To defeat him with Johnny, Sue, Ben, and Reed, use Johnny's ranged special from far away.
If you are Johnny, Ben, Reed, or Sue, you can do the Team Special Attack. Hold A + B then press L to perform the Team Special Attack.
Go outside of the building in level 1 and defeat the first set of test bots. Fly on top of the building. Walk to the left to see some of the game developers. Walk to the other building, fly on top of it, and walk to the left to see the remaining game developers.