Dan Price | Gravity Payments
Once again, there I was, sitting at a desk in the university’s common postgraduate area, with other students, struggling with my next moves. Well, to be completely honest, not only with my next moves, but pretty much struggling with everything dissertation-related. At that point I had an abstract written, any idea of what I wanted the outcome to be and I was also convinced that I had to excel in my interviews but none had done so far.
In a conversation with a friend in the same boat, she mentioned finding a website with the CEO’s emails. “What do you mean the CEO’s emails? Their personal emails??”, I was slightly shocked, she had found my golden egged chicken. “Yes, you search the company and then if you are lucky they have their personal email.” I rushed into the website and it was actually true! A lot of organisations are listed and a lot have the CEO contact. Since I wasn’t a premium premium member I could only see two emails a day, but it’s good enough for me!
Of course I am not that naive... I knew that CEO’s have more important things to do than reply to student’s emails asking for their help. But if I didn’t send it in the first place, the odds would be certainly nought. However, by sending it hope exists, and with luck I might get an amazing interview to add to my research. And that’s what I did.
Dan Price was all over the news a few months prior due to his 70K minimum wage policy. From Twitter to Linkedin, for weeks I’ve seen both criticism and praise to this guy that cut his own payment to give all his employees a 70K minimum wage.
Well, I was studying businesses and design, I read a lot about how to make people happy, their motivators, their engagement with a company and I thought this was a very smart move in the world we live in today. So… Why not try to contact the man himself? I was eager to understand what moved him and if he has ever studied design thinking practices, so I could establish my common language (or lack thereof) argument.
All in all, I wanted to come a little bit closer to pick brilliant minds in good heartened people.
Hence, I searched his company, got his email and then wrote the best email I could in hopes that he would maybe reply, even if it was a long shot.
One day later (yes, just one day later) an email popped up, “Dan Price”. It was a concise and very solicitous email saying he’d be happy to help, if I could just contact Hayley (whom in this process was has helpful and considerate as Dan) for further arrangements.
THE INTERVIEW . AUGUST 2016
Can you describe, in your own words, your role at work? (a little bit like you’d explain it to a young child or an elderly aunt)
I’m the Founder & CEO of Gravity Payments (www.gravitypayments.com/contact). I started the company at 19-years-old after recognizing businesses in my community being taken advantage of by their credit card processors. I started Gravity Payments to make credit card processing as simple and fair as possible for independent business owners.
I spend much of my time with our independent business clients, getting feedback and new ideas on ways we can improve our service. I also spend a significant portion of my time with our product team, translating client feedback into new products or services. Finally, I spend time with our internal operational team helping to remove obstacles, so they can do what they do best: help our clients succeed.
How would you describe your organisation’s culture? (strategy, values, purpose, employee engagement and relationships, business goals)
We have a very flat organizational structure. We don’t emphasize job titles, and we don’t say things like, “That’s not my job.” Everyone here is a strategic decision maker and must think and act like they’re the CEO of Gravity Payments.
Our core philosophy is that "Everyone is a CEO." I trust my team to do what they think is best for our clients, so it's important to me that team members feel empowered to make their own decisions. This entrepreneurial culture creates an atmosphere where we all know that we can go beyond our job descriptions. When you can be creative and do what you love, you're more engaged and can make a big impact on the business and the clients.
What led you to change the in-strategy at Gravity Payments?
Since starting Gravity Payments, a series of moments over the past 12 years led to my decision to raise the minimum wage to $70K. When I first started out, I was only able to pay my first hire $24,000 with no health benefits. Because I didn’t have the resources to pay what I wished I could, it was my mission to provide the team with a world class learning experience. But, I still felt horrible about that wage. It would eat away at me that I couldn’t pay more. I promised myself I would do the best I could to solve that problem as soon as possible.
Then in 2010, I read a Princeton study (Kahneman and Deaton, online report, 2010) that basically states the magic number for happiness is somewhere near $75,000. Dollars over that amount don’t really make an impact on emotional well-being. You can afford more luxuries, but your basic needs are covered at that point. However, dollars up to $75,000 per year do have a huge impact on someone’s happiness, as making less than that actually has an impact on emotional health. After reading that, I thought about whether or not the company could afford to do this. Although we were successful and growing, at that time we couldn’t make it work.
Then I went on a hike with a friend near where I live in Seattle. She started talking about how her rent would be increasing by a few hundred dollars a month, and she was worried how she was going to financially afford this. She is someone who is just as smart as me, works just as hard as me, and had served three tours in military. I thought, here I am making a million dollars a year, while she’s just trying to figure out how to make ends meet.
I started crunching numbers to see if I could make the “magic number for happiness” work this time around. I realized if I cut my own pay down and used company profits, we could set a new minimum wage at $70,000 per year.
Some people thought I was insane when I told them my idea, but I believe this will have a positive impact not only on business, but on society. I’ve always believed we need to do what is right and put skin in the game for the greater good.
What are the key employee motivators in your organisation?
First and foremost, we’re motivated by helping independent businesses process their credit cards for less while still providing the best service and as much value as possible. It has always been our conviction to put Gravity’s clients’ needs ahead of our own. We want to treat them better, and more fairly, than others in our industry.
My team understands the importance of investing time in long-term relationships with our clients. The sacrifices our team makes for our clients, have had an immense positive impact on Gravity over the past few years. I’m fortunate to work with people who are passionate about emotionally connecting with our clients and doing more while asking for less.
Which aspects do you prioritise to achieve a competitive advantage?
Our mission is to reduce the costs and headaches associated with accepting credit card payments for independent businesses. We do this by providing our clients with as much value as possible while charging them as little as possible. Our commitment to our purpose makes all the difference. By taking care of others, in return they’ll take care of you.
Another competitive advantage for us is how we think about doing business. Our main priority is to keep the clients we have. Then we think about how we can do more business with our current clients. Finally, we consider how to acquire new clients. Where companies get into bad shape is when they reverse the order and make getting new clients more important than keeping clients.
Do you think the world is in need of new approaches to problem solving to address the twenty first century problems? If so, which types of approaches would these be?
I have a 40-year goal to fundamentally change the way business is done where it’s more about service and helping others rather than greed and financial engineering. I’m optimistic about our progress as a human race. There are these tremendous problems that affect us on a global scale, but we’re constantly innovating and finding solutions to these issues.
As leaders, it’s our moral imperative to do the best we can for those we’re leading. We should try to find ways to use our leadership in business to solve problems in humanity. For me, income inequality is an issue that has been close to my heart for quite some time now. I spent a lot of time thinking about different ways I could help solve this issue and create a better life for my team who sacrifice so much to help our clients succeed. I stumbled upon a 2010 Princeton study that stated the magic number for happiness is somewhere near $75,000. Dollars over that don’t really have a positive influence on happiness and making less than that can actually have an impact on your emotional health. After reading that, I knew I couldn’t waste another day just thinking about it. I had to take action.
In April 2015, I raised the minimum wage at Gravity Payments to $70,000. I also took a pay cut from $1 million down to the minimum wage. It was my hope when making this decision that other business leaders would recognize that you can pay a living wage and still manage to thrive. This is a beginning of a conversation that you can do business with integrity and successfully get by.
I don’t think anyone needs to necessarily copy what we did. As a business leader, you need to assess your own situation and see what you can do to make a small difference in helping solve world issues.
What is your understanding of the term design thinking?
I’ll admit I don’t know much about it, but what I’ve read is that design thinking helps reveal new ways to approach solving a problem.
For you, how does design connect with business?
One way we’ve applied design thinking at Gravity is to simply understand how humans naturally operate. The thing that holds people back is lack of independence. Our team is able to perform their best when we eliminate distractions and they have complete autonomy over themselves and their jobs. When you show your team you trust them and give them freedom over themselves, it gives them responsibility to make the best decisions possible. One example of a policy we put into place that helped with autonomy was our unlimited paid time off policy.
We implemented the policy two years ago, and so far have not seen anyone taking advantage of vacation days. Giving our team the ability to take a vacation when they need to is more of an extension of trust than just an incredible perk. We trust our team to represent our company the best they can every day, so we feel it’s not a stretch to trust them with the responsibility of access to endless vacation days.
Rather than worrying about building up vacation days or fretting over whether or not you’ll be able to go home for the holidays, this policy allows our team to focus on their work. Right now we have a few of our colleagues whose Mothers continue to battle cancer. Before this program was in place, they’d be faced with the dilemma, “I only have so many days off available. Is it enough to be there for my Mother when she needs me?”
A lack of available days would force our team members to face an unfair decision – their job or their family. A choice none of us should ever have to make. Instead this policy has allowed each of them to have open conversations about the days they’ll be absent and create action plans for having their work covered. This eliminates wasting time, mental energy, and morale. With these worries eliminated, people enjoy putting more focus on work.
What role do you think design can have in helping organisations dealing with change / adapting to change?
I’m not sure about design thinking, but the way I normally do change is with a lot of one-on-one conversations and then a lot of engagement. I try to have the whole group decide together. However, when I made the decision to raise the minimum wage at Gravity to $70,000, I did it completely differently. I had a top-down mandate. Both strategies can work, but I prefer to hear from as many people as possible before I make a big decision.
How about the link between the purpose of an organisation and its people, do you think design has a role to play there?
It absolutely could play a role. However, if you have a company full of people who aren’t intrinsically motivated by your company’s mission and values, you’re going to have a tough existence.
I think you need to seek out the best people most aligned with your mission. If your team isn’t buying into your objectives, your clients will know. At Gravity, we hire for fit rather than experience. We want people with a strong sense of ownership, pride, and responsibility, who go above and beyond to fix whatever needs to be fixed. We want people who think like the business owners we serve.
To uncover these traits, we “designed” a recruiting strategy. We start with multi-hour interviews by team members. As our potential hires tell their stories, we find out if they fit our culture, and if they’re the kind of people who will make sacrifices for our clients. We want to know if they’re the kind of people who will bring our mission to life on a daily basis, not because we’ve asked them to, but because they want to.
What is the thing you think will change the world?
Business leaders need to step up and figure out how to solve problems in humanity. We all want to be part of something bigger. For my part, I want to create a world where values-based companies suck up all the oxygen and take over the economy. I don’t mind if existing companies convert, but I want to send out of business the ones that don’t.
When I’m 70, I want to say I was part of completely reshaping the economy at a moment when business stopped being about making the most money possible and became about purpose, service and making a difference.
POST INTERVIEW AND CONCLUSIONS
On the official paper I wrote a summary of this interview and highlighted the most relevant topics and conclusions, but I still added the integral interview to the attachments section. Not because I had to, I didn’t do the same with others, but because this interview truly inspired me. It was one of the most humane and honest interviews I’ve done, and I was happy to see that after thousands of interviews flooding the internet picturing Dan Price, he still managed to give me insights I haven’t read before.
He provided the most helpful and reassuring insights of them all in regards to a positive perspective on the organisational world. And that gave me a renewed strength to pursue this topic and follow my intuition, as I too believe in a positive future for organisations.
Curiously, before our interview Dan Price didn’t have a clear idea on what design thinking is, despite having used approaches to solving problems that fit in this methodology. Thus, it was probably the first interview to corroborate my point of view in regards to a common language between business and design, which is that people are using design thinking and calling it something else, and the fact that we try to draw the limits of certain terms might actually be more confusing than enlightening.
The conclusion drawn from this interview is that if one company can successfully implement measures that acknowledge and satisfy employees, by using, amongst others, design methodologies whilst still growing and expanding, it is possible that other organisations achieve the same result.
A common denominator between all the interviewees is that trust is fundamental. Some even stated trust as being the “thing that will change the world”, it has to be at the core of every culture, because there is a visible climate of distrust nowadays, where some prey on it to make profit or to expand, keeping people in line with fear of what can happen if they let their guard down. People are led to becoming localised, not globalised. Trust is crumbling and even when people have access to information they distrust its veracity, Brexit being a close example. Trust, if achievable, will be the root for the acceptance that things can be different (Kathryn Best interview, coming soon), and it is what will turn people’s belief into feeling positive about change, as they will trust one another to conjure better outcomes together in the interest of everyone and not just a few.
Finally, a huge thank you to Dan and Hayley for their time and help, and especially for showing me the world is still full of good people waiting to be given the chance to prove they can be even better.
Kahneman, Daniel and Deaton, Angus (2010) ‘High income improves evaluation of life but not emotional well-being’, [Online] Princeton University, Available: http://www.princeton.edu/~deaton/downloads/deaton_kahneman_high_income_improves_evaluation_August2010.pdf