Auckland couple wants to populate the planet
“People who want to start a start-up should really go and work for one first,” says Lance Hodges.
Mr Hodges and partner Kirsti Grant, who together form Populate, have certainly followed their first rule.
The pair worked for retail software company Vend as it zoomed from a handful of staff to 250 in a couple of years, with some inevitable speed wobbles along the way. Ms Grant was VP of Talent at Vend; essentially, the head of the recruitment team as the company piled on staff at its Auckland headquarters and satellite offices in Melbourne, San Francisco and Toronto.
Mr Hodges worked for the company first as a project manager (and employee No 12), and later as head of strategic projects, then head of product. Ms Grant was there for two-and-a-half years.
“That’s a lot of time for a start up,” Mr Hodges says of the whirlwind time. “We used to talk about ’Vend years’; two years at Vend is like 10 years anywhere else.”
Now the couple have created Populate, a software-as-a-service product designed to help tech startups and fast-growing tech companies in general manage the hiring process, and keep tabs on elements like staff numbers, demographics and salaries through a single dashboard view.
They're initially targeting tech companies purely because they don't have to sell them on the benefits of a cloud-based service. Later, Populate will broaden its focus.
The tech focus also doesn't hurt in that Silicon Valley, and the technology industry as a whole, has had a fierce debate over its gender and diversity gap recently — but few companies have an easy way to get a single view of the demographics of their workforce, plus metrics like average salary, from a dashboard view as Populate provides.
Human resource (HR) software is nothing new. Multinationals like SAP and Larry Ellison’s Oracle offer it as part of wider ERP (enterprise resource planning) suites of software. And one of the software-as-a-service (or “cloud”) companies, Workday, also includes an HR component.
Ms Grant and Mr Hodges say these solutions are aimed at corporates, and have pricing to match. They’re shooting to offer Populate from $US2 per employee per month, far below the sort of level that helps maintain Mr Ellison’s yachts.
Talk to customers before you start on your product
The pair’s second rule of being a startup is, “Meet potential customers before you start developing your product.” And by talking to customers, they mean talking to a lot and not just in your backyard.
“New Zealanders are very good at talking about New Zealand. But building a global company is hard,” Mr Hodges says.
To wit, after leaving Vend in September last year, the Populate duo met 120 companies in their target market. A trip to San Francisco was part of their fieldwork.
They were helped out by a new “shoulder tap” programme run by The Kiwi Landing Pad in San Francisco, and bankrolled to the tune of $50,000 by BNZ (three other startups: Weirdly, PageProof and Cloud Cannon shared the funding).
John Holt, who co-founded The Kiwi Landing Pad in 2011, says such funding is often dished out through competitions, applications or sponsored conference prizes – but that can still lead to under-prepared winners. “What’s different here is we proactively scanned the market and identified a range of companies and entrepreneurs doing the hard yards and invited them to participate,” he says.
The Kiwi Landing Pad, as its name suggests is a place for Kiwi startups who are new to the US or there on an extended fact-finding mission. As well as offering a co-work space, there is practical help for things like opening US bank accounts and other business logistics. Xero and Vend used it to their advantage during their early days attacking North America.
From their 120 discussions, Populate created wireframes for their proposed service, then sought more feedback. Only then did they bring in contract developers to create their product.
How did the Populate pair get a string of meetings with potential customers in the US? They concede that although the $100 million+ private equity value Vend is quite a big deal on the New Zealand IT scene, it’s not that well known in North America – at least outside of its retail vertical.
But running HR at Vend did see Ms Grant join recruitment discussion groups on LinkedIn, and sharing her experiences running a major recruitment drive allowed her to develop a strong network with her opposite numbers at American companies. Attending real-life meetup events for recruiters in Silicon Valley also helped.
US-based networking expert Kelly Hoey – an Inc.com columnist who appears regularly as an investor panelist on CNBC’s Power Pitch – says the most common mistake made by companies trying to break into the US market is not doing their homework. And by that, she means doing a lot of virtual networking from home before you jump on a plane.
“Yes, there should be serendipity in life and the unexpected,” she told NBR during a recent NZTE-sponsored trip to Auckland. “But there are only 24 hours in a day.” In her view, poor planning leads to time-wasting “random acts of networking.”
She also offers, “Tap into your peers who have gone before – Kiwi companies who have crossed the Pacific before. They are the ones most likely to help you.”
In cultural terms, Ms Hoey doesn’t see a lot of issues for New Zealanders.
“Kiwis have great accents. It’s cute; it helps get you through the door,” she says (while it was no biggie, Ms Grant – who is clearly spoken – says the accent issue did cause minor complications during her early time in the US).
She soon learned she had to say certain words like “tech” in an American accent or she just wasn’t understood. Another trap for young players: she found the locals never say “San Fran,” the abbreviation popular with New Zealand travellers. Locals shorten it to “SF” or say “the Bay Area”).
One thing Ms Hooey does criticise Kiwis for is being too quiet and too modest.“You need to get your brag on,” she says. “You need to take a brasher, bolder position with how you’re talking about your company. Step up your arrogance.”
Here, the Populate duo has some experience too. Their old boss at Vend, Vaughan Rowsell, is the most colourful and outspoken Kiwi tech executive this side of Rod Drury. But with their new company, they’re finding their own voice.
In practical terms, the pair are looking to raise around $500,000 in seed capital. Mr Hodges says they’ve turned down earlier funding offers. Their key aim is to find an investor who is a good fit and who can bring something to Populate’s table.