This start-up CEO bought shares of Berkshire 13 years ago and finally made it to Omaha

Key Points
  • Gusto CEO Joshua Reeves has been a longtime Berkshire shareholder but he never made it to the annual meeting until this year.
  • Reeves took notes for seven hours at the meeting.
  • Buffett's view on the importance of a hotline is something Reeves is bringing home.
Warren Buffett Secret Millionaire's Club dolls on display at the Annual Berkshire Hathaway Shareholder's Meeting in Omaha, NE on May 6, 2017.
Lacy O'Toole | CNBC

Joshua Reeves bought a few thousand dollars worth of Berkshire Hathaway shares in 2004, with some money he made from an internship at Intel. He'd just finished his freshman year Stanford.

Thirteen years later, as CEO of a $1.1 billion software start-up called Gusto, Reeves took advantage of his Berkshire ownership and traveled to Omaha, Nebraska, for the company's annual shareholder meeting.

For Reeves, who's read a number of books about Warren Buffett, the event marked the end of a two-week, 12-city road trip visiting Gusto's small business customers. Gusto's software is designed to simplify back office functions like human resources and payroll. He took the cross-country trek in an RV, before flying to Omaha from Jacksonville, Florida, on Friday.

"Books are great, but nothing can replace some face-to-face interactions," Reeves said in an interview on Monday, before hopping on a flight back to San Francisco. "I sat there for seven hours writing pages and pages of notes."

Reeves spent Saturday at the CenturyLink Center in Downtown Omaha, listening to the entire presentation and question-and-answer session. On Friday, he strolled through the exhibit hall for what Berkshire calls "shareholder shopping day," viewing demos from Dairy Queen and See's Candies as well as jet engine maker Precision Castparts and homebuilder Clayton Homes.

Reeves said he listened intently both to Buffett's views on technology and tech companies as well as his broader advice on leadership and building businesses.

ZenPayroll's plans for Gusto

Buffett admits when he makes mistakes. He acknowledged missing out on internet companies Google, Facebook and Amazon, because their models of capital efficiency didn't make sense in their early days. Buffett's specialty has been more in industrial and traditional retail names, where there's a clear capital structure -- a product and a cost to make that product.

"These software and media companies don't need equity financing because they can self-fund indefinitely given how profitable they are," Reeves said, reading off his notes. "He was describing that as a newer trend they missed out on."

The way Reeves interprets Buffett's investments in technology is that it's now a fundamental part of every industry. Software is pervasive in his jet engine, railroad and machinery investments, and even in how companies like insurer Geico run online ad campaigns.

Buffett on tech

"Tech is not just one category anymore," Reeves said. "It's a huge part of the economy."

Reeves said he was most impressed with Buffett's humility and the importance he places on ethics. Buffett called the recent Wells Fargo fake accounts scandal that led to the ouster of its CEO a "huge, huge, huge error," and said the employee incentive system was partly to blame. Berkshire is the bank's biggest investor.

Buffett talked about the Berkshire hotline that allows anyone across his portfolio of companies to submit questions and problems. Reeves said he was encouraged enough by the idea to consider putting in a similar hotline for Gusto, especially considering the troubles now facing Bay Area companies like Uber.

"We're of sufficient size now that it's important for folks to know they have an additional way to share feedback," Reeves said.

Reeves said he's presenting stories from his road trip to employees on Wednesday.

Correction: The original version of this story mistakenly said that Reeves purchased a couple hundred dollars worth of Berkshire shares instead of a few thousand.