Category Archives: Entrepreneurship

ION e-Letter August/September 2009

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GeniusNet is proud to host the ION e-Letter. ION is New Zealand’s original virtual community for innovators, entrepreneurs, mentors and investors. ION is kindly supported by EGL and Revera.

 EGLRevera

W2W W0W

The magic that is Wellington to the World returns on the 17th of November. Unlimited Potential are once again managing this annual technology showcase aimed at further cultivating the entrepreneurial ecosystem. Included in this year’s stellar speaker line-up are Read Write Web founder Richard MacManus, McDiarmid Young Scientist of the Year John Watt and Ben Young author, entrepreneur and social media guru. The event revolves around pitches from local tech entrepreneurs and presentations from the cutting edge of ICT research.

The central theme for W2W is “going global from New Zealand” so video content from the event is circulated to KEA‘s global network. Entrepreneurs from last year actually received phone calls from investors in the United States after seeing the online video content. Business intelligence software developer Futrix secured direct assistance from W2W co-sponsor UKTI to establish a market presence in Europe, after they presented at last year’s event.

Registrations are essential for this key event that aims to build bridges between technology innovators, entrepreneurs and investors.

http://www.up.org.nz/w2w09/

EDTalks Symposium

If you are planning to head to the capital for W2W, why not stay on for EdTalks the following day? The symposium will attract educators and officialdom from around New Zealand to hear about technology, learning, creativity and innovation. The programme looks great if you are in this field.

http://www.core-ed.net/edtalks-symposium

Icehouse Fast Pitch 2009

Fast Pitch is a real-life Dragon’s Den style business pitch competition for Kiwi entrepreneurs. Last year’s winner of the Best Funding Opportunity for Investors category was Sam Ng from Wellington. His company, Optimal Workshop, develops specialised feedback to enable software developers a way of getting and following-up feedback from end users. The programme offers pitching workshops and personal coaching and is great value at only $85.

Multicore Computing MiniConf

Interested in multicore and parallel computing? Come along to the MiniConf at the Linux conference in January. Multicore and parallel computing is an emerging area that promises to spawn some of the high growth businesses of the future. If you are a technology entrepreneur or investor, computing science researcher or software developer, the miniconf may well be of interest.

iwantmynameION Spotlight – Beetil

Beetil is a web-based service management solution by Wellington developers YouDo. Based around the ITIL framework, Beetil provides a seamless and easy to use framework for I.T. support and compliance. YouDo co-founder Dan Lee says that Beetil simplifies service management for small and medium enterprises who aren’t looking for a highly complex system. Beetil not only handles fault management, but also compliance around software changes. Users can also control customer access permissions through a unique portal set-up.

http://www.beetil.com/

Got an enterprising Kiwi tech story to share? I want your name! ION Spotlight is kindly supported by iWantMyName New Zealand’s most innovative global domain registrar.

ION Homepage Makeover

In case you have been wondering what has happened to our homepage – fear not. During October we plan to spend some time tidying up the site and returning it to its former glory. In the meantime you can still reach the ION forum here.

Got an event or story related to innovation or entrepreneurship in New Zealand? We’d love to place it in our bi-monthly newsletter. Reply to this blog or catch up on Twitter @GeniusNet.

Four Rules for Capturing Hearts and Minds

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I have sometimes been asked how a new web venture can grow itself from zero street credibility to a point where it can gain a place in consumer consciousness and secure a meaningful share of the marketplace. Here’s four approaches that we have taken at ideegeo as we grow iWantMyName into a global brand and attempt to differentiate our first product offering in an already mature and highly competitive market:

1. Cultivate a community of trust. Demonstrating industry knowledge,  showing moral and ethical leadership and delivering on product promises are fundamental keys to success.

2. Offer an exceptional user/customer/reader experience. Consumers have a lot of choice already. Why would you aim for mediocrity when you can have excellence?

3. Network. Connect in both the real world and online. Think – what can I learn from this person and how can I help them in return? What can our company do to help build communities?

4. Enjoy the journey. If you are looking toward the sky, you are more likely to find a rainbow. So find a project that you will enjoy doing.

If you follow these four rules and build a good team around such philosophies, you will have substantially improved your chances of success in going global. These are not the only rules of course, but it is a good starting point. Are there any other rules you would like to add?

 

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Cultivating an Entrepreneurial Ecosystem

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seedlingI can’t tell you how many meetings I’ve attended recently where I was involved in explaining the importance of having an entrepreneurial ecosystem within which to grow high value technology ventures. Unfortunately it can be hard work explaining why social capital is important when people are focused solely on linear metrics.

Recently I was inspired by a great success story that powerfully underlined my long held belief that building healthy communities and networks is an essential aspect of cultivating an entrepreneurial ecosystem. This is especially so in New Zealand where we are disadvantaged by our distance from the major consumer and capital markets of the world. But that disadvantage can be overcome by leveraging the creative boundaries where local networks overlap with those offshore.

Networks have  multiplier effects, as witnessed by the density of economic activity found in Silicon Valley. By building and maintaining social capital in our local technology sector we are establishing the pre-conditions for new economic life and the basis for small seedlings to grow into very large Kauri trees. But it takes time, 5 to 7 years for a good idea to develop into a viable business and then emerge as a high growth venture. Unfortunately this timeframe can be a problem for sponsoring organisations which rely on political support for their existence.

Investors in technology start-ups typically take a 5 to 10 year view of how much time will be required to launch, grow and then exit a high value business. But securing investment in the entrepreneurial ecosystem that underpins such ventures can be highly problematic because social capital is intangible and cannot be transacted. However, building the ecosystem is about making the pie bigger for everyone. Please consider supporting initiatives such as Unlimited Potential and Global Entrepreneurship Week if we come knocking at your door.

Innovate at the Point of Pain

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I get a lot of ideas across my desk and I’ve learnt the hard way that you need to question everything before offering to back someone else’s idea with your own reputation. One of the first questions I ask aspiring technology entrepreneurs is – what is the problem you are trying to solve?

This may seem like an obvious question but you would be surprised how many projects are launched on the basis of a good idea rather than upon a soundly researched market. It pays to question the market data as well because, after spending hundreds of hours on development, an enthusiastic technologist will do just about anything to justify their emotional investment in a product.

Many great ventures began as a personal point of pain for the founder. But the ones that survived were those that actually identified a mass market and then went on to execute well. A good idea on its own is not enough and the fact that there is “no competition” is not a selling point either. You need competitors for benchmarking and to validate that a market really exists.

For example at ideegeo we made a conscious decision to build a domain registrar site that rejected traditional norms of presentation because we observed that a lot of people really disliked having to grapple with poor navigation and invasive advertising found on other sites. Although the product caters for a design-centric niche user base, it turned out to be a winner because other companies approached us to help them improve their own offering.

Before you write a line of code or partition off your first protein molecule, ask yourself – where is the point of pain? What is the problem that you are trying to solve and are there a million other consumers out there who are suffering the same pain? If you can answer that question objectively and in the affirmative, you might just have a successful product on your hands.

There is Snow Recession in New Zealand

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remarkablesRecently I indulged my eight year son with a short holiday down south, including a day on the slopes at the very scenic Remarkables range. He’s already a very competent skier and full of confidence after only one season. In contrast, I spent most of the day sitting on my backside wondering why snow-boards do not have brakes installed – design flaw no doubt. But my son’s lack of fear provided me with some insight into what a difference attitude makes.

The recession may have dulled most travelers’ enthusiasm for spending in the short term; but the southern lakes region actually managed a small increase in visitor overnights in the past year. The “world’s adventure capital” must be one of the few places in which commercial and residential real estate development continues unabated and there remains a steady stream of incoming buses, boats and aircraft overflowing with families and young backpackers. Sure there has been the odd mortgagee sale and some of the trendy apparel retailers were a obviously bit quiet. But the town retains an optimistic feel about it, even in the midst of winter.

My point is that attitude can take you  long way. If other tiny Pacific Island nations can refuse to “participate” in the recession – why can’t we also? If positive-minded, friendly and engaging tourism industry employees and entrepreneurs can keep local economies ticking over – why can’t we apply this mindset to the whole country? And I don’t just mean tourism. Singapore has Biopolis, the U.S. has Silicon Valley and India has Bangalore. Regional resource advantage can be channelled by deliberate agglomeration, especially when there is sufficient access to capital and intellectual talent.

You can write good software code and draw up financial contracts just as easily from a villa overlooking beautiful Lake Wakatipu as you can from an office block in Palo Alto. So instead of polluting our landscape producing commodities that continually drop in price, we should be inviting entrepreneurs from offshore to base themselves here to create new enterprises and wealth whilst enjoying the scenery. The only crisis in well endowed New Zealand is one of lack of confidence.

Can Private Equity Rebalance?

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Private equity firms in the U.S. alone are reportedly sitting on over $US 1 trillion in funds whilst at the same time economies are being hollowed out as cash strapped businesses go to the wall. But a surge in buyouts in the first quarter of 2009 suggests that equity investors are emerging to pick over the fallen carcasses of once great firms. In Asia, private equity firms successfully raised over $US 50 billion in 2008. Now with the faltering of several leading equity firms in Australia, there has been a resurgence of interest by Asian firms in that market especially.

It remains to be seen how the rebalance of power across Asia-Pacific will impact on New Zealand. But one thing remains certain, private equity deal-making is alive and well across the region and New Zealand will not go untouched. One example of this is the sale of accounting software provider MYOB. Although critics claimed at the time the price was too low, there was an ironic twist when founder Craig Winkler reinvested some of his winnings in a direct competitor. Small shareholders in such target firms would be well advised to remain alert to any further machinations that may impact on the value of their holdings.

What is clear at present is that there is generally a dearth of quality assets on the market. Profitable medium sized firms are hard to come by, but this situation will change. In particular family owned firms that survive the recession may attract more attention as their baby boomer owners head into retirement and look to offload. At the other end of the scale relatively new companies, that have a unique value proposition, may begin to look more interesting. But current indications are that such businesses are few and far between and even some local venture capital firms are struggling to place cash.

So what does this mean for New Zealand technology companies? Asia-Pacific looks like becoming the “buyout destination of choice”, according to the Asia Venture Capital Journal. Deal flow was up in the first quarter of 2009 and (surprisingly) the more developed economies benefitted most, as opposed to the emerging economies of China and India. The implications of that fact are that eventually a bunch of cashed up former business owners from around the region, like Craig Winkler, are going to be looking for new projects.

Ten Ways to Bootstrap Your Tech Idea

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Despite the economic climate, it seems like there’s never been a better time to be a technology entrepreneur in and be supported with mentorship, investment and advice. Below are 10 initiatives targetted at helping aspiring technopreneurs get up and running in New Zealand. Note that some of these close off shortly, so don’t delay.

1. Grow Wellington – Activate Business Pitch

GW are offering a $4,000 Activate Scholarship to the best business pitch, as judged by their expert panel. The Activate programme is for entrepreneurs from all kinds of business sectors and is an intense 16 week programme aimed to inform and inspire. Applicants must be based in the Greater Wellington region. Closes 10th May.

 2. IRL – What’s Your Problem?

Industrial Research and A J Park have up to $1 million in technology research and development services on offer with the aim of producing more high value goods for export by adding value through R&D. The programme is ideal for established firms wishing to extend their product development pipeline. IRL have particular research strengths in energy, materials and life sciences. Competition closes 24th May.

3. Icehouse – Kickstart

The Kickstart seminars are packed with tips from experts and other entrepreneurs and are brought to you by the highly successful Icehouse incubator. The seminars cover sales, I.P., financials, funding and much more.

4. University of Auckland – Spark

Closely allied to the Icehouse programme is Spark the University of Auckland Ideas Challenge. There is a seminar on 5th May and the deadline for the  ideas challenge is 13th May. Ideas are submitted in writing and everyone gets feedback. There is also the spark $100K Challenge which is a separate intiative offering seed capital and business incubation at the Icehouse.

5. Adept – Designs for Life Award

Adept has been at the forefront of plastic processing technology and new product development in New Zealand for 40 years and now they are offering $50,000 worth of their product development expertise to an inventor or entrepreneur with a manufactured product that improves quality of life for people in some way.

6. UpStart – Dunedin

The Dunedin based UpStart incubator holds regular free seminars for budding entrepreneurs. There is also The Distiller group made up of young entrepreneurs and who offer support to others who are starting up.

7. Unlimited Investment Challenge

Unlimited is perhaps NZ’s leading publication aimed at entrepreneurs and they back that up with an annual investment challenge project. The 2009 programme gets underway in May. Watch this space!

8. Focus on Health – Innovation Challenge

Raising the profile of New Zealand health technology in the United States market is the aim of this New Zealand Trade & Enterprise sponsored initiative. Mentoring, introductions to key influencers and a substantial pool of cash prizes are on offer. Launch workshops begin in June.

9.  XMedialab

Perhaps the most effective and affordable globally focussed event for businesses involved in the digital media innovation space. XML comprises a conference day plus a weekend workshop for selected project teams. There are also social events at which the organisers can facilitate introductions to potential partners, investors and international mentors. XML will be held in Auckland this year 22-24 May.

10. W2W

Unlimited Potential will be hosting a half day showcase event in Wellington during October aimed at technology entrepreneurs and investors. If you have a new venture that has the potential to scale up and go global we’d love to hear from you. The half day event features entrepreneur pitches, technology researcher presentations and an evening social event attended by angel investors. For progress reports or to get in touch, please follow on Twitter @geniusnet or @upnz.

I probably missed something, so please feel free to post any additions in the comments below.

The Apprentice

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Almost one year into my “apprenticeship” as a technology start-up CEO I found it was time to take stock of achievements, critically reassess my position and then plan for the next phase of growth. Balancing the capital requirements of the business has proven to be the biggest challenge.

I read somewhere recently a suggestion that there is “an inverse relationship between the amount of capital available and the level of creativity in a start-up.” To some extent this is true. With too much capital in the bank there is a lot less urgency to get your product built and consequently innovation happens at a much slower pace. But when a company needs to find the cash to pay for rent and employees each month, building a brand and growing revenue certainly come into much sharper focus.  However, bringing in an investor should not be a priority at an early stage because it may result in divesting too much control at a very low price. If possible, put your assumptions to the test first.

On the other hand, running a capital starved business is like flying an aircraft without enough fuel in the tanks. You won’t make it to your destination and you may well end up wrecked in some farmer’s turnip field. Hence, we train pilots to load sufficient fuel for the planned flight plus an additional fixed margin for safety. Most experienced pilots add a little extra on top of this, especially if the weather is inclement. When the economic climate is adverse, it is not the time to be short on financial fuel.

We’ve made huge progress since we launched iWantMyName last December and I’m very proud of what the guys have already achieved. The good news for ideegeo is that the site has growing revenues and is only the first of several spin-off projects as we build and test our internal capability. The bad news is that we have entered a mature market in a highly competitive industry with this first project. That means we have no choice but to offer the best user experience and market our product powerfully.

Something else I read recently. “Overnight success” can take years, especially in the technology sector. That is why I realised that it was time to sit down, readjust my self-imposed frame of reference and plan for more growth (and more hard work). If consumers see value in the product, cash will continue to flow into the business; if not then it will soon become an expensive hobby. The key will be to add smart services that differentiate iWantMyName from other offerings in the market.

Can Web 2.0 Save the World?

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Last year Umair Haque, a Harvard University technology commentator, vented his annoyance about the fact that the new wave of Web 2.0 start-ups being funded out of Silicon Valley mostly contribute very little towards solving the world’s really big problems. I’m inclined to agree. So are New Zealand’s online ventures providing anything of real social value?

I’m not saying that simply selling stuff and making a profit is not an admirable goal in itself, because it is. Such activities generate taxes and contribute to the fabric of society in a variety of ways. But it would be great to see some more initiatives that have purely social or environmental goals, but with a sustainable business model. So I drew to Haque’s attention a New Zealand venture called Celsias.com. This is a community site that aims to “solve global warming one project at a time”. The site so far has no fewer than 126 global projects listed in which organisations or individuals commit to changing the environment for the better. Celsias also aggregates recent articles on green issues and has a discussion zone where users can initiate conversations on topics of their choosing.

Celsias looks great and makes a tangible contribution to society and probably doesn’t get the attention it fully deserves. Every workplace should have an account on their site. As Ben Milsom CEO of Nexx points out in this well considered blog article, for the most part we haven’t really progressed from simply being online consumers. After all, the sites with the most traffic in NZ are actually Web 1.0, simply replicating real life activities online such as banking and selling consumer goods. As Ferrit discovered, there is not a lot of upside left in this business model. We need more innovative online services that actually solve real problems.

Very few of the most highly trafficked websites offer true interactivity or provide an opportunity to be creative. As a nation, we are possibly not as digitally savvy as we might like to believe. However Ponoko is one site that simply shines because of the way it pools and leverages talent. Ponoko won’t save the world but it does allow its community of users an unusual creative outlet, one that has garnered global interest. It also facilitates collaboration and provides lots of advice and guidance on designing and selling. It is good to see new online business models emerging. Recently launched TribeHQ also takes a fresh approach to online knowledge sharing and, by acknowledging network effects and cluster theory, looks set to redefine white collar recruitment.

But ventures like Nexx, Celsias, Ponoko and TribeHQ can change the world, if for no other reason than that they remind us that the economic order is changing. Unfortunately there is a great deal of inertia out there. The battles with bureaucracy encountered by Nexx and other “social lending” platforms are instructive. The gatekeepers haven’t yet realised that we are in the midst of an economic, technological and social revolution. If a platform like Kiva can be allowed to facilitate micro-financing to clients in developing nations, why can’t we have a peer-to-peer lending platform in New Zealand? If we can get a project like Nexx underway perhaps it would expedite some much needed capital flowing into the technology sector too!

Got any other online ventures that have social, creative or environmental objectives? Let us know.

2008 Round-Up and Festive Cheer

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I’m pleased to report that (in stark contrast to 2007) this year was filled with achievements and a reaffirmed sense that our ideas on knowledge sharing and community building have even more relevance than ever before. This year also saw some big changes on the political landscape and darkening clouds of recession wrought by the purveyors of greed who suddenly found the debt taps had been turned off.

On a more positive note, with the mainstream embracing cloud computing and social media, there was mounting evidence of a paradigmatic shift towards conceptualising the Internet as an all encompassing virtual operating system. The hope is that creative digital enterprises that generate real value will survive beyond the nuclear winter.

Teaming up with some talented guys to form domain industry technology services provider ideegeo was certainly the highlight of the year and the fulfilment of a personal ambition of mine. The new company is an umbrella for a number of interesting spinoff projects, the first of which is iWantMyName our global domain registrar site. Strategising how we use this venture to leverage the aforementioned paradigm shift will occupy much of my time in 2009.

I was also invited to join the Unlimited Potential committee and was consequently able to put my organisational skills to good use helping another talented team to bring several key projects to fruition. UP is Wellington’s leading provider of live networking events to the technology community. I obtained a huge amount of satisfaction from project managing our wonderfully successful final event for the year – Wellington to the World and establishing a template for future advances.

But despite being rich with all this enthusiastic talent, New Zealand continues to suffer from being somewhat removed from the global epicentres of technology investment. Sometimes we are so busy even that we forget to chat to our neighbours and colleagues across the fence. We hope UP events in 2009 will continue to build a sense of community in the technology sector and catalyse new connections and creativity. We hope too that the change in government will result in the development of a truly inspirational national blueprint for innovation that retains incentives for research and development.

Most importantly, 2008 has been a year for many new friendships as a result of participating in the business and being actively engaged in community events and even social media channels like Twitter. Best wishes to all readers and their families. Keep safe and be well over the festive season.