Local VC Laments Science Funding Deficit

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I enjoyed Fiona Rotherham’s recent article in Unlimited magazine featuring the scientist who is inventing red-fleshed apples. But local venture capital investor Stuart McKenzie’s comments in the same article about the lack of science investment are a chilling reminder that New Zealand continues to underperform in terms of raising capital for technology commercialisation.

Hitching our economic success to agriculture is a sensible strategy in some respects, given our natural assets; but it should not be the only strategy. Agriculture alone cannot improve our economic fortunes; especially since the added value component remains tiny. Considering the deleterious effects of pastoral greenhouses gases and waterway pollution from farm run-off; if we are to enrichen New Zealand with more knowledge intensive businesses there simply must be a diversity of approaches.

Even more troubling is that there is a perfect storm brewing. As local VC funds begin to mature it is not entirely clear where the new funds will emerge from. Existing venture capital funded projects are looking for their next funding rounds to take those businesses to the next level. So, in the current economic climate, investors are naturally more inclined to look after the projects already on their books. It is harder than ever to get a true “start-up” company funded.

The government has set an aspirational goal of catching up to Australia by improving economic productivity, but it has confused business productivity with GDP per capita. Productivity is not the problem. The problem is we need to be exporting knowledge not farm commodities. Securing sufficient capital to commercialise and scale up our portfolio of intellectual property is the only way to achieve this.

PM’s Pill Pull Problematic, P Plague Prevails

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First it was the cycle-way, then it was the Letterman show, now he’s banning cold remedies from pharmacy shelves. Is there no end to the goofiness of our Prime Minister?

There’s no denying that New Zealand has a problem with methamphetamine drug use and the mindless sub-culture that goes with it. And it’s clear that access to precursor drugs plays an important part in the manufacture of pure crystal meth or “P”. What is less clear is exactly where the criminal element are sourcing these materials from.

Pulling pseudoephidrine based cold remedies out of chemist shops is not going to solve our drug problem. It will however deprive thousands of honest citizens temporary relief from cough and cold symptoms. In fact such a response may lead to even more serious crime because criminals will have to resort to more overt methods to secure the materials they need. In any event there remain substantial amounts of these drugs making it across our borders from offshore in a variety of different disguises.

What is even more crazy is that there is a technological solution available for this problem. The Australian Pharmacy Guild already offered free monitoring software to their Kiwi counterparts. The software correlates multiple purchases of drugs across pharmacies and reports suspicious activity directly to Police. For some unknown reason the offer was refused.

The fact that a technological answer to this issue has not been implemented is all the more bizarre given that the Prime Minister’s science advisor Professor Peter Gluckman has been all over the case. Perhaps Dr Gluckman’s time would be better spent reminding the government why this is an excellent example of  how New Zealand is failing miserably to use digital innovation to improve economic productivity.

Stick that in your pipe and smoke it!

The Day After – How You Can Help

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Yesterday was one of those days that puts our lives in context and reminds us of the fragility of our existence on this planet. In years to come, we will be able to look back and say, “I remember what I was doing the day the tsunami hit Samoa.”

The day was made all the more poignant for me because it was coincidentally also the day a long episode in my own life came to a close and a new one began in terms of my career. But the extent of the loss faced by our neighbours in Samoa far outweighed any uncertainties that may have been lingering in my own mind about becoming a full time self employed entrepreneur.

The islands of the South Pacific may be over the horizon, but their economic livelihood and stability is deeply entwined with that of our own. That is why New Zealand and Australia take such an active interest in Pacific island progress. The Pacific islands already receive a considerable amount of aid from abroad, but today we need to give a little more.

The ANZ bank will take care of cash donations at all their branches. You can also give specifically to the Samoa relief fund online at the Red Cross. Both ideegeo and GeniusNet have donated today and I urge others to do the same. Even a few dollars will help, if we all do our part.

ION e-Letter August/September 2009

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

 EGLRevera

W2W W0W

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

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

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

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

EDTalks Symposium

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

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

Icehouse Fast Pitch 2009

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

Multicore Computing MiniConf

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

iwantmynameION Spotlight – Beetil

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

http://www.beetil.com/

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

ION Homepage Makeover

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

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

BB Build Begs Benefits

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It is certainly a relief to finally see some leadership from the government in terms of their expectations around the broadband rollout. But in 5-10 years time when the project is finally complete will we have found a way to leverage this huge investment of public funds?

Industry ginger groups are being politely optimistic about the plan but it remains to be seen for how long the honeymoon lasts. Telecommunications is a highly political arena with many vested interests. Indications that the Crown Fibre Holding company will remain a Crown entity rather than a commercial state owned enterprise are certainly encouraging however; because the last thing we need is the new network being flogged off to an incumbent player or other foreign controlled interests at some point in the future.

But what are we going to use high speed broadband networks for once they are built? One would like to think that there will be more lofty social benefits than facilitating faster access to pornography, violent online games and moronic TV shows. Of course despite all the clamour by telcos and their equipment suppliers for a bite of the apple, we have never yet seen a properly articulated explanation of exactly what the social and economic return will be.

That aside, there is a wonderful window of opportunity for the government here. Surely we now need to provide an innovation challenge to stimulate the development of novel online services? Imagine how many creative new start-up companies could be kick-started. It seems glaringly obvious, but this aspect of the plan appears to have been somewhat overlooked as the government instead heavily promotes cowshit and tourism as our economic saviours.

There is another issue that has been overlooked as well. Until New Zealand gets access to better bandwidth and some decent competition on networks across the Pacific,  improving domestic connectivity is likely to have only a limited overall effect on economic growth.

Four Rules for Capturing Hearts and Minds

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

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

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

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

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

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

 

You can now follow GeniusNet on Twitter @GeniusNet

Gee Whiz It’s GGG’09

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Unlimited PotentialIt’s almost time for Geeks, Gamers and Gadget lovers to converge upon Unlimited Potential’s signature event for the year.

Hundreds of tiny elves have been toiling day and night to bring GGG to Wellington once again. And if you don’t believe me, come along and check out this year’s free and hugely diverse trade show. There will also be engaging talks by local speakers from the movie effects masters of the universe at Weta Digital and games developer Sidhe.

Keynote speaker will be Bill Reichert, regarded as one of the leading lights in the Silicon Valley entrepreneur community. Along with Guy Kawasaki he founded Garage Ventures an influential early stage venture capital fund. GGG’09 kicks off at 4.30pm on Monday 24th at the St James Theatre in Courtenay Place.

Find out more about the event and sign up here:

http://www.up.org.nz/ggg-09/

..and if that wasn’t enough, next week Unlimited Potential is bringing you a fairytale event that turns the tables on local investors and puts them in the hot seat. So if you want to find out what dragons and angels look for in a technology investment, check out this event:

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

Govt Aims to Improve Science Dialogue

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The Prime Ministerial advisor on science, Prof. Peter Gluckman is hoping to facilitate a better dialogue both within the science community and between scientists and the New Zealand government. He may have an uphill climb ahead of him.

In a recent radio interview Gluckman made it clear that his brief was simply to provide advice and to act as a translator to both government and public on science issues, it was not his role to become involved in politics. But when pressed on the subject of why the National government killed both the Fast Forward initiative and the R&D tax incentive scheme, he refused to comment. This suggests that (at least in public) he will be obliged to moderate his tone on some topics.

Professor Gluckman said better scientific literacy was required across the whole of society because we were having to deal with more complex issues such as climate change and the ever increasing impact of technology on our personal lives. He also indicated that it was his view that the science funding system was overly competitive and that this was dampening creativity; perhaps foreshadowing some much needed change in this area.

Prime Minister John Key recently gave a speech on economic direction. It was clearly signalled that, in terms of science research, the government is now primarily interested in supporting the agricultural sector as a bridge to greater economic prosperity. Unfortunately that confines us to a future of increasing pastoral pollution, high carbon output and enslavement to commodity prices that continually devalue in real terms.

But Gluckman agrees with his colleague Paul Callaghan that science must remain “an integral part of the innovation system” and that we need more high tech companies like Navman, Rakon and Weta Digital. If we are to improve economic productivity then science needs to connect with business, both within New Zealand and abroad, he stated. It will be interesting to see if he can similarly persuade the Prime Minister.

How Safe is Your Digital Identity?

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iwantmyname_logo_50The ongoing saga around the threatened discontinuation of url shortener tr.im plus the recent DOS attacks on Twitter are chilling reminders that your personal data is far from secure on the Internet. It also raises philosophical questions about the transient nature of knowledge on the Web. So where should we turn?

It’s a little unclear whether or not the tr.im panic was reality or just a cleverly orchestrated publicity stunt, but it doesn’t matter. What this incident reminds us is that when it comes to Internet content, we are all at the whim of the service providers. Whether it be business data, webmail, blogs, images or short links, if your favourite free service tanks – it can cause a lot of disruption.

Much of the trust we place in hosted web services hinges on the assumption that they will remain in perpetuity. Furthermore, we like to believe that such services are secure and that our personal data will not be abused. Are those fair assumptions? Even the big guys have server downtime and most don’t publish monthly reports on their financial stability. How can we feel confident that the best interests of end users are being served?

Don’t get me wrong. I like using services in the cloud and I’m 99% happy with what they provide. I also think tr.im is a very neat and user-friendly product and I’m sure they will find a way forward. However, it is a fairly straightforward exercise to set up your own personal url shortener service within your own branded domain name. Over at iWantMyName we’ve come up with a list of providers who can help you set up your own url shortener service. In some cases these services offer link portability – but you must own your own domain to do this.

But what if the domain name system (DNS) itself gets taken down? Well never say never. What we do know is that, despite it’s failings, the DNS system keeps chugging along and has done so for many years. It also has a powerful and well resourced regulatory body. The strength of the domain registration industry business model should ensure its longevity, unlike some other service offerings on the Web. So if you want to properly protect and control your digital identity, find an ethical, user-centric and innovative domain registrar such as iWantMyName and secure the web domains that you need.

Update – here’s a great article from LifeHacker assessing risks in the cloud:

http://lifehacker.com/5325169/the-hidden-risks-of-cloud-computing

Cultivating an Entrepreneurial Ecosystem

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

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

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

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