Ten years ago at the age of 19, Dan Price created Gravity Payments out of his Seattle Pacific University dorm room because he saw thousands of hard-working small business owners being under-served and over-charged by credit card processors.
Today, Gravity Payments serves over 11,000 merchants across America, saving them millions in fees and hours in headaches and frustration.
BusinessInterviews.com: What gap did you see in the market that inspired the launch of Gravity Payments?
Dan: I found that independent business owners were being treated unfairly by their credit card processor. I specifically found that credit card processors were very opaque and not trustworthy. There was no real relationship between the two. I saw the fees that small business owners paid were all over the board. They weren’t consistent, and generally really, really high. I couldn’t understand why they were so high. And, most importantly there was just no service.
BusinessInterviews.com: Why is transparency so important and why do you think it’s not more of a commonplace?
Dan: I think transparency is less commonplace in credit card processing because there’s an advantage to having information that the industry fully monetizes. They make a lot of money by making it be opaque and hard to understand. However, I think trust is the number one thing that’s really important. If you want people to trust you and your business, then it’s only common sense to tell them the truth. That’s why transparency is important.
Being opaque and confusing our customers were not the kind of practices I wanted to build a business on. I created Gravity Payments to level the playing field for independent businesses, giving them the same opportunities larger companies enjoy from their credit card processors. I decided to blow this whole predatory industry wide open by focusing on honesty and transparency, and not just fully disclosing, but educating our community business owners about where their money is going.
BusinessInterviews.com: Where does your passion for serving small to medium sized businesses come from?
Dan: I just love the feeling that I get from it. It’s addicting. I remember one of the first businesses that I helped out was a retail coffee shop. At the time, the high school band I was in would play acoustic shows there, and the woman who ran it was the nicest, sweetest person I ever met. She would give us free coffee when we performed and would go out of her way to help us in any way she could – she was a phenomenal person. She was really passionate about her business and loved her customers, but she was not a good business person in the sense that she was not super sophisticated or financially savvy.
One day, I was in her coffee shop and noticed she was having some issues with her business. I didn’t know much, but I just rolled up my sleeves and helped her anyway that I could. The fact that I was able to help her out and do something for her that she maybe didn’t have the time or energy or focus or background to do for herself felt really good. And she never forgot about it and always appreciated it. It was an amazing feeling to be able to give back to someone who had given so much to me.
The passion behind what I’ve built Gravity Payments on is simple: Find someone who needs help, and help them in any way you possibly can.
BusinessInterviews.com: What are some ways that you help your clients save both time and frustration when it comes to running their businesses?
Dan: First and foremost, trust is so much more efficient when you know someone has your best interests and the interests of your business at heart. A customer will relax and allow you to help them out as much as you possibly can, if you build a strong relationship based on honesty. Being transparent with our customers has been the number one way we’ve helped save them time and headaches.
But, there are a thousand different things that have come from building this trust with our customers. That has included automating their point of sale system in a way that drives more revenue, makes their business more efficient, and provides better data or analytics to the business owner.
We also invest our own funds into our customer’s businesses through a Working Capital program. Whether they need a hand up on anything from expanding and building onto their business or fixing a broken fryer, it saves them the stress and headache of applying for a small bank loan or putting it on a corporate credit card. Being able to provide a really efficient financing mechanism amongst our other added values have all been ways that we’re helping our customers to be successful.
But, the most rewarding thing has been just being there for them. I have one customer who called me and said they feel like our customer service team is sitting in their car waiting outside whenever they call. And that particular customer maybe calls us once a month or every several months. But, just the fact that they felt like Gravity knows them, cares about them, and we’re waiting to help them in any way we possibly can is, I think, the best way we’ve been able to serve them.
I heard another quote from a customer who said, ‘Your team would come and paint my roof if I asked them to.’ We’ve been able to help our customers the most simply by doing whatever it takes. We’re not asking questions about whose fault it is when something goes wrong. Instead, we just roll up our sleeves and figure it out. We understand that if our customer has a problem, then we have a problem.
BusinessInterviews.com: What advice would you give to a startup who is trying to decide between bootstrapping and seeking outside investment?
Dan: When I started out, I didn’t know what venture capital was – I didn’t understand that model. I just understood that I needed to find a way to help out customers that were being taken advantage of. When I was going through the University of Washington’s Business Plan Competition in 2007, I remember a judge in the final round told me I should sell my business right away or I’ll be out of business in two years.
At that point in time, Gravity had millions of dollars in revenue and we were doing pretty well, but this guy said we were going to be disintermediated in two years. His point was if you don’t have proprietary technology, IP, and patents, somebody is going to come and whack you. However, my theory was if Gravity can work harder than everybody else, and we’re doing it not for our own benefit but to try to help and serve our customers better, I can justify our existence.
So, the advice I would give is to be really clear about what your long-term goals are and figure out the path you should take to support those goals. Keep in mind external costs of fundraising, like the time it takes, and figure out what the goals of your organization are and what the goals of your investor are. If all of those goals are aligned, then it’s likely to be a good fit. If there’s even the smallest amount of ways that your goals are not aligned, those will be a source of potential conflict between you and an outside investor.
BusinessInterviews.com: Why do you believe that it’s important that entrepreneurs strive for a higher purpose than just money?
Dan: I think it’s really important for each of us to have some self-awareness and learn about ourselves. More often than not, those that care about others and care about the impact they have will be a lot happier and have a better life.
You know, we all get so focused around accomplishments and goals, but at the end of the day your life is relatively short and you only have a finite period of time. One question to think about is, “How am I going to have the most enjoyment of my life while I’m here?” I think for most people, helping others will lead to more enjoyment than other types of activities that you could be doing.
One other thing I’d like to say is if you know someone who is an independent business owner or someone who works with independent business owners, tell them about us and refer them to us. We’re not going to give you anything for doing it, except for the most important thing we can give you — our promise that the person you referred will always be glad they chose to work with us. And we promise that you’ll always feel proud that you referred them to us.
We take that responsibility very, very seriously. Most of our business comes from word-of-mouth referrals, and we personally make sure the independent business referred to us will always be appreciative of you for letting them know about the great things we do at Gravity Payments. I’ll give my personal pledge to make sure that happens. Anybody that’s involved in our larger community of supporters will always have 100 percent access to me and I hope will hold me accountable to following through on that promise.
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