The Value of Start-ups in the Ecosystem
May 23, 2023
I’ve been thinking about the parking ecosystem, lately, and the key elements that make our community thrive. Much like the world at large, ecosystems are healthiest when the stakeholder population is diverse and well-distributed. In other words, there’s a good mix of people who have been around the parking block a few times and those who have the skills and energy to build a start-up.
There are stories aplenty of long-in-the-tooth companies that lost their way or, on the other end, start-ups that “failed to thrive” and disappeared. My perspective is that it takes both youth and experience to build successful solutions. Sometimes those are different companies, but many times they can coexist in the same company.
The key ingredient for success in parking is to have parking experience. It is extraordinarily difficult to build a solution in parking without parking experience. For those reading this column, you aren’t confused. Parking is complex, complicated and non-standard. Naturally, I didn’t believe that when I started in parking seven years ago. I was like every other ignorant newcomer. It’s just parking, how hard could it be?
We all know the truth: parking is not simple. Combine that with the digital transformation taking place in parking and it’s clear: like every other industry in the world, software will be at the heart of any solution in the future. Luca Bovalino, the CEO of North America for HUB and TIBA Parking Group, put it best during our panel discussion at PIE this morning when he said: “Yesterday we were a hardware company, tomorrow we must become a software and analytics company.” For anyone in parking, no truer words have been spoken.
How and who will fill the gap? That’s where start-ups come into the picture. Start-ups bring innovation and talent to the game. They also bring a new way of thinking. But like a missile without a guidance system, without proper guidance from the people who have been there and done that, aka parking professionals, the payload’s chance of hitting pay dirt is greatly diminished.
The road to parking nirvana is littered with well-intentioned, but parking-naive entrepreneurs who thought they could march in and fix parking by writing and selling software. Their outsider perspective matched that of the general public. It’s parking…it can’t be that hard.
A start-up doesn’t always need to be “two men and a laptop.” There’s a growing trend of larger organizations that sequester a section of their business into a backroom and let them break all the rules the larger corporation has spent years building, while building a new product line or capability.
A growing number of larger companies are finding it valuable to consciously spin-off a group of entrepreneurial minds from the rest of the pack and let them go back to their roots of running and gunning as a start-up. The advantage these “intrepreneurial” companies have, of course, is their access to capital and the deep parking expertise desperately needed to ensure the system has the knowledge of all the exceptions for which parking is famous. The recipe for success is for the larger company to build in protections for the smaller company to operate unencumbered by large company rules as they find their way.
Spinning up start-ups inside a large company is not the only way to reach the parking summit. One tried-and-true alternative is to acquire those capabilities. After having cut his teeth in parking as a young man, another PIE panelist George Baker, Jr., Founder and Chairman of ParkHub, built a start-up to critical mass and is now on the hunt for other like-minded or complementary solutions to acquire and propel his company to reach its vision of a connected experience.
The key with any acquisition is to ingest the smaller company’s capability without killing the culture that got the start-up to the table in the first place, a feat almost as difficult as parking a car!
The central theme woven through all of these success-scenarios is the marriage of skill and experience and the expert application of both ingredients. The unanimous conclusion of this morning’s PIE panel was that the winners and losers in parking of the future will be defined by those companies that can reinvent themselves and their software platforms while attracting and retaining top talent.
We didn’t conclude it would be a small or large company that would win, but we did agree that experience in parking and collaboration across companies and platforms was critical to building an ecosystem that improved the parking experience for our customers and their customers.
It’s going to take a commitment from leaders across the industry to embrace technology standards to create win/win relationships within the ecosystem. I’m signing up. Will you?