In late 2019, former Facebook engineer Matt Schulman was tinkering on another fintech idea (a Mint-like app as an employee benefit) when he realized his potential clients had a lot bigger issues. Their compensation and benefit packages were so complicated that recruiters, human resources and employees alike were struggling to understand and communicate them. And, once recruiters did convince employees to join, there was no data-driven benchmarking to ensure the lifecycle of employee compensation made sense.
So Matt abandoned his original idea to found Pave, a platform that demystifies compensation packages for employees while helping employers make data-driven compensation decisions. Now clients like Allbirds, Discord and Shopify use Pave to attract top talent, as well as retain exemplary employees with market-driven compensation plans.
Pave is now one of the fastest-growing fintechs with 150 employees, a $400 million valuation and $63 million in backing from investors like Andreessen Horowitz, Y Combinator and Bezos Expeditions. After the company landed on Startup Search’s Top Fintechs of 2022, we sat down with Matt for a deep-dive into his plan for Pave.
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Table of ContentsWhat about compensation inspired you to found Pave?
As an outsider to the industry, how’d you get Pave off the ground?
What’s the most defining Pave product?
What’s unique about Pave’s culture?
Why should job seekers join Pave now?
What about compensation inspired you to found Pave?The deeper I got into compensation, the more I realized that it is an insanely complex problem that is universal. Every single employee who has a job encounters compensation, along with the confusion and stress. Meanwhile, it's also the most expensive part of the economy: the number one item on most balance sheets is payroll, but it is stuck in the dark ages. So Pave is at the intersection of something that is so interesting from an intellectual standpoint as well as something that is so universal across the world. Most people trying to tackle this problem are former HR; I’m just an engineer, but I find this problem so interesting.
As an outsider to the industry, how’d you get Pave off the ground?Being an engineer, I'm always inclined to build stuff. But I was very stern with myself that I didn’t want to write a line of code, raise a dollar of VC money or hire an employee until there was revenue in the bank from customers that have prepaid for this product to exist. So I created Figma mocks (I'm not a good designer so they were very ugly), and went to market to sell the Figma mocks. As a result, we got three deals around March of 2020 and they paid money up front. This basically de-risked the entire business because it de-risked the question of if there was a business to be made here. So often people built a solution before finding a customer’s problem and business model.
What’s the most defining Pave product?Pave started as what I would describe as ‘single player mode’ tools – tools to communicate compensation to candidates and employees, plus a merit-cycle, compensation planning tool to help administrators. But the company really changed once we added benchmarking, which is a tool that helps companies figure out how much to pay people and benchmark against what other companies are paying. So instead of being a ‘single player mode’ tool, it's really this ‘network’ tool.
We have 2,300 customers in that benchmarking so it’s really a network product. There was a chicken or egg problem at the beginning because companies integrate their systems to get access to the market data. When there's a network product, that's pretty conducive to a winner-takes-all market and, as a result, it's a bit of a space race. There’s a race against time to get as many companies online as soon as possible to ensure that we are the entity that brings the world online and that no other entity can capture it.
What’s unique about Pave’s culture?We started 2020 with just me, then we started 2021 with 10 employees and now we’re at about 150 – looking to be closer to 250 employees by the end of the year. We have a pretty unique culture that’s magnetic for the right person. That’s because we’ve done something pretty controversial – we’re in the office and we want an office culture. Most investors thought we were crazy in late 2020 and early 2021 when we said we wanted to continue to hire in San Francisco. We do this because of our philosophy is that the deepest and richest culture’s at an early, high-growth startup are not built over Zoom, but are built in-person. It’s the in-person camaraderie, the whiteboard jam sessions, dinner’s after work and impromptu walks along the water that build such a magical spark.
That is a sort of cultural underlying thesis that we’ve made. We’ve doubled down on that by opening an office in New York. It definitely turns off people at the top of the funnel, but for those who want that really rich, meaningful startup experience that isn’t just about work, Pave is one of the few companies that’s fully leaned into office culture.
Why should job seekers join Pave now?Thinking about my own experience when I was at Facebook, the cool part was that the code I wrote could touch a billion users. The frustrating part was that the scope of what I could do was so narrow and not malleable – I knew what I was going to be doing for the next 6-12 months. And that frustrated me. I wanted a lot more creativity and agency to shape broader products and pitch whole new business lines. That just doesn’t exist at a Google or Facebook.
For those who want to rapidly increase their scope and responsibility, it’s must more conducive at a place like Pave. And the cool thing about Pave is that it’s a problem that touches nearly every person and in Silicon Valley there’s a lot of tools like Airtable and Retool that I love but are B2B tools that are limited to a certain subset of the market. Compensation is something that nearly every single human deals with from one angle or another, and our vision is to build this global data network compensation and employment records for all 4 billion humans in the labor market.
This interview has been edited and condensed for clarity.
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