Episode 200: Building a Minimal Lovable Product with Tomer London

Join Melissa Perri in this episode of the Product Thinking podcast as she sits down with Tomer London, co-founder and Chief Product Officer of Gusto. Forget Minimum Viable Products, at Gusto, Tomer explains that their focus is on creating minimum lovable products. Doing so, in such a complex and rapidly evolving landscape, only serves to emphasize the critical role of user experience. He discusses the importance of maintaining a focus on customer needs, even as the company expands its offerings beyond payroll into benefits and HR solutions.

Tomer also reveals Gusto’s unique framework for ensuring delightful user experiences, outlining the three key components: solving problems end-to-end, intuitive design, and creating emotional connections with users. He reflects on the value of patience in product development, sharing lessons learned from his journey over the past 12 years.

Tune in to discover how a commitment to understanding customers and a strategic approach to product development can lead to lasting success in the tech industry.

Tomer shares Gusto’s unique approach to MVPs (Minimum Viable Products) by aiming to create a “Minimum Lovable Product” instead. This approach centered on crafting a simplified version of Gusto’s payroll software that not only worked but delighted users by exceeding their expectations. To achieve this, the team launched an early version that covered only essential payroll functions in California but delivered a smooth, user-friendly experience that left a lasting positive impression. For example, they introduced "employee self-service" to allow employees to input sensitive data independently, removing the awkward in-person interactions previously needed. This focus on delivering a lovable product proved effective, leading to strong word-of-mouth referrals and high Net Promoter Scores (NPS). Tomer’s focus on an MLP rather than just an MVP underscored Gusto’s commitment to building a product that customers would passionately endorse, setting the stage for organic growth and sustained customer loyalty.

Tomer discusses the delicate decision-making process Gusto undertakes when balancing growth with building sustainable operational infrastructure. He highlights that as a product or service gains traction, the company must choose between continuing rapid customer acquisition with a growing operational team or pausing to automate and streamline back-end processes. For startups, where growth is an immediate goal, this decision becomes especially challenging. Gusto approaches this by monitoring unit economics, where they focus on both growth and improving efficiency over time. Each quarter, if Gusto’s unit economics haven’t improved alongside growth, they halt further scaling until they optimize processes. Tomer emphasizes the importance of this dual focus for sustainable scaling, illustrating it as a strategy that Gusto has successfully applied across product offerings, such as health insurance and tax credits.

Tomer shares how Gusto has made compliance a competitive advantage by embedding dedicated product lawyers within certain teams. For products with heavy regulatory needs, such as payroll and financial products, Gusto’s product lawyers work closely with product managers, designers, and engineers to innovate while staying compliant. This proactive approach allows the legal team to co-create solutions rather than act as a “no” force, fostering a collaborative environment where lawyers actively participate in product innovation. By having embedded compliance experts, Gusto turns complex regulatory landscapes into opportunities to deliver secure, innovative products—a capability they have used to create strong relationships with regulatory bodies and navigate challenging compliance requirements effectively.

Follow/Subscribe Now:

Facebook | Instagram | Twitter | LinkedIn

Previous guests include: Shruti Patel of US Bank, Steve Wilson of Contrast Security, Bethany Lyons of KAWA Analytics, Tanya Johnson Chief Product Officer at Auror, Tom Eisenmann of Harvard Business School, Stephanie Leue of Doodle, Jason Fried of 37signals, Hubert Palan of Productboard, Blake Samic of Stripe and Uber, Quincy Hunte of Amazon Web Services

Check out our Top 3 episodes:

Product Thinking is handcrafted by our friends over at: fame.so
Product Thinking Guest and Audience Podcast Feedback Form