Wellington Local Body Amalgamation: My Submission

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For the record, here is a copy of my submission to the Local Government Commission

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“Firstly let me express my utter disappointment at the way this entire process has been managed. The release of the draft proposal from LGC was badly timed and there has been insufficient opportunity for robust public debate as a result. It’s clear that this suited the agendas of certain politicians who are hell bent on forcing a change that, it has become clear, the majority of people do not want. This is not good enough and we expect more of our elected officials and taxpayer funded civil service.

On that basis my submission is simply this:

1. That the entire process addressing changes to local body governance in the Wellington region be halted and subject to an independent review.

2. The existing proposal from LGC be scrapped and a new proposal be developed involving a far more democratic approach and with much deeper public engagement.

3. The existing Wellington Regional Council members be removed immediately and replaced with a temporary commissioner.

4. We already have a pan-regional council. We do not need to reinvent the wheel. What we need are functional board members who can work collaboratively with existing councils around the region.

This process is on the wrong path right now. I would urge the LGC to take heed of public opinion. Thank-you for your consideration of this matter. ”

Postscript:  We won! 90% of public submissions were against the merger and LGC has canned the existing proposal. More background here.

Dysfunctional Regional Council Must Go

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In case you hadn’t noticed, the public consultation around the proposal to amalgamate local bodies in the Greater Wellington region closes on March 2nd. You could be excused for not knowing, because (much to their shame) the parties concerned have done little to encourage public debate on the topic. The proposal is highly contentious, has huge implications and yet has been so poorly publicised. But the one thing everyone seems to agree upon however is that the highly dysfunctional Wellington Regional Council must be dissolved, whatever happens.

An information guide dated December 2014 finally turned up in my letterbox in mid-February. The pamphlet explains the “draft” proposal put forward by the Local Government Commission for local government amalgamation in the Wellington region and invites public submissions. Drilling down into the commission website, it became apparent that there was not an online form for submission anywhere, but simply an email or postal address. I guess they weren’t expecting many responses. There was no obvious mention of the proposal or submission process on the Wellington City Council website at all. The Wellington Regional Council website does have one page devoted to the topic, including some useful background material, but zero information on how to actually make a submission. In an age of nearly universal access to internet, this is unacceptable and makes me suspicious about transparency around the entire process.

Notwithstanding the obfuscation, there has been a flurry of media activity in recent weeks as it emerged that almost half the Wellington Regional Council elected councillors are having second thoughts as public disquiet has been growing. Even the pro-amalgamation “Chamber of Horrors” have toned down their rhetoric lately, as it became clear that the real bill for amalgamation could be well north of $200 million, if harmonisation of I.T. services were included. In a recent joint statement the business Chambers agree there is a “need for change”, but do not go as far as endorsing the current proposal.

The original suggestion for amalgamation came from Wellington Regional Council itself and is being driven largely by an individual with one eye firmly fixed on the future super-mayor job. This person has a sterling previous track record of successfully promoting unpalatable political agendas and knows the right levers to push to get the job done. But releasing the amalgamation proposal at Christmas, then fronting up to a couple of small debates a week before the doors close simply doesn’t cut the mustard in terms of public engagement.

Ironically, it is the lack of goodwill between the existing regional council and the other councils in the region that has led to this problem in the first place. There are important regional projects such as economic development, roading and water that must be addressed in a co-ordinated way, but the regional council has failed to galvanise and unify the other players in the region. Making a clumsy grab for power must have seemed like the only option. What is really needed is a functional regional council that has the confidence of all the city and district councils and that can play nicely and work collegially on the really important issues that face our region. What we do not need is another Auckland-style unitary authoritary. Why reinvent the wheel at a huge cost to ratepayers?

So it is very clear that the existing Wellington Regional Council members must now step down and that the Local Government Commission must go back to the drawing board and respond with a structure that empowers the regional council, whilst retaining local legitimacy and addressing community needs. With luck, we should see a public referendum on the issue in the future. A prominent WRC councillor once expressed her disdain for democratic processes in the past, when she said “let us hold our noses and vote”. Perhaps ratepayers (and voters) of the Wellington region should follow suit.

Paul Spence is a commentator, technology entrepreneur and is a co-founder of iwantmyname, a New Zealand based global Internet venture. You can follow him on Twitter @GeniusNet

Catton Furore Points To Painful Reality

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The last time I saw Eleanor Catton, she was travelling in a pushchair under the care of her doting father Phillip. Judging by her Dad’s response this week to Sean Plunket’s ill-judged comments, she’s still the apple of his eye. But the acclaimed author has come a long way since then.

Eleanor Catton reportedly made some disparaging comments about the parlous state of intellectualism in New Zealand and alluding to how arts and creative endeavours have suffered at the hands of neo-liberal politicians and their supporters. Plunket’s outburst therefore seems somewhat ironic given that he himself built a career out of freely criticising others, including dissecting the political establishement. Should not Catton be afforded the same privilege?

The most amusing aspect of this affair is that Plunket’s rant simply underlines the point Catton was trying to make. New Zealand has become an intellectual desert where the media’s (and public’s) chief obsessions are cleverly branded sports teams and little else. Furthermore, intellectual debate is reviled and the political discourse revolves largely around economic progress. Unsurprisingly, Catton has consequently shown little interest in being lauded as a daughter of New Zealand as her star ascended on the global stage.

We New Zealanders are an insecure race and are constantly needing to claim celebrities as our own, as if to fulfill our ambitions vicariously in some way. Perhaps that is a function of being a tiny island nation on the edge of the real world. Given the state of the rest of the world, we actually have much to be thankful for, in reality. But in the same way that film maker Peter Jackson succeeded in spite of being based in New Zealand, Catton achieved fame through her own efforts and by the quality of her scholarship and determination, not because she had a New Zealand upbringing or any obligation to our country.

Numerous pundits, including Eleanor Catton herself, have taken to social media to express a variety of viewpoints about this sorry episode. “New Zealand doesn’t invest enough in growing strong and stable institutions to nurture and develop its next generation of leaders, thinkers and creators”, exclaims Mark Rickerby in a brilliant but somewhat pessimistic article in support of Catton. Whilst I agree with many of his points, I’m still hopeful and here’s why.

My teenage son is growing up in a New Zealand where at least half his friends are immigrants or children of immigrants, where fewer and fewer kids are taking up team or contact sports and where traditional media is regarded as largely irrelevant by his peers. It’s simple demographics. Plunket and his conservative, flabby, white, football-loving, bogan mates are right to be worried, their days are numbered.

Paul Spence is a commentator, technology entrepreneur and is a co-founder of iwantmyname, a New Zealand based global Internet venture. You can follow him on Twitter @GeniusNet

A Year Of Global Entrepreneurship?

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It’s Global Entrepreneurship Week this week, with a focus on encouraging young entrepreneurs to step up all around the world. Unfortunately GEW seems to have bypassed New Zealand this year – but not to worry – there’s still a great deal happening in the start-up, tech and innovation space.

But lately I’ve become a little less optimistic that we are heading in the right direction in terms of supporting a high tech business start-up culture. Can start-ups really be artificially manufactured and then massaged into life, like characters on a reality TV show? Why are our academic institutions still failing to commercialise publicly funded intellectual property?

Admittedly incubation has had a somewhat chequered history in New Zealand to say the least and the jury is still out on whether intense “accelerator” programmes can work well in a small, distant and (relatively) capital poor market like ours. But who’s calling the shots on public investments in technology these days? Disturbingly, the New Zealand government’s 2015 science investment round still does not even mention a specific category for ICT. This raises questions about priorities, especially given that ICT companies have a demonstrably shorter development cycle than biotech and manufacturing.

The current crop of start-up programmes seem overly focused on creating opportunities for early stage investors, rather than advancing regional economic development. The focus should be in providing local foundations for high value, globally scalable businesses. For example, the most promising of the recent Lightning Lab alumni almost immediately relocated to the United States. But perhaps I’m missing the point? The departure of Lightning Lab itself from Wellington also underlined for me precisely why public servants and executives in suits should never be allowed to meddle with “innovation” initiatives.

Maybe none of that matters, because ultimately it’s the educational and motivational opportunities that are most meaningful. The various initiatives on offer also raise the profile of entrepreneurship as a career option. That’s important because it’s clear that the continuing lazy media obsession with sporting and entertainment “heroes” does little to encourage our young people into business at present.

What is encouraging however, is the fact that techies and start-up fanatics have become a lot more self-organising lately and are just getting on with it. I daresay the majority of interesting tech start-up companies of the future will probably get going in the same old way they have done historically – with a couple of mates bouncing an idea around over a beer and then raising some cash AFTER they get customers on board. Those companies will be thinking global from day one if they are smart. Global entrepreneurship should be the focus all year round.

Want to keep in touch with the best tech and start-up events? Make sure you sign up for the New Zealand edition of the free weekly Startup Digest.

Paul Spence is a commentator, technology entrepreneur and is a co-founder of iwantmyname, a New Zealand based global Internet venture. You can follow him on Twitter @GeniusNet

Capital Tech Beat Picks Up

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r9sw1The logo parade on High Tech Capital’s website aptly illustrates how Wellington’s tech start-up scene just keeps getting better and better. In the depths of the global recession back in 2008, when we bravely launched iwantmyname onto the world stage, you could count the number of innovative, global-facing web start-ups on one hand. The mood was downbeat at that time, but the stage was set for what local angel investor Dave Moskovitz has labelled as a “Cambrian explosion” of innovation.

Way back about the same time the dot-coms were busting in the U.S., some of us saw that the tech and start-up ecosystem in New Zealand needed fixing. Through early initiatives such as Capital ICT cluster, Unlimited Potential Wellington to the World and Startup Weekend we set to work joining the dots. Building an ecosystem takes a long time because it requires some political risk taking and a cultural shift. With a long overdue re-draft of the regional economic strategy and the blossoming of other initiatives such as Macdiarmid, CreativeHQ, AngelHQ and  tech accelerator Lightning Lab, we finally have all the ingredients in place.

It also helped a lot that we have high tech movie and games industries and a couple of hefty counterweights in the form of Xero and TradeMe. There’s a free flow of talent across the semi-permeable boundaries between games, movie and software industries and the big boys keep Wellington in the global spotlight. The recent Green Button acquisition by Microsoft was a coup for local angels who invested and demonstrates how success springs from the tech talent pool, many of whom are skilled migrants.

Keeping talent engaged in our region involves creating an attractive cityscape and ensuring infrastructure such as broadband and transport links are world class. We also need to constantly invigorate the flow of capital and ideas through events, initiatives and global outreach to other start-up magnets around the Asia-Pacific rim.

Stay in touch with start-up, tech and innovation related events with the weekly edition of New Zealand Startup Digest. Registration is free.

Pictured: Josh Forde, Paul Spence & Dave Moskovitz at R9SW. Photo credit: ParleyMedia

 

Recipe For Disaster

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bresolinsThe declining quality of our home grown television content was never so prominently on display as during the finale of The Great Food Race last night. Everything that is wrong about “reality TV” combined into a tragi-comedy of epic proportions that unfolded like a slow motion train wreck. The worst part was that the outcome was entirely predictable.

The Great Food Race got off to an entertaining enough start with oddball competitions played out in various exotic locations as bemused locals looked on. The format even looked workable with our national airline nicely leveraging the interest generated with each episode. The pre-recorded sessions were well edited and interesting enough to extinguish my initial scepticism. So what went horribly wrong?

Clearly the producers had exhausted their budget and their wit, judging by the minimalist venue and the lack of direction. Perhaps the writing was already on the wall regarding the future of the show, leading to a lax approach in delivering the end product. It may also explain why the presenters failed to mention the sponsors or prizes once during the final episode.

Where to begin? Clutching her cue cards and clearly still in shell shock from her husband’s (deserved) media drubbing earlier in the week, presenter Zoe seemed hell bent on interfering with the contestants as they improvised their dishes under intense pressure. Perhaps that was part of the challenge? The Bresolins are great entrepreneurs and a credit to their industry, but last night looked awkward and embarrassed. In their defence, they did their best under difficult circumstances, to nibble and slurp their way through the unscripted mess that was before them.

What lessons can be learned from this disaster? Firstly, cooking shows do not make good live television. I’ve seen telethons with better continuity than was on display last night. But at least telethon has audience participation and supports a good cause. Why was it even necessary to go live for this finale? Secondly, spontaneity is great but a little planning goes a long way towards successful execution. Thirdly, beware the disengaged and cynical audience, their social media hate stream can wreck your brand.

The saddest aspect of the entire debacle was that it was clear that the young, blond, more photogenic couple were shoe-ins to win, no matter what they concocted and despite their nastiness towards the opposition. Sara and Danny were the more entertaining of the finalists and genuinely enjoyed themselves throughout however. They even pulled off recovering their disastrous “pasta covered meatballs” with aplomb, which is more than can be said of the production values of the show itself.

It would be a shame if last night’s cook-off spelled the end of the series however. The overall format was worthwhile and could be improved upon in future, with a little more forethought. In the absence of any quality local content on the box these days, The Great Food Race could have been a winner.

How Long Is Your Runway?

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runwayAs a pilot I love it when I can draw aviation analogies and experiences into my entrepreneurial life. Perhaps the most obvious comparison involves the “runway” metaphor.

Most of us appreciate that the numbers we drafted in our start-up business plans are (let’s face it) rather meaningless. How can we possibly predict several years worth of revenue and cost data when we are still testing our initial business hypothesis? We simply cannot – but that doesn’t mean we shouldn’t have a plan. Cashflow distress is one of the leading causes of business failure. I’m not too proud to admit that I experienced a “near miss” myself in the past. Here are some tips to avoid a plane wreck.

The good news is that a cashflow crisis is entirely avoidable, if you have a robust planning and reporting process. Obviously, one of the goals of business is to generate a profit, but even profitable businesses are not immune from cashflow problems. If your bill payment cycle is out of sync with your revenue cycle, be wary. If you operate a web-based business, you have a particularly lumpy cashflow because your payment gateway provider may only pay you monthly initially. After a period of trading it is generally possible to negotiate weekly payments. Arrange this as soon as possible.

For other kinds of businesses, the chief risk is aged receivables. In other words slow payers. You aren’t a bank, so why should you loan precious operating capital to your customers?  Which is effectively what you are doing. There’s no law that says customers only pay on the 20th. For consulting or services work, I generally apply terms of 10 working days. Make sure you discuss the terms up front however, so everyone is on the same page. If they can’t be flexible – is that the kind of customer you want to be involved with?

Even if you don’t know exactly what your revenue is in advance, make an intelligent guess based on past experience. But be conservative. A cashflow forecast is quite possibly the one tool that will keep you out of the shit. Figure out your burn rate and balance this against cash on hand and income. That’s how you work out your runway. You should be able to forecast how much cash will remain at the end of each week, at least a few weeks ahead, preferably more. Initially this is tough, but it becomes easier as you collect more data.

Most businesses start out under-capitalised. Provided your business model is sound and revenue starts flowing early, this is not always a problem. But the reality is that under-capitalised businesses fail more often and grow more slowly due to less investment available for growth initiatives. If you are worried about excessive burn rate there are only two possible solutions. Sell more product or reduce outgoings accordingly. Unfortunately salaries are usually the first target, so be realistic with your early employees or co-founders and be clear about what the options are if cashflow drops.

Paul Spence is a commentator, technology entrepreneur and is a co-founder of iwantmyname, a New Zealand based global Internet venture. You can follow him on Twitter @GeniusNet

 

Making Your Startup Weekend Project Shine

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sw65Wet weather and some rumbles from the earth were not enough to put a damper on Wellington Startup Weekend special social enterprise edition in 2013. Teams rapidly coalesced around various ideas for social ventures and the hard work of crafting a business proposition in the short space of 54 hours got underway.

As entrepreneurs, what is our most pressing task? The most important role of an entrepreneur is TO LEARN. Starting up a new business is a crazy experiment. You have a hypothesis, you test it out and then you adjust according to what has been learned (or you stop altogether). That is the essence of a scientific approach to customer development and customers/revenue are ultimately the life blood of any enterprise. There is no magic formula apart from hard work.

Startup Weekend offers a microcosm of the venture development process. It’s primarily an opportunity to learn from and network with a wide range of people who you can potentially work with in the future. Most participants don’t walk away with a big prize or a viable long term business. If that is your primary goal, you are probably in it for the wrong reasons.
But here’s a few tips for polishing up your fantastic Startup Weekend idea.

Judging revolves around three main themes. Business model, validation and execution. Do not expect to have perfected any of these by Sunday evening.

Model. Sustainability is the key. Demonstrate that you can potentially offer a product or service that is both financially profitable or sustainably delivers on social objectives. Why would you invest many hours of your valuable time into a venture that cannot feed itself?

Validation. Judges love to see that you got out of the building and tested your ideas on others. Your Mum’s opinion doesn’t count. Talk to strangers in the street, competitors, suppliers, potential partners and anyone who can give you a subjective viewpoint. Get some online surveying going. Where is the demand? Does your idea suck or sing?

Execution. You don’t have to close any sales deals or have a fully functioning web app by Sunday evening (although many teams have certainly achieved extra credit for this at previous events). But if you have a cohesive team, a good story and some kind of “minimum viable product” or prototype concept to demonstrate, that will impress the judges a lot.

Social Media. Finally an extra tip. Startup Weekend is all about knowledge sharing, networking and community. Extra brownie points for those teams that have been actively generating buzz through social media throughout the weekend. If you don’t have those skills yourself, get someone on the team who does and learn from them – fast. Building an online profile is essential for scaling any kind of business – social enterprises are no exception.

Best of luck!

Paul Spence is a commentator, technology entrepreneur and a co-founder of iwantmyname, a New Zealand based global Internet venture. He’s also a veteran of eight ten Startup Weekends as an organiser, mentor, sponsor or player and was a judge at Wellington Startup Weekend: Social Enterprise in 2013. You can follow him on Twitter @GeniusNet

Tunnel Collapses. Good Call Minister!

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hollyfordAs you may be aware, Minister of Conservation Nick Smith this week delivered his decision on whether or not to grant a concession to Milford Dart Limited for construction of an eleven kilometre, one-way bus tunnel between the Dart Valley and Milford Sound. One has to sympathise with the Minister who frequently has to make such rulings and whose decisions are not always popular.

However, it beggars belief how such a ridiculous proposition even got as far as the Minister’s desk in the first place. Proponents of the tunnel who energetically cite how it will reduce travel times to and from Milford Sound seem to have missed the point. Tourists come to enjoy New Zealand’s scenery, not to sit in a dark tunnel. Others have championed how the plan will bring new economic life to the region – when in fact it is likely to kill small towns like Te Anau that rely on passing traffic. Milford Sound itself is physically constrained and simply cannot grow any more, so that argument also falls flat.

Smith used some sound reasoning as to why he declined the project. Uppermost in his mind seems to have been concerns about exactly where millions of tonnes of earth would be deposited after it was dug from the tunnel and that it was not consistent with the park management plan. Even ignoring the fact that the economics of the venture don’t actually stack up; there are much more important, but less tangible, reasons for filing the plan in the waste paper bin.

Despoiling our greatest national park (and world heritage area) for highly questionable commercial gain, would simply be a crime against all New Zealanders. We should keep our special places intact. Good call Mr Smith and deep shame on Tipene O’Regan and his fellow directors of Milford Dart who, given their connections, you’d think might have had more respect for the intrinsic value of a relatively untouched region.

Paul Spence is a commentator, technology entrepreneur and is a co-founder of iwantmyname, a New Zealand based global Internet venture. You can follow him on Twitter @GeniusNet

 

 

Will The Real Wellington Please Stand Up

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wcc2Our Prime Minister laid bare his regional biases when he implied recently that our Capital city is a hopeless economic case. But Mr Key would do well to remember that the regional economies are subsidising the infrastructure build up elsewhere.

Wellington may have lost a few corporate head offices, but its economy is a lot more diverse and robust than that. Let’s look at what’s really going on in Wellington in the context of high value, export oriented, knowledge based business activity. According to economic think tank Infometrics, in 2011/12 the overall number of businesses in Wellington actually grew slightly, whereas in Auckland the number dropped considerably. More importantly, Wellington has the highest GDP per capita of any New Zealand region. This is hardly surprising when we look at the emerging economic players.

Activity in the screen and digital sector grew twice as fast as the New Zealand economy generally, with film, animation, gaming and software delivering a billion dollars to the region annually. Wellington has the highest intensity of knowledge based businesses per capita, a busy port, two universities bursting with fee-paying foreign students and an enviable and growing tourism profile globally. Wellington also boasted the highest number of New Zealand companies in the Deloitte Asia Fast 500, an international benchmarking initiative that identifies high growth ventures across Asia-Pacific.

The only business types that decreased in Wellington were insurance and financial services. That is hardly surprising when you consider that insurance companies have little interest in the Wellington market post Canterbury earthquake and finance companies have been dropping like flies everywhere anyway. No great loss. It’s also no secret that government services have been operating with sinking lid staffing policies for some time amidst austerity measures. But despite fear mongering by public service unions, the actual number of staff affected has been minimal. Government sector makes up only about 10% of the regional economy (about the same as tourism income).

Many of us have invested a huge amount of effort into building creative communities in our region that have underpinned the growth of high value, knowledge based businesses. In the context of a sluggish global economy, Wellington has held its ground relatively well, so it is certainly unfair to make comparisons with the other main centres, which have entirely different contexts at present. The government should also be reminded that the growing tax take in the regions is supporting spend-ups in other parts of the country.

Paul Spence is a commentator, technology entrepreneur and is a co-founder of iwantmyname, a New Zealand based global Internet venture. You can follow him on Twitter @GeniusNet