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Why I built America's most-loved payroll company then reinvented it with AI
Eddie Kim, Co-Founder and CTO at Gusto, joins NEW ECONOMIES on cracking the small business market, keeping all three co-founders for 15 years, and why he just built the most important product of his career in eight weeks.
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Download the full transcript:
Eddie Kim is the co-founder at Gusto, the small business platform that just crossed a billion dollars in annual revenue serving over 500,000 companies across payroll, benefits, HR, and compliance.
A two-time YC founder who met his co-founders at Stanford and at a half marathon starting line, Eddie has spent 15 years proving that the most unglamorous problems in business are often the most valuable ones to solve. In this episode, we explore what it actually takes to build a category-defining company in a space nobody wanted to touch — and why Eddie believes he just built the most important product of his career — Gusto Cofounder: The AI Teammate Built for Small Business.
We also explore the blank canvas problem holding AI back from mainstream adoption, why the distinction between engineer and designer is disappearing, and how a team of five people went from zero code to full launch in eight weeks.
Timestamps
(0:00) Eddie Kim, Co-Founder at Gusto
(5:40) Lessons from Y Combinator
(9:30) 15+ years on co-founder relationships
(15:00) How to give feedback to your co-founders
(17:45) The early days at Gusto
(21:10) Gusto’s new product: Gusto Cofounder
(33:05) How to launch new features
(38:15) The rise of solo entrepreneurs
(41:25) How to avoid distractions
(45:20) How Gusto would launch today from scratch
(47:00) Lightning fire round
Our notes from this conversation
1. Boring problems are the best problems — if you can stomach the grind
In 2011, the hottest companies were chasing eyeballs. Mobile, social, local. Nobody wanted to work on payroll. Hiring was nearly impossible, and one of the category’s own pioneers told the Gusto founders to their faces: don’t do it. That discouragement was actually the signal. The problems everyone avoids are exactly the ones worth solving — because if you can crack them, the competitive field is almost empty.
2. The co-founder relationship is built over years, not conversations
All three Gusto co-founders are still at the company 15 years later — a genuinely rare thing. What makes it work isn’t a communication framework or a weekly check-in cadence. It’s shared values, accumulated trust, and the quiet confidence that comes from having survived a hundred disagreements and come out the other side. Real directness — saying what you actually think — only becomes possible once you’ve built that foundation. You can’t shortcut it.
3. The blank canvas problem is AI’s biggest obstacle
The reason most small business owners can’t harness AI isn’t capability — it’s context. Install Claude Code or open a frontier model and you’re staring at infinite possibility with no clear starting point. That’s paralyzing. The insight behind Gusto Co-Founder is that AI becomes transformative the moment it’s anchored to a specific domain, with real data and real problems already loaded in. Generic intelligence is a tool. Contextual intelligence is a co-founder.
4. Trust is infrastructure — and it takes 15 years to build
Gusto couldn’t have launched its AI co-founder product on day one. The depth in payroll, benefits, compliance, and tax took over a decade to accumulate. That history — 500,000+ customers, millions of data points on what makes small businesses succeed or fail — is what makes the product genuinely useful rather than just technically impressive. The lesson: trust and data are compounding assets. The longer you stay focused on one problem, the harder your moat becomes to replicate.
5. The future of building is builders — not roles
The team that built Gusto Co-Founder was five people: four engineers and a designer. No roadmaps, no sprint planning, no documentation. The designer wrote code. The engineers made design decisions. They ran a permanent Zoom call instead of meetings. In eight weeks, they went from zero to launch. That’s not a fluke — it’s a preview. AI is erasing the gaps between specialties. The builder mindset is the only identity that matters now.
Links
Subscribe to NEW ECONOMIES (@NEWECONOMIESPOD)
Discover Gusto CoFounder (https://gusto.com/company-news/cofounder)
Follow Ollie on X (https://x.com/ollieforsyth)
Follow Eddie on X (https://x.com/edawerd)
Our NEW MEDIA Community (new-media.co)
