ShopKeep rings up an iPad POS for artisan businesses

Based on experience of running small operations, ShopKeep offers a way to run the new coffee, burger and burrito joints

As with air-conditioning systems or tax forms it’s rare to hear people say, ‘I’ve got a great point-of-sale system!’ ShopKeep is a company that’s trying to change that negative perception by turning iPads into point-of-sale (POS) units and business management systems for small, often artisan businesses.

The confluence of the world’s favourite electronic media consumption device and the rise of gourmet coffee, burrito, burger and sushi outlets could be a winning combination. ShopKeep has raised about $95m in funding, having just completed a Series D round, and it sells to about 18,000 customers.

Founder and CEO Jason Richelson has built ShopKeep on hard-won experience having run a small chain of wine retailers, a grocery store and coffee shop in Brooklyn, New York. There he discovered the hassles of rebooting servers while on holiday and determined to do something about the problem. He still runs a wine delivery service in parallel with the day job.

ShopKeep is very much in the modern mode of ‘cloud/mobile first’. Subscribers pay $49 per month to have the hassles of running sales taken away from them. There’s a card reader (with contactless debit card and Apple Pay support), payments processing, management tools, data analytics and a Pocket app for iOS reporting. Tools support fast-moving retail premises, ‘quick serve’ fast environments and, increasingly, restaurant/bar premises with till, inventory, stock replenishment, support for promotions and other must-have services.

“I was on vacation with my family when the Microsoft server database crashed yet again, shutting down the whole store, and I thought I am so tired of doing this when everything else was cloud based,” recalls Richelson when I meet him for coffee in London, as he catches up on his local office.

A PwC-trained accountant, Richelson became a software analyst at Deutsche Bank and was therefore in a good position to try his hand at being an entrepreneur when the first dotcom boom reached its zenith in the late 1990s. His first effort, a prepaid shopping cart startup, burned through funds but he says he learned a lot about payment processing.

Setting up shop himself took him closer to what businesses need though. He says he asked himself how he could automate processes so budding entrepreneurs could focus on product and service. He’d used Microsoft RMS and even tried acting as reseller for it, but that taught him that few small business owners wanted to pay a significant sum upfront or to deal with hassles like database maintenance.

“I’d get close to a deal and then they’d say ‘$12,000? **** no, it’s too expensive’. I thought, something is broken.”

Richelson says he’s still building out ShopKeep and like many a cloud startup the losses will keep coming in for some time yet as he builds up subscription customers, but he’s confident that he’s on track, as attested to by that long menu of customers.

Richelson describes ShopKeep of having a “shared-risk model”. That means keeping customers happy or watching them walk away and to that end he says his first hire was a customer care rep so store owners have a point of contact.

He’s also enthused by the continuing rate of progress in cloud platforms and services, and what that means for companies building atop. “It’s even faster than a couple of years ago,” he says. “AWS tools, Ruby on Rails tools… they’re going to put a bunch of companies out of business.”

As for the iPad as choice of device, Richelson is big enough to admit his first sense was wrong. (“I didn’t jump on it straight away,” he says. “I thought it was a fad.”) But it turns out that having good looking, familiar tools is a win-win for store operators.

Today, Richelson says, ShopKeep still has a lot of work to do and one direction might be using ShopKeep’s crow’s nest view of data to help new business owners understand the KPIs of a good operation – margins, cross-sells and up-sells, for example – through parsing anonymised data.

ShopKeep today has about 250 staff across North America and the UK but after hitting the English-speaking countries there will literally be a world of opportunity. Rivals? There are plenty but Richelson says he’s confident that ShopKeep has sufficient differentiation from new-generation players like Square and the old generation of POS giants.

The nature of these small businesses is changing, he argues. People want to start creative niche businesses and they need tools that help them keep the cash tills ringing – or in this case pinging, perhaps.