StretchSense says Kiwi start-ups should look to Asia
Kiwi innovators in wearable technology are quickly paving their path to global domination.
Co-founder of StretchSense, Ben O'Brien said although the major customer base for his start-up is in America, it is also quickly gaining traction in Taiwan, Japan and South Korea.
StretchSense develops stretchy rubber band sensors that can be stitched into clothing to measure body movement, particularly valuable for tracking athletes' performance, coaching and rehabilitation.
The Auckland-based firm's focus is almost exclusively abroad, with over 200 clients in 28 countries.
O'Brien advises other Kiwi businesses to also look offshore for a larger, more diverse market.
He said raising smaller amounts of money for the initial stages of building a business isn't difficult in New Zealand, but raising serious venture capital here can be challenging due to the small number of players in the market.
"When you want to raise money in New Zealand it really hits you right in the face, unless you're really well aligned with the investment philosophy with one of the few players.
"Offshore there's enough investors there that you can find a specialist that aligns with your company."
But O'Brien warns, the process of seeking the right investors overseas can be a long one.
After over $100,000 in travel, legal and accounting costs, forty-odd rejections and 18 months around the world meeting with venture capitalists, StretchSense finally clicked with a multi-billion dollar fashion e-commerce company in Japan last year.
StartToday owns Japan's largest online clothing retailer ZOZOTOWN and Forbes valued the enterprise at $5.1 billion in 2016.
Co-founder Todd Gisby said after cementing their relationship with StartToday, they have been picking up pace in Japan.
"The investment has generated a lot of buzz - it's stimulated the Japanese market for us."
Gisby said people generally default to the United States for opportunities is because it's seen as a very small cultural jump and also because of the density of opportunity there, not necessarily the quality.
"A big realisation for us was that a good opportunity can come from anywhere, it's up to you to look for it.
"In the US it's part of the culture looking for new opportunities, but that also means there's a lot of noise you have to rise above to make an impact. In other areas where the investment community is growing there's a lot of people that are looking to get involved but are not saturated with new things already." .
O'Brien said dealing with the fast growing, large and diverse Asian market can have its challenges, but breaking down those barriers can be done simply through understanding and going beyond ways you would normally do business in New Zealand.
"Good communication when selling your business to overseas investors is so important. Language really opens up opportunity so taking measures like making sure our material is multilingual, accommodating brochures and pamphlets in different languages has opened us up to a lot of opportunities in conferences.
"It sends a message that you're trying, you value people from around the world and are willing to make things work."
Gisby said New Zealand's multicultural background gave them a head start into expanding overseas.
"We"re quite well equipped to deal with other cultures. At the end of the day you're dealing with people, they can come from anywhere. They may have unique cultural backgrounds, but people are people, there's actually a huge amount of overlap with cultures all around the world so when you realise that you'd be less intimidated to seek opportunities outside."
As for the future of wearable technology, O'Brien believes it lies not on the body but inside the body.
"Wearable technology is becoming more intimate. Once wearable technology is permanently in your clothes, or bonded to your skin or implanted in your brain it really has to never break.
"The future for wearables is making it so the technology is hidden from the user, that's what we call 'disappearables' and that addresses concepts of comfort, social acceptability and usability - not having to pull things out and charge them."