Editorial

By Matt Cooney, November 27, 2008 @ 1:53 pm

Talent may make capital dance, as Swedish economists Kjell Nordström and Jonas Ridderstrale subtitled their book Funky Business. But without money, talent faces a difficult slog.

We’re used to that in New Zealand. We’ve never had a vibrant venture capital industry, despite several efforts over the years. But without a steady stream of VC cash available to our cleverest startups, we’ll never move fully beyond our history as bush mechanics and supplier of top-notch talent to enterprises elsewhere in the world.

It’s not that offshore VCs won’t invest in New Zealanders—they will, as Mike Booker reports on page 66, but first they want to see evidence that New Zealanders will invest in ourselves. And although our VC industry has been more active in recent years, thanks to the 2001 launch of the government’s $200 million New Zealand Venture Investment Fund, it’s now at a crucial point. If they don’t get a substantial return on at least one of the current investments, it’ll be tough for creative New Zealanders—other than those with happy connections to angel investors, who are currently shouldering much of the early-investment burden—to get their ideas funded.

It would be a lot easier if our institutional investors were keen to fund VC investments, but they’re not, despite their offshore peers being often enthusiastic backers of venture capital. Yet if the fund managers aren’t prepared to invest in our newest entrepreneurs, they may find their only choices of local investment are aged and infirm. It’s in everyone’s interests to encourage the next generation of Kiwi business.

It’s not as if there aren’t great ideas around—and we profile a few in this issue. Like Julia Marshall, who created an export business by translating European children’s books into English. One publisher said she was either an idiot or the idea was brilliant—and, as Nicky Chapman discovers on page 60, Marshall is no idiot.

Bottled water often gets a (deservedly) bad rap, but no one has done it quite like Antipodes. That’s because the four founders of Antipodes knew nothing about the water business—if they had, “perhaps we wouldn’t have started,” head Antipodean Simon Woolley tells Vincent Heeringa on page 50. But their naiveté proved to be a strength, allowing them to make honest mistakes and profit from them.

It’s these genre-twisting ideas that create great businesses, and on page 56 Rosie Bosworth chimes in with another: the Black Room. It’s a way to look beyond today’s business-as-usual products and systems and reinvent them for the eco-markets of the future.

At Idealog, it seems wherever we look we find an inspired New Zealander with a great idea. Some will work and some won’t, but they all deserve our attention and many deserve the nation’s investment. After all, we can’t just rely on the angels.