Tomer London
Related people
Episodes
Notes
The Peel with Turner Novak · How Gusto Built a $9.5B Company with Co-founder Tomer London
-
What Did a 40-year Clothing Store Teach a Payroll Founder?
Tomer London says his dad has run a clothing store in Israel for over 40 years and is still running it. The lesson was how many jobs sit on one owner. A bigger company builds a career ladder so a person can stay inside one department. A store owner does not get that. The owner has to bring customers in, finance the inventory, decide what to sell, set the price, and react when a competitor moves in with a lower price or a different product. Taxes change and interest rates rise, and the cash flow still has to work.
There is no wall between a marketing team, an inventory team, and a fraud team. At the start it is one person. Get it right and the business is the reward. Miss it and the job is g
-
What Is Gusto Co-Founder?
Tomer London says Gusto Co-Founder is a way to run the back office by text instead of logging into Gusto. It works over SMS, iMessage, Slack, and WhatsApp. Building timesheets with AI is a capability. Co-Founder is the interface. An owner can text to change a salary, run a bonus payroll, pay a contractor, or sort out timesheets, instead of clicking through layers of menus.
The useful version does not sit and wait. It looks over the account in the morning. Seven PTO requests might be waiting before payroll. Five look ordinary, so it approves those and asks about the other two, all over text. It can also notice that a company hiring more engineers is not claiming an R&D tax credit that could
-
Why Did Gusto Acquire Guideline?
Tomer London says Gusto acquired Guideline, one of the leading 401k providers in the US, because Guideline had built the same kind of business Gusto built for payroll, only for retirement plans. Guideline made a delightful product that is easy on the employee side and easy on the company side, and robust enough for tens and hundreds of thousands of companies. Gusto had partnered with Guideline since Guideline started, and many Gusto customers already used Guideline, so the match was already working.
Putting both companies on the same code base, the same database, and the same application opens better products: faster payments so people get money sooner and invest it sooner, and one mobile a
-
How Did Word of Mouth Grow Gusto?
Tomer London grew Gusto through word of mouth by treating the small business owner as one decision maker. The choice is professional and considered, closer to an enterprise buyer, and it is still a single person, closer to a consumer. It is an objective decision meant to improve a business, without the complexity of an enterprise deal where 10 departments must align on strategy and a budget.
Word of mouth is the whole game, and it takes a product worth talking about, one people really love. The starting thesis was that Gusto could not afford salespeople walking the streets, so growth would come from incredible customer love, with NPS of over 80, over 70. Small businesses talk with one anoth
-
How Does Gusto Give Small Businesses Peace of Mind?
Tomer London says Gusto tries to give small business owners peace of mind by acting as a partner, not only a business tool. A tool is something the owner must use correctly, like a hammer they have to keep from hurting them. A partner takes work off the plate and offers reassurance that someone else has it handled.
Since day one, Gusto has asked the fewest questions possible to get the job done, sent reminders only when it absolutely has to, and explained any new concept in very plain language. The owner is not assumed to be a tax expert. The test is a one minute walk from the desk to the bathroom while trying to pay a contractor. The copy speaks like a human, and hearts and fun graphics ar
-
Do Small-business Regulations Come From a Good Place?
Tomer London says regulations come from a good place. No senator or government official sets out to make it hard to start a business. One part of the job is making the rules easy to navigate and doing the work so people do not need to worry about it, because the work is just done for them.
Government programs are really helpful and still so complex that it may be hard to take advantage of them. Only big companies end up having access, because they have whole departments to read the tax law and the tax code and figure out how to get the programs. Tax credits are the example. Dozens of different types exist, and every state has its own flavor. Hire a veteran and tax incentives apply. Invest i
-
Why Can Three Neighbors Owe Different Payroll Taxes?
Tomer London says three neighboring homes at the end of a United States cul-de-sac each have a different set of tax codes, so payroll has to know which side of the street an employee lives on to calculate taxes correctly.
Payroll in the United States runs across tens of thousands of localities. Some states base it on the county and some on the school district. A W-2 sometimes shows a couple of dollars for a city district, a school district, or a special interest district. Some localities are so small they have no big robust system. After the town committee passes a new resolution, a person in the office posts the update on the bulletin board and maybe in the local newspaper. A small busines
-
Is Payroll Just Wiring Someone Money?
Tomer London says payroll is not just wiring someone money, and doing that is illegal. Payroll means a proper W-2 at the end of the year, the employer withholding taxes, paying government agencies at the right time, and filing at the right time.
Someone could calculate the numbers in a spreadsheet, print the forms, and fax the IRS, then do the same for every state agency where employees work. One employee in New York or Washington State may mean four different agencies to report to on a quarterly basis and an annual basis, with payments sometimes on a weekly basis depending on the pay schedule. It gets complicated fast in the US, which is why payroll companies existed. The founders did not
-
Why Does Gusto Embed Payroll in Other Software?
Tomer London says Gusto embeds payroll in other software because only 9% of small businesses use Gusto today, leaving 91% still to reach, and many small businesses want payroll inside software they already use to run the shop.
Gusto serves under 10% of the market. Offering the technology through other products lets small businesses use Gusto without coming in only through Gusto. Small businesses differ in how they run the back office. Vertical software is still a strong way to run a business. Bakery software can be custom tailored to bakers and include a payroll button to pay the bakers, the cashier, and the employees. For a spa or salon, Vagaro is one example, and the payroll tab there use
-
What Happened to Gusto When Silicon Valley Bank Collapsed?
Tomer London says Gusto was not affected as a processor when Silicon Valley Bank collapsed, but some customers banked there. On Wednesday the customers had to run payroll with no bank to pull cash from. If Gusto had not stepped in, the employees would not have been paid.
Gusto identified the companies ahead of time and reached out. The dollars were still there and only inaccessible during the Silicon Valley Bank collapse. The freeze was a temporary issue that would probably be resolved in the next few days or a week through an acquisition or a similar ending. Gusto extended credit, paid the payroll, and told the customers they could run payroll safely, then debit the account the next week t
-
What Is Gusto's Net Promoter Score?
Tomer London says Gusto's net promoter score jumped to 88 or 89 and stayed there for a very long time. In payroll and HR, a positive score, anything larger than zero, already means a company is ahead. Gusto had treated a score above 70 as success, and the score suddenly moved to over 80.
Promoters said they noticed Gusto was there for them. Gusto was still mostly a payroll product, yet it helped them finance the business through the pandemic. They had not expected the help, and they read it as proof that Gusto cared.
Pandemic support was Gusto's first step into lending. The money was not Gusto's own. Banks came in as partners, and the work focused on cash flow: a business can owe payroll f
-
Did a Newspaper Declare the End of Small Business?
Tomer London says a couple of weeks into COVID, before PPP loans, a major newspaper he thinks was the Wall Street Journal ran a front-page headline like the end of small business, with a picture of everything blocked and shut down. Gusto hopes for a resurgence of small business across America and across the world, and Gusto is seeing the resurgence.
The numbers tell the story, and so does the everyday feeling of seeing small businesses around: they are becoming a more important part of the economy. It had not been like that every single day. For at least nine months, lots of major analysts shared a consensus that small business would shrink and shrink and shrink. A restaurant made the probl
-
Why Did Small Businesses Hire While the US Lost Jobs?
Tomer London says small businesses added 38,000 net jobs in July while the US economy lost 23,000, and he thinks AI is a big reason small businesses kept hiring. Firms that use AI as they start and run the company hire more, grow faster, and stay more resilient. They also feel the impact much faster, because putting AI to work is far harder inside a large company.
The National Jobs Board reported the July loss of 23,000 jobs across the country, and revisions later moved the totals down. Gusto's picture of small businesses showed net growth of 38,000 jobs, across every region, every sector, and every company size. The figure comes from Gusto customers: a representative slice of the economy,
-
What Does Every Gusto All-hands Start With?
Tomer London says every Gusto all-hands opens with a customer. The company holds an all-hands every two weeks, and each meeting starts with a live conversation or a recorded video of a customer talking about their business.
The point is to learn how customers use the product and also how they live, what matters to them, the big challenges they face, and how they feel about the economy, so the team can stand in their shoes. Hiring follows the same idea. Everyone already has a tie to a small business: someone they know who runs one or works at one, a family member, or a favorite shop down the street where they get coffee. Gusto looks for people who are genuinely interested in small businesses