Assuming that your employees aren't clueless (ie. know their market rate) and are free to leave (eg. not family members or H1-Bs), then you'll see significant employee churn if:
asshattery
$ < $market x -------------
cool factor
It seems to hold for most of the cases that I can think of.Apple, for example, has a high asshattery factor (Steve Jobs) and market rate (they want awesome people) but also has a huge cool factor to balance it out somewhat (I heard they pay ~1.5x market).
Banks, Traders, Insurance companies, etc. have low cool factor, so they have to make it up with large salaries and perks and not be too toxic to work at.
In the case of Mahalo, it seems like they have a large asshattery factor (Calcanis is an overbearing idiot who will post nasty things about you on Twitter), and cool factor < 1 (spammers) and (it seems) they pay below market rates, so it's not suprising that they're seeing lots of "job hoppers".