CEO Dan Price on His Decision to Make Entire Company's Minimum Wage $70K/Year
“The big goal for my life is to become a part of the entire economy transitioning to being about purpose and service, and economics being more of an unintended consequence instead of a be-all, end-all.”
That sounds like a lofty goal coming from a 30-year-old, but Dan Price is hardly your average young entrepreneur. The Seattle-based Gravity Payments CEO made waves a few weeks ago when he announced he was revising his company’s pay structure to bring every employee’s salary up to a minimum of $70,000 per year.
PEOPLE talked with Price to learn about what led him to this decision. Turns out, it involves everything from playing bass in a rock band to living in an unfinished utility closet.
“I was born in Michigan and lived in Wisconsin for a bit,” Price tells PEOPLE, “but by the time I was 5, I was in rural Idaho. We were out in unincorporated farmland. The closest town was 20, 30 minutes away.”
That, he says, combined with the fact that he was homeschooled until junior high, made it hard for him to adapt when he entered regular school in seventh grade. “I just got totally wrecked because I had no social skills,” Price admits.
“I was really trying to adapt, and I was trying way too hard, of course. There was this one day where someone told a joke and everyone was laughing hysterically; I didn’t get it, so I just started laughing along with it, and then I got some weird looks. I noodled on it the whole day, and by the time I got home from school, it hit me that the joke was about me and how socially awkward I was.”
It was music that gave Price the in that he wanted. “I had grown up playing music, a little bit of singing, a little bit of piano and guitar.” Then, in seventh grade, he says, “I met these two guys and I started playing bass guitar, and they wanted to start a band. We basically played in the garage every single day our whole seventh-grade year.”
“Toward the end of the year, we played three shows. The first two were just at our friend’s house, but the third show, we rented out this auditorium that fit 300 people, and we packed it out. And it was kind of this crazy phenomenon.”
In a relatively short time, Price’s band, called Straight Forward, met with success. “We started touring for the first time in eighth grade, we were being played on small-time radio stations, we got interest from a number of labels and we started to headline more shows and started being able to pack out pretty much any independent-type venue regionally. Our biggest show, we actually had 5,000 people at the Idaho fairgrounds.”
But things went south with the band following a rough summer tour and some personnel problems. The group’s drummer abruptly quit, and the group dissolved, leaving Price “super depressed.”
“It felt like the bottom dropped out. I felt like I was back to being that seventh-grader with no social skills, because I went from no friends to everyone screaming my name and being a celebrity, and so there was no in-between for me.”
He channeled that energy into building what would become Gravity Payments. “My dad was actually a business consultant, and he had a short stint in credit card processing, and I’d grown up looking over his shoulder. To be totally honest, I grew up idolizing my dad in a lot of ways and so finally I was like, ‘I have time now, I need something.’ ”
Using business relationships he made from the band and experience he’d gleaned from his father, Price built up about 200 clients for his business between his junior and senior years of high school, occasionally making up to $12,000 in a month. He launched the company in January 2004, halfway through his first semester at Seattle Pacific University.
“But I still got tens of thousands of dollars into debt, with student loans, credit cards,” he recalls. “And I spent every dollar I saved. I was able to barely get to break-even, because I’d get to $3,000 in profit, hire someone, go back to zero, turn a profit, hire someone, go back to zero. Looking back on it, I’m thankful that I went through that when I was so young, because I could kind of absorb those punches. Had I been 30 or 40 years old at the time, it would have been really hard for me to do things like live in an unfinished utility closet for six months. That’s something a 19-year-old is uniquely suited to do.”
Those times, he says, informed his recent decision regarding Gravity’s salary restructuring. “The first person I hired, who still works with me today, I could only afford to pay him $24,000 a year, no health, no benefits of any kind. And I felt horrible about that. I was young but to me it seemed like it wasn’t up to snuff. And then later, at Gravity, what was inspirational to me was seeing these amazing folks who were making $30-$35K a year and doing things at a higher level than I could or would and I didn’t hear complaints! That highlighted a lot for me.”
Other more personal reminders from his life affected Price as well: “Even though my dad did really well growing up, my parents had six kids and they started off pretty young. Financial struggle, to some degree, was pretty much a way of life for most of our lives.”
“And my parents they’re pretty transparent about things, and they would be pretty open with us about the financial reality we had as a family. I thought about financial struggle a lot growing up. I wanted to have a more relaxed, peaceful time with my parents and I didn’t want them to feel so much pressure to do so well for us. Neither one of my parents went to college, they started early, they had six kids – it’s a recipe for a very meaningful life, but not an easy life.”
Price’s life is certainly not going to get any easier – he mentions that he’s been sleeping between two and four hours a night since making the salary decision –, but it is meaningful, and it’s likely to get more so. By making himself, his company and his employees a part of the larger national conversation about wage inequality, he’s pushing long-ignored aspects of American life into the national discussion. He’s come a long way from being homeschooled on unincorporated farmland. What’s more American than that?