Frontier Firms Follow-On Funding Favoured

frontier-firms

The recently published New Zealand Productivity Commission Report on the economic contribution of “frontier firms” predictably rated only a passing mention in local media. However recommendations in the publication could have far reaching impacts if implemented. But is the government listening?

Frontier firms are described as the most productive, profitable and innovative in an economy and generally have scale and global reach. But the report says that New Zealand’s frontier firms lag behind their global peers in terms of productivity. The OECD defines productivity as the ratio of economic output compared to inputs. Nations with highly productive frontier firms have greater competitiveness because of more efficient use of resources such as labour and capital. These nations also benefit from secondary “innovation and knowledge diffusion” within their economies.

Chairperson of the Commission Ganesh Nana, in an interview with Radio New Zealand says New Zealand is already well behind other small developed economies in the OECD in terms of productivity and the gap is growing every year. He says part of the reason is because we do not have many so-called frontier firms to which smaller innovation based companies can anchor. One of the key findings of the report is that the government must invest in developing a deeper innovation ecosystem, including supporting more commercialisation of research, science and technology.

But will the government take on board this message? Many of us currently working within the New Zealand innovation ecosystem have lobbied in the past for vastly increased resourcing and for setting greater aspirations as a nation. But such pleas have largely fallen upon deaf ears over the years. There are sadly also actors within our ecosystem that are philosophically opposed to any kind of government investment on the basis that only wealthy and well-connected players should be allowed in the game. This is despite the fact that our neighbours (and competitors) in places like Australia, South Korea and Singapore identified the value many years ago and have literally invested hundreds of millions of dollars into building out their own innovation ecosystems.

Developing more frontiers firms is not about growing more “unicorns” as some have mistakenly claimed. But it is about building a more interconnected economy that has research, science and technology at the heart of the beast. That’s a big ask for a small nation for which there are many competing priorities and challenges to face such as health, housing and climate change. But the key to motivating the decision-makers involves grasping the reality that having a powerful innovation ecosystem is actually part of the solution to those challenges.

Paul Spence is a commentator and serial entrepreneur, a recently exited co-founder of a New Zealand based technology venture, a co-founder and director of Creative Forest, advisor at ThincLab within the University of Canterbury Centre for Entrepreneurship and principal at GeniusNet Research. 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. Paul is a co-author of the Entrepreneurship Manifesto 2020.

The Commercialisation Imperative

Oxford

Blue Skies Thinking Needed

Competing and surviving in a highly technological, fast changing and globalised economy increasingly dictates that universities and institutes step up and generate economic returns on their research. But although there have been a few notable exceptions at New Zealand universities, we continue to underperform in the commercialisation of new scientific knowledge into value generating products and services that drive economic growth. So if disruptive innovation lies at the core of economic development, how can we better reconcile commercialisation with the core purpose of our institutions?

Firstly, there are some valid arguments in favour of the separation of commerce from academia. Normative, collectivist elements of academic science as a social system, along with the autonomous nature of university culture, seem to sit uncomfortably with the motivations of profit seeking firms that wish to take ownership of intellectual property. Claims of IP ownership can lead to fears of diminishing the scientific commons, which would be detrimental to the collegial and collaborative nature of science and therefore hinder the very process that will drive future discoveries.

Furthermore, commercialising technology research is risky and accommodating new and developing fields of commercially focused science takes up resources that might be used for other teaching and research, impacting the core mission of universities. We have already witnessed closures and staff reductions within arts and humanities faculties where commercial outcomes are less of a focus. There’s also a danger that high tech institutes established in emergent fields become impenetrable and elitist silos of specialist knowledge open to only a few, at a time when we should be striving for greater equity. Are there other societal factors at play that dampen success?

Patent filings data is sometimes quoted as an indicator of “innovativeness” in the context of economic development. New Zealand sits at the lower end of the table, but not because it is a small economy. Countries with relatively small populations such as Finland, Switzerland and Israel lead the pack. In New Zealand total expenditure on research and development as a proportion of GDP has been increasing in recent years, but continues to lag behind other developed countries. Investment rose to 1.37% in 2018. This compares to an average research intensity figure of 2.38% across all OECD countries, ranking New Zealand 21st out of 34 nations [Statistics NZ — 2018]. So whilst the size of an economy does not fully explain the innovativeness of a nation, the level of commitment to research and development investment certainly plays a part.

Approximately half of that R&D investment originates from publicly funded sources. With government investment comes an expectation that tax payer funded academic research will provide a “return on science” or economic and social benefits to society. The challenge then is to generate meaningful commercial outcomes, that do not undermine the core missions of teaching and research. There are a great many reasons to do so, not the least of which is our ability to fund future health, education and welfare needs. As a nation heavily reliant upon commodity based income we must gravitate towards higher added value goods and services to ensure the future economic wellbeing of our society. Developing an ecosystem approach to cultivating innovation is a key part of this journey.

For example, benefits in cultivating university-industry ties become amplified due to network effects and serendipitous conversations around the humble water cooler (or perhaps kombucha fridge these days). This “innovation ecosystem” approach has benefitted a number of scientific fields. For example the emergence of biotechnology as both a science and business from MIT and other institutions clustered within the Boston area. Commercialisation of new knowledge can also speed up solving complex social, health and environmental problems that might not otherwise be addressed, attracting both government and private sector funding into academia.

The global pandemic has also accelerated the need for scientific innovation. Previous hard won gains against poverty and improvements in social equity have been wiped out by pandemic related economic carnage. In addition, because of growing urgency in relation to addressing environmental challenges, there is forecast to be a vast migration of capital away from polluting industries over the next two or three decades. This green transition will create enormous opportunities for scientific organisations operating at the leading edge of cleantech, renewable energy, low carbon construction and regenerative agriculture, for example.

Embedded within entrepreneurship centres of research, university innovation labs such as ThincLab at the University of Canterbury are important intermediaries in the cycle of innovation and a key part of a vibrant ecosystem that engages with a wide array of supporting players to ensure the success of spin-off companies, whilst at the same time respecting the scholarship that underpins scientific discovery.

This article was first published on the ThincLab blog and formed the basis of my presentation to the Food, Fibre and Agritech Supernode Challenge 2021 cohort.

Paul Spence is a commentator and serial entrepreneur, a recently exited co-founder of a New Zealand based technology venture, a co-founder and director of Creative Forest, advisor at ThincLab within the University of Canterbury Centre for Entrepreneurship and principal at GeniusNet Research. 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. Paul is a co-author of the Entrepreneurship Manifesto 2020.

Environmental Entrepreneurship Focus Needed

fern5The pandemic induced economic crisis has raised awareness that economies remain fragile since the GFC and that we must urgently shift to more sustainable and environmentally sound forms of economic development if we are to survive as a species. As a nation in the spotlight right now, New Zealand has an opportunity to lead with change. But we need a vehicle to drive this process and we must shift the mindset of the nation towards environmental entrepreneurship.

Institutional leaders such as the World Economic Forum (WEF) and the European Investment Bank predict that the next two decades will see a vast migration of capital from traditional industrial verticals to green investments, “responsible” deep tech and “bio-impact” investment, as the “just transition” to a cleaner, low carbon economy takes hold. Some sources claim that this “green shift” could be worth as much as $6 Trillion[1] per annum as infrastructure replacement and the migration to cleaner industries proceeds. The global effects of the COVID 19 pandemic has only served to accentuate the very urgent need for deep structural reform. In fact the WEF argues further that the fiscal response to the resultant economic crisis absolutely must be tied to a greener economy.[2]

Along with this shift comes increasing recognition from global corporations that profit and social purpose are inextricably linked. Socially responsible companies and those that develop engaged, happy and productive learner employees, will capture a greater share of value within the transition economy. Consequently this will invoke greater delivery on environmental, social and governance objectives (ESG) as part of reporting to boards, shareholders and other stakeholders such as local communities. Indeed, the New Zealand government is a signatory to the UNDP Sustainable Development Goals (SDG) of which SDG 9 has a particular focus on “building resilient infrastructure, promoting inclusive and sustainable industrialization and fostering innovation”. At the same time, governments remain interested in endogenous approaches to economic development[3] that value development of human capital, since innovation through creating new knowledge is essential to sustainable growth and wealth creation.[4]

Problem

With rapidly shifting technologies, the reconfiguration of the global economy and consequent disruption of traditional industries, in what has been described as the “fourth industrial revolution”, there is an ongoing need for discovery, evolution and enrichment of entrepreneurial skills, from an early age and throughout life, supported by better connectivity, greater insight and structured exchange of knowledge. Many of the capability building mechanisms required for this journey already exist in their own silos within New Zealand. But there is no unifying framework or plan in place to fully capitalise on this energy.

Solution

As part of the response to our Entrepreneurship Manifesto 2020 document I am calling for the establishment of a New Zealand Centre for Environmental Entrepreneurship (CEE). This would provide a coordinating role in aligning innovation and entrepreneurship programmes nationwide towards delivering a pipeline of talent fit and ready to address the biggest and most important economic opportunity of our lifetimes – our living environment. Partnership with the CEE would be through an application process with successful programmes receiving additional government funding support. A lean and future focused advisory board would administer the CEE. The board would comprise an equal weighting of experienced founders, business academics and government representatives supported by an executive officer. The CEE could be a virtual organisation as well as rotating hosting among academic institutions with strengths in business and environment.

Impact

Success would be measured thus:

  1. By a more coordinated national approach to entrepreneurship and innovation education in general, through supporting high performing enablers.
  2. By implementing micro-accreditation and NCEA credits for entrepreneurship and innovation courses.
  3. By delivering a talent pipeline with an environmental and social innovation mindset (including migrant entrepreneurs).
  4. By raising the status of entrepreneurs as champions of change and opportunity in the global transition economy.
  5. By a growing pipeline of new ventures that address both the SDGs and position New Zealand as a global leader in green transitional technologies.

Possible Focus Areas

  1. Technological responses to climate change.
  2. Alternative energy technologies.
  3. Social housing solutions.
  4. Management and improvement of flora and fauna ecosystems.
  5. Agritech and food security.
  6. Infotech and data security.
  7. Health Tech solutions for pandemic response.
  8. AI and Education.

Funding

Government would need to lead the funding but partnerships with venture funds and global corporations would be sought in return for early access to opportunities generated. A full time XO/Administrator with a part-time board of six and virtual workplace would require a commitment of around $300,000 per annum, plus additional supporting grants to member programme providers of say $500,000 in total. Less than $1 million per annum to focus our innovative talent on huge and challenging environmental problems worth trillions of dollars to the global economy.

References

  1. https://newclimateeconomy.report/2016/
  2. https://www.weforum.org/agenda/2020/05/the-european-green-deal-must-be-at-the-heart-of-the-covid-19-recovery/
  3. Isaac Ehrlich, Dunli Li, & Zhiqiang Liu (2017),The Role of Entrepreneurial Human Capital as a Driver of Endogenous Economic Growth, J Human Capital 11,3.
  4. Maradana, R.P., Pradhan, R.P., Dash, S. et al. Does innovation promote economic growth? Evidence from European countries. J Innov Entrep 6, 1 (2017).

Paul Spence is a commentator and serial entrepreneur, a recently exited co-founder of a New Zealand based technology venture, a co-founder and director of Creative Forest and principal at GeniusNet Research. 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. Paul is a co-author of the Entrepreneurship Manifesto 2020.

Finnotec Triumphs Again

finnotec2019After missing the previous two events due to timetable clashes, the planets aligned and I finally made it to this year’s Finnotec event. With some important partnerships now sorted and a bunch of thought-provoking speakers in hand, Binu Paul from Savvy Kiwi, the driving force behind the event, has ensured Finnotec will remain New Zealand’s prime conference for all things FinTech related.

With payments technology being an important aspect of my previous venture, I thought that I possessed at least a rudimentary knowledge of what goes on behind the scenes in traditional financial processing systems. But the high quality speakers at Finnotec soon made me realise that I had a lot more to learn. The annual one day conference has become an important “clearing house” for accessing regulatory knowledge, business networking and a nice showcase for emerging talent in a category that barely existed a decade ago.

I was especially impressed by speaker Cathryn Lyall, who clearly has a huge depth of experience across the FinTech space. A board member at Deutsche Bank UK and with 30 years in a variety of roles across capital markets, including as a market floor trader, ex-pat Aussie Lyall is undoubtedly well placed to be an investor and advisor in Fintech. The big takeaway from her talk was about the urgent need for Fintechs to “create real value” for customers in a crowded marketplace where users already get a lot of their services for free from the incumbents.

So courtesy of Rewired the new Xero co-working space, we enjoyed a number of presentations from some hot new startups that have been making waves in our local FinTech scene. Here’s a quick run-down from the showcase:-

MyCap Markets – A blockchain based private share management offering complete with a secondary market platform. Solving the problem of liquidity for shareholders of smaller, unlisted companies.

Kernel – A data driven approach to index investing with a digital tool kit that helps customers make informed decisions.

Transactional AI – Using AI to analyse consumer spending behaviour and better inform lenders. One of the shining stars of this year’s Kiwibank FinTech accelerator at CreativeHQ and a favourite with the Finnotec crowd.

Planolitix – A financial cashflow diagnostic Saas offering initially aimed at financial advisers. Anything that banishes spreadsheets has got to be good, right?

First AML – Simplifying dealing with the obligatory and burdensome administration around anti-money laundering legislation. Solving a real pain point.

Relay.AI – Back in the day it was called “factoring”, but this startup digitally reduces waiting times for businesses to receive invoice payments.

Overall, a thoroughly informative and engaging day out with a diverse group of highly dedicated players and supporters in New Zealand Fintech. Harmoney, Westpac Ventures, Paymark, Xero and UK DIT deserve compliments for having the foresight to back this event. With a little more community curation and the continuing support of FinTechNZ, this event can only get bigger and better as the industry grows.

Paul Spence is a commentator and serial entrepreneur, formerly a co-founder of New Zealand based technology venture iwantmyname,  a co-founder and director of Creative Forest and principal at GeniusNet Research. 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.

Creating An Education Nation

This week I gave my young son a tearful hug and watched him cross through airport security to join the first leg of a long journey to Europe. I found myself, reviewing the previous eighteen years and wondering whether or not I had done enough for him. His mother and I have a solid friendship now, but we separated when he was just two. So co-parenting presented numerous challenges for us for many years. Not the least of those was that (despite his intelligence) my son sometimes struggled within the school system. At times it broke my heart and I often felt like I badly let him down. But what I have found out since we began researching our new project Creative Forest is that the education system is simply not serving our kids well enough in the 21st Century.

Let me state that this article is not about shifting blame or spotlighting shortcomings in  education, it’s about acknowledging that kids have different learning styles, society is changing rapidly and that we are not addressing this fast enough. Our current “modern” form of Western education has origins that date back two centuries. That system arose in the wake of the Industrial Revolution as economies transitioned away from being agrarian and when there was a need for a more literate workforce. Teachers stood at the front of the class imparting knowledge to students lined up in rows. Little has changed.

I don’t mind admitting that this old system served me well personally, because I actually enjoy absorbing facts and was good at sitting exams (one of my few talents). I ended up with three degrees including a post-graduate qualification and was the first person on my father’s side of the family to complete a university education. But now it’s becoming clear that many bright children are not suited to this model, yet there are so few alternatives. It’s time we became an education nation where teaching is properly resourced and we provide alternate pathways that motivate learners. Our future viability in the world depends on it!

Today we are faced with vastly different economic structures, increasing disparities in wealth and exponentially accelerating technological change. How do we equip our children with the skills to navigate these enormous problems? With Creative Forest we take some of the emergent thinking on project based learning and personalised learning and bring them together with a design based ecosystem approach that supports both students and teachers. The open source Creative Forest system delivers success in STEAM subjects, on the basis of personal inquiry, guided by teachers and external mentors. So we use a hybrid setup with the online platform supporting the classroom environment.

Critics of these new methodologies worriedly cite the dangers of eliminating knowledge from the curriculum, but this is a red herring. Learning is not a zero sum game and introducing new approaches does not need to be at the expense of curricula. Indeed bringing forward some new thinking has the potential to enhance how knowledge is passed on. It also opens doorways for kids that were previously excluded and conveys soft skills such as collaboration that they will need in the real world. Thankfully some teachers are already beginning to embrace these ideas and Creative Forest is making progress working with these early adopters.

Meanwhile, thirty hours later we receive a cheerful FaceTime call from my son. He has negotiated several major international airports, landed in Tokyo, Japan, found his hotel then flown on to Osaka the next day, where he interprets online maps to find his way safely across a huge, unfamiliar non-English speaking city, via trains and buses, to a tiny apartment where his buddy is staying. We also hear that he has a job offer awaiting his return to New Zealand. I guess I didn’t fail him entirely in his education.

Paul Spence is a commentator and serial entrepreneur, a co-founder of New Zealand based technology ventures iwantmyname and Creative Forest 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.

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.

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.

Is Lean Thinking Killing Creative Thinking?

As a frequent Startup Weekend mentor (and co-founder of a successful boot-strapped tech company), I have had plenty of real life exposure to the doctrines of lean startup. But a recent experience has started me questioning whether we are doing ourselves a disservice through slavish adherence to lean methodology and an overly prescriptive approach to starting up.

Let me be clear. The Lean Startup framework provides a solid foundation for anyone who has not previously been in business and for whom resources are scarce. Starting a business is hard and developing a new business model is especially difficult. Coming from a science background, I’m very interested in how Lean Startup takes an experimental approach to testing hypotheses. This makes a lot of good sense. What makes less sense is when being Lean constrains our imaginations.

But I think there’s a way to resolve these tensions. There are two fundamental issues faced by a new startup and (to put it bluntly) not much else really matters outside of these two.

  1. Are you addressing a real problem that people will pay you money to solve?
  2. Can you position your solution in front of those people?

If you can answer these two essential questions, you have a shot at building a business. If not, fail fast and start over. At the forefront of your mind should be that customers are your chief source of capital, not investors. Engaging with customers early and identifying their problems is essential. Gaining venture funding is not a business model. Most businesses in the real world are NOT funded by venture capitalists.

By all means deploy Lean Thinking in your startup to discover customers, create value and extend your runway without becoming reliant on external funding. Indeed, a successful first product iteration that earns an income stream can provide a pathway to explore bigger ideas in the future. But please don’t let Lean Thinking kill your dreams. Many of the greatest tech companies started small and created their own markets. Be an entrepreneur scientist. Keep experimenting. Entrepreneurship is a creative endeavour, which is why many of us are drawn to it.

Paul Spence is a commentator and serial technology entrepreneur, a co-founder of iwantmyname (a New Zealand based global Internet venture) and a mentor with Startup Weekends. 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.

Finding The Happiness Particle

happyRecently I had the great pleasure of being guest of honour at Startup Grind in Auckland. We had a very frank Q&A session about the many challenges facing startup entrepreneurs. Some of the discussion revolved around bootstrapping and growing globally. But we also devoted a lot of time to the emotional challenges faced by business founders, because I think this is a topic that we don’t hear enough about.

Entrepreneurship is a hugely demanding calling and few of us get through it entirely unscathed. Along with the daily dramas of driving sales, paying the bills and keeping your team on track, there is the pressing need to balance work and home life. This balance becomes especially difficult if you have young children at home. With the need to put in long hours when starting a business, having the support of your family is critical to entrepreneurial success. So you must engage loved ones in the process early and set some clear expectations.

Funding rounds, media recognition and rolling out the next big software release are exciting and wonderful things, but all of that is fleeting. Family and friends are ultimately what sustain us in the long term – not money, public accolades or brilliant software code. Participating and contributing positively in the community and building authentic familial, personal and professional relationships is infinitely more rewarding.

Creating a palatable work environment is also important. Holacratic workplaces is one controversial approach to addressing this. However, there remains ongoing (and valid) criticisms from within traditional schools of management about whether holacracy can ever succeed. But perhaps the real issue is how you actually define “success” in this context. Tech companies such as Twitter, Medium and Zappos are the most well known proponents of holacracy, within which customer and employee happiness also figures large in company reporting.

At iwantmyname we built a virtually enabled company around a flat structure and uniform remuneration across the company. We engrained an ethos of self-management across the organisation, bringing with it both freedoms and responsibilities. Weaving elements of holacracy into our work setting has been extremely challenging at times and there have certainly been missteps. Whilst very rewarding, it is still a work in progress.

The face of management has evolved very little in the last century within the corporate world, despite the fact that there has been a huge migration away from assembly lines to desk-bound work. But companies that are disrupting traditional business models and leading change have a special responsibility to illuminate the way forward. Finding a suitable balance between home life, personal freedom and the demands of your business is essential to finding the elusive happiness particle.

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