Annabel Palmer meets Dan Wagner, back in the limelight with latest venture Powa Technologies
HE may be one of Britain’s most prominent tech entrepreneurs, but Dan Wagner has had more than his share of career ups and downs and scathing headlines. In the 1980s, he was subject to criticism from the financial community for his Donald Duck waistcoat and flamboyant attitude. And a former company, Dialog, was renamed “Dial-A-Dog” by the press after shares plummeted 95 per cent in the dotcom bust.
BACK ON THE SCENE
But his return to the limelight has, thus far, seen an altogether different reaction. His latest venture, Powa Technologies, allows retailers to set up e-commerce shops, process payments on mobile devices, and will soon enable consumers to buy goods just by taking a photograph. This time, he even has the support of the Prime Minister. “I am delighted that Powa is further contributing [to our economic recovery] with the creation of 250 jobs to expand their growing business,” David Cameron said recently.
Wagner, who describes himself as “a visionary, a pioneer,” today wants to revive our struggling high streets by bringing together e-commerce and traditional retailers. “I am customising the shopping experience by turning the retail environment into a distribution point when items are purchased online. It can enable physical stores to give a user experience similar to a website.”
Powa’s e-commerce platform, by his own admission, is not dissimilar to other offerings out there, although he tells me it is far more sophisticated than its rivals, and is “very fast to deploy”. However, he says, “it is not a revolutionary product; it is an evolutionary product”.
Powa’s second arm, mPowa, on the other hand, is revolutionary. The technology transforms any smartphone into a mobile till via Bluetooth – particularly helpful for salespeople. “If an engineer comes to fix my washing machine, he can take payment on the spot, rather than having to worry about chasing invoices.”
In addition, Wagner has spent three years and over £10m building a small, portable device that will enable shop assistants to “take payment on the spot, so you don’t have to go to a till.” An unusual choice, considering he never wanted to get into hardware. “I entered into it naively, as I often do. If I had known the time, the engineers, the cost it would take – I might have been put off doing it.”
But the third element is the one that Wagner is most excited about – “although I’m excited about everything we do because I’m the evangelist”. PowaTag enables consumers to purchase an item by taking a photograph of it. “Imagine seeing goods in a closed shop window, or a TV ad, and being able to purchase them instantly. It is transformational,” he says.
I ask whether other people are doing it. “I can’t answer that question without sounding stupid,” he responds curtly. “I’m a paranoid entrepreneur, and I’m sure there are other people, perhaps in their garages, building something similar. But are they as well-placed as we are? We’ve got the e-commerce platform, we’ve got the point of sale. We’re providing all the technologies.” I mention Twitter founder Jack Dorsey’s Square, which accepts debit and credit card payments on a mobile device. “That offers a service, we’re offering a platform,” Wagner says.
This is Wagner’s fourth business, and this time around he has had a few key advantages. To begin with, he started building the business in 2007, at a time when he had all the resources to follow his dream without having to try and sell it from day one. But aside from the product and the money, he has had two other elements usually completely outside an entrepreneur’s control: customer readiness and sentiment.
When Wagner founded his first company Maid, in 1984, it took nearly 10 years for the market to catch up. Wagner struggled to get backing for the online archiving business for newspapers and journals, partly because the market wasn’t ready, and partly because Wagner was 20 at the time. Nine months in, he had racked up over £60,000 debt in services unpaid. “I was on the dole. I was always dodging calls.”
But by 1986, he had acquired exclusive rights with newspapers, had built the system, and had raised £100,000 in investment. Ten years later, it was listed on the London stock market for £120m, making Wagner the youngest chief executive of a UK-listed company. In 1997, however, he bought Knight Rider Information, and the business was renamed Dialog. In 2000, soon after its 95 per cent share price fall, the bulk of the business was sold to Thomson Reuters for $500m. Wagner left the board a year later.
“I had spent 16 years of my life building a world leader, and ended up with nothing. It was a strange time, and I was not one of the beneficiaries.”
However, two years earlier, Wagner had started to build a cloud platform. At the time, few believed e-commerce had a future. It took five years, he tells me, for those attitudes to change. The company, Venda, now lists Tesco and Jimmy Choo among its clients, and is planning a £170m initial public offering. “They say pioneers get shot in the back. They sustain their vision for long enough for the market to catch up. Those businesses were truly labours of love,” he says.
In a career spanning almost 30 years, and with a number of ups and downs, I ask what the biggest setback has been. “My location. I am born, bred and committed to this country.” Indeed, Wagner does not share the optimistic view of our comparatively modest yet fast-growing Silicon Roundabout. He agrees that it is far easier to be a tech entrepreneur here now than it has been in the past, but he thinks access to capital is far too difficult, and investors far too conservative.
He raised investment for his latest venture in the US – a rumoured £49m from Massachusetts-based fund Wellington Management, and in return for a stake of less than 25 per cent. The fund “had very clear expectations of what Powa could be. The difference in reaction to a business like mine in the UK and US is marked.”
But Wagner is evangelical about promoting change. He wants to use the significant attention PowaTag has attracted (in part thanks to a Forbes article suggesting his technology could “eat Amazon’s lunch”) to encourage banks to start building their research teams so that they are better able to notice the potential of UK tech firms. “If they do that, companies like Powa will float in London.” He also wants to persuade the government to remove capital gains tax (CGT) for investors backing these companies. “CGT is mental. Why would anyone with a taxed income of, say, £100,000 want to make such a high-risk investment, when even if they make gains, they will be taxed at 28 per cent?”
What he won’t do, however, is enter the world of venture capital. “I’d be a rubbish angel investor. I am a salesman, and I can easily be sold. I’m not ruthless enough.” So what advice would he give to budding entrepreneurs? “Never give up. A lot of people are frightened of risk – don’t listen to them,” he says.
CV DAN WAGNER
Company name: Powa Technologies
Number of staff: Approximately 200, including EU and US
Company turnover: 2013: $4.5m
Job title: Chief executive and founder
Lives: Belsize Park
Studied: Merchant Taylor’s School and University School
Drinking: Anything alcoholic
Eating: Everything in front of me
Currently reading: Too busy to read anything other than the hundreds of emails per day
Favourite business book: Marketing warfare, by Al Ries and Jack Trout
Motto: Just do it
First ambition: To create an online repository of newspapers and periodicals that can be interrogated by a computer over a telephone line
Heroes: Dennis Bergkamp (Arsenal striker)
Talents: Can pat my head and rub my stomach at the same time
Awards: World Economic Forum Global Leader 1997, Ernst and Young Entrepreneur of the Year 1999
Most likely to say: Get on with it
Least likely to say: Come on Spurs