NEW ZEALAND’S E-MAG FOR ENTREPRENEURS AND BUSINESS OWNERS
February 2013
10 Questions
Graeme Carrie
with
Market Validation - Friend or Foe? Finding The Right Investor Strategies That Win Customers Profiles on #nzentrepreneurs Gerard Campbell and Erin Walshe
Plus heaps more inside!
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Contents 4
From the Editor
6
Market Validation: Friend or Foe?
8
Meeting Matters
10
10 Questions with Graeme Carrie
14
Case Study: Booktrack
15
Entrepreneurial Intelligence with Sandy Geyer
16
Profile: Gerard Campbell
18
Profile: Erin Walshe
20
Strategies that Win Customers
22
Choosing Winners
24
Product Standards
27
Tomorrows Entrepreneurs
28
Parting Shot
ABOUT /
iP is
Short and sharp, New Zealand Entrepreneur is a free e-magazine delivering thought provoking and enlightening articles, industry news and information to forward-thinking Entrepreneurs. EDITOR / Nick Harley ART DIRECTOR / Jodi Olsson GROUP EDITOR / Trudi Caffell CHIEF FINANCIAL OFFICER / Alastair Noble CONTENT ENQUIRIES / Phone Richard on (09) 522 7257 or email richardl@espiremedia.com ADVERTISING ENQUIRIES / Phone Richard on (09) 522 7257 or email richardl@espiremedia.com
From the Editor
I
ADDRESS / NZ Entrepreneur, C/- Espire Media, PO Box 99758, Newmarket, Auckland 1151, NZ WEBSITE / nzentrepreneur.co.nz
ISSN 2253-5683
often find the new year brings with it an eager and enthusiastic crowd of people looking to start the year on a health kick. Resolutions and fresh starts are made, leading to busy swimming
pools and gyms across the country. Often by mid February things have returned to normal as things start to get in the way, people become
NZ Entrepreneur is a GREEN MAG created and distributed without the use of paper so it’s environmentally friendly. Please think before you print. Thank you!
busy or they find it too hard or too much effort to continue. In a similar fashion, how often do we see new businesses come and go? Caught up in a wave of initial excitement, only to fade away when things become difficult or the novelty wears off. It’s easy to tell people about your idea or post on social media sites building some hype. It’s also never been easier to start a company here in New Zealand. Taking your ideas to market and creating a sustainable business is a lot harder. Entrepreneurship is not for the faint hearted and comes hand in hand with knocks and challenges along the way. There will be some dark moments and times when you want to throw in the towel, but if you believe in your ideas and are prepared to pursue your dreams, nothing should stand in your way, no matter how hard things get. You must treat any failures and disappointments as small bumps along your journey. Whether you want a good looking physique or a good looking business, they both take a lot of time, hard work and commitment. Wishing you all a prosperous 2013.
Nick Email nick@nzentrepreneur.co.nz LinkedIn http://nz.linkedin.com/in/nickharleynz
4
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5
ENTREPRENEURSHIP Had a great idea? Cool! But think carefully before investing your life savings trying to turn it into a business.
6
Market Validation Friend or Foe?
By Nick Harley
Market validation is annoying. Why are you wasting valuable time interviewing people about your proposed business? Time that could be spent building your product’s killer features and starting to make some serious money? Right?
I
t’s a dilemma a lot of start-ups face. Market validation and
Once you have a clear vision and you know there is a
research can be seen as a thorn in the side of many businesses.
demand, and more importantly, people will pay you for it,
Why? Because the majority of this work needs to be done before
then go ahead and build!
and during the initial building of the product - the most exciting time.
On the flip side, there can be such a thing as ‘too much’
Let’s face it, after you have that eureka moment, you start to
market validation. Business advisory organisations will
contemplate the possibilities of what your product could look like,
always require you to do more and more validating (it’s
how people use it, the money you could make and what colour the
part of their job). You can create business plans which
walls of your penthouse office might be painted. The last thing you
seem to change every week and financial projections
really want to be doing is boring market validation.
with numbers that are plucked out of thin air, but you’re
I fell into this trap with my first business. I didn’t do any market
never going to really know things with any certainty
validation. I built the product first and then dealt with marketing
until you’re out there in the marketplace.
it, blindly expecting people to use it the way I envisioned and to
You’ll always be trying to find out what the mystical
want the same things I ‘thought’ they would want. I didn’t ask a
level of market validation is. You can validate your idea
single person what they wanted to see until it was already in the
and it’s market until your face turns blue, but there
marketplace. Back then, I don’t think I even knew what market
comes a time when you just have to decide there are
validation was, how important it is, and why it needs to be done.
enough indicators to suggest you’ll do ok and get out
This was just one of my many mistakes and lessons learned the
there. Build your product, go out and sell it. Get people
hard way. I built the product for me, but forgot the fact that I am
touching and feeling your first demo/beta and ask for
not the customer.
feedback on its features, then you’ll be able to refine
When you first start developing your idea you get a rush of excitement.
your product even further.
It is seen time and time again with young companies. There is a wave
And remember, market validation doesn’t stop after
of activity, hype and ‘coming soon’ enthusiasm. At this point you must
the product is launched. Why develop and support a
put on the brakes and think about things. If you build this product,
new feature that nobody wants or needs? You should
will anyone pay you for it? If not, why bother building it?
constantly ask your customers for feedback and develop
Interview people on the street, talk to your friends and family, talk
features that are going to add value.
to business colleagues, carry out online surveys, write blog posts,
Before you spend substantial time and money building
do online research and make sure you know everything there is to
your product take some time to complete your market
know about the trends of your market and who your competitors
validation, you’ll be glad you did, but don’t get stuck
are. Collate the information and review it.
in endless market research and never get around to
Build a prototype, a demo or create some screenshots to
building it at all.
demonstrate how the product will look and feel. You’ll get better
The trick is find the right balance between the two.
feedback when people can physically see your ideas. Build an MVP
There is no perfect amount. Start doing it and you’ll
(Minimum Viable Product) and go out, talk to people. You can do
know when you’ve done enough and when you’re ready
all of this for very little money. If the market isn’t there, listen to it.
to start building.
Nick Harley is the editor of NZ Entrepreneur
7
GROWTH/MANAGEMENT/LEADERSHIP
Meeting Matters
Some writers say that there should be fewer meetings. What nonsense! The number of meetings is not the issue – the problem is that most companies do not know how to create and run great meetings. Meetings are crucial to drive effective business execution. Whether
TIPS FOR PRODUCTIVE MEETINGS By Stephen Lynch
I
it is a weekly team meeting, a project meeting, or your weekly 1 on 1 meetings with your direct reports - it is vital that leaders learn how to run effective meetings. As a leader, your aim is for everyone in your team to finish each
read a survey recently, where participants were asked “What
quarter with a sense of satisfaction and achievement. You want
frustrates you most about meetings at work?” The top reported
everyone being able to say “We hit our targets, and we nailed our
frustrations about meetings were:
project milestones” - rather than having a whole lot of projects still up in the air, with your people still grinding away day after day and never feeling the thrill of victory. You want the team to be able to pop the
•
No clear purpose or objective for the meeting.
•
Meeting doesn’t start on time, stay on track, or finish on time.
feel like failures.
•
Repeating information for late arrivals.
Everyone has a huge “to do” list of things they could be doing – but
•
Too long.
what is the “1 thing”? What is the 1 tangible bite sized action they can
•
Not organized. No agenda.
complete this week that will move each project forward? If they can
•
No specific action items or tasks assigned.
•
Allowing attendees to ramble.
•
Weak presenter (unprepared, not inspiring or motivating)
cork and celebrate their achievements at the end of every quarter, not
just get that “1 thing” done – that is the secret to strategic execution. Anything else they may accomplish during the week is a bonus – but everyone must know what their 1 thing is relating to each project. In many cases this also means being able to say “No” to anything else that comes up, and protecting your people from distractions. Business execution is not about working hard, or being busy. It is about everyone taking the right action - each and every week – and nailing that 1 thing. Leaders must follow up at every meeting and hold each of their people firmly accountable for commitments that were made, “Did you complete what you said you were going to do last week to move your project forward?” Fortunately, business execution software makes the leader’s job easier. You can create specific meeting agendas, and then use the software to drive the meeting and keep things on track. You can track everyone’s progress, and assign new tasks. It makes the job of holding people accountable so much easier. Running effective meetings is one of the key skills that business leaders must master.
Stephen Lynch is Chief Operating Officer of business execution and growth specialists, Results.com
8
INTERVIEW
10 Questions with
Graeme Carrie
A lot of focus is put on tech focused startups these days, but great businesses are started every day when people act upon an opportunity. Prior to handing over the reins to friend and co-founder Rob Darby, we talked with Graeme Carrie of The Free Range Egg Poultry Co, or ‘FRENZ’ about his journey, taking a simple idea to a place on supermarket shelves. When did you start FRENZ and how did you get the idea that the world needed eggs all the way from New Zealand in the first place? In the late 1980’s I ran a business which made and sold wetsuits to the USA and the the US Navy, and I so I travelled regularly to the US. One day I noticed that the eggs in New Zealand looked and tasted better than what I was eating in the US and when I returned to the States I gave my friends some eggs laid by my son’s small flock of hens who roamed our backyard. I quickly recognised that the taste difference was due to what the chickens ate and their freedom to move around. So 1988 was when I teamed up with Rob and started The Free Range Egg Poultry Co.
10
FRENZ co-founder Rob Darby
What other businesses had you started or built prior to starting FRENZ and is it true that it building businesses gets easier each time? After completing a Science degree my interest in the international market began with installing computer systems with Formica International here in NZ and in Australia and South Africa. I then went on to manage a very successful wetsuit manufacturing business in Auckland while completing a Business Management degree. In 1987 I started Export Systems Ltd to assist other exporters involved in or wanting to export to the USA and worked as a consultant to on a wide range of products from several industries. I still run that company.
You had exporting experience which would have helped, but what else do you believe enabled you to make a success of it? All my formal and hands on business learning was essential but entrepreneur does not have an “i “ in it . Creating the idea and identifying the opportunity is individual, but making it work needs other people. Getting people to work with you on the vision is the the most important part in the next step - and in my experience the most difficult. Frenz is also a success because of the friends and family that helped along the way, most unpaid at the start! My family allowed me the time for the total commitment required to launch and run a business. My wife Claire created the artwork and design and we all pitched in and worked the long hours necessary at the beginning. Later, our son Glen provided the creative drive to run the complex marketing side. I was particularly fortunate to work with some very good entrepreneurs prior to starting Frenz, viz Ron Barfoote, Alf Dickenson, Ken Gilbert, Peter Rudkin and Richard Osborne. We were even more fortunate in later years to have these very competent people come back and work in Frenz. I think the quote “make the trend your friend” worked for us . We started a product that people wanted and couldn’t get. Timing is an essential part of the mix. Back when we started, the term “free range” didn’t really exist so my marketing and export background enabled me to recognise the business potential in differentiating the eggs as “free range”. Rob was already a successful egg and poultry farmer so the credentials were there from the outset in terms of us being able to make the business a winner. Of equal importance is that we’ve ensured the FRENZ brand also has a great deal of integrity equity. We were first to market free range eggs in New Zealand, instigating consumer awareness of animal welfare issues in the egg industry. As that awareness has grown over the past decade, we have stayed ahead by refusing to compromise our standards. We use
“
Generally speaking anyone that really believes in their vision and is prepared to really give it their best shot has a reasonable chance to be an entrepreneur.
no antibiotics, pesticides, herbicides, growth stimulants and have never practiced debeaking, a common process in poultry farming, even on free range farms. So we have always taken the position that if you buy a FRENZ free range egg, you get genuine free range eggs, because not all free range eggs these days are genuine.
11
What were some of the challenges you had to overcome when
markets is expensive. Frenz has been fortunate to work with NZTE on
you were getting established?
this but establishing the market was just the start, building the market
No one had exported eggs from New Zealand before, so we were forced
is an even bigger challenge.
to fill out dairy exporting paperwork. Unsurprisingly, US authorities refused to believe that cows had laid our eggs. To overcome this, we
Our agricultural sector has been largely responsible for New
had a lot of support from the MAF, NZTE and Air New Zealand
Zealand’s international success and wealth to date, but it’s
A list of 21 requirements was issued and immediately fulfilled over one
becoming harder to compete in this arena. Where do you
busy weekend including blood tests on a full third of the free range
think our best competitive advantage lies is if we are to carve
flock. We had to sneak into the laying barn in the middle of the night.
out a niche for ourselves in the years ahead?
Next, our first two shipments - about 400 six-packs of eggs - had to
Organics, free range, sustainability and natural foods are areas
be given away; following a comedy of errors involving the US FDA’s
that are critical to the future of the food industry in NZ. I really
labelling requirements and an over-eager truck driver!
passionately believe New Zealand has a great future in the world’s
Supply and distribution quickly became a challenge once we got going
food basket if we stick with these particular areas, where we’re
- free range eggs take a lot of work to farm properly and developing
different and better than the rest of them. Having looked around the
sustainable markets is a continuing problem. Developing international
world a couple of times I can see that New Zealand has a huge future in those markets, particularly in the US and China.
12
New Zealand produces high quality safe food and most importantly
Were there times you doubted yourself in building your
has a worldwide reputation as a reliable food brand to use as a
business? If so what advice would you give to those who have
competitive advantage. We need to do a lot of work on that in
periods of doubt about whether or not they’ll make it?
product and market development. I believe we (NZ) can do. it. We are
Doubt is a constant companion when dealing with new products and
innovative, more so than most other countries, but we need to up the
new markets. Frenz always believed free range eggs were the best
ante and move from talking to walking!
product for the consumer and the animals welfare, eventually markets would accept the concept. We also believed we had to export to grow
Do you believe anyone can learn to be a successful
the company later on. We had to continually remind ourselves of that.
entrepreneur?
Keeping these two objectives in focus and continually keeping the end
Creating and/or identifying the opportunity is the hard part to learn.
result in mind helps to beat the doubts.
Also the stubborn persistence to keep at it when things are not going right. Most of the rest is learnable and follows business principles
Building a business can be the one of the most stressful
standard to commercial enterprise. Product and market development
things can undertake - what do you do to cope with stress?
is where the “entrepreneurial flair” helps. Generally speaking anyone
Managing the business well is the best way to beat stress. Not risking
that really believes in their vision and is prepared to really give it
more than you can afford to lose and sharing the load - a mentor
their best shot has a reasonable chance to be an entrepreneur.
helps. I was lucky to have some good ones. Relaxation is a must and being as fit mentally and physically as
What are the three most important skills you would advise
possible gave me the ability to absorb the day to day demands.
new entrepreneurs to develop? •
M a r k e t i n g - This was important when we started in 1989
What would your advice be to any NZers reading this, who
and is even more so now that there is an oversupply of product
have an idea for a business but are scared about leaving
in most markets worldwide. Get your target market defined
their jobs to try it?
as closely as possible. This involves knowing who you are selling to both consumers and customers. Frenz did at least a year’s research with customers and consumers locally and internationally (with NZTE) before we started. •
F i n a n c i a l C o n t r o l - Before long the entrepreneur will need money and the ability to control it. Find a sympathetic
I did a feasibility study before committing to anything. It took three months and sorted out many misconceptions giving us confidence to proceed. This was done whilst we continued with our “day” jobs. I would advise getting sound advice from as many reliable independent sources and taking as much time as possible before diving in the deep end.
bank and sound accountants. We were lucky with Ron and Ken providing that guidance. •
P e o p l e S k i l l s - Progress always comes back to getting
To find out more about The Free Range Egg Poultry Co, or ‘FRENZ visit their website at http://www.frenzs.co.nz/
things done by delegating to competent people.
13
I P / I n n o vat i o n
Case Study:
Booktrack IP IN ACTION By Deidre Coleman for AJ Park
A pair of New Zealand brothers has pushed the boundaries of ebooks with a new mobile application called Booktrack.
B
ooktrack is a fully immersive reading experience that adds new dimensions to an ebook, through carefully created and
synchronised sound effects and a music soundtrack that matches individual reading pace. Launched in the US in August
Any New Zealand company taking an idea to the world has to ensure
2011, it’s now a popular seller on the Apple App Store.
their IP is well protected at an international level. Brown has helped
Co-creator Paul Cameron: “Reading rates around the world are
them align their IP-protection strategy with their commercialisation
declining - especially with younger audiences - and it’s mainly due to
strategy to get the best result.
the rich multimedia environment reading has to compete with. With
“We assessed what they had and initially protected the most important
Booktrack, we’re trying to provide another reading option that will
inventions to secure them an advantage in the market,” he says.
make reading fun again.”
“Successful patenting and commercialisation is a lot about timing. They were developing their technology and at the same time wanting to protect their innovations and seek investment. Start-ups don’t have
LIGHT AS PAPER Booktrack could well be the ultimate weightless export model - it’s a highly efficient business with global reach, which leverages others’ distribution channels and infrastructure platforms, using IP created in New Zealand. While the sales and marketing of Booktrack is focused in the US, the R&D takes place here. Protecting that unique IP has been a vital step in Booktrack’s path to success. Three years ago, armed with a prototype and a provisional
big budgets for IP so it’s vital to file a patent application when the technology is advanced enough. It’s all about managing costs, timing and sequencing.” Booktrack is protected in several major international markets thanks to AJ Park’s well-established relationships with overseas associates. With differing and constantly changing laws in each country, getting the strategy right is essential.
patent application, Mark and Paul approached patent attorney Hadleigh Brown at AJ Park.
A REAL PAGE-TURNER
“Hadleigh’s been fantastic,” says Cameron. “He really understands
“These guys are exciting clients to work with,” says Brown. “They’ve
our product from a technical level, so we have good continuity
grown quickly and found significant credible investors willing to fund
when we come back with new developments. But he also suggests
their idea. It’s exciting, as an advisor, to see your client launching
different approaches and strategies around our IP. It’s been an
successfully and progressing on from having an initial prototype and
invaluable relationship.”
an idea to turning it into something that can be downloaded from the Apple App store.” Written by Deirdre Coleman, this case study was featured in #36 of Idealog. Photo courtesy of Booktrack.
14
P E R S ONA L T R A I N E R
Entrepreneurial Intelligence with Sandy Geyer Expanding the team By Sandy Geyer
I have been tempted many times to start my own business
of costs in reserve and an idea. My husband asked me to go back to a
but I am concerned about the lack of security as an
corporate position if we hadn’t made a profit in 6 months.
entrepreneur and wonder if it’s just best to stay employed
It took us 6 years to do anything more than cover the bills but our
so that I can be sure of my ability to provide for my family. What do you think?
growth became exponential and the returns have far exceeded his wildest expectations ever since. One of the most important steps to becoming an entrepreneurial thinker is learning to accept full
I think that the feeling of security as an employee is an illusion. Even those who are obviously brilliant at what they do, and valued very highly by their organization, are never completely secure. All
responsibility for your outcomes and understand that you will look after yourself and your loved ones with more dedication than anyone else will.
employees are vulnerable to outside influences such as buyouts,
Being in business is about making money by providing necessary
restructures, economic influences and even emotionally based
services and learning to adapt as the market shifts, as it will. If you are
influences such as nepotism.
clear on what you want and have a good idea of how you are going to
I have felt more secure as an entrepreneur since the day I started my first business in half my garage with no more than the next two months
do it, I say go for it. You have more motivation to succeed than any job could give you.
In each issue Sandy will be answering commonly asked questions from new entrepreneurs. If you have a question for Sandy to do with entrepreneurship, building successful businesses or the challenges and difficulties faced by entrepreneurs, email the editor at nick@nzentrepreneur.co.nz
Sandy Geyer is an entrepreneur and mentor and teaches the principles of entrepreneurial intelligence (EnQ), to entrepreneurs in New Zealand, Australia and South Africa. You can visit Sandy’s website at www.enqpractice.com
15
TAKING THE PLUNGE
Profile: Gerard
Campbell Profile by Nick Harley
Each month, we talk to an up and coming New Zealand entrepreneur who has set about turning their idea into a real business.Rowing is said to be the greatest team sport in the world as it involves working together as a unit to meet a common goal. Corporate Rowing delivers programmes using expert led discussions and rowing, to train winning teams. Briefly tell us about your business. How did you first come
What is the big goal for your business?
up with the idea?
To use our metrics to create business teams which enjoy solving the big
There is so much people can learn from the sport of rowing and a lot
problems and generate tremendous value for their organisations. The end
of fun to be had in developing a rowing team of eight. I view rowing
result will be a model which allows Corporate Rowing to licence its services
as the ultimate team sport and it is now New Zealand’s number one
to rowing clubs and generate income for the rowing community, whilst
Olympic sport. Corporate Rowing is a shared experience which quickly
offering tremendous value to businesses and a sustainable business model.
develops trust, breaks down communication barriers and brings
16
people together.
What inspired you to take the plunge?
I got the seed of the idea when I filled in to help out a Sovereign
Growing up I watched almost every Steve Jobs and Warren Buffet
Insurance eight when I was at high school. Two years after that, Marin
video on YouTube. Their money and their temperament (principled,
Construction founder, Craig Blaikie gave me an opportunity. In 2009
cool, free and compelling) always inspired me. As the business has
he asked if I could organise a race for him. Admittedly, an eighteen
developed I have learned to offer value to clients to influence positive
year old organising eight burly construction workers was a bit of a
change. Seeing the freedom a product or service can generate for me
shambles, but I learned heaps! That opportunity gave me the initial
and the benefits for people/a market is so inspirational. I guess you
motivation and money I needed to pursue the idea.
could say comparative advantage is what inspires me now.
What keeps you going when you feel like giving up? I never feel like giving up. I get down sometimes, but love what I do and what I will do in the future. What picks me up is knuckling down and then seeing some results. I love progress and I am not afraid to work hard to get it. What advice would you give to any people reading this who What have you found to be the most challenging aspect of
are thinking of starting a business?
building your business so far?
Go for it. If you fail and fail and fail that doesn’t matter, as long as
Building business relationships has been a challenge. I do not like
you learn and understand you will always always eventually succeed.
the idea of ‘selling’ - it seems manipulative to me. It has caused
Doing is the best way to learn! Look up “Ray Crock” and read a little
me to become robotic so many times in business relationships. I
about that old milkshake salesman or the Kiwi story “Every Bastard
am understanding more and more that story telling will compel
Says No.” If inspiration like that doesn’t get you out of bed in the
people and will strengthen my relationships and help me sell my
morning it will at least give you a few things to reflect on.
services without ‘selling.’ I enjoy listening to people and hearing about experiences they have had in business and discussing my experiences. Business relationships are a funny thing. A shared experience like rowing takes people away from work and trust is
For more information check out Gerard’s business, visit Corporate Rowing at http://corporaterowing.co.nz
developed as the base for a sound relationship. Most of the clients I have had on the course keep in touch with me and I have loved having them there. I think they loved being out on the water and this
Are you a New Zealand entrepreneur that has recently
mutual support develops trust and brings us a lot of repeat business.
“taken the plunge?” Would like to tell our readers your
Quickly and effectively building strong relationships has by far, and
own story? Get in touch with Nick at
still is, one of my largest challenges!
nick@nzentrepreneur.co.nz
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TAKING THE PLUNGE
Profile:
Erin Walshe Profile by Nick Harley
Pricemaker has developed a reverse auction platform for buying new, higher-priced items from traditional bricks and mortar retailers, turning the traditional shopping experience on it’s head.
Briefly tell us about your business. How did you first come up with the idea? I pretty much got sick of trawling around stores looking for the best deal every time I was buying a big-ticket item. You know the drill, you’re after a new TV and you may also want some television cables, a wall mount or cabinet, or maybe even a Blu-ray player. The massively automated online world was hopeless for that kind of request. Hopeless for the consumer and hopeless for the retailer. Pricemaker is a platform that connects consumers to retailers. It lets the consumer describe what they want to buy. It then gives the retailer the opportunity to respond with their best deal to entice the consumer, and get the sale.
What is the big goal for your business? We want Pricemaker to be a global business. There are many countries that we want to export the platform to. There are many different categories that we want to add. Pricemaker will appear differently in each country, as the verticals will resonate differently with different groups of consumers.
What inspired you to take the plunge? We had been working on Pricemaker as a hobby over the last few years. None of us had the time, or the cash, to make it a full-time commitment.
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Then out of nowhere the planets started to align. In March this year
What keeps you going when you feel like giving up?
I was made redundant from the banking industry so a good friend
To be honest I never feel like giving up. Having spent 15 years as a FX
offered me some part time work. As luck would have it we had also
Trader I have built up disciplines around when it is time to quit, or
recently raised some capital and been wondering whom we should
stop out of a losing position. So until I get to that point I don’t even
hire to get Pricemaker up and running. I quickly put my hand up and
entertain the thought. Also, I am enjoying myself far too much to feel
committed to getting stuck in. Having a part-time gig meant that I was
like quitting. I now actually want to go to work each morning!
not going to be a drain on our limited funds and we could therefore spend more on what was most important at that stage, our developers. Have I missed banking? Not once!
What have you found to be the most challenging aspect of building your business so far?
What advice would you give to any people reading this who are thinking of starting a business? I used to think that the Nike slogan of “Just do it� was the best advice. But that is only half of what I would say to someone now. Timing is just as important. I could not just quit my job to do this whenever I
I am a non-technical founder of a tech company. So that can be pretty
may have wanted to. I have a mortgage and three kids to think about.
challenging at times as I am not involved in the writing of our code or
So my advice to people now is: when the time is right for
the building of our infrastructure. Coming to grips with what the tech
you, then, just do it.
gurus are talking about can be tricky at times. But the benefit of that is that gives others ownership over that part of the business. They are empowered to make the calls and find the best way to do things. To date they have done an outstanding job.
For more information check out Prickemaker at http:// pricemaker.co.nz
I am free to spend all of my energy on the commercial side of the business, which is where I am most comfortable.
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SALES/MARKETING
Strategies That Win Customers without breaking the bank By Debbie Mayo-Smith
Back in the late 90s, working as a marketing consultant, I would always hear the managing director of a risk insurance brokerage I was assisting tell his team “activity equals success”. Without a doubt he was right. The sales you make today are generated from the marketing activities you have done in the past. What differs industry by industry is the lead time required for that activity to create a sale. Stop the activity and in a corresponding time in the future, sales will fall.
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his is not yet another article espousing the imperative of
QUANTIFY. MONEY TALKS. FLUFF WALKS
continuing your marketing efforts in difficult economic
Put a dollar value on how the potential customer will benefit.
times. Rather, it details six strategies to enhance and
Measure their rate of return.
refocus your marketing to generate greater success from less cost in
This exercise is easier than you might think. Will your product/
time, dollars and effort. I can vouch for all six because I personally
service save them time? Put a value on it by estimating how much
do them every day.
time it will save a year, multiplied by the value of that person’s time
“
The sales you make today are generated from the marketing acti vities you ha ve done in the past .
Australian house manager made this comment: “Debbie, the most important point I’m taking home from you isn’t one you mentioned, it’s what you vividly demonstrated throughout this conference. It suddenly hit me that I wasn’t doing any research before going to talk to prospective business partners or donors. I just front up to the meeting, talk about us and ask for donations or support. It is now clear to me that we can be much more successful by understanding them more. Putting their shoes on. Empathising how we can be of help to them also.”
THEM. NOT YOU Almost every piece of marketing material, proposal or sales presentation that I see has the wrong I/you ratio. Your prospects care solely about themselves. Yet most marketing material focuses on how wonderful we are. How great we do. Send this chest-thumping gorilla marketing philosophy packing. Replace it with a customer-focused “what’s in it for them” strategy. How will it make them more successful? How will it make them happier? How will it make them more money?
(their wage per hour, or salary). Can you reduce stress? Does that lead to happier employees which helps reduce turnover? You can quantify the recruitment costs saved along with the productivity.
COMMUNICATE. BUILD RELATIONSHIPS People do business with people, not companies. How many communications do you receive from businesses after you’ve paid the
Does it help them make more sales or increase turnover? Take the
invoice or bought the goods? By maintaining a regular communication
average value of one sale (you can even factor in the lifetime value of
strategy you will stay top of mind and gain more referrals.
that one new client) multiplied by the number of new ones expected.
But remember point 3 - the communication is for their benefit, not
You can get the base information any number of ways: research
just yours. The mode of communication should be varied too. Not
on the internet, their competitors, annual reports, talk to HR
just email. When was the last time you picked up the phone and
professionals about salary levels, colleagues in that industry, allies
called existing customers? You’d be surprised how much business
within that company.
you can generate that way.
TOP DOWN
TENACITY
It makes infinitely more sense to employ a top-down rather than
Figuratively speaking, most businesses knock on a door and ask,
bottom-up approach. Is your marketing directed to individuals or
“Will you do business with me?” When the answer is, “No, not
single businesses? Instead, focus on getting to many prospects at
now”, they move on to the next prospect. Then the next. And the
once by finding where they congregate - associations, clubs, groups.
next. That time spent is forever wasted.
This tactic does double duty by making you appear to be endorsed by the group in question.
When you knock, change the question to, “Can we start up a conversation?” In other words, by using the communication strategy you set up in point 4, you create tenacity. Persistence. You
DO YOUR HOMEWORK
nurture prospects along until they are ready to do business with
How much time do you take researching a prospect before your
you or, equally important, they refer people to you.
initial contact? After several presentations this September at the biennial
By combining these six strategies, you can improve your success
Asia Pacific Ronald McDonald House Charities conference, an
while using less money, time and effort.
Debbie Mayo-Smith is an International Motivational Business Speaker, trainer and bestselling author. She is in-demand at conferences and in-house training for her easy practical how-to ways to improve sales, time management and customer service. Visit her website for 500+ free articles and quick tip newsletter at www.successis.co.nz
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C A P I TA L R A I S I N G
Choosing Winners Finding The Right Investor By Andrew Duff
Seed capital investment due diligence normally focuses on the startup. But here’s how the founder can put would-be investors through their paces.
O
ne of the big decisions facing company founders is whether to bootstrap - that is, fund the company’s growth out of revenues and their own resources - as opposed to bringing in new
capital from investors. To bootstrap to profitability, you need to scale quickly and keep refining your offering. But most companies need early stage capital to be successful. That’s when founders really need to focus. Much gets said and written about how angel investors and venture capitalists choose companies to invest in and how careful they need to be to pick the right companies with the right people. This also applies to founders. If they are going to take on investors, they need to make sure they choose them carefully.
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The right type of investor can add huge value to a business, far beyond the cash they bring to the table. The wrong type can be disastrous. Take, for example, those consultants and would-be CEOs who claim to be investing, but often end up securing lucrative, cash sapping positions. You need to take care because seed investing is very early stage investment and requires particular skills and experience. Often a company is little more than a founder, a product and a sense of
When you seek funding, make sure you tick these boxes:
addressable market need. In New Zealand, few in seed investors have the cash and skills to move your business through the angel stage and offshore. Don’t end up with the wrong investors just for the cash. It is better to bootstrap than have the wrong investor on board. When you seek early stage capital, make sure you interview your would-be investors. This is often overlooked as the focus is on their due diligence on you, your idea and their cash. Do your due diligence on them. I have allowed investors to invest in our portfolio companies that I have later regretted. It can take years to remove such an investor from the
1 2 3 4
How many early stage investments has the investor made this year?
How many early stage investments has the investor made in total?
Find out the names of the last few investments and reference check with them.
What is the size of their portfolio and how many of their investments have they made in international markets?
share register when the company is using every available dollar for growth. If a potential investor does not quite tick all the boxes, consider combining them with people who are active and experienced. We need to encourage more early stage investors to get involved and partnering can be a way to get started. Use your contacts and find the right investor with the skills, networks and funding runway to get your company global. Investment in early stage companies is, in many respects, the result of hard lessons learned and experience. Growth companies have enough challenges, so do your due diligence and get the best investors on your team.
Andrew co-founded Sparkbox in 2001. He is a Director of a number of private start-up companies including many Sparkbox portfolio entities
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Getting It Done
Product Standards?
What you need to know By Adrian Nacey
Have a prototype up your sleeve or an importing opportunity on your mind? If so, there are various standards you should know about to enable your product to be sold in New Zealand. Business.govt.nz e-Business advisor Adrian Nacey explains.
T
he history of invention is littered with many forgotten facts, but perhaps chief among them is the undeniable truth that Leonardo da Vinci had never heard of product standards.
Brilliant, yes, many of his inventions undoubtedly were, but safe? Let’s put it this way, if anyone did make and test da Vinci’s flying machines they certainly didn’t live to talk about it. Creating a bold new product to meet a gap in the market - or even importing one - is exciting stuff. But you have to keep your feet on the ground (no pun intended). If you don’t keep New Zealand’s standards regulations in mind when developing your product or checking out an import opportunity, you’ll end up doing a good impression of a Renaissance-era test pilot yourself (i.e. flying without a parachute). Standards in New Zealand are governed by three pieces of legislation, that all work in tandem, plus product safety standards. They are:
There are many guarantees, with some applying to products and others to services, but they all include things you’d expect when you buy products and services from others. The guarantees include, for example, that a product is fit for purpose. Say you develop a price-busting household broom, but when you take it market you find the economic lightweight material you use for the handle means it breaks under normal use. In this situation, you’d be in breach of the CGA. Overall, it’s really common sense stuff. Where businesses often get it wrong is under what kind of products and services the CGA applies to.
●
the Consumer Guarantees Act (CGA)
●
the Fair Trading Act (FTA), and
product or service is designed for business use or as part of a
●
the Weights and Measures Act (WMA).
manufacturing process it’s not covered by the Act.
There are caveats, but the main thing to remember is that if the
This isn’t to say, however, that if you’re selling consumer goods to a Often, the most important of these for new or imported products is the CGA, which outlines the set of consumer guarantees products and services must meet.
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business the Act automatically doesn’t apply. If you don’t have their written agreement to you opting out, you’ll be in breach of the Fair Trading Act and could be fined up to $200,000 in court.
And then there’s the Weights and Measures Act. If your product needs to be weighed or measured, you also have to consider this Act that outlines the standards and accreditation required to ensure measuring accuracy. If you plan to sell firewood by the measure, for example, or use a weighbridge to set pricing, then you need to make sure you apply with this Act. At first glance, product safety standards and the triumvirate of Acts aligned with them, look like a puzzle worthy of The Da Vinci Code. But if you take the time to look into how they work together you’re much more likely to get your business off to a flying start. But, crucially, what the CGA states (under a product being ‘fit for
Further resources:
purpose’) is that you - as the manufacturer or importer of a product -
•
Business.govt.nz – for an overview of the standards regulations relating to manufacturing and importing.
are responsible for it being safe to use. In most product categories the CGA is the last word, with expected
•
The Ministry of Consumer Affairs – for more information
standards set by the Act’s consumer guarantees, industry and
on the Consumer Guarantees Act, product safety standards and
component-specific best practice standards (which you can find
the Weights and Measures Act.
online with Standards New Zealand), and market factors, such as the expectations of retailers.
•
The Commerce Commission – for more information on the Fair Trading Act.
However, there are also mandatory product safety standards in six categories. If your product is a baby walker, children’s nightwear, a child’s toy, a household cot, a cigarette lighter or a pedal cycle go online to the Ministry of Consumer Affairs website to find the standards you need to follow. If you import a product in one of these categories which doesn’t meet these standards, it simply won’t be allowed through customs. The best course of action is to seek legal advice from a lawyer with experience in your sector and, if you’re importing a product, to check first on the Ministry of Consumer Affairs website whether its banned in New Zealand by an Unsafe Goods Notice. Importing, selling or even advertising such goods is an offence under… you guessed it, the Fair Trading Act. The Fair Trading Act keeps coming up for a reason. It’s all about ensuring fair competition between rival businesses and ensuring consumers aren’t misled. Even if you don’t intend to mislead a consumer, if your actions result in a consumer being misled you could be investigated under the Act by the Commerce Commission, and be separately taken to court by the individual consumer in question. The Act covers deceptive or misleading activities carried out when promoting goods and services, plus others carried out regardless of whether the parties involved are ‘in trade’ (such as advertising a job in a misleading way).
Adrian Nacey is an e-Business Advisor at Business.govt.nz.
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One simple search and I’m in business!
Get your business off to a great start Securing a business name is simple with the new ONECheck online tool from Business.govt.nz Simply enter your proposed name, hit search and you’ll find out immediately if your name is available as a company name, website address and trademark. It’s quick, easy and one of the most valuable things you can do for your business.
Check it out at www.business.govt.nz/onecheck
ONECheck
T o m o rr o w s E n t repre n e u rs
Young Enterprise
VOLUNTEER: We want you!
Terry Shubkin, CEO Young Enterprise Trust
W
e are often asked what the secret to success is for our Lion Foundation Young Enterprise companies. Over the years, we have seen successful YES companies come
from a range of schools; public and private; low-decile and highdecile; urban and rural. In my opinion, the key factor in determining student success is not the students’ background or their location or school type. Rather, it is the enthusiasm, passion and expertise of the teacher that is the catalyst for student success. For most New Zealand teachers, ‘enterprise’ is a new concept that they have had little or no training in, and Business Studies is only an optional subject in the curriculum. That’s why Young Enterprise Trust exists – to bridge the gap and provide training and support for teachers across the country. We are a not-for-profit, not a Government agency as many people assume, and 92% of our funding comes from the private sector.
The 2013 school year has kicked off again, and we’re delighted to say that an increasing number of schools will be offering our enterprise programmes in their classrooms. For example, we will visit nearly 50 secondary schools this year to deliver the BP Business Challenge, a three-day programme similar to a virtual Dragon’s Den. We are also expecting more than 3000 students to take part in our most popular programme, the Lion Foundation
March is our annual donation appeal and we’d love for you to
Young Enterprise Scheme. These students will form 600 companies
help us spread the word. It costs us $150 to train a teacher in our
this year and bring a new product or service to market.
enterprise programmes and this is one of our focus areas for 2013. If you can donate or know of others who can, we’d really appreciate your support. Check us out at http://www.givealittle.co.nz/ org/yetrust.
These programmes cannot survive without the support of local businesspeople. Each year we are assisted by 1,000 volunteers from the business community, and we’re on the hunt for more people to join us. This is an investment of your time, and we want you! Local business people can volunteer by: •
Judging at a BP Business Challenge (3 hours total)
•
Judging at a regional or national event for the Lion Foundation Young Enterprise Scheme (Options vary but are usually 2-4 hours total)
•
A mentor/coach for a student company participating in the Lion Foundation Young Enterprise Scheme (1-2 hours every month for a year).
We know that students benefit hugely from the chance to connect with the local business community. For many, it’s their first experience with the world of business and it can have a huge effect on their study and career plans. Help us by giving up just a few hours of your time – volunteer now via our website.
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“
P A R T I N G S H OT
Continuous effort, not strength or intelligence is the key to unlocking our potential�
Winston Churchill
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