PayScale provides companies and individuals with compensation information by positions and job profiles of employees and employers around the world. They have a proprietary data-collection and reporting system which gathers the statistical records. The company claims to have the largest online database of employee salary information in the world.
PayScale is aimed at both – consumers and corporations. Consumers who complete a personal profile receive a free Summary Report with the option to purchase a detailed Premium Report for $19.95.
Corporations are provided an online compensation data service called PayScale Professional which provides them with highly targeted compensation and benefits information. These reports start at $99 onwards depending on the amount and frequency of information. In exchange for a free report detailing how his compensation compares to others in the market, individuals submit detailed, anonymous information about their workplace. This data is then analyzed and tested to ensure validity and accuracy. Since their inception, they have collected over 10 million job profiles and 4500 business customers.
The company is based in Seattle, Washington and was launched in 2002 by Joe Giordano, who is also the Chairman. In their Series C round, Allen and Company and three Seattle based firms invested $10.3 million in PayScale in July 2007. Previously in October 2005, the company raised $7 million in Series B funding led by Trinity Ventures and previous investors from their Series A round. In Fall 2004 they raised $3.2 million in their Series A round from Fluke Venture Partners, Madrona Venture Group and Buerk Dale Victor.
The company’s main competitor is Salary.com, a Massachusetts based public company. Its revenue grew 51% to $23 million during the last fiscal year, according to an article in Seattlepi.com. SalaryScout, Indeed and PayScroll are other competitors with similar or related offerings.
A post on VentureBeat, describes another tool from PayScale which is a widget other sites can place on their job boards which pops up salary information about specific jobs. Effectively a marketing tool, this service leverages the web 2.0 phenomenon called viral widgets.
Another program, Meeting Miser, calculates in detail how much a meeting is costing a company. This helps some companies cut out unnecessary meetings. For others, it’s just idle curiosity. I have the feeling, for most, it is the latter.
Other more useful use cases of the PayScale service include the ability to do “what-if” on, say, living in San Francisco and working for Google.
The service is not restricted to white collar workers, and everyone from nurses to coal miners use it.
This is a very good example of a company that built itself on an intelligent and scalable market research value proposition.
This segment is a part in the series : Deal Radar 2008