New Zealand’s startup ecosystem has come a long way since its inception, but there are still steps that can be taken for it to become the innovation hub it aspires and has potential to be.
Longtime members of the startup community shared interesting insights about the startup ecosystem and where it needs to go at the official launch of New Zealand’s first virtual accelerator, ZeroPoint Ventures, last week.
Featured on the panel were Datacom transformation GM Kerry Topp, BizDojo co-founder Jonah Merchant, business coach Debra Chantry, Snowball Effect digital strategist Peter Thompson, and Northland Inc business growth manager Derryn Mawson.
Mawson says one of the biggest issues faced in regional New Zealand is growing capable teams.
“There are lots of ‘solepreneurs’ who are going at it alone in the regions and they’re struggling from lack of capital,” she says.
“They haven’t left the regions, so they haven’t seen where they can take their company.
“There’s a lot of confidence-building to be done to support them so they can take the next step forward.”
Chantry concurs, saying that there isn’t enough support for the everyday business. Tech startups get a lot of attention, but other startups tend not to know what they have and underestimate themselves.
Merchant says there’s a huge focus on startup methodology - building the basic business model, market validation, and scaling the business.
However, founders need more support beyond business knowledge, he says.
“Things like, how do founders build emotional and mental resilience to do the hard graft and where they can find support mechanisms if they need it.”
“It takes a lot of personal, emotional, and mental skill to do what is actually a very hard thing to execute successfully,” he adds.
Representing investors in the panel, Topp says what big companies look for are options.
“Some people want moonshots, and some people want a story like Datacom’s, which is steady growth that hasn’t happened overnight, but it’s been consistent,” he says.
“There’s different opportunities and different risk profiles, and we should be addressing that.”
Not everyone needs to shoot for the moon.
Thomson says there’s already a New Zealand methodology, but Kiwis tend not to acknowledge it or think it’s good, and that’s a classic Kiwi attitude.
“Things that are the modern rule for building a startup - be very practical, be very rugged, get things done quickly, make lots of small experiments and try things out, get it done without much money, pretty much sounds like trying to start a company in New Zealand,” he says.
“We might be forced into it, but it does get things done. I think we’re actually stronger than we realise.”
Merchant says Kiwis need to play to their strengths and take advantage of their size.
“The beauty of a small population is that we’re all very connected, we all know each other and we should really be able to shorten the distance between all the different players in the ecosystem - startups, corporates, governments, universities,” he says.
“If we get that right, then we can be playing to our strengths as a very small ecosystem and we can leverage that.”
New Zealand has the tendency to unthinkingly copy a lot of funding models from Silicon Valley, Thomson says.
“We’ve imported a lot of overseas logic without necessarily understanding why, and some of that is really hurting us, or has the potential to.”
He says it’s why he’s excited for some of the things ZeroPoint Ventures is working on, specifically around using debt instead of equity or combinations of the two and raising money incrementally.
“In a lot of markets in the world, you really have to go big or go home in terms of building new business and a new venture and attracting talent; whereas in New Zealand you can credibly work your way up to it,” he adds.
Chantry says New Zealand tries to follow in the footsteps of other countries, but we shouldn’t because we have different budgets and different expectations.
“Having different models to support different businesses is really important, particularly in New Zealand.”
Merchant says he would love to see Kiwis be a lot more innovative and creative around the models applied around building startups.
“We’re not quite there yet, even though New Zealand is getting better at some things compared to where it was five or ten years ago.
“New Zealand could be a testbed to do stuff way outside what’s happening internationally if we were a bit more creative because we’re all so closely connected - all of the different players in the ecosystem could come up with some very innovative models and lead the charge on this.”