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October 23, 2012 4:45 pm
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Lone ranger with a mass target
By Andrew Bounds
EDITOR’S CHOICE
©Rosie Hallam
Dan Wagner has never backed down from a business fight. Now the serial
entrepreneur is taking on Jack Dorsey, co-founder of Twitter and darling of Silicon
Valley.
Powa Technologies, one of the smooth-talking Londoner’s companies, has
developed a mobile payments system similar to Mr Dorsey’s Square, the dongle that
turns mobile devices into payment card readers. He even used the same stock shot
as Square to promote it, which earnt him a “cease and desist” letter from the US
company’s lawyers in July.
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“It was the best publicity we could have had,” he says
cheerfully and unapologetically over lunch in a
Manchester restaurant. “We got coverage and lots of
business inquiries on our website. We are already in
discussion with US banks. We are going to take the
fight to them.”
Mr Wagner, 49, says he has “never been involved in
something as exciting as this” in an eventful business
career spanning almost 30 years. Banks, telecoms and
software companies are all pushing consumers to use
http://www.ft.com/cms/s/0/8777fd1e-1915-11e2-af4e-00144feabdc0.html#axzz2AA9WogcO[23/10/2012 23:11:45]
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Lone ranger with a mass target - FT.com
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mobile phones as a payment tool. But Mr Wagner is
convinced that Visa and MasterCard will maintain
their grip on the infrastructure. Rather than create a
new system, as Square has done, he wants to build
mobile payment services in collaboration with the
banks.
Powa’s newest product, mPowa, will improve current
payment systems, he says. Far smaller than the bulky
payment terminals currently used in restaurants, for
instance, its card chip reader connects via Bluetooth
to the merchant’s mobile and sends a receipt by text
message or email to the cardholder. It levies a 0.25
per cent fee per transaction on top of what the card
services provider charges, usually about 2.5 per cent.
Unlike Square, which Mr Wagner sees as targeted
mainly at small retailers who do not currently take card payments, he believes
mPowa will appeal to big companies with a door-to-door salesforce, or those who
want to claim payment on delivery. “Over 70 per cent of Square customers transact
less than 20 transactions per year or less. They have a mud hut. I have a
skyscraper,” he says.
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MPowa has one big advantage over Square: it uses the chip-and-pin technology that
is widely used in Europe, Africa and Asia, whereas US-based Square can only
handle the magnetic stripe. South Africa’s First National Bank, the retail and
corporate division of First Rand, one of the country’s big four banks, in September
became the first company to adopt the mPowa card reader and software, for which
it will pay an annual fee.
Banks and others can also adapt it and label it as their own. “We are a ‘white-label
solution’. Square is a closed system,” Mr Wagner says.
In a sharp pinstripe suit and with his full head of greying hair swept back, Mr
Wagner seems more sombre than when he rose to prominence in the 1980s. Back
then he was as famous for his Donald Duck waistcoat as for his achievements as one
of a new breed of entrepreneur unleashed by deregulation.
A new culture for start-ups
After a 30-year career
as a serial entrepreneur,
Dan Wagner has strong
views on how the UK
government can help
entrepreneurs.
● The recent proposal by
George Osborne, the UK
Chancellor for employees to
waive their rights in return for
an allocation of up to £50,000
shares in the business would
not work for start-ups. “There is
a fundamental contradiction in
the idea itself, and it also
seems based on a one-sizefits-all principle, which in my
experience is not the best way
forward in employment
relations. I have never been
held back from running or
After leaving school at 16, he worked as a shop
assistant for Julian Richer, then an aspiring
entrepreneur whose hi-fi store Richer Sounds is now
worth an estimated £50m. “Seeing Julian do it at 17
made me think I could start a business. You need role
models,” he says.
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He left to work with as an account executive at WCRS,
a leading advertising agency, where he conceived the
idea of creating a digital record of information about
business sectors gathered from newspapers and other
publications to form a resource for marketing
professionals.
High Fashion Slippers Take to the Streets, Heat up
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He gave up his job and used a scheme aimed at
helping the unemployed to found Maid (Marketing
Analysis and Information Database). “When I told my
mother she burst into tears,” he says. “When I got a
job in advertising she thought I had made it. My dad
Executive Assistant
Temple Group
Chief Executive Officer
Advisory
Director – New City
Network
New City Network
Director of Qualifications
WJEC
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Lone ranger with a mass target - FT.com
expanding any of my
businesses by employment
rights.”
● Introduce a holiday from
capital gains tax on
investments in start-up
companies.
● Improve technology
infrastructure more quickly,
such as by providing
broadband internet services to
rural areas.
● Make more innovative efforts
to foster an enterprise-friendly
culture : “Our ideas and
entrepreneurial spirit could
indeed help lead us out of our
present doldrums, but it will
need a lot more than lip service
to create the conditions for a
genuine and lasting revival of
enterprise culture in the UK.”
was encouraging though.
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“Back then there was no structure to invest in start-up
businesses. This was 10 years ahead of the internet.”
TOOLS & SERVICES
Maid captured 26 per cent of a burgeoning market. It
floated in 1994 but the shares dived, and the
company, renamed Dialog, was quickly dubbed “dial a
dog” by some City investors. In 2000, it was sold it for
$330m to Thomson, the newspaper group.
A year later, he founded Venda, which runs
ecommerce websites for retailers such as Tesco,
Superdrug, JVC, Urban Outfitters, Condé Nast and
Jimmy Choo. It was based on technology bought from
Boo.com, an early online clothes retailer that crashed
spectacularly during the dotcom bubble.
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Bright Station, the holding company for Mr Wagner’s
various businesses, has an annual turnover of about
$50m, he says, and employs 450. It includes Powa, an
ecommerce and web publishing platform for small businesses, Locayta, which
allows retail websites to promote products through searches, Aigua Media Group,
featuring fashion and female-focused blogs, and the social shopping platform
Osoyou.com, which claims to have more than 1.4m unique visitors a month.
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For an entrepreneur who has started and sold several businesses, continuity seems
surprisingly important. He has lived in the same north London house for 20 years,
and attends Arsenal football games with childhood friends.
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In fact, Mr Wagner remains a surprising loner in the networked world of
entrepreneurs. He admits, for example, to leaving a Google party attended by
Rupert Murdoch early to catch an episode of 24 on television.
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He credits his modest upbringing for his tastes. Although his father was the UK
managing director of BMW, “the salaries weren’t like they are now”, he says. “I’m
happy. We had our holidays in Birchington on the southeast coast of England. I can
take my daughters to Italy and Spain.”
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Mr Wagner has spent £8m of his own money developing the mPowa product.
Square closed a $200m fundraising in September and takes $8bn of payments
annually.
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Mr Wagner, however, is in no doubt that Powa Technologies will one day catch it
up, and says that the first bank deal gave others a “jolt”. But he envies Silicon
Valley’s ability to raise money. “It is a terrible shame we do not have a venture
capital industry that supports initiatives like this. We are the financial capital of the
world.”
He has, however, no intention of becoming an angel investor himself and helping
others get started. “I would never invest in things other people do. I have enough
ideas myself and using my money means I have no need to convince other people.”
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