NBR article

Let the banks be your friends, entrepreneur says

Fingermark founder Luke Irving on debt versus equity.

Luke Irving part-owned a Wellington bar in 2003 when he first encountered touch screen technology.

He thought how cool it would be to turn the till around to face customers so they could order their own cocktails.

“It would have taken a lot of the pain away from us. It was my first idea of self-service and within 18 months I had sold the bar and set up Fingermark.”

The Hawke’s Bay-based digital solutions provider started off with kiosks. Some 15 years on, it uses computer vision, the internet of things, and artificial intelligence to improve revenue, operational efficiency and customer experience for its clients, which include four of the world’s top 10 biggest fast-food brands.

Its solutions range from kiosks to data signage to business analytics. In just one example, the company has rolled out digitised menu boards for KFC across Australasia.

It is, Irving says, his sixth or seventh company. He has lost count. “I bounced around quite a few different ideas before I landed on Fingermark,” the 40-year-old says.

The difference with this company is that he hasn’t become bored because the technology has changed as he’s gone on.

“I have a very short attention span and this plays nicely into that. I can create the same business – and I have for 15 years – but, because of the dynamic nature of digital and tech, you can move and blend into new fields really easily, while still having the same focus of what your vision basically is: delivering efficiencies and value to businesses using these technologies.”

He has set up two associated companies: Florence Health, which has developed a tool to help outpatients navigate the hospital system and has been picked up by local district health boards; and EyeCue, which is focused on computer vision and research and development.

Irving stepped down from the chief executive role three months ago after recognising he didn’t have the skillset for the day-to-day running of a profitable company the size it was growing to ($18 million to $20m revenue forecast this financial year).

“I’m still very much involved in the products and the sales side – the things I really enjoy doing – but I have the right team in place. Marc Rackett is my chief executive and it is now very structured and you can see the benefits from that.”

More than 90% of Fingermark’s customers are quick-service restaurants and fast-food chains and it has recently signed up McDonald’s and third-largest US fast-food restaurant chain Chick-fil-A, Irving says.

The banks and other lessons

Irving still owns 72% of the company despite it being a “really hard road.

“I’ve had to count every penny and I have a huge value on every share I own,” he says.

One of the best pieces of advice he’s had was from one of his informal advisers and investors, Andrew Harris, an accountant who showed Irving the best way to present himself to the banks to borrow money rather than giving away more equity to external investors.

“You have to understand that process and get good accountancy around you to know what the banks want to see to be able to lend to you. They have a lot of money to lend,” he says.

He also advises it’s best to have some sales revenue in the bag before approaching investors.

“You gain a lot more respect, certainly in the investors’ eyes, that you have actually gone out there and done a few deals yourself. Don’t do go out looking for money until you have learnt how to do that,” he says.

Though Irving always planned to build a global company, breaking into new markets has been his biggest challenge.

The company has just landed a substantial deal in Dubai that Irving says took him four years to win.

“The cards fell in the right way eventually and I think our products were what they needed but there are massive cultural lessons going into a market like that.”

While the company is now making headway in the US, operating in different countries and time zones spreads focus and the team. “You have to do a lot of learning and a lot of travel and a lot of persistence to get it right and you rarely get it right the first time,” he says.

Going provincial

Three years ago Irving, who grew up in Palmerston North, was sitting in his Auckland office and feeling uninspired by his surroundings.

“I’m a big believer – and I say to my team a lot – in the further you can see, the bigger you can think.”

Within three months he and his wife Emma had packed up their two (now three) children and moved to Havelock North. Irving had expected to have to commute for a couple of years between there and the Auckland office and was worried about losing staff.

But he chartered a plane and flew his team and their partners down to visit Hawke’s Bay and two weeks later he got the call that they were coming with him.

“We had to move not only one family but 10 families down, which was a real challenge, especially in Havelock North, as it doesn’t have a lot of rental accommodation, so I was sort of a property manager for the first six months, trying to find everyone a house to live in.”

He says there are distinct advantages in moving to the provinces, including picking up young local tech talent who may otherwise have had to move to get work in their chosen field.

“Hopefully what we have done has inspired other businesses to say ‘hey, we could do that too’ and start redistributing the talent into these regions and providing really good jobs.”

The move saw another local tech entrepreneur, Rod Drury, drop by to see what Fingermark was up to.

“He’s had a chance to breathe a bit now he’s stepped down as chief executive from Xero. He’s been great – giving me those small bits of information you need and you just absorb. I was lucky to have someone like him who’s prepared to listen and take an interest,” Irving says.

He remains the sole director of Fingermark despite trialling a few independent directors along the way. An informal advisory board of some of the company’s investors has also helped his decision-making but, Irving says with some reluctance, the company is now at the level where it will soon need a formal board.

Original article can be found here: https://www.nbr.co.nz/story/let-banks-be-your-friends-entrepreneur-says

Original article on NBR

Written by Fiona Rotherham

Co-editor/Online news editor