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Vendor mender: Vaughan Rowsell

Vaughan Rowsell is reinventing retail—with the help of Apple and Facebook.

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photograph by Stephen langdon

Disruption

Vaughan Rowsell could have picked an easier gig. Another three-deals-a-day online retailer, perhaps, or a cafe, or he could have kept consulting to companies like Trade Me who can be relied upon to pay their bills. But instead he’s spent the past two years creating a radical product for a penny-pinching, risk-averse sector that he expects will soon be a battleground for two of the hottest companies on the planet.

And he seems strangely calm about it.

Rowsell’s aim is to bring stores into the 21st century. His creation, Vend, is an online point-of-sale app completely different from the crufty, confusing systems that are currently in use on checkouts. The pitch is simple: a better POS.

He’s used to the reaction of those who wonder why you’d bother. After all, the current POS vendors are entrenched, and Vend’s potential customers range from large, controlling organisations like The Warehouse and Wal- Mart to small, cash-strapped corner stores. All of them are cautious, because POS is where almost every product eventually meets the market, and any flaw is measured in lost sales.

Still, he reckons they could use a better system. “It’s an industry that hasn’t had a lot of innovation. Up until today the level of innovation in a retail system is making the Eftpos machine go beep when you load a sale on the register.”

Rowsell’s system Vend is built for social networks and geo-location. Instead of installing expensive, proprietary terminals, retailers can use a normal PC with a web browser. It’ll work with their current scanners, printers, eftpos terminals and other hardware. The software is updated frequently so new features and bug fixes are quickly released to stores. It’s cheaper, as Vend charges by the month without setup fees. It scales more easily, too, as adding new lanes or opening a new branch is as simple as paying a bit more per month.

But the big payoff comes from moving the software out of a dumb terminal and into the cloud. Apple created custom software to let Apple Store employees process transactions on their iPads anywhere in-store, doing away with checkout lanes altogether. Vend will let other retailers do the same. And there’s a seemingly endless list of ideas to integrate with social networks like Foursquare, the location-savvy social network that allows people to track each other and the places they go.

Vend was conceived after a search for a similar product for a client turned up nothing. “I did a bit of research and was shocked at how badly retailers were being treated by their software. That got me thinking. Then the recession hit and I was hearing people lamenting how the sky was falling and the world was going to end. I thought, recessions are the best times to pick something new and challenging and go for it.

“Xero had been blazing a trail for the software-as-a-service style model. The more I thought about it, the more I thought what if … Then the next decision was, do I want to commit the next five years to being involved in a startup again? I’ve been involved in startups for the last ten years, so I’m no stranger to late nights and saying goodbye to your weekends.”

His family had faith, but investors were not so keen. “I wish I could get back the six months of my life that I wasted having coffee with potential investors in Auckland,” says Rowsell. He turned instead to two Wellington investors with first-hand experience of disruptive web ventures: Sam Morgan and Rowan Simpson, the founder and former development manager of Trade Me. “I didn’t even give them a business plan. It was more about them getting the idea and being willing to take a punt.”

I didn’t even give them a business plan. It was more about them getting the idea and being willing to take a punt

Rowsell expects to find himself working alongside companies with much deeper pockets than the Trade Me millionaires, like Amazon, PayPal, Google and Visa. “But with the innovations surrounding mobile payment, we’ll wait and see who the winner is,” he says. “One of the more exciting ones—and there’s been no signalling of it coming out—would be Apple’s move into this space. The iTunes store is probably the world’s biggest market place where people have a virtual wallet.

“Google’s been in this space and they’ll be chipping away at something. But it’ll be an arms race between Apple and Facebook. Facebook has the world’s biggest database of users but they’re not currently transacting, whereas Apple has the world’s largest database of users that they do financial transactions with, excluding Visa.”

He’ll be ready. Updating Vend to work with iTunes or Facebook transactions would be relatively simple, but traditional POS vendors would have a mountain of work. And the upside is vast: 20,000 stores in New Zealand alone, and countless potential customers around the planet. Vend already has customers in the UK, US and Dubai, and has a global pitch. “We’re getting a lot of interest because we’re a New Zealand company, but we have this opportunity to have the world as our marketplace,” says Rowsell. “Why turn away the guy in Dubai who wants to run a fast-food restaurant with our software? Retail is a huge industry and the world’s a huge place.”

www.VendHQ.com