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Posts Tagged Entrepreneur

The Kiwi innovation space is starting to look awfully crowded Peter Kerr Apr 16

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Is it just me, or is the innovation/commercialisation space looking awfully crowded and confused these days?

Sure, we like to think we’re (NZ Inc) inventive and entrepreneurial.

But there seem to be more entities out there offering innovation (and I shudder to use the term) advice, funding and connections than there are companies with good ideas.

Wearing my taxpayer’s hat, I have no problem when private money puts their proverbial on the line and takes a punt on a startup or early stage company being the next big market success.

Therefore the angel investor community, private equity companies and even family, friends and fools are to be admired and encouraged.

But the plethora of government, university and regionally financed organisations servicing our entrepreneurs is started to look very overlapping, rather uncoordinated; and the lack of transactions by some players needs to be questioned.

A cursory list includes (I’m not sure if I should apologise for accidentally missing some!):

NZVIF

Callaghan Innovation

MBIE (well, parts of it)

KiwiNet (and the individual university commercialisation units that are part of it)

Icehouse

SODA

BBC

CreativeHQ

powerHouse

Sparkbox

In fact this blog was inspired by the recent announcement that there is to be a merger between Wellington-based Kerasi Ltd, and powerHouse – though Kerasi’s website states it is a powerHouse partner so decide for yourself who the kingpin.

powerHouse has also recently announced a merger with Dunedin incubator Upstart.

Then there’s a new body I’d never heard of – Innovation Council NZ.

Again, one of its main sponsors is government via Callaghan Innovation.

All in all, I’m afraid it means that there is quite a bit of overhead costs to be paid for by someone (us) as all and sundry scramble around looking for something to invest in.

In other words, there’s lots of pedaling by a lot of people, but without the sense of urgency that having your own money invested brings to the game.

There will be a lot of meetings though, and any number of bureaucratic hoops to jump through to make sure that ‘value’ is being delivered to the taxpayer.

And then, by the time that someone higher up that government food chain ponders the question of whether flinging a whole lot of money at innovation, and seeing what sticks, actually does work, it’ll be time for another change of policy.

But by then minister of everything Steven Joyce will probably have ditched the science and innovation part of his portfolio!


Re-arranging science funding’s deck chairs Peter Kerr Apr 09

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Well, I guess you can’t have too many science funding bodies…

An alert colleague pointed out a GETS call for applications for – Capability in Independent Research Organisations Funding. (GETS Reference: 41196)

This fund is aimed at non-Crown Research Institutes,

“which hold significant research capabilities supporting national outcomes in areas of government priority.”

This will appeal to organisations such as the Cawthron Institute, HERA (Heavy Engineering Research Association), Opus Research and other independent researchers. (You can see a full list here at IRANZ, the Independent Research Associations of NZ).

The major surprise is that this fund is to be administered by the Health Research Council (HRC).

In a way it all makes perfectly logical sense given the way that science, innovation and commercialisation ‘policy’ (used in the very loosest terminology) has gone over the past few years

We had science policy and funding being separated – a Ministry and a Foundation for R,S & T.

Then these two were brought together to have a Ministry of Science and Innovation.

That lasted about five minutes, and MBIE was set up, with much of its funding allocation removed when Callaghan Innovation came, and is coming into, being.

Oh, there’s also the Primary Research Growth Partnership administered by the Ministry of Primary Industry as another entity entirely.

And now this.

The HRC does make funding allocations to researchers in health – which presumably they have a fair degree of expertise to do so.

Now they’ve got to become experts in a wide range of research fields, completely unrelated to their core knowledge.

Instead of the fund being under MBIE, and aligned to its overarching goals which seeing as it helped write them it should understand, a completely different body gets to do the choosing.

I guess, when as a country, we have no clear idea of what we should be concentrating our limited scientific endeavours on, then spreading the resource ever more thinly and hoping something, anything, serendipitously happens to happen is as good as any other approach.

But it takes us ever further away from the exemplar countries such as Denmark and Singapore – countries that have a plan, stick to it for a bit, and then modify what they do to achieve the clear goals that they have.

Talk about re-arranging the deck chairs!


‘Fire engine envy’ + time = sales Peter Kerr Apr 01

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Fire engine envy.

No, I never knew that such a condition existed, though it kinda makes sense if you happen to be involved in the fire fighting business.

But fire engine envy is one of many factors that’s assisted Lower Hutt’s Fraser Engineering into a pre-eminent position as an Australasian manufacturer of such tenders.

Speaking at a recent gathering of Technology Valley participants (and totally coincidentally, held at Petone’s Fireman’s Arms pub), Fraser’s general manager Martin Simpson told of how firemen looking enviously at the units put together by his own company, make comments that gradually and ever so slowly filter up to positively influence decisions made by a purchasing officer.

Fraser’s manufacture virtually everything in a fire engine tender beyond an imported truck chassis and cab (though they’re thinking about building this as well).

It starts with feedback and input from real firemen.

Hosereels, pumps, valves, nozzles, cabinents and the whole kit and caboddle are designed from scratch, from single components up, on a SolidWorks 3D CAD software platform.

Most of them are then created through the use of more than $20 million of manufacturing equipment, including an increasing amount of 3D (additive) metal and other products printing.

The demands of fire fighters are an important element in designing extremely robust equipment.

“A fireman’s pumped with adrenalin when they’re in action,” says Martin.

“They don’t want to be grabbing something in the heat of the moment…and it breaks. Likewise, a pump must start first time, every time.”

Another aspect of firemen psychology is that, during some of their downtime (mostly they’re not fighting fires), they’ll often surf the net, checking out tools of their trade. (You can imagine that this sort of exercise would certainly contriubte to fire engine envy!)

Martin says that unlike some of their competitors’ fire engines, all Frasers’ vehicles are immediately able to go into service (commissioning is relatively easy). The company also concentrates on the “whole of life cost” of the tenders, noting that Fraser’s has virtually zero warranty issues. In other words, the fire engines work first time, for a long time.

It is information and feedback such as this that slowly filters through the fire services of different states and countries – helping to build Fraser’s reputation.

Martin says Fraser’s is helping to organise a major fire fighting conference to take place in Wellington in September 2014, which may be attended by up to 2000 people.

“If there’s any other fire fighting related companies who would like to attend this event that will have every purchasing officer from Australia and New Zealand there, as well as a swag from other countries, we’ve love to hear from them,” he says.


Fraser Engineering; a billion dollar company in the making Peter Kerr Mar 26

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Well, you can’t accuse Hutt Valley-based Fraser Engineering of lacking ambition.

Speaking at a recent Technology Valley get-together, general manager Martin Simpson says it wants to be a billion dollar company.

The 60 year old private company with 100 designers, engineers and fabrication and production specialists has tweaked what it makes a number of times over the years – with its latest incarnation having manufacture of fully-specified fire engines as one of its major product lines.

Fraser’s are now the largest fire engine manufacturer in the Pacific area, and one of the largest in the world.  All of this has been achieved by ploughing profits back into the business, and NOT outsourcing to the likes of China.  It means that the company has more than $20 million of manufacturing ‘kit’, from 3D laser printers, to laser cutters, 9-axis machine tools to powder-coating facilities.

However, all this machinery starts and interacts with a Solidworks 3D CAD design software. (Martin noted that there’s a very large bill that the company has to pay for licence fees for this capability as one of the largest privately-owned users in New Zealand).

As a result Fraser’s are able to barcode-view the manufacture of every single part of the appliance, control valves, nozzles, hose reels and host of other components that make up a fire engine (or any other job it does for outside clients). From materials to drawings, purchasing and all aspects of turning raw metal into often very complex finished components, Fraser’s can track the process and progress of any individual part.

Should a replacement part be required, Fraser’s can find its specifications virtually instantly, and be able to produce it on the spot if required.

By maintaining a design-led in-house manufacturing and engineering capacity, “we’re now a powerhouse that can compete with anyone in Australasia,” Martin says.

“In fact, we’re advancing our manufacturing capability so quickly, our opposition can’t keep up.”

This in-house expertise also means that Fraser’s know to a few cents, how much an item costs to manufacture. Detailed information and internal reporting such as this is one reason that Fraser’s is now building 20-30 fire engines at any one time.

The company also has an intellectual property strategy that isn’t based on patents.

“The way we do it is to keep ahead of the competition,” says Martin. “If you copy you will never lead.”

Martin is also dubious (to say the least) about some of the ‘advice’ received over the years from government ministries.

Fraser’s deliberately didn’t outsource parts of its manufacturing to China. An observation he’s made of other engineering companies who have done so, is the waiting and co-ordination required to make sure hundreds of parts arrive on-time to create the component. This wait, and just as important the resultant delay in getting paid by your own customers is part of the reason the company has been so insistent on being a one-stop-shop, and/or outsourcing some manufacturing elements  to local collaborative partners.

Control of the process is key.

“Don’t sell your assets,” was one of Martin’s take-home points. “It keeps you in control.”

He says an exemplar company for Fraser’s is Rosenbauer.

They are often asked (with incentives) whether they would also like to establish themselves over the ditch.  In the meantime though growth will come through being smarter than their opposition.

That, and no doubt, a large degree of listening to themselves and not to others who don’t have skin in the game.


How long will it take for the Wynyard Precinct to hit its straps? Peter Kerr Mar 11

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Well, let’s see how Auckland’s new Innovation Precinct, Wynyard Precinct (it appears to have at least a couple of names) get’s up and going.

It has been one of those long time in coming projects – and now we’ll see if the deliberate talk of setting up an innovation hub to attempt to be a baby Silicon Valley can be pulled off.

Making it a digital and ICT concentration of goodness may work, but then it may not.

I don’t know enough of the psychology, come physical location, come proximinity to university relationships to guage this one yet.

That, and whether the office/laboratory rent will be in the right comfort zone for budding entrepreneurs, who, even though they’d like to be situated around other smart people, may prefer the rock-bottom payments due when operating out of garage.

With (well at least according to this NZ Herald story) hotbeds of innovation already taking place in Albany, Takapuna, Henderson, Parnell, East Tamaki and further south around Auckland Airport, how and where Wynyard fits in will be interesting over the next few years.

Wynyard’s got some solid operators, with a track record in start-ups through having The Icehouse and Auckland’s BizDojo as people to meet, greet and settle potential new firms. There’s nothing like a bit of experience and competence to help fledgling founders.

How Ateed (the Auckland development agency) and Callaghan Innovation bring the FoodBowl into the mix will be another challenge.

The Manukau-based Food Innovation Centre has had considerable investment put into it by central government.

While these ventures always take a long time (if ever) to pay themselves back, the FoodBowl’s been very much in that territory apparently.

But, that’s not to belittle Wynyard. Onwards, and hopefully upwards.

Mind you, given that it will take at least a couple of years for anything meaningful to happen, by then we’ll have forgotten what the original purpose of Wynyard was anyway.


Driver of Callaghan accelerator services to put pedal to the metal? Peter Kerr Mar 04

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We’ll make the assumption that Callaghan Innovation’s new GM of Accelerator Services isn’t there for the money.

Chris Somogyi’s come relatively unannounced to the crown entity whose role is to accelerate the commercialisation of innovation by NZ firms.

Chris Somogyi

Softly, softly is possibly how the American, recently from Seattle may do things – lie low, get a feeling for the place before making yourself known.

He’s been a venture capitalist, developed concepts into ready-made products and has a strong record in business development. He’s already been to NZ a number of times, so presumably isn’t too rose-tinted glasses about our place.

Given his interesting credentials, and presumably backstory as a biomedical engineer by training, Somogyi hopefully brings some deep connections and contacts into some of the business areas CI’s targeting.

Having been well over a year in the development, CI needs a few runs on the board, needs the accelerator pressed to the floor.

Investing in companies, having an umbrella view of industries and sectors will undoubtedly be a completely different gig to being down and dirty with would-be up-and-coming businesses within the same, and trying to help them scale quickly to significant size.

In other words, fighting in the trenches is completely different to attempting to direct from above.

Which Somogyi will undoubtedly be aware of, and hopefully up for the challenge of being part of.

From Callaghan Innovation’s point of view, they probably have little to lose.

An outsider (of NZ candidates) solves a few of those political/business bias challenges that can arise in such a pivotal, potentially game-changing position.

CI may’ve thrown a double six just found the exact person they need.

Or not.

He’s only been in the GM accelerator services role for a month or so, and Somogyi is probably doing a lot of listening while trying to make sense of the disjointed research, development, commercialisation and funding and investment scene in this country.

Welcome to New Zealand Chris.


Chipping in for multicore champion – let’s get parallel programming Peter Kerr Feb 04

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 You’ve got to admire someone who has a vision, almost as much as someone who is prepared to use the word vision.

So here’s a plug for Nicolas Erdody, founder of Open Parallel, and more importantly the organiser of Multicore World Conference 2014.

Erdody’s well aware that computer hardware power – where many cores (essentially single computers) can be placed on a single chip – has advanced beyond the IT industry’s ability to program for such beasts.

In this light, he’s put together for a third consecutive year a two-day conference at Auckland’s AUT on 25 and 26 February that brings together many global experts on dealing with this challenge.

Naturally Erdody’s keen to get as many attendees to the world-class event as possible (just under $1000 for full attendance, including a conference dinner on the Tuesday night).

Equally he wants NZ Inc to wake up to the realisation that there’s a real opportunity for our collective psyche and IT infrastructure to ride the just-beginning wave of programming possibilities that exist around multicore coding.

Erdody’s passionate that a concentrated effort of NZ government, commercial interest, engineering and developers’ communities, R&D and academia could provide programming solutions for multicore.

Given that multicore’s parallel coding requirements are weightless, location agnostic, and an increasing problem needing to be solved, Erdody’s dead right about the opportunity.

Rounding up the collective cats to bring it to fruition, even in a country as only two degrees of separation connected as New Zealand has been an ongoing challenge for the Oamaru (yes, you read that right), former Uruguayan businessman.

However he must be doing something right. After two years staging the event in Wellington, for the third conference Erdody has pulled Auckland’s AUT (Auckland University of Technology) onboard as one of the sponsors, along with well-known open source software promoters Catalyst IT, SKA Organisation (from the UK) Cray Inc, NesI, NZOSS, MBIE, ThinkAgency, Scoop Media and NVIDIA.

There are more than 20 speakers at MCW2014, with over two-thirds of them from overseas.

Erdody would love to see as many IT managers, CTOs and CIOs, engineers and developers as possible at what is cutting edge thinking – and what is sure to be an inside look at where computing is heading in the immediate and not-to-distant future.

In a sense (though Erdody’s too polite to say this), anyone connected with the IT industry at even a slightly senior level would be a fool not to be there – if not for the speaker quality, then for the informal conversations which alone can often be worth the price of admission.

Additionally, on February 27 & 28, Erdody’s helped organise in association with AUT’s Dr. Andrew Ensor and Prof. Sergei Gulyaev a Square Kilometer Array (Computing for SKA) Workshop – the global initiative, using radio telescopes based in South Africa, Australia and New Zealand to better map the universe.  (New Zealand is a full member of the 10 country SKA Organisation, which is a cornerstone sponsor of MCW2014).

(Incidentially, Open Parallel is the only New Zealand company that leads a work package of, admittedly a small part of a huge international effort, the design phase of the SKA. Open Parallel’s contribution to the SKA isn’t funded by the NZ government, and, as a result, Erdody would appreciate international sponsorship or donors for the effort).

Finally, and getting back to the ‘vision thing’ (as accidentally coined by George Bush), Erdody deserves recognition for hammering away at an opportunity for New Zealand.

Our country could position itself as a centre of excellence and make lots of money by solving multicore programming problems for others.

Who is up for the discussion, the challenge and the prospect?

(In particular, government-type advisers looking for the next big thing, are you listening?)


Today Wellington…tomorrow the world for ‘toys’ lending site? Peter Kerr Jan 28

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 LendYour has been start-upping its way to life in a next door office to me.

A bit like a nosy neighbour, I’ve been keeping an eye on the Wellington Startup Weekend 2013 inspired web play (with an app to come) whose proposition is to ‘rent what someone else owns’.

In that same neighbourly way, I’ve also had the occasional kitchen conversation with co-founder Nicolai Thomson, who currently works for a business-oriented mobile phone company.

It has been interesting watching and hearing of the tribulations and triumphs of putting together a website and backend that firstly enables the owners of big ticket items such as motorhomes, boats and holiday homes to register their items, and then for a borrower to do so.

And though (inevitably) the commercial motorhome rental industry will see LendYour as competition, Nicolai feels the owner-oriented site has a couple of advantages beyond around 30% cheaper for the renter.

“Firstly, we have greater accessibility than the national companies,” he says. “There may be a motorhome in your home town, and you’re not restricted to taking onboard the amount of baggage you can take on a plane. Secondly, there’s a lot more character and individualisation of an owner’s motorhome, and that will appeal to a great number of people.”

Building the LendYour infrastructure to do so has taken a group of global developers/partners a number of months (though Nicolai’s originally British and is tapping into his contacts).

LendYour has had its first five paying customers, and Nicolai’s intention is to go worldwide with the site – though tailoring it for individual countries.

Unlike some competing temporary lend/borrow sites, LendYour is starting with expensive holiday-type ‘toys’, as this provides a better margin on which to build the business. Eventually, other, smaller, lower rental items will be included – essentially to flesh out LendYour’s total offer.

LendYour’s revenue model is based on owner members receiving 92% of the total charge for accommodation, and 70% for a motorhome.

One interesting feature of the site’s development has been both the learning exercise and partnering up for insuring items.

Nicolai says LendYour has obtained premiums through CamperCare that are usually much better than those available through traditional insurance companies. This premium insures both the motorhome itself and its contents.

Getting this liability/protection aspect of the business sorted out has been one of the solved headaches for the team, as up till now motorhome owners have had no way of insuring their vehicle when lending it out to a third party.

The full site is due to go live in February, and will eventually include the ability for hirers to add map-based travel information and photos – creating LendYour specific content which in itself creates more reasons for site visits. Initially this will be through static information and photos, with dynamic maps to be added later on.

The business is also up for inclusion as one of the Lightning Lab 2014 teams to be announced this coming Friday (31 Jan).

As well as the $18,000 ‘living costs’ (and commensurate acquisition of equity by the Lightning Lab investors), Nicolai sees the process would be extremely valuable for quickly learning more quickly on how to grow what has already been developed.

Using the neighbour analogy, it has been extremely interesting observing a type of toddler moving from crawling to now walking.

Whether the baby develops into a fully-fledged adult sprinting for all its worth – time will tell – and though I’ll no longer be a neighbour, I’ll watch with interest.


A hidden gem in Callaghan Innovation’s business case? Peter Kerr Jan 21

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Callaghan Innovation’s business case came out a week before Christmas among a flurry of keep it under the radar government documents released about the same time.

(Ironically, the business case appeared a couple of hours after sticK commented that it hadn’t turned up…though I’m not claiming any credit!).

As a some people commented, it wasn’t much different from CI’s Statement of Intent delivered in late July.

But, delving among the entrails is the first new, rather than inherited, scheme put up by the Crown Agency.

A repayable grants programme. (As described in their own words on page nine of the document it is):

Repayable Grants Programme: provides grants to technology-focused incubators in order to create and nurture new businesses based on promising areas of technology. This new programme will ramp up to providing 24 grants annually of $450,000. These grants must be repaid once the new businesses begin generating revenues.

Now there’s not much flesh or other information around this RPG, but what it essentially is, is a repayable loan if and when a fledgling company starts making money.

Israel (among a number of exemplar countries) has had this model for a number of years, as mentioned in the fourth paragraph of a guest blog by Daniel Saunders in VCCafe.

From what I gather, the main advantage of such a repayable loan is it recognises that many technology focused ventures are risky; a punt.

That being the fact, if they succeed, the money’s paid back. If not, ‘deems da breaks’.

It is also relatively simple to administer – and much less influenced by a bureaucrat’s whim (apparently).

So, a bit of a thumbs up for Callaghan Innovation…some innovation of its own.

We’ll look forward to seeing how the RGP is going to work in actuality, as Callaghan Innovation works towards its stated ideal of being a small R and big D in New Zealand’s R&D (research and development) landscape.


PledgeMe co-flounderer’s words of wisdom Peter Kerr Jan 14

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 You’ve got to give a bit of kudos to someone who calls themselves the chief bubble blower and co-flounderer (yes, spelling is correct) of a company.

Whether you call New Zealand’s first crowd-funding platform PledgeMe a startup is debateable, as the 18 month company is still alive, kicking and more importantly growing.

Said, co-flounderer Anna Guenther gave a short presentation to Wellington’s Entrepreneur’s Club recently, highlighting the mostly ups, and a few of the learnings for PledgeMe that has so far raised $2.1 million across 470 successful fund-raising projects.

PledgeMe’s business model is a 5% success fee commission (with an additional 2.8% to pay for credit card fees). And while of course earning your way is important, you get the feeling Guenther’s absolutely enjoying enabling mostly community projects with an average size of $3500. Apparently 49% of all projects receive their funding target.

I suspect she’s excluded from this average size figure their most successful fund-raising – a $207,000 Christchurch sculpture initiative (matched by Westpac, and with an additional $180,000 sent in by cheques!).

The oldest successful fund-raiser was 82 year old Stu Buchanan, a jazz band leader who crowd-sourced (including from three generations of students he’s taught) enough money to put together his first ever album. He ticked it off his bucket-list!

Guenther gave the following wisdomettes for anyone starting up. Being an internet wizard, she’s also put these points up so you can check it out on Dropbox.

  • Choose the right partner
  • Have a hard conversation at the start around a shareholder agreement. The discussion can focus around the who’s idea it was, the writing of the business plan, other expertise brought to the table. What are people going to be contributing now and down the line?
  • Ask for help – a coffee or beer can be empowering in the knowledge and networks that result
  • Sometimes you have to jump (code is never ready!). Have a launch party, then you have to begin
  • Build networks without expectations. In 12 months, you never know, those contacts could ignite
  • Surround yourself with smart people. You don’t want to be (or think you are) the smartest person in the room
  • Design. The best dollars spent are at the start – and that means making the brand look good and people wanting to connect with it
  • You can’t compare your feelings inside, with others’ outside website. In other words, what other startups show as their exterior view, in no way matches the undoubted angst and sometimes indecision that goes on inside. (Guenther acknowledged Rowan Simpson’s advice on this one)

Geunther also encouraged taking any opportunity to speak at other peoples’ events, launches, meetings as a way of spreading the word/love.

When asked if she thought that the recent launch of an NZ-oriented Kickstarter would affect PledgeMe, she felt no.

“We’re different, and we believe that local is important to us,” she says.

“But indeed, if anyone wants some advice about putting a project up on Kickstarter, or on PledgeMe, give me a yell.”


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