5 September 2012
No. 8 wire approach hampers global business growth
Grant Thornton New Zealand’s Director of People and Culture and MBA student, Vicki Caisley has recently returned from a
two-week Massey University study tour of the United States (US) looking at international business models and innovation.
Stories abound of New Zealand businesses, large and small, falling over when they try to go off-shore and make it in
larger markets. Some succeed brilliantly but these seem to be few and far between. Vicki talked to a wide range of US
business people from large corporates to start-ups and met with a number of Kiwi’s working in the US market and gained a
number of valuable insights along the way.
Strengthening a firm’s expertise by “letting other people in to help” and ditching the “No. 8 wire mentality” are two
crucial steps she believes that New Zealand companies must take if they are to succeed in the international arena – or
at least the US market
Many successful New Zealand businesses are built on the back of successful entrepreneurs who have an innovative concept
and business model but then hang on and try to do everything themselves. We talk admiringly of the ‘jack of all trades’,
or ‘no 8 wire’ mentality as a cornerstone of Kiwi culture and innovation.
Undoubtedly these qualities have led to many promising New Zealand start-ups, but “this business culture can hamper
building a business of sufficient global scale and their ability to compete internationally” says Vicki.
We talk of the new age where geography doesn’t matter but in reality strong businesses are built from
strongrelationships with the people who can open the right doors for us. And thismeans investing time and energy in
building networks. This can’t be done with one fleeting visit to the market once a year.
Like it or not, we can’t change our size and our geographic location therefore we need to acknowledge our limitations
and enlist expertise when needed. By surrounding ourselves with experts who hold the skill sets we haven’t personally
mastered and ensuring we have a team who are focussing our product or service towards the local customer’s needs, we
will ensure that our business is building, even when we aren’t there. A perfect example of this is Zoom Systems, founded
by Kiwi entrepreneur Gower Smith. Born in Dannevirke and now based in San Francisco, Gower is inspirational in terms of
what Kiwis can achieve in the global market. Zoom Systems designs high-end automated retail shops (Zoomshops). These are
essentially vending machines dispensing electronic goods including digital cameras, i-phones, and i-pods in spaces such
as airports, military bases and tourist resorts (they have 1,250 machines across Europe, Japan and the US).
What is unique about the business model is that Gower has identified the vending technology and the electronic
procurement systems as his touch points of excellence. He has focussed on outsourcing the areas of expertise that can be
performed by others – such as inventory replacement.
Gower’s success also comes from his ability to identify that his core area of expertise is in innovation and technology
and he has surrounded himself with experts in leadership, financing and other core business disciplines.
“There are many Kiwis and Aussies doing well here in the valley. To raise capital and build a great company you need to
be persistent and you need a talented and focused team dedicated toexecuting the vision” says Gower.
One of the difficulties of breaking into the US for New Zealand entrepreneurs is the ruthlessness of US investors and
businesses when it comes to opening doors for new comers. At times our laid back approach doesn’t work in our favour.
Kiwi’s report examples of pitches to major US corporations as ill-prepared and targeted, with poor personal and product
presentation, and no real focus on the target customer.
New Zealand businesses need to ensure they present as ‘A’ players and sometimes need to enlist the support and expertise
of those who have the appropriate knowledge, contacts and skills for what it is they are trying to achieve.
The difference between success and failure also lies in how well our Kiwi entrepreneurs understand the business drivers
and needs of who they are talking to whether it is a potential investor, a distributor or an end customer. By taking the
time to understand what their key drivers of success look like, and being prepared to adopt appropriate styles and
strategies and then by pitching at the right level, Kiwi’s will dramatically improve their chances of success.
New Zealand technology companies have a great resource available to them to help navigate the complexities of
doingbusiness in the US. The brainchild of John Holt, the Kiwi Landing Pad is a public/private venture in the heart San
Francisco’s SoMa district. Established to help New Zealand technology companies accelerate their growth into the US
marketplace, it provides office and business development support to New Zealand technology companies attempting to
establish or grow their business in the US and facilitates vital links to investors and entrepreneurs. It also offers a
reality check by challenging some of the assumptions that Kiwis make regarding the ease with which they can enter a new
market. Their Catapult programme provides start-ups with a month in San Francisco to ‘test the waters’ before they
commit too heavily.
Hugely successful in New Zealand, Rod Drury has taken Xero to the US and enlisted the expertise and assistance of the
Kiwi Landing Pad. Hopefully, other sectors will come on board to help ease the way for other New Zealand companies
looking to export into this market.
Of course it is not just because of investor expectation that New Zealand businesses need to recruit specialist
expertise. The sheer size and complexity of doing business across the States (in terms of federal and state laws and tax
systems) is challenging and presents a major risk too. Kiwis should look to their New Zealand advisers for help in
navigating through the complexity of the local markets and answer critical questions like: where is the best state to
set up in business? How do we meet compliance obligations without massive expense? What is the best structure to
lawfully position ourselves to minimise our tax obligations? The benefit of working with local New Zealand advisers with
strong direct links is obvious.
So the message from both US business people and the successful Kiwi business abroad is: “don’t believe we can do it all
ourselves. There is plenty of help out there – grab hold of it because it will really lift your chance of success”.
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