When Brett O’Riley returned to New Zealand from working abroad in the late-noughties, he saw untapped potential.
“Auckland didn’t have a hub of innovation, and particularly didn’t have a showcase,” the chief executive of Auckland Tourism, Events and Economic Development (ATEED) says.
The challenges faced by the innovation system were similar to Auckland City’s pre-amalgamation.
“It was just too fragmented.”
After a few conversations, $30 million of Auckland Council investment set aside in its long-term plan and more investment from Precinct Properties, and cooperation from the real estate and business sector, GridAKL – a high-tech innovation hub in Wynyard Quarter – was created in 2015.
By offering curated communities, responsive places and a range of services relevant to businesses of varying stages and sizes, the council aims to grow advanced industries, create jobs, enrich the innovation community and diversify the economy.
The end goal? Position Auckland as an innovation hub of the Asia Pacific region by focusing on world-class research, attracting talent and helping to get more innovative, tech-based ventures off the ground.
GridAKL’s initial BizDojo-led John Lysaght building houses 78 businesses, startups and entrepreneurs, and Generator, a co-working space company, will house an additional 300 businesses in the new Madden Street and Mason Brothers buildings opening in Wynyard Quarter in September. A huge amount of corporate space and facilities are also under construction in the area.
With the two new buildings, it is estimated GridAKL and the wider Wynyard Quarter innovation precinct, will contribute $450 million annually to Auckland’s GDP by 2020 and 3,270 people will be employed there by 2022.
Specifically designed for collaboration, co-working is taking corporate real estate by storm globally.
A recent report by real estate firm Bayleys found Auckland’s co-working spaces have grown from 1,400 square metres in 2011 to 13,800 in 2016.
O’Riley says the buy-in that the concept has had from all sectors, with co-working spaces popping up all over the city, is “what success looks like”.
But why are both SMEs and larger corporates businesses making the decision to join these communal work arrangements? And why the investment from council?
Enter the Grid
O’Riley puts it down to interaction, the agglomeration effect, a young entrepreneurial workforce and, importantly, the services and events provided to GridAKL tenants.
During an early conversation about GridAKL, a colleague said to O’Riley if the only thing the space provided was a visible location for the innovation community to connect and thrive in, “that would still be a great thing”.
“When we first talked about that people sort of rolled their eyes, but actually that is a prophecy for the health of the ecosystem.”
As well as the space, there's been guest speakers, more than 900 events, the involvement of tenants in programmes like the Tripartite Economic Alliance Auckland has with Guangzhou and Los Angeles, and access to government support from NZTE and Callaghan Innovation programmes administered by ATEED. All have been extremely beneficial to those scaling their ventures, O’Riley says.
For Auckland Council, investment in GridAKL will continue to support economic diversification, increase advanced industries and offer better jobs for those living and relocating to the city, which is becoming increasingly known as a centre for tech and innovation.
As the benefits of agglomeration for economic growth and creativity become evident, businesses are no longer making location decisions based purely on cost and convenience. So O’Riley says on top of addressing a need, GridAKL has fostered the growth of Auckland’s innovation ecosystem.
Over the last ten years Auckland’s ICT and Digital Media sector has grown by 26 percent in GDP, accounting for one in 30 jobs in Auckland.
66 percent of New Zealand’s top 200 companies are based in the city and it is also home to more than 600 international companies. GridAKL follows the global trend of urban innovation districts from New York to Seoul to Stockholm. Compact, transit-accessible, and technologically-wired innovation clusters are popping up the world over.
With GridAKL’s new buildings opening this year, O’Riley says ATEED will likely focus on service provision and business attraction rather than investing in more property. And with many startups becoming scaleups, the needs of those companies change.
“What other services should we be providing to those companies, what sort of support, and how do we take the collaboration to the next level?”
He says some of that is around lifting management capability, giving tenants access to ATEED’s networks and board experience, and driving talent attraction.
At your service
Ryan Wilson, the founder and chief executive of Generator, says the new GridAKL buildings are designed specifically to promote the co-working experience.
“We’ve learned diversity is hugely beneficial for our environments, and this diversity is key to everything we do.”
As well as the size and scope of businesses, he says the search for diversity extends to innovation.
“Businesses of all sizes that excel at what they do and are open to diversity in people, business, and ideas are ideal members for our space at GridAKL.”
Generator, which currently occupies over 4,000 square metres in three Britomart buildings, with international members including Facebook and Expedia, tailors services to members’ needs. This, Wilson says, is critical to success.
An on-site IT team with tailored ISP, technical support and network solutions, front of house staff, concierge services, spaces for meetings and networking, and bars and cafes will all be on offer, along with Generator’s Plug and Play tailored business solutions.
Building a community
Joining GridAKL isn’t just about changing locations, it’s about changing cultures.
“Without a strong sense of community, we would just be a place to work,” Wilson says.
“We can have aesthetically attractive spaces and exceptional service offerings, but the one thing our members’ experience is dependent on is the culture we cultivate.”
Wilson says having places to express creativity, energy and authenticity are vital aspects of the Generator landscape.
“If you’re working in an uninspiring place, how can you be expected to produce inspiring ideas and solutions?”
He says the co-working space at GridAKL will allow employers and employees to work in a challenging environment humming with creativity and opportunity.
“At any given moment you are exposed to new ideas that enable you to think outside the box, because you’re not confined to one.”
Although Wynyard Quarter is no stranger to big business – housing the likes of Datacom, Air New Zealand, IBM, Microsoft and Fonterra – the Madden Street and Mason Brothers buildings will see large companies joining the GridAKL mix.
“Generator at GridAKL allows large corporates and SMEs, who are typically disconnected, to collaborate and engage in collective problem solving,” he says.
By having a mixed space, the chances for collision of ideas from businesses at different stages of life is greatly increased, and there’s already been significant interest from some of the country’s largest corporates, he says.
Full speed ahead
BizDojo, the second largest co-working space provider in Australasia behind WeWork, has been operating GridAKL’s John Lysaght building since day one and will continue to do so, co-founder Jonah Merchant says.
Merchant puts the rapid growth in co-working down to changes in technology that allow flexibility, and the cost-effective way of working.
But beyond that, he says technological changes have been a catalyst for the bigger social changes powering the ongoing global interest in co-working.
“Increasing flexibility and collaboration are trends that are changing the way we approach work itself, whether you’re a freelancer or a large corporate.”
On top of encouraging business growth, the social connectivity boosts moods and energy levels, and in turn productivity.
Bracing for growth
Having a well-designed, collaborative space to work is great, but space alone doesn’t lead to great work. Co-working at BizDojo is centred around the core ideas of using collaboration and community to support business growth, Merchant says.
This is reflected in design, support systems, learning facilitation, and events.
“The community needs it. In many ways, the most important way of supporting the community is having people open to listening to what that person needs, and then caring enough to walk through the logical next steps with them.”
He says every resident at BizDojo is different and the support on offer changes depending on the business type and stage of the founder.
“In many ways we have focused on that ‘co’ in co-working. Beyond a shared space, we investigate and instigate the means to create community, collaboration and connection.”
Taking a breather
Other co-working spaces like The Crate on the North Shore, Level One in Devonport and Level Two in Parnell are expanding the co-working options in the city. And BizDojo now has seven co-working sites across New Zealand.
With more than 1,500 members in Auckland alone, it has experienced 300 percent growth in one year, going from 14 staff to 45 and boosting turnover from $2.2 million to $12.5 million.
Merchant says they know first-hand what it’s like to grow fast and starting or scaling a business is one of the hardest undertakings most people will try.
“We believe that if we want to see New Zealand moving forward at pace, we need to support those people with an idea, startup founders, entrepreneurs and creators of value,” he says.
In it to win it
With the three GridAKL buildings that will be up-and-running at year’s end and the GridAKL Tech Café it’s predicted GridAKL will add an additional $375m GDP to Auckland’s economy by 2042.
From just 16 businesses in 2014 to 78 today, it’s estimated membership will grow to 700 by 2020. Looking back on GridAKL’s development over the last three years, ATEED’s Brett O’Riley says although he’s a bit surprised with the speed co-working has been embraced, he’s not surprised by the talent Aucklanders are displaying.
“We hoped GridAKL would become a bit of a proof point for what was possible, and if we could prove the case other people would follow the example. It’s just fantastic, we’ve been able to create that and assemble something that’s actually based on global best practice.”
Travelling the world from the Viaduct
New Zealand tech success story Online Republic, a global travel group specialising in cruise, car rental and motorhome travel bookings, will be one of the first tenants in the 12 Madden St building, occupying the whole fifth floor – a total of 1,480 square metres.
Chief executive Vaughan Magnusson says the company was looking for a space in an up-and-coming part of the city when they heard about it.
“We were keen to find a space that aligned with our own values of maintaining high energy, agility and an entrepreneurial culture.”
After being spread over two separate offices in Generator’s Excelsior House for the past three years, Magnusson believes a single floor plate will do wonders for the company’s organisational culture.
Although Online Republic aren’t in a co-working environment, Magnusson says their open plan set up encourages as much team interaction as possible.
“Despite the fact that we are no longer a startup, we never want to lose those core startup values of passion, energy, agility and resourcefulness. Aside from cost efficiency of co-working spaces, I think small and early stage ventures feed off the energy of one another and that general vibe of excitement associated with new ventures.”
He says networking opportunities and serendipitous conversations that take place in co-working spaces aren't as readily achievable when you're not immersed in that environment.
“Our main benefit has simply been connections through networking,” he says. “Grants, sponsorships and guidance in this area that we wouldn't have known about otherwise have been essential.”
ARX was created nine months ago and spent its early days in the AR/VR Garage. It was the Garage that led them to GridAKL during the World Masters Games.
Thambiah says the services provided by GridAKL and BizDojo allowed the business to be fast tracked, and let the founders learn from the experiences of other startups and mentors.
“Overall it just made our ride much smoother, saving time and money.”
And would he recommend it for other startups? “Definitely.”
Simply being around other startups who are in similar stages or even well ahead of you is a great way to learn, he says, and it also provides opportunities for collaboration.
“We feel in this game it is important to fail fast and fail forward. This space allows and encourages that.”
Home away from home
Working in GridAKL has become a way of life for Sebastian Deans, the general manager of VR/AR company One Fat Sheep.
“I think the greatest accolade for BizDojo is I went away for a month on holiday and said to my other half as we returned home that I couldn't wait to get back to the space in GridAKL.”
Deans says the environment has had a positive impact on the culture of the business and has opened up the model to more partnership brokering, improving their bottom line.
One Fat Sheep moved to GridAKL in April 2016 as Deans thought it would incubate the business and facilitate collaborative partnerships, and he was keen on an environment that was relaxed and fun but understood the tech sector.
And the verdict? “They have more than exceeded these expectations,” he says. “BizDojo have gone above and beyond to promote One Fat Sheep to the tech world and also to influential people. I find they have an amazing ability to read what we do and then find a way to enhance it through a strategic intro or organic PR.”
Deans says creative and lunch-time sessions and BizDojo’s new people introductions have been incredibly useful services, giving insights and understanding to the other businesses and opportunities out there.
“I also love the fact that I can travel throughout New Zealand and seamlessly integrate into their multiple spaces and feel as though I get the same, charming and fostering experience anywhere I go.”
Deans says the space has changed the business and his own approach to it, and he gives it the unequivocal thumbs up for others looking to take the leap.
Breaking the mould
Jonathan Rice, co-founder of recruitment company Rice Consulting, started his co-working journey as a one-man band, claiming his spot in the Generator building ahead of its 2011 launch.
Rice had just moved to an inner-city office and was finding it “too dull, lifeless and prosaic there” when he was told about Generator. The mix of work, networking, collaborating, support and fun is perfectly balanced, and has become an integral part of the culture and personality of his business, he says.
“I like to work hard but am also quite sociable and you really get the best of both worlds here.”
The environment has meant Rice has attracted and retained top talent to his firm, growing his team to six, and he says he has also benefitted from introductions to other like-minded businesses who have become clients or suppliers – or both.
“It’s more of a lifestyle than a workplace and we’ve even made plenty of use of their valet parking services, dry cleaning services and of course the Friday bar service delivered right to our desks.”
He says being in an energised and entrepreneurial environment is a huge boost as an entrepreneur and has allowed him to develop a secondary business and “go against the grain”.
“It’s rare to suffer any nagging doubts when surrounded by so many other successful business people who I can ask advice from or bounce ideas around with.”