Since listing on the Australian Stock Exchange in May 2016 enterprise SaaS provider MPower MSL has been on a significant growth curve.
The company’s full stack of venue software, point-of-sale and business intelligence platforms helps venues, membership based organisations and stadium operators understand its members and patrons so they can keep tailoring their businesses with actionable data and insight. By providing operators better information and data they in turn can provide people with better experiences.
The company has its roots as a full enterprise platform to sport, leisure and hospitality venues but services venues across a variety of sectors and verticals as well as holding a significant stack of enterprise solutions for golf.
We talked at length with MPower’s CEO Craig Kinross. His business has significantly grown organically and through strategic acquisitions and that’s where we began our conversation.
Can you give a bit of insight into MPower’s acquisition strategy since 2016?
Craig Kinross: “To look at our growth strategy the marketplace that we operate in globally is historically, and currently, got a fragmented suite of suppliers. That provides a great opportunity to grow organically and through acquisition. Our model, having an open architecture technology platform actually helps.
“When we’re acquiring businesses that gives us a first and foremost a key entry point into new customers and then we can expose them to our MPower Connect platform and then enhance the relationship by growing application modules over time.
“The key things in acquiring a business is the customers they have, the marketplace we can get exposure to, the technology that they have and how’s it going to connect into our platform, the people and relationships and more fundamentals things around international growth and we’re traditionally buying businesses that have a track record and are profitable.”
Has that enhanced your proposition to a lot of venue operators, MBO’s, golf clubs?
CK: “We don’t propose to integrate every single third party application there. Our focus is on best of breed applications that can fit in and integrate to our module and we can provide the rest of the application module opportunity.
“A really good example would be we offer a few different point-of-sales (POS) that a customer can pick up. Through choosing one of those they know that if it comes through our MPower Connect platform it’ll automatically connect back into a membership application and also back into things like financials and importantly allow us easy connection back into the real time analytics and business intelligence.
“The sweet spot for us as a business is if we can help them understand who is coming through a venue, a member or a guest, and what they’re doing when they’re at the venue, how they’re interacting with the venue through things like POS, utilisation of loyalty points and we can bring all of that information back into data analytics to provide them better insights and intelligence to provide a better experience to their members and guests. That really moves the business from just being in survival mode to being able to thrive.”
Technological acceptance and onboarding would certainly be one of the tailwinds for your business.
CK: “Absolutely, it’s because all venues are looking for diversity in revenue.”
Is it difficult process trying to sell the proposition to golf clubs, member based organisations onto a cloud based solution? There could be so much staff and legacy systems and data to deal with.
CK: “Our type of model and platform is very unique being able to be applied on a modular basis. There’s no doubt over the last few years there’s been a real learning curve of us explaining what we do to customers and the value of that.
“What we’re actually finding in our more recent case studies with the advancement of the business intelligence and data analytics and real-time event analytics they’re actually getting payback and ROI within three months on the platform.”
Do you have any examples off the top of your head?
CK: “A good example of POS in a stadium environment was at one of the stadiums we service which had two Adele concerts in 2017. Everyone celebrated what they thought were really good numbers over two nights.
“Adele’s concert was performed in the centre of the stadium and a lot of people were sitting on the field. When the venue operators looked at the average food and beverage turnover received from both concerts it was actually less than what they would make on average for people going to a football game. The learning from that is to leverage more remote POS opportunities to allow the consumer more remote terminals and also the ability off their phone so they can go to remote collection points. It was actually too difficult when they were sitting on the field to go to a food and beverage outlet.”
It’s an expensive lesson.
CK: “And to think of it another way it’s a great opportunity next time to increase average turnover. They’re the sorts of insights we’re coming up with all of the time in our business working across things like membership, POS and data and analytics is actually helping them to understand how to operate better in the future and provide better engagement and a better experience for any person going to a venue.”
MPower’s product stack is designed to be agnostic. While you service golf courses, stadiums and venues, a lot of sectors. What other areas do you plan on targeting?
CK: “Adjacent sectors that we look at and that our systems apply nicely to are the boutique hotels and retirement living villages, restaurant franchise groups and theme parks. In the future once we build more relationships with sporting associations, which historically has worked really well for us in golf, we’d like to work closely with them to assist their administration and data requirements.”
With a Dubai office opening, what is the strategy for the Middle East? It’s a venue play, as well as having an eye on major championships and holiday venues in the region, not just the 2022 World Cup.
CK: “Of course the World Cup is an opportunity but before that Expo 2020 across Abu Dhabi and Dubai. That’s resulting in a lot of increased investment in the region in particular in hospitality and leisure venues. We’ve already got a few clients in the region such as Ferrari World.
“In setting up a local presence that’s a commitment we’re making to the region that we can demonstrate that to the client or potential clients that are looking to invest that we are committed to the region. There’s no difference with their pain points and needs.”
With the US and UK markets what are the aims in those markets? Even though it’s a greater chance of revenue, higher population and many venues and stadia to service how do you ensure that you can scale to those markets effectively?
CK: “Our strategy first of all is to expand into the UK and European markets. Culturally the UK market is very similar to the Australian market in the sport, leisure and hospitality venues we operate in.
“The last fiscal year was the first year that half of our company revenues were generated outside of Australia. As we look forward, I’m on the public record in saying the US has been a graveyard for a lot of technology companies. The sheer size of the market is a large incentive to want to move there but if you want to go in their organically you traditionally have to spend a lot on sales and marketing to get brand presence.
“Now we’re looking at some key partnerships on the ground that will give us a more opportunity to associate with another local brand and get some presence there and then over time look to expand more with our own people in the region as we grow clients.”
How do you prioritise your targets in a big market?
CK: “The key centres for us that we would be focused on in the US market are the stadium and golf market. In the last 12 months we’ve been invited to a couple stadium tenders just because of our credibility working with English Premier League stadiums and we’ve got 60 per cent of those clubs as clients. That credibility has given us the opportunity to go and talk to people in the local market.
“The golf market operates nationally but also has very heavily state based influences. You can go into the US state by state which is the best approach for us. One dynamic that is changing for in the world golf market over the next couple years which is quite exciting for us is that the Royal & Ancient and the USGA, the major powerbrokers of world golf, announced in February this year that the whole world will move to a unified world handicap system in 2020. Currently, if you’ve got a handicap of 10 in Australia it doesn’t equate to that in the US or the UK. They’re all on their own calculation systems.”
So that’s a really intriguing opportunity for your golfing management platforms as a global proposition.
CK: “We currently run the handicapping in Australia and across Scandinavia. As the strategic golf technology partner of Golf Australia we’ve actually agreed with them to upgrade the Australian handicapping system to be compliant as the world handicapping system in 2019.
“The nicer opportunity for everyone in the global golf market is not only handicapping but golfing solutions that integrate into a golf handicapping system such as golf management systems that run competitions and bookings and tournament systems.”
What about declining golf membership and the potential headwinds that it can cause?
CK: “It’s declined about one per cent per year over the last 10 years globally. I think most countries around the world has seen that stabilise.
“Having said that declining golf membership is an opportunity for our business model because what we’re actually in to as a business is helping them to expand and diversify their revenue streams.
“Golf clubs historically have relied upon membership fees as a major revenue stream and now they’re looking for flexibility and diversity in that revenue stream.”
What type of system can help with that?
CK: “We recently partnered with a Danish company called Players 1st that runs survey tools under the Net Promoter Score model into membership based organisations, primarily golf at this stage, and actually once they get those survey responses being able to tailor some insights and action items that the club can take that will actually help improve how their guests and members are viewing their venue.”
As MPower is the golfing technology partner of Golf Australia have you considered offering a suite of software products to other major governing bodies or rights holders?
CK: “Absolutely, when you look at our suite of application modules we have about a dozen that fit the needs of a venue itself. At the association level on what we’re doing in golf it’s around database management and score management but it’s about linking back to membership and then how you link that to the analytics. I think regardless of the association being able to provide that linkage of membership, CRM system back into the business intelligence analytics is consistent in any venerated model.
“Golf has its own peculiarities around its own handicap system and other sporting codes would want to link in their own competition score systems so it’s an opportunity for us to do that or to partner with other score systems that are currently doing that in those codes.”
And finally, what is the next 12 months looking like?
CK: “We’ve actually got a four year strategy. We’ve got about 2,400 clients in 25 countries. Our goal over the next four years is to increase that number of venue clients to 5,000. The key areas for us in doing that across our core or current sectors we are looking for growth in new market segments such as sporting associations and retirement living.
“From a product perspective, the key areas for growth for us is going to be in mobile and remote POS options. Rather than POS being a physical location, being able to use a tablet or phone as a mobile POS for remote ordering. Real time event analytics is another, people want to be tying together where their revenue is coming from and relate that back to their key costs like stock and workforce management on a real time basis and we see that as a growth sector.
“Then we have cloud membership and more generally venue analytics so tying together all the data sources within a venue to provide insights and intelligence. Lastly, the move to a handicap system how we evolve the relevance of our cloud golf solution into every country that plays golf.”