ICT start-ups have a lot of challenges and to take your technology to the market requires some smarts that you won't find in a textbook. Luckily we have Al Monro to spill the beans.
Al Monro has been through the wringer.
As head of NextWindow, he helped to create a touch screen technology that was going to revolutionise the retail world. Al had contracts, customers and a growth path that would see NextWindow installed in shops and kiosks around the world.
Instead, it became evident that the real future lay in touch screen computers so NextWindow was eventually sold to a Canadian company for $US82 million in 2010.
“You’ve got to be prepared to pivot and be clear-headed enough to move when you need to,” says Al. “When something does stick it’s all about focusing on the bit that’s stuck and executing on that really well. Get rid of the rest. Recognising a need to change is one of the important things.”
These days, Al is Principal and Director at Broadfield Advisory, which he co-founded in 2013 to help New Zealand technology companies expand globally. He serves on the boards of Phitek Systems, eStar, and Baanto, and is chairman of Foster Moore.
“Nothing is being done for the first time,” he says, “so it’s good to get advice even as simple as what hotel to stay at in Shanghai or how to engage with NZTE. Talk to those who’ve been there before you and learn from their wins and their mistakes.”
Al says making those connections and engaging with peers and pioneers is a great way to help new companies survive the inevitable bumps in the road to world domination.
“Capital raising is a big road block. It’s not just that you’ve got to do it but that it’s time-consuming and distracting. The more time you spend in capital raising, the less you spend on customers and products. Technical people aren’t necessarily good at it either. They’re great at software or design or engineering – running a company is a different skill set entirely.”
Al says forecasting growth is almost impossible at the start – companies can say they’ll have sales of $1 million or $5 million by a certain date but they really don’t know.
“There’s an old adage – it costs you twice as much and takes twice as long – and there’s some truth in it.”
Hiring staff is another potential pitfall new innovators can run into.
“You need a developer, a product manager and a sales rep but you can only afford one so what do you do?”
Failure is also something every realistic founder will have to consider.
“But you want to fail fast. You want to learn from the mistake and do better next time. You go through phases – there’s the start-up phase, the throwing the mud at the wall stage, and working it all out. Keep what sticks and focus on that – ditch those bits that don’t work.”
Fortunately, these days there is a raft of agencies and organisations devoted to helping get New Zealand start-ups into the game.
“It’s a lot better than it used to be,” says Al. “We’ve got organisations like Callaghan and NZTE and the NZ Hi-Tech Awards that are great networking events. There are a lot more places people can go to meet people.”
Al says the growing ICT sector, in particular, now has far more awareness than ever before. Through things like the annual TIN100 report into the state of the industry, he says, comes a growing appreciation for New Zealand’s capabilities in the ICT space.
“The TIN100 report means these things are talked about a lot more in all kinds of places, including government circles. When we first started out, government really only cared about the big international IT businesses offering services in New Zealand. Now the focus is on New Zealand ICT as an industry.”
Al refers to the late Sir Paul Callaghan’s dream of a New Zealand that is the place where “talent wants to live”.
“If you take the top 200 tech companies together, it makes us New Zealand’s third largest export sector. It’s about $9 billion a year and it’s almost all export. They’re high-value jobs – tourism is doing extremely well but offers lower value jobs. In ICT they’re all high-value jobs.”
So what does Al look for in an entrepreneur?
“I look for people who are prepared to listen. The worst are the ones who already know it all. It is frustrating – you see some basic errors and they’re just not listening. There are people who have done this before and you don’t have to reinvent the wheel.
“The best ones are hungry for knowledge and to tap into people’s brains.”
Being able to tell that the company needs to change its direction, especially when there are investors on board who have bought into a particular vision, can be challenging, especially for founders who are focused on the product or service at hand.
“Fortitude is a good word. You want a founder who can stand up for the vision he or she has and cope with the turmoil that comes with being in charge.”
Updated: 10 December 2015