We joined Y Combinator in 2012 with the idea that we could change the way people think about payroll. The name of our company back then, “ZenPayroll,” emphasized our focus on the payroll domain (although we already had aspirations to go beyond payroll, as contemplated in our YC pitch deck).
We rolled out to fellow Y Combinator companies first. With a few successful cycles under our belt, we opened up to “friends of friends” with the stipulation that all companies be based in California. You see, each state has its own rules around how tax data should be reported, and we wanted to be good at California before venturing across the border.
Obsessing about making it easy for small- and medium-sized businesses to manage payroll was (and continues to be) paramount to our mission. We believe we can help business owners find the freedom to focus on the non-administrative aspects of their businesses. And with this mission in hand, we continued to grow.
In 2013, we processed about $100 million in payroll. By April 2015, we reached a point where we were processing billions of dollars in payroll annually for 10,000-ish customers in multiple states.
Growth was good, and we needed to expand our team.
In July 2015, we announced the opening of our Denver office with a plan to seed that location with our customer experience team. Other teams would follow over the next few years. And with our new Denver location we were ready to announce big changes around expanding into new market segments.
Our mission is to create a world where work empowers a better life. There are several steps we need to take to get there. But the first involves making running payroll, benefits, and HR as easy as running water.
In September 2015, we changed our name to “Gusto” and announced we were going into the benefits business. A year later, we announced we were getting into the HR business. A significant portion of our customers expressed interest in an all-in-one people solution (payroll, benefits, HR) in order to further simplify their business operations. And in order to get into the benefits and HR markets, we needed to reorganize our Engineering, Product, and Design (EPD) team.
In the ZenPayroll days, all of EPD focused on the payroll domain. But in order to become an all-in-one people solution we needed to create two new product teams to support our go-to-market strategy: HR and Benefits.
Today we refer to our product teams as “missions” here at Gusto. Three of them are go-to market products we offer our customers (HR, Payroll, and Benefits). The two others are vital cross-product focus areas.
Growth, for example, focuses on product-based experiments that help us do a better job reaching new customers. That mission also has a concentration area around master data management to help our business and product teams derive insight from the millions of data artifacts our system generates every day.
FinTech focuses on moving money between bank accounts so employees get paid on time. They are masters at understanding the nuanced nature of ACH and other money transfer methods. Further, our Developer Experience (DEX) team loosely rolls into FinTech (via Infrastructure), and is the reason why we can do things like ship code to Production 5 to 10 times per day.
Each mission is led by an engineer, product manager, and sometimes a designer. Most of our missions are divided into pods, with each pod comprising a handful of engineers and a lead. But some of our missions are pod-less, opting to dynamically assemble teams based on project needs. We feel that experimentation around team structure is super important.
Two of our missions, Growth and Payroll, have pods in Denver. Most of Growth’s data team is there. The Denver payroll pod focuses on tax payments and filings.
As headcount in Denver continues to increase (we have about the same number of people in both offices), we asked ourselves if it made sense to bolster our EPD presence there. Many of our operational and engagement teams had re-centered in Denver. Was there a chance to optimize for geography?
We looked at how other companies went about opening their second engineering locations, and were inspired by how Instagram opened its NYC engineering office. We liked how they placed “big bets” on their new location, moving strategically important initiatives there.
And we realized that payroll, being core to day-to-day work for most of our Denver-based business teams, spiked high on geographic optimization. Our Customer Care teams do a lot of payroll support, and being able to walk over and talk through issues with engineers in person would add a ton of value. Our Tax Operations and Resolution teams file for our customers on a quarterly (and sometimes monthly) basis. They’d benefit for the same reasons.
Gusto would be a better business over the long term if we invested in making Denver our home base for the Payroll mission.
So that’s what we’re doing. The Denver Post announced last month that we’re hiring a lot of engineers (and PMs and Designers) in Denver in 2018. Much of that is tied to this decision.
Gusto EPD will always be headquartered in San Francisco. And the Payroll mission will always have teams in that city even though product and engineering direction will originate in Denver.
It’ll take time to do this properly. Payroll is core to our business and is esoteric, to say the least. We’ve planned for a long transition period with key milestones throughout. And when we get through the transition, it’s going to do great things for our business.