A couple of months ago I heard about a new startup that requests users to disclose detailed salary information about themselves, and in return they get information on what others are making. It seemed like a great way to get good user generated information at no cost, and there are lots of ways to make money by reselling the aggregate data to third parties. The problem was that the site, wageexchange, was a complete letdown. It is little more than a web form that spits back data at the user. There’s no analysis or ability to dig deep into trends, etc. Until it got a lot better, we passed on profiling it.
But the idea stuck in my head, and when I got a call from Seattle-based PayScale I was happy to learn that this company had been doing exactly what wageexchange promised. This isn’t a new company – John Cook at the Seattle PI has written about them, as have other local Seattle writers. But it’s very useful for people searching for a job or trying to negotiate a raise, and I’m not sure we need a new startup to improve on the service.
Users go through a process of disclosing detailed information about their job function and compensation, and add it to what PayScale says is the “world’s largest database of salary information” (300,000 new profiles are added each month). The user can then access detailed salary information in the database, including custom reports based on salary, bonus, commission, hourly rates, health and vacation benefits.
The basic service is free, and Payscale generates revenue by upselling users to premium accounts and selling access to aggregate data to third parties.
This is a useful service that gives significant value back to the user for spending time adding content to their database. Payscale has raised $10.6 million in venture capital over two rounds. Investors include Trinity Ventures, Madrona Venture Group, Fluke Venture Partners and Buerk Dale Victor.