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A new beginning for vending machines

by Archives September 26, 2001 0 comment
Oren Gabbay is a third-year Concordia finance student who has done much more than just study theory out of a textbook, he has put that theory to practice by transforming his business dream into reality.
It began four years ago, when then 17-year-old Gabbay invested his summer’s earnings into a small fleet of soda vending machines. Where it ended up, is what Gabbay is most proud of.
At the age of 21, he and his cousin David Sufer, 22, are set to launch a
revolutionary product that promises to benefit the entire vending machine industry by the end of October.
By late next month, if all goes as planned, operators who employ the new technology will have the luxury of simply calling their machines by phone or via the Internet to determine what needs restocking, how much has been sold, and whether or not the machine is functioning properly.
The digicom products use already existing technology to accomplish the main task. The new piece of hardware connects to a cellular phone through wireless and cellular transmissions to give the vending machine operator access to all of the necessary information.
Access to this information can come in two versions. The phone version allows the operator to simply call the machine for an inventory count, while the web version requires the operator to log on to www.digivend.com to request an update.
Otherwise, depending on the plan purchased, the operator can receive an update, twice a day, via e-mail.
For Gabbay, the device is crucial because it offers efficiency and accuracy, something that did not exist when he started out in the vending machine business.
“When I used to go fill the machines, people would tell me that they had lost a dollar, sometimes two. But, you can never know who is telling the truth and who is bluffing. You have no choice but to reimburse everyone,” Gabbay says.
This problem, coupled with the fact that there was no productive way of tracking stock, deterred Gabbay from expanding his holds past 17 machines.
In addition, Gabbay felt that his schooling had to be a larger priority; any
more machines would consume too much of his time, in turn, making his grades suffer.
With all odds working against him, Gabbay managed to come by a solution unexpectedly, after a discussion with Sufer, a co-op student at the University of Waterloo majoring in systems design. The two were prompted to endeavor in an entrepreneurial feat. “We wanted to create a device that would bring vending machine technology up to speed with the current digital phenomenon,” says Sufer.
Gabbay was set to handle the business end of things while Sufer was responsible for engineering a prototype. Sufer began constructing the model a year ago while working at Nortel Networks in Ottawa.
But once the model came underway, the next challenge they faced was to find funding. The two of them then decided to create a company, DigiVend Systems Inc., along with a business plan to try to generate financial support from larger investors. Unfortunately this was unsuccessful because the entrepreneurs realized that they did not want to end up with only a small share in a company that they, themselves, worked so hard to create.
Although very few options remained, Gabbay and Sufer clung to one possibility:
the young entrepreneurs program offered by ProMontreal, an organization generated by the Jewish community to encourage young people to work in Montreal.
After sending out their business plans, and facing a grueling question answer period from a panel of professionals, Gabbay and Sufer emerged from the meeting with a $50,000 interest-free loan- the highest that ProMontreal offers.
Today, Gabbay tests his new company’s product on the machines from his original company. He also attends Concordia on a regular basis.
Gabbay’s busy schedule has forced him to make many sacrifices. “I lose out on the kid stuff, because I have to juggle school, business and friends all at once,” Gabbay says. “If I have an exam coming up then my business has to suffer, and so does my social life.”
But all in all, Gabbay says that the tremendous pressure continues to be
worthwhile, because he is gaining a double-edged education. He stresses that anyone can experience the two facets of learning if they are ambitious and committed enough to the process.
“It advances you in a way that you would never believe,” Gabbay says about theory and practice combined. “And it is ignorant for students to think that they can graduate from university without any work experience in their field and still land a C.E.O position. You have to work your way up from the very bottom.”
That is precisely what Gabbay did.
Since then, he has pushed forward, armed with bigger goals and better knowledge.
“You can’t ask to own the market,” he says, “but you can ask for piece of it.
That’s what I’m doing.”
So far, Gabbay and Sufer are practicing what they preach. Their business sense has served them so well that they have been able to win over all of their company’s exposure and publicity for free. They appeared in the front page of The Gazette’s business section, “In Montreal” published a feature story, promoting his company’s launch and Canadian Vending, a specialized vendor’s magazine, is printing a feature story on Digivend Systems Inc. for their November issue.
“You don’t get into a newspaper or magazine just like that,” Gabbay says. He believes that it’s all about the way a person markets himself- the confidence and persistence that he exudes in an important situation. Those characteristics combined with a risktaker’s attitude is what breeds success according to Gabbay.
Meanwhile, Gabbay and Sufer still work out of their bedrooms. But, they are confident that, with the launch of their Digivend Systems in October at $400 per unit, they will afford an office location soon enough.

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