do love, you know, that combination of human and technology, which this industry does bring together. If I'm gonna, you know, maybe not be so tongue-in-cheek, better than any other industry is that combination of the human element and how can the tech advance and work hand in hand at the organizational level and at the provider level. Yeah.

Yeah.

Agreed.

Awesome.

Thanks. Yeah. I want to dig into all this, but, you know, I want to say, uh, I think it's interesting, Julie, how we talk and I talk to folks all the time who started their career, as you said, at ADP or maybe Paychex or whatever.

It's almost like—

thank you, ADP. It's like an— it's like a university. It's like college for a lot of us to, to get, to get started. I, I worked at ADP middle, middle career, early middle career, in the COS days when they first were launching COS. But I've met so many people, and shout out to Hire Heroes, who I, I try to help veterans find their way into the space. One of the first things I tell them when they're coming in and wanting to, you know, to, to explore HR is think about going to work for a vendor, right? You can learn at scale that's their business, right? HR and payroll is their business. What better way to get yourself educated and ramped up and ready to go? So yeah, it's a great, a great launching point for sure for so many great executives. But so, Matt, look, I want to get into this, man. I want to talk about the SMB space, just HR and payroll tech, just services, all, all things along that spectrum. But like, what gets you excited right now that you see? You've been around this game a while. I've heard a lot of your opinions, but what's getting you excited right now? What has you concerned right now as well? Just kind of contrasting there?

Yeah, I think the excitement comes from the clear delineation on the consumer side of what they want. So we have, uh, this fight between, again, technology and service is always kind of the thing when it comes to the down market in terms of like what's important to you as a small business. If you've got 10 employees and you're going out to acquire payroll, HR, timekeeping software, whatever it might be, like you're either going to be a Main Street business where it's going to be very important that you have access to an individual who's local to your community or regional to your community, or you're going to be somebody me who interestingly enough, I'm not really our ideal client. Like I'm more tech focused. Like I want an easy to use app. I'd rather use the chat feature. I'd rather just have an online user experience that's super easy and efficient for me as a business owner than to have to ever call support. And so I think that people are just getting more comfortable. It's almost like the industry's aging the same way we do as humans where, you know how like I always joke when I got into my 30s, I started like getting much more pronounced about like, I just really don't like that. Like I'm never going to, you know, I'm not going camping anymore. Like I'm done camping. I'll never camp again in my life. Like, you know, I used to Camp up until I was probably 35. I was like, this is stupid. I don't like this at all. And I think the industry is finally maturing in that way of like going like, hey, as a consumer, I understand this is what I want from my vendor. And the same, the vendors are starting to understand that too. Now, it's not like a regional provider can't have good software. Their software is fine, but it's never going to quite be the same as a Gusto or, you know, OnPay just raised $100 million to build out that more tech-first environment. Even ADP moved the Run environment more that way. And I think that's what we're seeing on the consumer side too, is they're starting to understand like, hey, we've got one of two paths to to pick here. And it's the same advice I'd give any small business owner. Like, look, you would like this vendor for this reason and this one for that reason, but they're definitely very different paths.

Yeah, yeah. You mentioned a dynamic that I saw happening as an analyst around probably pandemic, really, the DIY buyer, the DIY kind of cycle of folks going out and kicking the tires on things and fundamentally adopting them without really necessarily going through a sales cycle so much. And that's probably more down market, down, down market, but Do you see that still being prevalent? And you kind of talked about some of the fact that you'd rather just chat and, and touch the tech, right?

Yeah. Yeah. Now here's where it's different. I had a friend, he owns a very well-known Canadian payroll company. They probably have 50,000 customers in Canada and he tried to move into the US and they struggled for years. Yeah. He told me, Matt, when I come in again to that same 10-employee company and they say, hey, we need a new payroll provider. And I say, great, I've got a payroll software and a system that works exactly. It solves all these problems you have. Then it turns into 4 meetings, 5 of the 10 people on the team involved, and they treat it like it's an enterprise sale. And that is the thing that has continued to push down. So if you go back to that 2008 period, I saw it. I worked predominantly with companies with 50 to 1,000 employees at that time. My average customer now in my business and most of the people that I partner with is usually 100 employees and below. So, so I'm typically 1,000 employees and below in most of my purview in the, in this world. And you know, that used, that was becoming more and more common in, you know, 2008 to 2015 was, you know, we've got 5 people, these champions involved in a 75-person company. And we were, I remember back then we're rolling our eyes going, what on earth is happening? But now every small business owner has 25 employees, you know, no disrespect, but want to act like we're an executive that has, you know, our whole leadership team has to get involved in frontline people and all this. It's a $200 a month investment. And you know, we're spending thousands of dollars of internal time to evaluate that investment when we could, you know, simply change in a year if it's not the right fit for us. I think that that's another thing that people have stuck in our heads is that the pain of change is so hard and real, and it sucks to change, but it's not that big of a deal.

Feels like feast or famine to me, right, down market. I mean, you either have 25% of all the company involved in this thing, or, you know, one person seeing 3 demos and going, I pick you. Yeah, yeah.

Often some are taking the cheapest thing too, which is even scarier.

Always a challenge, right? And then, but to your point, Julie, it's like, so if I go out and I pick a software without my team involved, and then I just go, hey guys, here's the new software, go ahead and roll it out, they're going, what the heck is What's this guy doing out here just choosing things for the company without involving us? So I get it from all sides. I mean, it is more common to have a democratic approach to change in organizations at all sizes.

Yeah, absolutely. What are your thoughts on just sort of the pulse of the SMB buyer right now, just in terms of, you know, there's so many options right out there. There's so many ways of solving for these things. You could get a stack, you could get an all-in-one, you could, you know, you could go about it so many ways. There's no real wrong answer. But what do you feel like is the pulse on the buyer right now with the buy side?

Well, I think first of all, there's just this intense level of competition that creates almost just this eyewash around the whole thing of like, it all looks the same. Yeah. You know, we always say if you want to be different, be different, but it, you know, to the consumer, what looks different? And to your point earlier, it's like sometimes it's just saving money. Sometimes it's like, oh, you caught me at that moment of pain where I just have to change because, you know, ADP screwed up my taxes yesterday or whoever the incumbent is screwed up my taxes. So like usually it is very trigger-based in this world. But now obviously, like we mentioned, there's this big push now. Every small business, every business, you mentioned it in the notes before we talked, we have to talk about AI. Everybody has to talk about AI. And it's like, you know, what are we going to do to automate as small businesses? We're feeling that pressure of like our margins should be increasing. So how are we going to do that? What are we going to automate? Now it's, you know, this is a laggard industry historically, especially when you start to push down market because the revenue is so low compared to our enterprise counterparts. So you're not seeing like any true earth-shattering AI functions happen downmarket just yet. There are some kind of neat things, but nothing that makes you go, wow. But that's going to be, I think, where you're going to see over the next 12 to 18 months is going like, all right, we understand some workflow automation. We understand the value of onboarding being automated versus using paper. We understand the value of, you know, taking our HR files out of paper and put them online. And you'd be shocked, you know, that 30 to 40% of small businesses still don't do that stuff. Stuff, but they're going to start to really over-index on that workflow-related stuff, right? And how does this play with my other systems? We're seeing a lot more influx of inquiries around our API, which was never something the small business owner was asking us before, was, hey, can we have access to your API? It's like, oh, wow. Yeah, that's a new question from the 25-employee company that we didn't get 3 to 5 years ago. Yeah.

Yeah. They're building out their own stacks, right? I think in a lot of ways, and there's so many ways of doing that. I love it. So it's a little interesting because now we've had an episode on talking about the fact that the all-in-one is back again. You know, it's really in vogue both up and down market, I feel like.

I feel like we also have API as the buzzword, you know, like that'll just make everything happen faster. And in fact, there's a lot of gotchas in that. There's, you know, like you got to really know and be— yeah, if you're going to send something through and it's going to trigger a whole bunch of stuff and, you know, put somebody on a leave or cancel, you know, put them on an unpaid status. Like, you want to— do you want a safety zone or do you not?

Yeah. You know, Matt, along those lines, along the lines of like the best fit solution, one of the things I've found this last probably 18 months, I guess, maybe just for me anecdotally, I've come across a lot more payroll solutions that are specializing, right? You've always had kind of your— I'd say your construction out there, right? Certified payroll is a nightmare. It's always been a nightmare. That's a niche, right? I've seen healthcare solutions. I even met a solution the other day They kind of started their, their work and have really grown in the security space, but, and cannabis, of course. Right. That's a, that's a sort of a market need, I think, with, with some of the money movement issues for the big guys. But like, what are your thoughts on that? Like, do you see that as well emerging? There's, there seems to be more, uh, or just more specializing, I think.

Well, I always like to say the riches are in the niches and it even usually goes further than that. Right. So it's not even like, you know, I'm in We joke like we're nonprofits, but we're really good with charter schools. Like, so not even just like a nonprofit, like a sub-niche of a niche, right? And you're seeing that more and more. Like, you know, one of the fastest growing companies, Alliance HCM, they're one of the fastest growing private payroll companies. They are quick serve restaurant specialty. Like, you know, you name a major brand, McDonald's, Burger King, all of them, they've got that logo on their website. And it's like, hey, like we go in and we talk about these brands, you know, it's the social proof aspect. Nothing attracts a crowd like a crowd. Yeah. And so the, you know, I've, I always say like it, the biggest mistake I've made was not starting dentalpayroll.com and sticking with it. And, you know, 11 years later, I guarantee you my company would be 10 times the size it is now. And we still wouldn't run out of dentists to serve. They're everywhere. There's one on every corner and we'd be fighting off the acquisitions with a stick because everybody pays a premium for the niche-based providers as well. You know, we see the home care providers going at higher multiples. And so there's all sorts of value. There's inherent value to the client and that you know their business inside and out, you start to integrate with their other systems. And then there's inherent value to our team in that they know the customer inside and out. So they know, oh, they need that specific report. Oh, they're going to have this type of question. Oh, our salary banding. I don't have to create salary bands for 500 different industries, 500 different roles. Man, I know dental hygienists in South Carolina make this much. Dental assistants in South Carolina, you know, if I'm sticking on the dental example. So it just creates inherent exponential value up and down the supply chain for everybody involved. And I think you're just seeing that, you know, I always say, you call over here and you say, hey, we provide other PEOs with XYZ service, you're much more likely to get me on the phone than if you just say, hey, we provide XYZ service. Like industry-specific focus is highly, highly desired on all sides of the table.

Yeah, agreed.

Do you find as those take off that they end up getting sucked in by somebody and then lose their secret sauce a lot? Or, you know, it feels like that's a pattern to me, but I'm not as close to it as you are.

Obviously only 99.9% of the time.

Yeah.

Good. Yeah. I mean, that is the unfortunate reality, right? It's like as an entrepreneur and you grow a business, you've got a couple different paths you can take it down, right? It can be a generational business. You can involve your family in it. You can involve some of the employees to be owners in future generations, or you can get acquired or you can go out of business. I mean, there's, there's not a ton of different options there and acquisition. Typically comes from a bigger fish, right? And so usually those fish, and now more than ever, are private equity based. And they are, you know, let's call it, they're going to suck some of the soul out of the business. I'm not going to say they're soul-sucking entities because I have a lot of friends in private equity and I have no ill will there. But I have definitely seen that, you know, they have a playbook. They come in, they run the playbook. The playbook is not about soul and heart and culture. The playbook is about a spreadsheet. And, you know, and it's a very effective playbook. We just saw it. Somebody was telling me the other day about, you know, they were They walked into the mechanic and they saw the KPIs up on the wall of like how quick they were turning cars in and out and how quick they were getting people out the door. And I was like, yeah, that company's been bought out by private equity. And he was like, yeah, I actually just saw a press release that they were. Yeah, pretty easy.

Yeah, that tracks. Absolutely.

Absolutely.

So I want to kind of pivot a little bit, maybe not pivot, but stay in this lane. But let's talk PEO, ASO, right? Like, what are your thoughts on modern PEO? I came up in the PEO industry. I'm a big fan of it. I think it's right for the right right company at the right time. I think you do have to mature eventually away from it from a cost perspective. Most, most do. But what are your thoughts just on the PO industry, the PO solution, how it's evolved? It seems like it's growing well, but there's been a lot of consolidation. But yeah, what are your thoughts on that?

Yeah, it's interesting because I still joke about there's this level of education that has not changed in that, you know, 15 to 20 years I've been in the industry where if I go into a small business, they're still still a very high percentage of them that are not even familiar with the concept or loosely familiar with the concept. Yes. Yeah. At the same point, you know, Napio touts a whole bunch of data that says 1 in 8 employees at a small business or something ridiculous like this get paid by a PEO. And I don't know where the, you know, data is fun like that. But so I don't know where the truth lies, but I do know that the industry itself, since 2018, we've gone from almost 900 PEOs to today, we have about 500 PEOs, right? So the M&A market, you know, while active in all industries, I mean, you're talking about a 40% haircut on the number of providers as a whole, which is unheard of when you look at the size of the market. And so, you know, Venture is obviously the biggest player there. They've made just recently their 101st acquisition in the space in the last, I think, 6 years, 90% of those being PEOs, the other 10% being software or providers that are going to help them to expand their offerings.

I think there was one this week, right? Yes, there was. Yeah.

There was one this week, 101st. I just did an episode on their 100 acquisitions and it was great episode. Just as I was doing the research, I was like, man, this is insane. Just the logistics on this. I can't imagine the timeframe they're under. I mean, they raised $2.3 billion in capital to go out and fund these acquisitions and it's just, man, and I know from people on the ground there, it's insanity. But again, it's always going to be insanity on the ground when you're scaling something at that level. Yeah. So, so yeah, it's a dynamic. And like I said, I mean, this is common for a lot of industries. Now we're seeing high M&A where there's attractive monthly recurring revenue, right? We have a B2B solution with monthly recurring revenue, which means we're going to see high M&A target and movement. But when you're talking about 40% of an industry, man, I just don't, you know, I don't, I don't have enough purview to know if another industry is getting gobbled up like that. But that is an insanely high clip.

Yeah, there's a bit happening in EOR. We saw a flurry this week again. I think you're going to see more, right? These, these firms, especially in the EOR side, they they can't grow without constant churn. Like they gotta have constantly getting new customers, right? Because they are turning over. And I think coverage, right? Being able to cover 190 countries for them is hard and be able to get that native capability. You're gonna have to often acquire it to move fast. But PEO has been interesting. You're right. There's been a lot of acquisitions there and Venture, shout out to them and they have nailed a lot of it. You did a great podcast on that. I, I, uh, I brief with those guys every year at HR Tech, uh, try to stay close to it, but it is, it's impressive what they've done. And they've built a little empire over there that I still, I still waiting to see what it's gonna become., in the end. But do you think we're going to see more consolidation in that space in 2026?

Yeah, I think it's inevitable, right? Because if you're a guy sitting here like me and you own a PEO and the multiples keep going up and the regulations keep getting more challenging and the, the environment and the climate in which you're trying to do business keeps getting more complicated, you keep getting older and whose kid wants to take over a PEO? Yeah. Uh, and so like, you know, like there's, there's just pressure from all sides. Right. And so there, you know, you hope that at some point more of the regional players try to push up, create more upward competition for players like Venture, like Paychex, like ADP, who are going to do most of the M&A work there. But you're still, you're seeing people like Engage who are making acquisitions every quarter, every 6 months, every 8 months. And, and so it is, you know, it should be interesting to watch because it's, they don't form as quickly as payroll companies. There's 14,000 to 16,000 payroll providers in America, depending on which number you trust, which is an insane number, right? Like you sit down and divide that by 50 states and you go, what? What? But I always used to joke I could throw a baseball anywhere I stand in this city and hit a payroll provider. And it's true in some respects, but PEOs, now you do the math on 550 states and that's like, ooh, interesting, right? Well, A, there's just not as much, it's a very defined market who I can go after as a PEO, but then B, it just limits the number of potential acquirers if you ever do want to exit. So there, it might continue to be that upward vacuum even as new ones start.

Yeah. Yeah. What are your thoughts on Workday and Insperity getting together and what do you think that means for PEO? And I think the pressure it's going to put on many of the other downmarket players, you know, namely the 8— not, sorry, I'm using the word namely. That's a venture acquisition, but I mean primarily the firms that are building HCM technology for the downmarket. Now they've got this 800-pound enterprise gorilla in the room. What are your thoughts, man? Do you think it's a good move? Do you think it's a scary move? Like, what do you think? I think they've hooked hooked their cart to this. I mean, it's a huge investment. We've broken this down on here. I've written about it a couple of years ago. I've worked closely with Workday on it. What are your thoughts, man?

Yeah, I mean, you're going to know a lot more about this one than me, but I think what you're going to see is a lot like the UKG acquisition. So if you look at UKG's white label software that they have, the— still, their primary target is 100 employees and over. It's, it's very cumbersome for that small business market who wants to be the DIY buyer. I don't think that that is the target for a lot of people because of the fact it's just small MRRs and it's a fight out there every day and they understand it's still boots on the ground selling. There's no replacement for sales reps in territory, no matter what you try to do. Even Gusto had to eventually get away from just pounding ads and being the lowest cost provider to putting people in call centers to, oh, now people, you know, in little regions and like, before you know it, they're going to be out on the road. And, you know, there's just sort of this inevitable need for feet on the street that makes it a rather unappealing place to be when you go downmarket, right? Because it's like, I don't I'm, you know, again, if I'm in a small city, I'm in Columbia, South Carolina, I like call it a secondary market. You know, there's probably 15 ADP reps here in a city of a couple hundred thousand people. And so even for me, I always joke, you know, we talk about the centers of influence. Like if I go into a CPA, they go, oh Matt, like we don't care if that ADP rep brings by cookies once a quarter. Like it doesn't matter. I'm like, yeah, they're there every week, man. They're just hammering. They're like the rain on the shore or the, the tide on the shore, man. They're just wearing it away and they eventually get the business because they're just there. They're in market and they just don't stop. And I don't think that they— I don't think that Trinet, while they do have some of that with the PEO, I just don't know that their appetite is going to grow particularly more there. They're also struggling with the support side of it from what I can gather. So I mean, I think I like them in the enterprise space. I'm buying there. I'm probably selling on the SMB.

Insperity or Trinet? You're talking— you said Trinet. I was talking about Insperity and Workday.

Insperity and Workday. Yeah. Yeah.

I think, I think Insperity's thing here is, is keeping that maturing buyer from matriculating out of PEO is really what they're, you know, they call it their success penalty, you know, that they lose these customers when they matriculate. But it's going to be interesting to see, man. I mean, that's a very— listen, that's two very expensive solutions coming together. PEO is not the cheapest thing for a reason. It's very value-packed. It's an employment model, not just a, not just a payroll service. And, and then of course, Workday has historically been out of reach for a lot of SMBs. So I think the the, the multi-tenant approach is going to help bring that down, but I don't think it's going to be for everyone. I think it's going to really be for those that are probably discerning buyers that don't want to exit maybe the Insperity service. So I'm just curious what kind of pressure it's going to put on others.

I think the challenge for a lot of that is, you know, when you talk about flipping because of scale from one thing to another, it's still a solution and a transition, right? And so, you know, if you're talking about different products and everybody has them out there for different size markets and Um, you know, so what's the appeal to that if you have to go through a transition, you know?

Yeah, well, you nailed it earlier, Pete. I mean, that was the reason for the Namely acquisition by Venture is they called it the graduation program. Namely was literally marketing a graduation program from PEOs. Yeah. And so they got on their radar saying like, hey man, look, when they aren't outgrowing us, they're outgrowing our tech and they're going to Namely. And so like, we've gotta bring Namely in-house so that we've got a graduation program and we can monitor these PEO clients that start to outgrow the back.

Yeah, yeah, true, totally. So let me ask you, I want to kind of get your— I think we've sort of touched on this a little bit, but I want to get your thoughts on just the state of the market in terms of, like, you mentioned it earlier, this overcrowding, right? There's so many options and there's so many paths and so many ways, and you can solve with, you know, through your HCM, you can solve payroll, you could go to a fintech, you could go to whatever. But what are your thoughts just like on all that overcrowding, you know, just what it does in the marketplace. Like, does it, is it, is it make it harder for you guys to try and differentiate and compete? Or what's it like for the buyer? I'm just curious what the, what the pulse is on that around, around just the market itself, you know?

And you didn't even mention embedded payroll, right? So, oh yeah. Well, that's the hottest thing right now is the, you know, I'm writing about that right now, actually. So, and yeah, I got a lot of thoughts and stories on that. We won't go deep into, too deep into that, but I can't wait to read what you write on it. So I think it's doing both, right? So for the local guy who's completely content with showing up, you know, putting a couple salespeople on the ground, showing up at every chamber event, you know, getting to know the people in their community, it is creating a strategic advantage for them to be able to, you know, like we always say, create concentric circles around our office. I do think for the people that are trying to go sell, I'll tell you what, if I put a sales job up right now, I get more national sales reps applying for the jobs than I ever used to. I used to put up a sales job and I would get crickets. But now people are abandoning these national roles left and right because it's like, man, I'm the 15th rep that's called this person today. They're tired of hearing ADP and paychecks. They've heard it over and over again for 20 years if they're in business 20 years. And so they just, it's running out of its leash, right? And so I do think that, you know, while there's not going to be this big, you know, like, uh, there's not, we're seeing growth in these smaller bureaus and we're seeing them continue to expand and grow. It's always going to be hard for us to gain market share, but you're going to see more of what Venture is having to do. And that's like, Organic growth is just hard, man. It is. Like feet on the ground is just hard. So you've gotta grow through M&A and obviously that's been part of the playbook for all these folks for a long time. But even, you know, you'll notice over the last few years, ADP and Paychex, even a resurgence there back to the centric roles, like the CPA-centric role is so dominant at ADP right now because it's like, we know the 1 1 11 models works. If I go and I sell, you know, 20 CPAs that we are a great partner and we're constantly providing value to them, we're constantly providing them with the latest accounting updates and tools and packages and things, then we know that we'll get more value that way than going directly to the consumer. So that's where we're at too. And I think the key word here for all this, if you're to kind of culminate it, is trust. So for me, if I develop that trust by seeing you, they say it takes about 3 hours of time with somebody to feel comfortable buying from them. So if I spend 3 hours with you at these chamber events having a couple of Bud Lights, then great. Versus the, you know, my CPA, I know inside and out. If he tells me to use Guru for my PEO, I go, done. Like, that's easy. Like, I don't even question anything my CPA tells me. I do exactly what he says when he says it.

Yeah.

So, you know, a lot of things that would change.

Yeah, that's a great point. It's a good segue too to something that I find I'm spending a lot more time on is just the helping vendors with the development of their centers of influence, right? Your CPAs, your brokers, your, your banks, your, you know, and I would say, you know, ADP and Paychex, they did a really good job over the years building building very, very deep relationships. I think Pay— Pay— uh, what was it? Paycor that went to Paychex, right? If you read their 10-K, there's a big part about how I think 30 to 40% of their business comes from those centers of influence. Um, what are your thoughts on that? I mean, you just mentioned the CPA track, but what are you seeing in that way? And I got one that I wonder if folks are overlooking I want to talk about, but what are your thoughts on just—

I'm excited to hear that one. Yeah, yeah. The— you know, in some respects, it's like, you know, January comes and we all go, man, I want to lose 10 pounds. I'm going to get in better shape this year. And I start researching it and I, you know where I end up? Oh, I got to exercise more and I got to eat less. There's an equation in this industry that says if I stay in front of these CPAs long enough and consistently enough and develop relationships, I'm going to get referrals. And that playbook has been run since Paycheck started that playbook however many years ago. I mean, they were first to really infiltrate the CPAs and they've done a fantastic job with it. And ADP obviously with a huge push. As a matter of fact, if you go into Facebook Ads Library right now and you check Gusto's ads, all of their ads are targeted at accountants. They don't have any ads running towards small businesses. They're all targeted towards accountants. So that channel is alive and well. And again, like if I'm a regional guy or a local guy, like I've got the advantage of being like, hey, I'm Matt, I live here. I, you know, grew this business here. Like we're just like you, we're growing our firm, you're growing your firm, but you gotta stay in front of them, man. And they'll lie to you. They'll tell you that ADPs stopping by with those cookies doesn't matter, but they're liars. Yeah. Now I also think the integrations piece is more important than ever. We go back to the niching, you know, who are the key providers to my partners? If I'm in a niche industry, let's say charter schools again, as an example, like am I plugged into the state retirement system and can integrate there really well? And I have that in, in the door and now we can talk about lead sharing. We talk about going back and forth, whatever that is. I know for us, us. For us, it's brokers. I mean, you know, that's where you're going to start PEO. Yeah. So it's just a little bit different. We have healthcare brokers that go out there and they say, hey, I can't write this group because they're just not the right fit for me or they're just not healthy enough. So I'd rather still make some money on it. I'm going to refer them to a PEO who's going to pay me for the referral. And that's usually it, man. It always comes down to WIFM, what's in it for me. If I'm the partner, I have to have, you know, either that return of revenue or those return of leads. If I'm the provider, I have to have a way to make sure that I'm going to either make that revenue or that referral revenue back. So the game hasn't changed a lot there. I'm very interested now, you know, you've had, you did a wonderful job with that tease. I can tell you're a pro at this, Pete.

Yeah.

What's your, what's your channel that we haven't talked about?

Well, I think a channel that's been overlooked and I think I'd love to see folks lean into it is like, for example, I work with iSolve. They're, they're big on their centers of influence. And one of the things I told them is I said, hey, look, there are so many of these little consultancies that are popping up from practitioners who are leaving industry, who are leaving vendors, and they're going out and they're creating their own thing. And they're starting off with a couple of clients, right? And maybe it's a system selection today and a, and a, hey, our payroll manager quit tomorrow, right? We need help, whatever. And their businesses are growing and they're growing and they're growing and they're doing more, right? And I see some that will do, you know, staff augmentation and some other things. But the point is, is there are these little small firms and they have tremendous influence and they're helping companies select these systems and they're helping companies get to these systems. I think that there's something that needs to happen, or just in the same way we've curated brokers and CPAs for, for decades, that we got to start looking at these in the creator economy, these influencers, if you will, that are on the ground with these, these, these small shops that are on the ground in these communities building capability and helping companies. And I, and I think that maybe, you know, they're small, so they get overlooked, but collectively they could be a very big, very big audience. I think they're a, I think they're a niche to be looked at, to be honest with you. What are your thoughts on that? Yeah. Do you agree? Is that hard? Is that competitive?

I don't know. Well, it reminds me a little bit of Bamboo's done a good job. Bamboo HR has done a good job of this with HR consultants. Yeah. So they did a really good job going after HR consultants and they kind of developed what they call the reseller program, which really was just like a, hey, if you're in this account and you're the HR person, if you put this in, we're gonna give you commission. Mission for you putting this tech in place. You're not going to have to do— it's going to be there, it's going to be theirs, and you're going to help administer it or whatever. But so that's one small example of it. And I think there's value there. To your point, the only challenge becomes the scale. So you start to get into these fractional people is how many customers, how many people can they influence? There's all sorts of different thoughts around what a fractional role looks like, right? We've seen that role come out over the last couple of years. Sometimes it's like, hey, man, I couldn't get work for the last few years, so I was a fractional CMO, baby. And then other times it's like, hey, this is the path I'm taking and I'm going to become a fractional CMO at scale, whether that means a solopreneur with some additional virtual assistant hands or whatever around me, or just a network around me of trusted providers. But yeah, it just depends where you kind of go into that. And I do think it's something that there is some proof of concept there. When you look at Bamboo, they've got a little bit of a roadmap and I watch them kind of change that map in real time and start to realize like, yeah, these people can kind of sell it, but it's really more of a referral. And so, like, you know, let's take the percentage down a little bit. You know, what do we need? What do we need to equip them with to have those conversations? How do we need to comp them? Like, all those things come into play. Yeah.

Yeah. Yeah. You know, I had a, I had a conver— sorry, go ahead, Julie.

I was just going to say, I know you know this, Pete, but I'm very closely aligned to the, the whole broker model bit because ultimately our advisory is owned by Brown Brown, which is one of the top, I think the number 5, right? Largest. And, and there's been so much learning for me in the last few years about how that model works. Or what incents behavior, especially in the down market. And I'm sure that a lot of folks don't understand, you know, that if you're going to your broker, you know, they may not have a wide repertoire. They might have a trusted company that they're bringing in, or, you know, there's a lot of gotchas in that space. A lot of, you know, sometimes there's price and fee transparency. Do you know about referral fees and other things? And so, you know, it's the way that market moves in a lot of these centers of influence. Influence, you know, are driven to kind of make things more efficient down market where they, you know, they can't afford to do all the big show that a large enterprise would go through. So all of these, I think, are interesting channels. And I've seen more folks approaching us as for my broker colleagues on the other side of the house than, you know, the large market space and the advisory that is really our bread and butter. It's just, uh, been interesting to get close to.

Yeah. I spent some time last year interviewing some brokers and one of the things I took away was that they are very focused on ease of use and value for their customer. They don't care about what product the customer uses. They don't even have a preference. I just, but I found that, that it kept coming up that like, look, if whatever's gonna make it easiest for us to serve the customer and make the customer happy and get them live fastest and all that typically wins. Um, and so yeah, I I think it, you know, look, I think brokers have always been such a rich, rich outlet, but even that, that space is even getting disrupted a little bit. You, you just mentioned Julia. I think there's been a lot of those being acquired, right? I think maybe even Brown Brown's bought some of those, private equities bought some of those. But like, what, how, how's that changing? Like as we go into '26, is the broker still strong as ever? And are we seeing a different way in which the vendors are engaging them now with, with some of the changes?

Well, you know, my perspective's changed as I've, you know, we're pretty new to the PEO space. And so I'm learning the brokers from a different side. Over the last couple of years in terms of like, you know, I've got some Brown Brown counterparts here in the South Carolina area that, you know, we talk about, like, I remember when we first came to market and we were offering some piddly commission around what it would, what we would get for a referral. And people are like, dude, you have no idea what TriNet gives us, do you? And I was like, what? And so basically it's like, you know, it is to Julie's point, like, it's a, you've got to compensate people and they've got to feel good about it. And our model is like, you know, and it has to be some ownership among the two of us of, hey, I've got a broker partner, for example, in Kansas City, Missouri, where he's had a client for 13 years in Manhattan and New York. And he's like, look, we just can't write them this year with what they want. And so will you take a look at it? And we book the client together and we help them out. And he's very involved because he hopes to keep that relationship should everything fall apart with us. And so it's a different mindset than maybe some other referral partners might be in that respect, or, you know, the HR consultant or what have you. But it is interesting though to see, we have seen a very deep, you know, this is a personal level. I can't speak to industry-wide, but we've seen a big influx of interest from the brokers in in terms of like, this was the first year ICHRAs took a huge increase. And so this is the first year we saw people reverse course on the ICHRA and go, oof, like, man, we just, the exchange just took a massive increase. And so now the ICHRA doesn't make sense for our team. We want to go look at the group model again. Oh, they went to the ICHRA for a reason in the first place, whether that be participation or health or something. So now they're looking for other options and they're going, what's a PEO? What can a PEO bring to the table? And so the partnerships are starting to expand. People are getting more open-minded to it as time goes on and realizing, you know, we're particularly unique in that we don't offer payroll without the PEO. So we're never going to like backdoor them on anything else. We're never going to be, and we actually partner with payroll bureaus in that respect, which I think could be an interesting model to watch over the next coming years is like, hey, how do payroll partners provide, uh, partner with each other as they start to get more niche-based or partner with other PEOs and ASOs and, and really start to sync up well there. So yeah, a lot of interesting trends happening.

Yeah, they need each other. The payroll space needs the competitors more each other than you realize. I don't know if they, especially in the global payroll space, They absolutely do. But, but I want to come back to this, or kind of maybe bring it home here with this, this, this all-in-one trend. Right. And I want to talk about the embedded thing. I want to come back to embedded. What are your thoughts on embedded payroll? You know, bringing, bringing in payroll where it should maybe be in systems that don't ordinarily are operating systems for different industries, but don't necessarily always have or generally don't have payroll, time, HR in there. But bringing payroll into the flow of business, as I like to call it. I like it. I like the idea. Of it. What are your thoughts on it from the perspective of it kind of evolving and becoming normal?

Referring to the consumer being the software provider. So let's say you're a CRM for trash companies, right? And you want to embed payroll into your CRM for trash companies, you better have some scale. And so what I'm seeing is high demand in the down market in that like, hey, we have, you know, we have our CRM for trash companies, we have 5,000 customers, and you know, we have a team of 50 people. And man, they, we keep hearing about payroll, payroll, payroll. So we're going to reach out to Gusto. We're going to reach out to CheckHQ. We're going to embed it. And then we're going to quickly realize what an absolute nightmare payroll is. And like, we don't have the scale to put the support team in place to understand like, oh, like this is going to require real infrastructure around it. Like this isn't as simple as adding a button in our app. And, you know, over the years, you know, I often joke, if you Google white label payroll, we are page one. We have been for about 10 years. I've had more conversations probably about white label payroll than any other human on the face of the planet over the last 10 years. Because we're, it's like the Goldilocks solution. Like every business wants it in a different way. You know, you've seen all the different from UKG to iSolve to Payroll Relief, which is now an IRIS to QuickBooks used to have a version to that they sunset recently to, you know, now embedded is the new thing. So now everybody who reaches out says, man, you know, I just want to embed it in my XYZ software. And it's, it's interesting to hear. And, you know, we've actually done an install of one of these and it's a nightmare to install. The people who have the software really don't fully understand the payroll industry either is kind of the struggling thing, like the way Gusto serves their clients is different than the way a lot of providers serve their clients and their, their embedded team is predominantly developers. And the same goes for CheckHQ, same goes for everyone else. Um, and so I think it's going to take some time. You're starting to see some, you know, ADP with the, the most recent, um, POS provider they embedded in.

Fiserv, Clover.

Right. Yeah.

Clover.

That's the type of scale I think can be successful. Yeah. Clover's already got infrastructure built out around this, already in the payments space, a parallel space. Like, I could see that being incredibly successful.

And you're not just getting tech with ADP, right? You're getting this underpinning of services that is going to be— that is going to take that further. And I think you're right, there, there's just like everything, right? The integration, the tech, and the underlying capabilities are completely different from vendor to vendor. You got to kick the tires. But yeah, it's very interesting.

I think there's a lot of the M&A movement too that are bringing some of these different industry players together. So whether it's like your dental, your dental example in the front, Matt, or, you know, elevator, you know, buying up elevator or water companies, etc. That will, you know, maybe that'll bring some scale in a way, um, just because they're kind of bringing all these trades, mom-and-pops things under one umbrella. And, uh, that feels like a good, good application for it.

Yeah, yeah.

I think long term it's going to be successful for a handful of players in terms of like the vendors who are providing the embedded embedded software. I think it's going to suit a lot of enterprise companies very well that have scale in terms of internal resources and client base. But we've already seen the arbitrage of how much time and capital it's going to take. We've seen a couple of smaller players that pretty, I'd call well-funded, $40-50 million in funding, are already pivoting back to direct-to-market and saying embedded is too long of a road for us. And so when you've got the internal resources of Agosto and sort of never-ending investment partners and you've got check HQs funded by Square's investment fund. And you've got, you know, ADP and you've got Paycor. You know, these are the types of organizations that are going to have the longstanding ability to ultimately come up with a solution and figure it out over, you know, they're going to lose some high-profile clients along the way. They're going to gain some and ultimately it's going to work. But, you know, man, it's definitely, it's been going on for a good little while now. And it's not exactly a household thing yet.

Just keeping up with the investment needed, right? With all the compliance and everything. Anything else is, you know, that's an undertaking that probably sounds great at the onset but gets a little bit drab.

It's early. It's early. We'll get— we're gonna get there. It's got to mature. But, uh, yeah, no, I'm a fan of it. I, I think the idea of bringing the most impactful thing in your organization and on your balance sheet, your P&L, in line with the rest of the work that you're doing, I think it makes a lot of sense. But how you go about it certainly is going to dictate the experience.

But, uh, look, I'm gonna make a lot of portal builders cry out there, Yes, yes, yes. Everybody is trying to be a front door.

Everybody. Well, and you go back to, so we got to talk about AI, but like, I mean, Claude, the CEO of Anthropic, of Claude, just said, so they just released a new product in 10 days that is one of the first consumer-facing AGI applications called Claude Cowork. Their own Claude code, they built it with Claude code, and their CEO claims that in the next year, the code will be written by itself. And so like, you know, this, they're, we're already starting to see the push out of like, you know, so, okay, well, how is this CRM for trash companies going to exist? One of the first things every organization looks at when it comes to vibe coding or internal development resources is, man, we got to replace Salesforce. We got to replace whatever our CRM is that costs us multimillion dollars a year in enterprise seats. Like, why couldn't we have some of our developers start working on that and make it something custom to our organization? So there's also those tailwinds pulling at all of this and saying like, they're not necessarily going to vibe code a payroll, but they could vibe their own internal operating system and go, hey, how do I embed from one of the embedders, which is something to kind of like, you know, the subset downstream as you continue to move this forward 12, 18 months, because we're moving at, you know, we always talk about technology moving at lightning speed, but, you know, by the day it's picking up at a velocity that's almost unfathomable.

Yeah, agreed. Well, what's kind of the tone? Let's do that. We didn't talk AI. We managed to go this long without doing it, but what's the pulse in the buy-side community downmarket? Right. I feel like there's a little bit of a, of a, I don't want to say cautious optimism, but like kind of like a, yeah, right. We'll see. You know what I mean? With the small, smaller players, I think for a lot of the smaller market HR and payroll teams, that's how they're probably going to get AI is their commercial HCM investment. But what are your thoughts on just what's going on with AI down there? What's your advice maybe to buyers kind of tinkering around and starting to, starting to work with for that?

I think it goes back to Julie's point earlier on the evolution to all-in-one. You're not going to go all-in-one and go AI at the same time because the AI piece has to be a little bit more of a sniper shot in terms of what's the problem I'm trying to solve specifically with AI. Too many CEOs of smaller companies or small business owners have been focused on like, we've got to put AI into our organization. Well, what the heck does that even mean? And now they've got a bunch of ChatGPT licenses, not a whole lot to show for it, you know, 24 months later.

And now we're starting to get into, all right, what is use case we're actually trying to solve for?

And what are the products specifically built for said use case? Or again, how do we code something ourselves internally and put resources into this? I think you'll start to see a lot more of that internal developer, even for just simply professional services organizations that never used to exist. You know, an IT guy used to take care of like, you know, the printer and the network and all this stuff. I think the IT guy of the next 24 months is the person who's building, and I know it is for us. I mean, we just wrapped up our 2026 rollout of our playbook for this year, it's like, hey, how are we strapping all these systems together? We rolled out Cloud Enterprise seats for everybody in the organization. Started, you know, started tiptoeing into— I even said to the team, I was like, I guarantee one of you is going to be an expert in Cloud Code 6 months from now that never thought you would be. And like, I'm here to support that. I'm here to help you to make your job more efficient. We all as small business owners want the super employee, right? The person who can, you know, pull the strings on all the puppets that are effectively the bots, right? And like, we haven't seen that realized in a areas of our business yet. And if you take that back to our industry, we're finally starting to see some of the most obvious applications, which is like, I'm in my own, uh, you know, I'm in my own company in the HRIS and I can ask how much time off I have from an AI chatbot. Like, shouldn't that have been, you know, why are we waiting for this? Yeah. Like, you know, the chat interface, like it's finally, some of these things are finally starting to show up, but these are, like, there is no payroll software that's not a just massive enterprise application regardless of how many people are on it. So they take time to move. So it's a laggard industry. It's always just a hair behind, you know, just because of the breadth and the nature of the software in itself.

Yeah. And the trust that it, that it takes. Do you see it changing pricing at all yet? I mean, are you, are you noticing any, any, I've saw, I've kind of monitored some of the stuff going on with Paycom, Betty, how they've cannibalized some of their, some of their revenues. Uh, I think that's coming back now. That was a few years ago, but what do you think it's doing to pricing, you know, just sort of for payroll and HR that you can tell?

You know, I don't know what it's going to do to the pricing model. You'd be more in tune with that than I am. I know, you know, for example, for us as a PEO provider, we've got a software that we use that's a white label platform. You know, they're coming to us and they're saying, hey, buy the P— buy the AI functions. Yeah. Add on to it. And, you know, you're like, huh, great, man. Like, we're already paying for this, you know, this thing. And like, now we've got an uptick for that. And it's like, you start to immediately look to to how can we do this ourselves? Again, going back to like, do I even trust that you've built something I want? Um, or is there a way for me to lay something over top of this now with the way that I can go about building technology and putting things in place? And obviously they're all like, man, they shut down those APIs quick as can be when you want to start doing your own thing. Uh, back to Julie's point, but the, uh, you can't do that, you can't compete with what we're building. But, um, you know, it'll be interesting. What do you What are your thoughts, Pete? Sorry, Julie.

On pricing? Yeah. Well, look, I think what we're seeing so far is that the HCMs for the most part are including it in module for the, for the most part, right? Where it's being built from the, you know, internally, it's not being bolted on. It shouldn't be, right? I mean, most of these solutions are building the proper way. What I think it's going to do to pricing is a good question. I mean, Julie, we've talked about this a little bit. I think some of it is there's upsells, right? Like at UKG, if you want some of the more higher-end features from Bright, you have to pay a little bit for that. Otherwise, it's kind of in module, it's already in, in platform. But I think what you're probably going to see is eventually we're going to get to some sort of a mix of sort of a SaaS subscription, uh, maybe a volume usage, right? You've seen Workday do the flex credits for the enterprise to say, hey, you know, to try and encourage some experimentation and adoption. The challenge I think is interesting, especially that I've seen this like, you know, in the enterprise. We talked about this, I think, with Cornerstone On Demand, with Galaxy, you know, their thing is like, how do we get people to take something that they might not be entirely— I don't want to say distrusting of, but just not sure how they're going to use it right quite yet. If they've got to pay for it, it might be a deterrent. Maybe we get people the opportunity to, to come in the door, you know, get in there and then begin to grow with it in price later. So I think there's a lot of different things going on just in that regard, but I think downmarket you're probably going to see so much more of it just woven into the module pricing.

And hopefully things will be better next year.

Yeah, what do you got?

I've gone on record on our hot topics, you know, for this year, which probably will come out any day now. And I think, yeah, everybody says it's embedded in table stakes, but I just feel like my unpopular prediction is there's going to be upcharges all over the place. And people don't even know what or how or if they're going to use it. And it's just going to be frustrating from that perspective. But oh, I definitely see the vendors weaving that into commercial model. And what's even more interesting is I do a lot of contracting work and seeing how that plays out in subscriptions and order forms and bundling of SKUs.

And I remember reaching out to our development shop. You know, we use a third party to do all of our dev work. And I was like, hey, how are you guys using AI to be more efficient and develop for us faster? And like, you know, I expect us to start getting those questions from our customers over the next couple of years. Years of like, hey, so for my peppermint, like, what am I getting more now knowing that your team is using AI to be more efficient on their side? Like, you know, what am I getting for my price? And like, you know, when do I expect to see some relief there? Again, I don't want to breathe that into existence, but I know as a consumer, that's what I'm going to be thinking, right? If I'm relying on— Yeah. One of the first tweets I saw when all this started was some CPA talking about how, oh, my rates are only going to go up over the next few years. And I was like, man, like, there's no industry more ripe for large language models than a CPA when and everything is black and white written down, man. Like, I'm like, you better be careful what you wish for there. Uh, but you know, that's one where I also expect, like, if my CPAs, if my providers aren't using a high level of technology, I'm looking at them with a high level of scrutiny going like, why are you still doing things the old fashioned way when you could be operating more efficiently, serving me better, and I'm either getting more bang for my buck or you're reducing my rates.

Yeah. I mean, buyers are expecting that, right? That's, that's exactly what they're expecting. Meanwhile, Providers are adding in, they have innovation fees or COLA increases, and it's all about getting that stuff baked in. They're shocked, frankly, when they turn around and they have to pay additional fees for that because where else are you innovating, right? So I think there's a point of conflict there where these things come together and expectations are not going to be easily aligned.

Yeah, yeah. It's going to be interesting to see. We should have this conversation again in a year and see where we are. Pricing. It's kind of— it depends on the vendor right now. It really is really interesting. So, Matt, one more thing I want to talk about is this, this all-in-one, right? The all-in-one trend. We've had a couple of shows on this on the ERP side. One of the things I think I see is more finance coming closer to HR and HCM, right? You're seeing like we went through this phase, I think, 10 years ago where it was like no longer about payroll, is about, you know, not a $6 Peppermint for payroll. We're out there selling a $50 Peppermint for HCM, full sweet HCM, which is good for everybody. Now I feel like what we're talking about is more of an ERP play, where it's like, how much ERP does the small market want with their HCM? Because you're seeing things like FP&A come closer, financial planning. Obviously workforce management is getting bigger. What are your thoughts on these finance solutions sort of inching their way into the HR world and becoming kind of a module within, you know, FP&A kind of being a module within HR now?

You know, look, as a consumer, I would love it, right? So like, as a small business owner, to be able to go to one portal and know, like, look, for me, my labor expense is my number one expense far and away. Like, to be able to tie that into my books and have like a much cleaner look at that without having to have integrations or data syncs or all these things would be amazing. The problem is you're so far from it. The all-in-one solution is always the knock on it, right? And I've sold, I've sold it and I've sold against it. And you know, it's like when I'm selling against it, I'm going, you don't get the best of breed in any module that you have, right? Like, so you have kind kind of like a mediocre module across the board. And I think that's where we are for the foreseeable future is like just mediocrity across the board. If you're doing that versus going with some best-in-breed stuff, you know, obviously what you want to do though is be very selective with your tech stack and start to get things that play really nice together. So for example, we use Fathom HQ for our FP&A stuff and for, you know, all that. Like we want to make sure that integrates tightly with our financial suite so that we can see accurate data pulled right out of there without without having to come up with, you know, doing any data syncs or things like that. And then conversely, you know, now you really would ideally like that payroll syncing in and all that. It gets a little muddy, but it's, you know, the alternative is like just not having the feature functionality. It's the same old story. You know, I literally used to have a slide about where I just had a picture of a dog with a ribbon on its neck of like, we prefer the best in breed. You know, we sync these 3 different modules together. Well, that's all I had. So that's what I sold, right? Like, I mean, that was when we first opened the business. I had one payroll system, one HR system, one timekeeping system. It's what I had in my bag. And so I was like trying to sell on the value of it. And you could sell on the value of all-in-one. I think if you were to take a leap sideways and look at HubSpot as an example, CRM company who's gone all-in-one, it also just gets so clunky. Like we tried making the migration over to HubSpot off of Zoho a couple years back and we reversed course because I'm like, this is not the HubSpot that I used 5 years ago that was one of the most user-friendly CRMs, perfect for SMBs. Everything becomes enterprise so quickly and floods out the, you know, the small business user. So, you know, when you've got a team full of consultants and people on the team that are expecting sort of the, like, the friction that occurs in enterprise-level software and, you know, being able to spend time, money, energy on consultants to implement and service and set up and all that. Yeah, you can get away with that stuff. If you're a small company with 25 to 50 people and and you're like, look, like we don't have internal administrators of our software, then it just gets that much more challenging. Yeah.

Yeah. Matt, this is so awesome, man. I could talk to you forever. I hope we can, we can keep, keep hanging out offline, man. We got to check in every now and again, but look, to wrap this up, man, any advice for, for firms out there, buy side or even providers, any advice to the two of those sides about, you know, how to navigate all that's going on here, man?

Yeah. I always like to say, you know, look for pain relievers, not vitamins. Right. So like, don't get confused with the eyewash. Louie's point, like everybody's going to have these cool AI tools and features and you're going to go like, ooh, that's, that's really, that could be awesome. Like we could do some really neat stuff with that. Like you got pains in your organization right now, like solve the pains primarily with the best solution for your organization. And you know, don't listen to, I'm pretty, pretty non-aggressive when it comes like, hey, this is good for some people. This is good for other people. This is good for other people. I don't really, you know, there's plenty out there for everybody, but I do think it's important that you just understand your pains before you let somebody else kind of try to dictate what your pains are. Cause salespeople are really good. You know, I was one for a while. Like we're, you know, part our, our job is to bring you down the pain chain and to try to, you know, create some pain and make you think of some pain. Maybe they will help you identify some pain you didn't even realize was there. I've done that a lot of times. It's a real thing. Uh, but make sure you're solving pains, not buying vitamins. And there's going to be a lot of vitamin water in the market over the next couple years.

I love it. I love it. Matt, where can everybody, uh, get in touch with you, man? I'll make sure we share the links.

Yeah, just hit me up on LinkedIn. I'm looking forward to connecting with people.

Okay, awesome. I appreciate you. And look, thank you everyone, as always, for joining us. Thank you, Matt, so, so much for coming and sharing with us, man. It's informative. Uh, and yeah, we'll be back very soon. Appreciate everyone for, uh, sticking and staying with us.