Pioneering Data On-Demand: Salary.com CEO and Serial Entrepreneur Kent Plunkett (Part 2)

SM: What was the genesis of Salary.com?

KP: Right before I started Salary.com I was building software for What Color Is Your Parachute?, which is also in the career management space. There we ended our process with a recommendation as to what would be a good career fit for an individual. The goal was to identify where people would be able to succeed based on their skills, attitudes and interests. There were no readily available data sources as to how much jobs or careers in those areas would pay. We looked around to find resources and looked at how the industry was structured. Consulting firms had data.

Around the same time I had personal experience that really triggered the idea. I needed to hire a secretary and I could not get a straight answer from anybody as to how much I should pay the person. That brought the frustration and pain home. As a business user I desperately wanted to offer a fair pay package – that experience reinforced the point, and that is when we looked at the industry closely.

We found that a bunch of the consulting firms had an oligopoly. They all had the data and were willing to sell it for thousands of dollars, but they were only willing to sell it to a limited scope of clients who were large enough to pay for consulting engagements. They were not interested in the small businesses or the individuals having access to the information.

We thought the idea and need was real, but we did not know how to market the idea so we tabled it. One day we stumbled on an auction site for domain names and found the name Salary.com on sale.

SM: What year are we talking about?

KP: This was in 1999. We purchased the domain name and felt that it was a brand that could tie to us breaking into the data oligopoly. One of the structural issues that oligopolies tend to exhibit is that they tend not to drive significant investment in making the customer experience better. There was a lack of technology investment in making data useful. That tied to my overall belief that the human capital management space had room for best-of-breed vendors. That is in part because the companies that had taken those positions in the late 80s and early 90s had become so dominant that they had sucked the air out of the market.

SM: Where you still working at another company while hatching this idea? What were the circumstances surrounding the founding of the company?

KP: After being involved with InfoSpace in the early days, I founded a company with Cal Brown. We acquired the software rights to What Color Is Your Parachute?, and that company was looking like it was going to wind down at some point. It had reached $4 million in sales, but we were starting to see the CD-ROM category imploding. We had some smart developers and other people in our 12-person company, and we were looking to keep them working productively. That is why we were casting around for the next big idea.

SM: You did not do it with the $4 million run rate company, you started another company instead?

KP: Yes.

SM: What was the reason for that?

KP: We had investors in the first company that had invested in a certain vision. Salary.com was a different vision and business. Several of those investors did come with us but some did not.

SM: You funded the Salary.com idea right away?

KP: We actually raised angel money. I did not get paid on my InfoSpace project until a couple of years later. I did use those funds later to fund Salary.com when the bubble burst. We raised more angel money in 2000.

This segment is part 2 in the series : Pioneering Data On-Demand: Salary.com CEO and Serial Entrepreneur Kent Plunkett
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