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Kiwis as lab rats: international companies are testing their products on us

If they had followed this city-soaring UFO, observers would have seen it stop and hover before smoothly delivering the parcel to street level on what appeared to be a descending fishing line. A quarter of an hour later they would have seen a Fastways van pull up, comprehensively beaten to its own delivery.

This demo drone delivery in Auckland was the latest example of a foreign company (in this case US company Flirtey) partnering with a New Zealand business (Fastway Couriers) to test new products and ideas. In other examples of new technology being tested on these shores, Sway, Microsoft’s website-building app, was previewed in New Zealand in October 2014, and Facebook has trialed a number of features here, including single-column timelines and highlighted posts.

It’s a source of smugness for us. We tell ourselves these behemoths use New Zealand not just because of our geographical isolation, but also because of our tech-savvy population — a combination that provides the perfect, low-risk testing ground for new products.

They also like our hands-off regulatory environment, our network of early adopters and the openness of local companies to team up with foreign partners.

Oh, and we’re probably cheap too.

As Paul Spain, CEO of Gorilla Technology and host of the NZ Tech and NZ Business podcasts explains: “New Zealand has a growing reputation for innovation, fast execution, value, and ease of doing business with.”

Clever us.

The trend is getting noticed overseas. UK business magazine The Economist recently ran an article entitled “Kiwis as guinea pigs”, where it suggested international tech firms use New Zealand to fix bugs, check server capability and to make sure dud products are killed before anyone that matters gets to see them.

Image: Paul Spain, CEO of Gorilla Technology

“If a firm finds that a particular product, or a new feature added to an existing one, is a resounding flop in New Zealand, it can quietly be dropped without having much effect on the company’s overall reputation.”

Facebook apparently canned disappearing messages (à la Snapchat) and a tool that let users pay a small fee to promote their status updates to friends, after Kiwi users nixed them.

“If you mess up and burn [in the NZ market], it’s not that big a deal,” David Stewart of photosharing firm Fade told The Economist.

Being a lab rat isn’t normally a bargain, but in this case New Zealand firms also benefit from this country being the place to technology-test subjects.

For example, New Zealand was one of the first testing grounds for Eftpos payments in the 1980s. And this Kiwi success is one of the reasons New Zealand is at the forefront of trials into “mobile money” (smartphone payment systems), says Rob Ellis, CEO of Semble, the company behind New Zealand’s first mobile wallet – a product intended as competition for innovations such as Apple Pay and Google Wallet.

Image: Semble CEO, Rob Ellis

“New Zealand companies in the technology space will always be helped by the fact that Kiwis are very progressive in their uptake of technology,” says Ellis.

Semble (launched in March and previously TSM NZ) is a collaboration between Spark, 2degrees, Vodafone, Paymark, and banking partners ASB and BNZ. It uses technology provided by the Dutch security firm Gemalto to protect users’ contactless payments.

While Rob Ellis rejects the notion that Semble is somehow a test vehicle for foreign companies (“It is a New Zealand innovation, by Kiwis for Kiwis”), he accepts the country makes for an attractive proposition for overseas firms.

“I believe it’s about the Kiwi “can do” attitude and our size. We’ll always give it a go and we’re small so we’ve got a better chance of making it happen quickly,” says Ellis.

Paul Spain says he has come across a range of companies working with New Zealand firms – mostly leading innovators in their field globally, such as Umajin, Aeronavics, PowerByProxi, Navman, Teknique, Marker Metro and Fusion – to test technology in New Zealand. 

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