Last week, Hong Kong hosted the StartMeUpHK Festival, to showcase the startup ecosystem and delve into the future of entrepreneurship and disruptive innovations. The festival featured keynotes, interactive how-to-sessions, hackathons, advice from seasoned founders and investors plus much more.
PassKit was selected as one of the most successful Hong Kong startups. PassKit’s CEO, Paul Tomes, was asked to join a number of other entrepreneurs, events and presentations to share his experiences and visions for the future. Paul even shared the stage with Elon Musk, CEO of Space Exploration Technologies (SpaceX) and Tesla Motors, Inc., who took part in a “Fireside Chat” on Entrepreneurship and Innovation.
For those that couldn’t attend the event, here are some of the questions that Paul was asked along with his answers.
Are you from Hong Kong?
No. I was born in Bournemouth, England, but I have lived and worked in Hong Kong for the last 11 years and 3 of my children were born here. So I consider Hong Kong very much my home.
When did you first start a business?
My first business was not in technology. I used to hand paint t-shirts and sell them to friends and family when I was 12 and 13. It wasn’t exactly the most scalable business but it taught me a lot about understanding customer needs, innovation, design and how to make some extra pocket money.
What would be the one piece of advice you would give to your younger self?
The path to success is embracing your unique skill set. The more you invest in your talents the more they become strengths. Don’t get hung up on being something that you think others want you to be.
In my early corporate years in automotive and financial services, I believed that I needed to be similar to others around me. I believe I needed to fit in. I needed to prove how smart and analytical I was, in addition to my spontaneous, extroverted, feely personality.
I vividly remember chatting to a buddy of mine sat on our surfboards waiting for the rollers in Big Wave Bay. I was chatting about my ambition to become the CEO of Credit Suisse. He also worked for Credit Suisse and told me it would never happen if I was true to myself. He basically told me to stop trying to be someone else and go be myself.
There I was, considering myself as a high flying finance guy, so I took it as a grave insult! But the truth is that he was just recognising my unique strengths.
If I had it all to do over again I would still spend time in corporates but I would focus more of my energy on my natural talents and passion.
So, did you major in Finance?
My first degree was Mechanical Engineering at the University of Southampton, followed by an MBA at Henley Management College, after 7 years in industry.
I have always been excited about where art and science meet, so engineering was a great discipline for me. I’d recommend engineering to anyone as a great foundation for business; especially technology businesses. The MBA added a diverse range of business tools and skills to help me further my thinking and approaches to turning solutions into commercial propositions.
What inspired you to develop PassKit?
My business partner and I have been building services using Amazon Web Services since it was first launched in 2006. We have always been growing and scaling businesses using process optimisation and latest technologies. There is always great technology out there but it is very frustrating for us to see so many people, in particular marketers, not able to take advantage of these technologies. This was particular relevant when we witnessed how many people were struggling to get to grips with mobile wallet applications and beacon technology.
We started PassKit with the sole mission to help businesses of any size to leverage these amazing technologies without having to dedicate significant resources to build and maintain these ever-changing technologies.
Why Hong Kong?
Firstly, Nick and I were living here at the time of PassKit’s birth; as are our family and many of our network, initially.
Secondly, Hong Kong is a high density urban city that allows us to pilot new customer engagement solutions. There are many diverse and yet mature industries – retail, hospitality, finance, etc., as well as access to decision makers and influencers.
Wasn’t it challenging finding talent in Hong Kong?
Actually finding talent was not that difficult, but hiring local talent was more challenging.
Back in 2012 and 2013, there were a number of occasions where we wanted to hire local talent, incredible talent, but their parents didn’t support them. They wanted them to work for a big company, like a bank, a big consultancy or law firm. The scene has changed quite a lot now, and more parents see a start-up as a very real option for their children and are more supportive. It’s not perfect yet but it’s certainly getting better.
We also partnered up with some Intern placement companies, and we provided opportunities for talented interns, from all over the world. Not only was it great to have these interns create real value for PassKit, but it was truly humbling to witness how fast and how much these talented individuals grow in such a short space of time. The very best interns have now joined us as full time employees.
So let’s turn to PassKit. What does it do?
At our core we are a mobile wallet server. PassKit is to Mobile Wallet, what Amazon Web Services is to cloud computing,
PassKit allows our clients to engage with their customers through their most intimate possession – their mobile phone – without having to download an app.
We enable this by harnessing the power of the latest mobile wallets (like Apple Wallet, Android Pay, WeChat Wallet, AliPay and future native or quasi-native mobile wallet application), beacon technologies, physical web concepts and, where appropriate third part apps. Our solutions empowers brands to deliver online and offline insight-driven interactions with their customers, fostering real-time conversations, building long-term relationships and creating magical micro moments for their customers – when and where it matters the most.
We are recognised as world class experts in mobile wallet integration, proximity marketing, beacon technology, physical web and big data (and soon to be announced, something exciting around Blockchain).
How many clients does your company have?
Today, we have thousands of clients, who use PassKit to connect to their millions of customers worldwide.
Responding to our clients’ feedback and their increasing demand for even more user friendly solutions, we’ve just released our PassKit Portal solution in addition to Loopy Loyalty. Since then, our client growth has increased significantly and we expect this trend to continue.
What is your biggest sector of customers?
We designed our platform and software to serve multiple sectors. In fact any business that has a Physical presence, e.g. retail, hospitality, financial services, and entertainment can benefit from PassKit.
At the moment retail is our biggest and fastest growing sector.
Do you have a figure of how much your clients save from adopting PassKit?
Our clients benefit from revenue generation, through customer acquisition and increased loyalty, as well as operational cost savings. The amount depends on the industry and the breadth and depth of their deployment.
If you consider that there were 13 millions trees killed last year just from printing coupons it’s not just the cost saving of printing and distributing marketing and customer engagement content but also the environmental benefit of moving to PassKit’s technology.
Who is your competition?
We typically compete for budget for marketing and customer engagement spend, and our paying clients are typically Marketers.
Over the course of the last few years there has been a shift of spend on traditional advertising channels like TV, billboards, print etc. to digital advertising. But’s it’s still early days.
We’ve already passed the mark where consumers spend more time on their mobile device than they do on their desktop, and yet the marketing, advertising and customer engagement spend hasn’t shifted accordingly.
At PassKit we are constantly delivering new innovations, by leveraging the latest customer engagement technologies, and more clients are finding us and seeing our unique software and approach as the easiest, quickest and most affordable way to engage with their customers on their mobile devices.
What are the misconceptions around marketing automation, and what are the biggest trends you’re seeing in the space?
One misconception is that marketing automation is a thing strictly for B2B marketers. Another is that marketing automation is an acquisition-focused tool, designed to acquire “leads.” It’s really much bigger than that.
In terms of trends, I believe this is the year that marketing and customer engagement automation goes completely mainstream; it’s something for every organisation. In fact I believe that marketing will start to focus less on banners, or email messages and more on delivering customer convenience. So I’d say customer convenience is the new marketing. Does this mean, that more of an organisation, and not just the traditional marketing department, will be involved to make this happen? Yes, absolutely.
Our clients include retailers, like DFS in 24 countries, like Lane Crawford here in Hong Kong and China, financial services like AIA, hoteliers like Best Western, telcos, sports teams, event organisers, academic institutions, and even fundraisers like Quipley in California. Every type of organisation, marketer and industry — regardless of profile — needs this capability.
This trend of using technology to improve marketing and customer engagement is growing up. It’s growing up beyond customer acquisition to truly becoming the brain centre or nervous system for all customer engagement across the entire customer lifecycle – awareness, acquisition, advisory, purchasing, retention, loyalty, advocacy, etc.
Customer engagement is becoming the new advertising. Marketers are starting to figure out how to connect the art of paid advertising to the science of engagement marketing— the collision of advertising technology, marketing technology and payment technology — which is creating this ability to get down to real individual levels of communication and commerce with customers. That is what’s making all the difference.
So, do you feel like today’s CMO has to be equal parts CCO and CTO?
Hmm. Let’s start by asking “Is marketing art, or is it science?” The answer is really just “yes.”
Marketing will always be about art and creativity — that is what makes marketing great marketing. But because of the new digital, social world and access to technology and data, we’re able to engage and converse with customers on a personal level.
CMOs have to be agile at least in the concepts of technology and analytical skill sets. They don’t need to be able to do everything but have to be able to understand how these things contribute to moving their business and creating leverage.
It reminds me of a person that inspired me early on in life. Leonardo Da Vinci – not only was he an incredible scientist / engineer but also an amazing artist using the latest tools and techniques of the day. So today’s CMO’s need to be modern Da Vincis.
Ad blocking has become the latest disruptor in the marketing technology industry. What advice do you have for marketers as they tackle this challenge?
The concept of ad blocking has been around for a long time. Why? People don’t like ads, and if they can find ways around them, they will use them. Why do you think DVDs became popular?
People by and large don’t want to see ads. If I’m browsing the web, I don’t have a huge interest in seeing ads. It I am walking along the street, I don’t want someone jumping in my way to hand me a leaflet. We have to assume this trend is unstoppable.
Advertising as we know it has shifted toward a need for engagement marketing. The way around it is by solving a problem the customer has, and making them look forward to hearing from you because you are a trusted person who provides them with relevant and useful information. That’s why we’re seeing a collision of advertising technology and marketing technology.
[Edit: Watch Gary Vaynerchuk at Web Summit if you need convincing]
PassKit provides technology and analytics as part of it’s service. What’s the biggest roadblock you’ve faced to people buying?
The biggest roadblock is the resistance to or fear of change. It’s easy for a marketer to keep doing what they have always been doing; using traditional advertising tools and channels.
Once they have seen and experienced the power of PassKit, the next question is usually around reliability, security and data privacy.
Because our clients depend on our technology for enhancing their customer experiences, they must know PassKit is 100% reliable. They also want to know who owns the data and where the data sits.
Nick and I have decades of experience designing, implementing and maintaining reliable, secure, scalable infrastructures for financial services across many different jurisdictions and regulations, so we designed, implemented and guaranteed the same standards of world class banks from Day One.
PassKit is part of Intel’s Internet of Things Solutions Alliance, and you also partner with many other technology companies around the world. Can you talk about this some more?
Over the last 5 years, I’ve come to learn and appreciate that business leaders and marketers don’t care about the technology. What they really care about is being successful. They want to grow their careers and personal skill sets and brands. PassKit wants to continue to set the tech standard from an innovation standpoint, and we will, but we also want to create a community where smart people come together to learn and shape the future of the customer engagement industry.
It’s all about creating success for marketers regardless of the tools they are using. Sure, it helps that we help to build and fuel it but we’re doing it because we truly believe in this seismic shift in customer engagement and want to be part of this community that’s helping drive success for businesses.
Looking into the future, what do you think will be the CMO’s most valuable resource in 15 years?
PassKit of course.
Where does PassKit fit in the IoT?
The Internet of Things technologies are evolving fast. Examples include smart phones, wearables, beacons, physical web etc. Our clients access all of these technologies, and the benefits they unlock, through a simple to use yet comprehensive online interface, API and software development kits.
What is big data for you?
For me, big data is a bit of a buzzword. The main difference today to ‘data’ say 10 years ago, is there is more of it. i.e it’s Big!
That’s come about because of the lower cost of storage and much higher processing power.
However the secret to big data is the same as what it’s always been. It’s always been about what you want to achieve with the data. What questions do you want to answer today? And importantly what questions do you want to answer in the future?
How does big data meet the Internet of Things (IoT)?
Well we are in a world where more and more “things” becoming connected. Like a smartphone, or a watch, or a beacon, a TV, or even shoes etc.
This means more opportunity to collect data. So until recently you couldn’t collect high quality, real time data for actions and behaviours happening in the physical world. For example, to understand how many people were interested in a particular product in a retail store, a marketer would need to employ random sampling and someone sat there with a flip chart marking off five bar gates. Not only is the data quality poor, it’s impossible to make real time decisions off this data.
Innovative businesses can access these insights now without having to have customers answer questionnaires, or hire someone to collect offline data. This can now be done in the comfort of the office using these connected things.
The real challenge, again, comes not from collecting the data but what you do with it. How quickly can you respond? What triggers and systems do you have in place to help your associates in stores etc.
How do your clients leverage data, not just in online world but also in the physical?
Research suggests that most businesses are not utilising data. Why? Because they don’t know how to or they don’t have the capacity to do so. i.e. they are too busy on their day job.
So PassKit, does the heavy lifting for our clients. We synthesise and analyse the data, and deliver recommendations that our client can act on. This will further evolve, using augmented intelligence, so that our software learns what an individual prefers and deliver a highly personalised experience, to maximum return for both the marketer and the consumer.
What do you do with the information?
Make the experience more engaging and exciting for the customer.
Why do people enjoy shopping online? It’s convenient, quick, and easy (in most cases) and they don’t have to leave the comfort of their living room or bathroom!
But, people still do venture out into the highstreet, they still fly on planes, they still stay at hotels, they still eat at restaurants, they still visit theme parks. In fact as much as 90% of commerce today is offline.
So while I see that e-commerce will continue to grow, there is a massive opportunity for offline commerce to learn from e-commerce; to apply technology, to apply intelligence, to apply automation to make the offline experience 10X better.
What is it allowing businesses to do?
Our clients are understanding their customers even better and then delivering greater value with better impact and higher efficiency. Marketers are treating each customer as an individual. It’s becoming less about advertising and marketing, and more about convenience and engagement.
Think of using big data to deliver a personal concierge service to every individual. Before the advent of big data and IoT, business rely on sales associates or relationship managers to get to know their customers needs; both spoken and unspoken. Now a business can do this through technology and deliver consistency in the service to each and every customer.
Can we use this data to understand the world better?
Yes. This does require collaboration and I think we are only at the start of this journey, but used correctly data has massive benefits for society. Truly personalised experiences can be delivered – making sure the right person gets the right service at the right time in the right location. Ultimately this leads to less waste – less wasted time, less wasted product, less wasted marketing expenses.
What’s the next trend for big data?
Actually the most immediate trend and need is for businesses to use data. In the same way that Amazon uses it’s data and insights to make recommendations or deliver a personalised online experience, companies will use big data to deliver personalised value added experience offline.
Most companies aren’t really thinking about data in this way. Unfortunately, I see many companies collect data in the same way they file paper reports in the old metal filing cabinets. It gets stored there, just in case. But, this is not the power of data. Companies need to start to use this data in real time. They should not see “big data” as something they file away for use at a later date. They need to see data as an asset, as a living and growing organism that can allow them to learn and grow. There is massive value on the table today when it comes to the power of analytics.
What’s the most important thing for PassKit to communicate in its own marketing?
Marketers are being given more and more responsibility and taking on more and more in their organisations.
So, first off, it’s essential that PassKit stays true to our unique position in the market; ensuring that business people, that marketers, get access to the very latest customer engagement technology.
Our every waking moment is thinking about marketers and their success. Our ability to stay true and emphasise that is unique.
The second thing is practicing what we preach. Namely around the concept of engagement marketing. I believe that building individualised relationships with people based on relevant, timely and helpful content and ongoing interaction is the only way to successfully market, engage and grow. All the other approaches are just noise.
This approach leads to people inviting us into the conversation and relationship. We’re not trying to shout at people through billboards or TV ads; that’s not the foundation of a trust-based relationship.
And third, it’s necessary for us to develop and focus on a community of really smart marketers around the world – the PassKiteers. Creating and supporting this community further cements PassKit’s position above the fray or noise, so long as it’s the club that people want to be a part of because that’s where they can interact with other smart people.
What skills do you look for when hiring in PassKit?
The reality inside of a fast growing company like PassKit is that there is no single skill. Our force and our power comes from the collective talents and skills of many.
There is an ever-growing number of disciplines, from creative to product development to solutions engineering to product marketing to demand generation to customer success.
The skills I look for are people who understand how to create relationships with customers, with partners and with employees.
Regardless of where you sit, building a company is a team sport. The ability to collaborate is imperative. We have to build relationships with people regardless of where they sit or how they communicate. Our growth and journey is a conversation, and employees have to collaborate with other employees to have that conversation. It’s about curiosity.
We hire employees who are going to be innovative because they are constantly looking to learn and try new things.
So, what does it take to succeed as a start up in Hong Kong?
I think it’s similar to what is takes to succeed as a start-up anywhere.
A great idea, that adds value to the world and that people are prepared to use today.
Then personally you need to be absolutely passionate about what you are doing, and a significant amount of tenacity and a pretty thick skin.
On top of that, I’d recommend surrounding yourself, or finding, supportive friends, family, mentors and people who can help you along the way. Hong Kong is fairly small with a tightly knit ecosystem, so it’s fairly easy to do that here.
So, what, or who, has been most helpful in your journey so far?
Oh wow.. the list is long and they all provide different sources of ‘help’.
Obviously without my business partner and co-founder, PassKit wouldn’t have been born. It was his intimate knowledge of the Apple ecosystem that allowed us to seize the opportunity as soon as Apple announced Passbook.
Then our employees. I am sure all CEOs say this but we have an absolutely fantastic team. A combination of Hong Kong locals and people from all over the world. They all have this incredible passion and belief in the product and work tirelessly to help our customers succeed. I am constantly impressed by how much value they create together on a daily basis.
My wife is also pretty high up there. Without her understanding, support and encouragement to follow my dream, I probably wouldn’t be smiling quite as much as I do. And similarly, our investors – many are now close friends – have been incredibly supportive of our vision and have also helped connect us with other supporters and clients to help us grow.
There’s also been a few stand out clients that have really made this even more enjoyable, exciting and rewarding. They have been incredible at providing us feedback, ideas and constant communications that remind us daily that we really are making a big difference, both for their business bottom line and for their customers.
What has been the biggest challenge to date?
Initially, to be taken seriously as a global player based out of Hong Kong. That has now subsided, and our clients value our global presence and understanding, and the fact we are not just catering to United States clients’ needs.
If you started again, would you set up in Hong Kong?
Only if it wasn’t as cold as the last couple of days has been!
But seriously, yes. Hong Kong provides many advantages for our business; A high density urban landscape that allows us to pilot new customer engagement solutions, many diverse and yet mature industries – retail, hospitality, finance, etc., access to decision makers and influencers. We are also seen as a gateway to China – indeed, we have clients in China – but we are not seen as a Chinese company. We are seen as a global company. And lastly, access to capital in Hong Kong has improved significant in the last few years, which allows us to further innovate and grow.
What’s the most unexpectedly important skill from your past that you’ve found plays into your success?
Humility. I learned early on what it means to be on a team.
When I was young, I played a bit of rugby. Not very well mind, but I quickly learnt that to win was not about my skill only. To win it really took a great team…working together towards a common goal.
Ever since, I’ve sought out environments and places in which I would be the dumb guy in the room. In order to build teams, I actively seek out people who are better than me in every dimension I can find.
What’s it like being the CEO of a company dedicated to helping other CEO’s, CMOs and marketers?
I’ve held a number of incredible positions in my lifetime — engineer, project manager, strategy director, product marketing, consulting partner and board member.
I’ve said it on stage before and I’ve said this to my friends and family: I consider this role to be the greatest privilege of my career.
I feel this way for two main reasons. First, I love that I get to interact and learn from smart business people, marketers and technologists around the world every day. Having an ability to translate that back directly into my day job is a gift.
The second piece is that we are at a fortuitous moment in the world of marketing and customer engagement.
Marketing and customer engagement has changed more in the last five years than it has in the last 500, and will change more in the next five years than we have seen to-date. The opportunity to be here right now, working with amazing people around the world to shape that change, is a gift.
Hopefully you learnt a lot about PassKit and Paul, but if there’s anything else you’d like to ask Paul just write a comment below. And please keep it clean!