1 00:00:00,520 --> 00:00:04,240 Speaker 1: The USA the holy grail of markets for entrepreneurs all 2 00:00:04,280 --> 00:00:04,880 Speaker 1: over the world. 3 00:00:05,040 --> 00:00:08,560 Speaker 2: While we Kiwis have many cultural distinctions that separate us 4 00:00:08,600 --> 00:00:11,479 Speaker 2: from our western piers, we also have a huge number 5 00:00:11,560 --> 00:00:12,680 Speaker 2: of similarities. 6 00:00:13,000 --> 00:00:15,400 Speaker 1: This fact, as well as the sheer amount of money 7 00:00:15,560 --> 00:00:17,880 Speaker 1: and the number of people, make the US market a 8 00:00:17,920 --> 00:00:19,920 Speaker 1: golden goose for local entrepreneurs. 9 00:00:20,360 --> 00:00:23,840 Speaker 2: Our guest this week is Mahesh Moralda, a venture capitalist 10 00:00:23,920 --> 00:00:28,240 Speaker 2: who was the twenty fifth employee at Australian unicorn startup Canva, 11 00:00:28,320 --> 00:00:30,400 Speaker 2: and he has strong feelings about the need for New 12 00:00:30,480 --> 00:00:34,560 Speaker 2: Zealand companies, especially tech and software companies, to expand beyond 13 00:00:34,600 --> 00:00:35,159 Speaker 2: New Zealand. 14 00:00:35,520 --> 00:00:38,880 Speaker 1: With his deep experience in the VC world, maheshkiv's advice 15 00:00:38,920 --> 00:00:41,920 Speaker 1: to startups on how to capture some of that American cash, 16 00:00:41,960 --> 00:00:44,839 Speaker 1: as well as his view on why it's so important 17 00:00:44,840 --> 00:00:47,800 Speaker 1: for New Zealand businesses to break into the US market. 18 00:00:48,080 --> 00:00:51,600 Speaker 3: QUI founders who make it to the US are better 19 00:00:52,040 --> 00:00:57,160 Speaker 3: than the top tier American founders because American founders they're like, hey, 20 00:00:57,440 --> 00:01:00,600 Speaker 3: if this doesn't work out, I'll be fine. We founder 21 00:01:00,600 --> 00:01:04,679 Speaker 3: who makes the US knows and believes they have one shot, 22 00:01:04,840 --> 00:01:05,600 Speaker 3: and then they go. 23 00:01:05,760 --> 00:01:08,800 Speaker 2: All that's coming up later in this week's episode of 24 00:01:08,840 --> 00:01:11,520 Speaker 2: the Business of Tech, Howard by two Degrees for business. 25 00:01:11,600 --> 00:01:14,160 Speaker 2: But first, Peter, have you ever been smashed? 26 00:01:14,800 --> 00:01:18,280 Speaker 1: I haven't been successfully smashed, but I got to say, 27 00:01:19,640 --> 00:01:22,840 Speaker 1: literally last week I almost fell for one for the 28 00:01:22,880 --> 00:01:26,840 Speaker 1: first time, which was a message from supposedly from New 29 00:01:26,959 --> 00:01:32,399 Speaker 1: Zealand Post about a package that hadn't been delivered, had 30 00:01:32,400 --> 00:01:34,600 Speaker 1: been held up. I needed to give some more information 31 00:01:34,680 --> 00:01:38,360 Speaker 1: and I literally was waiting for a package that had 32 00:01:38,360 --> 00:01:40,880 Speaker 1: been held up. So I was like, finally they've got 33 00:01:40,920 --> 00:01:43,399 Speaker 1: in touch with me. It clicked through to it looked 34 00:01:43,440 --> 00:01:45,440 Speaker 1: just a little bit off, didn't look like the New 35 00:01:45,560 --> 00:01:49,160 Speaker 1: Zealand Post website, and then I looked at the URL 36 00:01:49,200 --> 00:01:52,200 Speaker 1: and it was not ented post dot code into ed. So, 37 00:01:52,960 --> 00:01:55,560 Speaker 1: I mean a lot of people will be familiar with 38 00:01:55,600 --> 00:02:01,240 Speaker 1: these smashing text messages. It's basically SMS fishing, which is 39 00:02:01,240 --> 00:02:05,360 Speaker 1: an attempt to get you to divulge sensitive information or 40 00:02:05,400 --> 00:02:08,440 Speaker 1: to click a link to download some malware onto your phone. 41 00:02:08,480 --> 00:02:11,720 Speaker 1: That's often the case as well, so I think kiwis 42 00:02:11,760 --> 00:02:15,120 Speaker 1: are quite familiar with this. But a case that's just 43 00:02:15,240 --> 00:02:19,320 Speaker 1: been uncovered that played out earlier in the year was 44 00:02:20,560 --> 00:02:24,519 Speaker 1: a smashing campaign that didn't just rely on the existing 45 00:02:24,600 --> 00:02:28,519 Speaker 1: networks of two degrees or one end Z or a spark. 46 00:02:29,360 --> 00:02:31,760 Speaker 1: What these people did is a lot more sophisticated. They 47 00:02:31,840 --> 00:02:36,800 Speaker 1: set up effectively a fake mobile base station in Auckland 48 00:02:37,600 --> 00:02:40,280 Speaker 1: to try and get people to connect to that base 49 00:02:40,360 --> 00:02:44,200 Speaker 1: station automatically thinking they were on a regular network, and 50 00:02:44,240 --> 00:02:48,040 Speaker 1: then they sent them dodgy SMS messages. And the reason 51 00:02:48,120 --> 00:02:50,920 Speaker 1: they would go to all that trouble is to bypass 52 00:02:51,120 --> 00:02:54,920 Speaker 1: all the sort of filtering systems that the other legitimate 53 00:02:54,960 --> 00:02:58,280 Speaker 1: networks have in place to try and weed out a 54 00:02:58,280 --> 00:03:01,200 Speaker 1: lot of these smishing messages. And then they could basically 55 00:03:01,240 --> 00:03:04,360 Speaker 1: tailor messages with their own phone numbers from this fake 56 00:03:04,520 --> 00:03:08,720 Speaker 1: base station and communicate with these people who thought they 57 00:03:08,720 --> 00:03:15,000 Speaker 1: were responding to legitimate messages. It's incredible how far they 58 00:03:15,040 --> 00:03:19,120 Speaker 1: went to make this happen. You've been very few examples 59 00:03:19,200 --> 00:03:21,840 Speaker 1: of this, mainly out of China where this sort of 60 00:03:21,960 --> 00:03:25,040 Speaker 1: level of sophistication of smishing messages has been seen. 61 00:03:25,400 --> 00:03:28,519 Speaker 2: Yeah, I mean it's almost kind of cool in a 62 00:03:28,680 --> 00:03:31,200 Speaker 2: way when you look at the technology that's involved, and 63 00:03:31,840 --> 00:03:34,960 Speaker 2: it's kind of this very ad hoc thrown together thing. 64 00:03:35,120 --> 00:03:37,200 Speaker 2: You can see the picture in the article will link, 65 00:03:37,720 --> 00:03:42,240 Speaker 2: but to kind of know there's some teenage amateur engineer 66 00:03:42,240 --> 00:03:44,520 Speaker 2: out there who's throwing together one of these things in 67 00:03:44,560 --> 00:03:49,440 Speaker 2: an attempt to defraud people. Obviously terrible behavior and not 68 00:03:49,520 --> 00:03:52,000 Speaker 2: something to be encouraged at all, but at the same 69 00:03:52,040 --> 00:03:56,200 Speaker 2: time kind of amazing that they were managed to get 70 00:03:56,200 --> 00:03:59,720 Speaker 2: the kit, put it together and successfully actually do this. 71 00:04:00,400 --> 00:04:03,480 Speaker 1: Yeah, and I wonder if there is a China link here, 72 00:04:03,520 --> 00:04:08,600 Speaker 1: either Chinese students in New Zealand doing this or someone 73 00:04:08,680 --> 00:04:11,840 Speaker 1: working with people in China to get the equipment here. 74 00:04:12,520 --> 00:04:17,440 Speaker 1: It was a operation by the police Operation ORCA. Funnily enough, 75 00:04:17,480 --> 00:04:19,040 Speaker 1: they had a bit of a sense of humor around 76 00:04:19,080 --> 00:04:22,640 Speaker 1: that one, and the Department of Internal Affairs was made 77 00:04:22,640 --> 00:04:25,080 Speaker 1: aware of the scam in July. I don't know whether 78 00:04:26,600 --> 00:04:29,360 Speaker 1: she was dabbed in or what happened, but they've been 79 00:04:29,400 --> 00:04:33,360 Speaker 1: on the case. These fake base stations, they call them 80 00:04:33,720 --> 00:04:39,159 Speaker 1: base transceiver stations BTS towers, and there is in China 81 00:04:39,160 --> 00:04:43,919 Speaker 1: again malware called swearing Trojan, which is Android based banking 82 00:04:43,920 --> 00:04:48,600 Speaker 1: malware which have been used in conjunction with these BTS towers, 83 00:04:48,640 --> 00:04:53,479 Speaker 1: which ultimately have a range. According to reports out of China, 84 00:04:53,560 --> 00:04:56,080 Speaker 1: off ten to twenty kilometers, so you could have a 85 00:04:56,080 --> 00:04:58,800 Speaker 1: lot of people. What I don't understand is how they 86 00:04:58,839 --> 00:05:02,320 Speaker 1: get you know, my phone, I'm on the skinny network 87 00:05:02,360 --> 00:05:05,720 Speaker 1: on a skinny sim. How they get my phone and 88 00:05:05,720 --> 00:05:08,880 Speaker 1: my sim to connect to their network. There must be 89 00:05:08,880 --> 00:05:13,719 Speaker 1: some authentication that there's somehow mimicking or bypassing there for 90 00:05:13,760 --> 00:05:14,400 Speaker 1: that to happen. 91 00:05:15,120 --> 00:05:18,120 Speaker 2: Yeah, because they talk about it just auto connecting as well. 92 00:05:18,279 --> 00:05:22,280 Speaker 2: Your phone will auto connect and you won't even know 93 00:05:22,320 --> 00:05:24,400 Speaker 2: that it's done it because and it will use I 94 00:05:24,400 --> 00:05:27,320 Speaker 2: think like a two G network as well, rather than 95 00:05:27,360 --> 00:05:31,479 Speaker 2: the three G or four G because for whatever reason, 96 00:05:31,480 --> 00:05:33,719 Speaker 2: it tricks your phone into thinking it's the network that 97 00:05:33,760 --> 00:05:37,719 Speaker 2: it should be connected to. There's some instructions where you 98 00:05:37,720 --> 00:05:40,640 Speaker 2: can actually disable the two G network on your phone 99 00:05:41,160 --> 00:05:43,240 Speaker 2: to be able to make sure you can avoid these 100 00:05:43,320 --> 00:05:47,720 Speaker 2: kinds of things. But realistically, the smishing is no more 101 00:05:47,760 --> 00:05:50,839 Speaker 2: sophisticated than any other text fishing, and they can be 102 00:05:50,880 --> 00:05:53,560 Speaker 2: pretty convincing. You know, you're not the only one who's 103 00:05:53,760 --> 00:05:56,679 Speaker 2: definitely clicked on one of these links and then gone, 104 00:05:56,720 --> 00:05:59,560 Speaker 2: oh no, that's actually not something I should be clicking on. 105 00:06:00,080 --> 00:06:03,479 Speaker 1: Yeah, And I think obviously a lot of those messages 106 00:06:03,520 --> 00:06:06,400 Speaker 1: still get through, because I got one just last week, 107 00:06:06,760 --> 00:06:10,320 Speaker 1: so that the networks aren't doing enough to keep up 108 00:06:10,360 --> 00:06:14,719 Speaker 1: with this deluge of smashing messages. But to go to 109 00:06:14,760 --> 00:06:19,479 Speaker 1: the next step of installing some physical hardware, you know 110 00:06:19,480 --> 00:06:21,480 Speaker 1: there must be a real incentive to do that, which 111 00:06:21,560 --> 00:06:23,880 Speaker 1: is and I think it is when you're on that 112 00:06:23,920 --> 00:06:27,960 Speaker 1: fake base station that's down the road from you or whatever, 113 00:06:28,160 --> 00:06:32,720 Speaker 1: they can tailor official looking numbers, They can create their 114 00:06:32,760 --> 00:06:35,279 Speaker 1: own basically their own phone number network to send you 115 00:06:35,880 --> 00:06:39,280 Speaker 1: official looking text numbers and phone numbers, which then you 116 00:06:39,640 --> 00:06:43,440 Speaker 1: might make you think, oh, okay, this is legitimate, but 117 00:06:43,520 --> 00:06:46,400 Speaker 1: ultimately they're still going to send you to a dodgy website. 118 00:06:46,440 --> 00:06:49,960 Speaker 1: So all the same preventative measures are in place. Is 119 00:06:49,960 --> 00:06:52,760 Speaker 1: it the right url? Are they asking for information my 120 00:06:52,920 --> 00:06:57,760 Speaker 1: bank normally wouldn't ask for over email or via a 121 00:06:57,760 --> 00:07:00,080 Speaker 1: web form? All those things come into play again, and 122 00:07:00,160 --> 00:07:04,559 Speaker 1: which should hopefully eliminate ninety nine percent of the chance 123 00:07:04,600 --> 00:07:05,960 Speaker 1: of you actually getting schmished. 124 00:07:08,560 --> 00:07:10,440 Speaker 2: I know it sounds like it's something you might want, 125 00:07:10,480 --> 00:07:12,080 Speaker 2: but trust me, you don't want to get smished. 126 00:07:13,640 --> 00:07:14,200 Speaker 1: Definitely not. 127 00:07:14,440 --> 00:07:18,280 Speaker 2: And of course cybercrime isn't just restricted to teenagers in Auckland. 128 00:07:19,160 --> 00:07:22,960 Speaker 2: There are nation state actors as well, and China, it 129 00:07:23,000 --> 00:07:26,520 Speaker 2: turns out, has been able to take advantage of backdoors 130 00:07:27,000 --> 00:07:31,320 Speaker 2: in telecommunications companies which were left open to meet US 131 00:07:31,360 --> 00:07:35,440 Speaker 2: federal regulations. That was a really interesting story that you 132 00:07:35,960 --> 00:07:40,640 Speaker 2: sent me on this one. Basically a bunch of professionals going, 133 00:07:40,920 --> 00:07:43,760 Speaker 2: we told you these backdoors were a bad idea, that 134 00:07:43,880 --> 00:07:47,160 Speaker 2: there were a weakness in the armor, and it turns 135 00:07:47,160 --> 00:07:50,200 Speaker 2: out that that some hackers have found those weaknesses. 136 00:07:50,720 --> 00:07:54,600 Speaker 1: Yeah, we talked earlier in the year about this vault 137 00:07:54,640 --> 00:07:59,640 Speaker 1: Typhoon hacking group again out of China. That was leaving 138 00:08:00,240 --> 00:08:04,160 Speaker 1: were packages and critical infrastructure the likes of power stations 139 00:08:04,640 --> 00:08:09,880 Speaker 1: and water infrastructure companies in the US, and this happened 140 00:08:09,920 --> 00:08:12,680 Speaker 1: several years ago, but the US governments and the Five 141 00:08:12,760 --> 00:08:15,160 Speaker 1: Eyes partners, including New Zealand, came out earlier this year 142 00:08:15,160 --> 00:08:18,480 Speaker 1: and said you need if you run critical infrastructure, you 143 00:08:18,560 --> 00:08:21,360 Speaker 1: need to go in and check your systems because this 144 00:08:22,360 --> 00:08:25,320 Speaker 1: vault Typhoon group is through a lot of companies in 145 00:08:25,360 --> 00:08:29,200 Speaker 1: the US. So fast forward sort of nine months, we've 146 00:08:29,200 --> 00:08:33,840 Speaker 1: got Salt Typhoon, and this is apparently a slightly different 147 00:08:33,880 --> 00:08:36,760 Speaker 1: group of hackers who have been very much focusing on 148 00:08:36,800 --> 00:08:42,560 Speaker 1: the wire tapping infrastructure that the US requires big telecommunications 149 00:08:42,559 --> 00:08:45,760 Speaker 1: and internet companies in the US to maintain by law. 150 00:08:45,840 --> 00:08:48,199 Speaker 1: So that's a law from about thirty years ago that says, 151 00:08:48,280 --> 00:08:52,560 Speaker 1: you need to make your network's interception capable, and there's 152 00:08:52,559 --> 00:08:54,559 Speaker 1: some little black box that hangs off the back of 153 00:08:54,640 --> 00:08:56,960 Speaker 1: your network that we need to be able to connect to. 154 00:08:57,160 --> 00:08:59,520 Speaker 1: We have that here in New Zealand as well. Most 155 00:08:59,520 --> 00:09:03,880 Speaker 1: countries do that, and when you get a warrant, then 156 00:09:04,360 --> 00:09:07,360 Speaker 1: that will activate the ability to use the y tapping 157 00:09:08,120 --> 00:09:13,040 Speaker 1: method to either infiltrate or listen to calls as well 158 00:09:13,080 --> 00:09:16,520 Speaker 1: as Internet traffic. So you know that is effectively a 159 00:09:16,520 --> 00:09:20,360 Speaker 1: backdoor in the network that the FEDS in the US 160 00:09:20,400 --> 00:09:22,559 Speaker 1: can access. Well, it turns out, according to the Wall 161 00:09:22,600 --> 00:09:27,440 Speaker 1: Street Journal, which reported this on Friday massive story, the 162 00:09:27,600 --> 00:09:32,160 Speaker 1: likes of AT and T and Verizon and Lumen Networks 163 00:09:32,800 --> 00:09:36,800 Speaker 1: formerly century Link have all been compromised. These y tapping 164 00:09:36,960 --> 00:09:45,199 Speaker 1: facilities have been compromised, potentially exposing customer data to these hackers. Now, 165 00:09:45,200 --> 00:09:48,640 Speaker 1: if that's the case, if we're talking about huge volumes 166 00:09:48,640 --> 00:09:50,560 Speaker 1: of traffic that go through the likes of AT and 167 00:09:50,600 --> 00:09:53,760 Speaker 1: T and Verizon, if that's the case. You know, that's 168 00:09:53,760 --> 00:09:58,240 Speaker 1: one of the biggest exploits in many years. It hearkens 169 00:09:58,280 --> 00:10:01,679 Speaker 1: back to the Edward snow and revelations of twenty thirteen 170 00:10:01,720 --> 00:10:05,679 Speaker 1: when he basically revealed and all the documents he leaked 171 00:10:06,080 --> 00:10:09,680 Speaker 1: a mass surveillance effort underway by the US government that 172 00:10:09,720 --> 00:10:14,160 Speaker 1: even some of the telcos and internet companies didn't really 173 00:10:14,160 --> 00:10:19,400 Speaker 1: know what was happening. Yeah. Effectively, that infrastructure still exists 174 00:10:19,679 --> 00:10:23,600 Speaker 1: to some extent, but has been cleaned up a lot 175 00:10:23,679 --> 00:10:26,240 Speaker 1: so that the tech companies are more aware of what's 176 00:10:26,280 --> 00:10:30,120 Speaker 1: going on, and you need sort of legal permission to 177 00:10:30,640 --> 00:10:35,640 Speaker 1: utilize that technology. But it's been found to be insecure, 178 00:10:35,640 --> 00:10:37,880 Speaker 1: and I guess it really sort of highlights that whole 179 00:10:37,880 --> 00:10:41,079 Speaker 1: point of the tech sect has been making about encryption 180 00:10:41,400 --> 00:10:43,040 Speaker 1: and back doors, and if you put a back door 181 00:10:43,040 --> 00:10:45,679 Speaker 1: in encryption, you're going to have this problem to an 182 00:10:45,679 --> 00:10:46,720 Speaker 1: even greater degree. 183 00:10:47,240 --> 00:10:51,600 Speaker 2: It reminds me of the telegram story from not long ago. Yeah, yeah, 184 00:10:51,640 --> 00:10:53,679 Speaker 2: you know, with the founder was at risk of getting 185 00:10:53,720 --> 00:10:57,200 Speaker 2: arrested by the French or did get arrested by the French. 186 00:10:57,000 --> 00:10:58,160 Speaker 1: Authority, still sitting there. 187 00:10:58,440 --> 00:11:00,760 Speaker 2: So the question then becomes like it's that age or 188 00:11:00,840 --> 00:11:03,920 Speaker 2: question of is it more important to have privacy or 189 00:11:03,960 --> 00:11:08,920 Speaker 2: is it more important to have a governmental oversight and 190 00:11:09,080 --> 00:11:13,760 Speaker 2: access into communications. It's difficult to find that balance. 191 00:11:14,200 --> 00:11:19,400 Speaker 1: Yeah, and I think this legislation which was introduced about 192 00:11:19,440 --> 00:11:22,959 Speaker 1: thirty years ago, it's called the Communications Assistance for Law 193 00:11:23,120 --> 00:11:26,840 Speaker 1: Enforcement Act ninety ninety four, that came into effect just 194 00:11:26,880 --> 00:11:29,360 Speaker 1: as sort of cell phones were starting to take off 195 00:11:29,360 --> 00:11:32,600 Speaker 1: and the Internet was in its infancy. But then after 196 00:11:32,880 --> 00:11:35,920 Speaker 1: September eleven we had a lot of wire tapping, huge 197 00:11:36,320 --> 00:11:39,840 Speaker 1: ramp up in wire tapping activity, so this was really 198 00:11:40,040 --> 00:11:43,280 Speaker 1: called on. But the interesting thing about that legislation, if 199 00:11:43,320 --> 00:11:47,640 Speaker 1: your network is fully encrypted, you obviously don't have to 200 00:11:47,679 --> 00:11:51,560 Speaker 1: comply with that. You can say, well, my mobile network 201 00:11:51,640 --> 00:11:54,800 Speaker 1: is end to end encrypted, I can't help you with 202 00:11:54,840 --> 00:11:57,920 Speaker 1: a wiretap. Sorry about that. Most of the telcos and 203 00:11:58,000 --> 00:12:02,640 Speaker 1: internet providers have an encrypted their networks, while they have 204 00:12:02,720 --> 00:12:07,319 Speaker 1: other security measures, and they facilitate their customers encrypting their 205 00:12:07,320 --> 00:12:10,240 Speaker 1: own data. A lot of traffic isn't and a lot 206 00:12:10,240 --> 00:12:14,360 Speaker 1: of that metadata obviously isn't as well. So I think 207 00:12:14,360 --> 00:12:17,959 Speaker 1: the next step will be Okay, the likes of Horizon 208 00:12:18,000 --> 00:12:19,920 Speaker 1: and AT and T will go well, this was really 209 00:12:19,960 --> 00:12:23,720 Speaker 1: embarrassing and this hurt us. We're going to encrypt our 210 00:12:24,120 --> 00:12:26,760 Speaker 1: entire network, and it's probably quite a lot of work 211 00:12:27,000 --> 00:12:31,800 Speaker 1: doing that, even on mobile networks and five G modern infrastructure, 212 00:12:31,880 --> 00:12:35,640 Speaker 1: encrypting the whole thing so that we can literally say 213 00:12:35,679 --> 00:12:38,800 Speaker 1: to the authorities so we don't have the ability to 214 00:12:40,280 --> 00:12:43,280 Speaker 1: wy tap our customers anymore. And that's really where the 215 00:12:43,400 --> 00:12:46,440 Speaker 1: likes of Meta and Signal and others have gone with 216 00:12:46,760 --> 00:12:47,560 Speaker 1: messaging apps. 217 00:12:48,040 --> 00:12:50,600 Speaker 2: It's just an absurd bureaucratic difference, isn't it really at 218 00:12:50,600 --> 00:12:53,319 Speaker 2: the end of the day, where you know, you just say, well, 219 00:12:53,360 --> 00:12:55,080 Speaker 2: if you spend a little bit more money and make 220 00:12:55,120 --> 00:12:57,640 Speaker 2: sure that everything is super secret, then we won't ask it. 221 00:12:57,640 --> 00:13:00,920 Speaker 2: We can't. You know, it just feels a little bit arbitrary. 222 00:13:01,679 --> 00:13:03,720 Speaker 2: But I suppose at the same time it's just going 223 00:13:03,760 --> 00:13:06,599 Speaker 2: to push everybody towards more encryption, which maybe at the 224 00:13:06,640 --> 00:13:09,480 Speaker 2: end of the day is beneficial for privacy and security. 225 00:13:09,960 --> 00:13:13,959 Speaker 1: Yeah. Well, the alternative is that you capitulate to the 226 00:13:15,280 --> 00:13:18,640 Speaker 1: FBI and the US administration and say, okay, we're going 227 00:13:18,720 --> 00:13:22,240 Speaker 1: to build a back door into encryption, and it turns out, 228 00:13:22,280 --> 00:13:24,320 Speaker 1: as has been the case here, that your customers are 229 00:13:24,360 --> 00:13:29,719 Speaker 1: even more vulnerable to foreign interference and terror, terrorism and 230 00:13:29,760 --> 00:13:32,800 Speaker 1: the like because of that back door and encryption systems. 231 00:13:32,800 --> 00:13:35,760 Speaker 1: And I think that's why it hasn't progressed any mandate 232 00:13:36,080 --> 00:13:40,200 Speaker 1: because they know that things are not secure. There's always 233 00:13:40,280 --> 00:13:43,480 Speaker 1: going to be a way in and if you building 234 00:13:43,559 --> 00:13:45,480 Speaker 1: that back door, someone is going to come through it. 235 00:13:46,040 --> 00:13:50,200 Speaker 2: Yeah. Signal president Meredith Whittaker is quoted in this tech 236 00:13:50,240 --> 00:13:52,960 Speaker 2: Crunch article saying there is no way to build a 237 00:13:53,000 --> 00:13:57,760 Speaker 2: backdoor that only the good guys can use. It's pretty 238 00:13:57,800 --> 00:13:59,400 Speaker 2: much like the summary, there isn't it. 239 00:13:59,520 --> 00:13:59,720 Speaker 3: Yeah. 240 00:14:00,080 --> 00:14:01,520 Speaker 2: Keeping an eye on what that might mean for the 241 00:14:01,520 --> 00:14:04,960 Speaker 2: future of regulation around privacy and encryption, But what isn't 242 00:14:05,000 --> 00:14:07,440 Speaker 2: going to change anytime soon is the fact there are 243 00:14:07,480 --> 00:14:11,199 Speaker 2: a whole lot of people and businesses in the USA. 244 00:14:11,720 --> 00:14:14,520 Speaker 1: Definitely. We've seen a bunch of New Zealand companies grow 245 00:14:14,679 --> 00:14:17,960 Speaker 1: really quickly once they break into the US, like startup 246 00:14:18,040 --> 00:14:20,960 Speaker 1: Parkable and INSIDEX listed Black Pearl Group. 247 00:14:21,280 --> 00:14:24,840 Speaker 2: Mahesh Moeralda is a venture capitalist and startup advisor who 248 00:14:24,960 --> 00:14:26,440 Speaker 2: runs Phase One. 249 00:14:27,080 --> 00:14:30,560 Speaker 1: His experience across New Zealand, Australia and the US has 250 00:14:30,600 --> 00:14:33,160 Speaker 1: led him to become a massive advocate for the potential 251 00:14:33,320 --> 00:14:37,560 Speaker 1: for New Zealand's economy offered by the US market, particularly 252 00:14:37,600 --> 00:14:39,960 Speaker 1: when it comes to software. Ben you spoke to him 253 00:14:40,240 --> 00:14:43,000 Speaker 1: about what needs to happen to see that potential realized. 254 00:14:43,280 --> 00:14:45,640 Speaker 2: Yeah, he's got some strong feelings about the topic and 255 00:14:45,720 --> 00:14:48,080 Speaker 2: we're more than happy to share them. So let's have 256 00:14:48,120 --> 00:14:57,360 Speaker 2: a listen to that interview now. Hi, Mahesh, thank you 257 00:14:57,400 --> 00:14:59,600 Speaker 2: so much for joining us on the Business of Tech podcast. 258 00:14:59,600 --> 00:15:00,360 Speaker 2: How are you today? 259 00:15:00,560 --> 00:15:04,200 Speaker 3: I am feeling pumped, really excited, great, energized. 260 00:15:03,920 --> 00:15:07,120 Speaker 2: Excellent, and I'm assuming that's related to your recent trip 261 00:15:07,160 --> 00:15:09,320 Speaker 2: to the US and what you've seen over there. 262 00:15:09,400 --> 00:15:09,600 Speaker 1: Yeah. 263 00:15:09,680 --> 00:15:13,120 Speaker 3: Yeah, it was a very powerful, informative, insightful trip. 264 00:15:14,200 --> 00:15:16,760 Speaker 2: Give us a little bit of information about your backgrounds. 265 00:15:17,240 --> 00:15:20,960 Speaker 2: What's your interest in the innovation VC startup scene in 266 00:15:21,000 --> 00:15:21,560 Speaker 2: New Zealand. 267 00:15:21,720 --> 00:15:25,080 Speaker 3: Yeah, quick story, right, So I came to New Zealand 268 00:15:25,160 --> 00:15:27,280 Speaker 3: on my own when I was fourteen from Singapore in 269 00:15:27,360 --> 00:15:30,600 Speaker 3: the mid nineties when Nape boys from which is a 270 00:15:30,720 --> 00:15:34,320 Speaker 3: very good cultural grounding. And you grew up in Auckland 271 00:15:34,320 --> 00:15:37,800 Speaker 3: City and started work here. After that, I had a 272 00:15:37,880 --> 00:15:40,480 Speaker 3: career professional services and NBA and then had my own 273 00:15:40,520 --> 00:15:45,120 Speaker 3: startup in the early twenty tens in Sydney en route 274 00:15:45,200 --> 00:15:49,320 Speaker 3: coming back home somewhat successful, but then was fortunate enough 275 00:15:49,320 --> 00:15:50,880 Speaker 3: to be invited to be one of the first leaders 276 00:15:50,880 --> 00:15:55,000 Speaker 3: at Canva. So number twenty five, I think business was 277 00:15:55,160 --> 00:15:58,640 Speaker 3: probably about twenty mil and obviously now it's two thousand 278 00:15:58,680 --> 00:16:03,760 Speaker 3: plus strong, well north of twenty billion. And then I 279 00:16:04,000 --> 00:16:05,920 Speaker 3: was a C suite in a few other major startups 280 00:16:05,960 --> 00:16:09,200 Speaker 3: and Ossie came back home. And what I've done for 281 00:16:09,240 --> 00:16:12,400 Speaker 3: the last three years is cultivate a group of an 282 00:16:12,400 --> 00:16:15,560 Speaker 3: early stage founder community called Phase one Phase one Ventures, 283 00:16:16,920 --> 00:16:20,040 Speaker 3: and the target we have is six unicorns from that 284 00:16:20,080 --> 00:16:23,720 Speaker 3: community community, right, and a key part of that is 285 00:16:23,760 --> 00:16:27,040 Speaker 3: global ambition, right, and how we need to be braver 286 00:16:27,160 --> 00:16:31,120 Speaker 3: and boulder because to be honest, we're an entrepreneurial country, 287 00:16:31,440 --> 00:16:33,680 Speaker 3: two islands and the corner of the world. You have 288 00:16:33,800 --> 00:16:38,040 Speaker 3: to be. But the truth is we haven't been able 289 00:16:38,040 --> 00:16:41,080 Speaker 3: to see scale. And that's all we've got to do. 290 00:16:41,240 --> 00:16:44,320 Speaker 3: We've just got to start reaching up and looking up 291 00:16:44,520 --> 00:16:48,240 Speaker 3: and seeing that our skills and experience applied to the 292 00:16:48,240 --> 00:16:51,960 Speaker 3: world's problems drives incredible even more innovation. 293 00:16:52,200 --> 00:16:55,440 Speaker 2: So you've been part of the venture system in various 294 00:16:55,480 --> 00:16:58,600 Speaker 2: places throughout the world, and you mentioned Canva there considered 295 00:16:58,600 --> 00:17:01,680 Speaker 2: one of the world's you know start up. Darling's really 296 00:17:01,960 --> 00:17:06,600 Speaker 2: an incredible success story. What are you seeing in terms 297 00:17:06,600 --> 00:17:09,159 Speaker 2: of New Zealand's space at the moment. 298 00:17:09,400 --> 00:17:15,159 Speaker 3: Yeah, incredible opportunity and perhaps over the last couple of decades, 299 00:17:15,640 --> 00:17:20,800 Speaker 3: perhaps we haven't taken advantage of the of our foundational 300 00:17:21,640 --> 00:17:26,520 Speaker 3: entrepreneurial zeal And then some early wins like Navman and 301 00:17:27,040 --> 00:17:29,760 Speaker 3: a few others, you know, we started. We've always been 302 00:17:29,760 --> 00:17:32,720 Speaker 3: an entrepreneur and we actually have had a very strong 303 00:17:32,800 --> 00:17:37,800 Speaker 3: electrical engineering background, which ellen electrical engineering is a base 304 00:17:37,840 --> 00:17:41,439 Speaker 3: for software engineering. But for a variety of reasons, we 305 00:17:41,600 --> 00:17:46,719 Speaker 3: didn't really hook into the software engineering and software and 306 00:17:46,840 --> 00:17:53,320 Speaker 3: SaaS growth curve. And you need role models, right, So 307 00:17:53,359 --> 00:17:56,560 Speaker 3: when I give a speech in Sydney, three hundred people 308 00:17:56,560 --> 00:17:59,120 Speaker 3: show up and I'm there answering questions for two hours 309 00:17:59,200 --> 00:18:01,119 Speaker 3: because there's a whole bunch of people who want to 310 00:18:01,119 --> 00:18:03,760 Speaker 3: be the next Melanie Perkins from Canvas and safety culture 311 00:18:03,760 --> 00:18:06,879 Speaker 3: and culture app we've got zero. We've had then to 312 00:18:06,880 --> 00:18:10,960 Speaker 3: a certain extent, but we haven't had that role modeling, 313 00:18:11,240 --> 00:18:15,640 Speaker 3: which then doesn't allow investor class to believe that Canvas 314 00:18:15,640 --> 00:18:19,440 Speaker 3: secondary sale of two billion dollars of Aussie flooding back 315 00:18:19,440 --> 00:18:24,560 Speaker 3: into the Sydney market last year this year can happen here, right, 316 00:18:24,600 --> 00:18:27,439 Speaker 3: So you need those role models just both for founders 317 00:18:28,119 --> 00:18:31,920 Speaker 3: and for the investor class so that it's really exciting 318 00:18:31,960 --> 00:18:35,040 Speaker 3: companies like Tracksuit, Next Work, Kiki, there's a whole bunch 319 00:18:35,040 --> 00:18:40,399 Speaker 3: of now New Quodis new new software scale ups that 320 00:18:40,480 --> 00:18:42,840 Speaker 3: are startups that are coming through. So we need that 321 00:18:43,040 --> 00:18:46,920 Speaker 3: role modeling. So we need a few winners to really supercharge, 322 00:18:47,000 --> 00:18:48,960 Speaker 3: a few more winners to supercharge. 323 00:18:49,240 --> 00:18:55,000 Speaker 2: Yeah, for sure. That's obviously, you know, a difficult thing, 324 00:18:55,240 --> 00:18:58,200 Speaker 2: right because as they say, the hardest part of getting 325 00:18:58,200 --> 00:19:01,280 Speaker 2: the boulder rolling is that first push. And in some 326 00:19:01,359 --> 00:19:04,000 Speaker 2: ways we've kind of had that. We had a zero 327 00:19:04,119 --> 00:19:06,680 Speaker 2: as you mentioned, and we've had trade me and are 328 00:19:06,720 --> 00:19:10,960 Speaker 2: you starting to see the Jacob happening, do you think? 329 00:19:11,080 --> 00:19:14,120 Speaker 2: Or are we still still kind of trying to get 330 00:19:14,160 --> 00:19:15,320 Speaker 2: that first push. 331 00:19:15,880 --> 00:19:19,800 Speaker 3: No, it's going to be an incredibly exciting time in 332 00:19:19,880 --> 00:19:23,359 Speaker 3: the next ten to fifteen years, right, and it is 333 00:19:23,480 --> 00:19:27,000 Speaker 3: well started as well. Started that likes of gd one 334 00:19:27,560 --> 00:19:31,200 Speaker 3: and Samantha Wong from Blackbird coming into New Zealand and 335 00:19:31,560 --> 00:19:35,399 Speaker 3: going hey, let's play like a global game and New 336 00:19:35,480 --> 00:19:39,520 Speaker 3: Zealand VCS ice House has been an incredible pioneer in 337 00:19:40,800 --> 00:19:45,199 Speaker 3: kicking off the space but having global counterparts. So Vicnation 338 00:19:45,200 --> 00:19:48,480 Speaker 3: from GD one came from Apple in the US as 339 00:19:48,600 --> 00:19:52,080 Speaker 3: Kiri come back home and I think your question regards 340 00:19:52,119 --> 00:19:55,480 Speaker 3: to one is the Jacob happening? Absolutely? It is? How 341 00:19:55,520 --> 00:20:00,280 Speaker 3: do why is that happening? It's not a surprise a 342 00:20:00,320 --> 00:20:05,120 Speaker 3: group of overseas Kiwis who've gone overseas and done some 343 00:20:05,160 --> 00:20:09,520 Speaker 3: stuff and seeing some stuff coming back home and going hey, 344 00:20:09,720 --> 00:20:12,719 Speaker 3: so maybe we could do this differently. We can have 345 00:20:12,760 --> 00:20:15,399 Speaker 3: a different horizon, a different We need to think about 346 00:20:15,400 --> 00:20:18,240 Speaker 3: early stage differently, like myself. Right, So when I came 347 00:20:18,280 --> 00:20:21,560 Speaker 3: back home three years ago, all I've done for the 348 00:20:21,640 --> 00:20:23,600 Speaker 3: last three years, and I started in a living room, 349 00:20:24,200 --> 00:20:27,240 Speaker 3: is give free strategic support to a group of early 350 00:20:27,240 --> 00:20:30,879 Speaker 3: stage founders, going hey, let's get the foundations and fundamentals 351 00:20:30,960 --> 00:20:33,960 Speaker 3: right if you really want to go big. So that 352 00:20:34,119 --> 00:20:37,440 Speaker 3: ecosystem is now expanding with a Kiwi diaspora that's coming 353 00:20:37,480 --> 00:20:41,600 Speaker 3: back home and a group of early founders listening, what 354 00:20:41,640 --> 00:20:44,560 Speaker 3: could we do to help is actually make even more 355 00:20:44,680 --> 00:20:49,200 Speaker 3: space for that Kii diaspora to come in because sometimes 356 00:20:49,200 --> 00:20:52,200 Speaker 3: in a small country, when you hit the ceiling, there 357 00:20:52,280 --> 00:20:55,200 Speaker 3: is a desire to maintain that ceiling. You know, that's 358 00:20:55,200 --> 00:20:58,080 Speaker 3: a normal thing. So if we can be more open 359 00:20:58,200 --> 00:21:02,480 Speaker 3: to hey, people overseas and you've come back home, let's 360 00:21:02,560 --> 00:21:06,120 Speaker 3: listen a bit more and understand what you've seen that 361 00:21:06,200 --> 00:21:08,800 Speaker 3: I think would accelerate things even further. 362 00:21:09,200 --> 00:21:11,679 Speaker 2: What are us What would you say are some of 363 00:21:11,720 --> 00:21:14,440 Speaker 2: those key things you mentioned? You know, there are things 364 00:21:14,520 --> 00:21:16,800 Speaker 2: people have seen an experience and they're bringing that home. 365 00:21:17,560 --> 00:21:20,719 Speaker 2: What you what are the lessons that you've seen overseas 366 00:21:21,080 --> 00:21:23,280 Speaker 2: or that you've seen other people bring back that are 367 00:21:23,280 --> 00:21:25,280 Speaker 2: really important that we should be capitalizing on. 368 00:21:25,560 --> 00:21:27,760 Speaker 3: Yeah, and we discussed this just before we chat it. Right, 369 00:21:27,880 --> 00:21:30,679 Speaker 3: like a tech company, you could argue, let's break it 370 00:21:30,760 --> 00:21:33,399 Speaker 3: up into three tiers, right, a tech company that wants 371 00:21:33,440 --> 00:21:37,120 Speaker 3: to reach some sort of exit or ceiling at one two, 372 00:21:37,840 --> 00:21:40,040 Speaker 3: one hundred mil, right, and then you have the one 373 00:21:40,080 --> 00:21:42,960 Speaker 3: hundred mil to a billion ceilings second swim lane, and 374 00:21:42,960 --> 00:21:46,040 Speaker 3: then the third swim lane is a billion two billion 375 00:21:46,080 --> 00:21:49,600 Speaker 3: north right. And it's very important that any one of 376 00:21:49,600 --> 00:21:53,480 Speaker 3: those swim lanes is equally cool, right, But it's they're 377 00:21:53,520 --> 00:21:57,840 Speaker 3: different founders with different constraints and different ambitions that work 378 00:21:57,880 --> 00:22:00,399 Speaker 3: in each of those swim lanes. And it's really important. 379 00:22:00,400 --> 00:22:03,200 Speaker 3: There's a set of different conditions. But let's talk about 380 00:22:03,200 --> 00:22:06,679 Speaker 3: that last swim lane, right, like that two billion north 381 00:22:06,800 --> 00:22:10,800 Speaker 3: world changing company. And again I can't state this enough. 382 00:22:10,840 --> 00:22:13,240 Speaker 3: The other two swim lanes and entrepreneurs are equally cool. 383 00:22:13,280 --> 00:22:15,560 Speaker 3: What's cool is doing what's right by you. But that 384 00:22:15,680 --> 00:22:20,480 Speaker 3: last swim lane, what's important is a founder that wants 385 00:22:20,560 --> 00:22:25,080 Speaker 3: to change the world that has unheralded like ambition, right, 386 00:22:25,280 --> 00:22:29,560 Speaker 3: I want to six fix a global problem. Right. So 387 00:22:29,600 --> 00:22:31,880 Speaker 3: something conversation I have with all the Phase one founders 388 00:22:31,920 --> 00:22:34,400 Speaker 3: is you know what's your why, and you know when 389 00:22:34,440 --> 00:22:37,840 Speaker 3: you as you as you gain in influence and so forth, 390 00:22:38,000 --> 00:22:39,399 Speaker 3: what are you going to do with that? And you 391 00:22:39,480 --> 00:22:44,000 Speaker 3: have that conversation early on. Outside of that what's really important? 392 00:22:44,160 --> 00:22:46,239 Speaker 3: So and you actually have to have a US from 393 00:22:46,320 --> 00:22:51,200 Speaker 3: day one customer approach because it's the largest homogeneous market 394 00:22:51,240 --> 00:22:56,000 Speaker 3: that works. And finally you have to build. You have 395 00:22:56,040 --> 00:23:00,159 Speaker 3: to have customer and problem obsession, right, because you're trying 396 00:23:00,160 --> 00:23:03,399 Speaker 3: to build a love product that scales the world, and 397 00:23:03,440 --> 00:23:06,239 Speaker 3: the only way you do that is by having an 398 00:23:06,280 --> 00:23:13,720 Speaker 3: incredible thesis on a deep problem with this huge ambition 399 00:23:14,400 --> 00:23:16,639 Speaker 3: that said, and that delta is really hard to manage. 400 00:23:17,040 --> 00:23:18,000 Speaker 3: Does that make sense? 401 00:23:18,200 --> 00:23:21,880 Speaker 2: Yeah, yeah, definitely a couple of things that I want 402 00:23:21,880 --> 00:23:23,280 Speaker 2: to pick up on there. The first is that you 403 00:23:23,320 --> 00:23:26,239 Speaker 2: said you need to be US from day one, and 404 00:23:26,359 --> 00:23:28,760 Speaker 2: traditionally we've very you know, talked about it in terms 405 00:23:28,800 --> 00:23:33,639 Speaker 2: of being global from day one. Obviously, you know, you 406 00:23:33,760 --> 00:23:36,280 Speaker 2: pointed out the benefits of the US that the homogeneity 407 00:23:37,440 --> 00:23:40,479 Speaker 2: the last size of the market. But is it the 408 00:23:40,480 --> 00:23:43,959 Speaker 2: only option? Like, obviously you've got the UK and Europe 409 00:23:44,000 --> 00:23:47,320 Speaker 2: as well, where if the Europe has a really large 410 00:23:47,359 --> 00:23:51,960 Speaker 2: English speaking group and the UK is a great entry point, 411 00:23:52,440 --> 00:23:55,760 Speaker 2: you've got Australia which is a great launching pad for scaling, 412 00:23:55,920 --> 00:23:57,400 Speaker 2: So why the US. 413 00:23:57,880 --> 00:24:00,680 Speaker 3: So there's a few reasons for that. So global from 414 00:24:00,800 --> 00:24:08,960 Speaker 3: day one is effectively either US, China, India and Russia. Right, 415 00:24:09,400 --> 00:24:14,240 Speaker 3: it's a large market. And let's discuss the homogeneity piece. 416 00:24:14,280 --> 00:24:18,240 Speaker 3: So Europe doesn't offer homogeneity right the minute you solve 417 00:24:18,880 --> 00:24:21,840 Speaker 3: for let's say it's a problem for real estate agents 418 00:24:21,920 --> 00:24:25,160 Speaker 3: of this size, of this size and some workflow automation tool, 419 00:24:25,720 --> 00:24:33,320 Speaker 3: or it's for couples who have this sort of lifestyle 420 00:24:33,400 --> 00:24:37,480 Speaker 3: problem issue. Right the minute, say you're operating in the 421 00:24:37,560 --> 00:24:40,600 Speaker 3: United Kingdom. Oh wait, if you want to scale to Italy, 422 00:24:41,400 --> 00:24:49,719 Speaker 3: to France, to Czech Republic, suddenly the rules, regulations, culture, food, 423 00:24:49,960 --> 00:24:55,680 Speaker 3: everything changes. So then there's additional cost to manage that change. 424 00:24:56,040 --> 00:24:59,480 Speaker 3: Right while say you just operated in India, US India 425 00:24:59,560 --> 00:25:02,520 Speaker 3: or China or US Russia for example, or Brazil, maybe 426 00:25:03,240 --> 00:25:06,800 Speaker 3: then there is still a culturally, there is a homogeneity, 427 00:25:07,200 --> 00:25:11,159 Speaker 3: and US of those options is the only one that 428 00:25:11,320 --> 00:25:17,159 Speaker 3: offers sort of law contracts signaling. All of that works 429 00:25:17,160 --> 00:25:20,919 Speaker 3: to a large extent. Now, the other question is, but 430 00:25:21,040 --> 00:25:23,960 Speaker 3: when we have a launch in Australia fest right or 431 00:25:24,040 --> 00:25:27,920 Speaker 3: United Kingdom. First the issue is if the truth of 432 00:25:27,960 --> 00:25:32,239 Speaker 3: the matter is, hey, we're building a global business and 433 00:25:32,320 --> 00:25:35,800 Speaker 3: part of that we have to win. Well, we're only 434 00:25:35,800 --> 00:25:37,920 Speaker 3: able to win build a global business if we win 435 00:25:37,960 --> 00:25:41,280 Speaker 3: the US, right, and we're talking about software scale ups generally. Right, 436 00:25:42,000 --> 00:25:45,880 Speaker 3: Oh the minute you have any other entity like an Australian, 437 00:25:45,920 --> 00:25:47,720 Speaker 3: United Kingdom and d that's in the back of your 438 00:25:47,760 --> 00:25:51,119 Speaker 3: mind because that's starting to put food on the table 439 00:25:51,359 --> 00:25:54,240 Speaker 3: for some early employees, etc. When if you want to 440 00:25:54,280 --> 00:25:57,360 Speaker 3: go global, I have to go all in on this, 441 00:25:58,320 --> 00:26:00,439 Speaker 3: and I need to put one hundred and fifty of 442 00:26:00,520 --> 00:26:03,920 Speaker 3: my thought and energy, the CEO's thought and energy on this, 443 00:26:04,119 --> 00:26:07,800 Speaker 3: and I can't carve out any other energy because the 444 00:26:07,880 --> 00:26:11,760 Speaker 3: minute you do that, you're defeating that first priority goal 445 00:26:12,000 --> 00:26:16,800 Speaker 3: of hey, we need that large foundation and there's nothing 446 00:26:16,800 --> 00:26:18,920 Speaker 3: wrong in launching in Australia. But I then founders and 447 00:26:19,000 --> 00:26:22,639 Speaker 3: entrepreneurs need to be circumspect and investors need to understand, Okay, 448 00:26:22,880 --> 00:26:25,399 Speaker 3: so this is going to be This may de risk 449 00:26:25,480 --> 00:26:31,000 Speaker 3: the venture, but it risks scale right right. So then 450 00:26:31,440 --> 00:26:35,280 Speaker 3: from a strategic and commercial perspective, you can make sure 451 00:26:35,280 --> 00:26:39,440 Speaker 3: you manage expectations even better. The wonderful thing that we 452 00:26:39,560 --> 00:26:46,720 Speaker 3: have is culturally Kiwi's and Aussies are even the American 453 00:26:46,760 --> 00:26:50,119 Speaker 3: culture is incredibly accessible to us. That truly, we are 454 00:26:50,359 --> 00:26:55,439 Speaker 3: absolutely comfortable and confident with a US cultural base. In 455 00:26:55,520 --> 00:26:58,920 Speaker 3: my recent trip to the US, a learning was capital 456 00:26:59,000 --> 00:27:04,080 Speaker 3: is easy, talent's easy, and QWE founders who make it 457 00:27:04,119 --> 00:27:08,080 Speaker 3: to the US are better than the top tier American 458 00:27:08,119 --> 00:27:13,960 Speaker 3: founders because American founders feel they have optionality right because 459 00:27:13,960 --> 00:27:15,920 Speaker 3: they are like, hey, if this doesn't work out, I'll 460 00:27:15,960 --> 00:27:17,880 Speaker 3: go work in big tech or I'll start something else 461 00:27:17,920 --> 00:27:19,760 Speaker 3: and I know that credit's kind of easy and I'll 462 00:27:19,800 --> 00:27:22,720 Speaker 3: be fine, while a QWI founder who makes the US 463 00:27:23,320 --> 00:27:26,960 Speaker 3: knows and believes they have one shot and then they 464 00:27:27,000 --> 00:27:29,720 Speaker 3: go all in. Like there were countless times I was 465 00:27:29,760 --> 00:27:32,800 Speaker 3: working with Toby Thomas Smith from KIKI over the weekend 466 00:27:32,920 --> 00:27:36,280 Speaker 3: for three weeks on end and we'd be the only 467 00:27:36,320 --> 00:27:39,040 Speaker 3: people and the we work, I was stunned. And there 468 00:27:39,080 --> 00:27:42,680 Speaker 3: were you know, the iconic Y Combinator founders all around, 469 00:27:43,160 --> 00:27:46,360 Speaker 3: and they were not around, and I was like, wait 470 00:27:46,359 --> 00:27:48,280 Speaker 3: a second, what's going on? And I have conversations with them, 471 00:27:48,320 --> 00:27:50,560 Speaker 3: and I was like no, Like, I know a huge 472 00:27:50,560 --> 00:27:54,200 Speaker 3: group of QI founders that are hungrier, better and even 473 00:27:54,240 --> 00:27:57,600 Speaker 3: more purposeful. So that's really exciting. 474 00:27:57,880 --> 00:28:02,680 Speaker 2: Yeah yeah, cool. Capital is easy in the US and 475 00:28:03,320 --> 00:28:08,280 Speaker 2: you know, more available and more plentiful. The question is 476 00:28:08,720 --> 00:28:13,080 Speaker 2: how do we get US investors who might be used 477 00:28:13,080 --> 00:28:16,680 Speaker 2: to investing in the US companies because it's easy. You 478 00:28:16,720 --> 00:28:18,880 Speaker 2: don't have to worry about where's my money going into 479 00:28:18,920 --> 00:28:22,200 Speaker 2: this country in the South Pacific. How do we bridge 480 00:28:22,240 --> 00:28:25,480 Speaker 2: that gap? How do we say, as a first time founder, 481 00:28:26,200 --> 00:28:29,240 Speaker 2: you can trust me with your money, mister San Francisco. 482 00:28:29,359 --> 00:28:33,000 Speaker 3: Yeah, yeah, yeah. I think it's a few things. Firstly, 483 00:28:33,080 --> 00:28:35,119 Speaker 3: I think your first check is coming from Australian New 484 00:28:35,200 --> 00:28:38,120 Speaker 3: Zealand and that's the truth of the matter, right, So 485 00:28:38,240 --> 00:28:41,160 Speaker 3: then what do you need next? You need again role modeling, 486 00:28:41,360 --> 00:28:44,520 Speaker 3: And there's an increasing number of founders who have gone 487 00:28:44,560 --> 00:28:47,760 Speaker 3: to the US, who've been successful that are now through 488 00:28:47,800 --> 00:28:50,320 Speaker 3: back channels and cultural norms going no, no, you can 489 00:28:50,440 --> 00:28:52,800 Speaker 3: do this, let me connect you. Lastly, I think there 490 00:28:52,880 --> 00:28:56,880 Speaker 3: is a real opportunity and the likes of GD one, Blackbird, 491 00:28:57,320 --> 00:29:00,480 Speaker 3: ice House are doing this like ice House in San 492 00:29:00,520 --> 00:29:03,200 Speaker 3: Francisco when I was there, where they are making sure 493 00:29:03,280 --> 00:29:07,400 Speaker 3: that they are partnering with US VC firms. Right, So 494 00:29:07,480 --> 00:29:10,280 Speaker 3: then the vcs here have a part to play in 495 00:29:10,320 --> 00:29:13,680 Speaker 3: regards to hey, let's nurture and then who are we 496 00:29:13,840 --> 00:29:17,720 Speaker 3: partnering with? Who are us counterparts? And I've seen again 497 00:29:17,760 --> 00:29:19,800 Speaker 3: the likes of GD one, Blackburn and ice House do 498 00:29:19,960 --> 00:29:24,720 Speaker 3: that around hey, how do we like nurture our founders? 499 00:29:24,760 --> 00:29:28,640 Speaker 3: And then in some ways like shake hands to shake 500 00:29:28,640 --> 00:29:31,960 Speaker 3: hands with another venture part venture player going hey, okay, 501 00:29:32,080 --> 00:29:35,000 Speaker 3: you're now playing it even larger capital. How do we 502 00:29:35,080 --> 00:29:35,720 Speaker 3: pass the song? 503 00:29:35,840 --> 00:29:38,560 Speaker 2: If you will, how do you tap into it? If 504 00:29:38,600 --> 00:29:42,040 Speaker 2: you're a founder. I mean, are you relying on your 505 00:29:42,120 --> 00:29:45,360 Speaker 2: VC investors to go and make those introductions? Do you 506 00:29:45,360 --> 00:29:47,560 Speaker 2: know You've got like the likes of nz NTE, but 507 00:29:47,600 --> 00:29:51,200 Speaker 2: they've got limited resources as well, So you know, how 508 00:29:51,200 --> 00:29:54,680 Speaker 2: do you actually make those connections to these other founders, 509 00:29:54,720 --> 00:29:57,720 Speaker 2: to the to these experienced kiwis these you know, because 510 00:29:57,720 --> 00:29:59,520 Speaker 2: there is still a limited number compared to. 511 00:29:59,720 --> 00:30:02,720 Speaker 3: Yeah, I can tell you this. It's actually being quite 512 00:30:02,840 --> 00:30:05,600 Speaker 3: pointed about the questions you ask and who you ask, 513 00:30:05,720 --> 00:30:08,880 Speaker 3: who you hang out with. So how many QII founders 514 00:30:09,680 --> 00:30:12,640 Speaker 3: who want to go on this global journey are actually going? 515 00:30:13,280 --> 00:30:16,080 Speaker 3: Who has been on this global journey? And I want 516 00:30:16,120 --> 00:30:18,440 Speaker 3: to speak to those people because one of the things 517 00:30:18,520 --> 00:30:22,040 Speaker 3: that's quite distracting is there are so many people with 518 00:30:22,080 --> 00:30:26,000 Speaker 3: the best of intentions that start offering support, advice and guidance. 519 00:30:26,560 --> 00:30:26,760 Speaker 2: Right. 520 00:30:26,960 --> 00:30:31,960 Speaker 3: So for example, somebody who is currently a senior marketing 521 00:30:32,120 --> 00:30:35,640 Speaker 3: leader at Meta a, Facebook or Google does not have 522 00:30:35,720 --> 00:30:40,000 Speaker 3: this experience. That is a different experience like AKII is 523 00:30:40,040 --> 00:30:43,880 Speaker 3: doing that, right, that's big tech, that's a large company experience. 524 00:30:44,480 --> 00:30:48,840 Speaker 3: How many other is a KII founder going. I'm looking 525 00:30:48,880 --> 00:30:51,760 Speaker 3: to speak to other kiris who have gone through this 526 00:30:52,280 --> 00:30:58,800 Speaker 3: early seed to scale up experience either as a founder, 527 00:30:59,200 --> 00:31:03,760 Speaker 3: as an early breader, or as an investor. And I 528 00:31:03,880 --> 00:31:08,840 Speaker 3: know the connections, the language, et cetera. So if that's 529 00:31:09,280 --> 00:31:11,560 Speaker 3: be my biggest advice to keep founders going on this journey, 530 00:31:11,800 --> 00:31:17,959 Speaker 3: one of around, please be quite clear about the question 531 00:31:18,120 --> 00:31:23,360 Speaker 3: you're asking and who you're asking it too, because most 532 00:31:23,480 --> 00:31:27,600 Speaker 3: of us have the best of intentions, but then really 533 00:31:27,680 --> 00:31:32,200 Speaker 3: tap into those with the legitimate experience that you are seeking. 534 00:31:33,760 --> 00:31:37,200 Speaker 2: Yeah, that can be kind of a cultural thing with Kiwi. 535 00:31:37,240 --> 00:31:39,760 Speaker 2: Sometimes we don't want to ask the direct question, right Like, 536 00:31:39,800 --> 00:31:42,800 Speaker 2: we don't want to say, hey, I know you did this, 537 00:31:43,120 --> 00:31:45,160 Speaker 2: how did you do that? There was a sense of 538 00:31:45,560 --> 00:31:49,280 Speaker 2: a transactional nature about that in terms of I'm willing 539 00:31:49,360 --> 00:31:52,320 Speaker 2: to share with you what I know, but we're gonna 540 00:31:52,480 --> 00:31:55,480 Speaker 2: it's gonna be purposeful. In New Zealand, maybe doesn't quite 541 00:31:55,520 --> 00:32:00,760 Speaker 2: have that meeting oriented perspective to those kinds of things. 542 00:32:00,560 --> 00:32:03,160 Speaker 3: Right, But I'd frame it a little bit differently, right So, 543 00:32:03,800 --> 00:32:09,080 Speaker 3: I think again, because we're a small country, we don't 544 00:32:09,120 --> 00:32:15,080 Speaker 3: have we don't know how to signal security safety excellence 545 00:32:15,880 --> 00:32:21,800 Speaker 3: through very well formed badges. Right Like, so someone who's 546 00:32:21,840 --> 00:32:25,080 Speaker 3: worked who's run a division at g Capital or Boeing 547 00:32:25,640 --> 00:32:28,120 Speaker 3: or Canvas, et cetera. Oh, I can see that badge 548 00:32:28,160 --> 00:32:29,760 Speaker 3: and I know what you've done and I know what 549 00:32:29,800 --> 00:32:32,280 Speaker 3: you experience it. So that's a small country thing, and 550 00:32:32,360 --> 00:32:33,880 Speaker 3: it's not a bad thing. It's not a negative. It 551 00:32:34,160 --> 00:32:35,920 Speaker 3: is what it is. So then we want to sit down, 552 00:32:36,480 --> 00:32:39,200 Speaker 3: let's get to know you as a person. While in 553 00:32:39,240 --> 00:32:42,400 Speaker 3: a large country you can look at the discrete signals 554 00:32:42,960 --> 00:32:46,000 Speaker 3: and you can form opinions. You can see the stories 555 00:32:46,440 --> 00:32:51,200 Speaker 3: much faster. Right, and so if a KIP founder wants 556 00:32:51,200 --> 00:32:53,480 Speaker 3: to go play that game, Okay, so this is the 557 00:32:53,520 --> 00:32:57,760 Speaker 3: context that culture that you're now executing on. Let's be 558 00:32:57,800 --> 00:33:00,000 Speaker 3: a little bit clearer. I'm here for this. There's my background. 559 00:33:00,040 --> 00:33:01,840 Speaker 3: It's made this and I have to kind of explain 560 00:33:02,320 --> 00:33:05,280 Speaker 3: because most Americans won't know much about New Zealm. Yeah, 561 00:33:05,280 --> 00:33:08,400 Speaker 3: but they're really curious. So share some tidbits, get them excited. 562 00:33:08,520 --> 00:33:12,760 Speaker 3: They trust it. It's Western, etc. They've heard of the 563 00:33:12,840 --> 00:33:16,120 Speaker 3: All Blacks and the America's Cup and thank God for 564 00:33:16,160 --> 00:33:18,400 Speaker 3: the Lord of the Rings. So they're like, Okay, we 565 00:33:18,560 --> 00:33:21,120 Speaker 3: know this, So now what would you like? 566 00:33:21,600 --> 00:33:26,520 Speaker 2: Yeah, gotcha? Yeah, So I guess like being in the 567 00:33:26,520 --> 00:33:28,200 Speaker 2: same way that you have, like an elevator pitch for 568 00:33:28,240 --> 00:33:30,920 Speaker 2: your company, have an elevator pitch for you as a 569 00:33:30,960 --> 00:33:34,480 Speaker 2: person that you can just drop in fifteen twenty seconds 570 00:33:34,560 --> 00:33:35,880 Speaker 2: and then be like, now it's a business guy. 571 00:33:36,000 --> 00:33:37,400 Speaker 3: Absolutely. Absolutely. 572 00:33:38,000 --> 00:33:39,360 Speaker 2: The other thing that I wanted to ask you about 573 00:33:39,480 --> 00:33:45,320 Speaker 2: is the dials in New Zealand's innovation ecosystem. So what 574 00:33:45,360 --> 00:33:49,040 Speaker 2: do we need in terms of the support around it 575 00:33:49,080 --> 00:33:52,000 Speaker 2: to actually make it sing? And one of those things 576 00:33:52,120 --> 00:33:57,480 Speaker 2: is the conversation on going around ESOPs. And recently the 577 00:33:57,520 --> 00:33:59,320 Speaker 2: government came out and said they're going to up the 578 00:33:59,320 --> 00:34:02,320 Speaker 2: threshold about five thousand to seven and a half thousand dollars. 579 00:34:02,800 --> 00:34:03,640 Speaker 2: Do you think that's enough? 580 00:34:04,040 --> 00:34:07,680 Speaker 3: Yeah, And as you're aware, I ran for the National 581 00:34:07,720 --> 00:34:12,880 Speaker 3: Party in the recent election and excited about furthering that 582 00:34:13,040 --> 00:34:17,000 Speaker 3: journey another day. And let's be clear to all the listeners. 583 00:34:17,880 --> 00:34:23,360 Speaker 3: ESOP is the equity share program that high tech companies, 584 00:34:23,480 --> 00:34:27,640 Speaker 3: especially high growth companies, need to offer, because the argument is, hey, 585 00:34:27,719 --> 00:34:32,520 Speaker 3: take a discount on your salary and instead a big 586 00:34:32,560 --> 00:34:35,399 Speaker 3: part of your conversation that will be equity. So yes, 587 00:34:35,440 --> 00:34:42,120 Speaker 3: we do need to reimagine equity visas Erica Stanfords come 588 00:34:42,120 --> 00:34:44,160 Speaker 3: out talking about this as well, So there is an 589 00:34:44,200 --> 00:34:48,480 Speaker 3: opportunity to reimagine all of this. The government's obviously dealing 590 00:34:48,480 --> 00:34:52,319 Speaker 3: with a few different priorities, so taking one thing at 591 00:34:52,320 --> 00:34:56,120 Speaker 3: a time, and I'm excited to see that progression in 592 00:34:56,160 --> 00:34:58,239 Speaker 3: that space as well as be part of that conversation. 593 00:35:00,520 --> 00:35:05,440 Speaker 2: In summary, I guess on the ups in particular, you 594 00:35:05,480 --> 00:35:07,359 Speaker 2: said it was a good first step, but you do 595 00:35:07,400 --> 00:35:08,439 Speaker 2: think it needs to gook further. 596 00:35:08,440 --> 00:35:11,240 Speaker 3: Oh of course. I mean, if you want billionaire unicorn 597 00:35:11,280 --> 00:35:15,200 Speaker 3: businesses coming from New Zealand, it has to be like 598 00:35:15,520 --> 00:35:20,520 Speaker 3: there's a template, like there's no, this is not like 599 00:35:20,560 --> 00:35:23,400 Speaker 3: a crazy idea like ye, yes, yeah. 600 00:35:23,680 --> 00:35:25,919 Speaker 2: I mean I mean because the thing is as well, 601 00:35:25,920 --> 00:35:27,640 Speaker 2: it's going from five k to seven and a half 602 00:35:27,680 --> 00:35:31,279 Speaker 2: k year, which is nothing really in the grand scheme 603 00:35:31,320 --> 00:35:33,359 Speaker 2: of things. When you're talking about if you're bringing on 604 00:35:33,440 --> 00:35:37,080 Speaker 2: a CTO and you know you want to say, well, 605 00:35:37,080 --> 00:35:39,719 Speaker 2: we're going to pay you niney K and no you 606 00:35:39,719 --> 00:35:41,440 Speaker 2: could go and get one hundred and fifty k elsewhere, 607 00:35:41,719 --> 00:35:43,160 Speaker 2: but we're going to try and top you up with 608 00:35:43,200 --> 00:35:45,960 Speaker 2: some of that. Like seven grand a year is pittance 609 00:35:46,000 --> 00:35:50,040 Speaker 2: for them. So but your your argument is that is 610 00:35:50,080 --> 00:35:54,120 Speaker 2: a signal that they're taking it seriously and just working 611 00:35:54,160 --> 00:35:54,680 Speaker 2: through things. 612 00:35:54,719 --> 00:35:58,960 Speaker 3: Of course, I mean the country has seen better days 613 00:35:59,400 --> 00:36:03,640 Speaker 3: and we are working through quite a few things to 614 00:36:03,800 --> 00:36:08,200 Speaker 3: get us to a better place. And government's been obviously 615 00:36:08,480 --> 00:36:14,719 Speaker 3: very good with getting stuff done, and nobody's denying that 616 00:36:14,760 --> 00:36:16,520 Speaker 3: in regards to hey, we said we're going to do 617 00:36:16,560 --> 00:36:19,279 Speaker 3: this in one, two, three, four, So as part of 618 00:36:19,320 --> 00:36:22,280 Speaker 3: a long to do list, I definitely appreciate the signaling. 619 00:36:24,640 --> 00:36:28,879 Speaker 3: But definitely if the ambition is to have more high 620 00:36:28,880 --> 00:36:32,120 Speaker 3: powered software and high goro tech companies, this needs to change. 621 00:36:32,239 --> 00:36:34,520 Speaker 3: But to be fair, this is not the most important thing. 622 00:36:35,360 --> 00:36:38,440 Speaker 3: The most important thing is a group of more and 623 00:36:38,520 --> 00:36:41,880 Speaker 3: more Kiwi entrepreneurs believing that they can go big. 624 00:36:49,160 --> 00:36:51,200 Speaker 2: So if I'm a business leader, what are some actions 625 00:36:51,200 --> 00:36:53,640 Speaker 2: that I can take as a business leader in New 626 00:36:53,719 --> 00:36:55,759 Speaker 2: Zealand to actually help this progress. 627 00:36:55,880 --> 00:37:00,320 Speaker 3: That's actually a really interesting question. I think first, almost 628 00:37:00,360 --> 00:37:04,640 Speaker 3: acknowledging your risk profile and risk framework right, which is 629 00:37:04,719 --> 00:37:07,920 Speaker 3: absolutely okay, right, and because it's really important you have 630 00:37:07,920 --> 00:37:12,239 Speaker 3: so many employees and things your vital entity and and 631 00:37:12,239 --> 00:37:16,239 Speaker 3: and and really be really happy about that. The other 632 00:37:16,320 --> 00:37:21,319 Speaker 3: pieces do you want to tackle global markets right? I 633 00:37:21,400 --> 00:37:24,719 Speaker 3: was recently of speaking to one of the head of 634 00:37:24,719 --> 00:37:27,920 Speaker 3: strategy at one of the energy companies and and uh 635 00:37:28,040 --> 00:37:30,759 Speaker 3: and they were like, you know, but you know, our 636 00:37:30,800 --> 00:37:34,480 Speaker 3: board may not want to you know, grow right. I 637 00:37:34,560 --> 00:37:39,319 Speaker 3: think there's an opportunity to know that middle and large 638 00:37:39,360 --> 00:37:42,760 Speaker 3: New Zealm companies. If we do not grow our GDP 639 00:37:42,920 --> 00:37:47,799 Speaker 3: per capita in New Zealand, we can't have the imagination 640 00:37:48,200 --> 00:37:50,880 Speaker 3: that we have of ourselves of being done. Marks we 641 00:37:51,000 --> 00:37:53,560 Speaker 3: to nowhere, right, and we have a desperate desire to 642 00:37:53,560 --> 00:37:58,000 Speaker 3: address inequity small country compassion, Absolutely, we are compassion our call. 643 00:37:58,360 --> 00:38:02,239 Speaker 3: But we have to all a GDP per capita. We 644 00:38:02,440 --> 00:38:06,040 Speaker 3: have to for us to have the hospitals and schools 645 00:38:06,080 --> 00:38:08,800 Speaker 3: and all of this stuff. Okay, so then as a 646 00:38:09,080 --> 00:38:12,000 Speaker 3: as a as a as a middling company. Wait, maybe 647 00:38:12,040 --> 00:38:17,000 Speaker 3: we have a responsibility to tap into global markets. How 648 00:38:17,000 --> 00:38:20,000 Speaker 3: do we tap into global markets? Maybe we should set 649 00:38:20,239 --> 00:38:24,759 Speaker 3: like a higher revenue goal. What could we do there? 650 00:38:25,280 --> 00:38:28,279 Speaker 3: Could we send services? Could we start a services arm 651 00:38:28,719 --> 00:38:31,520 Speaker 3: and me let's start off with Australia. Let's do it 652 00:38:31,560 --> 00:38:36,719 Speaker 3: like a pilot thing. Could we could we maybe extend 653 00:38:36,800 --> 00:38:40,879 Speaker 3: our products to one other niche tier in the US. 654 00:38:40,880 --> 00:38:43,600 Speaker 3: And can we set aside a small little amount of money, 655 00:38:43,600 --> 00:38:46,239 Speaker 3: even if it's two hundred k a finer k just 656 00:38:46,280 --> 00:38:50,520 Speaker 3: as an experiment. Actually you don't do it with even less. 657 00:38:50,640 --> 00:38:54,280 Speaker 3: Start super lean and can we get one overseas customer, 658 00:38:54,400 --> 00:39:01,360 Speaker 3: two overseas customers in the pursuit that building more powerful small, 659 00:39:01,400 --> 00:39:04,759 Speaker 3: medium sized and large businesses in New Zealand with a 660 00:39:04,800 --> 00:39:09,279 Speaker 3: global perspective is valuable for all of us. Right, So 661 00:39:09,600 --> 00:39:13,840 Speaker 3: it's hard, This is a hard thing. It requires leadership 662 00:39:13,960 --> 00:39:18,719 Speaker 3: within those businesses. But my only pitch is, hey, if 663 00:39:18,760 --> 00:39:21,800 Speaker 3: you guys become more valuable and start to have a 664 00:39:21,840 --> 00:39:25,040 Speaker 3: few more global customers, it's actually good for all of 665 00:39:25,120 --> 00:39:32,080 Speaker 3: us because suddenly your employees, your productivity because now the 666 00:39:32,200 --> 00:39:35,520 Speaker 3: dollar of our effort that you're putting in is being 667 00:39:36,640 --> 00:39:41,680 Speaker 3: spread across a few towns in the US, you know, 668 00:39:41,800 --> 00:39:45,719 Speaker 3: and suddenly productivity levels, everything goes up. Right, So I 669 00:39:45,760 --> 00:39:46,920 Speaker 3: think that's a good pitch. 670 00:39:47,640 --> 00:39:49,560 Speaker 2: So the idea is in the same way that you 671 00:39:49,640 --> 00:39:52,960 Speaker 2: might put aside, you know, whatever one percent of revenue 672 00:39:53,000 --> 00:39:57,160 Speaker 2: for R and D, do the same thing for global efforts, 673 00:39:57,640 --> 00:40:01,560 Speaker 2: like just say this is part of how we operate. 674 00:40:01,600 --> 00:40:03,359 Speaker 2: As you know, we got a little bit of money 675 00:40:03,360 --> 00:40:05,799 Speaker 2: where we're trying to build new products or trying new things. 676 00:40:06,640 --> 00:40:07,839 Speaker 2: Now we're going to have a little bit of money 677 00:40:07,840 --> 00:40:10,480 Speaker 2: where we're actually trying to target new markets as well. 678 00:40:10,640 --> 00:40:14,319 Speaker 3: That's exactly right. And my suggestion if you were to 679 00:40:14,360 --> 00:40:20,360 Speaker 3: do that is focus on revenue. Like with five dollars, 680 00:40:20,440 --> 00:40:23,160 Speaker 3: we need to generate revenue. With ten dollars, we need 681 00:40:23,200 --> 00:40:27,200 Speaker 3: to generate revenue. The most powerful thing you can do 682 00:40:28,000 --> 00:40:34,200 Speaker 3: is not research, is win a customer. I don't care 683 00:40:34,280 --> 00:40:37,560 Speaker 3: how you do it. Just win one customer, because in 684 00:40:37,600 --> 00:40:41,520 Speaker 3: the pursuit of winning that customer, the amount you learn 685 00:40:42,200 --> 00:40:46,600 Speaker 3: is so much more than Hey, let's just understand the market. 686 00:40:46,719 --> 00:40:49,120 Speaker 3: Let's go hang out. No, just win one customer, h 687 00:40:49,200 --> 00:40:53,400 Speaker 3: then win two, then win three. Do the unscalable things. 688 00:40:54,040 --> 00:41:00,600 Speaker 3: Do not worry about scale. Right, cool, we wrap up. 689 00:41:00,680 --> 00:41:02,440 Speaker 2: Let's talk a little bit about your time in Canvas. 690 00:41:02,840 --> 00:41:06,919 Speaker 2: So you said you were employee number twenty five. That's 691 00:41:07,200 --> 00:41:10,000 Speaker 2: very early in a massive company's journey. How long were 692 00:41:10,000 --> 00:41:10,520 Speaker 2: you there. 693 00:41:10,400 --> 00:41:15,720 Speaker 3: Altogether closing in and around just around three years? 694 00:41:15,800 --> 00:41:17,840 Speaker 2: Around three years, I mean in the growth of Canva 695 00:41:17,960 --> 00:41:20,360 Speaker 2: was extraordinarily quick, so you would have seen quite a 696 00:41:20,360 --> 00:41:24,279 Speaker 2: lot in those three years. What did you learn? What 697 00:41:24,400 --> 00:41:27,520 Speaker 2: is the most valuable thing that you learned from your 698 00:41:27,560 --> 00:41:29,719 Speaker 2: time inside a company growing that quickly. 699 00:41:29,880 --> 00:41:32,760 Speaker 3: That you have to have a love product. I remember 700 00:41:32,800 --> 00:41:37,799 Speaker 3: even when I joined on Twitter, it was I love camera, 701 00:41:37,880 --> 00:41:39,839 Speaker 3: love can I love Cana love Cana love camera like 702 00:41:39,920 --> 00:41:44,239 Speaker 3: you could hear the customer voice singing its praises right, 703 00:41:44,320 --> 00:41:46,480 Speaker 3: and which is why I keep saying one of the 704 00:41:46,520 --> 00:41:50,640 Speaker 3: most important things is customer and problem obsession like mail 705 00:41:50,840 --> 00:41:55,239 Speaker 3: for mail, people who designed was her tribe. These were 706 00:41:55,280 --> 00:41:57,800 Speaker 3: the people she lived for and when it gets to 707 00:41:57,880 --> 00:42:02,080 Speaker 3: solving that problem the other pieces. I remember walking to Canva, 708 00:42:04,920 --> 00:42:07,280 Speaker 3: a small group of people and walking to the office 709 00:42:07,360 --> 00:42:09,120 Speaker 3: the first time, and I had my own tech startup 710 00:42:09,160 --> 00:42:12,120 Speaker 3: at that point, and I remember straight away thinking something 711 00:42:12,200 --> 00:42:19,640 Speaker 3: was different, and looking back now is that everything was intentional, right, 712 00:42:20,120 --> 00:42:25,200 Speaker 3: So where the laptop was that Cliff, who is co 713 00:42:25,280 --> 00:42:28,719 Speaker 3: founder and Mel's partner and a billionaire, was the first 714 00:42:28,760 --> 00:42:31,680 Speaker 3: canvas for chef. He would make the meals and it 715 00:42:31,719 --> 00:42:34,440 Speaker 3: was intentional that from twelve to one everybody came back 716 00:42:36,239 --> 00:42:40,040 Speaker 3: and had had a meal together. How we celebrated birthdays, 717 00:42:40,840 --> 00:42:44,600 Speaker 3: It was a very peculiar ritual, fun amusing ritual that 718 00:42:44,680 --> 00:42:48,640 Speaker 3: we did and a quick story. So I was responsible 719 00:42:48,680 --> 00:42:50,520 Speaker 3: once on a Sunday to do. We were like at 720 00:42:50,520 --> 00:42:53,640 Speaker 3: about seventy or nearly closing it, one hundred people about 721 00:42:53,880 --> 00:42:56,480 Speaker 3: making sure that a company riorg was done properly. So 722 00:42:56,520 --> 00:42:59,320 Speaker 3: I'd worked through the weekend and about Sunday two o'clock 723 00:42:59,360 --> 00:43:02,080 Speaker 3: I'd come up with a plan and I'd said, okay, 724 00:43:02,160 --> 00:43:05,759 Speaker 3: so people would come in and then there's clear instructions. 725 00:43:05,760 --> 00:43:09,440 Speaker 3: They'd moved their laptops from here to here, right. And 726 00:43:09,520 --> 00:43:11,520 Speaker 3: mel walked in at about two thirty on a Sunday, 727 00:43:12,120 --> 00:43:14,760 Speaker 3: and you know, she was happy with the work and 728 00:43:14,800 --> 00:43:17,080 Speaker 3: all the thinking that had been done. And they said, oh, 729 00:43:17,400 --> 00:43:18,840 Speaker 3: what do you mean people are going to come in 730 00:43:18,880 --> 00:43:21,640 Speaker 3: and you know, move stuff, And I said, yeah, I 731 00:43:21,680 --> 00:43:25,520 Speaker 3: mean it's the most efficient thing. So no, that's not 732 00:43:25,600 --> 00:43:29,080 Speaker 3: the experience camera team members get when they come in. 733 00:43:29,320 --> 00:43:33,960 Speaker 3: They should feel like, hey, like we are here for them. Right. 734 00:43:34,640 --> 00:43:40,600 Speaker 3: So for the next four to six hours, Cliff mel Zach, 735 00:43:40,640 --> 00:43:43,440 Speaker 3: who's one of the top leaders of Canvan still is 736 00:43:43,480 --> 00:43:48,880 Speaker 3: and myself spent wiping down the tables, moving each laptop, 737 00:43:49,200 --> 00:43:53,160 Speaker 3: connecting each thing, making sure everything was done properly. She 738 00:43:53,400 --> 00:43:58,200 Speaker 3: was so clear and intentional, this is my house, this 739 00:43:58,280 --> 00:44:02,560 Speaker 3: is my farey and this is how it's going to be, right, So, 740 00:44:03,520 --> 00:44:05,560 Speaker 3: and I think there's there's an opportunity again when you 741 00:44:05,560 --> 00:44:07,879 Speaker 3: think about these global founders, this takes a lot of 742 00:44:08,080 --> 00:44:11,600 Speaker 3: like internal thesis around like who am I, what do 743 00:44:11,640 --> 00:44:15,400 Speaker 3: I want? Et cetera. Right, So, uh, it's it's again 744 00:44:15,480 --> 00:44:18,400 Speaker 3: that you know again that customer obsession and that like 745 00:44:18,800 --> 00:44:21,200 Speaker 3: who are you? Because if you're going to play in 746 00:44:21,200 --> 00:44:24,000 Speaker 3: the global markets, the market's going to ask, right, so 747 00:44:24,239 --> 00:44:28,680 Speaker 3: you really have to have that thinking done. Now, that's 748 00:44:28,920 --> 00:44:31,959 Speaker 3: that didn't require any money. But when when an early 749 00:44:32,040 --> 00:44:38,239 Speaker 3: team member gets that, that is such powerful cultural signaling around, Hey, 750 00:44:38,360 --> 00:44:40,960 Speaker 3: this is really meaningful to me, and I want to 751 00:44:41,000 --> 00:44:43,760 Speaker 3: share this with you. It's not it's not a fast 752 00:44:44,000 --> 00:44:47,480 Speaker 3: you know, table tennis table you know it is. This 753 00:44:47,600 --> 00:44:51,920 Speaker 3: is important. You are important, We are doing great things. 754 00:44:52,280 --> 00:44:55,040 Speaker 3: Let's do this. My suspicion is Team New Zealand the 755 00:44:55,080 --> 00:44:59,360 Speaker 3: All Blacks talk about cleaning the sheds, right. It's those 756 00:44:59,520 --> 00:45:06,439 Speaker 3: like very intentional, time consuming, unscalable things initially they then 757 00:45:06,560 --> 00:45:10,000 Speaker 3: scales so powerfully as stories and signals. 758 00:45:10,360 --> 00:45:13,200 Speaker 2: Yeah, it's interesting. I think the key you said there 759 00:45:13,280 --> 00:45:16,839 Speaker 2: is time consuming, right, Like yeah, and there's that old 760 00:45:16,880 --> 00:45:21,040 Speaker 2: adage with kids. Don't give them your money, give them 761 00:45:21,040 --> 00:45:22,759 Speaker 2: your time, right, that's what they really want. And it 762 00:45:22,760 --> 00:45:24,680 Speaker 2: sounds like that's a very similar thing to what you're 763 00:45:24,680 --> 00:45:28,479 Speaker 2: saying about employees, is that obviously a good compensation is nice, 764 00:45:28,480 --> 00:45:30,319 Speaker 2: and having a table ten and stable is nice, but 765 00:45:30,400 --> 00:45:31,640 Speaker 2: at the end of the day, they want to know 766 00:45:31,760 --> 00:45:37,200 Speaker 2: that they're being thought of as humans with needs and 767 00:45:37,239 --> 00:45:39,160 Speaker 2: support it and made it be comfortable. 768 00:45:39,880 --> 00:45:43,839 Speaker 3: Absolutely, the single most important thing, in my opinion for 769 00:45:44,040 --> 00:45:49,480 Speaker 3: a great culture is that it's winning. Right. Everybody that's 770 00:45:49,480 --> 00:45:51,319 Speaker 3: a mess. You have a bunch of humans together, it's 771 00:45:51,320 --> 00:45:54,920 Speaker 3: going to be challenging, right, everybody's good opinions insecurity is 772 00:45:54,960 --> 00:45:55,720 Speaker 3: a whole bunch of stuff. 773 00:45:55,800 --> 00:45:55,960 Speaker 1: Right. 774 00:45:56,760 --> 00:46:00,760 Speaker 3: But if as a team you go, hey, these are goals, 775 00:46:01,320 --> 00:46:05,359 Speaker 3: and you continuously surpass the goals, then people come into 776 00:46:05,480 --> 00:46:10,319 Speaker 3: the team go, oh great, when I do work, which 777 00:46:10,360 --> 00:46:14,680 Speaker 3: is the primary point of this activity, it is valuable 778 00:46:16,360 --> 00:46:21,520 Speaker 3: and that is the leader's base level responsibility, right, And 779 00:46:21,560 --> 00:46:25,200 Speaker 3: then are you being treated fairly, is it a safe environment, 780 00:46:25,480 --> 00:46:28,399 Speaker 3: et cetera. And to do what I've just said at 781 00:46:28,560 --> 00:46:33,440 Speaker 3: world class levels is hard, right, but that's all you 782 00:46:33,480 --> 00:46:34,880 Speaker 3: got to do. You got to make sure it's winning 783 00:46:35,680 --> 00:46:38,359 Speaker 3: and an a startup that's like a hockey stick curve, right, 784 00:46:38,360 --> 00:46:43,160 Speaker 3: it's a love product go nuts, and then it's it's safety, 785 00:46:44,080 --> 00:46:48,279 Speaker 3: growth and the added Are you being treated fairly right 786 00:46:48,280 --> 00:46:51,880 Speaker 3: from a compensation term external perspective? And again all of 787 00:46:51,880 --> 00:46:57,480 Speaker 3: that requires deep work, not frills and short term cash. 788 00:46:58,000 --> 00:47:00,759 Speaker 2: But a nice coffee machine also helps, a. 789 00:47:00,800 --> 00:47:03,600 Speaker 3: Scaby machine and you know the occasional night out. 790 00:47:03,600 --> 00:47:10,200 Speaker 1: It's good, fantastic entrepreneur and great you know to have 791 00:47:10,280 --> 00:47:12,719 Speaker 1: him here with Phase one and New Zealand, this sort 792 00:47:12,719 --> 00:47:16,320 Speaker 1: of network for startup founders as well as the investment fund. 793 00:47:16,840 --> 00:47:22,160 Speaker 1: Interesting that political career that hasn't quite come to fruition yet, 794 00:47:22,200 --> 00:47:24,280 Speaker 1: but he is really a sort of a blue green 795 00:47:24,600 --> 00:47:28,040 Speaker 1: sort of guy. He really likes the environmental aspect and 796 00:47:28,080 --> 00:47:32,439 Speaker 1: he's trying to marry that obviously with tech and entrepreneurship 797 00:47:32,560 --> 00:47:35,799 Speaker 1: and innovation. And he has been very close to the nets, 798 00:47:35,840 --> 00:47:37,200 Speaker 1: helping them with their tech strategy. 799 00:47:37,440 --> 00:47:39,920 Speaker 2: Yeah. I do actually think what he was saying about 800 00:47:39,960 --> 00:47:44,040 Speaker 2: the potential for New Zealand's economy taking some of that 801 00:47:44,480 --> 00:47:46,839 Speaker 2: you know, sweet us money and bringing it back home. 802 00:47:47,200 --> 00:47:51,960 Speaker 2: I think that is a very apt thing. And I've 803 00:47:52,000 --> 00:47:54,440 Speaker 2: often spoken to people who are like, you know, we 804 00:47:54,520 --> 00:47:56,440 Speaker 2: focus too much on the US. You know, we need 805 00:47:56,440 --> 00:47:58,400 Speaker 2: to look at Europe, we need to look at Southeast Asia. 806 00:47:58,480 --> 00:48:03,279 Speaker 2: But his argument for the US fairly convincing. 807 00:48:03,560 --> 00:48:06,240 Speaker 1: Yeah, well, we spent a lot of time in Silicon 808 00:48:06,280 --> 00:48:11,360 Speaker 1: Valley in San Francisco, obviously was very early in Canva, 809 00:48:11,920 --> 00:48:14,279 Speaker 1: the biggest success in recent years in this part of 810 00:48:14,320 --> 00:48:16,799 Speaker 1: the world. And you can tell from his discussion here 811 00:48:16,840 --> 00:48:21,840 Speaker 1: he's really interested in founder talent and how to foster it, 812 00:48:21,840 --> 00:48:24,560 Speaker 1: how to identify it, how to foster it, and how 813 00:48:24,560 --> 00:48:28,799 Speaker 1: to tap into that diaspora of key we talent overseas, 814 00:48:29,680 --> 00:48:33,040 Speaker 1: how to bring some of that money and capital human 815 00:48:33,080 --> 00:48:35,080 Speaker 1: capital as well that they have access to and bring 816 00:48:35,080 --> 00:48:37,600 Speaker 1: it back to New Zealand. So a lot of this 817 00:48:37,640 --> 00:48:40,920 Speaker 1: is real music to my years and years being. You know, 818 00:48:40,920 --> 00:48:43,880 Speaker 1: we took to Black Pearl group on the podcast recently 819 00:48:43,880 --> 00:48:45,680 Speaker 1: and they were saying exactly the same thing. We went 820 00:48:45,719 --> 00:48:48,920 Speaker 1: straight to the US market because that has the homoganity 821 00:48:49,120 --> 00:48:53,240 Speaker 1: to allow you to go wide and broad very quickly. 822 00:48:53,680 --> 00:48:58,240 Speaker 2: And then Black Pearl just raised a huge investment around 823 00:48:58,280 --> 00:49:01,000 Speaker 2: in New Zealand, specifically with New zeal Island investors. So 824 00:49:01,760 --> 00:49:04,719 Speaker 2: they raised ten million and off market and then they've 825 00:49:04,760 --> 00:49:07,440 Speaker 2: got another two and a half million and share placement 826 00:49:07,520 --> 00:49:10,879 Speaker 2: foreign existing investors in New Zealand. So a really clear 827 00:49:10,920 --> 00:49:13,640 Speaker 2: example of how that can really work for people. 828 00:49:14,520 --> 00:49:17,600 Speaker 1: Yeah, so phase one is a great addition to the 829 00:49:17,640 --> 00:49:21,680 Speaker 1: startup ecosystem. I think he talked about the ESOP thing, 830 00:49:21,880 --> 00:49:25,840 Speaker 1: you know, the share schemes for startups, which Judith Coms 831 00:49:25,920 --> 00:49:30,040 Speaker 1: I believe is working on, so some action will happen there. 832 00:49:30,239 --> 00:49:33,880 Speaker 1: He's also quite an advocate for reform of the Foreign 833 00:49:34,000 --> 00:49:38,799 Speaker 1: Investment Fund taxation, which is this I don't quite understand it, 834 00:49:38,840 --> 00:49:42,440 Speaker 1: but basically, if you're an investor and you have overseas investments, 835 00:49:42,560 --> 00:49:44,920 Speaker 1: if you're in New Zealand and have overseas investments, they 836 00:49:44,920 --> 00:49:49,160 Speaker 1: can effectively tax you five percent of the unrealized gains 837 00:49:49,719 --> 00:49:52,920 Speaker 1: of that investment. Which, say you're a big American tycoon, 838 00:49:53,000 --> 00:49:55,360 Speaker 1: you come and live in New Zealand, you've got tens 839 00:49:55,360 --> 00:49:59,040 Speaker 1: of millions of dollars in investments overseas, that's going to 840 00:49:59,040 --> 00:50:01,440 Speaker 1: be not a very attract of things. So he's basically 841 00:50:01,480 --> 00:50:03,719 Speaker 1: saying if we reform that, we're going to be more 842 00:50:03,840 --> 00:50:07,120 Speaker 1: likely to get these high networth individuals locating here and 843 00:50:07,400 --> 00:50:11,440 Speaker 1: investing in New Zealand, so saying a lot of I 844 00:50:11,520 --> 00:50:15,359 Speaker 1: think quite sensible things, and clearly he wrote a really 845 00:50:15,400 --> 00:50:17,960 Speaker 1: good column we'll link to in the New Zealand Herald 846 00:50:18,000 --> 00:50:20,760 Speaker 1: back in March, and I think he's got an eye 847 00:50:20,800 --> 00:50:24,000 Speaker 1: on the next election, and who knows, by then, Judith 848 00:50:24,080 --> 00:50:27,640 Speaker 1: might be sick of having seven or eight portfolios and 849 00:50:27,719 --> 00:50:32,719 Speaker 1: maybe she'll be thinking of someone else for the tech portfolio. 850 00:50:33,280 --> 00:50:35,719 Speaker 2: Could be Yeah, yeah, he could be a candidate, that's 851 00:50:35,760 --> 00:50:40,040 Speaker 2: for sure. I don't know his view on the ESOPs, 852 00:50:40,239 --> 00:50:43,680 Speaker 2: saying that what they have put in place with that 853 00:50:44,080 --> 00:50:48,440 Speaker 2: seven thousand dollars cap increase is just the beginning. I 854 00:50:49,320 --> 00:50:52,759 Speaker 2: hope so, and I'd like to believe that, but I 855 00:50:52,760 --> 00:50:54,920 Speaker 2: do also know that it's a government that is kind 856 00:50:54,960 --> 00:50:57,399 Speaker 2: of struggling for money at the moment that it would 857 00:50:57,440 --> 00:51:01,640 Speaker 2: be interesting to see whether they can really do what 858 00:51:01,719 --> 00:51:03,879 Speaker 2: needs to be done with those ESOPs in the long run. 859 00:51:04,239 --> 00:51:07,160 Speaker 1: I mean, it wouldn't be great if we had a 860 00:51:07,200 --> 00:51:11,640 Speaker 1: Canva like success. And I think he's obviously so inspired 861 00:51:11,680 --> 00:51:14,359 Speaker 1: by what he saw there working with that founder group 862 00:51:14,400 --> 00:51:17,960 Speaker 1: that he is going to try his hardest to do it. 863 00:51:18,040 --> 00:51:20,360 Speaker 1: But you know, really, when it comes back to it, 864 00:51:20,360 --> 00:51:23,239 Speaker 1: reading that founder story. It was the passion of the 865 00:51:23,680 --> 00:51:28,759 Speaker 1: founders for that particular thing, making graphic design simpler. They 866 00:51:29,880 --> 00:51:33,319 Speaker 1: designed a whole way up to tackle the problems they 867 00:51:33,320 --> 00:51:36,960 Speaker 1: were facing. It really comes back to that problem solving. 868 00:51:37,080 --> 00:51:39,040 Speaker 1: What is the problem that you're trying to identify and 869 00:51:39,480 --> 00:51:42,719 Speaker 1: is a market for it? And that's just universal. And 870 00:51:42,760 --> 00:51:45,840 Speaker 1: I've got to say a lot of our entrepreneurs have 871 00:51:45,960 --> 00:51:48,319 Speaker 1: become a lot more laser focused on that so called 872 00:51:48,320 --> 00:51:52,880 Speaker 1: product market fit and identifying the problem and validating the 873 00:51:53,200 --> 00:51:56,919 Speaker 1: market for solving that problem. So I think we're getting 874 00:51:56,920 --> 00:52:00,160 Speaker 1: a lot more sophisticated. But having people who've actually been 875 00:52:00,080 --> 00:52:05,640 Speaker 1: in these really successful unicorms coming to New Zealand living here, 876 00:52:06,400 --> 00:52:10,560 Speaker 1: spending time and willing to impart that knowledge is really valuable. 877 00:52:11,160 --> 00:52:13,760 Speaker 2: Yeah. Absolutely, bring on the hockey stick growth. 878 00:52:13,840 --> 00:52:18,080 Speaker 1: I say absolutely. Well that's us for another week. 879 00:52:18,320 --> 00:52:20,880 Speaker 2: It is, And thanks very much to Mahash morale Da 880 00:52:20,960 --> 00:52:22,560 Speaker 2: for coming on the Business Off Tech. 881 00:52:22,800 --> 00:52:24,719 Speaker 1: You can find the stories we talked about today and 882 00:52:24,800 --> 00:52:28,239 Speaker 1: links to other interesting tech stories over on Business Desk 883 00:52:28,280 --> 00:52:31,480 Speaker 1: dot co dot nz and you can subscribe and listen 884 00:52:31,480 --> 00:52:34,719 Speaker 1: to all episodes of the podcast over on iHeartRadio or 885 00:52:34,760 --> 00:52:36,160 Speaker 1: wherever you get your podcasts. 886 00:52:36,360 --> 00:52:39,239 Speaker 2: Drop us a line with suggestions for future guests. Can 887 00:52:39,280 --> 00:52:41,919 Speaker 2: email me Ben at business desk dot co dot nz. 888 00:52:42,239 --> 00:52:44,839 Speaker 2: We'll find both of us on LinkedIn and ax. 889 00:52:44,840 --> 00:52:47,880 Speaker 1: And another episode coming your way next Thursday. 890 00:52:48,160 --> 00:52:49,759 Speaker 2: Until then, have a great week,