Starting a Conscious Company: Jeff Marcous Interview

Not all new startups are millennials creating new high tech companies. There is another trend happening – founders starting businesses that are socially responsible. Here’s a story about one industry veteran who started such a company based on Conscious Capitalism. 

An interview with Jeff Marcous, co-founder of Dharma Merchant Services and Chief Evolutionary Officer

I settled into a chair in the conversation corner of Jeff Marcous’s office. I was immediately stuck by his gentle manner. He encouraged me to put my glass of water on the wooden table without a coaster. Jeff had refinished the table by hand, recounting his early career as a carpenter in Maine. Before I could start my questions, he warmly asked me how I was doing. This was more than a pleasantry. He genuinely wanted to hear. I told him about my escapade earlier that day – rescuing a stray dog at Marshall Beach. We had something in common. Now that Jeff was assured that I was comfortable and relaxed, we started the interview.

This focus on the other person, curious inquiry, generous listening, and creating a safe place is typical of Jeff’s leadership style in the company he co-founded almost ten years ago – Dharma Merchant Services.

Dharma --a company named for the teachings of Buddha might certainly qualify for the lofty aspirations of conscious capitalism – to aim a company’s priorities toward helping people and the planet before making a profit. I wanted to know more about the person who starts such a company. 

Jeff’s Spiritual Path

Jeff Marcous has been on and off the conscious path since he was seventeen. He read Siddhartha, Herman Hesse’s book about life of Buddha. The book led him to transcendental meditation. It was his starting point on a spiritual path that Jeff describes as “on again, off again.” Today he is now a committed Buddhist practitioner and a weekly volunteer with the Zen Buddhist meditation group at San Quentin Prison. 

Jeff’s Business Career

At the same time that he was on a sporadic spiritual path, Jeff had a series of jobs. From being a carpenter, Jeff then sold kitchen remodeling packages. When the economy went through a downturn and he needed a job, Jeff found an opening selling merchant credit card processing with a merchant service provider (MSP). Even though he desperately needed the work, Jeff modestly admitted in the interview, “I’m not a very good salesperson.” He got the job anyway.

Contrary to his self-description, Jeff was very successful. Within two years, he became the regional manager at Cardservice International, which was the largest MSP in the country at the time. Then in 1998 Jeff became the SVP of Authorize Net (now a unit of Visa USA) and created the most successful online payment gateway in the world. As Jeff expressed it, he gained 15 years of “capital,” of industry knowledge.

But Jeff was bothered about the industry’s practices. MSPs were not always forthcoming about their fees. There were hidden costs, binding contracts, and undisclosed exit penalties. The owners of these companies liked to flaunt their success by showing off. Jeff characterized that lifestyle as “boring.”

The industry could improve. 

Jeff cofounds Dharma Merchant Services

Jeff’s pivot from working a for-profit company to becoming a conscious capitalist occurred when a series of life events came together. 

“I had just moved to California. My daughter had just moved to California too. I had thought about starting a company and suggested it to my daughter. It would be a neat thing to do together. My daughter knew nothing about the industry. But she had an MBA. She was smart.

“I had returned to my meditation practice. I believed that my livelihood should be a part of my spiritual path. There should be no separation between what I believe in and the work I do. Buddhists believe that Right Livelihood is one of the ways to release ourselves from suffering. It leads to an ethical way of doing commerce.” 

 “Also at that time, I read an article from the Institute of Noetic Sciences. The article referenced life purpose as it related to one’s career, which lighted an idea to apply conscious practices in the likeness of a few other visionary companies. That seemed to describe the difference in how the MSP industry was and what it could become.

“At the time, no one in the MSP industry, any industry, was applying these values.” Jeff recited a short list of the early adopters -- Tom’s of Maine, Newman’s Own, Ben & Jerry’s, and Working Assets Long Distance, which is now CREDO. There were not many forward-looking companies that anchored their business on social values. This was new territory for a business mission.

And from an industry perspective, an industry that needed a lot of cleaning up, Jeff felt he couldn’t fail if he did better than his peers. When Jeff thought about how this might apply to his industry, he was encouraged. “I could attract customers just by being a better operator. Merchant credit card processing is a commodity. My angle on being different would be that I would provide better service, lower prices, more transparency, and operate on the values of social responsibility. 

“At the same time I starting thinking about starting my own company, I had to face my fears.” Jeff revealed, “I’m afraid of confrontation and rejection. I fear failure. I had to ‘lean into my discomfort.’ So I did a number of big changes all at once – physical, mental, financial, and spiritual. I guess it was easier to go ‘all in’ rather than to enter this incrementally.”

So in 2077 Jeff started Dharma Merchant Services from scratch, self-funded. Within six months, he could afford to pay his daughter so she could quit her day job. And Jeff was able to pay himself after the first eighteen months. Overcoming the fear of failure paid off. He was making money.

But money really wasn’t what Jeff wanted.

Building a Workplace that Works for its Employees

Jeff brightened when he talked about how the company values employees. “What if we turned Maslow’s Hierarchy of Needs upside down and started by self-actualizing employees? We would create purpose and meaningful living.”

Jeff built his company’s culture around a philosophy outlined in Sacred Commerce. This small book is a how-to guide for business leaders who want to create a sacred place of work. Its premise is that employees thrive where they are respected, where there is authenticity and an abundance of support. “We all get that we do not operate in a vacuum, that we are simply a part of the whole and so every action, every word, every thought has an impact on our stakeholders. We learn to take responsibility, apologize, give up being right, coach each other, make powerful requests in a way that reflects Business as a Path to Awakening.”

Dharma selects employees who want to work in such a place. Cultural fit is more important than professional expertise. 

Employees are richly rewarded. The minimum salary is $70,000 so that employees do not have to struggle with their finances in order to support their basic living needs. Employers also receive tremendous benefits. In addition to fully paid health insurance, they get paid disability, vision, and dental insurance, gym memberships, quarterly company trips and events, company lunches, transit passes, 401K matching contributions, maximum H.S.A. contributions, as well as a stock ownership program. 

Employees make a salary; they are not paid on commission because Dharma does not make cold calls to get new business. The company has never had a sales force. Customers come to them. 

What makes the company so attractive to merchants?

Looking at it From the Customer’s Point of View

Jeff looks at credit card processing as a critical part of a small merchant’s business. “They have to get their money but they can’t afford high fees. When Dharma Merchant Services started, their first targets were non-profits and sustainable businesses. They wanted to help these noble businesses.

“Our fees are lower than the industry standard. And a merchant knows what all the fees are upfront. We are very transparent and reveal everything on our web site. We even have a way for them to calculate what our service would cost them and compare that to their current provider. A new customer could enroll by filling out a form online if they wanted to.

“We don’t tie up our clients in long-term contracts either; our agreements are month-to-month. Besides, I wouldn’t want to keep a customer who wasn’t happy with us,” Jeff proclaimed. Other MSPs charge exorbitant cancellation fees. We have no contract so we have not such fees.

“We not only charge less, but we also have great service. We have a comprehensive knowledge base on our web site as well as a very well-informed staff to help with any question. There are a thousand possible failure points in this industry. A typical credit card service might have 300-500 complaints per year. We have had only one complaint in ten years. Good service is really attractive.

“I also know that merchants are pleased to work with a company that is socially responsible. And we choose to work with companies that are socially responsible too. We often turn down companies and organizations that do not meet our social criteria. For example, we had one recently that was creating a new political party that supported a number of biased and right wing platforms.

Connected to the Community

Jeff’s belief in the interconnectedness of us all is reflected in Dharma’s contributions to the community. Dharma contributes over $100,000 a year. About half of those donations are decided by employees who select organizations that hold a meaningful spot in their own lives. Jeff selects the rest. Some are based on incoming request and other contributions go to the nonprofits where Dharma has an ongoing relationship, such as Green America, Amazon Watch, Pachamama Alliance, and Planting Justice.

Dharma is also conscious of doing business with suppliers who are good stewards of the earth. Even though they are a service, they are served by a lot of suppliers. Dharma tries to work with other companies who conscious, local, committed to sustainability, and women- or minority owned.

Jeff pointed me to a concept in Sacred Commerce – their acronym for doing business – PASS. The leader asks everyone at all times to consider: Are we Profitable? Does it serve the company as an entity? Are we Awakening? Does this cause transformation? Are we Sustainable? Are we in harmony with the Earth? Are we Serving? Are we creating a just society? This is an incredibly forward-thinking way to design a business. Jeff started Dharma Merchant Services years before the book Conscious Capitalism was published.

Perhaps one of the reasons that Jeff Marcous is a visionary leader is that he reads and puts ideas into action. A conversation with Jeff includes quotes from a wide range of philosophers and business thinkers – from Buddha, Aristude, Aristotle, St. Bernard, and Maslow. Now Jeff is spreading his commitment to a changing business culture to others, one customer at a time.

Lessons Learned:

• Doing good helps a company will do well. And doing good should be the primary goal.

• If the industry provides a commodity, your company can stand out by being a better actor.

• Attraction is stronger than promotion. A good reputation is better than a pushy sales force.

• Lean into your fear.

• Create a culture that is “bottom down, rather than bottom up.”

• A leader’s priority is to give more to the employee’s soul than to get more work from employees.

• We are all connected so take care of your community and the planet.