1:28 - Tomer describes Gusto Embedded and the complexities behind compliance.</p><ul><li>Gusto Embedded takes ten years of Gusto’s experience building payroll software and compliance and makes it available to any software company wanting to ship their own payroll product to the market. </li></ul><p><strong>5:00 </strong>- Why did you decide to pursue startups as the company’s first target audience? How did you think about customer segments in that first year? </p><p><em>Over the last ten years, Gusto has scaled to build for multiple customer segments – starting with startups, then SMBs, accountants, and now with Gusto Embedded Payroll, developers who are embedding payroll directly into their software. </em></p><ul><li>When you have a grand vision, where do you start as a founder? Choose a customer segment. Make sure you choose a segment where 1) they have an important customer problem, 2) the product you are building solves that problem, and 3) you can reach your customer. </li></ul><p><strong>9:30 </strong>- Who were your competitors in the early days? </p><ul><li>The old, traditional payroll solutions, which were complex. With Gusto, <em>anyone</em> can run payroll at <em>any time</em>. Gusto also focuses on employees, a critical part of the system, by building a great payroll experience for them. </li></ul><p><strong>11:30 </strong>- Why did you decide to build for SMBs after startups? </p><ul><li>Look at your current customer base and learn from customers adjacent to the market you want to expand into. When you do expand into another vertical, make sure you maintain that early customer love. </li></ul><p><strong>14:45</strong> - How did you maintain the customer love of the existing customer segment? </p><ul><li>Think about your long-term vision and don’t put yourself in a corner when you want to move to the next segment. </li></ul><p><strong>17:00</strong> - Most startups find it hard to tackle the SMB market. Why do you think this is the case? </p><ul><li>Traditionally SMBs are hard to reach and use incomplete or manual solutions. Since 2000 an entire generation of business owners had to learn to trust online financial services. Today, SMBs are online and looking for solutions.</li></ul><p><strong>22:25 </strong>- What is different about serving SMBs as a customer versus startups? </p><ul><li>Startups come and go, and the real economics come from the big winners. Focusing on startups is a good place to start your journey, but think about how to scale with them.</li><li>There are more small businesses than startups, and they are around for a long time – but most don’t grow to thousands of employees. You need to build a business model that works with that dynamic. </li></ul><p><strong>27:00 - </strong>Why did you pursue developers and how did you decide to service them? </p><ul><li>For many verticals, it is much better to have an all-in-one platform to run your small businesses. But payroll is really hard to build yourself. Gusto Embedded helps partners deliver a more integrated solution for customers without investing the several years and tens of millions of dollars.</li></ul><p><strong>29:00 </strong>- Gusto went from directly acquiring small businesses as customers to creating an embedded solution – essentially “giving up” the relationship with the customer. How did you think about that? </p><ul><li>Evaluate the future of the industry and don’t ignore reality. Be the one to create that future. In this case, many payroll customers want all-in-one solutions. We can either try to meet those needs directly, or empower hundreds of partners to customize unique solutions.</li></ul><p><strong>33:00 - </strong>How should founders think about who to partner with? When should founders build directly for the industry and when should they go the embedded route? </p><ul><li>Think about the unique insight you have in the business you’re creating and make sure you own your destiny around that insight.</li><li>For your customer, what does a successful product look like, and could you partner with a company to fulfill those needs.</li><li>Your product must be high-quality. You have to put enough resources behind whatever you own. For everything else, you must ensure you bring in the right partner. It’s all about the end-to-end experience. </li></ul><p><strong>39:30</strong> - Gusto now makes it easier for software providers to bake compliance into embedded payroll. Tomer, I think developers looking at a payroll API would assume that compliance is baked in. But there are often steps companies have to take beyond just calling APIs. Tell us if that assumption holds.</p><ul><li>Regulation can change every quarter and every year. This is built into the product. We protect the customer and make it easy for developers to ship something quickly that is compliant for the long term.</li><li>One third of the companies in the U.S. get fined for mistakes on payroll. </li></ul><p><strong>43:00 - </strong>Compliance is the hardest part of payroll to build and ultimately has to be right. It took ten years of experience in compliance to launch this into Gusto Embedded Payroll. What advice do you have for founders who are building complicated, yet essential, components for an industry?</p><ul><li>Determine the parts of your product that are highly regulated and which areas are not. Build a culture that ensures quality-first in those highly-regulated areas, as well as a culture where people can iterate quickly in other areas. You can’t build a monolithic culture.</li><li>Embrace cross functional work. </li></ul><p><strong>46:00 </strong>- In the early days of Gusto, what guidance did you provide to your engineers about building payroll? What areas could break and which areas could not break? </p><p><strong>48:40</strong> - Looking back, would you have done anything different? </p><ul><li>Start charging what you feel is the value you provide; fix downwards versus upwards. If you’re truly adding value, customers won’t hesitate moving forward at that price.</li><li>Have the humility to learn from the customer and how the market changes around you. </li></ul><p><strong>51:45 </strong>- How should founders be thinking about embedded finance and how does this market evolve over the next 5-10 years? </p><ul><li>When you build a new software system for your customer, the more connected the system is for your customer, the better it is. Embedded products enable you to do that quickly and in high quality.</li><li>Bring more solutions into your product that are driven by what your customer needs. Understand your customer’s day-to-day, and figure out how to build something that solves their entire flow instead of one segment.</li><li>If you are not making money on your product, you don’t know if there's a product market fit. If you can charge and retain a customer, then there is product market fit. </li></ul><p><strong>56:30</strong> - Outside of payroll, what are you seeing product wise offered by APIs? </p><ul><li>This space is brand new and there’s a ton of opportunity to create a product that helps customers go through the end-to-end journey successfully and solves multiple pain points – instead of the customer needing ten years of background to create a high-quality solution.</li></ul>","comment_id":"62fa7b87ab52db0001d3b656","feature_image":"/blog/content/images/2022/08/BlogTwitter-Image-Template--5-.jpg","featured":true,"visibility":"public","email_recipient_filter":"none","created_at":"2022-08-15T09:59:51.000-07:00","updated_at":"2022-08-15T11:48:12.000-07:00","published_at":"2022-08-15T11:32:19.000-07:00","custom_excerpt":"Today, more than 200,000 businesses use Gusto for payroll, employee benefits, talent management, and more. And with the recent addition of Gusto Embedded, developers now use Gusto’s APIs and pre-build UI flows to embed payroll, tax filing, and payments infrastructure into products. 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Combinator","slug":"yc","profile_image":"https://ghost.prod.ycinside.com/content/images/2022/02/yc.png","cover_image":null,"bio":null,"website":null,"location":null,"facebook":null,"twitter":null,"meta_title":null,"meta_description":null,"url":"https://ghost.prod.ycinside.com/author/yc/"},"primary_tag":{"id":"61fe29efc7139e0001a71179","name":"YC Events","slug":"yc-events","description":null,"feature_image":null,"visibility":"public","og_image":null,"og_title":null,"og_description":null,"twitter_image":null,"twitter_title":null,"twitter_description":null,"meta_title":null,"meta_description":null,"codeinjection_head":null,"codeinjection_foot":null,"canonical_url":null,"accent_color":null,"url":"https://ghost.prod.ycinside.com/tag/yc-events/"},"url":"https://ghost.prod.ycinside.com/yc-founder-firesides-gusto-on-building-for-new-verticals/","excerpt":"Gusto (YC W12) provides growing businesses with everything to take care of their team. Today, more than 200,000 businesses use Gusto for payroll, employee benefits, talent management, and more. And with the recent addition of Gusto Embedded, developers now use Gusto’s APIs and pre-build UI flows to embed payroll, tax filing, and payments infrastructure into products. ","reading_time":5,"access":true,"og_image":null,"og_title":null,"og_description":null,"twitter_image":null,"twitter_title":null,"twitter_description":null,"meta_title":null,"meta_description":null,"email_subject":null,"frontmatter":null,"feature_image_alt":null,"feature_image_caption":null},{"id":"620da5f7d710a50001fba7dd","uuid":"2e869860-9ab1-45e5-9761-e49ec49f7a45","title":"Y Combinator Top Companies - February 2022","slug":"y-combinator-top-companies-feb-2022","html":"<!--kg-card-begin: markdown--><p>We’re excited to share the <a href=https://www.ycombinator.com/"https://www.ycombinator.com/topcompanies/">2022 YC Top Companies</a>. In addition to the list of top companies, we also launched the <a href=https://www.ycombinator.com/"https://www.ycombinator.com/topcompanies/breakthrough/">YC Breakthrough Companies</a> list to highlight the fast-growing companies that have received between $15M-$300M <a href=https://www.ycombinator.com/"https://www.ycombinator.com/continuity//">from YC</a>.</p>\n<p>Both lists include private, public and exited companies valued at $150M or more and are sorted by valuation<sup class=\"footnote-ref\"><a href=https://www.ycombinator.com/"#fn1\" id=\"fnref1\">[1]</a></sup> or market cap as of February 2022.</p>\n<p>Here are some stats about this year’s list:</p>\n<ul>\n<li>\n<p>More than 260 YC companies are valued at $150M+ and more than 60 companies are valued at $1B+.</p>\n</li>\n<li>\n<p>99 new companies joined the list since our last update in July 2021.</p>\n</li>\n<li>\n<p>More companies are operating remotely</p>\n<ul>\n<li>11% of the top companies are remote first.</li>\n<li>Three of the top ten private companies are remote first (<a href=https://www.ycombinator.com/"https://www.ycombinator.com/companies/opensea/">OpenSea, <a href=https://www.ycombinator.com/"https://www.ycombinator.com/companies/brex/">Brex, <a href=https://www.ycombinator.com/"https://www.ycombinator.com/companies/gitlab/">Gitlab)./n/n/n
20 countries are represented</p>\n<ul>\n<li>6 new countries represented: Algeria, Tunisia, Senegal, Chile, Brazil, and Singapore</li>\n<li>Of the companies that are new to the list, 28% are outside of the US.</li>\n</ul>\n</li>\n<li>\n<p>Top 10 valuation jumps since July 2021:</p>\n<ul>\n<li><a href=https://www.ycombinator.com/"https://www.ycombinator.com/companies/flock-safety/">Flock Safety</a> (jumped 74 spots to #31)</li>\n<li><a href=https://www.ycombinator.com/"https://www.ycombinator.com/companies/solugen/">Solugen (jumped 74 spots to #51)</li>\n<li><a href=https://www.ycombinator.com/"https://www.ycombinator.com/companies/gem/">Gem (jumped 69 spots to #76)</li>\n<li><a href=https://www.ycombinator.com/"https://www.ycombinator.com/companies/modern-treasury/">Modern Treasury</a> (jumped 52 spots to #48)</li>\n<li><a href=https://www.ycombinator.com/"https://www.ycombinator.com/companies/xendit/">Xendit (jumped 49 spots to #37)</li>\n<li><a href=https://www.ycombinator.com/"https://www.ycombinator.com/companies/captivateiq/">CaptivateIQ (jumped 35 spots to #71)</li>\n<li><a href=https://www.ycombinator.com/"https://www.ycombinator.com/companies/easypost/">EasyPost (jumped 34 spots to #60)</li>\n<li><a href=https://www.ycombinator.com/"https://www.ycombinator.com/companies/h1/">H1 (jumped 30 spots to #98)</li>\n<li><a href=https://www.ycombinator.com/"https://www.ycombinator.com/companies/veriff/">Veriff (jumped 28 spots to #61)</li>\n<li><a href=https://www.ycombinator.com/"https://www.ycombinator.com/companies/promise/">Promise (jumped 21 spots to #121)</li>\n</ul>\n</li>\n</ul>\n<p>You can read more about some of the featured companies <a href=https://www.ycombinator.com/"https://www.ycombinator.com/topcompanies/featured/">here.
/nOne thing to note is that this is not an exhaustive list of YC’s top companies. We allowed founders to opt out of being listed for any reason. Here's the <a href=https://www.ycombinator.com/"https://www.ycombinator.com/companies/">full list</a> of YC companies.</p>\n<p>Congratulations to all of the fantastic companies highlighted here. We’re delighted to be part of their stories and hope these lists help potential employees, customers and investors identify companies they’d like to work with as well.<br>\n<br></p>\n<p><em>This list was published in late February 2022, just as the fighting in Ukraine began. We didn’t think it was an appropriate moment to be celebratory, and wanted to take time to turn our attention to <a href=https://www.ycombinator.com/"https://www.ycombinator.com/blog/supporting-ukraine/">the Ukrainian people</a> and the YC community being impacted by the invasion of Ukraine.</em><br>\n<br></p>\n<hr class=\"footnotes-sep\">\n<section class=\"footnotes\">\n<ol class=\"footnotes-list\">\n<li id=\"fn1\" class=\"footnote-item\"><p>Why do we use valuation? We have always said that valuation is not the best way to measure a company’s value, and we consistently warn our companies not to over-optimize their fundraising for a high valuation. That said, it’s the most commonly available metric to compare companies in the startup world. Other metrics, like revenue, are often kept private. We have a number of impressive companies who would appear on the list or rank even higher if we counted other metrics (revenue, revenue/employee, etc). <a href=https://www.ycombinator.com/"#fnref1\" class=\"footnote-backref\">↩︎</a></p>\n</li>\n</ol>\n</section>\n<!--kg-card-end: markdown-->","comment_id":"620da5f7d710a50001fba7dd","feature_image":"/blog/content/images/2022/02/yc-top-companies-list-og-image-2.png","featured":true,"visibility":"public","email_recipient_filter":"none","created_at":"2022-02-16T17:33:43.000-08:00","updated_at":"2022-04-19T16:33:56.000-07:00","published_at":"2022-02-28T08:44:00.000-08:00","custom_excerpt":"We’re excited to share the 2022 YC Top Companies. 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In addition to the list of top companies, we also launched the YC Breakthrough Companies list to highlight the fast-growing companies that have received between $15M-$300M from YC.","reading_time":2,"access":true,"og_image":null,"og_title":null,"og_description":null,"twitter_image":null,"twitter_title":null,"twitter_description":null,"meta_title":null,"meta_description":null,"email_subject":null,"frontmatter":null,"feature_image_alt":"Y Combinator Top Companies - February 2022","feature_image_caption":null},{"id":"63f91878d2b0220001e8d6e9","uuid":"a99f2458-1bdd-4a40-81e6-36ee441b133c","title":"Congratulations to the 2023 YC Top Companies!","slug":"yc-top-companies-feb-2023","html":"<p>We’re excited to present the 2023 YC Top Companies!</p><p>The startups are separated into 3 lists: YC’s top <a href=https://www.ycombinator.com/"https://www.ycombinator.com/topcompanies/" rel=\"noopener noreferrer\">private</a>, <a href=https://www.ycombinator.com/"https://www.ycombinator.com/topcompanies/public/" rel=\"noopener noreferrer\">public</a>, and <a href=https://www.ycombinator.com/"https://www.ycombinator.com/topcompanies/exits/" rel=\"noopener noreferrer\">exited</a>. 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Public companies are listed in alphabetical order.</p><p>The Breakthrough Companies list highlights the fast-growing companies we’ve doubled down on – which means they’ve all received significant additional investment from YC in their post-Demo Day rounds. </p><p><strong>Here are stats about the companies on this year’s list:</strong></p><p><strong>></strong> More than 290 private YC companies and 33 exits are valued at over $150M, over 90 are worth more than $1B, and 16 are public. </p><p><strong>></strong> 58% of the companies have HQs in the Bay Area. 27% of the companies are fully remote, and 55% list themselves as partially remote.</p><p><strong>></strong> YC Top Companies have HQs in 40 countries including: United States, India, United Kingdom, Canada, Colombia, Indonesia, Mexico, Nigeria, Argentina, Brazil, Chile, France, Spain, Israel, Netherlands, Philippines, Portugal, Germany, Egypt, Ireland, South Korea, Peru, Singapore, United Arab Emirates, Australia, Bolivia, Switzerland, Algeria, Estonia, Finland, Hungary, Italy, Norway, Romania, Sweden, Senegal, Uganda, Uruguay, Venezuela, Vietnam</p><p><strong>></strong> YC W16 is the most represented batch (by percentage). 23% of the companies from W16 are on the YC Top Companies list. </p><p><strong>></strong> Here’s a sector breakdown of the top companies:</p><ul><li>B2B Software and Services: 43%</li><li>Financial Technology and Services: 19%</li><li>Consumer: 13%</li><li>Healthcare: 12%</li><li>Industrials: 7%</li><li>Real Estate and Construction: 3%</li><li>Education and Government: 3%</li></ul><p><strong>></strong> 10 new companies joined the lists since August 2022:</p><p>Private:</p><ul><li><a href=https://www.ycombinator.com/"https://www.ycombinator.com/companies/treasury-prime/">Treasury Prime</a> (YC W18) - Embedded banking software platform and marketplace</li><li><a href=https://www.ycombinator.com/"https://www.ycombinator.com/companies/onesignal/">OneSignal (YC S11) - Engage customers through personalized omni-channel messaging</li><li><a href=https://www.ycombinator.com/"https://www.ycombinator.com/companies/skill-lync/">Skill-lync (YC W19) - Online engineering college for India</li><li><a href=https://www.ycombinator.com/"https://www.ycombinator.com/companies/tigereye/">TigerEye (YC S22) - Modern enterprise software for sales leaders</li><li><a href=https://www.ycombinator.com/"https://www.ycombinator.com/companies/zeitview/">Zeitview (YC W15) - Inspection software for renewable energy & sustainable infrastructure</li><li><a href=https://www.ycombinator.com/"https://www.ycombinator.com/companies/ontop/">OnTop (YC W21) - A bank for remote workers connected to payroll</li><li><a href=https://www.ycombinator.com/"https://www.ycombinator.com/companies/obie/">Obie (YC S19) - Insurance and risk management for landlords</li><li><a href=https://www.ycombinator.com/"https://www.ycombinator.com/companies/nabis/">Nabis (YC W19) - The largest licensed cannabis wholesale platform</li></ul><p>Public:</p><ul><li><a href=https://www.ycombinator.com/"https://www.ycombinator.com/companies/presto/">Presto (YC S10) - Digital meets physical for big chain restaurants</li></ul><p>Exits:</p><ul><li><a href=https://www.ycombinator.com/"https://www.ycombinator.com/companies/nurx/">NURX (YC W16) - Medicine or testing kit, prescribed online, and delivered to your door </li></ul><p>One thing to note is that this is not an exhaustive list of YC’s top companies. We allowed founders to opt out of being listed for any reason. The full list of YC companies can be found <a href=https://www.ycombinator.com/"https://www.ycombinator.com/companies/">here. </p><p>Congrats again to the companies recognized on the 2023 YC Top Companies list!</p>","comment_id":"63f91878d2b0220001e8d6e9","feature_image":"/blog/content/images/2023/02/BlogTwitter-Image-Template.png","featured":true,"visibility":"public","email_recipient_filter":"none","created_at":"2023-02-24T12:05:12.000-08:00","updated_at":"2023-03-16T09:44:58.000-07:00","published_at":"2023-02-27T09:00:00.000-08:00","custom_excerpt":"There are now 16 public YC companies, 290 private YC companies and 33 exits that are valued at over $150M, and over 80 that are worth more than $1B.","codeinjection_head":null,"codeinjection_foot":null,"custom_template":null,"canonical_url":null,"authors":[{"id":"61fe29e3c7139e0001a7106f","name":"Y 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How to pick the right startup to work for
by Ryan Choi10/19/2021
I talk to a lot of people who are trying to figure out which startup to join. I want to share some of the advice I’ve been giving, and I hope it helps you navigate your own job search.
Ask about the company’s runway, burn rate and plans for future funding.
A company’s runway is the number of months that it has until it runs out of money. This can be determined by a number of things, including the amount of funding it raised, the amount of revenue it generates, and the expenses (or “burn”) it has in operating the business on a monthly basis.
There is no right or wrong answer — it really depends on your risk tolerance. But you probably want a startup that has enough runway to both endure the downturn and also raise its next round of funding.
Also note that while cash-flow positive businesses are in a good position to weather this storm, even startups like Stripe endured the 2009 recession, despite being largely unprofitable at the time.
Ask how the business is adapting to this new economic environment.
While many startups might falter during a tough economy, it’s important to consider which might thrive as a result of changed consumer behavior or market opportunities. A few examples:
- Outschool (W16) offers online classes for homeschooled children, which used to be a small minority of American kids and overnight became the majority.
- Farmstead (S16) and Tovala (W16) are delivering more food and groceries than ever before.
- Curebase (S18) and Ginkgo Bioworks (S14) have invested in products to support COVID-19 response and research.
As you speak with founders during the interview process, ask how the economy has impacted their business (for worse or for better) and what they’re doing to adapt so they come out strong on the other side.
Assess the founders, not just their answers.
We tell YC founders to be very transparent with candidates during the interview process. We feel this is important to build trust early on, and the trust will be reciprocated when they hire great employees who can use information to make strong business/product/engineering decisions.
As you interact with the founders and team, look for answers to your questions that are thoughtful and balanced — revealing both the pros and the cons of any scenario. You’re likely to get more detail as you get to the end of the interview process (the company has more invested in you at that point), so take the opportunity to ask questions throughout the process.
Joining a startup isn’t for everyone, and the above should help you better assess the startup you are considering. Go in with thoughtful questions, and hopefully you will walk away with trust in the founders to make good, thoughtful decisions — about the business, the product, the customers who use it and the team you work with to build it.
If you’re looking for your next role, you can fill out a profile at Work at a Startup to view YC startups that are actively hiring. We’re here to help.
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Ryan Choi
Ryan works with YC companies to find great engineers — from 2-person startups to larger ones like Airbnb, Stripe and Instacart.
