For Hamed Shahbazi, culture isn’t the most important factor in a successful company; it’s the only factor.
Shahbazi, who in 1997 as a fresh University of British Columbia graduate founded the company that would become TIO Networks, has now led the financial technology (fintech) firm to more than US$7 billion in processed transactions during the last fiscal year.
TIO, which offers a number of software applications allowing customers without bank accounts to pay bills online, was sold earlier this year to fintech giant PayPal Holdings Inc. (Nasdaq:PYPL) for $304 million.
As the winner of this year’s mid-market category for Business in Vancouver’s BC CEO Awards, the West Vancouver native said none of the success of TIO would have been possible without the culture of the company, which was shaped through the collective efforts of all employees there – numbering around 200 over four locations at last count.
“We are in an industry with a lot of requirements, so if we started with a culture that’s not respectful of those tenets, we could have the most brilliant people here and tons of money – and it would not matter, because we would screw up eventually,” Shahbazi said. “I really feel that you can’t be successful in today’s world as a CEO if you don’t espouse a ‘do-the-right-thing’ culture … and a CEO can’t do his or her job if there’s not a good team working together.”
TIO has offices in Vancouver, Jersey City, San Francisco and the Washington, D.C., area. With the PayPal deal closing last July, Shahbazi said TIO’s office will be moving in with PayPal’s operations in the Bay Area, but the Vancouver-based senior leadership will stay intact as originally planned.
In fact, TIO may be on the lookout for bigger office spaces to expand, he said.
It has not always been so smooth.
TIO, in its initial iteration as Info Touch Technologies, at times struggled with linking up with companies with billing customers (billers) and the network of customers looking to pay their bills to those companies.
“That was the initial challenge,” Shahbazi said. “There was the chicken-or-the-egg problem where you go to a biller, but you need to have the network of people who pay these bills. When you go to the consumers, they want to know which billers you have. So for breaking that cycle, the first biller – in our case, Cricket Communications – was key for us. By using our kiosk devices, we convinced many billers of our value proposition.”
TIO specialized in turning those challenges into opportunities, eventually adding a software-based point-of-sale system to reduce the higher equipment costs of deploying hardware kiosks.
It then added mobile and online payment channels, all of which are now part of a multi-platform system with a sizable consumer base (16 million billing accounts at last count).
“That’s what I’m most proud of,” Shahbazi said. “We got to a scale that mattered, and that’s what caught PayPal’s eye.… And the fact that we are helping people, knowing that we are impacting vulnerable clients and helping them have confidence in managing their finances – that’s something we can build upon.”
There are things he wishes he had done differently, however; he noted that mergers and acquisitions (M&As) were such a big part of TIO’s expansion in the last five years that he wonders if the company should have started down that path earlier to achieve higher growth.
“For the longest time, we were committed to an organic growth program,” he said. “Some of my mentors tell me that I had to learn from the experience that I gained in the meantime to make the good decisions in M&A later, that if I started earlier, maybe I wouldn’t be as successful. But I still feel like if we started a little earlier, we’d be a little further along.”
But he couldn’t be happier about where TIO is today, he said, adding that he hopes the company can provide others with some hints about how to start a business and achieve success, beyond working diligently.
“It’s supporting a culture where the best idea wins,” Shahbazi said. “Especially in an M&A, nothing kills innovation quicker than playing to favourites, preferring ideas from one group consistently over those from another group. If a CEO can stand up for the best idea regardless of where it comes from, it drives electricity through a company and powers people up.
“As a leader, you will see reflections of yourself everywhere in the company. You will see your strengths, and you will see your weaknesses. That’s every business – and you as a leader have to recognize that, and the need to bring in people in areas where you need to improve. Our own strengths and weaknesses will manifest in our businesses, and if we want to improve, we have to cognizant of that – and we have to start with ourselves.” •
Join us to celebrate this year’s honourees at the 2017 BC CEO Awards November 8, 2017, hosted at the Fairmont Waterfront Hotel. For tickets and event info, visit www.biv.com/ceo.