Gravity Payments CEO Dan Price made waves earlier this week when he announced plans to slash his $1 million salary, while boosting the pay for every employee at his Seattle payment processing company to a minimum of $70,000 per year. At a time when the country is debating the minimum wage, Price’s bold move went viral with everyone from The Today Show to E! Online jumping on the story. (Price told The Today Show that the decision was not about the money, instead about about “making a difference.” Even so, the company has picked up new customers since the announcement was made).
Before Price became Internet famous, the Entrepreneur Magazine Entrepreneur of the Year appeared on stage with us at this year’s GeekWire Startup Day. Price — who grew up in rural Idaho where he said he didn’t even know the meaning of the words entrepreneur or venture capitalist — joined Porch CEO Matt Ehrlichman, USA Today’s Entrepreneur of the Year.
Price stressed the importance of bootstrapping his business, explaining why he didn’t raise venture capital. “I wanted my business to be 100 percent about my clients,” said Price. “I saw the other companies that did (raise capital) and they didn’t quite have the loyalty to their clients that I really wanted. And I have that overwhelming desire to keep that and control that.”
You can get some insights into Price’s business philosophy in the video below, including in minute 13 where he describes how he survived the economic downturn of 2008 when Gravity Payments lost 20 percent of its business overnight.
“I was running things so tight that there was no room to lose that,” said Price, adding that they had about nine months of cash left in the bank before they would have to consider layoffs or pay cuts.
Interestingly, from that experience, Price said that he “got a lot more conservative financially.”
“I basically learned to be a CFO over that year,” he recalled. “We basically plan for everything that can happen to happen, and try to figure out a way that we’d survive it.”
In minute 15 of the video, you can hear Price describe his creative approach to compensation when the payroll tax was increased. Price said the tax unfairly hit people making under $100,000, and he felt the need to do something for his employees.
In minute 27, Price notes that business partnerships are all about “values alignment.”
“We have a greater purpose of, we are trying to shift and create change in our industry,” said Price, adding that the big banks are always trying to pick on the little guy.
Watch more of the interview here:
