Gusto

Uber

Gusto

Gusto charges a monthly base fee plus a per-employee fee. The Simple plan starts at $40/month plus $6 per employee per month.

Plus and Premium tiers add features like time tracking, PTO management, and dedicated support at higher price points.

The per-employee pricing creates natural revenue growth — as customers hire more people, Gusto makes more money without any additional sales effort. This aligns Gusto's success with their customers' growth, which is a beautiful incentive structure.

Additional revenue comes from embedded financial products. Gusto Wallet (employee banking), Gusto-run health benefits, 401(k) administration, and workers' comp insurance all generate fees.

The payroll platform becomes a distribution channel for financial services — once you process payroll for a company, you have a direct relationship with every employee and can offer them financial products.

Uber

Uber is a marketplace that connects riders with drivers. You request a ride through the app, the nearest driver accepts, picks you up, drops you off, and Uber takes a cut — typically 25-30% of the fare.

The driver keeps the rest. Uber doesn't own any cars.

They don't employ any drivers. They built a $150 billion company by being the middleman with a really good app.

The model expanded into Uber Eats (food delivery, same concept — restaurants cook, drivers deliver, Uber takes a cut), Uber Freight (connecting truckers with shippers), and advertising. The advertising business is quietly enormous — Uber has data on where millions of people go every day, and brands will pay handsomely for that.

Gusto

Josh Reeves, Edward Kim, and Tomer London were Stanford engineering graduates who noticed that every small business owner they talked to hated the same thing: payroll. Running payroll meant calculating federal, state, and local taxes, filing quarterly returns, issuing W-2s, managing direct deposits, and dealing with an alphabet soup of compliance requirements (FICA, FUTA, SUTA).

One mistake and the IRS sends a penalty notice.

The existing solutions were terrible for small businesses. ADP and Paychex dominated the market but were designed for mid-to-large companies.

Their interfaces looked like they were built in 1998 (because they were). Their pricing was opaque.

Their customer service required calling a 1-800 number and sitting on hold. Small businesses with 5-50 employees were dramatically underserved.

The trio founded ZenPayroll in 2011 (rebranded to Gusto in 2015) with the mission of making payroll dead simple. The first version was a clean web interface that let business owners run payroll in a few clicks — enter hours, review the numbers, hit submit.

Gusto calculated all taxes automatically, filed them with the government, and sent direct deposits. What used to take half a day took five minutes.

Uber

The idea started in Paris in December 2008. Travis Kalanick and Garrett Camp were at the LeWeb tech conference and couldn't find a cab.

Camp had been obsessing over the idea of summoning a car with your phone. He bought the domain UberCab.com, built a prototype, and recruited Kalanick to help run it.

The first version launched in San Francisco in 2010 as a black car service — not the cheap rideshare everyone knows today. You'd tap a button, a Lincoln Town Car would show up, and it cost about 1.5x a regular taxi.

Ryan Graves answered a tweet from Kalanick looking for an "entrepreneurial product manager" and became employee number one. He ran operations while Kalanick was still finishing up another startup.

Graves would later become CEO briefly before handing the reins to Kalanick. The app launched with just a handful of cars in San Francisco.

It worked so well that riders couldn't shut up about it.

The real inflection point came in 2012 when they launched UberX — regular people driving their own cars at prices cheaper than taxis. That one decision turned Uber from a luxury black car service into a verb.

Within two years, UberX was available in hundreds of cities and the word "Uber" had entered the dictionary.

Gusto

Gusto grew by being the payroll platform that accountants recommended. Accountants manage payroll for thousands of small businesses, and Gusto built a dedicated Partner Program for accounting firms.

When a CPA recommends Gusto to all their small business clients, that's efficient distribution at scale.

The product-led growth motion is strong. Gusto's clean design and simple setup meant small business owners could sign up, enter their employee information, and run their first payroll without talking to a salesperson.

Free trials converted at high rates because the alternative was going back to manual calculations.

Expanding from payroll into HR, benefits, and financial services followed the natural workflow. Once Gusto ran payroll, adding benefits administration was a natural upsell — the same system that calculates pre-tax deductions can also manage the benefits that create those deductions.

Uber

Uber's early growth strategy was beautifully ruthless. They'd roll into a new city, launch without asking permission, and deal with the regulatory fallout later.

They called it "Travis's Law" — it's easier to ask forgiveness than permission.

The playbook was simple: launch in a new city, give massive discounts to riders (sometimes completely free rides), pay drivers signing bonuses and guaranteed hourly rates, and flood the zone until the city was hooked. Then slowly raise prices and cut driver incentives once the market was locked.

They burned billions doing this but it worked — by 2016 Uber was in 500+ cities across 70 countries.

They also weaponized word of mouth with referral codes. Every rider could give free rides to friends.

Every new driver got a bonus for signing up. The viral loop was insane.

At peak growth, Uber was adding a new city every day.

Gusto

ADP and Paychex aren't going to cede the small business market quietly. ADP Run is their small business product, and they've been modernizing it aggressively.

ADP has 70+ years of trust, massive sales teams, and relationships with every accountant in America. Gusto has a better product experience, but ADP has distribution that's hard to match.

Rippling is the most dangerous competitor. Parker Conrad (Rippling's CEO) is building an "all-in-one" HR/IT/Finance platform that includes payroll alongside device management, app provisioning, and expense management.

Rippling argues that payroll should be one feature in a broader system, not a standalone product. If companies buy Rippling for IT management and get payroll included, Gusto loses the deal.

Moving upmarket is hard. Gusto's sweet spot is companies with 1-100 employees.

Larger companies have more complex needs — multiple pay schedules, union rules, multi-state compliance, custom integrations — that Gusto's platform historically hasn't handled as well as incumbents.

Uber

Where do you even start? Uber might have faced more simultaneous existential crises than any company in history.

Regulatory wars. Taxi unions, city governments, and entire countries tried to shut Uber down.

London revoked their license. France arrested two executives.

Uber was banned, unbanned, re-banned, and sued in dozens of jurisdictions simultaneously.

The toxic culture. In 2017, former engineer Susan Fowler published a blog post describing rampant sexual harassment, discrimination, and HR cover-ups at Uber.

It went nuclear. Investigation after investigation followed.

Board members resigned. Executives were fired.

Travis Kalanick's ouster. After the culture scandals, a leaked video of him berating an Uber driver, and a federal investigation into stolen trade secrets from Google's self-driving car unit Waymo, the board forced Kalanick to resign as CEO in June 2017.

Dara Khosrowshahi came in from Expedia to clean things up.

The cash burn was legendary. Uber lost $8.5 billion in 2019 alone.

They subsidized rides so heavily that riders were paying less than the actual cost of the trip. The company didn't turn its first operating profit until Q3 2023 — fourteen years after founding.

Gusto

Gusto Payroll — automated full-service payroll processing with tax calculations, filings, and direct deposits across all 50 states. Gusto Benefits — health insurance, dental, vision, 401(k), HSA, FSA, commuter benefits, and workers' compensation administered through the platform.

Gusto HR — hiring and onboarding tools, employee self-service portal, org charts, and document management. Gusto Time & Attendance — built-in time tracking with PTO management, holiday calendars, and overtime calculations.

Gusto Wallet — a free employee financial wellness app offering early wage access, savings accounts, and financial planning tools.

Uber

Uber Rides is the core product — get from A to B in someone else's car. UberX is the standard option, Uber Black is the premium black car tier, UberXL fits bigger groups, and Uber Reserve lets you schedule rides in advance.

Uber Eats is the food delivery arm and competes directly with DoorDash and Grubhub. Uber Freight is the logistics play — basically Uber for semi-trucks, connecting carriers with shippers.

Uber for Business lets companies manage employee rides and meals. Uber now also offers package delivery, grocery delivery, and even boat rides in some cities.

Gusto

Google Capital (now CapitalG) led the Series C. General Catalyst invested early and has been in multiple rounds.

Dragoneer, T. Rowe Price, and Fidelity participated in later growth rounds.

Y Combinator was the starting point (Winter 2012 batch). The company was valued at $9.5 billion in its latest funding round in 2022.

Uber

Benchmark Capital, First Round Capital, Menlo Ventures, Jeff Bezos, Goldman Sachs, Google Ventures, Saudi Arabia's Public Investment Fund, SoftBank, Toyota, PayPal co-founder Peter Thiel, Tencent