Global Market for Mobile Digital Innovation Booming

Posted on Saturday, 12 July, 2008 by Paul Spence

Reports of an emerging mobile advertising revenue market globally worth $US 150 billion by 2011 seem outlandish until you realise that the number of mobile social networking users is predicted to grow to almost a billion worldwide. Now with the launch of the much anticipated iPhone, user expectations of application mobility have been raised further, so providers of mobile applications will be searching for new and creative ways to drive revenue models to support those aspirations.

New Zealand undoubtedly has a chance to position itself as a global leader in mobile applications development. We already have pockets of creativity emerging. Zodal in Christchurch has arisen as both a market leader and industry evangelist on the mobile games and marketing front. In Wellington, Instinct Entertainment and Run the Red are successfully pursuing their own particular niches and ideegeo is developing an Internet domain asset management tool that will have an iPhone interface. Open Cloud also grew up in the ICT Capital and, after a successful VC fund raising effort, is off to conquer the world with its acclaimed application server platform for provisioning Java based telco services. With mobile devices becoming even more ubiquitous than computers, it seems like we should be doing all we can to promote businesses like these as part of “transformative” efforts to improve the breadth of the economy.

On that note the next Unlimited Potential event is the annual “Geeks, Games and Gadgets” (GGG) showcase to be held in Wellington on 13th August. Because we are into promoting homegrown innovation, we’d love to have New Zealand mobile developers front up to demo and talk about their applications, especially games or edutainment. GGG ’08 will be bigger, brighter and marketed to a much wider audience than ever before. There will also be some surprise guests and lots of giveaways from our friends.

If you would like to share your clever games and gadgets, or position as an event sponsor, please get in touch as soon as possible. Post a reply on this blog article or use paul [at) up (dot] org [dot] nz.

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Events Epilogue

The roaring success of last week’s Start-Up.co.nz / Silicon Welly launch event underlines my comments about how Unlimited Potential is rapidly emerging as the event manager of choice within the Wellington technology networking scene. Building social capital within knowledge sharing communities is something I am personally very passionate about because of the natural multiplier effects of networks that especially assist new or smaller ventures to grow.

The underlying reason for these effects is explained by research suggesting the importance of social networks in supporting entrepreneurship and innovation through facilitating capital flows, enhancing technology transfer and sourcing talent. In particular, networks assist with the settlement and retention of skilled migrants. At a time when New Zealand’s ICT businesses are constrained by a shortage of human resources, networks have a critical role to play. On that point….watch this space for further developments.

Speaking of social events, I was roped into helping run the bar at the aforementioned Unlimited Potential event last week and noticed that Epic Beer was the most popular drink in the house. We gave away several dozen within minutes. Thanks Epic for your support! Kind of appropriate when you consider the entrepreneurial story of Epic brewer Luke Nicholas and how he is developing the brand through Web 2.0 marketing techniques. We smell success in the wind.

UPstarts Enliven Capital ICT Scene

Posted on Monday, 7 July, 2008 by Paul Spence

After a period of quiescence, Wellington’s technology and business networking event scene is now undergoing somewhat of a renaissance.

On Thursday evening this week Unlimited Potential are throwing a launch party for Start-Up magazine and Silicon Welly whilst throughout July and August 7X7 are offering a thought provoking weekly think-fest on “economic transformation”. But wait there’s more!

Also in the pipeline @UP is the annual Geeks, Games and Gadgets technology showcase in August, Software Freedom Day in September for Open Sourcers, and a possible Town and Gown collaboration with Victoria University ICT researchers. With UP taking over managing the ICT Capital membership base it brings this collective community to over 1500 ICT sector professionals, business owners and technology managers.

After the wild successes of XMediaLab and Webstock it is clear that Wellington is now emerging as a “go to” destination for technology and innovation related events in New Zealand. People are talking more and more about the value of community. Sponsors, opinion-makers and governmental agencies are now realising there is tremendous value in leveraging the interest groups that grow up around such events and Unlimited Potential is rapidly positioning as the event manager of choice for this sector.

In 2002 when GeniusNet set up the first virtual community for innovators and entrepreneurs, we did not have the resources to run live events as well. Back then, people struggled with the concept and of course the term “social network” was not widely in use in a web context. But our research found that the best ideas arise from the creativity found where community boundaries overlap. You can’t build a collaborative community by email, webforum or teleconference alone however. Trust is the bandwidth for the exchange of knowledge and one generally needs to meet people face-to-face to build that trust.

Virtual communities and social networking platforms do facilitate engagement to a certain extent, but real live meetings build much deeper foundations of trust. Jobs are located, deals transacted and relationships forged ultimately because people met together in person, eyeballed each other and learned trust. I know this for a fact, because right now I’m developing a very cool business with some smart guys I originally met online. How Web 2.0 is that?!

X|Media|Lab Delivers Quality ConneXions

Posted on Monday, 16 June, 2008 by Paul Spence

xml Held last month at Te Papa, X|Media|Lab proved that we can all be global influencers for digital innovation. Not only that, but by utilising knowledge networks, we can leverage the creativity that already exists in our own back yard to help build successful global businesses. Some quick notes from the conference day:

The speaker session opened by addressing the concept of “ideation” – finding good ideas. Former Sony Entertainment president Chris Deering focussed the audience’s attention with the observation that online entertainment services would likely overtake revenues from TV and cable in the very near future. With MySpace (reportedly) approaching already 100 million sign-ups and phone handset sales ballooning he also predicted a future market for mobile communities in the vicinity of 400 to 800 million users by 2012. With numbers like that it was easy to see where the smart money was headed he said.

In a room full of game developers and creators of virtual worlds, those remarks really set the tone for the day. Continuing the theme, Virgin Comics and Animation CEO, Bangalore based Suresh Seetharaman, noted that in India alone there were 550 million under 20 year olds and that the mobile phone has become far more ubiquitous than the computer. He explained that his business was developing new creative streams, starting with fantasy comics because many of the largest grossing feature films have sprung out of comic book stories. Virgin Comics are creating a new pop culture by drawing on both mythology and modern media. A curious example of this is their Sachin Tindulkar super cricket hero storyline.

Local lad made good Richard MacManus prophesised on technology trends, later posting the presentation on his highly rated Read Write Web blog. Moves towards the “intelligent web” were to the fore in his discussion as was the ongoing battle of Google versus Facebook. Keynote speaker Noah Falstein then spoke about the essentials of brainstorming and how to promote ideas instead of egos. Afterwards he went on National Radio and took part in a panel discussion about the future of online gaming.

Tom Duterme enthused about new venture development and the importance of establishing a good team behind the product. As Google’s talent scout for purchasing new businesses, I noticed he was much sought after during the intervals. Gao Li lead a team from the controversial but now profitable Suzhou Science Park (near Shanghai) and shared with us the staggering scale of China’s investment in research, science and technology. In her home province alone there is a $US 2 billion VC fund and some 3.8% of regional GDP is reinvested back into RS&T, putting New Zealand thoroughly to shame.

Alvin Wang Graylin expanded on the China story by mentioning that there are already nearly 600 million mobile phone users but with SMS being the predominant use, he cautioned that revenue per user remains low. In an effort to grow this market his company sets up mobile phone marketing services. He suggested that whilst carriers were keen on securing new revenue streams, this was limited by network capability for the time being.

Perhaps the speaker I enjoyed most was Hugh Mason from the U.K., a politely spoken and knowledgeable investor and entrepreneur in the creative sector. He had a very simple mantra for creating value with a winning start-up business team. “You need a finder, a minder and a grinder” on your team he said and try to have your product solve a problem that makes the world a better place. I took some comfort in the fact that we have formed our latest venture around just such a model.

I also enjoyed the networking session kindly hosted by Park Road Post the evening before but I found myself asking, as a “veteran” of the Wellington technology business networking scene, why was it the first time I had set foot in those hallowed halls. X|Media|Lab stands for cross-media connection. Why then do we hear so infrequently from our friends in Miramar? How about we run a local XMedia event each year and challenge film, software and graphics entrepreneurs to bounce new ideas around together.

According to Tim Berners-Lee, the new imperative for the Web is now creative connectivity. But as one of the XMediaLab speakers mentioned, “I do business with people that I like – but I first need to get to know them in person to like them”. Creativity and good ideas arise from the interstices between communities and hence it is very important to overlap from time to time. I feel that lately we have not been achieving this often enough. New Zealand Trade & Enterprise are to be congratulated for supporting this event and let’s hope there will be others in the future. In the meantime local networks like Unlimited Potential and ION will continue to add value by building social capital and sharing knowledge amongst the technology sector community.

Smallworlds Launches Virtual Playground

Posted on Monday, 2 June, 2008 by Paul Spence

New Zealand developer OutSmart go public with their virtual world offering this week. The Smallworlds team can be rightly proud of what they have achieved in terms of leveraging Kiwi creativity and generating a bankable global business opportunity. I was invited to be a beta tester on the site earlier this year and consequently got my son (7) and stepson (10) to try it out. The fact that they were so enthusiastic about it augurs well for the future.

Not only is Smallworlds safe and child-friendly, but it requires only an Adobe Flash plug-in to run within a browser. No expensive software downloads or monthly subscriptions. The site is hosted around the globe on Amazon’s EC2 cloud server array.

But Smallworlds will have wide appeal to young adults as well. You can personalise your avatar, set up and furnish your 3D virtual home and create a virtual pet that trots around after you adoringly. Then you can invite friends over to play pool or listen to music. And it’s all free to access. Have fun with it.

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Entrepreneur’s Epilogue

It was with much relief that we overcame the roadblocks that beset our baby start-up last week. Our internal wiki and email is in good health again and our funky web design expert is back home from the wilds of Bosnia (where Internet access is still a challenge to say the least!). So we now have a cool new logo and the makings of a website at last.

My CTO proudly showed me the server rack he acquired on TradeMe. It looks very impressive, all black and shiny with impressive LED displays. You know that you really do have an Internet business on your hands when your company owns a server rack. But can we spin some gold from all that silicon?

By the way, speaking of cost effective infrastructure for start-ups, Helen Baxter* links here to an interesting article on how the real cost of starting a business continues to fall as technology and connectivity improve. Food for thought.

* It was great to finally meet the effervescent Ms Baxter who was in town mentoring at X|Media|Lab last week. XML was the best event I’ve been to in years and I will devote some space to sharing about it very soon.

Start-Up B. Goode

Posted on Sunday, 25 May, 2008 by Paul Spence

Paul Graham, from high profile Silicon Valley investor Y-Combinator, extols the virtue of “doing good” in this clip as he speaks to an audience of young entrepreneurs at the Start-Up School ’08 conference held recently at Stanford.

Graham is the kind of guy you sit up and pay attention to. His company currently funds and mentors over 50 start-ups, many of which are Web 2.0 ventures. He believes projects that do good gain a lot more traction when it comes to attracting customers and winning funding.

He cites Google which launched in 1999 as a hacker response to the lack of search functionality on the Internet. When Google began it had neither revenue nor customers, but it was those early years that saw the fastest appreciation in its share value.

By the way there is a whole bunch of stimulating material from the conference featured on Omnisio a very cool video presentation sharing site that is being backed by Y-Combinator and was co-founded by Ryan Junee. Seriously, I could happily spend hours surfing Omnisio which, unlike YouTube, actually hosts informative material worth watching.

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X|Media|Lab Event – Commercialising Ideas – Fri 30th May – Wellington

Don’t forget that the XMediaLab event hits town on Friday. If you are involved in anything remotely connected to mobile content, virtual worlds, Web 2.0 or digital media innovation in general, then you really need to be at this event. At $99 a head it has to be the best value outing of the year. Attracting global leaders in innovation to engage with NZ firms is one way we can overcome our remoteness. GeniusNet supports this event because we strongly believe that a lot of creativity and opportunity arises when you cross fertilise between different disciplines such as film, animation and software. See you there!

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Entrepreneur’s Epilogue

We hit our first speed bump this week. It was bound to happen. Our office server fell over for several days meaning we had no internal email and we lost our virtual whiteboard facility. With our people currently spread around Munich, Melbourne and Wellington, these tools are essential. So everything simply stopped happening. Very frustrating.

Then on Thursday night I made the mistake of venturing into the central city at 5pm. It was gridlock. As an organisational researcher I’m always interested in analogies between business theory and real life and it didn’t take me long to make the connection. In project management terms it’s called event chain methodology.

So I quickly realised I needed to find a sub-critical pathway to get my damn car out of the middle of the Willis Street / Manners Street intersection! The point is that we had encountered the exact same problem within the business. A critical feature had failed, leaving us with flow-on effects and time delays. Back to the drawing board to find a way around the problem. All good learning.

500 Pound Gorilla with a Long Tail

Posted on Sunday, 11 May, 2008 by Paul Spence

Logan McMillan’s cheekily named Gorilla Pictures has scored a publicity coup by posting a YouTube clip taken from their latest project, a splatter movie about zombies taking over the world.

What is remarkable about this episode is that McMillan received an offer to fund the movie whilst he was already part way through shooting it. It also demonstrates the disintermediating power of the Internet and supports Chris Anderson’s long tail hypothesis – if you can focus enough eyeballs on your product niche, eventually somebody will buy it.

McMillan’s extraordinary success does have a negative corollary however. Because the Internet aggregates vast numbers of users, it also enables other less noble business models. Nobody really believes that Google ads will make them rich and spammers continue to plague us because they know that 5 guys out of every million actually will respond to their viagara sales promotion.

Zombie movies are not really my thing, but I applaud Logan McMillan’s initiative and I hope the screening at Cannes and subsequent release goes well.

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Epilogue – The New Start-Up

I’m particularly interested in the success story mentioned above because a bunch of us are currently in the throes of launching ourselves into the unknown with a new and rather exciting venture. Our project is also very much about leveraging creativity and knowledge and having some fun along the way. Web-based marketing will certainly form part of the mix because, apart from a diversity of other skills, we all share an interest in blogging.

I’m very realistic about the hard work that lies ahead, in fact it feels a little bit like we’ve grabbed a 500 pound gorilla of our own! But I’m also enjoying immensely the collegial atmosphere and the opportunity to develop my leadership skills and business knowledge. Keep those eyeballs tuned for progress reports.

Pie in the Sky Venture for High Flyers

Posted on Sunday, 27 April, 2008 by Paul Spence

Just a short (but mildly humourous) post this week as I have happily found myself with a couple of interesting projects on my plate plus with school holidays underway my son and I are escaping for a few days to the (rainy, damnit!) north. So time is at somewhat of a premium.

When I first stumbled across Dinner in the Sky I thought it must surely be an April Fool’s prank. But as far as I can tell it really is a legitimate business. For an obscene amount of money it seems you can treat your friends to a dinner party suspended by a crane 50m above the ground. Not for those of nervous disposition, but what a buzz!

Up to 22 guests can be seated on a giant platform which is then raised by a crane. A small group of waiters and cooks stand in the middle of the platform and serve the aerial diners as the crane slowly rotates. Two Belgian entrepreneurs dreamed up the concept and have run events in Brussels, Paris, London and Dubai. They even have video clips on their website to prove it. What they don’t explain is what happens if somebody needs to heed the call of nature during the dinner party. Presumably, heavy drinking is discouraged.

Rumour has it that a franchisee from New Zealand has approached the company for rights to operate the business. That got me thinking about all the possibilities. Perhaps we could set up the operation in front of the NZX building on the Wellington waterfront and allow listed companies to hold airborne board meetings? Shareholders could be charged a small fee to sit and manipulate the crane controls, reflecting their approval or otherwise of board decisions. Better yet, government Cabinet meetings could be held aloft. That would certainly focus Ministers’ attention.

It all sounds rather like a Bransonian promotional gimmick, but it shows there is no end to entrepreneurial creativity. Dinner in the Sky contains elements of performance and reminds us once again that the arts and business are not as separate as we sometimes might think.

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Exporting to Germany Workshop – Tues May 6th

Speaking of entrepreneurial Europeans – my mate Oliver Heringhaus from Triple-E is running an exporting workshop in Wellington on May 6th, in conjunction with NZ Trade & Enterprise, for those looking at Germany as an export destination. Germany is a market of over 82 million affluent consumers. Oliver’s e-marketing background and native understanding of his homeland market make him an ideal speaker.

Silicon Welly to Host Technology Mentor Glitterati

Posted on Saturday, 19 April, 2008 by Paul Spence

In an outstanding acknowledgement of Wellington’s status as the centre of New Zealand’s digital innovation universe the city has secured a global X|Media|Lab event to be held at Te Papa May 30th to June 1st. The theme is “Commercialising Ideas” and comprises a one day conference followed by an intensive weekend workshop involving technology venture mentors and successful entrepreneurs. You heard it here first!

The event is geared to helping technology firms develop their ideas to a point where they can increase the chances of receiving funding and getting to market successfully. Online gaming, mobile content, animation and anything Web 2.0 are focus areas for this event. The mentors include Chris Deering (former president Sony Entertainment), Marcelino Ford-Livene (GM Interactive Content – Intel Digital), Tom Duterme (Google) plus local heroes Sam Morgan and Rod Drury. The conference day alone will bring a wealth of knowledge – but imagine having a team like that on your advisory board!

The first X|Media|Lab event was held in Sydney in 2003. Aimed at spanning digital media and bring digital creatives and entrepreneurs together XML has grown to encompass multiple locations around the globe. The event has some serious backing from global partners and is supported by NZ Trade & Enterprise, so the entry cost is minimal (only $99 for individuals). Our research at GeniusNet showed that the most creative ideas spring from where different communities overlap and we have long felt that Wellington needed such an event.

Everything you need to know is on the X|Media|Lab website. But note that although the conference day is open to the public, the weekend workshop is only by invitation from the selection panel. If you require assistance preparing for the selection process and to be introduced to the organiser directly, please contact GeniusNet as early as possible.

Research Profile: Vietnam – A Nation on the Cusp

Posted on Monday, 7 April, 2008 by Paul Spence

After repelling foreigners and enduring wars for the last 150 years Vietnam is finally at peace and enjoying an economic renaissance that may well surpass that of its neighbour China. Therein lies some opportunities for New Zealand businesses.

When I visited Vietnam in 2005 it was obvious that the country of some 84 million inhabitants was on the cusp of something big. Rapidly industrialising and with a young and highly motivated population, the South-East Asian nation has recorded consecutive GDP growth rates of around 8% for many years since the economic reforms of the mid-1980s. An example of this growth was the recent announcement that Samsung will build a plant for manufacturing mobile handsets with an eventual capacity of up to 100 million units. But manufacturing is not the only economic growth driver.

The mighty Mekong river basin, which fans out from the south of the country, is also the food basket in a region renown for its delicious Eurasian fusion cuisine. With a huge output from intensely farmed field crops and fisheries that are managed under a centrally planned system, the Mekong directly supports about 18 million farmers and fisherman and their families and provides food for at least 60 million.

Vietnam continues to move towards full market economy status and has benefitted from substantial inflows of capital from neighbouring states and the U.S. since the lifting of trade sanctions by President Clinton. total foreign investment was around $US 20 billion in 2007. As well, Vietnamese dispora who left as refugees are now returning newly educated and with new capital and fresh ideas. There are many challenges remaining however, particularly in the areas of environmental sustainability and infrastructure.

Work is about to commence on a $US 8 billion project to build a new airport for Ho Chi Minh City (Saigon) at Long Thanh for example. Although the existing airport was recently upgraded, it sits amidst the low-roofed shacks within the Ho Chi Minh city limits and is constrained from further growth. The new airport is expected to become a regional hub of some significance.

New Zealand exports to Vietnam grew by a whopping 62% last year. Dairy products and educational services are leading the charge; but there are a multitude of other opportunities for small businesses who can find smart ways to partner locally and secure access to the region.

Vietnam is a nation of huge contrasts. On the one hand a booming economy and beautiful scenery on the other tremendous environmental challenges and horrific human legacies from the war. But with a sound strategy and local partners there are rich pickings for those that can stay the course.

Contact GeniusNet for business research and connections into emerging global markets.

Scaling Up the Innovation Ecosystem

Posted on Monday, 24 March, 2008 by Paul Spence

Thomas Nastas is an American venture capitalist based in the heart of Moscow. A recent blog post nicely condenses an article of his in which he explains how technology firms need to leverage success in their home markets before moving up the value chain.

Although writing about Russian and Eastern European SMEs, one immediately draws some strong comparisons with the New Zealand situation as he reflects on the role of government in national innovation systems. Like New Zealand, both Russia and Hungary have set aside funds to kick start a public-private partnership to co-invest in technology start-ups. But unlike New Zealand, Eastern Europe and Russia has a huge and largely untapped domestic market for technology products and services. Russia also has the benefit of an extensive programme of university research funded by government and the military.

Nastas prescribes a formula that involves SMEs targetting domestic customers and refining their product offering prior to approaching investors for cash to support tackling global markets. He quotes the example of Israel’s cleantech industry of water purification that grew up, with government support, around addressing a vast domestic need for fresh water. Exports of this technology alone are expected to reach $2 billion by 2010.

He also has some praise for New Zealand as a remote economy grappling with the need to diversify globally. By focussing where there already existed a competitive advantage, he notes how New Zealand’s exports of high end wine and meat products have grown substantially over the last decade or so, based on investment in technical innovation.

It’s a salutary lesson probably not lost on the architects of the Fast Forward programme. But we must not forget that agriculture isn’t the only game in town. High tech exporters like Endace, Rakon and Weta Digital sell their wares almost exclusively in offshore markets. The natural competitive advantage these companies enjoy is the ability to attract and retain an intelligent and highly creative labour force. Focussing only on food and beverage innovation within the agricultural sector would be a mistake.

Thomas Nastas first published his article in the Eastern European edition of the Harvard Business Review. A full version can be found here.

Genius Net

Technology, innovation and entrepreneurship in New Zealand.

Category Archives: Entrepreneurship