Kiwis urged to turbo-charge start-ups
Some comments from me on what Kiwi’s can do to drive their start-ups to new levels. At the end of the day I believe that NZ’s lifestyle is not a negative influence on entrepreneurship. In fact, it’s an advantage as this post from Rod points out.
We need a deeper shift in thinking and approaches to occur. I also don’t think that this should be viewed in a negative light but rather as part of the natural evolution of entrepreneurship in NZ.
I haven’t met a great entrepreneur that doesn’t think they could be working harder or smarter. I’ve met plenty of Ok entrepreneurs with lots of reasons why they didn’t go the extra mile.
New Zealand’s lifestyle is a competitive advantage. New Zealand entrepreneurs should revel in it and use it to attract talent. What we shouldn’t do is confuse working long hours with productivity and output. While there is no short-cut to building great companies, they do require a combination of working hard and working smart. Platitudes aside, it’s the smarts we have to build. Plenty of Kiwis are willing to work hard.
We also need a shift in the DNA that can only come from experience and role models. As new bars for creating value get set, a new generation of Kiwis will rise to that bar. Look at what we have seen in the past few years with Aftermail, 42 Below, TradeMe and Endance. These entrepreneurs will excite and inspire more to follow in their steps.
Longer-term we need to get more entreprenurial training and skills into our Education system. And that Education system needs to encourage students in disciplines like engineering, sciences and software development. If we don’t do that we will face a worsening skills shortage that can’t easily be corrected through immigration policies.
New Zealand is at a really exciting juncture. The Internet is a terrific leveler, getting about the planet has never been easier, and new models and standards for entrepreneurship are emerging in New Zealand. There is lots to be positive and excited about.
Choose Thrift…
There is a clear impression among NZ entrepreneurs that Silicon Valley-based start-ups get big cash from VCs and spend like crazy. Reality couldn’t be more different. The WSJ this morning throws light on prevailing the “thrift” is good mentality.
Some great quotes throughout:
“Cash is queen these days,” says Mr. Thomas, who estimates Sharpcast can last another two years even if it doesn’t produce any revenue. “Fiscal discipline is harder to teach later in the life of a company, and we want to be the last guy standing.”
“Indeed, while tech start-ups are raising less funding these days — an average of $8 million each time, down from $11 million in 2000 — they are making the money last longer. According to research firm VentureOne, tech start-ups in Silicon Valley now survive an average of 17 months on a single round of funding before needing to raise more money, up from just 10 months in 2000. (VentureOne is a unit of Dow Jones & Co., publisher of this newspaper.)”
Made From NZ
Cool site promoting NZ. Like the PR stunt with the Silver Fern!
Technorati Tags: NZ
Do Start-Ups Need A Business Plan?
Yes! The WSJ also has some other thoughts -subscription required. I look at lots of business plans in my other life as a VC. My main message keep them simple and focus on illuminating the idea. Only include data you really understand. Some highlights:
- Matt Coffin, founder and chief executive of LowerMyBills.com, a Web site sold to Experian Corp. in 2005 for $330 million, says he used a 10-page PowerPoint presentation that he spent four to six months gathering research for instead of a formal business plan when pitching his idea to investors in 1999. He succeeded in raising $4 million in venture capital by convincing them that the market for people needing a one-stop place on the Internet to refinance was ballooning.
- Tim Petersen, managing director of Arboretum Ventures, a health-care venture-capital firm in Ann Arbor, Mich. says he generally prefers getting five-to 10-page summaries of business ideas or PowerPoint presentations over lengthy business plans.
- Benson Honig, a professor at Wilfrid Laurier University in Ontario, Canada, says his research of 396 nascent entrepreneurs in Sweden from the late 1990s also found no correlation between business planning and profitability. Instead, his study found the biggest predictor of success to be knowing customers in advance. Mr. Honig says he teaches “contingency planning” to his students — or thinking about a business as constantly progressing, changing and making decisions based on the market climate — instead of traditional business planning.
The WSJ also includes links to some relevant research:
Plans and Performance
Study: “Pre-startup formal business plans and post-startup performance: A study of 116 new ventures” by Julian E. Lange, Aleksandar Mollov, Michael Pearlmutter, Sunil Singh, and William D. Bygrave (all Babson), June 2005.
Summary: The study compares the success of 116 ventures started by Babson College alumni between 1985 and 2003, using performance measures such as revenues, employee numbers and net income. Researchers found no statistical difference in performance between those businesses launched with formal business plans — roughly half of the 116 — and those started without them, and concludes that “there is no compelling reason to write a detailed business plan before opening a new business” unless the entrepreneurs needs to raise substantial amounts of start-up capital. Instead, the researchers say start-up entrepreneurs should generally just make some financial projections, especially cash flow, and open the business.
You’ll need a plan to get funded but it’s like the old saying about memos “I didn’t have time to write a short memo, so here is a long one”. Make the time.
Leave The Squid Alone…
If they ever do find the giant squid, I wonder how they squid will feel about it. Giant squids don’t seem to be the kind of creature you really want to disturb…
Marine biologist Peter Batson says he plans to try photographing giant squid at a depth of 3000m off the coast of New Zealand.
