Are you joining the revolution?
At the recent ICE Ideas conference in Auckland ideas were shared by 30 speakers keen to improve New Zealand’s economic success. Peter Thiel of Facebook fame, Mai Chen of Chen & Partners, Grant Ryan of Yike Bike, Government Minister Steve Joyce together with Peter Chrisp from NZTE and Murray Bain of the Ministry of Science and Innovation shared their big ideas to move New Zealand forward.
A new initiative called 3000.org.nz was also launched as a catalysing attempt to change the game. The simple concept is that we need 3000 internationally engaged, capable and competitive firms in New Zealand if we are going to transform our economic performance. We currently have 1000 such firms, so the challenge is to grow this 1000 significantly while also finding another 2000 firms. If we are successful, then we would become what Derek Handley spoke of as “the best little country in the world”. Supporting this goal are initiatives in the areas of Talent, Capital, Innovation Ecosystem, Internationalisation and Measurement. These initiatives will be added too over time by people who are leading the execution of specific projects.
Talent
New Zealand needs thousands of talented executives to drive and support the growth of the internationalising companies as well as creating new ones. This is both helping the existing with lifting their leadership and management capabilities, while also creating the environment for the next generation to come through from our Universities wanting to start global businesses. We also need to address some fundamental areas of weakness where the skills we are developing are not competitive on the world stage.
One of the innovative projects identified by Fady Mishriki, co-founder and CEO of world-leading wireless power company, PowerByProxi was to issue a Start-Up Visa for international entrepreneurs to come to New Zealand to start a business from the IP that exists in our public funded science institutions. Kauffman Foundation from the US has proven that the fastest way you turn IP into products in the market is by putting an entrepreneur onto the project. We do invest heavily into science, what we currently lack is world-class entrepreneurs who can take this IP and shape it into something the market needs. Imagine if we could attract 50-100 of the best entrepreneurs to come here and start a business off our IP.
Additional talent projects include a productivity kicker for SMEs with the BNZ and NZTE creating a $1.5m fund over the next 2 years for SME business owners to receive up to a 50% subsidy on attending the ICEHOUSE Owner Manager Programme; an Intern Programme for 100 graduated students from Universities who would work in commercialisation offices, incubators, angel groups and venture funds learning about starting a business, raising funding and getting offshore; a call to Corporate executives to join an Advisory Board or Board of a start-up or emerging company so that we can pass on their wisdom but also create thousands of executives who are helping our young companies weave their way through internationalisation; and an initiative to deepen our technical software and engineering skills in New Zealand so that we could create partnerships with global centres of innovation like Silicon Valley who are interested in creative talent to enable their development projects.
Capital
NZ needs a better mechanism to channel capital into the funding ecosystem that supports internationalising firms. Enough wealth and funding are available in New Zealand through organisations such as NZ Super and offshore via expats. What is lacking are the mechanisms via which this funding can be channelled on a portfolio basis, and a range of product options for these classes of capital to make their investment choices. We need a radical redesign of financial offering to support the needs of New Zealand’s internationalising firms.
Over the next ten years, it has been estimated by Franceska Banga, CEO of the New Zealand Venture Investment Fund that there is a funding gap to support the growing firms of $NZ2b or $200m per annum. Franceska Banga’s project to fill the gap is both highly sensible and practical. The annual $200m could be filled from: NZ Super and Institutional Investors ($50m), high net worth investors and angel investors ($50m), Kiwi Saver Funds ($30m), International Co-Investment Funds ($25m), NZVIF ($25m) and wealthy migrants ($20m).
Other capital projects include a Global from Day One Seed Fund being raised from high net worth investors by The ICEHOUSE and leading seed investor Sparkbox, and two venture funds Movac and Pan Pacific Capital the former of which just announced its initial close at $30m against its target of $60m plus.
Internationalisation
Living at the bottom of the world with little or no scale, we have no choice but to build the bridge to the rest of the world. This is a great opportunity as we have an ideal test market, which can be leveraged once we have established beachheads and critical connections into key international markets.
Sue Watson, CEO of Kea, the global expat organisation is focused on creating the most able and supportive network of the diaspora and Kiwi philes to propel our companies to global success. Scaling up Kea is critical. Other projects identified including the Silicon Valley Concierge Service being lead by the Angel Association of NZ with support of US angel legends and friends of New Zealand Bill Payne and Ian Sobieski and the establishment of a physical Landing Pad in San Francisco lead by Sam Morgan and his partners which is a fantastic initiative.
Innovation Ecosystem
To create, enable and grow thousands and thousands of firms you need to have a well functioning environment that both supports and kills concepts when they are no longer viable. It happens naturally eventually and is commonly termed an innovation ecosystem.
Ray Avery has launched the New Zealand Knowledge Bank, an initiative to create the Wikipedia for New Zealand knowledge and content. It has a big vision and big ambition.
System projects included scaling up New Zealand’s start-up support organisations by merging or moving closer together organisations such as The ICEHOUSE, Bio Commerce Centre and others who support start-up creation, the establishment of a New Zealand Innovation Park in Auckland and finally the formation of an innovation council to lead the overall monitoring and performance of NZ’s innovation system, lead by the NZ Institute.
Measurement
If you create a goal or mantra, a critical aspect is measurement. It should start with who are New Zealand’s 1000 hero firms now and then who will be the next 2000 who will join them? Where is the evidence of success, not just inputs like capital raising success but deals, listings and yes exits as well. It is our hope that the public sector, lead by MSI and NZTE will join with the private sector in creating the 3000 list each and every year, so we know who are these firms and how big the gap is.
What questions remain
Should we choose sectors and/or pick winners? Are we favouring high technology too much over agriculture? These are very difficult questions, it is not a question of the tyranny of ‘or’ but it is all about working with our assets. We hope to see 3000 great Kiwi firms building and succeeding in global markets. Only a few will be blockbusters on the global stage, such as Fonterra and emerging chances like Lanzatech. Most will be good solid firms that employ people, focus on their niche and grow from there. We believe clusters of competence ‘happen’, they are not made. Our isolation is not a weakness, in the age of the internet it is a true strength and opportunity, no more excuses are needed. We must also build public and private partnerships, Government enables the environment and is supportive, and business makes the deals happen.
The final comment – the opportunity to join a revolution
Derek Handley at ICE Ideas released his prediction of the Time cover story for July, 2031 and how a revolution had occurred over the previous 20 years in New Zealand. One of his pertinent quotes came from legendary investor Peter Thiel, the co-founder of Paypal and first external investor in Facebook, “I could see that the New Zealand model was going to represent the future. I knew it would start by helping create wealth, helping create innovative companies, building an ecosystem in sectors that New Zealand could lead. So we backed a few small ideas, a few big ideas. And we were right about the Kiwis.”
Derek left one further concept for the audience in closing the conference, “You can choose to do anything as long as it’s one of these three things.
Option one, enable the revolution, use whatever position you have in your company, organisation, community or university and help. There were more than enough ideas to latch onto today and many more to come on the 3000.org.nz site. If something resonated with you, go after it, put your hand up. And do whatever you can to move it forward. This is your civic duty.
Option two, support the revolution, find a start-up doing amazing things, inventing the future and get a job there. And become a true part of the new fabric of our nation that together we are weaving.
Option three, the ultimate in sacrifice, but the ultimate in reward. Take the leap of faith, join the revolution. Be one of those 2000 that we need. Create your own thread in that fabric. Andy will help you. The ICEHOUSE will help you. I will help you. We’all help you, that’s why we’re here. Because we know we can’t do it on our own. Those are your three options. Those are the only choices you have. Pick one.”
The ICEHOUSE is a business growth centre that hosted #iceideas and has launched www.3000.org.nz a collaborative effort to create a brighter economic future for New Zealand.
If you want to talk to a real person then Andy Hamilton from The ICEHOUSE can be reached on a.hamilton@theicehouse.co.nz or +64 274 960 101 or @iceandy