An Upstart’s Journey into Payroll: David vs. Goliath
By Rieva Lesonsky
Remember the Jack and the Beanstalk fairytale where an ordinary person took on a colossus—and, against all odds, won the battle? Makes for a good story, but that couldn’t happen in real life, right? Wrong! It’s happening right now in the seemingly mundane realm of payroll companies.
Who is this modern-day giant-slayer who’s taking on the likes of ADP and Paychex? This Smart Hustler: Joshua Reeves. Joshua spotted an opportunity—a niche in the market that wasn’t being served—and decided he had the better a solution.
Reeves, who launched ZenPayroll in December 2012, didn’t set out to be a giant-killer. His “golden egg” wasn’t in possession of the giants—or anyone else. It’s the nearly 50 percent of small businesses that still do payroll manually. Some of those businesses (about 33 percent) get fined for incorrectly doing payroll, paying, in aggregate, about $5 billion a year in penalties.
Reeves’ plan, which is to provide a “simpler, easier, really enjoyable” way to do payroll is working. Already ZenPayroll processes over $400 million in annual payroll for small businesses.
Because he’s not an ordinary entrepreneur (and it’s not all about the money), Reeves created guiding principles to steer the business:
- Ownership mentality.
- Don't optimize for the short term.
- We are all builders.
- Go the extra mile.
- Do what's right.
- Be transparent.
But to succeed in business today, you have to do more than just show up. Innovation is part of ZenPayroll’s dance, which is perhaps one of the reasons it got funding (both seed capital and money from venture capitalists)—to the tune of $26+ million (for a payroll company!)
Reeves believes payroll should be more about the people, “a celebration of how work is done.” And there’s something for everyone. One of ZenPayroll’s competitive advantages is the API integration it provides with other SaaS (software as a service) providers, making it easier for entrepreneurs to run their companies. The goal is not to just be a payroll provider, Reeves explains, but “to be a payroll partner. We want to make the world better.” To that end, ZenPayroll offers a “giving” option to employees who want to (literally) pay it forward, enabling them to donate to charity, one time or every payday.
Like other hustling startups, ZenPayroll tries to differentiate itself from its competitors. Reeves says, “We ask ourselves, ‘What can we do that no one else can?’ We are always looking to the future. Agility has no baggage.”
Despite raising millions, Reeves isn’t short on hustle. He knows the money offers an advantage, but he acknowledges, “You can never take anything for granted. The work is never done.”