Dan Wagner: 'Maybe I'm not the best person to run a public company.'

We’re sitting on a white leather couch on the 9th floor of The Met Building, just off Tottenham Court Road, London. Dan Wagner has turned his wide, besuited shoulders to point out over the chimneys of central London to the City beyond.
 
‘We’re negotiating at the moment on offices in the Heron Tower,’ he says pointing at the glistening skyscraper, one of London’s newcomers and one which Wagner’s rent money could help to save from receivership.
 
‘Ours hopefully – we’re very close to closing that deal. All steel and glass on the 35th floor, it’s not very Shoreditch at all – and it doesn’t need to be.
 
Wagner has a bee in his bonnet about Shoreditch, feeling it pigeonholes technology entrepreneurs into the ‘jeans, t-shirts and table tennis’ stereotype and gives the wrong impression about the industry. He’s planning to float Powa Technologies and sees the need for listed tech companies in the UK, but ‘won’t be listing here’. He also believes the investor community leaves a lot of be desired, ‘there’s no venture capital in this country.’ The health of the high street is his latest focus, promising that his new technology venture will lead the evolution of our struggling town centres. He is as outspoken as ever, but will he change his forthright ways when he leads his latest company into an IPO?
 
‘There are plenty of good tech entrepreneurs in the north of the UK; Scotland, Manchester, Leeds etc. And they have nothing to do with Shoreditch,’ he simmers.

‘Being an entrepreneur isn’t a teenage folly that you grow out of. We should stop our myopic view of tech companies in the UK and start thinking about the global leaders we can have here.’
 
Wagner is something of a veteran when it comes to the UK’s tech industry and is pretty well-placed to comment. He started his first company, M.A.I.D. (market analysis and information database), back in 1984 - aged 21, which he floated ten years later valued at £120m before selling to Thomson Reuters for $500m in 2000.
 
His second venture, Venda, was founded in 2001, was one of the first ‘cloud’ based ecommerce platforms and is still going strong, looking after 14% of the European ecommerce market.
 
So far so good. But Wagner’s time at the helm of MAID was not without tribulation. In 1997 he watched as the MAID share price nose dived 95% - his shares had a volatility which he puts partly down to the media portrayal of him. He had a very public scrap with the FT when it started referring to Dialog (the new name given to MAID) as ‘Dial-a-dog’. He was often criticised for his ‘flamboyant’ ways; famously wearing a Donald Duck waistcoat to a media photocall ahead of the MAID float - which was blamed for wiping 10p off the share price.

But Wagner is back on the scene. At the end of August he announced $76m investment (‘from unnamed investor rumoured to be Wellington Management’) in his latest venture Powa Technologies – a three pronged ecommerce solution. He intends to float the company within 18 months.

‘I won’t wear a duck waistcoat this time,’ he says he tells me.
 
He’s passionate about the London technology scene but is explicit in his belief that unless things change dramatically in London, he won’t be floating Powa here.
 
‘I’d like to float in the UK but at this point it is highly unlikely,’ he says regretfully.
 
‘The environment here is not right for me to float. The business I am in is completely over the heads of any investors in the UK - they won’t understand. It would be difficult for investors in the UK to reconcile themselves with the value and the opportunity presented by Powa.’
 
Wagner wants to see a change and is banging the drum for the UK’s technology scene. While our startup scene is thriving, we don’t have any tech giants to call our own and despite the best efforts of the LSE and its High Growth Segment (launched this year and designed to encourage tech companies to list in the UK), tech companies are still overlooking the UK for the States and NASDAQ. For example, King, the UK-based maker of Candy Crush - one of the most popular mobile games in the world - has just announced it will be floating in New York.
 
‘I don’t think those new LSE rules are very effective,’ he tells me. ‘They are very superficial; they just lower the threshold for how many shares you can list and that doesn’t solve the problem.’
 
The most pertinent issues in Wagner’s mind are the lack of understanding (driven by a dearth of specialist technology analysts in the City) and an uninviting tax landscape.
 
‘Remove capital gains for investors in entrepreneurs,’ he says. ‘Let them make a return – since they are taking all the risk. If we educate investors and encourage them with lower tax, it will have a huge impact on stimulating what is already very rich hive of creative talent in the UK.’
 
Powa’s recent investment round is something of a totem to his argument. He’s proud of the ‘unfathomable,’ $76m US investment round he’s just landed, pointing out it’s rare in Silicon Valley and nigh on impossible in the UK.
 
‘We did $2m in sales last year - to get $76m for a minority investment with no controls is mad, obviously our investors share our vision. In the US, investors think about the product, the market, the brand and the management and say "it could become a multibillion-dollar business and if it does, we're getting a really good deal.’"
 
Powa Technologies is Wagner’s answer to the high street’s regeneration. Powa, the first of the three arms, is an enterprise-class ecommerce platform. These platforms are ten a penny but Wagner says his differentiator is the speed at which companies can get robust, sophisticated sites up and running. Fair enough.
 
MPowa is the next offering – ‘a slightly more exciting one’ in his own words. It is a platform for retailers to use at the point of sale. It not only allows store staff to accept payments through mobile – it gives sales assistants access to information, which will help them to tailor the shopping experience for customers.
 
‘There are two visions of the high street; one is tumbleweeds and lawlessness, the other is a regeneration of the high street, a changed user experience,' he opines.
 
'Personalisation, which is very rewarding online, is not present in store. MPowa is a platform, which can help retailers to give their customers a better service – to improve the in-store experience.'
 
Wagner is excited about MPowa, but he reserves most of his exuberance for PowaTag – he believes it's what his (unconfirmed but heavily hinted) investors Washington Management were most interested in getting a slice of. The technology, when it is launched early next year, will allow users to purchase items from any media – by pointing their phones at an ad in a magazine, at a billboard – even just be pointing at the item itself.
 
'PowaTag is a revolutionary product in terms of transforming retail form what we understand today to a whole new paradigm,' he says.
 
The technology will allow retailers to geolocate where an order has been made and actively pursue the sale by offering to deliver the item as fast as they can get to that location. 'It will give advantage back to physical retailers - its the evolvement of the retail environment,' he beams.
 
With the investment on board, Wagner is poised to do what he needs to grow the company and see it to an IPO within 18 months. He has already doubled the Powa workforce: 'We’ve been recruiting like mad. On the first of August I had 80 people here, today we are 160.'
 
It's full steam ahead for and with such rich experience under his belt (and a tasty $76m) Wagner's got a good run at creating the kind of publicly-listed tech giant the UK needs. But there's a hesitance in his voice when he talks about the lessons he's learnt from his previous businesses.
 
‘One lesson I learnt which I wouldn’t change is that my outspoken, honest nature doesn't always go down well with investors,’ he says candidly.
 
‘As a public company CEO you have to be very circumspect and I’m not. I don’t regret it, I’m saying maybe I’m not the best person to run a public company, maybe it’s better if I am the chairman and I have someone else to be the CEO. It's not something I need to worry about now but it will certainly come up in consideration when the time comes.’
 
With that bombshell, the 50-year-old dotcom veteran gets up and shakes my hand. He's not a terribly tall man at 5 foot 11 but has a commanding presence. From head to toe he's perfectly manicured - his expertly pressed suit shows none of the effects of having been sat down chatting for quite so long.
 
Very un-Shoreditch indeed...