VOL. 127 | NO. 58 | Friday, March 23, 2012
Memphis Standout Profile
Paytopia CEO Seeks to ‘Fix’ E-Commerce
By Andy Meek
Editor’s note: This is the first in a six-part series on entrepreneurs in the current round of Seed Hatchery’s boot camp.
(Photo: Dennis Copeland)
This is how it starts.
An entrepreneur like Mike Hoffmeyer has a moment when the light bulb flashes. An idea is born, and possibilities for a new way of doing something – and the itch to build a company to do that new thing – start to germinate.
In the case of Hoffmeyer, who has spent 12 years as entrepreneur in the online payment space as a technologist with two payment companies, it was a particular time he met his wife for dinner. She was getting her nails done at a salon, so he went inside to wait on her.
“We knew the salon owner, so we were talking to her, but at one point she had to go take a payment for another customer,” Hoffmeyer said. “The customer pulled out a credit card. And the owner was like, ‘I’m sorry, we only take cash or checks.’”
Without immediately realizing it, the salon owner called Hoffmeyer’s attention to the transaction.
“This was in a strip mall, and usually you don’t see that sort of thing in that environment,” Hoffmeyer said. “And she’s very successful. She’s been around seven to 10 years. So I was very intrigued.”
The owner told him the reason she avoids plastic is that the cost of her items is so low that payment fees take too much of a bite out of that. It got Hoffmeyer wondering how many businesses out there similarly don’t take credit cards – and more importantly, how many businesses have failed or seen the expense associated with plastic be a contributing factor to failure?
What Hoffmeyer decided to do about it is build a company – Paytopia – with a lofty goal in mind: “We intend to fix what’s wrong with the Visa/MasterCard system.”
After the idea and the excitement of building an innovative company from scratch comes the grunt work of bringing that idea to fruition. To that end, Paytopia is one of six companies in the current round or “cohort” of Seed Hatchery, which puts entrepreneurs like Hoffmeyer through a rigorous boot camp at which they’ll get seed funding but also, ideally, the training they’d need to make it on their own.
This is the first of a six-part series of profiles offering a snapshot of those entrepreneurs.
As important as settling on the idea and laying the foundation is getting one’s head firmly in this risky game of entrepreneurship, where success is never a sure thing. To that end, Hoffmeyer is certainly there.
In a recent blog post he wrote about the Paytopia site as he entered week 3 of Seed Hatchery, he shared a kind of inner dialogue.
“Hey moron, you have no choice but to make this company work,” he wrote. “You willingly gave up your comfortably secure job, your income, and you won’t find another job in Memphis at the same level of pay. You have a wife and kids to provide for. You have nothing to fall back on. Do or die.”
Hoffmeyer is working at Paytopia with Bryan Robinson, who’s the venture’s user experience specialist. Hoffmeyer himself was involved last year with stiQRd, a veteran of the last Seed Hatchery go-around that focuses on using QR codes to replace paper-based loyalty programs for merchants.
Hoffmeyer decided to shift from there to Paytopia, though, for what he says is a simple reason.
“The two core problems that are very difficult to deal with are the rampancy of fraud and the extremely high cost of the transactions themselves,” Hoffmeyer said. “I’ve waited 12 years for Visa/MasterCard to address these issues.”
What Paytopia is building is a new payment network intended to put consumers in control of their online payments.
“We partner with the consumer’s bank, and we link their checking account to the Paytopia network the same way you would with a Visa check card that’s linked to your bank account and that you go around making payments with,” Hoffmeyer said.
In his recent blog post, Hoffmeyer reflected on the busy nature of the Seed Hatchery process helping keep entrepreneurs like him focused on meeting deadlines, creating deliverables and eventually getting something built – instead of letting self-doubt about the future take hold.
“The ever-ticking time clock on the wall here in the Launchpad shows 78 days left,” Hoffmeyer noted at the time he wrote his blog post. “My blogging time is up. It’s time to go be awesome.”