The Moxie Sessions: Forget Fonterra, we need a Coca Cola: why the next great Kiwi business needn’t be that Kiwi at all
Edited by Lucy Luo
Our national emblem, the kiwi, is a small, nocturnal bird. It is quiet, shy, and flightless; it has never had to contend with any natural predators. The topic of Wellington’s second Moxie Session was how Kiwi businesses can expand internationally; and one of the takeaway messages was that we may need to separate ourselves from the reticent bird not only in our actions but in our branding too.
Phil Veal, chief executive of investment firm Rangatira and chairman of Kea, reckons New Zealand businesses lack ambition. In his view, we are thinking too small and this holds us back from dominating the global stage. Businesses need to dream bigger and hustle harder to be successful beyond our shores. He suggested New Zealanders should translate their passion for travel and expand it into trade – when Kiwis travel, we can make more of an effort to understand how to create customers in those foreign markets. We’re some of the world’s best travellers, and yet we’re probably among the worst traders.
To take our business to the next level, Mr Veal reckons New Zealand companies should be more demanding – of capital, and of ourselves. We’re typically happy to get a modest return on our capital. But we need to start demanding as much of our assets – including our capital, our people, our time and energy – as offshore investors do. Comparing the corporate structure of Nestle to the co-operative structure of Fonterra, he says that the farmer-owned co-op structure can be capital-constrained, and individual caution stops Fonterra’s mentality from being long-sighted enough.
Part of these limitations is that “we are a nation of wholesalers but we need to be a nation of retailers.” New Zealand needs to move from commodities distributed by others to value-added products delivered straight to consumers on the international stage, with clothing company Icebreaker cited as one successful example.
Marie-Claire Andrews, the founder of conference app ShowGizmo, decided in week four of her start-up journey (now four years on) to take her company international. She had the room in complete agreement when she said New Zealand businesses are scared of competing in the international sphere because, like the kiwi, “we have no natural predators” and are stuck in the mindset of safety and comfort.
New Zealanders are world-beaters on the sports stage, and don’t shy away from competition when it comes to the Silver Ferns or the All Blacks but in business they are relatively timid, and this needs to change. It’s not just their retiring nature they need to outgrow. Mr Veal stressed that we should be aiming to create multinational business models. We should not simply bank on the “New Zealand brand” and we don’t have to focus on exporting goods which have been made in New Zealand. Like Coca-Cola, our businesses should be unafraid to produce all around the world, to sell all over the world. We can invest our capital offshore, and generate returns offshore for New Zealand investors at home.
Ralph Highnam, chief executive of Volpara Solutions, talked about his own experience in marketing breast imaging solutions and software in the US. For him, it was important to spend money on getting the right people on the ground when expanding into an unknown market – “not just good but the very best.” A key part of his role now is keeping the company cohesive as it grows.
Mr Highnam built Volpara as a company that was “was global from day one” – now present in 31 countries and most recently expanding into India. It was founded as a US company, and coincided with the internet reaching a stage where it enabled a company to operate internationally from Wellington (Ralph being an advocate of Skype and Google Hangouts). Nevertheless, they balanced sales between direct distribution and relying on American distributors; plus listening and being aware of cultural differences was also key in countering the isolation that arises from being based in New Zealand.
Ms Andrews shared a story on what not to do. ShowGizmo’s expansion into the UK was a case of “too soon, too cheap, and not being able to follow up.” It raised far less than its competitors – New Zealand just doesn’t have that level of capital lying around. Her US competitors tended to raise large, and then focused on executing the hell out of it. As the room found out, the moral of the story is “get two pillows,” so that you’re not left sleeping on a rolled-up hotel room towel.
Where might we as Kiwis find some help? The Kiwi mafia overseas was repeatedly mentioned as a great resource for expanding beyond our borders. Kea, a global network of New Zealanders founded by Sir Stephen Tindall and chaired by Mr Veal, was suggested as a way for business to connect with Kiwis on the ground and get local knowledge, as well as New Zealand Trade & Enterprise (NZTE). Mr Veal encourages businesses to leverage Kea’s ‘Borderless Nation’ – a network of Kiwis around the world ready to prove that, wherever you’re doing business, there should be no such thing as a cold call.
And what can the government do to facilitate our success overseas? New Zealand is already an easy place to set up a business, particularly compared to the US. Mr Veal made the point that the US succeeds in spite of itself. It’s much more difficult to set up a business in the US, with the regulation and differing layers of state taxes as just some examples, and yet the Americans bulldoze through the administrative difficulties to make it happen.
A lot was mentioned about NZTE’s role in all of this, with most people having good experiences with NZTE, and others finding out about what NZTE could do to help them. Richard Laverty, a general manager at NZTE, said entrepreneurs and businesses shouldn’t shy away from talking to NZTE about the different ways that the agency can help and, for those already working with NZTE, set high expectations of their customer managers.
If Mr Highnam could have his way, there would be faster internet and cheaper travel. Having said that, the general consensus in the room was that the government just needs to step back, while business needs to step up.
As the session was wrapped up, a question was asked: do New Zealanders simply prioritise a more relaxed lifestyle? Many in the room agreed that the Kiwi dream – the boat, the bach and the BMW – needs to be reassessed if Kiwis expect to move forward. But are they willing to compromise on lifestyle to build the success and global businesses they are capable of?
While the room was uninspired by the current state of global aspirations from New Zealand, there was hope. For Andrew McCallum of MBIE, there has been a generational shift in mindset for those who grew up after 1984, and this is beginning to make itself known now: he was hopeful that Gen Z would be more globally minded than its predecessors.
If Kiwis are to succeed internationally – ambition, and a willingness to divest from the local mentality and its limitations, is the key. The Kiwi has to leave the nest and do the impossible in order to fly.
Sophie Boot is a senior news editor for Salient Magazine, and is currently undertaking her masters in Journalism. Lucy Luo is a technology lawyer at Simmonds Stewart and convenor of the Moxie Sessions in Wellington.
Every month, The Moxie Sessions brings together a small group of business thinkers to discuss ways New Zealand can take advantage of the Internet to boost its national competitiveness. For more, including an invitation, see http://themoxiesessions.co.nz.
Thanks to Alcatel Lucent and its ng Connect programme for their generous sponsorship that helps to make The Moxie Sessions possible.