About this episode

Arnaud Rubeck is an entrepreneur and management professional with over 10 years of experience. Currently, he is the founder & CEO of TripTax. Arnaud’s expertise spans a range of areas including strategic planning, operations consulting, and project management. He also has a strong interest in AI, fintech, blockchain, travel and food tech.

Here are some highlights of our discussion:

  • Licensing and monopoly in the industry
  • The 4 pillars of a government-startup playbook: patience with an incremental-first approach to deliver gradual win-win outcomes, word choice matters a lot, the backdoor, finding support to build trust, 
  • The importance of having a northstar for B2G startups
  •  Who created the rules and how companies can bring a change in legislation
  •  Why governments are hesitant to trust big projects and promises
  • How to structure a venture studio model that is designed to provide solutions to the government

Episode Transcript

Andries De Vos: What is the origin of tourist tax refund globally?

Arnaud Rubeck: The refund was launched as a privilege for tourists to get back the amount, because they benefit from the infrastructure (healthcare, etc.) only partially. The second reason is purely economic:  when you are entitled to a refund, you will spend more. Looking at the bigger picture, the tourist tax refund brings much more value to the system than it takes out of it. License is mandatory, and there are 2 types: for independent retailers and operators. TripTax doesn’t fit into these categories and is qualified as an independent tourist processor in France. The system has been validated and legislation updated accordingly. This is a good example of government being open-minded and bringing business from the grey area to the green one, to a safe and regulated environment.

Andries De Vos: The legislation was initiated because you pointed out a gap in it. The update allowed for more competition in the industry, correct?

Arnaud Rubeck: Yes. One of the main issues with this industry is that it’s controlled by very few companies. Governments get tired of monopolies, so they allow us to operate a special hybrid model between independent retailers and operators.

Andries De Vos: Helping the governments identify these gaps is so relevant for many industries. How do you push for that?

Legislation is set up by our competitors – the companies that were there in the beginning and created the rules together with the government, so the rules applied to everybody are not super fair. Change is happening now, and the industry is becoming much more transparent and fair for new digital actors to come. The rules of the past 30 years are changing, and we cooperate with governments to make the environment more fair for tourists and the industry actors.

Andries De Vos: How did that work in France?

Arnaud Rubeck: First of all, you shouldn’t try to destroy or reinvent the wheel but should fit as much as possible in the current system and align your technology with it. If you go inside and tell the government what they’re doing is bad and is not working, you will just face a wall. Secondly, bring transparency, and show that your processes are transparent and fair. Third, you need somebody willing to listen, to let you show that what you’re pitching is a solution that brings a lot of advantages and complies with the current system.

Andries De Vos: Staying within compliance framework, would that work everywhere? Is tourism legislation good enough globally?

Arnaud Rubeck: The banking sector is a good example of cooperation. There are current players –the banks, who made rules with the government in the beginning, and on the other hand, we have new players, digital banks. Someone might say this is too complicated, but there is space for new companies and digital players that bring something different, something technologically advanced and fair. I wouldn’t say that it is impossible because legislation is different. We have introduced the TripTax model successfully in Singapore.

Andries De Vos: The paradigm you bring is 95% compliance and 5% change. Could it be 50% compliance and50% change? Would it be realistic?

Arnaud Rubeck: The current problem is the lobbying by the companies that do everything possible to push us out of the market and the hesitation of governments to take more risk. Every time you trust a new fintech and something goes wrong, you will be criticized, but it’s easier to take the blame if the fintech is 95% compliant with the current system. There will be more change because more and more companies are entering the market, so the 50% model is possible. However, right now the change is only beginning and what we pitch is brand-new for governments. They want to take it step by step.

Andries De Vos: Do you have a North Star of that plan (introducing incremental change before more radical options)?

Arnaud Rubeck: Definitely. What we do now is trying to pitch to governments the tourist tax refund 3.0. Our North Star, our target consists of two parts. The first one is removing the burden of tourist tax refund in processing from the store. The objective is to process it entirely by technology and enable stakeholders to actually enjoy the distribution of extra service. The second part is to bring solutions to governments, which are much more sufficient in terms of money and experience. We want to bring systems that are easier to operate and more effective in detecting fraud.

Andries De Vos: How savvy are those government sponsors? Do you have to explain your approach to them?

Arnaud Rubeck: The choice of words is critical. When we approach a government, we don’t say we want a big partnership – that’s a lot of commitment and money. We say we want to do a test, a pilot to show how the technology is working, and if it’s successful, we can turn to partnership. Everyone is more open-minded to pilots, and if the test project fails, it’s not a big problem.

Andries De Vos: How do you think about the sale cycle?

Arnaud Rubeck: This industry has a very high entry barrier, but once you’re in, it’s super hard to lose the license, and the company does very well. You can’t scale this business immediately. In the TripTax business, we have to be very careful in the beginning to get many contracts, then we can move faster.

Andries De Vos: You described this process as finding other ways to get in when the main door of the building is closed to you. Could you talk about that a bit?

Arnaud Rubeck: Pitching directly to governments is hard: either you’re too small or they don’t trust you. We need to find the right access, try to connect with the digital side of the government and with tourism and fintech agencies, and get as much support as possible. Then, it’s much easier to have a conversation. Whatever country we approach, first we look for people on the inside, considering the language and the culture.

Andries De Vos: Are there analogies for your journey in other industries? Are there lessons to be learned for other entrepreneurs trying to work with governments?

Arnaud Rubeck: As I’ve mentioned, there is definitely the analogy in the banking industry – the emergence of digital banks. Another example is the blockchain industry, the companies that are trying to bring more automation and security in the process. This concerns particularly the matters of identification. Entrepreneurs and governments are bringing their expertise and experience to the table. An amazing example is the Singpass in Singapore; now people have this digital identity, and they can do more and more just with this pass.

Andries De Vos: In a scenario, in which TripTax becomes wildly successful and decides how governments decide difficult problems, imagine you allocate $50M to build a venture studio providing solutions for the government. How would you structure that studio?

Arnaud Rubeck: I would structure it into 3 main parts. The first part is speaking to people and identifying real problems. There are way too many companies trying to solve non-existent problems. The second part is being transparent and open-minded with governments in negotiations and offering real solutions. Finally, the third part is building a good development team – this takes 30% of the structure. Ideally, it is a local team of talents to execute the vision.

Andries De Vos
Venture Builder
Andries is a serial entrepreneur. He built 3 companies as CEO/Founder, and sold 1 enterprise payment solution to a Global MNC. His latest venture, Slash (www.slash.co), is a venture studio with 2 activities. Slash builds cross-functional engineering squads and provides software consultancy for top brands and multi-lateral organizations in Europe and Asia. Slash works include designing and engineering practical AI, GIS and Blockchain solutions. Slash also invests in and co-founds startups with experienced corporate executives who turn to entrepreneurs to solve their B2B industry problems. Slash has hubs in Singapore, Cambodia, Bali and Armenia, and a global team spread out across Asia and Europe. Andries has co-founded 7 SaaS startups and invested in many more. Previously, Andries founded 2 consumer internet businesses, including Clubvivre, the #1 Uber for Chef in Singapore. Prior to starting his internet businesses, Andries was a principal at a strategy consultancy where he advised Fortune 500 clients on strategy.
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