This is part of a series of personal essays we're calling Stories from Seattle, contributed by our community and designed to show how the coronavirus pandemic is impacting the lives of Seattleites. Want to share your story, coping mechanisms, wildest ideas? We’d love to hear. Please email: firstname.lastname@example.org.
Dan Price is the CEO of Gravity Payments, a credit card processing company that made international news five years ago when Price announced that all employees would be paid a base salary of $70,000. Price just self-published a book, Worth It: How a Million Dollar Pay Cut and a $70,000 Minimum Wage Revealed a Better Way of Doing Business. —As told to Tricia Romano
When the Seattle outbreak happened, I was in Jackson Hole, Wyoming. And it was a life goal of mine to go to Jackson Hole with my siblings. We had all planned a trip together. I come from a big family of five siblings. And so out of the 10 of us, if you count spouses, we had six of us all in Jackson Hole together. That was the last week of February.
We were very concerned at that point, and we closed our office pretty early, on March 5th. Because, in our mind, if this was really bad, we should close and have everyone work from home right away. And if it wasn't bad, it would be a good thing to do to prepare to have to close your office without any notice last second. The chief operating officer of Gravity, Tammi Kroll, she's one of the top incident response people in the entire world. She had these high-flying jobs for big tech companies. And she was the executive in charge of incident response. So she was just on it. We do disaster fire drills pretty regularly because of her experience in that area.
In early March, like, it's clear that this is a serious thing. The second week of March, we're starting to see our business decline. I talked to a friend who owns 20 restaurants in Seattle, the second week of March, and he blew me away because he said that they were projecting 25 percent off for the rest of the year.
Most of our competitors charge, not only a percentage and a transaction fee to process a credit card transaction, but they also charge very significant monthly service fees. We don't make much money at all, because we, as much as possible, charge little or nothing on monthly service fees. And so our revenue, as a result, is tied directly to small business revenue, which is down on average about 55 percent right now, which means our revenue's down 55 percent. Our competitors in these situations, they add fees, they invent fees to make up for the gap.
One of our largest competitors decided to institute a $55 monthly fee to all of those customers without their permission. My industry peers all said, “Well, it's not really that big of a deal because you have 20,000 small business customers, if you institute this $55 fee, that'll be more than a million dollars a month in revenue. Right? Why don't you just do that? That makes up the gap, right? And then if you do like a 20 or 30 percent layoff also, then you're back to profitability.”
And, it's so antithetical because Gravity's whole thing is to try to stick up for small businesses. And then five years ago, I instituted the $70K wage, and since then, we've been associated with trying to stick up for employees. That wasn't the original purpose of the company, but we grew into that. It just seemed like to take the only option that seemed to be available to fix it, would be to destroy what we cared about as a company.
I just was completely against doing it, and I was just at my wit's end for what I could do. I called an all-hands company meeting via Zoom at noon on the 19th. I started that meeting by saying, “We're not going to make any decisions, I really think that we need time to think about this as a group. ” Tammi and I met, either one-on-one or in small groups, with every single one of our 200 employees in the next four days.
And the first idea was, let's come up with a democratic solution and then vote on it. But then some other people were like: “What if we have a broad policy proposal like a pay cut or layoffs or something. How do we know that is not going to hurt some people more than others?” Because we have a lot of people that just had a spouse laid off. And with other people, we had one guy that was like, “You know what, Dan, my wife makes way more money than I do.” So he's like, “I'm fine.” And everything in between.
The employees put together this spreadsheet. It was mostly related to like working more to help our clients recover, because if our clients’ revenue goes up, then our revenue goes up. So a bunch of people thought of things that they could do to help our clients’ revenue go up. And that was the number one thing.
The number two thing was, people said, “I'll take a voluntary anonymous pay cut.” We had 10 people out of 200 say that they wanted to work completely for free and not get paid anything until further notice. We had several ask for at least a 50 percent pay cut. And out of just under 200 people, all but four volunteered, which was fine. They're all still at the company. And there are zero repercussions in the spirit of this, and that was able to save us 30 percent and take us from a million and a half monthly shortfall to a half-million-dollar monthly shortfall. So we're still up against it. We did not lay off a single person, even though we lost 55 percent of our revenue, but it's because the employees bailed us out.
So we need to help our clients get their revenue up enough to make up that extra half a million. And since then we've just been in full-on execution mode. Whatever continuing cratering is happening, we've been able to counteract it. We started instituting online ordering for all of our restaurants so that they could take orders to go and especially with the new rules around alcohol sales. Some consumers—if their choice is to use Uber Eats or pick up the phone and call—they'd rather use Uber Eats. But they actually would be fine to order online. And if they use Uber Eats that the restaurant gets charged a 30 percent commission, most people don't know that. Thirty percent is more way more than the restaurant makes bottom line.
We also set up all of our veterinarians for mobile pay, so that the veterinarian can come out, get the dog, then the dog can go in safely, and then they can come give you the dog, and there's no time for payment. So it improves social distancing. So that's been helping our veterinarians.
I'm working 16 to 18 hours a day. I've had one day off in the past month. I've planned several evenings off or mornings off, and things just come up. We can make a greater difference in the next 16 months than we have in the last 16 years. So we're pretty much all working around the clock. I would hate to have anybody review like how good Gravity Payments is to employees right now because people just are eating, sleeping, drinking it. And we're all concerned about the toll that that's going to have on our health and so we're encouraging each other to put your health first, and to not cross boundaries.
And I need to get better about modeling that. I normally fall asleep on my computer around one or two and I normally start working again, around six or seven. I’m supporting small businesses with my social media and public platform. I was on MSNBC on Sunday promoting all these things.
I'm shopping at Pike Place Market, which is very quiet and it's easier to distance there than a grocery store. Right before they closed I bought as much as I could from Pure Food Fish Market which has been my client for 16 years since the very beginning. And the owner Solly, who's in his 90s, Sol Aman, he has owned his business for 60 years in the market. When he chose to use Gravity when I first started, it gave me credibility with everybody there. And then I went and shopped down the way from him there, at Sosio’s Produce. Midweek it's completely empty. I've been finding ways to effectively distance and support small businesses.
I’ve only had one day off so far. It was an amazing day. I have a snowboard that's sawed in half and it turns into two skis. I strapped on the two skis and I climbed up 5,000 feet of a mountain in the Cascades. I'm in the wilderness, and I climbed up the 5,000 feet and then I snap the two skis together and turn them into a snowboard and I snowboard it down. I did one long snowboard run. A day like that I'll burn 3,500 calories and it's a nice, 10-hour day. It's an intense day, maybe seven hours, but it's a long day. And it was really, really beautiful.
I mean, I cry every day, pretty much, you know? Just all the pain and suffering that's happening right now in the world. It's just heartbreaking. And certainly, I'm heartbroken for my clients that are trying their best to save one more job and just heartbroken that they can't or people that have risked everything and spent their whole life building a small, local one location Main Street business that are under threat of losing everything and can't get the assistance that they need and deserve and they didn't do anything to deserve this happening. But the other 23 and a half hours that I'm not crying, I'm up for the fight. I'm just fighting as hard as I can.