Archive July 2012

Startup Weekend leans into NZ version of global entrepreneurship competition Peter Kerr Jul 31

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What was the fifth Startup Weekend in New Zealand, and the second in Wellington, continued to raise the bar.

Co-organiser, and WebFund chairman Dave Moskovitz says the 54 hour event that aims to take pitched (to all participants’) ideas into businesses with a future keep getting better.

“After six events, we’re starting to know the rhythm and the skills required in managing teams and their crises really well,” he says.

The mentoring aspect is one of the key components of the value Startup Weekend delivers to participants, where (as well as the global mission of Startup Weekend) the idea is to inspire entrepreneurs.

“But we have to implement that in the New Zealand context,” Moskovitz says.

“What we’re really trying to provide is experiential learning to help people acquire skills that they may not have.”

As well as honing talents that people may have, it is also a high pressure situation in which to test them.

Among the attributes that participants learn are:

  • Learn how to work in a team under high pressure
  • Learn how to participate in an idea being born
  • Learn about customer and market validation
  • Learn how to plan and execute with a really short production
  • Learn hot to present in a very compelling way

Moskovitz says the application of Startup Weekend in New Zealand that is different to much of the rest of the world is the emphasis of Lean Startup methodology.

The trouble with writing say a 100 page business plan is even before it is finished it is out of date.

In particular the teams used a Lean Startup Canvas, a sheet of A2 paper that provides an outline assumption of a business around factors such as the unique value proposition, the solution that’s being provided and revenue (among others).

“As you learn things, the learnings are incorporated into the business model,” says Moskovitz. “As you write down your assumptions, you have things you can test. It’s a scientific method to making a business, with tests and experiments to validate it.”

Such methodology is much cleaner than “just being driven by a passion and the she’ll be right approach to building a business,” he says.

Wellington’s Startup Weekend (27 – 29 July) saw attendees carrying out much more validation and incorporating this learning in their businesses. The learning also meant much more pivoting as people truly listened to what the market wants.

When the market (i.e. interviewed people) don’t agree with assumptions, it can lead to a crisis.

For one particular team it initially meant a disbanded team with only one member left. But, that person thought about their findings, that there might be something else there, and rang up the team members. The rest of the team all returned that night.

One extremely pleasing aspect for Moskovitz was the new people he discovered in the entrepreneurial and innovation space.

“I like to think I’m really well connected in this ecosystem,” he says.

“But I didn’t know two thirds of the people in the room.”

He says that everyone knows that it is very difficult to produce something realizable in 54 hours.

“But more importantly, people are going to meet 30 or so people that they know and may be able to team up with in the future,” he says. “They may not carry on with a real thing now, but they’re much more likely and able to do so in the future.”

For the record, the weekend winner was Questo – a website and app to make homework fun and link teachers, parents and children more closely in its sphere.

Questo won because it best satisfied the judging criteria:

  • 1/3 validation
  • 1/3 business model
  • 1/3 execution

“The judges attempt to replicate what happens in real life,” Moskovitz says.

“It’s not necessarily the best idea that wins, but the one that is best executed. Questo was strong across all three areas.”

Market validation – “get outside and ask customers questions” Peter Kerr Jul 26

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No business plan survives the first customer contact Michael Elwood-Smith told a recent meeting of Wellington’s Lean Startup group.

Describing his presentation as a Business Model Canvas meets the Lean Startup, the Creative HQ adviser says “high growth, investable businesses need a repeatable, scalable business model.”

He combined thinking of a number of influential books over the past five years to produce this particular plan. His presentation can be seen here:

The start of this model is a search for customers – broken down to discovery and validation of those customers, with a pivot (or two or five) to discover and validate for a business’s particular offer.

The business execution comes down to customer creation and customer building.

What is most important; “it’s about the questions you’re going to ask as you go through discovery,” says Elwood-Smith. “Then it is about validating.”

He says a business model describes the rationale of how an organisation creates, delivers and captures value……..”but this is just a set of hypotheses.”

“There are no facts inside the building, so get outside,” and query people and potential customers he says.

The Business Canvas Model (see here can be used as a scorecard to track progress for such a search of a business model. This can be updated weekly as new insights are gained.

The following are a list of questions that can and should be asked Elwood-Smith says.

Customer Segments

  • Which customers and users are you serving?
  • Which jobs do they really want to get done?

Value Propositions

  • What are you offering them?
  • What is that getting done for them?
  • Do they care?


  • How does each customer segment continue to be reached?
  • Through which interaction and points?

Customer Relationship

  • What relationship are you establishing with each segment?
  • Personal?
  • Automated?
  • Acquisitive?
  • Retentive?

Revenue Streams

  • What are customers really willing to pay for?
  • How?
  • Are you generating transactional or recurring revenues?

Key Resources

  • Which resources underpin your business model?
  • Which assets are essential?

Key Activities

  • Which activities do you need to perform well in your business model?
  • What are crucial? (chuck out ones that aren’t core activities)

Key Partners

  • Which partners and suppliers leverage your model?
  • Who do you need to rely on?

Cost Structure

  • What is the resulting cost structure?
  • Which key elements driver your costs?

Elwood-Smith says this business model testing process is an opportunity to test and adapt.

It is based on the lean startup principles of building, measuring and learning, and agile sprinting within this framework.

As he commented in an aside. Building a business model on a piece of paper without going out to validate it means a new enterprise is almost certainly doomed to failure.

Only by asking people if they want something, and how much they’re going to be willing to pay for it can businesses get themselves to a scalable, repeatable size he says.

‘Boy’, what a great way to get free publicity Peter Kerr Jul 24

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In a ‘small world’ way, PledgeMe’s crowdfunding platform has a lot to thank film maker Taika Waititi for making its New Zealand presence much more visible.

After the success of ‘Boy’ to become New Zealand’s most successful NZ-made film (with an NZ topic, as opposed to Lord of the Rings), Waititi wanted to distribute the tale in the USA.

In what was then a novel move, Waititi used Kickstarter to crowdfund seek $90,000 to do so (and eventually obtained over $110,000).

PledgeMe chief operating officer Anna Guenther says the Kiwi platform had recently undergone a redesign, and news of Waititi’s US success gave its New Zealand projects’ funding website a real boost.

Taika Waititi’s use of Kickstarter to help fund USA distribution of his movie ‘Boy’ greatly raised PledgeMe’s NZ profile says COO Anna Guenther

She’s also positive that our country’s relative smallness is another reason that currently 51% of projects put up for crowdfunding have obtained their desired money targets. Admittedly this is based on a smaller sample number of 60 successes from a few more than 100 proposals.

But worldwide, the comparative success rate is 44%.

“Crowdfunding is about linking in with your crowd,” Guenther says.

“New Zealand has only four degrees of separation, compared to seven in the rest of the world.” (See some evidence here: )

“We are an online platform with an active offline presence funding the arts, as well as community and tech projects.”

She says that the rewards side of PledgeMe (where project creators offer incentives/rewards of increasing scale for larger donations) is an important part of project success.

People need to provide a clear goal and deadline, but within that, rewards can be very creative. Normally these are an output of what the project is – e.g. a book for a writing project – but can be more quirky than that.

These (so far) have ranged from a Skype session to discuss what’s being done, to baking and sending a brownie.

“A band, for a $1000 donation, promised to build a religion based on the donor,” says Guentther. “When that came through, they had to go and create what they’d promised!”

Roll up, roll up, the ATI’s going to be bigger than Ben Hur Peter Kerr Jul 19

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Well, isn’t the Advanced Technology Institute going to be an all singing, all dancing affair.

At least that’s what the cabinet paper proposes.

For a strategic move that has major implications for New Zealand’s thin innovation ecosystem, there’s been remarkably little (public, industry or media) comment on the proposal – with the ATI’s desired start date being 1 December 2012.

In fact, compared to the range of consultation that took place before the introduction of the Crown Research Institute platform 20 years ago, the ATI as announced has arrived like a stealth bomber.

There are some disturbing points in, inferred from or missing from the background information provided by MSI – a cabinet paper, a stock take of IRL and an industry demand analysis: (Check out a swag of the justification and cabinet papers here)

  • There are concerns raised about the limited number of technical people available in New Zealand suitable for staffing the ATI. Most of these are in the IRL already and there is a risk that a major change could lead to loss of key people.
  • IRL has had a rough ride over 20 years. Its performance over that period has been less than stellar. However, the stocktake fails to give adequate acknowledgment to the five-year turnaround plan of the board and management and the 75% increase in private sector revenue achieved over the last year, albeit off a low base. This last increase is outstanding under any circumstances, especially in difficult economic times. One would have thought that it would be worth waiting at least one more year to see if it would be repeated, which could indicate that a revamped IRL was both a reality and a success model.
  • The Danish Research Institute is referred to as a model on more than one occasion. Ironically, the Institute is now moving in the opposite direction to that proposed for the ATI, allocating more resources to research vis-à-vis consulting/advisory activities.
  • The demand analysis tells us at least as much about the structural weaknesses of New Zealand’s manufacturing industry as it does about IRL and other public sector research providers. One only has to study recent IRL annual reports to appreciate that there is little in the demand analysis that IRL would not already know. Given IRL’s much stronger recent commitment to industry engagement, it is questionable whether a new organization will be able to deal more effectively with the reticent New Zealand business environment.

While the ATI was originally proposed as a more engineering and service oriented Industrial Research Ltd, the fact it is also pulling in food (through the Food Innovation Network and the Foodbowl) and wood products means it is going to have a hell of a wide brief.

If the question becomes, “what does the ATI do,” and the answer is, “well everything,”, then there’s a power of potential for banana skin slips.

As with all these things, the devil’s going to be in the details – and there’s a swag of these to sort through.

Not the least, and in no particular order, crucial components and questions will include:

  • The ATI establishment board and chairman. So many decisions to be made, networks to be tapped, egos to be mollified……a potential poisoned chalice
  • The ATI chief executive. Superman or superwoman needed here.
  • What’s the role of the CRIs’ own commercialisation units (especially IRL) under the new structure? Indeed, how does the ATI differentiate itself from CRIs, who themselves have been strongly encouraged to be more market oriented
  • If, as appears likely, the HQ of the ATI is Auckland (and the quite far from everything actually Wynyard Quarter), how does the university, Icehouse and the rest of the country integrate with its location?
  • How will the ATI be prevented from crowding out other service and consultancy providers?
  • How “business facing” (the in-expression) will the organization really be as a Crown agency? At least IRL has a private-sector board. This is a very serious concern and that is to be hoped that the Minister will give serious consideration to a more commercial model – even if it is necessary to create a new type of entity somewhere between a Crown Research Institute and a state-owned enterprise in terms of commercial modus operandi and governance, but possibly without the requirement of earning a profit. The profit requirement does nothing to encourage businesses to engage with a public funded research organization which they often regarded as too expensive anyway.

Because, while Minister Steven Joyce may want the ATI to be bigger than Ben Hur, there’s a heck of a large potential for an epic failure.

Unfortunately, it is going to take more than 10 years to determine success – even more so when its financial performance is only one key metric.

Its measure of performance will also be its wider contribution to the economy.

The ATI Establishment Board is to report back by 30 September on an accountability and performance framework. If, like the former Ministry of Science & Innovation, there’s about 50 such measures – such performance is actually impossible to ascertain.

Let’s hope this isn’t a lay down misere by Joyce.

The all or nothing approach, rather than modifying what already exists may be a brilliant move – but the history of backing a single horse is shaky.

There’s much more than the $160 million or so allocated to setting up ATI at stake here.

The distraction, and breath-holding of starting a whole new structure and organisation at a time when tweaking and retweaking the current model would suit the environment much more is something the country doesn’t need.

However, as a representative democracy, this is politics…’s a done deal.

Anyone putting their hands up to be on the Establishment Board?

Why buy when you can hire – special kit gets its own sharing home Peter Kerr Jul 17

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“We believe we’re the first country in the world to ever offer this service,” says Paul Reid

They reckon they’re the only broker of specialist gear for rental in the world.

Specialist Rentals – think $25,000 – $100,000 high end test and compliance equipment in the IT/comms area – started last August in Canterbury, and now fully employs one of its founders, Derek Law, and part time other co-founder, Paul Reid.

With both having an IT and engineering background of almost 50 years combined experience, they’re well aware of a shortfall by NZ companies requiring hi end test and compliance equipment.

Access to such kit allows new products and prototypes to get to market more quickly – and ensures they have been life cycle tested, meet standards requirements and operate in a variety of conditions.

“We identified that many of your smaller startup type companies are often unable to afford that type of equipment,” says Reid. “We want to make it accessible to such people.”

At the same time, a lot of companies with such specialist kit may only utilise it 20% of the time. In the US for example, it means up to US$28 billion of equipment is idle at any one time.

Having come up with what they considered a good idea a couple of years ago, Reid and Law have created collateral around their website, talked to people and developed some key partnerships, particularly with local Canterbury organisations including Tait Communications, the University of Canterbury, Dynamic Controls, Eaton and Allied Telesis to name a few.

As well as having their own equipment to lease, there’s some good tactical reasons for universities and CRI’s to be interested in partnering Reid says.

“If people need equipment to measure certain aspects, they’ve also often got a problem that needs solving,” he says. “Alternatively, larger companies have a sense of social responsibility, and, especially since its earthquakes, a strong network sharing among people.”

It also means that equipment that is lying around unused brings in a bit of revenue, perhaps even to the extent of covering the cost of buying new equipment.

Specialist Rentals is taking their story and equipment hiring business further afield, having recently pushed the idea nationally. “We’ve had a good response; we are very excited about recent contacts made in Wellington and see strong partnerships emerging,” Reid says.

The company takes 10% of the rental fee as brokerage, with the two parties arranging their own transfer to and from premises.

Specialist Rentals is also pledging 10% of its sales back to the community which generated it in the first place.

Currently it has 600 would-be users on its subscriber list, and is looking to grow this number, including offshore. The model is internationally scaleable, with Australia the next major target for the two.

“The pain points that product developers go through, particularly with regard to compliance, are not well understood,” says Reid. “Often, new product makers have to take their new baby offshore to test them. The ability to share equipment from a New Zealand source can mean a big saving in time and money.”

Reid says their service has a lot of benefits – one of which is that government regulations consider plant rental/lease to be a tax deduction in research and development, whereas capital purchase of the same isn’t.

“Hopefully those benefits are tangible for businesses,” he says. “As with any new venture, building the business takes time. One thing we are seeing is a paradigm shift away from owning to renting.”

Crowdfunding with a Kiwi flavour suits our tastes – PledgeMe Peter Kerr Jul 12

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Self promotion’s part of the PledgeMe crowdfunding platform’s operation, and its COO Anna Guenther is keen to promote the website’s potential

PledgeMe are the first to admit that they’re copying and tweaking an overseas model of crowdfunding, perhaps the best known of whom is Kickstarter.

But the local web platform to create, collaborate and support the funding of creative projects reckons the Kiwi-centricness plays into our sensibilities.

The year old startup, which really got going at the beginning of this year after a redesign, has just had its 60th successful project funded. This is out of more than 100 projects put up for consideration by New Zealanders, and represents (albeit with a relatively small sample size) a 51% success rate.

Chief operating officer Anna Guenther, says the world-wide success rate for crowdfunding is 44%, so at least PledgMe’s on the right side of the bell curve. It is estimated there are about 300 crowdfunding platforms around the world, and about US$1.5bn was pledged last year.

As with other crowdfunded projects, project creators often provide a reward for supporters to come onboard. It could be the first edition of a book, a party, or (in the case of a young woman who wanted a few hundred dollars sponsorship to attend an Auckland illustration course) a hand-draw doodle.

To date $315,000 has been raised, the largest amount being $21,000 for a documentary on curling (wow, a hidden fan base there! sticK comment).

When a project is successful, PledgeMe takes a 5% fee, plus a 3% credit card fee, and the remainder is passed onto the creator.

As a business venture, “it’s getting up there,” says Guenther, who, along with original founder Camilo Borges, both work one day a week on PledgeMe. She works the rest of the time on some of NZ Trade & Enterprise’s programmes.

Guenther, a Wellington-based Kiwi/American came upon the embryonic PledgeMe last year while carrying out a (distance-learning) one and a half year Masters of Entrepreneurship at Otago University. She already has a degree in English Literature, has worked, travelled overseas, and “always been interested in the startup space.”

Her Masters’ (which she passed with distinction) thesis was on the crowdfunding platforms (of which there were none here when she began. After meeting up with Camilo, she came onboard not long after PledgeMe started.

Since its redesign, PledgeMe has experienced exponential growth, and it now receives more than 5000 hits a week. Its next target is 100 successful projects.

“It’s a very interesting space to be in,” she says, “and New Zealand’s well positioned for this type of product,” in a country where startup capital can be hard to obtain and there’s a smaller pool of investors able to be tapped.

“Our smaller nature’s important, partly because we say our creativity is quite important,” Guenther says. “80% of New Zealanders consider that arts define who we are, and the statistics show that we’re also very charitable. It’s a perfect space to test crowdfunding.”

The platform isn’t restricted to arts projects however, and it also includes tech-type projects such as Loomio, an open source decision making software that raised $5,000 to feed their developers.

She says the PledgeMe ‘engine’ that has been created can handle many different types of project. The coding behind it is “quite complicated”, and a recent valuation of what it would cost to build PledgeMe from scratch came up with a figure of $1 million.

PledgeMe has ten ‘ambassadors’ around the country – people in the creative space who talk about and promote the platform when they’re out and about.

Guenther and Borges are often talking to other crowdfunding platforms, tending to regard them as collaborators rather than competition. To this end they’ve recently conversed with Nesta (UK platform to promote innovation), Pozible (an Aussie crowd) and Catarse (a Brazil startup; Borges is Brazilian).

Guenther’s not short of optimism and confidence for PledgMe.

Where will it be in five years?

“By then we’d like to have $100 million of projects. It’s a big call…..but it’s doable.”

An ATI set to fly… a turkey Peter Kerr Jul 10


If rumours are to be believed, the Advanced Technology Institute, is to be established as a separate crown entity.

The ATI is meant to be a hi-tech, engineering-oriented link between science and industry to boost New Zealand high value manufacturing and its ilk.

If true, there’s only two words for it – Oh & no.

Information recently released by The Treasury gives some idea behind its thinking.

So, a separate board, whole new startup and establishment phase, creation of an edifice, building of relationships – a full scale duplication of what already exists in embryonic form from the creator of the original ATI idea, IRL.

There will also be the not inconsiderable challenge in forming a ‘relationship’ between IRL (whose own mandate will have to change) and the ATI – and the inevitable turf war that will go with that.

And if said rumours are true, it’s a heck of a convoluted way to avoid possible redundancies while IRL morphed into a new beast. Not that there would necessarily be that many redundancies.

Supposedly IRL’s doubling in size from about 350 scientists to 700 experts would mostly be engineering and applied science based anyway. So, mostly new people, not many, if any, redundancies.

What’s the bet too the ATI is set up in Auckland’s former tank-yard farm the Wynyard Quarter – a type of government inspired effort to convert a camel into a racehorse.

Not that these comments will make a scrap of difference, but we’re all going to pay for what will be a drawn out, badly designed, poorly executed bureaucratic mess.

Instead of allowing IRL to organically reinvent itself, and reinvent itself, and reinvent itself into the structure(s) which best fit our New Zealand environment, government as god will command from on high.

I look forward to seeing the ‘evidence-based’ rationale for going down this dead-end path.

Let’s hope for all our sakes that for once, it’s a rumour untrue.

Maintaining quality edge major focus of axe maker Peter Kerr Jul 05

Tuatahi Racing Axes & Saws founder Eddie Fawcett with one of the Masterton company’s world-beating products

Whether to outsource or insource, that is (one of) the questions.

For axe and saw maker Tuatahi Racing Axes & Saws, the question resolved itself a number of years ago says its office manager, Jo Fawcett.

The 45 year old company, started in Masterton by her father Eddie who as a competitive axeman was originally asked by others to sharpen their blades, and then to make the finished product, used to get others to carry out the forging component of making the axe head.

“But we found that some of our axes were bending and breaking,” she says. The company made the decision to bring this forging side back and also bought the power-hammer required to form the axehead.

Tuatahi orders 25 tonnes of the specialty steel at a time in 3 – 5 metre lengths. A five kilo block of this is in turn crafted into an axehead.

There is still a large degree of hand forming in the axes and Eddie, as well as Jo’s brother Grant are still competitive axemen and “they have a feel how an axe or saw should run.”

“They’re very particular, and if they aren’t happy will keep tweaking the blade or edge until it is just right. It is a skill that takes years to develop. Grant is more into the management side of the company these days, but is teaching the other guys, passing the skills on.”

As well as the racing axes and saws, Tuatahi is also looking to expand its working implements side of the business. Racing axes and saws currently make up about 60% of the company’s almost $1 million a year turnover.

In this regard Jo Fawcett notes two particular trends.

The USA’s Obama administration has opened up more heritage trail areas in America’s forested areas. The US Forest Service only allows hand held equipment to be used in clearing and maintaining these trails, and Tuatahi’s M-tooth and Peg and Raker Work saws are the preferred implement for these gangs.

The greenie movement and a bit of a back to basics wish among some foresters and farmers is also seeing the revitalisation of interest in using hand axes and saws instead of chainsaws.

“A lot of silverculturists are using hand saws,” says Fawcett. “They like to know they’ve done a day’s work, and there’s the whole fitness aspect for some people too.”

From a business point of view, Tuatahi is looking to become more streamlined.

“At the beginning of the year, we decided we wanted to start at the beginning,” she says, “and really look at how we are doing things.”

This started with how Tuatahi takes orders, organises the factory, invoices and packages its products. “We’ve concentrated on having more systems in place.”

This should help reduce the axes and saw waiting times (for orders) and enable Tuatahi to have actual stock implements on its shelves.

“That would allow us to go down a completely different path, instead of chasing our tail all the time,” Fawcett says.

“Making sure we’re on top of our game would enable us to look more fully into that United States market, where we know we have a big demand for what we produce.”

She says the USA doesn’t have any axe manufacturer which produces the same quality as Tuatahi, the nearest competitor being hatchet makers, “which is not the same market as us.”

One new market would be firefighters’ axes, which the company hasn’t yet had the time to investigate properly.

Automation of some of its processes, particularly to produce the $295 work axes is something that Tuatahi would like to develop. Having had a limited success with a prototype machine to help grind the teeth of its racing saws means that the company knows it has a challenge to replicate some of the handmade operations.

“We’re keen on R&D,” she says, “we have to reinvent ourselves all the time. We encourage the staff to look at ways to streamline production, and if there’s ways to speed things up, that will be great as a way for us to catch up on our orders.”

The perfect present for someone that has everything? – Golden Mean Calipers Peter Kerr Jul 03

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The Golden Mean Calipers maintain the ratio of 1:1.6180…. across its full span

Golden Mean Caliper maker, marketer and whizz, Nick Taylor

Occasionally you come across a product so cool, so seemingly useful and unuseful at the same time……well here’s such a product, Golden Mean Calipers.

They, or at least the for sale on the internet version, are the brainchild of Nick Taylor.

In the two years  he’s been making them, the former Wanganui, nowWellingtonresident has sold about $45,000 worth of the three sized, three-priced calipers. The innocuously perfect piece of hinged metal now provides the coder and MakerSpace co-founder, half an income.

The Golden Mean is an anciently understood, ratio of Phi (1:1.6180….).

It is aesthetically the most pleasing ratio. The most beautiful of faces are full of such ratios, as are spirals of flowers and shells (among many).

Taylor came upon the idea of the Golden Mean when travelling with his parents in a camper van around Europe for a year when he was about 14. Specifically learning about the Golden Mean in Greece, the concept has been a background curiosity ever since.

He made a pair of calipers for himself three years ago, along with trying a bunch of other manufactured stuff through Ponoko.

What with “I would love some of those,” comments from friends, and the fact they actually sold on the net, his calipers’ manufacturing has morphed into an online business.

Currently he makes them from brushed stainless steel and brass (the rivets provide the right amount of hinge and ‘hold’). The three sizes are 114mm, 180mm and 400mm, selling for $35, $65 and $75 respectively.

Among the wide variety of buyers are artists, sculptors, graphic-designers and gadget-collectors.

One previously unknown and unexpected market is plastic surgeons. (Not much use having a perfect new nose if it doesn’t fit the rest of your face….sticK comment!)

“In fact, such has been the demand from this sector, I’m about to make a version just for them,”Taylor says. “We’re going to make these out of mirror-polished stainless steel, with a slightly more complex design so the tips can touch.”

One of MarkerSpace’s business models is for people to come up with a new design that can be relatively easily prototype-made at theirVivian Stfacility.

The demand for such a product can easily be tested at some ofWellington’s cosmopolitan weekend markets, and if this is high enough, then sold worldwide through the net.

Much likeTaylor’s Golden Mean Calipers really, proof of the pudding!

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