Things are heating up in Silicon Valley’s little talked about but highly competitive human resources tech sector.
Via Flickr: pittaya
San Francisco lost one of its manifold Zen-prefixed startups today, but not because a company was acquired or shut down. ZenPayroll, heretofore an employee payment software company, is just changing its name.
Gusto, as the company will henceforth be known, is also adding services, specifically benefits. That means the employees of the "tens of thousands" of businesses that use the service who already use ZenPayroll to track payments, manage savings, and more can, over the next few weeks, also use it to receive workers' compensation packages and — in California only for now — health insurance. To sell health insurance, the company actually had to become a broker in each state; as the benefits feature is gradually rolled out across the country, Gusto's goal will be to offer as many small-business appropriate health care plans as possible.
CEO Josh Reeves said that the name change and the new services are unrelated. "The name change is almost a coincidence in terms of coinciding," he told BuzzFeed News.
In fact, Reeves said that the expansion of ZenPayroll's — now Gusto's — offerings has been part of the plan all along.
This slide from a 2012 ZenPayroll presentation to investors suggests that expanding to benefits after payroll was always part of Reeves' plan.
When the company graduated from the Y Combinator incubator three years ago, Reeves and his executive team picked the name because they needed something to put on a T-shirt, he explained. But the intention was always to expand beyond payroll, and create a company that bulldozes over what Reeves calls the "walled gardens and silos" of traditional HR tech.
(For what it's worth, Reeves doesn't believe in the "human resources" industry as we traditionally understand it. "'Humans aren't resources' is one of our guiding philosophies," he said.)
To that end, Reeves also said that the move has nothing to do with what competitors in the HR tech market are doing. Earlier this week, BuzzFeed News reported that Zenefits, a Silicon Valley unicorn, is quietly working on "Project Nutshot," an internal code name for a payroll product aimed at competitors including ADP and ZenPayroll. But Reeves said his focus is on sticking to the original company blueprint, regardless of what competitors are up to.
"I love living here. I was born in in Silicon Valley. It's a wonderful place to live. But there's an echo chamber I think is dangerous. We're not here to serve Silicon Valley," Reeves said. "What we're building is a fundamental part of how a capitalist society functions."
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