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16,000 installs in 90 countries in less than 24 months and counting – Vend is rewriting the export record books with its cloud-based point-of-sale and inventory management software. Exporter talked to CEO Vaughan Rowsell and head of marketing Nick Houldsworth about the journey so far.

OK, it’s been said before and I’m saying it again: The first thing you notice about Vend’s Vaughan Rowsell and Nick Houldsworth is the facial hair – particularly Vaughan’s distinctive handlebar ‘stache/chin puff combo.
The second thing I noted when I dropped into their Parnell headquarters is the relaxed, minimalistic office environment: two rows of desks – sales and support one side, marketing on the other; billiard table in the corner. It’s simple, uncluttered and has room for expansion.
This is the look and feel of ‘weightless’ exporting – not the facial hair – the simplicity of everything taking place online, ‘in the cloud’ if you prefer. Leaving a tiny environmental footprint it’s now possible to access multiple overseas markets almost overnight.
Vend is setting the pace with its cloud-based retail point-of-sale (POS) software ‘app’ that lets retailers process sales, track inventory, and manage customers. The world’s first HTML5 retail POS, it works on any device or platform, including iPads or even existing POS hardware.
Vend’s achievements in just two years has been impressive to say the least and it’s no wonder clients and investors are lining up. Vaughan and Nick attribute much of their success to their ability to relate to retailers.
“Retailers appreciate the fact that we understand them,” says Vaughan.
Support is another vital factor. Vend has a helpdesk system and ticketing system which include forums and interactive participation. All support is channelled through email, social media and the ticketing system, and there is a special partner program for retailers – reps or resellers on the ground in various markets who can provide hands-on ‘added-value’ service.
Vaughan and Nick turn out to be a couple of fairly relaxed sort of guys with a healthy sense of humour. Compare their stories about how they hooked up. Vaughan tries to tell me they met at a facial hair growing convention. The truth is that Nick literally walked in off the street looking for a job.  
“He was interested in anything marketing-ish; back then Vend was just me and there was no shortage of stuff I needed help with. I asked if he would take care of some support emails a few hours a week and we’d take it from there.
“Nick has since grown the support team to four, made himself redundant by hiring a support manager and is now focused on what he really wanted to help me with, which is online marketing.”
Nick informs me he had worked for a point-of-sale company in Scotland during the late 90s.
“It was about as far removed from Vend in design, user experience and marketing as is technologically possible, but it did teach me everything POS shouldn’t be.
“Then more recently, working as an online marketing consultant in New Zealand, I discovered Xero. It was a revelation in terms of how people could connect with, and feel about, business software – even accounting software!”
Nick read about Vend through the Xero newsletter. “It was like a light bulb went on,” he says.
“There was obviously a massive opportunity to disrupt retail software on a global scale. So I kept showing up at Vend HQ and making cups of coffee until there was something else I could do around the office. There was just this one guy with a massive moustache and a rapidly growing customer base, which meant there was plenty to get stuck into.”
Xero, the cloud-based accounting software pioneer, obviously had a huge influence on Vend’s founder. Vaughan has been a software engineer for almost 20 years, saw how archaic retail software was and thought it could be perfectly at home in the cloud.
“I’ll admit my inspiration came from Xero; my plan was to build Vend as the ‘Xero for retail’.”
He spent around six months developing the programme at home, launched in August 2010 with a couple of beta customers and today Vend installs total more than 16,000 in 90 countries. Seventy-five percent of sales are now in offshore markets. The company has an office in San Francisco and plans to open offices
in Australia and the UK.
Customers are basically any business with inventory – from chiropractors to service suppliers, retailers, to your local IT company. Google Adwords and smart SEO (search engine optimisation) brings many of them – others are referred on by the likes of Xero or Canadian e-commerce website Shopify (Vend synchronises with Shopify for businesses that want to make online sales) as well as various affiliates and resellers.
“Every week we hear of a new, awesome business in another corner of the world using Vend,” says Nick. “A backpackers in Vietnam, a sports goods shop in Kuwait, a car-wash in Indonesia, or a monster supply shop in London.” He says they’ll notice one business in a street in San Francisco, as an example, signing up and then clusters of businesses close by quickly following.
“For me, every single one of these is a remarkable milestone, and a story about how a weightless product like Vend can find a market anywhere in the world.”
Vend was able to launch into the US market on day one. In fact, by securing funding they could do a bigger, more focused push into the US and other key markets such as Australia and the UK.
Vaughan says they secured the funding by “having an awesome product, awesome team and awesome traction”.  The investors must have been convinced, Vend has raised more than $3 million since launching and the business model has allowed them to scale up quickly.
“The relationships I have with our investors stretch back to almost day one,” he says. “This is one thing a lot of people get wrong when capital raising. They think they can do a road show, visit a couple of venture capitalists (VCs) and then the following week get a cheque.
“What you need to do is establish
a relationship with potential investors, then tell them a story with progress over a number of months. Start raising funds six months before you need the money.
“To get in front of investors, you need to get in front of investors.
I spend quite a bit of time meeting with partners and future investors in the US. For the price of a flight and a week of motels you can get in front of a lot of VCs. Being face to face and pressing the flesh makes all the difference,” he says.
Vaughan says you need to be prepared to do things slightly differently in each market you export to. “The features of Vend that appealed to US customers were very different to those that appealed to customers in the UK. In the US the credit card is the primary driver of POS integration, in the UK is more about cash. You must focus on the correct selling points for each of your markets.”
Competition in the US is fierce, especially in the software space, says Vaughan, although they have managed to establish themselves as a market leader in this particular niche.
“You’ve a dozen or more direct competitors who have the advantage of being local and in market. You need to counter that by understanding the market as well as they do, which can be tough. “Perhaps you are best to do this by hiring in-market people to represent you. Something we are working at.”
He says they are grateful for the help they’ve had from expats around the globe who’ve helped open doors, and from their investors. “We get a lot of great advice from people who have been there and done that.”

PayPal partners
An early milestone for the company was linking up with online payments specialist PayPal. So how did that come about? In his inimitable style Vaughan makes it sound easy.
“I dropped them a line one day saying something like ‘Hey, I have this awesome idea on some cool stuff we can do together’. I happened to be in San Francisco the following week so we caught up. I showed them some of our ideas and we took it from there.  
“We knocked together some proof of concepts pretty quick and then we were working with them on their cloud-based wallet, PayPal Here.
“We enjoy working with their guys very much and they enjoy working with us a lot too I think!”
Timing is everything when launching a new business – and Vend seems to have timed its race perfectly so far.
“We honestly thought we would’ve had a much slower start,” admits Vaughan. “When we launched almost two years ago the ‘Cloud’ was not a mainstream term. We had to explain how an Internet-based POS worked to most people at the start.
“But very quickly the market has adopted the cloud and realised the benefits for small and large business alike. So growth has been pretty rapid for us.”
Educating potential clients is very much part of the sales process for Vend too. For most business owners, unless you’re a start-up or still stuck on manual systems, making the switch to a new POS programme is a major decision. There are other POS applications for specific niche industries, much larger competitors such as MYOB’s Retail Manager. But Vend is more generic, says Vaughan. Although they make the transition as easy as possible for customers, there can still be barriers in people’s minds to moving. He says rather than shoe-horn as many features as possible into Vend to make it work for every sub-vertical market, they make Vend extendable via APIs (Application Programming Interfaces) and product partnerships.
“For example, we have a new integrated cloud-base appointment schedule tool for the services industry called Timely, a business intelligence reporting tool called People Minder, and a loyalty points integrator.
“That’s probably the most exciting aspect of working in this space,” says Vaughan. “This eco-system of apps.” He says a year ago they thought it would be great for Vend to have an app-store of its own, but they weren’t sure about how to build such a thing.
“But when you reach a critical size, suddenly people start approaching you with all these great apps that they want to add on to your product.
“For us that’s a real competitive advantage – being ahead of the game and our competitors in terms of having that eco-system,” adds Vaughan. “It gives our customers so many more options. They can build this really great network of apps and only pay for what they need, and at a fraction of the cost of just five years ago.”

Injecting some fun
Ask Vaughan and Nick why they get on so well and the jokes start to fly.
“I’m CEO,” responds Vaughan. “That just means I founded the company and gave myself the most impressive title. My job is to hire smarter people who make me look good. I’m still very much the product guy, and I’ve some fairly grand plans for what we’ll be doing.”
Nick is Vend’s head of marketing, “which means I try to create a buzz online about Vend and translate Vaughan’s big personality and even bigger ideas into a unique voice for our brand on our website, social media, videos and customer support.”
“When Vaughan and I first chatted over beers about how we wanted to build ‘brand Vend’, both as a product and a company, we clicked right away. We wanted to inject some fun into a stuffy sector.
“B2B marketing, and the software it promotes, is often boring, conservative and lacking in any human emotion. But people start a shop or café because they want to ditch the day job, do something meaningful, and enjoy their working day. In everything we do at Vend, we try to celebrate this, show that we also enjoy our work, and hope that this resonates with our customers. We also share a childlike sense of humour, which helps.”
You get the feeling nothing fazes these two. Vaughan describes his scariest moment in business as the time he jumped out of a plane at 14,000 feet to demo the new PayPal Checkin payment integration. (You can see it on YouTube). “I was more fearful of a bug in the software than the chute not opening,” he says.
Nick’s scariest moment (he also describes it as his most satisfying moment) was dropping an old 12kg cash register off the side of a central city car park in broad daylight for a marketing video. “We only had one take to get the shot.”

Where to next
So what’s on the horizon for Vend?

As you’d expect, Vaughan and Nick, along with the company’s two other directors Miki Szikszai and Rowan Simpson, have ambitious plans for the business. Staff numbers are 22 and growing. Fifty percent of new employees have probably “walked in off the street”, admits Nick, a reflection of the product’s appeal.
The plan for 2012 and beyond is to roll out more sales offices in all of its key markets.
“One of the factors that sets us apart from our competitors is that we sell to the world, whereas they seem to focus on the US,” says Nick. “Our immediate goal is to be the largest cloud-based POS provider to the world’s English-speaking countries.”
Having a local sales presence makes life much easier, especially when the time zone is 12 hours away, says Vaughan. “Our plan is to do more of the same, keep growing and keep revolutionising retail all around the globe. It’s a huge market, there are literally hundreds of millions of retailers out there.
“We plan on being the global leader for online POS. So no, we don’t have many plans,” he smiles.

 

Vaughan & Nick’s best tips
Think global! Create a product that has worldwide appeal.
“It’s true that if you can get a product to work in New Zealand, you can get it to work anywhere, but that doesn’t mean you should forgo every other market. People can misinterpret that advice about testing first in New Zealand and then Australia.
“Being a local company you should test the product in your backyard, that’s where you’ll get your first customers from. But at the same time, you should apply that market knowledge to other overseas markets, which in turn can help enhance the product even further.”
When you’re a start-up build strong relationships with companies that are already working in your target markets. There are benefits for both parties, and down the track you can pay the favour forward to other emerging exporters.

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