Passport: Starting From the Bottom
A conversation with Parking Technology Today and Charlie and Bob Youakim
It was 2010, and both Charlie and Bob Youakim were experiencing parking problems. Charlie had just left McGann and Associates (Now Amano-McGann), and was attending the University of Minnesota’s Carlson School of Management in his attempts to switch careers. His cousin Bob was working at Wells Fargo in North Carolina as an investment banker. They were separated by thousands of miles but connected by family, career goals, and a common problem: broken parking systems.
Charlie parked in a private on-campus parking lot in Minneapolis, where each day he was required to write his license plate number on an envelope, fill it with three $1 bills, and drop it into a box. Bob worked at a high-rise in Charlotte, where everyone knew the parking garage gates would go up for free when the attendant left at 10 p.m. — and everyone took advantage of it.
Both had harbored entrepreneurial instincts and aspirations from an early age, and now a problem was staring them in the face —technology in the parking industry was not just lagging behind; it was completely broken.
Passport was born and subsequently migrated from a single desk in Minneapolis to a garage in Charlotte to The Ranch, a ranch home in suburban Charlotte that served dual purposes as Charlie’s residence and the company’s headquarters.
This early version of Passport would be unrecognizable today. Initially, the cousins planned to build a parking operations company and create greater efficiency and competitive advantage through proprietary technology.
“We really struggled to get the ball rolling, and like many startups, we had to pivot,” acknowledged Bob. “We had a life-changing meeting with Secure Parking in Charlotte, where Daniel Levine told us, basically, that we had no business running operations, but that instead we should focus on the tech and sell it to him.”
Charlie remembered the meeting, as well. “That meeting really hit us hard, and it took a couple of days to recover. But we did, and we took his advice.”
Bob agreed. “That’s a great example of how our customers have shaped our company, which continues to be a driving force behind our success.”
“At that point, we were bootstrapped, and we were running low on the money from Bob’s initial investment,” Charlie recalled.
“We really felt that dropping the hardware component was important to our potential success. We knew hardware just didn’t scale well, and even though there was well-established competition in the mobile payments space, we felt like there was a gap in the offerings available.”
The gap, explained the two, was ease-of-use. Their competition required parkers to sign up with a lengthy enrollment process, which seemed illogical to the two partners.
“When you’re parking, the last thing you’re thinking about is the parking process. We wanted to get users on their way, so we focused on getting a user into our platform and parked as quickly and easily as possible,” said Bob.
In July 2011, many would have considered the two crazy. They were going after a market dominated by PayByPhone, backed by the resources of its public company parent (PayPoint) since 2001. It was a giant. ParkMobile was also well-established after entering the U.S. market in 2008.
Starting a mobile payments company focused on parking in that environment flew in the face of conventional wisdom.
Customers were not very interested, either. Parking was a risk-averse industry, and the incumbent products at the time, PayByPhone and ParkMobile, seemed to be the obvious choices to most potential customers in the market.
The cousins raised their first round of financing from friends and family, instead of a traditional venture capital firm, and made several key additions and business decisions. They opened an office in India to maximize the impact of their funds, and convinced Khristian Gutierrez to join them from Wells Fargo. A young, energetic and successful investment banker, he was looking to be a part of an exciting startup.
“Khristian brought an immediate energy to the company,” Charlie said, “and his interest in joining, along with others, really gave the company new life. We wouldn’t have made it without that injection of enthusiasm.”
Gutierrez joined Charlie at The Ranch, and the office grew. He recalled the times: “I had worked with Bob at the bank, and I knew that if he had left his job for this, there must be something to it. After traveling from New York to see [the cousins], I was convinced that this was where I wanted to be — that there was something special happening at The Ranch.”
And there was more life to the company on the other side of the globe. Its first employees weren’t even working in the U.S.; they were working in India.
“Divya [Venkataramanappa] really made the India office a success,” Bob said. “Without her dedication and talent, I don’t feel like we would have made further investment in India.”
But they did. Charlie moved to India for five months to start the company’s R&D office, while Bob and Khristian worked on developing business and making a name for Passport in the U.S.
Around this time, the group also landed its
“We’ll never forget ‘Kirk’ and ‘Sandy.’ They gave us the chance we needed,” Khristian said.
Kirk and Sandy Iventosch founded Park Select Franchising out of Wilmington, NC. Gutierrez explained that they gave Passport a chance, because it was “a young company just like them, and someone had recently given them their chance. Giving us a chance was almost like paying it forward. We couldn’t let them down.”
Gutierrez also pointed to the ease-of-use and the flexibility that Passport offered. “We were willing to build facets of our systems around their needs, which was nothing that anyone else offered. The other companies out there gave them a ‘take it or leave it’ type pitch.”
The experience with Park Select led to a great reference and more business opportunities — with Ken Putnam of the City of Asheville, NC, and Chip Rich with the City of Ocala, FL, becoming the company’s first municipal clients.
“Right after we signed Asheville, we decided that we needed local developers to better support our systems,” Charlie said. “That’s when we published our programming challenge in the
U.S. market. Brad Powers and Bingen Eguzkitza were the first to
successfully complete the challenge and join the team. We added two really talented and experienced developers to the Passport family at just the right time,” Charlie said.
Bob seconded the motion: “Our positioning as a customer-centric B2B mobile payments service was leading to a ramping pipeline, and adding some talented developers to our office really solidified our product and also allowed for 24/7 development.” Passport also had more help — volunteer help.
“That’s when Nate Berry started coming by The Ranch. He was attending seminary school at Wake Forest and looking for a calling,” recalled Bob. “Nate was just awesome to have around, and he really brought great sales experience.”
With the addition of these team members, Passport’s success continued to grow. They landed a deal with the City of Omaha in early 2013 and attracted the attention of Chicago and Toronto because of their customer-centric approach and their ability to tailor systems to meet the needs of large clients.
Gutierrez reiterated the company’s successful philosophy. “Our customers shaped just about every aspect of the product you see today, from Private Label applications to our operator wallet system and our backend management platform. All of that was designed by industry experts — our customers”
Big clients in turn attracted big funding, with Grotech Ventures (the same group behind Living Social) and Relevance Capital putting $6 million into Passport.
The rest is modern history. The company has taken a market-leading position in the industry. Its platform is installed in more than 1,000 locations, and the company believes that the tide in the industry has shifted.
Bob smiled and explained: “The displacements you’re seeing in the market are a testament to what’s going on. Switching providers isn’t easy, but customers are switching to Passport, because we deliver what we promise, and we let the customer take part in building the platform.”
The company isn’t focused just on parking anymore; it’s much bigger than that. Charlie explained: “We’re focused on enabling municipal transportation. Some people call this urban mobility. Some call it intelligent transportation. We just call it helping you get from point A to point B.”
This product expansion has led to aggressive growth in transit mobile payments, where Passport has also taken a lead role, Charlie said.
As the cousins sit in their new 12,000-square-foot office, just outside Charlotte’s Downtown, Bob looks back at the beginning:
“We had to work hard to get where we are today, and that’s not easily lost on the management team here or the employees. We’re still working hard to keep our customers happy and drive this industry into the future.”
For more information, go to https://gopassport.com.