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.

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

Making Your Startup Weekend Project Shine

sw65Wet weather and some rumbles from the earth were not enough to put a damper on Wellington Startup Weekend special social enterprise edition in 2013. Teams rapidly coalesced around various ideas for social ventures and the hard work of crafting a business proposition in the short space of 54 hours got underway.

As entrepreneurs, what is our most pressing task? The most important role of an entrepreneur is TO LEARN. Starting up a new business is a crazy experiment. You have a hypothesis, you test it out and then you adjust according to what has been learned (or you stop altogether). That is the essence of a scientific approach to customer development and customers/revenue are ultimately the life blood of any enterprise. There is no magic formula apart from hard work.

Startup Weekend offers a microcosm of the venture development process. It’s primarily an opportunity to learn from and network with a wide range of people who you can potentially work with in the future. Most participants don’t walk away with a big prize or a viable long term business. If that is your primary goal, you are probably in it for the wrong reasons.
But here’s a few tips for polishing up your fantastic Startup Weekend idea.

Judging revolves around three main themes. Business model, validation and execution. Do not expect to have perfected any of these by Sunday evening.

Model. Sustainability is the key. Demonstrate that you can potentially offer a product or service that is both financially profitable or sustainably delivers on social objectives. Why would you invest many hours of your valuable time into a venture that cannot feed itself?

Validation. Judges love to see that you got out of the building and tested your ideas on others. Your Mum’s opinion doesn’t count. Talk to strangers in the street, competitors, suppliers, potential partners and anyone who can give you a subjective viewpoint. Get some online surveying going. Where is the demand? Does your idea suck or sing?

Execution. You don’t have to close any sales deals or have a fully functioning web app by Sunday evening (although many teams have certainly achieved extra credit for this at previous events). But if you have a cohesive team, a good story and some kind of “minimum viable product” or prototype concept to demonstrate, that will impress the judges a lot.

Social Media. Finally an extra tip. Startup Weekend is all about knowledge sharing, networking and community. Extra brownie points for those teams that have been actively generating buzz through social media throughout the weekend. If you don’t have those skills yourself, get someone on the team who does and learn from them – fast. Building an online profile is essential for scaling any kind of business – social enterprises are no exception.

Best of luck!

Paul Spence is a commentator, technology entrepreneur and a co-founder of iwantmyname, a New Zealand based global Internet venture. He’s also a veteran of eight ten Startup Weekends as an organiser, mentor, sponsor or player and was a judge at Wellington Startup Weekend: Social Enterprise in 2013. You can follow him on Twitter @GeniusNet

Will The Real Wellington Please Stand Up

wcc2Our Prime Minister laid bare his regional biases when he implied recently that our Capital city is a hopeless economic case. But Mr Key would do well to remember that the regional economies are subsidising the infrastructure build up elsewhere.

Wellington may have lost a few corporate head offices, but its economy is a lot more diverse and robust than that. Let’s look at what’s really going on in Wellington in the context of high value, export oriented, knowledge based business activity. According to economic think tank Infometrics, in 2011/12 the overall number of businesses in Wellington actually grew slightly, whereas in Auckland the number dropped considerably. More importantly, Wellington has the highest GDP per capita of any New Zealand region. This is hardly surprising when we look at the emerging economic players.

Activity in the screen and digital sector grew twice as fast as the New Zealand economy generally, with film, animation, gaming and software delivering a billion dollars to the region annually. Wellington has the highest intensity of knowledge based businesses per capita, a busy port, two universities bursting with fee-paying foreign students and an enviable and growing tourism profile globally. Wellington also boasted the highest number of New Zealand companies in the Deloitte Asia Fast 500, an international benchmarking initiative that identifies high growth ventures across Asia-Pacific.

The only business types that decreased in Wellington were insurance and financial services. That is hardly surprising when you consider that insurance companies have little interest in the Wellington market post Canterbury earthquake and finance companies have been dropping like flies everywhere anyway. No great loss. It’s also no secret that government services have been operating with sinking lid staffing policies for some time amidst austerity measures. But despite fear mongering by public service unions, the actual number of staff affected has been minimal. Government sector makes up only about 10% of the regional economy (about the same as tourism income).

Many of us have invested a huge amount of effort into building creative communities in our region that have underpinned the growth of high value, knowledge based businesses. In the context of a sluggish global economy, Wellington has held its ground relatively well, so it is certainly unfair to make comparisons with the other main centres, which have entirely different contexts at present. The government should also be reminded that the growing tax take in the regions is supporting spend-ups in other parts of the country.

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