A new venture accelerator called ZeroPoint has launched in New Zealand and wants to bring a fresh approach to the start-up scene.
The model uses a virtual incubation programme that helps companies grow their revenues from day one, rather than focusing on maximising shareholder profits.
Managing director of Silicon Valley's Garage Technology Ventures Bill Reichert recently included ZeroPoint Ventures in his list of the top ten and a bit of New Zealand businesses on a trip here, describing ZeroPoint Ventures as "a venture fund that is driven by proof, not just hope."
Khan says during his time building start-ups in the UK and helping nurture them as the co-founder of Start Up Weekend and the programme leader of Lightning Lab in New Zealand, he observed that the Silicon Valley exit model that so many subscribe to may not necessarily be the best fit for Kiwi businesses.
"In New Zealand, the mainstream start-up narrative is often measured by the amount of capital you've raised, rather than how many customers, or how much revenue you've achieved,” he says.
“I realised that for the most part, most of the companies I ended up seeing tried to go big, go fast and get offshore, but I felt that worked for a very small number of companies we saw. That’s all well and good, but I felt everyone else was being pushed in that same direction, whether or not it suited them. That model of entrepreneurship is only fit for a small number of people that’s where the ZeroPoint vision came from.”
He says this is the due to the “cult of the founder”, where building a business and selling it off has become glamourised.
“The main way people build companies is they have a side project whilst at work,” he says. “It’s a labour of love – a passion – then they realise they can get a few sales through it and turn it into a couple of thousand dollars, then they think this is something more sustainable than doing my main job. That’s the way the smart people do it, but it’s how much you get brainwashed by the Silicon Valley mindset.
“When you’ve been to start-up meet up after start-up meet up, everyone thinks an exit-focused approach is the way to build a company. That exit focus approach is one way to do it, but we just don’t think it always works in an environment like New Zealand.”
And Khan says while events like Start Up Weekend are great for developing ideas, it’s difficult for founders to navigate the way forward once the event wraps up.
“If I want to do that and move from my day job, the pathways aren’t clear. Yes, you can go to a three-month accelerator, but that’s a big ask and a risk and after three months, you’re left to your own devices. This [ZeroPoint Ventures] puts a clear path in front of people.”
ZeroPoint Ventures’ programme is run virtually, which Khan say is an advantage compared to the traditional accelerator or incubator model as there are no co-founders required, no need to give up a job and no need to move cities to found a business.
Instead, it can be done from anywhere in New Zealand, spreading the innovation further afield in the regions than just being situated in start-up hubs in the main centres.
“There’s innovation happening all over the place and people with good ideas aren’t limited to being in Auckland, Wellington or Christchurch. How do you give them access to the national mentor network, the other inspiration networks?” Khan says.
However, ZeroPoint Ventures has also partnered with BizDojo so that anyone in its programme can use its co-working spaces and get the in-person start-up experience.
Over 130 start-ups and entrepreneurs applied to join the programme during a beta phase earlier this year.
Applications for the next cohort are open now, with ZeoPoint Ventures on the lookout for mostly software based businesses in the early stages of entrepreneurship that can support 4 to 5 people and turn over $1 million or more in annual revenue within two years. Applications close at midnight on 14 August.
Khan says through this process, he hopes to build a more New Zealand centric playbook of entrepreneurship.
“I see the current way we build start-ups is by taking our best and brightest and clustering them tighter or pushing them offshore to go global from day one. Many who are successful go offshore and stay offshore. What we’re trying to do here is bring this focus back to the local community so companies can be built here and get the support they need, so all the talent and investment doesn’t go offshore.”