Mobile Payments and The Kobayashi Effect
Google. Not the first search engine.
Facebook. Not the first social network.
Pandora. Not the first music site.
Groupon. Not the first deal site.
Takeru Kobayashi. Not the first competitive eater.
And Passport. Not the first mobile payment company.
The list goes on, but, importantly, they all completely changed and redefined the rules of the game. Kobayashi is a perfect example of this principle and one that we can all use as guide to solving problems.
If you have not heard of Takeru Kobayashi, he is a visionary. He is not defined by what society or anyone else tells us. He is a 130-pound, world-record hot dog eating champion. In 2001, Kobayashi rose to stardom and destroyed the world record at the famous Nathan’s International Hot Dog Eating Contest. After four decades, the world record for the contest was 25⅛ hot dogs. Kobayashi came out of nowhere, obliterating the record by eating 50 hot dogs in 12 minutes!
The key to his success: The willingness to take a new approach to a challenge.
While other competitive eaters were trying to squeeze more hot dogs in their stomachs, Kobayashi focused on how to make one hot dog easier to eat. This changed everything, and the rest is hot dog history.
Similar to Kobayashi, Passport completely changed the game in mobile payments by continuing to take a different approach to the problem. When Passport first entered the market, we noticed that participants were all using the same framework to their product. While others primarily viewed the user as their customer, building on ways to pay for parking with a smartphone, Passport instead viewed the agency as the ultimate customer, focusing on creating tools for municipalities to operate more efficiently. By providing agencies with products which removed pressure points from their day to day, we allowed them to streamline operations and ultimately better serve their customer: the user. Being forced to rethink something that had been in place for years allowed us not only to differentiate and but to push the market.
In any competitive market or situation, people need a reason to rethink what could be possible. For Kobayashi, 40 years passed with everyone thinking that 25 hot dogs was the limit. He knew shoving hot dog after hot dog into his mouth wasn’t going to cut it. So he reduced his body fat to allow his stomach to expand without being restricted, he ate the dog and the bun separately, he soaked the bun in water to hydrate without having to stop and drink, and he performed a wiggle called the ‘Kobayashi Shake’ to shift and compact the food in his stomach.
And for the result? Kobayashi busted through the ceiling by eating 50 hot dogs! At that point, everyone knew that there must be a different approach to the problem. And until an event like that happens, people rarely question what else is possible. Now guys who used to eat just 15-20 hot dogs routinely eat more than 40 using methods that Kobayashi introduced.
This same dynamic also happened in the mobile payment space for parking as Passport was the first to introduce customized solutions with a private label branded service. This changed the view for agencies and shifted what the marketplace thought was possible - just like the hot dog contest. Municipalities realized that they could do much more when working outside a one-size fits all approach and began requesting private label functionality in their scope of services. The many benefits of branding can be found in Charlie Youakim's post: The Reasons for the Branding Movement in Parking.
Recently, we began to see other participants follow suit by attempting to change their approach in order to support market demands and start offering white label options. Soon, I would expect that all remaining participants shift to support this private label approach or they will not be competitive or meet industry requirements and conditions. This cycle is great for the industry and will continue to push everyone to innovate and rethink how to approach challenges.
In the end, it all comes down to a key ingredient: execution. Firms have to execute on building great products, on building a sound business and finally, on scaling and evolving.
Rinse and repeat, over and over again.
If everyone would continue to find ways to rethink the problem, or even better, redefine the problem, rather than simply accepting existing limits, we would all benefit. Just ask Kobayashi.