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Carnival Labs: being Kiwi, but selling globally

Carnival Labs: being Kiwi, but selling globally
Carnival Labs, a mobile app development company, is taking flight. James Robinson checks in with co-founder Guy Horrocks.

Carnival Labs, a mobile app development company, is taking flight. James Robinson checks in with co-founder Guy Horrocks.

Guy Horrocks took 81 flights in 2011. With Carnival Labs, Horrocks’ Wellington-based mobile app development company, working for a roster of companies that had recently expanded to include Taco Bell, Dreamworks, and HBO, he was just doing what he had to do as business director. Clients want you close by, he says.

“It’s not something that you want to keep doing,” Horrocks says dryly over Skype from New York.

So it’s hardly surprising to hear that the next move for Carnival Labs is to shift from being a New Zealand company doing most of its business internationally to setting up its own American roots.

If all goes to plan, within a few months he’ll be calling New York home officially.

From New York, Horrocks is readying the company paperwork for an American visa interview, where he needs to illustrate that Carnival Labs is a committed and growing participant in the US mobile app market. He’s signed a lease on an apartment for himself and is hoping to have lined up permanent office space for the company before he next returns to New Zealand.

There’s a lot to get right in setting up a subsidiary, Horrocks says. There are tax complications that are manageable when you’re small, but can become exponentially larger headaches as you expand.

“The good thing is, 95 percent of other international companies would have fallen by the wayside by the end of this application process. Now all we have to do is compete with the Americans,” Horrocks laughs.

At the start of 2011, things were looking less rosy for Carnival Labs, which was formed at the end of 2008 as a partnership between Horrocks and Cody Bunea. The company name is a combination of its two founder’s attributes; Horrocks is the creatively driven half, the carnival, where Bunea is the technical whizz, the lab. The two raised capital by sending a few “cruder” early projects straight to market. Its first effort, a game called Duck Shoot, briefly became one of the most downloaded applications on iTunes internationally.

The mobile app market notched its 30 billionth download in April of this year, but just a few years ago did not exist.

By the start of 2011, with little barrier to entry, the market was exploding. Carnival Labs needed to move overseas to stay viable. Its acclaimed work on projects like the NZ Herald iPad app was all well and good, but it would only take them so far. The company wanted to cash in, but it needed a push.

“There’s a limited pool of work in New Zealand. It’s a fraction of what is out there.” This push abroad however, came in trying circumstances. In February 2011 Carnival Labs’ Christchurch office was destroyed in the earthquake. It moved operations to Wellington, but six weeks after the quake, the agency that provided them with almost 80 percent of their work sold up and moved all of their mobile development over to India.

But adversity served as a catalyst for an international push that has netted Carnival Labs contracts it would have otherwise missed out on. It recently finished its hundredth project as a company, in a market where products either blow up quickly or sink without a trace. Now it’s designed everything from a programme for Nestlé that helps you track a pregnancy, through to one for Dreamworks that lets you insert Puss in Boots into your photos.

Now, an American base opens up even more possibility than ever before.

“We were building out from old clients to get new ones. Now we can build on our current profile to get new clients of our own accord.

“Before, you met a potential client and you had a great meeting. Then you went back to New Zealand and someone else was meeting that same client.”

All of Carnival Labs' software development is still done in Wellington, and Horrocks and Bunea communicate exhaustively through Skype.

“We almost talk more when we’re away than we do when we’re in the same building.”

As yet there’s no plan for Bunea to join him in America. The strategy for now is to be New Zealand but sell globally.

Horrocks sees the app market as part-advertising and part-technology and admits that Carnival Labs has drifted closer to a work-for-hire agency model than was planned. This has let the company do work across a dizzying array of sectors: medical, banking, entertainment and food. But it aims to launch more of its own product to insure itself against the inherent “lumpy” nature of sales, and grow the company steadily.

Positioned where it is in the world, for Carnival Labs the sky is the limit. But it wasn’t a place it could get to without some sacrifice.

Horrocks quips, “If it was easy, I think everyone would do it.”

Here's a video interview Bunea recently did with NZTE:

http://www.youtube.com/watch?v=PHsto95X7B0