Mylaensys

BACKGROUND

Please provide a brief description of what your company does.

My company sells parking equipment and parking services in various forms, like parking cloud, which parking operators use to either collect parking fees, or to facilitate the provision of parking services. We happen to be the Northern California distributor for various meter operators, some of which are in the top three or four parking meter manufacturers in North America. We have been in business since 1960, so we’re essentially entrenched in parking.

What is your position in the company?

My position is chief executive officer and president. My background is extensive public service in the local government for nearly 28 years. My last 16 to 18 years were in capacities related to the management of parking programs. I was the parking manager for the city of Sacramento as well as the city of San Rafael. I was also the deputy director of parking and transportation for the University of California at Berkeley. I hold a Master’s degree in public administration and a bachelor’s degree in political science. I launched this company in 2010, and we’ve been growing and picking up clients ever since. In fact, we recently accepted a proposal this past Tuesday.

Sounds like you’re excelling quickly in your industry.

It’s slower than I had thought when we initially launched, but taking into account the uncertainty that public agencies have had with their budgets, especially in California, it’s been reasonable. Northern California was the epicenter of the housing crisis, but yes, we’ve never had a quarter where we weren’t in the black. That’s pretty good for a startup company.

OPPORTUNITY / CHALLENGE

What were your business goals or reasons for undertaking a project with Mylaensys?

We represent Parking Cloud and Mylaensys as a dealer, so we essentially market their products. The way that relationship developed was that I was interested in seeing who the up-and-coming, pay-by-phone companies were, specifically the ones that use cloud computing strategically in delivering their services.

I conducted a corporate search and located two companies that fit the category and that were relatively new startups. I contacted them and initiated a dialog. What I found was that Mylaensys had an absolutely unique approach to delivering a type of service that’s already dominated by three major players in the United States. There are three companies that dominate almost 90 percent of all the pay-by-phone business, and here comes Mylaensys with a different way to do it. That impressed me.

I contacted them and requested more detailed corporate information. I also told them I wished to explore a joint venture arrangement because what they’ve done is developed a product. What they needed in order to make their product commercially successful were links to the parking industry, and that’s what we do.

We’re a dealer for a major company, and we have salespeople to go out and visit parking operators. What Mylaensys has is the technical ability and a great vision for a product that could succeed in my industry. What they lack are any connections or even the expertise as an operator in parking. For example, they may have the best product in the world, but parking operators won’t utilize them if they don’t know they exist. I’ve been of some help to them in defining their product, especially in the marketing sphere. One example is that they were not accurately targeting the right groups. The literature they developed was targeted almost exclusively at municipal government, and that’s fine. I worked for cities most of my career. The kind of product that they have invented lends itself particularly to college parking and they weren’t even thinking of that as a potential market. They were thinking of cities and airports. We’re primarily visiting colleges and explaining that they can essentially eliminate their permit system, completely avoiding the need to grant permits and collect monies.

It’s a very expensive process, which can be replaced entirely by this new product.

SOLUTION

Please provide more specifics about the scope of the project.

What they did was come up with a way to do the financials, and to process payments that had a different twist. They had to put together the whole software system that has enabled a lot of different pieces to combine seamlessly. It has to identify a user location with GPS; it has to allow people to use credits to purchase parking, and it has to generate reports for parking operators – be they public or private. They had to set up an automated banking system so when someone wanted to park someplace, and accessed the parking, the payment for that space would go to the appropriate operator.

I didn’t do any of that. Where I came in was on the marketing side and on the pricing. I know what the price structure is for the traditional pay-by-phone services: 

Basically, what those services do is they charge a processing fee to a parking operator, but most of the revenue is generated from the customer. For example, if you go to the city of San Francisco or Oakland, in our service area, and you dial the pay-by-phone number that’s on street signs, you can pay for parking using a credit card through your phone. You can also register for future calls, making it even more convenient. You dial the correct number and it charges your credit card accordingly.

Parking Cloud charges nothing for transactions. It’s free, and so the fact is they have a product in a market where the up-and-coming unknown companies are charging 25 cents a transaction, and the established ones are charging double that. The client cost of using a Parking Cloud model is only about 15 cents, and they don’t pay it by transaction. People establish a credit account and then buy credits by transferring funds into their account via PayPal interface. They then no longer need their credit card. They can do it from a bank account or use a credit or debit card if they prefer.

When they access the parking, they just click an icon on their phone, and the screen asks whether or not they are using the same license plate as last time. They click yes and they’re done. It transfers payment for the parking from their credits to the account of a parking operator.

That’s unique because there are no other companies that offer that service.

Let’s say you have a community college with 30,000 parking spaces. You sell those spaces by deploying meters. Alternatively, students can, when they register for their semester, purchase a semester parking permit, and that’s how you do parking. You have to collect the monies from those meters frequently — and meters tend to break down a lot. That’s what our company does: maintain and supports parking meters.

You have a lot of customer issues. The pay by phone model can be a great option.

What’s unique about this is a student can log onto an established account and select one of two options: they can either pay for the semester or pay for daily parking. By doing that, if they want a discount on parking [colleges typically sell the permits for less than the cost of daily parking] they can select the first option and they have fulfilled their entire payment obligation. They are then granted unlimited parking on the college campus until the completion of that semester.

If they chose to pay by the hour, the process is identical to paying a meter. The difference is there’s no printed permit. Nobody has to keep track of every permit every day, so the auditing overhead is completely removed. You don’t even have to have a clerk because the students pay for this online and there’s no permit. You don’t have to spend thousands of dollars every year and employ a full-time staff.

I designed permits for several agencies. It requires changes to the colors schemes and you employ reference numbers that an enforcement officer can check and validate. All of that goes away with this system because only unfulfilled parking accounts with be displayed, making citations much easier.

The other thing is, at the same time, if you have multi-space meters that only take cash, the client has to decide whether to upgrade these meters at a cost of about $200,000, or leave the old meters that only take cash. This system allows students who want to pay with a debit or credit card to pay for their parking more conveniently. It also reduces tremendously the amount of overhead costs for parking maintenance.

Because Parking Cloud does not have a credit card processing fee, it costs even less than implementing meters that accept credit/debit card transactions. It’s about half as much.

You can see this is a great product. What’s missing is that nobody in the academic world has ever heard of it and that’s where we come in. Mylaensys built this great service, but it needs adequate marketing. We’re attending conferences where people in different areas of parking go, such as parking operators. I’m fairly confident that, once people become aware of it, and they realize that it’s cheaper, more convenient, and more modifiable than pay-by-phone, it will become more popular.

So what technologies are actually used when they were actually building the product or starting the project?

I wasn’t involved in the development and I’m certainly not technically proficient. The use of the cloud has opened the door to economical ways of moving the money and information.

How recently was the project finished? Do you have any sense of the size of the initiative in terms of manpower or dollar amounts that you could share?

Our participation began when we got to the point of September 2012, of actually concluding a relationship.  We signed contracts to distribute the product around that time. Prior to that point it was mere solicitations for information entirely done by myself.

The other thing was that my timing was really good because they weren’t even in the market when I first contacted them. They were at the point where they actually asked me how I discovered them. I had visited their website, which had recently gone live. I suggested that we might be interested in distributing their product. They indicated that they were not yet ready to distribute the product because they were in the process of finalizing it.

I had some serious concerns about some elements of what they had designed. For instance, some of the rules they had implemented just did not function well. On the bright side, they were quite accommodating. They were willing to listen to new ideas and perspectives, which is how their product went from relative obscurity to commercial success.

RESULTS & FEEDBACK

How would you rate their performance?

I would say their performance was excellent due to their flexibility. They knew they had a good idea or series of ideas that they strung together into a service, but I didn’t know how they would react in the marketplace. I’d give them a high rating because what they were willing to do is go back and rethink certain elements of the program. In the process, they were able to identify opportunities that I wouldn’t have known about, like dealing with bankers.

Do you have further comments about their performance and your experience working with them?

It’s been very pleasant to work with them. One of the unusual things is that, and it may not be always so, but I can reach somebody anytime. That kind of commitment is something you don’t get from General Electric. They want to make this work and they’re committed to it, so I give them high marks for that. The other aspect is originality. The only reason that we’re even talking is because they came up with an innovative approach to collecting payments and, in this case, they happened to apply it to parking. It could’ve been used in a dozen other areas probably, and given that nobody else had thought of it, that’s quite outstanding.

The first parking meter was installed in the 1930s, but it hasn’t seen the innovation and the vision that Mylaensys has brought to it. This kind of innovation was long overdue.