Point-of-sales system Posboss caters especially to hospitality companies. Here’s how founder Jonny McKenzie made it happen.
Stop me if you’ve heard this one: student gets night job in a bar, falls in love, makes it a career.
Admittedly it wasn’t quite that simple for Jonny McKenzie, but twin passions in hospitality and IT could prove a winning recipe for a tech venture with the potential to go global.
Interning at mobile technology company Run the Red while studying tech at Victoria University, McKenzie did well enough to score a project management role after graduating and it genuinely captured his interest.
Then there was McKenzie’s other student job at Matterhorn, the restaurant and bar with half a decade on Cuba St and billed as “a scene of assembly for Wellington’s creative cognoscenti”. It came complete with glamorous trips to Cuba, Mexico, London, New York and LA competing in cocktail competitions.
It was perhaps not surprising that the hospitality trade, which he’d entered aged 14 at a catering company, won the battle for his affections.
“I liked computers at school but the reason I went into IT was more because of how the wonderful schooling system and parents put pressure on you to choose your life path. Victoria University was offering a brand new degree and it sounded cool. I knew IT was potentially money-making and a booming industry so I joined up. But I had much more passion for the hospitality trade. It was more the interaction with people and the creativity in a cocktail bar.”
Now McKenzie and his brother own three Wellington bars, after buying The Hawthorn Lounge eight years ago, Cuckoo Cocktail Emporium two years later and CGR Merchant and Co another two years on.
Although he’d found his niche, IT wasn’t finished with McKenzie. In 2012 Wellington IT company Touchtech was scoping interest in a cloud point-of-sale application concept, catering specially for hospitality companies.
“They came to me with an iPhone ordering system for restaurants,” says McKenzie. “The initial concept wasn’t necessarily new, it was a palm pilot system but on an iPhone. Staff could use their own iPhones to take orders at tables using the app.”
Hospitality is one industry (health and fitness and employee time-keeping are others) where Touchtech has hunted partnerships to create cloud or mobile systems designed to simplify business for those companies.
“We generally work with similar, ambitious businesspeople,” says managing director Robert Clarke. “We really enjoy that journey of helping make things better.”
Three coffee meetings later, McKenzie was sold on Touchtech’s idea and Clarke’s Touchtech partners Adrian Falvey, Robin Marshall and Matthew Watson joined McKenzie as owners in a new company, Posboss, that would bring the idea to life.
McKenzie was annoyed by the POS systems he’d used. “Traditional point-of-sale systems are hardware that’s just for point-of-sales and in most cases require a back of house networked computer that feeds information to all the systems.
“It’s all done through wired connections. Not only is there a big setup cost to get the IT guru to network your building, you’ve got to make sure your printer is all connected.
“The reason people still have those push button Casio tills is the price of a new system is astronomical, so they’re not upgrading. To invest that amount you have to know you’ll have the till system for five years to make your money back, which is probably about $1,000
a year. That’s pretty intense for a small coffee house where income is predominantly $4 lattes. That’s a lot of lattes.”
McKenzie also has an insider’s eye on why Posboss hits a very targeted retail niche.
A department store, for example, will sell a whole item like a T-shirt, while a cafe sells sandwiches, which are parts of a whole. A shop might have standard opening hours, while a restaurant could take an hour to set up and another two to clean up and close.
Then there are differences in margins made selling products made perfectly to a recipe rather than mass production.
“There’s a ‘same, same, but different’ mentality,” McKenzie says. “The further we looked into it, the more we realised we had to build our own system because the way we looked at information flow was slightly different. We realised there was a huge market for a hospitality system that looks at how kitchen flows work how barista and maître d’ stations, bills and accounts work, to stock and recipes and loyalty systems and how staff rosters work.”
The company is unashamedly in the Apple camp, with the iPad its device of choice.
“We want our users to be experts in under 10 minutes, with simple instructions and little videos. Current point-of-sales systems might have a 110-page manual. You can pretty much give an Apple device to most people and they’ll turn it on and start using it. Owner operators didn’t get into hospitality because they like computers.”
Posboss hopes to cash in on recently green-lighted equity crowdfunding law that would allow it to raise up to $2 million in 12 months using this method. Picking investors with a vested interest, like hospitality industry members or those with cloud knowledge, will be key, says McKenzie.
Around 10 businesses in Auckland and Wellington are using Posboss and New Zealand is the target market as the company proves its product. But partnerships with big Kiwi cloud players like retail point-of-sales firm Vend and accounting software provider Xero pave the way for wider markets.
Hospitality companies with wholesale and retail arms, like a coffee roastery/cafe, can use an integration of Posboss and Vend, and upsize that combo with Xero for cash management and invoicing. Posboss might also integrate with Mobi2Go, which provides mobile and web ordering for restaurants (see Idealog #45).
“Our goal is to be an affordable point-of-sale system and create a community around it and give hospitality businesses a chance to go back into service and not worry about reporting and systems,” McKenzie says. “Wherever that takes us in the world, who knows?
“There’s always the dream to be global. New Zealand has a really strong hospitality industry and high quality tourism. If we can prove [Posboss] in the New Zealand market it’s easily sellable to the rest of the world.”