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The Moxie Sessions: Tin lids, instant coffee and the business of turning ideas into success

Every month, The Moxie Sessions bring together a small group of Auckland business thinkers to discuss ways New Zealand can take advantage of the Internet and boost its competitiveness. For more, see http://themoxiesessions.co.nz.  This month, we looked at how well New Zealand commercialises its science.

Adding their expertise to the discussion were guests David Downs of NZTE, Russell O’Brien of Callaghan Innovation and Brent Ogilvie from life sciences and clean tech investment firm Pacific Channel.

So how well do New Zealand inventions travel from shed to shop? Is it enough to build a better mousetrap, or is there more to making a killing than, well, making a killing?

The short answer is that simply inventing something, no matter how useful, isn’t enough, and it never has been. The good news is that we’re getting better at walking that path from shed door to shopfloor.

Take, for example, the simple tin lid. According to online encyclopedia Te Ara (and David Down’s upcoming book, Number 8 Rewired), the airtight lid used on coffee, paint and golden syrup lids was invented in 1884 by Dunedin tinsmith John Eustace. The lid was an immediate hit, and Eustace sent his prototype to England to have a die made so it could be mass-produced. The English saw its potential and offered Eustace thousands of pounds for the rights to the design, before realizing his IP protection was well short of airtight (he hadn’t patented the lid) and just produced copies themselves. Rip off the colonial? Sure can!

Even patenting an idea, though, doesn’t necessarily pave the way to fame and fortune. Today, many of those Dunedin-invented tin lids spend their days keeping the Gregg’s Red Ribbon Roast inside nice and dry. And who invented instant coffee in the first place? Yep, another New Zealander, Invercargill factory-owner David Strang. Strang even patented the process in 1889. Commercial success though, went to a Japanese scientist who marketed his instant coffee not from a shop on Tweed St but at the Pan-American Exposition in Buffalo, New York.

One hundred years on, says Ogilvie, New Zealand inventors and entrepreneurs are getting a little smarter with their creations. Somnaceutics, for example, was a Pacific-Channel-cofounded company (since sold to New Image Group) that developed a milk powder with sleep enhancing properties. Marketed as Sleep Time, the powder was especially popular in Taiwan, which for some reason (possibly the high number of Taipei personalities) has one of the highest rates of insomnia in the world. Today, Ogilvie says, Sleep Time sells for hundreds of dollars a kilo and is a model for the kind of IP-driven businesses New Zealand needs more of.

So what are we doing about it at a national level? Callaghan Innovation’s Russell O’Brien sees risk-friendly funding as a big part of the equation (and MBIE has just announced an initiative to provide bucketloads of it) but accepts that commercial acumen is almost as critical as the innovation itself. As Pacific Channel’s Ogilvie points out, a third of companies seeking funding for their idea wouldn’t bother to come to the meeting if they’d Googled it first and seen that it already existed. 

Encouraging inventors to open that shed door is important too. Earlier Moxie Sessions have talked about the reluctance some New Zealanders have to exchange equity for investment, but just admitting that being a great inventor or scientist doesn’t make you a great CEO or CMO is an important cultural hurdle to overcome. 

Building deep IP matters too. If you came up with that great idea one night at the kitchen table, well, there’s not much to stop anyone, anywhere in the world doing the same and the roadmap to success can come down to little more than a race for user numbers. But if your innovation flows from deep IP – big groups of people spending a long time on world-leading thinking in a particular area – you’re far less likely to step off NZ8 to find a dozen startups with similar plans for world domination.

Which brings us back to those tins. While the tins ordinary milk powder comes in might serve as a reminder of early Kiwi IP failures (and you can double down on that if you add the stuff to your instant coffee), the pricey little sachets Sleep Time ships in prove that sound business thinking, including protecting and marketing your ideas, can be just as important to success as having those ideas in the first place.

The Moxie Sessions is an internet economy discussion group held once a month in Auckland. Its purpose is to bring together a group of interesting folks from across the economy to talk about how New Zealand can take advantage of the internet to improve its economic performance.

Check out the standing invitation, the podcasts and the records of previous events at http://themoxiesessions.co.nz, and follow @moxiesessions on Twitter.

Vaughn Davis is principal at social media and advertising agency The Goat Farm.