As part of our new One-on-One with the CEO series, OEN recently reached out to VendScreen CEO Paresh Patel to share his startup story, how and where he gets his entrepreneurial drive and his long history with OEN (Paresh joined OEN in 1998 and has taken advantage of many different programs ever since, including finetuning his pitching skills!).
Q: Tell us about your company – how and when did it start and where are you at today?
A: A few years ago, I was at a Baskin Robbins with my daughter and noticed that they had calorie information on the ice cream. Having founded one of the largest vending machine companies in the area, I started thinking and said to myself, “Someday they are going to make us put calorie information on vending machine selections!”
And then it hit me how complex this task would be. Unlike a restaurant, where the menu is relatively static, in a vending machine, the route driver adds and removes 5-6 items with each servicing. To keep the disclosures current using stickers or posters would be nearly impossible.
Moreover, the time it would take would be enormous. Think about how astronomical the odds are to win the Powerball lottery, and “all” you have to do is pick six numbers from about 60. Each vending machine is filled with about 40 items from a set of 4,000 possible items. The odds of finding two machines filled with the same products are very slim. So I started with solving this data flow problem first. In fact, the first patent I filed wasn’t really for the hardware per se, but rather how the data would flow to allow this problem to be solved in a simple and seamless manner.
Today, we have built a successful solution to this problem. And as I expected, a federal law was enacted that will require calorie disclosure on all vending machines in the United States. The government itself is estimating it will cost the industry 14 million man hours per year to comply with this law. With VendScreen, this compliance is seamless and automatic, and requires virtually no involvement or time from the operator after installation.
Q: Tell us about your journey as an entrepreneur – did being an entrepreneur find you or did you choose to become one?
A: I most certainly chose to become an entrepreneur. Early on, when I was a child, I always had two interests: computers and business. I chose to go the business route. While I liked programming and technical stuff, I felt business was in my DNA. I’m fortunate I get to do both – be in business with technology.
Q: How and when did you first learn about OEN?
A: I believe I first became a member of OEN around 1998 as I was finishing up business school. By age 23, I was on my way of starting my third company. And I signed up for OEN to tap the resources. I had made a business plan, and I went through the business plan review process with an OEN committee. I also attended events to network.
Q: Tell us how your involvement with OEN has helped your company through any or all of the following ways: networking, education, mentoring, local recognition, funding, etc.
A: One of the most dramatic and significant impacts OEN has had on VendScreen was feedback I received after a PubTalk presentation.
I entered the “So you think you can pitch” event and did my pitch at an OEN PubTalk in August 2010. I won that one, and advanced to the Seed Oregon Round 1 in October 2010.
I was feeling good after winning the first PubTalk. I felt I had a good pitch and great business idea. I did my pitch, and then the audience did the voting. I got creamed, and creamed pretty badly! Instead of just lamenting the loss, I analyzed every question I got from the audience. I wanted to understand what the problem was. After all, why was I not able to convey to them that this was a good opportunity?
And I realized every question seemed to be around the nutrition facts. People thought of vending machines as being synonymous with junk food machines, and they didn’t think people who would use vending machines would want to know calorie information. And even more to the point, they didn’t think the operators of the machines would want to pay to provide that information because arguably it would just hurt their sales.
While based on my experience, I believed that providing the information would improve sales because it would allow the operator to sell to a group of people who normally would not use the machine. Moreover, whoever didn’t want to know the nutrition content didn’t have to look at it anyway just like they don’t have to look at the label.
But the other point was valid – operators would not want to pay to just disclose nutrition information. That would be hard sell (keep in mind there was no law at this point).
So after thinking about this feedback, I came up with an even better idea for VendScreen. We would build a screen with a card reader – which means we would be able to accept cashless payment. So instead of just providing information, we would also accept cashless forms of payment, allowing operators to sell more to more people. This created a compelling reason why operators would pay for it. Long story short, the feedback I got from the OEN event helped me create a much better business model and product offering.
Q: In your view, what are the top 3 ways OEN helps entrepreneurs?
A: Networking opportunities; educational opportunities; and time pressure to get things done – this one is not so obvious so I’ll elaborate. Whenever I have signed up for something (such as a PubTalk, Seed Oregon, or Angel Oregon), it has forced me to do the work with a deadline – such as write the one page summary, make the slides, practice the pitch, etc. Early entrepreneurs don’t have much time pressure to get things done (no investors, no board, no employees, etc). OEN can help push us entrepreneurs and set deadlines for us to get things done!
Q: If you had to describe OEN to another entrepreneur, what would you say?
A: If you want to be a successful entrepreneur, hang-out out with other smart and successful people. OEN facilitates bringing those people together.