Innovation Ecosystem Worries Unfounded

It was very disappointing to read Mike O’Donnell’s recent comments about the supposedly tragic state of New Zealand’s innovation ecosystem. Now whilst I respect what those guys have built, it seems like not a year goes by without a member of the TradeMe cabal bagging our community and what we have achieved. It’s starting to get a bit old.

Let’s deal with the obvious hypocrisy first. O’Donnell draws on a marine ecosystem analogy that he picked up at a recent conference. He describes startup companies as bottom feeding low life species, feeding off the stronger, larger fish in the ocean (read – TradeMe, Xero). Like his mates previously, O’Donnell goes on to lament the confusing proliferation of incubators and accelerator opportunities available to aspiring startup companies. However there’s conveniently no mention of the actual economic value created or new jobs that have been delivered by such institutions.

On the other hand, he loudly sings the praises of two companies led by extraordinary women and illuminates them as exemplars of real startups that deserve success. He’s right about both of them of course, but he conveniently neglects to mention that both companies received a leg-up from the very ecosystem that he dislikes so much. Furthermore, some of the the commentators backing his position are folks who also benefited from being part of the startup community. That’s hard to reconcile.

Opposition to state funding of startup programmes springs from a deeply held philosophical belief in some quarters that only well funded companies with friends in the right places should be allowed to succeed. Now it’s very unlikely that the incoming Labour government will roll back recently announced funding for accelerator programmes, but they will no doubt be reviewing how to deal with promoting innovation and entrepreneurship in New Zealand in the future. That’s an opportunity, so understandably Mike wants to influence that debate. But I disagree with his position and here’s why.

Whilst many of us agree that the startup venture model is less than perfect, that’s not a good reason to pull public funding from the sector. As a nation we must diversify way from commodities and move up the value chain. Let’s take the wins when they come and accept there will also be some failures along the way. Government support comes in many forms across the spectrum from enabling academic research commercialisation through to co-funding accelerators. Arguably we are not doing enough compared to others globally. I don’t see any criticism of Israel or Australia, nations that actively and successfully apply substantial government support to their innovation ecosystems.

Having taken a company through the Lightning Lab accelerator this year (and bootstrapped a previous tech company from nothing), I guess that makes me one of the “bottom feeding” losers mentioned in the article. I find that analogy quite offensive, especially since (for the record) we received no funding handouts whatsoever within this year’s Lab. Let’s work together to achieve good outcomes for New Zealand and ensure there are a mix of great programmes with excellent community partnerships in place and that solid companies with real customers get oxygen to move forward.

Postscript:

Mike O’Donnell reached out to me recently and we had a chat about the context of the term “bottom feeder” that he used in his article. Mike sees bottom feeding species (such as Snapper) as the healthy foundation of the ocean ecology and I accept that his analogy was not intended to be derogatory. As I originally mentioned, we all have huge respect for what has been achieved by companies that have a connection to the TradeMe story. There’s a role for all kinds of fishes in the ocean. We should try to work together to ensure sustainability and longevity of the fishery.

Paul Spence is a commentator and serial entrepreneur, a co-founder of Wellington, New Zealand based technology ventures iwantmyname and Polanyio and a founding mentor with Startup Weekends and Lightning Lab. You can follow Paul on Twitter @GeniusNet or sign up for a free weekly digest of startup, tech and innovation related events curated by him through New Zealand Startup Digest.

Innovators Online Again

It seems like half a lifetime ago that myself and Annick Janson established New Zealand’s first online community for innovators and entrepreneurs (ION). It was a clunky PHP forum site that we managed for hundreds of users thanks to the support of University of Auckland School of Business and Revera. After ten years and a couple of post-graduate research projects between us, we reluctantly moved on to other endeavours. But the need for a community platform did not go away.

So I was thrilled to discover recently that the NZ Innovation Council now has a community site on offer. The new site provides lots of fresh content about New Zealand innovators plus a discussion forum and event listings. In the tech world timing is everything and I guess ION was a little bit ahead of its time. I remember sitting through numerous dull meetings with risk averse public servants who just couldn’t see the opportunity and chose not to support us (including one in particular who subsequently thought spending half a million on a boxing match was a great use of public funds – go figure). Judging by the list of sponsors now backing this new initiative, the change of guard at both NZTE and Callaghan has been a positive thing. </rant>

One of our first sign-ups on ION was a bloke working hard on building a little accounting software startup that you might have heard of. There was lots of great conversations on the forum and we helped a bunch of people. What we learned from our initial efforts in this arena was that valuable knowledge truly arises when you facilitate social engagement. In New Zealand we tend to work in silos, but only through collaboration can we create meaningful impact in the world. Online communities are part of the mix, because we need to push beyond the mindless dross of the big social platforms that do not have our interests at heart.

I commend the NZ Innovation Council for this initiative and encourage everyone to sign up and get involved by sharing ideas and content.

Paul Spence is a commentator and serial entrepreneur, a co-founder of Wellington, New Zealand based technology ventures iwantmyname and Polanyio and a mentor with Startup Weekends and Lightning Lab. You can follow Paul on Twitter @GeniusNet or sign up for a free weekly digest of startup, tech and innovation related events curated by him through New Zealand Startup Digest.

Big Ideas Poor Execution

In early 2014 the Wellington City Council announced a series of “big ideas” to boost economic growth in the city. Predictably, in the two years since, there has been little progress.

For starters, it was always clear that the airport runway extension was not a good idea because of technical reasons that I have outlined on numerous occasions. What was less clear, was the business case to justify a ratepayer funding subsidy based on these illusory benefits. It subsequently emerged that the real reason for the extension was to make it safe for existing aircraft. Something that the airport should have taken care of years ago.

The Miramar film precinct and creative enterprise zone idea sounded promising at first, but once again there seems to have been little progress. Additionally, Shelly Bay (see photo above) on the Miramar Peninsular is ripe for development but has been an embarrassing eyesore for many years because the ownership can’t seem to work collaboratively and constructively. A number of attempts have been made to move forward on developing the area but once again nothing has happened yet. The film museum now looks set to rise on a site opposite Te Papa, co-funded by the city. At least we have that to look forward to.

Finally, and most disappointingly, there was the concept of a tech district based around the Cuba Street precinct, where many of our most exciting startups and technology sector companies reside. Our office is located in this area and I’m not aware of any initiatives yet. In fact council staff have been putting up more yellow stickers and telling building owners to get concrete masonry sorted or suffer the consequences. So the future of the area is sketchy, especially in light of recent seismic activity.

What did happen in the previous two years was that the council invested a huge sum of ratepayer funds into a vanity project aimed at helping a private company set up a large co-working space on the edge of the CBD. It’s a good venue, but initially bold community-building objectives seem to have fallen a little by the wayside this year. I’ve also heard one or two newly elected councillors privately express their reservations over this and the lack of innovation support generally. Now that the Grow Wellington model has been homogenised and had the life crushed out of it, the incoming council are trying to figure out how to fill the vacuum.

Overall I’m worried about Wellington’s crumbling economic competitiveness, a scenario which is likely to be compounded by the hidden effects of a slow-moving earthquake impact, including incapacitation of the container shipping terminal. There are many old and damaged buildings in the city now and (unlike Christchurch) there does not seem to be a unified vision about renewal of the inner city. The old town is looking dated and shabby, whilst our neighbours in Australia and Asia surge ahead. This situation has crept up on us, but it’s time to cut through the political window dressing and admit we have a problem.

Paul Spence is a commentator and serial entrepreneur, a co-founder of Wellington, New Zealand based technology ventures iwantmyname and Polanyio and a mentor with Startup Weekends and Lightning Lab. You can follow Paul on Twitter @GeniusNet or sign up for a free weekly digest of startup, tech and innovation related events curated by him through New Zealand Startup Digest.

Parochialism Will Ultimately Fail So Think Globally

Australian Prime Minister Turnbull’s recent flying visit to New Zealand, to meet our new PM Bill English, was a considerably more civil affair than Turnbull’s reportedly heated conversation with the “so called” U.S. President the previous week. Perhaps that is why the visit went under-reported in the media. Neither Prime Minister could be regarded as a stellar charismatic, but perhaps that’s not such a bad thing. In these unenlightened times, a safe pair of hands with good diplomatic skills and a head for business is a far greater asset. Strengthening regional economic linkages will be key to survival in an uncertain world.

During that top level meeting in Queenstown a cooperation agreement on science and research was signed that paves the way for more trans-Tasman collaboration. To the popular media, topics such as this are about as dull as a damp dish cloth and the agreement went largely unnoticed. That’s a shame because everyone needs to understand how important regional cooperation is becoming to the economy. How we play within Asia-Pacific will have implications for our future opportunities and prosperity. The disturbing shift (in some quarters) towards isolationism and protectionism demands that we build stronger regional relationships.

There needs to be a local mindshift as well. I’m tired of well-meaning local government agencies constantly banging on about how they are making over their cities into the next big centre for technology innovation. It’s a ridiculous notion. The entire population of New Zealand could fit into most major cities on the Asia-Pacific rim, with whom we are in a battle for capital and talent. We contribute 0.1% of the global economy and we are under-cooked by most measures in terms of science and technology research and innovation commercialisation. Short-sighted parochialism makes no sense and must end now. Our businesses and civic leadership need to get with the programme and start connecting regionally.

I had a conversation along these lines recently with Shawn O’Keefe, formerly a co-founder of South by Southwest (SXSW), a huge global film, music and interactive media event. Shawn is currently based in New Zealand and is now an advisor to the Myriad event launching in Brisbane this year. Myriad is supported by the Queensland government, which is pouring a huge investment into promoting innovation in the Sunshine State. Myriad is a three day festival of art, technology, innovation and investment match-making. A key theme of the event is that we need to collaborate regionally to compete globally.

It would be great to see a strong contingent of New Zealand tech founder entrepreneurs at this event.

Image credit: Paul Spence

Paul Spence is a commentator and serial entrepreneur, a co-founder of Wellington, New Zealand based technology ventures iwantmyname and Polanyio and a mentor with Startup Weekends and Lightning Lab. You can follow Paul on Twitter @GeniusNet or sign up for a free weekly digest of startup, tech and innovation related events curated by him through New Zealand Startup Digest.

Ashes To Ashes 2016. Now Welcome To 2017

Let’s face it, last year was a pretty shit year for fans of popular music and culture. I don’t care what the statisticians say, the catalogue of highly talented stars that made premature exits in 2016 was exceptional and shocking. However the media were (mostly) too polite to mention that the collective drug consumption of the dearly departed probably supported a number of small South American nations’ economies throughout the 1970’s and 80s. All tragic losses, but perhaps not entirely unexpected.

Less predictable was the outcome of the U.S. election, a result so unpalatable that we can only hope that the American political establishment will find a way to put matters right, before there is a very nasty accident involving long range armaments or fiscal collapse. One way or another, I very much doubt Trump will see out his four year term. The Brexit debacle was equally disturbing and was also another example of a poorly informed, inward looking minority being allowed far too much influence. But of course it would not be democracy if we excluded people with double-digit IQ and questionable heredity from voting.

At a time when irrational fear, regional isolationism and misguided notions of nationalism seem to be taking root globally once again – it is important that thinkers give voice to their concerns loudly and often. Important because intellectualism usually becomes an early victim of the mob, when rational thought gives way to populism and slogans. History repeatedly shows us that this never ends well.

So I was at first encouraged when I read this opinion piece on how we all need to work together to create a sustainable economic future for New Zealand. Whilst I certainly agree with the sentiments, I disagree that this approach is predicated on Auckland as the “centre of innovation” for New Zealand. In fact the problems of Auckland are analogous to arterial thrombosis. If the heart fails, the entire body will die – and that’s a big issue for all of us in New Zealand. Regional relationships and complex networks are the better approach, as I have discussed previously, with regional linkages and multiple innovation hubs.

For my part this year, I intend to continue to connect entrepreneurs and innovators from across New Zealand and abroad and to contribute economically by working on growing the businesses we have under the GeniusNet portfolio and (hopefully) add one or two more during the year. I will also continue to speak out on issues, especially those that relate to economic development. It is about time the citizenry had greater influence over decisions than those self-serving politicians whose main aim is building grandiose edifices to themselves. Here’s something good from 2016 that gives the world hope in this regard. Thanks Audrey.

Paul Spence is a commentator and serial entrepreneur, a co-founder of Wellington, New Zealand based technology ventures iwantmyname and Polanyio and a mentor with Startup Weekends and Lightning Lab. You can follow Paul on Twitter @GeniusNet or sign up for a free weekly digest of startup, tech and innovation related events curated by him through New Zealand Startup Digest.

When Good Ideas Have Sex: The Case For Innovation Networking

w2wLast year I attended the final pitching session at Get Funded 36, a compressed accelerator course for budding entrepreneurs from within the academic community. Callaghan have produced a blog article explaining how it all worked, nicely showcasing PhD student Brendan Darby and his spectroscopy solution for testing turbid fluids. During the one and a half day event, the participants were walked through the fundamentals of lean startup methodology and coached on how to develop a short pitch to promote their proposal with investors and funding agencies.

I have been involved in promoting this kind of innovation networking through startup community events for some years now, including developing Unlimited Potential Wellington to the World (see photo above) a tech and research innovation showcase and helping to run a special Startup Weekend for researchers last year. The results were mixed, but Get Funded 36 went on to tailor the model a little more and I hope there will be other similar events in future. There’s certainly a strong case for developing more short course formats for giving researchers and academics a taste for entrepreneurship and for exposing the business community to new ideas.

Technology research forms the basis of most high value ventures, but New Zealand has traditionally been a poor performer in commercialising academic research. Part of the problem has been an obsession with “publishing” research, instead of turning it into a business. Our university commercialisation offices have had some successes at licensing intellectual property, but less success at seeding high growth ventures in which most of the economic value has been retained locally. Those mindsets need to change if we are to earn our keep as a nation in future.

There are other initiatives in the New Zealand research and academic community such as Velocity (formerly Spark) and KiwiNet that have gained some traction over recent years and which welcome engagement with the broader innovation and business community. We need more of this! I firmly believe researchers need to get downtown and mingle with entrepreneurs and investors more often. As a friend of mine is often fond of saying, “when good ideas have sex, great things can be achieved”.

Paul Spence is a commentator, technology entrepreneur, a co-founder of iwantmyname (a New Zealand based global Internet venture) and an organiser and mentor with Startup Weekends in New Zealand. You can follow him on Twitter @GeniusNet or sign up for a free weekly digest of startup, tech and innovation related events curated by Paul through New Zealand Startup Digest.

No Public Funding For Runway White Elephant Please

777lotrThe debate over whether or not public money should be invested in the extension of Wellington International Airport’s (WIAL) runway is starting to heat up. Despite project studies only being released to the public this week, city councils across the region have already indicated they will provide financial support towards the $330 million cost. At present central government has said it will not support and some local body councillors are already starting to feel uneasy about the overall proposal.

The Wellington City Council (minority shareholder in the airport), Wellington Chamber of Commerce and WIAL have been enthusiastically promoting the supposed “economic benefits” of the project. But the real reason the extension is needed is because the current length is sub-standard even for short-haul jet operations. WIAL is essentially asking taxpayers and ratepayers to co-fund capital works. Given that WIAL parent company Infratil earned a staggering $453 million last year and reportedly has a $1 billion war chest, why are public funds needed at all? Surely WIAL can make it’s own business case and access funding itself?

Adding 300 metres to the runway will not make it safe for wide-body aircraft.  “Long haul” flights are not coming to Wellington any time soon and here’s why. Firstly, medium haul, mid sized airliners are actually being phased out across the Asia-Pacific region as we speak. My understanding is that the last Qantas 767 has already gone and Air NZ has a small number remaining with limited lifespans. Asian airlines no longer operate these types. Air Asia and Jetstar withdrew A330s from Christchurch and Auckland, because they could not make a profit. In any event, an A330 would not be able to operate fully laden, even from an extended runway. Truly “long haul” aircraft such as A380, A340 and B777 are unlikely to be operated because of weight and size limitations.

The 787 Dreamliner is often touted as the saviour of long thin air routes. Again, it will not be possible to economically operate this aircraft out of WLG, even with a longer runway. Extending the runway will not remove the nearby hills. Aircraft take-off restrictions are governed by the climb performance under instrument flight conditions with a failed engine at the takeoff point. Long haul operations (10-16 hours) require huge fuel loads and substantial take-off weights. Take-off performance is a function of aircraft weight, engine power and ambient conditions, NOT runway length. Aircraft will be payload limited even with the runway extension in place. This is a really important point that most commentators and the media have missed.

There are many other reasons why investing in a runway extension is a bad idea. Not the least of these is that the airlines refuse to commit. You can be sure that Air New Zealand is not going to undermine it’s cosy hub and spoke operation that is based in Auckland and it’s not clear that any Asia or U.S. based airlines are at all interested. Some passengers complain that travel via Auckland or Sydney is onerous. But can you name any city under 500,000 population in North America that has direct air links with London or Hong Kong? Hub and spoke operations are the norm elsewhere in the world. There are many other investments that Wellington can make as a city and a region in order to promote economic development.

Unsurprisingly, there is zero information on the WCC or WIAL websites about the public consultation process. But the media are reporting the following information. There will be three public open days where people can meet one-on-one with the experts who prepared the reports. The open days will be held at Chaffers Dock Function Centre on December 2 from 12pm to 3pm, at SPCA Fever Hospital in Mt Victoria on December 3 from 5pm to 8pm, and at the Brentwood Hotel Conference Centre in Kilbirnie on December 5 from 12pm to 3pm.

Postscript: There is now a dedicated website providing links to information from the consultants who were paid by the project supporters to provide reports. The site also contains information about public presentations and how to make a submission.

Paul Spence is an ardent supporter of regional economic development, a commercial pilot licence holder and a technology sector company director based in Wellington.

A Special Event For Entrepreneur Researchers

swrschCompared to many OECD nations, New Zealand underperforms at building great global companies based on smart commercialisation of knowledge. That’s a shame, because we have no shortage of intellectual talent and we also enjoy a fantastic natural resource base.
So we are putting on a very special Startup Weekend event here in Wellington focusing on science and research. It’s all part of our efforts to strengthen the entrepreneurial ecosystem in New Zealand and get more people in science and technology thinking about entrepreneurship as a career. Encouraging a culture of entrepreneurialism and building bridges between the research and business communities are important themes in driving value-added economic growth that we need to underpin our future.
It is a fantastic opportunity for young researchers who are interested in research commercialisation to spend a weekend with some very cool mentors as well as investors and people from across the business community. The McDiarmid Institute and Kiwinet are actively supporting this event. It’s mostly about teaching a lean methodology for developing and testing business ideas, as well as networking with potential future collaborators.

Participants can bring a project of their own that they wish to explore or join another team simply for the learning opportunity. We are looking for researchers from any field plus engineers/developers, designers and business gurus to get involved as well. Who knows where it might lead?

This will be a smaller event than usual and spaces are limited. Sign up for Startup Weekend Science & Research today!

Paul Spence is a commentator, technology entrepreneur, a co-founder of iwantmyname (a New Zealand based global Internet venture) and an organiser and mentor with Startup Weekends in New Zealand. You can follow him on Twitter @GeniusNet

Wellington Local Body Amalgamation: My Submission

For the record, here is a copy of my submission to the Local Government Commission

“Firstly let me express my utter disappointment at the way this entire process has been managed. The release of the draft proposal from LGC was badly timed and there has been insufficient opportunity for robust public debate as a result. It’s clear that this suited the agendas of certain politicians who are hell bent on forcing a change that, it has become clear, the majority of people do not want. This is not good enough and we expect more of our elected officials and taxpayer funded civil service.

On that basis my submission is simply this:

1. That the entire process addressing changes to local body governance in the Wellington region be halted and subject to an independent review.

2. The existing proposal from LGC be scrapped and a new proposal be developed involving a far more democratic approach and with much deeper public engagement.

3. The existing Wellington Regional Council members be removed immediately and replaced with a temporary commissioner.

4. We already have a pan-regional council. We do not need to reinvent the wheel. What we need are functional board members who can work collaboratively with existing councils around the region.

This process is on the wrong path right now. I would urge the LGC to take heed of public opinion. Thank-you for your consideration of this matter. ”

Postscript:  We won! 90% of public submissions were against the merger and LGC has canned the existing proposal. More background here.

Dysfunctional Regional Council Must Go

In case you hadn’t noticed, the public consultation around the proposal to amalgamate local bodies in the Greater Wellington region closes on March 2nd. You could be excused for not knowing, because (much to their shame) the parties concerned have done little to encourage public debate on the topic. The proposal is highly contentious, has huge implications and yet has been so poorly publicised. But the one thing everyone seems to agree upon however is that the highly dysfunctional Wellington Regional Council must be dissolved, whatever happens.

An information guide dated December 2014 finally turned up in my letterbox in mid-February. The pamphlet explains the “draft” proposal put forward by the Local Government Commission for local government amalgamation in the Wellington region and invites public submissions. Drilling down into the commission website, it became apparent that there was not an online form for submission anywhere, but simply an email or postal address. I guess they weren’t expecting many responses. There was no obvious mention of the proposal or submission process on the Wellington City Council website at all. The Wellington Regional Council website does have one page devoted to the topic, including some useful background material, but zero information on how to actually make a submission. In an age of nearly universal access to internet, this is unacceptable and makes me suspicious about transparency around the entire process.

Notwithstanding the obfuscation, there has been a flurry of media activity in recent weeks as it emerged that almost half the Wellington Regional Council elected councillors are having second thoughts as public disquiet has been growing. Even the pro-amalgamation “Chamber of Horrors” have toned down their rhetoric lately, as it became clear that the real bill for amalgamation could be well north of $200 million, if harmonisation of I.T. services were included. In a recent joint statement the business Chambers agree there is a “need for change”, but do not go as far as endorsing the current proposal.

The original suggestion for amalgamation came from Wellington Regional Council itself and is being driven largely by an individual with one eye firmly fixed on the future super-mayor job. This person has a sterling previous track record of successfully promoting unpalatable political agendas and knows the right levers to push to get the job done. But releasing the amalgamation proposal at Christmas, then fronting up to a couple of small debates a week before the doors close simply doesn’t cut the mustard in terms of public engagement.

Ironically, it is the lack of goodwill between the existing regional council and the other councils in the region that has led to this problem in the first place. There are important regional projects such as economic development, roading and water that must be addressed in a co-ordinated way, but the regional council has failed to galvanise and unify the other players in the region. Making a clumsy grab for power must have seemed like the only option. What is really needed is a functional regional council that has the confidence of all the city and district councils and that can play nicely and work collegially on the really important issues that face our region. What we do not need is another Auckland-style unitary authoritary. Why reinvent the wheel at a huge cost to ratepayers?

So it is very clear that the existing Wellington Regional Council members must now step down and that the Local Government Commission must go back to the drawing board and respond with a structure that empowers the regional council, whilst retaining local legitimacy and addressing community needs. With luck, we should see a public referendum on the issue in the future. A prominent WRC councillor once expressed her disdain for democratic processes in the past, when she said “let us hold our noses and vote”. Perhaps ratepayers (and voters) of the Wellington region should follow suit.

Paul Spence is a commentator, technology entrepreneur and is a co-founder of iwantmyname, a New Zealand based global Internet venture. You can follow him on Twitter @GeniusNet