The Moxie Sessions: Frank Sinatra, dinosaurs and the hidden dangers of startup nationhood
“If I can make it there,” sang Frank Sinatra in his 1979 hit New York, New York, “I’ll make it anywhere.”
Hidden behind that hip-swaying beat was a handy message: if you can make it in the toughest of places, where no one cares if you live or die, well, nothing in the world can stop you.
But what if you flip that on its head? What if you start a business in a place where everyone is helpful, barriers to entry are low and you can register a business in the time it takes to read this column? Turning a country into one big incubator might be great for hatching lots of businesses, but what happens when they leave that snuggly nest and take their ideas to the big, generally uncaring, world?
We’re not afraid of big questions or indeed mixed metaphors at The Moxie Sessions, so armed with little other than cheap supermarket wine, some leftover almonds from last time and a lethal cocktail of intellectualism and whimsy, we convened at GridAKL to ask: How does New Zealand rate as a place to start things up? Can we be a "beta-nation" or an incubator for good ideas to the world?
Leading the discussion were three founders who have all started businesses in New Zealand with a view to taking them worldwide. Kirsti Grant leads HR-for-startups platform Populate and was recently (along with Weirdly boss Dale Clareburt) named one of 4 “woman CEOs to watch” in HR tech. Rich Chetwynd heads up security and password management company ThisData. (Me: so are you live yet? Him: we should have our millionth user by the time this goes to print.) And German-born Mel Langlotz from Geo AR Games has used augmented reality to infest a bunch of New Zealand parks and public spaces with dinosaurs (as you do).
Populate has been live since June and is quickly getting traction among startups facing similar talent management challenges to Kirsti (and cofounder Lance Hodges’) former employer Vend. For Kirsti, New Zealand is a very good place indeed to launch a tech business. “Everyone’s willing to help and there’s a real sense of community. There’s no shortage of free advice and support, and you don’t get lost in the crowd in the way you can in the US.”
While there’s no lack of people willing to help, that doesn’t always translate to investment. Kirsty quotes a startup truism: “Ask for money and you’ll get advice. Ask for advice and you might get money.”
Not being in the US though, she points out, is painful. Like so many SAAS businesses, Populate’s biggest market sits 10 hours thataway, so there’s no getting away from the need to head stateside and meet customers face to face – something she and Lance do regularly.
It’s a journey that ThisData founder Rich Chetwynd has made many times. The fast-growing company offers contextual authentication technology (keep reading!) that uses data about location, behaviour, digital device, browser choice and more to add layers of identity protection that go well beyond username and password. Unsurprisingly, very few of its million users live in Lower Hutt, so the USA is critically important to the business.
While Rich sees value in basing development and support functions here, he says there’s no substitute for boots on the ground in target markets, so his sales and marketing team will soon be US-based. Geography matters to when it comes to raising funds too, with some US-investors reluctant to buy into offshore companies.
Mel Langlotz from Geo AR Games has taken a slightly different path to Kiwi startup success. Originally from Germany, Mel decided in 2011 to leave the film industry and explore augmented reality. Naturally, her journey took her to Chile, where Startup Chile offered a place to work, Spanish lessons, connections to local mentors (and a requirement for Mel to do the same) and USD$20,000 with no equity. An unexpected benefit, says Mel, was the connections she made with founders from all over the world.
From Chile, the next step was Wellington, where Lightning Lab Wellington also offered $20,000, but in exchange for a 6% stake. It was there that Mel partnered with Kiwi CTO Amie Wolken to develop the platform that saw Auckland’s Victoria Park overrun with dinosaurs, and sold it directly to a group of local councils – helping avoid the need for investors.
For Mel, New Zealand’s relatively lean bureaucracy made all the difference – “I can’t imagine getting a dozen local government agencies in the US to sit down and talk… but you can do that here.”
There’s not much doubt around the table, then, that New Zealand is a relatively easy place to start something. But is that necessarily good? Figure.NZ founder Lillian Grace argues that there could be value in raising the bar, rather than lowering it.
“New Zealand is a great place to start something… but that can mean people don't spend the time up front testing their idea and seeing who else is working in the space.”
While this can sometimes lead to awesome ideas turning into unprofitable businesses, Lillian points out that this isn’t the only measure of success: Figure.NZ operates as a social enterprise, and Lillian sees potential in New Zealand as a startup nation for others like it.
Another route to success could be sector specialisation. While the primary industries route seems obvious (and feeding the world connects nicely to the social enterprise theme), the idea of establishing New Zealand as a banking and finance innovation hub got a lot of support from the table. Joining the crowd equity, blockchain, peer to peer lending and other fintech dots could present a real opportunity, rather than just supporting innovation in a fuzzier sense. (And hey, the world needs more virtual elephant banks, right?)
Whichever path we take, though, scale will be the key. And to reach that means looking beyond our borders and doing that quickly, to grow, succeed or fail on the mean streets of Gotham, not just the friendly café tables of Ponsonby Road and Cuba Street. Because, to paraphrase Mr Sinatra, “If you can make it here, well, that doesn’t mean shit.”
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, see themoxiesessions.co.nz.