Beyond Features: How Pequity Turned Compensation Software Into a Mission-Driven Company

Beyond Features: How Pequity Turned Compensation Software Into a Mission-Driven Company

Most HR tech companies start with a feature set. Pequity started with a mission. In a recent episode of Category Visionaries, co-founder Warren Lebovics revealed how a focus on pay equity shaped not just their product, but their entire company vision.

The Mission from Day One

“Our mission from the very second that we started Pequity was fair pay and opportunity for all,” Warren explains. This isn’t just a feel-good statement – it’s a response to a systemic problem they observed in the tech industry’s compensation practices.

Understanding the Systemic Problem

The insight came from one of their early mentors, Frank Wagner, VP of Comp at Google, who identified a critical issue in the market. As Warren shares, “Compensation is directly going to contribute to obviously pay equity and gender gaps and race gaps and just general pay gaps. And where it’s mostly going to happen, actually, is in your 500 to 5000 person companies.”

This focus on mid-market companies isn’t arbitrary. These companies, growing rapidly and competing for talent, often make compensation decisions that have ripple effects across the entire industry. When they make exceptions for certain candidates, it can create lasting inequities.

The Domino Effect of Compensation Decisions

Warren explains the chain reaction: “When you bring in somebody who’s well over market rate, they eventually leave after maybe, what’s the average tenure at a tech company? 18 months. So they leave, they go to another company, and they’re expecting these really high salaries. They’re going to the Googles of the world, the Facebook’s, or I guess Meta, the Amazons, and they go, hey, I was just getting paid a million dollars at this other company. I need you to match it. And then they go, okay, well, I guess that’s what the market’s driving.”

Building Solutions, Not Just Software

Rather than just building compensation management software, Pequity created a platform that helps companies make better, more equitable compensation decisions. Their approach combines software with expertise: “We have the software coupled with the expertise to help make sure that your company has whatever it needs to succeed,” Warren notes.

This includes features like proactive pay equity monitoring and tools that help recruiters make fair offers. The goal is to prevent pay inequities before they start, rather than trying to fix them after the fact.

The Vision for the Future

Looking ahead, Pequity’s ambitions extend beyond just building successful software. “We see in three years every single company using Pequity to pay their people and having a lens into pay equity, being completely compliant with all these new pay transparency laws, and even taking a step further to push pay transparency as far as they want to push it as a company,” Warren envisions.

This mission-driven approach has proven effective even in challenging market conditions. In 2022, while many tech companies struggled, Pequity doubled their revenue. Their success suggests that focusing on solving systemic industry problems can be good for business.

A New Model for HR Tech

Pequity’s approach offers several lessons for founders building mission-driven companies:

• Start with a clear mission that addresses systemic industry problems
• Focus on prevention rather than just solving immediate pain points
• Combine software with expertise to drive better outcomes
• Target markets where you can have the most impact on industry-wide issues

For B2B founders, Pequity’s story demonstrates that building a mission-driven company doesn’t mean sacrificing growth or profitability. In fact, by focusing on solving fundamental industry problems, companies can create more sustainable competitive advantages than they could by focusing on features alone.