- Anu Hariharan, Managing Director at Y Combinator, interviews Tomer London, co-founder and CPO of Gusto, about their first 5 hires.
- The first hire was Davey, a designer who had a full-stack mentality and was able to stretch across multiple disciplines.
- The second hire was Steven, a software engineer who brought a methodology of software development, including pair programming.
- The third hire was another Steven, who had deep experience in taxes and payroll, filling a skill gap in the team.
- Hiring this third person was challenging because they were not from the industry, but they found them through LinkedIn and reached out to many people.
- Gusto focuses on hiring people with a growth mindset and a willingness to learn and grow.
- The company emphasizes building a great place to work and celebrates every person who receives an offer.
- The early hires at Gusto set the culture for the rest of the company and contribute to their mission of helping other companies build great places to work.

- Gusto has a unique culture of a "no shoe policy"
- This culture started when the company was started in the founders' house
- Even after moving to an office, the founders decided to keep the shoes off policy to maintain a home-like atmosphere
- Gusto provides slippers or branded socks for employees to wear instead of shoes
- Some people even think Gusto is a sock company because of this culture
- The video also mentions Gusto's first 5 hires and provides links for job opportunities at Gusto and other startups.

In the first episode of our new series, First Five, we talk with the Co-Founder and CPO of Gusto, Tomer London, about the first five hires he and his co-founders made when they were first starting out. Along with host and Managing Director of Y Combinator Continuity, Anu Hariharan, Tomer discusses how Gusto prioritized which roles to hire for, how they found top candidates, and the early values they've held onto as the company has grown to over 2,000 employees.

Chapters (Powered by https://bit.ly/chapterme-yc) - 
00:00 - Introduction
00:45 - First hire
02:17 - Second hire
04:12 - Third hire
07:45 - Fourth hire

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#startups #hiring #business #hr

Welcome to the first 5, where growth stage companies funded by Y Combinator look back on their first 5 hires.

I'm a Managing Director at Y Combinator and work with our growth stage companies.

I'm here with Tomer London, the co-founder and CPO of Gusto, which provides growing businesses with everything to take care of their teams.

Gusto was part of Y Combinator's Winter 2012 cohort.

Today Gusto has more than 2,000 employees.

Tomer, can you talk to us about the first Gustie?

So the first Gusty outside of Josh, Eddie and myself, the founding team, his name is Davey and he's been a phenomenal part of our journey for many years.

So basically, where we started, 1 of the things that we knew that's really, really critical for the success of our business is to build a great user experience.

But it was really important for us that it would be easy to use, and user experience was 1 of the most important key differentiators in the way we saw this industry's evolving.

1 of the unique things about Davii is basically this full stack mentality, this ability of knowing, hey, I'm not just going to be a part of this little box, and I'm just going to do the things that designers do and what designers, whatever profession it is, you kind of have the box that usually people expect you to sit in.

And generally when we think about all of our first hires, and for the first at least, I would say 50 to 100 people, we really, really celebrated and put a lot of emphasis of folks who can stretch across multiple disciplines, even if they don't know, that they don't have experience in that, they'll be able to kind of jump in and learn that on the go.

Okay, so that was your designer was the first hire.

He was also a great cultural fit, came through your network.

And, you know, you really emphasized user experience.

And that's how I, you knew you wanted to go out and hire a designer.

So our second hire is, his name is Steven, and he's a software engineer.

We really put a lot of emphasis on not just ability to code and build good software and being a smart problem solver, but also someone who thinks a lot about the way of building software, like the how and the methodology of software development in general.

So he was really skilled at taking what he liked across different types of teams and helping us build a methodology of how to build great software.

So for example, 1 of the first things that we were really early into is pair programming.

Still today, 11 years later, we heavily rely on pair programming because it's a really great way of getting more and more people to understand the code base.

And again, as I mentioned, code, like, payroll is pretty complex.

So I think pair programming is a way that really helped us, is a methodology that really helped us on board and engineer successfully over the years.

So that's just kind of 1 example of the type of practices, best practices that he brought to the table.

I have not heard that that often in many startups, especially at scale.

Now for Steven in particular, how did he get convinced to join Gusto?

Yeah, so we got Steven through a job post on Hacker News.

He was trying to read something else on Hacker News.

And then he got to read about our company.

And that's really what got us the privilege of having that first meeting.

know, you're not the first founder and I'm sure you're not gonna be the last founder to use Hacker News to hire some of your first 5 engineers.

It's amazing to me how well Hacker News works.

And it shows there was mutual interest, right?

You wrote about your problem, and he expressed an interest.

So the third hire, we knew 1 of the things when you think about the skill set of the team, 1 of the things that we had missing is actually deep experience of decades in taxes and payroll.

So all of us, again, were software engineers and electrical engineers and product people, and we were users of payroll and HR software from ourselves or from watching our parents.

We knew that we didn't have that heavy tax experience.

So we really quickly knew that this is something that was really, really important for us to bring in someone with that skill set, with that amount of understanding of the industry for both to build our compliance function, but also be able to advise us on product decisions and on customer care and operations.

And we kind of really focused on the same idea, growth mindset, challenging yourself.

He took himself, he took his truck from Minnesota, packed all of his stuff and literally moved to California for this job, which was amazing.

He used to, his name is Steven too, by the way.

So he used to wear suits every day to work.

And he said in an interview that 1 of the things he was most excited about is to work in a payroll company.

And a company that sells like a payroll product that doesn't make you wear a suit every day to work.

We actually surprised him by all of us wearing suits.

So that's kind of, you know, early days, it's full stack.

Today, we have like literally hundreds of people doing this type of work, but it's really compliance and operations and customer care all together in 1 person.

Because I think it's easier to convince like the Stephen who was the software engineer or the designer, because they probably are in the Valley and they want to work at a startup.

This is a person from Minnesota who worked in payroll and then you're just 4, 5 people at the time in total.

Like how, How did you even find this person and how did you especially convince him to join Gusto when you got Gatuanso?

Yeah, that's definitely 1 of the hardest hires actually exactly because of this.

I would say I would add 1 more thing which is how do you evaluate this person's skill set?

Because we're not from that, again, that industry.

Now we just, you know, spent, I spent, in the first 5 years of the company, I probably spent, not exaggerating, between 5 and 10 hours a week on LinkedIn, reaching out to people.

Like that was basically my off day when my brain was kind of like fried already from a whole day of coding and work.

It was me going to LinkedIn and just like connecting with a lot of people and seeing if there's an opportunity if they're interested in talking with us about a job at Gusto.

There's a lot of time and patience and numbers.

And until, 1 of the interesting things also when you do that, again, not scalable, but in the early days, you don't have to do everything that scales, not everything has to scale.

A lot of these people that I reached out in the first year, second year, third year, actually ended up coming back years later for a job at Gusto and were part of our journey.

So these things again like have a way in the end of having returns if you have long enough you know breath time and all that.

And I love the fact that you bring back your long-term focus, which is truly, I think, Gusto's superpower, which is, if not today, it'll be in the future, but you always lay the legwork for what it takes to scale the team.

So we actually hired more engineers around that time.

So it was similarly Hacker News, Posts, and again, really putting the emphasis on these 2 things.

1 is the skill set, so to be able to expand what we do, our ability to – so we got folks, for example, with funding experience, back then we had a little bit missing of that.

But then on the other side, really focusing on the mindset, this growth mindset, this ability to kind of keep learning and growing.

And as people joined, obviously we really understood that people are the most important part of any business and that's 1 of our missions in the companies to help other companies build great places to work.

So for us, making that a priority was kind of an obvious thing.

And once we did find someone who was great, we went all in in order to get them to accept and to join us.

For example, we still, by the way, do it today.

So every person who gets an offer on Gusto, the offer itself has – You meet the entire panel on a phone call.

All of us talk to celebrate the person and share why we love working with them and why we would love to work with them.

We still do it to the very first, just today as well.

But back then it was the entire company, you know, so you were 10 people, whatever.

So the entire company goes on the call and everyone goes around and celebrates the person.

So really spending a lot of energy and focus on how do we build a great place to work where people feel like they're appreciated and they're giving, they're part of a team that really loves them.

That kind of helps sets the tone then because this very first, I call it 30, 40 employees end up really setting the culture for the entire rest of the company later, because many of them become very influential, whether as managers or not as managers, become really influential in the company.

You know, what I really like about what you said is how you wanted Gusto to be a great place to work and influence the culture, but that's really what you're building for your customers.

Because you also mentioned that is your mission to make it great for your customers to feel like it's a great place to work.

I think the 1 other point I'd love for you to highlight for the audience, which I think is really unique about Gusto is you and I have joked about this, that a lot of our kids think Gusto is a socks company.

So maybe you can touch on how did you keep that culture of no shoe policy?

So yeah, so when the company started, we started it in our house.

And in our house, we actually, you know, just growing up, I always took my shoes off.

Josh and Eddie also took their shoes off in the house.

So we just, you know, naturally asked the first few folks who joined the company, the first few guests, just to take their shoes off in the beginning of the, kind of the enter to the office.

And we ended up being very early days like just a shoes off company as a result of this.

Then obviously in the beginning it was very easy because we literally worked in a house.

I actually distinctly remember this moment of people coming in the first day to the office.

We were around I want to say 15 people or something like 20 people, something like that, coming in and kind of looking around like, are we going to wear shoes in this place or not?

And I think, again, Josh, my co-founder CEO, made a call in that moment, looked around like, no, no, no, no, we're going to keep the shoes off thing because we want to feel like this is our home.

And in the moment decision ended up today, 10 years later, still being a part of a really big part of our culture.

And yes, we make a lot of, we give people a slipper, Stein's type band for them to buy before the first day.

You don't have to walk around with your socks.

We do have tons of branded socks for every big event, every new product milestone or a big milestone for the company with a sock collection.

So I knew, as you mentioned, some of our kids think, really, some of the kids and people in Gusto feel like Gusto is a sock company now.

So it's very colorful socks too, really good ones.

But thank you so much, Tomer, for taking the time to share your insights on the first 5 hires and how you went about doing that.

If you want to work for Gusto, visit gusto.com slash careers.

If you're looking to be 1 of the first employees at a startup like Gusto, Check out Y Combinator's job board at workatastartup.com.


Speaker 0: Welcome to the first 5, where growth stage companies funded by Y Combinator look back on their first 5 hires. My name is Anu Hariharan. I'm a Managing Director at Y Combinator and work with our growth stage companies. I'm here with Tomer London, the co-founder and CPO of Gusto, which provides growing businesses with everything to take care of their teams. Gusto was part of Y Combinator's Winter 2012 cohort.

Welcome Tomer.

Speaker 1: Thank you. Great to be here.

Speaker 0: Today Gusto has more than 2,000 employees. Tomer, can you talk to us about the first Gustie? Who was it and how did you find them?

Speaker 1: Yeah, absolutely. So the first Gusty outside of Josh, Eddie and myself, the founding team, his name is Davey and he's been a phenomenal part of our journey for many years. And Davey is a designer. So basically, where we started, 1 of the things that we knew that's really, really critical for the success of our business is to build a great user experience. But it was really important for us that it would be easy to use, and user experience was 1 of the most important key differentiators in the way we saw this industry's evolving.

1 of the unique things about Davii is basically this full stack mentality, this ability of knowing, hey, I'm not just going to be a part of this little box, and I'm just going to do the things that designers do and what designers, whatever profession it is, you kind of have the box that usually people expect you to sit in. But Debi was not thinking like that. And generally when we think about all of our first hires, and for the first at least, I would say 50 to 100 people, we really, really celebrated and put a lot of emphasis of folks who can stretch across multiple disciplines, even if they don't know, that they don't have experience in that, they'll be able to kind of jump in and learn that on the go.

Speaker 0: Okay, so that was your designer was the first hire. He was also a great cultural fit, came through your network. And, you know, you really emphasized user experience. And that's how I, you knew you wanted to go out and hire a designer. Who was the second?

Speaker 1: Right. So our second hire is, his name is Steven, and he's a software engineer. We really put a lot of emphasis on not just ability to code and build good software and being a smart problem solver, but also someone who thinks a lot about the way of building software, like the how and the methodology of software development in general. So he was really skilled at taking what he liked across different types of teams and helping us build a methodology of how to build great software. So for example, 1 of the first things that we were really early into is pair programming.

Still today, 11 years later, we heavily rely on pair programming because it's a really great way of getting more and more people to understand the code base. And again, as I mentioned, code, like, payroll is pretty complex. So I think pair programming is a way that really helped us, is a methodology that really helped us on board and engineer successfully over the years. So that's just kind of 1 example of the type of practices, best practices that he brought to the table.

Speaker 0: That's great. That's actually a really profound 1. I have not heard that that often in many startups, especially at scale. Now for Steven in particular, how did he get convinced to join Gusto?

Speaker 1: Yeah, so we got Steven through a job post on Hacker News. And he famously said he fat thumbed it. He was trying to read something else on Hacker News. And then he got to read about our company. And that's really what got us the privilege of having that first meeting.

You

Speaker 0: know, you're not the first founder and I'm sure you're not gonna be the last founder to use Hacker News to hire some of your first 5 engineers. It's amazing to me how well Hacker News works. And it shows there was mutual interest, right? You wrote about your problem, and he expressed an interest. And who was your third hire?

Speaker 1: Right. So the third hire, we knew 1 of the things when you think about the skill set of the team, 1 of the things that we had missing is actually deep experience of decades in taxes and payroll. So all of us, again, were software engineers and electrical engineers and product people, and we were users of payroll and HR software from ourselves or from watching our parents. We knew that we didn't have that heavy tax experience. So we really quickly knew that this is something that was really, really important for us to bring in someone with that skill set, with that amount of understanding of the industry for both to build our compliance function, but also be able to advise us on product decisions and on customer care and operations.

And we kind of really focused on the same idea, growth mindset, challenging yourself. He took himself, he took his truck from Minnesota, packed all of his stuff and literally moved to California for this job, which was amazing. He used to, his name is Steven too, by the way. So he used to wear suits every day to work. And he said in an interview that 1 of the things he was most excited about is to work in a payroll company.

And a company that sells like a payroll product that doesn't make you wear a suit every day to work. So he came in his first day. We actually surprised him by all of us wearing suits. So that's kind of, you know, early days, it's full stack. So he's 1, he was doing.

Today, we have like literally hundreds of people doing this type of work, but it's really compliance and operations and customer care all together in 1 person. That was the beginning.

Speaker 0: But how did you hire this person? Because I think it's easier to convince like the Stephen who was the software engineer or the designer, because they probably are in the Valley and they want to work at a startup. This is a person from Minnesota who worked in payroll and then you're just 4, 5 people at the time in total. Like how, How did you even find this person and how did you especially convince him to join Gusto when you got Gatuanso?

Speaker 1: Yeah, that's definitely 1 of the hardest hires actually exactly because of this. I would say I would add 1 more thing which is how do you evaluate this person's skill set? Because we're not from that industry. Because we're not from that, again, that industry. Now we just, you know, spent, I spent, in the first 5 years of the company, I probably spent, not exaggerating, between 5 and 10 hours a week on LinkedIn, reaching out to people.

Like that was basically my off day when my brain was kind of like fried already from a whole day of coding and work. It was me going to LinkedIn and just like connecting with a lot of people and seeing if there's an opportunity if they're interested in talking with us about a job at Gusto. So just a lot of numbers. There's a lot of time and patience and numbers. And until, 1 of the interesting things also when you do that, again, not scalable, but in the early days, you don't have to do everything that scales, not everything has to scale.

A lot of these people that I reached out in the first year, second year, third year, actually ended up coming back years later for a job at Gusto and were part of our journey. So these things again like have a way in the end of having returns if you have long enough you know breath time and all that.

Speaker 0: And I love the fact that you bring back your long-term focus, which is truly, I think, Gusto's superpower, which is, if not today, it'll be in the future, but you always lay the legwork for what it takes to scale the team. So that was your third hire. Who's the fourth?

Speaker 1: So we actually hired more engineers around that time. So it was similarly Hacker News, Posts, and again, really putting the emphasis on these 2 things. 1 is the skill set, so to be able to expand what we do, our ability to – so we got folks, for example, with funding experience, back then we had a little bit missing of that. But then on the other side, really focusing on the mindset, this growth mindset, this ability to kind of keep learning and growing. And as people joined, obviously we really understood that people are the most important part of any business and that's 1 of our missions in the companies to help other companies build great places to work.

So for us, making that a priority was kind of an obvious thing. And once we did find someone who was great, we went all in in order to get them to accept and to join us. For example, we still, by the way, do it today. So every person who gets an offer on Gusto, the offer itself has – You meet the entire panel on a phone call. All of us talk to celebrate the person and share why we love working with them and why we would love to work with them.

We still do it to the very first, just today as well. But back then it was the entire company, you know, so you were 10 people, whatever. So the entire company goes on the call and everyone goes around and celebrates the person. So really spending a lot of energy and focus on how do we build a great place to work where people feel like they're appreciated and they're giving, they're part of a team that really loves them. That kind of helps sets the tone then because this very first, I call it 30, 40 employees end up really setting the culture for the entire rest of the company later, because many of them become very influential, whether as managers or not as managers, become really influential in the company.

Speaker 0: You know, what I really like about what you said is how you wanted Gusto to be a great place to work and influence the culture, but that's really what you're building for your customers. Yeah. Because you also mentioned that is your mission to make it great for your customers to feel like it's a great place to work. I think the 1 other point I'd love for you to highlight for the audience, which I think is really unique about Gusto is you and I have joked about this, that a lot of our kids think Gusto is a socks company. So maybe you can touch on how did you keep that culture of no shoe policy?

Speaker 1: Exactly. Yeah, yeah. So yeah, so when the company started, we started it in our house. And in our house, we actually, you know, just growing up, I always took my shoes off. Josh and Eddie also took their shoes off in the house.

So we just, you know, naturally asked the first few folks who joined the company, the first few guests, just to take their shoes off in the beginning of the, kind of the enter to the office. And we ended up being very early days like just a shoes off company as a result of this. Then obviously in the beginning it was very easy because we literally worked in a house. Then we moved to the first office. I actually distinctly remember this moment of people coming in the first day to the office.

We were around I want to say 15 people or something like 20 people, something like that, coming in and kind of looking around like, are we going to wear shoes in this place or not? And I think, again, Josh, my co-founder CEO, made a call in that moment, looked around like, no, no, no, no, we're going to keep the shoes off thing because we want to feel like this is our home. And in the moment decision ended up today, 10 years later, still being a part of a really big part of our culture. And yes, we make a lot of, we give people a slipper, Stein's type band for them to buy before the first day. So they can walk around with slippers.

You don't have to walk around with your socks. We do have tons of branded socks for every big event, every new product milestone or a big milestone for the company with a sock collection. So I knew, as you mentioned, some of our kids think, really, some of the kids and people in Gusto feel like Gusto is a sock company now.

Speaker 0: So it's very colorful socks too, really good ones. But thank you so much, Tomer, for taking the time to share your insights on the first 5 hires and how you went about doing that.

Speaker 1: Thank you. Thanks, Anu.

Speaker 0: Thank you for your time, Tomer. If you want to work for Gusto, visit gusto.com slash careers. If you're looking to be 1 of the first employees at a startup like Gusto, Check out Y Combinator's job board at workatastartup.com.

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The First Five Hires Of This $10 Billion Business