Part 3/Episode 44
Vaughan continues describing the journey with Vend – the first holistic cloud based retail platform.
Years ago the company differentiated and aligned to the independent retailers – he describes them as generally incredibly passionate, not techies and just ok business people. He calls them Cherish retailers
And Vaughan feels the online experience will never kill the bricks and mortar. He also talks about how crucial his early hires were and why independent retailers are the sweetspot for Vend
Whether it’s at a BBQ or at an event like this, find a way to get up on stage and share your story. First of all, the more you do that, the better you get at telling your story. Second of all you never know who is in the audience. Quite often you don’t even know who you’re really talking to at a BBQ. This is the funny thing. We’ve raised a lot of money over the years and we’ve brought on lots of investors. If I trace back … first of all it was never go to an event, meet an investor , pitch them an idea – and then you get a term sheet 2 weeks later. It was never anything like that. That just doesn’t happen. But if I trace back all of my experiences with my investors … the relationship started 18 months before the investment … and it was at a BBQ … or anything like this … where you just meet someone interesting and you share your story. And you spend the next 18 months building that relationship – til you get to the point where you can ask for money and they already know the back story .. and they’re just looking to give you a cheque.
Welcome to 14 minutes of SaaS, the show where you can listen to the stories and opinions of founders of the world’s most remarkable SaaS ScaleUps.
This is episode 3 of a 7 part series with Vaughan Fergusson, sole founder and former CEO of Vend.
Vaughan continues describing the journey with Vend – the first holistic cloud based retail platform. Years ago the company differentiated and aligned to the independent retailers – he describes them as generally incredibly passionate, not techies and just ok business people. He calls them Cherish retailers
And Vaughan feels the online experience will never kill the bricks and mortar.
How did you actually go about getting a team and thinking about how you should approach getting product market fit.
Yeah. So it was about it was about halfway through the cycle. I’d pretty much made up my mind that I was going to go ahead with the idea of Vend. And I had screen designs … I had ideas of what it would look like. And as I was cycling through different cities around New Zealand I would hit up people that I knew were in the the startup ecosystem. I’d say ‘Hey, wanna go on a bike … I’ve got some crazy ideas that I wanna ask you.’ 2 of those people were Sam Morgan and Ron Simpson who were from Trade Me which was New Zealand’s eBay back in the day that they… they exited at from Trade Me for squizillions of dollars. But that’s how I got to know … not super well … but I got to know Sam and Ron. Both of them. I hit them up and sais ‘hey, you know, I’m going to be passing through your town.’ And I knew they were into cycling. So it’s like fancy coming for a bike ride and… and then, yeah, just as we rode I told them about my idea of what I was doing, pulled up the screenshots, ‘And it’s gonna be great! It’s going to be amazing.’ And, you know… I never really ask them but like … I don’t know if it was the bits of paper and the idea … or whether it was like this is crazy guy who was on a bike though New Zealand … you know, ‘if he could do that, then he would probably follow through on this idea for a setup.’
And the 3 of you, what sort of different skills did you bring … you know, how did that work? You must have really thought about finding people to do stuff well that you don’t do or that you didn’t do yet.
So, I brought Sam and Ron in as investors. They invested multiple times over the years. So they became cornerstone investors. Ron was a bit more active. So he was, you know, ask him to become the Chair for the first three or four years. He was… he was pretty active in the business, you know. Sharing his experiences that he had seen within Trade Me as they were on a rocket ship journey. And so I’m really grateful for that time with Ron.
And then… and then we just constructed the team. It’s one of the lonely things about being a sole founder. It’s the weight on your shoulders. And so you’ve got a very quickly find a bunch of equally passionate people to share the load. And those early team members are pivotal. And when… when you are one … and you’re growing the team to be 2 …if you get that 1st hire wrong, and it can be devastating for the business. It could be a mistake that takes years to unwind. And… so I think I was lucky. I had amazing people who wanted to come on board. They could see the same thing that I saw. And just wanted to be part of the journey.
So it’s definitely now a high growth SaaS success story. Just for people who are not in this space … What differentiates it from, let’s say, a Shopify or a Square or a Springboard retailer, a Quickbooks as well. What is it that separates them from all of these others.
So when we started we were the first cloud based retail platform. And what I mean by that was we did point of sale (POS), we did inventory management, CRM like all the bits of the software that a retailer would use to run their business. And we were the first on iPad – because the iPad came out a year after we launched. But then very quickly the space filled up quite a bit … because everybody from adjacent areas also realized that they could build an iPad app, do POS and build some inventory features. And, and so, yeah, the thing that makes us different … I think we rode the wave of being 1st for maybe 5 years. But then you gotta come up with a new trick. You gotta come up with something else that is different – because then everybody else was also doing the same thing that we were.
So the area that we really focus on is independent retailers – because retailers as an industry is massive. Some people think of retail as everything from bars and cafes all the way through to, you know, fashion stores up to service industry and salons … and we were doing all of it for the first five years. We were trying to service every variety of retail and they’re all different businesses. Like the way you run a cafe is different to the way you run a bar, which is different the way you run a fashion store, which is different to what you run a nails salon. And, and so, yeah, a couple of years ago, we just had a look at ‘what was one of the things that kind of makes us different …that we are really good at …. both from a product point of view … but also from a cultural point of view. Like what is the area of retail that we feel the most passionate? And it was really obvious. It was the independent retailer …. the fashion stores or the gift shops … or sporting goods. Because these are the retailers who opened a retail store because they were in love with their thing. They loved vases or they loved sporting goods, or they loved toys or whatever that passion was … these are passion people. And so they’re passion led, they weren’t great technologists, and they were okay business people. Within that they were kind of learning how to run a business like we all do. But the thing that made them special, their superpower … was their pasion for their particular style or type of retail. And so now, we just align ourselves completely on what we call cherish retailers.
Cherish retailers …
Yeah, where you’re going shopping because you’re buying something that you want to cherish or a gift to somebody else that you hope they will cherish as well. Versus the chore of retail which is like grocery shopping or filling your car with gas.
And of course, the cool thing is the trend is moving back again to smaller retailers. People are tired of the large megastores.
Yeah. The experience is changing. So malls are dying. And people are going back to the independent retailers because we don’t all want to have the same clothes and drive the same cars and wear the same shoes. In a global environment where it’s actually getting easier and easier to be your own brand. Like it’s actually becoming much easier to manufacture and build products. So if you’re a retailer and, you know, you want to have your own professional label. Like it’s still hard, but probably a lot easier than it was 10 years ago to create your own fashion label. And the software available to you to run your business. Like the eCommerce tools like, you know, the Shopifys and the Woo Commerce’s and the Magentos. And then, you know, you’re running your accounting in the cloud. So the software has lowered the bar considerably. Yeah. And so the thing that actually defines the success for a retail business is the experience, it’s the brand and the whole customer experience that you get in the store. And this is why, you know, obviously people ask me a lot around eCommerce …and how Amazon is gonna kill retail … like it’s never gonna happen. It’s never gonna happen because… you cannot replicate that physical tangible experience of a retail store online. Yeah, VR will be the next thing, but it will never be quite the same as a that experience of going hunting – the hunter-gathere type thing.
I actually think building a personal brand sometimes .. is almost easier than building a corporate brand … and you are very recognizable. You are also quite charismatic in your own way .. and I think you know that too. How useful is it to a business to have an individual that has a profile … because you’re a TedX speaker, you do lots of things, you know, does that draw people towards you? Do you think? And has it been been useful for you as an entrepreneur?
Absolutely! On multiple levels. People are more and more … and I mean by customers and team members … they want to connect with a purpose, a meaning as to why are we doing this? Like why are we building the software? or Why are we in retail? And more and more people are looking for the back story or the connection or the goal .. or the dent in the universe that you’re trying to create. And I think that’s something that happened by accident. I didn’t design it this way. But I just shared my story with as many people who would listen. I quickly realised that the more I did it, the more people just gravitated to wanting to help.
So that’s how I attracted the, you know, the early team members .. and this is like people just literally started coming to me saying ‘What are you doing? … and ‘I want to know how can I help you?’ And same with customers like they heard the stories about a crazy founder disrupting the industry in a good way. Yeah, making retail more dynamic. And. They were literally hunting us out as well. And it just kept going from there. So this is the other bit of advice I tell founders.
Like … tell your story every way you can. Find the thing that you’re passionate about … the part of the story that you are going to be passionate about. And that passion can be incredibly infectious. Whether it’s at a barbecue or at an event like this …find a way to get up on stage and share your story. First of all, the more you do that, the better you get at telling your story. Second of all you never know who is in the audience. Quite often you don’t even know who you’re really talking to at a BBQ. This is the funny thing. We’ve raised a lot of money over the years and we’ve brought on lots of investors. If I trace back … first of all it was never go to an event, meet an investor , pitch them an idea – and then you get a term sheet 2 weeks later. It was never anything like that. That just doesn’t happen. But if I trace back all of my experiences with my investors … the relationship started 18 months before the investment … and it was at a BBQ … or anything like this … where you just meet someone interesting and you share your story. And you spend the next 18 months building that relationship – til you get to the point where you can ask for money and they already know the back story .. and they’re just looking to give you a cheque.
So a great example of what this is like… is just after we raised a seed round, which was from Sam and Ron, … I got invited to one of these events … you know, one of the kind of like startup pitch events where you get a five minute window, whatever it is, to pitch your idea to an audience. And so I did a few of those … and I did one in San Francisco. And which it was called Cloud Connect. And like Ven didn’t even really exist. I had the video and some pretty looking screenshots. I was frantically building the software. And I got into the finals of this. I didn’t win. But just the experience of being able to get up and talk about your idea and do the pitch …. was an incredibly valuable experience. And then out of that, just out of the Blue, I had this German fellah reach out to me … who’d seen the Vend pitch. And he was like … ‘Wow, this is really interesting … I want to talk to hear more about it!’
In the next instalment – episode 4 of 7 part series, Vaughan explains why founders should tell their story and pitch to people wherever they find themselves. And he explains why he feels his Mum, Pam Fergusson, was the key to his success – and why she was the source of his desire to help every kid in New Zealand become confident with technology.
You’ve been listening to 14 minutes of SaaS. Thanks to Mike Quill for his creativity and problem solving skills and to Ketsu for the music. This episode was brought to you by me, Stephen Cummins. If you enjoy the podcast, please don’t forget to share it with your network, subscribe to the series and give the show a rating.