Archive November 2010

NZ’s largest single VC recipient picks up another international prize (Atlantis Healthcare) Peter Kerr Nov 30

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An Auckland-based global company, that in August was the target of New Zealand’s largest single venture capital investment, has picked up an international award.

Atlantis Healthcare has unique programmes that help patients stick to their courses of treatment, where particularly for chronic diseases such as diabetes, asthma and obesity, non-adherence is a burgeoning cost to the health system all over the world.

The company received a $20 million capital injection from London-based White Cloud Capital for a 50% share of the private company, in order to globally expand more than 50 programmes in seven countries.

It took top honours for digital innovation at the Pharmaceutical Marketing Excellence Awards in Britain for its ThisWayUp programme launched in July 2009 to support patients taking the growth hormone Saizen.

ThisWayUp is built around an interactive website and associated support helpline, and judges singled out its use of SMS and email to ensure ongoing interaction with patients as “particularly interesting and clearly effective.”

Atlantis Healthcare specifically targets, and is the market leader, in patient-tailored programmes to tackle non-adherence to their prescribed treatments. In the U.S. healthcare system alone, non-adherence is estimated to cost US$290m a year.

“As a GP writes a prescription, they assume their patient is going to be adherent,” says Atlantis chief executive, Michael Whittaker. “Yet we know for a fact, 20% of patients don’t even go to the pharmacy to pick up the prescription in the first place. We know that 50-60% of chronic diabetes, asthma and obesity patients don’t carry on those medications as they should after six months.”

Atlantis has developed strong, evidence-based programmes with proven effectiveness in ensuring prescription adherence he says.

Atlantis spent, and still spends, much of its research on health psychology and early on secured the exclusive services of Prof. Keith Petrie of the University of Auckland who pioneered predictive models of patients’ non-adherence. Prof. John Weinman of the University of London, another leading academic in this field was also brought on-board.

‘They’ve helped provide the basis of our whole clinical approach,’ Whittaker says. ‘We’ve built a whole enterprise over the top by taking academic thinking and research and going out to the real world with interventions that work.

The British prize follows a second year in a row top prize for Excellence in Patient Support at the Australian Pharmaceutical Research, Innovation and Marketing Excellence Awards for its Looking Forward programme.
White Cloud’s $20m investment, based on common venture capital rate of return metrics, could see a future company value in three to four years of $100m.

Cancer detection commercialisation could never be an ‘overnight’ happening Peter Kerr Nov 30

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Pacific Edge Ltd., is inching its way to commercialisation of its bladder cancer detection tests – showing that it can be done, but never ‘overnight’.

Above all it also demonstrates just how much effort it takes to turn an idea, detecting the presence of cancer cells in urine, and turning that into a sellable product – an assay test that is easily and accurately able to be used by urologists and physicians as a diagnostic and prognosis tool.

Along the way the Dunedin-based company has had to prove its methodology in different locations; so far in Australasia, America and Europe, and is now working on the best way to commercially roll out the tests.

For New Zealand and Australia, as its home-based testing ground, that means setting up a diagnostic laboratory in Dunedin; to where the collected urine samples are sent for analysis and evaluation. The potential Australasian market size is in excess of 50,000 tests annually.

Its strategy in other locations will be to develop and run diagnostic laboratories in selected geographies. This will initially be for its bladder cancer detection technology, then adding its colorectal cancer prognostic product.

The company also has other cancer tests it is developing, and these would also be analysed and evaluated through its laboratories.

One part of its commercialisation will be ‘turn-key’ licences for select partners in Europe and the USA.
The market itself is large. There’s over 63,000 new cases of bladder cancer a year in America, which means more than 1,000,000 people will require investigation whether they have the disease. The cost of these investigations is between US$520m to $1 billion, using conventional clinical technology.

In announcing its half-year results, in an understated way Pacific Edge says, “the company expects that Cxbladder could reasonably be expected to enable significantly better outcomes for the patient and cost savings for the healthcare system.”

Which is short-hand for saying they can clip part of that ticket by providing a test that is more accurate than the other urine tests in common usage.

Pacific Edge has shown in clinical trials that cancer detection methodology is better than the alternatives, and provides physicians with a better of idea of a cancer’s progression. The cost of developing this proof isn’t insignificant however, and yet again, the company recorded a net loss.

For the half year to the end of Sept. that loss was just under $1.4m – the majority being for the company’s clinical trials, product development and intellectual property protection.

During the year existing shareholders invested another NZ$4.7m in the company; so it has a significant number of people who have faith that in the longterm, it will deliver.

And it is a longterm game. The company was formed in February 2001 based on multiple cancer biomarker research out of Otago University.

By going down a cancer diagnostic path, rather than a ‘cure’ (though that might be possible later on), its speed to market can be relatively quicker.

But never overnight.

‘Really chuffed’ science prize winners to look for complementary skills Peter Kerr Nov 29

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The winning of $400,000 through the Prime Minister’s Science Prize will enable Magritek to bring on a complementary researcher with a different skill set to its development team.

“There is never a finite, limited amount of R&D that you can do,” says Dr Andrew Coy, Magritek’s chief executive, and leader of the commercialisation company that’s taken Victoria University’s magnetic resonance research to the world in small scale packages.

“We want to keep growing, and to do that we’ve got to keep investing in the innovation,” he says.

That side of the prize money will be used to create a PhD scholarship for a student to work on magnetic resonance, which uses magnetic fields and radio waves and measures the interaction with an atom’s nucleus, measuring signature frequencies. (See sticK story here).

Coy says the prize is a recognition of a fantastic team and of a lot of work carried out over a long time.
“We’re proud of what we’ve achieved academically, and that we’ve commercialised that and are generating millions of dollars in export income,” he says. “We want to continue that.”

As well as the $400k for research, there’s another $100,000 to be split between the research team members – which they can decide to spend how they may.

Meanwhile, Coy’s going to “take the team out and do something special. This is a real honour, we’re really chuffed about it.”

Have a beek at this — giving tourists a flavour of somewhere they’ve never been before they decide to visit Peter Kerr Nov 29

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When people are thinking of new places to go and visit, the internet’s not the most inspiring place to check them out… least until now according to Ben Knill.

The developer of ‘beek‘, an interactive destination guide, is on the lookout for investment capital to develop the next edition of his software widget which can sit on a hotel, attraction or restaurant’s website, to make it easy for those thinking of visiting to check them out, as well as the surrounding area..

beek’s special trick as such, is to enable a hotel for example, to show 3D immersive photos of its inside and allow an internet user to ‘walk’ through its premise. People can stroll into a bedroom, walk into the restaurant, check out the pages of a menu and wander outside through its front door, and down the street. They can keep on wandering, past the city sites, into other beek customer’s front doors and premise, say a café, perhaps a ferry, and have a look (and listen too). The clever bit is all the businesses are advertising all the other businesses.

Knill has based his initial development and version on Wellington, working with tourism partners to make contact with potential customers, which in turn has made it easier for him to sell the concept to them. (It is one of those facts of life that, being interactive software, it’s better to have a look at it working than try and describe it.)

Knill describes the software as being a rabbit warren around capital (in this case), allowing tourists, or conference attendees or businesspeople to check the destination and its facilities out, without needing to actually visit.

He did something vaguely similar back in his British homeland, by taking photographs for a fee of historical houses and the like, which internet users could click on and ‘explore’ inside.

The intended business model for beek, which is currently based in Creative HQ under Grow Wellington’s auspices, is to sell the concept almost as a franchise-like model.

The system will suit photographers in particular, who can charge up to $200/scene (of the hotel for example), and those photographers in turn will download the images onto the hotel’s website. beek’s revenue will come from an annual subscription fee from each customer for guide membership, support, embedding on lots of websites and hosting the site (in Amazon’s cloud).

“We’re a start up, looking for capital, as the software needs more development in order to automate it,” Knill says.

“We don’t want photographers needing to know how to code, and it needs to be easy for customers and tourism operators to use.” At the moment, Knill has to labouriously download each item such as the menu, photo, or scene himself. Enabling others to do this simply, is key to launching it on the world stage.

He’s been given a $40,000 quote from a developer to get it to an automated stage, and, having launched and automated, intends expanding to Auckland, the rest of New Zealand and then to overseas destinations. Alternatively, he and his three partners are willing to sell a 20% share for $165,000.

“beek’s call to action is it is collaborative, that’s its secret sauce,” Knill says. By working with and through Regional Tourism Operators, whose job is to promote regions/cities, they in turn can contact people who they think will be interested in putting themselves forward to use the platform on their own website, as well as interconnecting with others on the interactive guide.

“People are looking to work together, because that’s what the internet is all about,” Knill says.
The system uses an Austrian colleague’s proprietary software, though “getting out there and providing the destination focus is a form of protection in itself. Speed is the key.”

And in case you’re wondering, whey ‘beek’? Well, it’s a combination of things Knill says.

“Being nosey and cheeky for a start. But it’s also to do with seek, peek, look and book.”

Which, in a nutshell, it exactly what a good internet destination guide should do.

…..and the winners are (P.M’s Science Prize recipients announced) Peter Kerr Nov 26

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So, how much will the rest of New Zealand care about last night’s announcement of the Prime Minister’s Science Prizes?

John Key and Wayne Mapp are going their manful best to promote research, and its close kissing cousin, innovation, as one of the main ways (the only way?) that New Zealand can lift our economic performance.

The recognition of science participants, none of them remotely like the mad-scientist depicted in movies, is a small part in that promotion.

It will be interesting to see how much interest and attention is given to the winners of the Prime Minister’s Science Prizes announced this morning in Auckland. You’d like to think someone’s tracking some numbers on the media attention……no doubt if they’re upwards, we’ll hear about it.

For the record the full list of 2010 winners is:

The P.M’s Science Prize
Victoria University’s magnetic resonance research team and Magritek (its commercialised outcome, see sticK story here). Prize of $500,000, $400,000 for research.

Future Scientist Prize
Bailey Lovett, 17, or James Hargest College, Invercargill. $50,000 towards her university studies

Science Teacher Prize
Steve Martin, Howick College, Auckland. Steve receives $50,000 and Howick College $100,000

MacDiarmid Emerging Scientist
Dr Donna Rose Addis, University of Auckland. Donna receives $200,000, with $150,000 to be used for research

Science Media Communications
Dr Cornel de Ronde, GNS Science. Cornel receives $100,000, $50,000 of which will be used to develop his science communication skills

Have money…..will take on the world, 77 Pieces at a time Peter Kerr Nov 26

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77 Pieces is a platform technology, that every potential investor who has looked at it reckons is a great idea and will be a great enterprise according to its founder.

The globally unique software, allows a 2-D pattern to be imaged as a moving 3-D item, be it clothing or an inflatable wing. Adjustments to the rendered image translate back to an altered pattern, and vice-versa. (See fuller explanation of the CAD software’s capability in an earlier sticK story, here).

There’s nothing like it in the world says chief executive, Wellington-based American Sebastian Marino, applied mathematician and film industry animation expert.

The start-up company is now on the hunt for outside investment capital. Marino, who in an earlier life has been part of U.S.A-based CAD-oriented software start ups, says ideally the $1 million required will come in large part from his original homeland.

This will provide a secure base on which potential kiwi investors could syndicate, “without necessarily requiring any more reporting,” he says.

The capital injection will also enable patent protection of some of the heavy-duty mathematical modeling and algorithms associated with the software.

Marino intends testing a Beta version of the software within a network of friends in fashion; and initially staying within the fashion industry roll out its distribution through traditional CAD software sellers, firstly in America. He describes the product as a traditional application, not one that is in the cloud or particularly internet based.

“We’re costly software that requires training,” Marino says. “Finding the right partners who can provide support and training is crucial. We’ll train them, they’ll train our customers.”

Though the clothing industry is the first that 77 Pieces is going to target, it is by no means the only market – there being many vertical within a broad horizontal range of business types.

“New Zealand is not a market that could support us,” he says, “though being a developer in New Zealand has many advantages.”

He expects many customer inquiries to come from other industries, and 77 Pieces will be “more than happy to customise it for them.” An example could be hot air balloon makers, or upholstery and furniture makers.

In a year’s time he envisages the company being in a comfortable office, with perhaps 10 staff, creating an environment that is happy, creative and focused.

And while Marino sees himself as being the ‘ring master’ at this early stage of the company, he can also see that later on another type of chief executive may be more suitable to sustain 77 Pieces’ growth.

For now he’s preparing investor pitch-type documents and answering calls during the day, and making Skype calls back to the States while perfecting the software at night.

The fledgling company kicks off in earnest early next year. And while Marino may have a preference for an initial U.S. investor, anyone with a spare million would be sure to get a good reception.

Mass customisation and Wellington’s culture — a marriage made in heaven? Peter Kerr Nov 25

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The term mass customisation is one that will increasingly become common. (Feel free to say you heard it here first!)

An example is a pair of jeans, made, perhaps on the premise, exactly to fit the purchaser.

Wellington-originated, globally located (well San Francisco anyway) company Ponoko is an early example. Through its website, individuals can get one-off designs such as jewellery, laser-cut and delivered overnight. It describes itself as a ‘personal factory’.

Founder and chief executive of start-up software company 77 Pieces, Sebastian Marino, says it “is interesting to be at the leading edge of the future of mass customisation.” (See more about its unique software here)

For the fashion industry, 77 Pieces has virtual prototyping software that enables a moving 3-D image to be rendered from a two dimensional pattern as it’s created. Adjustments to either the pattern or image can flow backwards and forwards – something no one else in the world has done.

The company’s selected clothing as the first market for its CAD-software, though the heavy mathematics and algorithm-based program is suitable for any flexible material where users want to see the final shape and movement of their product designs.

“We provide the ability to make a pattern and to analyse the structure and understand what it’s going to do,” Marino says.

From an engineering point of view, a prediction of what a shape will be is very important. An example is pneumatic flexible sheeting (such as in a balloon), where it is necessary to understand how the structure will move as conditions change.

As part of this coming mass customisation “we’re keen to be a next generation company rather than just a new company with a new trick up its sleeve,” he says.

This includes new creation technologies such as 3-D printing and CNC milling, items which may one day be cheap enough to be seen in a home situation.

Wellington is also a great place for 77 Pieces to develop its software products Marino says, “and is well-placed to be the next Silicon Valley.”

The city can attract and keep talented people in the IT space for a number of intrinsic reasons such as a reasonable cost of living, a beautiful environment and nice people Marino, an American, says. As a film production expert, he and his team have and authored more than 30 mathematics based research papers, he could base himself virtually anywhere in the world.

“The country turns out great computer scientists from Victoria, Canterbury and Otago universities, as well as AUT, and Wellington can offer a compelling work experience,” he says.

Many people don’t realize it, but with Weta Digital headquartered in Wellington there’s a constantly changing who’s-who population of the computer graphics and computer science elite.

“When you’re here you can walk down the street and bump into people who may be artists, researchers or professors from the most prestigious institutions in the world,” he says

“Overwhelmingly, everyone loves his or her time spent in Wellington. We certainly look to take full advantage of this opportunity, and give people an interesting and meaningful workplace should they want to take a break from visual effects, or a shop where where professors can send their top students to work or intern with us,”

“All the intrinsic qualities are already here; good schools, reasonable cost of living, beautiful environment. To advance Wellington as a technology hub we need to create momentum, and for that we need to create more internationally competitive jobs.”

Weightless export succeeds in crowded internet domain name space — (iWantMyName) Peter Kerr Nov 25

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There’s no shortage of web-based companies offering the ability to secure an internet domain name.

But within that crowded field, Wellington company iWantMyName, has carved a small but growing niche, and after two years in business has moved beyond start-up to record revenue growth of over 250% a year.

Co-founder Paul Spence, who is also chairman of the capital’s IT professionals group ‘Unlimited Potential’, says domain name registration was deliberately targeted as an arena in which global growth was possible.

“We started in the middle of the recession, and despite the currency moving against us and tight terms of trade from suppliers and banks, we’ve survived,” he says. iWMN is a reseller for a European domain name register.

Its differentiation is to “provide an interface that is simpler and cleaner.”

Globally, about 10 big domain name players have between half to two-thirds of the trade, with the biggest, ‘Go Daddy’ having about a quarter of the total business.

“But if you look at their sites, they’re very hard to navigate, and they’re constantly trying to up-sell additional products and services,” Spence says. “If someone’s trying to save a dollar on their domain registration, that’s fine. But we’re not chasing that market.”

Who iWMN is after are the early adopters and those in the technology community, especially in New Zealand and the United States.

“We’re very focused on thought leaders and the early adopters market; they’re our champions,” Spence says.

“They have some influence in the community of developers, designers and techie-type people. Securing the interest of people like them is important; the same for any software product.” iWMN makes purchasing and managing a domain, “frictionless,” Spence says.

This type of business model sees new domain registrations, and an annual renewal of the same. Each year approximately 70% of people renew, allowing exponential growth.

Promotion of the iWMN site is non-traditional, “we’ve never paid for an advertisement, anywhere,’ he says. “We concentrate on optimising the site for search engines, and are hammering social media.”
This includes a bit of Facebook promotion, but much more so the use of Twitter.

“Twitter’s actively used because it attracts the early adopter audience,” he says. “We also blog in several languages, and by finding high traffic blogs contribute on the topic of the global domain industry. They back-link to us, and may also be part of our affiliate program. The job’s to get our name out there, quickly. It’s still a work in progress.”

Spence says though he had no personal experience in the domain name business, his business partners did. Looking at the sector it stood out as one that had a high probability of success.

We saw it “as a service that could generate revenue from day one, and be exporting from day one,” he says. “We made sales on the first day we turned the site on, and because most of the market is outside New Zealand, it is mostly export revenue for the country.”

“We truly are a weightless export.”

Growth will occur organically Spence says, with one source of revenue being the licencing of its platform to other domain name registers. Such global partnerships already include a Netherlands partner.

“With our model, we can roll out an internationalised version of our site, and we’re now looking for non-English partners.”

Wellington’s (bad?) weather not the main reason for its IT entrepreneurship Peter Kerr Nov 24

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The joke is that Wellington’s a good place for IT entrepreneurs because the weather forces developers and the like to stay indoors.

More likely given its concentration of internet and computing based businesses is the ability to rub shoulders with like-minded people.

“Wellington’s a small, connected community,” says Paul Spence, chairman of ‘Unlimited Potential’, an IT professionals group.

He says the region has 3000 IT professionals, whose collective realisation is that there’s strength in working with each other.

“There’s a Wellington buzz that we’re good at this,” says Spence, who is also chief executive of internet domain name register, iWantMyName. “We’re finding small groups to do start ups that are drawing on the expertise in the capital.”

Spence considers that it is the city’s creativity that is more significant than the (so-called bad) weather.

“There’s an arts and music scene that’s vibrant, and our positioning as creative has the effect of attracting creative people, often from overseas,” he says. “There’s something in the water that keeps them staying on.”
The question is how to build on that?

Spence sees small inroads, though one necessity is to ensure there’s capital available for creative people to develop their projects. There are investment gaps for some companies that are still small, but posting revenues, “but no one wants to touch them.”

He sees communities such as Unlimited Potential as having a role to play in bridge building between entrepreneurs, investors and creative people, acting as a type of catalyst.

The support of the Wellington City Council and its enterprise development agency ‘Grow Wellington‘ has also seen a resurgence he says.

Spence makes the point that Unlimited Potential is an apolitical organisation. “We’re happy to work with anyone who is constructive.”

2-D to 3-D and back again — making virtual real (77 Pieces) Peter Kerr Nov 24

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Ever wondered why so many computer generated characters in movies these days are naked, or near enough to it? Alternatively, if they’re not naked, everyone seems to wear cloaks and robes.

The main reason is because realistic clothes, that is, clothes that appear to drape and move and be natural, is an extremely difficult cinematic thing to pull off. To say that there’s a mass of mathematics and algorithms behind achieving it is to totally understate the feat.

Enter Wellington-based American Sebastian Marino, who has an applied mathematics and computational physics background, as well as an Academy Award for his clothing simulations in the 1999 Star Wars movies.

He’s just finished a two year gig at Weta Digital, and is about to take his and UCLA colleague partner Professor Joseph Teran’s learnings in the virtual world and apply it to our everyday reality. It is sort of the reverse of what happens in actual life!

Their recently formed company, 77 Pieces, is about to launch a CAD-based software program that can take two dimensional patterns and model how the resulting structure/item will move and act in a three dimensional way. What’s more, users can tweak the 3-D version, and the program will backwards calculate how the 2-D pattern will need to be modified to achieve the outcome.

In short, “we provide the ability to make the pattern and analyse the structure and understand what it is going to do,” Marino says. “That could be anything from a T-shirt to an inflatable wing, and knowing how that will react.”

There are a large number of vertical and horizontal markets, from upholstery, automotive and aerospace applications that the software is suitable for. Not surprisingly though, the first field that 77 Pieces is to target is the clothing industry.

As well as clothes being something of interest to virtually everyone, the other reason “is because no one gets killed if something goes wrong,” Marino says. “We’ll look at the building industry and engineering later.”

The program seamlessly (unintended pun) links the 2-D pattern with a visually appealing user-interface, allowing a realtime view of the garment draped on a human mannequin, which can also be a moving model if required- something no one else has so far managed to do.

“One will update the other,” says Marino. “Tweak a saggy bottom in 3-D, that will go back to the pattern.”

The program also solves another fashion problem – ‘grading’. “Ours allows you to take a basic pattern and change the dimension of the design as people don’t scale linearly,” he says. The pattern can be adjusted to fit from extra small through to extra large.

“We’re trying to endow our schematics with purposeful information so that working with one of our diagrams they can be anywhere on the small to large continuum at any time,” says Marino.

“Another feature is that a build-up of information at the meta level starts to make numerous assets that can be repurposed later.” In English, this means a feature such as a pocket or collar size and shape, can be plucked and placed at a later stage on another garment.

Marino says 77 Pieces is about to launch the Beta version of the software, for colleagues and associates to test and assist in de-bugging, before a launch to the world through traditional CAD distributors.

(Note; more sticK stories to come on this and other aspects of the company’s go-to-market plans).

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