#76 Lead with Purpose: PayPoint’s ex-CEO’s no-nonsense leadership approach

0:00All the businesses I'm involved in, we're trying to understand what is AI and how can it be used. And I think there are a number of examples, even today, where AI doesn't get it right. There's a danger with AI, rubbish in, rubbish out.

0:22Paypoint is a hugely recognisable brand. I'm sure you've seen the signs outside convenience stores all over the UK. But what may be less familiar is that it was one of the first British payment technology businesses emerging out of the late 90s. And it really revolutionized the way millions of people transact across everything from payment meters to BBC license fee through to national lottery tickets. I am thrilled to tell you that we have got the CEO and chairman of Paypoint, Dominic von Trother Taylor. Dominic spent the early days of his career as a submarine navigator for the Royal Navy and learned many life lessons from this experience, which stood him in good stead for a successful career in business.

1:10He left the armed forces with nothing really to go to, but following a response to a forgotten application with fledgling communications giant Vodafone, an amazing career started in the telecommunications space and then subsequently payments, which then took him to being part of the team which set up Paypoint, becoming chief executive in 1998 and spending nearly 22 years at the helm. He finally left in 2019 to pursue managing a portfolio of some of the UK's most exciting technology startups. This is an enlightening conversation with somebody who, quite frankly, has been there, done it, and has got the T-shirt.

1:47Seldom have I interviewed somebody with such credentials and business experience. It was a real treat. I think you'll love it. It's Dominic von Trother-Taylor.

2:01So Dominic, thank you so much for coming on the Tech Leaders podcast from sunny Ibiza. How are you today? I'm very well, thank you. So look, the first question I always ask guests and I'm particularly interested to hear your take on this. You've had an incredible career and I know there's still probably a long way to go in your career. But looking back now, what are the key ingredients of good leadership or what does good leadership mean to you, Dominic? Yeah, I think it encompasses a variety of things. I mean, I think first thing, it's important that the company, before you kind of engage people, is to work out what the values of the company are.

2:38You know, what does this company stand for in terms of how we behave? What is important? All those sorts of things. Then I think it's important to make sure that people understand that, that there's a very clear plan as to what we're trying to do, that no one's confused around, you know, what we're trying to achieve and where we are on that journey. And then, you know, to make sure individuals understand what their involvement in that plan is and how they're assessed and how they're managed and how they communicate about progress. and you know that talks about leadership structure how people are empowered through the leadership team to be able to do that how to encourage people how to track progress and make sure we're still on our core mission if i can put it that way yeah and you know to have a culture in the organization that doesn't get political that is very true to what we're trying to get done that talks about the important things uh dismisses the irrelevant things and the distractions and has a culture as well, whereby people can openly challenge things and challenge where we are, you know, out the truth when things aren't quite working properly, or we're not quite on progress, those sorts of things.

3:45So, you know, I think leadership is about having, you know, a clear set of rails, which you set out the way in which we drive down those rails and having a very transparent culture around truth. Yeah, brilliant. No, absolutely. I think you covered pretty much all elements there, didn't you i think absolutely setting a goal and taking the team on the journey with you and make correct and obviously allowing them to feel part of that journey i always use maritime examples in this respect if someone's rowing in the wrong direction then it does affect the the course of the ship doesn't it so um correct so yeah now that's that's really really interesting dominic so for the listeners who are not so familiar with yourself i'm sure they would have heard of pay point, but maybe not so familiar with yourself and your journey.

4:30Could you give us maybe a high level overview? I'm particularly interested in the earlier days of your career. Upon leaving university, I know you went to Naval College. What set you on the path that you ultimately went on up until the point of setting up a pay point? It's a very good question. And it's better to articulate looking backwards than it was looking forwards. Retrospect is a great thing. In retrospect, yeah, I was born in West London. My parents were antique dealers, Portobello Road. So my early life was helping my mum and dad get stock, help on the stall, which started off on a stall and then ended up in a shop.

5:07And so I guess through that, I kind of got a little bit, absorbed a little bit about what commerce was about, the need to make a profit and all those sorts of things. I went to grammar school and didn't do as well as I thought I was going to do at grammar school. I wanted to go to one of, you know, a mega, mega university. And my parents had sort of set me down that line. And actually, I got an average set of A-levels. Oh, my God, you know, I don't want to go. I just thought of you. I didn't want to go to what I perceived to be an average university. And then I did one of the things that I've now done consequently a lot in my life.

5:39I hadn't realized what was going to be a theme of my life. I did a handbrake turn on intuition and joined the Navy. I had no experience of being in the Navy before. It was literally a decision that was made over three months. And I applied to go to Dartmouth as a young cadet and became a naval officer and ultimately spent the best part of 10 years in submarines during the Cold War. Oh, wow. Okay. And I kind of left that phase of my life again completely by accident at the end of the Cold War in 1989 is when I left. And I left because I had a very, I think, a pretty successful career as a young junior officers and submarine.

6:21I ended up being navigator of a nuclear submarine. I was selected to go on what they call the submarine command course. And I kind of felt, you know, I'm at a sort of moment in my career at that stage where I can either stay in the Navy and go through to the rest of my career, getting to wherever I'd get to. Or at the age of that stage, I was still 28, 29. I could jump out and do something completely different. And I did my second handbrake turn, much to the surprise of the Navy, and I left. And because at that stage, I didn't have a formal degree. I'd gone to the officer school at Dartmouth, but I didn't have a formal degree.

6:59So I thought, well, I'd better go and get a degree. So I went off and did an MBA at a place called Cranfield, just north of London, near Bedford, and had an amazing time. I had no idea what I was going to learn. I thought I knew nothing about finance and nothing about business which I guess would be true having been in the Navy but actually I knew a lot more than I thought and I discovered quite a lot about myself in the context of I thought initially I might want to work for a big company despite having done very well on the course I ended up again married with two young children without a job and so I thought oh my god this wasn't the plan so I briefly started a business which was what a sort of house maintenance business i used to live at that stage i was living on the south coast with a friend of mine and that paid the bills got money in and you know how sometimes you you want to apply for a job and you write to all these companies say i'd really like to work with you i did a load of those including ones of vodafone while i was doing my mba and i got no answer which was basically the case with all the letters i sent out but lo and behold about a year after leaving Cranfield, I got this letter from Vodafone saying we'd like to talk to you about a job.

8:09Was it a response? Yeah, well, kind of a response because that's how they knew about me. So for all those listeners that kind of send letters out and never get responses, they often do get there. And in my case, one of them at least got read. And they were looking for someone to set up a business in Germany for them. And I should say, by the way, my mother was German, so I'm half German. Anyway, I got interviewed by the chief executive of Vodafone for this role to be their man on the ground setting up a business in Germany. And I got the job. So I was absolutely amazed. So that got me into mobile telephony at the very beginning of digital mobile telephony, basically.

8:49And that took me into a kind of career through Vodafone. Then I became the first product manager for text messaging, SMS within the business. and we spent a lot of time in the company trying to work out how SMS text messaging might be used. But of course, we had no idea how big it was ultimately going to be. We thought it was going to be big, but no idea how big. I had a red Vodafone. It was quite early on. I remember I was texting when not that many people were texting, showing my age now, but I was quite young at the time. And I remember Vodafone were one of the pioneers of the text message in the UK market, weren't they?

9:23Yeah, they were. In that particular role, I was working with the engineer. I mean, you've probably gathered by now I'm not an engineer at all. I'm not a tech specialist. But I was working with the key architect, if you like, of the GSM specification to try and work out what is this text messaging thing. It was actually in the signaling channel as opposed to the voice channel and how can we use this. And it was previously always a kind of chat channel for engineers, if you like. That's what it was really kind of used for. Sure. And we were thinking, well, how can we commercialize this? And if we do that, what could we do with it?

9:57And so we're designing all sorts of commercial hooks so that when the GSM standard was approved and was starting to be used, we could start to launch all these services. And then I'll go to handset manufacturers. And so we've got this thing, text messaging coming through. And this is how it could be used. And you need to potentially identify a phone number or something within the text so that they can. And of course, the people saying, well, why would you do that? Because if you're going to communicate like that, why wouldn't you just call? And stuff that we take for granted now as to how text messages are being used were absolutely not understood clearly at that stage.

10:36So it's very, very, very interesting. Yeah. Anyway, I then went on to get involved in a Vodafone led bid to run the National Lottery before the National Lottery was started. We didn't win it. It wasn't Camelot. And that ultimately led me to Paypoint as it happened. So in terms of Paypoint, did you set Paypoint up along with co-founders, I'm assuming? Yes? Yeah, I literally, it's one of those funny things. In the bid for the lottery, I got to know a number of key players that worked in supporting retailers and technology in retailers. Yeah. And when I was becoming pretty disillusioned around the sort of politics of very big companies and kind of wondering where it was going, And coincidentally, one of the key people I knew said, look, I'm just starting with this startup business.

11:25It's literally on the verge of starting, has just started. They desperately need someone with your experience from the way you design the whole lottery thing. Yeah. And would you be interested? And so I joined probably within six months, four to six months of Paypoint having started. Yeah, sure. It was then backed by a number of utilities because they were going to get the key value out of the pay point proposition. So they were the sort of founding shareholders. Yeah, sure. And I joined initially as retail director to set all that up. But within a few months, I became CEO as a number of management changes were made from the shareholders request.

12:05There's a lot to unpick there, Dominic. The question I want to ask you there is being in the submarine is a very unnatural, irregular environment. And I'm sure you spent endless days under water, probably months. What did that experience teach you about life and leadership? It's a really good question. I think the thing I really, I can say this more in retrospect than probably at the time. um but the thing i really liked about the submarine uh experience particularly relating to look you know life afterwards was that you know you went to sea and whilst you're under the water you can't really communicate and so you know you're given a brief about what you're there to do let's say you're going on a patrol to do x y or z yeah you know what your brief is so the mission is really clear you're underwater so you're basically alone yeah and if things don't quite work out or things go wrong you've got to work out how to solve it there and then there's no sort of yeah press the red button and someone comes and rescues you yeah yeah there are no consultants you can sort of you know dial in to sort of help you know you've yeah you're there you're on your mission you know where you're trying to go and you've got to you get down and sort of sort that out and i i really like that sort of very clear direct kind of purpose um on a on a mission by mission basis I thought that was very powerful the other thing that I think was very important at that time was the sort of culture of how you get things done with people probably never been on a submarine very few people have but I mean essentially you're living in a machine you don't have a bedroom in the way we know it at home you're actually living in a machine and and the crew are kind of housed in and out of the pipes as it were yeah the machine and so it's quite intense in terms of the environment and that brings out a very very strong culture yeah sure and and it's a no bullshit culture i mean if people are bullshitting people recognize that very quickly you know uniforms and rank has has much less prominence over you know personality and your ability to to lead and gain respect and all that kind of stuff and i think culturally those are organizations that i like working in you know that where it's less hierarchical it's more about look we respect each other we respect we've got different jobs we communicate clearly and we solve problems openly and we get on and get this thing that we're set with you know that we're trying to get done done now that that makes total sense no i had to ask you about the summary and stuff because i think i found that fascinating i wanted to go back to paypoint then fascinating organization i think obviously companies like paypoint financial technology companies are kind of commonplace these days.

14:50But in 1996, that wasn't the case, was it? There wasn't really that much of a startup culture at all in the UK around payments companies, for sure. So what sort of challenges did you have trying to scale that? I mean, the initial use case is like all these things looking backwards. The pay point evolved, I guess, on a step by step basis. And the initial use case or the initial problem that we're trying to solve is that you remember, you may not remember, but when ATM ATMs started on high streets. Every bank had their own ATM. So you go to a, you know, you go to a wall and you'd have, you know, you'd have an HSBC one, you'd have a Lloyd's one, you'd have a whatever one all in a row.

15:29And then someone realized, actually, this is nuts. We've got all these different machines basically do the same thing. Why don't all the banks share one machine? Yeah, of course. And so, and that was the sort of fundamental logic. And so in the world of Paypoint, when we started, many consumers, particularly cash reliant consumers were paying their bills in cash. And those days, and they're still today, actually, their energy prepayment meters used to have a chip based device that had to be charged at the retail. So the consumer would pay over cash. And you'd load that cash value for like onto the chip, onto a little what they call key that the consumer was holding.

16:05And then they take that key back to the meter at home, and the value paid be uploaded on the meter and the energy would flow and so the initial use case was for different utilities that you know how every utility had one of these machines in a retailer and you'd have all these different machines all lined up on the retail counter and we thought this is crazy why didn't you have one machine that does all of that in the store it opens up more space on the shop counter yeah and provides an easier service for the retailer because they're all these things are done in the same way through the same device Yeah, sure.

16:40And that was essentially the initial main use case, working with the energy companies to try and get all their slightly different standards and different ways of doing things in their individual machines to work through our device. And that's where it all started from. And then television license payments came through. And as we started to evolve and get volume consumers making payments through, we're able then to broaden that out to normal bill payments. and then it rolled forward. And once we started to get strong penetration in bill payments, in terms of cash bill payments, we then started to think about online payments and how we can offer a broader payment solution, mobile payments.

17:21And then we started to think, well, actually we've got all these customers we're bringing into retailers and these are typically independent retailers. And what other services can we provide to the retailer that would help the retailer? and what other services can we offer to consumers? So that got us into parcel collection, for example, Collect Plus. Yeah. It's a business that we started. So if you can't get your parcel delivered to your home, have it delivered to the local shop, you can pick it up when you're ready. Yeah, yeah, sure. And I'd like to say we had the whole vision of where Paypoint ended up.

17:53At the beginning, we didn't. But, you know, you start with one brick of opportunity and then you think, right, pivot accordingly. Yeah. As you kind of roll through. And it was a fascinating journey. Yeah, absolutely. There's loads of things there I wanted to ask you about. But let's maybe do it chronologically then. So you took over as chief executive in 98. The strategy then, I'm assuming, was all around shops, partners, post offices, stuff like that. The strategy then was to get, at that stage, that we had contracts with these large utilities to get the technology working, to aggregate all these different technologies into one new platform that I referred to earlier on.

18:35And then to get that working. So customers understood it, retail understood it, it was working. And if that all worked, then the revenues would then flow in from these founding utilities. So that was like first base, get the thing off the ground and then get to a point where we started to make money, that we started to become profitable. Because the whole mission of any young startup business is to actually start to generate revenues to ultimately become profitable so that you can live on your own cash generation as opposed to always going to shareholders for more money. Where did the original sort of funding come from then?

19:07From our customers. So they had this problem. We presented them with an opportunity about how you can aggregate all this technology to provide a better service and reduce your costs. Right. And so if you invest in this opportunity, we will deliver it on this basis and the basis is fully described. That was the handshake. And then the first challenge was to deliver that, as we promised we would, and then take it forward from there. Yeah, so you didn't have any venture capital, private equity people to appease from day one. It was just, you owed it to your customers to make it work. And that's a brilliant way to start a business, isn't it?

19:49It is, yeah. Identify a customer need, get them involved, help them fund it, or get them to help you fund it, because they're going to get the benefit from it later. There's obviously a lot of trust involved there. And then off you go. So you became chief executive at a time, at quite a transformational time for business and technology. It was a dot-com boom. Everyone was talking about Y2K around then, weren't they? In 98, 99. Gosh, yes. There was lots going on with that. Obviously, we had a massive influx of capital and interest into the dot-com space. And the internet was obviously still in its infancy then.

20:26Was that period a tumultuous time for Paypoint or was it a period of growth? It was. It was in its own way. Ultimately, it was a period of growth all the way through. But the Y2K thing brings things in my memory around that because that was a whole, the Y2K issue was the whole issue around how does technology and incumbent technology adjust to the change into the new millennium? Yeah, that seems crazy now, doesn't it? What was going to happen? And it does, yeah. It was a very real thing back then, wasn't it? What would happen to the technologies and how they work? And, you know, in the context of PayPoint, I've described, you know, there are lots of different technologies out there operated by different, you know, utilities or customers that we have.

21:08And, you know, what would happen? Would consumers be able to charge up these key devices that I mentioned as the millennium turns to starting with a two as opposed to a one? So we had lots of people on the ground, you know, ready in case something went wrong at that time. There was a lot of preparation going on. That was a notable kind of operational management planning ahead. What if this happened? How would we manage it? Kind of exercise in a very, very young company at that stage. So that was quite profound. I think more generally with the sort of dot com and, you know, mobile payments and that kind of stuff, it became obvious to us that we as a company needed to offer more than just cash payments.

21:51Yeah. Offer, as it were, full payment solutions. Yeah. That got us into Internet payments. We built an Internet payments company. And that was quite a challenging time because at that stage that, you know, there's a lot of the Internet payment rules and regulations were still being formed. there are some very big companies out there doing it we were still very much a minnow equally with mobile payments which obviously came later but you know the early stage of mobile payments was you know nothing like it is now as an integrated as a core payment method in the way we see it now yeah and so we dabbled in you know either liaising with companies or creating companies to get into these spaces to learn to understand how these things work and then ultimately work out strategically how paypoint should actually get involved in in those sorts of things yeah we've built an internet payment business we ultimately sold but we actually leveraged the learning out of that into build that into a core platform solution right gotcha yeah and we also bought a mobile payments business actually pay by phone you might know from parking we we own that business We ultimately sold that on to a German car company, VW.

23:05But we took the learnings from what we learned from that and integrated that into a multi-channel payment solution that the business now has. And that has evolved significantly since I left in 2019. Yeah, sure. What about regulation and compliance then? Because obviously it's a bit of a minefield, payments. I think you obviously weren't, you're obviously not a bank, so you didn't have to get a banking license. but you probably did have a lot of regulation and compliance that you had to adhere to. Talk us through how that did that did that harm your growth plans at all in any way? Or was it something you embraced and just was it not that restrictive for you?

23:42Regulation and compliance is always restrictive for the right reasons. And, you know, in a way, it's the other side. And so far as we were always trying to learn about what the opportunity was by owning these Internet businesses and ultimately mobile payments businesses and so on. You know, what is the opportunity? How far can we go? The clarity of regulation needs to make it really clear as to what the boundaries are. And I think understanding that and having good conversations with regulators to sort of understand those boundaries properly is the critical thing. Yeah, yeah. You know, I'm generally for regulation.

24:18Yeah, sure. I mean, it has to be there to protect the consumer, if anything. Payments regulation is very, you know, is quite complex. Yeah, no, I can understand. So I wanted to ask you about the internet business. So obviously that was an enormous growth area. I'm just curious why you didn't proceed with that and make that your core business, like a PayPal or something like that. I think because our core business was really, and still is, is the crossover between creating a great solution for a segment of customers that started off with cash paying customers. Yeah. And what that relationship was with corner shops up and down the country.

24:59And, you know, at my time, we had about 20, 27, 28 ,000 relationships with corner shops up and down the country, bigger than the post office and the supermarkets and the banks put together. It's an enormous network. And our core business was much more about how do we drive value to retailers and value to consumers and create new services in that very unique crossover. You know, that was in a way our differentiation as a business. I think in business, differentiation is such an important thing. And if you can establish that sort of differentiation and drive that through your business. And we created another business in Romania and we're looking to do that in other countries at the time to use the same experience that we had created out of the UK to push into other countries.

25:46The company is now much more UK-centric, but that was my kind of view at the time, is to grow through the differentiator we created in the UK and then into other countries. Yeah, sure. Now that makes sense. And that was our kind of core purpose. And we could have been much more general list payments, as many companies have been. Yeah. But you have less differentiation in those markets. I wanted to leverage what we'd created. Yeah, sure. So what do you think about the emergence of the fintech sector in the UK in the 2010s? It was obviously an explosion of payments companies in the 2010s and challenger banks.

26:21Is that something which surprised you? Or is that something that you just thought was just inevitable at some point? These things are easy to look back on and say it's probably a natural evolution of how technologies emerge and how you can drive much better solutions for consumers. And that drives a bow wave of companies getting into that space with a lot of creativity and so on. And at the time, you know, wow, there's this completely new thing here. And one always surprised how great some of these consumer solutions can be. And so, yes, I think, you know, I think looking backwards, I think it's been a very natural thing.

26:55And I think the evolution of payments is evolving, continuing to evolve all the time. I think they're great new solutions that kind of come out there through entrepreneurial efforts. I'm involved with a company called Nude. I'm a director and investor in that company today. that is a very young startup business that is providing great new saving solutions. Consumers that are young people that are looking to buy their first home are trying to wrestle around how do I get a mortgage and how can I find a platform that's going to help me do that? And companies like Nude or sitting to this fintech sector are providing great solutions to motivate people through open banking to give them tips as to how they can better save for their mortgage and actually reduce the time it takes to get their deposits and get their first home.

27:45And so I think that's an example of how even today, completely new solutions can come out that drive and make a big difference to consumers. And if you get those things right, then you start to get traction and you start to create a whole new wave of new opportunity. Yeah, absolutely. That's a brilliant segue, Dominic. I wanted to talk about your portfolio. So you obviously leave Paypoint. You didn't want to keep your hand out for too long, quite clearly. I think you obviously wanted to get back involved. And obviously you had all these amazing lessons and battle scars, I like to call them. And I'm sure that's going to be of massive value to entrepreneurs.

28:20And I know you do some work around that as well. But tell us about that sort of period after you left Paypoint and that period since and what companies and what organizations you're involved with right now. I realized a couple of things. I realized that I really like startups. I really like the energy of young companies trying to go through all the enormous challenge of actually launching their rocket, building the rocket in the first place and getting it off the ground, if I can use that analogy. Yeah, that's a good analogy. And getting it into orbit where it's sort of, you know, it's got there.