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Catherine Mohr on how to build sticky companies in New Zealand

Catherine Mohr is a New Zealand-born engineer and surgeon, brought up in the US. Her early research involved alternative energy vehicles and high-altitude aircraft, but since going to medical school, she has become one of the leading international experts in (and developers of) surgical robots. (You know, devices going where human hands and eyes just can’t go.) Mohr is now vice president of medical research for Nasdaq-listed Intuitive Surgical, where she has played a key role in developing the di Vinci surgical system.

In New Zealand this week for her 2014 Hood Fellowship visit, Mohr  talked to Idealog about how we can develop sticky New Zealand companies.

What do you mean by “sticky” companies?

Companies which have a reason to be in New Zealand – and to stay here. A good example is Mesynthes (mesynthes.com), which makes wound care and tissue repair products using a product easily available in New Zealand – sheep rumen [part of the stomach].

Mesynthes has stickiness because of its raw material supply and also because it’s product is light and easy to transport, and not labour intensive, so there is no reason to make it somewhere else.

Another example is Freedom4, a start-up out of Otago University, which has just come up with the world’s first handheld DNA sequencer. This is technology where distance doesn’t matter; you don’t need to be close to your customers. And they are the companies that are likely to stick.

Does New Zealand have stickiness criteria?

The agricultural base is a big one. You have companies like Icebreaker producing high-tech fibres from New Zealand wool, and other companies doing great things in areas such as early detection of infection in cows, or improving the sugar yield of fruits in cold climates.

New Zealand has the opportunity to be unique in its application of high tech to low tech agricultural production and improving quality.

Another thing New Zealand has is some enormously talented people. For example, we’ve put funding into some research being done by Dr Cather Simpson and the team at the Photon Factory at the University of Auckland. She is running a multi-user laser physics company and I’m very impressed with the students she has working there and the sort of applications they are developing lasers for – from medical, to art conservation to sperm sorting.

At Intuitive Surgical we work with Photon Factory on lasers for bone cutting, and we use this New Zealand company purely because of the concentration of talent there. Their lab is the best of its sort in the world.

So what’s holding us back?

It’s true that you find brilliant people doing really good work all over New Zealand. But I think the big question is how do you connect them to the people with the business savvy.

AUT University’s business dean Geoff Perry argued recently that the Government’s innovation policy focusses too heavily on “Stem” subjects (science, technology, engineering and maths) at the expense of encouraging people with business and marketing skills. Do you agree?

I don’t know what the solution is, but I know that there is an enormous amount of ingenuity and ideas generation in New Zealand, but that we build up to small company size and so often fail to progress. Part of this reflects the realities of distance and scale of market. But it’s more than that.

For example, I have noticed when I’m talking to people at some of the universities and I ask: How are your business school and your entrepreneurship programmes connected to your scientists and researchers – and people look at me a bit blankly. It’s critical to have communication so that business students and future entrepreneurs know what the opportunities are and where to find them, and scientist know where to go to when they are looking to scale.

Do the US do business education better than we do?

In the US, it’s very common for people go to back to business school to do an MBA once they have been in a company for a while, whereas in New Zealand, often people do a business degree, but they don’t have any real world experience. You have to know the problems you have to solve before you go back to school. Business in isolation isn’t useful; it’s adding business skills onto something else. The best innovation has to be made in teams and for these to be successful you have to foster cross-pollination

Another thing I’ve noticed is that in the US a medical degree is a post-graduate qualification, so mostly the doctors have done something else first – they have wider experience.

You are an advisor to CERA on the Christchurch health precinct project. What are you talking to them about?

To create successful sticky health companies from New Zealand you need to provide an environment where young start-ups have everything they need to be able to build their products and their businesses here – the things they aren’t able to afford on their own.

It might be patent and FDA (US Food and Drug Administration approval) advisors, help with prototype manufacturing, or providing facilities to do sterilization. As a young companies you can’t afford to hire all these people, but they could be available through the health precinct set-up.

How important is stickiness?

It’s obviously good for New Zealand to build sticky businesses. But it’s not the only thing. Some companies just aren’t going to be stand alone businesses, they are always going to have to grow to a certain size and then be sold into a portfolio of products, just to achieve scale.

That doesn’t mean you’ve failed. Understanding the difference is also important.

Catherine Mohr was one of the NZTE/Kea 2014 World Class New Zealanders. The Lion foundation supported her Hood Fellowship

See Catherine Mohr talking at TED about her work with surgical robots – not for the squeamish

Chief editor at Idealog, Nikki's a veteran in the journalism industry. A former lecturer at AUT University, she was the chief reporter at NZ weekly business publication The Independent and was deputy editor of Canadian publication Unlimited magazine.

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