What we’ve learned about the Vending World

June 01 2013

What we’ve learned about the Vending World

IT’S FREAKING TOUGH TO GET IN WITH THE BIG BOYS!

Obviously when we started this company, we thought it was going to be easy.  We made this cool hardware that will increase vending machine revenue.  THE VENDING COMPANIES ARE GOING TO BE BEATING DOWN OUR DOOR! The past year has been a reality check.

Let me backup

So when we first got started, we weren’t just trying to do mobile payments.  We built a system where advertisers could buy you a drink in exchange for you promoting them on facebook, twitter, instagram, or any social network.  Awesome right? Well it was awesome, except that the vending industry isn’t typically 20 something tech people who get social media.  To make things worse, Facebook went public and started changing their terms of service – 3rd party posting on your wall.  This instantly created issues and more work for us. But in a way it was a good thing.  It made us realize, that when we piggyback on top of someone else’s network – if they change things we’re screwed.

From there we started to freak out a bit.  We had this cool device, we had native iOS, Android, and Mobile Web apps that work nicely – BUT –  we don’t have any vending machines to put them in.

The Non-Social Media Crowd

We’ve been extremely lucky to have Mark Cuban on board.  Right from the beginning we started talks with Dr Pepper, getting amazing insight & technical pieces that we needed to make this hardware perfect. What really lacked on the Dr Pepper side, was social media knowledge.  Don’t get me wrong, they have an awesome social media team, but the social media team doesn’t make decisions when it comes to vending machines.  A 60+ year old who has been running vending machine organization and logistics for 30+ years is making those decisions.  And getting him to understand the value of a social media barter system, how they are already paying for this type of promotion with less results, and that they need this in all of their vending machines – proved to be mission impossible.

Brian Wong – KIIP – Got us on track

So at this point, we started scrambling.  We need to pivot, but what do we pivot to?  Games, funny promo ideas, hamster wheels???  Before we dove too hard into the pivot, I decided to use another one of Mark Cuban’s companies:  Clarity - clarity.fm  It allows you to have conversations with all of the big fish in the tech world that you read about everyday on a pay-per-minute basis.  We had seriously been thinking about doing games, and I saw that Brian Wong from Kiip was on the list.  So I requested a call with him, and he actually accepted.  I was pretty pumped just to talk to him, cause I had been following him since he was a designer at Digg.

So I hopped onto the conference line, and he wasn’t there.  10 minutes go by, still not there.  15 minutes, still not there.  Waiting wasn’t really the problem.  The problem was that when you’re “waiting” it plays music.  And it played the same song on repeat.  Heart – Crazy on You (http://www.youtube.com/watch?v=OZuW6BH_Vak) over and over again.  I didn’t know all the lyrics to that song, but by the time Brian got on the call I was a professional karaoke singer.  So after about 15 minutes Brian hopped on the call, and apologized for being late.  It was a pretty crazy feeling, talking directly to someone you read about daily.

So we start chatting, I tell him that we developed this cool vending machine hardware that can let you pay for drinks with your mobile device,  we’re in the middle of a pivot cause we tried to do this social media bartering thing, and now we’re thinking about doing games (play a game, if you win, you get a drink).  Since he’s in the gaming industry, I wanted to know what he thought.  He was very straight-to-the-point and said “Games would be stupid! And why are you already thinking about ads, social media bartering, and all of that.  It seems like you skipped passed the core of your business”.  I didn’t understand at first but he continued “You said you were jogging and wanted to pay for a drink but you only had your phone right? So then DO THAT!  Let people pay for a soda with their phone, you can’t do that in the US”

He was right.  It was kinda like I got punched in the face and at the same time my mom called me stupid.  Our vision had looked so far forward that we totally skipped the problem we had originally.  Our device could accept payment, but that wasn’t our focus.  So instead of pivoting we’ve done a REWIND.  We’re going back to the beginning and making mobile payments cross platform for vending machines.

So our new future is the one we thought of from the very beginning.  Thanks Brian.

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    BG

    6 months ago

    While it has no doubt been a matter of debate for you guys already, if there anyway that you can make it so its possible to pay directly with the Paypal or Wallet app, that would be a huge plus (because we all suffer from ‘yet another app’ syndrome). If I use Paypal or Wallet already then there is some value in having that app on my phone permanently.

    Japan’s vending machines are only app agnostic because they use NFC – and hence are useless to iPhone users (until next yr’s “6″ model at least).

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