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?

ION e-Letter March/April 2010

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

ION is kindly supported by EGL, Revera and iWantMyName.

During 2010 we are moving to an opt-in newsletter format. Through our relationship with Silicon Valley based theStartupDigest.com we can now offer you a weekly digest update of tech/biz/startup events across New Zealand. To check out the latest NZ digest, follow this short link:

http://eepurl.com/oky5

Follow the subscription button within the digest to get a weekly update of events in New Zealand and please let us know if you have a technology, innovation or startup event or a cool product launch that you wish to promote. Also, if you are heading offshore on company business, don’t forget to check out other regional Startup Digest event listings.

Why are we doing this? This is ION’s 8th year and it has never been more important to share knowledge and connect. Small businesses (especially knowledge based ventures) are leading the world out of recession. Connectors such as ION play an important role.

You can follow ION on Twitter now too!

Keep in touch and please share this with others.

Fraud Cases Reveal a Rotten Core

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There were two fraud cases before the Courts in New Zealand last month, both involving high flying women executives. The different ways in which each offender was dealt with says a lot about our civic institutions and soundly illustrates the suffocating effects of an engrained regimen of political correctness that ensures style succeeds over substance.

Lynn Fiebig was a socialite and failed restauranteur who was appointed fundraising manager at IHC, an organisation that advocates for and provides care to people with intellectual disabilities. During her tenure she stole $500,000 to fund her own lifestyle. She was sentenced to three years imprisonment for this crime. Mary Anne Thompson was a senior civil servant who fooled her peers into believing she had a PhD when she did not. Thompson’s only defence was that she thought the qualification had been awarded. She must have had a memory lapse because walking up on stage to collect your scroll is not something you forget in a hurry, I can assure you.

Thompson’s offence may seem trivial in the context of her 15 years of sterling service in our fine public sector, especially in light of the glowing epithets from figures such as the State Services head. But her offending resurfaced after another investigation into how she improperly handled an immigration application from a Kiribati based family member, whilst employed as head of the Immigration Service. Why did nobody smell the stench?

Thompson must have seemed like a god-send to the middle class, white, male elite that make up Wellington’s most senior mandarins and who were eager to promote diversity within the public service. They desperately wanted to believe, but unfortunately she led them on a merry dance, despite warnings from a human resources consultant who had twigged to the fraud early on. During the course of her employment under false pretences as a senior public servant, I estimate Thompson must have collected well over $2 million in salary. Last week she received a trivial fine of $10,000 after pleading guilty. Neither of the two women are likely to be in a position to repay what they owe to society; in fact there is every chance that Thompson will manage to resurrect her career eventually.

Perhaps the saddest aspect of these two cases is that it will make it just that much harder for genuinely qualified, intelligent and commited women to ascend to positions of responsibility in the public sector. It also reminds us how entirely subjective the justice system is when it comes to addressing white collar and non-violent crime.

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.

More CRI Babies Needed

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The government’s recent report examining funding and strategic governance of New Zealand’s Crown Research Institutes (CRI) echoes what has been known for years by most participants in the nation’s technology innovation system. The existing funding model is broken and there are too many stakeholders, resulting in inefficiencies. But restructuring the bureaucracy alone will not be sufficient to ensure better returns from State investment in science.

The CRIs are tasked with a variety of social and economic objectives that range from enhancing and protecting the value of our primary sector through to identifying and managing environmental risks. A profit based model and traditional business metrics clearly does not work. The convoluted bidding process for funding of limited duration also does not ensure good science gets done; in some cases it actually impedes the process.

 There is certainly no shortage of excellent scientific research being done within these institutions right now and there remains potential to spin off more baby companies in the future. Here’s a few examples.

  • There are two existing spin-offs involved in high temperature semi-conductors and cable technology, an area that has huge economic returns and is largely untapped.
  • Last year’s New Zealand young scientist of the year (and W2W event  speaker) John Watt is working with CRI staff to look at the commercial applications of nano-particles in reducing motor vehicle emissions.
  • Government owned companies are sitting on huge amounts of seismic data that has the potential to attract oil and mineral prospecting, with comcomitant economic benefits.

But the CRIs encountered problems in the past through attempting to self fund the commercialisation of new science. Attracting smart money and building linkages offshore  must surely be the key to growing our knowledge based companies faster. The CRIs will have to find a new business model that reaches out globally, whilst balancing the need to retain some control of intellectual property and return value to NZ. They also need to make this process happen a lot quicker than in the past.

You can follow us on Twitter @GeniusNet

Why Would Welly?

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I’ve never been particularly fond of the “Welly” moniker. But to have it plastered all over a local hillside on the approach to Wellington Airport smacks of a complete lack of imagination.

I generally try to avoid getting too deeply mired in political debate and I don’t want to start a rant about why we don’t need to be aping American culture; but there remains something rather disturbing about the prospect of a Hollywood style sign being plonked on my front doorstep. I have friends and family over in Hataitai and there is certainly no great enthusiasm for the idea amongst local residents.

For me personally, the overriding image attached to the original Hollywood sign is one of tacky fakery and gross self-indulgence. Yes, Wellington has benefitted economically through partnerships that reach deep into the L.A. film industry. But that doesn’t mean we need to emulate it entirely. In fact our strength is that we differ from it.

I would also question whether a creative city, such as Wellington, needs to brand itself by ripping off someone else’s intellectual property. This seems entirely counter-intuitive when we have a vast richness of other iconology available from amongst our collective Maori, Pacifica, Asian and European peoples. I hope the airport company will sniff the wind and quietly retire the concept. As one commentator suggested, they would gain a lot more respect by simply replanting the hillside in native trees.

Is “Productivity” the Wrong Goalpost?

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A recent research report1, looking at the reasons for New Zealand’s relatively poor economic performance, has some fascinating theories as to why we have paradoxically lagged behind other developed nations despite many structural advantages. It also raise questions about whether aiming for “productivity” parity with Australia is the right goal for New Zealand.

The report, authored by Professor Philip McCann, observes that New Zealand has struggled to compete on the OECD ladder since the economic reforms of the mid-1980s, despite its notable status as a free economy. In fact GDP per capita has been eroding steadily for over 40 years, a trend that shows little sign of abating. Few now doubt that this reduction in income has increasingly serious implications in regards to the affordabiity of the lifestyle currently enjoyed by New Zealanders.

In a world where human and financial capital are highly mobile, McCann theorises that economic geography, rather than macro-economic settings, constrains New Zealand from achieving its full economic potential. McCann says that focusing on a “productivity” gap with Australia is entirely the wrong approach, when in fact we should be looking at how we can leverage regional advantages. Only through regional cooperation can we hope to position for better growth.

He says that New Zealand has been constrained in adapting fully to the era of globalisation because of its small scale and distance to global markets. He also observes that worldwide economic growth is now being concentrated within larger cities and hyper connected regions. Such regions attract creative people and are increasingly associated with knowledge-based, high value economic activities, according to work by other researchers.

Because of the intense competition for talent and capital from power-house “global cities” on the Pacific Rim such as Shanghai, Singapore and Sydney, second tier cities (like Auckland or Adelaide for example) have no choice but to actively strengthen the existing web of interrelationships that bind them together on a sub-regional basis, suggests Professor McCann. Unfortunately, enormous reductions in capital flows during the recession have only added urgency to addressing the challenge of regionalisation.

The World Bank reported2 that from a peak of $296 billion (U.S. dollars) in foreign direct investment (FDI) into Asia during 2007, the figure had dropped to around $88 billion in 2009 as European and American institutions reviewed their investment strategies. Despite a forecast investment rebound to about $120 billion in 2010, the refinancing needs of the region have been estimated in the order of $200 billion per annum, leaving a substantial deficit to be covered by borrowing. This situation is likely to have considerable flow-on effects to neighbouring countries and trading partner nations across the Asia-Pacific rim.

So where does this leave New Zealand? A 2009 survey by Financial Times subsidiary publication FDI Magazine placed both Auckland and Wellington in the top ten of 133 Asia-Pacific cities in terms of quality of lifestyle. Auckland also surpassed many others by ranking an impressive number 10 with its FDI attraction strategy. But New Zealand cities ranked poorly in terms of infrastructure, education and the ability to create jobs through foreign investment or by leveraging technology and intellectual property. So whilst we can attract people for lifestyle reasons, our conversion rate is somewhat less impressive in respect of wealth creation.

MacDiarmid Institute physicist Shaun Hendy has been looking at patent data from the OECD. His study3 showed that Australia was well ahead of New Zealand on numbers of patents filed per capita, but that this was to be expected because data also suggested that larger cities produced more patents anyway. However he found that individual inventor productivity did not increase markedly with city size. This suggests that there are quite likely other influences such as quality of educational institutions, existence of research networks and availability of funding. Interestingly, the role of social effects and “knowledge spillover” on science researcher productivity has yet to be fully explored in this context.

Might the government’s well intentioned but controversial efforts to bridge the perceived “productivity gap” with Australia possibly be aiming at the wrong set of goal posts? Unless we fully acknowledge the importance of attracting and connecting people and capital on a regional basis we risk having to compete in isolation with much more powerful players throughout Asia-Pacific. A joint Australia-New Zealand investment showcase planned for March seems like the perfect opportunity to demonstrate a commitment to regional cooperation. But the government will have to ensure that the talk is followed up with decisive and timely actions as well as a leadership vision.

Bibliography:

  1. McCann, Philip. (2009). Economic geography, globalisation and New Zealand’s productivity paradox. Motu Research Group Public PolicyPaper
  2. Seward, J. (2009). Would a regional fund help get Asia through the financial crisis? World Bank weblog – East Asia and Pacific on the Rise.
  3. http://sciblogs.co.nz/a-measure-of-science/2009/12/16/the-productivity-of-inventors-in-cities/

A bullet point summary of the McCann report can be found here:

http://www.motu.org.nz/files/docs/McCann_seminar_slides.pdf

Photo Credit: Luke Appleby

ION e-Letter Jan/Feb 2010

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GeniusNet is proud to host the ION e-Letter. ION is New Zealand’s original virtual community forum for innovators, entrepreneurs, mentors and investors. February and March are looking like hot months for tech, business and innovation events all over New Zealand.

ION is kindly supported by EGL, Revera and iWantMyName.

Collaboration with Start-Up Digest

We are thrilled to announce that our New Zealand biz/tech event listings will be shouted out globally from this month.  TEDxSV social media strategist and Silicon Valley based entrepreneur Chris McCann also runs the highly acclaimed The StartUp Digest and has now included New Zealand event listings within his service offering. It’s more important than ever for New Zealand tech companies to connect offshore and especially in the U.S. market, so if you have an upcoming event or are a technology start-up with a launch announcement – please contact ION about it so we can share.

Don’t forget to sign up for The StartUp Digest to find out about global biz/tech events if you are heading offshore to promote your business.

Webstock – Wellington – 15-19 February

Design, development, mobile, usability, content, community, open data, innovation & inspiration. 5 full-on days. 13 hands-on workshops. 24 kickass international speakers. 24 must-see presentations including Kevin Rose (Digg) and Eric Ries (Lean StartUps guy).

http://www.webstock.org.nz/

Eric Ries Workshop – Webstock – Wellington – 15th February

The Lean Startup: a disciplined approach to imagining, designing, and building new products. Through case studies, exercises, and discussions, Eric Ries will guide entrepreneurs of all stripes through the key areas that determine success for startups: product, engineering, QA, marketing, and business strategy.

http://www.webstock.org.nz/10/programme/workshops.php#ries

NZICT Meeting – Wellington – 16th February

Andy Lark is a director of technology venture capital firm No 8 Ventures and sits on the board of Xero. He also chairs the NZTE technology beachhead in the U.S. market. Andy will speak about a number of themes covering ICT, marketing and communications.

http://www.ict.org.nz/index.php/02022010_wellington-members-meeting/

SKANZ 2010 Conference – Auckland 16-18 February

Reviews recent developments with the Square Kilometre Array, a next generation radio telescope project aimed at probing the universe with a much greater degree of resolution than before. 

http://www.aut.ac.nz/study-at-aut/study-areas/computing–mathematical-sciences/skanz-2010-conference

Accelerate 2010 – Hawkes Bay – 17th February

Interactive one day session for management, founders and investors of high growth New Zealand technology companies. Features ex-pat Kiwi Andy Lark (senior exec at Dell). Good food, wine and music plus workshops covering strategy, marketing and funding. [Sold out – but may consider individual late applications]

http://www.0to60.com/
 

Escalator – Power Pitching – Various venues from 18th February

Interactive workshop where you will learn what investors are looking for in an investor pitch. The course helps you to refine your company “pitch”.

http://angelassociation.trainingplatform.co.nz/courses/1-power-pitching

Mentors Needed for E-Day – Wellington – Tuesday 23 February  

The Lion Foundation Young Enterprise Scheme (YES) needs some mentors for an E-Day. The E-Day will kick off this year’s YES programme in the Wellington region. About 60 student companies are taking part and they need 30 mentors. YES in Wellington is managed by the Wellington Regional Chamber of Commerce.

1.30- 2.45pm. Venue: Lecture Theatre 1, Ground Floor, Rutherford House, Pipitea Campus, Victoria University.

Distiller Event – Dunedin – Thursday 25 February

Technology start-up incubator Distiller is holding a meetup with guest presenters at South Bar, Frederick Street, Dunedin.

http://thedistiller.org/

Activate Networking Event – Wellington – Thursday 25 February

Want to activate your business or idea? Activate’s mission is to find Wellington’s most talented entrepreneurs and give them the skills, know-how and networks to get their dreams off the ground and their businesses humming. Mingle with Wellington’s best and brightest entrepreneurs and hear from some amazing businesses already on the journey.

Venue: Smith the Grocer, Old Bank Arcade  RSVP: By Monday 22 February to: activate [at} growwellington (dot) co [dot) nz

2010 Shanghai Expo Workshop – Wellington – 26 February

The Wellington City Council invites interested parties to attend a workshop on the 2010 Shanghai Expo. The workshop is a chance to learn more about Wellington City Council’s ideas on sending a delegation to the Shanghai Expo – and the potential opportunities for your business. RSVP by 19th Feb.

More details here >>

Damsel’s Den – Wellington – 9th March

Unlimited Potential  and Angel HQ matchmake angel investors with technology geeks and cool startup founders. Special guest Bill Payne, engineer, entrepreneur and technology investor.

http://up.org.nz/damsels-den-201/

Planet 2010 Conference Launchpad – Auckland 12-13 March Telecommunications industry event offering 10 start-up companies the chance to pitch their business ideas to a panel of judges. The winner will receive $70,000 worth of IT, marketing, legal and accounting services.

http://www.planet2010.co.nz/launchpad/

Spark 2010 Launch – Auckland – 18 March

The University of Auckland Business School Entrepreneurship Challenge kicks off with a launch event on 18th March 5.30pm. 

http://www.spark.auckland.ac.nz/


NZBio Conference – Auckland 22-24 March

The annual showcase for New Zealand’s life sciences sector. Attracting innovators, entrepreneurs and investors from across the agriculture, food, health and biofuel industries.

http://www.nzbio2010.co.nz/home

CloudCamp Wellington – 26th March

CloudCamp is an unconference where early adopters of Cloud Computing technologies exchange ideas.

http://www.cloudcamp.org/wellington

Want to add your tech/biz/startup event? Contact us @ Twitter or post a comment below.