Entrepreneur Steve Gill on his plans to bring new tech to co-op retail

We catch up with the chief of VME, a software firm which is converting to a co-op, ahead of his retail conference appearance

Steve Gill is a man with a plan. Several plans. Big plans. Going from university dropout to leading a management buyout, building a successful tech business and meeting a prime minister, he’s now the CEO and CTO of VME, a privately owned company that’s in the process of conversion to a co-operative.

VME is the firm behind of IntelliStore – till and back office software for supermarkets and convenience stores, which now runs in six of the 13 independent co-ops supplied by Co-operative Federal Retail and Trading Services, the central buying group for co-op retail societies in the UK.

“This equates to more than 600 stores and 2,000 lanes,” says Steve. “We are in discussions with most of the other societies about joining us, so that all UK co-ops can be running the same platform, allowing them to develop new tools and apps to grow the grocery co-op market share.”

Related: Preview of the Co-operative Retail Conference

 He says this could save the movement millions of pounds a year, and remains passionate about retail co-ops adopting new tech to create economies of scale across the movement. “We are constantly researching new payment methods on behalf of all our consumer co-op customers, and when VME implements something, all of the consumer societies automatically get it,” he says.

Next month, Steve will give a talk on the future of payment systems at the Co‑operative Retail Conference, organised by Co-operatives UK, which is held in Cheshire from 8-10 March. His session will explain and explore emerging trends and technologies, including cashless and mobile payments, rewards-based shopping and Amazon Go – where checkouts are not required.

“We have already carried out research and development using the exact same technology as is running in the Amazon Go stores in the US, and early stage experiments are promising,” he says.

“This technology is extremely expensive, but the cost will come down over time. It’s a great example of how co-ops co-operating would be able to share that cost, when Amazon Go eventually comes to the UK. The co-op movement needs to be ready.”

Steve Gill

Steve’s passion for a fairer, more co-operative approach to tech originated at Scotmid Co-operative – where he landed a role in the IT department after studying computer science for a year at Napier University. He saw that many of the IT companies supplying Scotmid did so on a ‘take the money and run’ basis. “Before the sale they were our best friend,” he says, “but once the sale was done they disappeared, with no interest in a long term relationship or fixing problems.”

But when Scotmid installed VME software in its stores in 1999, Steve was so impressed by the supplier’s approach, he went to work for them.

“The owner of VME was different,” he says. “He believed in long-term relationships and working with the customer to deliver what they needed. It was a breath of fresh air.”

Five years later, Steve led a management buyout of VME from its family owners. VME now has offices in the UK, Malta and Ireland, employing 30 people – two thirds of whom are software developers.

Steve is now based in Malta, where he attended the Co-operatives Europe conference in 2017. “I’m embarrassed to admit I didn’t realise that converting a private company into a co-op was a thing,” he says.  But that changed after he heard Co-operatives UK secretary general Ed Mayo talk about TransfertoCOOPS – a project backed by Cooperatives Europe to support the transfer of private businesses to employee-owned co-ops.

“My brain started thinking,” he says. “What if we could all co-operate together, and use VME’s tech to allow grocery co-ops, small or large, anywhere in the world, to properly compete with the Tescos and Carrefours? That would be amazing.”

A flurry of meetings with the CEOs of numerous UK retail societies followed, as did a determination to convert VME into a co-op, and potentially go on to harness the IT expertise available in Malta to create an ethical tech sector on the island.

“Malta is small but has a lot of IT developers, mostly working for gambling companies who are here to save tax,” he says. “I don’t like gambling companies, because they profit from other people’s losses and don’t add value to anything. But I like the fact there are a lot of developers who would be interested in working for a co-op, making a difference.”

But he soon learnt that Maltese co-operative law was very old, having been designed for agriculture and fishing co-ops. So he set about lobbying the government to update it.

“I ended up emailing the Maltese prime minister directly,” he says. “We exchanged a few emails and a few weeks later we were sat in his office. He was very interested and supportive. And he loved my idea of building a platform co-op alternative to Silicon Valley in Malta – so much so, we email every few weeks to keep him abreast of my progress.”

He adds: “It pains me when I read fake news about Malta being a tax haven, and personal attacks on the Maltese prime minister, especially from some of the UK press who are passing off opinion pieces as fact. I’m not saying he is perfect, nobody is, but I have found him and his government genuinely supportive of co-ops. They also have a 100% track record of delivering on promises to help grow the co-operative movement – which is very encouraging.”

With one hurdle down, there was still another – big – stumbling block: how to raise the money to buy out the less co-operatively minded shareholders of VME? “Now that I knew conversion to a co-op was a thing, to encourage other private companies to do the same, we needed a way to raise capital to buy out shareholders easily and without the delays I’d experienced,” says Steve.

He’d never been a fan of venture capital (VC). “I hate the idea of being forced to ‘hard sell’ a customer just to meet certain artificial profit targets, so the venture capital can sell out. The only person that wins is the VC. The employees, the customers are typically screwed over.”

When he learned about Fairshares – the association promoting multi-stakeholder ownership of social enterprises – he saw the potential for an ethical solution. “Here was a model which fairly rewarded all stakeholders in an enterprise,” he says. “I’m a problem solver using tech kind of guy, so I set to work developing a platform, based on EventStore and blockchain, that would allow anyone to easily buy and sell shares in multi-stakeholder platform co-ops using major world currencies or even cryptocurrencies.”

The result of his efforts, Co-op Exchange, will be launched as a platform co-op, with VME Co-op its first customer. “I genuinely feel this could be the beginning of the end of the days when co-ops struggle to compete with tech businesses funded by venture capital due to being unable to raise capital,” he says.

And what of next for VME? “We have a plan to take our software to Europe and then the rest of the world by working with local ‘service’ co-ops and by open sourcing what we’re doing,” says Steve.

One of his dreams is to help the UN Sustainable Development Goals by focusing on Africa. “I’d like to see us help more African communities come together and create grocery co-ops; we provide the software so the other co-ops can take advantage of what it can do, and take advantage of their combined buying power.”