Category Archives: Innovation

Innovation Investment For Tech Minnows Drys Up

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Last year the government signalled its intention to invest heavily in “primary sector innovation”. As an efficient producer of food with a huge and growing consumer market emerging on our back doorstep, it absolutely makes sense to invest in this area, but it should not be treated in isolation. It also sends a disturbing message that high carbon, environmentally damaging industries are the priority.

The official announcement of a $144M investment into the Primary Growth Partnership (PGP) springs from a promise made in 2009 to form a public-private partnership to invest into developing more innovative high value added products and services based upon our existing expertise in farming. But this funding was purloined from an almost identical programme that had already been set up just prior to the demise of the previous government. While the Nats rebranded the package, nothing happened for over a year. In the meantime the global economy tanked and the public’s attention was diverted away from the issue.

The recently announced and much lauded additional $189M in funding for high tech industries also sounds good at first glance, but is worthy of closer inspection. It’s spread over four years and is entirely targeted at larger firms. The problem here is that a lot of the most interesting ideas are being generated in smaller companies that are already being hit hard by the recession. Small companies don’t have a lobby group and tend to be way too busy innovating and simply staying afloat to complain anyway.

Starting-up and growing a tech company has always been a crucible of fire and only the best and brightest will succeed. That is why I’m sometimes a little bit ambivalent about publicly funded handouts. On the other hand, larger firms now have better access to government grants than smaller one, which seems a little unfair. New Zealand is way too reliant on commodity exports and certainly needs to add more value through innovation. But let’s not forget emerging software and high tech manufacturing companies that build and export high value products and services with almost no pollution or carbon attached.

There is a real disconnect between innovation at the coal face within small and enterprises and the resources being made available by government to stimulate these enterprises, some of which will grow to be bigger fish eventually. Under the new system, small companies will self assess their needs and receive training to improve “capability”. That is both laudable and necessary, but it doesn’t help get new products developed and to market faster.

Postscript: In response to my friends at TechNZ. My comments above refer to the new funding. There remain avenues for small firms to access co-funding for small projects from the existing funding pool.

Finder, Minder, Grinder

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What kind of attributes do you need to make a start-up dream team? When we think about high flying tech companies, a single high profile founder often springs to mind. But the reality is that start-ups with high growth potential need a mix of skills to build something long-lasting.

A lot depends on the type of business that you are thinking about starting. But for a definition of a basic start-up team I quite like the analogy of “finder, minder and grinder”. The Grinder is the person with domain knowledge. In a software start-up it’s obviously a skilled developer, at a micro-brewery it’s the brewer, in a restaurant it’s the chef. The Minder looks after the accounts, makes sure the money gets banked and the bills paid and later on, helps to raise capital. The Finder is your marketing guru who gets out there and makes the all important sales, without which there will be no business.

When we established ideegeo and started developing domain registrar iWantMyName, that was pretty much the roles we each took on. Being a web start-up we also had a designer at the outset, which was important for us. Now I don’t want to be too prescriptive because there are always exceptions to a rule and there is almost always some overlap in these early co-founder roles as well. But “finder, minder, grinder” is a good rule of thumb to get your team started. 

On Thursday 9th September Unlimited Potential will be running the Co-founder Match-making Event in conjunction with the Bright Ideas Challenge and Grow Wellington. This event is specifically aimed at taking people with I.T. related bright ideas and matching them with others who have technology or business skills to take these projects forward. The event is NOT for consultants looking to sell services to companies; it’s for folks who actually want to put their time into a project in return for equity and a bigger potential return downstream.

If you are a developer, designer, web marketing expert or just have a great tech idea you want some help with – come along to this facilitated networking session and find your dream team! We will also be having inspiring Minimonos co-founder and serial tech entrepreneur Melissa Clark-Reynolds join us for the evening.

Please create a short profile on the new Unlimited Potential website and register for the event.

The Hills Are Alive

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The hills of Wellington may not be alive with the sound of music as such, but they are home to some of New Zealand’s coolest emerging technology sector companies.

Providing a network forum for entrepreneurs to connect with investors, future employees and other innovators is part of what we do at Unlimited Potential. This week IN-Business magazine published its fantabulous SmartNZ technology supplement and were kind enough to include an article penned by yours truly. In the article I talk about the resurgence of tech entrepreneurship and how we can enjoy New Zealand’s lifestyle whilst scaling our businesses globally.

The publication leans heavily on the people and events happening in the technology scene around the Greater Wellington region and is a beacon of light for those of us working within smaller tech companies. Being an entrepreneur has its ups and downs and we all need a little dose of inspiration at times. Tim Collins and the team at IN-Business have done an outstanding job with SmartNZ and I would highly recommend grabbing a hard copy or checking out the digital version of the magazine.

The article I wrote for SmartNZ also mentions Startup Digest, a weekly listing of startup, innovation and technology events. If you would like to subscribe to the New Zealand digest or find out how to get your tech event or product launch listed, you can find this week’s edition here.

Mid Winter Mentors Offer X Factor

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At this time of year when it’s cold, grey and wet, it becomes all too easy to simply enter hibernation mode. But businesses don’t stop running just because the weather sucks and certainly nobody can afford to stop creating and implementing new ideas. Every so often we need to escape our local environs, go away and stimulate our brain cells by becoming totally absorbed in something completely different. That’s why I’m looking forward to my trip to X|Media|Lab Sydney later this week.

X|Media|Lab is a highly effective and affordable globally focussed event for businesses involved in the digital media innovation space. The event 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. X|Media|Lab visited New Zealand in 2008 and 2009 and we’d love to see them back again. The events are organised at venues around the world, several times a year and attract a who’s who of speakers from the worlds of digital media, animation, games and mobile.

With ideegeo being essentially a business software developer, I wasn’t sure we would ever get the chance to attend the international mentoring workshops – but much to my delight, the opportunity has arisen. No, we haven’t started creating digital animated games or building social network sites, but we have begun conceptualising a product that will help such sites to monetise. So it was with much excitement that we found our project had been selected as one of a handful for mentoring from over 80 entries.

We’ve already been talking to some very smart people about the idea but there is more work to be done. Whether or not we can take the next step will largely hinge on securing some high level partnerships at a very early stage. Such relationships are difficult to secure without travelling outside of New Zealand. X|Media|Lab brings a bunch of influential movers and shakers to our front doorstep. It’s an opportunity we are relishing.

Research Week Brings Science Leaders Together

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A winter retreat for scientists interested in medical research and biotechnology is bringing some of the world’s finest science researchers together for a week long convocation.

Queenstown has for many years played host to a number of research meetings across a diverse range of topics from molecular biology to neuroscience. Now these meetings are being clustered into a knowledge fest being labelled as Queenstown Research Week. It’s an opportunity for local researchers to mingle with and learn from some of the world’s leading minds from within the medical and biotech arenas.

It is also an opportunity for investors to hear about opportunities within biotech and to promote science commercialisation in general. No doubt there will also be some quiet analysis during the coffee breaks on whether or not there is any substance to Craig Venter’s recent pronouncement that life had been created in a test-tube.

Irrespective of one’s position on that particular topic, one thing is certain. Medical and biotechnological science is advancing at a rapid rate and such fields create wonderful opportunities to improve human quality of life, address environmental problems and deliver economic gains – provided these technologies are viewed with a robust ethical overlay.

Starting Lean: When to Pivot

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Lean Startup methodology when applied to technology start-up companies advocates rapid prototyping, iterative re-testing of market assumptions and soliciting frequent customer feedback to more quickly evolve a product offering. At a recent lunchtime seminar hosted by Wellington’s Lean Startup group, we discussed when to pivot.

Pivoting involves a fundamental change to one or more of the three fundamental questions that frame the business model and could be a response to either a flawed model or a new opportunity.

We Are Selling What? + Via Which Channel? + To Whom?

Bruce Aylward from Psoda described how his company underwent a complete change in strategic direction in terms of how their product was marketed and distributed. Psoda is a SaaS suite that assists professionals to manage programs, projects, requirements, testing and product development. Psoda’s pivot point came when they realised that customers only wanted some of the services being offered – so they created a pick ‘n mix option. It was a subtle change that boosted the company’s revenue take.

The domain registrar industry has a well established model and hundreds of incumbents. Finding ways to innovate within such a model is tough, but it is the only way forward for a new company. At iWantMyName our pivot point came when we realised we were creating a scalable platform-as-a-service offering that we could rapidly roll out to channel partners. It was a great learning experience for us that added a lot of value to our business.

Bright Tech to Lead Recovery

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The collapse of financial institutions during the recession led to the destruction of billions of dollars of wealth and made us question the sanity behind investing exclusively in property or risky finance companies. But a renaissance in angel investing and a surge of interest by economic development organisations in the tech sector is opening up new opportunities.

Grow Wellington is the regional economic development body that offers business programmes for enterprises across Kapiti Coast, Wairarapa, Hutt Valley and Wellington city. Recently Grow Wellington launched the Bright Ideas Challenge in an effort to identify and motivate the region’s closet entrepreneurs and help get good ideas supported and funded. The challenge invites aspiring entrepreneurs to submit a 100 word description of their business idea in return for advice and coaching. The top 200 ideas will be eligible for KickStart, a business startup programme. There is $25,000 in seed funding on offer plus the chance to meet investors and inspirational leaders in business.

With high value technology ventures and small businesses driving the economic recovery globally, at Unlimited Potential we thought it a good idea to get behind the Bright Ideas Challenge and to encourage our entrepreneurial members from the ICT sector to put their best foot forward. So when you go to the Bright Ideas submission page, make sure you click on Unlimited Potential in the dropdown box. UP will use its industry networks and events to support nominated ICT projects that graduate from the challenge.

Paul Spence is currently Unlimited Potential co-chair, CEO at tech startup iWantMyName and the New Zealand moderator for Silicon Valley based StartupDigest. You can contact him on Twitter @GeniusNet.

Search Build Grow

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I recently spent an enjoyable Saturday with the Wellington Lean Startups group watching live webcasts from the Startup Lessons Learned conference in San Francisco. Perhaps the most important lesson of the day emerged from Steve Blank’s presentation about the role of a startup founder. The underlying iteration for a startup venture can be defined by the following three words, search-build-grow. It’s a message that we do not yet fully embrace in New Zealand, which is a nation of small businesses that (mostly) do not scale up at all.

Prof. Blank teaches at the Berkeley business school and introduced a novel subject called “customer development” to the curriculum there. I say “novel” because in the excesses of the late ’90s, more than a few startups (and investors) overlooked the fundamentals of business for a while. It took a bursting bubble and a massive destruction of capital to remind tech company founders that the foundations of a real business never change. At the outset, the entrepreneur’s role involves searching for a viable business model. Later the task becomes building a set of organisational processes that can allow the business to grow. Finally, the business has to scale upwards.

Possibly the reason we predominantly remain a nation of small businesses is that we are great at being founders and innovators, but less confident at implementing formalised professional management that can deliver scale. Part of that is about the desire to retain control; but there is also the question of ambition. New Zealand needs more medium to large sized businesses, especially ones that export value added goods and services. We need to get over our lack of self confidence and think global.

When I left the secure bosom of full-time paid employment last year I stated that my goal was to build a knowledge based business with a $100 million valuation. No doubt there were a few quiet chuckles in private about that statement. But if we don’t set ourselves big goals how can we measure ourselves and drive forwards? At ideegeo having reached the “build” phase of our first venture, we have already begun the “search” phase for our next one. It has been challenging at times, but I’m confident we remain on track. Serial searching and building is a valid business model in itself, provided you can assemble the right skills and access sufficient resources.

Thanks to Dave Moskovitz uber-mentor and facilitator from Webfund for organising the Wellington Lean Startups group and CreativeHQ for feeding us and taking an interest in what’s happening at street level in the local tech startup scene.

Two Dimensional Culture Devalues Society

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A couple of issues currently being debated in the New Zealand media suggest why as a nation we struggle to think outside the box. It also illustrates how we are failing miserably to deal with a selfish and deeply ingrained culture of alcohol misuse that continues to plague our society.

Proponents of street racing in Christchurch have suggested that the best way to keep intoxicated young drivers off the street is by providing a burn-out pad adjacent to a residential suburb away from the city centre. The disadvantages of this idea will be immediately apparent to local residents who will be required to endure hours of engine revving, tyre squealing and the stomach churning stench of burnt rubber associated with this mindless “sport”. Construction of a burn-out pad therefore simply legitimises what is already a highly anti-social form of behaviour.

At the other end of the country there is much public hand-wringing and a media feeding frenzy over the lack of progress to develop the Auckland waterfront into “party central” in time for the predicted influx of visitors to the Rugby World Cup (RWC). But nobody has yet questioned whether there exists a real need. A quick survey of Princes Wharf and surrounds reveals dozens of existing bars and restaurants, many of which seem to be struggling to attract any custom at all outside of the traditional boozy weekend nights. Surely the basis for “Party Central” already exists. On the other hand, given the rugby playing community’s poor track record in treating alcohol responsibly, perhaps the Police would prefer all of the RWC drinkers to be corralled into a large centralised holding pen, as is being suggested.

The most disturbing aspect of these two debates is that the focus seems to be on providing a solution that caters for and indeed promotes boorish behaviour as a cultural norm rather than addressing the prevailing values in wider society. In a nation that seems overly self-obsessed with a two dimensional culture of sport and binge drinking, will we ever truly be able to nourish and grow an environment of creativity and innovation?

Dazzle Shines at Telco Industry Gig

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Dazzle Tickets co-founders Christopher Smith and Nicolas Schembri have had a big couple of weeks. Not only did they steal the show at the Creative HQ showcase party recently but they also scooped the launchpad prize at Planet 2010 a telecommunications and technology industry event. I’m predicting big things from Dazzle in the future.

Dazzle provide online ticketing services to the entertainment industry. The company are part of a new wave of companies emerging from Wellington’s Creative HQ incubator and which mark a new found appetite for technology plays as the business incubator carves out a different strategic direction. The incubator assists a wide range of business types, but there has been a few lean years without much focus on high tech. This was in part due to the fact that the regional economic development plan largely ignores the contribution of ICT as an enabler. But with Wellington being the home of well known companies such as TradeMe and Xero, it was becoming embarrassing that technology was not a major focus.

Unlimited Potential has been working hard to rectify that situation. Through promoting technology entrepreneurship as a winner and by working closely with other stakeholders such as Victoria University, we have been able to focus attention on ICT as a key aspect in regional economic development. So it is tremendously gratifying to see some smart companies emerging from what is now a rapidly strengthening ecosystem. To their credit, economic development agency Grow Wellington have seized the moment and have big plans for cultivating even more Bright Ideas.

Ideas alone are not enough however. In fact what I like most of all about Dazzle Tickets is that they present well and look like a great team. The fact that they already executed on their idea and went out and made some sales of their service says a lot about the potential as well. The real key to success will be identifying a model that can allow them to scale up globally. That next step will be an exciting one, but will require fresh capital and some well connected advice. That’s where an entrepreneurial ecosystem for bright technology kicks in.