Making Tons of Money Means Nothing If You Don't Have a Passion for Your Startup
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As the founder of an app development company, Josh Reeves didn’t love his startup. Despite making thousands in revenue each day and having millions of subscribers, he wasn’t happy.
“I wasn't excited to talk about it,” Reeves says. “I was happy to stay in stealth-mode, which is an easy and simple way to not talk about what we were doing.”
When he sold the company in 2010, he knew next time around things were going to be different. He wanted a strong mission behind his business.
In addition to running his own venture, in the past Reeves had worked for big firms, in labs and in the nonprofit sector.
Despite the inherent differences between all these environments, Reeves saw them all facing a similar challenge: a clunky, non-friendly HR experience. The question of how to make business functions like payroll and benefits better account for the individual needs of the employees, rather than a cold, one-size-fits-all system, was something that fascinated Reeves.
In 2011, he co-founded Gusto, a payroll and human resources platform, with Edward Kim and Tomer London, to help businesses treat their employees like human beings, not numbers on a spreadsheet. A Stanford graduate with a background in electrical engineering, Reeves is a Silicon Valley veteran, but he describes his work developing Gusto as a true passion project.
In the five years since the company's launch, its client base has grown to more than 40,000 small businesses around the country, it processes tens of billions of dollars in annual payroll and has raised over $175 million from investors like Google Capital and the founders of startups like Dropbox, Eventbrite Instagram, PayPal and Yelp.
We caught up with Reeves about leading with your passion, running a business with a mission and the importance of setting aside time for reflection.
Q: Knowing what you know now, what would you have done differently when you were first starting out?
A: The simplest way to put it is that work is not work, it's a part of life when it's a mission-driven business. The lesson there is to be proactive, not reactive.
My last startup was a company called Unwrap, Inc. that I launched in 2008. We had a product called Buzzeo. I spent two years working on that company and from the financial standpoint, it looked successful. We were making thousands of dollars a day in ad revenue. We had millions of users; it was a way for businesses to build apps on top of Facebook.
But what was really lacking in retrospect was that we were reactive, because it wasn't clear what problem we were trying to fix. It also wasn't clear what this would look like in five, 10 and 20 years. And that really bothered me. In retrospect it was just very reactive, we were constantly trying to improve, make more ad revenue but what specific customer were we trying to serve?
The biggest lesson I learned is to focus on the problem you want to solve. Is this something I want to spend years working on? If I was going to build a team and evangelize about it, I had to be really passionate about it.
Q: How do you think young entrepreneurs might benefit from this lesson?
A: The advice I always give is imagine it's the 10,000th time you're describing it. Will you be as authentically and sincerely excited about it then as you were the first time? Because on the 10,000th time, you can’t fake it. With Gusto, I definitely have described it more than 500,000 plus times, and it's been a privilege, because I really believe in it.
As an entrepreneur, if you aspire to build a mission-driven business, start with a problem. I don't think a company is a thing to do. It's almost caring so much about a problem that someone is forced into starting a company to do something about. If someone is thinking about it in that way and that's what's meaningful to them, they will build a mission-driven business.
That enthusiasm to wake up every day to try and build something better [will sustain them].
Q: What are you glad you didn’t know then that you know now?
A: I think a lot about how we started Gusto. None of my co-founders and I have ever worked in HR, payroll or benefits. We had all been employers and employees and we approached it from that perspective. We thought about how it could work, how it should work. We wondered why it wasn't done that way. We wondered why people were being treated like ID numbers, why there wasn't as much community inside companies as there should be.
There were a lot of things that we wondered about because there wasn't really any legacy or baggage that encumbered us; we just thought about it from the perspective of what seems like common sense? If we were to put ourselves in the shoes of the employer or the employee, what would make sense for them? We had never worked in this industry before so we just had to approach it that way.
Q: What is your best advice for aspiring entrepreneurs?
A: You have to create your own time for introspection. Ten years can fly by without ever taking a step back and wondering, “Am I spending time on something I really care about or am I working with people I look forward to spending my time with?” Especially for entrepreneurs, who have to be the ones evangelizing and inspiring others.
Take time for introspection. It could be weekly, monthly, quarterly. For me, I like to go out in nature. International travel is a big one for me, too. I try to do two trips a year that are at least two weeks long. It gives me a chance to disconnect. Because there are always a million things to do, and sometimes entrepreneurs celebrate having a lot of things to do but not doing the few things that matter most. List out the things you're not doing. If someone can't immediately list out the things they aren't doing, then it usually means they’re trying to do everything.