Gravity Payments CEO Dan Price grew up in rural southwest Idaho, home-schooled until the age of 12 in a rural area where the nearest grocery store was 30 miles away.
Not your typical training ground for a startup entrepreneur.
But for Price — whose gone on to build Seattle-based Gravity Payments into a multi-million dollar powerhouse in the credit card processing arena— that experience certainly shaped him.
After a short stint in a rock-and-roll band, the self-described socially-awkward teen found his calling, helping a coffee shop owner in Caldwell, Idaho build her business.
“It was wonderful. It was addicting. It made me so happy to see an entrepreneur or small business person that I could get in there and help them. It was so fun,” recalled Price, the keynote speaker at last week’s University of Washington Business Plan Competition. He later got his first contract at the age of 16, helping another small business owner build a Web site.
“I remember I got back to school late, and I got two hours of detention,” said Price, who just turned 30. “It was so worth it. It was such a great feeling.”
Price, who later founded Gravity Payments while attending Seattle Pacific University and actually finished second in the UW Business plan competition in 2007, told the story of his entrepreneurial beginnings last week to make a point to the young entrepreneurs in the audience.
“Sometimes there’s value in not having a lot of options,” he said. “And sometimes there’s value in keeping things simple, and just going for it.”
In many cases, business does not need to be overly complex. And it doesn’t have to be driven by greed or money.
Outside capital? Term sheets? Detailed business plans? Destroying competitors?
At the end of the day, Price said it’s just better to focus on the customer pain point.
Back in 2007 when Price was competing in the UW business plan competition, a judge from the technology industry suggested that his company — which was already generating millions — should sell out while before getting crushed by the Visas of the world.
“His point was, if you don’t have proprietary technology and IP and patents, somebody is just going to come and they are going to whack you,” recalled Price. “And my theory was: If we work harder than anybody else and if we are doing it not for our own benefit, but to try and help and serve our customers, and if we try to learn … as fast as we can about how we can help them more, we can justify our existence. That was my bar. How do we justify our existence.”
That existence was tested in the recession of 2008 when two of Gravity’s biggest customers filed for bankruptcy, sending the company to the brink with just $200,000 left on the books. Price worked hard to return the company to its roots, rolling up his sleeves and learning everything he could about bankruptcy law in order to navigate the tricky situation. Without much cash to hire attorneys, he was appointed to the committee of unsecured creditors for both bankruptcies, which meant he was in charge for a multi-million legal budget.
“It was exciting. I was able to get out of it,” said Price, noting that in the larger of the two bankruptcies he was able to get paid 100 cents on the dollar. “It was a really great time in my life, as much as it was very traumatic, because it taught me a lot of perseverance and sticking to your guns.”
That philosophy helped build Gravity in the later years, a company which now employs more than 100 people and to this day has generated more than $290 million since inception. It has done that with little outside capital, something that Price also addressed last Thursday during his 35-minute talk.
There are a lot of businesses where venture capital is a great tool, but for Price it was never really an option. He said many people “overestimate” how many businesses really need outside funding. Price said he didn’t even know what venture capital was when he started Gravity Payments.
“When I found out, I was like: ‘Wow, you can raise a bunch of money and lose money for a few years? That’s crazy.” If given a check today for $20 million and told to go build Gravity Payments, Price said he’d probably lose every penny.
Raising money is a full-time job, one that continues to some degree after the money is brought in, and that’s something many entrepreneurs need to consider.
“I would challenge the students in this room, if you were to look at the work involved and the difficulty of that job and you thought about how can I go out there and help people, and charge them money for it, you might be able to get more money with more independence, less headaches, and be truer to whatever the mission of your business is,” he said.
Price then concluded his talk with a call to action for the entrepreneurs in the room to strive for a higher purpose than just money. He showed a graphic detailing the characteristics of successful and unsuccessful people, with the latter category being defined by those who like to see other people fail; watch too much TV; fear change and hide information.
“When I think about the traditional model of what a company is supposed to be and what a company is supposed to do, and what we are told the goal of a company is, it seems like it fits the unsuccessful people model,” he said. “And so when I look at Gravity’s success, it comes from the fact that we are out there serving others. That’s our ethos. That’s who we are. We might not make the most money. There might be an opportunity to make more money, but it is really fun. And it makes us really happy. And, hopefully in the end it will also make us successful.”
He then took a shot at the famous line in the movie “The Social Network” in which the character representing Sean Parker tells the Facebook founders: “A million dollars isn’t cool. You know what’s cool? A billion dollars.”
“That’s such bullshit, right?” said Price. “What’s being cool is being happy, and serving others and caring about others and all of these things that go along with true success.”
Previously on GeekWire: From flu finders to sauerkraut: Meet the winning teams from the UW biz plan competition
Here’s Price talking about his entrepreneurial journey in a piece with KING 5 last year.