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Posts Tagged Market validation

Is the future for our sheep their milk? Peter Kerr Jul 16

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Being the farm raised boy I am, I’m keen on the idea of clever new and profitable products from our ability to convert sunlight, soil and water into them.

So, Blue River Dairy, the sheep milk products company which is over 10 years old, is something to keep an eye on.

It is the creation of Keith Neylon, a 60-something entrepreneur, who has had previous lives in deer recovery (owned 10 helicopters at one stage) and salmon farming (co-pioneered its development in NZ) among other things.

He was semi-talked into exploring sheep milk potential by a meat company chairman – and saw opportunity.

There’s sheep milked around the world – but almost all is consumed in Spain, Portugal, Sardinia (four million sheep for two million people) and their own country of origin.

There’s was also an Asian and China angle. Over 85% of these countries’ peoples are allergic to cow’s milk.

The resut has been over a decade’s worth of front loading all the expense of setting up a market to production entity, investing in plant, genetics, farms and an entire system to produce sheep milk products.

He didn’t do things by half during this ‘research’ phase. Keith spent three months on an Israeli kibbutz that was one of its top sheep milk farms. Some of the knowledge from these experts has been incorporated in BRD.

Now, year round (having perfected lambing five times in two years), 4000 ewes are milked twice a day.

A new drying plant in Invercargill receives milk that has had 85% of its water removed on-farm, and most of it converted to whole sheep milk’s powder, canned onsite, most as infant formula.

This sells at a considerable premium to cow’s milk powder, though as Keith explains, it is better .

Sheep’s milk takes a baby 30 minutes to digest, compared to four and a half to five hours for cow’s milk. It has 500% more vitamin D. It doesn’t make babies skin become rashed.

Currently, hundreds of thousands of cans are tied up on China’s borders as The Middle Kingdom sorts out an issue of what it considers to be too many (up to an estimated 2000) brands of infant formula). This will pass.

But Keith is more than confident that at least 10 million milking sheep would not be an oversupply and continue to hold a price premium.

He says BRD has the best genetics, allied to a retail market position that is way ahead of any other land-based product from New Zealand.

He envisages a revitalisation of the sheep industry based on their milk – and remember they still produce lambs and wool.

Another strong point in sheep milk’s advantages is that “you never get leaching off sheep country.”

Keith is proposing that farmers become participants in the opportunity through a franchise-like system (including the all-important supply of sheep genetics), in which New Zealand, and its reputation and image, deliver high value products to a growing market.

This potential is one reason Landcorp is seriously considering an sizeable investment in the industry – perhaps alongside BRD.

I was privileged to hear him speak recently in Wellington.

This is ballsy entrepreneurship (a 10+ year lead time!), that plays to our strengths.

One day I predict he’ll be acknowledged as the man who saved the sheep industry.

 


Branding’s dark arts leans to build, measure, learn Peter Kerr Jun 18

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The dark arts of branding received an illumination when Brant Cooper spoke to a packed house at Wellington’s Lightning Lab.

The ‘Lean Entrepreneur’ co-author from San Diego popped in on invitation on his way to Australia, and talked about how startup businesses should also take a lean approach to branding – from day one.

This lean build, measure and learn approach to branding (also taken for the product creation and validation) – is defined as a two-way relationship that creates value for a customer.

“You’re in a relationship from the moment a customer is aware of you,” says Brant.

“By putting off branding, you’re already branding, and affecting that relationship.”

Along with Jeremiah Gardner, Brant’s writing a new book, ‘The Lean Brand’. The pair crowd funded its publishing, with 441 pre-orders, obtaining $23,020 from a target of $12,500.

Brant says the Madison Avenue types of branding consultants and experts traditionally concentrate on the artifacts of a brand, such as a logo, tagline and mission statement.

Where brand meets lean is working out what elements of your brand are needed to create value for your customer. This is done through validated learning – moving unknowns to knowns as is carried out for product development.

More so says Brant because initially, startups don’t know the value they’re creating, or for who they’re creating it. With customers comes the opportunity to learn what aspects of brand you should be concentrating on.

Ultimately, Brant says a business is after passionate customers. The aspirations that a business shares with a customer are its brand.

All this is encompassed in a story he says.

This startup story starts with questions such as:

  • Who are you?
  • Why do you exist?
  • Why should I care?
  • What is your rallying point?
  • What is your shared aspiration?

A brand can grow out of answering these questions, as a startup build, measures and learns, and uncovers the elements that provide an emotional resonance with a customer. In other words, experiment to discovering the emotional value of a startup product – hypothesis testing to validate learning.

Brant says startups should own their own brand design and not send this side of the business out to an agency.

“Entrepreneurs can and should own their brand creation,” he says.

“A brand development is not a black box to be owned by others.”

This self-effacing American, who got plenty of laughs during his presentation, will be doing no great favours for branding experts when The Lean Brand Book is published.

But, since under lean, brand is much more than its logo, such disruptive thinking will mean startups start branding right from the get go.

 


In the rush to all things digital, are we missing a biological trick? Peter Kerr Jun 12

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New Zealand is missing a trick when it comes to the startup weekend, incubator, accelerator programme ecosystem that’s got lots of attention lately.

And sure, I can appreciate how the digital side of things is extremely quick at developing and validating a business through processes such as Lightning Lab.

Where I wonder if we’re underplaying to one of our strengths, is in the biology/technology economy (the analogue economy perhaps?).

What would be the new research and commercialisation projects if we had fired up scientists, engineers, manufacturers,  hands-on finance and distribution people, digital experts and some other odd and even people hothoused in a similar way to the incubator models?

How much learning, cross-fertilisation and ‘ideas-worth-pursuing’ could we generate?

Would the intersection of different peoples’ thinking create new opportunities?

The answer is surely it would.

But still, you’ve got to wonder whether the gift that mother nature has given us to produce biological raw materials isn’t being leveraged to anywhere near the extent we can and should be doing.

As far as I’m aware, there’s no forum that brings a width of sector participants together to collaboratively cook up new schemes.

Obviously, the dairy, meat, wool, forestry, and fishing sectors have their conferences – but they tend to be only mildly looking-over-the-horizon talk fests.

It is rare that people come away from such events with the attitude “I didn’t realise that,” or “I wonder if there’s an opportunity with…”

Now, the last thing I’m suggesting is our country should be either digital or analogue; we should do both, and both should and do inform each other.

Examples include TracMap, started by a former Wrightson colleague Colin Brown – which has expanded from using GPS and other clever computing to expand from helping fertiliser to be applied more accurately, to a range of markets under the heading ‘Situation awareness made easy’.

In fact there’s any number of digital/analogue connections for New Zealand’s primary industry – as evidenced at last year’s initial mobile tech forum.

However, we’re less good at the market end, adding value in areas such as functional foods, or ramping up the use of wood fibre as a multi-talented resource.

I appreciate I’m merely stating the problem without coming up with many answers.

But, how can we as self-described inventive Kiwis, create and explore biological/technologydigital opportunities better; much better?

 

 


Lightning Lab II grows up – will its offspring make it to adolescence? Peter Kerr Jun 03

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Anyone that’s been around young children will appreciate there’s a heck of a difference between a one year old and a two year old.

A similar comparison is valid with Lightning Lab II, which last week had nine of its 10 starters from three months ago pitch to about 250 would-be investors, and a number of others who mostly filled Te Papa’s main theatre last Wednesday.

As LL itself says, it is modeling the way it works off TechStars and other USA originated accelerator initiatives.

But there’s a New Zealandness to how it is done.

So, as well as the added degree of presentation polish, one of the more notable aspects was, apart from three business asking for just under $500k each, the other six businesses were relatively low in how much money they were asking for.

This partly reflects there’s still more market validation and proof required, and also the New Zealand environment.

Often overseas startup accelerator businesses have already obtained some money (from friends, family and fools) before they begin the three month intensive mentoring and ‘is there a business here’ questioning process.

New Zealand accelerator startups at this LL tend to be less mature, and the degree of realism in the money pitch in bringing new investors onboard was one of the features this time round.

Naturally, since many of the pitches are as much about selling the sizzle as the sausage, there is a touch of scepticism required in the growth projections put forward.

But, without any due diligence, all the pitches sounded like they could – with the right combination of expertise, clear direction and luck – gear themselves up to grow.

And, rather than attempting to break down each businesses’ prospects myself, I’ll repeat Nicolai Thomson’s speculation. Nicolai, (Twitter handle, @nicolaithomson) is the founder of Lendyour.co.nz. Here are some of his, and some of his colleagues’ thoughts about the business propositions put forward at LL Demo Day.

He raises some interesting points, that investors too will no doubt explore as they look under the hood of these potential part-purchases.

In Nicolai’s words:

I don’t rate Twingl’s business model though I would totally use their product. They need to look at alternative monetisation and in the last 18 months I’ve heard their CEO twice and don’t rate his ability to spot a future trend, change and win fast enough when established companies jump on their un-patented mapping.

MishGuru, too reliant on Snapchat being a fad today, and limited audience using it. Snapchat will pass and be dead in 3 years. Their subscription plan is also fundamentally wrong as their target market is enterprise paying $10 a month. Every company will start on that level with little incentive to move to more expensive plans which would assure MishGuru can pay their bills.

Floc has a great concept but little future. Using Telco data is not going to be given to a brand new team with no reputation, and would be revoked the moment a controversial CEO or diplomat was tracked leaving their building after someone eyeballed then and identified their dot after hacking in to Floc systems. Never-mind the fact restaurants have legal obligations when it comes to employment and cancelling shifts before or on the day won’t fly for long in the name of saving the owner some dollars. Staff would likely leave and cause unnecessary headaches.

Coach Seek will be a safe bet, no spectacular exit so ideal for the risk averse of those investing. I like the product though maybe a touch too expensive starting at $49USD a month.

Cloud Cannon were my top pick, followed by CommonLedger.

CommonLedger will have a competition issue and will probably be best to position themselves to be bought out quickly. They will be overtaken by deeper pockets if their concept starts to take off. Their CEO gave the impression they are going to build a global giant and may miss a good return which some investors could be spooked by.

Cloud Cannon though probably have the closest disruptive product but I spoke to a designer friend last night and there are major concerns with SEO ability if you get quite messy code that it would deliver the site through. There is no comparison to original source code being indexed. This service cuts out the core web developers who provide the framework/CMS which is why WordPress has been so popular. If they can get SEO to be great, then it’s a winner. Again, won’t take long for others with resources to reverse engineer. Great business model though.

What I didn’t see from any of the teams though is a disruptive produce that carves out a niche which cannot simply be reversed engineered, or copied by teams with deeper pockets, more experience and crucially an existing customer base to test, and get faster feedback from. There were a couple of self-proclaimed engineers and maths geeks, however no one stated their competitive advantage was an algorithm that is one of the few things not easily replicated.

 

 

 


To business plan or startup plan? That is the question Peter Kerr May 20

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Just at the time I have no clue what to write, up turns this blog, It’s well worth repeating.

I’ve written about Nicolai Thomson and LendYour, a startup ” to be the place people come to rent”.

Here’s his very well written observations on the difference between a business plan and a startup plan…with the word rhetoric in the opening sentence.

By Nicolai Thomson, CEO, LendYour.com

Follow him on Twitter @nicolaithomson

Believe it or not, there is a big difference between a Business Plan and a Start Up Plan. The following stories come from experience and not rigid theory. Stories help illustrate points, and provide context by somehow firmly embedding knowledge in the real world, unlike rhetoric which can lack grounding.

I was sixteen and still at school when I started my first business in the UK. I designed jewellery and had it made and imported from Hong Kong, along with Indian and Brazilian style costume jewellery. This was back in 1999 so the few pieces I actually sold were at car boot fairs and markets. It was fun, but not a lot came of this business other than my sister getting a huge box of stock once I was through with it all. But still I collected my lessons and learnings.

Four years later, at age twenty, I started Executive Hospitality which later became taxiclub.co.uk. We created a basic website that could give you real-time taxi quotes driven by owner-drivers all around the UK. We also offered, minivans and executive cars in addition to normal saloon cars. We basically did half of what Uber does today, except back in 2003 so we were ahead of the game. We sold the company in November 2005 for an acceptable figure and it still operates today. I took off and travelled around the world for three months before deciding to start over in bonny New Zealand.

Although both experience were helpful and I learnt a lot, my fundamental mistake was having no Business Plan. Without well-thought-out visions and strategies the businesses floundered. We had no problems working out our short-term tactics, which got us short-term gain, but we had nothing to help us attain longer-term goals or even just a steady footing.

Too many people out there assume that a Business Plan is the first thing you should do. Don’t get me wrong, there is a place for a Business Plan, and it must be comprehensive, but if you are either thinking about, or have got beyond that to starting a business, then you need to start with a Start Up Plan. A Start Up Plan will give you time to think about the business without being bogged down in trying to work out financials or marketing strategies when you should be thinking about your vision and initial strategy.

How do you proceed with a Start Up Plan and what are the benefits?

First thing you need to think about is your vision, which should not fundamentally change unless there is a complete change in direction.

My latest venture, LendYour, started out as a simple marketplace website wanting to list holiday homes, motorhomes and boats, but that idea soon crystallised and we decided we wanted to be an international network providing mobile-first search, pricing, booking and review services for cars, vans, trucks and motorhomes — so, anything that drives on a road. Our vision, however, barely changed and has always remained “To be the place people come to rent”. Rock solid.

Do you have a grand vision for your business yet? If so, be sure to check your vision is not the same as what your product is meant to do. Your vision is what your legacy will say about you and your business. Richard Branson’s vision for Virgin is to ‘Improve society through the businesses we operate’.

Some may call this idealistic, but it reminds everyone that we’re here to enhance other people’s lives. In other words don’t be selfish, help others first. Imagine if every business in the world was there to enhance other people’s lives, and their actions were held accountable by boards and shareholders. This world would look very different!

Next is your strategy that is produced by thinking a lot about your goals and objectives. It’s OK and expected that these change often so don’t feel you are a dreamer that never does anything because strategy is the hardest, and takes the longest. It’s also what your product is. You should refer to your business idea as the benefit to your customer of using your product — don’t go around saying you are building ABC for the XYZ industry. Sell the benefits, not features because they are the things that a customer can relate to.

A company I have really enjoyed watching grow over the last six months is Groove. Their first description of the business focused on what they do, which quite rightly is “SaaS & eCommerce Customer Support”. It was bringing thousands of visitors to the site but did not get many sign-ups. Why? “… it doesn’t give me a single reason to do business with you” was the feedback.

Groove’s team then spoke with customers, asked their advice, and why they used Groove — a journey that could’ve happened at the very beginning.

The outcome and new message was “Everything you need to deliver awesome, personal support to every customer”. Conversions nearly doubled.

Perhaps building in Groove’s awesome customer support in to our software would be even more beneficial to my customers?

Think about your tactics last, as they could change daily or even hourly. Don’t be tempted to think about tactics until you have your strategy nailed. Tactics are ideas that turn your strategy into a business, which then absolutely requires a Business Plan, funding, sleepless nights and little social life.

I decided to apply the above Groove example to LendYour by describing our benefits to target customers and asking them, “If this product existed, would it be important enough that you would make it one of the top priorities for you or your company this year?”

The first client feedback shifted our strategy slightly, and after accepting and proposing that change he promptly said yes and committed to paying $25 a month for the basic plan. A sale! Talk about a confidence boost.

It’s only at this point that you need to think about detailed financial forecasts, sales strategies and marketing plans with your team.

Must haves of a Start Up Plan

Your Start Up Plan should be no more than 1 page long, and answer the following:

  1. What is the vision for your business? A good question to ask yourself is what’s the purpose of your business even existing. Be honest.

  2. Set your goals and objectives. Goals are not tangible things you can easily measure, whereas objectives are. Goals are also broad; objectives are narrow. This is how your strategies comes in to being, and are the two sentences on your Start Up Plan that you need to keep updating whenever your ideas change. Your objectives will reveal clues as to your competitive advantages too.

  3. Your team. Do a SWOT analysis on them. If you do not know what a SWOT analysis is find out. At this stage your answers to each can just be one or two words. Pretend you are in a large company, then ask yourself if you would employ the team you are heading up to launch this internal project you are writing a business case for. Again, answer honestly, and write down the concerns you would have because in a few months time you may have overcome those issues and its useful to have them written down to remind yourself of the progress you are making.

  4. Identify your three core markets or industries you are going to be involved in. This is where you go looking for your target customers.

  5. Identify what you can charge money for. Allow the answer to this question to influence your goals and objectives heavily. Neither of these questions has to be detailed at all, they are there for you to reflect on as your ideas change the strategy.

Once you have written this down, print it out and stick it on your wall somewhere you will see often. You are now ready to formulate strategies. Write them all down somewhere electronic and cloud-based so you can edit and add to them often. I use Evernote that has been absolutely amazing for this exercise. Every now and then I scroll down through my various notes about objectives and goals, growth, revenue, markets, or quotes I realise how far the business and my thinking have come.

Once you have those fundamentals it’s time to start refining that elevator pitch but don’t be rushed in to working it out until you have given due time to thinking about your strategy. If you rush, you may make mistakes and the probability of you going bust will be much higher than they need to be.

Don’t be afraid of spending an extra 2-3 months thinking and talking about your strategy to target customers. You may have noticed I have not talked about friends and family during the thinking period. Proceed with caution, because your ideas are going to change so often that you risk others close to you doubting your ideas and ability, which has serious knock-on effects to your confidence. Talk to the people who would be paying customers before friends and family.

Next, if you are up to it, write about your experience somewhere because it will be extremely useful to many people out there struggling to get to Start Up ‘first base’. Good luck!

Follow Nicolai on Twitter @nicolaithomson


Lightning Lab grows up, gets into its groove Peter Kerr Apr 30

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The Lightning Lab’s demo day had some quite fascinating works in progress…bring on Demo (to investors) Day on May 28 at Te Papa.

The team behind LL are also, as you’d hope, a year wiser, further along a path with the aim of rapidly ramping up verified/proven businesses.

It also isn’t surprising to see the LL accelerator (now there’s a nice rhyme/assonance) expanding to Auckland next year and Christchurch.

The nine, mostly two or three man teams (and a question asked why so few females?), have had assumptions challenged, hard questions posed – as teams are forced to think about building a business as opposed to creating a product.

There is also wider value beyond the incubation itself, as Ken Erskine, director of startups at The Icehouse, (as appears in Stuff), puts it perfectly

He says research showed successful startup accelerators provided a network of highly experienced and committed mentors and investors, an active alumni network and, most importanly, connections to future capital.

Together, we have a phenomenal combined network of mentors, investors and startup entrepreneurs to help ensure the success of the nationwide accelerator programme.”

At the demo, with a small d, day on April 23, one of the three month intensive’s more interesting pivots was the horse guy.

The original pitch was to do something to make horse shoeing more easy. But the team lead by Ashok is now looking to create a tool so that businesses can run campaigns on SnapChat (the instant appear/disappear photo app).

The guys looking to build a tool to automate translating accounting figures from say Xero, MYOB or QuickBooks to an accountant’s own chart of accounts has already got strong traction and demand.

One of the startups wants to capture, retain and effectively distribute that deep institutional knowledge longertime employees have about a company and how it works.

There’s an app to help the hospitality industry manage its staff/flow requirements, and software for managing shared expenses – as in flatmate situations. An easy, no-bugs way to get a web design quickly going live and updateable, a water tank monitor device, management software for sports coaches, and an app that uses social networks as a way to connect offline – say a quick game of tennis – were explained, and a brief lessons learned given by all.

Finally, and this will be interesting to see if they can get it right – a map that shows where you’ve been on web searches – a way of collecting notes and creating shortcuts through the world’s knowledge.

So, obviously no shortage of ideas up for grabs.

But, as we all know, ideas are easy – it is getting them to sustain flight that’s the trick.

And, an interesting final note:- LL is a partnership between founding investor partners (who receive a percentage share of any startup’s initial offer) and MBIE, part of its accelerator funding pool.


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.”


Callaghan Innovation’s evolution gets curiouser and curiouser Peter Kerr Dec 17

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The analogy of Alice in Wonderland, and curiouser and curiouser comes to mind with Callaghan Innovation.

That and a type of ennui as the 14-months-in-existence Crown Agent struggles to come into life.

Firstly, rumour has it (from a number of well-informed people) that minister of everything Steven Joyce is sitting on CI’s business plan.

Such a business plan was meant to be delivered not long after (but never really defined) CI’s Statement of Intent which came out in early July.

So six months later all we still have is a generic SOI of what Callaghan Innovation will do.

How, (the hard part) is still to be revealed through this business plan. Which, by inference means Steven’s just a bit wary (and one suspects weary) of it.

But wait, there’s more.

In the meantime, there’s been an announcement of a new stakeholder advisory board for CI.

As the press release says:

“This panel of experts will support the Callaghan Innovation Governance Board to deliver fresh thinking, and offer a diversity of perspective and experience that will help grow New Zealand’s economy through science and innovation.”

Intriguing.

The Callaghan Innovation board was announced in January.

Just what has it, and more particularly its chair Sue Suckling been up to since then?

And, with the advisory board on-board as well, who is going to be responsible for what?

sticK always argued that the cart was in front of the horse in effectively scrapping the old IRL without defining what the new entity would do, or how it would do it.

While building the plane while you fly it may be OK for bootstrapping startups, doing the same with 400 or so scientists and engineers already employed is a much less validated process.

You have to suspect that Steven Joyce wishes he’d backed the well-planned potential morphing of IRL into an Advanced Technology Institute model, similar to say Taiwan’s ITRI.

The other exemplar that has been touted is the Danish Technology Institute. Callaghan representatives (and dozens of other NZ science people have visited this over the past decade).

Both ITRI and DTI are applied science/engineering-heavy entities that work hand-in-glove with industry and academia to turn prototypes and concepts into sellable commercial products.

Both have a well-defined mandate; they know their role.

Which, for all the commercialisation-speak of the embryonic Callaghan Innovation; it is still a long way off defining.

Quite where and how the new CI stakeholder advisory board will ‘advise’ Callaghan Innovation will be fascinating.

But, if the advisory board chairman Andrew Coy (magnetic resonance equipment-maker Magritek chief executive) wanted to help the country and his own company’s growth, he could do much worse than suggest dusting off the ATI model.

It could be just the thing to bring to a Mad Tea Party.


We’re getting over our notions of shame around business failure Peter Kerr Dec 10

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I’m putting the proposition out there that we’re getting over our collective Kiwi hang-up about startup and business failure.

That is, whereas in the past we’d write somebody off for having tried, and been not successful in a new business venture – these days we’re much more inclined to encourage them to dust themselves off, and get on with something else.

From that point of view, we’re becoming much more American in our attitude to ‘failure’, and as long as it is failure for the right reasons, are inclined to regard it as experience.

This was the basis of a speech I recently had the privilege of giving to the NZ Institute of Patent Attorneys in Wellington.

Now, there’s no academic research that’s been carried out on this change in our collective attitude; not that I could find anyway.

And, in checking with Professor Sally Davenport of Victoria University’s School of Management, she doesn’t believe there’s been any study of this kind either – but being ever-entrepreneurial herself, would be keen to research the topic if some funding was available.

In talking about some of the anecdotal evidence for the proposition (see below), Sally made the following observation.

“It is how these things become normalised. We’re getting over the tipping point.”

So, and based pretty much on a gut feel, what’s some evidence that we’re collectively over a tipping point with regard to business failure.

Item 1.

Lightning Labs.

Now this Wellington (and nationwide) initiative to fast track good ideas into investor-backable businesses saw nine February startups, pitch to would be financiers in May.

Four of the startups garnered over $2 million in investment between them. Just as notably in a September press release was the unashamed dealing with and description of what the unsuccessful fund-finders were up to.

Some are still building their business model, one’s taking an amateur sports funding concept to South America, and the other teams have moved onto other ventures. But, they’ll all be back for LL II next year. To all extent and purposes, this LL press release was a recognition, if not a celebration of failure, and of its absolute value.

Item 2.

The TIN 100 report, though in this context the discussion around the report which came out in late October.

TIN 100 report founder Greg Shanahan gets to meet a fair number of the founders of these companies, including those of the TIN 100+, those smaller companies (less than $2 million annual turnover) hovering outside the main group.

“Most were baby-boomers, most were grey-haired,” says Shanahan.

What he didn’t say, but is sure to be the case is that a fair number of these CEOs will have known previous non-success.

This age group belies the notion that all entrepreneurs are in their twenties – and backs the stats that it is older people who actually begin more startups than younger (see a couple of studies, here and here).

The other ‘advantage’ of baby-boomer entrepreneurs is we’re more prepared have a go. At our age, failure is in fact NOT trying.

Item 3.

The Dead Startup Society.

A couple of years ago, the idea of getting together to commemorate a business failure would’ve been an absolute non-starter. But the packed-out attendance of this offshoot of Lean Startup Wellington on November 20 showed how cathartic people found the experience (I’ll get up next time to demonstrate my non-success).

As the Dead Startup Society said on its Meetup page:

“Many of us have been involved in startups that have failed – some quietly, some spectacularly, most somewhere in between. Come along to reflect and share our failures and the lessons we’ve learned from them.”

If there is anything that demonstrates a change in attitude, it is an ability to take the mickey out of ourselves.

Laughing about failure, after you’ve swallowed its bitter pill, takes away its stigma.

This part of our NZ tall poppy syndrome (the knocking machine) is no longer the invisible anchor preventing those of us who have failed for the right reasons, from getting out there and having another go.

Live long and prosper – as Star Trek’s Spock would say.


KiwiNet and the sell of commercialisation Peter Kerr Nov 26

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There’s always something to learn at commercialisation workshops.

KiwiNet, the group-hug of university and CRI commercialisation units held a Wellington-based forum around understanding customers.

So, here’s couple of interesting bits and pieces from the day – of which I was only able to attend some of, so this is in no way representative.

KiwiNet chair Ruth Richardson, also sits on the KiwiNet Pre-Seed Accelerator Fund (PSAF) investment committee that evaluates ideas put forward by its members – before such ideas are put forward to MBIE.

She gave some investment criteria tips for the ±30 attendees.

  • The ‘sell’ usually comes in your answers to the question and answers, not in the initial presentation
  • Show your enthusiasm
  • Bring your principal investigator if you can
  • Bringing a representative from the business partner can work very well
  • External expert advice can add substantial value
  • Demonstrate value right along the supply chain
  • If you’re unsure, try a project review
  • Listen to the committee and address the concerns
  • It’s OK to fail

Magritek CEO Andrew Coy (risking, he reckons the wrath of his work colleagues) considers that the drivers of a successful academic scientist and commercialiser (who could be a scientist) are different.

Difference/orientation between an academic scientist and a commercial scientist

Science Commercial
Ideas Execution
Best Good enough
Right Successful
Thorough Fast
Publish Secret
Individual Team
Funding Investment and return
Wide ranging Focus
Happy PBRF Happy customer

Coy commented that sometimes universities get very tied up in trying to value intellectual property, before any money has been made from a possible venture.

“Share in the future value, not today’s costs,” he says.

He gave the example of Stanford University. The university owns any IP that comes from its scientists while they’re working there – but the university then licences it back to the inventor for a dollar. They then have a huge incentive to make the technology worth something.

Finally, Coy says rather than attempting to tie up any intellectual property in patents and the like, “the best IP is about making it work in reality,” he says.

“You want something that is hard to do, and you have to do lots of little things right to achieve it.”


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