A system of easy-to-understand signs and lights guides drivers to the nearest empty spot in a car park. It has also led Daniel Cohen to a very profitable niche. By MIKE PRESTON.
By Mike Preston
When Daniel Cohen quit his investment banking job at the age of 24 to co-found parking technology company Park Assist he was the classic young entrepreneur in a hurry: confident and keen to make a quick impact.
Sign up for SmartCompany newsletter.
Free to your inbox every weekday
But even he didn’t expect that he and partner Richard Joffe would be able to develop Park Assist’s technology, sign contracts with some of the world’s biggest shopping centre companies and make a profit on a multi-million dollar revenue flow in just three years.
Cohen was driving around a car park in his home city of Sydney, hunting desperately for an empty spot, when he realised there was an opportunity in his frustration. At the time, he and Joffe were working in investment banking and management consulting in the infrastructure sector and could see that the right technology could unlock value in car parks.
They worked together to develop the concept for Park Assist, which uses sensors to find the empty parking spots and then guides drivers to the closest one via a system of strategically located signs and signals. They quit their high-paying jobs and starting looking for an investor to turn the idea into commercial technology.
They say it was easy to raise the “hundreds of thousands” they needed to get Park Assist off the ground. “Raising money was our core expertise; we had good networks from our previous profession and we leveraged off them to find an angel investor who took a small strategic stake,” he says.
Using these funds and some of their own money, Cohen and Joffe established offices in Sydney and the UK and hired staff with technology development skills – which they lacked but the business needed.
Persuading highly skilled staff to join their fledgling operation was a huge challenge, Cohen says, because they had an untested idea in a tight market for talent. But their financial backing meant they could offer a competitive package to the right person.
“We were able to find a great guy from Motorola and he has really driven the development of the technology platform and we have full faith in him,” he says. “We’ve found that provided you put the right people in place you don’t need to be technology people to run a technology business.”
Finding suppliers who could provide the components for system at the quality and price required was another hurdle that had to be overcome. It took Cohen and Joffe 18 months travelling the globe to put together the supply chain they needed and make logistics arrangements that would allow the business to keep inventory to a minimum.
By mid-2005, Park Assist had developed a commercial technology that was ready to roll out and has no direct competitors – in Australia or overseas. A few months later they struck their first deal, a contract with multinational shopping centre developer Westfield to install Park Assist in their Chatswood shopping centre in Sydney.
Cohen insists there is no magic to getting in the door of a global giant like Westfield. “We believed in our value proposition and we pitched hard, it was nothing more than that,” he says. “Yes, it’s hard to get in the door, but if you have something that’s unique we’ve found people are willing to listen. We didn’t have a previous relationship with Westfield, we just made some phone calls, arranged a time to pitch and went from there.”
With runs on the board, Cohen and Joffe have since won contracts to install Park Assist in Sydney’s Queen Victoria Building car park and a Tesco supermarket in the UK. Negotiations are under way for a more extensive roll out of Park Assist across the Tesco chain.
The multi-million dollar revenues these deals produced delivered Park Assist its first profit in the 2006-07 financial year, an achievement Cohen says he and Joffe plan to build on through triple digit growth in the years ahead.
An important element of this growth plan is to expand Park Assist’s overseas business, particularly in Europe and the US. The effort will be led by Joffe from the company’s UK office.
The global presence of Westfield, Tesco and QVB owner Ipoh (through its Singaporean parent GIC Real Estate) means Park Assist has the opportunity to leverage its current operations to achieve substantial international growth relatively quickly.
But for the foreseeable future, Cohen says Park Assist will remain an Australian business with a predominantly Australian focus. “Australia will continue to be where most of our income comes from and we will be exploring opportunities to expand our business into parking sites at locations such as hospitals and airports as well as new and existing shopping centres here.”
As for the corporate towers the Park Assist founders left behind, Cohen says there is no chance of a return.
“It was slightly scary to quit but this is what we were born to do. In business you are totally accountable and responsible but we have found that liberating; you just have to back yourself when you take this kind of risk and we’re totally committed.”