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Published 13 September 2012 05:02, Updated 13 September 2012 10:45
The career path of serial BRW Fast Club member and chief executive of Tyro PaymentsJost Stollmann has been anything but linear.
After three years in Chicago with management consultants Boston Consulting Group in the 1980s, the entrepreneur, who holds an MBA from Harvard, founded IT systems business CompuNet in his native Germany. It became the country’s leading IT network integrator, generating $US1 billion in revenue, and in 1996 Stollmann sold the company to GE. He stayed there for a year before leveraging his profile as a prominent business leader to enter federal politics briefly.
Stollmann spent six months as Germany’s shadow minister for economics and technology and was considered pivotal in getting Gerhard Schroder elected as Chancellor in 1998. He quit politics shortly afterwards and committed his time to his role as chief executive of an incubator for entrepreneurs.
In 2002, the avid sailor set off on a journey around the world with his wife and five children. After two years at sea, the Stollmann clan landed in Australia, where they decided to settle. Stollmann looked for new business ventures and in 2004 he spotted an opportunity.
After meeting three engineers who had founded a company called MoneySwitch with a view to competing with the big banks at processing Eftpos transactions, Stollmann was convinced the business case was compelling.
In 2005 he was appointed chief executive of the company, which at that stage had changed its name to Tyro Payments. The business has enjoyed exponential growth since then, and now generates $28 million in revenue and employs 70 staff.
Stollmann says back at the beginning of the venture he didn’t appreciate the enormity of the task ahead.
“In hindsight we were hopelessly naïve in underestimating the effort and time it would take to build a market presence,” Stollmann says.
“We were a start-up banking institution competing with an established oligopoly in the core banking space.”
Stollmann says the lessons he learned will be familiar to many start-ups.
“Things takes three times longer, cost three times as much and cause three times as many headaches as you’re expecting,” he says. “We discovered a number of barriers and problems in the regulatory framework as we went and underestimated the difficulty of establishing our place in the market.
“Of course, that became even harder when the financial crisis came along.”
It only bolstered Stollmann’s determination to take on the establishment and the business is still steadily chipping away at the banks’ stranglehold over the $427 billion Australians spend on their credit and debit cards each year. Last year, Tyro processed $3 billion of that.
“We are outgrowing the banks significantly although from a very small base,” he says. “We now have 12,000 Eftpos terminals that serve 6500 local merchants. There are probably 390,000 merchants in the country and 765,000 terminals, so there is lots of market share to grab.”
Tyro processes more than half of all Medicare rebates through the Eftpos system, making it the dominant player in that sector. It is a notable development, but Stollmann says it is not the company’s best achievement.
“We did not have a second of failure of our systems last year, so we achieved 100 per cent reliability,” he says.
“I consider it to be wholly unacceptable that the retail payment systems still go down. Imagine consumers, with a full trolley of groceries, not being able to pay at Coles? It’s completely disruptive.”
A $30 million investment in this “mission critical” infrastructure is the reason Stollmann says Tyro avoided any service outage. Keeping up with the pace of new technology is the challenge, and that means hunting down talented developers to join the team of 70.
“We’d love to double our development team,” Stollmann says. “We are looking for top-notch developers but it’s a very difficult market because of the demand. There is so much cool technology coming down the pipeline and we want to be the first to use that in many ways.”