Latest / The SME Stream / NZ tech should be taking on the world, now

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NZ tech should be taking on the world, now · The SME Stream

0:00
Speaker 1: The USA the holy grail of markets for entrepreneurs all
0:04
Speaker 1: over the world.
0:05
Speaker 2: While we Kiwis have many cultural distinctions that separate us
0:08
Speaker 2: from our western piers, we also have a huge number
0:11
Speaker 2: of similarities.
0:13
Speaker 1: This fact, as well as the sheer amount of money
0:15
Speaker 1: and the number of people, make the US market a
0:17
Speaker 1: golden goose for local entrepreneurs.
0:20
Speaker 2: Our guest this week is Mahesh Miralda, a venture capitalist
0:23
Speaker 2: who was the twenty fifth employee at Australian unicorn startup Canva,
0:28
Speaker 2: and he has strong feelings about the need for New
0:30
Speaker 2: Zealand companies, especially tech and software companies, to expand beyond
0:34
Speaker 2: New Zealand.
0:35
Speaker 1: With his deep experience in the VC world, Maheshkiv's advice
0:38
Speaker 1: to startups on how to capture some of that American cash,
0:41
Speaker 1: as well as his view on why it's so important
0:44
Speaker 1: for New Zealand businesses to break into the US market.
0:48
Speaker 3: QUI founders who make it to the US are better
0:52
Speaker 3: than the top tier American founders because American founders they're like, hey,
0:57
Speaker 3: if this doesn't work out, I'll be fine. He founder
1:00
Speaker 3: who makes the US knows and believes they have one shot,
1:04
Speaker 3: and then they go all.
1:06
Speaker 2: That's coming up later and this week's episode of The
1:08
Speaker 2: Business at Tech Howard by two degrees for business. But first, Peter,
1:12
Speaker 2: have you ever been smashed?
1:14
Speaker 1: I haven't been successfully smashed, but I got to say,
1:19
Speaker 1: literally last week I almost fell for one for the
1:22
Speaker 1: first time, which was a message from supposedly from New
1:26
Speaker 1: Zealand Post about a package that hadn't been delivered, had
1:32
Speaker 1: been held up. I needed to give some more information
1:34
Speaker 1: and I literally was waiting for a package that had
1:38
Speaker 1: been held up. So I was like, finally they've got
1:40
Speaker 1: in touch with me. It clicked through to it looked
1:43
Speaker 1: just a little bit off, didn't look like the New
1:45
Speaker 1: Zealand Post website, and then I looked at the URL
1:49
Speaker 1: and it was not ented post dot code into ed. So,
1:52
Speaker 1: I mean a lot of people will be familiar with
1:55
Speaker 1: these smashing text messages. It's basically SMS us fishing, which
2:01
Speaker 1: is an attempt to get you to divulge sensitive information
2:05
Speaker 1: or to click a link to download some malware onto
2:08
Speaker 1: your phone. That's often the case as well, so I
2:10
Speaker 1: think kiwis are quite familiar with this. But a case
2:14
Speaker 1: that's just been uncovered that played out earlier in the
2:18
Speaker 1: year was a smashing campaign that didn't just rely on
2:23
Speaker 1: the existing networks of two degrees or one end Z
2:27
Speaker 1: or a spark. What these people did is a lot
2:30
Speaker 1: more sophisticated. They set up effectively a fake mobile base
2:35
Speaker 1: station in Auckland to try and get people to connect
2:39
Speaker 1: to that base station automatically thinking they were on a
2:42
Speaker 1: regular network, and then they sent them dodgy SMS messages.
2:47
Speaker 1: And the reason they would go to all that trouble
2:49
Speaker 1: is to bypass all the sort of filtering systems that
2:53
Speaker 1: the other legitimate networks have in place to try and
2:57
Speaker 1: weed out a lot of these smishing messages. And then
3:00
Speaker 1: they could basically tailor messages with their own phone numbers
3:03
Speaker 1: from this fake base station and communicate with these people
3:08
Speaker 1: who thought they were responding to legitimate messages. It's incredible
3:14
Speaker 1: how far they went to make this happen. You've been
3:17
Speaker 1: very few examples of this, mainly out of China where
3:21
Speaker 1: this sort of level of sophistication of smishing messages has
3:24
Speaker 1: been seen.
3:25
Speaker 2: Yeah, I mean it's almost kind of cool in a
3:28
Speaker 2: way when you look at the technology that's involved, and
3:31
Speaker 2: it's kind of this very ad hoc thrown together thing.
3:35
Speaker 2: You can see the picture in the article will link,
3:37
Speaker 2: but to kind of know there's some teenage amateur engineer
3:42
Speaker 2: out there who's throwing together one of these things in
3:44
Speaker 2: an attempt to defraud people. Obviously terrible behavior and not
3:49
Speaker 2: something to be encouraged at all, but at the same
3:52
Speaker 2: time kind of amazing that they were managed to get
3:56
Speaker 2: the kit, put it together and successfully actually do this.
4:00
Speaker 1: Yeah, and I wonder if there is a China link here,
4:03
Speaker 1: either Chinese students in New Zealand doing this or someone
4:08
Speaker 1: working with people in China to get the equipment here.
4:12
Speaker 1: It was a operation by the police Operation ORCA. Funnily enough,
4:17
Speaker 1: they had a bit of a sense of humor around
4:19
Speaker 1: that one, and the Department of Internal Affairs was made
4:22
Speaker 1: aware of the scam in July. I don't know whether
4:26
Speaker 1: she was dabbed in or what happened, but they've been
4:29
Speaker 1: on the case. These fake base stations, they call them
4:33
Speaker 1: base transceiver stations BTS towers, and there is in China
4:39
Speaker 1: again malware called swearing Trojan, which is Android based banking
4:43
Speaker 1: malware which have been used in conjunction with these BTS towers,
4:48
Speaker 1: which ultimately have a range. According to reports out of China,
4:53
Speaker 1: off ten to twenty kilometers, so you could have a
4:56
Speaker 1: lot of people. What I don't understand is how they
4:58
Speaker 1: get you know, my phone, I'm on the skinny network
5:02
Speaker 1: on a skinny sim. How they get my phone and
5:05
Speaker 1: my sim to connect to their network. There must be
5:08
Speaker 1: some authentication that there's somehow mimicking or bypassing there for
5:13
Speaker 1: that to happen.
5:15
Speaker 2: Yeah, because they talk about it just auto connecting as well.
5:18
Speaker 2: Your phone will auto connect and you won't even know
5:22
Speaker 2: that it's done it because and it will use I
5:24
Speaker 2: think like a two G network as well, rather than
5:27
Speaker 2: the three G or four G because for whatever reason,
5:31
Speaker 2: it tricks your phone into thinking it's the network that
5:33
Speaker 2: it should be connected to. There's some instructions where you
5:37
Speaker 2: can actually disable the two G network on your phone
5:41
Speaker 2: to be able to make sure you can avoid these
5:43
Speaker 2: kinds of things. But realistically, the smishing is no more
5:47
Speaker 2: sophisticated than any other text fishing, and they can be
5:50
Speaker 2: pretty convincing. You know, you're not the only one who's
5:53
Speaker 2: definitely clicked on one of these links and then gone,
5:56
Speaker 2: oh no, that's actually not something I should be clicking on.
6:00
Speaker 1: Yeah, And I think obviously a lot of those messages
6:03
Speaker 1: still get through, because I got one just last week,
6:06
Speaker 1: so that the networks aren't doing enough to keep up
6:10
Speaker 1: with this deluge of smashing messages. But to go to
6:14
Speaker 1: the next step of installing some physical hardware, you know
6:19
Speaker 1: there must be a real incentive to do that, which
6:21
Speaker 1: is and I think it is when you're on that
6:23
Speaker 1: fake base station that's down the road from you or whatever,
6:28
Speaker 1: they can tailor official looking numbers, They can create their
6:32
Speaker 1: own basically their own phone number network to send you
6:35
Speaker 1: official looking text numbers and phone numbers, which then you
6:39
Speaker 1: might make you think, oh, okay, this is legitimate, but
6:43
Speaker 1: ultimately they're still going to send you to a dodgy website.
6:46
Speaker 1: So all the same preventative measures are in place. Is
6:50
Speaker 1: it the right url? Are they asking for information my
6:52
Speaker 1: bank normally wouldn't ask for over email or via a
6:57
Speaker 1: web form? All those things come into play again, and
7:00
Speaker 1: which should hopefully eliminate ninety nine percent of the chance
7:04
Speaker 1: of you actually getting schmished.
7:08
Speaker 2: I know it sounds like it's something you might want,
7:10
Speaker 2: but trust me, you don't want to get smished.
7:13
Speaker 1: Definitely not.
7:14
Speaker 2: And of course cybercrime isn't just restricted to teenagers in Auckland.
7:19
Speaker 2: There are nation state actors as well, and China, it
7:23
Speaker 2: turns out, has been able to take advantage of backdoors
7:27
Speaker 2: in telecommunications companies which were left open to meet US
7:31
Speaker 2: federal regulations. That was a really interesting story that you
7:36
Speaker 2: sent me on this one. Basically a bunch of professionals going,
7:40
Speaker 2: we told you these backdoors were a bad idea, that
7:43
Speaker 2: there were a weakness in the armor, and it turns
7:47
Speaker 2: out that that some hackers have found those weaknesses.
7:50
Speaker 1: Yeah, we talked earlier in the year about this vault
7:54
Speaker 1: Typhoon hacking group again out of China. That was leaving
8:00
Speaker 1: were packages in critical infrastructure the likes of power stations
8:04
Speaker 1: and water infrastructure companies in the US, and this happened
8:09
Speaker 1: several years ago, but the US governments and the Five
8:12
Speaker 1: Eyes partners, including New Zealand, came out earlier this year
8:15
Speaker 1: and said you need if you run critical infrastructure, you
8:18
Speaker 1: need to go in and check your systems because this
8:22
Speaker 1: vault Typhoon group is through a lot of companies in
8:25
Speaker 1: the US. So fast forward sort of nine months, we've
8:29
Speaker 1: got Salt Typhoon, and this is apparently a slightly different
8:33
Speaker 1: group of hackers who have been very much focusing on
8:36
Speaker 1: the wire tapping infrastructure that the US requires big telecommunications
8:42
Speaker 1: and internet companies in the US to maintain by law.
8:45
Speaker 1: So that's a law from about thirty years ago that says,
8:48
Speaker 1: you need to make your network's interception capable, and there's
8:52
Speaker 1: some little black box that hangs off the back of
8:54
Speaker 1: your network that we need to be able to connect to.
8:57
Speaker 1: We have that here in New Zealand as well. Most
8:59
Speaker 1: countries do that, and when you get a warrant, then
9:04
Speaker 1: that will activate the ability to use the y tapping
9:08
Speaker 1: method to either infiltrate or listen to calls as well
9:13
Speaker 1: as Internet traffic. So you know that is effectively a
9:16
Speaker 1: backdoor in the network that the FEDS in the US
9:20
Speaker 1: can access. Well, it turns out, according to the Wall
9:22
Speaker 1: Street Journal, which reported this on Friday massive story, the
9:27
Speaker 1: likes of AT and T and Verizon and Lumen Networks
9:32
Speaker 1: formerly century Link have all been compromised. These y tapping
9:36
Speaker 1: facilities have been compromised, potentially exposing customer data to these hackers. Now,
9:45
Speaker 1: if that's the case, if we're talking about huge volumes
9:48
Speaker 1: of traffic that go through the likes of AT and
9:50
Speaker 1: T and Verizon, if that's the case. You know, that's
9:53
Speaker 1: one of the biggest exploits in many years. It hearkens
9:58
Speaker 1: back to the Edward snow and revelations of twenty thirteen,
10:01
Speaker 1: when he basically revealed and all the documents he leaked
10:06
Speaker 1: a mass surveillance effort underway by the US government that
10:09
Speaker 1: even some of the telcos and internet companies didn't really
10:14
Speaker 1: know what was happening. Effectively, that infrastructure still exists to
10:19
Speaker 1: some extent, but has been cleaned up a lot so
10:23
Speaker 1: that the tech companies are more aware of what's going on,
10:26
Speaker 1: and you need sort of legal permission to utilize that technology,
10:32
Speaker 1: but it's been found to be insecure, and I guess
10:36
Speaker 1: it really sort of highlights that whole point of the
10:39
Speaker 1: tech tech has been making about encryption and back doors,
10:42
Speaker 1: and if you put a back door in encryption, you're
10:44
Speaker 1: going to have this problem to an even greater degree.
10:47
Speaker 2: It reminds me of the telegram story from not long ago. Yeah, yeah,
10:51
Speaker 2: you know, with the founder was at risk of getting
10:53
Speaker 2: arrested by the French. We did get arrested by the French.
10:57
Speaker 1: That are already still sitting there.
10:58
Speaker 2: So the question then becomes like it's that age or
11:00
Speaker 2: question of is it more important to have privacy or
11:04
Speaker 2: is it more important to have a governmental oversight and
11:09
Speaker 2: access into communications. It's difficult to find that balance.
11:14
Speaker 1: Yeah, and I think you know this legislation which was
11:18
Speaker 1: introduced about thirty years ago. It's called the Communications Assistance
11:22
Speaker 1: for Law Enforcement Act ninety ninety four. That came into
11:26
Speaker 1: effect just as sort of cell phones were starting to
11:28
Speaker 1: take off and the Internet was in its infancy. But
11:32
Speaker 1: then after September eleven we had a lot of wire tapping,
11:35
Speaker 1: huge ramp up in wire tapping activity, so this was
11:39
Speaker 1: really called on. But the interesting thing about that legislation,
11:43
Speaker 1: if your network is fully encrypted, you obviously don't have
11:47
Speaker 1: to comply with that. You can say, well, my mobile
11:51
Speaker 1: network is end to end encrypted, I can't help you
11:54
Speaker 1: with a wire tap. Sorry about that. Most of the
11:57
Speaker 1: telcos and internet providers have an encrypted their networks, while
12:02
Speaker 1: they have other security measures, and they facilitate their customers
12:06
Speaker 1: encrypting their own data. A lot of traffic isn't and
12:10
Speaker 1: a lot of that metadata obviously isn't as well. So
12:14
Speaker 1: I think the next step will be Okay, the likes
12:17
Speaker 1: of Horizon and AT and T will go well, this
12:19
Speaker 1: was really embarrassing and this hurt us. We're going to
12:22
Speaker 1: encrypt our entire network, and it's probably quite a lot
12:26
Speaker 1: of work doing that, even on mobile networks and five
12:29
Speaker 1: G modern infrastructure, encrypting the whole thing so that we
12:34
Speaker 1: can literally say to the authorities, so we don't have
12:38
Speaker 1: the ability to wide tap our customers anymore. And that's
12:42
Speaker 1: really where the likes of Meta and Signal and others
12:45
Speaker 1: have gone with messaging apps.
12:48
Speaker 2: It's just an absurd bureaucratic difference, isn't it really at
12:50
Speaker 2: the end of the day, where you know, you just say, well,
12:53
Speaker 2: if you spend a little bit more money and make
12:55
Speaker 2: sure that everything is super secret, then we won't ask.
12:57
Speaker 2: But we can't. You know. It just feels a little
12:59
Speaker 2: bit arbitrary. But I suppose at the same time it's
13:03
Speaker 2: just going to push everybody towards more encryption, which maybe
13:06
Speaker 2: at the end of the day is beneficial for privacy
13:08
Speaker 2: and security.
13:09
Speaker 1: Yeah. Well, the alternative is that you capitulate to the
13:15
Speaker 1: FBI and the US administration and say, okay, we're going
13:18
Speaker 1: to build a back door into encryption, and it turns out,
13:22
Speaker 1: as has been the case here, that your customers are
13:24
Speaker 1: even more vulnerable to foreign interference and terror, terrorism and
13:29
Speaker 1: the like because of that back door and encryption systems.
13:32
Speaker 1: And I think that's why it hasn't progressed any mandate
13:36
Speaker 1: because they know that things are not secure. There's always
13:40
Speaker 1: going to be a way in and if you building
13:43
Speaker 1: that back door, someone is going to come through it.
13:46
Speaker 2: Yeah. Signal president Meredith Whittaker is quoted in this tech
13:50
Speaker 2: Crunch article saying there is no way to build a
13:53
Speaker 2: backdoor that only the good guys can use. It's pretty
13:57
Speaker 2: much like the summary, there isn't it.
13:59
Speaker 3: Yeah.
14:00
Speaker 2: Keeping an eye on what that might mean for the
14:01
Speaker 2: future of regulation around privacy and encryption, But what isn't
14:05
Speaker 2: going to change anytime soon is the fact there are
14:07
Speaker 2: a whole a lot of people and businesses in the USA.
14:11
Speaker 1: Definitely. We've seen a bunch of New Zealand companies grow
14:14
Speaker 1: really quickly once they break into the US, like startup
14:18
Speaker 1: Parkable and INSIDEX listed Black Pearl Group.
14:21
Speaker 2: Mahesh Moraalda is a venture capitalist and startup advisor who
14:24
Speaker 2: runs Phase One.
14:27
Speaker 1: His experience across New Zealand, Australia and the US has
14:30
Speaker 1: led him to become a massive advocate for the potential
14:33
Speaker 1: for New Zealand's economy offered by the US market, particularly
14:37
Speaker 1: when it comes to software. Then you spoke to him
14:40
Speaker 1: about what needs to happen to see that potential realized.
14:43
Speaker 2: Yeah, he's got some strong feelings about the topic and
14:45
Speaker 2: was more than happy to share them. So let's have
14:48
Speaker 2: a listen to that interview now. Hi, Mahesh, thank you
14:57
Speaker 2: so much for joining us on the Business of Tech podcast.
14:59
Speaker 2: How are you today?
15:00
Speaker 3: I am feeling pumped, really excited, great, energized.
15:03
Speaker 2: Excellent, and I'm assuming that's related to your recent trip
15:07
Speaker 2: to the US and what you've seen over there. Yeah.
15:09
Speaker 3: Yeah, it was a very powerful, informative, insightful trip.
15:14
Speaker 2: Give us a little bit of information about your backgrounds.
15:17
Speaker 2: What's your interest in the innovation VC startup scene in
15:21
Speaker 2: New Zealand.
15:21
Speaker 3: Yeah, quick story, right, So I came to New Zealand
15:25
Speaker 3: on my own when I was fourteen from Singapore in
15:27
Speaker 3: the mid nineties when Napy boys from which is a
15:30
Speaker 3: very good cultural grounding, and you grew up in Auckland City,
15:35
Speaker 3: started work here and after that I had a Korean
15:38
Speaker 3: professional services and NBA and then had my own startup
15:41
Speaker 3: in the early twenty tens. In Sydney en route coming
15:45
Speaker 3: back home somewhat successful, but then was fortunate enough to
15:49
Speaker 3: be invited to be one of the first leaders at Canva.
15:51
Speaker 3: So number twenty five, I think business was probably about
15:56
Speaker 3: twenty mil and obviously now it's two thousand plus strong,
16:00
Speaker 3: well north of twenty billion. And then I was c
16:04
Speaker 3: suite in a few other major startups and Ossie came
16:06
Speaker 3: back home. And what I've done for the last three
16:09
Speaker 3: years is cultivate a group of an early stage founder
16:13
Speaker 3: community called Phase one Phase one Ventures, and the target
16:17
Speaker 3: we have is six unicorns from that community community, right,
16:22
Speaker 3: and a key part of that is global ambition, right,
16:25
Speaker 3: and how we need to be braver and boulder because
16:28
Speaker 3: to be honest, we're an entrepreneurial country, two islands and
16:32
Speaker 3: the corner of the world. You have to be. But
16:35
Speaker 3: the truth is we haven't been able to see scale
16:39
Speaker 3: and that's all we've got to do. We've just got
16:41
Speaker 3: to start reaching out and looking up and seeing that
16:45
Speaker 3: our skills and experience applied to the world's problems drives
16:50
Speaker 3: incredible even more innovation.
16:52
Speaker 2: So you've been part of the venture system in various
16:55
Speaker 2: places throughout the world, and you mentioned Canva there considered
16:58
Speaker 2: one of the world's you know start up. Darling's really
17:01
Speaker 2: an incredible success story. What are you seeing in terms
17:06
Speaker 2: of New Zealand's space at the moment.
17:09
Speaker 3: Yeah, incredible opportunity and perhaps over the last couple of decades,
17:15
Speaker 3: perhaps we haven't taken advantage of the of our foundational
17:21
Speaker 3: entrepreneurial zeal And then some early wins like Navman and
17:27
Speaker 3: a few others, you know, we started. We've always been
17:29
Speaker 3: an entrepreneur and we actually have had a very strong
17:32
Speaker 3: electrical engineering background, which ellen electrical engineering is a base
17:37
Speaker 3: for software engineering. But for a variety of reasons, we
17:41
Speaker 3: didn't really hook into the software engineering and software and
17:46
Speaker 3: SaaS growth curve. And you need role models, right, So
17:53
Speaker 3: when I give a speech in Sydney, three hundred people
17:56
Speaker 3: show up and I'm there answering questions for two hours
17:59
Speaker 3: because there's a whole bunch of people who want to
18:01
Speaker 3: be the next Melanie Perkins from Canvas and safety culture
18:03
Speaker 3: and culture app we've got zero. We've had then to
18:06
Speaker 3: a certain extent, but we haven't had that role modeling,
18:11
Speaker 3: which then doesn't allow investor class to believe that Canvas
18:15
Speaker 3: secondary sale of two billion dollars of Aussie flooding back
18:19
Speaker 3: into the Sydney market last year this year can happen here, right,
18:24
Speaker 3: So you need those role models just both for founders
18:28
Speaker 3: and for the investor class. So that's really exciting companies
18:32
Speaker 3: like Tracksuit, Next Work, Kiki, there's a whole bunch of
18:35
Speaker 3: now New coodis new new software scale ups that are
18:40
Speaker 3: startups that are coming through. So we need that role modeling.
18:43
Speaker 3: So we need a few winners to really supercharge, a
18:47
Speaker 3: few more winners to supercharge.
18:49
Speaker 2: Yeah, for sure. That's obviously, you know, a difficult thing,
18:55
Speaker 2: right because as they say, the hardest part of getting
18:58
Speaker 2: the boulder rolling is that first push. And in some
19:01
Speaker 2: ways we've kind of had that. We had a zero
19:04
Speaker 2: as you mentioned, and we've had trade me and are
19:06
Speaker 2: you starting to see the Jacob happening, do you think?
19:11
Speaker 2: Or are we still still kind of trying to get
19:14
Speaker 2: that first push.
19:15
Speaker 3: No, it's going to be an incredibly exciting time in
19:19
Speaker 3: the next ten to fifteen years, right, and it is
19:23
Speaker 3: well started as well. Started that likes of gd one
19:27
Speaker 3: and Samantha Wong from Blackbird coming into New Zealand and
19:31
Speaker 3: going hey, let's play like a global game. And New Zealand.
19:35
Speaker 3: VCS ice House has been an incredible pioneer in kicking
19:41
Speaker 3: off the space but having global counterparts. So Vicnation from
19:45
Speaker 3: GD one came from Apple in the US. As KII
19:49
Speaker 3: come back home and I think your question regards to
19:52
Speaker 3: one is the Jacob happening? Absolutely? It is? How do
19:55
Speaker 3: why is that happening? It's not a surprise a group
20:00
Speaker 3: of overseas Kiwis who've gone overseas and done some stuff
20:05
Speaker 3: and seen some stuff coming back home and going hey,
20:09
Speaker 3: so maybe we could do this differently. We can have
20:12
Speaker 3: a different horizon, a different We need to think about
20:15
Speaker 3: early stage differently, like myself. Right, So when I came
20:18
Speaker 3: back home three years ago, all I've done for the
20:21
Speaker 3: last three years, and I started in a living room,
20:24
Speaker 3: is give free strategic support to a group of early
20:27
Speaker 3: stage founders, going hey, let's get the foundations and fundamentals
20:30
Speaker 3: right if you really want to go big. So that
20:34
Speaker 3: ecosystem is now expanding with a Kiwi diaspora that's coming
20:37
Speaker 3: back home and a group of early founders listening, what
20:41
Speaker 3: could we do to help is actually make even more
20:44
Speaker 3: space for that Kiwi diaspora to come in because sometimes
20:49
Speaker 3: in a small country. When you hit the ceiling, there
20:52
Speaker 3: is a desire to maintain that ceiling. You know, that's
20:55
Speaker 3: a normal thing. So if we can be more open
20:58
Speaker 3: to hey, people overseas and you've come back home, let's
21:02
Speaker 3: listen a bit more and understand what you've seen that
21:06
Speaker 3: I think would accelerate things even further.
21:09
Speaker 2: What are you what would you say are some of
21:11
Speaker 2: those key things you mentioned? You know, there are things
21:14
Speaker 2: people have seen an experience and they're bringing that home.
21:17
Speaker 3: What are you?
21:18
Speaker 2: What are the lessons that you've seen overseas or that
21:21
Speaker 2: you've seen other people bring back that are really important
21:23
Speaker 2: that we should be capitalizing on.
21:25
Speaker 3: Yeah, and we discussed this just before we chat it. Right,
21:27
Speaker 3: like a tech company, you could argue, let's break it
21:30
Speaker 3: up into three tiers, right, a tech company that wants
21:33
Speaker 3: to reach some sort of exit or ceiling at one two,
21:37
Speaker 3: one hundred mil, right, and then you have the one
21:40
Speaker 3: hundred mil to a billion ceilings, a second swim lane,
21:42
Speaker 3: and then the third swim lane is a billion two
21:45
Speaker 3: billion north right. And it's very important that any one
21:49
Speaker 3: of those swim lanes is equally cool, right, But it's
21:53
Speaker 3: they're different founders with different constraints and different ambitions that
21:57
Speaker 3: work in each of those swim lanes. And it's really
22:00
Speaker 3: important as a set of different conditions. But let's talk
22:02
Speaker 3: about that last swim lane, right, like that two billion
22:06
Speaker 3: north world changing company. And again I can't state this enough.
22:10
Speaker 3: The other two swim lanes and entrepreneurs are equally cool.
22:13
Speaker 3: What's cool is doing what's right by you. But that
22:15
Speaker 3: last swim lane, what's important is a founder that wants
22:20
Speaker 3: to change the world that has unheralded like ambition, right,
22:25
Speaker 3: I want to six fix a global problem. Right, So
22:29
Speaker 3: something conversation I have with all the Phase one founders
22:31
Speaker 3: is you know what's your why, and you know when
22:34
Speaker 3: you as you as you gain in influence and so forth,
22:38
Speaker 3: what are you going to do with that? And you
22:39
Speaker 3: have that conversation early on outside of that what's really important?
22:44
Speaker 3: So and you actually have to have a US from
22:46
Speaker 3: day one customer approach because it's the largest homogeneous market
22:51
Speaker 3: that works. And finally you have to build. You have
22:56
Speaker 3: to have customer and problem obsession, right, because you're trying
23:00
Speaker 3: to build a love product that scales the world, and
23:03
Speaker 3: the only way you do that is by having an
23:06
Speaker 3: incredible thesis on a deep problem with this huge ambition
23:14
Speaker 3: at the scene, and that delta is really hard to manage.
23:17
Speaker 3: Does that make sense?
23:18
Speaker 2: Yeah, yeah, definitely. A couple of things that I want
23:21
Speaker 2: to pick up on there. The first is that you
23:23
Speaker 2: said you need to be US from day one, and
23:26
Speaker 2: traditionally we've very you know, talked about it in terms
23:28
Speaker 2: of being global from day one. Obviously, you know, you
23:33
Speaker 2: pointed out the benefits of the US, that the homogeneity,
23:37
Speaker 2: the lat size of the market. But is it the
23:40
Speaker 2: only option, Like, obviously you've got the UK and Europe
23:44
Speaker 2: as well, where if the Europe has a really large
23:47
Speaker 2: English speaking group and the UK is a great entry point,
23:52
Speaker 2: you've got Australia which is a great launching pad for scaling,
23:55
Speaker 2: So why the US.
23:57
Speaker 3: So there's a few reasons for that. So global from
24:00
Speaker 3: day one is effectively either US, China, India and Russia. Right,
24:09
Speaker 3: it's a large market. And let's discuss the homogeneity piece.
24:14
Speaker 3: So Europe doesn't offer homogeneity right the minute you solve
24:18
Speaker 3: for let's say it's a problem for real estate agents
24:21
Speaker 3: of this size, of this size and some workflow automation tool,
24:25
Speaker 3: or it's for couples who have this sort of lifestyle
24:33
Speaker 3: problem issue Right the minute, say you're operating in the
24:37
Speaker 3: United Kingdom. Oh wait, if you want to scale to Italy,
24:41
Speaker 3: to France, to Czech Republic, suddenly the rules, regulations, culture, food,
24:50
Speaker 3: everything changes. So then there's additional cost to manage that change.
24:56
Speaker 3: Right while say you just operated in India, US India
24:59
Speaker 3: or China or US Russia for example, or Brazil, maybe
25:03
Speaker 3: then there is still a culturally, there is a homogeneity,
25:07
Speaker 3: and US of those options is the only one that
25:11
Speaker 3: offers sort of law contracts signaling. All of that works
25:17
Speaker 3: to a large extent. Now, the other question is, but
25:21
Speaker 3: when we have a launch in Australia fest right or
25:24
Speaker 3: United Kingdom. First the issue is if the truth of
25:27
Speaker 3: the matter is, hey, we're building a global business and
25:32
Speaker 3: part of that we have to win. Well, we're only
25:35
Speaker 3: able to win build a global business if we win
25:38
Speaker 3: the US right, and we're talking about software scalepes generally. Right,
25:42
Speaker 3: Oh the minute you have any other entity like an
25:45
Speaker 3: Australian Kingdom, that's in the back of your mind because
25:48
Speaker 3: that's starting to put food on the table for some
25:51
Speaker 3: early employees, etc. When if you want to go global,
25:55
Speaker 3: I have to go all in on this, and I
25:58
Speaker 3: need to put one hundred and fifty of my thought
26:01
Speaker 3: and energy, the CEO's thought and energy on this, and
26:04
Speaker 3: I can't carve out any other energy because the minute
26:08
Speaker 3: you do that, you're defeating that first priority goal of hey,
26:12
Speaker 3: we need that large foundation and there's nothing wrong in
26:17
Speaker 3: launching in Australia. But I then founders and entrepreneurs need
26:19
Speaker 3: to be circumspect and investors need to understand, Okay, so
26:23
Speaker 3: this is going to be This may de risk the venture,
26:26
Speaker 3: but it risks scale right right. So then from a
26:31
Speaker 3: strategic and commercial perspective, you can make sure you manage
26:36
Speaker 3: expectations even better. The wonderful thing that we have is culturally,
26:42
Speaker 3: Kiwis and Aussies are even the American culture is incredibly
26:48
Speaker 3: accessible to us. That truly we are absolutely comfortable and
26:52
Speaker 3: confident with a US cultural base. In my recent trip
26:56
Speaker 3: to the US, a learning was capital is easy, talent's easy,
27:02
Speaker 3: and QWI founders who make it to the US are
27:05
Speaker 3: better than the top tier American founders because American founders
27:10
Speaker 3: feel they have optionality right because they are like, hey,
27:14
Speaker 3: if this doesn't work out, I'll go work in big tech,
27:16
Speaker 3: or I'll start something else, and I know that credit's
27:18
Speaker 3: kind of easy and I'll be fine, while a QWI
27:21
Speaker 3: founder who makes the US knows and believes they have
27:25
Speaker 3: one shot and then they go all in. Like there
27:28
Speaker 3: were countless times I was working with Tobey Thomas Smith
27:31
Speaker 3: from KIKI over the weekend for three weeks on end
27:34
Speaker 3: and we'd be the only people and that we work.
27:38
Speaker 3: I was stunned. And there were you know, the iconic
27:40
Speaker 3: y Combinator founders all around, and they were not around,
27:45
Speaker 3: and I was like, wait a second, what's going on?
27:47
Speaker 3: And I have conversations with them, and I was like, no, Like,
27:49
Speaker 3: I know a huge group of q founders that are hungrier,
27:52
Speaker 3: better and even more purposeful. So that's really exciting.
27:57
Speaker 2: Yeah yeah cool. Capital is easy in the US and
28:03
Speaker 2: you know, more available and more plentiful. The question is
28:08
Speaker 2: how do we get US investors who might be used
28:13
Speaker 2: to investing in the US companies because it's easy. You
28:16
Speaker 2: don't have to worry about where's my money going into
28:18
Speaker 2: this country in the South Pacific. How do we bridge
28:22
Speaker 2: that gap? How do we say, as a first time founder,
28:26
Speaker 2: you can trust me with your money, mister San Francisco.
28:29
Speaker 3: Yeah, yeah, yeah, I think it's a few things. Firstly,
28:33
Speaker 3: I think your first check is coming from australiasand and
28:36
Speaker 3: that's the truth of the matter, right, So then what
28:38
Speaker 3: do you need next? You need again role modeling. And
28:41
Speaker 3: there's an increasing number of founders who have gone to
28:44
Speaker 3: the US who've been successful that are now through back
28:48
Speaker 3: channels and cultural norms going no, no, you can do this,
28:50
Speaker 3: let me connect you. Lastly, I think there is a
28:53
Speaker 3: real opportunity and the likes of GD one, Blackbird, ice
28:57
Speaker 3: House are doing this like ice House in San Francisco
29:01
Speaker 3: when I was there, where they are making sure that
29:03
Speaker 3: they are partnering with US VC firms. Right, So then
29:08
Speaker 3: the vcs here have a part to play in regards
29:10
Speaker 3: to hey, let's nurture and then who are we partnering with?
29:14
Speaker 3: Who are us counterparts? And I've seen again the likes
29:18
Speaker 3: of GD one, Blackburn and ice House do that around Hey,
29:21
Speaker 3: how do we like nurture our founders? And then in
29:25
Speaker 3: some ways like shake hands to shake hands with another
29:29
Speaker 3: venture part venture player going hey, okay, you're now playing
29:32
Speaker 3: it even larger capital. How do we pass the song
29:35
Speaker 3: if you will, how.
29:37
Speaker 2: Do you tap into it? If you're a founder? I mean,
29:40
Speaker 2: are you relying on your VC investors to go and
29:43
Speaker 2: make those introductions. You know, you've got like the likes
29:46
Speaker 2: of NZTE, but they've got limited resources as well, So
29:50
Speaker 2: you know, how do you actually make those connections to
29:53
Speaker 2: these other founders, to the to these experienced kiwis these
29:57
Speaker 2: you know, because there is still a limited number compared.
29:59
Speaker 3: To Yeah, I can tell this. It's actually being quite
30:02
Speaker 3: pointed about the questions you ask and who you ask,
30:05
Speaker 3: who you hang out with. So how many Kiwi founders
30:09
Speaker 3: who want to go on this global journey are actually going?
30:13
Speaker 3: Who has been on this global journey? And I want
30:16
Speaker 3: to speak to those people because one of the things
30:18
Speaker 3: that's quite distracting is there are so many people with
30:22
Speaker 3: the best of intentions that start offering support, advice and guidance. Right.
30:26
Speaker 3: So for example, somebody who is currently a senior marketing
30:32
Speaker 3: leader at Meta, a, Facebook or Google does not have
30:35
Speaker 3: this experience that is a different experience like Akiwi is
30:40
Speaker 3: doing that, right, that's big tech, that's a large company experience.
30:44
Speaker 3: How many other is a ki founder going. I'm looking
30:48
Speaker 3: to speak to other kiris who have gone through this
30:52
Speaker 3: early seed to scale up experience, either as a founder
30:59
Speaker 3: as an early bread or as an investor, and I
31:03
Speaker 3: know the connections, the language, et cetera. So if that's
31:09
Speaker 3: would be my biggest advice to keep you founders to
31:10
Speaker 3: go on this journey. One of around, please be quite
31:16
Speaker 3: clear about the question you're asking and who you're asking
31:20
Speaker 3: it too, because most of us have the best of intentions,
31:26
Speaker 3: but then really tap into those with the legitimate experience
31:31
Speaker 3: that you are seeking.
31:33
Speaker 2: Yeah, that can be kind of a cultural thing with Kiwi.
31:37
Speaker 2: Sometimes we don't want to ask the direct question, right
31:39
Speaker 2: Like we don't want to say, hey, I know you
31:42
Speaker 2: did this, how did you do that? There was a
31:44
Speaker 2: sense of a transactional nature about that in terms of
31:48
Speaker 2: I'm willing to share with you what I know, but
31:51
Speaker 2: we're gonna it's gonna be purposeful. In New Zealand, maybe
31:54
Speaker 2: doesn't quite have that meeting oriented perspective to those kinds
31:59
Speaker 2: of things.
32:00
Speaker 3: Right, But I frame it a little bit differently, right
32:03
Speaker 3: So I think again, because we're a small country, we
32:08
Speaker 3: don't have we don't know how to signal security safety
32:14
Speaker 3: excellence through very well formed badges. Right Like, so someone
32:21
Speaker 3: who's worked who's run a division at g Capital or
32:24
Speaker 3: Boeing or canvas, et cetera. Oh, I can see that
32:27
Speaker 3: badge and I know what you've done and I know
32:29
Speaker 3: what you experience it. So that's a small country thing,
32:32
Speaker 3: and it's not a bad thing. It's not a negative.
32:34
Speaker 3: It is what it is. So then we want to
32:35
Speaker 3: sit down, let's get to know you as a person.
32:38
Speaker 3: While in a large country, you can look at the
32:41
Speaker 3: discrete signals and you can form opinions. You can see
32:45
Speaker 3: the stories much faster. Right, and so if a KIP
32:50
Speaker 3: founder wants to go play that game, okay, so this
32:53
Speaker 3: is the context that culture that you're now executing on.
32:57
Speaker 3: Let's be a little bit clearer. I'm here for this,
32:59
Speaker 3: this is my background, This made this, and I have
33:00
Speaker 3: to kind of explain because most Americans won't know much
33:04
Speaker 3: about New Zealm. Yeah, but they're really curious. So you
33:06
Speaker 3: share some tidbits, get them excited. They trust it. It's Western, etc.
33:11
Speaker 3: They've heard of the All Blacks and the America's Cup
33:14
Speaker 3: and thank God for the Lord of the Rings. So
33:17
Speaker 3: they're like, Okay, we know this, So now what would
33:20
Speaker 3: you like?
33:21
Speaker 2: Yeah, gotcha? Yeah, So I guess like being in the
33:26
Speaker 2: same way that you have like an elevator pitch for
33:28
Speaker 2: your company, Have an elevator pitch for you as a
33:30
Speaker 2: person that you can just drop in fifteen twenty seconds
33:34
Speaker 2: and then be like, now it's a business guy. Absolutely.
33:36
Speaker 3: Absolutely.
33:38
Speaker 2: The other thing that I wanted to ask you about
33:39
Speaker 2: is the dials in New Zealand's innovation ecosystem. So what
33:45
Speaker 2: do we need in terms of the support around it
33:49
Speaker 2: to actually make it sing? And one of those things
33:52
Speaker 2: is the conversation on going around ESOPs. And recently the
33:57
Speaker 2: government came out and said they're going to up the
33:59
Speaker 2: threshold about five thousand to seven and a half thousand dollars.
34:02
Speaker 2: Do you think that's enough?
34:04
Speaker 3: Yeah, And as you're aware, I ran for the National
34:07
Speaker 3: Party in the recent election and excited about furthering that
34:13
Speaker 3: journey another day. And let's be clear to all the listeners.
34:17
Speaker 3: ESOP is the equity share program that high tech companies,
34:23
Speaker 3: especially high growth companies, need to offer, because the argument is, hey,
34:27
Speaker 3: take a discount on your salary and instead a big
34:32
Speaker 3: part of your compensation that would be equity. So yes,
34:35
Speaker 3: we do need to reimagine equity visas Erica Stanfords come
34:42
Speaker 3: out talking about this as well. So there is an
34:44
Speaker 3: opportunity to re imagine all of this. The government's obviously
34:48
Speaker 3: dealing with a few different priorities, so taking one thing
34:52
Speaker 3: at a time, and I'm excited to see that progression
34:56
Speaker 3: in that space as well as be part of that conversation.
35:00
Speaker 2: In summary, I guess on the ESOPs in particular, you
35:05
Speaker 2: said it was a good first step, but you do
35:07
Speaker 2: think it needs to go further.
35:08
Speaker 3: Oh, of course. I mean, if you want a billionaire
35:10
Speaker 3: unicorn businesses coming from New Zealand, it has to be
35:15
Speaker 3: like there's a template, like there's no this is not
35:20
Speaker 3: like a crazy idea, of course, Yeah.
35:23
Speaker 2: I mean, I mean because the thing is as well,
35:25
Speaker 2: it's going from five k to seven and a half
35:27
Speaker 2: k year, which is nothing really in the grand scheme
35:31
Speaker 2: of things. When you're talking about if you're bringing on
35:33
Speaker 2: a CTO and you know you want to say, well,
35:37
Speaker 2: we're going to pay you niney K and no, you
35:39
Speaker 2: could go and get one hundred and fifty k elsewhere,
35:41
Speaker 2: but we're going to try and top you up with
35:43
Speaker 2: some of that. Like seven grand a year is pittance
35:46
Speaker 2: for them. So but your your argument is that is
35:50
Speaker 2: a signal that they're taking it seriously and just working
35:54
Speaker 2: through things, of course.
35:55
Speaker 3: I mean the country has seen better days and we
35:59
Speaker 3: are working through quite a few things to get us
36:04
Speaker 3: to a better place. And the government's been obviously very
36:10
Speaker 3: good with getting stuff done, and nobody's denying that in
36:14
Speaker 3: regards to hey, we said we're going to do this
36:16
Speaker 3: in one, two, three, four, So as part of a
36:19
Speaker 3: long to do list, I definitely appreciate the signaling. But
36:25
Speaker 3: definitely if the ambition is to have more high powered
36:29
Speaker 3: software and high goro tech companies, this needs to change.
36:32
Speaker 3: But to be fair, this is not the most important thing.
36:35
Speaker 3: The most important thing is a group of more and
36:38
Speaker 3: more KII entrepreneurs believing that they can go big.
36:49
Speaker 2: So if I'm a business leader, what are some actions
36:51
Speaker 2: that I can take as a business leader in New
36:53
Speaker 2: Zealand to actually help this progress.
36:55
Speaker 3: That's actually a really interesting question. I think first almost
37:00
Speaker 3: acknowledging your risk profile and risk framework right, which is
37:04
Speaker 3: absolutely okay, right, and because it's really important you have
37:07
Speaker 3: so many employees and things, your vital entity and and
37:12
Speaker 3: and and really be really happy about that. The other
37:16
Speaker 3: pieces is do you want to tackle global markets right?
37:21
Speaker 3: I was recently of speaking to one of the head
37:24
Speaker 3: of strategy at one of the energy companies and and
37:28
Speaker 3: they were like, you know, but you know, our board
37:31
Speaker 3: may not want to you know, grow right. I think
37:34
Speaker 3: there's an opportunity to know that middle and large MW
37:39
Speaker 3: ZEALM companies. If we do not grow our GDP per
37:43
Speaker 3: capita in New Zealand, we can't have the imagination that
37:48
Speaker 3: we have of ourselves of being done marks we do
37:51
Speaker 3: to nowhere right, And we have a desperate desire to
37:53
Speaker 3: address inequity small country compassion Absolutely we are compassion our call.
37:58
Speaker 3: But we have to roll a GDP per capita. We
38:02
Speaker 3: have to for us to have the hospitals and schools
38:06
Speaker 3: and all of this stuff. Right. Okay, So then as
38:08
Speaker 3: a as a as a as a middle in company. Wait,
38:11
Speaker 3: maybe we have a responsibility to tap into global markets.
38:16
Speaker 3: How do we tap into global markets? Maybe we should
38:19
Speaker 3: set like a higher revenue goal. What could we do there?
38:25
Speaker 3: Could we send services? Could we start a services arm
38:28
Speaker 3: and we let's start off with Australia. Let's do it
38:31
Speaker 3: like a pilot thing. Could we could we maybe extend
38:36
Speaker 3: our products to one other niche tier in the US.
38:40
Speaker 3: And can we set aside a small little amount of
38:43
Speaker 3: money even if it's two hundred k a finder k
38:46
Speaker 3: just as an experiment, or actually you don't do it
38:49
Speaker 3: with even less? Start super lean and can we get
38:52
Speaker 3: one overseas customer, two overseas customers in the pursuit that
38:58
Speaker 3: building more power awful small, medium sized and large businesses
39:03
Speaker 3: in New Zealand with a global perspective is valuable for
39:07
Speaker 3: all of us. Right, So it's hard. This is a
39:11
Speaker 3: hard thing. It requires leadership within those businesses. But my
39:16
Speaker 3: only pitch is, hey, if you guys become more valuable
39:20
Speaker 3: and start to have a few more global customers, it's
39:24
Speaker 3: actually good for all of us because suddenly your employees,
39:28
Speaker 3: your productivity because now the dollar of our effort that
39:33
Speaker 3: you're putting in is being spread across a few towns
39:40
Speaker 3: in the US, you know, and suddenly proactivity levels, everything
39:43
Speaker 3: goes up. Right, So I think that's a good pitch.
39:47
Speaker 2: So the idea is in the same way that you
39:49
Speaker 2: might put aside, you know, whatever one percent of revenue
39:53
Speaker 2: for R and D, do the same thing for global efforts,
39:57
Speaker 2: like just say this is part of how we operate.
40:01
Speaker 2: As you know, we've got a little bit of money
40:03
Speaker 2: where we're trying to build new products or try new things.
40:06
Speaker 2: Now we're going to have a little bit of money
40:07
Speaker 2: where we're actually trying to target new markets as well.
40:10
Speaker 3: That's exactly right. And my suggestion if you were to
40:14
Speaker 3: do that is focus on revenue. Like with five dollars,
40:20
Speaker 3: we need to generate revenue. With ten dollars, we need
40:23
Speaker 3: to generate revenue. The most powerful thing you can do
40:28
Speaker 3: is not research, is win a customer. I don't care
40:34
Speaker 3: how you do it. Just win one customer, because in
40:37
Speaker 3: the pursuit of winning that customer, the amount you learn
40:42
Speaker 3: is so much more than Hey, let's just understand the market.
40:46
Speaker 3: Let's go hang out. No, just win one customer. Yeah,
40:49
Speaker 3: then win two, then win three. Do the unscalable things.
40:54
Speaker 3: Do not worry about scale.
40:56
Speaker 2: Right, cool, we wrap up. Let's talk a little bit
41:01
Speaker 2: about your time in Canva. So you said you were
41:04
Speaker 2: employee number twenty five. That's very early in a massive
41:08
Speaker 2: company's journey. How long were you there.
41:10
Speaker 3: Altogether closing in and around just around three years?
41:15
Speaker 2: Around three years, I mean, and the growth of Canva
41:18
Speaker 2: was extraordinarily quick, so you would have seen quite a
41:20
Speaker 2: lot in those three years. What did you learn? What
41:24
Speaker 2: is the most valuable thing that you learned from your
41:27
Speaker 2: time inside a company growing that quickly that.
41:30
Speaker 3: You have to have a love product. I remember even
41:33
Speaker 3: when I joined on Twitter, it was I love camera,
41:37
Speaker 3: love Cana love can I love Cana love camera like
41:39
Speaker 3: you could hear the customer voice singing its praises right,
41:44
Speaker 3: and which is why I keep saying one of the
41:46
Speaker 3: most important things is customer and problem obsession like mail
41:50
Speaker 3: for mail people who designed was her tribe. These were
41:55
Speaker 3: the people she lived for and when it gets to
41:57
Speaker 3: solving that problem the other pieces. I remember walking to
42:01
Speaker 3: Canvas a small group of people and walking to the
42:06
Speaker 3: office the first time, and I had my own tech
42:08
Speaker 3: startup at that point, and I remember straight away thinking
42:11
Speaker 3: something was different, and looking back now is that everything
42:17
Speaker 3: was intentional, right, So where the laptop was that Cliff,
42:24
Speaker 3: who is co founder and Mel's partner and a billionaire,
42:28
Speaker 3: was the first Canvas for chef. He would make the
42:30
Speaker 3: meals and it was intentional that from twelve to one
42:33
Speaker 3: everybody came back and had a meal together. How we
42:38
Speaker 3: celebrated birthdays. It was a very peculiar ritual, fun amusing
42:44
Speaker 3: ritual that we did and a quick story. So I
42:47
Speaker 3: was responsible once on a Sunday to do. We were
42:50
Speaker 3: like at about seventy or nearly closing it, one hundred
42:52
Speaker 3: people about making sure that a company reorg was done properly.
42:56
Speaker 3: So I'd worked through the weekend and about Sunday two
42:59
Speaker 3: o'clock I'd come up with a plan and I'd said, okay,
43:02
Speaker 3: so people would come in and then there's clear instructions.
43:05
Speaker 3: They'd moved their laptops from here to here, right. And
43:09
Speaker 3: mel walked in at about two thirty on a Sunday, and
43:12
Speaker 3: you know, she was happy with the work and all
43:14
Speaker 3: the thinking that had been done. And they said, oh,
43:17
Speaker 3: what do you mean people are going to come in
43:18
Speaker 3: and you know, move stuff, And I said, yeah, I
43:21
Speaker 3: mean it's the most efficient thing. So no, that's not
43:25
Speaker 3: the experience camera team members get when they come in.
43:29
Speaker 3: They should feel like, hey, like we are here for them. Right.
43:34
Speaker 3: So for the next four to six hours, Cliff mel Zach,
43:40
Speaker 3: who's one of the top leaders of Canon still is,
43:43
Speaker 3: and myself spent wiping down the tables, moving each laptop,
43:49
Speaker 3: connecting each thing, making sure everything was done properly. She
43:53
Speaker 3: was so clear and intentional. This is my house, this
43:58
Speaker 3: is my farey, and this is how it's going to
44:01
Speaker 3: be right. So and I think there's there's an opportunity
44:05
Speaker 3: again when you think about these global founders, this takes
44:07
Speaker 3: a lot of like internal thesis around like who am I,
44:11
Speaker 3: what do I want? Et cetera. Right, So it's it's
44:15
Speaker 3: again that you know again that customer obsession and that
44:18
Speaker 3: like who are you? Because if you're going to play
44:21
Speaker 3: in the global markets, the market's going to ask, right,
44:23
Speaker 3: so you really have to have that thinking done. Now,
44:28
Speaker 3: that's that didn't require any money. But when when an
44:31
Speaker 3: early team member gets that, that is such powerful cultural
44:36
Speaker 3: signaling around, Hey, this is really meaningful to me, and
44:40
Speaker 3: I want to share this with you. It's not it's
44:43
Speaker 3: not a fast you know, table tennis table you know
44:46
Speaker 3: it is. This is important. You are important, We are
44:50
Speaker 3: doing great things. Let's do this. My suspicion is Team
44:54
Speaker 3: New Zealand the All Blacks talk about cleaning the sheds, right.
44:58
Speaker 3: It's those like very very intentional, time consuming, unscalable things
45:05
Speaker 3: initially they then scale so powerfully as stories and signals.
45:10
Speaker 2: Yeah, it's interesting. I think the key you said there
45:13
Speaker 2: is time consuming, right, Like yeah, and there's that old
45:16
Speaker 2: adage with kids, don't give them your money, give them
45:21
Speaker 2: your time, right, that's what they really want. And it
45:22
Speaker 2: sounds like that's a very similar thing to what you're
45:24
Speaker 2: saying about employees, is that obviously a good compensation is nice,
45:28
Speaker 2: and having a table ten and stable is nice. But
45:30
Speaker 2: at the end of the day, they want to know
45:31
Speaker 2: that they're being thought of as humans with needs and
45:37
Speaker 2: support it and made to be comfortable.
45:39
Speaker 3: Absolutely, the single most important thing, in my opinion for
45:44
Speaker 3: a great culture is that it's winning. Right, everybody, there's
45:49
Speaker 3: a mess. You have a bunch of humans together, it's
45:51
Speaker 3: going to be challenging, right, everybody's opinions insecurity is a
45:55
Speaker 3: whole bunch of stuff.
45:55
Speaker 2: Right.
45:56
Speaker 3: But if as a team you go hate these are
46:00
Speaker 3: goals and you continuously surpass the goals, then people come
46:05
Speaker 3: into the team go, oh great, when I do work,
46:10
Speaker 3: which is the primary point of this activity, it is
46:14
Speaker 3: valuable and that is the leader's base level responsibility. Right,
46:21
Speaker 3: And then are you being treated fairly, is it a
46:24
Speaker 3: safe environment, et cetera. And to do what I've just
46:27
Speaker 3: said at world class levels is hard, right, And but
46:33
Speaker 3: that's all you gotta do. You got to make sure
46:34
Speaker 3: it's winning. And an a startup that's like a hockey
46:37
Speaker 3: stick curve. Right, it's a love product, go nuts, and
46:41
Speaker 3: then it's it's safety growth and the added Are you
46:46
Speaker 3: being treated fairly right from a compensation termal external perspective,
46:50
Speaker 3: And again all of that requires deep work, not frills
46:56
Speaker 3: and short term cash. But a nice coffee machine also
46:59
Speaker 3: helps the scoby machine and you know the occasional night out.
47:03
Speaker 1: It's good, fantastic entrepreneur and great you know to have
47:10
Speaker 1: him here with Phase one and New Zealand, this sort
47:12
Speaker 1: of network for startup founders as well as the investment fund.
47:16
Speaker 1: Interesting that political career that hasn't quite come to fruition yet,
47:22
Speaker 1: but he is really a sort of a blue green
47:24
Speaker 1: sort of guy. He really likes the environmental aspect and
47:28
Speaker 1: he's trying to marry that obviously with tech and entrepreneurship
47:32
Speaker 1: and innovation. And he has been very close to the nets,
47:35
Speaker 1: helping them with their tech strategy.
47:37
Speaker 2: Yeah. I do actually think what he was saying about
47:40
Speaker 2: the potential for New Zealand's economy taking some of that
47:44
Speaker 2: you know, sweet us money and bringing it back home.
47:47
Speaker 2: I think that is a very apt thing. And I've
47:52
Speaker 2: often spoken to people who are like, you know, we
47:54
Speaker 2: focus too much on the US, you know, we need
47:56
Speaker 2: to look at Europe, we need to look at Southeast Asia.
47:58
Speaker 2: But his argument for the US fairly convincing.
48:03
Speaker 1: Yeah, well, we spent a lot of time in Silicon
48:06
Speaker 1: Valley in San Francisco, obviously was very early in Canva,
48:11
Speaker 1: the biggest success in recent years in this part of
48:14
Speaker 1: the world. And you can tell from his discussion here
48:16
Speaker 1: he's really interested in founder talent and how to foster it,
48:21
Speaker 1: how to identify it, how to foster it, and how
48:24
Speaker 1: to tap into that diaspora of key we talent overseas,
48:29
Speaker 1: how to bring some of that money and capital human
48:33
Speaker 1: capital as well that they have access to and bring
48:35
Speaker 1: it back to New Zealand. So he's a lot of
48:37
Speaker 1: this is real music to my years and years being.
48:40
Speaker 1: You know, we took to Black Pearl group on the
48:42
Speaker 1: podcast recently and they were saying exactly the same thing.
48:45
Speaker 1: We went straight to the US market because that has
48:47
Speaker 1: the homoganity to allow you to go wide and broad
48:52
Speaker 1: very quickly.
48:53
Speaker 2: And then Black Pearl just raised a huge investment around
48:58
Speaker 2: in New Zealand, specifically with New ze Island investors, so
49:01
Speaker 2: they raised ten million and off market and then they've
49:04
Speaker 2: got another two and a half million and share placement
49:07
Speaker 2: foreign existing investors in New Zealand. So a really clear
49:10
Speaker 2: example of how that can really work for people.
49:14
Speaker 1: Yeah, so phase one is a great addition to the
49:17
Speaker 1: startup ecosystem. I think he talked about the ESOP thing,
49:21
Speaker 1: you know, the share schemes for startups, which Judith Coms
49:25
Speaker 1: I believe is working on, so some action will happen there.
49:30
Speaker 1: He's also quite an advocate for reform of the Foreign
49:34
Speaker 1: Investment fund taxation, which is this I don't quite understand it,
49:38
Speaker 1: but basically, if you're an investor and you have overseas investments,
49:42
Speaker 1: if you're in New Zealand and have overseas investments, they
49:44
Speaker 1: can effectively tax you five percent of the unrealized gains
49:49
Speaker 1: of that investment. Which, say you're a big American tycoon,
49:53
Speaker 1: you come and live in New Zealand, you've got tens
49:55
Speaker 1: of millions of dollars in investments overseas, That's going to
49:59
Speaker 1: be not a very attract of things. So he's basically
50:01
Speaker 1: saying if we reform that, we're going to be more
50:03
Speaker 1: likely to get these high networth individuals locating here and
50:07
Speaker 1: investing in New Zealand, so saying a lot of I
50:11
Speaker 1: think quite sensible things, and clearly he wrote a really
50:15
Speaker 1: good column we'll link to in the New Zealand Herald
50:18
Speaker 1: back in March, and I think he's got an eye
50:20
Speaker 1: on the next election. And who knows, by then, Judith
50:24
Speaker 1: might be sick of having seven or eight portfolios and
50:27
Speaker 1: maybe she'll be thinking of someone else for the tech portfolio.
50:33
Speaker 2: Could Beah, yeah, he could be a candidate, that's for sure.
50:36
Speaker 2: I don't know his view on the ESOPs, saying that
50:41
Speaker 2: what they have put in place with that seven thousand
50:44
Speaker 2: dollars cap increase is just the beginning. I hope so,
50:50
Speaker 2: and I'd like to believe that, but I do also
50:53
Speaker 2: know that it's a government that is kind of struggling
50:55
Speaker 2: for money at the moment that it would be interesting
50:57
Speaker 2: to see whether they can, you know, really do what
51:01
Speaker 2: needs to be done with those ESOPs in their long run.
51:04
Speaker 1: I mean, it wouldn't be great if we had a
51:07
Speaker 1: Canva like success. And I think he's obviously so inspired
51:11
Speaker 1: by what he saw there working with that founder group
51:14
Speaker 1: that he is going to try his hardest to do it.
51:18
Speaker 1: But you know, really, when it comes back to it,
51:20
Speaker 1: reading that founder story. It was the passion of the
51:23
Speaker 1: founders for that particular thing, making graphic design simpler. They
51:29
Speaker 1: designed a whole way to tackle the problems they were facing.
51:34
Speaker 1: It really comes back to that problem solving. What is
51:37
Speaker 1: the problem that you're trying to identify and is a
51:39
Speaker 1: market for it? And that's just universal. And I've got
51:43
Speaker 1: to say a lot of our entrepreneurs have become a
51:46
Speaker 1: lot more laser focused on that so called product market
51:49
Speaker 1: fit and identifying the problem and validating the market for
51:54
Speaker 1: solving that problem. So I think we're getting a lot
51:57
Speaker 1: more sophisticated. But having people who've actually in these really
52:00
Speaker 1: successful unicorms coming to New Zealand living here, spending time
52:07
Speaker 1: and willing to impart that knowledge is really valuable.
52:11
Speaker 2: Yeah. Absolutely, bring on the hockey stick growth.
52:13
Speaker 1: I say absolutely. Well that's us for another week.
52:18
Speaker 2: It is, And thanks very much to Mahash moral Da
52:20
Speaker 2: for coming on the Business Off Tech.
52:22
Speaker 1: You can find the stories we talked about today and
52:24
Speaker 1: links to other interesting tech stories over on business Desk,
52:28
Speaker 1: dot co, dot nzen and you can subscribe and listen
52:31
Speaker 1: to all episodes of the podcast over on iHeartRadio or
52:34
Speaker 1: wherever you get your podcasts.
52:36
Speaker 2: Drop us a line with suggestions so future gusts can
52:39
Speaker 2: email me Ben at business desk dot co dot nz.
52:42
Speaker 2: We'll find both of us on LinkedIn and ax.
52:44
Speaker 1: And another episode coming your way next Thursday.
52:48
Speaker 2: Until then, have a great week,