The purpose of Welsh Government funding the Technium Challenge is to promote inwards investment into Wales. I’m really impressed by the Welsh team who have lined up an excellent week of activities meeting a number of companies and people that can help Xero enter the UK.
Already I’ve learned a lot about the UK market.
We were based in a Corporate Box at Cardiff Arms park for a lot of today. I’d love to be here when there is a game on. I thought it would be bigger as it handles 72,000 people, but it is really intimate. You are very close to the action. It must be great when the crowd is going full noise with the roof closed. It’s right in the middle of Cardiff so can see how the atmosphere would be special for the big games. Xavier Rush is captain of the Cardiff Blues so they are big fans of New Zealand around the park.
One of the highlights of the day was visiting an Incubator that assists companies with market entry into Wales and the UK. The program is the @Wales Digital Media Initiative. This place was really slick. Funded by the Welsh Government it was very inexpensive for new companies and an excellent first facility.
It made me think how token our knowledge economy aspirations are in New Zealand. Wales has gone past the talking stage and investing significantly in new economy businesses. All countries in the world see the opportunity for the Knowledge Economy. We have to invest just for parity. There is no doubt we are going backwards which made me feel slightly ill.
What also interested me was the success in companies going through the incubator. More than half had successfully graduated and were on their way to the becoming significant businesses.
I think our lack of success is partly be due my Valley of Death point. To reach significant markets we need to be exporters.
But as they have continued success there is more experience to help out the young companies.
Drove down to Swansea where I’m based for the next few days. Weather is excellent and both Cardiff and Swansea look like great towns. The hour drive down was tough as the lack of sleep kept in.
Met one of the other finalists Eyeslices from South Africa who have a cracker CEO who has her marketing nailed. She’ll be tough to beat. I managed to get some of their product so looking forward to some eye soothing in a few minutes.
It was a packed first day. The people and way of networking in Wales is very similar to NZ and they are very passionate about their country. The Welsh have got mobilized and are transforming their country to be more service based. The next part of their plan is to attract higher value work and workers.
If you thought I was fired up about Broadband investment before - wait until I get back.On Trade Sales
I know how Peter Maire must feel.
Like Juha I heard recently that the AfterMail Wellington Office is scaling down with development possibly moving to Wisconsin.
In Fry Up it’s characterized as a US company coming in and closing it down. Itâ€™s an unfortunate fact that often when the founders leave that there will be a few speed wobbles, and after the honeymoon, any business needs to look at its operations.
Itâ€™s always difficult to manage remotely and in this case with Questâ€™s technical messaging specialists in Madison I believe they have decided to consolidate. We always had difficulty recruiting Messaging experts in New Zealand. They have an excellent team there in Madison and from a Quest point of view it makes sense.
Quest are a fantastic company and have provided great opportunities and experience for our staff. The reality is that we live in a global market and over time the New Zealand operation probably did not stack up. Attracting technical staff, communications, time zone, currency are all factors that make it tough. I tell you, the travel, frequent early and late calls - are hard.
There are many positive outcomes from a sale. Obviously the capital injection back into the local economy. A Trade Sale is a big export. In many cases a substantial portion of the sale proceeds are rolled forward into further investment. But the international experience gained by staff is even more valuable. I probably learned more after the deal than I did building a small company. We sort of knew what we needed to do to build a small software business up to a Trade Sale but experiencing how a world class company operates a global sales model was all new and just a fantastic experience.
Companies come and go, it’s the people that carry the knowledge and experience. The Quest experience will benefit our local industry for many years.
Further, Trade Sales are a sign of the health of our local software industry. Companies in our industry should be distributed in something like the diagram on the left below. However I suspect our industry is more like the diagram on the right.
We aren’t seeing enough moving through the pipe. Where are the next Trade Sales coming from? We should be doing 10 a year!
There are some sectors of our Industry that suit a Trade Sale. In the Enterprise software space it is very difficult to grow a sustainable business from a rock in the South Pacific. Say you do nail a big deal with Luftansa. We just don’t have 30 consultants to parachute in. It is hard for us to build global sales team from New Zealand. In the Enterprise software space acquisition is therefore often the natural outcome of success and a great result for our tech companies. Many public companies rely on R&D by acquistion. It’s the model.
I’m excited that the SaaS space is an area where we may be able to grow long term businesses that stay New Zealand owned (and we can keep living on our very inhabitable rock).