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Hi Product People,
How do you move beyond simply meeting customer needs to creating products they genuinely love?
This week on Product Thinking, I spoke with Tomer London, co-founder and Chief Product Officer at Gusto, about their unique approach to building what they call a "Minimal Lovable Product."
"We built what we called a Minimal Lovable Product with the idea of like, it needs to be lovable. And then we measured on the other side when we had customers do it. What's our NPS? How many people actually refer? We measured on the other side, what's the product market fit survey results and things like that. Luckily, we discovered that actually we're able to succeed people's expectations to a place where they were in love with the product."
Tomer shared how this philosophy shifts the focus from just viability to delivering an experience that exceeds expectations. By emphasizing guidance, simplicity, and delight, their team created a product that not only solves problems but leaves a lasting impression on users.
We also discussed the importance of using metrics like Net Promoter Scores and product-market fit surveys to measure success and how aligning these insights with a user-centered approach can drive meaningful innovation.
Tomer’s reflections on patience in product development were another highlight—reminding us that creating truly great products takes time and a commitment to long-term impact.
Have you worked on a product where creating delight was a core part of your strategy? Reply here or join the conversation on my LinkedIn post!
P.S. Want to dive deeper into building an effective strategy? Our newest course, Mastering Product Strategy, will show you exactly how to do this - from initial data analysis to deploying to executives and teams.
The course launches in Q1 2025, and early birds save $200 with code HOLIDAY. Or get access to our complete course library, including Mastering Product Strategy, for just $1,999 with code LEARN2024. Both offers end on December 31st. Learn more here.
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See you next week,
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Melissa Perri
Founder Product Institute, Board Member, and Teacher
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Key Moments on the Podcast to Check Out:
09:50 - Minimum Lovable Products
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.
24:00 - Balancing Growth and Infrastructure
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.
28:57 - Product Lawyers: Transforming Compliance into an Asset
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.
Episode Resources:
Other Resources:
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THE PRODUCT THINKING PODCAST IS SPONSORED BY
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