Dan Price- Gravity Payments

“I want to be a small part of a revolution where business ceases to be primarily about money, but instead is focused on mission, service, and solving the problems of humanity.” – Dan Price

In recent years, we’ve noticed a steady rise of ethical, or purpose-driven, entrepreneurs. People who want to change the way business is done, challenge the status quo, and build companies that are driven by more than just money. 

Purpose-driven entrepreneurs are dedicated to building businesses that focus on fairness, integrity, decency, and sustainability, and in this series of articles, I’m going to shine a spotlight on some of the best.

Today I’m going to introduce you to a well-known purpose-driven entrepreneur who made international headlines in 2015 for taking a huge pay cut in order to pay his employees fairly – Dan Price.  

The Man

You’ve most likely already heard of Dan Price, the man who gave up his million-dollar compensation package so that everyone at his company could earn a decent wage. 

He raised the minimum salary at Gravity Payments to $70,000 a year in order to help employees make a reasonable living, but that wasn’t where his journey into ethical entrepreneurship started. 

Raised in rural Idaho, Dan founded Gravity Payments from his university dorm room when he was just 19 years old. After witnessing thousands of hard-working, small business owners being overcharged and generally mugged off by their credit card processors, he made it his mission to provide a better alternative.

Dan built his Seattle-based credit card processing company on the values of honesty and transparency that were instilled in him during his rural upbringing. These simple values are what set Dan and his company apart from others in the industry, ultimately making Gravity Payments once of the most trusted names in the industry.

“The owners [of small businesses] are usually overworked and under-rewarded. They are heroes to me, and if I can spend my career serving them, I know I will be fulfilled.” – Dan Price

His Business Philosophy

It was after talking with a close friend that Dan first decided to cut his own salary from $1.1 million to $70,000 in order to raise the minimum wage of his employees. His friend told him about how difficult it was for her to pay her living expenses and ever-increasing rent, even though she was earning a good salary of $50,000 a year. 

The conversation got him thinking about his own business model, and what he could do to change the lives of the people working hard to keep his business going.  

"I just decided I'm gonna do $70,000. I don't care if I have to stop paying myself or I have to work 20 hours a day. I'm going to do it." – Dan Price

I’m sure he never imagined the huge impact his decision would have on his staff, his business and the wider world, but what Dan did struck a nerve and he found himself at the centre of a debate that’s now raging across the American business landscape. He had begged the question that was now on everyone’s minds. 

How much – or indeed, how little – should workers really be paid? 

While fat cats and greedy execs have continued to bask in the profits of their companies, most ordinary working people in America haven’t had a proper raise for more than twenty years. Over the years, as the nation's productivity improved significantly, wages only rose by a miniscule amount – especially when compared to inflation. Meanwhile, all those productivity gains were lining the pockets of C-Suite execs who earn, on average, 300 times more than typical workers. As a numbers guy, Dan knew all the statistics and was determined to do something about it by leading by example. 

“I never want to make ‘screw-you’ money like the rest of the financial services industry.” – Dan Price

So when the opportunity arose to make a difference to his employees, Dan grabbed it with both hands, but doing so didn’t come without its criticisms.

At first, Gravity Payments lost some customers who ditched the business because they objected to what seemed at the time like a political statement. Some felt pressured to raise their own wages, whilst others thought that Dan’s decision would lead to price increases or service cutbacks.

Dan was branded the “lunatic of all lunatics” by Fox News, other local business owners were disgruntled, and several of his own staff members resigned after learning others with less experience were getting an overnight raise. Not to mention the fact that his brother, Lucas Price, a 30% shareholder in the company, decided to sue him.

However, the so-called “panicked customers” didn’t have much to worry about in the end, as the customer retention rate rose from 91% to 95% after the initial shock decision was made.

In fact, revenue at Gravity Payments continued to grow at double the previous rate, while profits also doubled which just goes to show that when you have a strong vision, a strong purpose and know that you’re doing the right thing, people will get behind you, even if it takes them a while.

Today, Dan continues to polarise with his business views, but he’s very careful about the financial state of his company, and doesn’t underestimate the significance of its service in providing credit card processing services to more than 12,000 small businesses.

The salary increase was just the tip of the iceberg in Dan Price’s ethical entrepreneurship ideas, though. Other benefits to working at Gravity include unlimited paid leave and all meetings being optional. Dan also prefers to work alongside his employees rather than hiding away in a big office. 

Dan is a firm believer that the more independence and better work-life balance he can provide his workforce with; the more motivation they have to achieve great results for the business, and so far that seems to have been the case.

However, it’s not just America that’s concerned with these ideas. On both sides of the Atlantic, several companies have now voluntarily opted to pay more than the national minimum wage to their employees – including Ikea, Aldi, Costa Coffee and Morrisons, which has got to be a good thing for living standards.

What do you think of this great debate? Is Dan Price an ethical entrepreneur, or a misguided dreamer? 

If you’d like to learn more about purpose-driven entrepreneurs, follow the hashtag #DoxVox to read my future articles.

If you’re a purpose-driven entrepreneur and want to grow your influence, increase your visibility and maximise your impact through thought leadership, drop me a DM and let’s have a chat.

About Me

I’m a thought leadership consultant and content writer. My clients are the CEOs and CMOs of corporates who lack the capacity to create prescient thought leadership content in-house. I specialise in writing white papers. Drop me a DM if you want to have a chat.