1 00:00:00,400 --> 00:00:03,840 Speaker 1: The world of venture capital, it can seem like a 2 00:00:03,880 --> 00:00:07,400 Speaker 1: bit of a black box. Lots of hoopla about multimillion 3 00:00:07,440 --> 00:00:11,000 Speaker 1: dollar fundraising rounds, but often little discussion of how these 4 00:00:11,080 --> 00:00:13,360 Speaker 1: funded companies fare in the long term. 5 00:00:13,480 --> 00:00:16,680 Speaker 2: But one of our most established venture funds, ice House Ventures, 6 00:00:16,680 --> 00:00:19,600 Speaker 2: has opened up about some of its most high profile 7 00:00:19,680 --> 00:00:20,760 Speaker 2: startup investments. 8 00:00:21,000 --> 00:00:25,320 Speaker 3: The only feature that is ubiquitous is that the companies 9 00:00:25,320 --> 00:00:29,159 Speaker 3: that have become headliners and generated high value returns have 10 00:00:29,280 --> 00:00:32,599 Speaker 3: had a dance with death and their real and visceral 11 00:00:33,040 --> 00:00:33,920 Speaker 3: and they survived. 12 00:00:34,200 --> 00:00:36,560 Speaker 1: This week on the Business of Tech Powered by Two 13 00:00:36,560 --> 00:00:40,280 Speaker 1: Degrees Business, ice House Ventures Managing director Robbie Paul on 14 00:00:40,320 --> 00:00:42,959 Speaker 1: the hits and misses of the last decade or so 15 00:00:43,040 --> 00:00:45,960 Speaker 1: of investing in New Zealand startups and how the VC 16 00:00:46,080 --> 00:00:49,400 Speaker 1: industry is doing after the healcion days of twenty twenty 17 00:00:49,440 --> 00:00:52,360 Speaker 1: one and twenty twenty two, when money was cheap and 18 00:00:52,479 --> 00:00:53,760 Speaker 1: valuations were high. 19 00:00:54,080 --> 00:00:55,680 Speaker 2: But first, of course, I look at some of the 20 00:00:55,680 --> 00:00:59,400 Speaker 2: big stories from the tech world and a scooter scandal 21 00:00:59,480 --> 00:01:03,200 Speaker 2: has left scooter ride sharing company Beam in disarray. 22 00:01:03,640 --> 00:01:06,000 Speaker 1: This is remarkable a story that sort of played out 23 00:01:06,040 --> 00:01:10,720 Speaker 1: over the last week. Ben we saw Beam Singapore owned 24 00:01:10,760 --> 00:01:13,920 Speaker 1: company has been doing quite well. You see their purple scooters, 25 00:01:13,959 --> 00:01:16,560 Speaker 1: a lot of them around the streets off Wellington, or 26 00:01:16,560 --> 00:01:19,479 Speaker 1: at least you did until sort of the weekend when 27 00:01:20,080 --> 00:01:24,440 Speaker 1: the Wellington City Council ordered Beam scooters and e bikes 28 00:01:24,560 --> 00:01:28,760 Speaker 1: off the streets. That was following Auckland Council doing exactly 29 00:01:28,800 --> 00:01:32,600 Speaker 1: the same thing. And this relates to revelations that were 30 00:01:32,600 --> 00:01:37,800 Speaker 1: published in the Australian newspaper over a week ago based 31 00:01:37,840 --> 00:01:42,120 Speaker 1: on some whistleblower allegations and documents that were fed to 32 00:01:42,880 --> 00:01:47,400 Speaker 1: these councils alleging that Beam had put more scooters onto 33 00:01:47,440 --> 00:01:50,280 Speaker 1: the streets of Auckland and Wellington and other cities in 34 00:01:50,280 --> 00:01:54,600 Speaker 1: Australia than they were allowed to, very much in breach 35 00:01:55,000 --> 00:01:58,760 Speaker 1: off their agreements with those councils, to the extent that 36 00:01:59,600 --> 00:02:02,160 Speaker 1: hundreds of scooters were on the streets of Auckland that 37 00:02:02,200 --> 00:02:04,640 Speaker 1: shouldn't have been. I think about at one stage one 38 00:02:04,720 --> 00:02:09,000 Speaker 1: hundred and eighty scooters over their camp here in Wellington. 39 00:02:09,639 --> 00:02:13,000 Speaker 1: So this is a really bad look for Beam and 40 00:02:13,080 --> 00:02:14,680 Speaker 1: has hit them really hard. 41 00:02:14,880 --> 00:02:18,519 Speaker 2: They said that they did things like make some scooters 42 00:02:18,560 --> 00:02:21,359 Speaker 2: look like they were not there on the system when 43 00:02:21,360 --> 00:02:23,360 Speaker 2: they were being checked as a way to kind of 44 00:02:23,360 --> 00:02:26,519 Speaker 2: intentionally reduce the numbers. It's just a terrible look for 45 00:02:26,639 --> 00:02:31,440 Speaker 2: one of these companies to not only try and get 46 00:02:31,480 --> 00:02:34,520 Speaker 2: around regulation, but to kind of do it in a 47 00:02:34,560 --> 00:02:35,639 Speaker 2: really underhanded way. 48 00:02:35,919 --> 00:02:41,399 Speaker 1: Yeah. I mean, these are really the epitome of startups 49 00:02:41,480 --> 00:02:44,360 Speaker 1: in terms of they want to take advantage of the 50 00:02:44,400 --> 00:02:47,040 Speaker 1: network effect, which is get as many scooters out there 51 00:02:47,040 --> 00:02:50,360 Speaker 1: as possible. The more you have on the streets, the 52 00:02:50,400 --> 00:02:53,480 Speaker 1: more money that you make. They want to grow quickly. 53 00:02:53,520 --> 00:02:56,680 Speaker 1: It's very cut throat, low margin, but you can sort 54 00:02:56,680 --> 00:03:01,079 Speaker 1: of see they're under pressure to re grow this business 55 00:03:01,160 --> 00:03:06,079 Speaker 1: quickly to satisfy investors, and you know, maybe it has 56 00:03:06,160 --> 00:03:08,799 Speaker 1: led to some bad behavior. That is what is being 57 00:03:08,840 --> 00:03:11,360 Speaker 1: alleged from some of the documents and messages that have 58 00:03:11,480 --> 00:03:15,240 Speaker 1: come out of that company. Beam is denying that and 59 00:03:15,320 --> 00:03:18,640 Speaker 1: saying the reason that they had these scooters on the 60 00:03:18,639 --> 00:03:22,840 Speaker 1: streets in breach of their agreement was they were putting 61 00:03:22,880 --> 00:03:27,760 Speaker 1: scooters out to replace ones that were inoperable or inaccessible, 62 00:03:27,919 --> 00:03:29,760 Speaker 1: you know, thrown over a fence or something like that. 63 00:03:30,200 --> 00:03:32,680 Speaker 1: Auckland Wellington Council aren't really having a bar of that. 64 00:03:32,960 --> 00:03:34,519 Speaker 1: They have canceled their licenses. 65 00:03:34,800 --> 00:03:38,160 Speaker 2: Now, you don't just get to make kind of overarching 66 00:03:38,200 --> 00:03:40,800 Speaker 2: decisions about when you do and don't put more scooters 67 00:03:40,800 --> 00:03:43,040 Speaker 2: out if you have a really firm contract with the 68 00:03:43,080 --> 00:03:45,880 Speaker 2: public service. You know, that's a bit absurd. 69 00:03:46,080 --> 00:03:47,800 Speaker 1: Beam has said to the council, we want to do 70 00:03:47,840 --> 00:03:50,720 Speaker 1: a financial settlement to sort of settle this whole thing 71 00:03:50,880 --> 00:03:54,520 Speaker 1: and apologize. But you know, it's sort of going criminal 72 00:03:55,080 --> 00:03:58,320 Speaker 1: potentially with the reporting it to the police, so there'll 73 00:03:58,320 --> 00:04:01,680 Speaker 1: be an investigation there, and they're talking to other operators 74 00:04:01,720 --> 00:04:03,000 Speaker 1: about filling that void. 75 00:04:03,240 --> 00:04:06,920 Speaker 2: Silly decisions come back to haunt you. Which is I 76 00:04:06,920 --> 00:04:10,960 Speaker 2: guess another story that we're kind of talking about, which 77 00:04:11,080 --> 00:04:15,800 Speaker 2: is the the issues of Elon Musk's X over in Brazil. 78 00:04:16,760 --> 00:04:22,080 Speaker 2: X allowed a far right congressman in Brazil, Nicholas Ferreira. 79 00:04:22,279 --> 00:04:24,320 Speaker 2: Oh goodness, I'm going to butcher that. Apologies to all 80 00:04:24,320 --> 00:04:27,680 Speaker 2: the Portuguese speakers out there, but he basically posted some 81 00:04:27,720 --> 00:04:32,120 Speaker 2: stuff on X that was considered hate speech that Brazil 82 00:04:32,240 --> 00:04:34,479 Speaker 2: didn't really like, and they said that you need to 83 00:04:34,480 --> 00:04:37,400 Speaker 2: do a better job at moderating, and Elon Musk says, 84 00:04:37,440 --> 00:04:41,160 Speaker 2: no free speech, free speech. That's the short version. There 85 00:04:41,200 --> 00:04:43,320 Speaker 2: was probably a bit more to it than that, and 86 00:04:43,760 --> 00:04:45,960 Speaker 2: as a result, Brazil said, well, then you need to 87 00:04:45,960 --> 00:04:50,920 Speaker 2: shut down X in Brazil, and Elon Musk refused. Brazil 88 00:04:51,000 --> 00:04:53,880 Speaker 2: came in told all of the telco operators in Brazil 89 00:04:53,960 --> 00:04:56,880 Speaker 2: to close off access to X, which most of them did. 90 00:04:57,279 --> 00:05:01,080 Speaker 2: The only one that hasn't is Starlink, and so Brazil 91 00:05:01,279 --> 00:05:05,719 Speaker 2: is quite angry at Starlink for turning off access. They've 92 00:05:05,760 --> 00:05:08,960 Speaker 2: also seized some of the assets of Starlink, they've freezed 93 00:05:08,960 --> 00:05:13,480 Speaker 2: it's financials in the country, and Elon Musk is really 94 00:05:13,520 --> 00:05:14,880 Speaker 2: not very happy about it. 95 00:05:15,320 --> 00:05:19,160 Speaker 1: He's no, he said, the Supreme Court judge that made 96 00:05:19,160 --> 00:05:24,440 Speaker 1: that decision is a tyrannical dictator masquerading as a judge. 97 00:05:24,480 --> 00:05:27,160 Speaker 1: So he is, in typical Musk fashion, sort of gone 98 00:05:27,200 --> 00:05:31,200 Speaker 1: off the deep end on his own platform. And it 99 00:05:31,720 --> 00:05:34,799 Speaker 1: does raise questions about exactly where the line is around 100 00:05:34,839 --> 00:05:37,280 Speaker 1: freedom of speech and censorship and all that sort of thing. 101 00:05:37,640 --> 00:05:40,440 Speaker 1: But I think the interesting aspect of the story is 102 00:05:41,080 --> 00:05:46,080 Speaker 1: the Stylink connection, and so Stylink. Now Musk has come 103 00:05:46,120 --> 00:05:48,400 Speaker 1: out and this is fast developing story, so it may 104 00:05:48,440 --> 00:05:50,800 Speaker 1: have moved on by the time this goes to air. 105 00:05:50,839 --> 00:05:54,080 Speaker 1: But he's basically said I'm not going to cut off 106 00:05:54,120 --> 00:05:56,960 Speaker 1: access to Stylink at this point, even though our bank 107 00:05:57,000 --> 00:06:00,359 Speaker 1: accounts for Stylink in Brazil have been frozen, and that 108 00:06:00,520 --> 00:06:02,920 Speaker 1: is what we've been talking about before about you know, 109 00:06:02,920 --> 00:06:05,640 Speaker 1: Starlink is really well established in New Zealand. Now we've 110 00:06:05,680 --> 00:06:09,320 Speaker 1: got nearly forty thousand connections in New Zealand, so even 111 00:06:09,360 --> 00:06:12,920 Speaker 1: compared to Brazil, that's huge penetration. So you know, what 112 00:06:12,960 --> 00:06:16,120 Speaker 1: are the prospects down the line of Musk has some 113 00:06:16,320 --> 00:06:18,520 Speaker 1: falling out with the New Zealand government as he has 114 00:06:18,560 --> 00:06:21,440 Speaker 1: had with the Australian government and went to court over that. 115 00:06:22,200 --> 00:06:24,800 Speaker 1: They dropped that suit against them. But you know, is 116 00:06:24,839 --> 00:06:27,000 Speaker 1: he siddenly going to go, well, what happens over here 117 00:06:27,040 --> 00:06:29,000 Speaker 1: on X you don't like, so therefore I'm going to 118 00:06:29,520 --> 00:06:33,840 Speaker 1: restrict access on stylink. You can see why people are 119 00:06:33,839 --> 00:06:37,920 Speaker 1: worried about having over alliance, particularly for rural broadband delivery, 120 00:06:37,960 --> 00:06:43,280 Speaker 1: on one company and one sort of quite volatile billionaire. 121 00:06:43,600 --> 00:06:47,040 Speaker 2: Yeah. And the thing is as well, because Elon Musk 122 00:06:47,080 --> 00:06:50,200 Speaker 2: has proven himself to be somewhat petulant. It would only 123 00:06:50,200 --> 00:06:52,800 Speaker 2: take a new public New Zealand figure, maybe a politician, 124 00:06:52,880 --> 00:06:55,440 Speaker 2: to say something that he didn't like, and then he 125 00:06:55,440 --> 00:06:58,919 Speaker 2: could turn around and turn Starlink off for the country 126 00:06:58,960 --> 00:07:00,839 Speaker 2: just for the fun of it, if he really wanted to. 127 00:07:00,920 --> 00:07:02,760 Speaker 2: You know, I'm not saying he would no, I'm just 128 00:07:02,760 --> 00:07:07,400 Speaker 2: saying that it is a possibility, and because of his volatility, 129 00:07:08,040 --> 00:07:11,840 Speaker 2: it makes it a bit less reliable that it's going 130 00:07:11,920 --> 00:07:14,920 Speaker 2: to be there in the you know, constantly. Especially because 131 00:07:14,920 --> 00:07:17,240 Speaker 2: it's a small country, a small market. It's not really 132 00:07:17,680 --> 00:07:21,280 Speaker 2: got the kind of financial incentive that maybe some other 133 00:07:21,360 --> 00:07:22,360 Speaker 2: jurisdictions would have. 134 00:07:22,640 --> 00:07:26,000 Speaker 1: Yeah, and so the way I see it heading because 135 00:07:26,040 --> 00:07:28,320 Speaker 1: we do just you know, this week we had Chris 136 00:07:28,440 --> 00:07:34,400 Speaker 1: Kill from The Herald reported about Amazon its applications to 137 00:07:34,400 --> 00:07:38,280 Speaker 1: buy land in New Zealand for ground installations for its 138 00:07:38,280 --> 00:07:42,880 Speaker 1: own satellite broadband service, project Cooper, which the suggestion is 139 00:07:43,120 --> 00:07:45,760 Speaker 1: some of those satellites will be in space and operational 140 00:07:46,040 --> 00:07:47,960 Speaker 1: by the end of this year. So you will have 141 00:07:48,000 --> 00:07:54,080 Speaker 1: another billionaire, another big tech company that is offering broadband services. 142 00:07:54,080 --> 00:07:55,720 Speaker 1: It's going to take a while to have thousands of 143 00:07:55,920 --> 00:07:59,560 Speaker 1: satellites up there, as Stylink does. And I think what 144 00:07:59,560 --> 00:08:01,600 Speaker 1: we will see around the world as more of these 145 00:08:01,640 --> 00:08:07,280 Speaker 1: constellations of satellites go up, providing broadband. Governments will say, Okay, 146 00:08:07,400 --> 00:08:10,200 Speaker 1: we're happy for you to service our country. Bring it on, 147 00:08:10,480 --> 00:08:13,600 Speaker 1: but there's got to be some service level agreement or 148 00:08:13,640 --> 00:08:17,560 Speaker 1: some surety of service. You can't just pull the plug 149 00:08:17,680 --> 00:08:21,640 Speaker 1: on tens of thousands of people if you don't like 150 00:08:21,800 --> 00:08:25,000 Speaker 1: it or we have some dispute. This is a essentially 151 00:08:25,000 --> 00:08:29,440 Speaker 1: an emergency service for many people and we need surity 152 00:08:29,520 --> 00:08:30,800 Speaker 1: and continuity of service. 153 00:08:31,320 --> 00:08:33,960 Speaker 2: Yeah, yeah, definitely, it's going to have to come to 154 00:08:34,000 --> 00:08:36,640 Speaker 2: it at some point. Considering the regulation of the taco 155 00:08:36,720 --> 00:08:40,240 Speaker 2: market in New Zealand, at some point there was going 156 00:08:40,280 --> 00:08:42,920 Speaker 2: to need to be a discussion around what are the 157 00:08:42,960 --> 00:08:49,480 Speaker 2: obligations of providing a an emergency service in the country. 158 00:08:49,720 --> 00:08:51,400 Speaker 2: The end of the day, having a second player in 159 00:08:51,400 --> 00:08:55,560 Speaker 2: New Zealand is going to be beneficial. I think it is. 160 00:08:55,679 --> 00:09:00,000 Speaker 1: Yes. The other side of that, though, is doctor and Griffin, 161 00:09:00,040 --> 00:09:02,760 Speaker 1: you know, the astronomer from DNED. No relation of mine, 162 00:09:02,800 --> 00:09:05,920 Speaker 1: but a really good guy I know quite well. He's 163 00:09:06,080 --> 00:09:09,680 Speaker 1: very upset about the light pollution and the pollution of 164 00:09:09,720 --> 00:09:11,680 Speaker 1: the night sky, and that's one aspect of it. But 165 00:09:11,800 --> 00:09:13,599 Speaker 1: just it's going to be soon there's going to be 166 00:09:13,720 --> 00:09:16,679 Speaker 1: a lot of satellites in low Earth orbit, So the 167 00:09:18,040 --> 00:09:21,040 Speaker 1: chances of things going wrong and satellites colliding with each 168 00:09:21,080 --> 00:09:25,040 Speaker 1: other and sending debris all over the place is going 169 00:09:25,040 --> 00:09:27,600 Speaker 1: to increase. So there are downsides to that as well. 170 00:09:27,640 --> 00:09:30,440 Speaker 1: But great having styling. I think they've changed the game 171 00:09:30,440 --> 00:09:33,880 Speaker 1: in satellite services even better, probably to have someone doing 172 00:09:33,880 --> 00:09:36,439 Speaker 1: exactly the same thing they are doing, to keep them 173 00:09:36,480 --> 00:09:38,480 Speaker 1: honest and to keep the prices reasonable. 174 00:09:38,760 --> 00:09:43,120 Speaker 2: Yeah, definitely. I mean there's also the environmental impact of 175 00:09:43,920 --> 00:09:46,640 Speaker 2: shooting rockets through the ozone layer over and over again, 176 00:09:46,760 --> 00:09:48,760 Speaker 2: so yeah, something dickens that are as well. 177 00:09:48,920 --> 00:09:53,560 Speaker 1: Yeah. Now, our featured guest this week is Robbie Paul, 178 00:09:53,600 --> 00:09:56,480 Speaker 1: who has been with ice House Ventures for nearly fifteen 179 00:09:56,600 --> 00:10:01,360 Speaker 1: years and associated with the ice House itself since two 180 00:10:01,400 --> 00:10:05,040 Speaker 1: thousand and eight, so he's played an integral role in 181 00:10:05,080 --> 00:10:07,760 Speaker 1: the development of the Auckland based venture capital firm and 182 00:10:07,840 --> 00:10:11,520 Speaker 1: the funds it manages. Been this big showcase that they 183 00:10:11,600 --> 00:10:14,160 Speaker 1: ran a couple of weeks off the ice House Ventures 184 00:10:14,800 --> 00:10:17,160 Speaker 1: companies in this stable. What was that all about? 185 00:10:17,440 --> 00:10:21,880 Speaker 2: Yeah, it's a yearly event where they get about eight 186 00:10:22,400 --> 00:10:25,800 Speaker 2: startups to come and pitch in front of a room 187 00:10:25,840 --> 00:10:29,240 Speaker 2: full of basically the some of new Zealand's wealthiest people 188 00:10:29,679 --> 00:10:31,960 Speaker 2: as a way to number one, kind of show off 189 00:10:32,280 --> 00:10:35,880 Speaker 2: the startups and kind of get maybe get a little 190 00:10:35,880 --> 00:10:39,880 Speaker 2: bit more investment from the investors there as well, get 191 00:10:39,920 --> 00:10:43,680 Speaker 2: them on as LPs for funds, or get them angel 192 00:10:43,760 --> 00:10:47,520 Speaker 2: investing into specific companies or whatever it is. So it's 193 00:10:47,559 --> 00:10:50,320 Speaker 2: been going for fourteen years and a total of one 194 00:10:50,400 --> 00:10:53,400 Speaker 2: hundred and forty eight companies have presented. That's not including 195 00:10:53,559 --> 00:10:55,880 Speaker 2: this year, and of those, one hundred and eleven have 196 00:10:56,000 --> 00:10:59,079 Speaker 2: raised capital from the audience or from one of the 197 00:10:59,160 --> 00:11:02,280 Speaker 2: ice House Adventures funds. Some of them have not done 198 00:11:02,360 --> 00:11:04,640 Speaker 2: so well. So well, quite a fair few of them 199 00:11:04,679 --> 00:11:07,560 Speaker 2: have been successful, but of those companies that got an investment, 200 00:11:07,920 --> 00:11:11,600 Speaker 2: thirty have eventually failed or delivered returns less than a 201 00:11:11,640 --> 00:11:14,520 Speaker 2: one to one. They include the likes of Sunfed Meats 202 00:11:14,559 --> 00:11:16,760 Speaker 2: and Soupe, both of which I think we've mentioned on 203 00:11:16,800 --> 00:11:20,080 Speaker 2: the podcast before. Then there have been some pretty standout 204 00:11:20,120 --> 00:11:23,480 Speaker 2: successes as well. You've got Pelter who have just done 205 00:11:23,480 --> 00:11:28,400 Speaker 2: a big deal in the US, Crimson Education who have 206 00:11:28,640 --> 00:11:31,679 Speaker 2: just grown rampantly from the day they were born. Basically, 207 00:11:32,240 --> 00:11:34,880 Speaker 2: it's kind of a high profile event and it also 208 00:11:34,960 --> 00:11:37,560 Speaker 2: kind of puts a bit of a flag in the 209 00:11:37,640 --> 00:11:39,920 Speaker 2: sand each year to say these are the kinds of 210 00:11:40,240 --> 00:11:43,400 Speaker 2: exciting things that are happening in startups in New Zealand. 211 00:11:43,559 --> 00:11:47,800 Speaker 1: Trek Suitdoorn, Eurospace Cheers, these Mint Innovation, some great names there. 212 00:11:48,040 --> 00:11:50,400 Speaker 1: So according to some of the stats they gave you, Ben, 213 00:11:50,920 --> 00:11:55,120 Speaker 1: these showcases held annually, these companies that appeared at those showcases, 214 00:11:55,160 --> 00:11:57,760 Speaker 1: they've gone on to raise one point nine to four 215 00:11:58,040 --> 00:12:02,480 Speaker 1: billion dollars between them, So that initial funding led on 216 00:12:02,600 --> 00:12:07,400 Speaker 1: to those companies succeeding and raising you know, series ABCD 217 00:12:07,679 --> 00:12:10,600 Speaker 1: and on, which is in some cases ten or twenty 218 00:12:10,880 --> 00:12:14,440 Speaker 1: or million dollars or more. So to me, it just 219 00:12:14,920 --> 00:12:19,200 Speaker 1: really shows how mature this sector has come. This is 220 00:12:19,280 --> 00:12:21,520 Speaker 1: just one company that really is at the heart of it. 221 00:12:21,600 --> 00:12:24,319 Speaker 1: I think they've done it a particularly good job of 222 00:12:24,320 --> 00:12:27,840 Speaker 1: fostering some of these big names. And as Robbie sort 223 00:12:27,880 --> 00:12:30,720 Speaker 1: of lays out in this interview, it really goes all 224 00:12:30,760 --> 00:12:33,240 Speaker 1: the way back to the Trade Me days, the people 225 00:12:33,240 --> 00:12:35,720 Speaker 1: who came out of Trade Me who had a really 226 00:12:35,720 --> 00:12:37,040 Speaker 1: successful exit there. 227 00:12:37,400 --> 00:12:40,560 Speaker 2: And Robbie is a relentless optimist, so you know, he 228 00:12:40,600 --> 00:12:42,880 Speaker 2: talks about it from the point of view of an 229 00:12:42,920 --> 00:12:48,200 Speaker 2: investor who wholeheartedly believes in the startup seeing the venture 230 00:12:48,240 --> 00:12:50,800 Speaker 2: scene and all of the companies that he works with. 231 00:12:51,160 --> 00:12:53,200 Speaker 2: But at the same time, he really does have his 232 00:12:53,240 --> 00:12:56,040 Speaker 2: finger on the pulse and he really does see everything 233 00:12:56,080 --> 00:12:58,400 Speaker 2: that kind of goes on within the ice House Ventures 234 00:12:58,400 --> 00:13:01,600 Speaker 2: world and the startup ecosys them more broadly. So I 235 00:13:01,880 --> 00:13:04,080 Speaker 2: threw some questions ad him to try and get a 236 00:13:04,120 --> 00:13:06,760 Speaker 2: sense of what's going on, how the showcase has been, 237 00:13:06,880 --> 00:13:16,400 Speaker 2: and what the startup world is like today. Hi, Robbie, 238 00:13:16,440 --> 00:13:19,320 Speaker 2: welcome to the Business of Tech podcast. Thanks for joining us. 239 00:13:19,320 --> 00:13:19,920 Speaker 3: Great to be here. 240 00:13:19,960 --> 00:13:23,600 Speaker 2: Thanks So ice House Showcase this is a fantastic event 241 00:13:23,640 --> 00:13:25,760 Speaker 2: that's held every year where you get a bunch of 242 00:13:25,760 --> 00:13:28,640 Speaker 2: really exciting startups into a room to pitch kind of 243 00:13:29,200 --> 00:13:32,280 Speaker 2: shock tank dragons Den style, and you get a whole 244 00:13:32,960 --> 00:13:35,840 Speaker 2: huge number of investors to have a few drinks, have 245 00:13:35,920 --> 00:13:38,960 Speaker 2: some nice food, and they can elect to invest in 246 00:13:39,000 --> 00:13:41,480 Speaker 2: these startups and really exciting event. How long has that 247 00:13:41,520 --> 00:13:42,440 Speaker 2: been going on now? 248 00:13:42,960 --> 00:13:45,600 Speaker 3: Yeah? So the showcase was established with the Rugby World 249 00:13:45,640 --> 00:13:49,000 Speaker 3: Cup in twenty eleven, and it was under this sort 250 00:13:49,000 --> 00:13:52,079 Speaker 3: of pretense that there were a bunch of international investors 251 00:13:52,120 --> 00:13:54,960 Speaker 3: coming in and that they would be interested in investing 252 00:13:55,000 --> 00:13:57,679 Speaker 3: in New Zealand companies. And so it was only about 253 00:13:57,679 --> 00:14:01,640 Speaker 3: six weeks before the first event where Ray Thompson, who 254 00:14:01,640 --> 00:14:04,320 Speaker 3: we recognize each year who sad they passed away, came 255 00:14:04,400 --> 00:14:06,720 Speaker 3: up with this idea to showcase the best of New 256 00:14:06,840 --> 00:14:09,880 Speaker 3: Zealand to the world on the sort of Rugby World 257 00:14:09,880 --> 00:14:13,480 Speaker 3: Cup stage. And we've never looked back. So fourteen years on. 258 00:14:13,760 --> 00:14:16,839 Speaker 2: And you got a wealth of international investment that year, 259 00:14:16,880 --> 00:14:17,120 Speaker 2: did you? 260 00:14:17,240 --> 00:14:22,440 Speaker 3: I'm afraid we got no international investment. And there it 261 00:14:22,520 --> 00:14:25,680 Speaker 3: turns out that Kiwis were happy to gather and rally 262 00:14:25,720 --> 00:14:30,080 Speaker 3: around it, but most of the international people are here 263 00:14:30,080 --> 00:14:32,480 Speaker 3: for the Heineken and the Rugby World Cup. 264 00:14:32,680 --> 00:14:38,400 Speaker 2: Yeah. Absolutely, So looking back fourteen years ago the first showcase, 265 00:14:38,920 --> 00:14:41,280 Speaker 2: what was New Zealand's startup scene like at that point? 266 00:14:42,000 --> 00:14:44,680 Speaker 3: It was very nascent, right, I mean there was a 267 00:14:44,720 --> 00:14:49,200 Speaker 3: lot of learning to take place, and there were many 268 00:14:49,200 --> 00:14:52,800 Speaker 3: fewer sort of believers, right, many fewer investors who had 269 00:14:53,240 --> 00:14:56,600 Speaker 3: been exposed to this asset class or the opportunities to 270 00:14:57,120 --> 00:15:02,560 Speaker 3: feel ownership in aspirational Qiwi companies. And I think it 271 00:15:02,600 --> 00:15:05,720 Speaker 3: was a lot of aspiration, but it pales into comparison 272 00:15:05,760 --> 00:15:08,160 Speaker 3: to where we've come to today as an ecosystem. 273 00:15:08,520 --> 00:15:11,080 Speaker 2: Yeah. Absolutely. What do you think of the key things 274 00:15:11,080 --> 00:15:15,040 Speaker 2: that have helped to see the startup world in New 275 00:15:15,120 --> 00:15:16,440 Speaker 2: Zealand grow? 276 00:15:17,320 --> 00:15:19,840 Speaker 3: You got to give a lot of credit to the trailblazers, right, 277 00:15:21,000 --> 00:15:26,200 Speaker 3: Peter Beck, Patty Mushrieky, right, Sean Simpson, Ron Drury, Sam 278 00:15:26,280 --> 00:15:31,040 Speaker 3: Morgan and people before them to some extent, because the 279 00:15:32,520 --> 00:15:36,960 Speaker 3: you know, cynics are more often right in startup investing 280 00:15:37,160 --> 00:15:39,600 Speaker 3: than they're not, so they come across as being very 281 00:15:39,600 --> 00:15:45,280 Speaker 3: smart and authoritative, and the easiest way to refute, you know, 282 00:15:45,360 --> 00:15:49,280 Speaker 3: the positives about startups and investing in startups is to 283 00:15:49,320 --> 00:15:52,920 Speaker 3: just say, oh, show me the results. Where are the results? 284 00:15:53,040 --> 00:15:56,880 Speaker 3: And of course fourteen years ago there were many fewer results, 285 00:15:56,920 --> 00:16:03,840 Speaker 3: and through amazing grit and hard work and commitment, the 286 00:16:04,200 --> 00:16:07,200 Speaker 3: likes of Peterbeck and Fatty Mushriki who was on stage 287 00:16:07,200 --> 00:16:09,600 Speaker 3: and you know, one of the earliest showcases, have not 288 00:16:09,720 --> 00:16:13,360 Speaker 3: demonstrated that, in fact, great companies can be built from 289 00:16:13,360 --> 00:16:16,760 Speaker 3: New Zealand and there is reward for being a participant 290 00:16:16,840 --> 00:16:17,120 Speaker 3: in that. 291 00:16:17,240 --> 00:16:22,080 Speaker 2: Absolutely. Yeah, And going back to showcase, I've got some 292 00:16:22,080 --> 00:16:25,160 Speaker 2: stats here that as one hundred and forty eight companies 293 00:16:25,200 --> 00:16:30,800 Speaker 2: have pitched at Showcase over those years, and a lot 294 00:16:30,800 --> 00:16:33,400 Speaker 2: of them have been really successful. We're talking the likes 295 00:16:33,440 --> 00:16:36,680 Speaker 2: of Dawn Aerospace, who's still coming up, but they're doing 296 00:16:36,800 --> 00:16:38,400 Speaker 2: very well. But I think you did you say rocket 297 00:16:38,480 --> 00:16:42,680 Speaker 2: Lab was one that pitched Crimson Education, some track Suit 298 00:16:43,000 --> 00:16:47,640 Speaker 2: Halter who've just done fantastic in the US recently Mint 299 00:16:47,640 --> 00:16:51,600 Speaker 2: Innovation Law Review, who are just a real, under the radar, 300 00:16:51,840 --> 00:16:55,600 Speaker 2: fantastic outfit. So is there a common factor in these 301 00:16:55,680 --> 00:16:58,600 Speaker 2: really successful startups? Is there something that you can kind 302 00:16:58,600 --> 00:17:01,160 Speaker 2: of point to and say you're gonna make a big kid. 303 00:17:01,480 --> 00:17:04,439 Speaker 3: I wish there was. I mean there certainly. Retrospectively you 304 00:17:04,480 --> 00:17:09,320 Speaker 3: can identify certain features that where there's commonality, but less 305 00:17:09,320 --> 00:17:17,280 Speaker 3: so causality. And probably the only feature that is ubiquitous 306 00:17:17,760 --> 00:17:19,880 Speaker 3: is that the companies that have come out the other 307 00:17:19,960 --> 00:17:24,600 Speaker 3: side and become headliners and generated high value returns and 308 00:17:25,040 --> 00:17:30,639 Speaker 3: minted successful entrepreneurs have had a dance with death and 309 00:17:30,680 --> 00:17:34,360 Speaker 3: in most cases they're I mean, they are documented, right, 310 00:17:34,400 --> 00:17:39,560 Speaker 3: and they're real and visceral dances with death and they survive, right, 311 00:17:39,560 --> 00:17:43,640 Speaker 3: Which is a very difficult sort of thing to process 312 00:17:43,720 --> 00:17:46,880 Speaker 3: as an entrepreneur, because when you are approaching a point 313 00:17:46,920 --> 00:17:49,679 Speaker 3: where it feels like failure is inevitable, you have to 314 00:17:49,720 --> 00:17:53,840 Speaker 3: ask yourself, is this failure or is this the dance? 315 00:17:54,600 --> 00:17:58,359 Speaker 2: How does an investor identify they've got a bunch of 316 00:17:58,400 --> 00:18:01,359 Speaker 2: money in a startup? How do they tell the difference? 317 00:18:01,400 --> 00:18:05,399 Speaker 2: I mean Soupie was a pretty famous example where investors 318 00:18:05,480 --> 00:18:08,719 Speaker 2: ended up pulling the plug because they felt like perhaps 319 00:18:08,760 --> 00:18:10,960 Speaker 2: there was nowhere else for it to go. How is 320 00:18:11,000 --> 00:18:12,840 Speaker 2: that decision made from that end? 321 00:18:13,440 --> 00:18:15,320 Speaker 3: I think the one thing that we rely on the 322 00:18:15,359 --> 00:18:19,080 Speaker 3: most is the perspective of the founder, right, if they're 323 00:18:19,119 --> 00:18:21,720 Speaker 3: waving the white flag, even if you think the business 324 00:18:21,760 --> 00:18:25,120 Speaker 3: is going well, you got to go right. Because these 325 00:18:25,560 --> 00:18:28,399 Speaker 3: this is not private equity. We don't take controlling stakes. 326 00:18:28,440 --> 00:18:32,760 Speaker 3: We are investors that elevate and empower founders and their teams, 327 00:18:33,000 --> 00:18:38,520 Speaker 3: and we rely on them to deliver exceptionally and pull 328 00:18:38,560 --> 00:18:42,680 Speaker 3: off things that are very difficult to imagine. So if 329 00:18:42,720 --> 00:18:45,720 Speaker 3: a company sorry, if a founder is saying we don't 330 00:18:45,760 --> 00:18:48,760 Speaker 3: have this anymore, that's when you pull the plug, right, 331 00:18:48,800 --> 00:18:51,800 Speaker 3: That's when it becomes very obvious. Three times this year, 332 00:18:52,400 --> 00:18:54,240 Speaker 3: if you had asked me the day before I found 333 00:18:54,240 --> 00:18:57,240 Speaker 3: out news, will the company survive? The answer would have 334 00:18:57,240 --> 00:19:01,760 Speaker 3: been no founders pull off some remarks, pivots and changes 335 00:19:01,800 --> 00:19:06,520 Speaker 3: and commercial successes. And in each of those cases, we 336 00:19:06,520 --> 00:19:11,160 Speaker 3: were there trying to provide the support and resources and encouragement, 337 00:19:11,680 --> 00:19:13,280 Speaker 3: but there wasn't more capital going in. 338 00:19:13,520 --> 00:19:17,520 Speaker 2: Yeah, obviously, you know, it's not always wins. We talked 339 00:19:17,560 --> 00:19:20,440 Speaker 2: about Soupee that was a pretty high profile case because 340 00:19:20,440 --> 00:19:22,600 Speaker 2: of the market that they were in, but there have 341 00:19:22,640 --> 00:19:25,520 Speaker 2: been a few other cases as well, particular ones that 342 00:19:25,560 --> 00:19:30,800 Speaker 2: have pitched at showcase. So Caldera Health, Sunfed Meats was 343 00:19:31,200 --> 00:19:36,399 Speaker 2: reasonably big neriad as well, was reasonably well publicized. You know, 344 00:19:36,440 --> 00:19:38,320 Speaker 2: you said there was no commonality or there was no 345 00:19:38,440 --> 00:19:40,520 Speaker 2: causation that you could find with the startups that were 346 00:19:40,520 --> 00:19:43,280 Speaker 2: really successful. What do you see as some of the 347 00:19:43,680 --> 00:19:48,520 Speaker 2: things that maybe linked startups that aren't so successful. 348 00:19:48,760 --> 00:19:51,080 Speaker 3: Yeah, So I actually did a fair amount of work 349 00:19:51,160 --> 00:19:53,920 Speaker 3: on all the companies that we'd had fail over twenty years, 350 00:19:53,960 --> 00:19:56,320 Speaker 3: and all the companies that had sold. The failures total 351 00:19:56,359 --> 00:19:59,440 Speaker 3: across the whole portfolio is about fifty of three hundred 352 00:19:59,440 --> 00:20:04,600 Speaker 3: and thirty, and positive is about twenty five or high twenties, right, 353 00:20:04,640 --> 00:20:08,119 Speaker 3: And I tried to say, well, let's pick on a 354 00:20:08,200 --> 00:20:14,200 Speaker 3: few perspectives that people have that they assume will lead 355 00:20:14,200 --> 00:20:17,400 Speaker 3: to success or failure. Right. One I think that we 356 00:20:17,560 --> 00:20:22,919 Speaker 3: could observes as a relative pattern in the companies that 357 00:20:23,000 --> 00:20:27,639 Speaker 3: have failed is when they don't demonstrably have nor is 358 00:20:27,680 --> 00:20:32,000 Speaker 3: there evidence that they could create global competitive advantage. 359 00:20:32,160 --> 00:20:32,360 Speaker 1: Right. 360 00:20:32,440 --> 00:20:36,280 Speaker 3: So, this sort of copycat type of play is a 361 00:20:36,359 --> 00:20:40,480 Speaker 3: very difficult one to translate into an exceedingly large business. 362 00:20:40,840 --> 00:20:44,760 Speaker 3: Of course, randomly in this country we have one of 363 00:20:44,760 --> 00:20:49,240 Speaker 3: the greatest copycats ever that which was trade me eBay 364 00:20:49,400 --> 00:20:52,679 Speaker 3: that became like the cornerstone of venture capital in New Zealand. 365 00:20:52,800 --> 00:20:56,240 Speaker 3: And full credit to them because they fought off a 366 00:20:56,960 --> 00:20:59,160 Speaker 3: you know, a very large incumbent and built a lot 367 00:20:59,200 --> 00:21:04,680 Speaker 3: of value. But among the thirty companies that sorry, among 368 00:21:04,720 --> 00:21:07,960 Speaker 3: the fifty or so companies total that had failed, relative 369 00:21:08,000 --> 00:21:11,479 Speaker 3: to the thirty that has succeeded, you could see in 370 00:21:11,520 --> 00:21:15,840 Speaker 3: those ones that had failed a higher ratio of companies 371 00:21:15,880 --> 00:21:20,320 Speaker 3: that really didn't have a global competitive edge. Right. And 372 00:21:20,400 --> 00:21:22,800 Speaker 3: so as a result of that, they can't capture as 373 00:21:22,880 --> 00:21:26,280 Speaker 3: much market, they can't capture as many as much capital, 374 00:21:26,680 --> 00:21:28,080 Speaker 3: and on and on it goes, and they can just 375 00:21:28,080 --> 00:21:30,000 Speaker 3: get usurped by the bigger players. 376 00:21:31,000 --> 00:21:33,359 Speaker 2: What about the case of you know, NERIID that was 377 00:21:33,400 --> 00:21:37,520 Speaker 2: a fairly unique company. They had a really great proposition, 378 00:21:37,800 --> 00:21:40,720 Speaker 2: but it turned out that the market didn't really eventuate. 379 00:21:40,920 --> 00:21:42,600 Speaker 2: Is that something that's common. 380 00:21:42,840 --> 00:21:46,920 Speaker 3: Yeah. Absolutely. You can have sort of like a consumer 381 00:21:47,440 --> 00:21:51,120 Speaker 3: or regulatory change, or just market sort of shifts that 382 00:21:51,520 --> 00:21:55,280 Speaker 3: are very difficult to predict, right, And you have to 383 00:21:55,640 --> 00:21:58,359 Speaker 3: appreciate that most of the time when we're investing in 384 00:21:58,359 --> 00:22:03,399 Speaker 3: a company, eat stage company is zero years old, right, 385 00:22:03,520 --> 00:22:07,800 Speaker 3: maybe one year old, and they are if they are 386 00:22:07,840 --> 00:22:11,520 Speaker 3: to become successful, the likelihood that they are selling into 387 00:22:11,640 --> 00:22:15,399 Speaker 3: a market with a model that is known and exists 388 00:22:15,440 --> 00:22:19,199 Speaker 3: today is extremely low. Right. In fact, most of the 389 00:22:19,240 --> 00:22:24,120 Speaker 3: companies that become consequential have almost built ecosystems or business 390 00:22:24,119 --> 00:22:28,280 Speaker 3: models or industries. So yeah, there are certainly times where 391 00:22:29,200 --> 00:22:31,639 Speaker 3: people just didn't see how something was going to change. 392 00:22:31,760 --> 00:22:34,520 Speaker 3: I don't know if that's necessarily near Yad's case. They 393 00:22:36,000 --> 00:22:40,320 Speaker 3: I think directionally were correct and execution was a real challenge. 394 00:22:40,960 --> 00:22:45,320 Speaker 2: You've had a couple of IPOs, one of them Martin Jetpack, 395 00:22:45,960 --> 00:22:48,160 Speaker 2: which is you know cool in the name. 396 00:22:48,400 --> 00:22:51,359 Speaker 3: Well, look, Martin Jetpack was at the very first showcase. 397 00:22:52,160 --> 00:22:54,600 Speaker 3: They were a very unique one. I mean, I think 398 00:22:55,400 --> 00:22:59,199 Speaker 3: we like to say at showcases, we want it to 399 00:22:59,240 --> 00:23:01,760 Speaker 3: be a bit of an intellect actual rollercoaster, and we 400 00:23:01,800 --> 00:23:05,120 Speaker 3: want a real diverse mix of companies, So not all 401 00:23:05,160 --> 00:23:07,720 Speaker 3: early stage, not all late stage, not all medical devices, 402 00:23:07,760 --> 00:23:12,000 Speaker 3: not all software. Right, and and Martin Jetpek was certainly 403 00:23:12,000 --> 00:23:15,120 Speaker 3: a wild card, and most people will know that went 404 00:23:15,160 --> 00:23:18,600 Speaker 3: on a crazy ride after that where it sort of 405 00:23:18,800 --> 00:23:25,160 Speaker 3: brought in a strategic player listed and then became a failure. 406 00:23:25,359 --> 00:23:29,920 Speaker 3: I think when people are conceptualizing, you know, this sort 407 00:23:29,920 --> 00:23:34,159 Speaker 3: of final destination. First, I don't know if there is 408 00:23:34,240 --> 00:23:38,000 Speaker 3: a final destination, right You sort of in the startup world, 409 00:23:38,040 --> 00:23:40,720 Speaker 3: you're always building, aiming higher and so on, unless it's 410 00:23:40,800 --> 00:23:44,280 Speaker 3: literally an all cash exit and and everybody sells out 411 00:23:44,320 --> 00:23:46,679 Speaker 3: and it, you know, is packaged up into a different company. 412 00:23:46,720 --> 00:23:52,320 Speaker 3: But so Martin jetpack was like a really, at the 413 00:23:52,400 --> 00:23:55,960 Speaker 3: time pretty crazy concept. We gave them a shot on 414 00:23:56,080 --> 00:23:59,680 Speaker 3: stage and credit to them for what they were trying 415 00:23:59,680 --> 00:24:04,600 Speaker 3: to build. And I think some version of what they 416 00:24:04,640 --> 00:24:08,119 Speaker 3: were aspiring to build will become reality, right, but probably 417 00:24:08,119 --> 00:24:10,400 Speaker 3: forty years after they were working on it. 418 00:24:10,480 --> 00:24:13,080 Speaker 2: Well, that's the that's another downside of being a trailblazer 419 00:24:13,160 --> 00:24:16,159 Speaker 2: sometimes is that the technology isn't there for what you 420 00:24:16,200 --> 00:24:19,159 Speaker 2: want to do. We're talking about exit as well, you know, 421 00:24:19,160 --> 00:24:21,680 Speaker 2: I mean that really is one of the one of 422 00:24:21,720 --> 00:24:25,080 Speaker 2: the big goals for startups and for startup investors is 423 00:24:25,119 --> 00:24:30,120 Speaker 2: to see great exits of their companies. And a famous 424 00:24:30,119 --> 00:24:32,720 Speaker 2: one we have power by proxy, you know, a huge 425 00:24:32,720 --> 00:24:36,399 Speaker 2: exit to Apple. What's your take on the idea of that. 426 00:24:36,440 --> 00:24:38,680 Speaker 2: When a New Zealand company is acquired by a big 427 00:24:38,720 --> 00:24:42,240 Speaker 2: overseas company, it's somehow a loss to New Zealand. 428 00:24:43,400 --> 00:24:45,719 Speaker 3: Well, the good news is in that reference is it 429 00:24:45,760 --> 00:24:48,879 Speaker 3: is a complete contradiction to that theory. So if anybody 430 00:24:49,320 --> 00:24:53,159 Speaker 3: has the theory, reference power by proxy as the counter 431 00:24:53,280 --> 00:24:56,480 Speaker 3: to that, right, like a mile from here are more 432 00:24:56,520 --> 00:24:59,000 Speaker 3: than one hundred people that are in very high paid 433 00:24:59,080 --> 00:25:05,360 Speaker 3: jobs are now powering wireless power across all Apple products 434 00:25:06,080 --> 00:25:11,439 Speaker 3: in Auckland, right. So, and some of the early investors 435 00:25:11,440 --> 00:25:15,560 Speaker 3: and early founders of that company are very significant supporters 436 00:25:15,680 --> 00:25:20,280 Speaker 3: of the next generation of companies. Right now, I'd say 437 00:25:20,720 --> 00:25:24,879 Speaker 3: the greater risk is not that a company sells and 438 00:25:24,920 --> 00:25:27,240 Speaker 3: then the sort of value is lost. The greater risk 439 00:25:27,400 --> 00:25:32,720 Speaker 3: is that the ecosystem doesn't provide the right elements to 440 00:25:32,880 --> 00:25:35,760 Speaker 3: keep people here, enable them to be funded such that 441 00:25:35,800 --> 00:25:40,320 Speaker 3: when they do reach a final destination, if we're not successful, 442 00:25:40,520 --> 00:25:43,200 Speaker 3: most of that value to be captured by offshore investors. Right, 443 00:25:43,520 --> 00:25:46,399 Speaker 3: we want more kiwis to be more financially aligned to 444 00:25:46,440 --> 00:25:48,080 Speaker 3: the success of Kiwi companies. 445 00:25:48,480 --> 00:25:50,520 Speaker 2: There's also, you know, from that as well, the idea 446 00:25:50,560 --> 00:25:53,600 Speaker 2: that like you mentioned, all of these power by proxy 447 00:25:53,840 --> 00:25:57,200 Speaker 2: employees that have gone on to do to go back 448 00:25:57,240 --> 00:26:01,399 Speaker 2: into the statup ecosystem and add value. How have you 449 00:26:01,400 --> 00:26:04,280 Speaker 2: seen that play out? Are you seeing that recycling of 450 00:26:04,280 --> 00:26:06,760 Speaker 2: talent in New Zealand or are we losing a lot 451 00:26:06,760 --> 00:26:08,239 Speaker 2: of people overseas. 452 00:26:07,800 --> 00:26:10,720 Speaker 3: Or there's so much recycling of talent and there's so 453 00:26:10,920 --> 00:26:15,919 Speaker 3: much goodwill and energy and capital and networks and resources 454 00:26:15,960 --> 00:26:20,240 Speaker 3: being given back by kiwi's here and abroad that have 455 00:26:20,320 --> 00:26:25,200 Speaker 3: built experience and everything else. So it is extremely vibrant now, 456 00:26:25,840 --> 00:26:30,360 Speaker 3: I alike in recycling of talent, which would be say 457 00:26:31,440 --> 00:26:35,040 Speaker 3: Peterbeck starts a company, he grows it, he builds capability, 458 00:26:35,080 --> 00:26:39,159 Speaker 3: and then Craig Piggot's working at rocket Lab and Pete says, hey, 459 00:26:39,240 --> 00:26:41,840 Speaker 3: I'll back you, and then with Pete we invest in 460 00:26:41,880 --> 00:26:45,639 Speaker 3: Halter right, that that sort of recycling talent, that that 461 00:26:45,920 --> 00:26:49,000 Speaker 3: was about a seven year maybe ten year journey, right. 462 00:26:49,440 --> 00:26:54,359 Speaker 3: And I liken that too, those types of animals that 463 00:26:54,400 --> 00:26:57,840 Speaker 3: went extinct because they only breed every seven years, right, 464 00:26:58,400 --> 00:27:04,080 Speaker 3: And so in the wrong environment, you could destroy the 465 00:27:04,080 --> 00:27:07,080 Speaker 3: whole population because there's only one chance for an egg 466 00:27:07,080 --> 00:27:10,399 Speaker 3: to hatch every seven years. But of course, with the 467 00:27:10,480 --> 00:27:16,679 Speaker 3: right ingredients in the right settings, those populations can proliferate, 468 00:27:17,119 --> 00:27:21,159 Speaker 3: and it just needs time, right, And that's what we're seeing. 469 00:27:21,359 --> 00:27:23,080 Speaker 2: Right. One of the things that I've heard before is 470 00:27:23,119 --> 00:27:27,639 Speaker 2: that if you are an entrepreneur who's wanting to do 471 00:27:27,720 --> 00:27:31,360 Speaker 2: a startup, but you aren't coming out of an established 472 00:27:31,359 --> 00:27:34,320 Speaker 2: startup or a you know, don't have venture links or 473 00:27:34,880 --> 00:27:37,480 Speaker 2: don't have a big wallet at your own back through 474 00:27:37,520 --> 00:27:39,520 Speaker 2: own experience, but you're just a young person with an 475 00:27:39,520 --> 00:27:42,639 Speaker 2: idea and a dream, it can be really hard to 476 00:27:42,800 --> 00:27:47,320 Speaker 2: find the resources to kind of support that dream, to 477 00:27:47,359 --> 00:27:49,800 Speaker 2: think about how you actually get into it. What are 478 00:27:49,840 --> 00:27:53,840 Speaker 2: some things that are available for people who may be 479 00:27:53,840 --> 00:27:56,400 Speaker 2: coming a bit out of the blue who are interested 480 00:27:56,480 --> 00:27:59,080 Speaker 2: in the startup entrepreneurship dream. 481 00:27:59,520 --> 00:28:02,199 Speaker 3: Look job as a founder is to rally lots of 482 00:28:02,240 --> 00:28:05,920 Speaker 3: different types of people around a mission, right, And so 483 00:28:05,960 --> 00:28:09,480 Speaker 3: that you need to obviously rally investors if you need capital. 484 00:28:09,600 --> 00:28:12,200 Speaker 3: You also need to be able to rally people who 485 00:28:12,240 --> 00:28:16,119 Speaker 3: will commit their nights and weekends to building this company 486 00:28:16,240 --> 00:28:21,320 Speaker 3: for potentially nothing, right, And you need to rally potential 487 00:28:21,440 --> 00:28:27,120 Speaker 3: customers or trial users and so on. And so when 488 00:28:27,160 --> 00:28:31,040 Speaker 3: it comes down to starting in the resources that are available, 489 00:28:31,400 --> 00:28:35,520 Speaker 3: the most amazing asset that's available is the willingness of 490 00:28:35,600 --> 00:28:38,760 Speaker 3: keyping entrepreneurs to speak to other key entrepreneurs, right. And 491 00:28:39,600 --> 00:28:43,320 Speaker 3: I don't think you need to spend time watching YouTube 492 00:28:43,360 --> 00:28:49,040 Speaker 3: videos or or learning from you know, Jeff Bezos right 493 00:28:49,280 --> 00:28:52,680 Speaker 3: about the amazing business that is Amazon today. I think 494 00:28:52,720 --> 00:28:56,120 Speaker 3: you need to get in front of and learn from 495 00:28:56,160 --> 00:28:57,920 Speaker 3: people that are just a few steps ahead of you 496 00:28:58,240 --> 00:29:01,800 Speaker 3: in their entrepreneurial journey, right, who don't have any agenda, 497 00:29:02,520 --> 00:29:07,920 Speaker 3: who are generally receptive to helping others and sharing their knowledge, 498 00:29:08,160 --> 00:29:11,680 Speaker 3: and they can solve a lot of problems and move 499 00:29:11,680 --> 00:29:14,920 Speaker 3: a lot of mountains for you. So go straight to founders. 500 00:29:14,960 --> 00:29:17,520 Speaker 3: They're not hard to find, They're on LinkedIn, right, and 501 00:29:18,680 --> 00:29:20,720 Speaker 3: they're willing to take a call. 502 00:29:20,800 --> 00:29:23,320 Speaker 2: And what about the other side, if you're somebody who 503 00:29:23,440 --> 00:29:27,440 Speaker 2: has done some maybe traditional investing, maybe some property or 504 00:29:27,480 --> 00:29:30,920 Speaker 2: some term deposits, and you're starting to think about maybe 505 00:29:31,320 --> 00:29:35,040 Speaker 2: looking at angel or getting being an LP and a fund. 506 00:29:36,240 --> 00:29:40,200 Speaker 2: What are some good ways to get started to think 507 00:29:40,240 --> 00:29:40,680 Speaker 2: about that? 508 00:29:41,280 --> 00:29:44,560 Speaker 3: Yeah, I think education is like a critical element to it, right, 509 00:29:44,600 --> 00:29:48,920 Speaker 3: And part of education with investment is coming to appreciate 510 00:29:49,400 --> 00:29:52,880 Speaker 3: sort of what venture is, how it fits within your 511 00:29:53,240 --> 00:29:56,280 Speaker 3: overall sort of portfolio, how it aligns to your risk 512 00:29:56,360 --> 00:29:59,640 Speaker 3: preferences and your time horizons and your liquidity requirements. I mean, 513 00:29:59,640 --> 00:30:03,240 Speaker 3: there's a lot to consider there. And you know, nowadays 514 00:30:03,280 --> 00:30:08,200 Speaker 3: there's there are plenty of entities that will uh share 515 00:30:08,560 --> 00:30:13,520 Speaker 3: views on that and provide training and and and uh 516 00:30:13,720 --> 00:30:16,000 Speaker 3: introduce you to companies and all that. And I guess 517 00:30:16,000 --> 00:30:19,480 Speaker 3: the key piece of advice is, you know, take it slow, 518 00:30:20,080 --> 00:30:24,280 Speaker 3: don't fall in love on the sort of first glance, right, 519 00:30:25,440 --> 00:30:29,920 Speaker 3: learn to compare different options and different fund managers, and 520 00:30:29,920 --> 00:30:34,400 Speaker 3: and once you've got the foundational sort of perspectives, the 521 00:30:34,520 --> 00:30:37,280 Speaker 3: lead with your heart, right, which is am I most 522 00:30:37,280 --> 00:30:41,320 Speaker 3: passionate about young entrepreneurs? Or am I only wanting to 523 00:30:41,360 --> 00:30:44,520 Speaker 3: invest in companies that can have a positive impact on 524 00:30:44,560 --> 00:30:47,800 Speaker 3: the environment or or whatever it may be? Right, But 525 00:30:47,800 --> 00:30:52,480 Speaker 3: but do that once you've really uh sort of quizzed 526 00:30:52,560 --> 00:30:55,000 Speaker 3: us or or any number of other people in the 527 00:30:55,000 --> 00:30:57,600 Speaker 3: ecosystem on on sort of how this sort of works 528 00:30:57,600 --> 00:30:57,840 Speaker 3: for you. 529 00:31:05,080 --> 00:31:06,760 Speaker 2: One of the challenges at the moment, you know, we 530 00:31:06,800 --> 00:31:11,080 Speaker 2: talk about constrained capital, that there's less access to capital. 531 00:31:11,880 --> 00:31:14,320 Speaker 2: I'm not entirely sure that's true in the case of 532 00:31:14,520 --> 00:31:19,560 Speaker 2: New Zealand specifically because a VC seens was so young 533 00:31:19,920 --> 00:31:23,160 Speaker 2: that it has grown a lot recently. But when it 534 00:31:23,200 --> 00:31:27,560 Speaker 2: comes to you know, science research, for example, is really 535 00:31:27,600 --> 00:31:32,560 Speaker 2: hard lately to find support for that frompel grants and 536 00:31:32,640 --> 00:31:35,560 Speaker 2: things like that. Like are you concerned about where we're 537 00:31:35,560 --> 00:31:40,280 Speaker 2: heading in terms of the future considering the economic space 538 00:31:40,320 --> 00:31:40,720 Speaker 2: that we're in. 539 00:31:41,600 --> 00:31:44,320 Speaker 3: I walk a sort of like a line between like 540 00:31:44,720 --> 00:31:49,880 Speaker 3: just like yeah, realism and just the sheer fact that 541 00:31:49,960 --> 00:31:53,120 Speaker 3: New Zealand is underinvested in R and D right, and 542 00:31:53,160 --> 00:31:57,000 Speaker 3: it's got an uphill battle to be globally competitive with 543 00:31:57,720 --> 00:32:01,960 Speaker 3: total optimism that entrepreneurs come from everywhere, does not matter 544 00:32:02,040 --> 00:32:08,160 Speaker 3: the macro challenges that exist, a tyranny of distance, not 545 00:32:08,280 --> 00:32:13,040 Speaker 3: enough capital, not enough talent, like those have been stated 546 00:32:13,200 --> 00:32:17,760 Speaker 3: for sixteen years since I've been involved, and yet Rocket 547 00:32:17,800 --> 00:32:22,160 Speaker 3: lab started right Crimson is a billion dollar company, Right 548 00:32:22,280 --> 00:32:26,720 Speaker 3: zero is winning on a global stage, and Lansattech is 549 00:32:26,840 --> 00:32:29,960 Speaker 3: crushing it. So you have these companies from all different 550 00:32:29,960 --> 00:32:32,959 Speaker 3: walks of life, started by all different types of people 551 00:32:34,200 --> 00:32:37,960 Speaker 3: throughout time where there were plenty of arguments why it 552 00:32:38,000 --> 00:32:40,960 Speaker 3: was too hard, or it wouldn't work right and or 553 00:32:41,000 --> 00:32:43,240 Speaker 3: there's not enough of this, or not a big enough 554 00:32:43,480 --> 00:32:47,520 Speaker 3: tax cut, or this policy wasn't gonna help or whatever. Like, 555 00:32:47,680 --> 00:32:50,840 Speaker 3: entrepreneurs are a very specific breed, and you know they 556 00:32:50,880 --> 00:32:52,520 Speaker 3: sort of say, oh, you think those are problems, like 557 00:32:52,560 --> 00:32:54,680 Speaker 3: hold my beer, I'll shave you, I'll shave you problems. 558 00:32:54,840 --> 00:32:57,520 Speaker 2: One of the criticisms around the start up of VC 559 00:32:57,600 --> 00:33:01,320 Speaker 2: scene is that people can kind of get caught up 560 00:33:01,320 --> 00:33:03,720 Speaker 2: and hype and you end up with a whole bunch 561 00:33:03,760 --> 00:33:06,720 Speaker 2: of proliferation of startups in one area, a bunch of 562 00:33:06,800 --> 00:33:09,840 Speaker 2: money gets thrown at them, and then only if you 563 00:33:09,960 --> 00:33:14,280 Speaker 2: remain and everybody goes, oh, there's this big look, this 564 00:33:14,320 --> 00:33:16,720 Speaker 2: is exciting. Oh no, it's a bubble. Oh no, it's popped, 565 00:33:16,720 --> 00:33:19,200 Speaker 2: And this just kind of repeats. I was talking to 566 00:33:19,280 --> 00:33:21,239 Speaker 2: somebody the other day, one of your representatives, and they 567 00:33:21,280 --> 00:33:23,840 Speaker 2: said that ice House has managed to kind of avoid 568 00:33:23,920 --> 00:33:27,560 Speaker 2: that trend based investing. Was that something that you've done 569 00:33:27,600 --> 00:33:31,240 Speaker 2: intentionally or is that just a byproduct of, you know, 570 00:33:31,280 --> 00:33:32,480 Speaker 2: a philosophy around investing. 571 00:33:33,080 --> 00:33:35,160 Speaker 3: Well, if you look at the companies that have become 572 00:33:35,560 --> 00:33:41,400 Speaker 3: really consequential, usually they didn't jump into a trend, they 573 00:33:41,440 --> 00:33:45,400 Speaker 3: created a trend, right, And so, I mean twenty years 574 00:33:45,440 --> 00:33:50,080 Speaker 3: ago in my internship, I remember looking at all these 575 00:33:50,120 --> 00:33:54,680 Speaker 3: sort of permutations of social media networks. Right now, why 576 00:33:54,800 --> 00:33:59,080 Speaker 3: was that happening? Because Facebook had one hundred million users 577 00:33:59,080 --> 00:34:01,680 Speaker 3: at that point, whatever it was like, they were taking off. 578 00:34:02,280 --> 00:34:06,040 Speaker 3: And so I do have a general allergy to jumping 579 00:34:06,080 --> 00:34:10,880 Speaker 3: on any bandwagons, right, And so certainly a lot of 580 00:34:10,920 --> 00:34:13,520 Speaker 3: questions have been around, oh are you investing in AI? 581 00:34:13,880 --> 00:34:16,320 Speaker 3: And the answer is yeah, we invested in an AI 582 00:34:16,600 --> 00:34:20,360 Speaker 3: data company in twenty twelve, right, and that is becoming 583 00:34:20,440 --> 00:34:24,720 Speaker 3: more interesting and hopefully there's some real tailwinds now that 584 00:34:24,800 --> 00:34:27,799 Speaker 3: they're sort of a market perspective that's changed. But if 585 00:34:27,800 --> 00:34:31,719 Speaker 3: a company today says their AI, the first question is, well, cool, 586 00:34:32,080 --> 00:34:34,839 Speaker 3: how long have you been working on whatever your business is? 587 00:34:35,360 --> 00:34:38,360 Speaker 3: Because if it started today, unless you were researching it 588 00:34:38,400 --> 00:34:41,640 Speaker 3: and now you've started a business, it's probably not of interest. 589 00:34:41,920 --> 00:34:45,240 Speaker 3: I mean, half of our companies are hardware and product, 590 00:34:45,400 --> 00:34:48,000 Speaker 3: you know, sort of hard tech, so those can be 591 00:34:48,480 --> 00:34:50,760 Speaker 3: you know, the development of those can be accelerated by AI. 592 00:34:51,080 --> 00:34:56,880 Speaker 3: The rollout of them, the testing, right, the conceptualization of it, 593 00:34:57,040 --> 00:35:01,520 Speaker 3: the innovation within them can all be empowered by better compute. 594 00:35:01,880 --> 00:35:02,000 Speaker 1: Right. 595 00:35:02,880 --> 00:35:06,480 Speaker 3: And then the question is sort of as a venture investor, 596 00:35:06,560 --> 00:35:11,240 Speaker 3: especially seed stage investor, where do you stand to generate 597 00:35:11,239 --> 00:35:14,240 Speaker 3: the most yield? Right? And I think it's a difficult 598 00:35:14,360 --> 00:35:17,359 Speaker 3: question to answer right now whether or not there will 599 00:35:17,360 --> 00:35:21,480 Speaker 3: be a plethora of sort of seed stage startups that 600 00:35:21,520 --> 00:35:25,359 Speaker 3: are taking very small slices of it, or if AI 601 00:35:25,440 --> 00:35:29,000 Speaker 3: will just permeate all companies. Right. And it was maybe 602 00:35:29,080 --> 00:35:33,720 Speaker 3: similar to what cloud computing was, which was first people 603 00:35:34,320 --> 00:35:36,719 Speaker 3: didn't know what it was, and then it was this 604 00:35:36,840 --> 00:35:40,360 Speaker 3: real novelty, and then it was ubiquitous and if you 605 00:35:40,360 --> 00:35:46,200 Speaker 3: were not cloud you were questioned. And so yeah, every 606 00:35:46,360 --> 00:35:51,760 Speaker 3: company is harnessing AI in various forms already and smart 607 00:35:51,800 --> 00:35:54,200 Speaker 3: ones I have been for a long time, long before you know, 608 00:35:54,239 --> 00:35:58,480 Speaker 3: a consumer could sort of ask some novel questions to 609 00:35:58,640 --> 00:35:59,719 Speaker 3: a bunch of code. 610 00:35:59,840 --> 00:36:03,560 Speaker 2: I remember it was maybe six years ago even that 611 00:36:03,960 --> 00:36:07,040 Speaker 2: people were going, we're born in the cloud, We're cloud first, 612 00:36:07,120 --> 00:36:09,839 Speaker 2: and that was kind of the mark of the mark 613 00:36:09,920 --> 00:36:14,960 Speaker 2: of progress. Yeah, now it's the same AI first and 614 00:36:15,640 --> 00:36:18,080 Speaker 2: the same the same words with a different now and 615 00:36:18,120 --> 00:36:23,440 Speaker 2: switched in. So yeah, it must be difficult to navigate 616 00:36:23,560 --> 00:36:27,759 Speaker 2: that a little bit when you're leading a fund or 617 00:36:27,800 --> 00:36:32,840 Speaker 2: funds and you've got partners going, hey, what's this exciting 618 00:36:32,840 --> 00:36:34,960 Speaker 2: thing over here? Why aren't we putting all of our 619 00:36:34,960 --> 00:36:37,799 Speaker 2: money over here? What are those conversations like? 620 00:36:38,320 --> 00:36:40,840 Speaker 3: I mean, we just indexed so heavily on the pedigree 621 00:36:40,880 --> 00:36:45,839 Speaker 3: of the people that are running the businesses that in 622 00:36:45,840 --> 00:36:49,600 Speaker 3: some ways we're sort of we're not picking an area 623 00:36:49,840 --> 00:36:52,680 Speaker 3: in which we may want to invest. We're biasing towards 624 00:36:52,760 --> 00:36:55,319 Speaker 3: founders who are spending their days and nights and have 625 00:36:55,440 --> 00:36:58,840 Speaker 3: been for a decade working on an area that merits investment. 626 00:36:59,560 --> 00:37:03,279 Speaker 3: And so that I think makes life a little bit 627 00:37:03,280 --> 00:37:07,759 Speaker 3: more straightforward. Right, you start with people who've thought much 628 00:37:07,800 --> 00:37:10,960 Speaker 3: more deeply than you about whatever the business it is, 629 00:37:11,880 --> 00:37:17,560 Speaker 3: zinc recycling, right, foiling fairies. I mean, there's only one 630 00:37:17,600 --> 00:37:23,439 Speaker 3: example recently where somebody pressed me to pick a sort 631 00:37:23,440 --> 00:37:26,600 Speaker 3: of like an area that I was interested in, and 632 00:37:27,200 --> 00:37:31,440 Speaker 3: I described energy density and batteries right, because that's a 633 00:37:31,480 --> 00:37:37,239 Speaker 3: real limiting factor for electrification of many things. And then 634 00:37:37,280 --> 00:37:40,560 Speaker 3: a company came along and it was like, Okay, well 635 00:37:40,600 --> 00:37:42,600 Speaker 3: we have to invest in that because we were thinking 636 00:37:42,600 --> 00:37:47,320 Speaker 3: about that. Yeah. But generally, especially at the earliest stages, 637 00:37:47,840 --> 00:37:52,799 Speaker 3: you're backing founders who have well formed hypotheses, and you 638 00:37:52,840 --> 00:37:56,120 Speaker 3: can only have those having thought very deeply or researched 639 00:37:56,200 --> 00:37:59,360 Speaker 3: very significantly or felt a very pronounced pain in a 640 00:37:59,400 --> 00:38:01,600 Speaker 3: space to sort of inform it. 641 00:38:03,239 --> 00:38:07,080 Speaker 2: What are your let's say we're having this conversation, it's 642 00:38:07,160 --> 00:38:10,760 Speaker 2: twenty thirty for you've got another ten showcases under your belt. 643 00:38:11,880 --> 00:38:14,080 Speaker 2: And I know this is always an unfair question to 644 00:38:14,120 --> 00:38:16,880 Speaker 2: ask because it's an impossible question, but what are your 645 00:38:16,920 --> 00:38:20,719 Speaker 2: kind of hopes for where New Zealand's startup scene will 646 00:38:20,719 --> 00:38:22,520 Speaker 2: be in ten years? 647 00:38:23,640 --> 00:38:27,400 Speaker 3: One aspiration is that more and more of the people 648 00:38:27,480 --> 00:38:30,200 Speaker 3: that are in the room are ones that have been 649 00:38:30,560 --> 00:38:33,600 Speaker 3: deeply engaged in entrepreneurial journeys. And you can see it 650 00:38:33,760 --> 00:38:36,400 Speaker 3: right like the sort of ratio of the people at 651 00:38:36,440 --> 00:38:40,040 Speaker 3: the tables. You can see it in the profile of 652 00:38:40,080 --> 00:38:44,359 Speaker 3: the wealthiest people in this country that more and more 653 00:38:44,560 --> 00:38:51,440 Speaker 3: folks have generated real consequential companies by building transformational tech, right. 654 00:38:52,360 --> 00:38:52,440 Speaker 1: And. 655 00:38:54,520 --> 00:38:57,399 Speaker 3: I think the beautiful thing about entrepreneurship is it is 656 00:38:57,600 --> 00:39:02,360 Speaker 3: just this is this voracious dry I've to solve real problems. 657 00:39:02,480 --> 00:39:04,800 Speaker 3: And so that's why I approach most things with a 658 00:39:04,840 --> 00:39:08,880 Speaker 3: fair amount of optimism, because most of the problems that 659 00:39:09,080 --> 00:39:12,759 Speaker 3: we're facing today can be translated into very significant opportunities 660 00:39:12,880 --> 00:39:20,120 Speaker 3: or entrepreneurs and businesses moving forward. And then I think 661 00:39:20,640 --> 00:39:25,000 Speaker 3: you're seeing just this sort of compounding nature of venture capital, 662 00:39:25,160 --> 00:39:29,839 Speaker 3: of people learning, taking those learnings, applying it again, doing more, 663 00:39:30,080 --> 00:39:32,560 Speaker 3: achieving more, aiming higher, and on and on and on 664 00:39:32,800 --> 00:39:37,960 Speaker 3: and so there's irrespective of what we do, as I 665 00:39:38,080 --> 00:39:41,800 Speaker 3: SU's ventures or the government does, or universities or whatever, 666 00:39:42,200 --> 00:39:46,280 Speaker 3: there is an absolute certain tsunami of talent and aspiration 667 00:39:46,480 --> 00:39:49,560 Speaker 3: in entrepreneurship. And so we just hope that we can 668 00:39:49,600 --> 00:39:51,120 Speaker 3: be around to sort of celebrate it and be a 669 00:39:51,160 --> 00:39:51,520 Speaker 3: part of it. 670 00:39:51,600 --> 00:39:58,919 Speaker 1: In a decade, some really interesting stuff in there. Being 671 00:39:59,280 --> 00:40:03,600 Speaker 1: very upfront about some of those failures like Soupy Caldaris, 672 00:40:03,640 --> 00:40:06,640 Speaker 1: Sunfared NEARIAD, Yeah, it's really sad in hindsight. You know, 673 00:40:06,640 --> 00:40:10,080 Speaker 1: we've talked about and covered those companies and seemed very 674 00:40:10,080 --> 00:40:12,160 Speaker 1: promising in their own rights at one point. But this 675 00:40:12,239 --> 00:40:16,320 Speaker 1: is the game that Robbie Paul and his contemporaries around 676 00:40:16,400 --> 00:40:19,560 Speaker 1: the industry are in. They know that off a portfolio 677 00:40:19,600 --> 00:40:22,200 Speaker 1: of ten companies, the majority of them are probably going 678 00:40:22,280 --> 00:40:28,399 Speaker 1: to fail, at least not deliver on the expectations that 679 00:40:28,520 --> 00:40:31,000 Speaker 1: the VC companies have when they put money into them. 680 00:40:31,680 --> 00:40:33,319 Speaker 1: I really liked what he was saying about, you know, 681 00:40:33,800 --> 00:40:38,120 Speaker 1: not jumping on bandwagons and fads and AI. It's the 682 00:40:38,160 --> 00:40:42,319 Speaker 1: pedigree of the people, that's what he said. And you 683 00:40:42,360 --> 00:40:48,000 Speaker 1: just see that really maturing and improving as this industry develops. 684 00:40:48,560 --> 00:40:51,359 Speaker 1: The fact that you've got founders now who I'm sure 685 00:40:51,400 --> 00:40:54,960 Speaker 1: they're still going through the same university courses and exposed 686 00:40:55,000 --> 00:40:58,279 Speaker 1: to the same sort of ideas and education, but you've 687 00:40:58,280 --> 00:41:01,720 Speaker 1: got this network of people around them who can spot 688 00:41:01,800 --> 00:41:04,759 Speaker 1: that talent and then put them on that pathway to 689 00:41:04,880 --> 00:41:09,600 Speaker 1: success with mentoring and support. And as you were saying, 690 00:41:09,640 --> 00:41:12,120 Speaker 1: you know some of these partners who really play quite 691 00:41:12,160 --> 00:41:15,640 Speaker 1: a hands on role in companies. Some of them even 692 00:41:15,680 --> 00:41:18,239 Speaker 1: go and are embedded in those companies for a while 693 00:41:18,239 --> 00:41:21,280 Speaker 1: because they really need essentially a CEO or a CFO 694 00:41:21,320 --> 00:41:25,640 Speaker 1: type person at a particular point in time. So that's 695 00:41:25,680 --> 00:41:28,920 Speaker 1: the value that's been added. And because of the success 696 00:41:28,960 --> 00:41:31,839 Speaker 1: of some of these companies, that is sort of recycling 697 00:41:31,920 --> 00:41:33,680 Speaker 1: around the industry, which is great to see. 698 00:41:33,960 --> 00:41:37,440 Speaker 2: Yeah, the focus on people that Robbie was talking about 699 00:41:37,760 --> 00:41:41,839 Speaker 2: is fantastic to kind of get your head around. You know, 700 00:41:42,040 --> 00:41:44,600 Speaker 2: we hear so much about the amazing stuff that the 701 00:41:44,640 --> 00:41:47,760 Speaker 2: companies are doing, and the big numbers get thrown around 702 00:41:47,920 --> 00:41:51,239 Speaker 2: and the excitement and the fervor and all that, but 703 00:41:51,760 --> 00:41:53,960 Speaker 2: it must be a huge challenge to actually look at 704 00:41:54,000 --> 00:41:57,719 Speaker 2: people and go, I believe that you can take this 705 00:41:58,360 --> 00:42:02,040 Speaker 2: into something that is spectacle. How do you actually do 706 00:42:02,160 --> 00:42:07,280 Speaker 2: that as an investor? And Robbie talking about that founder 707 00:42:07,360 --> 00:42:10,799 Speaker 2: analysis side of the stuff that he does, I thought 708 00:42:10,840 --> 00:42:15,759 Speaker 2: was really interesting. And then conversely thinking about when as 709 00:42:15,800 --> 00:42:19,919 Speaker 2: an investor you have to decide that actually we can't 710 00:42:20,000 --> 00:42:25,959 Speaker 2: keep going on something like with Soupy unfortunately, the role 711 00:42:26,000 --> 00:42:28,839 Speaker 2: that the founder plays and even that decision as well, 712 00:42:29,000 --> 00:42:31,680 Speaker 2: I found even a little bit surprising because you know, 713 00:42:31,920 --> 00:42:35,160 Speaker 2: to me it felt like when these startups fail, it's 714 00:42:35,200 --> 00:42:38,920 Speaker 2: usually the investors going no, no more. But Robbie saying, well, 715 00:42:38,960 --> 00:42:41,480 Speaker 2: it's the investors are taking their cues from the founder 716 00:42:41,520 --> 00:42:42,479 Speaker 2: at the end of the day. 717 00:42:42,800 --> 00:42:46,640 Speaker 1: Yeah, and you know he talked about at least one 718 00:42:46,840 --> 00:42:48,840 Speaker 1: company where they thought it was going to go to 719 00:42:48,920 --> 00:42:52,160 Speaker 1: the wall and the founder said, look, you give me 720 00:42:52,160 --> 00:42:54,200 Speaker 1: a bit of time to try and pull something together, 721 00:42:54,239 --> 00:42:55,840 Speaker 1: and then they were able to do that and raise 722 00:42:56,280 --> 00:42:59,160 Speaker 1: subsequently quite a lot of money. So great to hear 723 00:42:59,200 --> 00:43:01,480 Speaker 1: those sorts of stories. So it's not as clear cut 724 00:43:01,760 --> 00:43:04,759 Speaker 1: as that. Interesting to hear about the likes of the 725 00:43:04,800 --> 00:43:12,759 Speaker 1: Martin jetpack and why companies ultimately fail. No global competitive 726 00:43:12,880 --> 00:43:16,920 Speaker 1: edge really is one of the key reasons cited, and 727 00:43:16,960 --> 00:43:20,800 Speaker 1: that really goes to We've had numerous startup founders on 728 00:43:21,200 --> 00:43:25,480 Speaker 1: the podcasts, including the founder of Black Pearl Group, a 729 00:43:25,600 --> 00:43:29,160 Speaker 1: listed tech company on the nz X, who basically said, 730 00:43:29,239 --> 00:43:31,560 Speaker 1: I'm global from day one. I went to the US 731 00:43:31,600 --> 00:43:34,680 Speaker 1: first because if I don't succeed in the US, I 732 00:43:34,719 --> 00:43:38,960 Speaker 1: cannot achieve my ambitions for this company. And that's the 733 00:43:39,000 --> 00:43:41,160 Speaker 1: mantra from Robbie Paul and others as well as we're 734 00:43:41,160 --> 00:43:42,960 Speaker 1: too small to focus on our own country, so the 735 00:43:43,120 --> 00:43:47,759 Speaker 1: likes a whole to sure they tested and prototypes and 736 00:43:48,160 --> 00:43:51,520 Speaker 1: validated their technology on dairy farms in New Zealand, but 737 00:43:51,560 --> 00:43:54,480 Speaker 1: they're now into beef in the US and in Europe 738 00:43:54,520 --> 00:43:57,600 Speaker 1: as well. That's the real prize for them. Also last 739 00:43:57,600 --> 00:44:01,360 Speaker 1: week some other stats came out about ice House ventures. 740 00:44:01,440 --> 00:44:05,399 Speaker 1: They're really big fund. It's called Growth Fund one, which 741 00:44:05,560 --> 00:44:09,600 Speaker 1: was set up in twenty twenty one, and you know, 742 00:44:09,640 --> 00:44:12,760 Speaker 1: those ventures included in that fund have raised one hundred 743 00:44:12,800 --> 00:44:18,200 Speaker 1: and ten million. That's in twenty twenty one, they raised 744 00:44:18,200 --> 00:44:21,200 Speaker 1: one hundred and ten million. Since then, ninety point two 745 00:44:21,200 --> 00:44:25,279 Speaker 1: million has been invested across thirty two companies and those 746 00:44:25,280 --> 00:44:27,920 Speaker 1: companies are valued at one hundred and six million. So 747 00:44:28,480 --> 00:44:31,640 Speaker 1: it sort of shows that that's big money now. And 748 00:44:31,680 --> 00:44:34,160 Speaker 1: this is just one fund and one venture capital firm 749 00:44:34,200 --> 00:44:36,360 Speaker 1: in New Zealand. There are lots of other VC firms 750 00:44:36,400 --> 00:44:39,480 Speaker 1: as well, so there's the serious capital going into our 751 00:44:39,719 --> 00:44:42,719 Speaker 1: early stage of businesses now. But it also shows that 752 00:44:42,880 --> 00:44:44,720 Speaker 1: you know, this is going to take a few years. 753 00:44:44,719 --> 00:44:46,960 Speaker 1: You know, they have a horizon for these companies to 754 00:44:47,080 --> 00:44:50,880 Speaker 1: deliver the value and some of them to exit. But 755 00:44:50,960 --> 00:44:52,600 Speaker 1: at the moment they're valued at one hundred and six 756 00:44:52,600 --> 00:44:55,719 Speaker 1: million dollars and you can see that growing. If the 757 00:44:55,760 --> 00:44:59,000 Speaker 1: stats they've been quoting for over the last thirteen years. 758 00:44:59,000 --> 00:45:03,640 Speaker 1: You know, those companies that are now collectively having raised 759 00:45:03,640 --> 00:45:05,680 Speaker 1: nearly two billion dollars, we can see that one hundred 760 00:45:05,719 --> 00:45:09,160 Speaker 1: and six million dollars becoming a lot more over the 761 00:45:09,239 --> 00:45:09,960 Speaker 1: next few years. 762 00:45:10,080 --> 00:45:11,640 Speaker 2: Yeah, it's like that. It's like the old dudes in 763 00:45:11,680 --> 00:45:16,120 Speaker 2: the mainland. Dad said, good things take time. You can't 764 00:45:16,160 --> 00:45:18,839 Speaker 2: just expect returns on overnight. When you when you're trying 765 00:45:18,880 --> 00:45:22,719 Speaker 2: to literally grow a company to be something that is 766 00:45:22,800 --> 00:45:26,359 Speaker 2: returning massive amounts, it's you need scale, you need money, 767 00:45:26,400 --> 00:45:29,520 Speaker 2: you need you need time. Yeah, and I think that 768 00:45:29,600 --> 00:45:32,920 Speaker 2: anybody who gets into startup investing with the idea that 769 00:45:32,960 --> 00:45:34,960 Speaker 2: it's going to be quick returns is going to be 770 00:45:35,280 --> 00:45:37,480 Speaker 2: very quickly taught the opposite. 771 00:45:37,800 --> 00:45:41,120 Speaker 1: Yeah. So credit to them for putting some of these 772 00:45:41,120 --> 00:45:43,680 Speaker 1: stats together and giving us a bit more of a 773 00:45:43,719 --> 00:45:47,399 Speaker 1: bigger picture snapshot. You usually only hear about the successes 774 00:45:47,440 --> 00:45:51,040 Speaker 1: and sort of in isolation when they have a story 775 00:45:50,920 --> 00:45:53,360 Speaker 1: they want to tell to trying to track more investment. 776 00:45:53,400 --> 00:45:55,759 Speaker 1: But they've you know, they've got the confidence now at 777 00:45:55,800 --> 00:45:58,680 Speaker 1: ice House Ventuance, they've done so much and had so 778 00:45:58,760 --> 00:46:02,920 Speaker 1: much success and yes, failures as well. Telling these stories 779 00:46:02,960 --> 00:46:06,040 Speaker 1: I think is going to give not only our other 780 00:46:06,120 --> 00:46:09,400 Speaker 1: VC companies based locally but offshore investors more confidence to 781 00:46:09,400 --> 00:46:11,640 Speaker 1: put money into New Zealand. So that's a great thing. 782 00:46:11,960 --> 00:46:15,560 Speaker 2: Yeah, absolutely, Well that's it for this week's episode. Big 783 00:46:15,600 --> 00:46:17,719 Speaker 2: thanks to Robbie Paul for taking the time to come 784 00:46:17,800 --> 00:46:19,120 Speaker 2: on the Business of Tech. 785 00:46:19,480 --> 00:46:22,680 Speaker 1: Subscribe to get all episodes off the podcast in your 786 00:46:22,719 --> 00:46:26,240 Speaker 1: favorite podcast app or from iHeartRadio, where you can stream 787 00:46:26,320 --> 00:46:29,239 Speaker 1: every episode. Show notes for the Business of Tech are 788 00:46:29,239 --> 00:46:31,400 Speaker 1: in the Tech section on the Business Desk website. 789 00:46:31,840 --> 00:46:34,800 Speaker 2: Get in touch with your feedback, your ideas, your topics 790 00:46:34,800 --> 00:46:37,879 Speaker 2: and your guest suggestions. You can email meant business Desk 791 00:46:37,960 --> 00:46:40,680 Speaker 2: dot co dot NZAD. We'll find both of us on 792 00:46:40,719 --> 00:46:42,200 Speaker 2: LinkedIn and x. 793 00:46:42,640 --> 00:46:45,160 Speaker 1: And another dose of the Business of Tech coming your 794 00:46:45,160 --> 00:46:46,640 Speaker 1: way next Thursday. 795 00:46:46,760 --> 00:46:47,480 Speaker 2: We'll catch you then