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Speaker 1: Think of the best known e commerce and software startups

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Speaker 1: that New Zealand has produced.

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Speaker 2: The zero Trade me then timely just to name four

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Speaker 2: of them.

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Speaker 1: Well, there's one tech entrepreneur and investor who has been

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Speaker 1: heavily involved in all four of the ones you mentioned

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Speaker 1: and many more.

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Speaker 2: Rowan Simpson is one of the most successful serial tech

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Speaker 2: entrepreneurs in the country, and he's distilled what he's learned

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Speaker 2: into a new book, How to Be Wrong, A Crash

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Speaker 2: Course in startup success.

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Speaker 3: The biggest successes in tech companies did not invent the

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Speaker 3: technologies that they are famous for. By Apple, the biggest

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Speaker 3: technology company, did not need any of the things that

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Speaker 3: they are most famous for. But they did work out

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Speaker 3: what all of those things were for, and man, they

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Speaker 3: worked out how to make us want them and to

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Speaker 3: pay top dollar for And so the really valuable part

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Speaker 3: has not been the first to have the idea. The

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Speaker 3: really valuable part has been the one who works out

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Speaker 3: how to sell that to somebody in a way that

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Speaker 3: they will pay for.

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Speaker 1: Coming up on the Business of Tech by two Degrees Business,

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Speaker 1: Rowan Simpson on learning lessons, the hard Way, measuring Everything

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Speaker 1: and near death moments and startups.

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Speaker 2: I'm Ben Moore and I'm Peter Griffin and some very

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Speaker 2: articulate commentary about the state of innovation in New Zealand

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Speaker 2: coming up. Rowan's interview has lots of great nuggets of advice.

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Speaker 2: Try things, make mistakes, but learn from them and he's

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Speaker 2: definitely done that, going on to enjoy major success in

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Speaker 2: New Zealand startup sector.

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Speaker 1: So here's Rowan Simpson talking to Peter about failing pivoting

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Speaker 1: and the importance of having a beginner's mind.

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Speaker 2: Rowan Simpson, Welcome to the business of Tech. Great to

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Speaker 2: see you again and thanks for coming on.

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Speaker 3: Thanks for having menu. It's great opportunity.

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Speaker 2: It's incredible, you know when you think of the legacy

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Speaker 2: that you have had in New Zealand in the startup community.

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Speaker 2: We talk about trade me obviously zero ven timely so

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Speaker 2: nice sex and one capacity, whether on staff, as part

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Speaker 2: of an executive team or as an investor as well.

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Speaker 2: Probably not a lot of key wes know your face,

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Speaker 2: like a Sam Morgan or a Rod Drury. You're just

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Speaker 2: interested to start really what your approach has been. Did

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Speaker 2: you ever want to be that sort of founder that

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Speaker 2: had all the intention or were you more happy being

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Speaker 2: a support person part of a team.

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Speaker 3: I mean, I play my role, and I mean it's important,

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Speaker 3: I guess that there is a person to front these companies.

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Speaker 3: One of the things I write about in the book

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Speaker 3: is this what I call the myth of the lone genius.

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Speaker 3: We tend to attach one name to any successful company,

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Speaker 3: and Sam and Rode a great examples, so that vorn

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Speaker 3: at vend would be another. But there's always a team,

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Speaker 3: there's always a big group of people that sit behind

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Speaker 3: any successful business like that, and I guess I'm just

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Speaker 3: one of those. So yeah, it's maybe useful for people

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Speaker 3: who might fill those roles themselves to get that perspective.

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Speaker 2: You start the book very clearly talking about some of

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Speaker 2: the near death experiences off those four companies. They all

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Speaker 2: had great exits or in Zero's case, listed in multi

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Speaker 2: billion dollar business that now, but each one of those

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Speaker 2: companies had massive challenges. You talk about trade Me in

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Speaker 2: two thousand and one, you said the business model was

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Speaker 2: not working at left us hanging by a thread. I

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Speaker 2: planned to provide free online classified supported by advertising, had

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Speaker 2: failed to generate revenue, and it was that successfully that

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Speaker 2: you added that saved the business. But for a time

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Speaker 2: there it was looking like, I mean, you guys went overseas,

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Speaker 2: you've basically left it behind.

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Speaker 3: Yeah, Sam, his sister Jess, who was the second employee

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Speaker 3: before me, and myself, we were all in London at

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Speaker 3: the same time in two thousand and one Year's Eve

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Speaker 3: two thousand and one, So yeah, I mean we literally

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Speaker 3: had billboards back in those days which said only Turkey's

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Speaker 3: pay for classifieds. That was the tagline for trade me.

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Speaker 3: So we were quite wrong about the business model. And yeah,

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Speaker 3: I mean this is a repeated pattern, So I would

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Speaker 3: think about that across all four Like the stories we

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Speaker 3: tell about startups tend not to be actually honest or

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Speaker 3: accurate or detailed stories, and there's a good reason for that,

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Speaker 3: Like the honest story is messy, convoluted, doesn't fit so

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Speaker 3: nicely into soundbites. But the airbrushed versions of these stories,

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Speaker 3: in my opinion, kind of skip all the interesting bit

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Speaker 3: and often most of the important lessons as well. So yeah,

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Speaker 3: I think it's I think it is useful to tell

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Speaker 3: those stories. I was really determined in the book to

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Speaker 3: start with those four near death moments. It's easy to

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Speaker 3: retrospectively look back on those four companies and say, you

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Speaker 3: know they were great successes, but that's not how they

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Speaker 3: felt when we were actually in those moments. Like when

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Speaker 3: I left to go to the UK, if I'm honest,

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Speaker 3: I didn't think there'd be a trade me to come

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Speaker 3: back to well. And you know, that's the experience of

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Speaker 3: working in those companies day to day, and for people

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Speaker 3: working on their own startups today, like understanding that experience

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Speaker 3: is way more interesting than just reading the headline success stories.

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Speaker 2: Yeah, you take Timely another great company that had a

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Speaker 2: fantastic exit as well, But and Covid obviously that that

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Speaker 2: particular product for hairdresser is you know, small businesses for

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Speaker 2: managing timing and scheduling and all that sort of stuff

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Speaker 2: went out the window when people went into to lockdown.

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Speaker 2: That company almost went to the wall.

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Speaker 3: Yeah, I mean, you know, all of our customers were

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Speaker 3: health and beauty businesses. They take their bookings week by week,

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Speaker 3: and we saw those numbers go very quickly to zero

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Speaker 3: as the world shut down. Where customers all around the world,

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Speaker 3: so it was sort of different in different places depending

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Speaker 3: on how those lockdowns worked. But that required a really

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Speaker 3: quick kind of you know pivot for the business. If

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Speaker 3: you're like we had to respond very quickly to that

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Speaker 3: or we would have been dead. And yet it was

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Speaker 3: a relatively short period of time after that twenty twenty

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Speaker 3: one when we exited the business for you know, one

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Speaker 3: hundred million plus, and so you know again that experience

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Speaker 3: sort of being in that moment where the company felt

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Speaker 3: very tenuous, and you know, we had to make some

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Speaker 3: very quick, difficult decisions about how we were going to

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Speaker 3: adjust the cost model or the business around that too.

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Speaker 3: Only you know, a year or so later, you know

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Speaker 3: that excitement of selling the company. If you only hear

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Speaker 3: about the exit, you kind of miss a lot of

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Speaker 3: the interesting bits of that story and that journey.

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Speaker 2: You call the book How to Be Wrong, you know. So,

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Speaker 2: and it's very clear that all of these lessons and

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Speaker 2: mistakes that you've made along the way and as part

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Speaker 2: of these companies, have built a confidence in you. You know,

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Speaker 2: you talk about vend in the book, another great company

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Speaker 2: but was burning cash twenty fifteen, close to shutting it

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Speaker 2: all down. You came back, camped out in a hotel

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Speaker 2: room in Auckland and went to work with the team

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Speaker 2: there to try and save it, which was painful cutting jobs, Yeah.

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Speaker 3: Especially painful because a lot of those folks who were

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Speaker 3: let go in twenty fifteen were the ones who had

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Speaker 3: been you know, on the steep curve up and had

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Speaker 3: done the hard yards, so that was especially painful. And yeah,

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Speaker 3: I had a lot of very direct conversations with our

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Speaker 3: investors too, because you know, at that point, because of

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Speaker 3: the mistakes we've made Wet, we weren't going to be

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Speaker 3: able to raise external capital. So if we were going

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Speaker 3: to keep the company alive, we need to get support

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Speaker 3: from our existing investors. So those are crunchy discussions, you know,

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Speaker 3: And yeah, I think it is. I think again it's

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Speaker 3: interesting to share those stories so that people can sort

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Speaker 3: of appreciate what that's actually like.

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Speaker 2: Yeah, because there are you know, probably a lot of

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Speaker 2: startup founders and even just small business owners at the

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Speaker 2: moment who are in one of those near death experiences.

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Speaker 2: We've already seen some of our startups that had a

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Speaker 2: lot of exposure sort of fail in the last couple

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Speaker 2: of years, sunfed Ubco, great electric bike company, even solar Machines,

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Speaker 2: you know, Gred Crofts, fantastic innovative companies run in to

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Speaker 2: trouble with its business model. So a lot of people

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Speaker 2: in these businesses are thinking, if I make a mistake here,

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Speaker 2: the business is over, what do you do? I guess

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Speaker 2: it's hard to give advice. Every situation is different. But

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Speaker 2: what have you learned the confidence that you've built up

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Speaker 2: to tackle these problems over successive crises in startups? What's

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Speaker 2: your advice?

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Speaker 3: Yeah? So, I mean, as you say, call the book

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Speaker 3: how to be So maybe let me just run through

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Speaker 3: the three ways to be wrong, because there's actually only three,

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Speaker 3: which surprises some people. The first way is to not

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Speaker 3: even ask the question, So don't even measure your results,

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Speaker 3: don't even ask if it's working or not. And I

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Speaker 3: think that's the first piece of advice. I would go, like,

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Speaker 3: be inside the business at least be very inquisitive about

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Speaker 3: whether it's working and how you will know. You can

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Speaker 3: do a lot of work to really understand how much

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Speaker 3: of the story you're telling externally actually is true internally,

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Speaker 3: So it's the first way. Second way is just to

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Speaker 3: make an error. Like we're all human, we have our

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Speaker 3: own biases, especially when you're a young company, Like the

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Speaker 3: feedback you get from your first few customers can sometimes

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Speaker 3: be quite misleading as you expand to a broader range

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Speaker 3: of customers. So those sorts of things. You just have

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Speaker 3: to be consciously and continuously aware that you might be wrong.

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Speaker 3: And I think it's always better to kind of have

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Speaker 3: that mindset, assume you're wrong and look for the ways

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Speaker 3: you're wrong so that you can correct them quickly, rather

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Speaker 3: than kind of assume your right, which is I think

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Speaker 3: the sort of behavior more of an encouraging founders. And

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Speaker 3: then the last way is just to lie, which you

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Speaker 3: know kind of sounds facetious but actually is surprisingly common.

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Speaker 3: And I told a few of those stories in this

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Speaker 3: book too, like you, where people know that something's not working,

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Speaker 3: but it kind of doesn't serve them to be honest

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Speaker 3: about that, especially externally, and so they just sort of

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Speaker 3: plow on. And I think, you know, so all three

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Speaker 3: of those things, whether it's you know, omitting to actually measure,

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Speaker 3: or making a mistake or just being dishonest, like, there

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Speaker 3: are easy things you can do to avoid all three

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Speaker 3: of those mistakes. And if you really consciously avoid those

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Speaker 3: three things, you give yourself a chance to be right.

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Speaker 3: There's no guarantee. These are startups we're talking about, but

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Speaker 3: I think those behaviors are you know, the things that

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Speaker 3: I would pin my advice on.

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Speaker 2: You talk about the value of curiosity and continuous learning.

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Speaker 2: That's a continuous theme actually through the book. You're on

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Speaker 2: a journey, but you're learning from every interaction you have

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Speaker 2: with the founded team. When you investigate a company with

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Speaker 2: a view to investing, you talk down I think it

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Speaker 2: was you know, Steve Jobs quote about having this beginner's

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Speaker 2: mind as technology evolves, and I think that's really pertinent

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Speaker 2: at the moment where we have, you know, the biggest

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Speaker 2: technology that's attracting investment and hype at the moment is

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Speaker 2: generative AI. Trying to as a company reinvent yourself to

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Speaker 2: incorporate this technology, because we're being told if you don't,

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Speaker 2: you won't be competitive anymore. What's been your approach in

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Speaker 2: a fast moving technology landscape. Sure, you're an expert in

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Speaker 2: software as a service those types of business models, but

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Speaker 2: everything from accounting software to and voiceing so nice sex

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Speaker 2: very different type of business. How have you kept fresh,

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Speaker 2: kept curious, and kept learning.

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Speaker 3: I mean, that's definitely a moment right now, isn't it.

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Speaker 3: And I guess old enough to have seen a few

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Speaker 3: of these waves with the you know, trade me road,

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Speaker 3: the breaking wave of the internet really as that became

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Speaker 3: broadly adopted, and then in between then and now we've

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Speaker 3: had the mobile wave, you know, with the iPhone and

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Speaker 3: two thousand and seven and Normwalds and so you know,

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Speaker 3: it often surprises people, for example when I tell them

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Speaker 3: that zero iPod before the iPhone was released, which is

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Speaker 3: kind of crazy to think, but so, you know, I

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Speaker 3: think all you need to do, really and I think

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Speaker 3: this is the behavior that we need to kind of

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Speaker 3: really try and encourage the kids especially is to understand

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Speaker 3: how things work, like be curious about how things work,

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Speaker 3: like try and deconstruct that because everything, everything was made

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Speaker 3: by somebody. So generative AI is a great example, like

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Speaker 3: you show, you know, the average person what that technology

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Speaker 3: can do and it feels magical, like they type in,

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Speaker 3: you know, a simple command and the machine responds in

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Speaker 3: a very human kind of way and it feels magical.

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Speaker 3: But you can deconstruct that, you can understand how that works.

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Speaker 3: I'm about four and a half hours into a five

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Speaker 3: and a half hour podcast you recommended better on this,

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Speaker 3: which is like you know, dense with information about that.

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Speaker 3: You know how they underlying technologies have evolved and been

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Speaker 3: built up and all those things. So yeah, if you

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Speaker 3: are curious to understand and those are things you can

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Speaker 3: inquire about and learn and discover for yourselves. And then

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Speaker 3: the next step is to realize that you can you

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Speaker 3: can build those things. You don't just have to consume

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Speaker 3: those things. And so you know, for me, that was

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Speaker 3: the real switch that flipped when I was at university

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Speaker 3: and the Internet wave was breaking. So when I was

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Speaker 3: in second year was when the first web browser was released, Mosaic,

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Speaker 3: and you know it would it would have been easy

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Speaker 3: to see that as a consumption media and a lot

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Speaker 3: of people consume the Internet, but you can also build them.

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Speaker 3: And so yeah, having that mindset of being a writer

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Speaker 3: as well as a reader, I think is part of

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Speaker 3: that curiosity.

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Speaker 2: One of the things you've written in many LinkedIn posts

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Speaker 2: and probably got a bit of flat for as well,

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Speaker 2: because we do love in this country in the startup community,

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Speaker 2: our meetups and startup founders, talking to startup founders, and

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Speaker 2: one of your bits of advice which has stuck with

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Speaker 2: me is don't spend time talking to other startup founders.

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Speaker 2: Go out there and talk to your customers. If you're

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Speaker 2: doing software for a cement company, go and talk to

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Speaker 2: cement makers and go to their conferences. And that's about

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Speaker 2: that learning and that curiosity about what is actually going

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Speaker 2: to improve your product and not make you feel better

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Speaker 2: as a founder because you're hanging out with a bunch

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Speaker 2: of people drinking beer.

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Speaker 3: Yeah. I mean to be clear, I don't say don't

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Speaker 3: hang out with startup founders. That's fine, Yeah, And I

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Speaker 3: think it's probably important too, like to have peers who

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Speaker 3: can relate to the things that you're working on experiencing.

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Speaker 3: But my advices, don't spend all your time in that

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Speaker 3: community because your customers aren't there. And this was a

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Speaker 3: real lesson from Timing. Actually, like when we first started Timely,

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Speaker 3: we thought ourselves we thought of ourselves as a technology

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Speaker 3: company that was providing technology software effectively to the health

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Speaker 3: and beauty sector. And eventually, over time we realized that

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Speaker 3: we were wrong about that and we wear ourselves a

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Speaker 3: health and beauty business and our product was technology services.

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Speaker 3: And as soon as we made that switch mentally, it

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Speaker 3: totally changed the way that we thought about selling and

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Speaker 3: marketing the product. Like, as you say, we started hanging

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Speaker 3: out at health and beauty conferences, not at startup conferences.

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Speaker 3: It was very hard to get Ryan and scoff to

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Speaker 3: come to startup events. It wasn't their scene, and you know,

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Speaker 3: it's part of part of the success I think of

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Speaker 3: that business was really getting to know the customers deeply

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Speaker 3: and well. And yeah, like going back to those hard

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Speaker 3: moments you were talking about earlier, I think that that

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Speaker 3: allowed us to respond better because we had that connection.

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Speaker 3: We even had we even had people on the board

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Speaker 3: who were health and beauty people, not technology people, not investors,

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Speaker 3: and so they were able to you know, they were

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Speaker 3: able to see the right way to respond in those moments.

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Speaker 2: Yeah, you've obviously learned a lot about investing as well

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Speaker 2: as a beautiful anecdote you're telling you Sam Morgan very

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Speaker 2: hard nosed, an investor, very experienced. Now so nice sex.

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Speaker 2: You know, you were saying, oh, that was a good return.

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Speaker 2: He was going, Nah, I think we could have done

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Speaker 2: much better out of that. What have you learned and

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Speaker 2: how how have you did your approach to investing based

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Speaker 2: on the success but also maybe some of the things

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Speaker 2: that didn't work out the way you wanted to.

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Speaker 3: Yeah, I was really fortunate in that Zero was a

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Speaker 3: nice hybrid for me. Like I was an employee at

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Speaker 3: Zero but also an investor pre IPO. So in many ways,

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Speaker 3: my first kind of investment post trade me was a

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Speaker 3: very easy one, and the next couple that followed after

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Speaker 3: that definitely punched me in the face. And I tell

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Speaker 3: those stories, but I think the key lesson I took

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Speaker 3: away from that was for me, at least, what made

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Speaker 3: me happy was being closer to the founders, being part

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Speaker 3: of the business, and really understanding what was working in

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Speaker 3: those businesses, what wasn't working in you know, that sort

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Speaker 3: of quick iteration in the very early stages especially was invigorating.

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Speaker 3: But also where I could add the most, like just

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Speaker 3: being an investor sitting on the sidelines and kind of

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Speaker 3: cheering them on, didn't wasn't you know, wasn't giving me

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Speaker 3: any happy points. And Sin of Sex is a great example,

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Speaker 3: like I doubled my money on that, but I learned

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Speaker 3: almost nothing from it. And so yeah, the ones that

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Speaker 3: came after that were really heavily informed by that experience,

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Speaker 3: and thankfully a lot of those have gone very well.

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Speaker 2: Yeah, and we're seeing more cases of sort of hands

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Speaker 2: on investors who have all this experience, people who've gone

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Speaker 2: through two or three startups now who are willing to

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Speaker 2: this is.

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Speaker 3: How ecosystems grow. And I've been saying this for a while.

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Speaker 3: We talk about building an ecosystem, but actually ecosystems grow,

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Speaker 3: and it's awesome now. Like I would say, if you

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Speaker 3: define the ecosystem as just the collective noun of startups,

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Speaker 3: we're in as strong a position now probably as we've

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Speaker 3: ever been. And there's a really easily understood reason for that,

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Speaker 3: and that is a lot of people who have spun

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Speaker 3: out of drave Mee and zero and Vened and Timing

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Speaker 3: and lots of other companies that have had successes and

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Speaker 3: are doing their next thing, either either directly you starting

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Speaker 3: the new company themselves, or they're investing or advising. Ryan

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Speaker 3: at Timley is doing exactly what I did ten years

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Speaker 3: ago and has handpicked two or three companies to work

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Speaker 3: closely with and is trying to make them as good

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Speaker 3: as poss like that's exactly what grows an ecosystem.

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Speaker 2: We're going to close really discussing the state of the

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Speaker 2: ecosystem and the state of sort of tech in New

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Speaker 2: Zealand as well, but keind of drill into building teams

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Speaker 2: in company culture. You write in the book, first, we

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Speaker 2: need to accept that being excellent at just one thing

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Speaker 2: is often insufficient. Then we need to think harder about

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Speaker 2: the skills we have that can be combined. This is

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Speaker 2: true for individuals, but especially true for the team. So

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Speaker 2: I mean, these days, I think you play an incredibly

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Speaker 2: valuable role in looking at a team. You've learned from

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Speaker 2: the early days of trade me through to zero, what

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Speaker 2: actually makes for a good team, especially in those early

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Speaker 2: days when you may only have five or six people.

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Speaker 2: What have you learned about that? And have we got

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Speaker 2: better at doing this? Building startup teams in New Zealand.

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Speaker 3: I think the metaphor I like to use as a

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Speaker 3: rugby team because New Zealanders kind of understand this. Like

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Speaker 3: when you think about selecting a rugby team, you've got

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Speaker 3: a lot of different positions to fill. You know, you

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Speaker 3: need to props, you need some locks, you need a

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Speaker 3: half back, you need to fall back. And same time

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Speaker 3: with startup teams, like going back to the myth of

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Speaker 3: the lone genius, it's kind of alluring to think if

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Speaker 3: you just have you know, a team of those crazy,

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Speaker 3: you know, inspirational leaders, then then magic could happen. But

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Speaker 3: actually you need you need some props, and you need

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Speaker 3: a half back to complement the fleshy winger, you know,

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Speaker 3: And so yeah, that's I think the mindset that people

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Speaker 3: should have is, like, is what are all the skills

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Speaker 3: we need? And those those extend well beyond just product

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Speaker 3: as well, like thinking about the business model, thinking about

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Speaker 3: sales and distribution, like those are not strengths in New Zealand,

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Speaker 3: but they are skills that are vital to any successful company.

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Speaker 3: So yeah, like, I mean, you know, one of the

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Speaker 3: one of the mantras that we had at trade Me

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Speaker 3: actually was a's higher a's, b's higher cs. And so

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Speaker 3: the whole mindset was trying to hire people who were

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Speaker 3: better than us, and thankfully I managed to do that

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Speaker 3: in a couple of instances so that by the time

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Speaker 3: I left Trade Me, they more or less didn't miss me.

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Speaker 3: But it's easy to do the opposite. It's easy to

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Speaker 3: kind of to not think carefully about the people that

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Speaker 3: you're bringing into the team, especially in those early days,

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Speaker 3: who really set the culture and set the trajectory for

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Speaker 3: the business. So hiring intentionally is a huge part of.

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Speaker 2: That, I guess as a founder and as a CEO,

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Speaker 2: knowing when to step aside or as the CEO and

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Speaker 2: you've had that with Vorn and people like that throughout

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Speaker 2: the history of some of these companies have gone I'm

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Speaker 2: a software guy, I'm a CTO type person. So I

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Speaker 2: guess that's really pivotal and this is where investors can help. Look,

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Speaker 2: you're still integral to the business, but not necessarily in

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Speaker 2: an operational role.

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Speaker 3: Yeah, I mean, i'd include myself in that as much

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Speaker 3: as anything. I'm also a generalist. I think that I

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Speaker 3: am best suited to those early stages of the business,

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Speaker 3: but everyone will have their own life cycle in these companies.

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Speaker 3: Some people can see it all the way through. Others

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Speaker 3: will be more suited to certain ages and stages of

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Speaker 3: the business. And that's fine. It's not something I think

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Speaker 3: you need to get too stressed about. It's just understanding

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Speaker 3: what you can contribute to the business at the staf

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Speaker 3: age it's at right now.

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Speaker 2: Yeah, you've been at times a bit skeptical of things

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Speaker 2: like accelerator programs, you know, startup incubators. We've got one

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Speaker 2: Creative HQ here in Wellington that's done reasonably well. There's

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Speaker 2: some others around the country in terms of bringing young

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Speaker 2: budding entrepreneurs together and trying to sort of flesh out

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Speaker 2: those teams and find their way and where they add

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Speaker 2: value to a startup. What is the best approach? What

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Speaker 2: is the best way to go about that? We've got

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Speaker 2: You know a lot of people coming out of universities

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Speaker 2: and they will typically look to go into some of

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Speaker 2: these incubators. Is there a better way?

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Speaker 3: One hundred percent there's a better way? I mean, I'm interested.

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Speaker 3: You say that's worked quite well. I don't. I don't

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Speaker 3: know how well.

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Speaker 2: I guess got a start in those places, but exactly

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Speaker 2: how do you measure would they have done it any

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Speaker 2: better or worse if they hadn't gone through the HQ.

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Speaker 3: The Cheesease founders came out of zero and Kivybanks, So

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Speaker 3: I'd probably ascribe more of the success to that. To

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Speaker 3: be honest, I mean you need to ask them, But

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Speaker 3: I mean, there's one hundred percent a better way, which

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Speaker 3: is like the best way to get an apprenticeship on

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Speaker 3: a startup and learn is to learn by doing. Like,

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Speaker 3: all of these companies are desperately short of people, and

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Speaker 3: they will hire smart people quite readily into roles where

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Speaker 3: you will learn a huge amount and a very compressed

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Speaker 3: period of time and be paid for it, And for me,

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Speaker 3: that's a much smarter route for somebody who's interested in

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Speaker 3: startups rather than an incubator program or an innovation hard

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Speaker 3: or or whatever else where where most of the advice

436
00:21:30,000 --> 00:21:31,640
Speaker 3: is going to come from people who have never done

437
00:21:31,640 --> 00:21:36,200
Speaker 3: it themselves, like learn by doing, by getting into a startup,

438
00:21:37,000 --> 00:21:38,200
Speaker 3: and even if you want to spend a couple of

439
00:21:38,520 --> 00:21:41,159
Speaker 3: years there, you'll come out the end of that with

440
00:21:41,560 --> 00:21:45,320
Speaker 3: so much experience and so many lessons that you can

441
00:21:45,359 --> 00:21:47,120
Speaker 3: apply to whatever you want to do next that will

442
00:21:47,160 --> 00:21:50,640
Speaker 3: be so much more valuable than any of those programs.

443
00:21:50,800 --> 00:21:54,440
Speaker 3: So that's like, individually, I think, much smarter advice for somebody,

444
00:21:55,119 --> 00:21:57,040
Speaker 3: and then collectively, I think it goes back to what

445
00:21:57,040 --> 00:21:58,720
Speaker 3: we were just talking about before about the difference between

446
00:21:58,760 --> 00:22:03,560
Speaker 3: building and growing system. We've invested enormous amounts of money,

447
00:22:04,040 --> 00:22:07,640
Speaker 3: billions of dollars over ten fifteen years and trying to

448
00:22:07,760 --> 00:22:11,800
Speaker 3: build an ecosystem from the top down, and the measurable

449
00:22:11,840 --> 00:22:14,840
Speaker 3: results of that are pretty hard to find, you know,

450
00:22:14,880 --> 00:22:16,920
Speaker 3: certainly if you look at the highest kind of level

451
00:22:16,920 --> 00:22:22,600
Speaker 3: economic indicators productivity per capita GDP, all those headline things

452
00:22:22,600 --> 00:22:25,680
Speaker 3: that we're supposed to improve as a result of us

453
00:22:25,760 --> 00:22:29,520
Speaker 3: investing that much in these things haven't improved at all.

454
00:22:29,520 --> 00:22:33,040
Speaker 3: In most cases have deteriorated, So, you know, I think

455
00:22:33,520 --> 00:22:36,480
Speaker 3: collectively again, the smart way is to try and build

456
00:22:36,480 --> 00:22:38,080
Speaker 3: these companies up one at a time. So if you're

457
00:22:38,080 --> 00:22:41,680
Speaker 3: somebody who really wants to contribute to an ecosystem, choose

458
00:22:41,680 --> 00:22:44,080
Speaker 3: one company and go and work on it, or invest

459
00:22:44,080 --> 00:22:45,879
Speaker 3: in it, or get close to it and make it

460
00:22:45,920 --> 00:22:48,280
Speaker 3: as great as you can. And if enough of us

461
00:22:48,440 --> 00:22:51,399
Speaker 3: did that, the ecosystem would be much bigger and stronger.

462
00:22:51,520 --> 00:22:54,120
Speaker 2: Yeah, and actually what you say about the Sharesas team

463
00:22:55,080 --> 00:22:58,080
Speaker 2: is really pertinent, and it goes for like the guys

464
00:22:58,080 --> 00:23:00,840
Speaker 2: behind first AML, they came out of the financial sect,

465
00:23:00,840 --> 00:23:03,080
Speaker 2: and you see this a lot in fintech people who

466
00:23:03,080 --> 00:23:06,280
Speaker 2: work in banks, insurance companies. There's a frustration. They come

467
00:23:06,359 --> 00:23:08,400
Speaker 2: up against it in their work and they go, I'm

468
00:23:08,400 --> 00:23:10,200
Speaker 2: going to go and find a better way of doing this.

469
00:23:10,240 --> 00:23:12,520
Speaker 3: One hundred percent. Discontent is the one one of the

470
00:23:12,600 --> 00:23:14,600
Speaker 3: rare things that all founders have in common. So, yeah,

471
00:23:14,840 --> 00:23:16,000
Speaker 3: that's your apprenticeship, you know.

472
00:23:16,119 --> 00:23:19,000
Speaker 2: So rather than come out of university, look for an

473
00:23:19,080 --> 00:23:21,600
Speaker 2: incubator type opportunity where you might get thrown a little

474
00:23:21,640 --> 00:23:25,720
Speaker 2: bit of money usually in exchange for some equity, go

475
00:23:25,760 --> 00:23:27,960
Speaker 2: into the industry that you're passionate about or want to

476
00:23:28,000 --> 00:23:28,560
Speaker 2: learn about.

477
00:23:28,920 --> 00:23:30,680
Speaker 3: That's your apprenticeship. And if you don't know yet, like

478
00:23:30,680 --> 00:23:32,960
Speaker 3: there's some great programs for students too, Summer of Tech

479
00:23:33,000 --> 00:23:35,480
Speaker 3: here in Wellington and it's just a fantastic program, been

480
00:23:35,560 --> 00:23:38,600
Speaker 3: running for many years and some great examples of people

481
00:23:38,640 --> 00:23:41,040
Speaker 3: like you know Amanda and Nicco too, people we hired

482
00:23:41,040 --> 00:23:43,440
Speaker 3: at south Gate Labs back in the day who've gone

483
00:23:43,440 --> 00:23:47,119
Speaker 3: on to work on multiple of these successful companies. Amanda

484
00:23:47,160 --> 00:23:49,520
Speaker 3: was part of the design team timely is now at

485
00:23:49,560 --> 00:23:52,520
Speaker 3: a new company called Connectworks. So you know, you see

486
00:23:52,560 --> 00:23:56,520
Speaker 3: those sort of dots connected through the ecosystem when people

487
00:23:56,560 --> 00:23:59,520
Speaker 3: take those opportunities and yeah, it's it's the only way

488
00:23:59,560 --> 00:24:00,960
Speaker 3: to lard.

489
00:24:06,800 --> 00:24:10,400
Speaker 2: This leads us really to discussing the ecosystem where we

490
00:24:10,480 --> 00:24:15,359
Speaker 2: are at the moment in New Zealand. You know, there's

491
00:24:15,359 --> 00:24:17,919
Speaker 2: been a lot of discussion in the wake of the

492
00:24:17,960 --> 00:24:21,560
Speaker 2: Science Sector Advisory Group report from Sir Peter Gluckman and

493
00:24:21,960 --> 00:24:24,959
Speaker 2: his team of advisors has been put out quite disruptive

494
00:24:25,040 --> 00:24:29,720
Speaker 2: for R and D and innovation sector, particularly the winding

495
00:24:29,760 --> 00:24:32,199
Speaker 2: down of Callahan Innovation. You devote quite a lot of

496
00:24:32,920 --> 00:24:35,280
Speaker 2: space in the book to talking about Sir Paul Callahan.

497
00:24:35,320 --> 00:24:37,439
Speaker 2: You obviously have a lot of respect for him and

498
00:24:37,480 --> 00:24:40,360
Speaker 2: some of the ideas. You disagree with some of them

499
00:24:40,480 --> 00:24:44,080
Speaker 2: as well. But pretty sad to think twelve years on

500
00:24:44,920 --> 00:24:48,320
Speaker 2: that we are winding down something that had his esteemed

501
00:24:48,600 --> 00:24:52,720
Speaker 2: name on it. What is your sort of summary off

502
00:24:53,080 --> 00:24:56,480
Speaker 2: the legacy of Sir Paul and how do we need

503
00:24:56,520 --> 00:24:57,560
Speaker 2: to adapt that now?

504
00:24:58,080 --> 00:25:00,119
Speaker 3: Yeah, it's kind of devastating how it's ended up, to

505
00:25:00,119 --> 00:25:01,439
Speaker 3: be honest. So I was lucky enough to be in

506
00:25:01,480 --> 00:25:03,719
Speaker 3: the room when he gave that lecture in twenty eleven,

507
00:25:04,000 --> 00:25:06,160
Speaker 3: which included so many of the lines that we still

508
00:25:06,200 --> 00:25:08,920
Speaker 3: repeat all the time, like, you know, New Zealand needs

509
00:25:08,920 --> 00:25:10,840
Speaker 3: to be the place where Tellent wants to live, and

510
00:25:11,080 --> 00:25:12,560
Speaker 3: the things that we're going to be great at will

511
00:25:12,600 --> 00:25:16,639
Speaker 3: be niche in confusing and surprising and so on and

512
00:25:16,720 --> 00:25:20,040
Speaker 3: so forth. Had he had all the answers in twenty eleven,

513
00:25:20,720 --> 00:25:23,480
Speaker 3: and sadly we stood something up in his name that

514
00:25:23,560 --> 00:25:25,600
Speaker 3: kind of did the opposite, you know, it tried to

515
00:25:25,600 --> 00:25:28,720
Speaker 3: pick winners when he explicitly said that we're going to

516
00:25:28,720 --> 00:25:31,679
Speaker 3: be surprised by these things. So it is kind of

517
00:25:31,680 --> 00:25:33,840
Speaker 3: devastating to think that we've spent so much and have

518
00:25:33,960 --> 00:25:38,760
Speaker 3: so little to show for it in that sense, and

519
00:25:38,800 --> 00:25:40,320
Speaker 3: I do have a lot of respect for him. I

520
00:25:40,320 --> 00:25:42,160
Speaker 3: think I think a lot of his ideas were right.

521
00:25:42,280 --> 00:25:44,760
Speaker 3: I think I mean one that we've already talked about

522
00:25:44,800 --> 00:25:47,760
Speaker 3: where he maybe didn't quite see the future, where he

523
00:25:47,760 --> 00:25:50,199
Speaker 3: said it would only take one hundred inspired founders to

524
00:25:50,240 --> 00:25:53,240
Speaker 3: turn this country around. Yeah, and like the reality of

525
00:25:53,280 --> 00:25:56,439
Speaker 3: that is not right. Like it's true, we probably do

526
00:25:56,480 --> 00:25:59,320
Speaker 3: need a hundred Peter Becks, but every Peter Beck needs

527
00:25:59,440 --> 00:26:02,359
Speaker 3: one hundred or a thousand people whose names you don't

528
00:26:02,400 --> 00:26:04,800
Speaker 3: know to build those companies out. So we actually need

529
00:26:04,840 --> 00:26:09,080
Speaker 3: tens of thousands of people, and that's the real constraint now.

530
00:26:09,160 --> 00:26:11,960
Speaker 3: So yeah, I mean, it's it's a necessary reset. In

531
00:26:12,000 --> 00:26:15,160
Speaker 3: my opinion, what's happened at Callahan Innovation. I think they

532
00:26:15,200 --> 00:26:17,880
Speaker 3: got bogged down, especially in recent years, doing too many

533
00:26:17,920 --> 00:26:24,760
Speaker 3: things and again with very little measurable impact. So it's

534
00:26:24,800 --> 00:26:27,399
Speaker 3: awful for all those folks who are directly impacted by that.

535
00:26:28,080 --> 00:26:30,960
Speaker 3: But I actually hope that some of them at least

536
00:26:31,040 --> 00:26:34,080
Speaker 3: will take the opportunity now to go and work directly

537
00:26:34,119 --> 00:26:38,199
Speaker 3: on startups. Rather than working on a bureaucracy that's sort

538
00:26:38,240 --> 00:26:41,280
Speaker 3: of an umbrella over the top of these companies. Every

539
00:26:41,280 --> 00:26:43,440
Speaker 3: single one of those companies that they've been supporting through

540
00:26:43,480 --> 00:26:48,760
Speaker 3: Callahan will needs to hire more people. Yeah, and that's

541
00:26:48,800 --> 00:26:50,320
Speaker 3: the constraint that I keep coming back to.

542
00:26:51,000 --> 00:26:54,560
Speaker 2: And there will be a new what was a Crown

543
00:26:54,600 --> 00:26:57,880
Speaker 2: Research Institute, they call it Public Research Organization. It will

544
00:26:57,920 --> 00:27:04,280
Speaker 2: focus on artificial intelligence, quantum technologies, and synthetic biology. What's

545
00:27:04,320 --> 00:27:08,240
Speaker 2: your take on that. Having written about this recently, a

546
00:27:08,240 --> 00:27:10,840
Speaker 2: lot of people from the business community and the startup

547
00:27:10,840 --> 00:27:13,600
Speaker 2: world is saying this is doomed to fail. If you

548
00:27:13,680 --> 00:27:17,120
Speaker 2: really want to move quickly and grow the economy, as

549
00:27:17,200 --> 00:27:21,040
Speaker 2: Christopher Laxon is saying he wants to do, actually invest

550
00:27:21,119 --> 00:27:24,440
Speaker 2: in startups that find the best AI experts in the country,

551
00:27:24,520 --> 00:27:27,439
Speaker 2: don't put them under a roof of a bureaucracy. Actually

552
00:27:27,600 --> 00:27:29,239
Speaker 2: tell them what you want to do and see if

553
00:27:29,240 --> 00:27:30,360
Speaker 2: they can solve the problems.

554
00:27:30,520 --> 00:27:34,040
Speaker 3: Yeah, and again I don't necessarily think government will solve

555
00:27:34,080 --> 00:27:38,440
Speaker 3: this problem from the top down. I guess I don't

556
00:27:38,440 --> 00:27:41,200
Speaker 3: have a very informed view on the pure science aspects

557
00:27:41,240 --> 00:27:43,840
Speaker 3: of that. It probably is one of the parts of

558
00:27:43,880 --> 00:27:47,640
Speaker 3: Callahan that actually has been successful, ironically, and hopefully there

559
00:27:47,680 --> 00:27:51,480
Speaker 3: is a way that that values retained in the system.

560
00:27:52,240 --> 00:27:55,400
Speaker 3: But what you're talking about with that area is much

561
00:27:55,440 --> 00:28:01,520
Speaker 3: more invention than execution or innovation. Innovation. For me, the

562
00:28:01,520 --> 00:28:04,399
Speaker 3: definition I like to use at least is fresh thinking

563
00:28:04,440 --> 00:28:07,280
Speaker 3: applied to create value. And I think often we get

564
00:28:07,320 --> 00:28:09,600
Speaker 3: bogged down in the first part of that, which is

565
00:28:09,640 --> 00:28:11,720
Speaker 3: the inventing part of it, and New Zealand has a

566
00:28:11,720 --> 00:28:14,160
Speaker 3: pretty good track record of being the first to think

567
00:28:14,160 --> 00:28:18,160
Speaker 3: of things, But it's the applied to create value part

568
00:28:18,240 --> 00:28:21,080
Speaker 3: that we just continue to struggle with, and I think

569
00:28:21,119 --> 00:28:25,320
Speaker 3: that's where we need to probably focus our energies and efforts.

570
00:28:25,480 --> 00:28:31,480
Speaker 3: And that's sort of bad news because to be inventive,

571
00:28:31,880 --> 00:28:36,639
Speaker 3: you just need to have one novel idea. To be

572
00:28:36,760 --> 00:28:41,040
Speaker 3: graad at, execution in these businesses requires thousands of little

573
00:28:41,040 --> 00:28:44,640
Speaker 3: things to go right repeatedly over time and for years,

574
00:28:45,480 --> 00:28:49,320
Speaker 3: and that's much harder work, and it requires a big team,

575
00:28:49,520 --> 00:28:51,520
Speaker 3: and again our constrainers that there's just not that many

576
00:28:51,520 --> 00:28:55,000
Speaker 3: of us. So yeah, like I think, you know, the

577
00:28:55,080 --> 00:28:57,840
Speaker 3: sorts of things that are going to ultimately lead to

578
00:28:57,880 --> 00:29:00,280
Speaker 3: the success that the Prime Minister and others talk about

579
00:29:01,640 --> 00:29:05,960
Speaker 3: is in my mind quite disconnected from that pure science end,

580
00:29:07,680 --> 00:29:09,240
Speaker 3: which is not to say we don't need it, but

581
00:29:09,680 --> 00:29:14,920
Speaker 3: it's maybe a useful precurs rather than the silver bullet.

582
00:29:15,080 --> 00:29:17,880
Speaker 2: Yeah. I mean, if you look at something like synthetic biology,

583
00:29:18,160 --> 00:29:21,600
Speaker 2: we've really wound down that capability in New Zealand. So

584
00:29:21,640 --> 00:29:24,080
Speaker 2: it's going to take a decade for the pure science

585
00:29:24,080 --> 00:29:25,720
Speaker 2: to build up something that we're going to be able

586
00:29:25,760 --> 00:29:26,640
Speaker 2: to add value in.

587
00:29:27,440 --> 00:29:31,239
Speaker 3: But remember the biggest successes in tech companies did not

588
00:29:31,320 --> 00:29:35,760
Speaker 3: invent the technologies that they are famous for. Apple, the

589
00:29:35,800 --> 00:29:38,560
Speaker 3: biggest technology company, did not mean any of the things

590
00:29:38,560 --> 00:29:41,000
Speaker 3: that they are most famous for, but they did work

591
00:29:41,040 --> 00:29:44,720
Speaker 3: out what all of those things were for, and man,

592
00:29:44,760 --> 00:29:46,560
Speaker 3: they worked out how to make us want them and

593
00:29:46,600 --> 00:29:48,960
Speaker 3: to pay top dollar for them. And so the really

594
00:29:49,080 --> 00:29:51,959
Speaker 3: valuable part is not being the first to have the idea.

595
00:29:52,360 --> 00:29:55,320
Speaker 3: The really valuable part is being the one who works

596
00:29:55,360 --> 00:29:57,240
Speaker 3: out how to sell that to somebody in a way

597
00:29:57,240 --> 00:30:00,920
Speaker 3: that they will pay for. And that's a repeated padn

598
00:30:00,920 --> 00:30:03,479
Speaker 3: across all of these companies that I've worked in, and

599
00:30:03,520 --> 00:30:06,280
Speaker 3: in fact across every big tech company. Google wasn't the

600
00:30:06,280 --> 00:30:09,120
Speaker 3: first big search engine. Netflix wasn't the first streaming service.

601
00:30:09,560 --> 00:30:11,400
Speaker 3: Zoom wasn't the first video.

602
00:30:11,440 --> 00:30:13,480
Speaker 2: And I think that goes for AI in particular. We're

603
00:30:13,520 --> 00:30:16,000
Speaker 2: never going to be able to compete on large language models,

604
00:30:16,040 --> 00:30:18,800
Speaker 2: even with deep seeks, you know, cutting the costs. It's

605
00:30:18,840 --> 00:30:23,160
Speaker 2: the application of AI, whether it's law view making legal

606
00:30:23,200 --> 00:30:27,640
Speaker 2: papers easier to assemble, So it's the application.

607
00:30:27,160 --> 00:30:29,520
Speaker 3: One hundred percent. I think. I think my personal view

608
00:30:29,560 --> 00:30:32,400
Speaker 3: on AI is that it will always be imminent, like,

609
00:30:32,440 --> 00:30:36,080
Speaker 3: because the things that actually work will We'll just think

610
00:30:36,080 --> 00:30:38,440
Speaker 3: that they're features of the products that we use. Auto

611
00:30:38,440 --> 00:30:40,560
Speaker 3: correct is the best example I have of that. Suddenly,

612
00:30:40,600 --> 00:30:43,240
Speaker 3: after years have been quite crap, Auto crep got quite

613
00:30:43,240 --> 00:30:46,280
Speaker 3: good recently, have you noticed, And that's because it's now

614
00:30:46,360 --> 00:30:50,320
Speaker 3: using AI under the covers, right, And so yeah, we'll

615
00:30:50,720 --> 00:30:53,200
Speaker 3: just consider those things to be features of the products

616
00:30:53,200 --> 00:30:56,480
Speaker 3: and services we use. I'll give you another example of innovation,

617
00:30:56,520 --> 00:31:00,000
Speaker 3: which is completely fieled. New Zealander basically invented pop up.

618
00:31:00,480 --> 00:31:02,080
Speaker 3: We were the first country in the world to do

619
00:31:02,560 --> 00:31:04,960
Speaker 3: that format of talent reality.

620
00:31:05,440 --> 00:31:06,600
Speaker 2: Nigel Stanford's business.

621
00:31:06,680 --> 00:31:08,560
Speaker 3: No it wasn't Nigel, it was another guy, but you

622
00:31:08,640 --> 00:31:15,120
Speaker 3: might remember Troopliss, the Girls band, And then we can

623
00:31:15,960 --> 00:31:18,640
Speaker 3: the inventor of that completely failed to capitalize on that.

624
00:31:18,720 --> 00:31:21,440
Speaker 3: Other people around the world were the ones who captured

625
00:31:21,440 --> 00:31:23,560
Speaker 3: the value of that. So yeah, I think we over

626
00:31:23,640 --> 00:31:27,480
Speaker 3: index on invention and massively under it index on execution.

627
00:31:27,760 --> 00:31:32,080
Speaker 2: Yeah, in terms of that talent, In terms of that

628
00:31:32,200 --> 00:31:36,880
Speaker 2: talent constraint, I mean, we've got sort of token things

629
00:31:36,880 --> 00:31:38,920
Speaker 2: the government's just thrown out in the last couple of

630
00:31:38,960 --> 00:31:43,400
Speaker 2: weeks visa changes to try and get both investors but

631
00:31:43,480 --> 00:31:46,880
Speaker 2: also digital nomad's people working here and that sort of thing.

632
00:31:46,880 --> 00:31:49,280
Speaker 2: That's only going to go so far.

633
00:31:49,560 --> 00:31:52,280
Speaker 3: So far, all those things are fine, but yeah, none

634
00:31:52,320 --> 00:31:56,040
Speaker 3: of them are a silver bullet. They are long term

635
00:31:56,080 --> 00:31:58,440
Speaker 3: investments unfortunately, Like the best time to pine a tree

636
00:31:58,480 --> 00:32:01,040
Speaker 3: is twenty years ago. And if you look at the

637
00:32:01,120 --> 00:32:03,440
Speaker 3: number of STEM grads we have, for example, coming out

638
00:32:03,480 --> 00:32:06,920
Speaker 3: of New Zealand universities, it's pretty woful. So we're not

639
00:32:07,320 --> 00:32:09,920
Speaker 3: we're not in a strong position really to capitalize on

640
00:32:09,960 --> 00:32:14,120
Speaker 3: these things. Sadly. We need to probably really change our

641
00:32:15,160 --> 00:32:17,760
Speaker 3: mindset of how we invest in that pipeline.

642
00:32:18,000 --> 00:32:22,520
Speaker 2: Yeah, the domestic talent pipeline. Labor had the Digital Industry

643
00:32:22,560 --> 00:32:26,920
Speaker 2: Transformation Plan that's been spiked by the government. There just

644
00:32:26,920 --> 00:32:29,280
Speaker 2: seems to be a big gap around how we get

645
00:32:30,040 --> 00:32:34,600
Speaker 2: the pipeline really going get businesses offering apprenticeships and things

646
00:32:34,680 --> 00:32:38,240
Speaker 2: like that. I think until we solve that problem, we're

647
00:32:38,240 --> 00:32:41,480
Speaker 2: going to be reliant on an overseas tech workforce trying

648
00:32:41,520 --> 00:32:43,240
Speaker 2: to lure them here for lifestyle reasons.

649
00:32:43,400 --> 00:32:45,520
Speaker 3: Yeah. I mean. Another thing that's a little depressing about

650
00:32:45,600 --> 00:32:48,720
Speaker 3: the active investor visa announcements in the last week or

651
00:32:48,760 --> 00:32:51,040
Speaker 3: so as we record this is it. It's that mindset

652
00:32:51,080 --> 00:32:55,800
Speaker 3: of importing foreign solutions, and I mean we do this,

653
00:32:56,040 --> 00:32:59,120
Speaker 3: we do this with capital as well. We're desperate for

654
00:32:59,400 --> 00:33:03,080
Speaker 3: international investors to come and invest in New Zealand. And again,

655
00:33:03,120 --> 00:33:05,080
Speaker 3: I think we could shift our mindset on this, Like

656
00:33:05,160 --> 00:33:10,240
Speaker 3: we have been very tentative on compulsory savings in New Zealand,

657
00:33:10,560 --> 00:33:13,239
Speaker 3: and politicians like to compare us to Singapore and other

658
00:33:13,280 --> 00:33:16,560
Speaker 3: countries like that, Australia even you know, those countries all

659
00:33:16,600 --> 00:33:21,040
Speaker 3: have a much more aggressive superannuation scheme, you know, for

660
00:33:21,240 --> 00:33:24,160
Speaker 3: all of their people, which builds a huge pool of

661
00:33:24,160 --> 00:33:27,440
Speaker 3: capital that then gets invested. And so let me make

662
00:33:27,480 --> 00:33:30,600
Speaker 3: that really practical and specific. Like when vend was sold

663
00:33:30,640 --> 00:33:33,880
Speaker 3: in twenty twenty one, about fifty percent of the ownership

664
00:33:33,920 --> 00:33:36,479
Speaker 3: of that company was New Zealanders or New Zealand Funds,

665
00:33:37,000 --> 00:33:40,920
Speaker 3: and fifty percent were overseas investors who'd invested large amounts

666
00:33:40,920 --> 00:33:43,840
Speaker 3: of capital. We've took in about seventy million dollars of

667
00:33:43,880 --> 00:33:46,720
Speaker 3: capital into that business over the years and one of

668
00:33:46,760 --> 00:33:50,160
Speaker 3: the biggest, I think the biggest investor in vent that

669
00:33:50,280 --> 00:33:52,800
Speaker 3: exit was Squarepeg Capital, which is a big venture fund

670
00:33:52,880 --> 00:33:57,080
Speaker 3: in Melbourne. You know, their investors are the Australian superfunds,

671
00:33:57,640 --> 00:33:59,240
Speaker 3: and so if you think about it that way, like

672
00:33:59,280 --> 00:34:02,520
Speaker 3: the value that was created at the end that was

673
00:34:02,560 --> 00:34:05,800
Speaker 3: returned to shareholders when we solved the business ultimately went

674
00:34:05,840 --> 00:34:10,880
Speaker 3: back to benefit Australian supernuation funds, So all Australians that

675
00:34:10,920 --> 00:34:14,200
Speaker 3: were invested in those funds. That's the way we should

676
00:34:14,200 --> 00:34:18,640
Speaker 3: be capitalizing on the ecosystem that we're growing, but we

677
00:34:18,719 --> 00:34:22,440
Speaker 3: just don't do it. We're very tentative about even making

678
00:34:22,760 --> 00:34:25,680
Speaker 3: Kebsaber compulsory alone, let alone at the high levels that

679
00:34:26,239 --> 00:34:28,560
Speaker 3: is sort of mandated in countries like Australia or Singapore.

680
00:34:28,920 --> 00:34:33,640
Speaker 2: So we've got some challenges, but you're passionate about this country.

681
00:34:33,640 --> 00:34:36,360
Speaker 2: It's very clear from the book that you're optimistic for

682
00:34:36,440 --> 00:34:40,839
Speaker 2: the future as well. What's on the cards for you

683
00:34:41,160 --> 00:34:43,480
Speaker 2: this year? Are you sort of living to dream of

684
00:34:43,560 --> 00:34:46,560
Speaker 2: investing in companies? You've had a great track record, so

685
00:34:47,120 --> 00:34:49,880
Speaker 2: having you on board as a director and as an investor,

686
00:34:50,040 --> 00:34:52,239
Speaker 2: you must be getting opportunities all the time.

687
00:34:52,640 --> 00:34:54,480
Speaker 3: Yeah, I mean I see a lot. The biggest constraint

688
00:34:54,480 --> 00:34:57,399
Speaker 3: I have continues to be time. There's only so there's

689
00:34:57,440 --> 00:34:59,239
Speaker 3: only so many hours every day. It doesn't matter how

690
00:34:59,280 --> 00:35:02,520
Speaker 3: much money you have. And I like to be close

691
00:35:02,600 --> 00:35:04,719
Speaker 3: to these companies that I work with, and so that's

692
00:35:04,760 --> 00:35:06,880
Speaker 3: the constraint for me. There's a small handful of companies

693
00:35:06,880 --> 00:35:10,520
Speaker 3: that I pick pretty carefully to work with. But I

694
00:35:10,560 --> 00:35:12,719
Speaker 3: look around and think that there was a time when

695
00:35:12,800 --> 00:35:15,360
Speaker 3: I felt like I was an investor in all of

696
00:35:15,400 --> 00:35:18,400
Speaker 3: the good companies in New Zealand, and that's definitely no

697
00:35:18,480 --> 00:35:21,600
Speaker 3: longer true. Like there's now a wide list of companies

698
00:35:21,640 --> 00:35:23,520
Speaker 3: that are doing great things, and so yeah, for me,

699
00:35:23,640 --> 00:35:28,080
Speaker 3: the state of the ecosystem from the bottom up has

700
00:35:28,160 --> 00:35:30,360
Speaker 3: kind of never been better. I think there's things we

701
00:35:30,760 --> 00:35:33,040
Speaker 3: need to think about and configure differently from the top down.

702
00:35:33,160 --> 00:35:34,800
Speaker 3: I think we need to do a much better job

703
00:35:34,960 --> 00:35:38,320
Speaker 3: of connecting the dots from these companies that are successful.

704
00:35:38,360 --> 00:35:41,879
Speaker 3: How does that actually benefit all New Zealanders. I don't

705
00:35:41,880 --> 00:35:44,440
Speaker 3: think we've told that story particularly well at all. But

706
00:35:44,960 --> 00:35:47,560
Speaker 3: on an individual company level, like if you're somebody who's

707
00:35:47,600 --> 00:35:49,920
Speaker 3: working on or investing in one great company at the moment,

708
00:35:50,120 --> 00:35:52,520
Speaker 3: things are good for you at the moment you and

709
00:35:52,800 --> 00:35:54,040
Speaker 3: there's lots of opportunities.

710
00:35:57,760 --> 00:36:01,399
Speaker 2: Really interesting book How to Be Wrong, and it sort

711
00:36:01,400 --> 00:36:04,520
Speaker 2: of resonates as we were talking about being AI some

712
00:36:04,640 --> 00:36:09,200
Speaker 2: of the difficulties that early stage companies go through. Rowan

713
00:36:09,280 --> 00:36:13,640
Speaker 2: talks in the book about a fate worse than failure

714
00:36:13,640 --> 00:36:17,200
Speaker 2: for a startup, which he describes as being basically living dead,

715
00:36:18,040 --> 00:36:19,600
Speaker 2: and he says there are a few features off it.

716
00:36:19,600 --> 00:36:23,919
Speaker 2: It has some customers and associated revenues, but few who

717
00:36:24,000 --> 00:36:26,719
Speaker 2: really love it. Because people don't feel strongly about it

718
00:36:26,719 --> 00:36:29,399
Speaker 2: one way or other, it's difficult to get really good

719
00:36:29,680 --> 00:36:33,319
Speaker 2: feedback product where crawls to a standstill and it just

720
00:36:33,320 --> 00:36:36,479
Speaker 2: sort of spirals into failure. But it takes a long

721
00:36:36,520 --> 00:36:38,520
Speaker 2: time and a lot of money is lost along the way.

722
00:36:38,640 --> 00:36:41,319
Speaker 1: I think what really underpins that idea of living death

723
00:36:41,440 --> 00:36:43,440
Speaker 1: is what you mentioned in that quote, which is that

724
00:36:43,480 --> 00:36:48,000
Speaker 1: the love and the passion and you know, really startups

725
00:36:48,040 --> 00:36:52,040
Speaker 1: require people who are going to pour everything to the

726
00:36:52,040 --> 00:36:57,160
Speaker 1: point where it may cost them, you know, personally into

727
00:36:57,200 --> 00:37:02,279
Speaker 1: that business, and that that's a hard thing to ask for.

728
00:37:02,480 --> 00:37:07,000
Speaker 1: I think sometimes I think maybe Ruin in your conversation,

729
00:37:07,960 --> 00:37:12,399
Speaker 1: I think maybe he underestimates how large the leap can

730
00:37:12,440 --> 00:37:15,560
Speaker 1: be for people. It's all very well and good to say,

731
00:37:15,760 --> 00:37:17,680
Speaker 1: you know, these people out of Callahan, they should go

732
00:37:17,719 --> 00:37:21,759
Speaker 1: and get into startups and throw themselves into the ecosystem.

733
00:37:21,800 --> 00:37:23,480
Speaker 1: It's like, well, you know what, maybe some of them

734
00:37:23,480 --> 00:37:27,160
Speaker 1: can't do that. Maybe that their life does not you know,

735
00:37:27,239 --> 00:37:29,480
Speaker 1: allow for that kind of risk. Maybe they don't have

736
00:37:30,760 --> 00:37:35,440
Speaker 1: the capital or the capability to do that right now.

737
00:37:35,480 --> 00:37:40,200
Speaker 2: So yeah, that is true. Having said that, he sort

738
00:37:40,239 --> 00:37:44,279
Speaker 2: of has lived that experience himself, albeit starting at a

739
00:37:44,719 --> 00:37:47,200
Speaker 2: young age, and trade me it's easier to do this

740
00:37:47,719 --> 00:37:51,640
Speaker 2: as a young person, but has then gone on to

741
00:37:52,040 --> 00:37:54,719
Speaker 2: add a lot of value to other startups who have

742
00:37:54,840 --> 00:37:58,640
Speaker 2: young teams as well. So that's great. One of the

743
00:37:58,719 --> 00:38:02,360
Speaker 2: key takeaways for me is this idea that Royan has around,

744
00:38:02,880 --> 00:38:07,920
Speaker 2: you know, rather than innovation, execution is everything, and maybe

745
00:38:07,920 --> 00:38:10,040
Speaker 2: that's where we've fallen down. He said, if we have

746
00:38:10,080 --> 00:38:13,239
Speaker 2: an agency supporting startups in this country, it should be

747
00:38:14,120 --> 00:38:18,080
Speaker 2: it should have been probably Callahan execution rather than Callahan innovation,

748
00:38:18,760 --> 00:38:22,239
Speaker 2: because he's basically saying that being first isn't the most

749
00:38:22,280 --> 00:38:24,839
Speaker 2: important thing. He pointed out in the book. Google wasn't

750
00:38:24,840 --> 00:38:28,200
Speaker 2: the first search engine, Facebook wasn't the first social network.

751
00:38:29,080 --> 00:38:32,800
Speaker 2: Amazon wasn't the first online store, but it did something

752
00:38:33,239 --> 00:38:37,280
Speaker 2: in the application of it, of doing its own version

753
00:38:37,440 --> 00:38:42,080
Speaker 2: of those things that gave it the edge. And sometimes

754
00:38:42,120 --> 00:38:46,360
Speaker 2: the innovation isn't the product itself, but it's the distribution channel,

755
00:38:46,440 --> 00:38:49,840
Speaker 2: or it's the revenue model. If you take Zoom for instance,

756
00:38:49,880 --> 00:38:51,960
Speaker 2: you know it wasn't by any means the first video

757
00:38:52,000 --> 00:38:56,120
Speaker 2: conferencing tool, but it, especially during COVID, became the one

758
00:38:56,200 --> 00:38:59,920
Speaker 2: everyone wanted to use. So I think that's a really

759
00:39:00,520 --> 00:39:04,160
Speaker 2: important takeaway is that we focus very much in New

760
00:39:04,239 --> 00:39:09,239
Speaker 2: Zealand on the inventor sort of mindset where you need

761
00:39:09,280 --> 00:39:11,319
Speaker 2: to create your IP and all the value will come

762
00:39:11,360 --> 00:39:14,080
Speaker 2: from that. But and this is really important for the

763
00:39:14,120 --> 00:39:19,520
Speaker 2: world of artificial intelligence. Being first or or having something

764
00:39:19,520 --> 00:39:22,120
Speaker 2: that is completely unique is very difficult for us. But

765
00:39:22,480 --> 00:39:25,319
Speaker 2: applying that in a very innovative way, which goes to

766
00:39:25,320 --> 00:39:29,240
Speaker 2: what David McDonald's trying to do with with its treehouse concept.

767
00:39:29,280 --> 00:39:34,000
Speaker 2: This sort of broker of APIs for the AI agents,

768
00:39:34,880 --> 00:39:36,719
Speaker 2: you know, that could be the way forward. That's the

769
00:39:36,760 --> 00:39:39,880
Speaker 2: sort of thinking we need. But it's all about execution.

770
00:39:40,920 --> 00:39:44,160
Speaker 1: Yeah, and it goes into something that I read somebody

771
00:39:44,520 --> 00:39:48,000
Speaker 1: post somewhere a while ago and it stuck with me,

772
00:39:48,080 --> 00:39:50,279
Speaker 1: but unfortunately I can't remember who it was. But there's

773
00:39:50,520 --> 00:39:52,640
Speaker 1: the you know, actually New Zealand needs to start to

774
00:39:52,640 --> 00:39:56,960
Speaker 1: step away from the number eight wire mentality. Yeah, because

775
00:39:57,840 --> 00:40:01,320
Speaker 1: realistically what people now want is, like you said, execution.

776
00:40:01,800 --> 00:40:05,080
Speaker 1: They want really clean user interface. They want it to

777
00:40:05,160 --> 00:40:09,200
Speaker 1: be you know, well processed, have a clear path, and

778
00:40:09,480 --> 00:40:12,839
Speaker 1: to be you know, really focused on what are the

779
00:40:12,920 --> 00:40:17,520
Speaker 1: outcomes going to be for that company, for investors and

780
00:40:17,719 --> 00:40:21,080
Speaker 1: for the customers, how it's going to you know, impact

781
00:40:21,120 --> 00:40:25,480
Speaker 1: their outcomes and deliver value. And I guess, you know,

782
00:40:25,719 --> 00:40:29,640
Speaker 1: just using a bit of number eight wire to make

783
00:40:29,680 --> 00:40:33,600
Speaker 1: a fuse or fix a railing is a little bit

784
00:40:33,600 --> 00:40:35,880
Speaker 1: of a different approach and maybe not quite right for

785
00:40:35,920 --> 00:40:37,360
Speaker 1: the current state of startups.

786
00:40:37,760 --> 00:40:40,680
Speaker 2: I think we've actually left that behind quite a while

787
00:40:40,719 --> 00:40:44,920
Speaker 2: ago in the software space. Anyway, that mindset they've got

788
00:40:44,960 --> 00:40:48,799
Speaker 2: quite good at at all of those things, but the constraints,

789
00:40:48,800 --> 00:40:54,600
Speaker 2: as Ron points out to really nail that execution, talent

790
00:40:54,880 --> 00:41:00,439
Speaker 2: and capital were really constrained on both fronts, and there's

791
00:41:00,480 --> 00:41:04,239
Speaker 2: no great answers there. The government is tinkering with investment

792
00:41:04,360 --> 00:41:07,799
Speaker 2: and visas and all that sort of thing, but we're

793
00:41:07,840 --> 00:41:11,320
Speaker 2: well behind. Until we have great people and a pipeline

794
00:41:11,320 --> 00:41:15,319
Speaker 2: of people to go into these startups, and until we

795
00:41:15,400 --> 00:41:19,200
Speaker 2: have more capital from sovereign wealth funds, our own capital,

796
00:41:19,239 --> 00:41:24,560
Speaker 2: not just international capital, we're really going to be constrained.

797
00:41:24,680 --> 00:41:28,960
Speaker 2: So those are the two things that are standing in

798
00:41:28,960 --> 00:41:32,200
Speaker 2: a way off the sort of world that we want,

799
00:41:32,280 --> 00:41:34,279
Speaker 2: which is the knowledge economy, all the things that so

800
00:41:34,400 --> 00:41:38,480
Speaker 2: Paul Callahan talked about, which are still as valid as ever,

801
00:41:38,560 --> 00:41:40,960
Speaker 2: but we just haven't really got as close to as

802
00:41:41,000 --> 00:41:41,480
Speaker 2: we need to.

803
00:41:41,800 --> 00:41:45,120
Speaker 1: And if I may climb up on my soapbox slightly

804
00:41:45,200 --> 00:41:47,200
Speaker 1: for a moment, I think that we do need to

805
00:41:47,280 --> 00:41:53,160
Speaker 1: create an environment where people can try really hard and

806
00:41:53,320 --> 00:41:56,120
Speaker 1: veil and it's not going to ruin them, you know,

807
00:41:57,600 --> 00:42:02,480
Speaker 1: because if people don't have security, if people don't have

808
00:42:02,800 --> 00:42:07,560
Speaker 1: you know, like at least some semblance that if they fail,

809
00:42:07,719 --> 00:42:10,879
Speaker 1: it's going to you know, ruin everything, because when you're young,

810
00:42:10,960 --> 00:42:13,080
Speaker 1: like you say, you can do that, but if you

811
00:42:13,120 --> 00:42:15,880
Speaker 1: want a pipeline of people, we can't only be focusing

812
00:42:15,920 --> 00:42:17,839
Speaker 1: on young people. We need to be enabling people who

813
00:42:17,880 --> 00:42:21,160
Speaker 1: are not just those who are already wealthy and comfortable,

814
00:42:22,080 --> 00:42:23,759
Speaker 1: but maybe people who are willing to take a bit

815
00:42:23,800 --> 00:42:27,680
Speaker 1: of a risk, but maybe not their entire life, you know,

816
00:42:27,880 --> 00:42:29,960
Speaker 1: maybe that's just you know, maybe there are some social

817
00:42:29,960 --> 00:42:31,480
Speaker 1: structures that we could put in place there.

818
00:42:31,520 --> 00:42:35,800
Speaker 2: But yeah, and that's what Silicon Valley is really really

819
00:42:35,800 --> 00:42:39,520
Speaker 2: good at. Actually, and there are older founders there as well.

820
00:42:40,440 --> 00:42:43,960
Speaker 2: There isn't necessarily a safety net for them. The reward

821
00:42:44,040 --> 00:42:46,960
Speaker 2: is great if they succeed, but there isn't a stigma

822
00:42:47,000 --> 00:42:49,960
Speaker 2: there if you fail. You could do two or three

823
00:42:50,040 --> 00:42:53,520
Speaker 2: ventures before you have a successful startup, and they don't

824
00:42:53,520 --> 00:42:57,080
Speaker 2: do living dead over there. You know, you very quickly

825
00:42:57,480 --> 00:43:00,759
Speaker 2: die or succeed and move on to the next thing

826
00:43:00,760 --> 00:43:05,360
Speaker 2: if need be. So that's still something we need to

827
00:43:05,400 --> 00:43:06,520
Speaker 2: take some lessons from.

828
00:43:06,800 --> 00:43:07,560
Speaker 3: Yeah, definitely.

829
00:43:08,560 --> 00:43:11,399
Speaker 2: So thanks to Ron Simpson for coming on. His book

830
00:43:11,480 --> 00:43:14,520
Speaker 2: How to Be Wrong at Crash Course and Startup Success

831
00:43:14,640 --> 00:43:17,120
Speaker 2: is out now. Links to where to find it are

832
00:43:17,120 --> 00:43:19,960
Speaker 2: in the show notes at Businessdesk dot co dot NZ.

833
00:43:20,040 --> 00:43:22,600
Speaker 2: You just check out the podcast section for them.

834
00:43:23,120 --> 00:43:24,440
Speaker 1: Follow the business attack on.

835
00:43:24,440 --> 00:43:26,600
Speaker 3: Your podcast platform pop choice.

836
00:43:26,719 --> 00:43:29,120
Speaker 1: We're also streaming on iHeartRadio.

837
00:43:29,520 --> 00:43:32,279
Speaker 2: Get in touch with your feedback and topic suggestions. We're

838
00:43:32,320 --> 00:43:34,000
Speaker 2: on LinkedIn and blue Sky.

839
00:43:34,400 --> 00:43:37,520
Speaker 1: Catch us again for the next episode next Thursday.

840
00:43:38,120 --> 00:43:41,920
Speaker 2: See it end