Entrepreneurs urged to sell stakes to grow
Google executive Craig Nevill-Manning says successful IT entrepreneurs should be prepared to sell part of their business to those wanting to invest in them to gain size.
That was common in the United States where companies in the technology industry understood the benefits of gaining scale quickly and were eager to take in venture capitalist funding.
Educated at the University of Canterbury, Nevill-Manning said it could be better to sell half the company to another investor if, in the end, the company grew 10 times larger using the capital.
New Zealanders were probably too cautious and entrepreneurs tapped into relatives and friends before being willing to sell part of their company to outside investors.
"We are a kind of careful nation," he said.
Americans were also much more tolerant of company failures, particularly if the company picked itself up and started again.
It was almost as noble to try and fail as it was to try and succeed in the United States.
Now engineering director at the famous search engine company's New York offices, Nevill-Manning is in New Zealand as part of the Transit of Venus Project.
The Press sponsored his public lecture at Canterbury University on Tuesday evening which was arranged by the New Zealand Manufacturers and Exporters Association.
Nevill-Manning was surprised at the important role of government in the success of IT startups after looking into their history. The founders of Google, Larry Page and Sergey Brin, tapped into funding from the National Science Foundation.
The government did not get the payoff it thought it would get with that funding but the ultimate success of Google had been "an indescribable benefit" to the wider economy.
Governments should not be trying to pick winners with their funding, nor tie the funding to "deliverables" but fund entrepreneurs who were incredibly ambitious.
In a city the size of Christchurch, it made sense to concentrate IT startups in one place where IT owners and staff could swap and talk about their ideas and projects and those visiting Christchurch would know where to tap into the local industry.
"I think for collaborating there is nothing like sitting in the same room."
At Google there was "an immense amount of collaboration" between the various offices around the world because the company believed in face-to-face working despite the pervasiveness of electronic communication.
More face to face was required at the beginning of developing a new product. At Google, staff involved in a new product were immersed together in that for at least a week to get to know and develop relationships with the people they were collaborating with.
To those aspiring to go places in the industry, Nevill-Manning said it was incredibly important to spend time with the IT industry's great academics and entrepreneurs and "to stew in their juices".
The success of Silicon Valley and New York as IT industry hubs came down to several factors including universities being part of that mix and leading companies training and attracting new people.
- © Fairfax NZ News